Plain packaging threatens Dominican Republic’s hard-fought premium position

by Jenny Novac on November 15, 2012

The Dominican Republic has required the establishment of a panel under the dispute arrangement procedures of the World Trade Organization to examine a challenge to Australia’s plain packaging actions for tobacco products, as outlined by a Marketwire report.

The country’s representatives have requested that this demand be involved in the agenda of the WTO Dispute Settlement Body meeting on December 17.

Premium Cigars

Premium cigars arranged in a line

Starting with December 1, Australia will demand that all tobacco products be marketed in ‘plain packaging’ – packaging intended for the government to be as unattractive as is possible. Packages will be a standardized olive color, without having logos or other design characteristics, and with brand and variant names in a standardized font and location.

The demand will avert tobacco products from using their logos and geographical indicators.

‘These unprecedented actions will weaken the Dominican Republic’s tobacco industry, specifically its premium cigar sector,’ the report said. ‘By recommending standardized plain packaging, the cigarette market will be led towards commoditization, with decreasing prices, and growing – rather than dropping – consumption and illicit trade.

‘The Dominican Republic accepts Australia’s health goals. Nevertheless, plain packaging will weaken those health goals, failing to reduce tobacco use, while ruining the market for Dominican producers. Australia’s plain packaging actions do not, consequently, hold up against analysis under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and the Agreement on Technical Barriers to Trade.

“Tobacco has been an intrinsic part of the Dominican culture and heritage for hundreds of years, and the tobacco sector is crucial for growth,” said Luis Manuel Piantini, the Dominican Republic’s ambassador to the WTO.

“Our companies have made huge investments – including in intellectual property – to transform the Dominican Republic from a simple exporter of tobacco leaf into one of the world’s top manufacturers of premium cigars and the world’s biggest exporter of cigars. This is a considerable success for a small growing economy.

“Plain packaging will wipe away these successes – premium cigars will be considered as low cost products, which people will keep on to smoke; prices will eventually drop, impacting on the livelihood of more than a hundred thousand Dominican employees and their families.

“The agreements of Trade-Related Aspects of Intellectual Property Rights and the Agreement on Technical Barriers to Trade defend our business and growth results.

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