Health Over Profit: What the World Can Learn From Australia's Showdown With Philip Morris

By Joe Jordan Australia's plan to introduce brand-less cigarette packs causes controversy and hope. n a way you can say the entire world is somewhat liberal. That is to say, that most countries are engaged in progress and reform. In an industry as blatantly unhealthy as the tobacco industry, it has only gotten steadily harder for the corporations to peddle their dangerous product to the people. (To read LLoyd Khaner's 22 worries facing investors this week, click here.) In a bold and widely respected move, Australia recently went public with plans to introduce plain, brand-less packaging for all tobacco products come January 2012. The law, which is expected to go into affect despite a lawsuit just initiated by tobacco mogul Philip Morris PM, is already fostering international interest in reigning in the tobacco industry in order to protect consumers. Making all cigarette packs indistinguishable would in essence deny large tobacco conglomerates the clear advantage they have by marketing their products. The movement, which is also being considered by New Zealand, Canada, and Britain, was triggered by the desperate need to reduce smoking rates and the health costs associated therein. Since the fact that smoking cigarettes causes lung cancer is universally accepted and highly publicized, the tobacco leviathan Phillip Morris will be hard-pressed to justify compensation from any countries that choose to render all tobacco products anonymous. (To read Michael A. Gayed's article on this week's flash crash, click here.) Philip Morris International Inc. is a New York-based holding company which, through its subsidiaries, engages in the sale of cigarettes and other tobacco products in approximately 180 different countries. If several countries choose to adopt the same packaging regulations as Australia, the potential to loose billions in profit is very real for the tobacco giant. Analysts paint a grim picture for the industry, and say “plain packaging would hit tobacco firms in emerging markets where they are seeking to lure smokers away from cheap brands to more expensive ones and, if widespread, could lead to takeovers in the industry to cut costs,” according to a Reuters report. And lose they will. The fact that Australia and any other country that decides to hinder the effectiveness of tobacco firms will deeply cut profits is both undeniable and irrelevant. It is the duty of governments to protect the people, not the budgets of multinational corporations. Since the company's trading rights and freedoms will be evaluated by a United Nations panel, and since the UN was founded on the principle of raising the quality of life, Philip Morris can expect little sympathy. (To read what Todd Harrison thinks austerity means for the markets, click here.) It's just an easy assumption to make that Australia, and any country for that matter, has every right to safeguard their citizens from the predatory brand marketing that kills droves of people every year. This movement, if embraced by more and more countries, might just signify the tipping point in which governments care less about financial health, and more about actual health. To read the rest, head on over to Minyanville.