The tobacco industry is squaring off for another bruising round in its war against the Australian federal Government and health and anti-smoking groups, warning it may slash the price of cigarettes by up to a half if plain packaging is introduced.
Legislation banning all branding and forcing companies to sell smokes only in matt olive green packets - shown by research to be the most repulsive colour - will be introduced to Parliament soon.
Provided the new laws are passed, plain packaging will come into force next January in a world first that will join increasingly tough measures against an addiction that kills an estimated 15,000 Australians a year and costs the community about A$31.5 billion ($40.6 billion) annually.
As well as state and local laws banning smoking in public places ranging from shops and offices to beaches, tobacco advertising and sponsorship has been outlawed, and the federal Government last year raised taxes on cigarettes by 25 per cent.
The move added more than A$2 ($2.50) to the price of a packet of 30, with the extra A$5 billion ($6.4 billion) in revenue channelled directly to hospitals.
But the tobacco industry, which plans to fight the latest move in court, yesterday warned that plain packaging would harm - rather than help - efforts to reduce smoking.
British American Tobacco Australia, whose brands include Winfield, Dunhill and Benson & Hedges, yesterday announced a new advertising blitz against the Government's strategy.
BATA claimed the move would infringe international trademark and intellectual property laws, and that there was no evidence plain packaging would have any impact on smoking rates. It said confidential federal Government documents, some gained under Freedom of Information laws, supported the industry's view.
BATA has also warned that plain packaging would encourage counterfeiters and the trade in illegal tobacco, forcing the industry to dramatically reduce its prices to compete.
BATA chief executive David Crow said the market in illegal tobacco had grown by 150 per cent in the past three years, and that the Australian Crime Commission had linked organised crime to the trade.
"When all cigarette packs look the same and lose their trademarks and distinguishing features, counterfeiters will have a field day mass producing packets to smuggle into Australia," he said. "Does the Government want to see a situation where the tobacco industry is forced to compete on price as their brands have been taken away which in turn causes cheaper and therefore more accessible cigarettes?"
Crow told the Daily Telegraph that the price of the 22 billion cigarettes sold annually in Australia could be cut in half.
He also said that BATA would fight to protect its brands and, if necessary, sue the Government for "billions" in compensation.
Health Minister Nicola Roxon said the Government would not be intimidated by threats of litigation, and that the industry's threat to slash prices showed how desperate it was to fight the new laws.
"Today they are so desperate that they're talking about slashing their own profits in order to hook people onto their products, which they can put the price up for later," she said. "We simply won't let threats of litigation stop us from taking the course of action which we believe will help save lives.
"We're very confident - and we are more confident every day when big tobacco yells and screams and scratches - that this measure will have a big impact and that that's why they're fighting so hard to stop it."
Anti-smoking groups also attacked the industry's threats.
Quit executive director Fiona Sharkie said the scare tactics had been concocted by an industry running scared over a potential loss of profits.
"There's one reason and one reason alone the tobacco industry and BATA are fighting so hard against plain packaging," she said.
"Research shows putting cigarettes in plain packs will reduce the appeal of smoking to young people, reduce deception about the harmfulness of cigarettes and strengthen the impact of graphic health warnings."
Action on Smoking and Health said the industry's latest campaign showed it was desperate to block plain packaging and promoting cigarettes to children.
Chief executive Anne Jones said: "BATA is effectively flexing its muscles against the Government, threatening to engage in a price war to overturn or water down an important health policy that will help save lives by reducing smoking rates."By Greg Ansley Email Greg