Philip Morris has launched legal proceedings against the Australian government for its plans to remove all company logos and branding from cigarette packets and replace them with colour pictures of the consequences of smoking.
The cigarette manufacturer is claiming the government's plans will breach a bilateral trade treaty between Australia and Hong Kong, where the owner of Australian affiliate Philip Morris Ltd, Philip Morris Asia Ltd, is based.
The company is the first of the tobacco companies that have threatened legal action to file a notice of claim. It is arguing that the ban on logos will severely diminish the value of its trademark, which is property belonging to the company and is protected by the treaty.
Anne Edwards, spokeswoman for Philip Morris, said: "Our brands are really one of the absolute key valuable assets that we have as a company. It's what helps us compete; it's what enables us to distinguish our products.
"This move ... would essentially amount to confiscation of our brand in Australia."
The Australian government believes the proposals will put smokers off from buying cigarettes when they are confronted by gruesome pictures of mouth cancer and images of sick children who have been affected by passive smoking.
The proposals will be introduced into Parliament in July 2011, and a six-month phase in is due to begin from June 2012.
The Government maintains that the plans do not break any laws. The Australian Prime Minister said: "We are not going to be intimidated by big tobacco's tactics".
A three-month period of negotiation between the parties has now begun.
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