The federal government has rubbished a claim by big tobacco that a plan to introduce plain packaging from mid-2012 will result in a cigarette shortage because manufacturers won’t be able to meet the deadline.
British American Tobacco Australia (BATA) says it’s impossible to produce the olive-brown packs devoid of branding by May as required under Labor’s proposal.
Chief executive David Crow told a parliamentary inquiry on Thursday that illegal cigarettes could flood the market as a result.
“If the bill (draft laws) stands … I will be out of stock on July 1,” he said.
“The cigarettes will have to come from China and India - illegal cigarettes would come in and smother the market.”
Under Labor’s plan, manufacturers would have to produce plain packets from May 20 while retailers would be banned from selling any branded stock six weeks later on July 1, 2012.
But BATA - whose brands include Winfield, cigarettes Dunhill and Benson & Hedges - wants until the start of 2013 to make the transition.
Mr Crow said retailers should be able to sell leftover branded stock until 2014.
But the federal health department says that’s nonsense.
“We certainly wouldn’t agree with their claim that they won’t have any product available as of July 1,” assistant secretary Nathan Smyth told the lower house’s health committee.
Fellow official Simon Cotterell said the department didn’t believe big tobacco needed extra time to prepare.
“We’ve heard so many different figures (from manufacturers) we’re not convinced by those figures,” he said.
“(And) we’re not convinced by the statements that new specialised machinery needs to be bought.”
Mr Cotterell said cigarette makers were already aware of the specifications of the new packs and they didn’t have to wait until regulations were finalised in January.
The only things not locked were the exact shade of colour to be used and the dimensions of the packs.
But, the bureaucrat said, almost all existing cigarette packets would be okay size-wise.
“Most of those packs will fall within the dimensions that are (to be) specified.”
Mr Crow on Thursday reiterated that BATA would challenge the plain packaging legislation in the courts on the grounds that it unlawfully acquired the company’s intellectual property rights.
“We’ll defend ourselves,” he said.
“That will no doubt get adjudicated at some later stage by a court. Whether that’s the High Court or the Federal Court it will happen.”
But the health department’s general counsel isn’t scared of a legal stoush.
“We are confident that should proceedings of that kind be taken we would expect to win,” Chris Reid told the parliamentary hearing.
By Julian Drape