[Intl-tobacco] Japan Tobacco To Launch Mild Seven In Netherlands

[Robert Weissman]

Here comes a tobacco-trade dispute.

-- 
Robert Weissman	<rob@essential.org>
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Japan Tobacco To Launch Mild Seven In Netherlands -Source
by MATTHEW NEWMAN / Of DOW JONES NEWSWIRES
Source: The Wall Street Journal Interactive Edition, Friday, 6/15/01

BRUSSELS -- Japan Tobacco Inc. (J.JTB) plans to launch its "Mild Seven"
brand in the Netherlands this Monday, despite an E.U. law that will ban
the descriptions of "light" and "mild" in cigarette brand names, a source
close to the company said Friday.

Japan Tobacco wants to start selling the brand even though European
legislation to ban companies' use of the word "mild" in their brands will
take effect from September 2003.

The source said Japan Tobacco is eager to take advantage of its investment
to launch the brand.

In 1999, Japan Tobacco paid $8 billion for the international tobacco
business of RJR Nabisco Holdings Corp., part of the arrangement in which
the RJR cigarette business was spun off from the foods business.

Japan Tobacco wanted RJR's marking and distribution network as a vehicle
to boost its sales in the U.S. of Mild Seven, the No. 2 selling brand in
the world after Philip Morris Inc.'s (MO) Marlboro.

The source said Japan Tobacco plans to launch Mild Seven in other E.U.
countries in the coming years.

Another source close to the company said Japan Tobacco has already started
procedures at the World Trade Organization to defend its trademark.

The company believes the E.U. legislation violates intellectual property
rights because Mild Seven is a registered trademark. Japan Tobacco has
asked the E.U.  to justify how banning the word "mild" in cigarettes
contributes to improved health, the source said.

However, Japan Tobacco still hasn't decided whether to ask for WTO
consultations with the E.U. regarding the law's possible violation of the
WTO's accord on trade-related intellectual property (TRIPS).

It's unclear when a TRIPS case could launched, but for now Japan Tobacco
is trying to build a case that the E.U. law is a technical barrier to
trade.

Japan Tobacco's other legal route is to challenge the law at the European
Court of First Instance, the source said.

The company's strategy is to focus on the specific problem in the E.U. law
that bans companies from using their trademark brand names rather than
attacking the entire law.

"It would be better to give the E.U. some wiggle room and to allow them to
put in a grandfather clause that allows the use of trademarks," the source
said.

Company Web site: http://www.jti.com

-By Matthew Newman, Dow Jones Newswires; 322-285-0133;
matthew.newman@dowjones.com

-0- 15/06/01 10-19G

URL for this Article:
http://interactive.wsj.com/archive/retrieve.cgi?id=DI-CO-20010615-001733.djm