[Intl-tobacco] Australia: Comm'n to ask tob co.'s to admit deceit

[robert weissman]

Tobacco giants in mild war of words
The Age (Melbourne)

By Phillip Hudson
Political Correspondent
Canberra
August 29, 2004

The Australian Competition and Consumer Commission wants tobacco
companies to run advertisements admitting they may have misled and
deceived smokers by using the words mild and light on cigarette packets.

ACCC chairman Graeme Samuel recently met with tobacco executives and
asked them to pay for a community education campaign about the harmful
effects of smoking, and to stop using by year's end the terms light and
mild.

The tobacco companies said they did not want to make the change until
early 2006, when they will be forced to put new graphic health warnings
on packaging, a delay Mr Samuel said was unacceptable.

Mr Samuel will also decide in the next few weeks whether the ACCC will
launch legal action against cigarette makers for alleged past deceptive
and misleading conduct over the issue - potentially starting one of the
biggest compensation cases in Australian history.

He said preliminary legal advice "suggests that there is a possible case
that they are misleading and deceptive", but he was waiting for further
advice.

The ACCC has seized 97 boxes of documents from tobacco companies and
began examining millions of pages from United States court actions to
see if there is any relevance to Australia.

Victorian Democrats Senator Lyn Allison raised concern that the ACCC
might be "negotiating" with the tobacco companies over the issue and
said the regulator should proceed with the court case and immediately
take action to stop the use of the words light and mild on cigarette
packets.

"It has been established in the United States there is no credible
argument against the fact that so-named mild and light cigarettes are
any more milder, or lighter, or any less harmful than any other
cigarette," she said.

Tobacco companies insist there is a difference in relation to the
cigarette paper, the filter and the manufacturing process. They say
smokers can tell the difference in taste, and deny they have misled
consumers. They also say governments around the world encouraged them in
the 1980s to create these products.

Mr Samuel revealed his plans, and the detail of his meeting with the
cigarette companies, in previously unreported evidence to a Senate
inquiry in mid-August, under questioning from Senator Allison. He told
the Senate the ACCC wanted "corrective advertising that advertised to
consumers that the descriptors light and mild were inappropriate and may
have misled and deceived".

The tobacco industry responded by stating it would discuss correcting
any "misunderstanding" in the community, but it did not believe it had
misled or deceived smokers and would not apologise.

Mr Samuel said the chiefs of British American Tobacco, Philip Morris and
Imperial Tobacco had "all agreed in one form or another that, at a point
in time, the light and mild descriptors on cigarette packets need to be
modified and or removed".

Tobacco companies said there were time delays and costs caused by having
to print new packaging, and the ACCC and the Government had been unable
to tell them what words should replace light and mild.

Australia's biggest cigarette company, British American Tobacco, which
has 45 per cent of the market and makes brands such as Winfield,
Dunhill, Benson & Hedges and Holiday, said it had co-operated fully with
various government and ACCC investigations.

The company's corporate and regulatory affairs director, John Galligan,
said it was happy to discuss how its products were described.

"At all times we maintain our company has not done anything
inappropriate with respect to the way we market or describe our
products," he said. "Many consumers rely on product descriptions to
distinguish between different tobacco brands and different variants
within the same brands."

ACCC chief executive David Cassidy told the Senate that if legal action
was started, the ACCC would need funding of "tens of millions" of
dollars. It is believed some in the Government do not want the ACCC to
run the case and would prefer it be left to plaintiff lawyers.

Senator Allison said she feared the Government would not give the ACCC
the funds, and had raised the issue with Treasurer Peter Costello on
September 9 last year.

"I had a discussion with the Treasurer, who said, 'You can't be serious
about suggesting that this Government would want to put out of business
the tobacco industry,' " she said.

A spokesman for Mr Costello said the Government had increased
substantially the ACCC's budget to deal with its increased workload. He
rejected suggestions that the Government directed ACCC prosecutions.

"The ACCC is empowered to prosecute any breach of the law," the
spokesman said.