Tobacco giants threaten to slash cigarette price over Australia's plain packaging plans

At the launch of a multi-million dollar campaign against the government's proposals, British and American Tobacco Australia (BATA) said more people would end up smoking if plain packaging was introduced.
BATA warned that uniform packets would make illegal imported cigarettes made in China and Indonesia and known as "chop chop" easier to disguise and would eventually force prices down sharply as tobacco companies tried to compete.
Last month, Australia unveiled the world's toughest laws on tobacco promotion that would see cigarettes sold in ugly olive-green packets plastered with graphic health warnings. Under the plan, due to take effect next year, all logos would be removed and replaced with the brand name in a small, specific font.
But BATA has vowed to fight the move, warning that it will backfire and spark a boom in black market tobacco.
"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," David Crow, BATA's chief executive said.
BATA owns brands such as Dunhill, Benson and Hedges and Winfield.
"Could (the price of) cigarettes halve over time? In the longer term, potentially yes," he told the Herald Sun newspaper, saying the cheap prices "basically means more people will smoke, more kids will smoke".
Mr Crow said there was no evidence that plain packaging would reduce smoking and BATA has claimed that the new legislation would infringe international trademark and intellectual property laws.
But Nicola Roxon, the health minister, said she was prepared for a fight and said that excise could easily be raised if cigarette prices fall.
"I think we are in an extraordinary position where they say they want to protect their brands and profits but then they say they will slash prices to get people hooked onto smoking," she said.
Statistics from the government show that each year 15,000 Australians die of smoking-related diseases and that tobacco use costs the country Aus$31.5 billion annually in healthcare and lost productivity.
Although Australia would be the first country to mandate plain packaging for cigarettes, New Zealand, Canada and Britain have considered a similar policy.