The European Commission has proposed a bill that will mean graphic visual and written warnings will take up 75 percent of the surface of all cigarette packaging, leaving 25 percent for the brand. The bill has been proposed after a hectic two years of discussion marked by heavy industry lobbying and the resignation of an EU health commissioner over cash-for-influence allegations.
In a statement that set out the plans, Tonio Borg, Health Commissioner, said: “The figures speak for themselves: tobacco kills half of its users and is highly addictive."
The plans are also intended to ban slim cigarettes and flavourings such as menthol.
"Consumers must not be cheated. Tobacco products should look and taste like tobacco products, and this proposal ensures that attractive packaging and flavorings are not used as a marketing strategy," said Borg.
The new law would be a drastic change from current legislation, where health warnings must cover only 30 percent of the packaging.
Australia adopted an even more thorough policy earlier this month, demanding that cigarettes are sold in completely plain packaging. Although European governments won’t be able to go that far, they will be able to ban all branding if justified on public health grounds.
The EU governments and lawmakers are expected to take a further two years finalising and potentially toughening the laws. The industry is expected to redouble their efforts to weaken the plans over this period.
Monika Kosinska of the European Public Health Alliance said: “We're hopeful that we can still get the mandatory introduction of plain packaging across the European Union, despite the fierce lobbying that awaits from the tobacco industry.”
Companies such as Imperial Tobacco Group PLC (LON:IMT) and Philip Morris International Inc. (NYSE:PM) fear that tougher EU restrictions will lead to high growth markets such as Asia and Africa adopting similar policies.
However, Morgan Stanley (NYSE:MS) said that it did not expect the rules to have an impact on sales or profitability for the industry, saying: “We take some relief that the (worst) case - mandatory plain packaging - wasn't proposed.”
British American Tobacco plc (LON:BATS)'s shares fell by three percent since the EU proposals were announced on Monday.
Australia’s own cigarette packaging laws came into effect less than two weeks ago. The rules stipulate that all cigarettes are sold in the same olive-green packs with graphic health warnings and slogans printed on the packaging. Some have stated that Australia's new laws are among the strictest on Tobacco in the world.