Intended for healthcare professionals


Tobacco giant loses legal action over Uruguay’s tobacco packaging rules

BMJ 2016; 354 doi: (Published 11 July 2016) Cite this as: BMJ 2016;354:i3850
  1. Ingrid Torjesen
  1. London

International tobacco company Philip Morris has lost its legal challenge against Uruguay’s tobacco packaging rules, which it argued violated its trade rights under investment agreements between Uruguay and Switzerland.

Philip Morris, which has its headquarters in Switzerland, first brought its case in 2010, claiming $25m (£19.3m; €22.6m) in damages over laws enacted in Uruguay in 2006 that banned tobacco advertising and smoking in public. Under Uruguay’s regulations, health warnings must cover 80% of the main surface of tobacco packages, and tobacco companies are limited to one unique package for each cigarette brand.

The World Bank’s International Centre for Settlement of Investment Disputes said that the measures applied by the government of Uruguay to reduce tobacco consumption did not violate Philip Morris’s trade rights as established in investment agreements between Uruguay and Switzerland.

Marc Firestone, international senior vice president and general counsel of Philip Morris, said, “For the last seven years, we have already been complying with the regulations at issue in the case, so today’s outcome doesn’t change the status quo. We’ve never questioned Uruguay’s authority to protect public health, and this case wasn’t about broad issues of tobacco policy. The arbitration concerned an important, but unusual, set of facts that called for clarification under international law, which the parties have now received. We thank the tribunal for its assessment and respect its decision.” He added, “With this case now over, PMI [Philip Morris International] is no longer a party to any investment protection claims.”

In 2015 Philip Morris lost a four year legal struggle to overturn legislation in Australia requiring standardised packaging for cigarettes. In May 2016 tobacco companies failed to block European Tobacco Directive 2014, which states that health warnings must cover 65% of the front and back of a cigarette package sold in the single market.1 The United Kingdom and France imposed standard packaging soon after, with retailers in both countries given months to sell existing branded cigarette stocks. Norway and New Zealand planned to follow suit.