The Scottish Government is likely to be faced with substantial compensation claims for depriving tobacco companies of their intellectual property if they implement plain packaging for tobacco products according to a former Advocate General for Scotland.
The Rt Hon Lord Davidson of Glen Clova QC has produced a legal opinion which stipulates that plain packaging is likely to be seen as a deprivation of property under Article 1 of Protocol 1 of the European Convention of Human Rights (ECHR), and likewise under Article 17 of the EU Charter.
As highlighted in the Scotsman newspaper, the Scottish Government could have to pay up to £500m in compensation if they legislate for plain packaging for tobacco products.
The Scottish Wholesale Association (SWA) says the legal and economic implications highlighted by one of Scotland’s most distinguished legal minds should not be disregarded by the Scottish Government.
“The fact that taxpayers will have to pay approximately £500m in compensation to tobacco companies should cause the Scottish Government to reassess their plans for plain packaging.
The news of this substantial compensation figure comes on top of the findings of KPMG’s recent study in Australia which showed the illicit tobacco market had increased to record levels following the introduction of plain packaging – costing the government AUD$1bn in lost excise revenue – whilst having no impact on smoking consumption.
Wholesalers and retailers in Scotland are already disproportionately affected by public health legislation. Yet emerging evidence from Australia has also underlined the negative economic consequences for small retailers, a scenario likely to be replicated here should the Scottish Government implement plain packaging.
In precarious economic circumstances and when budgets are under pressure, Scottish taxpayers will be concerned at paying £500m for a policy that has been shown to benefit criminals and counterfeiters at the expense of the government and legitimate retailers, especially as the public health case has been found wanting.
Australia remains the only place where evidence of this policy can be judged. We therefore urge the Scottish Government to await the findings of the Australian Government’s post-implementation review of plain packaging rather than rushing to legislate.”