The Era of Plain Pack­ag­ing is Com­ing in Thai­land

Thai-American Business (T-AB) Magazine - - Contents - Writ­ten by: Maturos Piy­a­cho­tisukij, Noemie Sancelme, and Mathilde Ta­chon

The lat­est leg­isla­tive de­vel­op­ments in the to­bacco sec­tor in Thai­land are wor­ry­ing the to­bacco in­dus­try but also the food and bev­er­age sec­tors as sim­i­lar reg­u­la­tions may fol­low.

The con­tent of the draft Thai To­bacco Prod­uct Con­trol Act ( TPCA) reg­u­lat­ing the pack­ag­ing and la­bel­ing of to­bacco prod­ucts was first in­tro­duced in 2010 un­der a dif­fer­ent Bill named draft To­bacco Con­sump­tion Con­trol Act ( or TCCA), and high­lights the ever- grow­ing re­stric­tions im­posed on the to­bacco in­dus­try in Thai­land.

The in­creased size of shock- pic­tures and health warn­ing state­ments cov­er­ing the pack­age of cig­a­rettes is one ex­am­ple. Com­pared with its neigh­bors, Thai­land has been lead­ing the way since 2014 with 85% of space cov­er­age ( up from 55% pre­vi­ously).

KEY PRO­VI­SIONS OF THE DRAFT TPCA

The key pro­vi­sions of the draft TPCA are as fol­lows:

• In­crease of the min­i­mum age for the pur­chase of cig­a­rettes to 20 years ( in­stead of 18 years cur­rently) in an at­tempt to re­duce youth smok­ing ( Ar­ti­cle 26);

• Ban of the sale of in­di­vid­ual cig­a­rettes and in a num­ber smaller than 20 for the purpose of lim­it­ing ac­cess to, and dis­cour­ag­ing pur­chase of cig­a­rettes ( Ar­ti­cle 39);

• To­bacco prod­uct sales re­stric­tions, such as pro­hi­bi­tion of cig­a­rette vend­ing ma­chines ( Ar­ti­cle 27);

• Broader def­i­ni­tion of to­bacco prod­ucts to cover any item con­tain­ing nico­tine, in­clud­ing hookahs and elec­tronic cig­a­rettes ( Ar­ti­cle 4);

• Stricter rules on ad­ver­tis­ing of to­bacco prod­ucts, such as pro­hi­bi­tion of the dis­play of the names or marks of to­bacco prod­ucts, or of the man­u­fac­turer or im­porter, on to­bacco prod­ucts or non- to­bacco prod­ucts, and any logo or sym­bol that might cause the pub­lic to un­der­stand that such names or marks are the names or marks of the to­bacco prod­ucts or of the man­u­fac­turer or im­porter, pro­hi­bi­tion of spon­sor­ship and mer­chan­dis­ing as forms of in­di­rect ad­ver­tise­ment ( Ar­ti­cles 30- 36);

• Obli­ga­tion for man­u­fac­tur­ers to dis­close all in­gre­di­ents in to­bacco prod­ucts to the Min­istry of Pub­lic Health ( MOPH) for the purpose of ob­tain­ing the Cer­tifi­cate of No­ti­fi­ca­tion of the list of com­po­nents of to­bacco prod­ucts, a nec­es­sary doc­u­ment for the sale of to­bacco prod­ucts in Thai­land ( Ar­ti­cle 37). Since the list would be pub­lished, this dis­clo­sure re­quire­ment would jeop­ar­dize trade se­cret pro­tec­tion that may be granted to the com­po­si­tion of to­bacco prod­ucts ( one con­di­tion of the pro­tec­tion be­ing to re­main se­cret);

• Obli­ga­tion for man­u­fac­tur­ers and im­porters to dis­close the volumes of pro­duced and im­ported to­bacco prod­ucts, mar­ket­ing costs and in­comes gen­er­ated from the sale of to­bacco prod­ucts in Thai­land and any other rel­e­vant in­for­ma­tion ( Ar­ti­cle 40);

• Open door to the in­tro­duc­tion of plain pack­ag­ing for cig­a­rettes by al­low­ing the MOPH to im­pose the cri­te­ria and fea­tures of to­bacco prod­ucts’ pack­ag­ing ( size, color, sym­bol, label, trade­mark, pic­tures and mes­sages ( Ar­ti­cle 38 - the ini­tial dis­puted pro­vi­sion stat­ing that “The law on in­tel­lec­tual prop­erty shall not ap­ply to the dis­play of the Pack­age un­der this Sec­tion” has been deleted). “Plain pack­ag­ing” – also known as ho­moge­nous, generic or stan­dard­ized pack­ag­ing - refers to the ap­pear­ance of all to­bacco pack­ages in a stan­dard­ized man­ner: the cig­a­rette pack­ag­ing is a sin­gle color and the brand name is re­pro­duced in a stan­dard font, size and lo­ca­tion.

PUB­LIC HEALTH VS. PRI­VATE RIGHTS: THE BAT­TLE OF THE GI­ANTS

The Thai Min­istry of Pub­lic Health is de­fend­ing the new text in the name of pub­lic health.

For the to­bacco in­dus­try, this new law ( and plain pack­ag­ing laws in gen­eral) is vi­o­lat­ing in­tel­lec­tual prop­erty rights and in­ter­na­tional treaties, en­cour­ag­ing il­licit trade and mak­ing it dif­fi­cult for con­sumers to identify the prod­uct’s gen­uine source.

The Thai Min­istry of Com­merce is try­ing to con­cil­i­ate the in­ter­ests of both sides; while aim­ing to dis­cour­age and help con­sumers quit smok­ing, the new Bill should not af­fect the rights of the trade­mark own­ers and trade se­crets as pro­tected un­der the Thai Trade­mark and Trade Se­cret Acts and should com­ply with the in­ter­na­tional agree­ments re­gard­ing trade and in­tel­lec­tual prop­erty.

These con­cerns are shared by some World Trade Or­ga­ni­za­tion ( WTO) mem­bers such as Mex­ico, Hon­duras, the Euro­pean Union, China, the United States of Amer­ica and Brazil, which raised a se­ries of ques­tions to the Thai rep­re­sen­ta­tives dur­ing the last WTO’S Trade Pol­icy Re­view in Novem­ber 2015. When asked how they will en­sure a fair com­pe­ti­tion en­vi­ron­ment for the sale of to­bacco prod­ucts, what would be the im­pact on trade­marks cur­rently used on to­bacco prod­ucts or whether sim­i­lar plain pack­ag­ing reg­u­la­tions will be ex­tended to al­co­holic bev­er­ages, Thai­land reaf­firmed its com­mit­ment to the WTO Agree­ment on Trade- Re­lated As­pects of In­tel­lec­tual Prop­erty Rights and pub­lic health pol­icy.

CUR­RENT LEG­ISLA­TIVE PROCESS: 2017, THE TURN­ING POINT FOR PLAIN PACK­AG­ING IN THAI­LAND?

The TPCA was ap­proved by the Na­tional Leg­isla­tive As­sem­bly on March 3, 2017 and pub­lished in the Gov­ern­ment Gazette on April 5, 2017, mak­ing it ef­fec­tive start­ing July 4, 2017.

The WTO rul­ing in the dis­putes re­lat­ing to Aus­tralia’s to­bacco plain pack­ag­ing mea­sure has been post­poned till May 2017. A decision in fa­vor of the Aus­tralian gov­ern­ment will likely pave the road for sim­i­lar reg­u­la­tions in Thai­land. To date, plain pack­ag­ing is ef­fec­tive in the United King­dom since May 2016 and in France since Jan­uary 1, 2017 for re­tail­ers ( man­u­fac­tur­ers had to com­ply by May 2016).

THE SUGAR IN­DUS­TRY ALSO UN­DER SCRU­TINY: WHO’S NEXT?

To­bacco is only the start. The gen­eral health of the pub­lic seems to be a top pri­or­ity for the gov­ern­ment which is also tar­get­ing the sugar in­dus­try.

In an at­tempt to ad­dress the ris­ing obe­sity in the King­dom and to en­cour­age man­u­fac­tur­ers to lower the sugar con­tent of their prod­ucts, soft drinks with high sugar con­tent will be sub­ject to a higher tax than less- sweet prod­ucts. The new Ex­cise Act BE 2560, no­tably ap­pli­ca­ble to non- al­co­holic bev­er­ages or bev­er­ages with not more than 5% al­co­hol, pub­lished on March 20, 2017 in the Of­fi­cial Gazette, will be ef­fec­tive from Septem­ber 16, 2017 on­wards. Cur­rently, drinks ( in­clud­ing most car­bon­ated drinks, fruit juices and en­ergy drinks) are sub­ject to a 20- 25% ex­cise tax. The re­vised Act pro­vides two types of max­i­mum tax rates: ( 1) a value- based rate with a max­i­mum tax of 30% based on the value of bev­er­ages and ( 2) a vol­ume- based rate with a max­i­mum tax of Baht 20 per liter. The de­tails ( such as the list of drinks con­cerned, sugar amount and as­so­ci­ated rates) should be avail­able in the Min­is­te­rial Reg­u­la­tions ex­pected in Septem­ber 2017. It has yet to be con­firmed in the Min­is­te­rial Reg­u­la­tions whether there will be a tran­si­tion pe­riod to al­low sug­ary- soft drink pro­duc­ers to adjust to, and com­ply with, the new re­quire­ments.

With to­bacco likely to be re­vamped with plain pack­ag­ing and sug­ary soft drinks get­ting a tax hike, junk food and al­co­hol may be next to re­ceive sim­i­lar treat­ments.

Maturos Piy­a­cho­tisukij is Head of Patent De­part­ment, Noemie Sancelme is Co­or­di­na­tor/ Man­ager of Over­seas De­part­ment, and Mathilde Ta­chon is Con­sul­tant at Vi­don & Part­ners. They can be con­tacted at vi­don­bangkok@ vi­don. com.

Thai­land’s cur­rent cig­a­rette pack­ag­ing and a mock- up pro­posed plain pack­ag­ing

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