Farmers mad at Australian smoking law

Korea’s tobacco farmers are planning to hold a rally protesting the Australian government’s moves to reduce the country’s cigarette market.

The farmers claim the action limits Korean exports unfairly as the countries discuss a free trade agreement.

The Korea Tobacco Growers Cooperative Association, KTGCA, demanded yesterday that Australian Prime Minister Julia Gillard, who will be arriving today to discuss a possible free trade agreement, withdraw proposed plain packaging regulations.

On April 7, the Australian government released a draft of a “plain tobacco packaging” bill that calls for the removal of branding, including trademarks and logos, from cigarette packs.

The bill was first proposed in 2009 and the law, if passed, is supposed to go into effect in July 2012.

The antismoking bill is being keenly watched by tobacco companies and other governments.

“The use of trademarks is the most fundamental part of commercial business, which enables consumers to recognize the product they want, and the right to trademark has been protected by international agreements and treaties,” the association said in a statement. “By restricting the use of trademarks, the plain packaging policy deprives tobacco products produced in Korea of an opportunity to enter and compete in the Australian market, therefore, cutting out the possibilities of exporting tobacco produced in Korea to the country.”

Korea’s only tobacco company, KT&G, isn’t big in the Australian market. It exports only about $1 million of products to Australia every year.

Even so, KT&G said the new regulations could not only create trade disputes but also infringe on private companies’ intellectual property rights.

“KT&G has been expanding mostly in Southeast Asia, the Middle East and Central Asia, including Turkey, Iran and Russia, but we have a department devoted to studying possibilities in other countries, including Australia,” a KT&G official said.

The official said that for a company trying to enter a new market already dominated by global companies such as Philip Morris, limiting package design completely blocks its chances of selling in the market.

Korean tobacco farmers said that a comprehensive ban on tobacco advertising already in place in Australia has made it difficult for new brands to enter the new market, and the additional antismoking measures will make things worse.

The farmers said raising entry barriers is unfair especially when lots of Australian products are expected to flood the Korean market if the two countries negotiate a free trade pact.

Australia is the third-largest exporter of agricultural and livestock products to Korea following the U.S. and China.

By Lee Ho-jeong, ojlee82@joongang.co.kr

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