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Phillip Morris, Norway's Goliath

Posted on April 4, 2010 at 6:01 AM

Subject:  The company that makes Marlboro cigarettes has decided to sue Norway

Take:  I hope they will lose this fight - for all the right reasons. 

My information comes from the short article published to date in Norway's major paper, unfortunately only in Norwegian, in March (http://www.aftenposten.no/okonomi/innland/article3555869.ece).  I'll do the translating as well as the editorializing.


A bit of background:  A few months ago, the cigarette racks at the groceries, which are usually situated just behind or just to the right hand of the cashier, were covered over with small metal covers so that each set of rows was covered by a fold-up/fold-down lid.  This prevents you from seeing the stacked ends of the cigarette packs.  Over here in Norway, those include a lot of Prince packs, Camels, Pall Malls, and then Dunhill, and a few others including Marlboros.  As a result, when you get to the check-out and want to ask for your pack, you can't see them, you just ask, and the cashier gets the pack out and rings it up.  The system uses coupons, too, which you carry to the cashier, where they are validated. Anyway, if you want a pack of cigarettes and you're old enough, you can buy them . . instead of, based on their unbelievable cost here, a car after two years (which also has an unbelievable cost, but which you could afford if, instead of smoking a pack a day, you saved that money).  Background over.


From the beginning of this calendar year, it was forbidden to show tobacco products on the shelves in Norwegian kiosks (small groceries, other small stores) and larger stores. According to the Purchasers Association, it has cost Norwegian businesses a huge amount of money to implement this ban.  The goal is to protect the average customer from being exposed to seeing tobacco products.  The Norwegian government's ambition is to reduce the number of persons smoking, since smoking is dangerous. 


Phillip Morris responds that there is no scientific proof showing that such a visual prohibition has a health effect.  Of course, they've put a woman on the case, Anne Edwards.  Iceland has had a similar system since 2001, she argues, and there's still no proof that it improves health.  Phillip Morris took their case to the Oslo courts in March, claiming that it was a prohibition that worked against natural competition, and against economic freedom.


Several other European countries have a similar prohibition, and it's thought this case could lead to a slew of such cases being filed and fought for in various countries.  There has also been the suggestion that the Oslo court could refer the case directly to the EFTA court (European Free Trade Agreement court). The EFTA Court fulfills the judicial function within the EFTA system with regards to those states who embraced the '4 freedoms' (Free movement of workers, free trade, etc etc), and who are not EU nations: that includes Iceland, Lichtenstein and Norway.


Norway's director of public health said, (in Norwegian), "This shows that we are on the right track. If Phillip Morris really believes that the prohibition doesn't reduce tobacco usage, then they wouldn't be troubled by this law. In contrast, I think their case filing is a sign that the prohibition will reduce tobacco usage over time." Love it, Bjørn-Inge Larsen!


Sold by Phillip Morris worldwide in CY2008: for 150 billion NOK

Income of operations worldwide in CY2008: 60 billion NOK. Sales figures were not available for Norway alone. However, consider that Norway has a rather small population, 4.8 million.  Norway's gross domestic product (purchasing power parity) in CY 2008 was 279.6 billion U.S. dollars, or 1,621 billion NOK.  Per capita, this makes Norway one of the 'richest' countries in the world, at $60,200 per capita in CY 2008, but also one most impacted per capita by marketing and advertising campaigns. In general, Phillip Morris's overall sales and profitability continue to climb dramatically worldwide.


The World Health Organization has set up a body whose goal is to encourage the consistent regulation of tobacco products. Ideally, they discourage the use of tobacco products altogether.  The Framework Convention on Tobacco Control (FCTC) is the first international public health treaty on tobacco.  One of the FCTC's suggested approaches is to restrict the public display of tobacco products.


Who is the David?  Norway.  Who is the Goliath?  We know who.  


Norway needs to win this fight - for all the right reasons.  What are the reasons Norway would lose?  The restriction of competition in the marketplace is limited, generally - in order to foster economic activity and the free trade of goods.  The problem is that tobacco products are not 'good' goods.  What are the reasons Phillip Morris should lose?  The government has the right to regulate for the protection of the health, safety and welfare of its people.  Hiding cigarettes, even if 'out-of-sight means 'out-of-mind', is precisely what the government should have the right to do. 


With tobacco a continuing scourge to all who have contact with it, ruining lives, families, health care systems, estates, and the future for generations of young people the world over, I hope - at the very least -  that such products will remain covered in Norway.  That is at least a stand in the continuing and spreading battle to rid the world of the debilitating deadly economy of tobacco.

Categories: Law Stuff, International Miscellaneous, Political Jargon