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EDITORIAL: Branded smokes

Free-market capitalism finds a surprising and unexpected defense

- - Friday, June 20, 2014

The latest restriction dear to the hearts of nanny states is a ban of attractive packaging for cigarettes. Instead of colorful logos and trademarks that differentiate brands, every pack of cigarettes must look alike, with the same prominent government warning.

This idea, known as "plain packaging," was first implemented two years ago when Australia eliminated "branding" on all tobacco products. Everything from the red roof on Marlboros to the yellow rings around Cohibas vanished, part of the country's "experiment" to reduce smoking.

Cigarettes sold by the tobacco companies increased during the first year of the regulation, reversing what had been a four-year decline, as the black market prospered. Smokers Down Under don't cotton to the dreary packaging, and they prefer their Marlboros, Dunhills and Kents in their familiar full regalia. Like an '80s Soviet teenager craving a pair of Levi's, Australian smokers want smuggled cigarettes with the old branding, and sales increased by more than 150 percent.

Both Ireland and England regard the Australian experiment as a success and threaten to impose plain packaging. It's probably a matter of time until no-branding arrives in America and is applied to more than just cigarettes.

The world's trademark lawyers gathered the other day in Hong Kong for their annual conference and talked a lot about how "both the U.S. and the EU could follow Australia's lead" in enacting branding restrictions for alcohol, pharmaceuticals, tobacco and food. In her latest scary documentary, this one called "Fed Up," Katie Couric urges surgeon general-like warning labels on food.

The Philippines leads the way on this. Manila has stripped branding from baby formula, saying it dissuades new mothers from breast feeding. Chile proposes mandatory health warnings on fast food and some legislators in Thailand propose warning labels with graphic images on alcohol.

One nation standing up for the trademarks is an unlikely defender of capitalism and the free market. Cuba has spent decades cultivating a market for premium-branded cigars, and now comes Australia to "commoditize" its famous cigars, tossing Montecristos, Cohibas and Hoyo de Monterreys into the bin with discount stogies. With just the thought of the United Kingdom and Ireland following, Cuba calls those sometime stalwarts of the free market "anti-capitalist" and a "threat to free trade."

The communist island is leading a group of aggrieved countries, including the Dominican Republic, Honduras, Indonesia and Ukraine, to challenge the Australian law before the World Trade Organization. The global trade body's final decision on tobacco packaging could have broader impact on consumer goods ranging from Big Macs and Big Gulps to cigars, wine and Scotch — just the pleasures and indulgences that the nannies lust to regulate.

The world is truly turned upside down when the likes of Canberra, Dublin, Westminster and Washington need a lesson in capitalism from mentors in Havana. But experience is a good teacher for everyone.