Digest No. 2120
|Date of Introduction:||17 December 2013|
|Select Committee:||As at 15 January, 1st Reading not held.|
|Published: 15 January 2014by John McSoriley BA LL.B, BarristerLegislative AnalystP: (04) 817-9626 (Ext. 9626)||Caution: This Digest was prepared to assist consideration of the Bill by members of Parliament. It has no official status.Although every effort has been made to ensure accuracy, it should not be taken as a complete or authoritative guide to the Bill. Other sources should be consulted to determine the subsequent official status of the Bill.|
The main aim of this Bill is to introduce a plain packaging regime for tobacco products.
In a recent media release, Associate Minister of Health Hon Tariana Turia announced that this Bill was designed to remove “tobacco company colours, logos and other marketing ploys designed to make tobacco products glamorous and attractive” and that it “is an important step in reducing the uptake of smoking” and a “really important step on our path to being a Smoke-free country by 2025”. She said that “plain packaging, together with bigger health warnings, will send a clear message that tobacco causes serious illness and death”.
She pointed out that Australia’s plain packaging regime had prompted “World Trade Organization (WTO) challenges against it by five countries (Ukraine, Honduras, Dominican Republic, Cuba and Indonesia) and that the New Zealand Government would “continue to watch … [the] progress [of those actions] closely.” She said that: “Internationally agreed guidelines for implementing the UN Tobacco Treaty recommend that countries consider plain packaging as part of their comprehensive tobacco control programmes. Australia has shown the way, and New Zealand will follow. Ireland has recently approved its draft plain packaging legislation for consultation, and the United Kingdom has also announced it will put regulatory powers in place so that it is able to proceed with plain packaging after it completes an independent review due to report back in March 2014.” 
Departmental disclosure statement: http://legislation.govt.nz/disclosure.aspx?type=bill&subtype=government&year=2013&no=186&
Regulatory impact statement: http://www.treasury.govt.nz/publications/informationreleases/ris
The purpose of Part 2 of the Act (“Control of smoking products”) is, amongst other things, to reduce the social approval of tobacco use, particularly among young people, by
- imposing controls on the marketing, advertising, or promotion of tobacco products and their association through sponsorship with other products and events; and
- requiring health messages and other information to be displayed on, or included with, packages containing tobacco products, and on automatic vending machines; and
- prohibiting the sale of toy tobacco products to people younger than 18 years (Section 21(a) of the Act).
The Bill adds a new additional purpose which is to require standardised tobacco products and plain packages (including messages and information) for tobacco products in order to:
reduce the appeal of smoking and tobacco products, particularly for young people; and
further reduce any social acceptance and approval of smoking and tobacco products; and
make warning messages and images more noticeable and effective; and
reduce the likelihood of consumers acquiring false perceptions about the harmful effects of tobacco products (Part 1, Clause 6, amending Section 21 by inserting new paragraph (aa)).
Use of trade marks
The Act, in general terms, limits the use of a tobacco product trade mark on “any article” other than a tobacco product or a container in which a tobacco product is sold or shipped.
The Bill replaces the term “any article” where it occurs in this provision with the term “non-tobacco product” which is defined as “a tobacco product … or … a package or container in which a tobacco product is sold or shipped” (Part 1, Clause 7, amending Section 24).
The intention of the amendment is to “remove any suggestion that a trade mark may be used on a tobacco product, package, or container”.” 
Sale of loose cigarettes and loose tobacco prohibited
The Bill repeals the provision which allows loose cigarettes (in amounts of at least 20 cigarettes) and loose tobacco (in weight of at least 30 grams) and provides that a tobacco product must comply with regulations and, if sold or offered for sale, must be contained in a package and must be packaged in a quantity that complies with regulations (Part 1, Clause 9, repealing Section 30A; Clause 10 inserting New Section 31A, new subsection (1)).
Plain packaging of tobacco products
The Bill provides that the package for a tobacco product must comply with the labelling and health messages provisions of the Bill (described below). Other than part of the package that is wrapping or lining, the package may display the brand or company name for the product, but only in accordance with regulations and the package must comply with regulations “in all respects” (Part 1, Clause 10, inserting New Section 31A, subclause (2)).
Labelling of, and health messages on, tobacco products and herbal smoking products
The Bill amends the existing law relating to labelling and health messages introducing the following differences:
- the new provision relates to tobacco products generally and not just to their sale;
- the message which at present relates simply to the “effects of [the tobacco product’s] use on health” is expanded to require a message relating to both:
- the harmful health, social, or economic effects, or other harmful effects, of using the product;
- the beneficial effects of stopping the use of the product or of not using the product.
This same requirement is applied to pictures, and information that can be required on packages. Similar amendments are made in relation to herbal smoking products (Part 1, Clause 11, amending Section 32; Clause 12, amending Section 32AA).
Offences and penalties
The Bill increases the penalties in respect of the following :
- a person who, without reasonable excuse, publishing any advertisement for a tobacco product in contravention of Section 22 (“Advertising of tobacco products”) ;
- a person who, without reasonable excuse, uses any trade mark or company name in contravention of Section 24 (1)-(2) (“Use of trade marks, etc., on goods other than tobacco products, or in relation to sponsored events”), or who distributes, sells, or offers or exposes for sale any article in contravention of subsection (3) of that section;
- a manufacturer, importer, distributor, or retailer of tobacco products who, in contravention of Section 25 (“Sponsoring activity involving use of trade mark, etc., of tobacco products”), sponsors (within the meaning of Section 25(2)) an organised activity;
- a manufacturer, importer, distributor, or retailer of tobacco products who, in contravention of section 25A(“Sponsoring activity involving exclusive supply arrangement”), sponsors (within the meaning of Section 25(2)) any organised activity
The maximum fine for a manufacturer, an importer, or a distributor is increased from $50,000 to $600,000, for a “large retailer” from $10,000 to $200,000, and for any other person from $10,000 to $50,000).
The Bill provides a definition of the new term “large retailer” which reads: “in relation to a person that is alleged to have committed an offence in a certain accounting period, means a retailer whose total turnover in the prior accounting period exceeded $50 million (as accounting period and turnover are defined by section 2(1) of the Commerce Act 1986, except that in those definitions body corporate is to be read as any retailer)” (Part 1, Clause 13, amending Section 36).
New offence in respect of plain packaging of tobacco products
The Bill provides that an offence is committed by:
- a person who manufactures, distributes, sells, offers for sale, or otherwise supplies a tobacco product knowing that the product contravenes New Section 31A(1) (i.e. breaching the plain packaging regulations and sold or offered for sale unpackaged or in illegal quantities – see above); or
- a person who distributes, sells, offers for sale, or otherwise supplies a tobacco product in a package knowing that the package contravenes New Section 31A(2) (i.e. contrary to the plain packaging regulations); or
- a person who does the following knowing that a package for a tobacco product contravenes New Section 31A(2) (i.e. contrary to the plain packaging regulations):
- manufactures, distributes, sells, offers for sale, or otherwise supplies the package; or
- packages, or arranges for the packaging of, a tobacco product in the package.
The maximum penalties are as described above in respect of other offences and detailed above. The Bill provides for a presumption that a defendant (who is not a manufacturer, an importer, or a distributor) (subject to any defendant’s evidence to the contrary) is a large retailer.
The Bill provides for an infringement offence (strict liability (i.e. does not need evidence of intention for a conviction to be entered) in respect of distributing, selling, or offering for sale or otherwise supplying a tobacco product in a package knowing that the package contravenes Section 31(2)). This carries a maximum infringement fee of $1,000 (Part 1, Clause 14, inserting New Sections 36AA and 36AAB; Clause 15 ameding Section 38A by inserting new paragraph (j)).
The Bill provides for regulations to be made relating to plain packaging. “The regulations can impose requirements or permit options for tobacco products and for packages for tobacco products. Most of the provisions relate to restrictive requirements about the appearance of the products and packages.”  The term “appearance” is defined to include “anything that may affect a person's senses” (Part 1, Clause 17, inserting New Section 39A).
The Bill provides that an enforcement officer may apply (in the manner provided in the Search and Surveillance Act 2012) for a search warrant which may be issued if there are reasonable grounds to suspect an offence an offence has been, is being, or will be committed and to believe that there is evidential material in the relevant place. The Bill amends the Schedule of the Search and Surveillance Act 2012 to insert the new power under the Smoke-free Environments Act 1990, to obtain and execute a search warrant to search for evidential material in relation to a suspected offence (Part 1, Clause 18, inserting New Section 41BA; Part 2, Clause 22, amending the Schedule of the Search and Surveillance Act 2012).
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- Media release, Hon Tariana Turia, Associate Minister of Health, “First Reading For Tobacco Plain Packaging Bill Early 2014”, 17 December, 2013. [back]
- Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill, 2013 No 186-1, Explanatory note, clause by clause analysis, p. 6. [back]
- Ibid., pp. 7 and 8. [back]