Cigarette packets Australia is to become the first nation to ban logos and other advertising on cigarette packs to make smoking less appealing. The new laws means tobacco companies wont be able to display their distinctive colours, brand designs and logos on the packets.
Instead cigarettes will all be sold in the same olive green packs with brand names dwarfed by often gruesome, full-colour health warnings covering 75 per cent of the packs' front.
Graphic health warnings currently cover only 30 per cent.
The government has vowed to fight tobacco companies over the legislation change, which comes into force from December next year, in court.
Tobacco giants argue that the move illegally diminishes the value of their trademarks and have threatened a court battle for billions of dollars in compensation.
Health Minister Nicola Roxon said her government was 'determined to take away the last method of advertising' cigarettes in Australia.
She said: 'We're not going to be bullied into not taking this action just because tobacco companies say they might fight us in the courts.
'We're ready for that if they do take legal action.'
Australia is a relatively small tobacco market where the falling rate of smokers is 17 percent, compared with around 20 percent of American adults.
But tobacco companies fear a precedent that could be adopted by more lucrative and growing markets.
Offenders would face fines of up to 1.1 million Australian dollars or around £700,000 for a company and AU$220,000, or £140,000 for an individual.
Australia already bans advertising at the point of sale.
Hong Kong-based Philip Morris Asia Limited, which owns the Australian affiliate Philip Morris Limited, filed a notice of claim against the government in an Australian court in June arguing the legislation violates a bilateral investment treaty between Australia and Hong Kong.
Philip Morris says the treaty protects companies' property, including intellectual property such as trademarks. It says plain packaging severely diminishes the value of the company's trademark.
British American Tobacco Australia Ltd., the Australian market leader, warned that the government would have to spend millions in legal fees in numerous legal challenges to the law and potentially billions in compensation.