Big tobacco fights back after 'plain packs' law passes

Australia passed the world's toughest anti-tobacco legislation yesterday, requiring cigarettes to be sold in plain packs – and within hours the tobacco giant Philip Morris announced that it was suing for billions of dollars in compensation.

The other big tobacco companies are expected to follow suit, after the law – which outlaws logos, imagery, colours and promotional text – crossed its final hurdle. From December next year, cigarettes, cigars and pipe tobacco will have to be sold in generic olive green packs, three-quarters of which will be covered in graphic health warnings.

The tobacco industry claims the restrictions will infringe its trademark rights and contravene global trade regulations. Philip Morris – which makes seven of the world's top 15 international brands – initiated a lawsuit through its Hong Kong division, but plans to launch a separate domestic action.

British American Tobacco has already said it will launch its own legal challenge once the law receives royal assent, and Imperial Tobacco is expected to follow.

The government said it had received comprehensive legal advice and was confident about its position. The Health Minister, Nicola Roxon, said: "Big Tobacco is ignoring the will of the Australian parliament and is prioritising their profits over the lives of everyday Australians."