'Marlboro Man' threatens to sue State over new cigarette packet law

President Michael D Higgins must decide in the next 72 hours whether to sign the legislation into law.

Philip Morris International (PMI), whose annual revenue of US$80bn is bigger than Ireland's tax take, says it will sue for damages if the law proceeds - forcing it to incur manufacturing costs - and an EU test case on plain packaging succeeds.

The US multi-national, which makes the 'Marlboro' brand warns: "PMI would have strong grounds to commence a claim for damages against the State in order to recover the costs highlighted above. Should it be necessary, PMI would pursue such a claim vigorously and without delay."

A letter to Taoiseach Enda Kenny and several other ministers arrived last month. The Government is currently preparing a response through the Chief State Solicitor's Office.

The legal letter was sent by the Irish legal firm Matheson.

Last week, Ireland became only the second country in the world to pass legislation requiring cigarettes to be sold in plain packets.

Japan Tobacco International and Imperial Tobacco Group have already said they would take legal action against the plan to ban the colourful logos used to sell tobacco brands but the Government has said it plans to proceed.

The law was approved by the Dail and the Seanad last week and the bill is expected to be signed into law by the President in the coming days.

Under the legislation, companies will be banned from producing branded tobacco products for the Irish market from May 2016 and banned from selling branded tobacco products in Ireland from May 2017.

Australia introduced a similar ban in 2012 and faced down a legal challenge from PMI, which has taken actions in a number of countries.

Tobacco companies claim plain packaging infringes international law, could threaten future foreign direct investment and sets a dangerous precedent for other sectors.

Unlawful

In its letter from Matheson's, PMI claims the legislation is "unlawful" and says it is "unreasonable" to bring in the law before a ruling in a case going through the European Court of Justice.

"If the Bill is enacted, PMI will have strong grounds to challenge its unlawfulness. As set out above, the result of the PMI claim may be to render such an Act unlawful, thus rendering unnecessary any challenge to Act.

"Should that occur, the State would have unnecessarily incurred costs, and would be liable to cover PMI's costs in bringing its challenge to the legislation. PMI's costs are likely to be very significant," it says.