Australia's double standard on Thailand's alcohol warning labels

COMMENTARY

Australia’s double standard on Thailand’s alcohol warning labels

PAULA O’BRIEN

Melbourne Law School, University of Melbourne, Melbourne, Victoria, Australia

AbstractIntroduction and Aims. Since 2010, members of the World Trade Organization (WTO), including Australia, haveopposed Thailand’s proposal for graphic warnings on alcohol containers. This paper aims to provide an account of thearguments for/against Thailand and to examine the arguments’ legal and political validity. Design and Methods. Thispaper reviews primary WTO records in relation to Thailand’s proposal to reveal the arguments for/against Thailand’s proposal.The paper analyses these arguments in light of WTO cases to identify the legal strengths and weaknesses of Thailand’s position.The paper then considers whether the attacks on Thailand by Australia are justified in light of the Australian Government’sposition on (i) alcohol warning labels in Australia and (ii) tobacco plain packaging. Results. The legal arguments againstThailand are: only harmful alcohol consumption should be prevented; there is no evidence that graphic warning labels canreduce alcohol-related harm; the labels unnecessarily restrict international trade.There are some legal weaknesses in Thailand’sproposal.Yet, Australia’s opposition to Thailand cannot be justified whilst Australia is (i) mandating pregnancy-related alcoholwarnings in Australia and (ii) defending its plain packaging law against similar WTO attacks. Discussion. No WTOmember is obliged to challenge another member for being non-compliant.The case tests the willingness of WTO members likeAustralia to respect the autonomy of other countries to pursue their public health goals and trial novel interventions.Conclusions.Australia’s actions suggest it is willing to protect its alcohol industry at the expense of public health in Thailand.[O’Brien P. Australia’s double standard on Thailand’s alcohol warning labels. Drug Alcohol Rev 2012]

Key words: alcohol, warning label, trade law and policy, Australia, Thailand.

Introduction

The Australian Government is under attack fromtobacco companies for its new legislation which man-dates the plain packaging of tobacco. But the Govern-ment is not fazed by the legal attacks. The AustralianAttorney-General says she is ‘pleased to continue thefight against big tobacco’ [1]. The legislation is acrucial part of Australia’s ‘anti-smoking action plan’for achieving its national tobacco control benchmarks[2,3].

This position contrasts with Australia’s approachto Thailand’s public health efforts to reduce alcoholconsumption and related harms. Australia is one ofseveral members of the World Trade Organization(WTO) opposing Thailand’s proposal to introduce

graphic alcohol warning labels. The proposal is Thai-land’s response to its ‘alcohol epidemic’ [4]. Australia ischallenging Thailand’s measures on the basis that theyunnecessarily interfere with international trade. In thisinstance, Australia is clearly willing to use WTO law tofurther the financial interests of the Australian alcoholindustry at the expense of Thailand’s interests inachieving its public health priorities.

Thailand’s proposed alcohol warning labels

On 21 January 2010,Thailand notified theWTO Com-mittee on Technical Barriers to Trade (‘TBT Commit-tee’) of its intention to introduce a new alcohol warninglaw (‘Thailand’s Notification’) [5,6] under s 26(1) of itsAlcohol Beverage Control Act [7].

Paula O’Brien BA/LLB (Hons) (Melb), LLM (Cantab), Senior Lecturer. Correspondence to Ms Paula O’Brien, Melbourne LawSchool, University Square, 185 Pelham Street, Carlton, Vic. 3085, Australia. Tel: +61 3 90354963; Fax: +61 3 83440106; E-mail: [email protected]

Received 25 March 2012; accepted for publication 31 May 2012.

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R E V I E W

Drug and Alcohol Review (2012)DOI: 10.1111/j.1465-3362.2012.00485.x

© 2012 Australasian Professional Society on Alcohol and other Drugs

Thailand’s proposal has three parts [5]. First, it pro-hibits any words on alcoholic beverage packages whichwould mislead the consumer into believing that (i)alcohol can improve health or (ii) one alcoholic bever-age is less ‘toxic’ than another. Second, it requires thatall alcohol beverage packages carry the words: ‘Sale ofalcohol beverages to persons under 20 years old is pro-hibited . . .’. Finally, it requires all alcoholic beveragepackages (including bottles, cans, boxes or wrapping) tocarry one of six graphic warnings. The warnings mustbe in set colours and affixed in a permanent manner,constitute 30–50% of the package’s surface, and berotated every 1000 units of production. In Thailand’sNotification, the warnings are translated into Englishas [5]:

• Drinking alcohol causes the hypertension livercirrhosis (sic.)

• Alcohol intoxication leads to the accidents (sic.)• Drinking alcohol leads to unconsciousness and

even death• Drinking alcohol leads to inferior sexual

performance• Drinking alcohol leads to adverse health effect and

family problems (sic.)• Drinking alcohol is a bad influence on children

and young people

However, in a technical report provided by Thailandto the members of the TBT Committee (‘Report’) [8],the word ‘could’ is inserted into each of the abovewarnings, thereby lessening the asserted causal connec-tion between alcohol and the adverse outcome. Forexample, the text ‘Drinking alcohol causes the hyper-tension liver cirrhosis’ becomes ‘Alcohol consumptioncould lead to liver cirrhosis’ [8].

WTO member concerns andThailand’s response

Since 2010, Australia and several other members[Argentina, Canada, Chile, Mexico, New Zealand,Switzerland, United States and European Union (EU)]have repeatedly expressed concerns in the TBT Com-mittee [4,9–13] that Thailand’s warnings labels areinconsistent with the Agreement on Technical Barriersto Trade (‘TBT Agreement’) [14]. Although Thailandhas assured WTO members that it would take theirconcerns into account, it seems that Thailand is deter-mined to defend its warning labels.Thailand’s proposalremains on the TBT Committee’s agenda for ‘dis-cussion’ in 2012. However, it is open to one or moredisgruntled members to escalate matters and file a‘dispute’ against Thailand. This possibly leads to aformal hearing by a WTO Panel.

The TBT Agreement sets down rules in relationto ‘technical regulations’. A ‘technical regulation’ is adocument which ‘lays down product characteristics . . .with which compliance is mandatory . . . [including]packaging, marking or labelling requirements . . .’(Annex 1) [14]. Thailand’s proposed alcohol warningsare clearly a ‘technical regulation’.

The WTO members’ concerns about Thailand’swarnings relate primarily to art 2.2 of the TBT Agree-ment. Under this article, members have an obligation toensure that ‘technical regulations are not prepared,adopted or applied with a view to or with the effect ofcreating unnecessary obstacles to international trade.For this purpose, technical regulations shall not bemore trade-restrictive than necessary to fulfil a legiti-mate objective, taking account of the risks non-fulfilment would create.’ ‘Legitimate objective’ isdefined in art 2.2 to include ‘protection of humanhealth’ [14].

Thailand’s compliance with art 2.2 raises three keyissues [15–20]:

1. Is Thailand pursuing a legitimate objective?2. What contribution does Thailand’s proposed law

make to fulfilling the objective?3. Does Thailand’s law restrict trade more than is

necessary to achieve the degree of contributionwhich the law makes to fulfilling the objective?

In the paragraphs below, the WTO members’ com-ments about these three issues and Thailand’sresponses are analysed in light of relevant WTO law.

Legitimate objective

To be consistent with art 2.2,Thailand must be pursu-ing a legitimate objective with its warnings. In a WTOPanel hearing, the Panel must determine a member’sobjective and the legitimacy of that objective [15–18].

So far Thailand has not articulated a sole objectivefor its warnings. It speaks variously of preventingalcohol-related harm, preventing alcohol consumptionand giving information to consumers about risks asso-ciated with alcohol. Thailand says its population hasa particularly severe problem with alcohol, with Thai-land’s total burden of disease attributable to alcohol(8.1%) being twice the global burden of disease attrib-utable to alcohol. The percentage of regular drinkersin Thailand has increased from 37.14% in 1996 to40.67% in 2007 [8]. Thailand vehemently asserts thatthere is no ‘risk-free drinking’ and rejects claims ofhealth benefits from alcohol for populations in low- andmiddle-income countries [8].Thailand’s position is that‘marketing, including advertising through beveragepackaging, had been the most important vector for thealcohol epidemic in Thailand’ [4].

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No WTO member has attempted to argue that Thai-land does not have alcohol-related problems, nor that itis ‘illegitimate’ to seek to prevent harms from alcohol.However, the EU, Mexico and Chile have argued that itis not drinking per se, but excessive drinking that is theproblem [4,9,10,21]. Mexico and Chile have claimedthat moderate drinking is consistent with a healthylifestyle [9,10].

The EU, Mexico and Chile’s comments flag thatthere might be a quarrel about the legitimacy ofThailand’s objective, if it were not framed narrowly interms of harmful alcohol use. As reflected in the WHOGlobal Strategy to Reduce the Harmful Use of Alcohol[22], many countries prefer not to see alcohol con-sumption itself as a problem. By contrast, Thailand’sobjective could be understood as providing informa-tion about the risks associated with alcohol consump-tion generally or reducing alcohol consumption acrossthe population. There may be argument that suchobjectives are not ‘legitimate’ under art 2.2, on thebasis that it is not ‘justifiable’ nor ‘proper’ to suggestthat any alcohol consumption is harmful [17]. If thisissue arose, the Panel would be lead into the debatesabout whether alcohol has some positive healtheffects, about the increased risks of disease from anyalcohol consumption [23], and about the epidemio-logical claims that tackling harms from alcohol means‘targeting aggregate consumption as well as high-riskdrinkers’ [24]. The definition of the objective hasimplications for answering the questions at the nexttwo stages.

Contribution to fulfilment of the legitimate objective

In a dispute about art 2.2, a Panel must determine whatcontribution (if any) a measure makes to the fulfilmentof a member’s legitimate objective [16,17]. From thediscussions in the TBT Committee, this will be a verydifficult issue for Thailand, because of the lack of con-clusive evidence of the effectiveness of warning labels inreducing alcohol consumption or harm. It is this issuewhich will expose theWTO’s preparedness to recognisea country’s autonomy to try public health interven-tions, which lack firm evidence of effectiveness butwhich have some defensible basis in the existing scienceand which are directed to a pressing public healthproblem.

Under art 2.2, there is no requirement that Thai-land’s warnings completely fulfil the stated objective[17]. But the level of contribution which the warningsare required to make to the objective is not clear. Onecase spoke of a ‘material contribution’ [15]. Anotherformulated a lesser requirement (that is the mosthelpful to Thailand’s case) that there be a ‘genuinerelationship between the end (objective) and means

(technical regulation)’ [18]. The most authoritativestatement from the WTO Appellate Body suggests thatno particular level of contribution is required, but themeasure must make some actual contribution tomeeting the objective at the level of protection set bythe member for itself [17].

Most of the members have questioned whether thereis a scientific basis for the form and content ofThailand’swarnings [9–11]. The USA has queried the evidencebase for the language of all warnings, except the drinkdriving warning [9–11]. (This might be explained bythe USA having had a text-based drink-driving warningon alcohol containers since 1989 and this Thai warningbeing cast in terms of ‘alcohol intoxication’ as opposedto ‘alcohol consumption’) [25]. One likely argumentagainst Thailand is that the warnings do not contributeto the objective at all, because they make factuallyincorrect claims that the listed harms arise from drink-ing any amount of alcohol [18].

Thailand’s response has been that the labels willmake a contribution to the objective, because thecontent and form of the warnings have ‘high contextualrelevance’ to Thai society [10]. Their main benefit issaid to be their ability to educate the public, especiallyregular alcohol consumers, about the health risks andpotential dangers of alcohol consumption. In doing so,the labels would correct misunderstandings inThailandthat alcohol is just an ‘ordinary commodity’ [24] andoverturn the positive messages about alcohol which areoften communicated via industry alcohol labelling.Thailand says that graphic warnings are important,because there are low literacy rates amongst Thailand’sdisadvantaged sub-groups who are most likely to sufferalcohol-related harms [8].

Thailand does admit that evidence of the effective-ness of graphic warnings on alcohol products is ‘scarce’[8], but it seeks to offer some supporting evidence.Thailand primarily relies on tobacco studies whichshow that graphic warnings on tobacco products canraise awareness of risks of smoking and, in turn, leadto behaviour change [8]. The unstated, and possiblyincorrect, assumption seems to be that graphic warn-ings on alcohol would work the same way [25]. Inaddition, Thailand makes two arguments on the basisof findings from studies on text-only messages onalcohol that warning labels increase knowledge orawareness of the risks of alcohol, but do little in termsof positive behaviour change. Thailand implies that itswarnings will be more effective than those in the text-only studies, because its warnings will involve largeand highly visible graphics. But Thailand also arguesthat the text-only warnings studies show that warninglabels do affect knowledge of risks and this is an essen-tial cognitive stage for behaviour change [8]. Finally,Thailand relies on an unpublished study about the

Australia’s double standard on Thailand’s alcohol warning labels 3


potential positive impact of the proposed warnings onThai youth [8].

More trade restrictive than necessary

The final issue which a Panel would address under art2.2 is whether Thailand’s warning labels restrict trademore than is necessary to achieve the degree of con-tribution which the warning labels make to fulfillingThailand’s legitimate objective [17]. This challengingquestion will most likely be answered by comparing (i)the contribution made by the warning labels (whichmight be quite minimal) and the trade-restrictivenessof the labels with (ii) specific alternative measures thatpurportedly are reasonably available, make an equal (orgreater) contribution to the objective and are less trade-restrictive than the warning labels, taking into accountthe risks non-fulfilment of the objective would create[17].

The complaining WTO members have repeatedlyemphasised that the warnings would be a majorburden on international trade. The EU was concernedthat if the warning label applies to the front of thebeverage container, it would interfere with an industrypractice that producers use the container’s front foruniform product labelling and the container’s back forcountry-specific labelling [9,10]. New Zealand andArgentina considered there was a burden on interna-tional trade because Thailand was the only country torequire such warnings [10]. The USA was particularlyfocussed on production being stopped every 3–4 minto meet the 1000-unit rotation requirement [10,11].The USA has also argued that Thailand’s proposalis an interference with manufacturers’ trademarks[4,10,11].

Many members have proposed alternatives, whichimpliedly are less trade-restrictive but equally effectiveoptions for achieving Thailand’s objective [9,10]. TheEU and New Zealand have consistently asked whetherThailand is considering information and educationcampaigns [6,9,10]. Australia has suggested that winelabels could indicate alcohol content alone. ‘This wouldallow consumers to make better informed purchasingdecisions. . .’ [9].

Thailand seems to be trying to play down the traderestrictiveness of the measure. It has simply stated thatit is ‘technically feasible’ to do the label rotation andthat the size of the warning leaves room for otherproduct information [10]. In terms of alternatives,Thailand says the evidence shows text-only warnings,education campaigns and drinking guidelines are notvery effective. In any event, Thailand already has edu-cation campaigns [10], and restrictions on alcoholadvertising and signage [26,27], and the labels wouldbe a new (and more effective) part of this ‘package’.

Australia’s double standards

Effectiveness of warning labels

On the one hand, it is not surprising that Australia hasopposed Thailand’s warning labels in the TBT Com-mittee. In December 2011, the Federal Health Minis-ter, along with state and territory health ministers,rejected a recommendation from the Government’sown review of food labelling [28] that generic warningmessages be placed on alcoholic beverage containers[29]. The Government is seeking further advice onthis question but supports continued monitoring ofvoluntary initiatives, which presumably encompassesthe labels proposed by Drinkwise in July 2011 [30].However, the Government did agree to mandate awarning on alcohol containers about the risks of con-suming alcohol while pregnant. The justification givenfor this warning is that there is ‘strong evidence aboutthe risks of consuming alcohol while pregnant’ [29].This ignores the strong evidence of other harms fromalcohol, of which the Australian Government is aware[31–34]. But the Government’s decision suggests that itdoes not consider warning labels to be ineffective perse. Instead, its actions suggest that it considers there issome basis for including warnings on alcohol contain-ers as a legitimate public health intervention. This iscontrary to what Australia is saying to Thailand in theTBT Committee, where it questions the effectiveness ofwarning labels and suggests that alcohol content is theonly consumer information needed on the label.

Australia’s tobacco control contradictions

There is something disingenuous about Australiatackling Thailand’s public health proposal in the TBTCommittee, given the measures it has introduced fortobacco control. Australia introduced text-based warn-ings in 1995 and graphic warnings in 2006 [25]. In2011, it passed legislation to mandate the plain pack-aging of tobacco [35]. Its plain packaging legislation isbeing challenged in the WTO. Ukraine has initiated theformal WTO dispute settlement process by requestingconsultations with Australia [36]. Other members havenow joined the consultations, butThailand is not one ofthose members.There is the possibility that this disputewill progress to a WTO Panel hearing.

One of the claims against Australia’s plain packaginglegislation relates to art 2.2 of the TBT, the same pro-vision with which Thailand’s proposal is said to beinconsistent. Australia and Thailand have to defendtheir respective public health measures on the sameterms. While Australia challenges Thailand’s warningsas lacking evidence of effectiveness and being moretrade restrictive than necessary, Australia is confronting

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exactly the same arguments about its tobacco plainpackaging legislation. The tobacco industry itself hasnoted this seeming contradiction [37]. As a matter oflaw, Australia may be in a slightly stronger positionto argue that its legislation is WTO-compliant. Onefavourable argument is the legislation’s compliancewith art 11 of the Framework Convention on TobaccoControl [38,39]. This is arguably an ‘internationalstandard’ for the purposes of art 2.5 of the TBT Agree-ment, which states that compliance with internationalstandards creates a rebuttable presumption that thetechnical regulation does not create an unnecessaryobstacle to trade under art 2.2.

But the possibly firmer legal footing for Australia’slegislation does not change the fact that it is un-principled for Australia to oppose Thailand’s effortsto address alcohol-related harm through warnings.Alcohol warnings, unlike a ban, are not extreme meas-ures. They are exactly what Australia tried (with realsuccess) with tobacco, and what it is doing withpregnancy-related warnings on alcohol. The evidenceto supportThailand’s laws is not conclusive, but neitheris the evidence on plain packaging. Both countries areexperimenting with policies to address their particularpublic health priorities. As a WTO member, Australiais not obliged to challenge Thailand’s laws even if itconsiders them to be non-compliant with WTO law.For example, it has not raised concerns about Kenya’salcohol labelling laws which were before theTBT Com-mittee in June and November 2011 [40,41]. Australiahas chosen, as a matter of deliberate government policy,to oppose Thailand’s laws.

Australia’s alcohol trade interests

Australia’s trade interests in alcohol seem to be itspriority here. One trade-related concern is likely to bethe effect of Thailand’s labelling laws on Australia’swine industry. In 2006 and 2007, the growth rates inAustralian wine exports to Thailand were 11% and34% respectively, whilst the growth rates to the rest ofthe world were 8% and 3% respectively [42]. TheThailand-Australia Free Trade Agreement provides forthe progressive reduction of tariffs on Australian wines[43]. By 2015, the tariffs on Australian wines will bezero. Despite this, high taxes on wine in Thailand pur-portedly add 300% to the cost of Australian wines [42].The Australian wine industry no doubts seesThailand’swarning labels as another barrier to wine exports toThailand and has managed to convince the AustralianGovernment to see things the same way.

Conclusion

It is highly inconsistent for Australia to actively partici-pate in legal attacks in the WTO on Thailand’s alcohol

control measures while at the same time legislatingplain packaging for tobacco products and introducingpregnancy-related alcohol warnings. Australia’s attackson Thailand reveal the Australia Government’s willing-ness to protect the alcohol industry at the expense ofthe public’s health.

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Australia's double standard on Thailand's alcohol warning labels