Tobacco firms vow to fight plain cigarette packaging in the courts

Three tobacco firms are threatening to sue the government over plain packaging. Credit: Chris Ison/PA Wire

Smoking kills but marketing can be seductive.

MPs have voted by a majority of 254 to strip cigarette packets of any branding from May next year.

The stated aim is not to help people quit but to stop them starting. Two thirds of smokers say they began when they were children.

If the Lords backs the Commons, on Monday, the proposals will become law.

Tonight three tobacco companies are threatening to sue the government in the courts. At the very least they want compensation.

British American Tobacco (makes Dunhill, Lucky Strike and Rothmans) berates a "flawed consultation process".

JTI (owns Camel, Camel and Silk Cut) complains MPs are "putting politics before process, evidence and debate".

Imperial Tobacco (Lambert and Butler and JPS) told ITV News "we cannot just sit back and see these brands taken away from us".

A legal challenge by the tobacco companies in Australia failed.

Standardised cigarette packaging has been in that country for around for two and a half years.

It's early days and its effectiveness is difficult to measure. Official smoking rates have fallen (but were falling anyway), the tobacco companies argue the black market is thriving as a result.

The big picture?

Cigarette sales around the world are in gentle but steady decline. Tobacco companies have remained highly profitable. largely by putting up their prices for the 1 billion people who still smoke.

In Britain in the last 40 years the percentage of the adult population who smoke has fallen from 45% to 19%.

Company profits are at stake here but so are tax revenues.

One of Imperial Tobacco's best-selling brands is Lambert and Butler. One packet of twenty cigarettes retails for £8.19 - 78% of this goes straight to the government in VAT and Excise Duty.

Tobacco companies make most of their money by putting up prices. Credit: Jonathan Brady/PA Wire

Tobacco companies are also popular with City investors.

Imperial Tobacco handed £1.2 billion back to its shareholders last year, among them the pension funds who many of us rely on for an income in retirement.

Tobacco companies expect cigarette sales to continue to decline but they believe the future is bright because they can afford to keep raising prices and e-cigarettes offer a new, less obviously harmful, way of making money.

How they would love to break into China, home to 20% of the world's population and 40% of the world's smokers, but the market is state controlled as is the world's largest tobacco company China National Tobacco Corporation.