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Philip Morris threatens to sue Australia over packaging

Tobacco giant Philip Morris has threatened to sue the Australian government for "significant financial compensation" over its plan to introduce plain, brand-less packaging for cigarettes.

business Updated: Jun 27, 2011 09:05 IST

Tobacco giant Philip Morris has threatened to sue the Australian government for "significant financial compensation" over its plan to introduce plain, brand-less packaging for cigarettes.

Philip Morris Asia served a notice of claim on the Australian government outlining a plan to launch legal action under Australia's bilateral investment treaty with Hong Kong.

"We believe we have a very strong legal case and will be seeking significant financial compensation for the damage to our business," Philip Morris Asia spokeswoman Anne Edwards said in a statement from Hong Kong.

The notice sets the clock ticking on a three-month period for the two sides to negotiate an outcome. If there is no agreement, Philip Morris Asia said it would seek arbitration.

The damages could amount to billions of dollars, Edwards was quoted as saying in The Australian newspaper.