The cost of plain packaging revealed

London: Some of the world's most recognisable companies would lose nearly $250 billion if governments extended Australia's controversial plain packaging laws from tobacco to alcohol, sugary drinks and junk food.

Analysis by Brand Finance found the makers of Coca-Cola and Pepsi would lose the most, with each company shedding about $52 billion each, or a quarter of their value.

The study calculated the likely loss of royalties if eight of the world's biggest brand owners were forced to give up their glossy packaging.

Those companies included AB InBev, The Coca-Cola Company, Danone, Heineken, Mondelez International, Nestl??, PepsiCo and Pernod Ricard, which between them control 1242 brands, 907 of which are used to market alcohol, fizzy drinks and junk food.

Chief executive David Haigh said their findings were on the "conservative" end and showed plain packaging would cause huge damage to companies which have spent decades and even centuries building their brands.

"Take a brand like Johnnie Walker. Johnnie Walker is an absolutely huge brand globally, it's the same sort of thing with M??et and Chandon champagne or Heineken beer, they have all developed very strong positions over decades and sometime centuries," Mr Haigh said.

"Now if those brands all suddenly had to go plain packaging they would obviously lose market share, they would lose price premium, they would lose large amounts of money.

"Perhaps the health lobby would say, 'well that's perfectly reasonable, we want them to lose money, we want them to be less attractive, we want the consumption to go down'.

"And so it's a public policy debate about how far should the state go in restraining people's right to choose and right to use these products - my view is that they shouldn't."

He said while regulations would cause huge damage to the brands, it would not destroy them.

"Well the cigarette companies don't seem to have given up despite plain packaging because there is a demand for the products, so no doubt there will continue to be demand for the product but clearly it would not be particularly helpful for the shareholders if their market leading positions are undermined by plain packaging so it [will] obviously be damaging but I expect they would continue.

"Just because you make whisky plain packaging doesn't mean there won't be a demand for whisky," he said.

In December 2012, the then Labor government became the first in the world to introduce plain packaging on cigarettes. The tobacco companies unsuccessfully fought the legislation in the High Court and at the World Trade Organisation. Since then several countries have followed Australia's lead, including the United Kingdom, France and Ireland. Lawyers have already warned that fatty foods and alcoholic drinks could be next.

The British neuro-scientist Wolfram Schultz who studies the brain's reward system involving the release of the chemical dopamine said earlier this year that selling high-calorie foods in plain packaging could help combat rising rates of obesity.

"Colourful wrapping of high-energy foods, of course, makes you buy more of that stuff and once you have it in your fridge, it's in front of you every time you open the fridge and ultimately you're going to eat it and eat too much," he said.

Dr Judith Mackay, an advisor to the World Health Organisation who has worked in Asia driving anti-smoking measures, said the WHO's convention on tobacco control offers a template for how controls could be extended to alcohol. And the British government's own health advisory body has proposed extending the regulation to alcohol.

Mr Haigh said he first learned of the plain packaging threat in 2004 at a trademark conference where participants warned that activists would not stop just at tobacco. "That prediction has proved true," he said.

"I don't think [the prospect is] that unlikely, there are certain countries that have already begun talking about having plain packaging on alcoholic drinks," he said.

He believes plain packaging is a retrograde step. "It seems to be a contradiction to allow them to be legal products, freely sold, but to try and restrict their consumption by restraining trademark ownership and branding - it seems illogical," he said.

This story The cost of plain packaging revealed first appeared on The Sydney Morning Herald.