It looks like Australian politicians have taken up reading neuromarketing books. In the ever-escalating war between regulators and tobacco firms, the most aggressive step yet has been proposed Down Under: un-branding cigarette packaging.

In Martin Lindstrom’s Buyology, we learned that tobacco firms had coped with increasing restrictions on advertising in various ways. One key method was to create a strong brand association with such simple design elements as color. Researchers found that even though the signature Marlboro logos were gone from Ferrari Formula One cars, merely seeing their bright red color triggered tobacco craving in the brains of subjects who saw race car photos. And as for the graphic warnings promising smokers disease and death? They, too, triggered cravings for tobacco (see Are Tobacco Warnings Really Ads?).

Whether he read Buyology or not, Australian prime minister Kevin Rudd seems to understand some of the neuromarketing principles at work here. He has proposed legislation to remove all distinctive branding from cigarette packages. No Marlboro logo, not even a red box. Just a plain, generic-looking package with a hideous disease photo and a tiny text brand name. While I have no doubt that after a few months of such packaging one could strap an Australian smoker into an fMRI machine and demonstrate that plain brown boxes trigger craving for a smoke, these packages would create a major branding challenge for the tobacco firms.

The difficulties posed by these packages are twofold. First, such a package would break the link between satisfying an addictive craving and the distinctive brand characteristics: colors, logos, graphics, etc. Dozens of potent branding opportunities would vanish. (Arguably, the correlation between the craving satisfaction and the cigarette package might well be one of the most potent branding moments for any legal product.)

Second, one’s brand of cigarettes signals something to others. Marlboro is a rugged, masculine brand – think cowboys, ultra-fast race cars, and the other associations the brand has created over the years. When a paunchy accountant shakes a Marlboro out of its pack, he’s doing more than getting a hit of nicotine – he’s showing that he’s the kind of guy that identifies with the macho Marlboro heritage. Generic packaging would virtually eliminate the signaling benefit of smoking a particular brand.

Can tobacco companies survive such legislation? As addictive as their products are, and as many resources they have, most likely they will find a way to keep moving their product. With so many restrictions on advertising and packaging, though, the opportunities for brand building will be increasingly limited. I find it inconceivable that a new brand on the scale of Marlboro and the other biggest brands could emerge in this environment. If anything, cheaper brands (if any brand that costs $15US per pack can be considered “cheap”) might grow simply because the packages have lost their signaling value.

This legislation has not been enacted, and I’d expect the tobacco firms to fight it fiercely. In essence, the brand equity that they have invested billions of dollars in building is being rendered nearly worthless. Should some version of this legislation pass, it will be interesting to see what new approaches to conveying brand identity will emerge in the aftermath.