According to legal experts, if plain packaging legislation was passed and the tobacco industry challenged that legislation, it would likely be struck down as illegal absent fair compensation to the tobacco industry for the deprivation of its trademark rights. That compensation could run into the billions of pounds. The tobacco analyst at Citigroup Investment Research, using simplified discounted cash flow modelling of tobacco industry profits calculated a fair value for tobacco industry brand designs (which are lost with plain packaging) of £5 billion. An alternative estimate, based on the implicit value of the intangible assets of Gallaher when it was bought by Japan Tobacco, suggests a figure of a bit under £4 billion. Combined with the economic implications of plain packaging covered in our report, the consequences of such a compensation bill could be dire for the Government's deficit and debt reduction policy.