Clear The Air News Tobacco Blog Rotating Header Image

TPD

Industry-funded International Tax and Investment Center responds to criticism by attempting to muddy the waters

The tobacco industry is under attack. In just two weeks, in May 2016, its tactic of challenging any law that threatens its profits, took a big hit. The arbitration panel, that tobacco giant Philip Morris International (PMI) had hoped would overturn standardised packaging legislation in Australia, published its full ruling that the company’s self-serving claims were inadmissible. Just days later, all four major tobacco companies lost their challenges against both the European Union’s Tobacco Products Directive and standardised packaging legislation in the UK.

This means that from 20 May 2017 EU member states must ensure that health warnings cover 65% of the tobacco pack and are free to introduce standardised packaging for tobacco products. The UK, France and Ireland, which have already enacted standardised packaging legislation, will now go ahead with this brand removal. Further afield Canada, New Zealand, Hungary and Norway are due to follow suit and other countries which have expressed an interest will be buoyed by the way the industry’s legal and trade challenges to plain packs are being soundly rejected. The World Health Organization’s (WHO) slogan for World No Tobacco Day 2016 was “Get Ready for Plain Packaging” recognising that the removal of branded tobacco packaging is “going global.”

Each jurisdiction to consider standardised packaging legislation has received sustained attacks from tobacco companies, using both their own voices and those of third parties which they fund. By commissioning and publicising research reports and opinions from seemingly independent experts, tobacco companies have created not only the impression of a large network of opposition but of an illusory body of evidence, particularly in relation to the industry argument that standardised packaging will increase the illicit tobacco trade.

PMI private documents, leaked to Action on Smoking and Health (UK), revealed that “broad third-party media engagement” and “high profile opinion pieces” would be used to raise awareness of such arguments among “decision makers and the general public” as part of its attempt to prevent standardised packaging in the UK. These documents also revealed that PMI intended to use the International Tax and Investment Centre (ITIC) as one of its key “media messengers”. Since 2012, PMI has paid ITIC (in collaboration with global advisory firm, Oxford Economics) to produce annual reports on the illicit trade in Asia. These claimed that illicit trade is increasing in the region but have been accused of being methodologically flawed. When publicly available routine data was used in an attempt to replicate ITIC’s findings in Hong Kong, illicit levels were found to be under half of what ITIC had estimated.

Key to the industry’s use of third parties is its attempt to shift the paradigm by presenting third parties as ‘independent experts’ and their research as ‘trustworthy and rigorous’ while simultaneously positioning public health academics as ‘advocates’ and ‘zealots’ and their research as ‘advocacy’. This presentation of corporate pawns as informed moderates producing quality work and public health researchers as misguided fundamentalists producing poor quality work is a public relations tactic employed for decades by corporations in relation to environmental and health issues.

Over the last few weeks this tactic has been adopted by the tobacco industry third party, ITIC, in a series of letters sent to Non-Governmental Organisations (South East Asia Tobacco Control Alliance (SEATCA), ASH (UK), EU SmokeFree Partnership), the University of Bath in the UK, and the Editors of Tobacco Control, all of whom had criticised ITIC’s activities, some in letters, reports and webpages. ITIC’s letters made three inter-related claims, each of which we explore in the paragraphs below.

First, that public health research should be seen as advocacy while, by contrast, ITIC’s research (none of which appears to be peer-reviewed) should be seen as high quality. For example, in his letter to the University of Bath the President of ITIC, Daniel Witt, claimed: “We have become increasingly concerned about how the integrity of reputable institutions and individuals is maligned by overzealous advocacy ….. and ….by what passes for academic research when it is clearly constructed to fulfil an advocacy agenda”.

This denigration of public health research has been strongly criticised by independent experts. In her 2006 verdict in an extortion case against the tobacco industry in the United States Judge Gladys Kessler noted: “Much of the Defendants’ [i.e. the tobacco industry’s] criticisms of Government witnesses focused on the fact that these witnesses had been long-time, devoted members of “the public health community.” To suggest that they were presenting inaccurate, untruthful, or unreliable testimony because they had spent their professional lives trying to improve the public health of this country is patently absurd”.

The recent high court ruling on the challenges made by British American Tobacco, PMI, Japan Tobacco International and Imperial Tobacco to UK standardised packaging legislation made a similar point, citing Sir Cyril Chantler’s 2015 review of the evidence: “Chantler … rejected the criticism made by the tobacco companies that those that advised the Government were biased against the industry. Conversely, he articulated scepticism about the methodological efficacy of research results generated by the tobacco companies. He also criticised the tobacco companies for adopting unrealistic criticisms of the output of existing researchers…”

This ruling drew upon two peer-reviewed papers, one confirming the poor quality of industry evidence in comparison to public health evidence on standardised packaging and the other paper showing how BAT and JTI went about distorting and misrepresenting public health evidence.

ITIC’s second claim is that it is not a lobby group. Yet based on widely accepted definitions of lobbying, ITIC’s own descriptions of its activities, and the global health communities’ observations of its behaviour, ITIC clearly acts as a lobbying organisation.

Indeed, it has persistently boasted of its lobbying success. in 1995, ITIC produced a document which outlined how “ITIC has developed trusted, advisory relationships with key, senior-level policy makers…..[which]…provide channels for private sector expertise to reach the Government before, during and after the official policy-making process. This combination…… provides ITIC and its sponsors a ‘seat at the policy-making table’”. And in 2004, Daniel Witt, ITIC’s President noted: “ITIC is a public policy organization actively work ing to change public policy in a pro-investment direction.” Although ITIC claims to be an “independent, non-profit research and educational organization” it receives tobacco company funding and has industry representatives on its Board of Directors. Outputs such as the Asia-11 and Asia-14 illicit trade indicator studies, commissioned by PMI and published by ITIC along with global advisory firm Oxford Economics, have been critiqued by Dr Hana Ross (on behalf of SEATCA) for opaque methodology and “unverifiable” results that were “inconsistent with results from other studies” in the region (for more on this issue, read here). In 2014, ITIC was blasted by the WHO for its underhand attempt to destabilise the proposed guidelines on tobacco tax and price policy by convening a meeting with Parties and Observers to the Framework Convention on Tobacco Control (FCTC) immediately prior to the sixth Conference of the Parties (COP6).

Finally, in each letter, ITIC’s President, Daniel Witt argues that public health organisations ought to engage with ITIC given its tax expertise. This position displays a fundamental misunderstanding of the FCTC’s Article 5.3 which aims to protect policy making from the vested interests of the tobacco industry. It also displays a fundamental lack of understanding of public attitudes to ITIC. For example, the World Bank withdrew from an ITIC event in India, following a letter from the Institute of Public Health in the country, similarly, following a letter from ASH (UK), the UK Department for International Development (DfiD) asked ITIC to remove its name, from its list of sponsors on ITIC’s website as DfiD has never been a sponsor, and the WHO has urged all governments not to engage with ITIC.

SEATCA and the University of Bath have respectively published and sent to ITIC detailed rebuttals of ITIC’s letters to them. These rebuttals and the aforementioned high court rulings are unlikely to deter ITIC from trying to influence tobacco control policies such as standardised packaging across the globe and undermining Article 5.3 of the FCTC. But the more people who reject engagement with ITIC, the harder it will be for ITIC to boast that it can get its tobacco industry clients a “seat at the policy making table”.

The Importance of High-speed Track and Trace Solutions for the Tobacco Industry

The tobacco industry is a demanding one, and with production lines operating almost continuously, coding and marking systems need to be able to operate reliably at speeds of up to 1,000 packs per minute.

It is also a highly regulated industry, and demand for coding and marking solutions that can also help manufacturers to achieve compliance is increasing. At present there are two major initiatives in the industry – the Tobacco Product Directive 2 (TPD2) from the European Union, and the Framework Convention of Tobacco Control (FCTC) from the World Health Organisation, both of which require tobacco companies to track and trace products throughout the supply chain in order to try and avoid illicit products entering the market.

A challenging environment

In order to comply with track and trace requirements, manufacturers have to ensure that every single product they supply to the market carries a unique code or number.

There are two ways in which the industry can achieve this. One is by utilising serialized tax stamps, provided by approved authorities. The other is to perform direct serialization marking on the product. Some direct serialization marking can offer authorities features similar to tax stamps (digital fiscal marking).

Aggregation is a key technical step to implement effective tracking and tracing of products throughout the supply chain. To date, aggregation based on tax stamps has failed to be successfully demonstrated on all manufacturing equipment. On the contrary, aggregation has been implemented based on direct marking on all type of machines.

Tax stamps are also causing manufacturers some difficulties, as they can cause significant decreases in production efficiency. This is an unwelcome issue for any manufacturing business to deal with, and many believe that if they move to online coding (with digital fiscal marking), which can ensure the same level of security as a typical tax stamp, then line speeds would not be affected. Tax stamps, although sophisticated in terms of the information they carry, are also becoming more widely counterfeited. The industry believe that these counterfeited tax stamps are not only causing problems for the producers, but also for the security element that they are obliged to provide.

Countries in the EU, for example, have to develop a system which complies with TPD2 – which requires a track and trace system to be in place that gives each individual package a unique identifier containing machine, date and time references. Serialized tax stamps are not able to comply with this requirement. In addition, the unique identifier must be non-removable and must be clearly visible on the pack, so whenever a customs authority scans the product they can ensure the product is intended for that specific market. The number should be visible at pack level as it is the lowest unit size sold on the market. The issue is that tax stamps can be removed, and therefore the track record of a pack can be lost entirely. This creates a big problem, as governments are looking to have a clear understanding of how many products are being entered into the market, as every product will generate a specific amount of tax income for that government. If they can’t track the products they will see the widespread problem of illicitly traded products being shipped into markets where they were not intended to be used.

The price variations across Europe are significant, and are a main driver of illicit trade. If a truck full of illicit cigarettes is diverted to the UK from a nation where that product is far cheaper, the government will not see any tax revenue and the supplier company will not see any kind of revenue if they are successfully smuggled in – as they could theoretically sell these products at a much higher price. This is why the industry is fighting hard to stamp out illicitly traded and counterfeit tobacco products.

Counterfeiting and illicit trade will cost approximately 60bn dollars in losses this year alone and there are several reports from KPMG, PWC and many official authorities who are highlighting this subject. This is why the EU and the World Health Organisation (WHO) have introduced the requirement for end to end track and tracing of tobacco products, as it allows them to ensure that individual packs, bundles and cases can be fully aggregated and synchronised with what is expected to be available on the market.

How can Videojet technologies help manufacturers to remain compliant?

Track and trace is a challenging requirement for the tobacco industry. Today the tobacco industry is responding to this challenge by promoting direct marking solutions such as Codentify. To date, the tobacco industry has tracked millions of packs around the world over a period of more than 10 years. Videojet has successfully demonstrated its commitment with the tobacco industry and has developed an interface to the tobacco solution that not only provides integration flexibility into multiple points on the line, but is also flexible enough to be used with the majority of coding equipment (Continuous Inkjet (CIJ), laser, Thermal Inkjet (TIJ) or label applicator) and track and trace software. This allows manufacturers to remain compliant.

For example, in the case of digital fiscal marking, individual packs are marked with unique identifiers that have been authorised and accounted for by the government of the country in which the products are intended for sale. In addition, by employing serialization on the higher packaging levels, aggregation can be recorded.

Tracking of the product through the supply chain can then be recorded by scanning the higher packaging level and information can be retrieved by all relevant stakeholders.

Now, when products that have undergone this process reach the border of the country they are shipped to, customs at that point can read the code and can tell immediately if the products present are entitled to be allowed into the country. If the codes present are not within the acceptable range issued by the government, they will either be shipped back to point of origin, or destroyed at the manufacturer’s expense. At the same time, any products that arrive without a code are instantly recognized to be out of place and will receive the same treatment.

This comprehensive approach also allows governments and manufacturers to tackle diversion, as if a shipment goes missing it will be evident at which point in the process the products disappeared – allowing investigative action to be taken in order to prevent further occurrences.

Videojet coding and marking technologies offer a solution to manufacturers with regard to traceability and digital fiscal marking, helping manufacturers to meet regulations while keeping production efficiency at maximum levels. Products can be coded at speeds of up to 1,000 packs per minute, meaning production schedules are not affected.

Looking to the future

Serialization and track and trace initiatives can be successfully implemented through the use of coding and marking systems. Their ability to operate in conjunction with serialization enables manufacturers to remain compliant, at the same time protecting profit margins as well as brand reputation.

Videojet, thanks to its successful partnerships with a number of specialist suppliers, is able to deliver turnkey solutions to manufacturers for track and trace, providing aggregation and line management solutions and ultimately helping to stamp out counterfeiting and illicit trade.

Our tobacco laws just changed – here’s everything you need to know

http://metro.co.uk/2016/05/20/our-tobacco-laws-just-changed-heres-everything-you-need-to-know-5893582/

Major changes to tobacco laws have come into force today, May 20.

One of the most high-profile changes comes in the form of new standardised packaging – which will see all cigarette cartons be the same drab green colour.

At the same time, we are now no longer able to get 10-packs of cigarettes (sorry social smokers) – and we can start saying goodbye to menthol smokes.

There’s a lot to take in with the new laws, so we’ve put it all together for you.

Wait, what is this new law?

It is officially known as the Tobacco and Related Products Regulations 2016, which is part of the EU’s Tobacco Products Directive (or TPD for short).

Basically it’s an overhaul of our laws around the sale, advertising and packaging of tobacco products, such as cigarettes and vapes.

What’s happening to cigarette packaging?

The introduction of standardised, plain packaging is a major success for smoking health campaigners.

Under the new law, all cigarette boxes will be one uniform colour – a dull green – and will be the exact same size and shape.

New cigarette packaging laws are coming into force today, which means all boxes will have to be the same olive green colour, with the same font, colour, size, case and text appearance. Dr Nick Hopkinson, spokesperson for the British Lung Foundation, says evidence shows plain packaging works to cut smoking

All of the fonts will now be a standardised too, as will the colour, size, case and alignment of any text.

And logos will be strictly prohibited (a fact that caused particular contention with four tobacco giants).

They will also have much larger health warnings which, with a graphic picture and text, will take up 65 per cent of the front and the back of the boxes.

Campaigners from Action on Smoking and Health (ASH) and Cancer Research have hailed the packaging change as a victory, mainly because of… well, this.

Shops now have a year to get rid of the boxes they still have, before they’re totally replaced in May 2017.

I usually smoke menthols, they’re okay right?

Nope – from today menthols are going to be phased out, ready for a total ban in May 2020.

Deborah Arnott, chief executive of ASH, told Metro.co.uk: ‘There is evidence to show that menthol in cigarettes makes it easier for children to try smoking and to become addicted regular smokers.

‘That’s why ASH supports the ban on menthol cigarettes.’

Did you say I can’t buy 10-packs anymore?

Yep – the cheap 10-packs of cigarettes are now withdrawn from production.

Shops and companies now have a year to basically sell up stock, before they’re totally replaced in May 2017.

It’s hoped that by getting rid of the small, cheap packets, fewer people will be tempted to take up smoking.

You also won’t be able to buy bags of loose tobacco that weigh less than 30g.

What about my lite, organic, all-natural smokes?

Stop right there! Cigarettes that are branded ‘lite’, ‘natural’ and ‘organic’ are now a thing of the past.

This is because these descriptors are actually pretty misleading, making you subconsciously think that type of cigarette is healthy.

What about shisha and other flavoured tobacco?

Flavoured tobacco is now banned outright.

However shisha, aka hookah or water pipe, is exempt from this ban.

A Department of Health spokeswoman told Metro.co.uk that this is because shisha tobacco doesn’t sell in high enough volumes to merit being outlawed completely.

But shisha tobacco will now be subject to the same packaging laws as explained above.

What about e-cigarettes?

E-cigarettes are now subject to a whole new set of regulations.

For example, the advertising of vapes is now almost totally banned.

Plus, any e-cigs with a nicotine concentration above 20mg/ml will need to be licensed as a medicine and therefore subject to the same strict regulations as over-the-counter drugs.

Goodbye, menthol: new EU-wide cigarette regulations come into force

Say goodbye to those slim ‘lipstick’ style cigarettes. Adios to that menthol, fruit or vanilla flavoured tobacco.

New tobacco regulations that form part of the EU’s Tobacco Products Directive come into force today, and they bring with them significant changes to the manufacturing, sale and presentation of tobacco products.

Tobacco products with flavours designed to mask the taste or smell of tobacco are out, although menthol smokers have until 2020 to kick the habit.

Health warnings on tobacco products must now cover at least 65 per cent of the front and back packages, and the tar, nicotine and carbon monoxide labels smokers are used to will be replaced with the messages “smoking kills” as well as “Tobacco smoke contains over 70 substances known to cause cancer”.

Other tobacco products such as pipe tobacco, cigars, and cigarillos must carry a general warning and an additional text warning. Cigarette packets can contain a minimum of 20 cigarettes, thereby outlawing the 10-packs popular with young people in other EU countries.

All tobacco products must also report their ingredients in a standardised electronic format.

Electronic cigarettes are also regulated. They can contain nicotine concentrations of no more than 20mg/ml with cartridges no bigger than 2ml. The Commission has also said it will monitor e-cigarettes’ uptake and report back in five years’ time.

An estimated 500 people died through causes directly attributable to smoking in Malta between 1999 and 2013.

In Malta, the average annual deaths attributable to smoking in males and females between 1999-2013 were estimated to be 396 and 111 deaths respectively. Another concern is the take up of smoking by youths. Research shows that 70 per cent of smokers start before the age of 18 and 94 per cent before the age of 25 years.

eu-rules-tobacco-products

Plain packs and EUTPD II tobacco legislation comes into force

http://www.talkingretail.com/category-news/industrynews/plain-packs-eutpd-ii-tobacco-legislation-comes-force/

Standardised packaging and EUTPD II tobacco legislation comes into force today, with tobacco manufacturers now only allowed to produce products that comply with the new regulations.

This includes no longer being able to manufacture cigarette packs containing less than twenty sticks, roll-your-own tobacco pouches under 30g or packaging featuring price marked packs.

Today also marks a year-long countdown to 20 May 2017 – beyond this date retailers must only sell standardised packs which comply with EUTPD II.

The High Court ruled yesterday that the tobacco industry had been unsuccessful in its legal challenge to the Standardised Packaging of Tobacco Products Regulations in the UK.

Duncan Cunningham, Imperial Tobacco UK and Ireland’s head of corporate and legal affairs, said: “Our focus remains on ensuring the success of our customers through the supply of compliant products. While the new regulations affect pack sizes and branding, today’s initial deadline principally affects tobacco manufacturers. Retailers will still be able to sell current formats until 20 May 2017 – an entire year from now.

“Tobacco pricing plays a critical role in the independent trade, and our experiences in Australia – which introduced standardised packaging in 2012 – suggest retailers who plan and prepare for change will be putting themselves in the strongest position to transition successfully.

“In the UK, we are working with the trade through our ‘Partnering for Success’ initiative to ensure the independent trade remains both compliant and competitive now the new regulations have come into force.”

Meanwhile, research from ECigIntelligence has found that nearly half of EU member states look likely to miss the deadline for putting the EU Tobacco Products Directive into local law.

It said as many as 12 countries may end up missing the deadline, including major European countries with significant e-cigarette markets such as France, Poland and Spain.

Tim Phillips, director of ECigIntelligence said: “This shows that regulating e-cigarettes across Europe will be a long road and Friday May 20th is only the beginning rather than the end.”

EU health chief compares tobacco deaths with terrorism

Health Commissioner Vytenis Andriukaitis said that “Two terrorist attacks in Brussels are very dangerous, but of course 700.000 premature deaths are also very dangerous.”

http://www.euractiv.com/section/health-consumers/news/eu-health-chief-compares-impact-of-tobacco-industry-to-isis-attacks/

Health Commissioner Vytenis Andriukaitis strongly criticised the tobacco industry on Thursday (19 May), saying it “only kills people”, while expressing his opposition to the renewal of an agreement to counter cigarette smuggling in the EU.

Speaking to a group of reporters on the eve of the entry into force of the new Tobacco Products Directive today (20 May), Andriukaitis wondered “Why we don’t see headlines, why we are so blind, so silent” in Europe concerning tobacco, the single largest cause of avoidable deaths in the EU.

The EU Health Commissioner then went on to draw unexpected parallels between deaths caused by the terrorist attacks in Brussels last march and those caused by tobacco.

“Two terrorist attacks in Brussels are very dangerous, but of course 700,000 premature deaths are also very dangerous,” he said referring to tobacco mortality figures which dwarf deaths caused by terrorism in Europe.

The former physician insisted that “Tobacco is a very profitable industry that only produces something that kills people, nothing more… such industrial activity is a mistake from different perspectives.”

Fight against smuggling

His comments came as the European Commission is about to decide whether to extend a controversial deal with Philip Morris and other big tobacco firms to fight against the smuggling of cigarettes in Europe.

Andriukaitis stated that “There is no legal need to continue with such an agreement.” The Commission is emphasising that the new directive will provide better tools to address such challenges.

According to the deal reached with Philip Morris, Japan Tobacco, British American Tobacco and Imperial Tobacco, the EU, and the member states, will drop all court cases against them, over the loss of tax revues caused by illegal trading in cigarettes. In return, Philip Morris, the world’s largest tobacco company, has to pay $1.25 billion over 12 years (2004-2016). The others will have to pay a total of $900 million.

Tobacco firms were sued for their alleged involvement in smuggling cigarettes in the EU.

The agreement with Philip Morris will be the first one to expire in July. The executive’s decision on its renewal will set the tone for the other three.

Decision by early June

Andriukaitis told reporters that Commissioners will make up their mind about continuing the agreement by the end of May, or the beginning of June.

He said that there was a very good cooperation ongoing with Commission Vice-President Kristalina Georgieva, who is in charge of the dossier, as she oversees OLAF, the EU’s anti-fraud agency.

Compared with Andriukaitis’ strong views, the Bulgarian Commissioner’s opinion is more “moderate” and “cautious”, EU officials told EurActiv.com.

In a debate held in the European Parliament in February 2016, Georgieva left all options open for a renewal of the agreement.

“The question is whether or not, between today and the time when we have the Tobacco Products Directive in place – 2019, or the time when we have the [World Health Organisation’s] Eliminate Illicit Trade in Tobacco Products protocol enacted – 2022, we still need a legally binding instrument to fight illegal trade,” she told MEPs.

However, Georgieva faces strong arguments against maintaining close ties with big tobacco.

“Too close”

A European Commission assessment of the agreements noted that these deals bring “anti-fraud policy, if not EU policy at large, too close to comfort to the tobacco manufacturers”.

The report also highlighted that these companies are legally challenging the new Tobacco Products Directive. This “prompts some to question whether it is opportune for the EU to enter into a contract with an entity on policy issues related to the ones legally challenged.”

Georgieva is aware of the risk of the negative impact for the EU’s image that the continuation of such agreements could cause.

Moreover, the Commissioner does not want to antagonise MEPs by neglecting the negative opinion they gave on the deals, just when she is about to start negotiating the EU budget with co-legislators.

In a resolution voted on last March, a majority of lawmakers urged the Commission not to renew the deal, as they proved ineffective to stop the increase of smuggled non-branded “cheap white” cigarettes.

The executive and the European Parliament agreed that the WHO’s protocol could be a much more powerful instrument, as it will introduce at international level better tools to trace and track cigarettes.

The protocol will enter into force once it is ratified by 40 countries. Only 16 countries have done it to date, including only five member states (Austria, France, Latvia, Portugal and Spain).

Meanwhile, a majority of member states are in favour of prolonging the anti-smuggling agreements with the tobacco sector. EU officials said that around 20 member states responded affirmatively when the European Commission sent letters to the capitals last year to request their views.

Focus on implementation

In the meantime, the European Parliament called on the executive to focus on the implementation of the Tobacco Products Directive, which also includes similar tools at EU level.

Adopted in 2014, the directive will enter into force today. Andriukaitis was positive, as up to 19 national governments are preparing stronger measures.

But only Germany, Italy, Malta, Portugal and Slovenia completely transposed the directive on the eve of the entry into force, while it was partly adopted by Belgium, Estonia, Lithuania and the United Kingdom.

Britain, France, Ireland, Hungary and Slovenia either adopted or planned to include plain packaging, where brands and logos are removed.

The Lithuanian Commissioner warned laggard that he will be “very active” in ensuring that all member states bring their national legislation in line with the new EU rules.

Otherwise, he is ready to launch infringements procedures without delay.

The Commission, along with the member states, will assess the implementation of the Tobacco Products Directive during the next group of experts on tobacco policy, to be held on 15 June.

Positions

Ben Townsend, JTI’s EU Affairs Vice-President, noted that the new EU Tobacco Products Directive “is an attack on adult consumers’ freedom of choice and yet another example of extreme regulation.” Moreover, the EU move to further restrict packaging design and formats is so confusing and complex that regulators in EU member states are scrambling to draft national laws. JTI is a member of Japan Tobacco Group.

Background

EU member states and the European Commission entered into agreements with tobacco producers Philip Morris International (PMI) in 2004, Japan Tobacco in 2007, British American Tobacco (BAT) in 2010 and Imperial Tobacco in 2010 in which they agreed to pay a collective total of $2.15 billion to the EU, and member states.

Around 90% of the revenue from these deals goes to member states, and 10% to the EU budget, as own resources.

The tobacco firms pledged to prevent their products from falling into the hands of criminals, by supplying only quantities required by the legitimate market, taking care to sell only to legitimate clients and implementing a tracking system to help law enforcement authorities if cigarettes are traded illegally.

Meanwhile, the new Tobacco Directive updates the 2001Tobacco Products Directive, by bring it in line with market, scientific and international developments in the tobacco sector.

According to the new rules, the new cigarette packs will feature mandatory picture and text health warnings covering 65% of the front and the back of cigarette packs – to be placed on the top edge. 50% of the sides of packs will also be covered with health warnings (e.g. “smoking kills – quit now”; “tobacco smoke contains over 70 substances known to cause cancer”), replacing the current printing of tar, nicotine and carbon monoxide (TNCO) levels.

On top of this, flavourings in cigarettes and tobacco must not be used in quantities that give the product a distinguishable (‘characterising’) flavour other than tobacco.

Accordingly, Menthol is considered a characterising flavour and will be banned after a phase-out period of four years – a period which applies to all products with more than a 3% market share in the EU.

Delay in plain pack cigarettes a ‘missed opportunity’

As the new Minister for Health signs the European Tobacco Directive into Irish law, the Irish Cancer Society say it is a missed opportunity that plain packaging on cigarettes will not come into force on Friday, as originally planned.

On Friday, Simon Harris signed the European Tobacco Products Directive into Irish law. The new regulations include a ban on flavoured tobacco, misleading labelling (such as ‘natural’ or ‘organic), increased health warnings and stricter controls on e-cigarettes.

The introduction of standardised packaging on tobacco products was originally billed for Friday, 20 May but will not go ahead as it has not yet been passed through the Oireachtas.

The bill was initiated in the last Dáil, but did not make it past the second stage due to the “prolonged period of government negotiations.”

It comes as the UK’s legislation on plain packaging cigarettes, which will see them all be sold in drab green packages, came into force on Friday.

The Irish Cancer Society (ICS) have described the Irish governments delay as “a missed opportunity” to become the first country in Europe, along with the UK, to introduce plain packaging.

Plain packaging was introduced in Australia two years ago and has seen the smoking rates fall from 15.1% to a historic low of 12.8%.

The current smoking rate in Ireland stands at 19.5%, and Donal Buggy from the ICS says that the delay in introducing plain packaging puts the government’s commitment to be tobacco free by 2025 at risk.

“It is especially useful in stopping young people from smoking. We know that in Australia the daily smoking rate among 12-17 year olds has fallen to just 5%, compared to 8% here,” he explained.

The cancer charity say research shows 78% of people support the introduction of plain packaging.

“We’re encouraged by the level of support for plain packaging with almost four in five people behind it, while more than three in five smokers support it.

“The sooner plain packs are on the shelves in Ireland the better. Fasttracking plain packaging will put us on the road to a tobacco-free Ireland by 2025,” stated Mr Buggy.

Minister Harris said: “I look forward to progressing our Standardised Packaging Regulations in the near future.”

UK court quashes tobacco firms’ packaging challenge

http://www.politico.eu/article/uk-court-quashes-tobacco-firms-packaging-challenge/

LONDON — A High Court judge Thursday quashed the tobacco industry’s challenge to U.K. rules to require drab packaging stripped of logos and other branding on cigarettes and other products.

The 386-page judgment addressed all 17 grounds on which the tobacco industry challenged the U.K.’s rules, and sided with the government.

“I have found that the Secretary of State has adduced ample evidence to support the suitability and appropriateness of the Regulations,” the ruling reads.

The U.K. law is part of the country’s effort to implement the EU’s tobacco products directive, which comes into force on Friday.

The British standardized packaging regulations also take effect that day. Health warnings will have to cover 65 percent of the front and back of cigarette packaging. Anti-smoking advocates praised the decision.

“This landmark judgment is a crushing defeat for the tobacco industry and fully justifies the government’s determination to go ahead with the introduction of standardized packaging,” said Deborah Arnott, chief executive of ASH, an anti-smoking charity.

Cigarettes and hand-rolling tobacco will be sold in plain brown packages, which have had all the attractive features and colors removed. This so-called plain packaging is not required by the EU, but member countries can go beyond the floor set by the directive.

However, new packets will not be on sale until stocks of existing cartons have been sold over the next year.

The U.K.’s biggest tobacco firm, JTI, and British American Tobacco, both said they will challenge the ruling.

“We will continue to challenge the legality of plain packaging. The fact remains that our branding has been eradicated and we maintain that this is unlawful,” Daniel Sciamma, U.K. managing director of JTI, said in a statement on the decision.

ASH supported the government’s defense and provided written evidence and gave oral testimony to the court.

According to Arnott, who was in the London court, the judgment rejected every argument the industry put forward.

It was “highly critical” of the industry’s use of commissioned expert evidence, its failure to disclose any internal assessments on how packaging design affects children and young people, and the effect of standardized packaging on sales, according to Arnott.

The case was the first challenge to plain packaging laws, coming into force in France and Ireland among other countries.

700,000 deaths a year: tackling smoking in the EU

http://www.europarl.europa.eu/news/en/news-room/20160518STO27901/700000-deaths-a-year-tackling-smoking-in-the-EU

tobacco-lung-story

More than one in four Europeans smoke. Half of them will die prematurely, shortening their life by 14 years on average. From 20 May new European legislation will be in place to make smoking and cigarettes less attractive, especially among young people. Read on to find out what will change and check out our infographic about smokers in the EU.

What is changing

The new directive, which enters in force in all EU countries on Friday 20 May, sets more stringent rules regarding tobacco and related products.

Some of the new rules aim to make smoking less attractive for young people by banning cigarettes and rolling tobacco with charactering flavours, as well as small and cheaper packages for certain tobacco products.

Health warnings – including both picture and text – need to cover 65% of the front and the back of cigarette and roll-your-own tobacco packages, while all promotional and misleading elements on tobacco products are banned.

Manufacturers are obliged to notify novel tobacco products before placing them on the EU market, while they are also required to submit detailed reports to EU countries on the ingredients used in tobacco products, in particular cigarettes and roll-your-own tobacco.

In addition EU countries are allowed to prohibit internet sales of tobacco and related products and e-cigarettes are regulated either as medicinal products – if they are used to help people quit smoking – or as tobacco products.

End of gimmick tobacco products

Tobacco companies tried to prevent the new rules entering into force, but the European Court of Justice ruled against them.

UK S&D member Linda McAvan, who was responsible for steering the new rules through Parliament, welcomed the legislation entering into force this week: “People across the whole of the EU will see tobacco packs change from now on as gimmick tobacco products disappear from the market and tobacco packs carry more health warnings than adverts. These new clear rules, together with other national measures such as bans on smoking in public places, should help stop the tobacco industry from recruiting a new generation of young smokers in Europe. And now that the big tobacco companies lost their case in the European Court of Justice, those member states who have still not fully transposed the directive need to get on and do it.”

The lethal habit

Tobacco consumption is responsible for nearly 700,000 deaths in the EU every year. Smokers suffer more from poor health (as they are more at risk of cancer, cardiovascular and respiratory diseases) and half of them die prematurely (14 years on average).

No good news on packaging regs

The European Court of Justice has backed the EU Tobacco Directive and told producers of packaging for tobacco products that they cannot use fancy substrates, designs or techniques to differentiate brands following the plain packaging requirement that comes into force on 20 May.

One such firm is Amcor, whose designs include the ‘scissor’ pack, which opens sideways to reveal hidden branding.

The directive will also ban packs of 10 cigarettes, rolling tobacco in packs under 30g and all menthol cigarettes, from 20 May 2020. Packs across the EU are required to have health warnings across 65% of their surface.

Meanwhile, the sector is on tenterhooks awaiting the decision of the UK High Court in an intellectual property case brought by Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International.

Many businesses due to be affected by the legislation are reserving comment until the decision comes through but the mood is not good. In Australia, which introduced plain packaging in December 2012, a similar high-profile and very expensive legal battle between the Australian government and tobacco titans did not go the tobacco lobby’s way.

Mike Ridgway of the Consumer Packaging Manufacturers Alliance says: “A lot of printing will be badly affected by the implementation of plain packaging. Plain packaging means standardised packaging doing away with branding and ID, having health warnings and an olive green background with a small font.

“It’s not just graphics, it’s the construction and the substrates. There’s no hot-foil stamping, no embossing, graining or anything that gives the pack any sort of particular graphical marketing characteristics.”

While the plain packaging law, barring a last-minute reprieve by the court, will be introduced in the UK, Ireland and France, the EU directive affects all EU states. Any converter who has decided to make up for lost printing income through focusing on packaging shape, will find itself at the mercy of a double whammy.

Ridgway, a former Chesapeake Branded Packaging executive, adds: “I’m a non smoker; I just think it’s excessive regulation and there’s no proof it works, from a packaging and printing point of view it’s affecting tins, pouches, the whole packaging industry. They have really got issues.”

The pro-plain packaging lobby, however, claims Australian cigarette packs which feature large, gory photographs, do work.

Research by the Cancer Council, published in the medical journal Tobacco Control last year, found 20% of smokers were trying to quit the month before the ban and 27% the month after.

UK substrate manufacturer API is one company that was actively targeting tobacco packaging and at Packaging Innovations at London’s Olympia in September last year, cigarette packets featuring its signature Fresnel Lens PET laminate took pride of place on its stand. API also produces foils used on the front of cigarette packs and the plain packaging legislation has “badly knocked” its business, according to Ridgway.

Printed tobacco packets will not suddenly disappear from shelves. Retailers have a year for ‘sell-through’ and the introduction of standardised packaging could also produce opportunities for creative businesses.

When the Australian ban was introduced in December 2012, enterprising label printers, including Box Wrap and Stickerette, decided to print sticker covers for cigarette boxes.

Stickerette has patented its whole pack wraps and now calls itself a global brand which aims to increase sales in the UK and the US under its ‘Your Pack – You Decide’ slogan.

The standardised plain pack design can be produced litho or even digitally, according to Ridgway.

Parkside, Amcor and Multi Packaging Solutions are among the packaging firms likely to be hit. The latter prints cigarette packets on gravure. Amcor Tobacco Packaging president Jerzy Czubak said the legislation posed “a real risk” to consumers.

“Standardised packaging lowers barriers of entry into the tobacco market, leading to de facto creation of scale benefits for criminal organisations trading in counterfeit tobacco. Consumers are exposed to hazardous contents in illicit tobacco products and there will be a limited capacity to authenticate and differentiate between products.

“Amcor Tobacco Packaging believes that standardised packaging represents an unnecessary intervention into not only tobacco, but also packaging in general – a legitimate and essential industry that employs hundreds of thousands of people worldwide.”

Another gravure printer which is likely to be affected by the rules is Benkert. Its Alva, Clackmannanshire plant prints the paper which goes around cigarettes.

“Our argument has always been that if you take complexity out of the packs you’re opening the market up to illicit trade,” Ridgway says. “Over £2bn is lost through tax revenue losses per year through counterfeiting. That’s £8m a day. This business about increasing price is just not going to help. The projection is that by 2020 a packet of  cigarettes will be £20 and 14% of trade will be illicit.”

Countefeiting also concerns the BPIF. General manager at BPIF Cartons Neal Whipp, says: “BPIF Cartons supports any packaging initiative that has been proven to improve public health by reducing smoking. However thus far we have not seen sufficient evidence to this effect and so there is a risk that plain packaging may make matters worse by facilitating more counterfeit products at lower prices.”

Another fear is that the incoming rules will have a knock-on effect, in other countries and in terms of other sectors coming under the plain packaging microscope.

Alcohol is the obvious contender but concerns, espoused by the anti plain-packaging fraternity at least, is that fatty and sugary foods could also be in the firing line, as a way to be seen to be doing something to appease the health lobby.

The government claimed sound reasons for pressing ahead with plain packaging. In 2012-13 it spent £87.7m on services to help people stop smoking. It says the new packs will save lives and, in addition, money. Public Health England estimates a £500m healthcare saving if the fall in smoking seen in Australia is mirrored here.

So why not ban them completely? In 2014-15 the government received £9.5bn in revenue from tobacco tax and that excludes VAT. So we have a compromise which benefits some, but packaging printers and converters least of all.