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‘Phone-Up Cigarettes’ A Problem For Officers

Customs admits trade is hard to prosecute

Clifford Lo – Mar 06, 2009 – SCMP

A senior customs official admitted yesterday there were difficulties in cracking down on phone orders for illicit cigarettes, while announcing the arrest of 54 people and seizure of HK$7.5 million worth of illegal cigarettes in a week-long operation.

The arrests included tobacco traffickers and buyers, but none were involved in phone orders, said Chow Chi-kwong, head of the Customs and Excise Department’s revenue and general investigation bureau.

“To evade our detection, illegal traders only take orders from regular customers, or buyers are required to say a password. It is one of the obstacles we are facing,” he said.

Customs had carried out successful operations against such phone-order services in the past but it was time-consuming. He said the department was determined to deal with such tactics and would spare no effort to crack down on the trade of illicit cigarettes.

Tobacco traffickers hand out fliers across the city listing brands, a price list and contact numbers before delivering the illegal goods to buyers.

After the 50 per cent rise in tobacco duty announced in the budget, the average price of a pack of 20 cigarettes rose from HK$29 to HK$39.

Mr Chow said some tobacco traffickers also pushed up the price of illicit cigarettes by HK$10 to HK$20 for a package of 10 packs.

“Counterfeits sell for HK$60 to HK$90 a package and smuggled genuine cigarettes cost HK$120 to HK$160 a package,” he said.

The illegal trade is focused on Mong Kok, Yau Ma Tei, Sham Shui Po and Wan Chai.

Bracing itself for a possible rise in illicit activities after the increase in tobacco tax, customs stepped up enforcement to deal with the problem in a week-long operation that started on February 26. Officers made 46 arrests, including 26 buyers, in 40 cases and seized HK$130,000 worth of cigarettes. They found four storage areas for illegal cigarettes, where four people were arrested, and HK$900,000 worth of cigarettes.

To stop smuggling from the mainland, officers stepped up inspections at control points. They arrested five drivers, seized HK$6.5 million of illicit cigarettes and impounded three trucks and two cars at the Lok Ma Chau and Man Kam To checkpoints.

On Sunday, a 52-year-old man was arrested with 3,800 illicit cigarettes in his handbag and rucksack at the Lok Ma Chau border checkpoint as he returned from Shenzhen.

“We will not give criminals a chance to take advantage of the rise in tobacco duty to increase the trade of illegal cigarettes,” Mr Chow said.

While saying there was no sign of a rising trend in the trade of illegal cigarettes, he said customs would monitor events, enhance intelligence collection and step up enforcement.

The maximum penalty for trading in illicit cigarettes is a HK$1 million fine and two-year imprisonment. Mr Chow urged people to report such activity on customs’ 24-hour hotline, 2545 6182.

Customs dealt with 1,570 cases of illegal cigarette smuggling, distribution, sales and storage last year, 14 per cent fewer than in 2007.

The Electronic Cigarette

‘As a smoker, there was no heft to the experience’

Dan Kadison and Agnes Lam – Mar 05, 2009 – SCMP

The electronic cigarette is strange and fun, mystifying and intriguing – but when push comes to smoke, the gadget is a novelty act, a pet rock, a gimmick to move with the times.

A Post reporter, who alternates his days between quitting heroically and smoking relentlessly, was asked to test the banned doodad.

The battery-operated device is a bit heavier than a coffin nail, but it is not bothersome. It delivered pleasing draws of nicotine relief that tasted like burnt chocolate. And a smoky mystery mist appeared with each exhale. Another plus is that the gizmo’s tip glowed orange with each draw.

Other benefits? The manufacturer claims there’s no second-hand smoke, no carcinogen worry, no falling asleep and burning down the house.

Still, with all the perks, the reporter can’t back the stick. As a smoker, there was no heft to the experience. As a non-smoker, there was no healthy sacrifice.

Electronic cigarettes were still available for sale yesterday at a wine store, Cheers at Olympian City, after the Department of Health called on smokers not to use the devices until their safety, efficacy and quality was established.

The product, which is sold at HK$580 with a coupon, originally cost HK$1,880.

“The product is made in China and then shipped back to Europe and then exported to other places. It contains no nicotine and it is legal for you to buy it and possess it,” a shopkeeper told a reporter posing as a customer. The shop assistant also told the reporter that the product was exempted from Hong Kong laws, claiming it was nicotine-free.

“Quite a lot of customers have brought this electronic cigarette and some elderly smokers told me that it can really help them quit smoking,” the shopkeeper said.

Electronic cigarettes were also available at another outlet of Cheers at Hollywood Plaza in Diamond Hill.

Electronic Cigarettes On Sale On Internet

Hong Kong Digest – Updated on Mar 03, 2009 – Ming Pao Daily

Surge of tobacco duties by 50 per cent recently has led to the re-emergence of “electronic cigarettes” for sale on the internet. Claiming the product to be tax and tar – but not nicotine – free, a vendor said stocks of “electronic cigarettes” had been sold out since many smokers were turning to the product for financial reasons. He said the “smokeless” cigarettes contained no tobacco and could be used indoors without violating the law. The Department of Health declined to comment if internet advertising of “electronic cigarettes” was against the law.

The Dial-A-Pack Cigarette Gangs

Clifford Lo – Updated on Mar 01, 2009 – SCMP

Illegal cigarettes are being sold for as little as HK$6 a pack to attract customers – part of a sophisticated trafficking operation designed to elude police and customs officers – say law enforcement sources.

The gangs hand out fliers across the city listing brands, a price list and contact numbers – or post them in residents’ letter boxes – and take orders by phone, the sources say.

Customs chiefs are braced for a rise in tobacco smuggling following the 50 per cent rise in tobacco duties announced in last week’s budget speech. The increase pushed the average price of a pack of 20 cigarettes up from HK$29 to HK$39.

The government hopes the rise will persuade between one in five and one in 10 smokers to quit the habit.

“After taking orders, illicit cigarettes are delivered to your home or pickups are arranged in parks or at MTR station exits,” a government source said.

“To avoid being caught in a sting, illegal traffickers will observe buyers and the location of the transaction before doing business. New buyers may be asked to leave money on a park bench before being told where to pick up the goods.”

Mainland visitors, housewives, drug addicts and Vietnamese residents had been recruited to distribute the goods and run the business, this source said. Counterfeits sell for HK$6 to HK$10 a pack; smuggled genuine cigarettes cost HK$15 to HK$17. Another source said most buyers of illegal cigarettes were from lowincome families and the illegal traders did most of their business in public housing estates. Customs officials said crackdowns on areas where the gangs operate had cut into their sales. However, authorities were concerned that the rise in tobacco duties would spur an increase in the trade.

Cross Street in Wan Chai is one of the places where the illegal trade flourishes. The vendors hide the cigarettes in an alley or nearby building.

“Now traffickers have resorted to a phone-order service to evade detection and arrest,” one source said. “Some traffickers only take orders from regular customers or those who can say a password.”

The Customs and Excise Department dealt with 1,570 cases of illegal-cigarette smuggling, distribution, sales and storage last year, 14 per cent fewer than in 2007. Officers arrested 1,170 people and seized more than 73 million cigarettes.

Most of the illegal cigarettes are smuggled from the mainland.

Ben Leung Lun-cheung, head of the department’s land boundary command, said: “We are determined to crack down on the import, storage and sale of illicit cigarettes.”

Raising Taxes Just The First Step On Anti-Smoking Front

Updated on Mar 01, 2009 – SCMP

Stepped-up smuggling activities are to be expected after the government raised tobacco duty by 50 per cent. But the brazen manner in which some criminals hand out fliers in busy streets and drop them in residential mailboxes to promote the sale of illegal cigarettes is deeply troubling. Customs and police have anticipated such developments; they must make sure they have adequate resources and manpower to nip such criminal activities in the bud.

It was right to raise the duty on cigarettes; we had not done so since 2002. As a result, our city had been selling some of the cheapest cigarettes in the developed world. Officials had cited the danger of encouraging tobacco smuggling as a reason to avoid raising taxes. Now they have bitten the bullet. By making smoking expensive, it will help deter people from starting the habit and encourage addicts to quit. The revised duty will not only help boost government coffers at a time of a rising deficit, but save many lives. It is especially important to discourage youngsters from taking up the deadly habit.

However, law enforcement against smugglers and illegal sellers must be coupled with education and medical services to help smokers quit. And anti-smoking messages should be promoted. Unfortunately, with an illegal pack selling for as little as HK$6, more smokers may be tempted to buy illegal cigarettes in this downturn. Such people may need to be nudged in the right direction.

Is it not more sensible to quit than to resort to dealing with criminals and waste money on illegal tobacco that will damage one’s health? But to get this message across, more community resources and campaign drives are needed. The Department of Health and some non-government groups run free or highly subsidised smoking-cessation services. Schools should also be given more resources to educate young people, but with more effective and creative messages so they get the point. This summer will see the smoking ban extended to all enclosed public spaces. Many bars are lobbying to extend their exemption from the ban. Officials must stick to their guns, because our city is finally moving in the right direction on the anti-smoking front.

Health Hotline Flooded Since Tobacco Duty Raised

Hotline flooded since tobacco duty raised 50pc in budget

Ng Kang-chung – SCMP – Feb 28, 2009

The decision to raise the tobacco duty in the budget to discourage people from smoking seems to have had an immediate effect – a hotline that helps people kick the habit has been flooded with inquiries.

By 4pm yesterday there had been 403 inquiries to the Department of Health’s hotline – 1833 183. It received 322 calls on Thursday, against a daily average of just 12 last year.

The hotline is manned by nurses who provide counselling. After hours, a computerised call-handling system provides information on quitting smoking.

Financial Secretary John Tsang Chun-wah announced the 50 per cent increase in tobacco duty in his budget speech on Wednesday. With immediate effect, the duty on cigarettes increased from around 80 cents per cigarette to about HK$1.20.

The increase pushed the retail price of a pack of 20 cigarettes to about HK$39, up from HK$29.

Mr Tsang estimated that 10 per cent to 20 per cent of smokers would opt to quit after the duty increase.

Meanwhile, the health minister disclosed yesterday that the idea of imposing an import ban on cigarettes was once considered as a move to force people to stop smoking.

Secretary for Food and Health York Chow Yat-ngok also warned the government could one day reconsider such a move.

Dr Chow made the comments during a radio phone-in programme in which he faced a torrent of criticism over the move to increase tobacco duty by 50 per cent.

In yesterday’s RTHK Talkabout programme, one smoker, a Mr Ching, asked why the government did not simply outlaw tobacco imports.

Dr Chow said: “It was not that we had not thought of this idea. But society is changing and the habit [of smoking] can change by not [banning imports]. In the past 10 to 20 years, we have increased tobacco duty and strengthened education in the hope of encouraging people to quit smoking.

“Many places in the world are using more or less the same means.”

Repeatedly challenged by Mr Ching over an import ban, Dr Chow said: “We have not ruled that out. One day, we might consider that or carry it out.”

But he was quick to add: “Hong Kong is a free society. We hope people can kick the habit willingly.”

According to figures from the Department of Health’s Tobacco Control Office, the proportion of smokers dropped from 14 per cent of the population in 2005 to 11.8 per cent in 2007-08.

The percentage of young smokers – aged between 15 and 19 – also fell, from 3.5 per cent of the youth population in 2005 to 2.4 per cent in 2007-08.

But Dr Chow said he was still worried. “Young smokers now consume 11 sticks every day, as compared to nine sticks in 2005.”

On media reports about a surge in smuggling of cigarettes after the duty was increased, Dr Chow said: “Customs will have sufficient measures and resources to deal with this problem

HK$10 Rise In Price Of A Packet Of Cigarettes

Smokers left gasping at HK$10 rise in price of a packet of cigarettes

BUDGET 2009 – SCMP – Bryony Taylor – Feb 27, 2009

Tobacco companies yesterday capitalised on the 50 per cent tax increase proposed in the budget by adding an extra HK$2 per pack onto the retail price.

Almost all brands increased by HK$10, rather than the HK$8 tax increase announced on Wednesday. Retailers 7-Eleven and Circle K said they were told by the suppliers to make the larger increase.

Philip Morris International estimated the increase in tax would mean an extra cost of HK$2,000 a year for a smoker who consumed 14 cigarettes a day.

However, this estimate does not take into account the extra HK$2 per pack, which adds a further HK$555 a year on average.

Despite this, lucky customers at Circle K stores continued to buy cigarettes at the old prices due to late publication of new price lists from suppliers. But some small vendors took advantage of the tax increase by putting up prices by HK$12 a pack.

“We have informed our trade partners that the price of most products must increase due to the significant tax increase and anticipated drop in the sale of duty-paid tobacco,” Philip Morris said.

Many anti-smoking groups were worried that the increase would be absorbed by the manufacturers, but this has not been case.

Philip Morris also expressed worries that the higher tax would provide business for illegal traders.

Anti-smoking campaigners deny this, however, and stressed the strength of Hong Kong’s customs department.

Cigars have also been affected by the increase, but due to their more complex pricing structure, new price lists have yet to be released.

“We are pleased that the tobacco companies are helping our cause by increasing the price further,” said Anthony Hedley, of the University of Hong Kong’s school of public health.

Li Cheong-lung, from the Committee on Youth Smoking Prevention, said: “Price influence is one of the most important reasons of youth smoking.

“Some youths have told me that they attempted smoking by purchasing lower-priced products, therefore the price increase could help stop newcomers.”

New prices

Marlboro HK$39; Kent HK$39; Salem HK$39; Next HK$34; L&M HK$36; Dunhill HK$39; Davidoff HK$35; Winfield HK$34; Capri HK$41; Winston HK$35

50pc Tobacco Duty Rise Brings Confusion

BUDGET 2009 – Ella Lee and Danny Mok – Feb 26, 2009 – SCMP

Confusion arose last night over cigarette retail prices, with two major tobacco agents taking the unusual step of not raising charges immediately after a 50 per cent increase in tobacco duty was announced in the budget.

Some retailers immediately raised prices, while others imposed a limit on the number of packs each customer could buy.

British American Tobacco Hong Kong and Hong Kong Tobacco did not raise charges yesterday, along with most 7-Eleven outlets and other vendors.

But most 7-Eleven stores allowed each customer to buy only two packs a time. Smokers were seen rushing for cigarettes at outlets of Circle K, which did not raise charges.

Most petrol stations did not increase their prices.

However, some vendors raised prices by HK$8 a pack after the budget.

The 50 per cent increase in duty was welcomed by anti-smoking activists. However, they were quick to warn that the measure should not lead to any “trade-off” with the tobacco industry.

Financial Secretary John Tsang Chun-wah announced that the duty would be increased from about 80 HK cents per cigarette to HK$1.20, with immediate effect. The duty for cigars was increased from HK$1,035 per kg to HK$1,553. Tobacco duty was last raised in the 2001-02 financial year – from 76 cents to 80 cents a cigarette.

Executive secretary of the Tobacco Association of Hong Kong Raza Zulfiqar said the trade was disappointed with the “drastic increase” in tobacco duty, adding that it would only stimulate smuggling of cigarettes. He said individual tobacco companies would decide later on the new retail prices of their products.

A senior government source said the increase was not aimed at increasing revenue for the administration but at reducing the smoking population. There are about 754,800 smokers in Hong Kong, or 13.2 per cent of the population aged over 15. Fears had been raised about the increasing number of young and female smokers in Hong Kong, the source said.

Secretary for Food and Health York Chow Yat-ngok said the measure could deter more young people from smoking.

Tobacco tax has been increased from HK$16 to HK$24 per pack of cigarettes, with retail prices of some popular brands expected to rise from about HK$29 to HK$37 a pack.

The anti-smoking group Clear the Air said the government must legislate for the excise tax to be not less than 80 per cent of final retail cost, to prevent tobacco companies reducing prices to offset the tax rise.

Anti-tobacco groups had been calling for the administration to increase tobacco duty after government figures showed a 13.8 per cent rise in cigarette consumption since 2006, despite a smoking ban in restaurants.

Anthony Hedley, a professor in community medicine at the University of Hong Kong, welcomed the move and said it plugged a big hole in tobacco control.

“Credits should go to the NGOs, the Department of Health and the Food and Health Bureau which have pushed for the increase,” he said.

Going Up In Smoke

Despite the perception that Hong Kong has made strides against smoking, activists and public health officials say the opposite is true

SCMP – TOBACCO – Raymond Ma – Feb 26, 2009

How did it all come to this? That is the typical response of anti-tobacco campaigners, when asked about their crusade to rid Hong Kong of a highly addictive but legal product that has been linked time and again to everything from obesity and diabetes to stroke and cancer.

Anthony Hedley, chair professor of community medicine at the University of Hong Kong, has been campaigning for tougher anti-smoking laws since he arrived here 21 years ago. He believes that “we are losing an enormous amount of ground”.

“From a public health point of view, it’s very serious,” he said. “Hong Kong is beginning to stand out among economically developed nations as a place which is losing progress in terms of the gains which it made in advocacy and legislation, and it will eventually lose ground in terms of health protection.”

Such concerns are not without foundation. Research by the university has estimated that 7,000 Hongkongers die from active or passive smoking each year.

The total cost to the community, taking into account pain, suffering and lives lost, is put in excess of HK$70 billion per year. Smoking is considered one of the biggest health concerns in developed countries, right up there with high blood pressure, alcohol misuse and high cholesterol.

However, despite the tireless efforts of people such as Professor Hedley and a strong community of tobacco-control activists and public health officials, there is a growing consensus that the city is losing its war against cigarette consumption.

This may not be readily apparent to the average man or woman. According to figures from the Department of Health’s Tobacco Control Office, the percentage of Hongkongers who smoked daily has fallen from 14.9 per cent in 1993 to 11.8 per cent in 2007-08.

A cursory glance down a typical Hong Kong street may lead many to believe that fewer people are lighting up, compared with a decade ago. That is thanks, in part, to the smoking ban implemented in 2007 at all indoor public places that succeeded in ridding the city’s restaurants of cigarette smoke.

Hong Kong is also one of fewer than 20 countries or regions around the world where all cigarette packets feature graphic warning labels that convey on an emotive level the dangers of smoking.

Finally, the passing of a sweeping set of legislative amendments to the city’s smoking laws in 2006 generated substantial media interest. Yet, despite these measures, the anti-smoking lobby remains frustrated. Activists centre on how the city, once considered a trailblazer in the field of tobacco control, has been surpassed by more progressive jurisdictions.

Consider that, in the late 1990s, Hong Kong was seen as a model of tobacco-control policies following the passage in 1997 of sweeping reforms that virtually eliminated all but the smallest forms of tobacco advertising in the city. At the time, such a ban was not even in place in Britain, of which Hong Kong was still a part.

Fast forward a decade, and the situation is reversed. Four years after New York banned smoking from all enclosed workspaces, the so-called ban on smoking in “all” indoor public venues, implemented with much pomp and circumstance, was rife with extensions – for bars, bathhouses and mahjong parlours. Critics belittle the ban, and say it is continuing to fail in one of its chief aims: to protect catering and hospitality workers from second-hand smoke.

Against this backdrop, the reality – despite what some may perceive – is that the consumption of tobacco has risen steadily over the years. Latest Customs and Excise Department figures show that 3.79 billion cigarettes were sold last year, compared with 3.33 billion in 2006. In 2007, 3.49 billion cigarettes were consumed.

“Up until 1997, we were, arguably, the second best in Asia after Singapore, but after that, all the way up to 2007, we did almost absolutely nothing during that period,” said Judith Mackay, a senior policy adviser to the World Health Organisation.

“We did have legislation that went through and came into effect in 2007 which brought us a little bit more up to speed, but then we had all these ridiculous extensions,” she added, referring to the grace periods given to some businesses and the delaying of a ban on point of sale cigarette advertising until later this year.

“Both of those had extensions in the law and it made it less than perfect.”

But where Hong Kong really fell behind was in its failure to increase tobacco duty, despite the fact that it was widely considered to be the best measure to cut consumption, she said.

Before yesterday’s 50 per cent rise, the last time the government put up the duty was in 2001. In the 1990s, some of the highest tobacco tax increases were recorded.

Year after year, anti-smoking lobbyists called on the government to raise the tobacco duty, only to have their pleas ignored. Most recently, the publicly funded Council on Smoking and Health (Cosh) sent a petition, with around 4,000 signatures from people around the world, to Financial Secretary John Tsang Chun-wah urging him to raise the tobacco duty.

Hong Kong is bound, under the WHO Framework Convention on Tobacco Control – a global anti-smoking treaty which has been signed by Beijing – to implement tax or price measures.

Dr Mackay noted that even the mainland, the largest producer and consumer of cigarettes in the world, is considering using taxation to curb consumption. She said that Hong Kong had been “shockingly, critically and embarrassingly backwards” on raising the duty. “It’s really shameful.”

Aside from the bold step of a tobacco duty increase, Dr Mackay said that it was also important that the extensions, which will expire in June, be ended without further delay.

Furthermore, the government needed to hold out against putting smoking rooms in bars in Hong Kong, which had already spent HK$2.5 million of taxpayers’ money to study, she said.

While there has been some debate over the plan’s merits, putting a ventilated smoking room in every bar in Hong Kong was simply too expensive, and it would still fail to protect the health of the people who work at these places, Dr Mackay said.

“Somebody’s got to clean it, work in it, so it’s still not without risk.”

Finally, Hong Kong should consider plain packaging for cigarette packets, which would be a world first, and set prevalence targets, a measure not uncommon in other jurisdictions. Dr Mackay challenged the government to reduce smoking prevalence to 11 per cent for daily smokers by the end of 2010.

A spokesman for the Food and Health Bureau said the government agreed that taxation was one of the many effective measures to reduce smoking. He said the financial secretary considered all factors before making a decision. And he was adamant that the administration would make no exemptions in its planned implementation of the amendments to anti-smoking laws passed in 2006, including its plans to end the grace periods for bars and other places under the indoor smoking ban, and to eliminate point of sale advertising for cigarettes.

However, he said the government was still continuing its study on smoking rooms. No decision had yet been made, he said, and the government would report to the Legislative Council when it was ready.

At a conference on managing tobacco dependence, held by the Tobacco Control Office in Hong Kong last week, Secretary for Food and Health York Chow Yat-ngok acknowledged that, while Hong Kong had made progress in fighting smoking, more needed to be done. He made the comments shortly after the government unveiled an extension to its community-based smoking cessation programme, to include after-office hours and weekends.

Meanwhile, there have also been calls for the government to commit more resources to fighting smoking. James Middleton, the anti-tobacco committee chairman for lobby group Clear the Air, believes that the current resources allocated by the government to fight smoking are inadequate.

In the 2008-09 fiscal year, the government budgeted HK$47 million for the Tobacco Control Office to carry out its duties. The office employs 124 people, including 85 tobacco-control inspectors, to carry out enforcement, seven police officers, and various medical and clerical professionals. Meanwhile, each year, Cosh receives a dwindling subvention that stood at HK$11.3 million in the previous budget, down from HK$14.8 million in 2005-2006.

“The Tobacco Control Office has [85] inspectors to cover the whole of Hong Kong on two shifts. It’s totally inadequate. How can you do that?” Mr Middleton said.

Cigarette Stocks Gone in Puff of Smoke

Timothy Chui and Grace Tsoi – Hong Kong Standard – Thursday, February 26, 2009

Smokers eager for a pre-budget- priced nicotine hit cleared convenience stores across the territory of cigarettes yesterday.

News that the city’s tobacco tax was being increased by 50 percent – effective immediately – just before noon left stores short or sold out of cigarettes by early evening.

One store clerk said his shop was cleaned out of 2,700 packs, with buyers breaking brand loyalty to snap up all 40 or so brands on offer.

Street vendors also tried to make a killing by upping the price of pre- budget cigarettes before the 50 percent hike in tobacco duties announced by John Tsang took effect.

Tsang said tobacco duties would rise by HK$8 per pack, taking the total duty per pack to HK$24 from HK$16.

Last night Shau Kei Wan street hawkers were charging HK$37 a pack.

The duty hike will boost the goverment’s take from HK$3 billion to HK$3.8 billion a year, said a government source who put the number of smokers in the SAR at about 600,000.

He added that while progress had been made in making male smokers quit, younger female smokers were taking their place.

Professor Judith Mackay, director of the Asian Consultancy on Tobacco Control and senior policy adviser to the World Health Organization, called the budget’s only tax hike a “much- needed, overdue and timely increase.”

She said cigarettes were getting cheaper in real terms because tobacco duties had remained the same over the past eight years.

She added that every jurisdiction that increased tobacco duties saw declines in smoking rates, especially among the young.

Mackay said there was a 4 percent decrease in smoking rates for every 10 percent increase in tax, while a government source pegged the figure at 6.3 percent per 10 percent.

Anti-smoking group Clear The Air called for a doubling in manpower for the Tobacco Control Office, and said legislation should be passed to bind tobacco duties at no less than 80 percent of final retail costs to prevent tobacco companies from absorbing the hike.

A Japan Tobacco International spokeswoman does not see the number of smokers dropping after the tax hike. She pointed out that the average daily consumption during the early 1990s was steady despite a 200 percent tax hike in March 1991.

She warned higher taxes will lead to more cheap illegal cigarettes.

A Philip Morris Asia spokeswoman echoed the smuggling concerns.