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How to measure the black market for cigarettes

Popular methods include surveys, statistical analysis and rooting through rubbish

http://www.economist.com/blogs/economist-explains/2017/06/economist-explains-4

LAST month Britain joined a growing number of countries in which cigarettes can only be sold in plain packs. Tobacco companies claim that the move will boost the sales of contraband cigarettes by making them trickier to spot. There is one way to tell whether this actually happens: track how black-market sales change. But how can such sales be measured?

There are about a dozen ways to do it, of which three are the most commonly used, says Hana Ross of the University of Cape Town. The first is a comparison of the number of cigarettes sold legally (from records on cigarette taxes paid) with the number of cigarettes consumed (which is calculated from surveys asking people how much they smoke). The gap between the two figures is the estimated share of the black market. The second commonly used method is to ask smokers where they have bought cigarettes and how much they have paid; smokers might also be asked to show the most recent pack they have bought. A price lower than that of legally sold brands suggests a contraband sale; some smokers openly admit that they have bought contraband cigarettes, or show a telltale pack.

The third method is to look at discarded cigarette packs and count up each that looks like a black-market purchase, for instance by missing its tax sticker or displaying a brand that is not officially registered. Discarded packs can be collected from vendors who sell cigarettes by the stick, from litter in the streets, or by rummaging through rubbish bins or the hauls of refuse-collection trucks. (“We dress them as if they are going into space”, says Ms Ross about the recruits who rummage through the heaps.)

Each of these methods has its weakness. Smokers may, for example, be reluctant to mention purchases of cigarettes they know to be contraband. They may also claim to smoke less than they actually do (especially if researchers come round soon after a major anti-smoking campaign). Ideally, multiple methods should be applied to get a better estimate of the total black-market sales. And trends over time are best measured by applying the same method. Such studies are conducted in a growing number of countries. Just because a sale occurs in the shadows does not mean it is impossible to cast a smouldering light on it.

Centre wants to stub out airport tobacco shops

Welcome move: The Ministry also ordered that tobacco shops are not located to smoking rooms. In a significant move to discourage smoking at airports, the Union Health Ministry has written to the Airports Authority of India (AAI) Chairman, the Union Ministry of Civil Aviation Secretary, and CEOs of Chhatrapati Shivaji International Airport, Indira Gandhi International Airport and Rajiv Gandhi International Airport to ensure that tobacco shops at airports are not located near smoking rooms. Punishable offence Besides tobacco shops at airports displaying signage stating that “sale of tobacco products to a person below the age of 18 years is a punishable offence”, they shouldn’t sell non-tobacco products, the letter adds. In the May 26 letter, the Health Ministry brought to the notice of the AAI and the Civil Aviation Ministry that provisions of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act (COTPA), 2003, were being violated at airports by shops selling cigarettes and other tobacco products. These shops, in contravention of provisions of COTPA, display tobacco advertisements and are located just outside smoking rooms or in food courts, thus facilitating tobacco use among non-smokers, especially children. ‘No signage displayed’ The letter highlighted that certain tobacco products are also sold at shops selling souvenirs, food articles, books and comics, thus enabling easy access to non-smokers, especially children, to these shops and tobacco products. These shops also do not display the signage stating that “sale of tobacco products to a person below the age of 18 years is a punishable offence”. An anti-tobacco activist said, “The Health Ministry had earlier issued a notification banning the use of hookah in any smoking area or space provided for smoking.

https://www.nyoooz.com/news/delhi/831807/centre-wants-to-stub-out-airport-tobacco-shops/

It had also directed owners, proprietors, managers, supervisors or in-charges of affairs of the hotel, restaurant or airports shall display at the entrance of smoking areas or spaces a board of minimum size of 60×30 cm with a white background the messages — “Tobacco Smoking is Harmful To Your Health and The Health of Non-Smokers” and “Entry of Person Below The Age of Eighteen Years Is Prohibited” — in English and an Indian language in black colour.”. . .

Sunday Interview: Dr Mackay, tobacco industry’s worst nightmare

ANTI-TOBACCO advocate Professor Dr Judith Longstaff Mackay has been identified as ‘one of the three most dangerous people in the world’ by the industry. She was instrumental in developing the World Health Organisation’s Framework Convention on Tobacco Control. In her recent visit to Malaysia, she shares her experience campaigning against tobacco in Asia since 1984.

“I HAVE been described as a ‘psychotic human garbage, a gibbering Satan, an insane psychotic, power-lusting piece of meat, Hitler and a nanny’ and they (the tobacco industry allies) threatened to destroy me. But such threats and offensive words never once diverted me from my cause,” says Professor Dr Judith Longstaff Mackay.

Dr Mackay, 73, wears many hats. The World Health Organisation (WHO) senior policy adviser is also senior adviser to Vital Strategies, part of the Bloomberg Initiative to Reduce Tobacco and director of the Asian Consultancy on Tobacco Control.

Her recent visit was part of her capacity as a visiting professor at the University Malaya Centre of Addiction Sciences.

A recipient of British Medical Journal Lifetime Achievement Award (2009) and a Special Award for Outstanding Contribution on Tobacco Control (2014), she has published 200 papers, and addressed over 460 conferences on tobacco control.

Dr Mackay has received many international awards in recognition of her contribution on tobacco control. She was selected as one of Time’s 60 Asian Heroes (2006) and of Time’s 100 World’s Most Influential People (2007).

Question: Born in Britain, you moved to Hong Kong in 1967 after earning a medical degree from the University of Edinburgh in 1966. What led to your resignation as a physician in 1984, and then becoming a leading campaigner and advocate for tobacco control for the last 30 years?

Answer: I had a complete career change from cure to prevention and there were three main reasons for making the shift.

First, when I was working in a hospital in Hong Kong, we had a maxim on our male medical wards that every person we admitted was a smoker with tobacco illnesses, like heart diseases, cancer and chronic chest problems, which were often too late and too advanced to be cured.

I realised we had to go a step “higher upstream” to prevent this rather than merely providing the ambulance services at the end-stage.

I came to feel that hospital medicine was important but it works like a band-aid in comparison with prevention.

You may be able to save hundreds of lives in a lifetime in hospital medicine, but millions of lives could be saved if you work in prevention. It is a completely different ball game, and yet the money, prestige and attention all go to curative medicine; and that is similar around the world.

Second, was the realisation that although women’s health those days was defined very gynaecologically, more women were being killed by tobacco than by every method of contraception combined. I was particularly concerned that the tobacco industry was enticing women with promises of beauty, fame, emancipation and freedom.

The third reason was that the tobacco industry felt Asia was theirs for the taking.

They said it themselves — when asked about their future in the 1980s, “What do we want? We want Asia”.

Q: Why did the tobacco industry had their eyes set on Asia?

A: They wanted the huge populations and the large number of men already smoking who could be persuaded to smoke their brands of cigarettes.

They galloped into Asia with the dream of converting the 60 per cent of men who smoked local cigarettes to switch to international brands, and the second dream of persuading Asian women to start smoking. If this happened, their markets would be enormous.

It would not matter if every smoker in Britain stopped smoking tomorrow if they could capture the massive Asian markets.

Also, Asia was becoming more affluent, so, it was easier for people to afford cigarettes.

Thirdly, when I wrote an article in the South China Morning Post on banning cigarette advertising, a tobacco giant came down on me and labelled me as “entirely unrepresentative and unaccountable”.

The tobacco industry claimed that they were the best source of information on tobacco and they even said it has not been proven that “illness was actually caused by smoking”.

I was so outraged that it was just one of those tipping points in life in 1984. Everything came together and I realised that I really had to work on prevention rather than cure.

Ever since, I have been working principally with governments on the policy level to try and get the tax and the laws in place in tobacco control.

Q: You are known as one of the three most dangerous people in the world by the tobacco industry. What do you have to say about this?

A: Well yes, I’m proud of that. The reason that I got that title was essentially location. I happen to be in Asia and the tobacco companies wanted Asia. They saw this region as their future, but I set about thwarting their goals.

I went early on to countries like China, Indonesia, Malaysia, Mongolia, Vietnam and Cambodia and more recently to North Korea upon learning that British American Tobacco had gone into the country to get laws in place.

Q: In campaigning against tobacco use, what are some of the challenges you have faced?

A: I have had many problems, and was subjected to verbal abuse and even had death threats from allies of the tobacco industry.

Twice, I was threatened by the tobacco industry publicly, saying they would take me to court.

Nothing came of it, so it was either an attempt to intimidate me or to cast doubt on my credibility in the minds of the public.

In a television interview in South Africa, I openly said “I’m not a suicidal type, and if I were to be found knocked down by a bus, you need to find out if the tobacco industry is behind it before you look anywhere else.” And the industry was apparently furious with me for saying that.

However, their tactic now is not so much to attack people individually, but to threaten governments.

They threaten them under Constitutional Law on the rights of their products to advertise, and on freedom of speech and they attack them under trade treaties.

This is intimidating to governments and it can cost anything up to US$50 million (RM214 million) to fight these threats.

Q: You were one of the key persons in formulating the Framework Convention on Tobacco Control (FCTC), the first international treaty on public health. Malaysia is currently drafting the Control of Tobacco and Smoking Bill after lobbying for it since 2004 and they have sought your expertise. What do you have to say about this?

A: If you look at Malaysia and Hong Kong, many of the things that these two jurisdictions have done in the last 30 years are similar, yet Hong Kong has managed to half its male smoking rate.

Hong Kong is down to 10 per cent smokers now, whereas prevalence rates in Malaysia have not really decreased (at around 22.8 per cent). I understand it is not something that can be done overnight.

But the fact that the prevalence has not decreased is either because the excise tax imposed on cigarettes is not high enough, or that the laws that have been passed are not being enforced. In the case of the tobacco bill, the tobacco industry has been an unseen hand behind the scenes.

Q: The Health Ministry plans to increase prices of cigarettes from RM17 to RM21.50 in the near future to deter people from smoking. Several industry players were quick to say that increasing the tax would only lead to increased sales of illicit cigarettes. Is this true? What is the link between the increase in excise tax and contraband cigarettes?

A: There is zero truth in this. This sounds to me suspiciously just like what the tobacco industry would say. Economists, tax, finance and customs officials know, or they should know, that putting up a tobacco tax is not related to any increase in smuggling.

Our Customs chief in Hong Kong, for example, had said quite categorically there is no relationship between the amount of tax that is put in place and smuggling, and that is the position of the WHO too. But the tobacco industry keeps repeating it so often that some governments have come to believe it.

This is one of their tactics. A United States-based non-governmental organisation (NGO) has been going around the world, saying “don’t put up the tax, otherwise, there will be a rise in illicit cigarettes”. What many governments do not realise is that it is funded by the tobacco industry.

Q: WHO proposes that the tax imposed on cigarettes should be at least 75 per cent of the retail price. How efficient would this be in reducing smoking prevalence particularly among Malaysia’s young as compared with other measures, such as school education programmes?

A: Ten experts from around the world were present at a conference held in Hong Kong and, each speaker was asked “If you have one thing to do in tobacco control, what would that be?” and every single one said “tax”. This is because higher prices make cigarettes unaffordable to young people.

Taxation is the most effective approach to controlling the spread of tobacco. Creating smoke-free areas is the second measure, followed by things like advertising bans and smoking cessation.

Some people say health education in schools is crucial. Certainly, everybody likes health education, but it has not been proven effective in bringing down the prevalence of youth smoking.

And you can tell it is not effective because the tobacco industry does not oppose it. They oppose tax increases, plain packaging and smoke-free areas. And because the tobacco industry fights them, we know these are the measures that work.

Q: What needs to be done to improve our health education programmes at schools?

A: School health promotion programmes do not work because traditionally they say that if you smoke, you will get cancer when you are 60 years or heart attack when you are 70 years. If you are only a 11-year-old child, it is totally meaningless.

We need to do much more to revitalise and revamp health promotion and health education. Smoking and non-smoking youth have, in fact, the same level of health knowledge about the harms of smoking. The difference between the two groups is whether they think smoking is cool or a dirty expensive habit.

We have got to make it attractive to be a non-smoker in the teenage years.

Q: The Control of Tobacco and Smoking Bill currently being drafted would see the minimum age for buying cigarettes raised to 21 years old, ban on displaying tobacco products and making it illegal to smoke in vehicles with children inside, among others. How effective would this be in tackling smoking prevalence?

A: (People aged) 8 to 23 years is a vulnerable period. If you can stop children from smoking at this age, they are less likely to smoke. Whereas before that, they do not have the kind of mature judgment to analyse what it will mean to actually smoke.

The tobacco industry is very interested in youth and young adults because one has to only smoke 100 cigarettes and he or she will become lifelong smokers. It is so addictive.

Q: Besides health effects, what are the other impacts of cigarette smoking to the country and its people?

A: Two out of every three smokers die from cigarette smoking, so, you are losing skilled workers. One in every three fires in the world is caused by careless smoking.

There is also loss of productivity. Smokers go out for seven minutes to smoke. So, that’s seven minutes every time they smoke. Smokers are sicker and die on average a decade before non-smokers, so families lose their bread-winner.

There are medical and health costs. There is smoke damage to buildings and fabric.

And then there is a massive cost of cleaning up all the litter, billions of cigarette ends, packets, matches and lighters that are discarded every day in the world.

The tobacco industry claims that tobacco control would harm workers and farmers. This is not true. We have got so many projects now, including right in the heart of tobacco-growing in China showing that if farmers grow alternative crops they actually earn more.

The second fallacy is that if restaurants go smoke-free, they would lose revenue. Nowhere in the world has that happened. The revenue, including in Hong Kong and California, where they have introduced smoke-free policies, has gone up and not down.

Another fallacy is the government would lose money if it puts up the tax.

This does not happen. Some smokers will still pay more for cigarettes, so the revenue goes up. The number of smokers will come down particularly among the young and the poor.

There are so many economic fallacies that some non-governmental organisations propagate. Sometimes, governments almost innocently believe these economic arguments.

Q: If the situation is so dire, why can’t countries impose a blanket ban on cigarettes?

A: No country has put a blanket ban on cigarettes. Authorities have learnt from the prohibition of alcohol in the United States (1920-1933), for example, that it leads to much bigger implications particularly with crime and corruption cases.

So, the idea is to slowly push tobacco use back, so that the reduction is genuine and it is done throughout the community. This is what every government is really trying to do rather than actually ban it.

Q: Malaysia aims to be smoke-free (the End Game of Tobacco) by 2045. Are we moving in the right direction?

A: I strongly commend Malaysia for the foresight in establishing the 2045 goal and targets; few countries have yet to do this.

Recently the prevalence of male smokers has begun to decrease.

It is going to require a major commitment by the government and a huge effort by academia as well as non-governmental organisations in achieving this goal.

The Health Ministry has worked out a year-by-year plan of reducing prevalence up to 2045. It has developed a roadmap and has filled in what needs to be done each year to achieve the goal.

But it is not a quick process: if a country reduces its prevalence by one per cent a year, it is doing quite well.

So, it’s possible for Malaysia, but it will be challenging.

Hong Kong Customs seizes suspected illicit cigarettes

Hong Kong Customs yesterday (June 2) seized about 1.5 million suspected illicit cigarettes with an estimated market value of about $4.1 million and a duty potential of about $2.9 million at Man Kam To Control Point.

http://www.info.gov.hk/gia/general/201706/03/P2017060200961.htm

Customs officers intercepted an incoming truck declared to contain cloth at Man Kam To Control Point yesterday. After inspection, Customs officers found about 1.5 million suspected illicit cigarettes inside 156 carton boxes. A male driver, aged 52, was arrested and the truck has been detained for further investigation. Investigation is ongoing.

Smuggling is a serious offence. Under the Import and Export Ordinance, any person found guilty of importing or exporting unmanifested cargo is liable to a maximum fine of $2 million and imprisonment for seven years.

Members of the public may report any suspected illicit cigarette activities to the Customs 24-hour hotline 2545 6182.

Ends/Saturday, June 3, 2017
Issued at HKT 15:30

“Stop Smoking, Save Lives”

Tobacco in various forms has proved beyond all reasonable doubt to be a killing machine. Despite the information available, the Tobacco Industry continues to succeed by using manipulative tactics to attract both the young and the old.

http://www.businessghana.com/site/news/general/146769/%E2%80%9CStop-Smoking%2C-Save-Lives%E2%80%9D

31st May is World No – Tobacco Day and was used to raise awareness on the harmful effects of tobacco use. The war on curbing smoking for instance continues but globally we are a far cry from winning. The theme for this year is “Tobacco, a threat to development”.

Smoking harms almost every organ of the body and causes ill health. Unfortunately non-smokers who inhale the fumes (passive smoker) are also at risk of the many disease conditions caused by tobacco. Do not be deceived by those who claim that Shisha is a safer alternative. It may actually be more disastrous since several other additives are mixed with the tobacco. Some people even share the pipes bringing into play several other contact diseases.

Tobacco use in various forms puts a strain on many economies as money is channeled into taking care of many illnesses that this killing machine may have caused. The worst news is that many of these people eventually die prematurely or are in no position to contribute actively to the work force.

Growing the plants also requires the use of a lot of pesticides and fertilisers that also end up harming the environment. Whichever way you look at it, messing up with tobacco is a death sentence and it does it slowly causing you pain and raining poverty on you.

STAGGERING FACTS

Secondhand Smoke and Death

This causes an extremely high number of deaths from lung cancer and heart disease so do not look on passively and inhale smoke from someone else

Premature Deaths

The life expectancy of those who smoke cigarette is at least 10 years less than a non-smoker

Quitting smoking before age 40 reduces the risk of dying from smoking-related diseases by about 90%

Do not deceive yourself and start hoping to quit on your fortieth birthday.

Increased risk for death among men and women

There is an increased risk of death from lung diseases such as bronchitis, emphysema, cancer of the lungs, trachea, bronchus

Death from cardiovascular (heart and blood vessel) disease such as a stroke is also very high among both males and females.

Cancers

Virtually no organ in the body is spared; bladder, stomach, oesophagus, pancreas. The list is long and essentially if you can remember a part of the body then it is likely smoking can cause cancer there.

Oral Care

Tobacco surely affects teeth and gum and in addition to discolouration of teeth it may also lead to teeth loss

Fertility and Childbirth

Getting pregnant and carrying the baby to term is a challenge

Affects a man’s sperm and may lead to sterility

Babies may be born before term or are born with very low birthweight exposing them to other disease conditions

Lifestyle Diseases

The risk of Type II Diabetes is high and also smoking makes it difficult to control the condition

It increases risk of high blood pressure and makes its control difficult.

It thickens the walls of blood vessels and narrows their lumen making it difficult for blood to blood and increasing the pressure against the walls of the blood vessel.

We all need to play a role to stop the harmful effects of tobacco use; cigarette smoking, pipe smoking, huffing and puffing on Shisha is not fashionable. It does not make you look “cool” and even if you do not smoke yet fail to advise those you mingle with to stop, you will also be at risk of several diseases.

AS ALWAYS LAUGH OFTEN, WALK AND PRAY EVERYDAY AND REMEMBER IT’S A PRICELESS GIFT TO KNOW YOUR NUMBERS (blood sugar, blood pressure, blood cholesterol, BMI)

Dr. Kojo Cobba Essel

Health Essentials/St Andrews Clinic

(www.healthclubsgh.com)

Dr Essel is a medical doctor, holds an MBA and is ISSA certified in exercise therapy and fitness nutrition.

Thought for the week – “prevention is certainly better than cure BUT when you fall ill seek a cure immediately instead of holding unto preventive measures only.”

References:

www.who.int/tobaco/wntd
CDC – Health Effects of Cigarette Smoking

Big tobacco’s big profits

Why are tobacco companies’ profits still booming – despite government regulation and declining smoking rates?

http://www.aljazeera.com/programmes/countingthecost/2017/06/big-tobacco-big-profits-170603092904305.html

Smoking kills. So if you’re in an industry where your product is known to be damaging the health of people who buy it, then you should, in theory, go out of business.

But shares in companies listed in the Bloomberg tobacco producers index have risen 351 percent since 2009, making it one of the best investments of the past decade.

Graphic warning labels and taxes seem to have some effect on reducing the number of smokers but less so on industry profits which keep rising. And investors can’t quit buying the stocks because operating profits continue to go up.

Although some pension funds and life insurers have turned their back on the sector, it’s still not enough to hit big tobacco where it hurts.

Different tax regimes around the world mostly account for the difference in price of cigarettes. But governments are not as hooked as the consumers who buy cigarettes.

Consumers cough up for higher prices because they crave the drug in tobacco – nicotine. Without nicotine addiction, there would be no tobacco industry.

The tobacco industry knows this and has diversified to develop other nicotine products like E-cigarettes. The electronic cigarette market has grown from just $50m in 2005 to an estimated $7.5bn last year, according to Euromonitor. It’s all part of the unique economy of addiction.

New evidence suggests the dangers of cigarettes in the United States have increased despite the fall of smoking rates in recent years. A new study has found that so-called “light” cigarettes may be behind a spike in lung cancer cases, as Heidi Zhou-Castro reports.

Jeremias Paul from the World Health Organization joins Counting the Cost from Geneva to discuss the unique dynamics of the nicotine economy.

Paul thinks the tobacco industry should pay more taxes because they’re making a profit out of people’s addiction.

“If they cause death, they should be taxed to death. In the latest global adult tobacco survey, there was a reduction in tobacco use of about 20 percent, which essentially proves increasing taxes regenerates a lot of revenues but at the same time reduces consumption.”

WHO China launches smoke-free campaign targeting youth

The World Health Organization (WHO) started a “smoke-free generation” media campaign in Beijing Thursday targeting young Chinese.

http://www.china.org.cn/china/2017-06/03/content_40957899.htm

China is in the grip of a national tobacco epidemic, and children are most susceptible with cigarettes portrayed as fashionable and alluring in popular culture, said Bernhard Schwartlander, WHO Representative in China at the launch event.

According to WHO, over half of Chinese adult men smoke, two thirds of whom started as young adults. By 2014, 72.9 percent Chinese students had been exposed to secondhand smoke.

“There is nothing cool about smoking, but there is something empowering about choosing to live a healthy, smoke-free life,” said Schwartlander.

Since China ratified the WHO Framework Convention on Tobacco Control in 2005, the country has made a number of tobacco control efforts, including banning tobacco advertisements, increasing tobacco taxes and putting forward regional smoking bans.

As of 2016, 18 cities, including Beijing, Shanghai and Shenzhen, had implemented regional smoking bans.

China has set a target to reduce the smoking rate among people aged 15 and older to 20 percent by 2030 from the current 27.7 percent, according to the “Healthy China 2030″ blueprint issued by the central authorities last October.

Philip Morris ‘tobacco sticks’ court prosecution postponed

The heat has come on tobacco company Philip Morris for importing and selling “tobacco sticks”.

http://www.stuff.co.nz/business/industries/93268568/Philip-Morris-tobacco-sticks-court-prosecution-postponed

The company is facing two charges brought by the Ministry of Health over the sticks, called Heets.

The charges were to be called in the Wellington District Court on Friday but at the last minute they were adjourned by agreement until September 7.

That date was for a case review hearing, an indication that the company would plead not guilty although it appeared no pleas were entered.

The ministry said it considered Heets fell into a category of tobacco products for oral use, other than smoking, and so were banned under the Smoke-Free Environments Act.

Heets were described as tobacco sticks heated in an electronic device, rather than being burned like a normal cigarette.

Through a code-protected invitation-only website, the company was marketing its IQOS smokeless electronic devices, which heated the sticks to release the nicotine.

In March the company said it was confident the way it was doing business was legal.

General manager for Philip Morris New Zealand, Jason Erickson, said they complied with all sections of the Smoke-Free Environments Act.

“We are currently making our IQOS device and Heets available to registered adult smokers on a website. If requested, we will provide a demonstration on how to use the IQOS device, which as the Ministry of Health has acknowledged, is a consumer electronics product.”

The two charges the company faced had a maximum $10,000 penalty.

ABP under pressure over €1.5bn tobacco investments

Employees of the Netherlands’ university medical centres (UMC) have called for their pension fund, ABP, to stop investing in the tobacco industry.

https://www.ipe.com/countries/netherlands/abp-under-pressure-over-15bn-tobacco-investments/10019240.article

Jos Aartsen, chairman of the academic hospital UMC Groningen, spoke out during a conference entitled ‘Aiming for a smoke free health care sector’, organised by the Royal Dutch Medical Association earlier this week.

Aartsen complained that employees of academic hospitals as participants in ABP were effectively obliged to invest in the tobacco industry.

“I stand here on behalf of 70,000 employees of the eight UMCs. We are ashamed of these investments,” said Aartsen, quoted on the UMC Groningen website. “Investing in tobacco is not what we want.”

The Dutch Federation of University Medical Centers confirmed that all eight Dutch academic hospitals supported Aartsen’s call.

Aartsen acknowledged that tobacco companies can produce yields for investors.

“But every year, 20,000 people die unnecessarily because of smoking,” he added. “The fact these deaths are happening is more important than the return on investment in tobacco.”

Aartsen argued that it was a matter of social and governance responsibility for ABP to exclude tobacco.

Other funds had already excluded tobacco investments, he added, including healthcare pension fund PFZW and sector pension funds for GPs and for medical specialists.

ABP currently invests €1.5bn in tobacco-related assets, a spokesperson for the fund said. She pointed out that tobacco was legal in the Netherlands and regulated by the Dutch government.

The pension fund said it screened tobacco companies for issues involving child labour or unethical marketing practices. It also said it was in dialogue with several stakeholder organisations.

In addition, ABP was working on an “inclusion policy”, the spokesperson said. The next few years will see companies consciously chosen for the portfolio based on the criteria of return, risk, cost, sustainability, and accountability.

University medical centres are currently employer members of ABP, although there have been attempts to transfer this sector to PFZW, which caters for regular hospital staff.

A study by the Dutch Heart Foundation and the Association of Investors in Sustainable Development in March showed that more than two-thirds of pension funds didn’t have a policy in place for tobacco investments, compared to 10% of insurers.

It suggested the difference was attributable to the fact that many insurers also sell healthcare policies and have adjusted their investment policies accordingly.

The metalworkers pension scheme PME has excluded from its portfolio any companies that get more than 75% of their revenues from tobacco sales.

The €22bn multi-sector pension fund PGB is working on a similar policy, following a survey suggesting that just 17% of its participants supported tobacco investments.

PFZW ceased investing in cigarette manufacturers in 2013.

Three men jailed over illegal tobacco factory

Three men have been jailed for a total of 16 years for a £17m tax fraud after an illegal tobacco factory was discovered.

http://forecourttrader.co.uk/news/fullstory.php/aid/13410/Three_men_jailed_over_illegal_tobacco_factory.html

HM Revenue and Customs (HMRC) officers found that a Poland-based criminal network used several sites in the North West and Essex to process raw tobacco into illegal tobacco products in an attempt to evade excise duty and VAT.

During the investigation, HMRC seized tobacco in Preston, Lancashire, in 2013 followed by arrests and more seizures of tobacco and manufacturing equipment the following year in Bury, Greater Manchester; Blackburn, Lancashire; and Halsted, Essex.

One of the men, Robert Zduniak, fled during the trial but was convicted and jailed for eight years in his absence at Manchester Crown Court on Friday. His co-conspirators, Hubert Jankowski, and Lukasz Pawelec, were each jailed for four years.

Pawelec had also tried to flee but was caught at Doncaster Airport and remanded for the remainder of the trial.

In April 2014, HMRC raided a farm in Essex, as well as four premises near Bury and another in Blackburn. They seized around three tonnes of raw tobacco that was in the process of being converted into counterfeit hand rolling tobacco (HRT), £15,000 in cash, chemicals, counterfeit packaging and tobacco packing machinery. The tobacco processing plant in Essex was dismantled immediately by HMRC.

HMRC linked the 2014 seizures and the jailed men to a further eight tonnes of tobacco valued around £1.8m in evaded duty and tax that was seized in Preston in 2013.

Further enquiries by HMRC established that the gang had imported more than 100 tonnes of raw tobacco mislabelled as ‘furniture’ into the UK, from the Czech Republic, over a 15-month period. If converted into counterfeit hand rolling tobacco this represents a potential tax loss of £17m.