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April, 2011:

Tax rises shown to slash rate of smoking – Retailers report huge fall in cigarette sales

South China Morning Post — 29th April 2011

Fewer people are buying cigarettes and more are trying to quit since the government increased the tobacco tax by 41.5 per cent in February, while a previous rise caused a dramatic reduction in youth smoking, new statistics and university studies show.

Retailers say cigarette sales plunged by almost 40 per cent immediately after the increase was announced in this year’s budget.

This comes as lawmakers seek to revoke the order giving effect to the increase, saying it will hurt low-paid workers who cannot quit.

A 7-Eleven shop manager said tobacco sales had dropped by nearly 40 per cent since the announcement.

Before the tax rise, his outlet sold about 400 packs of cigarettes a day. This fell to 170 packs immediately after the budget, and although sales had risen since, his outlet still sold just 250 packs a day.

This was in line with the number of people who tried to give up. A total of 4,151 people have called the Department of Health’s quit line since March, which was 2.6 times more than in the same period last year.

And in February and March, some 634 people enrolled in quit-smoking programmes at the clinics of the department and the Tung Wah Group of Hospitals, 2.2 times more than in the same period last year.

“Some lawmakers always say raising tax significantly will hurt the grass roots, but in fact minor increases won’t be effective in pushing people to quit,” Council on Smoking and Health chairwoman Lisa Lau Man-man said.

In further evidence of the effectiveness of tax rises, a University of Hong Kong study found the 50 per cent increase in 2009 was the main reason the youth smoking rate fell 51 per cent from 2008 to last year.

Researchers surveyed 53,504 pupils from Form One to Form Five, and found that 3.4 per cent smoked. This was down from 4.8 per cent last year, which was itself a 43 per cent drop from 6.9 per cent in 2008.

School of public health assistant professor Daniel Ho Sai-yin, who carried out the survey, estimated that the 2009 tax rise had prevented 13,452 young people from taking up smoking, saving half of them from premature deaths.

Another study found 56 per cent of young people who called the university’s quit line were motivated by the tax rise. Of these, half had been able to kick the habit.

Ho said young people were the main target of tobacco companies’ efforts to expand their customer base, and they were the most price-sensitive. As two-thirds of the city’s smokers took up the habit in their teens, Ho said stopping young people from smoking was essential to reduce future tobacco-related deaths.

Meanwhile, a proposal by two lawmakers to repeal the public revenue protection order – which gave a provisional legal basis for the 41.5 per cent tax rise – seems likely to fall short of the votes needed to pass.

Lawmakers Albert Chan Wai-yip, of People Power, and Vincent Fang Kang, of the Liberal Party, will seek to repeal the tax increase at a Legislative Council meeting on Wednesday. But major parties, including the Democratic Alliance for the Betterment and Progress of Hong Kong and the Civic Party, will oppose the attempt. The Federation of Trade Unions will also vote in favour of the order, despite its opposition to the tax increase.

“Blocking the order will create administrative troubles, as the government will need to refund the tax it has already collected,” federation lawmaker Wong Kwok-kin said.

DAB lawmaker Wong Ting-kwong, an opponent of the tax rise, said he would go on urging the government to concede. “We believe that even if the order is passed, the government will make a concession if we can line up enough opposition.”

The director of Hong Kong University’s school of public health, Professor Lam Tai-hing, said that if legislators overturned the increase, it would send “a very wrong message” to young people. “They would think that even the honourable lawmakers are encouraging people to smoke.”

Some lawmakers say increasing the tax will push more people to buy illicit cigarettes, but Lam said the illicit trade had always existed regardless of the tax.

“What the lawmakers are doing is to reverse something that has already been established,” he said. “If they succeed, cigarettes would suddenly become much cheaper. When price decreases, demand will certainly shoot up. And when that happens, do you think the illicit traders will back off and step out of the game?”

NZ increases tobacco excise tax

Government Increases tobacco excise tax  Last updated 00:00 29/04/2010

Parliament has given overwhelming support to a tobacco tax increase that will raise the price of a pack of 20 cigarettes by about a dollar to around NZ$11, (HK$ 73) effective from midnight, with two more hikes in the pipeline.

After a debate under urgency tonight the bill was passed into law on a vote of 118-4 with all parties except ACT giving it full backing. ACT split its vote with one MP supporting the bill – John Boscawen – and the other four opposing it.

It has put in place three excise duty increases of 10 percent – one at midnight, the next on January 1 2011  and the third on January 1 2012.

Loose tobacco used by pipe smokers and to make roll your own cigarettes is being socked with a 14 percent increase immediately to bring it into line with cigarettes, and then the 10 percent rises that affect all tobacco products.

Because the increases are cumulative, prices will rise by about 33 percent over the next two years.

When the final increase takes place (Jan 2012) a packet of 20 cigarettes will cost around NZ$14 (HK$ 93) and a 30 gram pouch of loose tobacco about NZ$30.

The Government, which gets about $1 billion a year in tobacco excise, can expect to gather an estimated $200 million more.

Associate Health Minister Tariana Turia, a strong anti-smoking campaigner, introduced the bill and said the debate on it was going to be about life and death.

“We know that putting up the price is a powerful tool to reduce smoking,” she said.

“It forces people to cut back, but more importantly it provides a strong incentive for smokers to quit and helps dissuade young people from over starting to smoke.”

The Quit Group said it was preparing to see the number of people contacting Quitline for help to quit smoking to double or even triple.

“The last time we saw a significant taxation increase for tobacco was back in May 2000. Overnight we saw our call volumes almost triple from 6000 to 16,000 calls per month,” Quit Group chief executive Paula Snowden said.

“We fully expect to see an increase in quit attempts, which is great, and our advisors are there to help people using the tax increases as a prompt for thinking about those other, more sustainable reasons for overcoming their addiction.”

While it took on average six serious attempts to break the habit for good, those who contacted Quitline were five times more likely to succeed, she said.

Mrs Turia said 21 percent of New Zealanders over 15 were smokers and tobacco caused 5000 deaths a year.

“For too many years we’ve turned a blind eye to this…the price of cigarettes has plateaued and the reduction in the number of smokers has stalled,” she said.

“Helping smokers quit is a priority of this government and one of our health targets.”

Labour supported the move, with associate health spokesman Iain Lees-Galloway saying the party had consistently argued for measures that encouraged people to quit smoking.

“Sadly, legislation to increase the price of tobacco does not address issues such as point of sale advertising,” he said.

“Tariana Turia says she personally supports removing point of sale tobacco advertising, so why isn’t it happening?”

ACT MP Sir Roger Douglas said the Government was already getting about $1 billion a year in tobacco excise, and the increase would disproportionately impact on poor people.

“You have to weigh up the benefits that might or might not flow from this with individual freedom,” he said.

“The ‘I know what’s best for you’ mentality is getting out of hand…our flight from individual responsibility never ends.”

Sir Roger said that if the Government believed that raising the price of tobacco really worked, it should increase it by much more.

“Why not put it up 600 percent, then you would fix it,” he said.

Action on Smoking and Health (ASH) said it expected some smokers would quit in response to the tax increase.

“However a bigger increase would have resulted in great numbers of smokers quitting,” said ASH director Ben Youdan.

Last year the tobacco industry discounted prices heavily by around $1 per packet, so even with this increase we are treading water in terms of tobacco affordability, he said.

The Salvation Army said it applauded the move, but wished the Government had the courage to act as harshly against alcohol.

“We hope a government willing to recognise the harm tobacco causes will have the courage to more heavily tax alcohol, which has even wider community costs and detriments,” Salvation Army spokesperson Major Campbell Roberts said.

The Drug Foundation said the decision on tobacco put the prime minister’s rejection of an excise increase for alcohol in stark contrast.

“International and local experience consistently shows the effectiveness of excise tax increases on changing smokers’ behaviour – it helps current smokers cut down and deters potential new smokers from starting,” foundation executive director Ross Bell said.

The Royal New Zealand College of General Practitioners welcomed the excise tax, saying it would improve the health of many people.

Despite progress in tobacco control, more than one in five New Zealanders still smoke tobacco regularly and smoking prevalence was much higher for Pacific peoples (28 percent) and Maori (44 percent), the college said.

China to ban smoking in enclosed public places from May 1

Xinhua News Agency

BEIJING, April 29 (Xinhua) — Smoking will be banned in all enclosed public locations including hotels, restaurants, theaters and waiting rooms at railway stations and airports starting May 1, according to a regulation issued by the Ministry of Health.

Business owners should set up conspicuous non-smoking signs, carry out promotional activities to warn people of the dangers of smoking and encourage their employees to dissuade smokers from lighting up, according to the regulation.

The new regulation also says that outdoor smoking areas should not obstruct pedestrian walkways and that cigarette vending machines should be excluded from public places.

Yang Gonghuan, director of China’s National Office of Tobacco Control, said the regulation gives business owners a clear view of their responsibilities in relation to the smoking ban.

“It is realistic to demand a bigger role for these business owners in dissuading smokers,” Yang said.

It is estimated that China has more than 300 million regular smokers, and more than 700 million people are routinely exposed to harmful second-hand smoke, according to experts.

The regulation does not specify punishments for business owners who fail to meet the smoking ban’s requirements. It also does not specify penalties for people who continue to smoke in areas affected by the smoking ban.

Tobacco tax increase must not be voted down

South China Morning Post — 27 April 2011

On the day Chief Secretary Henry Tang Ying-yen resumed the debate to complete the budget’s controversial journey through the legislature, he pledged the administration will not become a mere “caretaker government” while it completes its term due to end next year. If the promise is to be kept, officials must first dig themselves out of the hole created by this year’s budget, which seems to get ever deeper. Taxing people, only to give them back the cash, is not the soundest public finance policy, although this has become the standard political response to demands from the public whenever there is a big surplus. But the latest twist in the budget saga could see the government taxing smokers, only to then give some of those proceeds back to the tobacco industry. This bizarre outcome could occur if legislators vote down the tobacco tax increases made in the budget, as many have suggested they will do. The government was right to impose the higher taxes as part of measures to deter smoking. It should seek to persuade legislators not to veto the increase and avoid another embarrassment.

The problem has arisen as a result of the sorry budget saga. The government has generally shown a lack of commitment towards sustainable long-term policies in its budgets, but at least in the past, it appeared to have faith in the analysis and the calculations of its professional economists and stuck to its principles on delivering what it thought would be a balanced budget. But in March, Financial Secretary John Tsang Chun-wah decided to react to a public outcry and effectively contradict himself – and all the principles he had previously championed about fighting inflation – by announcing direct cash handouts of HK$6,000 to permanent residents. As the weeks went by, it became clear that this populist announcement was a politically motivated, panic-induced response. Until now, the details of the proposal remain sketchy and it is unclear exactly who, how or when people will get hold of their cash. And even though the new arrangement could potentially require extra spending of HK$40 billion, of which none will result in investment returns, the government has not explained how these new arrangements affect their original calculations.

Now, lawmakers who criticised the pan-democrats for opposing the budget are themselves threatening to derail one of its most sensible measures. The government presumably identified the tobacco industry as one which should be taxed more because it agrees with the experts that tax increases are the best way to help quit smoking. The increased taxes will provide more funds for anti-smoking campaigns and improved health services. At the same time, the profit incentive in a harmful industry will be decreased. All in all, it is a sensible tax policy. But lawmakers from the pro-establishment camp which controls the legislature wants to overturn or at least cut that increase which was implemented with immediate effect upon the delivery of the budget in February. If that happens, the government will have to pay back the tobacco industry an estimated HK$300 million, even though it was the consumer who had to pay. Meanwhile, there would be less money for anti-smoking campaigns and to improve health services.

Lawmakers should think hard before vetoing these measures. The tax increases are needed in the interests of public health. Should the unthinkable happen and the increases be voted down, the tobacco industry must act responsibly and donate any tax rebate it receives to public health services.

Government to clamp down on tobacco smuggling

April 27, 2011

Tough new plans to tackle the illicit tobacco trade have been published by HM Revenue & Customs (HMRC).

Under the new strategy, supported by the UK Border Agency, the Government has provided additional investment for more officers to target organised criminals who smuggle tobacco. There will be increasing numbers of prosecutions, more illicit tobacco will be seized, and smugglers will face fresh hard-hitting financial sanctions. Minimum indicative levels for travellers bringing tobacco into the UK from the EU will also be reduced, aligning the UK with levels elsewhere in Europe.

Justine Greening, Economic Secretary to the Treasury, said: “The Government believes that tobacco smuggling must be tackled head on. Tobacco fraud costs taxpayers more than £2bn a year, depriving the public of revenue to fund vital public services.”

“We have made an additional £917 million available to HMRC to tackle evasion, avoidance and criminal fraud across the tax system, and that includes illicit trading in tobacco. Those who think that tobacco smuggling is a quick, easy and risk free crime that will go unchallenged, are making a serious mistake.”

Key changes under the new strategy include:

increasing our criminal intelligence and investigation resources deployed on tobacco fraud by 20% to prosecute more of those involved in smuggling at all levels;

expanding our successful overseas network of fiscal crime liaison officers to increase seizures of illicit cigarettes targeted on the UK by 20%;

introducing new technology, intelligence and detection capability to improve our ability to respond more flexibly at the border and inland;

pursuing proceeds of crime and applying new powers of assessment and penalties, including recovering lost taxes and charging penalties up to 100% of the tax evaded, to deter offending and prevent re-offending;

reducing the minimum indicative levels for personal imports to 800 cigarettes and 1 kg hand-rolling tobacco in the autumn, bringing the UK into line with all other EU Member States. These levels are used as a guide for determining whether tobacco products imported from the EU are for personal use.

Fiscal cost of smoking far more than tax revenue from tobacco

MTI – Econews Wednesday 01:40, April 27th, 2011

The fiscal cost of smoking in Hungary is well over revenue from excise tax and VAT on tobacco sales, business daily Világgazdaság reported on Wednesday, a day after Parliament approved a ban on lighting up in most public places.

Budget costs related to smoking — both direct and indirect — came to HUF 379 billion-397 billion in 2004, Zsófia Pusztai, who heads the World Health Organisation office in Hungary, told the paper.

In the same year, budget revenue from excise tax and VAT on tobacco products reached just HUF 258 billion.

About 3 million of Hungary’s 10m population smoke. About 2,300 Hungarians die each year as a result of exposure to second-hand smoke, the paper said, citing scientific studies. Almost 28,000 Hungarian smokers die each year because of smoking-related illnesses.

The ban is likely to have little effect on Hungary’s catering industry, health economist József Bodrogi told the paper. In a recent study of 48 countries that introduced bans on smoking in public places, the only country in which turnover fell was Ireland, but there the ban came at the same time as a hike on the beer tax, he added.

Hungary’s tobacco industry, which employs almost 25,000 people, turns out more than 15 billion cigarettes a year, 11 billion fewer than ten years earlier.

Treasury to cut holidaymakers’ personal tobacco allowances in £2bn tax clawback effort

The number of cigarettes holidaymakers may bring back from Europe without attracting questions from Customs officials is to be cut by more than two-thirds as part of a Treasury attempt to claw back some of the £2.2bn in tax lost to tobacco smuggling every year.

The proposed change, which sets a guideline limit of 800 cigarettes and 1kg of rolling tobacco, will reignite a battle with campaigners such as smokers’ rights group Forest. Simon Clark, director of Forest, described the move as “shocking”, noting that current limits of up to 3,200 cigarettes and 3kg of rolling tobacco were set in 2002 after an attempt to clamp down further met with outrage and legal challenges.

Treasury minister Justine Greening is to set out plans to slash existing guideline limits, bringing them in line with Ireland and many other parts of Europe. “It doesn’t actually change the rules,” she said. “People who are holidaymakers or travellers from the UK, who maybe want to bring back some cigarettes when they come home for personal use, they are not affected at all. But we do believe this will do is start to deter those people who are actually just using minimum indicative levels as a way of bringing in wholesale amounts of cigarettes.”

“The levels people [will still be able to] bring in are more than enough for their own personal use – that is not something we would, or should, challenge.”

This claim was immediately challenged by Clark said: “The Labour government was forced to increase the limit from 800 to 3,200 because there was chaos at airports and ports around the country, with goods and vehicles being seized all over the place. We have absolutely been there with the 800 guideline. It didn’t work.”

Under European law, smokers bringing in tobacco merely have to convince Customs officials it is for personal use. Official guidance, however, sets the level at which suspicion is cast on personal imports.

In 2002, when then chancellor Gordon Brown sought to impose a maximum guideline of 800 cigarettes, an opposition campaign won enthusiastic support from sections of the media. The Sun newspaper claimed it had been victorious when the level was increased to 3,200 after a series of stunts including sending its own bus, full of page three girls, to head a protest convoy of cross border shoppers to Calais. The Treasury also faced a legal challenge from cross-Channel operator Hoverspeed.

This time, Greening is confident she has the support of the tobacco industry and believes a guideline limit of 800 cigarettes – commonplace across the continent – is well established in European law. Campaign group Action on Smoking and Health is also supportive.

The Tobacco Manufacturers Association said it would not oppose the reduced guideline limits but noted the move would not be welcomed by low-income smokers, coming a month after heavy price rises imposed in the budget. Paul Stockall of the TMA said the budget imposed the steepest price rises on cheap cigarettes and rolling tobacco, the price of a packet of 20 cigarettes and a 25g pouch rising around 10% to £5.64 and £7.34 respectively.

“We would expect non-duty-paid [smuggled cigarettes] sales to increase,” he added.

More than one in 10 cigarettes smoked in the UK is smuggled or bought legitimately by overseas travellers. The figure for rolling tobacco is almost half. Tobacco sales nevertheless generate £8.8bn in tax each year for Treasury coffers.

The controversial move to lower guideline limits for returning holiday-makers is part of a broader package of measures which will see a 20% budget increase for Revenue & Customs’ 685-strong anti-smuggling team. Additional resources will primarily be focused on intelligence operations overseas, where seizures exceeded 1bn cigarettes for the first time last year.

The biggest loss to the Treasury comes from counterfeit tobacco products and so-called “illicit white” – brands manufactured for overseas markets and smuggled into the UK, the most prevalent of which is Jin Ling, which is made in Kaliningrad, Russia.

Deborah Arnott, chief executive of Action on Smoking and Health said: “ASH welcomes the much of HMRC’s new strategy particularly increased investment in tackling smuggling. However, there is too much weight placed on collaboration with the tobacco industry which has historically been a major driver of smuggling, and no reference to the UK’s obligations to protect tobacco control from the vested interests of the tobacco industry. And there is no clear ambition for the size of reduction in the illicit market which they expect to achieve from this increased investment.”

Tobacco firms used diet-aid chemicals — 24 April 2011

Internal documents reveal that appetite suppressants were added to cigarettes as companies pitched their products to women

British and American tobacco companies deliberately added powerful appetite-suppressing chemicals to cigarettes to attract people worried about their weight, according to internal industry documents dating from 1949 to 1999. Chemical additives are just one of several strategies successfully used by tobacco companies over the past 50 years to convince people that smoking makes you thin.

Tobacco giants Philip Morris and British American Tobacco added appetite suppressants to cigarettes, according to the documents, released during litigation in the US. Four other major companies tested potential chemicals, including amphetamine and nitrous oxide, better known as laughing gas, but the documents, which are incomplete, do not reveal if such chemicals were ever added and sold to the public.

The presence of appetite-suppressing chemicals could help explain why smokers who quit often gain weight, according to Swiss researchers in the European Journal of Public Health. They call for stricter rules on tobacco additives amid suggestions that sensitive documents are being removed from databases by the industry to avoid disclosure.

Critics say this is further evidence of tobacco companies targeting smokers concerned with weight gain. They argue that the industry continues to exploit such anxieties through sophisticated marketing and packaging, which they are pressing the government to ban.

Professor David Hammond, a tobacco industry expert at Waterloo University, Ontario, Canada, said: “We know the industry explored ways to exploit concerns about weight loss back in the Sixties, because they knew it was an issue that concerned women, who they wanted to recruit as smokers. We don’t know if appetite-suppressing molecules are still added, because compliance with additive regulations is poor and sensitive internal documents are usually shredded.”

By the end of the 20th century, smoking was almost exclusively male behaviour, but the number of women smokers dramatically increased in the 1940s and 1950s. Today, one in five British men and women smoke, causing more than 100,000 preventable deaths a year.

A Canadian study of 500 young women, published in Tobacco Control this month, found those looking at female-oriented cigarette packs branded with words such as “slim” and “vogue”, were more likely to believe smoking helps people control their appetite – an important predictor of smoking among this group – compared with those viewing plain packaging. Smokers wrongly believe that certain words, such as the names of colours, and long, slim cigarettes mean the brand is less harmful, according to a study, that included 2,000 Britons, published in Addiction.

Since the widespread advertising ban, images such as Kate Moss smoking on the catwalk have become invaluable for the industry.

Last year, Australia became the first country to introduce compulsory plain packaging. Here, the Government committed to considering similar controls on packaging in the Tobacco Control Plan published in March. The public health minister Anne Milton will meet her Australian counterpart in the next few weeks.

Action on Smoking and Health (Ash) is urging the Health Select Committee to force tobacco companies to disclose documents that would shed light on marketing strategies, including product packaging and design, to help MPs make an informed choice about introducing plain packaging.

Deborah Arnott, chief executive of Ash, said: “Now advertising is banned, the industry uses pack design and product descriptors, such as “slims”, to promote the message that smoking makes you thin. It must be required to put its products in plain, standardised packaging to prevent it using such “dog whistle” tactics to promote smoking to vulnerable young women.”

A Tobacco Manufacturers’ Association spokesman said: “We do not believe any plans for plain packaging are based on sound public policy, nor any compelling evidence… Plain packs are likely to lead to further increases in smuggling… and make it easier for counterfeiters to copy.”

Letter from Clear The Air

SCMP 22 April, 2011

‘Lawmakers in cigarette duty revolt’ states that certain Legco members and parties are considering voting against the increase in tobacco tax in the latest Budget. Their reasoning is none other than for political gain with District Council elections in 2011 and Legco elections in 2012, they are seeking to attract blue collar votes by attempting to repeal this important preventative health measure. James To and Starry Lee already stated in a local English language  television interview they will vote against the tobacco tax. Tobacco tax increases are targeted at preventing children from becoming addicted for life to nicotine by way of lack of affordability; nicotine is more addictive than heroin or cocaine. Unlike alcohol or other self abuse lifestyle choices, tobacco smoke kills innocent bystanders. The paid tobacco soldiers state that smoking is an adult choice, but how can being a nicotine addict be deemed choice ?  The number of non smoking voters in Hong Kong far exceeds the smoking voters and we would urge these voters to place their votes with those politicians who are working in the interests and health of Hong Kong people and their children rather than those working on behalf of the tobacco companies. Seven thousand people die each year in Hong Kong because of illnesses associated with tobacco use and of those 1,324 (HKU study) die as a result of  illnesses related to passive smoking. Hong Kong does not need self serving lawmakers but those who will represent the health and welfare of the people. Recently a lobby group seemingly paid for its actions named Momentum 107 has been opposing the tobacco tax increase; its leader Raymond Ho Man Kit a Saikung District Councillor was reported in SCMP last week to have testified under immunity against his accomplices , former district councillors in an ICAC case, who were all jailed.  Tobacco disproportionately affects the less well off in society, their overall family income and wellbeing and instead of pushing Government for additional funded resources to remove their addiction these shameful lawmakers are working hand in hand with Big Tobacco; voters can prevent this and consign them to the political wilderness in the interests of our children and future generations.

James Middleton


tel 26930136

address on above webpage

  • Nicotine is:
    • 1000 X more potent than alcohol
    • 10-100 X more potent than barbiturates
    • 5-10 X more potent than cocaine or morphine
  • A 1-2 pack per day smoker takes 200-400 hits daily for years. This constant intake of a fast acting drug (which affects mood, concentration & performance).. eventually produces dependence.

The economic burden of lung disease in Europe

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