July, 2011:
Japan eyes tobacco tax hike for reconstruction
http://www.reuters.com/article/2011/07/07/us-japan-tobacco-tax-idUSTRE76604F
20110707
http://www.reuters.com/article/2011/07/07/us-japan-tobacco-tax-idUSTRE76604F
20110707
Tobacco tax hike to pay for rebuilding Country
Japan eyes tobacco tax hike for reconstruction -Yomiuri
http://www.reuters.com/article/2011/07/07/us-japan-tobacco-tax-idUSTRE76604F20110707
By Stanley White and James Topham
TOKYO | Wed Jul 6, 2011 8:26pm EDT
TOKYO (Reuters) – Japan is considering a hike in its tobacco tax to help fund reconstruction costs, the Yomiuri newspaper said on Thursday, which could be first in a variety of tax increases as the country rebuilds from natural disaster and tries to repair weak public finances.
The hike, which the government hopes to implement as early as the next fiscal year starting April 2012, could bring in as much as 200 billion yen ($2.5 billion) annually, the newspaper said without citing sources.
The Democratic Party-led government agreed last month to double the 5 percent sales tax by mid-decade to pay for social security costs, which are rising by about one trillion yen a year due to an aging society.
Japan’s outstanding debts are about twice the size of its $5 trillion economy, and credit ratings agencies say tax hikes are needed to avoid a sovereign downgrade.
An advisory panel called last month for a temporary hike to either the sales tax, the corporate tax or income taxes to rebuild the northeast coast, which was devastated by a large earthquake and tsunami on March 11.
But embattled Prime Minister Naoto Kan faces a divided parliament where opposition parties can block legislation and it is not clear whether such hikes can be implemented.
The government is leaning toward increasing taxes on cigarettes as that’s likely to draw less objection from the public, the Yomiuri said.
A tobacco tax hike would however be a blow to Japan Tobacco (2914.T) which controls close to two-thirds of the domestic cigarette market. ($1 = 80.930 Japanese Yen)
Why is Deloitte’s name on junk tobacco research?
http://www.abc.net.au/unleashed/2783400.html
6 July 2011
Remember the Alliance of Australian Retailers (AAR) who brought us the first salvo of anti-plain packaging ads in 2010?
These were the doozies that featured storekeepers with advanced knowledge of effective tobacco control explaining that plain packs “won’t work, so why do it” and then later on, “It just doesn’t make sense“.
It is no secret that the AAR is funded by big tobacco, who strangely have one or two concerns of their own about a policy “that won’t work” – enough to be in blind panic mode, pouring millions into their campaign to stop it. Personally, I never bother worrying about changes to my life that won’t make any difference.
This week the AAR released a Deloitte report with lots of shocking numbers and findings in it about an Armageddon that will descend on Australia’s corner stores because of a policy that won’t work. But now we have “research” to prove it. So let’s take a look at how they conducted the research.
First, Deloitte tells us that “Roy Morgan Research was engaged by the AAR to conduct a consumer survey to verify the risk of channel shift following the introduction of plain packaging”. Channel shift is industry jargon for your customers switching to buying their tobacco from bigger outlets like supermarkets, which of course have been attracting small business customers for decades because of their cheaper prices on everything.
Note importantly that the survey was not designed to examine whether there was a risk in channel shift arising from plain tobacco packaging, but to “verify” it. It’s a foregone conclusion, apparently. Great science.
We read that those surveyed “were presented with an overview of the proposed regulation and asked whether they thought their shopping experience at a small retailer would be affected”. So they were presented with an overview that would assist in “verifying” the risk of channel shift. No chance of any push polling there, I suppose?
Catastrophically for our corner stores, independent petrol stations and newsagents, more than one of three smokers (34 per cent) and 18 per cent of non-smoking consumers told Roy Morgan after hearing the overview that they were “either somewhat likely or very likely to change where they shopped as a result of plain packaging”.
So why would they do this? Smokers thought they would be “more likely to be given the wrong tobacco product”. So presumably they think that small shopkeepers are a cut below the staff in supermarkets and specialist tobacconists, and won’t be able to read the name on the pack or the column on the pack shelving behind the counter. Why else would there be more mistakes in handing over the brand requested? They will be packaged the same wherever they are sold.
Another reason given was that small store staff “would have a harder time finding what I want” and so “queues would be longer”. Again, how could this be different in small stores compared with large stores, given that the packs will be the same? Particularly when we discover below that small shopkeepers think supermarkets will stock far more brands, which presumably makes the search more difficult in the larger outlets.
The research also reports on focus groups with small retailers who believed that channel shift may occur because of:
- The increase in time required to complete a tobacco related transaction would lead to customers becoming increasingly frustrated due to delays and longer queuing time.
- The knowledge that a larger retailer, eg. a major supermarket with a broader range of products, would always have what they require.
Come again? Small shopkeepers think that the introduction of plain packs will cause them to cut back on the range of products they offer, but that supermarkets won’t do this? How come?
And what about the greater transaction time issue? Next time you are in a shop selling tobacco, watch what happens when a smoker asks for their brand. The shopkeeper turns away from the counter to face the storage columns on the wall behind them, as they have always done. Each brand is kept in its own column, they are not all jumbled together.
The regulations may well permit the brand name in standard font and colour to be displayed on the top or base of the pack so that the shop assistant can simply read “Winfield Blue” or “Holiday”. The idea that the shop assistant won’t know which brand is which is utter nonsense. The columns will be allowed to be labelled.
We have long expected big tobacco and its acolytes in tobacco retailing to react against any policy that threatens to reduce tobacco use and to use all manner of scare tactics to argue their sordid case for wanting to keep selling as many cigarettes as possible. But the really interesting question is what is a company with Deloitte’s reputation doing putting its name to nonsense like this?
The information contained in this report can only suggest that those interviewed were not given a full account of what plain packaging would look like. It seems that many are falling for tobacco industry lies that the packs will be indistinguishable: that there will be no way of distinguishing one brand from another. But every pack will be clearly labelled with its brand name and variant (eg: Winfield Blue, Winfield Red).
The Deloitte report is prefaced with an interesting caveat “No-one else, apart from the AAR, is entitled to rely on this Report for any purpose. We do not accept or assume any responsibility to anyone other than the AAR in respect of our work or this Report.”
Fine. Now we all know.
Simon Chapman is professor of public health at the University of Sydney
CLEAR THE AIR Tobacco Blog welcome replies from the following persons to print on our site :
Markus Shaw of Shaw Brothers
Dear Mr Shaw – the Shaw Brothers movie ‘Love in a Puff’ – who were the sponsors who paid for this movie ? Was this local or international tobacco company sponsored ?
Miriam Lau The Liberal Party
Dear Mrs Lau –
On a recent Backchat interview you stated that the Liberal Party would support the tobacco tax increase but in the Legco hearing you all voted against it – is the Liberal Party stacked with hypocrites ?
(Go to the section after the 9 am news and skip forward to 12 minutes 40 seconds of the 18 minute 33 second clipJ
Quote
“We(the Liberal party) would not object to the (tobacco) tax (increase)”
“The Liberal Party is not against tax measures that improve public health”
What is the current level of yearly sponsorship by the tobacco companies / Tobacco Control Concern Group or like body of the Liberal Party ? Overseas by law legislators and parties have to report all forms of sponsorship, why is Hong Kong different ? Do you think this should change – if not why not ? Surely the electors have the right to know which donors are seemingly pulling the Party strings ?
Regina Ip New Peoples Party
Dear Mrs Ip –
We note you opposed the last Budget tobacco tax increase , a measure that is proven to save lives and stop youth from starting smoking.
What is the current level of yearly sponsorship by the tobacco companies / TCCG or other tobacco organisation of your new Party ? Overseas by law legislators and parties have to report all forms of sponsorship, why is Hong Kong different ? Do you think this should change – if not why not ? Surely the electors have the right to know which donors are seemingly pulling the Party strings ?
http://tobacco.cleartheair.org.hk/?p=3123
James To and Starry Lee said they would oppose the increase in tobacco tax
Was this solely to enhance your profiles in regard to assisting your parties to get additional district council member votes for your chosen candidates from blue collar (smoker) voters in the November 2011 elections ?
http://app.hkatvnews.com/v3/world/world.php?program=3000006
We note you supported the tax increase – why did you change your mind or was it changed for you ?
Paul Tse Wai Yin Tourism Functional Constituency
Dear Mr Tse
We note you opposed the last Budget tobacco tax increase , a measure that is proven to save lives and stop youth from starting smoking.
What pressure was placed on you to vote in this manner ? Is it because 60% of Mainland men smoke and the Mainlanders are the main tourist sector visiting Hong Kong ? We note that the Tourism Board has for years been headed by Liberal or ex Liberal Party lawmakers – has this affected your decision making ? We note that the Executive Director of the Tourism Board Anthony Lau Chun-hon ( since 2007) was formerly head of Philip Morris Singapore and was with that company for 20 odd years – did his presence have any effect on your vote ? Overseas by law legislators and parties have to report all forms of sponsorship, why is Hong Kong different ? Do you think this should change – if not why not ? Surely the electors have the right to know which donors are seemingly pulling the Party strings ?
Australia Brings Tobacco Legislation to Parliament
Asian Wall Street Journal – 5 July 2011
SYDNEY—Australia’s government introduced into parliament new laws banning advertisements on cigarette packets Wednesday, setting up a legal battle against the world’s biggest tobacco companies.
Under the proposed laws, Canberra wants to be the first government in the world to restrict logos, branding, colors and promotional text on tobacco packets beginning in January 2012. Product names will appear in standard colors and positions in a regular font and size on packets colored a dark olive-brown, which government research has found holds the lowest appeal to smokers.
Health warnings with graphic images of the harmful effects of smoking will have to make up 75% of the front of the packaging and 90% of the back.
“This world first initiative sends a clear message that the glamour is gone from smoking,” Health Minister Nicola Roxon said in a statement.
Philip Morris International Inc., the world’s largest tobacco company by revenue, last month warned Australia’s government it will challenge the decision in the courts and will seek billions of dollars in financial compensation.
British American Tobacco PLC—the biggest cigarette seller in Australia—has also warned it could pursue legal action, while Imperial Tobacco Group PLC is also opposed to the measures.
The new laws have the backing of the center-right opposition coalition and are expected to be passed by both the lower and upper house of parliament.
Write to Enda Curran at enda.curran@dowjones.com
What a drag … Iceland considers prescription-only cigarettes
Guardian newspaper – 5 July 2011
Tobacco bill proposes outlawing shop sales, with only doctors allowed to prescribe cigarettes to addicts unable to kick habit
Iceland is considering banning the sale of cigarettes and making them a prescription-only product.
The parliament in Reykjavik is to debate a proposal that would outlaw the sale of cigarettes in normal shops. Only pharmacies would be allowed to dispense them – initially to those aged 20 and up, and eventually only to those with a valid medical certificate.
The radical initiative is part of a 10-year plan that also aims to ban smoking in all public places, including pavements and parks, and in cars where children are present. Iceland also wants to follow Australia’s lead by forcing tobacco manufacturers to sell cigarettes in plain, brown packaging plastered with health warnings rather than branding.
Under the mooted law, doctors will be encouraged to help addicts kick the habit with treatments and education programmes. If these do not work, they may prescribe cigarettes.
The private member’s bill is sponsored by former health minister Siv Fridleifsdottir, who worked with the Icelandic Medical Association as well as a coalition of anti-tobacco groups to come up with the proposal. “The aim is to protect children and youngsters and stop them from starting to smoke,” she said on Monday. The proposal would initially result in an increase in cigarette prices, said Fridleifsdottir, of “10% per year, in line with World Health Organisation proposals – evidence shows that a 10% increase results in a 4-8% reduction in consumption”.
But by the end of the 10-year plan, prescription-only cigarettes should actually be cheaper than ever, according to Thorarinn Gudnason, president of the Icelandic Society of Cardiology, who helped draw up the proposal.
“Under our plan, smokers who are given prescriptions will be diagnosed as addicts, and we don’t think the government should tax addicts.”
Gudnason said current cigarette pricing in Iceland did not take into account the huge costs imposed on society by smokers. “A packet currently costs around 1,000 krona [£5.50], but if you factor in the cost of sick leave, reduced productivity due to smoking breaks and premature retirement on health grounds, it should really be 3,000 krona,” he said.
The tobacco proposal also says that nicotine should be classed as an addictive substance. “It’s as hard to give up nicotine as heroin, not in terms of the side effects, but in terms of the cravings and how quickly one becomes addicted,” said Gudnason.
“We also want the government to license cigarettes like a medicine, which would mean they would have to go through the same rigorous trials as any other drug. I doubt cigarettes would ever get on the market now that we know the side-effects – lung cancer, heart attacks, chronic obstructive pulmonary disease.”
Gudnason said 300 out of the 1,500 deaths in Iceland each year were caused by one of those three conditions.
“That’s 20% of all deaths. We think that our proposals could lead to a significant reduction in smoking-related deaths – perhaps down to just 100 annually.”
The proposal also suggests that tobacco smoke should be treated as a carcinogenic substance, and that it should be restricted in a similar way to other known carcinogens, because of the known effects of passive smoking.
Gudnason did a study five months after Iceland introduced a smoking ban in restaurants and pubs in 2007 and found a 21% reduction in acute coronary syndrome (heart attacks and near heart attacks) among non-smoking men, compared to five months before the ban.
A spokeswoman from the Icelandic ministry of welfare said on Monday that the proposal was “very serious” but had limited chances of success.
“Siv Fridleifsdottir is a very serious politician and this is a very serious proposal,” said Anna Baldursdottir, political adviser to the minister of welfare, Gudbjartur Hannesson.
“Whether it not it eventually becomes law, I do not know. I seriously doubt it.”
The idea will be debated in the Althing, Iceland’s parliament, in the autumn, when politicians return from recess, she added.
Iceland has successfully halved smoking rates over the past 20 years. In 1991, 30% of the population smoked; today, only about 15% light up regularly, according to Baldursdottir, giving it the lowest smoking rates in Europe.
This success is attributed to huge increases in tobacco tax, which accounts for about 25% of the pack price, as well as the drop in disposable income among islanders since the financial crash of 2008.
Other countries have gone further. Bhutan has completely outlawed smoking and Finland hopes to follow suit by 2040.
Swedish surgeons now refuse to operate on smokers until they give up, because of the deleterious effect smoking has on the healing process, Gudnason added.
As an isolated island, Iceland arguably stands a greater chance of success with such draconian measures than other nations.
With no neighbouring countries and rigid customs controls at ports and airports, it will be difficult for anyone to smuggle in contraband cigarettes.
High tobacco tax increase has led to large drop in sales of cigarettes
South China Morning Post – 5 July 2011
I refer to the letter from Markus Shaw (“A lot of puff about new cigarette tax”, June 23). Yet again Mr Shaw seeks to repeat the PR spin of big tobacco by attempting to equate tobacco smoking with junk food and alcohol use.
Passive smoking kills innocent bystanders – 1,400 people out of 7,000 total smoking deaths a year here – whereas junk food and alcohol affect the product users not bystanders. Mr Shaw says the health secretary should instead comment on air pollution.
The Hedley online index shows the deaths attributable to pollution in 2010 were 792, being 11 per cent of the deaths attributable to smoking, while smoking itself is a serious form of air pollution.
Mr Shaw states the increased tax will deny “pleasure” to the poor and present an opportunity for crime.
The people most in need of quitting are the poor who can then spend more on their families and add 10 years to their lifespan with them. In the past two years, 65 per cent of contraband cigarettes seized by the Customs and Excise Department were genuine tobacco products and, of those, 7 per cent were marked “HK Duty Not Paid”, obviously leaked from our duty free outlets. It is a fact proved worldwide that the tobacco companies deliberately fail to control their supply chains, allowing unscrupulous elements to supply the illicit market.
The government has injected an additional HK$42 million in 2011 towards increased free cessation therapy and products. Mr Shaw further states the tax increase oppresses a minority. In 2010, when there was no budget excise tax increase, the legal sales of cigarettes in Hong Kong were: March, 53.9 million; April, 114 million; May, 225.7 million. After the tax increase announced in February’s budget, the numbers were: March, 6.1 million; April, 45.2 million; May, 75.5 million. Even the blinkered can see the tax increase is a positive preventive health measure. We have probably the most efficient Customs and Excise Department in the world and statistics show that the seizures and quantities have declined dramatically since 2007.
The only oppression of this health measure is on the dwindling profits of the tobacco companies. The University of Hong Kong’s department of community medicine study (1998) shows that the cost to Hong Kong society including loss of life per year was HK$72 billion; this will now be far higher in equivalent 2011 terms.
James Middleton, chairman, Clear the Air
Plain Packaging
Summary
Tobacco packaging has become one of the tobacco industry’s leading promotional tools. In Australia,
the Government proposes to require that tobacco products be sold in plain, standardised packaging.
In the UK, the Government has committed to consulting on similar legislation. Research suggests that
plain packaging would increase the impact of health warnings, reduce false and misleading messages
that one type of cigarette is less harmful than another, and reduce the attractiveness to young people.
SummaryTobacco packaging has become one of the tobacco industry’s leading promotional tools.
In Australia,the Government proposes to require that tobacco products be sold in plain, standardised packaging.In the UK, the Government has committed to consulting on similar legislation. Research suggests thatplain packaging would increase the impact of health warnings, reduce false and misleading messagesthat one type of cigarette is less harmful than another, and reduce the attractiveness to young people.
Read more, download PDF : ASH_699