Clear The Air News Tobacco Blog Rotating Header Image

December 12th, 2011:

Effect of excise tax hike on consumption of duty paid cigarettes in Hong Kong – products remain too affordable

Cigarette Smuggling Burns

U.S. Rep. Peter King says that the federal and state governments, along with manufacturers, must prioritize the fight against cigarette smuggling.

WASHINGTON – U.S. Rep. Peter King (R-NY), chairman of the House Homeland Security Committee, shared his opinions about the proliferation and consequences of contraband cigarettes last week in Politico, a Capitol Hill publication.

King wrote that the “failure to strongly combat the growing crime of contraband cigarette smuggling deprives governments of billions of dollars in tax revenues — siphoned off by terrorist and criminal organizations.”

Using his home state of New York as an example — which has the highest cigarette excise tax in the United States — King suggests that as cigarette taxes increase, so has the illegal activity by some retailers to bypass wholesalers and acquire and sell counterfeit-stamped cigarettes. “This allows the smuggler and retailer to sell at substantial discounts — and still profit thanks to the margin created by unpaid taxes,” the representative wrote.

“In New York, contraband cigarettes are typically trafficked from southern states, which have lower or no taxes, or across federal tribal lands, where taxes are not collected,” wrote King, adding that tax-free cigarettes sold on tribal lands account for as much as one-third of all brand name cigarettes sold in New York — sales that are “supposed to be limited to tribal members.”

One result of cigarette smuggling, notes King, is that both the federal government and state governments are missing out on tax revenue collected from tobacco sales. “Nationwide, the annual loss is estimated at $5 billion at the state level, and a further $3.8 billion loss at the federal level,” he wrote.

King also cites that in 2008, a House Homeland Security Committee investigation found “a terrifying nexus” between cigarette smuggling and terrorism.

“We uncovered far too many examples,” said King, noting that counterfeit cigarette tax stamps “were found in an apartment used by members of the Egyptian Islamic Jihad cell that carried out the 1993 bombing of the World Trade Center. The notorious ‘Lackawanna Six’ Islamic-terrorist cell received $14,000 from a former gas station operator, who was subsequently convicted for cigarette trafficking and money laundering. …Last year, the U.S. comptroller general and the Justice Department verified that cigarette smuggling provides financial support for international terrorist groups including Hezbollah and Al Qaeda.”

Citing his support for the Smuggled Tobacco Prevention Act (STOP), King says that cigarette smuggling has presented a security threat for years that has not been addressed. “With the revenue-starved governments across the country – including in New York — facing huge shortfalls, there is even more incentive to address the problem. The era for tolerating cigarette smuggling with ineffective tax enforcement must end.”

The STOP Act was introduced in both the U.S. House and Senate in October, which seeks to significantly hamper the proliferation of black market cigarettes through stiffer penalties on smugglers who avoid taxes. NACS is working to make sure that certain provisions contained in the STOP Act do not adversely affect retailers. NACS is also advocating that the legislation is drafted in a manner that will apply to all contraband tobacco, including Native American tribes.

Roxon denies Big Tobacco the prospect of any smokescreen

Nicola Roxon cigarette packets

Nicola Roxon unveils the new plain cigarette packs. Picture: Alan Pryke Source: The Australian

MANY smokers and, at a guess, pretty much every cufflink-wearing executive from the big tobacco companies have a habit of posturing as macho libertarians.

They argue that cigarettes are a legal product, smoking is a matter of choice, and that when it comes to telling us how we can live our lives, the nanny state can go stick it in its pipe and smoke it.

This is all fine, up to a point. And that point is when smokers get sick and automatically assume that it is the job of the health system – that is, the taxpayers – to step in and cover the cost of their collapsed lungs, clogged arteries and triple bypasses.

It is a logically inconsistent position and, frankly, quite a pathetic one. If smokers and the tobacco industry are going to be hairy-chested about the manner in which they live their life, they should also be held to account for the manner of their death.

I write that not as some clean-living puritan, but one of those poor sad dills who has become addicted to this stupid drug, but who is now happily (and hopefully) in the final stages of a victorious battle against nicotine, setting aside last week’s beer-fuelled regression at the office Christmas party.

You hear smokers say all the time that the amount of tax levied on their habit is more than enough to cover the cost to the health system of smoking-related death and disease, and lost productivity through the premature departure of the nicotine-addicted from this mortal coil.

The reality is somewhat different. The cost of smoking to the health system alone is a very hefty $31.5 billion a year. Annually, some 15,000 of us go to meet our maker many years before we otherwise would. Think back to early 2010 when then prime minister Kevin Rudd jacked up the price of a packet of fags by 25 per cent a packet. Even that whopping increase only raised $5 billion, which is just one-sixth the annual illness bill from our vulgar little habit.

The tobacco industry has been having a pretty ordinary time of it of late, as all those personal choice arguments vanish in a puff of acrid smoke as even smokers like this one start to admit there is no logical defence available for smoking or the public costs associated with smoking.

As a final last-gasp action, the tobacco industry has been mounting a spurious civil libertarian argument against plain packaging, featuring a matronly nanny-state lady displayed at tobacconists and corner store cigarette counters. The campaign has failed to ignite the outrage the tobacco industry would have envisaged because even smokers know deep down that what they are doing is quite dumb.

As Health Minister until yesterday’s reshuffle, Nicola Roxon carved out a deserved reputation as the nation’s wowser-in-chief with her one-woman campaign against alcopops and other forms of fun. Suitably, one of her final actions in the portfolio ahead of the reshuffle was to meet with veteran American anti-tobacco campaigner Matthew Myers, who helped US states claim about $206 billion in healthcare compensation from tobacco firms.

Myers’ argument is that if tobacco companies are knowingly peddling a product which kills people – and they clearly are – it should follow that they contribute to the social cost of the carnage they unleash.

It is an aggressive move by Roxon to invite Myers to advise the Federal Government on how it could take similar action here. She made it clear yesterday that she was delighted at the prospect of learning from the US experience.

“I am looking forward to having him here to pick his brains on the strategies that they used in the US to hold tobacco companies accountable for the costs that governments pick up from tobacco-related disease,” she told the Herald Sun.

If the Federal Government goes down that path it could wrong-foot the tobacco companies by opening up a new flank in the legal battle, which at this stage has two of the biggest tobacco firms taking the feds in a bid to suspend the introduction of the drab, olive-green packaging, which will turn thousands of people, kids especially, off cigarettes.

By fighting back with legal action of its own, for deliberately peddling a product that claims thousands of lives a year, the once-mighty tobacco industry could be stretched to breaking point. At the risk of being disloyal to my vice, all I’d say to that is: cop that, big tobacco.

If any car manufacturer knowingly sold vehicles that ran off the road, or a pharmaceutical company sold painkillers that actually made you feel worse, they would be put out of business. There is a word for this kind of conduct and it is negligence.

In the case of tobacco it is made worse because the word negligence implies behaviour that is inadvertent or accidental. Tobacco companies know exactly what they are doing – helping people hasten their deaths. And in the same way that smokers can’t logically rabbit on about individual rights while still expecting the community to pay for the damage they do to themselves, tobacco companies can’t fairly shirk the social cost of the deaths and diseases for which they are also responsible.

EXCISE DUTY TABLES – Part III – Manufactured Tobacco

DOWNLOAD FULL PDF : excise_duties-part_iii_tobacco_en

FEDERAL and state governments could take big tobacco to court, seeking compensation for smoking’s health-care costs.

Two international tobacco giants have launched billion-dollar legal action, seeking the suspension of plain packaging laws that will see all cigarettes dressed down in drab green packaging.

Two more companies will begin action in coming days.

But the states may mount their own court challenge within months.

And today in Melbourne, Commonwealth lawyers and public-health and law experts are to meet veteran anti-tobaccocampaigner Matthew Myers, who helped US states claim about $206 billion in health-care compensation from tobaccofirms.

He will discuss his role in the US Master Settlement Agreement, which awarded the compensation, and forced cigarette companies to change their marketing and pay for a $1.5 billion anti-smoking campaign.

The settlement also forced the disclosure of previously secret documents held by the companies.

Federal Health Minister Nicola Roxon said the Government was readying itself for a fight and wanted to arm itself with the lessons learned overseas.

“I am looking forward to having him here to pick his brains on the strategies that they used in the US to hold tobaccocompanies accountable for the costs that governments pick up from tobacco-related disease,” Ms Roxon told the Herald Sun yesterday.

The US experience would help Australian jurisdictions consider what options they might pursue, she said.

Smoking kills more than 15,000 Australians a year.

The unhealthy habit costs the nation at least $31.5 billion in health care.

Mr Myers will also advise on big tobacco’s likely game plan to tear down plain packaging laws, in a sign Australia’s world-first laws are grabbing global attention.

“This is a fight that many other countries around the world have been in for different tobacco-control measures,” Ms Roxon said.

“So it’s important to talk to the experts from around the world about the tactics that we can expect from big tobacco and the strategies that they might have successfully used.”

Read more:

Environmental Tobacco Smoke’s Impact on Children Exposed in New Online Video

Source: Cochrane & Associates, LLC

The IAQ Video Network produces another educational video about environmental dangers due to exposure to indoor air quality contaminants.

Phoenix, AZ, December 12th, 2011 — Today, the IAQ Video Network and Cochrane & Associates announced the release of another online video to help educate the public about issues that may impact their health. The latest educational video discusses the threat to children’s health due to environmentaltobacco smoke (ETS).

According to the U.S. Environmental Protection Agency (EPA), “Environmentaltobacco smoke is the mixture of smoke that comes from the burning end of a cigarette, pipe, or cigar, and smoke exhaled by the smoker. It is a complex mixture of over 4,000 compounds, more than 40 of which are known to cause cancer in humans or animals and many of which are strong irritants. ETS is often referred to as ‘secondhand smoke’ and exposure to ETS is often called passive smoking.’

“Infants and young children whose parents smoke in their presence are at an increased risk of lower respiratory tract infections, including pneumonia and bronchitis, and are more likely to have symptoms of respiratory irritation,” reported Paul Cochrane, President of Cochrane and Associates, the company behind the IAQ Video Network and the new public outreach video. “The EPA estimates that between 200,000 and 1,000,000 asthmatic children have their condition made worse by exposure to secondhand smoke each year. We hope this new online video helps to educate people about secondhand smoke and ways people can protect their children’s health.”

To view this video please visit or