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May 25th, 2012:

Budget 2012: Smokers open wallets wide

25 may 2012

The 2012 Budget calls for a NZ$5 increase in the price of 20 cigarettes. Photo / Thinkstock

The Budget’s $5 increase in the price of 20 cigarettes has been welcomed by public health experts, but some wish the Government had added a much bigger “shock” hit to its series of smaller rises.

Associate Health Minister Tariana Turia announced tobacco excise taxes would rise by 10 per cent a year on January 1 for the next four years.

That will lift the average price of a packet of 20 from about NZ$14 now, to $15.40 next year and $20.50 in 2016.

Read all of’s Budget coverage here.

The good news for Government coffers is an estimated revenue rise from $1.2 billion a year to $1.7 billion by 2016.

Professor Richard Edwards, head of public health at Otago University in Wellington, said the tax rises were a good move and would help to reduce smoking.

“Increasing the tax and therefore the price of cigarettes is one of the most effective ways to help people stop smoking and reduce the number of people who start smoking.

“On the down side, we would have liked there to be an even larger increase because there’s evidence that large increases of 20 or 30 per cent have an additional shock value.”

Adding a rise of that magnitude among the series of 10 per cent rises would have a much greater impact on smoking. It would act as a big trigger and many more people were likely to say, “I’ve had it, I’m going to stop”.

“If you have a big hit, it’s difficult for the tobacco industry to cut that. With smaller ones, they can adjust their prices and smooth the effect of an increase. With a big hit, they have less ability to do that.”

The increases announced yesterday are in addition to the annual tax increases linked to inflation and follow the excise rise of 25.4 per cent on loose tobacco and 10 per cent on cigarettes in April 2010 and two later rises each of 10 per cent on both types of tobacco.

Calls to the Quitline increased dramatically in the weeks after the April 2010 rises. Mrs Turia’s advisers said , based on tobacco company data, the volume of tobacco consumed fell 14 per cent from 2009 to 2011.

Mrs Turia said: “We know that for every 10 per cent increase in the price, tobacco consumption falls by about 5 per cent. Many smokers will quit and many more will reduce their tobacco consumption.”

She also announced $20 million would be spent over the next four years on programmes to encourage quitting and to discourage people from taking up smoking.

Imperial Tobacco spokesman Brendan Walker said the tax rises would create “a lucrative black market for tobacco”.

But Action on Smoking and Health communications manager Michael Colhoun dismissed this “industry scaremongering” as a “tired old argument”.

Before the January excise rise, the Government’s next tobacco control measure will be the ban on displays of tobacco products in dairies and other shops, from July 23.

The public will be consulted on any moves to forced plain packaging.

The cost of smoking
Cost of a 20 pack / Tax increase on a 20 pack of cigarettes
$20.50 10% 2016
$18.60 10% 2015
$16.90 10% 2014
$15.40 10% 2013
$14.00 10% 2012 Jan ($16.00 for more expensive brands)
$12.60 10% 2011 Jan
$11.20 10% 2010 April (On cigarettes; 14% on all other tobacco products)
$8.40 14% 2000 May (Plus extra 6% by tobacco companies)
$6.50 10% 1998 May (On all tobacco)
$5.80 37% 1995 Dec (On non-cigarette tobacco products)

Tobacco revenue to rise from $1.2 billion a year to $1.7 billion by 2016

Regular adult smokers
1990 28%
2005 23.5%
2009 21.3%

Bars that ban smoking will do well

SCMP Letters

The Dickens Bar of the Excelsior Hotel in Causeway Bay has strictly enforced the no-smoking ban from day one without apparently losing customers.

They are happy to go there to watch a soccer game and have a beer, knowing they cannot light up, because they are in a well-run bar. They will come even though the prices are not cheap.

Contrast that with a bar I visited in Sheung Shui about nine months ago to watch a match. Locals looked at me initially as if I was a spy, then lost their inhibitions and started smoking.

When you are in a bar like that, it makes you wonder what other laws are being broken; perhaps, for example, the sale of drugs or counterfeit goods.

Don’t these publicans realise they are shooting themselves in the foot? They should pay a visit to the Dickens and copy its entrepreneurial strategy.

Because it is so well run and sticks to the law, in business terms it will do well in the long run. As I said, non-smokers are happy to pay the relatively high prices so they can enjoy a few quiet hours in a clean and tidy environment.

Pang Chi-ming, Fanling

Child addicts at heart of Indonesia anti-smoking suit

Child addicts at heart of Indonesia anti-smoking suit

Published: Thursday, 24 May 2012 | 3:30 AM ET

KARAWANG GIRANG, Indonesia (Reuters) – Anti-tobacco advocates in Indonesia plan to file a class action lawsuit this month using cases of child addicts in the hope of forcing tougher regulations on a society where one in three people smokes.

It is a rare attempt of its kind to constrain a tobacco industry which looks to the world’s fourth most populous country and its growing appetite for cigarettes to replace dwindling sales elsewhere.

The suit against tobacco companies and the Indonesian government argues that feeble regulation has left children dangerously exposed to the risks of smoking.

“There are … kids who have fallen victim to the impact of cigarette companies and smoking. They are addicted. In the context of people’s rights, the society has been disadvantaged by the tobacco industry,” head of the National Commission for Child Protection, Arist Merdeka Sirait, said.

Indonesia is something of a paradise for both smokers and tobacco companies, with the world’s fifth largest population of smokers. It is a widely tolerated habit and one which even in this relatively poor archipelago most can afford to feed.

And it is getting more popular as the economy grows. In 1995, one in four Indonesians smoked. Fifteen years later it had risen to one in three.

That in turn has tempted international tobacco firms to join the hugely profitable home-grown ones such as Gudang Garam, P T Djarum and Hanjaya Mandala Sampoerna, which is now part of Philip Morris International.

The government even gives tax incentives for the manufacture of hand-rolled cigarettes because it provides such a major source of employment in east Java where the local firms congregate.

Sampoerna said it had only seen reports of the planned lawsuit and could not comment. Other producers also had no immediate comment.

A spokesman for the Federation of Indonesian Cigarette Manufacturers said he had heard of the suit but declined comment because it was not aimed at the federation.

“If a child is smoking is that the problem of the advertisement or the parents?” spokesman Hasan Aoni said.


Ilham Hadi has become something of a poster child for the anti-smoking campaign.

He began smoking aged four when his mother Nenah said she gave him 3,000 rupiah ($0.32) to buy snacks at school. He bought a cigarette instead.

The addiction has since blackened his teeth, damaged his skin and, his friends say, made the now nine-year old a useless soccer player and slow, wheezy runner.

“He sometimes bangs on the window at 4 a.m. in the morning to buy a cigarette,” said Iin Indriyani, who runs a tiny store from the front room of her home around 100 yards (meters) up a winding path from the two-room house where Hadi’s family lives.

“Whenever he wants a cigarette he looks like he is in a trance,” she told Reuters, saying that he sometimes hit her and her daughters to demand cigarettes.

Hadi smokes two packs a day, adding to the financial stress on his parents given that his father earns only $5-6 per day as a laborer and part-time motor bike taxi driver.

“If there is no money left at home, nothing to sell anymore, he would go to the grocery shop, get money by helping park cars and come back home with cigarettes, sometimes a pack, sometimes two and expensive brands too,” said his father Umar.

His habit has also brought the family unwanted celebrity as media crews troop to their house on a hillside beside a rice paddy in the village of Karawang Girang around 40 miles south of the capital.

The child protection commission paid for Hadi to be treated in March and he quit, but last week he ran away from home – not for the first time – in search of cigarettes and has not been seen since.

His case has triggered a debate among the village’s 344 residents about smoking and an attempt by the head of the village to make Karawang Girang a smoke-free zone, said Husein, a local government health worker.

But the chances of it leading to a broad national conversation about the dangers of cigarettes, seen by many as a sign of sophistication, seem slim.

The vast majority of Indonesian smokers puff cigarettes laced with cloves, called kretek, a word based on the crackling sound made by the burning, heavily scented spice.

So pervasive is the habit that tobacco products are the number two item in household expenditure after rice, according to the statistics bureau.

Health worker Husein blames advertising. Billboards in the main street near the village feature cigarette advertisements and local entertainment events are often sponsored by tobacco firms.

It is a scene replicated across Indonesia’s vast network of islands.

The annual cost of smoking-related diseases is estimated as high as 11 trillion rupiah, said analyst Abdillah Ahsan of the University of Indonesia’s Demography Institute.

By contrast, cigarette firms are expected to produce 268.4 billion cigarettes in 2012 and contribute $8.45 billion in tax r e venue, according to the finance ministry.

It is enough to make national and regional authorities reluctant to tighten regulations and risk losing funds.

“Every time you want to make a regulation, it is very difficult because on every level of the bureaucracy they have been bought by the cigarette industry,” said Tutus Abaci, a member of Indonesia’s National Commission on Tobacco Control.

($1 = 9242.0000 Indonesian rupiah)

(Editing by Jonathan Thatcher)

(c) Copyright Thomson Reuters 2012. Check for restrictions at:

Adult Awareness of Tobacco Advertising, Promotion, and Sponsorship — 14 Countries

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