Clear The Air News Tobacco Blog Rotating Header Image

May 9th, 2013:

$2 per pack tobacco tax on fast track in California Legislature,0,7639018.story

$2 per pack tobacco tax on fast track in California Legislature

By Patrick McGreevy

11:19 AM PDT, May 8, 2013

A proposal to raise the tobacco tax by US$2 per pack of cigarettes cleared its first two policy committees Wednesday, with Republicans unified in their opposition.

Sen. Kevin De Leon (D-Los Angeles) proposed the tax, which would move California’s tobacco taxes from 33rd-highest in the nation to fourth. The $1.5 billion raised each year would help pay for medical care for tobacco-related diseases, anti-tobacco education and enforcement of tobacco-related laws.

DeLeon said the state currently spends $3.1 billion on medical costs involving tobacco-related diseases and health impacts.

“Our goal is to ensure that taxpayers don’t foot the bill related to any industry,” De Leon said.

The state currently charges 87 cents in taxes on each pack of 20 cigarettes, with money going to healthcare programs, including an anti-smoking campaign.

Supporters also hope the higher tax will discourage some people from smoking.

The vote of the Senate Governance and Finance Committee was 4-2, with Republicans including Sen. Stephen Knight of Palmdale opposed.

“Why wouldn’t we just obliterate smoking by raising it [the tax] $25?” Knight asked sarcastically. “Is it our job to tax people into a good decision?” SB 768 goes to the Senate Health Committee this afternoon so it can meet a looming deadline for committee action on bills.

[Updated at 2:30 p.m. May 8: Later in the day, the bill was approved on a 6-2 vote of the Senate Health Committee.

[Bill Dombrowski, president of the California Retailers Assn., opposed the measure, telling the health panel that the tax will cost jobs, promote black-market activity and hit the wallets of some people more than others.

[“Raising taxes will unfairly burden low-income earners,” he told the Health Committee.

[De Leon said the same goes for health.  “What is truly regressive is the disproportionate impact smoking has on low-income and minority communities.”

[Some supporters said the money can help with the expansion of MediCal, although De Leon said the bill does not yet address that issue.]


California may go without a financial reserve

California tax revenue yields multibillion-dollar surplus

Proposition 30 win is no guarantee of fiscal security for California

Copyright © 2013, Los Angeles Times

Cabinet approves proposed hikes in tobacco tax, surcharge

Cabinet approves proposed hikes in tobacco tax, surcharge

2013/05/09 18:25:09

Taipei, May 9 (CNA) The Cabinet on Thursday approved a draft bill to raise the tax and surcharge on tobacco products, which will increase cigarette prices by NT$25 (US$0.85) per packet once the bill is passed by lawmakers.

The draft amendment proposes raising the health surcharge on cigarettes from NT$20 to NT$40 per pack, and the tobacco tax from NT$11.8 to NT$16.8 per pack, according to a Cabinet statement.

The average cost of cigarettes in Taiwan is NT$70 per packet, including taxes and surcharge, according to the 2012 edition of Tobacco Atlas, which is published by the World Lung Foundation and the American Cancer Society.

The surcharge, implemented under the Tobacco Hazards Prevention Act, is used to fund cancer prevention and medical services in rural areas, among other things.

The Department of Health (DOH) said the NT$25 increase is expected to reduce the smoking rate in the country by 20.8 percent, which means cutting the number of smokers by 740,000. The rate of smoking in Taiwan among people 18 years old and over stood at 18.7 percent last year, according to government statistics.

The expected drop in the smoking population will generate long-term social benefits valued at an estimated NT$296 billion, said Chiou Shu-ti, director-general of the DOH’s Bureau of Health Promotion.

Citing a recent telephone poll, the bureau said 62.1 percent of the public supported an increase in the tobacco surcharge.

When the respondents were informed how the surcharge would be used, the support rate rose to 82.6 percent, the bureau said.

However, Deputy Health Minister Day Guey-ing said that even with the proposed hikes, Taiwan will not meet the World Bank’s recommendation that such taxes should account for 67-80 percent of the price of tobacco products.

To reach the minimum 67 percent level, the combined increases would have to total least NT$27.6 per packet of cigarettes, he added.

In addition, Lin Ching-li, chief of the John Tung Foundation’s tobacco prevention division, said the tax should be raised by at least NT$30 since it had not been increased in 26 years.

Lin also said she is worried that lobbyists will succeed in getting lawmakers to reject the NT$5 tobacco tax hike.

Meanwhile, Deputy Finance Minister Tseng Ming-chung said the government will work harder to crack down on tobacco smuggling, in light of the fact that such activities increased in 2006 and 2009 when the tobacco surcharge was raised.

(By Hsieh Chia-chen, Chen Ching-fang and Kay Liu)

Tobacco producers excluded from the Government Pension Fund Global

09.05.2013 – Oslo

Tobacco producers excluded from the Government Pension Fund Global

The Ministry of Finance has excluded the American company Schweitzer-Mauduit International Inc. and the Chinese company Huabao International Holdings Limited from the investment universe of the Norwegian Government Pension Fund Global (GPFG) on account of their tobacco production.

Photo : Mark J Sebastian

Keep Updated with the Latest News and Feeds, Follow Us on Facebook


The decision is based on a recommendation from the Council on Ethics for the Fund.

The Council on Ethics gave this recommendation to the Ministry of Finance on 24th January 2013. Schweitzer-Mauduit International Inc. and Huabao International Holdings are involved in the production of reconstituted tobacco leaf (RTL).

According to the guidelines for observation and exclusion of companies from the Pension Fund Global, Section 2 (1) b), “The assets in the Fund shall not be invested in companies which themselves or through entities they control: […] produce tobacco”. As the Council on Ethics points out in its recommendation, the Ministry of Finance gave a further definition of this in the National Budget for 2010, section 5.4.4, stating that producers of products that contain tobacco shall be excluded from the GPFG. The Council underlines that RTL primarily is made from the tobacco plant and therefore must be regarded as a tobacco product. The two companies concerned state in their annual reports and investor presentations that they produce RTL. The Council on Ethics has based its recommendation on this information.

The Ministry of Finance has decided to exclude Schweitzer-Mauduit International Inc. and Huabao International Holdings Limited based on the recommendation from the Council on Ethics. In accordance with the guidelines, the decision to exclude is made public once the shares are sold.

Questions for Cameron over Lynton Crosby’s links to alcohol and tobacco firms

Questions for Cameron over Lynton Crosby’s links to alcohol and tobacco firms

After minimum alcohol pricing and plain cigarette packaging are dropped from the Queen’s Speech, Labour and Tory MPs point to the election chief’s connections.

By George Eaton Published 08 May 2013 8:50

After minimum alcohol pricing and plain cigarette packaging are dropped.

Lynton Crosby, who was recently appointed as the Conservatives’ election campaign manager after running Boris Johnson’s re-election campaign.

As notable as what is in today’s Queen’s Speech is what isn’t. Despite repeated promises by ministers, the speech will not include a bill enshrining the government’s commitment to spend 0.7 per cent of GNI on aid in law, nor, to the dismay of public heath campaigners, will there be any mention of minimum alcohol pricing or plain cigarette packaging. Only gay marriage survives as an emblem of Cameroon modernisation.

Conservative MPs attribute this strategic shift to Lynton Crosby, the Tories’ recently appointed campaign strategist, who speaks of scraping the “barnacles off the boat”. By this, the hard-nosed Australian means dispensing with namby-pamby measures of little concern to the average voter (such as minimum pricing and plain packaging) and focusing on people’s core concerns: the economy, immigration, education and welfare reform.

But could Crosby’s motives go beyond the merely political? As the Daily Mirror reports, the strategy chief’s PR and lobbying firm Crosby Textor has long-standing links with the alcohol and tobacco industries. The company was on a retainer with British American Tobacco when cigarette companies fought the introduction of plain packaging by the Australian government and Crosby was federal director of the Liberal Party when it accepted large donations from the industry. Crosby Textor Fullbrook, the UK arm of the firm, has represented tobacco companies since the 1980s.

The company’s links with the alcohol industry are no less notable. The Distilled Spirits Industry Council of Australia, which campaigned against minimum alcohol pricing, is listed as a client of Crosby Textor in a New South Wales register of lobbyists. The trade body includes multinational companies such as Diageo and Bacardi, currently lobbying against a price floor in the UK.

With minimum alcohol pricing and plain cigarette packaging both abandoned in quick succession, some in Westminster are beginning to smell a rat. Shadow health secretary Andy Burnham said: “Two public health policies have been dropped since Lynton Crosby arrived. David Cameron needs to come clean about whether Crosby had any involvement in these decisions. From the outside it looks very much like a right-wing lobbyist is dictating the coalition’s public health policy.”

Downing Street has so far refused to say whether it was aware of Crosby’s links to the alcohol and tobacco industries and what role he played in the decision to abandon the measures. But it isn’t just Labour that is sounding the alarm. Sarah Wollaston, the independent-minded Conservative MP for Totnes, and a former GP, tweeted the Mirror’s story with the accompanying words: “Why we desperately need an effective register of lobbyists.

Why we desperately need an effective register of lobbyists.…

— Sarah Wollaston MP (@drwollastonmp) May 7, 2013

Convenient, then, that a statutory register of lobbyists is another of the “barnacles” that Crosby has scraped off the boat.