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July 31st, 2015:

Govt should own up to cost of tobacco litigation

Kyla Tienhaara and Deborah Gleeson
On Tuesday, Fairfax Media economics writer Peter Martin made the startling revelation that the government’s ongoing legal dispute with Philip Morris has already cost the country $50 million (“Tobacco box legal row costs hit $50m”, July 29, p5). Martin’s information was from an unnamed source. The government has refused to disclose what is being spent, even to the Productivity Commission.

Most legal experts agree that Australia should eventually win the case. But the reasoning provided by these experts is largely based on legal technicalities. No one is suggesting that health policy is immune from challenge in “investor state dispute settlement” (ISDS).

What is also concerning is that even if the government wins it may not be able to recoup the enormous cost of defending the plain packaging legislation. We know very little about the case, which is being heard by a private arbitration tribunal behind closed doors in Singapore. But what is certain is that the arbitrators are not bound by a “loser pays” rule. What that means is that Australian taxpayers may end up footing the bill regardless.

While it is outrageous that Australia should have to spend millions defending our right to regulate a product that is expected to kill two thirds of Australia’s 2.7 million smokers, there is no question that plain packaging is a policy worth defending.

Even at this early stage, the evidence is clear: plain packaging is achieving its objectives: reducing the appeal of tobacco packs, increasing the effectiveness of health-warnings and reducing the ability of packaging to mislead people about the harm that tobacco causes. Since the introduction of tobacco plain packaging and the suite of other tobacco control measures that came in at the same time, tobacco consumption has fallen at record rates. In this context, even $50 million is money well spent.

However, while it is laudable that the government continues to fight Philip Morris despite the cost, other countries put in the same position may not have this luxury. The government of Uruguay has admitted that it would have had to give up its defence of similar tobacco packaging rules in ISDS, had it not received financial support from an non-profit organisation in the United States.

And US news reporter/comedian John Oliver revealed earlier this year that Togo, Namibia, and the Solomon Islands have all received letters from Big Tobacco threatening litigation over proposed laws. These countries would not be able to fathom a $50 million legal bill.

Given the high costs and the importance of the public policy issues at stake, it is not hard to understand why the list of opponents to ISDS continues to grow. The Productivity Commission, the Chief Justice of the High Court, a Reserve Bank board member, and the director-general of the World Health Organisation have all criticised ISDS. The Greens are firmly opposed to ISDS and at its recent party conference, Labor committed to eliminating ISDS from all existing Australian treaties if it is returned to power.

In fact, the only people in Australia that seem ready to defend ISDS are the Prime Minister and Minister for Trade and Investment.

Initially, the Abbott government suggested that it would consider ISDS on a case-by-case basis, but provided no objective criteria for how decisions on this issue would be made. Having signed agreements with Korea and China that include ISDS, the government is now faced with its biggest decision yet: whether to agree to ISDS in the Trans Pacific Partnership Agreement (TPP).

Negotiators are currently in Hawaii trying to bash out a deal to get the TPP signed before the narrow window that President Obama has to get it through Congress before the 2016 elections closes.

Statements from Andrew Robb suggest that Australia’s acceptance of ISDS is up for grabs.

The TPP is significant not just because it is big – 12 countries are involved in the negotiations – but also because the US is at the table. US corporations are the biggest users of ISDS.

One of the main reasons that Australia hasn’t yet been exposed to more ISDS cases is that the Howard government declined to accept its inclusion in the Australia-US Free Trade Agreement.

We now know how much just one case (that hasn’t even ended) can cost taxpayers. To avoid having to make such expenditures in the future to defend much-needed health and environmental policies, the government needs to reject an ISDS clause applying to Australia in the TPP.

Kyla Tienhaara is a research fellow at the Regulatory Institutions Network, Australian National University.

Deborah Gleeson is a lecturer in public health at La Trobe University. She is currently in Maui observing the TPP negotiations from the sidelines.

Trans-Pacific Partnership Agreement Must Protect Nations’ Right to Enact Measures to Reduce Tobacco Use

The following is a statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids:

As they complete negotiations on the Trans-Pacific Partnership (TPP) trade agreement, the United States and the 11 other countries involved must ensure the final agreement protects the right of participating nations to adopt public health measures to reduce tobacco use and prevents tobacco companies from using the TPP to attack such measures.

It is absolutely necessary that the TPP include this safeguard because of the tobacco industry’s own abusive behavior in using trade and investment agreements to challenge tobacco control measures around the world.

With TPP negotiations in the final stages this week in Maui, the tobacco industry and its political allies have stepped up their fight against any safeguard for tobacco control measures by claiming it would harm tobacco farmers. It is truly shameful that tobacco companies are hiding behind tobacco growers to disguise their own wrongful and abusive behavior. The proposed TPP provision is focused on preventing tobacco manufacturers’ abuse of the international trade system, addresses the actions of cigarette manufacturers and not growers, and would not impact trade of tobacco leaf in any way.

The proposed safeguard for tobacco control measures is necessary and appropriate given the abusive conduct of the tobacco industry and the uniquely harmful nature of tobacco products. Tobacco products are the only consumer products that kill when used as intended. Globally, tobacco currently kills about six million people each year and is projected to kill one billion people this century unless governments implement effective tobacco control policies. There is a global consensus that nations must act to reduce tobacco use as demonstrated by an international public health treaty, the World Health Organization Framework Convention on Tobacco Control, which has been ratified by 179 nations and the European Union.

The TPP must protect public health measures relating to tobacco from being challenged under the agreement, specifically under a legal mechanism called investor-state dispute settlement (ISDS) that allows foreign companies to sue governments in international trade tribunals. The industry increasingly has filed – or threatened to file – these costly trade lawsuits with the aim of defeating effective tobacco control measures or intimidating government into inaction. Australia and Uruguay are currently battling such lawsuits, and other countries have faced or been threatened with them. The tobacco industry’s behavior is a real and direct threat to public health around the world, and it must be stopped.

The Campaign for Tobacco-Free Kids has joined dozens of public health groups in the U.S. and worldwide, as well as many members of Congress, in urging that tobacco control measures be protected under the Trans-Pacific Partnership. The United States and other countries involved must act to protect children and health around the world rather than the interests of the tobacco industry.

SOURCE Campaign for Tobacco-Free Kids

Malawi’s forests going up in smoke as tobacco industry takes heavy toll

Malawi is reliant on tobacco for 60% of foreign earnings, but while demand is falling the cost of environmental damage caused by the industry is rising

For cigarette smokers and tobacco growers, the sight – and sweet smell – of the Chinkhoma auction house near Kasungu in central Malawi is heaven. Tens of thousands of metre-cubed bales of golden leaf, each with enough tobacco to make more than 50,000 cigarettes, cover the floor of a warehouse the size of three football fields.

Malawi, now the poorest country in the world according to the World Bank, depends on tobacco as a cash crop. Chinkhoma, in the heart of the tobacco-growing Central region, is where much of it is sold before being exported and made into cigarettes.

However, while tobacco is central to the economy, there is a high price to pay. The industry contributes greatly to the destruction of forests, with millions of trees required for the drying barns involved in air- and heat-curing. The cost also includes floods, changed rainfall patterns, and a reduction in food growing.

This year, bales are selling for about $200 (£128) each. This represents about three months’ labour for a smallholder farmer. The 160kg of – air- and heat-cured– tobacco that Chinkhoma and its sister house at Limbe, outside the capital Lilongwe, are expected to sell in the next month, will earn the country about $350m.

But as people in rich countries cut back on smoking and emerging economies like the Philippines, Indonesia and Brazil place higher taxes on cigarette sales, Malawi faces declining demand for its “green gold”.

International sales have held up, but on 21 July the government hit out at anti-smoking campaigners, saying tobacco played a vital role in the development of African countries like Malawi, Zambia and Zimbabwe, and warning that the western anti-smoking lobby risked plunging some of the poorest people in the world into further economic peril.

Allan Chiyembekeza, the agriculture minister, accepted that tobacco harmed health, but said it “is not alone in causing diseases”.

The impact of the industry is evident in the reduction of trees cut down or tobacco curing or construction of barns

Custom Nyirenda, Malawi’s principal forest officer
“Tobacco does not stand alone in this. Other habits derived from the consumption of agricultural products are dangerous. Alcohol is addictive and leads to even higher social costs than tobacco consumption, sugar added to food leads to diabetes and obesity, butter leads to increased cholesterol. We cannot accept the discrimination and we need to stand united and resist it,” said Chiyembekeza at an international tobacco meeting in Lilongwe.

According to Graham Kunimba, head of the Tobacco Association of Malawi (Tama), tobacco is a strategic crop for some African countries. In Malawi, the industry is the second largest employer, with more than 350,000 farmers and their families, 70,000 hired labourers and 10,000 people in leaf-processing factories dependent on it, he said.

“Why is the target on tobacco products and not on other products which may have a negative impact on health, including sugar? This is not done in good faith but to punish poor countries like Malawi who rely on tobacco for its economic growth,” he said. “In the end, the people who suffer most from this situation are the tobacco farmers, who support a very large part of Malawi’s agricultural production.”

Campaigns to introduce plain cigarette packets in some countries, including Britain and France, will only drive prices down further and lead to illegal sales because the packets will be easy to copy, he said.

“The manufacturers of tobacco products will no longer have an interest in supplying a product which has a brand value. This will inevitably lead to the use of cheaper tobacco and drive down the price of leaf tobacco,” he said.

Malawi devotes more than 5% of its farming land to the crop – the highest percentage globally – but its impact contributes to a deforestation rate that is the fourth fastest in the world. Most trees are cut for fuel and charcoal, but tobacco is also an important factor. In 1990, more than 47% of the country was tree-covered, but by 2010 16.9% had been lost.

The government accepts tobacco is a major driver of deforestation. “The impact of the industry on natural resources is visible in tobacco-growing districts. This is evident in the reduction of trees which have been cut … either for tobacco curing or construction of tobacco barns,” Custom Nyirenda, the principal forest officer in the ministry of natural resources, energy and mining, told Al Jazeera last week.

According to Philip Morris, manufacturer of cigarette brands like Marlboro and Benson & Hedges and one of the largest buyers of Malawian tobacco, it takes 10kg of wood to dry 1kg of tobacco.

In a statement, the company, based in Switzerland, said: “The average amount of wood needed to dry tobacco is currently 10kg of wood/kg of dry tobacco. PMI and [local NGO] Total Land Care have created cooperatives to plant more than 90m trees and bamboo on farms and communal lands, helping to reduce Malawi’s deforestation.

“Together with our suppliers we are actively promoting the introduction of rocket barns that reduce fuel-wood consumption by 40%, to below 6kg of wood/kg of dry tobacco. We aim to convert standard curing barns to improved/rocket barns in both Malawi and Mozambique by 2017, which will result in saving the equivalent of 25m trees by 2018.”

The company said that reforestation was transforming villages. “Chitoola village in the Kasungu District was bare of trees four years ago. It is unrecognisable today with its forest cover of 50,000 trees. Its residents once had to buy wood – now they sell it to others.”


Delhi govt writes to CBSE and NCERT for chapters on tobacco in curriculum

The Delhi government also observed ‘Dry Day’ (observed on the last day of every month) and appealed the tobacco vendors to close their shops voluntarily and the general public to refrain from tobacco use.

The Delhi government has written to CBSE and NCERT for inclusion of tobacco related matters in the curriculum of 6 to 12 standard students, for sensitising students at an early age about the perils of smoking.

“We have written to CBSE and NCERT for inclusion of tobacco related matter as a chapter in course curriculum of 6 to 12 standard students so that the students, teachers and parents are sensitised right from the beginning and lakhs of deaths every year due to tobacco use get prevented,” said Dr S K Arora, Additional Director of Health, Delhi government.

The official underlined the importance of sensitising children about the issue, especially when the markets are flooded with products like e-cigarettes and hookah bars.

“Around 14 per cent of students are affected by tobacco habits and the new marketing strategies of tobacco industry bringing e-cigarettes and hookah bars, are doing damage to young boys and girls. At the tender age of four, children pick up chewable tobacco habits which is very dangerous and responsible for oral cancer in 90 per cent of cases,” said Arora. Arora said that the NCERT had expressed its willingness to consider the proposal.

“NCERT last week had responded to consider this in their next committee meeting to be held shortly,” he said.

The Delhi government also observed ‘Dry Day’ (observed on the last day of every month) and appealed the tobacco vendors to close their shops voluntarily and the general public to refrain from tobacco use.

“Today educational institutes, schools and coaching centres were mainly targeted. In Shahdara district alone around 20 government and private schools were inspected and around 700 schools staff including teachers sensitised about the perils of tobacco use. Around ten challans were issued to some of the schools for various violations under section 4 of Cigarette and other Tobacco Products Act (COTPA) 2003 and a fine of Rs 8,500 was collected,” Arora added

‘NGOs’ acting at behest of foreign tobacco firms: ITC chief Y C Deveshwar

As its core tobacco business faces pressure, ITC chief Y C Deveshwar today accused some ‘NGOs’ of acting as agents of foreign firms and helping them smuggle international cigarette brands ‘duty-free’ while steep taxes are hurting the domestic industry.

Addressing diversified group’s annual general meeting here today, ITC’s Chairman Y C Deveshwar said if cigarettes were harmful, then why the product was being sold in airport duty-free shops.

“Unprecedented pressure on the legal cigarette industry with imposition of steep taxes has led to consumption being diverted to tax-evaded as well as smuggled products,” he said.

Kolkata-headquartered company’s revenue from cigarettes dropped by 1.22 per cent to Rs 4,149.61 crore in the first quarter ended June 30, as against Rs 4,201.06 crore year-ago.

For the year ended March 31, ITC’s consolidated revenue from cigarettes stood at Rs 17,765.99 crore compared with Rs 16,368.46 crore, up 8.53 per cent.

At the AGM Deveshwar said, the wide proliferation of illegal cigarettes has deprived the exchequer of significant revenue, eroded income of Indian farmers and threatened livelihood of many engaged in the supply chain by driving the trade into unscrupulous hands and creating a large unaccounted flow of foreign exchange out of the country.

Referring to the cigarettes business, he said the regulatory environment was not entirely rational.

“We are continuously engaging with governments, both at the central and state levels, and hopefully there will some rationality next year,” he added.

Lashing out at the anti-tobacco lobby, Deveshwar said: “I wonder some NGOs are acting as agents of overseas cigarette companies helping smuggling of cigarettes into the country.”

In this year’s Budget, Finance Minister Arun Jaitley had increased excise duty by 25 per cent for cigarettes of length not exceeding 65 mm and by 15 per cent for cigarettes of other lengths. Moreover, excise duty on cut tobacco was also increased to Rs 70 per kg from Rs 60 per kg earlier.

Marlboro launches Ducati promotion

Retailers visiting selected Dhamecha and Bestway outlets will enjoy a first-hand experience of one of the world’s finest motor racing brands, Ducati, courtesy of tobacco brand, Marlboro.

The promotion will see a Ducati bike in-depot from the 3rd August for 5 days to drive awareness of two Philip Morris deals. Deal one is ‘Buy 5 Outers of PMP and receive £15 off’ trade offer of which one Outer must be Marlboro Touch. The second deal is ‘Buy 1 Outer of 12.5g Marlboro Gold Roll Your Own and receive £5 off.’ This follows a successful trade campaign using a Ferrari in Dhamecha Hayes and Bestway Abbey road depot last month.

Marlboro Touch, previously known as Marlboro Gold Touch, now has a soft touch pack and firm filter keeping the consistency with the rest of the Marlboro range. The firm filter allows adult smokers a cleaner way to stub out their cigarette, as well as adding an overall feeling of quality, without having an impact upon taste.

Marlboro Touch offers one of the highest PORs in its price segment, so this really is a must-stock brand, according to Philip Morris.

Marlboro Gold Original rolling tobacco, which uses the finest tobacco available and is presented in a premium quality tactile pouch, triple layered for freshness has a 12% POR* making it a must-stock for the trade.

Tobacco retailers who participate in the promotion will be entered into a draw to win Moto GP tickets. There will also be instant prizes to win. Point of sale material and pop-ups will drive retailers to the activity in-depot.

“These Marlboro products have excellent PORs for the retailer and the high speed promotion will stand out to customers with a great offer on product and the chance to win a once in a lifetime prize,” Jerry Margolis Philip Morris sales director.

Source: Philip Morris Limited

Health benefits of 20 years of tobacco tax increases modelled

Continuing annual 10% tobacco tax increases in New Zealand until 2031 should lead to health gains, net health-system cost savings and modest reductions of about 2% to 3% in health inequalities between Māori and non-Māori, according to a new study published by University of Otago, Wellington, researchers.

The research by Professor Tony Blakely and colleagues is published this week in the international journal PLOS Medicine.

The researchers estimated quality-adjusted life-years (QALYs; a measure of disease burden that includes both duration and quality of life) gained, and net health system costs, over the remaining life of New Zealand’s 2011 population exposed to annual 10% tobacco tax increases for 20 years.

The model included 16 tobacco-related diseases in parallel using national data on all-cause mortality and morbidity (illness). In 2011 smoking prevalence was 35% for Māori and 14% for non-Māori.

Compared to the 2011 population simulated into the future with no tax increases, the researchers estimated that 260,000 QALYs would be gained if the population were exposed to the annual tax increases, with net health system cost savings of around NZ$ 3.87 billion (due to prevention of tobacco-related diseases).

“This health gain of 260,000 QALYs is 17% of all health gain that we estimated would occur if all smokers in 2011 quit that year, and we followed or simulated the population into the future,” says Professor Blakely.

The QALY gains per capita associated with annual tobacco tax increases were 3.7 fold higher for Māori than for non-Māori because of higher smoking levels and likely greater price sensitivity among Māori.

Professor Blakely says the health gains and cost savings are not predicted to peak for several decades.

“This is because smoking is more common among younger age groups and the tobacco tax effect is greater among young people, given their limited disposable income.

“These young people would not reap the maximum benefits from reduced rates of tobacco-related diseases for many decades to come, due to the long delay between taking up smoking and the incidence of tobacco-related disease in individuals,” he says.

As with all modelling studies, the accuracy of these findings depends on the assumptions built into the model and the data fed into it.

Professor Blakely says this modelling work has suggested that ongoing tobacco tax increases deliver sizeable health gains and health sector cost savings, and are likely to reduce health inequalities.

“However, if policy-makers are to also achieve more rapid reductions in the non-communicable diseases (NCD) burden and health inequalities, they need to complement tobacco tax increases with additional tobacco control interventions focused on cessation among middle-age and older smokers.”

The study authors are supported by the BODE3 Programme, which is investigating the effectiveness and cost-effectiveness of various tobacco control strategies and receives funding support from the Health Research Council of New Zealand.

India second largest consumer of tobacco

India is the second largest consumer of tobacco after China and 8-9 lakh deaths can be attributed to it each year, the government today. “India is the second largest consumer of tobacco after China.

As per the report of Tobacco Control 2004 published by Health Ministry, each year 8-9 lakh deaths in India can be attributed to tobacco use,” Minister of State for Health Shripad Naik told Rajya Sabha today.

He said that as per the Global Adult Tobacco Survey (GATS 2010) conducted by Health Ministry, 35 per cent of adults in the age group of 15 years and above consume tobacco in some form or the other.

“Among them, 33 per cent of the adult males and 18 per cent of the adult females use smokeless forms of tobacco,” Naik said. The Minister said that the government has taken a series of measures to educate citizens on the ill-effects of tobacco use and persuade them to quit it.

He said that public awareness campaigns on ill effects of tobacco use through media at national and state level as part of the National Tobacco Control Programme and National Health Mission has been undertaken while notification to regulate depiction of tobacco products or their use in films and TV programmes has been done.

Naik also said that notification for display of pictorial warning on tobacco product packages has been done while the government has set up tobacco cessation centre to provide counselling to those who desire to quit it as part of the district level activities under National Tobacco Control Programme in the 12th Five year plan has been done. PTI

The long read: smoking kills so why is Big Tobacco’s toxic business thriving in the Middle East?

Thirty-five years ago this month, worried executives at British Ame­rican Tobacco flew the company’s commercial partners in the Arab world to London for an urgent conference to discuss “Smoking and Health in the Middle East”.

The agenda awaiting the dele­gates from Abu Dhabi, Dubai, Kuwait, Oman, Saudi Arabia, Egypt and Bahrain who flew to the United Kingdom for the meeting on July 23, 1980, was not concerned with the health of their customers.

Instead, they had been summoned to HQ to discuss BAT’s concerns over the increasing efforts being made by governments in the Middle East, including the UAE, to reduce the harm caused by smo­king – and to return home armed with a strategy to undermine those efforts in the interests of the company’s vast profits, according to papers archived in the Legacy Tobacco Documents Library. More of which later.


Three-and-a-half decades on, Big Tobacco wears a different face. Today, it would have the world believe it is a good corporate neighbour, dedicated to reducing the harm caused by cigarettes and developing, what it likes to call, “new generation” or “reduced-risk products”, such as e-cigarettes.

Behind all the platitudes and talk of corporate responsibility and “harm reduction”, Big Tobacco remains the same old ruthless, steely-eyed killer it has always been, determined to push its deadly core product for as long as possible.

In 2015, 60 years after the link between smoking and cancer was first established beyond doubt, it would be reasonable to assume that the tobacco industry is in its death throes. After all, worldwide, the regulatory noose is tightening – health warnings appear on cigarette packs, advertising is banned in magazines and on television and taxes are raised to ever higher levels.

But, as I discovered during the course of a recent investigation for the British Medical Journal, far from being a slain dragon, Big Tobacco is thriving – and nowhere is this more true than in the Middle East.


For the tobacco industry, the global market for its toxic product is like a balloon. If it is squeezed by public-health regulation in one place, it simply expands in another. And today, as Big Tobacco’s sales and profits are squeezed in other, increasingly health-conscious areas of the world, parts of the Middle East and Asian markets are becoming more important to its deadly business than ever.

Take Philip Morris International, which, with 25 per cent of the global market, is the world’s largest tobacco company. Last year, the American company shipped 287 billion cigarettes to the industry-designated EEMEA (Eastern Europe, the Middle East and Africa) region, which generated 34.2 per cent of the company’s total income of US$29.8 billion (Dh109.5bn). Only Asia, where the company shifted 288 billion cigarettes, performed better.

In its annual report, the company notes it continues to benefit from “innovations” to its “iconic” Marlboro brand – such as its Smart Seal technology, “which maintains product freshness with a novel, state-of-the- art re-seal mechanism [and] has been a key driver of Marlboro’s reinvigorated performance in the Arab Gulf”.

Somehow, over the years, the company has managed to shrug off the negative PR caused by the deaths, from smoking, of no fewer than four of the actors who played Marlboro Man in the adverts that ran from the 1950s onwards.

In its most recent annual report, Japan Tobacco International, the world’s third-largest cigarette company, doesn’t break down its total of 266 billion cigarettes into regional sales, but does offer this helpful analysis of regional opportunities.

In mature markets, it notes, the overall number of cigarettes sold is in decline, “reflecting various factors such as limited economic growth, tax increases, tightening regulations, and demographic changes.” But in emerging markets, “total consumption tends to increase, driven by population growth and economic development, particularly in Asia, the Middle East and Africa”.

So, 35 years after that London meeting, how is BAT, the world’s second-largest tobacco company, faring in the region?

Last year, BAT reported a global profit of £6.1bn (Dh34.7bn). Its annual report for last year showed that while the share of that profit in Western Europe was down by 0.98 per cent, in the industry-designated EEMEA region it was up by 9.1 per cent.

In the report, a BAT director singled out and celebrated the company’s “strong performance” in the Middle East. The region as a whole provided BAT with a revenue of £4.355bn – 28 per cent of its total income and more than that generated by any other region – and a healthy profit of £1.62bn.

Healthy, that is, for the company’s shareholders.

As the World Health Organisation (WHO) points out, Big Tobacco has the dubious distinction of being the only industry on the planet whose products kill 50 per cent of all people who use them as intended. Around the world, says WHO, that adds up to a death toll of almost six million people a year.

Seen in that light, the six trillion cigarettes consumed around the world each year start to look a little like bullets. But when it comes to destroying lives, the arms industry has nothing on Big Tobacco.

All the wars of the 20th century, including both global conflicts, claimed the lives of 72 million people. Tobacco’s score over the same period? One hundred million.

Imagine the outcry and panic if a pandemic such as Middle East Respiratory Syndrome were claiming the lives of millions of people each year, rather than the 1,300 thought to have been killed by the disease to date. Even the death toll of the 2014-15 Ebola outbreak (11,200 cases by the beginning of July, according to WHO) pales against tobacco’s harvest of lives.

The problem, of course, is that tobacco is a vastly lucrative business for the companies, their shareholders and the governments that tax them – heavily, but never quite punitively enough to kill the golden goose.

Just four companies account for most of the cigarettes smoked in the world outside China and, according to their most recent annual reports, their combined annual profit amounts to more than £21bn. They are Philip Morris (£9.2bn), British American Tobacco (£6.1bn), Japan Tobacco International (£3bn) and Imperial Tobacco (£2.9bn).

While some individual investors and institutions draw the ethical line at profiting from such a business, there remains no shortage of people prepared to take advantage of one of the best investments around. Between March 2008 and December 2014, for example, the combined shareholder return from the Standard & Poor 500 was 81.5 per cent. Over the same period, the tobacco sector yielded more than 117 per cent.

The tobacco industry points to its new interest in e-cigarettes as evidence that it is concerned about public health. In fact, as Simon Capewell, professor of public health and policy at University of Liverpool’s Institute of Psychology, Health and Society, says: “If tobacco companies were genuinely concerned about the harm they caused, they would cease production [and] go into e-cigarette production 100 per cent.”

Many countries have been taken by surprise by the rise in popularity of e-cigarettes and have no legislation in place to deal with the phenomenon. Others, such as the UAE, have banned their sale.

Scientists, meanwhile, have also been caught flat-footed and are divided on key questions: do e-cigarettes actually help people to give up smoking, or are they used interchangeably with tobacco and hence contribute very little to harm reduction? Worse, there is, as yet, no agreement on whether e-cigarettes are acting as a gateway to smoking for the young.

Professor Capewell and colleagues would prefer governments to err on the side of caution, as the UAE has done. He believes e-cigarettes are being cynically exploited by the industry, both to glamorise and renormalise smoking and to win it a place at the table in discussions with health ministries: “They are now saying ‘this is all about harm minimisation, we’re part of the solution, we’re no longer the problem’.”

Meanwhile, while posing as a champion of harm reduction, Big Tobacco has also been sidling into another boom market – shisha. Increasingly popular among the young in the Arab world, shisha has benefited from the mistaken belief that it is somehow safer than cigarette smoking.

And, in the same way that it has gobbled up almost all indepen­dent producers of e-cigarettes, Big Tobacco is now muscling in on shisha – in March 2013, Japan Tobacco bought Egyptian company Al Nakhla, the leading producer and exporter of shisha tobacco in the Middle East.

Evidence from a cache of 14 million internal industry documents from 1950 to 2009, released into the public domain over the past decade as a result of litigation between 46 states of the United States and the major tobacco companies, suggests cynicism is the industry’s default setting.

The Legacy Tobacco Documents Library, maintained online by the University of California in San Francisco, amounts to an indictment of an industry that clearly knew for decades that its products were killing people, and yet deliberately hid the truth.

As one analysis of the documents by WHO concluded, “in the face of mounting damning evidence against their product, the companies responded by creating doubt and controversy surrounding the health risks” and “lulled the smoking public into a false sense of security”.

The papers reveal that by the early 1960s, industry scientists were working on producing “safer” cigarettes – the very work to which it is returning with such self-congratulatory fanfare now – but that its lawyers advised that to do so was to admit that its other products were unsafe. As one internal memo from the time put it: “Ignorance is bliss”.

A confidential internal Philip Morris memo from March 15, 1961, concedes in passing that, in addition to being “stimulating, pleasurable and flavorful”, the “biologically active” materials in tobacco are “cancer causing, cancer promoting [and] poisonous”.

Compare this internal admission with the delusional propaganda handed out by BAT to its Middle East reps almost 20 years later at its London summit in 1980, recorded in a paper among the millions now held at the Legacy Tobacco Documents Library.

Diseases such as cancer could be described only as “allegedly associated with smoking”, Mike Scott, BAT’s public affairs manager, told the delegates. “A considerable controversy still exists,” he said, and there are “two sides to the argument. The anti-smokers would have everyone believe that ‘causation’ is proven beyond all reasonable doubt and that there is nothing further to debate.”

The document reveals that the delegates were then provided with “the necessary general information on smoking and health” and dispatched back to their countries equipped with a strategy to undermine attempts to reduce tobacco harm.

Such a deliberate attempt to subvert the will of a government working to protect the health of its citizens might seem shocking, but one should hardly be surprised. As a 1978 document from the Legacy archive reveals, BAT had already proposed a public-relations strategy for the entire industry.

The document outlining the strategy contains the callous observation that, “with a general lengthening of the expectation of life we really need something for people to die of.” Absence “the effects of war, poverty and starvation, cancer, as the disease of the rich, developed countries, may have some predestined part to play”.

This argument was “obviously not one that the tobacco industry could use publicly. But its weight, as a psychological factor in perpetuating people’s taste for smoking as an enjoyable, if risky, habit, should not be under-estimated.”

More evidence of the industry’s manipulation of its customers comes from a BAT creative- advertising brief from January 1995, highlighting the sales opportunities to be had from exploiting Ramadan.

The holy month of Ramadan, it said, was “a time when Muslims try to live a healthier life and … many people may try to give up smoking”. What better time, then, to exploit the fact that “smokers will not have had a cigarette for around 14 hours” and persuade them to switch to supposedly “milder” brands instead?


In March, Abu Dhabi hosted the 16th World Conference on Tobacco or Health, which saw the launch of the latest edition of The Tobacco Atlas, published by the American Cancer Society and the World Lung Foundation.

Smoking rates were dropping in many high-income countries, noted Peter Baldini, chief executive of the World Lung Foundation, in the foreword to the report. But in response the industry was simply focusing on “addicting hundreds of millions in emerging markets”.

One of the co-authors, Dr Judith Mackay, a Hong Kong-based senior adviser to the World Lung Foundation, has spent most of her professional life working to reduce the harm caused by tobacco and, despite all the apparent advances in regulation and education, she offered a gloomy prognosis.

“There’s no tobacco farmer or manufacturer who need worry about their job in my lifetime,” she says. “Here’s an industry that is going to be expanding for the next several decades.”

It is true that in some parts of the world, the proportion of people who smoke is falling. But the population of the world is going to rise by a billion in the next decade, reaching as much as 9.5 billion by 2050, “so even if you bring the prevalence [of smoking] down … the reality is that population expansion will exceed any decrease in prevalence”.

The result, she says, is that – e-cigarettes and all of the other white noise of so-called “harm reduction” notwithstanding – “by 2030 or 2040 we will have a lot more smokers in the world than we do today and the industry is certainly going to be selling a lot more cigarettes than it does today”.

It was a naive question, but I asked BAT why, if it really was serious about reducing the harm caused by its core products, it didn’t just stop making them.

“We have made meaningful steps in our journey to tobacco harm reduction,” says Will Hill, BAT’s public-relations manager.

But, he admits the “lion’s share” of BAT’s revenue and profits for the foreseeable future is “going to come from the traditional cigarette side of our business … Simply to turn off that … would not be acting in the best interests of our employees, our partners and suppliers or, of course, our shareholders”.

No mention, in that sentence, of the best interests of Big Tobacco’s two largest groups of stakeholders – its customers and the six million killed each year by cigarettes.

Jonathan Gornall is a freelance journalist based in London.

Pacific Rim free trade talks go down to the wire–finance.html#sUKm4bw

By Ami Miyazaki and Krista Hughes

LAHAINA, Hawaii (Reuters) – Talks on a Pacific Rim free-trade pact faced a fast-approaching deadline on Friday as trading partners aimed to wrap up a deal within hours, with New Zealand digging in over trade in dairy products and ministers tussling over monopoly periods for next-generation drugs.

Trade ministers from the 12 nations negotiating the Trans-Pacific Partnership, which would stretch from Japan to Chile and cover 40 percent of the world economy, delayed until 4 p.m. local time (10 p.m. ET) a news conference originally scheduled for 1:30 p.m. on the Hawaiian island of Maui.

“We are still aiming to conclude the negotiations by the time of the news conference,” Japanese Economy Minister Akira Amari said before heading into the morning plenary session.

“Some countries are insisting on enormous demands and that’s the cause of the impasse.”

A Japanese industry source briefed on the talks said New Zealand’s demands over dairy and the monopoly periods for biologics, drugs made from living cells, were the two remaining stumbling blocks.

New Zealand has said it will not back a deal that does not significantly open dairy markets, with an eye to the United States, Japan and Canada.

John Wilson, chairman of the world’s largest dairy exporter, New Zealand dairy cooperative Fonterra , arrived to attend the talks late on Thursday to press home the case.

“It’s still dire. This thing is now on a knife edge. There is still not enough in this for New Zealand at all,” said Mike Petersen, who represents New Zealand’s farm sector.

Ministers have also yet to agree on how long to protect data used to develop biologic drugs. U.S. drugmakers want 12 years, but Australia wants five. People briefed on the talks say a compromise on seven or eight years seems likely, but Mexican Trade Minister Ildefonso Guajardo stressed no deal was done.

“That is exactly what we are trying to negotiate,” he told reporters on his way into the meeting.

As the talks entered their final hours, U.S. Senate Majority Leader Mitch McConnell, a Republican from the tobacco-growing state of Kentucky who will be influential in garnering votes in Congress for the deal, added his weight to warnings against excluding tobacco from rules allowing foreign companies to sue host governments over policies that harm their business.

Marlboro maker Philip Morris is suing Australia over its plain packaging tobacco laws. Australia is seeking a general exception from the rules for health and environment policy.

(Reporting by Ami Miyazaki and Krista Hughes; Editing by Dan Grebler and Ken Wills)