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Big tobacco’s push to legalise e-cigarettes needs to be quashed immediately

Jul 14th, 2017
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If Philip Morris truly believed it’s push to legalise e-cigarettes containing nicotine in this country had merit it would be making its case publicly and under its own name.

http://www.canberratimes.com.au/comment/ct-editorial/big-tobaccos-push-to-legalise-ecigarettes-needs-to-be-quashed-immediately-20170713-gxaow8.html

The fact the tobacco giant is using its catspaw smokers’ rights lobby group “I Deserve To Be Heard” to lend the argument the dubious legitimacy of contrived popular support is, in itself, a good reason for the Federal Government to refuse to give this matter any oxygen.

Another is that in the almost 500 years since Spanish merchants introduced tobacco to Europe from the New World big tobacco’s track record of advocating anything in the public interest has been appalling.

It’s a pretty good bet, just on the historical record, that if Philip Morris thinks it would benefit from the legalisation of e-cigarettes there’s likely some sort of downside for the broader society.

Despite the handsome revenues governments rake in from the taxes, levies and charges imposed on what is arguably the most deadly mass consumption product available for public sale, the industry, and its users, always come out ahead.

The costs to other taxpayers from picking up the burden of additional healthcare and lost productivity arising from the chronic illnesses and early deaths caused by consumption on tobacco products far outweigh the revenues that come in.

An estimated 15,000 Australians die of smoking related causes each year at a cost to the community, in terms of health expenditure and economic costs, of $31.5 billion a year. This is almost three times the roughly $12 billion spent on tobacco products in Australia in 2015.

This is not a message big tobacco is keen to spread. Instead, by enlisting proxies from the nicotine-using and “vaping” communities, it is trying to play this as a “free speech” and “freedom of choice” issue.

That is not the case. Public health was, is and must always be, the core issue in the smoking debate. Everything else, as was demonstrated by the industry’s failed bid to overturn plain packaging, is a side show.

Health concerns were behind the many initiatives, including increased prices, that have seen Australian smoking rates fall to less than 13 per cent compared to 1945 when 72 per cent of males and 26 per cent of females smoked.

Today’s battle is not so much to wean the last hard core smokers off the habit as it is to stop young people from taking it up.

This is why e-cigarettes, which could be touted as a “reduced risk” and potentially “cool” way to imbibe must stay banned.

If legalised they would simply serve as yet another gateway towards the use of the traditional product.

Exposed: big tobacco’s behind-the-scenes ‘astroturf’ campaign to change vaping laws

Jul 12th, 2017
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Tobacco giant Philip Morris is running an under-the-radar campaign to convince federal politicians to legalise e-cigarettes containing nicotine, with anti-smoking campaigners accusing the company of using the same “astroturf” tactics it used in its fight against plain packaging.

http://www.smh.com.au/federal-politics/political-news/exposed-big-tobaccos-behindthescenes-astroturf-campaign-to-change-vaping-laws-20170712-gx9lsl.html

The multinational has been using its offshoot smokers’ rights lobby group – dubbed “I Deserve To Be Heard” – to contact Australian smokers and vapers and urge them to make submissions to a parliamentary probe into the use and marketing of e-cigarettes.

The company’s campaign – along with a coordinated push from Australia’s online vaping community – has seen the inquiry inundated with submissions from people who say vaping has helped them quit smoking and dramatically improved their health.

While health groups in Australia and across the globe continue to warn about the potential risks of nicotine vaping, 107 of the 108 submissions so far loaded on the inquiry’s website are strongly pro-vaping – and the vast majority follow a similar “personal story” template.

World renowned tobacco control expert Simon Chapman, an emeritus professor at the University of Sydney, said Philip Morris and other interest groups were “astroturfing” – trying to create the illusion of a big grass-roots pro-vaping movement that does not really exist.

“They’ve been actively recruiting people to put in submissions,” Professor Chapmen told Fairfax Media. “These are exactly the same tactics they used for plain packaging. They have dusted off the same software, the same template and just changed the content.”

E-cigarettes are a multi-billion-dollar business overseas but the sale and personal possession of nicotine e-cigarettes is illegal in Australia. Health groups fear that if the government relaxes the rules it could lead to a wave of seductive advertising that would lure young people into taking up the habit – and possibly serve as a gateway drug to other forms of smoking.

Philip Morris’s new campaign comes after it was ordered to pay the Australian government millions in legal costs over its failed bid to kill off world-first plain packaging laws.

The company used I Deserve To Be Heard in its plain packaging efforts but it has been largely sitting dormant in recent years. It fired back into life late last month with an email blast to members calling on them to “make their voices heard”, as the company intensifies its push into the increasingly lucrative international e-cigarette market.

“Australia’s laws on vaping are ridiculous. While the UK, USA, EU, Canada and New Zealand have all legalised or are legalising e-cigarettes, Australia completely lags behind. There’s no reason why e-cigarettes with nicotine shouldn’t be legal in Australia,” it said.

Company spokesman Patrick Muttart told Fairfax Media that Philip Morris was committed “to converting the world’s one billion plus smokers to smoke-free alternatives”. I Deserve to be Heard members had demonstrated a strong interest in the legalisation of smoke-free products, he said: “As such we wrote once to our membership, informed them of the inquiry and encouraged those interested to consider submitting.”

The submissions are also being coordinated by senior members of Vaper Cafe Australia, an online forum.

On June 7, a senior member of the forum identified as a 52-year-old man from Western Sydney urged users to “inundate” the inquiry with submissions. He offered a step-by-step guide on writing a submission.

Many of the 108 published submissions closely follow the template, in which people are urged to include “your age and gender, when you started smoking, how long you smoked for, how much you smoked and if you suffered any side effects from smoking”.

Australian Medical Association president Michael Gannon said the tobacco industry was aggressively pursuing the potential of e-cigarettes because it had given them the opportunity to “rebrand” themselves as part of the effort to reduce smoking – even there is no evidence e-cigarettes work as a deterrent.

“We must not allow e-cigarettes to become a socially acceptable alternative to smoking,” he said. “E-cigarettes essentially mimic or normalise the act of smoking. They can result in some smokers delaying their decision to quit, and they can send signals to children and young people that it is okay to smoke.”

But Dr Colin Mendelsohn, a tobacco treatment specialist in Sydney who advocates for e-cigarettes as a healthier alternative to smokes, said the AMA’s submission was “disgraceful” and accused it of using misleading data and ignoring international evidence that could save lives.

He defended the submissions despite the coordination: “These are still genuine stories, many of whom have had their lives saved by vaping.”

The National Health and Medical Research Council says ‘there is currently insufficient evidence to support claims that e-cigarettes are safe”.

Philip Morris to pay millions to Australia on failed plain packaging case

Jul 10th, 2017
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Big tobacco battle: Final costs figure kept secret but reported as being up to €33.36m

https://www.irishtimes.com/news/world/asia-pacific/philip-morris-to-pay-millions-to-australia-on-failed-plain-packaging-case-1.3149956

Tobacco manufacturer Philip Morris will be forced to pay millions of dollars in legal fees to Australia after its failed case against plain packaging laws.

Big tobacco companies have fought vigorously against the Australian government’s plain packaging laws since they were introduced in 2011.

By banning logos and distinctive-coloured cigarette packaging, Australia’s laws went further than the advertising bans and graphic health warnings introduced in many other countries.

Philip Morris, Imperial Tobacco and Japan Tobacco quickly attempted to have the laws overturned through a constitutional challenge in the high court, which they lost in 2012.

Philip Morris Asia then took a case to the permanent court of arbitration in 2012. It tried to use the conditions of a 1993 trade agreement between Australia and Hong Kong to argue a ban on trademarks breached foreign investment provisions.

Corporate giant

The corporate giant not only lost but was criticised by the court, which found the case to be “an abuse of rights”.

The court published a decision on the payment of costs at the weekend, which it made in March. The decision, which brought five years of proceedings to a close, found Philip Morris Asia liable to pay Australia’s multimillion-dollar claim for legal costs.

The final costs figure was kept secret but Fairfax Media reported it as being up to AUS $50 million (€33.36 million).

Australia successfully argued Philip Morris must pay its court fees and expenses, the cost of expert witnesses, travel, and solicitors and counsel. It also claimed interest.

Australia had told the court its claim was modest and was a small proportion of what the tobacco giant had sought in damages.

Critical importance

It said Philip Morris had sought to challenge a public health measure of critical importance to Australia, making it important to “mount a robust and comprehensive response to all aspects of the claim”.

Philip Morris had tried to argue the government’s costs were unreasonable for a “legal team that consisted primarily of public servants”.

The company argued that two similar countries, Canada and the US, had never claimed more than US$4.5m and US$3m respectively in costs and fees. Australia’s claim was much more than that.

“The claimant emphasises that, even excluding the fees of four outside counsel, the respondent’s government lawyers claim over [REDACTED]in fees, even though Australia itself pays them ‘very modest government salaries’,” the court’s decision read.

But the court found Australia’s claim was reasonable, rejecting Philip Morris’s arguments.

“Taking into account the complexity of issues of domestic and international law relevant in this procedure, particularly for a government team usually not engaged in such disputes, the Tribunal does not consider that any of these costs claimed by the Respondent were unreasonable and should not have been incurred,” it found.

“In making this assessment, the Tribunal also takes into consideration the significant stakes involved in this dispute in respect of Australia’s economic, legal and political framework, and in particular the relevance of the outcome in respect of Australia’s policies in matters of public health.”

Earlier this year big tobacco failed in a separate bid to have the laws overturned by the World Trade Organisation. The decision was widely seen as a green light for more countries to follow Australia’s lead.

Submission to The Standing Committee on Health, Aged Care and Sport on Electronic Cigarettes and Vapourisers

Jul 6th, 2017
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Download (PDF, 1.31MB)

Cheaper cigarettes, roll-your-own tobacco slows smoking’s downward spiral

Jun 2nd, 2017
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Yesterday morning, Australia’s tobacco industry woke to the latest chapter in the book documenting its inexorable decline.

https://theconversation.com/cheaper-cigarettes-roll-your-own-tobacco-slows-smokings-downward-spiral-78745

The Australian Institute of Health and Welfare released data from its 2016 National Drug Strategy Household Survey, which it has conducted every three years since 1985.

While it was always going to be hard to show even further decline in teenage smoking from what was an already very low level, it’s happened again.

The proportion of teenagers (aged 12-17) who have never smoked more than 100 cigarettes significantly increased between 2013 and 2016, from 95% to 98%. Smoking more than 100 cigarettes in a lifetime has long been used in Australia as a benchmark question to sort curious, experimental smokers from more committed and addicted smokers.

Younger people also continued to delay when they first smoked their first full cigarette. This increased in the 14 to 24-year-olds from 14.2 years in 1995 to 16.3 in 2016 (a statistically significant increase from 15.9 years in 2013).

Catch ‘em young

The tobacco industry knows it needs to attract and addict new consumers to replace those who stop smoking through quitting and death. As a 1981 report sent to the then vice-president of research and development at Philip Morris put it:

Younger adult smokers are the only source of replacement smokers … If younger adults turn away from smoking, the industry must decline, just as a population which does not give birth will eventually dwindle.

Australia’s plain packaging legislation, implemented in December 2012, was aimed at reducing teenage Australians taking up smoking. As the health minister who introduced it, Nicola Roxon emphasised in April 2010 when announcing the policy:

We’re targeting people who have not yet started, and that’s the key to this plain packaging announcement – to make sure we make it less attractive for people to experiment with tobacco in the first place.

As Australian young people have turned away from smoking, the tobacco industry is left scrambling for new ways to addict young customers to nicotine.

Total smoking levels remain level

The proportion of people of all ages who smoke was also not good news for the tobacco industry.

The percentage of people aged 14 and over who smoke daily is down from 12.8% in 2013 to 12.2% in 2016. While any decline is welcome, this was less than it should have been, and the first time in two decades that a statistically significant fall was not recorded.

There are several factors likely to be responsible for the previously brake-less downward slide in smoking.

Long-time campaigners Mike Daube and Todd Harper have set out nine strategies the Australian tobacco industry has used so it can keep earning from the deaths of two in three Australian smokers likely to die from using their products.

Two critical factors here are price discounting and the dramatic rise of roll-your-own tobacco.

How price discounting works

Plain packaging means brand differentiation is gone as all packs look the same, except for the written brand name. So, the ability of branding to convince gullible smokers that premium (expensive) brands are somehow “better” and worth spending more on than cheaper, budget brands goes out the window.

After plain packaging was introduced, there was an industry-wide decision to cut prices to compete with lower priced brands for market share. There were large tobacco tax rises in the run-up to plain packs being introduced (25% in 2010) and a further 12.5% each year from 2013 to 2016.

Again, the tobacco companies cut their margins by desperately trying to keep some brands below A$20 a pack, a price known to trigger quitting.

These practices may see renewed interest in floor pricing of tobacco products, when a price is set below which a product cannot be sold.

Rise in roll-your-own tobacco

Tobacco companies have also aggressively pushed cheaper roll-your-own tobacco by introducing loose tobacco with cigarette brand names. The tax in roll-your-own tobacco will rise from September 2017, which may see a further round of price discounting to try and stop people quitting.

The use of roll-your-own cigarettes has gone from 26% of smokers in 2007, to 33% in 2013 and to 36% in 2016. Lower price is one factor driving this, but so too are the quite erroneous beliefs that roll-your-own tobacco somehow contains fewer additives and is less harmful, an issue I will explore in my next column.

The increase in roll-your-own cigarettes since 2007 has been largest among smokers aged under 40 (increase of 82% for young adults and 70% for smokers in their 30s between 2007 and 2016). Between 2013 and 2016 roll-your-own use in smokers in their 30s jumped from 29% to 37%.

National campaign wheels fallen off

Sustained and adequately funded mass media campaigns are a vital component of strategies health authorities recommended to change health behaviours, like smoking.

And with smoking, one of the most obvious pieces of evidence comes from ex-smokers about why they stopped smoking. There are light-years between the answer that has always been given (concern about health) and everything else (cost, social unacceptability, pregnancy etc).

In this study of smokers in 20 US communities, 91.6% of ex-smokers nominated “concern for your own current or future health” as why they quit compared with 46.5% who nominated “pressure from family, friends or co-workers”.

Without large scale, on-going campaigns that reach large proportions of the population with unforgettable, motivating information about why smoking is so harmful, the core driver of quitting and not starting smoking may wane.

Regrettably, Australia’s world famous national tobacco campaign that started in 1997 and has been used by many other countries, has been mothballed since 2013 when the Coalition government took office.

Smokers still get sporadic small bursts of quit smoking ads on television in some states from state health departments. But they are not getting a fraction of the highly motivating exposures that were a big part of our earlier rapid declines. This absence is almost certainly a major factor explaining the slow down in people quitting smoking.

E-cigarettes

The latest stats show that while around 31% of smokers (ie 3.8% of the 14+ population) had ever tried e-cigarettes, 20% seemed to have done so out of curiosity (once or twice) with only 4.4% currently using them (the remaining 6.8% no longer use them). Just 1.5% of smokers were using e-cigarettes daily (0.8% of ex-smokers and 0.2% of never smokers).

There’s no evidence from these very small numbers that e-cigarette use is contributing to falling smoking in Australia.

Many are concerned that the tobacco industry (which has bought into vapourisers big time) has a business plan to have smokers vape and smoke, not vape instead of smoking. If that plays out, increases in vaping may in fact act to further slow people from quitting smoking. The next few years will provide important information on this important issue.

SmokeFree Tasmania and Minister trade barbs

May 28th, 2017
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A war of words has erupted between the Health Minister Michael Ferguson and advocacy group, SmokeFree Tasmania, after it accused the government of bowing to the wishes of big tobacco companies.

http://www.examiner.com.au/story/4691300/government-slams-smoke-group-claims/

The stoush comes after Tasmania was named runner-up in the Australian Medical Association’s Dirty Ashtray Award – for governments that make the least effort to reduce smoking.

Responding to the second placing, Health Minister Michael Ferguson said the state would achieve better scores from the association as more policies aimed at reducing smoking rates were implemented.

But SmokeFree Tasmania north member Harley Stanton said the government had included suggestions from big tobacco companies to formulate its Healthy Tasmania Strategic Plan.

“Given that the Tasmanian government, in its healthy Tasmania policy, included advice from Imperial Tobacco it is not surprising that they have been nationally rebuked,” he said.

“This is both embarrassing internationally and bad conduct for any government.”

Fellow SmokeFree Tasmania adviser Kathryn Barnsley said the government needed to distance itself from tobacco companies.

She said the benefit of the government’s crusade on the illicit tobacco market benefited tobacco companies, like Imperial Tobacco.

“The tobacco industry wants the government to crack down on illicit tobacco, but the illicit market is not a health problem,” she said.

But Mr Ferguson slammed the comments as “complete and utter rubbish”.

“I also point out for the record that last year, the government proposed as part of the five-year plan raising the smoking age to 21, and SmokeFree Tasmania aggressively campaigned against it which is inexplicable,” he said.

Dr Barnsley said the government had also failed to provide more money for mass-media campaigns to reduce smoking rates.

Dr Stanton criticised the government’s health expenditure announced in last week’s budget.

“Prevention is better than a cure and reducing the number of people smoking will take pressure off our hospitals,” he said.

Big Tobacco is losing the fight to stop plain packaging of cigarettes

May 23rd, 2017
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Dr Enrico Bonadio, a Senior Lecturer in the City Law School, says the tobacco industry’s bid to avoid plain packaging by relying on legal arguments around trade and intellectual property rights, is being systematically dismissed by courts around the world.

https://www.city.ac.uk/news/2017/may/big-tobacco-is-losing-the-fight-to-stop-plain-packaging-of-cigarettes

You may already have seen the tobacco packs currently sold in the UK: a dark, murky green colour with large graphic health-warning images and scary messages aimed at informing current and potential smokers about the devastating consequences of tobacco consumption. They have no colourful logos, with the brand name just displayed in small characters in a standard font.

These packs are now required by new regulations which entered into force in May 2016. There has been a one-year transitional period for the sell-through of old stock – and from May 20 2017 all tobacco products on sale in the UK must comply with the new rules.

The legislative move has been recommended to all countries by the World Health Organisation to reduce the attractiveness of smoking and eventually reduce consumption. Australia was the first country to introduce such strict packaging requirements in December 2012. France and, of course, the UK have since followed suit.

It follows significant research that shows these new standardised cigarette packs are much less appealing to consumers – and young people especially.
The industry’s legal defeats

No wonder tobacco companies have challenged the measure in the courts. They have argued that it is useless, too harsh – and is an infringement of their fundamental and intellectual property rights, especially trademarks. Yet, their claims are based on weak arguments and have been rejected by both the High Court of England and Wales and the Court of Appeal.

The tobacco industry has faced numerous courtroom defeats of late. Last year Uruguay won a landmark case against the Swiss giant Philip Morris International. The company had sued the Latin American state after it introduced two measures affecting tobacco packaging and trademarks. These were mandatory graphic health warnings covering 80% of cigarette packets (a measure very close to plain packaging) and the obligation for tobacco companies to adopt a single presentation for their brands, dropping for example the “gold” and “blue” descriptors, that could lead smokers to believe one variant was safer than another.

The fact that the courts sided with Uruguay would have been encouraging to other countries aiming to introduce controls on tobacco packaging. And even greater encouragement came recently from a World Trade Organisation ruling which deemed that the plain packaging requirements introduced by Australia as compliant with international trade and intellectual property rules – and are therefore a legitimate public health measure.

The decision has not been officially announced, but a confidential draft of the interim ruling was leaked to the media and the final decision is expected later this year. The Australian measure had been challenged at the WTO tribunal by Cuba, Dominican Republic, Indonesia and Honduras, countries whose economies strongly rely on the tobacco industry.

A domino effect

This is a blow to the industry. The short-term consequences of the WTO ruling – Imperial Tobacco’s shares fell more than 2% after the decision was leaked – reflects the longer-term danger that this ruling poses. It will likely convince other states to introduce plain packaging legislation without fear of violating international trade and intellectual property laws. It basically gives them a green light by removing the regulatory chilling effect that such legal action has produced on countries that wanted to follow Australia’s example.

After all, more and more countries seem interested in adopting standardised packaging. As well as France and the UK, Ireland and Norway will introduce packaging restrictions later in 2017, and Hungary in 2018. Many other states are debating similar measures, including New Zealand, Canada, Belgium, Slovenia, Belgium, Singapore and Thailand.

So, a legislative trend has started which aims to restrict the ability of tobacco manufacturers to make their products appealing to consumers by using eye-catching words, logos or ornamental features on the pack. And attempts by Big Tobacco to stop it by relying on legal arguments around trade and intellectual property rights are being systematically dismissed by courts around the world.

Ultimately, the industry needs to accept the fact that its ability to use fancy brands, especially on packaging, may be reduced by governments for public health reasons. Also that a company’s property rights are not absolute or untouchable. Not only does it not have enough legal basis – as has now been confirmed by several courts and tribunals – but it also disregards legitimate policies adopted by democratically elected governments.

NHMRC CEO Statement: Electronic Cigarettes (E-Cigarettes)

Apr 3rd, 2017
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Organised crime syndicates smuggling ‘low risk’ tobacco leaf and cigarettes into Australia

Mar 22nd, 2017
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ORGANISED crime syndicates trafficking drugs like ice and cocaine are now smuggling tobacco leaf and cigarettes and funnelling the cash back to terrorist groups.

http://www.geelongadvertiser.com.au/news/national/organised-crime-syndicates-smuggling-low-risk-tobacco-leaf-and-cigarettes-into-australia/news-story/81507f303ce6c7005b0f764afc10fe9b?nk=4a17044c8404afede5aa34fab4c90734-1490219416

With government taxes on tobacco set to rise again in May’s federal Budget, black market tobacco leaf and cigarettes are now as profitable as narcotics.

And such is the “low risk high return” market, Federal law enforcement now have credible evidence monies from tobacco trafficking are supporting terrorist groups in the Middle East.

Lead national crime fighting agency Australian Border Force intelligence has flagged a noticeable shift in the pattern of trafficking of tobacco which is rising exponentially, in ordinary postal mail alone by 10 to 15 per cent every year.

According to figures obtained by News Corp Australia, in January last year 3.6 million sticks of cigarettes and 435kg of loose leaf tobacco was intercepted at the nation’s main foreign parcel receiving facility in Sydney through which 75 per cent of all mail nationally passes through.

But this January, the latest monthly figure available, 5 million sticks and more than 1 tonne of loose leaf was intercepted.

Last year’s record average was 150 tonnes of loose leaf and 40 million sticks seized but this year that’s expected to be significantly eclipsed.

The difference has been the emergence of serious organised crime groups as opposed to opportunists taking over the trade almost in entirety.

“It’s all about the money,” one frontline ABF officer involved in the fight said.

“Those who were sending drugs are now involved, because the profit is there. We will recognise the mail coming through as being from the same criminal syndicate … over the last 12 months with tobacco we are actually seeing the exporters using the methodologies we would normally see with drugs.”

Such is the profit margin, ABF recently seized a teddy bear with just four packets of cigarettes sewn into it, a considerable effort for just $60 profit but in multiple individual teddy parcels it could be considerable.

Most of the illicit cigarettes, some of which ends up on the shelves of legitimate corner shops, is from South Korea, Japan, China and Hong Kong while loose leaf is mostly from Indonesia and the Middle East.

Some of it is manufactured legally but with the intention to import it specifically to Australia (evidenced in their plain packaging) to avoid duties or to fuel the black market with foreign markings and brands.

While the trafficking alone is a concern so to are its national security implications.

It has been learnt Australia’s multiagency counter terrorism agents, including the ABF, Australian Federal Police and ASIO, have been warned by overseas counterparts notably both US and French authorities and Interpol that the tobacco smuggling industry was being taken over by terrorist networks.

Specifically suspects linked to Lashkar-e-Taiba and the Taliban in Pakistan, Hezbollah in Lebanon and elements linked with al-Qaeda in the Islamic Maghred (AQIM) in North Africa, Islamic State (ISIS) and even Colombian militant group FARC who traditionally have been involved almost exclusively just in cocaine production.

Australian authorities have intelligence of targets here believed to be in the tobacco smuggling trade and sympathetic and or indirectly linked to the Islamic extremist cause of both Hezbollah and ISIS.

Authorities have conceded the thresholds that have to be established for a prosecution with proof of knowledge and proof of origin are substantial and hard to make, not helped by suspected corrupt import brokers and freight handlers.

Earlier this month, the Australian Criminal Intelligence Commission (ACIC) told a parliamentary joint committee inquiry into illicit tobacco it was a “low risk high reward” trafficking industry and as such high-end criminals were using profits to fund into other criminal enterprises.

This included those with jihadist terror links, although sensitivities around element prompted a request for the evidence to be heard behind closed doors.

There was evidence just one successful import out of 20 attempts from the Middle East was all that was needed to turn a profit.

In 2015, the ABF recognised the rise in tobacco smuggling and the potential loss to government in tax revenue and created a dedicated strike team.

The level of illegal trafficking attempts is expected to rise significantly with a 12.5 per cent increase in excise and customs duties to come in this September under the Federal Government’s May budget, to make the average cost of a packet of cigarettes the most expensive in the world at up to $40 a packet.

AMP snuffs out tobacco investment

Mar 20th, 2017
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http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11821645

AMP Capital is to snuff out its investment in tobacco manufacturing companies including millions of dollars invested through its KiwiSaver funds.

The move is part of a decision to pull out of tobacco investments worth A$440 million across its global investment portfolio.

The asset manager will also pull its Australian investments out of cluster munitions, landmines, biological and chemical weapons companies.

The move follows on from its New Zealand arm which pulled out of these investments last year following reports by the New Zealand Herald and Radio New Zealand which highlighted KiwiSaver’s exposure to the controversial sectors.

AMP Capital chief executive Adam Tindall said it had excluded tobacco manufacturers under a new environmental, social and governance and socially responsible framework because their products were highly addictive, could not be consumed safely and impacted non users via second-hand smoke.

He said cluster munitions, landmines, biological and chemical weapons manufacturers were excluded because their products indiscriminately kill through normal use (including during peace time) and their use leaves a legacy of significant and specific danger for civilians.

“We are not prepared to deliver investment returns to customers at any cost to society.

This position has been affirmed through consultation with major institutional clients and engagement with retail customers.”

Divestment from the tobacco investments would occur progressively over 2017 the company said, with impacted investors notified prior to any changes being made.

“The managers of impacted portfolios will be instructed to progressively sell down their holdings of excluded securities in a reasonable manner. This may take up to 12 months from time of formal notification,” a spokeswoman said.

Last year the Herald identified AMP Capital’s KiwiSaver funds had $17,169,091 invested in tobacco companies in the year to March 31, 2015.

It also has investment funds outside of KiwiSaver which are likely to include tobacco investments.

The AMP spokeswoman said it was not giving a regional breakdown for its tobacco investment.

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