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July 18th, 2012:

WHO urges China to tax smokers

By Shan Juan and Wang Qingyun (China Daily)

Cigarette tax should be increased to combat nicotine addiction in the world’s largest tobacco consumer and producer, the World Health Organization chief said.

WHO Director-General Margaret Chan called for more taxes on Wednesday after awarding Health Minister Chen Zhu a certificate in recognition of his efforts to combat smoking.

World Health Organization Director-General Margaret Chan (right) gives the certificate and medal of the Director-General’s Special Recognition of Contribution to Global Tobacco Control to Chen Zhu, the minister of health, in Beijing on Wednesday. WeiXiaohao / China Daily

“There is still plenty of room for China to raise its tobacco tax and the government should take more action regarding this to help curb smoking,” she told China Daily.

“Evidence shows that higher taxes deter people, especially the young, from smoking,” she said.

International studies indicate that for every 1 percent rise in the price of a packet of cigarettes, the number of smokers falls by about 0.4 percent, she said.

“Every time I have come to China and had the opportunity of speaking to Chinese leaders, I encouraged them to raise tobacco tax,” she added.

There is a huge financial cost in treating tobacco-related diseases, Chan said.

China has 350 million smokers, more than one-third of the world’s total, and at least 1 million people die from smoking-related diseases each year, according to the ministry. By 2020, the figure for fatalities is expected to reach 2 million without effective intervention.

Government agencies, like the ministries of health and education, have introduced policies such as smoke-free hospitals and schools, as well as smoking bans at most public indoor places. Tobacco products have also been targeted with tax hikes.

In 2009, authorities increased tobacco tax by at least 6 percent, mostly on the more expensive brands.

“But that had little effect on curbing tobacco use, particularly the low-end brands,” said Yang Gonghuan, former director of the tobacco control office under the Chinese Center for Disease Control and Prevention.

Tobacco tax, even after the hike, remained very low on a global scale.

“Countries are looking at how to increase tobacco tax and China should also raise the tax according to its own circumstances,” Chan said.

China signed the WHO Framework Convention on Tobacco Control and ratified it in 2005.

The campaign to combat nicotine addiction falls under the Ministry of Industry and Information Technology, which also oversees the State Tobacco Monopoly Bureau, often referred to as the China National Tobacco Corp.

Chan suggested that implementation of the WHO framework should be led by the Ministry of Health instead.

“I would confer an award to the Ministry of Industry and Information Technology to encourage them,” she said.

Vice-Premier Li Keqiang also met Chan in Beijing on Wednesday.

Li congratulated Chan on her second term as director-general of WHO, which was announced in May.

Chan spoke highly of China’s progress in medical reform, which, among other things, saw medical insurance coverage rise from 30 percent to 95 percent for residents in the past five years.

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apply this to the tobacco ceo’s

Hong Kong (HKSAR) – A man aged 50 and his wife aged 57 were respectively jailed for 42 and 51 months for ‘money laundering’ at District Court today (July 19).

The Court heard that the duo had accepted bets on local horse racing and global soccer matches, and a number of large amounts were deposited into their bank accounts from 2004 to 2010.

The Regional Crime Unit of New Territories North conducted in-depth investigations and arrested the man at Lo Wu Border Control Point on May 23, 2011 when he returned to Hong Kong from the Mainland. About HK$180,000 and RMB$12,000 cash were found in his possessions. Police also seized some cash and valuables worth about HK$800,000 at his residence and arrested the female defendant.

Investigations revealed that the duo used two and five bank accounts respectively for dealing with crime proceeds about HK$39 million and HK$23 million.

About HK$10 million of the couple’s assets were restrained. Police would apply to the court to confiscate crime proceeds in accordance with the Organized and Serious Crimes Ordinance (Chapter 455).

Both defendants were subsequently charged with respectively two and five counts of ‘dealing with property known or believed to represent proceeds of an indictable offence’. The male pleaded guilty earlier while the female was convicted after trial.

Sentences were handed down today.

Police Report No. 244
Issued by PPRB HK Police

Customs smashes syndicate using cross-boundary private cars to smuggle illicit cigarettes

Hong Kong (HKSAR) – Hong Kong Customs yesterday (July 17) smashed a syndicate using cross-boundary private cars to smuggle illicit cigarettes. A total of 74,200 sticks of illicit cigarettes were seized and three men aged from 24 to 30 were arrested. Six private cars involved in the smuggling, storage and distribution of the illicit cigarettes were also seized.

After a series of investigations, Customs’ Revenue and General Investigation Bureau officers discovered a syndicate frequently using cross-boundary private cars to smuggle illicit cigarettes into Hong Kong from the Mainland. The illicit cigarettes were then delivered to carparks in Tin Shui Wai for temporary storage in the private cars pending collection and distribution by other vehicles.

The Customs officers mounted an operation yesterday and raided three cross-boundary private cars at Tin Shui Wai and Lok Ma Chau Control Point. Two private cars for storage and another one for collection and distribution were also seized.

During the operation, a total of 74,200 sticks of cigarettes were seized with a total value of about $740,650 and a duty potential of $126,600.

Three men were arrested.

A Customs spokesman said today (July 18) that the department will continue to closely monitor the situation and conduct stringent enforcement actions against illicit cigarette activities.

Under the Dutiable Commodities Ordinance, anyone involved in dealing with, possession, selling and buying illicit cigarettes commits an offence. The maximum penalty is a fine of $1 million and imprisonment for two years.

Members of the public are urged to report any suspected illicit cigarette activities to the Customs’ 24-hour hotline  2545 6182.

Source: HKSAR Government

Big Tobacco in US Targeting Youth in Indonesia?

Description: PHOTO: Two-year-old Chairul likes to light up right after a nap. His grandfather says he allows Chairul to smoke because it tastes good, "like bread with chocolate."

Two-year-old Chairul likes to light up right after a nap. His grandfather says he allows Chairul to smoke because it tastes good, “like bread with chocolate.” (Jon Meyersohn/ABC News)

– / +

By DAN HARRIS (@danbharris) and CHRIS KILMER

July 10, 2012

Indonesia is home to the chubby YouTube superstar known as the “smoking baby”, whose chain-smoking antics have racked up over 17.5 million views. But while many may be tempted to write this off as another passing fascination, the “smoking baby” actually represents just the tip of the iceberg of an astonishing, global epidemic of youth smoking.

A year-long ABC News investigation examined the tobacco industry’s expansion into Indonesia, which critics say is being fueled, in part, by one of the most powerful and profitable corporations in the United States.

Indonesia, the world’s fourth-largest country, has an enormous, thriving tobacco market and very few regulations on the sale and consumption of cigarettes. One company in particular, Philip Morris International (PMI), has found tremendous success in Indonesia, making millions selling Marlboros and popular local brands.

PMI can market their products to young people there in ways they could never do in the U.S. or Europe, where government agencies clamped down on tobacco advertising to youth over 40 years ago. In Indonesia, cigarette ads are abundant on television, and billboards even feature the iconic Marlboro Man, whom Philip Morris, under public pressure, laid to rest in the U.S. in 1999.

Jon Meyersohn/ABC News

Two-year-old Chairul likes to light up right… View Full Size

Jon Meyersohn/ABC News

Two-year-old Chairul likes to light up right after a nap. His grandfather says he allows Chairul to smoke because it tastes good, “like bread with chocolate.”

‘Smoking Baby’ Kicks the Habit Watch Video

Dangerous Medicine? Smoke on Boy’s Skin Watch Video

FDA Picks Graphic Labels for Cigarettes Watch Video

ABC News first reported on this issue last September and PMI has repeatedly denied requests for interviews. So ABC News confronted PMI’s CEO Louis Camilleri at the company’s annual shareholder meeting in New York City in June and showed him a photo of a Marlboro-branded kiosk located near a school in the capital city Jakarta that ABC News had previously reported on.

Camilleri said PMI had attempted to locate the kiosk after ABC News broadcast its first investigation, but said the company was unable to locate it. Camilleri also defended his company’s efforts to reduce their products’ exposure to children in Indonesia.

During an attempt to interview Camilleri on camera after the shareholder meeting, he admitted that in Indonesia, “there are marketing freedoms that we don’t have in a number of other places, and we need to compete.” When asked if he is comfortable with the way PMI does business in Indonesia today, Camilleri said, “I think we’re doing the most responsible thing in Indonesia and that we’ve been very vocal advocates for restrictions.”

Despite those claims, “there has been no fundamental change in the fact that PMI and other tobacco companies continue to advertise every place they are allowed throughout Indonesia,” according to Matthew L. Myers, president of Campaign for Tobacco Free Kids in Washington, D.C.

“Indonesia was a tobacco industry playground, and today, sadly, Indonesia remains an industry playground,” he said.

In 2008, Altria, the parent company of Philip Morris USA, spun off its international operations and became PMI. Today, PMI is the leading international tobacco company, with tobacco products sold in approximately 180 countries. According to its annual report, PMI’s 2011 net revenues were $31.1 billion, up over 14 percent from 2010. PMI also reported a net income of $8.5 billion, a 18.3 percent increase over 2010.

In 2005, PMI had acquired Indonesia’s third largest tobacco company, Sampoerna. Selling a mix of Philip Morris brands and popular Sampoerna brands, PMI is now the number one tobacco company in Indonesia, controlling an estimated 30 percent of the market. According to the company’s annual report, PMI’s business in Indonesia accounts for 9.4 percent of its 2011 profits, up 25 percent over 2010.

PMI has claimed that it does not intentionally market to Indonesian youth, but in the years following PMI’s entry into the Indonesian market, government statistics show youth smoking rates there have nearly doubled.

In this wild west environment, children face almost no obstacle to purchasing cigarettes. In Jakarta, where tobacco ads were plastered on billboards, ABC News witnessed an 8-year-old girl buying tobacco from a vendor in a busy public market.

‘Smoking Baby’ Kicks the Habit Watch Video

Dangerous Medicine? Smoke on Boy’s Skin Watch Video

FDA Picks Graphic Labels for Cigarettes Watch Video

In tiny Palembang, a remote fishing village in Eastern Java, an elderly man freely admitted that he introduced smoking to his grandson, Chairul, when he was barely of grade-school age. “It’s all right,” the man said, “as long as he drinks enough coffee with his cigarettes.”

Not far from where Chairul lives, we found the original “smoking baby,” whose name is Aldi Rizal. His mother said she never wanted him to pick up smoking, but that his withdrawal-fueled tantrums were too difficult to endure.


Photo of the Marlboro-branded kiosk located near a school in the capital city Jakarta before the brand logos were taken down. Credit: Chris Kilmer/ABC

Tobacco Bonds Face Default as Smoking Declines, Moody’s Says

Tobacco Bonds Face Default as Smoking Declines, Moody’s Says

‎Bloomberg – 5 days ago

The declining number of U.S. smokers is proving hazardous to the health of municipal bonds backed by payments from cigarette companies 

Tobacco Bonds May Be Doomed to Default‎ Barron’s (blog)
Most US muni tobacco bonds will default – Moody’s‎ Reuters
Tobacco Bonds Could Go Up in Smoke, Moody’s Says‎ Wall Street Journal (blog

Tobacco company award ‘oversight’ – Helen Clark

Description: Helen Clark says her involvement in giving a business award to a tobacco company won't be happening again.  Photo / Listener

Helen Clark says her involvement in giving a business award to a tobacco company won’t be happening again. Photo / Listener

Former New Zealand Prime Minister Helen Clark says it was a “serious oversight” a cigarette company was able to win a World Business Development Award, which are supported by the UN agency she heads.

Clark, now the head of the United Nations Development Programme, has been slammed for presenting ITC, India’s largest cigarette maker, with a World Business Development Award late last night.

The company received the World Business Council for Sustainable Development’s highest prize for improving the environment and removing poverty.

In a statement, Ms Clark said she was shocked to learn ITC – formerly the Indian Tobacco Company – had been given an award.

“I have worked tirelessly throughout my career to achieve a smoke free society in New Zealand, and was thus, shocked to learn that a World Business Development Award, supported by UNDP, was given to a company which derives a substantial proportion of its profits from tobacco,” she said.

“Unfortunately the criteria for the World Business Development Awards did not exclude projects implemented by companies from certain sectors like tobacco.

“This has clearly been a serious oversight.

“UNDP is reviewing its rules and regulations to ensure that an incident like this never happens again. UNDP will not participate in these awards in the future unless companies like this are excluded.

“I retain my strong commitment to anti-tobacco policies and will continue to fight for the health and well-being of citizens in New Zealand and around the world.”

Columnist Pranay Lal, writing for India’s Daily News and Analysis, described the award as a “travesty of justice”.

“It [ITC] needs to clear forests and fields to grow tobacco, requires chemicals to ensure that the tobacco plant is free of pathogens, and trees to be hacked to cure the tobacco (one kilogram of tobacco needs roughly eight kilos of dry fuel wood), add more than 4000 undisclosed chemicals to make the cigarette addictive, and top this with glossy packaging of paper, cardboard and plastic, which we see littered on the streets and choking waterways.

“In addition, ITC’s factories have over-extracted water and polluted rivers,” Lal wrote.

“What is tragic is that Helen Clark, a responsible prime minister and wife of a respected public health expert could not have given this award in New Zealand or any other developed country.”

By Paul Harper

Copyright ©2012, APN Holdings NZ Limited

US free market group tries to halt sales of cigarettes in plain packets in UK

Description: tobacco shop display

US lobby group Alec wants to stop plans to sell cigarettes in plain packets. Photograph: Oli Scarff/Getty

A powerful US lobbying group that bankrolls climate change sceptics and leading members of the Tea Party ismobilising British opposition against plans to sell cigarettes in plain packs.

As the UK government considers the proposals, it has emerged the American Legislative Exchange Council (Alec), an organisation sponsored by big tobacco and other corporate interests, is playing a key role in trying to scupper them.

Supporters of the plans say they will deter young people from smoking. But opponents say there is little evidence this is the case and warn that generic packs will encourage counterfeiting.

Alec, which is heavily supported by Charles and David Koch, the billionaire oil baron brothers, has launched a sophisticated global lobbying campaign against the plan.

Alec, which proclaims its “belief in the power of free markets and limited government to propel economic growth”, has warned countries looking to impose plain packaging that they will be violating intellectual property provisions laid down by the World Trade Organisation, opening themselves to legal challenges.

It is targeting the UK, where the government has recently pushed the deadline for its consultation on plain packaging back by a month until the end of August as lobby groups on both sides of the debate make their submissions.

Karla Jones, Alec’s taskforce director, briefed members of its international taskforce at a luxury retreat that such a move threatened major business interests. Jones told those attending: “Among the countries considering plain packaging bills are Canada, the UK and Australia, and if passed, plain packaging regulations could effectively deprive corporations of what is often their most valuable asset, their brand, trademark and/or logo.”

Alec has also written to the Australian government, which intends to introduce plain packaging later this year, saying 2,000 state legislators, representing all 50 US states, “as well as 101 congressional alumni and over 250 companies and public policy associations” oppose the plan.

The organisation is seeking to convince politicians that the move would increase smoking. Alec warns in a submission to governments considering the plan: “Studies have shown that increased availability of generic cigarettes drives up cigarette consumption. As would be expected from their price, generic cigarettes appeal most to the poor, elderly and most dependent smokers. This proposal, then, will exploit those who can least afford to smoke and those who suffer most from smoking.”

Alec also persuaded politicians from around the world to back a trade resolution attacking the European Union ban onsnus, a moist smokeless tobacco product that comes in fruit flavours and is targeted at younger consumers.

The organisation’s attempts to influence the debate outside its native US has angered health campaigners. “Alec’s free-market rhetoric may work in the US but it won’t wash here in the UK,” said Deborah Arnott, chief executive of Action on Smoking and Health (Ash). “The tobacco industry and its lobbyists have money to burn, and they might as well just set fire to it as their campaign against plain packs is going nowhere. Their legal case is weak and the evidence in support of plain packaging is strong.”

Losing their brand identity would be a blow for cigarette companies, which are fighting the proposal tooth and nail.

British American Tobacco, Imperial Tobacco and Philip Morris, a major supporter of Alec, have launched high court challenges against the Australian laws, saying they infringe trademark rights. The tobacco companies have placed a series of adverts in the British media, including the Observer.

In recent months, concerns about some of Alec’s activities have seen a number of its high-profile corporate sponsors resign their membership. The exodus has thrust the Koch brothers into the limelight. The two are reputed to bankroll the Tea Party via a series of trusts, although both deny attending any of its events. According to Greenpeace USA, the Koch brothers have channelled almost $62m (£40m) “to climate change-denial front groups that are working to delay policies and regulations aimed at stopping global warming”.

Alec has enjoyed close links with the Atlantic Bridge, the defunct charity chaired by former Tory defence secretary Liam Fox, which sought to foster links between conservatives on both sides of the Atlantic. It was dismantled last year after criticism from the Charity Commission of its aims and operations.

Alec did not return calls