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October, 2012:

Mongolia to pass smoking ban

Submitted by admin on Oct 29th 2012, 12:00am



Michael Kohn in Ulan Bator

In nation where 48 per cent of men are regular smokers, parliament acts to tackle a growing health problem

It’s Friday night at the Grand Khaan Irish Pub and the house band is covering an Eric Clapton song, the waitresses are delivering pints of beer to patrons and thick clouds of cigarette smoke are wafting into the rafters.

It’s a familiar scene in the numerous pubs across this country, as many Mongolians fancy a drag on a cigarette while drinking beer or after a big meal. But it’s also a scene due for change with Parliament’s adoption last week of a strict anti-smoking law.

The new law bans smoking in all public areas, including bars, restaurants, office buildings, playgrounds, parks and apartment stairwells. It applies to common areas in hotels, too, although some hotel floors will still allow smoking.

“It’s tough. I smoke. But I am trying to quit, maybe this will help me do it,” said Grand Khaan patron Dale Choi, a smoker for more than 20 years.

Violators of the law will be slapped with an MNT50,000 fine. (HK$281). Businesses that allow smoking will be hit with an MNT3 million fine, while officials that permit smoking in their official posts will receive a fine of MNT1 million. The law comes into effect on March 1.

Smoking habits in Mongolia are a growing problem, says Tsogzolmaa Bayandorj, a National Officer for non-communicable diseases at the World Health Organisation. According to WHO data collected in 2009, 48 per cent of Mongolian men and seven per cent of Mongolian women smoke regularly.

“The situation has grown worse over the past 20 years due to increased production and importation of cheap cigarettes, mainly from China and Russia,” said Tsogzolmaa.

Young people are particularly susceptible and a target for domestic tobacco companies, he said. In a 2010 survey, 23.3 per cent of Mongolians aged between 13 and 15 admitted smoking regularly.

One provision of the law aims to shield youths from nicotine addiction by banning cigarette sales within 500 metres of any school or university.

Oyungerel Tsedevdamba, a member of parliament, said strict enforcement would be key and outlined a five-month period for police and government to collaborate on proper implementation. “Mongolia is becoming increasingly worried about growing smoking habits among young people and the dramatic increase of lung disease,” said Oyungerel.

Tsogzolmaa said specific data on lung disease attributable to smoking in Mongolia was not available but research indicated non-communicable diseases, such as cancers, were the country’s number one killer.

Around Ulan Bator, there was a mixed reaction to Parliament’s decision, with some offering praise and others criticism.

At the ever-smoky 100 Per Cent Bar, customer Erkhem Oyunbayar called the law a violation of human rights. The owner of the bar, Anaraa Nyamdorj, said his business would be affected because customers would be forced out into the cold weather to smoke cigarettes, rather than stay indoors to drink beer.

“Our climate is harsh. We are under snow for six months of the year, so it’s very tough. Also, smoking and drinking are both part of bar culture, you can’t separate them,” he said.

But at a table nearby, student Enkhbayar Dambadarjaa was mostly pleased with the law.

“I am a smoker but I think the government’s decision is really cool. Cigarette smoke is disturbing, especially on the dance floor or in at a restaurant,” she said. “It’s just going to be hard to go outside for a smoke in winter.”



Smoking Ban



Cigarette affordability in Europe

Tob Control doi:10.1136/tobaccocontrol-2012-050575

Evan Blecher1,

Hana Ross1,

Maria E Leon2

+ Author Affiliations

1International Tobacco Control Research, American Cancer Society, Atlanta, Georgia, USA

2International Agency for Research on Cancer, Lyon, France

Correspondence to Dr Evan Blecher, International Tobacco Control Research, American Cancer Society, Atlanta, Georgia, USA;

Received 19 April 2012

Accepted 10 September 2012

Published Online First 23 October 2012


Objective To analyze trends in excise taxes, real price and the affordability of cigarettes in Europe, and to examine the impact of EU wide tax policies on new member states.

Design We use a sample of 37 European countries with data from 2004 to 2010. 27 countries are EU member states of which 12 joined in 2004 or 2007 (new members), while 10 non-EU countries are included as a comparison. Data is sourced from the European Commission and the Economist Intelligence Unit.

Results The excise tax burden increased in all new member states between 2004 and 2010 while remaining relatively unchanged in existing member states. In 2010, the excise tax burden was higher in new (mean 63.8%) than in existing member states (mean 59.4%). Although cigarettes were significant cheaper in new member states the difference in affordability was narrower between the two groups. Excise taxes and prices rose aggressively in new member states while the increases in existing member states were smaller. While cigarettes became less affordable in most EU member states there was little difference between new and existing member states. The average annual percentage change in per-capita cigarette consumption was negative in all existing member states and in 9 of 12 new member states between 2004 and 2010, indicating declining per-capita cigarette consumption.

Conclusions Joining the EU results in significant increases in excise taxes and prices, and declines in affordability. Additionally, the structure of taxes, specifically the high excise tax floor resulted in higher taxes and prices

About 40% of the world’s cigarettes are smoked in China.

Updated October 29, 2012, 6:42 p.m. ET

Philip Morris Seeks an Edge in China


Marlboro is the world’s top-selling cigarette, but it has a minuscule 0.3% share of the market in China, where roughly a quarter of the population smokes.


Bloomberg News

About 40% of the world’s cigarettes are smoked in China.

Now, Philip Morris International Inc., PM +0.63%which makes and markets Marlboro outside the U.S., is trying to raise its profile in that enormous Asian nation by moving beyond simple smokes. In one curious effort, it is setting out to develop flu vaccines derived from a type of tobacco plant. In another project, closer to its core business, it is developing less harmful cigarettes, which it would aim to sell all over the world, but especially in China, where about 40% of the world’s cigarettes are smoked but state-owned China National Tobacco Corp. enjoys a virtual monopoly.

In September, Philip Morris said it would be licensing rights from Medicago Inc., MDG.T +1.10%a small Canadian biopharmaceutical company, to develop vaccines for sale in China. The seemingly incongruous move is underpinned and motivated by several different situations. Philip Morris already owns about 40% of Medicago. Philip Morris also has a goal of diversifying into different tobacco-related products.

More important, the vaccine agreement in China has as much to do with cultivating relations with government officials as diversifying into a new business that may or may not take root, highlighting how much of a long-term play China remains for Switzerland-based Philip Morris, the world’s second-largest cigarette company by volume, after China National Tobacco.

“This is one other way they could endear themselves to the Chinese,” said Bonnie Herzog, a global tobacco analyst at Wells Fargo WFC -0.26%.

At a recent investor conference, Philip Morris acknowledged traditional cigarettes from foreign companies will continue to be a hard sell in China, where the government generates tens of billions of dollars in profits from tobacco. Retail cigarette sales in the country topped $160 billion in 2011, roughly a quarter of the global market, according to estimates by Euromonitor, a data service.

“Why would they share their market?” Philip Morris Chairman and Chief Executive Louis Camilleri told investors in June. “To come up with new technology is really the only avenue to get into a place like China.”

Thus Philip Morris’s effort to develop next-generation cigarettes that are less harmful than current versions, with a serving of public health on the side.

There are rising health concerns about cigarettes in China. More than 1 million people die annually in the country from tobacco-related diseases and officials have warned the number could triple by 2030 without action. Health authorities have been pushing to turn more public buildings smoke-free.

Philip Morris is investing hundreds of millions of dollars trying to develop less-harmful cigarettes and executives have described the strategy as a potential “game changer” in China. One version generates smoke at temperatures below combustion, releasing fewer toxins, but aims to mimic traditional cigarettes more closely than alternatives already on the market such as electronic cigarettes.

Philip Morris has begun discussing its next-generation plans with CNTC and Chinese officials “are extremely interested,” Andre Calantzopoulos, Philip Morris’s chief operating officer, recently told investors. But he estimated the new cigarette products wouldn’t be launched before 2016 or 2017.

The vaccine is perhaps even further off in the future.

Philip Morris said its China flu business hinges on the successful completion of clinical trials and securing regulatory approvals. “We’re definitely talking years,” added a spokeswoman for Philip Morris.

Medicago specializes in producing flu vaccines from Nicotiana benthamiana, a relative of Nicotiana tabacum, the tobacco plant used in cigarettes. It represents one of several plant and cell-based alternatives to chicken eggs, which have been used for decades to make vaccines but are seen as slow and expensive.

China has been among the countries hardest hit by H5N1 over the past decade and was swept up in the H1N1 outbreak of 2009 and 2010, which killed an estimated 280,000 people world-wide, according to a recent estimate.

Under the Medicago deal announced in late September, Philip Morris will pay an initial $4.5 million for the rights to develop Medicago’s pandemic and seasonal influenza vaccines for China.

Medicago produced more than 10 million doses of an H1N1 or swine flu vaccine within 30 days earlier this year in a research project with the U.S. Department of Defense. It also has reported positive results from a Phase II clinical trial for an H5N1 or avian flu vaccine. The China program represents publicly traded Medicago’s first foreign-licensing deal.

Philip Morris began investing in Medicago in 2008, when it acquired a large minority stake in the Quebec-based company for roughly $15 million—pocket change for the cigarette maker.

Both the next-generation cigarettes and the flu vaccines are expected to take several years to come to market, if ever.

Philip Morris got its foot in the door in China in 2005, when it inked a strategic partnership with China National Tobacco, or CNTC. Under that arrangement, CNTC began producing Marlboros under license in China four years ago. Philip Morris also helps distribute CNTC brands outside China, including Poland and the Czech Republic.

But as of last year, CNTC still boasted a 97% market share in its home country, according to Euromonitor International. Marlboro’s 0.3% market share puts it behind more than three dozen CNTC brands including market-leading Hongtashan. China’s biggest foreign brand last year, British American Tobacco BATS.LN -0.26%PLC’s 555, had a 0.5% market share.

Write to Mike Esterl at

Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved

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Tobacco firm may have breached packaging laws

By Latika Bourke

Updated Fri Oct 26, 2012 11:51am AEDT

British American Tobacco Australia is being investigated over possible breaches of the Federal Government’s new plain packaging laws.

From October it became illegal to manufacture cigarettes for Australian consumption in breach of the new rules, but six brands are already being examined for potential violations.

The investigation began after the ABC alerted the department to the possible breach.

The cigarettes feature three-letter words at the top of each, which the department is investigating to see if they are a form of advertising, which would be banned under the legislation.

In one instance, Benson & Hedges cigarettes are labelled with “LDN”; in another case Winfield cigarettes are stamped with “AUS”.

The department is investigating the appearance of three-letter words at the top of the cigarettes.

Photo: The department is investigating the appearance of three-letter words at the top of the cigarettes. (ABC)

Under the plain packaging regulations, cigarettes are allowed to be branded with an alphanumeric code but it must not represent or in any way be related to the brand or variant of the cigarette.

Professor Simon Chapman from Sydney University says the potential breach does not surprise him.

“They’re probably just testing the waters here to see what they can get away with in the early stages of the new legislation,” he said.

Professor Chapman says tobacco companies will do anything to create a sense of “intrigue” about their products.

“They’re a bit like the Black Knight in Monty Python in The Holy Grail; you cut their legs off, you cut their arms off and they keep on saying, ‘it’s just a flesh wound, bring it on’.”

Tobacco manufacturers are allowed to stamp their products with an alphanumeric code for the manufacturing and recall purposes, but the legislation says those codes cannot in any way relate to the brands.

The Government has written to British American Tobacco Australia to see if the cigarettes in question were manufactured this month.

If they were and are deemed to be in breach, the company faces fines worth more than $100 million and could also be forced to recall their products.

Professor Chapman says the Government needs to be tough with the tobacco companies.

“I just hope the Government will be really, really serious about this and invoke the steepest possible fines that are available to them,” he said.

They’re a bit like the Black Knight in Monty Python in The Holy Grail; you cut their legs off, you cut their arms off and they keep on saying, ‘it’s just a flesh wound, bring it on’.

Professor Simon Chapman

British American Tobacco Australia has told the ABC it has received no notification from the Health Minister nor the department.

A spokesman said the company would be willing to discuss the issue with the regulator as it did not believe there had been a breach and the company had done nothing illegal.

In September, before the new laws came into force, the Government singled out Imperial Tobacco for its new packaging which complied with the new legislation but for one line written on the inside lid of the packet: “It’s what’s inside that counts.”

The Government described it as a “sick joke” and warned the tobacco companies it would be watching their products carefully when the laws became enforceable.

Government poised to make appointments

Submitted by admin on Oct 29th 2012, 12:00am

News›Hong Kong


Gary Cheung and Joshua But

Former head of HKU’s nursing school in line to become deputy to health chief Ko Wing-man

The government’s third batch of political appointees could be announced as early as this week, with two bureaus expected to name their undersecretaries.

Professor Sophia Chan Siu-chee, former head of the University of Hong Kong’s nursing school, is tipped to be undersecretary for food and health.

Kevin Yeung Yun-hung, currently principal assistant secretary for food and health, is in the frame to become the undersecretary for education. A government source said up to four undersecretaries and political assistants were expected to be named.

Chan began her career as a nursing student in Queen Mary Hospital in the 1970s, before moving into the academic field. She is now research director of HKU’s nursing school.

Chan, an expert in health protection measures, such as tobacco controls, will be the deputy to Dr Ko Wing-man, head of the Food and Health Bureau and an orthopaedic specialist.

Yeung, 49, was the administrative assistant to Secretary for Home Affairs Tsang Tak-sing for more than four years before moving to the Food and Health Bureau in 2010. He could be the first administrative officer to leave the civil service and become a political appointee in Chief Executive Leung Chun-ying’s administration.

He graduated from HKU in 1985 and joined the government in 1992. He earns about HK$130,000 a month as a principal assistant secretary. The Education Bureau has seen a major leadership overhaul in Leung’s government, as former secretary Michael SuenMing-yuen opted to retire and undersecretary Kenneth Chen Wei-on switched to become the new secretary general of the Legislative Council secretariat.

New chief Eddie Ng Hak-kim was heavily criticised for his handling of the National Education controversy in August. It is understood he prefers a deputy who is familiar with government operations.

Michelle Au Wing-tsz, environmental affairs officer of Friends of the Earth, is another favourite for the post of political assistant of the Environment Bureau. Au backed waste reduction and recycling as a green activist.

Meanwhile, a former police officer would likely be appointed the political assistant of the Security Bureau, according to another source. “The relevant procedures for the appointments have been cleared and announcements will be made in due course,” the source said.

On June 30, the government announced its first batch of undersecretaries: Julia Leung Fung-yee for financial services and the treasury and Florence Hui Hiu-fai for home affairs.

On September 12, three more undersecretaries were appointed. They were John Lee Ka-chiu, for security; Christine Loh Kung-wai, for the environment; Yau Shing-mu, reappointed for transport and housing. Caspar Tsui Ying-wai, became political assistant at the Home Affairs Bureau.


Hong Kong Politics

HKSAR Government


Sophia Chan Siu-chee

Kevin Yeung Yun-hung


Source URL (retrieved on Oct 29th 2012, 5:57am):

Questions raised over smoke alarms on ferries blocked by smokers

Submitted by admin on Oct 28th 2012, 12:00am

News›Hong Kong


John Carney

Passengers lighting up in toilets are putting others at risk by blocking life-saving smoke detecters with paper on vessels to outer islands

A new safety scare has hit ferries to outlying islands: passengers are covering up smoke alarms in toilets on board so they can have a sneaky smoke.

Less than a month after 39 people lost their lives in a ferry disaster off Lamma Island, the operator of New World First Ferry Services admitted that it had found cases of passengers lighting up after blocking potentially life-saving smoke detectors.

The company was conducting more checks but had also called in the Tobacco Control Office because, it said, it did not have the staff to ensure proper patrols.

It could only try to limit the damage, a customer service spokeswoman for First Ferry said.

“As our crew members have various duties to perform on board, it is not feasible for them to [keep conducting] spot checks during the entire sailing to identify offenders,” she said.

“We will continue to press the Tobacco Control Office to perform frequent enforcement action on board the vessels.”

The operator plies the routes from Central to Cheung Chau and Mui Wo, and from North Point to Hung Hom and Kowloon City.

It also runs the inter-island service serving Peng Chau, Mui Wo, Chi Ma Wan and Cheung Chau.

It issued the statement in response to a complaint from an eagle-eyed Cheung Chau resident who spotted during his daily journeys to Central and back that smoke alarms in the ferry toilets were regularly covered.

Hans Wergin, who works on Hong Kong Island as a chef for a chain of coffee shops, noticed passengers would come out of the toilets holding a lit cigarette but that the alarm inside the cubicle had not gone off.

On closer inspection, he found the detectors had been covered with paper to prevent the smoke from setting it off.

He reported his finding to First Ferry’s customer service division – and was told that it was an ongoing problem.

“It took First Ferry 17 days to get back to me on such a basic but important safety enquiry,” Wergin said.

The spokeswoman said First Ferry could only remind their crew members to carry out more frequent inspections and to ensure all smoke detectors were not obstructed when possible.


Maritime Safety


Smoke detector

New World First Ferry

Source URL (retrieved on Oct 29th 2012, 8:38pm):

Women who quit smoking before 30 cut risk of tobacco-related death by 97 per cent

Updated 09:57 AM Oct 28, 2012

LONDON – Women who smoke into middle-age have three times the death rate of non-smokers and risk dying at least 10 years early, according to a definitive study of the effects of tobacco in more than a million women in the UK.

The good news, according to the study by a team of Oxford University researchers led by Sir Richard Peto, is that giving up cigarettes before the age of 40 reduces a woman’s risk of smoking-related death by 90%. Quitting by 30 reduces it by 97 per cent .

The study, published by the Lancet a day before the 100th anniversary of the birth of Sir Richard Doll, who first established the link between smoking and lung cancer, shows conclusively for the first time that the disastrous effects of smoking for men are no different for women.

Because men historically began to smoke in large numbers earlier than women – most of the first generation of women with a lifelong smoking habit were born in the 1940s – the life-shortening impact of cigarettes on them has not until recently been fully measurable.

“If women smoke like men, they die like men,” said Peto. “But whether they are men or women, smokers who stop before reaching middle-age will on average gain about an extra 10 years of life.”

The data comes from the Million Women Study, which recruited 1.3 million women between 1996 and 2001 when they went for breast cancer screening, aged between 50 and 65. The study, unique because of its size, has compiled a vast amount of information on women’s health and led, among other things, to important findings on risk factors for breast cancer.

The women filled in questionnaires on their lifestyle, medical history and social background at the time of recruitment and again three years later. They have been followed up for an average of 12 years. At the start of the study, 20 per cent were smokers and 28 per cent former smokers.

Persistent smokers were nearly three times as likely to die over the study period as non-smokers. The results show that two-thirds of all deaths of smokers in their 50s, 60s and 70s are caused by smoking – not only through cancer but also other smoking-related illnesses such as heart disease and stroke.

The more women in the study smoked, the greater their risk of premature death. Even those who considered themselves social smokers, having between one and nine cigarettes a day, had double the death rate of non-smokers. The increased risks remained, even after adjusting for the fact that smokers were more likely to live in deprived areas, drink more than 14 units of alcohol a week and avoid strenuous exercise.

The age at which women started smoking was important. Picking up the habit at a young age increased the length of time for which they smoked and their risk of an early death. Although fewer women were now starting to smoke, those who are could be doing greater damage to their health. “In those days smokers were starting in late teens and now it is in their early teens,” said Peto.

Although stopping well before the age of 40 will substantially reduce women’s risk of dying early, “this does not mean … that it is safe to smoke until age 40 years and then stop, for women who do so have throughout the next few decades a mortality rate 1.2 times that of never-smokers,” says the paper. “This is a substantial excess risk, causing one in six of the deaths among these ex-smokers.”

Peto said the Million Women Study had allowed unprecedented insights into women’s health prospects and could only have been carried out in the UK.

“It is completely brilliant because the NHS health records are so brilliant. You couldn’t do it in any other country in Europe. We can send details of the women to the NHS central register and we get told what everybody died of. Every time they go to hospital, we know about it.” GUARDIAN


Copyright 2012 MediaCorp Pte Ltd | All Rights Reserved

Smoking will ‘kill up to a billion people worldwide this century’

Governments must do far more to control the global tobacco industry, say cancer experts

Steve Connor

Sunday, 28 October 2012

It is described as the biggest public health disaster in the history of the world, with its perpetrators linked to terrorists. Smoking will kill up to a billion people worldwide this century, unless governments across the world stamp down on the half-trillion-dollar tobacco industry.

These are the words of John Seffrin, chief executive of the American Cancer Society, who was speaking this weekend at a high-level forum of the world’s 100 leading cancer experts gathered in the Swiss resort of Lugano, who issued a stark warning to governments worldwide. They said governments must do far more than they have done to control the global tobacco industry, either by raising cigarette prices dramatically, outlawing tobacco marketing or by taxing the multinational profits of the big cigarette firms.

Smoking kills more than half of all smokers, mostly from cancer, and yet despite it being the single biggest avoidable risk of premature death, there are about 30 million new smokers a year, scientists have calculated.

If current trends continue, with cigarette companies targeting the non-smoking populations of the developing world, then hundreds of millions of people will be dying of cancer in the second half of this century, they said.

Some of the experts attending the World Oncology Forum went further by calling for an outright ban on cigarettes and for the tobacco industry to be treated as a terrorist movement for the way it targets new markets with a product that it knows to be deadly when used as intended.

“We have a major global industry producing a product that is lethal to at least half the people who use it. It will kill, if current trends continue, a billion people this century,” said Dr Seffrin, who leads the US national society dedicated to eliminating cancer.

“It killed 100 million in the last century and we thought that was outrageous, but this will be the biggest public health disaster in the history of the world, bar none. It all could be avoided if we could prevent the terroristic tactics of the tobacco industry in marketing its products to children,” Dr Seffrin told The Independent.

“There is a purposeful intent to market a product that they know full well will harm their customers and over time will kill more than half of them. The industry needs to be reined in and regulated,” he said.

The science showing that tobacco is the single biggest cause of cancer is now well established, following the publication of the earliest evidence in the 1950s by the late Sir Richard Doll, the Oxford epidemiologist who was born 100 years ago yesterday.

Worldwide, tobacco causes about 22 per cent of cancer deaths each year, killing some 1.7 million people, with almost 1 million of them dying from lung cancer. Yet the numbers of new smokers among the young is rising faster than the numbers giving up.

The latest study into the health effects of smoking, published last Saturday in The Lancet, involved 1.3 million women. It showed tobacco is even more dangerous than previously supposed, but the benefits of giving up smoking are greater than expected.

Sir Richard Peto of Oxford University, a co-author of the Million Women study who worked closely with Sir Richard Doll, is also the scientist who first calculated how many people this century will die from tobacco-induced cancers. “We have about 30 million new smokers a year in the world. On present patterns, most of them are not going to stop, and if they don’t stop, and if half of them die from it, then that means more than 10 million a year will die – that’s 100 million a decade in the second half of the century,” said Professor Peto.

“So this century we’re going to see something like a billion deaths from smoking if we carry on as we are. In Europe we have about 1.3 million premature deaths per year now, of which about 0.3 million are deaths by tobacco. There’s nothing else as big as that,” he added. “If you put all causes together, you wouldn’t get a total that’s half of that caused by tobacco, and tobacco kills more people by cancer than other diseases. Smoking is still the most important cause of cancer… If you smoke a few cigarettes a day, it will be the most dangerous thing you do.”

European countries need to raise cigarette prices significantly because this is the one proven method of reducing consumption, Sir Richard said. They should adopt a “triple-half-double” strategy, which was tried in France in the 1990s, when cigarette prices were tripled, consumption halved and the tobacco tax revenues to the French government doubled.

“The governments of Europe desperately need to be able to raise taxes and to do so in politically acceptable ways. Doing it for health reasons, by tripling the price of cigarettes and halving the consumption, is a way of doing both,” Professor Peto said.

“If we are talking of prevention in Europe then a quarter of all cancer deaths are due to tobacco. In many countries, the numbers of women dying of tobacco are rising.”

Asked whether a policy of tripling cigarette prices would hit poor smokers harder than the rich, Sir Richard said: “They are hit hardest already. Almost half of the social inequality in death is tobacco deaths. If you can help them to stop, then you are doing them and their families a favour.”

The World Oncology Forum, organised by the European School of Oncology, agreed governments must do more to combat tobacco marketing, especially when directed at younger non-smokers. One suggestion was that the profits of multinationals should be taxed globally so they cannot exploit national differences in revenue collection. There was agreement among the experts that more legislation and controls were needed to stop the “global scandal” of tobacco marketing.

Professor Paolo Vineis of Imperial College London said the developing world will see an explosion in cancer in the coming decades as the disease suffers from “globalisation” caused in a large part by smoking.

“It is a scandal that tobacco is the biggest risk factor for cancer, and that more people will be smoking next year. And yet we know that some things will make a really big difference at very little cost,” Professor Vineis said.

Stubbing out: France

The French government implemented a series of sharp price rises for cigarettes in 2003 and 2004 in a bid to slash the numbers of smokers. The rises pushed up the price of smoking by 40 per cent and led to nearly 2 million quitting smoking in France. The Government also introduced legislation to prevent the sale of cigarettes to children aged under 16. This month, François Hollande’s government is further hiking the price of tobacco by 6 per cent, following similar rises in the past two years. Other measures planned include a €200 million tax on tobacco companies, extending no-smoking zones, introducing blank packets and more health campaigns.

Smoke gets in BAT’s eyes

Published on Sunday, 28 October 2012 18:39

Written by J.A. de la Cruz / Coast-to-Coast

IN 2000 an official of the Action on Smuggling and Health (ASH), the United Kingdom-based health charity, appeared before the House of Commons Health Select Committee to reveal fresh evidence on the alleged promotion of smuggling by British American Tobacco (BAT), the biggest international tobacco company.

In his testimony, ASH Director Clive Bates provided a summary of BAT’s alleged smuggling operations based on six months of research independently undertaken by his organization and done in parallel with, among others, the International Consortium of Investigative Journalists. BAT, which “abandoned” its operations in the Philippines in the 1990s over what it said was “uneven playing field” in the industry, is now deeply involved in pushing through Congress what many sectors consider as an inequitable, unachievable and deleterious “sin” tax bill.

In addition to reportedly drawing up with senior finance officials the contentious P60-billion incremental sin-tax measure now being deliberated in the Senate, BAT has titillated Malacañang and the public with a promised $200-million investment in a cigarette manufacturing plant as and when its preferred measure is passed.

That advisory, of course, has drawn howls and a laugh for how can administration officials agree to work that out when they continue to insist that their bill is a “health,” not a “revenue,” measure? Evidently, there appear to be duplicity and schizophrenia there and we are not surprised.

We are excerpting parts of ASH’s documented testimony to provide one and all, especially the public, President Aquino and our legislators a clear idea of BAT’s record of governance worldwide. It is alleged to have a record of duplicity and active participation in the illicit trade in tobacco products—smuggling. This illegal operation, Senate President Juan Ponce Enrile and Ralph Recto, resigned chairman of the Senate ways and means committee, warned, will surely ensue if the Department of Finance (DOF)-sponsored bill passes muster in Congress. Excerpts from the ASH report:

BAT’s control over smuggling

“Correspondence between BAT executives shows the company was heavily involved in orchestrating, managing and controlling cigarette smuggling in Asia and Latin America in the early 1990s. BAT exercised control on illegal distribution channels through intermediaries, notably Romar in Aruba and SUTL [SingapuraUnited Tobacco Ltd] in Singapore. The form of control was:

a) Adopting an approach to business planning and sales-target-setting that treats the various routes for smuggling as near-normal distribution channels, which are under the same sort of control as legitimate channels;

b) Deliberately establishing business relations with intermediaries that directly or indirectly supply smugglers and directing these companies to gain a share in the illegal markets;

c) Controlling the price and availability of products through these channels and so influencing end-market conditions;

d) Building warehouses and stationing marketing personnel close to borders with poor Customs controls;

e) Using a small legal or duty-free market to justify advertising campaigns, which have the real purpose of stimulating demand for cigarettes on sale in the illegal market (these are known as “umbrella operations”);

f) Organizing complicated movements of cigarettes through several jurisdictions or multiple levels within an elaborate distribution chain–leading to difficulties in tracing the products;

g) Identifying and/or developing transit routes where official controls are weak or corrupt; and

h) Colluding with other international tobacco companies over pricing and smuggling strategy.

BAT executives knew

BAT executives knew the nature of their business and sought to conceal it.

Allegedly involved are senior personnel and the memos released feature current BAT board members, including the managing director (Ulrich Herter), finance director (Keith Dunt) and marketing director (Paul Adams). No documents have been found, to date, which refer to the current chairman or deputy chairman.

BAT assertion that it only acts legally is false. While there is little evidence of BAT smuggling tobacco itself, there is compelling evidence to suggest that BAT is a significant part of a conspiracy that causes smuggling. At least one BAT executive has been convicted of smuggling-related offenses in Hong Kong and other legal actions are possible. While conspiracy action in the UK is unlikely for technical reasons, conspiracy-equivalent actions in the jurisdictions where the smuggling has taken place are plausible. US-based investigations have been launched against the tobacco industry for alleged violations of the Racketeer Influenced Corrupt Organization (RICO) Act.

The prevalence of tobacco smuggling in Colombia and the Golden Triangle points to a wider picture, which almost certainly involves the laundering of “narco-dollars,” proceeds of cocaine and heroin trafficking. There is no suggestion in the documents that BAT staff are directly involved in this process, but it is very likely that contraband distribution in these areas is carried out by established organized crime networks, and for these organizations tobacco smuggling would provide effective money laundering with advantages to all parties. By failing to take responsibility for the markets that its product enters, BAT is facilitating the spread of illegal drugs as well as that of tobacco.

Recently, smuggling reached serious proportions in the UK and Europe, and from what we know, it appears that distribution management is similar in pattern to those documented from Latin America and Asia. This is particularly true of tobacco company relationships with intermediary groups in specific distribution nodes which supply smugglers. For a time, Andorra was used by British manufacturers, Gallaher and Imperial Tobacco, in a manner similar to BAT’s operations in Aruba detailed below. As a result of this distribution network, UK tobacco exports to Andorra rose from 13 million cigarettes in 1993 to 1,520 million in 1997, vastly more than the Andorran population of 63,000 could conceivably consume.

It is important that BAT’s own business practices are subjected to internal checks and balances and that the company is properly supervised by its non-executive directors, led by the deputy chairman, Rt. Hon. Kenneth Clarke QC MP. Mr. Clarke should now launch an internal inquiry to report to the AGM on April 27, 2000. BAT should also make a clear statement to shareholders regarding its exposure to smuggling-related legal action.

Smuggling is not victimless crime

Smuggling is not a victimless crime. Current projections suggest 1 billion people will die of tobacco-related disease in the 21st century—10 times as many as those in the 20th century and overwhelmingly in developing countries. Taxation is one measure to counter this dreadful toll and smuggling undermines it by lowering prices and reducing the political feasibility of a high tobacco tax policy. To this extent, tobacco companies benefit from the impact of smuggling in their markets—and health of society suffers.

The responsibility for tackling smuggling ultimately lies with governments. A new World Health Organization convention, the Framework Convention on Tobacco Control, has a proposed protocol on smuggling. This could form the basis of a global response to tobacco smuggling by creating a secure distribution system, introducing anti-fraud markings, tracking and tracing the movement of tobacco products and holding each person responsible for ensuring that they sell only to legitimate businesses.”

The 21st century hazards of smoking and benefits of stopping

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