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May 11th, 2016:

WHO’s strategy to put Big Tobacco ‘out of business’

Industry fights public health agency’s veteran chief Margaret Chan on taxes, labeling and trade.

GENEVA — The embattled tobacco industry is struggling to fight off one of its fiercest and possibly most dangerous foes to date: the World Health Organization.

The Hong Kong native who has run the U.N. body for the past decade, Margaret Chan, takes evident pride in being called Big Tobacco’s public enemy No. 1, saying that her goal is to “make sure that the tobacco industry goes out of business.”

In the past year alone, the WHO has called for a 75 percent tax on tobacco products. It’s urging countries to set up their own “track and trace” technology to fight cigarette smuggling, ignoring pleas from tobacco companies to use their own technology. The WHO is actively lobbying European countries to keep Big Tobacco out of discussions about how to implement the EU’s 2014 directive on tobacco products ahead of a May 20 deadline. The EU directive will, among other things, put in place new package labeling rules and ban flavored cigarettes.

Behind the scenes, WHO lawyers are helping governments across the world design anti-smoking policies. In a rare move for the agency, it is taking sides in legal disputes between countries over tobacco, all the way up to the World Trade Organization.

This aggressive approach has prompted howls from the industry. To them, the organization and its boss are straying beyond the WHO’s public health mandate by seeking to regulate — and as Chan openly said, kill — the industry. The tobacco industry says they want to be treated just like any other business.

Smoking and related habits cause six million deaths each year, WHO says.

“We are being ostracized,” said Alan Hardacre, head of corporate affairs strategy at Imperial Tobacco. “One wonders who’s next: alcohol, sugar, salt? Who else is going to be arbitrarily excluded from discussions about their own business, simply because it’s decided their product is not a good one?”

Chan and the WHO are unmoved. Smoking and related habits cause six million deaths each year, the agency says, so its mission is to reduce smoking by any fair means at its disposal. “They simply have to be defeated,” Roberto Bertollini, the WHO’s representative to the EU, told a conference organized by the EU ombudsman on tobacco in late April.

Chan, the WHO director-general, declined requests for an interview.

Undue influence, or free speech?

The Geneva-based agency gained power over tobacco with adoption of the first global public health treaty negotiated under the auspices of the WHO, the so-called Framework Convention on Tobacco Control (FCTC). Signed in 2003 and ratified in 2005, the FCTC has become one of the most swiftly embraced treaties in the United Nations’ history, with 180 parties to date. Its implementation is supported by a Geneva-based secretariat housed at the WHO headquarters.

The body promotes higher tobacco taxes to cut consumption, although it only has its moral authority to do that. Since the treaty came into force, the price of tobacco products has increased on average by 150 percent, according to estimates provided by the FCTC secretariat.

“We still have a lot to cover, and our targets are modest,” Vinayak Prasad, head of the WHO’s Tobacco Free Initiative, told POLITICO. Industry fights taxation “tooth and nail” because it’s the most powerful tool to fight smoking, he added. According to Prasad, only one in 10 countries is following through on promises to raise taxes and too few are banning advertising and slapping health warnings on packs.

For the champions of the WHO’s hard line on cigarettes, one of the problems is the undue influence of the tobacco lobby. The FCTC secretariat invoked a provision in the treaty that governs ties between the industry and governments to restrict Big Tobacco’s access to meetings on how to implement the accord.

Not fair, say tobacco representatives, who accuse Chan of stifling debate. At a recent gathering in Moscow on the FCTC, industry representatives, members of the public and journalists were reportedly thrown out of the room. Attendees are now screened ahead of the meetings.

“The process has been increasingly exclusionary and lacking integrity, balanced decision-making and transparency,” said Ben Townsend, a lobbyist for Japan Tobacco International.

Industry representatives have managed to sneak into the meetings, in some cases swapping badges with other delegates, said Katharina Kummer Peiry, a senior legal adviser at the FCTC secretariat. “It’s really quite a dirty fight sometimes,” she told POLITICO.

The fox and the cigarette

Separately, the WHO and the FCTC secretariat are urging the EU to keep its distance from industry as Brussels looks at ways to fight the illicit trade in cigarettes under a recent addition to the FCTC.

The WHO push comes as the EU is mulling whether to renew anti-fraud settlements struck with tobacco companies to compel them to take responsibility for when their products are smuggled across borders, avoiding taxes. EU anti-fraud officials are also considering a tracing technology developed by the world’s four largest tobacco companies, known as Codentify.

European cigarette manufacturers contend they simply have practical know-how that could help identify “solutions and realistic ways forward.”

WHO officials have been outspoken on this point. They argue this would run against the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products, which was signed in 2012 but still needs to be ratified by around two dozen parties, including by the EU, to become legally binding. The protocol states that obligations to clamp down on smuggling “shall not be performed by or delegated to the tobacco industry.”

“Imagine that you are approached by a fox who offers help, including a hi-tech tracking system so that you can trace the chickens and find out who is stealing them,” the head of the FCTC secretariat, Vera Luiza da Costa e Silva, said in a February op-ed in the EU Observer. “Is it wise to put a fox in charge of a hen house?”

The WHO’s Prasad says that the EU should be able to do this job itself, noting that Kenya and Turkey, with much smaller economies than Europe’s, have set up independent track and trace systems in just three years. “Why can’t the EU? Why do they want kids’ gloves?” Prasad asked.

European cigarette manufacturers contend they simply have practical know-how that could help identify “solutions and realistic ways forward.”

“This is an incredibly technical area and it’s very difficult to imagine finding some solution without including us in the discussion,” Imperial Tobacco’s Hardacre said. “This is core to what we do. These are our factories. This is going to impact us, and we have a lot of technical expertise.”

‘Clouded by zealousness’

Peter van der Mark, secretary-general of the European Smoking Tobacco Association, called the WHO “clouded by emotion and zealousness” in its bid to eradicate smoking.

“A smoke-free Europe is very difficult to achieve, because you’re bending the habits of people who in many countries regard it as a free choice,” he said.

Even as they battle, both sides admit smoking is a habit that’s tough to change.

Large no-smoking signs greet visitors at WHO’s leafy Geneva headquarters, and for eight years now, the organization has had a policy of not hiring smokers, or at least those who don’t want to quit.

But within the entirely “healthy, smoke-free” campus, on one wing of the building, a smaller laminated note is pinned onto a pillar.

“Do not throw butts on the ground,” it read. “Use your own ashtray. Thanks, the gardeners.”

Poll finds widespread support for cigarette tax

Australians overwhelmingly support the federal government’s decision to increase the tax on cigarettes, a new poll has found.

Treasurer Scott Morrison’s first budget handed down on May 3 included the plan to increase the tobacco excise by 12.5 per cent every year from 2017 to 2020.

It will see the cost of a packet of 25 cigarettes rise to roughly $40 within the decade.

An Essential Research poll has revealed 72 per cent of voters approve of the policy, compared to 21 per cent against.

The policy is expected to raise $4.7 billion over four years.

“If you want to have less of something, you increase the tax on it. That is how health organisations justify and urge governments, as we are doing, to increase the tax on tobacco,” Prime Minister Malcolm Turnbull said on Sunday.

Labor first flagged the idea last year, but the party is now facing criticism from the Coalition over how much it believes will be raised through the tax.

Treasury forecasts the tobacco excise will raise $28.2 billion over a decade, rather than the $47.7
billion the Opposition said it would reap.

“In terms of the cost of this we stand by our independent Parliamentary Budget Office; that’s an organisation who assess the policies of Oppositions and cost their ideas,” Opposition leader Bill Shorten said over the weekend.

“The Government has taken our policy, and that’s fair enough, because I think when you’ve got a good idea they should be bipartisan.”


The poll conducted between the 5th and 8th of May of more than 1000 voters shows while the budget has not been the Coalition’s most popular, some of its measures are welcomed.

More than 80 per cent of voters support the government’s decision to address tax avoidance by multinationals, and close to 70 per cent support the plan to offer internships for young unemployed adults.

Hong Kong Customs detects suspected case of smuggling illicit cigarettes by ocean-going vessel

Clear the Air says: how many such containers actually make it through undetected?
What brand and origin were the seized items ?
Genuine DNP product or counterfeit?

Hong Kong (HKSAR) – Hong Kong Customs detected a suspected smuggling case of illicit cigarettes at Kwai Chung Customhouse Cargo Examination Compound on May 9. About 8.8 million sticks of suspected illicit cigarettes were seized.

Through risk assessment, Customs officers inspected a 40-foot container declared to contain towels arriving in Hong Kong from Sri Lanka. During the inspection, Customs officers discovered about 8.8 million sticks of suspected illicit cigarettes with a market value of about $24 million and duty potential of about $17 million.

Investigation is ongoing.

Hong Kong Customs will continue to carry out stringent enforcement action against all illicit cigarette activities.

Under the Import and Export Ordinance, smuggling is a serious offence. The maximum penalty is a fine of $2 million and imprisonment for seven years.

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