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BAT in smuggling, researchers claim

“The authors of the study said ‘ the industry documents have primarily provided evidence of complicity in smuggling by BAT.’”

“Cigarette smuggling, comprising around one quarter of exports undermines public health by making cheaper cigarettes more readily available and, in turn, encouraging increased consumption.”

This is the conclusion of a research “supported by the National Cancer Institute, US National Institute of Health”. The study covers Asia, Lebanon, China, Cambodia, Uzbekistan.

A research done by J. Collins, E. LeGresley, R. MacKensie, S. Lawrence and K. Lee entitled Complicity in Contraband: British American Tobacco and cigarette smuggling in Asia” concludes BAT documents demonstrate the strategic importance of smuggling across global, regional, national and local levels.

“Particularly important in Asia, contraband enabled access to closed markets, create pressure for market opening , and was highly profitable.”

The results of the research points out “documents demonstrates BAT’s detailed oversight of illicit trade, seeking to reconcile the conflicting demands of control and deniability.

The research admits that there are strong indications that other cigarette companies are similarly involved in illicit cigarette trade. However, the authors of the study said “the industry documents have primarily provided evidence of complicity in smuggling by BAT.”

The researchers noted “… the documents from BAT often seem more candid than those from its competitors.”

According to the researchers “this may be attributable to variations to corporate culture, a historically lower sense of vulnerability to litigation.” This is variously interpreted to mean that BAT may have mounted a huge and successful lobby that might have lulled BAT into the culture of feeling invulnerable or have a lower sense of it.

The researchers pointed out “many of the most dramatic disclosures of tobacco industry misconduct have been obtained from BAT documents including evidence of price fixing.”

What appears to be the preparedness of the Philippine government to give to BAT in the name of leveling the playing field the privilege of raising by higher than 700 per cent the tax on cigarettes for the poor fits squarely with the alleged involvement of the new player in illicit cigarette trade.

We have tirelessly explained the reality that when the price of cigarettes for the poor goes up beyond their means as a result of the proposed heavy tax burden, they switch to cheaper smuggled brands.

It is not exactly funny or strange that BAT has proposed a higher tax burden on the cigarettes for the poor although the brands it will export to the Philippines are premium, or cigarettes for the well-heeled.

The BAT cigarettes do not in any way compete with the poor man’s cigarette of the Filipino. How is the playing field leveled that way?

The record shows that demand for premium brands is a speck in the tobacco industry, less than two per cent in fact.

How does raising the price of low end cigarettes which do not at all compete with premium figure in the business interest of BAT in exporting cigarettes to the Philippines?

It hardly does. Low-end brands and premium have their own distinct identifiable markets. One does not cross the other. Therefore, British American Tobacco does not hope to compete with the low end brands of Philippine-made cigarettes which may succumb to smuggling after the proposed 700 per cent additional tax takes effect.

Therefore it has no interest in pushing for higher tax increase on cheap cigarettes. But it does so in the interest, it says, of leveling the playing field.

Given the fact that demand for premium brands hardly grows, why does British American Tobacco want to come back to the Philippines on condition that the playing field is leveled by making the price of the poor man’s cigarette beyond his reach?

A higher liability would not in any manner increase the demand for the premium brands of BAT. What is definite is the poor man’s cigarette will practically disappear after its demand is taken over by illicit cigarettes.

Again, how does BAT benefit from a situation such as this? It will not. But it can immensely if it joins the smugglers.

This is the whole purpose of the research study supported by the National Cancer Institute and the US National Institutes of Health. What the researchers found in the documents of BAT itself are far from flattering. On the contrary it is condemnable.

Now we ask, what gain will the country get passing the excise tax bill? We see none. What harm can happen? We see a lot. We surrender the tobacco industry to the smugglers. We may not collect the expected tax precisely because illicit goods do not pay a tax.

Smuggled or “blue seal” cigarettes will encourage more smoking on the youth because of cheaper prices.



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