HEALTH: Tobacco Makers Profit from Smuggling, Meeting Told

By Haider Rizvi Reprint | | Print |

Haider Rizvi

UNITED NATIONS, Aug 9 2002 (IPS) - Cigarette makers are cashing in on the growing practice of tobacco smuggling, which costs governments world-wide billions a year in lost revenues, U.N. officials and non-government organisations (NGOs) said at a conference here.

About 20 billion packs of cigarettes – nearly one-quarter of all those processed for export – are smuggled each year, cheating the taxman of 25 billion to 30 billion dollars in lost revenues, says the U.N.’s World Health Organisation (WHO).

Citing previously secret documents from large tobacco companies, including Philip Morris and British American Tobacco and their subsidiaries, a WHO official said many senior company employees “sought to control and exploit smuggling as part of a worldwide marketing strategy to increase revenue”.

The practice has huge health as well as economic costs, added Derek Yach, WHO’s executive director for non-communicable diseases.

“Smuggled cigarettes are cheap cigarettes, cheap cigarettes mean more consumption among the young and poor,” he told law-enforcement officials, public health experts and NGO representatives from 145 countries who attended the meeting.

Smuggled cigarettes are not subject to regulations that many countries have imposed on labelling, additives and the sale of tobacco to minors.

The conference was organised ahead of the next round of negotiations for the proposed Framework Convention on Tobacco Control (FCTC), which will take place in Geneva, Switzerland.

In July, WHO released a draft of the treaty, which has been under negotiation for two years. NGOs said its main fault was that it does not give public health priority over trade.

Last week, those groups targeted the United States for ensuring that tobacco industry representatives attended the smuggling conference.

“Giant tobacco trans-nationals benefit from the effects of smuggling. They should not be invited here,” said Kathryn Mulvey, executive director of the US-based corporate accountability organisation, Infact, shortly before the three-day session began.

“This conference was intended to be open and transparent,” said a senior official of the U.S. Bureau of Alcohol, Tobacco and Firearms. “There are many, many interested parties here,” the official added. “The fundamental fairness requires that this be an open invitation.”

Critics of the U.S. stance on the effects of tobacco on health charge that the current administration in Washington is being held hostage by the tobacco corporations because it accepted million of dollars in campaign donations from them during the last election.

The tobacco industry contributed more than seven million dollars to the Republican Party of President George W. Bush during that election, says the U.S.-based Center for Responsive Politics.

Center research shows that Philip Morris, the largest U.S.-based tobacco maker, has given more than 800 thousand dollars to the Republican Party since then.

“Your negotiators sought to weaken treaty provisions related to tobacco advertising, cigarette labelling, taxes, second-hand smoke and other vital issues,” wrote U.S. Congressman Henry Waxman in a letter to President Bush before the third negotiating session on the FCTC started in November, 2001.

Waxman said he had obtained documents that showed how “repeatedly the U.S. negotiating team promoted positions in the second round of negotiations that were specifically requested by Philip Morris”.

The company also submitted a list of comments on the proposed treaty to the Bush administration in March last year, he added. “The similarities between these comments and the actual amendments offered by the U.S. delegation just six weeks later are striking,” Waxman said in the letter.

Among the proposals in the draft treaty that Philip Morris objected to were provisions on mandatory labelling of cigarettes in developing countries and a global ban on advertising, proposals that have been already endorsed by dozens of countries, Waxman said.

The tobacco industry sees high taxation as a leading source of smuggling, but public health advocates argue that even if prices and taxes were the same the world over, smuggling would not decline.

“The art of successful diagnosis is the isolation of the underlying illness from its symptoms,” says M. Doube, president of the South Africa-based International Non-governmental Alliance Against Tobacco, an umbrella group representing 57 organisations, mostly from the medical profession.

“This is a lesson that has yet to be understood in the treatment of tobacco smuggling.”

Doube’s organisation suggests that a liability regime, export bonds, racketeering actions and revocable licenses could be used to protect revenues, while governments could be encouraged to find ways to secure the tobacco distribution system.

“All of this is possible and done for other products, why not for tobacco?” he asks.

Health experts estimate that if trends in developing countries continue, tobacco will kill over 10 million people a year by 2030 – more than the number of deaths caused by tuberculosis and malaria.

Currently, there are 1.27 billion smokers in the world. Researchers at the WTO say even if global tobacco control efforts are highly successful, the world still may have more than a billion smokers by 2020, most of who will live in developing countries.

HEALTH: Tobacco Makers Profit from Smuggling, Meeting Told

By Haider Rizvi Reprint | | Print |

Haider Rizvi

UNITED NATIONS, Aug 8 2002 (IPS) - Cigarette makers are cashing in on the growing practice of tobacco smuggling, which costs governments world-wide billions a year in lost revenues, U.N. officials and non-government organisations (NGOs) said at a conference here.
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