Response to WHO FCTC

RNS Number : 7764I

British American Tobacco PLC

24 November 2008

 



For immediate release: Monday, 24 November 2008

Extreme regulation would make illegal tobacco trade worse - 
or Governments can choose a better way

British American Tobacco's Chief Executive Paul Adams today warned that important efforts by governments to reduce the health impact of tobacco could go badly wrong and make the huge illegal tobacco trade even worse if regulation is pushed by pressure groups into extreme and unworkable measures.

He was responding as a global World Health Organisation meeting in South Africa adopted this weekend three extreme 'guidelines' to be positioned as "best practice" for governments in tobacco policy-making. These suggest, for example, that governments should: 

·       Ban almost all communication by tobacco companies;

·       “Denormalise” tobacco companies’ corporate social responsibility activities and ban them, or others, from disclosing publicly any support given to good causes;

·       Minimise government contact with tobacco companies;

·       Ban any display of tobacco products in shops;

·       Consider forcing all tobacco product packaging to be ‘plain’ or unbranded.

The ‘guidelines’ are intended to give governments a guide to implementing their obligations under the Framework Convention on Tobacco Control¹,  a WHO treaty setting out a framework for tobacco regulation. But they have been heavily influenced by a coalition of anti-tobacco activists and pressure groups who have special access to the official proceedings of the treaty - while the tobacco industry and many other relevant stakeholders have been effectively excluded except for limited contact with some governments at national level.

Aspects of the 'guidelines' conflict with widely accepted legal principles and existing legal obligations of governments and could drive the tobacco trade yet further into the hands of smugglers, counterfeiters and criminals. 

Paul Adams said:  "We fully agree that the manufacture, distribution and sale of tobacco products should be regulated.  But these 'guidelines' raise serious questions about real best practice in policy making.  They are a potential recipe to vilify and marginalise legitimate, tax-paying, regulated businesses employing thousands of people, and risk forcing tobacco products 'underground' where the illicit, non-taxpaying, unregulated trade is already flourishing."

"Sharp tactics"

He added:  "Anti-tobacco activists openly talk of creating "the impression of inevitable success" to sway governments to their will. We have seen public boasts of tobacco regulation influenced by "sharp tactics" and "forcing" governments further than they want to go.

A better way

"But there is a better way. Despite the clamour for "denormalisation", exclusion and extremism, many governments seek balanced regulation that is transparent, accountable, proportionate and properly targeted. Indeed, some this week spoke out against the extreme proposals.

"Governments do not have to follow the more extreme proposals - the 'guidelines' are not binding. They can turn their backs on extremism - as many already do - and consult properly with the well run and responsible part of the tobacco industry to shape sound regulation that can reduce the impact of smoking on public health while also sparing their countries from the chaos of tobacco markets run by traffickers.

"The legitimate tobacco industry can help to block illegal sales to children, fight illicit trade, set standards for appropriate marketing, invest in researching potentially less harmful products - and also support thousands of jobs and pay valuable taxes, especially in tough economic times."

Canada - a warning 

British American Tobacco calls on all governments to look at Canada as a serious warning.

Canada seems not to have anticipated that its well intended efforts in health regulation would produce the unintended outcome of a widespread unregulated illegal tobacco sector.

As Canada has gradually become one of the world's most heavily regulated countries for tobacco, it has seen the growth of an illicit tobacco market that is now out of control.  In some areas, the Government is now regulating only half of the industry, while illegal traders have stolen the other half and flourish.

Regulation has brought hefty tobacco tax increases and now bans product displays in shops.  

But in the large lawless market, 200 cheap illegal cigarettes are readily sold loose in polythene bags for less than $6, including to children.  A new survey has found that one third of all cigarettes smoked across Canada are illicit2.  The figures are even worse in the most populated provinces - 48.6% of all cigarettes in Ontario and 40% in Quebec are contraband.

Meanwhile Government statistics show that as many Canadian adults were smoking in 2007 as in the two previous years3.  And in Saskatchewan after retail display bans began in 2002, the number of adult smokers in the province actually rose from 21% in 2002 to 24% in 20034.

Global illicit tobacco trade

British American Tobacco estimates that some 335 billion counterfeit and smuggled cigarettes will be smoked in 2008, a record high. This is about 6% of total world consumption and will cost governments worldwide some US$20 billion in lost tobacco taxes⁵

Organised crime is increasingly dominant, as rewards can be high.  One 40-foot long container of 8.5 million cigarettes smuggled into the UK and sold at half the recommended retail price could net a US$2 million profit.  Interpol, the international police organisation, has said that gangs trafficking drugs, arms and people are also behind the illicit cigarette and alcohol trade, and the US Department of Justice says some have ties to terrorist organisations.

Efforts to prevent sales to children are undermined by 'underground' illicit sales.  Counterfeit cigarettes may also be more harmful to health than genuine product, through unapproved ingredients and not complying with tar, nicotine and carbon monoxide regulatory standards.

ENQUIRIES
British American Tobacco Press Office
David Betteridge, Kate Matrunola, Catherine Armstrong
[phone] (24 hours)

Notes to editors

• British American Tobacco is the world's second largest stockmarket-listed tobacco group by global market share, with brands sold in over 180 markets and employing 54,000 people. It is the only tobacco business selected for the Dow Jones Sustainability Indexes, for the 7th year running in 2008-09, scored on its economic, social and environmental performance.

• 1 The FCTC has been ratified by 150+ countries.  Governments can interpret it as they judge appropriate taking guidance from guidelines adopted at Conferences of the Parties, like the one in South Africa.  A coalition of NGOs has been given accreditation allowing them to speak at these meetings and influence proceedings. Guidelines adopted in Durban cover 'tobacco industry participation' in policy making, 'packaging and labelling' of tobacco products and tobacco 'advertising, promotion and sponsorship'.  

• 2 Illicit Usage of Cigarettes: 2008 GfK Research Dynamics National Study for Canadian Tobacco Manufacturers' Council.

• 3 Smoking incidence is 19% of the adult population.  Source: Statistics Canada. 

• 4 Health Canada Tobacco Use Monitoring Survey, 2002 and 2003.

• 5 British American Tobacco research based on market surveys, consumer research and analysis of packs collected from consumers to estimate the difference between duty paid legitimate shipments and actual consumption.

 

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