.
Will the French ever give up their beloved cigarettes? Not if Big Tobacco has its way.
In an effort to curb smoking rates in France (which hover around 28% and are among the highest in the developed world), the government increased the price for a pack of cigarettes by €1 on March 1, bringing the average cost of a pack to €8. Under the government’s wider plan to reduce tobacco consumption, prices will hit €10 by 2021. Cigarette manufacturers estimate that this year alone, the government’s tax hike will cause French cigarette sales to fall by 10-15%.
Not surprisingly, the tobacco industry isn’t taking this lying down: Philip Morris International (PMI) has already announced in response that it will accept a slight drop in profits in order to raise its prices by only 70 cents and, hopefully, keep the good people of France puffing away.
Unfortunately, such Machiavellian tactics are all too common in the tobacco industry, which remains dedicated to efforts to keep individual smoking rates as high as possible—in profitable markets like France as well as elsewhere in Europe. Only last month, for instance, a French anti-smoking organization sued four major tobacco companies for deliberately concealing levels of nicotine and tar in their cigarettes. The lawsuit alleges that the real nicotine levels in cigarettes made by PMI, British American Tobacco (BAT), Japan Tobacco, and Imperial Brands Plc were five times higher than shown in tests, while tar levels were as much as 10 times higher than tests indicated.
Yet the tobacco industry’s penchant for deceit extends far beyond its efforts keep cigarettes affordable and to make their products appear safer than they really are. Indeed, Big Tobacco also has a history of being closely involved with efforts to prop up the illegal cigarette trade—to the benefit of their own bottom lines.
As outlined by the organization Tobacco Tactics, though it might seem odd that the tobacco industry would tacitly support smuggling, this is exactly what they’ve been doing over roughly the past two decades. After all, they benefit from the illicit tobacco trade because they are still paid for smuggled products and the lower market prices that result from smuggling help keep sales levels high. These lower prices, in turn, encourage teenagers to start smoking—thereby creating lifelong customers. Tobacco firms have also invoked smuggling as a reason why excise taxes should be lowered, which leads to higher demand in legal markets in turn.
Of course, such tactics have a detrimental effect not only on European states’ tax returns, but also on the health of ordinary citizens. According to a study carried out by KPMG, Europeans smoked 48 billion illicit cigarettes in 2016—more than all the legally-bought cigarettes in France that same year. The EU’s anti-fraud office, OLAF, says that collectively, the illicit trade in tobacco products costs the EU more than €10 billion a year. And not surprisingly, wide availability of cheap cigarettes keeps smoking levels artificially elevated, especially among poorer populations and lower-income countries—which means a boon for the tobacco industry’s profit margins.
To try to combat this, the EU is currently reviewing proposals for a system aimed at curbing tobacco smuggling and tax evasion. Among other specifications, the system would require tobacco products to be marked with unique identifiers that will make it easier for law enforcement officials to trace their origin. The track and trace system, which is a provision of the EU Tobacco Product Directive, will need to be in place by May 2019.
The European Commission has said that the proposed system is in line with the WHO’s Framework Convention on Tobacco Control (FCTC) Protocol to Eliminate Illicit Trade in Tobacco Products, which the EU ratified in 2016. Yet critics have charged that the system would still allow key tracking and tracing responsibilities to be performed or delegated to the tobacco industry—which directly contradicts the terms of the Protocol. The French left-wing MEP Younous Omarjee has been particularly vocal against the legislation, calling for the chance to veto the text and thereby force the European Commission to come up with a replacement.
He has a point: as it stands, the commission’s proposal does not require that any company or organization running the system would truly be independent of the tobacco industry. For instance, it says that any such group could be considered independent as long as it receives no more than 20% of its income from industry—which may still allow a back door for Big Tobacco to play a role in controlling any track and trace system.
Not incidentally, PMI has created its own track and trace system—known as Codentify—which has since been licensed for free to three of its main competitors. In June 2016, Codentify was transferred to Inexto, an ostensibly independent company that is run by former tobacco industry executives. Critics, including the WHO FCTC Secretariat, have questioned Codentify’s effectiveness, saying that it “is not a transparent or open source system and might have features that only the tobacco industry is aware of.” The fact that it has been passed along to a supposedly third-party company doesn’t change much.
Nevertheless, MEPs fell for Big Tobacco’s ruse, and a first bid by Omarjee to veto the texts was roundly rejected by the European Parliament’s ENVI committee. In spite of the strong objections of the WHO, known anti-tobacco MEPs—such as Giles Pargneaux or Françoise Grossetête—saw the passing of the measure as a big win against the industry.
Given the tobacco industry’s long pattern of deceit when it comes to such matters, then, the EU would do well to scrap the legislation as it stands and come up with new text that ensures that Codentify and other Trojan horses won’t come in through the back door. After all, with such a sordid history of efforts to keep cigarettes cheap, to hide the real levels of chemicals they contain, and to prop up the illegal cigarettes trade, the only way for lawmakers to treat Big Tobacco is with a ten-foot pole.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
a global affairs media network
Big Tobacco Parries Efforts to Curb Smoking in the EU
March 16, 2018
Will the French ever give up their beloved cigarettes? Not if Big Tobacco has its way.
In an effort to curb smoking rates in France (which hover around 28% and are among the highest in the developed world), the government increased the price for a pack of cigarettes by €1 on March 1, bringing the average cost of a pack to €8. Under the government’s wider plan to reduce tobacco consumption, prices will hit €10 by 2021. Cigarette manufacturers estimate that this year alone, the government’s tax hike will cause French cigarette sales to fall by 10-15%.
Not surprisingly, the tobacco industry isn’t taking this lying down: Philip Morris International (PMI) has already announced in response that it will accept a slight drop in profits in order to raise its prices by only 70 cents and, hopefully, keep the good people of France puffing away.
Unfortunately, such Machiavellian tactics are all too common in the tobacco industry, which remains dedicated to efforts to keep individual smoking rates as high as possible—in profitable markets like France as well as elsewhere in Europe. Only last month, for instance, a French anti-smoking organization sued four major tobacco companies for deliberately concealing levels of nicotine and tar in their cigarettes. The lawsuit alleges that the real nicotine levels in cigarettes made by PMI, British American Tobacco (BAT), Japan Tobacco, and Imperial Brands Plc were five times higher than shown in tests, while tar levels were as much as 10 times higher than tests indicated.
Yet the tobacco industry’s penchant for deceit extends far beyond its efforts keep cigarettes affordable and to make their products appear safer than they really are. Indeed, Big Tobacco also has a history of being closely involved with efforts to prop up the illegal cigarette trade—to the benefit of their own bottom lines.
As outlined by the organization Tobacco Tactics, though it might seem odd that the tobacco industry would tacitly support smuggling, this is exactly what they’ve been doing over roughly the past two decades. After all, they benefit from the illicit tobacco trade because they are still paid for smuggled products and the lower market prices that result from smuggling help keep sales levels high. These lower prices, in turn, encourage teenagers to start smoking—thereby creating lifelong customers. Tobacco firms have also invoked smuggling as a reason why excise taxes should be lowered, which leads to higher demand in legal markets in turn.
Of course, such tactics have a detrimental effect not only on European states’ tax returns, but also on the health of ordinary citizens. According to a study carried out by KPMG, Europeans smoked 48 billion illicit cigarettes in 2016—more than all the legally-bought cigarettes in France that same year. The EU’s anti-fraud office, OLAF, says that collectively, the illicit trade in tobacco products costs the EU more than €10 billion a year. And not surprisingly, wide availability of cheap cigarettes keeps smoking levels artificially elevated, especially among poorer populations and lower-income countries—which means a boon for the tobacco industry’s profit margins.
To try to combat this, the EU is currently reviewing proposals for a system aimed at curbing tobacco smuggling and tax evasion. Among other specifications, the system would require tobacco products to be marked with unique identifiers that will make it easier for law enforcement officials to trace their origin. The track and trace system, which is a provision of the EU Tobacco Product Directive, will need to be in place by May 2019.
The European Commission has said that the proposed system is in line with the WHO’s Framework Convention on Tobacco Control (FCTC) Protocol to Eliminate Illicit Trade in Tobacco Products, which the EU ratified in 2016. Yet critics have charged that the system would still allow key tracking and tracing responsibilities to be performed or delegated to the tobacco industry—which directly contradicts the terms of the Protocol. The French left-wing MEP Younous Omarjee has been particularly vocal against the legislation, calling for the chance to veto the text and thereby force the European Commission to come up with a replacement.
He has a point: as it stands, the commission’s proposal does not require that any company or organization running the system would truly be independent of the tobacco industry. For instance, it says that any such group could be considered independent as long as it receives no more than 20% of its income from industry—which may still allow a back door for Big Tobacco to play a role in controlling any track and trace system.
Not incidentally, PMI has created its own track and trace system—known as Codentify—which has since been licensed for free to three of its main competitors. In June 2016, Codentify was transferred to Inexto, an ostensibly independent company that is run by former tobacco industry executives. Critics, including the WHO FCTC Secretariat, have questioned Codentify’s effectiveness, saying that it “is not a transparent or open source system and might have features that only the tobacco industry is aware of.” The fact that it has been passed along to a supposedly third-party company doesn’t change much.
Nevertheless, MEPs fell for Big Tobacco’s ruse, and a first bid by Omarjee to veto the texts was roundly rejected by the European Parliament’s ENVI committee. In spite of the strong objections of the WHO, known anti-tobacco MEPs—such as Giles Pargneaux or Françoise Grossetête—saw the passing of the measure as a big win against the industry.
Given the tobacco industry’s long pattern of deceit when it comes to such matters, then, the EU would do well to scrap the legislation as it stands and come up with new text that ensures that Codentify and other Trojan horses won’t come in through the back door. After all, with such a sordid history of efforts to keep cigarettes cheap, to hide the real levels of chemicals they contain, and to prop up the illegal cigarettes trade, the only way for lawmakers to treat Big Tobacco is with a ten-foot pole.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
