Tobacco Asia

Volume 18, Number 5

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12 tobaccoasia FRONT PAGES 卷首新闻 Saudi Arabia Tobacco fatwa Saudi Arabia has issued a ban on the use of tobacco products in Islam's holiest city, Mecca, the site of the yearly pilgrim- age by Muslims known as the Hajj; and Medina, the burial place of Islam's Proph- et Muhammad. The ban includes hookah as well as cigarettes. For many, hookah, also known as shisha or water pipe, is a staple of Arab culture popular both in the Middle East and in other countries. The ban is expected to affect a huge number of Muslims, as between 2-3 million Muslims perform the Hajj to Mecca every year. According to the World Health Organization the Saudi tobacco religious ruling or "fatwa" includes a prohibition on tobacco smoking around the two holy mosques in Mecca and Medina, a ban of tobacco sales within city limits and beyond city limits, including the sales in all food stores and in the neighborhood of mosques and schools, a ban on water pipe smoking in cafés and restaurants within residential areas and near mosques, schools and wedding halls, as well as extensive campaigns to raise awareness about the hazards of smoking and the tobacco control policy in the cities among the public and city visitors. In circumventing the ban, a tobacco black market has developed in the holy cities, where buyers are often forced to pay a 300% surcharge on cigarettes and hookah products. India Graphic health warnings Tobacco packaging in India will have to display graphic health warnings across 85% of its surfaces, thanks to new measures recently announced by the country's ministry of health. At present, graphic warnings cover 40% of one side of the pack, but the new legislation will require 60% coverage with a graphic warning and 25% with a written warning. Manufac- turers will be required to use designs pre-tested for impact. Manufacturers and retailers of tobacco products will have until April 1, 2015 to comply with the new legislation, after which time penalties will apply for those breaking the law. Currently, tobacco control initiatives are pursued in more than 250 districts in 24 states across India, covering a popula- tion of around 400 million as part of the Bloomberg Initiative to Reduce Tobacco use. Union experts provide technical assistance and expertise for the develop- ment and implementation of new laws, capacity-building, and monitoring and evaluation of interventions. India currently has around 275 million tobacco users. Malaysia Pricing turn-around Two of Malaysia's largest tobacco companies, British American Tobacco (Malaysia) Bhd (BAT) and JT Interna- tional Bhd (JTI) decided to revise a RM 1 price hike on their cigarettes after a two-week run and return it to the previous price. Industry insiders speculate that the change of heart came about after rival Philip Morris (Malaysia) Sdn Bhd (PMI) maintained the price of their cigarettes while BAT and JTI increased theirs, causing smokers to switch to PMI cigarette brands instead. BAT maintained that the revised price hike was to ensure the company remained competitive. In a released statement, BAT managing director Stefano Clini said, "Our last price increase (announced on September 8) was to alleviate mounting inflationary cost pressure amplified by progressive loss of legal domestic volumes over the years to illegal trade, decline in contract manufacturing volume and an overall very competitive trade and distribution channels." He added, "In order to remain competitive, we have decided to revert to our prices before September 8." South Korea Cigarette tax hike South Korea recently proposed a tax hike that would nearly double cigarette prices as early as next year in an effort to reduce the country's smoking rate, one of the world's highest among adult males. The proposal calls for a more than 100% tax increase on a pack of ciga- rettes, which would double current prices that range between KRW2,000- 2,500 (US$1.80-2.70). The initiative also suggested banning cigarette advertisements in convenience stores and making graphic warning labels on cigarette packs mandatory. Government-backed tobacco maker KT&G shares fell more than 5% upon the announcement. KT&G sells 60% of all cigarettes in the country. The government said the tobacco tax could boost tax revenue by KRW2.8 trillion (US$2.7 billion) per year, but the proposal is likely to face an uphill battle in parliament as it was immediately heavily criticized by the main opposition party, the New Politics Alliance for Democracy. Tobacco company experts also say that a drastic price hike is unlikely to result in the expected drop in the smoking rate, but is almost guaranteed to create many problems such as smuggling, fake tobacco products, and a burgeoning tobacco black market. Philippines Philippines top black market A recent study conducted by Oxford Economics in partnership with the International Tax and Investment Center showed that consumption of illicit or untaxed cigarettes in the Philippines almost tripled last year, making the country one of the top illicit cigarette markets in the Association of Southeast Asian Nations (ASEAN). The study, which covered all ASEAN countries as well as Australia, Hong Kong, Pakistan, and Taiwan, was intended to provide an independent benchmark on illicit tobacco trade and its impact on government revenues to policy makers and administrators. According to the study, consumption of illicit cigarettes in the Philippines increased by 198% in 2013, compared to a year earlier. The Philippines now accounts for 34.5% percent of all illicit cigarette consumption in the region, second only to Vietnam with 39%. However, it was found that unlike other

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