Tobacco Asia

Volume 19, Number 2

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72 tobaccoasia / Issue 2, 2015 (May/June) Tobacco Asia The ONLY magazine written and edited for the Asia regional tobacco industry. Read and trusted by industry professionals around the world. Subscribe Now to Tobacco Asia and get a complete view of the tobacco industry. Rates 1 year $45 2 years $80 3 years $105 October Inter Co. Ltd. Vanit Building 2, Room 1403A 1126/2 New Petchburi Rd, Bangkok 10400 THAILAND Tel +66 22 55 66 25, Fax +66 26 55 22 11 Published 5 times a year in full English and Chinese versions. To subscribe visit: or email Challenges The biggest challenge Vietnam's tobacco industry faces is il- licit cigarette trade, which, according to Vinataba, accounts for more than 25% of the whole market, or more than one billion sticks. This equates to a loss of over VND8 trillion to the state budget. The importation of cigarettes has been illegal in Viet- nam since 1990. Another challenge manufacturers in Vietnam's tobacco in- dustry face is the Law on Prevention and Control of Tobacco Harms, which came into effect on May 1, 2013. Among other regulations, the law bans smoking in certain public places, the sale of cigarettes to minors, and any advertising of tobacco products. It also requires all cigarette packs to feature graphic health warnings on half the surface of the pack. Compliance deadlines were November 2013 for soft packs and March 2014 for hard packs. Add to that list the new Law on Special Consumption Tax, which will come into effect on January 1, 2016 and will increase excise tax on tobacco and alcohol. The tax rate on tobacco will be increased from the current 65% to 70% as of January 1, 2016, and to 75% as of January 1, 2019. Shisha smoking is also now very popular among young pro- fessionals, university students, teenagers, and foreign tourists in Vietnam, particularly in big cities like Ho Chi Min City and Hanoi. While shisha is not currently banned, authorities and the local medical community have started voicing concerns about its health effects, with some people up in arms and even going as far as proposing a total ban on shisha in the country. The year 2014 was a watershed year for the Vietnam to- bacco industry: the National Assembly passed the excise tax law amendments, the government-issued Directive 30 on strength- ening the combat against the smuggling of cigarettes and decided to destroy all smuggled cigarettes. It was also the first year that the implementation of the Law on Tobacco Hazard Prevention was fully enforced, which had a strong impact on production and operation of the manufacturers, leading to the number of smuggled cigarettes to increase by 30-40% compared to 2013. However, despite the numerous challenges, Vinataba achieved positive results and met its planned targets, including reaching US$1.4 billion in sales, US$350 million budget contri- bution, and over US$51 million profit. Vinataba has big goals moving forward. First and foremost, of course, is to maintain its position as the leader in the Vietnam tobacco industry as well as to promote the growth of the in- dustry and effectively consolidate export markets. Their second goal is to work with the authorities in fighting against illicit to- bacco trade, increase awareness against contraband tobacco, and to gradually eliminate illicit cigarette markets. In other words, Vinataba plans for 2015 to be its year of anti-smuggling.

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