Tobacco Asia

Volume 19, Number 3

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Page 46 of 75

tobaccoasia 47 • Double your resource value • Use 100% expanded fine- cut for MYO and RYO • Untouchable product quality • Impex – pressure/vacuum technology • DIET - Dry Ice Expansion Technology AircoDIET has supplied more than 55 DIET plants worldwide, many of which have been turn-key. We continuously develop and refine the DIET process and our DIET plants have above 95% uptime with a dry yield better than 98.5% through the plant. Over 100% tobacco expansion expansion expansion expansion into the framework of law. Under the legislation, the state systematically and exclu- sively organizes production and marketing of tobacco products and administratively applies the system of licensing. As also prescribed by the law, the state exercises unified and centralized manage- ment over annual planning for production and marketing of cigarettes, and retailers nationwide have to each obtain a license issued by the government. In July 1997, the state council issued the "Regulations of the People's Republic of China on Application of the Law on Tobacco Monopoly". Under China's law on legislation, regulations issued by the state council belong to administrative regulations, which are positioned below national laws in terms of legally binding force. More re- cently, at its 14th session held last April 24, the standing committee of the 12th NPC adopted the "Decision on Revision of Five Laws Including the Law of the People's Republic of China on Measurements", providing for revision of many parts of the law on tobacco monopoly, which contributed to further consolidation and improvement. It needs to be made clear that that STMA is an administrative agency of the central government, which represents the government in exercising administrative manage- ment over the tobacco trade, and that since the establishment of STMA, CNTC has been converted into an enterprise under STMA management. Today, there are 33 provincial-level commercial enterprises and 17 manufacturing enterprises in tobacco under CNTC's umbrella. Elsewhere in the world, many trans- national tobacco giants, such as Philip Morris International, Imperial Tobacco, and British American Tobacco, all have their own cigarette brands and cigarette produc- tion and marketing systems. In other words, not only do they produce cigarettes, but also directly supply cigarette products to distributors, which in turn, re-sell cigarettes to retailers. Through those retailers, the cigarette products eventually land in the hands of consumers. In comparison, the power to oversee cigarette production and marketing is con- centrated in the hands of CNTC, but the corporation itself does not directly produce or market cigarettes. Rather, it has its affiliated enterprises that do the work of cigarette production and marketing. Of the enterprises affiliated with CNTC nationwide, the 17 tobacco manufacturing enterprises are mainly in charge of research and development as well as production of cigarette products. Thus, the cigarette products made by them can only be supplied to the commercial enterprises under CNTC as a special group of "wholesalers". As opposed to wholesalers of other commodities that operate numer- ous wholesale channels, tobacco wholesalers can only be commercial enterprises of the tobacco industry, and are excluded by the law on monopoly from any other wholesale channels. The 33 provincial-level commercial enterprises, designated by the government as exclusive "wholesalers" of cigarettes, only distribute cigarette products they purchase The plant of Hongta Tobacco Group

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