Issue link: https://read.dmtmag.com/i/699960
14 tobaccoasia FRONT PAGE NEWS 卷首新闻 WORLD Illicit Trade Alarmingly High The latest cigarette trafficking reports have shown the tobacco industry has been right all along. As per a Klynveld Peat Marwick Goerdeler (KPMG) report published on June 8, a total 53 billion illicit cigarettes were consumed in the EU in 2015 alone. This accounts for 10% of the total tobacco market there. The unlawful activities have dented tax revenues by as much as €11.3 billion. KPMG conducts a study every year across 28 European nations including Switzerland and Norway. The data also sheds light on Poland and France, which outdo other countries in illegal tobacco trading. White cigarettes are sourced mainly from Belarus. Almost 1.3 billion white cigarettes originate from Jebel Ali Free Trade Zone in Dubai (U.A.E). Meanwhile, 88% of the trafficked cigarettes are from non-EU countries. Tobacco companies across the world undertook several measures to combat illicit tobacco trade. In May 2016, tobacco major Philip Morris International Inc. (PMI) came up with a new initiative – PMI Impact – to stop such practices. PMI Impact is headed by a seven-member council of external independent experts. These members have extensive experience in the field of law, anti-corruption, and law enforcement. Reynolds American Inc. set up a website - www.thenewtobaccoroad.com, showing how cigarettes are smuggled from lower-tax states in the US to higher-tax ones in the Northeast through I-95. The initiative aims to tackle the problem by raising awareness about the smuggling activities being carried out on the east coast along the highway Interstate 95 – the New Tobacco Road – which has turned into a key transit route for illegal activities. Illicit trade of cigarettes is on the rise. Strict governmental actions in the form of higher excise taxes prompt tobacco players to raise prices. This, in turn, gives rise to smuggling of counter- feit cigarettes at much lower prices. As a result, tobacco players' margins are impacted to a large extent. Moreover, these cigarettes are far more injurious to health than their legal counterparts, which again mars the reputation of tobacco majors. Ethiopia JTI Buys NTE Shares The ministry of public enterprise has confirmed Japan Tobacco International (JTI) has acquired a 40% share of Ethiopia's National Tobacco Enterprise (NTE). Signed by Messelech Wodajo, state minister for public enterprise, the letter notified JTI of the bid confirma- tion and requested the company to make the full payment within 10 days. JTI, making one of the biggest offers in Ethiopia's public enterprises privatiz- ing history, will pay the whole US$510 million while readying for contract signing. The company's offer was more than double that offered by another contender, British American Tobacco. Five bidders had made their respective offers for the acquisition but none came close to JTI's offer. NTE, established in 1942, was the first tobacco monopoly in the country, following the departure of the occupying Italians. After four decades it was restructured and renamed National Tobacco & Match Corporation. Later, in 1999, it was transformed into a share company with 22% of its shares being transferred to Sheba Investment Group for US$35 million. Last year NTE collected BR400 million (US$18.4 million) in profit. New Zealand Tobacco Crackdown Racist A crackdown by the New Zealand government on tobacco has been labeled racist and discriminatory towards Māori and other minority groups by one of the country's leading tobacco researchers. Since 2010 the government steadily increased the tax on tobacco, with the average cost of a pack of cigarettes projected to reach NZ$30 (US$21) by 2020. According to the ministry of health, 18% of New Zealanders smoke regu- larly, with Māori and Pacific island peoples grossly over-represented. Despite government measures, smoking rates among these ethnic groups dropped only slightly in the past nine years, according to the New Zealand Health Survey 2014/2015. The biggest smokers in New Zealand are Māori women – at nearly 42%. Prof. Dr. Marewa Glover, an associate professor at Massey University, said tobacco taxes hit the ethnic group least able to afford them and least likely to quit smoking long term. "The tax on tobacco is a regressive policy that is really hurting people," she said. "The attitude to smokers in New Zealand is pretty rabid, pretty mean, and there is a virulent smoking-basher culture. Māori and Pacific island peoples bear the brunt of this stigma, and Māori women disproportionately, even though they have entrenched stresses in their lives that make it more likely for them to start smoking, and then harder for them to quit." Recently the New Zealand govern- ment announced it would continue to raise the price of cigarettes until 2020, in line with its goal to be smoke-free by 2025. "Thirty years ago smoking was a society-wide issue and taxes worked," said Glover. "But now we can see there are wide disparities in smoking prevalence by ethnicity – with Māori the biggest smokers by far. This group has been paying more each year for cigarettes, even though it is a recognized addiction and now, smoker hatred is so bad in New Zealand that people feel justified giving smokers dirty looks on the street, or telling them to stop and being aggressive. These measures are really hurting people, and they aren't working." Nigeria BAT Seeks TCA Enforcement British American Tobacco (BAT) is calling on all relevant authorities to ensure full enforcement of the Tobacco Control Act (TCA) to achieve the objective of that law, including reduc- tion of product smuggling. TCA, passed by the 7th Parliament of Nigeria and signed into law in 2015, seeks to bring order into the manufacturing, promotion, and distribution of tobacco products in the country. Speaking on the enforcement of TCA almost one year after its enact- ment, Freddy Messanvi, director of legal and external affairs, BAT West Africa stated that "in line with our belief in the value of a balanced, workable, and