Tobacco Asia

tobaccoasia 31 Approximate Market Shares (in %) Sources: Nielsen Retail Audit, Taiwan National Audit Office, TTL, BAT, JTI Company 2016 Historical 2015 2014 2013 JTI 40.00 39.20 38.40 39.40 TTL 27.00 27.99 n/a n/a IMP 11.00 n/a n/a n/a BAT 10.02 10.17 10.08 9.30 PMI 8.50 n/a n/a n/a Others 3.48 LD Red Mevius Original Blue Winston Red Stiff Restrictions and Heavy Fines Taiwan's "Tobacco Hazards Prevention and Control Act" (THPCA) is one of the strictest anti-tobacco leg- islations in the world. It prohibits any form of tobacco product advertising and promotion. Manufacturers or importers in violation of any related restriction are pe- nalized with fines ranging from NT$5-25 million (ap- prox. $160,000 to 800,000) and can be fined for each and every subsequent violation. Although owned and operated by the state, TTL enjoys no preferential treat- ment in this respect and must comply with all THPCA regulations just as much as its competitors. Regarding tobacco sales, marketing, promotion and advertising, THPCA prohibits the following: • Advertising through radio, television, film, video, electronic signals, internet, newspapers, magazines, billboards, posters, leaflets, notifications, announce- ments, reference manuals, samples, postings, dis- plays, or through any other written, illustrated, physical or digital recording form. • Using journalist interviews or reports to introduce tobacco products, or using other people's identity with- out proper authorization to conduct promotions. • Using discounts to sell tobacco products, or us- ing other items as gifts or prizes for such sales. • Using tobacco products as gifts or prizes for the sale of other products or for the promotion of other events. • Packaging tobacco products together with other products for sale. • Distributing or selling tobacco products as indi- vidual sticks, in loose packs or sheathed. • Using merchandise with brand names or trade- marks identical or similar to tobacco products in con- ducting promotions or advertising. • Using tea parties, meal parties, conferences, testing events, concerts, lectures, sports or public interest events, or other similar methods to conduct [tobacco product] promotions or advertising. • Any other methods prohibited by competent authority at the central government level through public notice. have evidently not led to any substantial decrease in smoking prevalence. Neither have the smoking bans currently enforced in practically all indoor places and increasingly also extended to outdoor locations. Instead, Chan argued, "high-quality regulation" can only be achieved if the govern- ment can be encouraged to adopt the OECD's "better regulation" principles, which are endorsed by numerous international organizations, such as APEC. JTI scoops market leader position Despite all adversities, JTI Taiwan hardly finds itself in a corner position, though. The company claims to have consistently held market leadership since 2005, its market share in 2016 clocking in at a very comfortable 40%, putting it ahead even of native TTL (see table 2). "We are motivated by our core values – 'enterprising, open, and challenging' – which help us to maintain the highest standards and act with integrity in all that we do," Chan said. But corporate mantras aside, TOBACCO ASIA has a hunch that the ready availability in Taiwan of many of JTI's globally very well-known and popu- lar brands also might have something to do with the company's success. BAT advocates OECD principles British American Tobacco entered the market in 1995 in the form of B.A.T. Services Limited (Tai- wan Branch). Today the company sells such global favorites as Lucky Strike, Pall Mal,l and Dunhill, but also less well known ones like Vogue and others. Having held a rather consistent market share of around 10% since at least 2014, BAT Taiwan cur- rently has no immediate plans to launch any new brands, according to company spokesperson So- phia Yang. She also echoed what JTI Taiwan had observed, namely that a further tightening of the tax and regulatory structure would exacerbate il- licit trade, and that the government should adopt the OECD's "better regulation" principles for a legislative process that takes into account open- ness, participation, accountability, effectiveness, coherence, and proportionality. Courtesy of JTI Taiwan

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