India delays implementation of pictorial warnings on tobacco packs

The Indian government has once again postponed the implementation of pictorial warnings on cigarette and beedi packets.

According to the Press Trust of India, the deadline to have pictorial warnings displayed on tobacco packs has been pushed from December 1, 2008 to May 31, 2009. This is the fifth time that the deadline has been deferred, said The Indian Express.

Lobbying by the tobacco industry is reportedly the main reason behind the delay in the implementation of the pictorial warnings.
 

Source: Datamonitor 27 November 2008
Link: http://tiny.cc/onIyn

Treasury faces £5bn bill as British American Tobacco wins dividends tax case

The Treasury is potentially facing a £5 billion black hole after suffering a High Court defeat at the hands of British American Tobacco yesterday. 

The ruling comes days after Alistair Darling, the Chancellor, admitted that Britain’s public finances had deteriorated sharply since his March Budget and unveiled plans to borrow billions of pounds.

BAT, the world’s second-largest cigarette maker, had challenged HM Revenue & Customs over its policy of taxing dividend payments from foreign subsidiaries. The verdict paves the way for a £1.2 billion tax refund for BAT and exposes HMRC to a far bigger payout. That is because BAT was fighting a test case on behalf of some 20 multinational companies which, if successful, will spark similar cases.

The companies claim that HMRC’s policy is illegal under European law because the UK does not tax similar payments from domestic companies.

Significantly, BAT was chosen by the 20 to fight the test case because the circumstances of its situation are more complex than those of the others. The 20 have been assuming that, if BAT succeeds, they too will. 

Although BAT said that it expected to recover about £1.2 billion, HMRC declined to say how much it might lose from the decision. However, finding for BAT, Mr Justice Henderson said that the final sum claimed from HMRC could be as much as £5 billion.

Last night experts gave warning that HMRC would be almost certain to appeal against the ruling, while BAT admitted that it could be four years before the issue was finally resolved. HMRC does not have to pay any refunds while the legal process is continuing. A spokesman for HM Treasury said: “We will need to consider the specific points in this judgment before responding further.”

Source: The Times 28 November 2008
Link: http://tiny.cc/adbUs

Canada: Hamilton eyes ban on smoking in public housing

City health officials in Hamilton say they're meeting with public housing tenants about a plan to ban smoking in their homes. 

Dr. Chris Mackie, associate medical officer of health, said yesterday that his department is consulting with tenants about several options -- including offering smoke-free buildings or grandfathering the move so it would only apply to new tenants -- instead of an outright ban.

"I think most people think that we're going to be locking them up for smoking," said Mackie. "That's not our intention. This is about creating a choice for people who want to live in and plan in smoke-free environments."

The city is currently preparing a report that will examine the implications of banning smoking in public housing, beaches and parks.

Source: Toronto Sun 28 November 2008
Link: http://tiny.cc/mydqH

Johnson backs extra QOF smoking targets

GPs' pay could be linked to their success in getting patients to quit smoking.
Health secretary Alan Johnson told the health select committee that adding smoking cessation rates to the quality framework was 'certainly something we are looking at'.

At present, practices earn points simply for recording whether or not patients smoke. But during an evidence session on health inequalities, committee chairman and Labour MP for Rother Valley Kevin Barron asked whether rates of referral to specialist stop-smoking services should be added to the framework.

'It does seem extraordinary, when smoking is the number one determinant of health inequalities, that the quality framework ends at the recording and not taking action,' he said.

The health secretary replied that this was a 'damn good point', and added: 'We are looking at that specifically in our discussions next year.'

Source: Health Care Public, 27 November 2008
Link: http://tiny.cc/Gqza0 

Earnings up at Imperial Tobacco

Imperial Tobacco, the world's fourth-biggest cigarette maker, has posted a 15 per cent rise in annual earnings. The British maker of Lambert and Butler, West and Gauloises cigarettes saw net tobacco revenue rise by 60 per cent to £5.2 billion, up from £3.28bn last year, with demand for tobacco remaining strong.

Imperial bought Franco-Spanish rival Altadis in January for £11bn to add brands such as Gauloises and Fortuna, and launched a £4.9bn rights issue in May to part fund the deal, with the rest covered by debt. The acquisition, along with restructuring costs, saw its profits from operations for the year drop 18 per cent to £1.15bn, down from £1.4bn last year, but the company said it was on track to achieve the savings planned from its purchase of Altadis.

Adjusted profits excluding one-off items, were up 51 per cent to £2.23bn, from £1.47bn. Following the acquisition of Altadis the multinational group has 58 manufacturing sites and employs around 40,000.

The company said it was effectively managing increasing levels of regulation around tobacco sales. In the UK, despite the initial impact of public smoking bans, profits were up, although this was down to price increases and reduced costs. The company sold 21.4bn cigarettes in the UK over the last 12 months, down from 22.9bn in 2007. Strong performances were seen in Eastern Europe, Africa and the Middle East however, with the company expecting this momentum to continue.

Gareth Davis, chief executive, said: "We are comfortable with our current financing position and our business is highly cash generative. We are resilient in times of economic downturn and remain focused on efficiently integrating the two businesses, whilst maximising the enhanced growth opportunities presented by our versatile portfolio and extended geographic reach."
 

Source: Scotsmand.com 28 November 2008
Link: http://tiny.cc/UJP7s

A wisp of public-spiritedness

Tobacco firms want the right to participate in global efforts to limit the lethal consequences of nicotine addiction—but 160 governments say no

Some people would say it was tantamount to foxes asking to be consulted about the welfare of chickens. But the global tobacco industry, while no longer denying that its products do terrible damage, has long insisted that in any discussion about how to limit the medical effects of the weed, it is a legitimate partner.

That claim was emphatically rejected by health officials from 160 countries after a week’s deliberation in South Africa which concluded on November 22nd. In a statement that grew steadily tougher in the course of the meeting—to the dismay of cigarette firms and the delight of their adversaries—it was proclaimed that there is a “fundamental and irreconcilable conflict” between the interests of the tobacco industry and the cause of public health.

In a non-binding but morally powerful set of guidelines, it was also laid down that interaction between governments and tobacco firms should be limited to what is “strictly necessary” and kept transparent through public hearings and disclosure of records; voluntary or non-enforceable arrangements should be barred. In other words, anything that could make tobacco firms look like decent citizens, doing their bit for public service, ought to be avoided.

Isn’t the reference to “irreconcilable conflict” simply a statement of the obvious? Far from it, whichever side of the trenches you occupy. Tantalising but outrageous attempts to glamorise smoking through billboards and films may largely be a thing of the past, but these days the industry uses subtler tactics to burnish its image as a business that, despite everything, cares about its consumers. How much credence governments give these tactics is an important issue.

Critics claim that firms, while proclaiming their concern for health, use insidious methods to infiltrate and water down the efforts of the World Health Organisation to combat the scourge of tobacco. (It is a habit which by the WHO’s calculation claims more than 5m lives a year—a figure that may double by 2030. In the latest piece of dire news about tobacco and health, a study in The Lancet, a British medical journal, says 100m Chinese men may die early from smoking between now and 2050.)

The countries that conferred in South Africa were all parties to the WHO’s Framework Convention on Tobacco Control, the so-called global tobacco treaty, which commits signatories to stop the promotion of smoking through advertising, and also to protect health policies from interference by the tobacco industry.

According to foes of the industry, such protection is hard to ensure. Especially in countries where governance is weak and people are poor, tobacco companies can make themselves useful by organising “conferences” where, for example, the value of advertising bans is mocked. And ministers can be induced to water down bans on smoking in public places by decreeing more areas where people can still puff away. In what critics call a subtle form of self-promotion, companies can engage in campaigns against “youth smoking” which actually serve to publicise their brands. In Zambia, for example, British American Tobacco (BAT), the second-largest player in the global business, has been involved in a campaign to stop the sale of cigarettes to people under 18.

And BAT, as it happens, was quick off the mark in denouncing the outcome of the South African meeting. It emphasised what may be one of the industry’s more plausible arguments in favour of being treated as a legitimate partner: the need to crack down on cigarette smuggling (as urged by the global treaty) which tends to rise as high taxes are slapped on tobacco (also recommended by the treaty).

The guidelines adopted in South Africa, so BAT complained, could ban most public communication by tobacco companies, minimise contact between them and governments and ban the display of tobacco products in shops. Such “extremism” would obstruct the efforts of the “legitimate tobacco industry” to block illegal sales to children, fight illicit commerce and invest in “safer” products. (For health advocates, the very idea of “safe” forms of tobacco is misleading.) Another proposal that won an approving mention at the South African meeting—plain packaging for all cigarettes—would help counterfeiters and smugglers, BAT says.

Some critics would say Big Tobacco has been a latecomer to the war against smuggling. In years past, the European Commission used to accuse well-known firms of colluding with smugglers by slipping them merchandise that was destined to enter the European Union illegally. However in 2004, the EU announced a deal with Philip Morris International, a global tobacco concern, under which the company vowed to pay $1.25 billion over 12 years and take a series of anti-smuggling measures. European officials at the South African meeting said they couldn’t fight contraband without at least talking to legal producers. (Other foot-draggers at the gathering were the governments of Japan and China, both of which have big stakes in the tobacco business.)

The war against smuggling will always be hard in rich parts of Europe where the retail price of cigarettes is many times higher than in nearby places like Ukraine and Serbia. In recent months, European customs officers have complained of a tidal wave of contraband cigarettes arriving from the Russian enclave of Kaliningrad.

But industry officials say an explosion of contraband in Canada—normally seen as a law-abiding place—is another example of what happens when regulation (in the form of high taxes and a ban on all displays in shops) is exceptionally tough. Nearly half the cigarettes smoked in Ontario are now illegal, BAT said in its response to the South African statement.

The United States is a conspicuous absentee from the WHO’s war against smoking. The tobacco treaty is one of many instruments of international law that America helped to design, only to hold off from ratifying it because of stiff opposition on Capitol Hill. For example, Richard Burr, a senator from North Carolina, calls the treaty a surrender of sovereignty which would punish the United States by forcing it to fund the lion’s share of a global anti-tobacco drive with no corresponding rise in influence. Moreover, he says, the drafters of the treaty refused to listen to the “producers of tobacco”—a sure sign that their purpose was not “to bring a safer product to market” but to eliminate the production of tobacco altogether.

On the last point, at least, tobacco’s sternest foes might concur with the senator. However, some American legislators have taken a different view. In 2005 a group of 11 senators wrote to George Bush urging him to send over the tobacco treaty for consideration; they noted that tobacco claims more than 400,000 American lives a year. One of the signatories was a senator whose appealingly husky voice may owe something to his own weakness for the weed—Barack Obama.

Source: The Economist 28 November 2008
Link: http://tiny.cc/HoMkY