Regulatory News South Africa

WHO proposals will hit tobacco industry hard

The World Health Organisation's plan to ban ingredients used in making blended cigarettes has been greeted by howls of outrage from the tobacco industry.

The International Tobacco Growers' Association (ITGA) says regulations proposed by the WHO's Framework Convention on Tobacco Control will cost the jobs of millions of people worldwide.

International treaty

Signed by 169 member countries, including SA, the convention aims at the ultimate elimination of what it refers to as the global smoking "epidemic", which affects more than a billion smokers.

Its status as an international treaty makes the convention unusually powerful in getting the secretariat's proposals made law by national governments. Its 169 national signatories make it the UN's most widely ratified treaty.

Ingredient ban

Draft guidelines of articles 9 and 10 of the convention recommend a ban on ingredients that are added to cigarettes blended from Burley, Oriental and Virginia tobaccos. The convention's secretariat is also expected to revise the requirements for labels and health warnings on cigarette packaging.

Ahmed Ouma of the convention secretariat, based in Geneva, Switzerland, will not at this stage name the individual ingredients to be "regulated".

He says an official schedule of additives affected will be made public by 15 September 2010. It includes ingredients that make smoking attractive, "especially to young people", he says.

"These additives give tobacco an attractive taste and smell and entice young people into the habit of smoking. If allowed, these ingredients will make it more difficult to combat the smoking epidemic."

The ITGA says the ingredients include flavourants that distinguish various brands of cigarettes from each other.

"It is the blend of these additives that make Marlboro, for example, the most widely consumed cigarette brand in the world. It is what gives a cigarette its taste and makes individual smokers prefer one brand to another," says Francois van der Merwe, the association's representative in Southern Africa.

Menthol is among the ingredients to be banned.

Industry uproar

Van der Merwe says the tobacco industry is especially bitter about being subject to regulation by the convention without having been consulted by the body.

"The convention clearly states, in its article 5.3, that any engagement with the tobacco industry is discouraged," he says.

Ouma laughs off the complaint: "Our reason for not inviting the tobacco industry to our deliberations is simple. They are not welcome. They cannot expect to sit at the same table as us."

He is equally dismissive about the association's claim that the proposals, if implemented, will cost many livelihoods.

"That is a lie. The tobacco industry does not have a divine right to the money that is spent on cigarettes.

"The money that is used to buy tobacco products can just as easily be spent on vuvuzelas and other things that do not kill people like tobacco does - and jobs will then be created in other areas," Ouma says.

"Jobs will follow the money, as they always do."

'Devastating' impact

Van der Merwe, interviewed shortly before flying to Malawi for an urgent meeting on the issue with representatives from other tobacco-growing countries in Southern Africa, disagrees.

He explains that Burley and Oriental tobaccos cannot be used to make cigarettes without additives, though Virginia tobacco can. "About half the cigarettes sold throughout the world - five to six trillion every year - will be affected. It means that growers of Burley and Oriental tobaccos will be put out of business," he says.

Malawi, the world's biggest producer of Burley, would see its tobacco industry destroyed overnight, with devastating consequences. "About 700000 farmers cultivate tobacco in Malawi and 100% of its crop is sold to international cigarette makers," Van der Merwe says. "An estimated 70% of Malawi's population derives an income from tobacco and related industries."

Similarly, Mozambique produces 180mkg of Burley tobacco through 100000 farmers and the people who work for them, he says.

SA has a very small tobacco industry. Like those in Zimbabwe, SA farmers grow mostly Virginia tobacco.

But Van der Merwe says the country will be affected by the ban. "If the region is disadvantaged, all of us, including SA, are disadvantaged."

'Smokers will switch', not stop

Van der Merwe says it is unlikely that after the hardship caused by implementation of the convention's proposals, there will be a significant reduction in smoking. "We believe the vast majority of smokers will simply switch to Virginia cigarettes, which can be made without the ingredients that are to be banned."

He believes the "politically correct bureaucrats" of the convention secretariat are cheating themselves of valuable input by denying the tobacco industry a right to speak. "We are not opposed to the sensible regulation of our industry and we are not opposed to taxation," Van der Merwe says. "And there is no argument from us about the health risks associated with smoking."

Underground market

But he says the association is concerned about the lack of balance in "draconian" legislation and regulations that are creating a growing illicit trade in cigarettes - driving the market underground.

"Between 8% and 12% of cigarettes consumed globally - about 650bn - are through illicit trade. In countries that have gone overboard in antismoking regulation, like SA, Australia, New Zealand and others, the illicit trade has grown to between 20% and 25% of the total."

He says about R4,5bn/year is lost to the illicit trade in cigarettes - and about half of that would be due to government in taxes.

And while the cost of complying with increasing legislation on cigarettes is growing for the legal industry, there are no such constraints on the manufacture of cigarettes for the illicit trade.

'Opening the door...'

"We are distressed that the convention does no thorough scientific research into the effects of its policies. It is simply opening the door to illicit trade in cigarettes," Van der Merwe says.

And while the tar and nicotine content of cigarettes is regulated, the tobacco industry's tests on those sold illicitly reveal levels well above the legal maximums, he says.

Cost increase

Another move that will push up compliance costs is the introduction of "low ignition propensity" cigarette paper, aimed at reducing fires resulting from smoking.

"They will reduce the pleasure from smoking since they don't burn as easily and they will increase the costs of compliance, but the industry will, as always, obey the law," Van der Merwe says.

"Of course, the illicit industry won't be concerned about it. It will be another shot in the arm for them as they are able to keep costs down and take a greater share of the market from us."

Source: Financial Mail

Source: I-Net Bridge

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