IN RECENT WEEKS we have seen Bob McDonnell, Governor of the US state of Virginia, lobbying the Taoiseach – urging Enda Kenny to reject Minister Reilly’s plain cigarette packaging legislation. Our Oireachtas Health Committee is going to be forced to invite members of the Tobacco Industry into us, so that we can hear their views on the plain packaging bill.
This is not because we have a legal requirement to invite them in, but rather because the Government knows that the tobacco industry will use every legal ploy to drag out and delay the implementation of the legislation. The government is inviting them in to avoid the tobacco industry gaming the legal system with Supreme Court appeals.
We are not alone in this. In 2010 the government of Namibia brought in tobacco control legislation, but has been under threat of legal sanction ever since. As the New York Times reported, they have not been able to implement their legislation for fear of ruinous legal costs.
Dr Margaret Chan, Director General of the World Health Organisation, has argued that legal actions in Australia, Norway, and Uruguay were “deliberately designed to instill fear” in countries attempting to reduce the damage done by smoking.
Until Australia’s innovation on plain packaging, governments have attempted to reduce demand for tobacco by increasing the price of tobacco products through taxation.
Tobacco companies have been able to take advantage of the increases tobacco duty in two ways: firstly, tobacco companies have been able to increase their profits from tobacco products in tandem with the increases in tax. According to the Financial Times for example, Imperial Tobacco’s operating margin increased in the UK from 49 per cent in 1996 to 68 per cent 2012 – the same packet of cigarettes is more profitable now than it was five years ago.
Secondly, the tobacco industry has facilitated the smuggling of cigarettes, which has allowed them to circumvent regulation while still supplying the market with cheap cigarettes – make no mistake, the tobacco companies get paid for every smuggled cigarette. Proportionally, the problem of ‘counterfeit cigarettes’ is so small it almost does not exist.
This plain packaging bill is an attempt to hit the tobacco industry where it hurts; premium cigarettes are the main cash-generation engine of the industry.
With tobacco products undifferentiated by branding, they will be forced to compete on price alone, reducing the profits on tobacco, and reducing the value of each additional smoker.
The tobacco industry’s response to this, according to Shane MacGuill, a tobacco analyst at the Euromonitor research group, is to flex its muscles as “these measures are the ones that will hit consumption and their bottom line.”
One example of this is that the near-kleptocratic government of Ukraine is taking a case, through the World Trade Organisation, against Australia for its plain packaging legislation. The case against Australia is being funded by British American Tobacco. Ukraine sends less than €20 million worth of exports to Australia.
Meanwhile, the case taken against Uruguay became so costly that the state would have had to abandon its tobacco control law had the Michael Bloomberg’s philanthropic foundation not picked up the tab.
The profits from the tobacco industry are so large as to be surreal; according to the tobacco atlas the top six tobacco firms internationally in 2012 retained profits (after taxes and dividends) of almost €30 billion. That is more than twice what Ireland will spend on healthcare next year.
This is a bad industry, which sells a bad product that kills about half of its consumers – consumers which it recruits as children. We should limit our interactions with this industry as much as possible.
We have a legal obligation under the UN’s Framework Convention on Tobacco Control to limit our interactions with the industry – obligations which were flouted by the Government earlier in the year when the Taoiseach, the Minister for Justice, and the Minister for Finance met with representatives of the tobacco industry though their lobby group ITMAC.
The industry are past masters at creating false flag organisations. FOREST, for example, allegedly a grassroots movement for smoker’s rights, is a lobby group financed to the tune of €350,000 every year by the tobacco industry. It was initially to be funded by the mom-and-pop tobacconists of the UK but when only four of the ten thousand corner stores actually became members of FOREST, they had to give up the pretence and fully fund it.
Today I am introducing a Bill which I hope will get government support, a Bill which would limit all interactions between the tobacco industry and their false-front lobby groups and officials of the State, and so ensure that no future government is duped as this one was.
John Crown is a consultant oncologist at St Vincent’s Hospital in Dublin and a Senator representing the National University of Ireland.
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