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EUROPEAN NEWS BULLETIN
This excellent weekly update is prepared and distributed by Globalink, the
preeminent international tobacco control internet network.
Robert Weissman
Essential Information | Internet: rob@essential.org
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!# GLOBALink Tobacco - Weekly European News Bulletin
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EUROPEAN NEWS BULLETIN - EU9816 27 APRIL 1998
CONTENTS:
EUROPE - GENERAL
EUROPEAN UNION: Europe set to outlaw tobacco advertising.
EUROPEAN UNION: MEPs light up ad row - backing for tobacco ban triggers
legal controversy.
EUROPEAN UNION: L3bn a year lost on EU fraud and mismanagement.
EUROPE - SPECIFIC COUNTRIES
NORWAY: Increased tobacco smuggling anticipated.
SPAIN: Tabacalera retail offer lifted.
SWEDEN: Tobacco tax reduction regrettable.
UK: Fears over cigarette firm's aid for schools.
UK: Treasury in cross-Channel smuggling purge.
EASTERN EUROPE - SPECIFIC COUNTRIES
RUSSIA: Foreign giants to saturate tobacco market..
RUSSIA: Office centre planned on site of Dukat.
INTERNATIONAL - SPECIFIC COUNTRIES
GUATEMALA: Government may take tobacco action in US.
EUROPE - GENERAL
EUROPEAN UNION: Europe set to outlaw tobacco advertising.
MEPs on the Environment, Public Health and Consumer Protection
Committee have voted overwhelmingly in favour, 36-7, of the text
of the European Union Advertising Directive agreed by Health
Ministers in December last year. In doing so, they have brought
European Union member countries closer to implementing a comprehensive
ban on tobacco advertising. This Committee is the lead committee
scrutinising the Directive, which will come to a final vote at a
plenary session of the European Parliament in the week commencing
11 May. If the Committee's position is accepted by the Parliament,
and this vote increases the likelihood of the full Parliament
endorsing the ban, the Directive will become law within the UK
Presidency and the process of banning tobacco advertising and
sponsorship will begin. This Committee also examined and rejected
the opinion of the Legal Affairs Committee, which following intense
tobacco industry lobbying, claimed recently that the Directive was
drafted under an inappropriate legal base. The decision by the
Environment Committee is a serious setback to the tobacco industry's
campaign to tie the Directive up in conciliation procedures.
Industry lobby group the Tobacco Manufacturers' Association claimed
that the proposals were "ill conceived". However Clive Bates,
Director of ASH welcomed the Committee's decision, hailing it as
a "milestone", he added: "We are absolutely delighted, it is a
sound decision by pragmatic MEPs that want to get something agreed
and implemented. The Committee easily saw through the wrecking
tactics of the tobacco industry and supported the position already
agreed by Health Ministers in December." UK Health Secretary
Frank Dobson also endorsed the decision, saying it was a further
indication of the widespread support for the proposals.
Source: The Independent 23/4/98; Daily Telegraph 23/4/98; Financial
Times 23/4/98; The Times 23/4/98; ASH press release 22/4/98
EUROPEAN UNION: MEPs light up ad row - backing for tobacco ban
triggers legal controversy.
Despite the clearance of the Directive by the Environment Committee,
the tobacco industry is likely to challenge the proposals in the
European Court of Justice on the grounds that it violates the
principle of the single market. The outcome of the German elections
in September may also be crucial. In an echo of the UK last year,
Germany's position may change if Chancellor Helmut Kohl, who is
firmly opposed to the ban, is voted out of office.
Source: Sunday Business 26/4/98
EUROPEAN UNION: L3bn a year lost on EU fraud and mismanagement.
Approximately L760 million was paid out to tobacco farmers under
the Common Agricultural Policy in 1996 - more than five times the
market value for the low-grade product. Aid rate per hectare is
estimated to be L5000. The figures have been released by the National
Audit Office.
Source: The Times 23/4/98; Daily Mirror 23/4/98
EUROPE - SPECIFIC COUNTRIES
NORWAY: Increased tobacco smuggling anticipated.
There is a possibility that the Swedish Government's decision to
lower tobacco taxes could cause an increase in the smuggling of
cigarettes from Sweden to Norway (the Norwegian Government raised
tobacco taxes in its latest State budget). Following the 14%
reduction in tobacco tax a pack of cigarettes in Sweden will cost
SEK35 (US$4.4) whereas the price in Norway is currently SEK58.
The national organisation of retail and service trade fears that
the Swedish tobacco tax cut will result in increased border trade
between Sweden and Norway - there has been a 20% increase in border
trade in the past year.
Source: Dagens Industri (DI) 16 Apr 1998 p.15
Language: SWEDISH No. 06614479
Source: Information Access Company 24/4/98
SPAIN: Tabacalera retail offer lifted.
The Spanish Government is to increase the number of shares
available in the Tabacalera sell-off. Apparently, this is in
response to the high domestic demand for shares.
Source: Financial Times 21/4/98
SWEDEN: Tobacco tax reduction regrettable.
The Minister for Social Affairs, Margot Wallstrom has voiced
her concerns over the decision of the Swedish Government to reduce
the level of tobacco tax. Minister Wallstrom fears that tobacco
consumption is likely to increase because of the tobacco tax cut,
she will meet the Committee for People's health later this month
(April) in order to discuss preventive measures. However, the
Minister has also gone on record as saying that in her opinion,
some of the tax rises implemented in the past were probably too
high. It seems that the increase in the Government's income through
the tax rises in 1997, which was estimated at SEK 2.5bn (USD 0.3bn),
turned out to be almost negligible.
Source: Svenska Dagbladet (XUX) 16 Apr 1998 p.5
Language: SWEDISH No. 06614477
Source: Information Access Company 24/4/98
UK: Fears over cigarette firm's aid for schools.
Manchester Tobacco, manufacturer of the Regatta cigarette brand,
is working with local government councils to provide funds to schools
in disadvantaged areas. The company is among the businesses supporting
a bid by Salford and Trafford councils to locally manage schools, a
bid made possible by central Government's education action zones
initiative (the education zones are intended to raise academic standards
in deprived areas and ministers want to encourage business sponsorship
to improve management skills in schools). The education committee is
hoping that the tobacco company's involvement will stop at management
advice. Clive Bates, Director of ASH, said that tobacco companies should
be kept at a distance from schools. He said: "The fact that tobacco
companies are gaining access to schools on the back of a Government
initiative is sick."
Source: Sunday Times 19/4/98
UK: Treasury in cross-Channel smuggling purge.
The UK Government has announced new penalties for cross-Channel
smuggling. These include heavy fines (L250 and restoration of 50%
of the duty on the seized goods for a first offence, L1,000 plus
restoration of the full duty for a second offence) and the possibility
that persistent offenders could lose their driving licence and have
their vehicle confiscated. Publicans and restaurateurs caught selling
the contraband goods could also have their licences revoked. The trade
in contraband tobacco and alcohol is estimated to cost the Treasury
nearly L1 billion a year in lost revenue.
Source: Financial Times 23/4/98; Daily Telegraph 23/4/98; The
Independent 23/4/98; The Times 23/4/98; Daily Mail 23/4/98
EASTERN EUROPE - SPECIFIC COUNTRIES
RUSSIA: Foreign giants to saturate tobacco market.
It is expected that major US and British tobacco concerns Philip
Morris, RJ Reynolds, BAT and Rothmans will produce about 260 bn
cigarettes in Russia in 2002. If this happens, the Russian tobacco
market will be saturated by the products of these giants. The total
size of the Russian tobacco market is about 250 bn cigarettes per year,
with an annual growth rate of 2%. According to the market research
agency Business Analytica Europe, tobacco production in Russia is
very profitable. For example, the period for returns on investment
for a factory worth US$ 100 mn with an annual production capacity of
30 bn cigarettes is only two to three years. A calculated profitability
of such factory is about 40%.
Source: Ekspert (ESK) 13 Apr 1998 p.60
Language: RUSSIAN No. 06614518
Source: Information Access Company 24/4/98
RUSSIA: Office centre planned on site of Dukat.
US-based tobacco company Liggett, which owns 58% of the Moscow-based
cigarette factory Dukat, has decided to move the plant outside the
centre of Moscow. Liggett intends to build a new office on the site
of Dukat, it has signed a collaboration agreement with the American
developer Apollo Real Estate, to oversee the new development.
Construction is due to start in 1999.
Source: Finansovye izvestiya (ADQ) 16 Apr 1998 p.1
Language: RUSSIAN No. 06614525
Source: Information Access Company 24/4/98
INTERNATIONAL - SPECIFIC COUNTRIES
GUATEMALA: Government may take tobacco action in US.
The Central American state of Guatemala is exploring legal
action against two tobacco companies to recover health-care
costs associated with smoking. The Guatemalan attorney-general,
Mr Acsiclo Valladares Molina, has employed a US law company to
examine the possibilities for litigation to recover money - around
$500m - spent by the republic on healthcare. One of the tobacco
companies that the state could file a claim against is Tabacalera
Nacional, a subsidiary of BAT. The other is Tabacalera Centroamericana
which is controlled by Philip Morris.
Source: Financial Times 24/4/98