New Sri Lanka Restrictions (fwd)

[Robert Weissman <rob@essential.org>]

                               Dow Jones Newswires -- June 24, 1998
                   Sri Lanka To Enforce Curbs On Alcohol,
                   Tobacco Trade

                   Dow Jones Newswires

                   COLOMBO -- The Sri Lankan government is pushing ahead
with moves
                   to curb the "negative" influence ofalcohol and tobacco
usage, including
                   investment restrictions on related industries, officials
said Wednesday.

                   "The government will not allow any liquor or cigarettes
duty-free", said
                   Gamini Laksman Peiris, deputy minister of finance.
Incentives granted
                   under the Board of Investment program, will not be
allowed for firms
                   investing in liquor or tobacco, he said.

                   The government has touted the move as a major shift in
national policy in
                   line with health and environmental concerns.

                   The bill, which seeks a ban on advertisements of
cigarette and liquor
                   products, is yet to be made law. But the government plans
to introduce the
                   bill in parliament within the next six weeks.

                   The government has already banned advertisements on the
state electronic
                   media, and will enforce these regulation on the private
media by Jan. 1,
                   1999. Moreover, promotions of sports and cultural events by
                   manufacturers will be discouraged, according to the
provisions of the bill.

                   The government hopes to raise revenue by increasing
excise duty on these
                   products, which it hopes will lead to a reduction in the
levels of
                   consumption.

                   Stock market watchers say that the intended ban is
unlikely to affect listed
                   companies dealing in such products, since these entities
currently
                   monopolize the local market in breweries and tobacco sectors.

                   But, fallout from the ban on advertisements will further
encourage the free
                   spread of illicit liquor and the illegal entry of
cigarettes, they said.

                   -By Prisca Choksy; 941-336778, 9471-66682
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                       Copyright © 1998 Dow Jones & Company, Inc. All Rights
Reserved. 

Daily News (Sri Lanka)
Wednesday 24, June 1998


Prof. Peiris outlines govt. policy on alcohol and tobacco

Professor G. L. Peiris, Minister of Justice, Constitutional Affairs, Ethnic
Affairs and National Integration and Deputy Minister of Finance, told
Parliament during the debate on the Parliamentary resolution on excise
notification yesterday that the People's Alliance Government of President
Chandrika Bandaranaike Kumaratunga was the first administration to take an
unambiguous stand on alcohol and tobacco policy.. 

He said President Kumaratunga had, in 1997, appointed a Task Force to study
the effects of alcohol and tobacco use with a view to formulating a national
policy and an action plan to eliminate the harm resulting from the use of
these substances. 

The Task Force had, the minister added, carefully studied the issues
involved and had recommended measures in line with current trends in Sri
Lanka. Effective policy initiatives in other countries were also reviewed
and policy recommendations were made to the government based on scientific
evidence and in accordance with policy developments within the WHO and other
international organisations. The broad objective of the policy is to improve
the health and well being of all Sri Lankans, increase productivity and
alleviate poverty in the   ountry by achieving a sustained reduction in the
use of alcohol and tobacco substances. 

The abolition of duty free import of cigarettes and alcohol products, the
establishment of a National Authority on Tobacco and Alcohol (NATA) banning
of direct and indirect advertising of tobacco and alcohol industry are among
several measures proposed by the government in the formulation of national
policy on alcohol and tobacco. 

A press release issued by the Ministry of Justice said: 

"Vigorous action will be taken to curb production and sale of illicit
alcohol, illicit drugs and smuggling of cigarettes with the cooperation of
enforcement agencies, i.e. the judiciary and the police. Divisional
secretariats will receive public complaints regarding the above contraband.
Punitive measures will be enhanced. Duty free importation of cigarettes to
be abolished. 

All sponsorship by tobacco and alcohol industry will be prohibited. Direct
and indirect advertising of these substances will be banned. Finland was the
first nation to ban such activity in 1973. France banned advertising in 1994
which was followed by the European Union which banned advertising last
month. Advertising has been given a broad definition and will include
billboards, public notices and ancillary products carrying the logo of
alcohol and tobacco companies. 

An umbrella authority coordinating policy initiatives regarding tobacco and
alcohol, the National Authority on Tobacco and Alcohol will be established.
It will monitor patterns of usage of alcohol and tobacco and analyse
effectiveness of laws and regulatory mechanisms and advise the government on
related policy issues (for instance the EU has a clearly defined policy with
projected goals to reduce alcohol consumption by 25% in 2005) 

It will also assess the impact of proposed legislation on usage of alcohol
and tobacco use and coordinate with other bodies in community level and
public health activity and health promotion initiatives to avoid duplication
and waste of resources by effective coordination among the several agencies
carrying out public awareness and health campaigns. 

Excise duties will be increased not merely to augment government revenue but
to achieve a sustained increase in the real price of these substances to
reduce consumption levels. 

The limited focus of government policy centred on short-term revenue gains
does not take into account long-term revenue effects and the loss to the
economy due to alcohol and tobacco related harm. It is reported that the
massive loss accruing to the economy far outweighs the benefit received
through excise duties. Cigarette prices, though raised from time to time,
have not kept pace with inflation and will have to be appreciably increased
to match affordability levels as at 1980. 

Tax incentives and other concessions such as BoI status will not be granted
for production, distribution or sale of alcohol and tobacco products in Sri
Lanka. 

They will be considered for local alcohol products' producers to compete in
international markets and duty free imports of alcohol products will be
stopped. 

The government will recognise the right of non-users including children to
live in an environment free of contamination by tobacco smoke, accidents and
other inconveniences caused by usage of alcohol and tobacco. 

There is irrefutable scientific evidence to show that motor accidents and
domestic violence is increased by alcohol consumption. The proposed measures
are consistent with the government's policy of protection of women and
children. 

The proposed constitution includes the right of children to grow up in an
environment protected from the negative consequences of the consumption of
addictive substances harmful to the health and from the promotion of such
substances." 

The minister said the Bill to establish NATA was now finalised and would be
presented to Parliament shortly. The excise notification presented in
Parliament is a consolidation of recent notifications gazetted individually.
A compilation of the several notification has been prepared and gazetted for
easy reference, Prof Peiris said. 

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