[Intl-tobacco] Authors say don't follow Canadian example when it comes to curbing tobacco smuggling (fwd)

[Robert Weissman]

Authors say don't follow Canadian example when it comes to curbing tobacco=
=20
smuggling
Source: CNEWS, Thursday, 10/12/00

TORONTO (CP) --The world needs an arms-control style convention to stop
the massive problem of international cigarette smuggling, two European
researchers write in this week's British Medical Journal.

=A0A key feature of their argument: Do not, under any circumstances, follow
the Canadian example and cut tobacco taxes to try to curb smuggling.

=A0"I'm afraid that's the message. Don't, for goodness sake do not do what
they did in Canada," co-author Martin Raw said Thursday from London.

=A0"The results were an absolutely disaster," said Raw, a public health
consultant and senior lecturer at the school of medicine at the University
of London.

=A0His co-author is Luk Joossens, a consultant with the International Union
Against Cancer in Brussels.

=A0The article, published Friday in the British Medical Journal, was timed
to coincide with World Health Organization public hearings -- held
Thursday and Friday -- in Geneva on a proposed international framework for
tobacco control.

=A0Next week, governments from around the world will sit down in Geneva to
begin the first phase of negotiations for the framework. A final text is
to be written by 2002.

=A0The framework must address cigarette smuggling, which is out of control
around the world, the article says, noting about six per cent of the
world's cigarettes are sold tax-free on the black market.

=A0Raw and Joossens aren't talking about small-scale smuggling, where
someone drives in a van to a place where cigarettes are cheaper and
smuggles them across a border. They call that "cross border bootlegging"
and say it's a tiny portion of the smuggling problem.

=A0The real issue is what they call "container fraud" -- where tobacco
manufacturers export massive supplies of cigarettes from one jurisdiction
to another. They sell the cigarettes, on which no taxes were paid in the
country of manufacture, to dealers, who in turn sell them to smugglers who
bring them back into the country of origin, Raw said.

=A0"That's the main smuggling market. A third of global cigarette exports
are estimated to disappear into the contraband market."

=A0Some governments -- Canada is a prime example -- try to combat smuggling
by cutting tobacco taxes, which make up anywhere from a low of 52.9 per
cent of the cost of a pack of 25 (in Quebec) to a high of 71.2 per cent
(in Newfoundland).

=A0Canada and several central provinces slashed tobacco taxes in 1994 in th=
e
face of widescale cigarette smuggling through Mohawk reserves that
straddle the U.S.  border in Quebec and Ontario.

=A0A study released last year by Physicians For a Smoke-Free Canada looked
at the implications, five years on, of the decision.

=A0Youth smoking increased. Overall smoking decreased, but more slowly in
the provinces with low taxes. Federal coffers lost $5 billion. And
cigarette makers, who seized the occasion to raise their prices, ended up
with an additional $1 billion in revenues, said executive director Cynthia
Callard.

=A0Still, Callard doesn't fault Ottawa and the provinces for cutting tobacc=
o
taxes in 1994, but wonders why nothing has been done in the interim to
find another way to deal with the problem.

=A0"It was a crisis," she said of 1994. "And decisions reached in a crisis
are never optimal. But our major concern now is that it's six years later
and there's been no progress."

=A0Raw and Joossens noted that Spain had a similar problem with smuggling
from Andorra, even though Spain had some of the lowest cigarette prices in
the European Union.

=A0Instead of following the Canadian example, Spain worked with a number of
neighbouring governments to crackdown on smuggling and has made serious
inroads. In 1995, contraband cigarettes made up 15 per cent of Spanish
cigarette consumption. In mid-1999, the figure had dropped to five per
cent.

=A0Raw insisted that cigarette makers who want to export should have to jum=
p
through some of the same types of hoops that gun manufacturers do.

=A0"We need an international convention to treat cigarettes a bit like arms
-- you must have end-user certificates or end-market certificates. And the
onus must be placed on the manufacturers to prove that if they had English
health warnings on them, that they went to England via legal routes."

=A0Some tobacco manufacturers, such as British American Tobacco, have said
they believe in "sensible regulation." But Raw warned tobacco
manufacturers should not have a seat at the table when controls are drawn
up.

=A0"My personal view is that this is not an industry that you negotiate
with.  Because this is not an industry that is trustworthy. Not remotely.

=A0"You regulate. You do not negotiate with them."

=A0