Health ministry pushing for new tobacco regulations
Published:Friday | June 7, 2019 | 12:27 AMAvia Collinder - Business Reporter
Even as members of the tobacco industry continue to warn the Government that existing regulations which mostly impact the legal trade will cut away at revenue earned by the State, the Ministry of Health and Wellness is planning to introduce new directives which are intended to further reduce demand for the products.
On Tuesday, Minister of Health and Wellness Dr Christopher Tufton said the ministry is working for the passage of the draft Tobacco Control Bill 2019, which makes provision for the incorporation of the World Health Organisation’s (WHO) Framework Convention on Tobacco Control (FCTC) into domestic law.
The new law, he said, will bring Jamaica in compliance “with its international obligations to protect current and future generations of Jamaicans from the ill effects of tobacco products,” he told the Financial Gleaner.
The WHO FCTC was developed in response to the globalisation of the tobacco epidemic. As at June 15, 2016, a total of 180 countries have become parties to the WHO FCTC. Jamaica has been a party since July 7, 2005.
In 2017, the Ministry of Health and Wellness received technical support from the WHO to accelerate plans to enforce regulations under the framework.
Advertising ban
The work includes full implementation of a comprehensive ban on tobacco advertising, promotion and sponsorship; enacting a comprehensive tobacco control legislation, and reducing demand on tobacco products through increased taxes.
Tufton explained that the Bill, which has been tabled, will also address areas “not adequately covered in the existing legislation, which include tobacco advertising, promotion and sponsorship as well as the prohibition of sales of all forms of tobacco products to minors”.
The WHO FCTC proposes core demand-reduction provisions under articles 614 price and tax measures to reduce the demand for tobacco, and non-price measures to reduce the demand for tobacco.
The convention recommends that taxes be continually adjusted as demand changes. It proposes that “when establishing or increasing their national levels of taxation, parties should take into account, among other things, both price elasticity and income elasticity of demand, as well as inflation and changes in household income to make tobacco products less affordable over time in order to reduce consumption and prevalence”.
It adds, “parties should consider having regular adjustment processes or procedures for periodic revaluation of tobacco tax levels”.
Listed company Carreras has been trying to persuade the Jamaican Government to desist from adding more taxes on its products, claiming that new taxes only drive demand to the unregulated, illegal sector.
In the company’s nine-month report for the period ended December 31, 2018, directors stated that “the company continues to impress upon the Government the need for a sustainable excise strategy in light of the direct relationship between frequent and excessive increases in taxes and the rise in the illicit trade of cigarettes”.
Carreras said that a 21.4 per cent increase in excise duty implemented in March 2017 had resulted in an observed shift of volumes “from the legal to the illegal,” with a resulting impact on government revenues.
Income tax paid over to the Government for the year ended March 2019 fell marginally to $1.4 billion, compared to $1.5 billion the year before. Meanwhile company revenues increased during the year to $12.9 billion, up from $12.55 billion the year before.
Profit for the year was $3.4 billion, compared to $3.48 billion the year before.
The Ministry of Health and Wellness, through the new regulations being contemplated, is also looking at non-tax measures aimed at cutting demand for tobacco products.
Tufton said the ministry has no timeline for the promulgation of the Bill, but noted that key areas of focus will be education, communication, training and public awareness; tobacco advertising, promotion and sponsorship; and demand-reduction measures concerning tobacco dependence and cessation.
The last set of tobacco regulations were rolled out in 2013, setting out a ban on smoking in public spaces under the Public Health (Tobacco Control) Regulations 2013.
Back then, Carreras took the ministry to court, but later withdrew its objections. The court was told that the company and the Ministry of Health and Wellness held discussions on the matter.
The ban on smoking in public spaces and in the workplace was imposed on July 15, 2013.
On Wednesday, Carreras Managing Director Marcus Steele pointed the Financial Gleaner to the company’s efforts to prevent smoking among the young.
In May, it launched Youth Access Prevention, with the company stating that “we strongly believe that the sale of tobacco to anyone under 18 should be vigorously restricted”.
The prevention programme includes placing communication materials in outlets to assist retailers to send the message that they do not sell to minors and, ultimately, to prevent underage access to cigarettes at the point of sale, the company said.
Steele also reiterated his message that the current prevalence of illegal cigarettes in the market, which he said, based on studies conducted across the island, stands at 30 per cent.
“Illicit cigarettes rob our Government of well over $2.5 billion in much-needed revenues annually and inflicts not only irreparable economic and financial loss on public finances, but also damages the social life and health of Jamaica.
Steele said “the reality now is that there is an increasing inability of consumers to pay for legitimate brands, thus increasing the attractiveness and demand for low-priced cigarettes. The demand is such that some illicit cigarette brands are steadily and readily available, and in some cases, consumers ask for these brands by name.”
He said the company has found that half of all cigarettes consumed in Kingston alone are illicit.
The health ministry indicates on its website that tobacco is responsible for 11 per cent of all con-communicable diseases and three per cent of communicable deaths in Jamaica. It said cancer of the trachea, bronchus and lung accounted for 31 deaths per 100,000 of the population age 30 years and over, with 71 per cent of these deaths attributed to tobacco.
It note that the proportion of deaths attributable to tobacco was almost 12 per cent for men and six per cent for women. It quoted a Dr Dingle Spence, who reported that 90 per cent of lung cancer cases seen at Hope Institute were because of tobacco use.