New tobacco law will punish retailers – Carreras

More than 10,000 small businesses earning about 29 per cent of their revenues from cigarettes could see a significant fall-off in revenue if provisions in the draft tobacco law get the nod from Parliament, a major industry player has said.

Carreras Limited is of the view that the proposed Tobacco Control Act, 2020 would place a ban on the sale of tobacco in public places.

Managing Director Raoul Glynn said that a sales ban and unreasonable regulation of bars, restaurants, and other outlets would severely affect thousands of retailers in the sector.

“If you read the law and how the law is stated and our interpretation, ourselves and Myers, Fletcher & Gordon, it specifically puts a ban on all forms of sales because every space can be considered a public space,” Glynn told members of a joint select committee considering the bill.

Myers, Fletcher & Gordon is Carreras’ law firm.

Glynn argued that the draft law treats tobacco as an illegal product, which might have been an unintended consequence of the bill.

OPPORTUNITY FOR ILLICIT PLAYERS

The Carreras managing director cautioned that in the event this happened, these businesses were likely to start selling the illicit products that did not conform to regulatory standards.

“The regulation, as it is, will really create an opportunity for the illicit players particularly to benefit much more than the legal market. I don’t think that is the intention of this bill because the aim of it is to reduce consumption,” he said.

Glynn estimated that the size of the illicit tobacco trade in Jamaica was in the region of about $2.1 billion.

Another vexed issue raised by Carreras is that the proposed statute would prohibit the company from offering retailer incentives and promoting discounted products.

“These wholesalers buy the product in bulk. They put it on vans and go and sell it in the areas where there is consumption.

“And this bill says ‘no’, they cannot get a margin for doing that distribution. And it’s unique because you get a margin from everything else. You just would not be able to get it from tobacco anymore,” he said.

On the question of investment in the industry, Glynn contended that the bill would bar persons employed to a public body from investing in Carreras. He said this would prevent thousands of shareholders from investing in the company to supplement their incomes.

Further, he said that many pension funds in Jamaica invested in Carreras stocks because of attractive dividends.

The Carreras boss said that the bill would block the spouse of a custom worker from having a business that sold cigarettes.

“I don’t know if that is the intention of the bill, but I think it really is far-reaching and prevents those persons from investing in a stock that has high yield, and it really disenfranchises them,” Glynn said.

Dr Christopher Tufton, the health and wellness minister, asked Glynn to comment on claims that players in the tobacco industry increased the nicotine content in their products to cause smokers to get addicted.

The Carreras managing director dismissed the claim, saying that the suggestion was false.