Health activists push for tougher cigarette pricing laws

Aim to prevent multinational tobacco firms from exploiting regulatory loopholes

ISLAMABAD:

Health activists have demanded a tightening of laws so that multinational cigarette makers are not able to tread into the grey areas.

“No manufacturer or importer of cigarettes can introduce or sell a new cigarette brand variant at the same existing brand family at a price lower than the lowest actual price of the existing variant of the same brand family. For this restriction, the current minimum price variant of the existing brand means the lowest price of a brand variation on the day of the announcement of Budget,” Malik Imran, representative of Camp Gain for Tobacco-Free Kids, quoted the Federal Excise Act, 2005 as saying.

He said it has been observed that Pakistan Tobacco Company, a multinational subsidiary of British American Tobacco, has introduced a new product, Capstan International, at the price of Rs164. “This, prima facie, is a clear violation of the law. The existing brand is by the name of Capstan by Pall Mall, sold at Rs212,” he said.

He said no company is allowed to sell any product below the price set by the government in the Federal Excise Act 2005. Similarly, said Malik, Philip Morris International, another multinational is flagrantly violating not only the above restriction imposed under the law but also another restriction which states: “For levy, collection and payment of duty at the rates specified in column 4, against serial number 9 and 10, no cigarette manufacturer shall reduce retail price from the level adopted on the day of the announcement of the latest budget.”

Marlboro brand belonging to Philip Morris International falls in serial number 9. However, they have introduced “Crafted by Marlboro” in serial number 10 (which attracts a lower tax levy). This is specifically prohibited under the law and any attempt to use fanciful labels to bypass the law is a direct violation of the laws of Pakistan, aimed at increasing smoker numbers.

The principle behind increasing taxation is to make cigarettes more expensive; whilst these two multinationals are finding new ways of abusing Pakistani laws. Dr Hassan Shehzad, from IIUI, said, seemingly, these actions run counter to the WHO Framework Convention on Tobacco Control, to which Pakistan is a signatory.

The WHO guidelines, he said, mention that “Parties (countries) should require the tobacco industry and those working to further its interests to operate and act in a manner that is accountable and transparent. The tobacco industry should be required to provide Parties with information for effective implementation of these guidelines.”

Malik Imran said it is illegal because it is avoiding tax. Tobacco expert Dr Muhammad Zia said such introduction and dissemination/marketing of the products falls in the category of promotion of the tobacco product, which is completely illegal and banned in Pakistan by law. This is an additional violation of the law. “Neither a company nor any retailer can sell cigarettes by violating federal excise law.”

Published in The Express Tribune, March 28^th, 2024.