Tuesday, June 24, 2008

Sin taxes and such . . .

The Non-Smokers Rights Association (NSRA) has released their latest backgrounder on Canada’s tobacco industry and its markets.

In it they note advances made in tobacco control; the Tobacco Act of 1997, restricting tobacco advertising and banning sponsorship of sporting and cultural events, regulations requiring picture-based health warnings on cigarette packages, smoking bans in public places and workplaces, increases in sin taxes on tobacco, etc.

These measures, claim the NSRA, have contributed to a decline in smoking prevalence. However, they fail to mention that only legal cigarette sales reported by the tobacco industry were used to determine smoking prevalence. They ignore the fact that 25% to 40% of the current cigarette market is contraband and not included in those sales figures. Smoking prevalence may be considerably higher than the NSRA claims.

The backgrounder points out that: “This rise in cheap, tax-free tobacco sales could lead to a dramatic increase in consumption if it is not stopped as quickly as possible”.

Indeed, there was an apparent increase in consumption when governments responded to a similar increase in contraband sales in 1994 by cutting sin taxes dramatically. But, was it really an increase in consumption? Isn’t it far more likely that the apparent increase was due to people returning to legal product, where sales, and therefore consumption, could be more accurately measured?

Of course, such an admission would not support their contention that punitive sin taxes are the most effective means of inducing smokers to quit.

Then, they go on to lament that: “a substantial portion of federal funding announced in April 2001 has been eliminated and redirected to other government priorities”

Not a word about jobs lost in the tobacco industry, the hospitality industry, the gaming industry, etc. To the anti-smoker freaks, these adverse economic consequences are acceptable collateral damage in their war on smokers.

For example, Imperial Tobacco Canada, citing declining sales and profit margins, moved manufacturing operations of its tobacco products to Monterrey, Mexico. There’s no mention in the NSRA backgrounder of the 1,400 jobs that left the country when Imperial’s Canadian operations were shut down.

The NSRA backgrounder points out that Grand River Enterprise of the Six Nations now rivals JTI MacDonald and may be the third largest tobacco company in Canada.

Then, they lay the blame for the rise in contraband squarely on this relative newcomer to the tobacco scene: “(Native) cigarettes can be sold on reserves to status Indians tax-free. However, the company ships more cigarettes than could be reasonably smoked by status Indians on reserves and some observers suspect GRE cigarettes are being sold to non-natives tax-free on a large scale”.

But, the vast majority of GRE cigarettes are exported to the U.S, as well as China, Jamaica and Uruguay, and they do business in South Africa, the Middle East and Europe.

NSRA complains that GRE sales strategy appears to include “exploiting” sacred imagery and dressing First Nations people up in ceremonial and traditional outfits to market its products. Mohawk brand cigarettes, they claim, are being marketed in Germany as “real quality cigarettes from real Indians.” Which part of that claim do they find objectionable?

Are they saying GRE doesn’t make “quality” cigarettes? Or, are they saying that the people on the Six Nations Reserve aren’t “real” Indians?

And, just in passing, the outfit being worn by the young lady in the graphic accompanying this post is neither ceremonial nor traditional dress. Huh. What guy?

1 comment:

looped_ca said...

Hey any cigarette thats good enough for the German army; is good enough for me!

Also, GRE has concluded a reported $70-million deal to be the official supplier of cigarettes to the German army.


I want to be in the calvary! (wink)