The revision of the Tobacco Products Directive: A chance to deal a body blow to Big Tobacco in 2021?ACTA
In a study published on 6 January, scientists from King’s College London have finally put to rest the myth that smokers enjoy a degree of protection from COVID-19. Their research was clear: smokers who contract the novel coronavirus are more likely to suffer severe symptoms than non-smokers, and are twice as likely to end up in hospital. However, despite the whopping 209 million smokers in the wider European region (29% of total population), governments seem to have done precious little to ruffle the feathers of the tobacco industry throughout 2020. Will 2021 be different, writes Louis Auge.
Early signs are not looking great. A report published in late November by a coalition of NGOs looking at 57 countries warned that the tobacco industry managed to capitalise on governments’ preoccupation with the Covid-19 pandemic to further their agendas and curry favour with regulators. Many European countries figure either near the bottom of the list (Romania) or have opted for light-touch regulations (Germany, Spain), much to the disservice of public health. According to the NGOs, Big Tobacco used a mix of tactics to achieve its objectives, such as donating medical equipment, hiring former public officials or aggressively lobbying for its heated tobacco products.
However, with the upcoming revision of the EU’s Tobacco Products Directive (TPD) – slated for later this year – member states can wield the renewed interest that the coronavirus pandemic has sparked in efficient public health policies to set the record straight. While the regulatory fight is set to be a messy one, one arena has emerged in recent months as the leading candidate that could deal a blow to Big Tobacco’s stranglehold: the parallel tobacco trade.
A tale of two trades
The parallel tobacco trade refers to the act of purchasing cigarettes in a different country to that in which they are smoked. Thanks to price differences between neighbouring EU members, lucrative shadow markets have popped up all over the continent, contributing to the high prevalence of smoking and costing governments billions in lost tax revenue.
While the tobacco industry has long tried to deflect attention from the problem, by commissioning studies from KPMG (that have been exposed as relying on falsified data and faulty methodologies) to argue the phenomenon is caused by an increase in counterfeit cigarettes, the reality is much simpler. It is the tobacco companies themselves that oversupply certain countries so that smokers residing in areas with higher cigarette prices can benefit from lower prices. In Luxembourg, for example, customers who do not live in the country buy 80% of all cigarettes sold there.
A spate of recent scandals in France has put the parallel tobacco trade back on the agenda of the European Union. In late December, French MP François-Michel Lambert launched a suit against Philip Morris International (PMI) for their role in the parallel trade, in a case that could have severe repercussions for the tobacco giant. Next, in early January, the French ‘Association of Angry Tobacconists’ (ABEC), announced that they had filed a complaint in Brussels against tobacco price differentials between member states.
They have a point. According to statistics, the French smoke 54 billion cigarettes every year, but only purchase 38 billion from the 24,000 tobacconists who make up their official tobacco sales network. This means that 16 billion cigarettes smoked in France come from across the border. Half of these smokes can be traced to France’s immediate neighbours – Belgium, Luxembourg, Germany, Italy, Spain, Andorra – which all have lower tobacco taxes and entice smokers with lower prices.In reaction, the deputy leader of the MoDem parliamentary group, Bruno Fuchs, has said he will table a bold law that would have far-reaching effects across the continent if passed. The proposed law calls for the strict implementation of a key part of the 2018 WHO Protocol to eliminate illicit trade in tobacco products. Specifically, Fuchs is demanding the setting up of country-by-country tobacco delivery quotas, pegged exclusively to domestic consumption, in order to prevent tobacco companies from oversupplying certain countries. The WHO protocol has already been ratified by 60 countries (and the EU), so it would just be a case of enforcing the letter of the treaty. And because this international document sits higher up in the pecking order of international law than European directives and national laws, that shouldn’t pose legal problems.
Fuchs’ crusade has found allies within the European Parliament, where two leading MEPs, Cristian Busoi and Michèle Rivasi, have long called for the strict implementation of the Protocol. According to them, the TPD is currently incompatible with the WHO document, as the main European countermeasure for the parallel trade, a tracking and tracing mechanism free of industry interference, has been infiltrated by companies with strong ties to Big Tobacco. In a joint webinar organized at the end of December, the two MEPs pointed to the fact that Article 15 of the TPD allows the tobacco industry to choose the companies mandated to store tracking and traceability data. In addition, manufacturers have the ability to choose the auditors who are supposed to control them and with whom they also maintain close relations.
Fuchs, Busoi and Rivasi clearly show that the political appetite for taking on Big Tobacco is alive and well in Europe, and the proven correlation between tobacco use and the novel coronavirus is yet another example of the devastating impact smoking has on the human body. Revising the TPD in 2021 in accordance with the WHO Protocol would actually kill two birds with one stone: it would be a boon for public health by leading to lower smoking rates across Europe, and deal a financial blow to the war chest Big Tobacco has used to stall meaningful regulations. It’s a no-brainer.