Author: Staff Writer

The decision by South Korea’s National Health Insurance Service (NHIS) to sue cigarette manufacturers operating in the country has been described by a tobacco industry group as a misguided attempt to solve budget issues, according to a Yonhap News Agency story.

In an English-language statement, the Korea Tobacco Association (KTA) said it was disappointed with the tentative decision by the state-run NHIS to file a suit against tobacco manufacturers.

The suit had ‘little legal merit’ and wasn’t in the best interest of taxpayers, it added.

The NHIS’ board decided on Friday to file a damages suit against KT&G and other tobacco companies seeking up to WON333 billion.

But the Ministry of Health and Welfare opposes the suit and warned that, based on overseas experiences, the NHIS’ chances of winning were low.

It warned too that the cost of the action could be a financial burden to the NHIS.

No decision has been made on when the suit will be filed, but an NHIS official has said that it will be done “as soon as possible”.

In its statement, the KTA noted that the NHIS was ignoring a government directive on how public corporations should not file lawsuits unless the reasons for such suits and the amounts claimed are made clear in advance.

“Litigation against a lawful and highly taxed industry is a reckless attempt to solve NHIS’ budget problems by forcing smokers to pay more than their fair share in health care costs,” Brian Kim, the KTA’s chairman, was quoted as saying.

“Instead of reaching further into the pockets of smokers and exposing Korean taxpayers to years of costly litigation, the NHIS should learn from the failure of similar attempts by other governments and focus on finding a real solution to their budget woes.”

The Jordanian government is coming under fire for planning to enforce fully, by the end of this year, an anti-tobacco law passed in 2008, according to an Associated Press report published in The Tampa Tribune, Florida, US.

Enforcement would see the government this year revoke the licenses of all 6,000 coffee shops that serve shisha.

Business owners and smokers are criticizing the push, saying it goes against the culture of a country.

“We are caught between a rock and a hard place whereby the government is trying to force a closure of our businesses,” Mazen Alsaleh, who owns 14 coffee and hookah shops around the country, was quoted as saying.

“I am not defending the hookah or smoking, but we must defend our investments.”

But Health Minister Ali Hyasat, who is spearheading the effort to enforce the smoking ban, said the measure was meant to “save lives, not businesses”.

Hyasat said that smoking was costing lives and more than $1 billion annually in health care programs to treat smokers.

Enforcement started in 2009 with shopping malls and Amman’s QueenAliaInternationalAirport first enacting the smoking ban. They were followed by fast food restaurants.

The law bans smoking in hospitals, schools, cinemas, libraries, museums, government buildings, public transportation and other places to be determined by the health minister.

It prohibits, too, sales of tobacco products to those under the age of 18.

Ethiopia has passed an anti-tobacco law that includes a ban on ‘smoking in public’, according to a Diretube.com story.

The country’s house of representatives has issued a proclamation that would see the imposition of the ban on tobacco smoking in public places, the raising of cigarette prices through the imposition of ‘enormous taxes’, the inclusion on packs of health warnings, and a ban on the advertising and promotion of tobacco products.

It was not stated in the story when the new regulations would be enforced or by how much cigarette taxes would be increased.

The Indian government has decided to sell its 11.3 per cent share in ITC, according to a story in the latest issue of the BBM Bommidala Group newsletter.

The government is also selling its shares in Axis Bank (23.58 per cent) and L&T (8.27 per cent).

British American Tobacco, which has about a 30 per cent stake in ITC, reportedly said it was unlikely that it would increase its holding in ITC when the government shares were offered.

“We don’t have any plans to purchase more shares in ITC at this time,” a BAT spokesman was quoted as saying.

South Korea’s National Health Insurance Service (NHIS) has said it will file a damages suit against KT&G and other tobacco companies seeking up to WON333 billion, according to a story in The Korea Times.

The decision to go ahead with the claim was made at an NHIS board meeting on Friday, when 11 members voted to proceed and two voted against.

The Ministry of Health and Welfare opposes the suit and requested on Thursday that the NHIS not make any decision at the board meeting.

The ministry sent an official document to the NHIS saying that it understood the purpose of the suit, but warning that, based on overseas experiences, the NHIS’ chances of winning were low.

It warned too that the cost of the action could be a financial burden to the NHIS.

The board members agreed to leave the decision on the timing of the suit to NHIS president Kim Jong-dae, but an NHIS official was quoted as saying that it would be filed “as soon as possible”.

“All cigarette companies operational in Korea could be defendants,” the official said.

The amount to be claimed was based on the costs that the service had incurred in treating small-cell and squamous carcinoma, which a court has ruled are caused by smoking.

The agency has said too that it will work with lawmakers to table a bill aimed at forcing cigarette companies to pay a certain amount towards the treatment costs of patients suffering from smoking-related diseases.

As the Greek government continues to raise tobacco-products taxes as part of the austerity measures demanded by international lenders, it is having to expend more effort on trying to stem the growing tide of the illicit trade in cigarettes, which is being boosted by those tax increases.

According to a story by Andy Dabilis for the Greek Reporter, the government has raised tobacco taxes by more than 20 per cent since the economic crisis began in 2009, and recently announced that another five cents were to be added to the tax charged on a pack of cigarettes.

Austerity-stricken Greeks are responding by increasingly turning to illicit cigarettes that are typically sold for half the price of licit cigarettes.

The government estimates it is losing about €700 million annually to the illegal cigarette trade and the finance ministry said tobacco revenues had decreased by 11 per cent during the past two years to €2.7 billion.

Ilias Asimakopoulos, the chief executive of JT International Hellas, was quoted as saying the illegal cigarette trade had captured more than one-fifth of the local market; so about 4.7 billion illicit cigarettes were entering the Greek market every year.

Legislation that would impose standardized packaging on tobacco sold in Ireland is not fit for purpose, according to the smokers’ group Forest Eireann.

In a submission to the Oireachtas (parliamentary) Joint Committee on Health and Children, the group said that standardized packaging would not stop children smoking and could boost the illicit trade in cigarettes.

The group said the government should assess the impact of standardized packaging on smoking rates and the illicit trade in Australia before introducing similar legislation in Ireland.

“The case for plain packs is based on the fallacy that children are encouraged to smoke because of exposure to so-called glitzy or colourful packaging and that without branding far fewer children or young people would be tempted to start,” said John Mallon, spokesman for Forest Eireann.

“This argument is based not on fact but on speculation and conjecture.

“If the government really wants to protect children from smoking it should seek tougher enforcement of existing laws and focus on further education in schools.”

In its submission to the committee, which is about to conduct hearings to consider the Public Health (Standardised Packaging of Tobacco) Bill 2013, Forest Eireann argued that tobacco control studies failed to consider the unintended consequences of standardized packaging.

There was a wide body of expert international opinion that believed that counterfeiting could have a serious impact on public health and business, it said. Standardized packaging could put children at greater risk, not less, because criminals didn’t care who they sold to.

So the government had to address the concerns that people had about the impact of counterfeiting before proceeding with standardized packaging.

Failure to do so could have serious consequences for children and for adult consumers, especially those tempted to purchase counterfeit goods.

“Plain packaging has nothing to do with health and everything to do with the ‘denormalization’ of a legal product and the 1 million adults in Ireland who continue to smoke tobacco despite fierce opposition from anti-tobacco campaigners and politicians,” the group said in a press note.

“The dull, grotesque packaging envisaged by campaigners is a form of state-sponsored bullying designed to stigmatise the consumers of a legal product and denormalise a perfectly legitimate habit.”

“Ireland, like many other countries, continues to face a precarious financial situation.

“A global recession has resulted in a sharp drop in international trade, rising unemployment and slumping commodity prices.

“As a result many people are suffering profound hardship.

“Despite this the tobacco control industry wants government to devote precious parliamentary time introducing legislation for a policy for which there is no credible evidence that it will work.”

A workshop on cigarette smuggling is due to be held at the European Parliament tomorrow.

It has been organized by the Policy Department D on Budgetary Affairs and will be staged at the Altiero Spinelli Building from 9 a.m. until 12:30 p.m.

A draft program indicated that one of the sessions would see Hana Ross and Michal Stokłosa, “respectively the managing director and economist at the International Tobacco Control Research/American Cancer Society,” give an assessment of the co-operation agreement between the EU and the tobacco industry, an assessment of member states’ activities against cigarette smuggling in relation to the funds received from the agreement, and an assessment of a new EU strategy against cigarette smuggling.

The Finnish Grocery Trade Association believes that the recent falls in the domestic consumption of cigarettes and cigars are not down to the introduction of retail display bans in the country, according to an Esmerk Finnish News story.

Rather, it believes the falls are merely part of a long-term downward trend in tobacco use.

And the Finnish retail chain S Group agrees up to a point.

It has said that the introduction of display bans in the country has not affected the level of cigarette sales but has reduced cigar sales.

It believes that cigar sales have been affected because they are often the result of impulse purchases, and because consumers want to look at these products before buying them.

Lower tobacco product sales last year cost the Italian government €730 million in reduced taxes, according to a story in La Stampa quoting figures from the Federazione Italiana Tabaccai.

In the past 10 years, tobacco sales have shrunk by about 21 million kg; 10 million kg in the period 2011–2013 alone.