Greece’s Health Minister Andreas Xanthos yesterday called on the competent authorities to enforce the country’s anti-smoking law by starting to make strict checks on public places where currently tobacco smoking is banned but tolerated, according to a story by Philip Chrysopoulos for the Greek Reporter.
A 2010 law banning smoking in enclosed public places such as restaurants, coffee shops and theaters, was never truly enforced. Some random checks were made and fines imposed during the first few months of the ban, but Chrysopoulos reports that smoking in public places ‘continues to be rampant in Greece’.
In an effort to awaken the dormant bill, the ministry has issued a memorandum calling on all pertinent authorities to enforce the law by carrying out checks on establishments that allow smoking, and to impose harsh fines on offenders.
People who smoke in public places are liable to be fined €50-€500, depending on the circumstances.
And the owners of businesses such as bars, restaurants and coffee shops will be fined €500-€10,000 if they allow customers to smoke. Repeat offenders will be fined, and their licenses will be revoked after five offenses.
Those who sell tobacco products to minors or tolerate violation of the relevant provision will face a fine of €500-€10,000. And the same fines will apply to those who advertise tobacco products.
Drivers who smoke with a child under 12 in their cars will face a fine of €1,500.
Tag: Greece
Crackdown on backsliders
SEKAP’s future in question
The board of the Greek tobacco manufacturer, SEKAP, is due today to hold an extraordinary meeting to discuss the possibility of filing for bankruptcy, according to a story by Tasos Kokkinidis for Greek Reporter.
SEKAP, which is owned by the investor Ivan Savvidis, has been told by a Komotini Court of Appeal to pay a fine of €38 million for infractions that occurred in 2009, before Savvidis took over ownership of the company.
The daily newspaper Kathimerini apparently reported that board members would be joined today by Greek bankruptcy experts.
Savvidis owns a number of companies in northern Greece including the Makedonia Palace Hotel in Thessaloniki, the Souroti drinks company, and the PAOK soccer club.
Altogether, his businesses form part of a consortium that recently acquired a controlling stake in the Thessaloniki Port Authority, via his Belterra Investments company.
Illegal trade increasing
A recent study conducted by the Foundation for Economic and Industrial Research in Greece, estimates that illicit products could account for 30 percent of cigarette sales this year, according to a Kathimerini story relayed by the TMA.
In January-June this year, the decrease in the legal cigarette market was twice that of the corresponding period last year.
The story said that high taxes on tobacco products and a lack of remedial measures were considered as factors for the reported increase in the illegal cigarette trade.
Beating the smoking bans
It was often said that Italian smokers wouldn’t comply with a public-places tobacco-smoking ban, but they did. And much to many people’s surprise, French smokers also fell in line with such a ban. In Greece, meanwhile, many people refused to believe that smokers would observe a public places smoking ban, and they were correct.
In a story for CetusNews.com, Nektaria Stamouli describes how Greek citizens ‘still take pride in puffing where they please’ despite the country’s having passed a ban on smoking inside restaurants and offices in 2009.
The Deputy Health Minister Pavlos Polakis was said to have blithely flouted the ban, lighting up while giving a press conference last year. And at the Finance Ministry, smokers recently puffed away in a hallway under a large banner reading ‘Greece stubs out cigarettes’.
Taxi drivers were said to smoke while driving, holding their cigarettes out an open window only when they had passengers.
About 37 percent of Greeks smoke, compared with an EU average of 26 percent, according to a 2016 EU survey. In response to the poll, 87 percent of Greeks said they had been exposed to indoor smoking in bars.
Nevertheless, last year Greece’s parliament added to the country’s regulations by passing a ban on electronic-cigarette vaping in public places. During the debate, some lawmakers noted the irony of passing a new law in a chamber that ignores the original one. “Meeting room, parties’ offices, secretariats, walkways, toilets – the cigarettes are everywhere,” said center-right parliamentarian Niki Kerameos. “If we don’t set an example of following the laws, how do we expect citizens to do so?”
Stamouli said that as the country grappled with a seven-year economic downturn, enforcement of all types of infractions was haphazard. Budget cuts in the Attica region, which included Athens, had reduced by two-thirds the number of wardens who handed down fines for traffic and other offences, including smoking. The number of municipal police, who could also issue fines, had been downsized. And a telephone hotline for people wanting to call the Health Ministry to complain about smoking violations was rarely answered.
The Health Minister Andreas Xanthos has conceded that the smoking regulations haven’t been implemented. “What we need is to give the feeling that we are restarting,” he said to Parliament on May 31, International No Tobacco Day.
Stamouli’s piece is at:
Greece still smoking
Greece has the EU’s highest proportion of smokers, according to a ekathimerini.com story citing a survey published by the European Commission.
Thirty-seven percent of Greeks are smokers, according to the report, which also showed that Greece had, at 44 percent, the smallest proportion of people who said they’d never smoked a cigarette.
Overall, the EU’s smoking prevalence is 26 percent.
After Greece, France and Bulgaria were tied in second place, each with a 36 percent smoking prevalence. Croatia came in next at 35 percent.
Sweden had the lowest rate: seven percent.
The report found that overall in the EU, the smoking rate among 15-24-year-olds had gone up from 25 percent in 2014 to 29 percent this year.
Failing to enforce bans
Greece is failing to enforce its tobacco smoking bans despite apparent public support for the legislation, according to a Kathimerini story quoting the Hellenic Thoracic Society (HTS).
The society yesterday appealed to the government to crack down on violations of the ban.
Speaking at an event ahead of World No Tobacco Day on May 31, the HTS president, Michalis Toumpis, said the number of smokers in Greece seemed to be declining steadily. Eurostat’s most recent study had put regular tobacco users at 27.3 percent.
Despite this decline, however, seven in 10 Greeks had told the EU’s statistics agency that they had been regularly exposed to other people’s tobacco smoke when visiting bars, restaurants and cafes – where smoking was supposed to be prohibited.
“That 74 percent of non-smokers are angry about the situation, which means that the population is ready to accept the enforcement of the measures,” said Toumpis.
Toumpis hailed the fact that 75 percent of the retail price of Greek-market tobacco products went toward taxes. Quite a few people came to smoking cessation clinics because they couldn’t afford to keep up the habit.
Greece has about 50 such clinics, which have provided treatment and support to more than 300,000 smokers since they first opened in 2000.
Greece was one of the first nations to sign up for the World Health Organization’s Framework Convention on Tobacco Control, which entered into force in 2005.
Greece investment sound
Philip Morris International is feeling vindicated by the decision it announced in March to invest €300 million in its Greek unit, according to a story by Antonis Galanopoulos and Sotiris Nikas published in the Irish Independent.
When PMI announced the investment, it was betting on an economy that had ‘cratered as the country was struggling to strike a deal with its creditors’, the story said.
But PMI and its wholly owned subsidiary, Papastratos, didn’t want to wait.
Now, with review talks completed between the government and creditors, Christos Harpantidis, Papastratos’ CEO, says the company feels vindicated.
“Our example will be followed by many others,” Harpantidis reportedly said in an interview with Bloomberg in Athens.
The investment is among the biggest such inflows for Greece since the debt crisis in 2009, and is a much-needed boost for a country that has seen its economy shrink by more than a quarter.
Papastratos has begun transforming its factory in Aspropyrgos, a suburb of Athens, into a producer of tobacco sticks to be used in PMI’s iQOS heated-tobacco product.
The plan is to use Greece as one of the PMI’s bases to produce sticks for exports to more than 30 countries by the end of 2017.
Stretched thin
Semi oriental tobacco production in Kyrgyzstan Suppliers of classical oriental tobacco have matched production to diminished demand. Will they be able to accommodate a potential rebound?
TR Staff Report
The market for classical oriental tobacco has shrunk significantly in recent years. Following the European Union’s decoupling of tobacco subsidies from production and Turkey’s withdrawal of support for tobacco growers, production in the main sourcing areas plummeted; Turkey just harvested its smallest crop in living memory. At the same time, cigarette manufacturers decreased their use of oriental tobacco, creating an equilibrium between supply and demand. But as several oriental leaf traders pointed out during a recent visit to Greece, Bulgaria and Turkey, it’s a fragile balance, and the diminished industry would struggle to satisfy a sudden increase in demand.
Oriental tobacco has been famously described as a cigarette’s “salt and pepper” because it lends flavor and kick to tobacco smoke. Oriental tobacco is an important component of American-blend cigarettes, which rapidly gained popularity in the second half of the 20th century. But as cigarette sales started stagnating in the United States and Europe—the world’s leading American-blend markets—demand for oriental declined accordingly. Most of today’s growth markets are located in Asia, where smokers prefer Virginia cigarettes.
Also, in an effort to cut costs, manufacturers have been replacing premium oriental tobaccos with less expensive varieties and compensated for the loss of aroma with flavorings. This too has had an impact on demand for the classical oriental varieties. Nikos Allamanis, a Greek tobacco industry expert, estimates current global supply and demand of classical oriental tobacco at between 100 million and 120 million kg.
Production
On the supply side, production of classical oriental varieties has been affected by the withdrawal of support by the European Union and national governments. The Greek tobacco industry, for example, is a shadow of its former self. Whereas in the past the country’s growers could harvest more than 100 million kg of multiple tobacco varieties in a given year, they grew only two types of oriental in the most recent growing season—10 million kg of Basma and 10 million kg of Katerini (there’s also been a cautious revival of flue-cured Virginia production this year). The number of oriental leaf traders has shriveled along with the crops. Of the 22 companies operating in Greece in 2004, only four companies remain: Leaf Tobacco A. Michailides, Gleoudis, Missirian and SEKE. Socotab, which has a partnership with Universal Leaf, continues to trade Greek tobaccos but processes in neighboring Bulgaria. According to some estimates, there are about 15,000 tobacco farmers left in Greece, compared with more than 50,000 before decoupling.
On the bright side, the discontinuation of production subsidies has brought about a shift from quantity to quality. “Decoupling has weeded out the growers who cared only about volume,” says Nikos Tzoumas, managing director of Missirian. Once exposed to market forces, only the best growers could stay in business—growing in proper soils and following good agricultural practices. With the support of agricultural development programs, oriental tobacco cultivation today is concentrated in the regions of Thrace, East Macedonia and Central Macedonia. What’s more, today’s farmers are real farmers. Before decoupling, some “growers” were simply buying tobacco from others.
Bulgaria
Production of classical oriental tobaccos in Bulgaria has been relatively stable, hovering near the 20 million kg mark during the past few years. But Michail Papanastasiou, manager of Leaf Tobacco A. Michailides’ recently opened Sandanski factory, is bracing for a 20 to 25 percent drop in the upcoming season, which he attributes to the discontinuation of national production subsidies and a decline in commercial prices. Subsidies currently account for 40 percent of the money farmers receive for their leaf.
“Bulgarian growers will lose almost half their income overnight,” says Papanastasiou. He expects peasant farmers to continue growing tobacco because they have no alternatives. “Maize, wheat and sunflower don’t provide the same level of income,” he says. “And they don’t come with a guaranteed market like tobacco does.” But larger tobacco growers are likely to switch to such crops because they can make up for the lower per-kilo price with volume.
With their livelihoods threatened, Bulgaria’s tobacco growers have taken to the streets. The government is unlikely to be swayed by their protests, however, as the economic slowdown has depleted its coffers.
Turkey
Like in Greece, production of classical oriental tobacco has declined significantly in Turkey. The trade is looking at about 51 million kg of Izmir, Basma and Samsun this season—the smallest Turkish harvest on record. The decrease in Turkey was driven by the dismantling to the state monopoly, Tekel, which used to buy all unsold tobaccos at declared prices. For many years, this guaranteed uptake artificially boosted production, resulting in huge stocks and market distortions. At one point in time, Tekel was said to hold an inventory of 450 million kg. Those stocks have dwindled following privatization, and dealers estimate the former monopoly has only 11 million kg left, which will likely be sold within the next two years.
Without subsidies, farmers have found it difficult making a living growing tobacco. According to one trader, a kilo of tobacco used to cost the same as a bottle of raki, a popular Turkish drink. Today, a bottle of raki is much more expensive. And whereas in the past a typical farmer could buy a car with the income from a season’s tobacco crop, today he would be hard pressed to do so. Unsurprisingly, many farmers have abandoned tobacco growing. Currently, there are about 40,000 tobacco farmers in Turkey, compared with 62,000 only two years ago. This trend is likely to continue: The farmers who remain are aging, and their children would rather work in the cities than toil on the lands.
No slack
The attrition of tobacco farmers has merchants worried. While global supply and demand of classical oriental tobaccos are reasonably balanced today, it would be hard for the industry to accommodate a sudden increase in demand.
Such a reversal of fortunes for oriental leaf isn’t entirely unthinkable. During its November meeting in Uruguay, parties to the World Health Organization’s Framework Convention for Tobacco Control agreed to take action against cigarette ingredients. And while it remains unclear exactly which ingredients might be targeted, some fear it could result in a de facto ban on burley tobacco.
Without burley and additives, oriental is the only option to enrich the flavor of cigarettes. Regulation aside, consumer preferences also appear to be shifting toward more natural products, such as Santa Fe Natural Tobacco Co.’s American Spirit brand. Even multinationals have been launching additive-free versions of their flagship brands. Frederick de Cramer, general manager of Sunel Tobacco Co., has also noticed increased interest in classical oriental tobaccos from some nontraditional markets. Indonesia in particular has been a growth market for his company. “Turkish oriental blends well with the local tobaccos there,” he says.
At the same time, traders are keeping an eye on China, which is believed to be developing a blended cigarette with small amounts of oriental. Even if such a cigarette would include only 2 to 3 percent oriental, its impact could be huge, given the size of China’s cigarette market. China’s State Tobacco Monopoly Administration is reportedly also relaxing its concerns about blue mold. Traditionally, it has bought only tobaccos that are at least three years old, but it is said to be reconsidering that stance, possibly reducing the waiting time to one year.
While it’s always difficult to predict the market’s future requirements, and how the industry would respond to a possible ban on ingredients, the trade has its work cut out. Because so many growers have abandoned tobacco in the traditional growing areas, even a slight increase in demand would leave suppliers scrambling.
The industry has been working to develop new growing areas. Leaf Tobacco A. Michailides, for example, has been experimenting with oriental in several nontraditional areas and has been particularly enthusiastic about its results in India.
Sunel is active in Kyrgyzstan, while limited amounts of oriental are also grown in China, Thailand and certain Soviet Union successor states. But as one dealer points out, oriental leaf is finicky about soils and climates. Outside of the traditional growing areas, it is difficult to achieve the desired aroma and softness. The oriental varieties produced outside of the traditional growing areas do not compete directly with the classical oriental grown in the southern Balkans and Turkey.
The key to sustaining production in the traditional areas is farmer viability. “We need to give our growers better returns,” says De Cramer. To achieve this, tobacco companies in Greece and Turkey have been helping farmers increase yields and reduce their cost of production.
In Greece, leaf merchants have started buying tobacco earlier in the season—right after curing. The farmer gets cash in his pocket quicker and he doesn’t have to deal with storage. Of course, dealers take on extra stock under this scenario, but they are better equipped to do so than the farmer.
Traders have also been pushing the float system in Greece. “We first offer it free of charge to encourage the farmers to try it and then initiate their involvement in such practices,” says Tzoumas of Missirian. “We want to show farmers that they don’t have to run their business in the way their grandfathers did.”
At the same time, the industry has been moving toward more cost-effective packaging methods, abandoning time-consuming and expensive baling practices.
Because labor is the single biggest cost factor in oriental tobacco production, some dealers have been looking into mechanization of the process. Missirian, for example, has been working on a harvesting machine in cooperation with the engineering firm VIT. If successful, a harvester could change the cost calculation of oriental tobacco production completely.
Not all sourcing areas are equally suitable to mechanization, however. De Cramer says opportunity for mechanization in Turkey is limited because of the hilly topography of many tobacco plots and the limited support infrastructure in the villages. And the float system, he says, would be “a step too far” at this time in Turkey.
Instead, the Turkish industry is focusing on boosting yields through the use of certified seed and good agricultural practices, which should also help improve farmers’ margins.
In their efforts to sustain production of oriental tobaccos in the traditional growing areas, traders throughout the region are counting on the support of their customers. As one merchant points out, if cigarette manufacturers want more oriental tobaccos tomorrow, they had better make sure there will be farmers to grow it.
