Tobacco industry under threat

HARARE - Tobacco production in Zimbabwe might take a hit as a result of global smoke reduction strategies and the recent anti-tobacco marketing bans adopted by several countries.

Countries such as Australia and New Zealand have already adopted anti-tobacco marketing bans and packaging cigarettes in drab boxes devoid of branding with neighbouring South Africa already contemplating the move.

In the event that Zimbabwe adopts such a piece of legislation it will have severe negative consequences on the economy as a whole.

Tobacco is one of Zimbabwe’s major agricultural exports, accounting for 10,7 percent of the gross domestic product in the half-year to June.

Zimbabwe is largely dependent on tobacco as one of the top foreign currency earners and is slowly rebounding as the country sold more than 140 million kilograms (kgs) raking in more than half a billion dollars, though it remains off the 2000 peak figures of 236 million kgs.

Savanna Tobacco executive chairperson Adam Molai said if the legislation reaches Zimbabwe the impact on the value chain will not only be huge but will have negative effects.

“Retailers will most likely be going to record lower cigarette sales and less profits.

“Manufacturers in turn will also face decreased revenue if the retailers struggle to sell the cigarettes in this plain packaging which will have graphic warning signs,” said Molai.

He added that the tobacco industry would suffer from low capacity utilisation worsened by the fact that cigarette manufacturers would produce less.

“Revenue to the farmer will be decreased and their livelihood will be threatened.

“Tobacco merchants and processors will be not be spared thus there will an increase in unemployment and a general negative impact on the Zimbabwean economy,” Molai added.

He said they were concerned about the Tobacco Plain Packaging Bill of 2011 which was recently upheld by an Australian court and believes it is a harsh piece of legislation for both cigarette manufacturers and cigarette consumers.

“As manufacturers we believe that removing brand names and company colours from packets will lead to a drastic cut in profits and may result in fake products entering the market which affects the fiscus.

“The legislation will make the counterfeiters’ job both cheaper and easier by mandating exactly how a pack must looklike. It is still a bad law that will only benefit organised crime groups which sell illegal tobacco on our streets,” said Molai.

The aim of this piece of legislation is to reduce the smoking habit but to date there is no concrete evidence that the plain packaging will achieve this.

Manufacturers say the legislation does not provide a fair platform to compete as all packaging will be very similar with only the brand name or trademark as the distinguishing feature.

“Packaging is extremely essential to brand competition and competition in any industry is healthy as it encourages growth of the economy as a whole. Cigarettes are a legal product meant for adult consumers and consumers should be given the right to choose the best possible brand that appeals to them,” Molai said.

He vowed that they would continue to take every action necessary to protect their valuable brands and right to compete as a legitimate commercial business selling a legal product.

Health minister Henry Madzorera however, said government would not be taking drastic measures such as those adopted by Australia but would continue informing the public on tobacco’s health hazards and enforce tobacco control measures that are already in place.

“We are not going to follow suit on what other countries are doing because we are at different stages of economic development. However, the bottom line is that tobacco is not good for health and we will use all means necessary to discourage its use,” Madzorera said.

“There is need for all of us to be aware of the tobacco industry activities to undermine tobacco control efforts. The activities lure you into believing that tobacco is good yet it is not good at all, it destroys your health, it kills you,” he said.

Zimbabwe has a Statutory Instrument 264 of 2002 Public Health Act on tobacco control, which stipulates that smoking in public is prohibited in public transport and public offices.

“This is done to protect the society from the effects of smoking and also to reduce passive smoking. Tobacco industry therefore should comply on their advertising, ensuring that the health warning signs are prominent."

“The instrument gives the standards of the warning displays on tobacco packages,” added Madzorera.

According to the World Health Organisation, tobacco use is one of the leading preventable causes of death.
 
The global tobacco epidemic kills nearly six million people each year, of which more than 600 000 are people exposed to second hand smoke.

“Unless we take action now, tobacco will kill up to eight million people by 2030, of which more than 80 percent will live in low and middle-income countries,” said Madzorera.

Unlike in developed countries, there are no litigation worries in Zimbabwe.

The authorities are more pre-occupied with HIV/Aids to worry about issues such as lung cancer and carcinogens.

However, developed countries consider legal action to recover funds in smoking-related health-care costs from the tobacco industry and they are committed to reduce the impact of smoking-related illness and mortality.

Such litigation is a potentially powerful way of countering the tobacco industry.

Cigarette manufacturing companies are aware their products are controversial and poses a serious health hazard to smokers and non-smokers alike, but, they place the onus on consumers to choose whether one wants to smoke or not.

“We do not advertise to anyone under the age of 18 who might not be able to make an informed decision.
“However Savanna believes it is the right of every adult to choose whether he wants to smoke or not and to select the brand that best suits his needs,” said Molai.

The World No Tobacco Day theme for this year was “Tobacco Industry Interference” and was held in Bin were minister Madzorera said that in an attempt to lure more customers, tobacco companies were using various methods which in turn interfered with control measures.

“The tobacco industry uses increasingly creative tactics to boost the sale of its products. Adverts on billboards, in magazines, and on the internet, comprise only one area of the complex tobacco marketing net,“said Madzorera.

“The industry also ensures its products are highly visible in movies,on television and in the world of fashion. Tobacco companies sponsor sports and entertainment events, handout branded items and organise numerous popular promotional activities in an attempt to win and keep their customers. These practices by the tobacco industry interfere with tobacco control measures,” he said.

According to the World Health Organisation, the percentage of smokers over the past 15 years adult population is in the 30-39 percent range.

Zimbabwe which is on the lower side when compared to other African countries has average of 47 percent.
Tobacco business is similar to annuity businesses. Once a smoker is hooked, then an annuity income stream has been established.

The positive as well is that there are more new smokers than quitters.

Furthermore, it does not cost a lot to manufacture a cigarette, hence margins are good.
 
It is addictive and there is a fantastic brand loyalty which guarantees an annuity income flow until the smoker quits or passes on.

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