The EU cracks down on #Tobacco, but does it go far enough?

| January 15, 2019

New reports suggesting that Germany will back the European Commission’s crackdown on tobacco waste are just the latest sign that Europe is taking increasingly decisive action on cigarettes. Activists will no doubt cheer comments from German Environment Minister Svenja Schulze that those who produce tobacco filters (and other disposable plastic products) should fund the clean-up of the waste it produces. As she said, it’s now time for “drastic measures” to tackle the problem, writes Colin Stevens.

But is the EU’s multi-pronged approach to tobacco really drastic enough? The EU’s attempts to reduce tobacco’s environmental footprint may be just part of a wider attempt to clean up this most damaging of industries. Yet activists worry that Brussels is falling short the biggest piece of unfinished business: the creation of a genuinely effective system to track the billions of cigarettes flooding Europe every year. In fact, it now appears that the tobacco industry will be given a stake in the EU’s anti-smuggling system – which, as one highly influential commentator has suggested, is akin to locking the henhouse with the fox inside.

In refuting this criticism, EU officials will doubtless point to the raft of anti-tobacco regulations introduced at local and national level over recent years. Several member-states have passed sweeping prohibition, banning tobacco advertising and stopping smokers from lighting up in public. The EU has followed this example with its own package of laws; Brussels has strengthened smoke-free legislation in public places, introduced its own taxes on tobacco products and banned the promotion of cigarettes across its borders.

The centrepiece of this crackdown is the EU’s Tobacco Products Directive, which came into effect in May 2016 and imposed a series of fresh restrictions on the tobacco industry, followed by a more detailed 2nd Action Plan in December 2018. When the directive was activated, much of the media attention fell on the prohibition of 10-cigarette cartons and the ban on menthol and other “characterizing flavours.” Yet arguably the most significant aspect of the TPD was its proposal of a brand-new track and trace system, designed to put an end to smuggling across the continent.

Set to come into force in May, track and trace is a global requirement under the World Health Organization’s Illicit Trade Protocol (ITP), which was ratified in June 2018. But the EU, which loses an estimated $12 billion in tax every year due to illicit cigarettes, is determined to lead the way. In a recent action plan, passed just days before its agreement on plastic tobacco filters, the European Commission pledged to play a key role in the WHO’s global track and trace working group; the action plan also promised a number of regulatory changes in anticipation of the new system, including better coordination between police and customs and a harmonizing of excise duties with countries on the periphery of the bloc.

Concerns

Yet, ever since the EU announced plans for track and trace, activists have expressed concern that the tobacco industry will have some kind of control. After all, the manufacturers have repeatedly been found guilty of facilitating smuggling themselves, in an attempt to gain market share and undermine the case for tax hikes. Even after a raft of lawsuits, researchers have found that up to 70% of illicit cigarettes come from the tobacco companies’ own stocks. Despite all this evidence of complicity, until recently Brussels allowed the industry to effectively regulate itself. Between 2004 and 2016, Philip Morris International was tasked with helping the EU police contraband, providing expert research on a problem the company itself was exacerbating.

The EU, for its part, has consistently maintained that the key task of regulating the system will be passed to an independent third party, free of industry control. However, as critics (including a number of MEPs) have noted, many third parties which initially appear independent are in fact influenced by the tobacco industry. Their fears have been fuelled by the industry’s own lobbying; the manufacturers have tirelessly pushed their own product, Codentify, using a variety of front groups to claim the solution is independent – even though Philip Morris International built the technology and it’s protected by a tobacco industry patent, providing external observers from doing any kind of proper diligence.

Worryingly, it now seems the EU might be falling into the manufacturers’ trap. In December the Commission appointed a Swiss company called Dentsu Aegis Network to operate a key part of the track-and-trace system: the secondary repository for data regarding tobacco products. Dentsu will have a number of responsibilities, including establishing data exchange specifications and creating a common ‘data dictionary’.

Dentsu is supposed to be independent, but in fact the company is intrinsically linked to the tobacco industry through its 2017 acquisition of Blue Infinity, a digital transformation specialist whose own track-and-trace solution, AIT Central, is based on Codentify. In addition, Blue Infinity says it has worked with three of tobacco’s ‘big four’ – Philip Morris, Imperial and JTI – on the integration of traceability solutions.  To activists, it will doubtless seem that Codentify is sneaking in by the back door.

If EU officials are serious about building a truly independent traceability system, and curbing Big Tobacco’s worst excesses, they must reverse the decision to appoint Dentsu and reconsider their approach to the tobacco industry. They must reject the front groups funded by the manufacturers and understand their true intentions. As Vera Luiza Da Costa Luiza e Silva, the WHO official who oversees the ITP, said in a memorable 2016 article, the industry has actually done everything in its power to stop countries and organizations making genuine progress on tobacco regulation. Concluding with the analogy of a henhouse, Da Costa noted that, despite whatever the latter may protest, “farmers and foxes have different interests.”

If the EU can’t decide which side of the chicken-wire it’s on, then the door will always remain slightly ajar.

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Category: A Frontpage, Cigarettes, EU, Health, Tobacco

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