Philip Morris, BAT, Japan Tobacco Battle Putin’s Anti-Smoke Plan
Two companies, Philip Morris International Inc. and British American Tobacco Plc, are major cigarette manufacturers that want to destroy the plan of the Russia to take measures against smoking in the largest tobacco market after China.
Japan Tobacco Inc., along with PMI and BAT, persuade the government to refuse a plan to ban the sale, advertising and smoking in public places.
BAT, British multinational cigarette maker headquartered in London, is trying to seek a “mutually acceptable decision”.
Russian president Vladimir Putin has maintained the restrictions on smoking in order to stop the decrease of Russian population. A draft law published by the Health Ministry May 20 calls for outlawing all cigarette advertising straightway, stopping retail sales at kiosks within 18 months and prohibiting smoking in public buildings such as bars and restaurants in three years.
Irina Zhukova, a spokeswoman in Moscow for Marlboro-maker Philip Morris, said by e-mail that at the time when they maintain complete effective tobacco regulation, the bill of the Health Ministry comprise some measures that will not decrease smoking rates and may lead to negative consequences.
Russia has already accepted increasing its excise tax on cigarettes by 40 % a year through 2015. Now a pack of Marlboro cigarettes costs nearly $2.
The World Health Organization considers that nearly 39 % of Russia’s 143 million population are smokers, in comparison with 28 % in China and 27 % in the U.S.
BAT stated that any legislative changes should consider the realities of the Russian market. Any new limitations should be reasonable, well considered and compatible, the media office of the BAT, the maker of Kent, Pall Mall and Dunhill brands, told in an e-mail.
The cigarette manufacturers argue that a whole ban on smoking in public areas and on advertising tobacco products is very strict, while stopping of cigarette sales in kiosks will only end off damaging small businesses. They as well affirm that sharp tax increases won’t reak havoc on demand as much as the ministry believes because it will only give rise to a stream of cheaper imports from neighboring countries such as Belarus, Kazakhstan and China.
Finance Minister Anton Siluanov said that Russia, being a partner Belarus and Kazakhstan in a customs union, asked them to increase their excise taxes on cigarettes to avoid this from happening.
The Finance Ministry as well said that a pack of “inexpensive” cigarettes will rise to 40 rubles in 2014 from 16.50 rubles last year, but prices for the “most popular” brands will rise to 61 rubles from 36 rubles.
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