What scares them most

While acting as “master of ceremonies” for a seminar on health, tobacco and taxation hosted by the Health Justice group, I came across so much information that national and local media seem to ignore or intentionally boycott because of their fears that “tobacco related advertisers” might pull out or raise hell for giving equal time or space.

It is a tragic situation when we the media will dedicate and risk resources and personnel in tracking and covering small bands of terrorists who kidnap a handful of victims each year, yet we won’t cover events that tackle the destructive impact of the tobacco industry that kills a reported 90,000 Filipinos each year and has succeeded in turning 27% of young students into cigarette ADDICTS.

It is a betrayal of public trust when we in media dutifully cover and report about the travails of poor tobacco farmers and their need for government support yet intentionally close our eyes to hide the truth that more and more women and young people have been targeted by cigarette manufacturers as their most profitable market in most developing countries.

Furthermore, it is hypocrisy of the highest order when we condemn the pharmaceutical industry of taking advantage of sick Filipinos by selling their medicines at “exorbitant” prices but say nothing about the billions of pesos in profit made by the tobacco monopoly in the Philippines as well as the billions of dollars their mothership makes globally under the same monopolistic regime.

During an open forum, someone made a comparison about guns and tobacco. He asked why is it that when someone uses a gun to shoot someone, we put the blame on the user of the gun and not on the manufacturer. Why then do we try to put the blame on the cigarette maker?

I replied by pointing out that the gun is lifeless and the decision of using a gun is determined solely by the user. In the case of cigarettes, the manufacturer has full knowledge of the addictive nature of cigarettes, they have full knowledge of the cancer causing properties and effects of cigarettes and they willfully sell and target impressionable or vulnerable markets, and they have consistently misinformed the public worldwide through several generations.

It is the consistent effort to mislead that has even created a culture of ignorance among our legislators and government officials. After listening to speaker after speaker from different parts of the world, one thing that became clear was the undeniable fact backed by data and historical evidence that imposing annual escalating excise tax on cigarettes creates a funding source for government without even hurting the industry.

When compared to the market movements of illegal drug trade, there is a strong similarity between narcotics and cigarettes, in the sense that any action of government against the trade simply raises prices but do not directly decrease purchase or consumption, because the commodity is an “addiction” or dependency-based consumption.

To a lesser degree, it is like our gasoline or fuel dependency. We initially react but ultimately we grin and bear it because we all need to move around and most of us want to do it with our cars so we buy gasoline at any price.

The undeniable fact is that, while we have the second highest price for electricity in Asia, we manufacture the lowest or second lowest priced cigarettes in the region. Our cigarettes are so cheap that they can be absorbed by China, which has one of the highest statistics of cigarette smokers.

Being the cheapest gives us a very wide margin for tax increase because even our neighbors have long been imposing annual escalating excise tax on cigarettes. And unlike the Philippines where Congress has complicated, manipulated and protected taxes on cigarettes, our Asian neighbors have placed 3% (Singapore), 15% (Pakistan) and as much as 44% (Egypt) tax on cigarettes.   

So in terms of “current addicted users” the consumption in cigarettes won’t really decline. What the cigarette manufacturers don’t want the public to know is that there are multiple benefits to “annual escalating excise tax on cigarettes”. 

In the forum we learned how Thailand managed to collect tax revenues amounting to 182,000 million Baht in one go. In comparison the cost of the Thai elevated MRT as well as their underground mass transit system was only 170,000 million baht.

In New York City, Mayor Bloomberg specifically acted on the matter and has established a model and proof that local government can directly create revenue on tobacco/cigarette sales without any recognizable impact on the business.

And contrary to hysterical claims of the cigarette monopoly, it did not even make a dent on their market share. Each year tobacco companies continue to report profits and pay dividends to share holders. They were not even seriously touched by the global financial crisis because a lot of people were lighting up under stress.

If politicians and certain publicists and PR people make a lot of noise, please understand that they have to. That’s how they make a living, by being the prophets of doom while they collect paychecks, contracts or dividends worldwide!

What many people in the industry will never admit to is the reality that when annual escalating excise tax is imposed on cigarettes, the natural consequence is that young people, students and the poor will either opt not to smoke or will have no option at all because they are classified as the price sensitive and income sensitive population.

In the end, not only will Congress create a new income stream for government funds, they will through political will save the next generation, women and children from becoming the income generating addicted slaves of cigarette manufacturers.