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This is an archive article published on July 5, 1997

Deals with the devil

The World Health Organisation and American experts have slammed the $369 million settlement offered by the beleaguered US cigarette manufac...

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The World Health Organisation and American experts have slammed the $369 million settlement offered by the beleaguered US cigarette manufacturers to the 32 States that have sued them for contributing significantly to the national health care burden. The deal, to be implemented over 25 years, awaits Congressional approval and White House concurrence.

“The very fact that the value of British American Tobacco (BAT) shares actually went up immediately after the deal was announced is reason enough for us not to celebrate,” said Derek Yach, a South African expert working at WHO’s Geneva headquarters, in an interview with The Indian Express at the Fourth International Conference on Preventive Cardiology which has just concluded in the French-speaking Canadian city of Montreal.

BAT, incidentally, is the world’s number two seller of cigarettes, which sold 100 billion more cigarettes last year compared to 1995, thanks mainly to burgeoning sales in India, China and Eastern Europe. The tobacco transnational also has a substantial financial stake in ITC and Vazir Sultan Tobacco Company.

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There are good reasons for the optimism of the tobacco industry, which is being reflected in the stock exchanges. As Darwin Labarthe, an internationally-acclaimed epidemiologist with the University of Texas, Houston, pointed out, the actual cost of the settlement works out to a few cents for every pack of cigarettes sold.

Much of it, though, will go back to the industry in the form of tax breaks! The remaining bit may also revert to it if it is able to prove conclusively that smoking among children has nothing to do with the industry. “That’s a grey area and the industry can summon any number of experts to support its case,” Labarthe said.

But even if it does not win on that count, all it has to do is simply raise the price of cigarettes being sold in the US. It should not be very hard to do, considering the cigarette prices in the US are the lowest in the developed world.

“The average is $1.89 in the US, compared to $3-$4 in other OECD countries,” Yach pointed out. So, it’s a small price that the tobacco majors are paying to insure themselves against any lawsuit in the future. Who then, asked Yach, will pay for the people expected to die as a result of consistent tobacco use in the years to come? In the year 2020, the number is expected to touch 8.4 million, of whom 5 million will be current smokers.

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Experts like Yach are also concerned about the global impact of the settlement, if and when it comes into effect. They point to the aggressive global marketing drive of the tobacco majors, which has been responsible for the developing world contributing 800 million of the 1.1 billion smokers worldwide, according to Neil Collinshaw, also of WHO.

The number of smokers in the developed world, on the contrary, is going down steadily in the wake of heightened awareness.

The surge of tobacco transnationals for newer markets in countries with weak health legislation can only go up when they find themselves being pushed to a corner in the developed world. India, in fact, is a country being viewed with great concern.

The experts who had gathered in Montreal were shocked to hear from Priscilla Reddy of the University of Cape Town, South Africa, of how ITC organised a dance night for teenagers at the Ghungroo discotheque of New Delhi’s Maurya Sheraton, where packs of a newly launched brand of cigarettes were distributed free to the young guests. This would have invited penal action anywhere in the developed world.

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Yach pointed out that in the US, cigarette manufacturers are presently embroiled in several class action suits, among them the largest being the one moved by airline officials seeking compensation for the health hazard of passive smoking.

Industry officials, meanwhile, face the prospect of grand jury indictments for perjuring themselves in Congressional hearings. Moreover, the US Federal Drug Administration has stepped in with a plan to regulate nicotine and the Federal Trade Commission is threatening to act against Joe Camel, even as the country is annually spending between $300 million and $500 million to promote tobacco control.

Historically, tobacco giants have not played by the rules and the experts do not expect them to do so now, when the heat has really been turned on.

They remind you of the 1980s, when tobacco majors pressured the US government to invoke a 1974 Act to prise open markets for imported cigarettes in Japan, South Korea and Thailand using the threat of trade sanction.

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In this context, the words of the American tobacco control activist William D. Novelli are prophetic. “There will be no true justice and no end to the tobacco wars,” he said in May this year, “until American and other tobacco companies change the way they do business worldwide, not just in the US.”

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