Lectura 4:00 min
Cigarette brake
What are tobacco companies to do when they feel theyre being taxed to death? Sue, thats what.
The trend hasnt arrived in Mexico yet, but late last year, when yet higher taxes were applied to cigarettes, it was a close call. The virtual duopoly of Philip Morris International (PMI) and British American Tobacco (BAT) came to within inches of initiating legal action to try to block the measure. Maybe next time.
In the bigger picture, as sales to developing nations become ever more important to giant tobacco companies, they are stepping up efforts around the world to fight tough restrictions on the marketing of cigarettes.
PMI, BAT and other comparatively minor players are contesting limits on advertising in Britain, bigger health warnings in South America and higher cigarette taxes in Mexico and the Philippines. They are also spending billions of dollars on lobbying and promotional campaigns in Africa, and in one case providing undisclosed financing for TV spots in Australia.
Late last year, the industry shot steroids into its efforts in advance of a gathering in Uruguay of public health officials from 171 nations, who sought, with very limited success, to fine-tune guidelines to enforce a global anti-smoking treaty.
Just before the conclave, PMI sued the government of Uruguay, saying its tobacco regulations were excessive. World Health Organization officials say the suit represents an effort by the industry to intimidate the country, as well as other nations attending the conference, that are considering strict marketing requirements for tobacco, such as the ones Mexico has already implemented.
Uruguays groundbreaking law mandates that health warnings cover 80% of cigarette packages (as compared to Mexicos 60%). It also limits each brand, like Marlboro, to one package design, so that alternate designs dont mislead smokers into believing the products inside are less harmful.
The lawsuit against Uruguay, filed at a World Bank affiliate in Washington, seeks unspecified damages for lost profits.
Theyre using litigation to threaten low- and middle-income countries, says Dr. Douglas Bettcher, head of the W.H.O.s Tobacco Free Initiative. Uruguays gross domestic profit is half the size of the companys 66 billion dollars in annual sales.
Peter Nixon, a vice president and spokesman for PMI, told Bloomberg in December that the company was complying with every nations marketing laws, while selling a lawful product for adult consumers. The lawsuits, said Nixon, were intended to combat what it felt were excessive regulations, and to protect its trademark and commercial property rights.
Cigarette companies are aggressively recruiting new customers in developing nations, Dr. Bettcher said, to replace those who are quitting or dying in industrial nations, where smoking rates have fallen precipitously.
In emerging countries like Mexico, despite growing smoking bans in public places, the slide in smoking rates is negligible, which is essentially why the tobacco companies decided not to go the legal route. At the global level, cigarette sales are rising 2% a year.
Opposition to smoking grows. The number of countries adopting tougher rules, as well as the global treaty, underscore the breadth of the battleground between tobacco and public health interests in legal and political arenas from Latin America to Africa to Asia.
Recent experience shows that cigarette companies work together to fight some strict policies, but go their separate ways on others. For instance, Philip Morris USA, a division of Altria Group, helped negotiate and supported the anti-smoking legislation passed by Congress in 2009, yet it passed on a lawsuit filed by R. J. Reynolds, Lorillard and other tobacco companies against the FDA. So far, it is not protesting the agencys new rules, requiring bizarre graphic images with health warnings on cigarette packs.
PMI, the separate company divested from Altria in 2008 to expand the companys presence in foreign markets, has been especially aggressive in fighting new restrictions in markets outside the United States.
Thus, PMI has not only sued Uruguay, but also Brazil, Canada, Israel, Italy, Nigeria, Poland and Turkey, arguing that images the governments want to put on cigarette packages do not accurately depict the health effects of smoking and vilify tobacco companies. The pictures depict more grotesque health effects than the smaller labels recommended in the United States, including one, being used in Mexico, showing a fetus with the warning that smoking can cause spontaneous abortion.
