Sir, - As we approach the Budget, it is interesting to note comments from a tobacco industry spokesperson that high tobacco taxes are a significant factor in the smuggling of tobacco. Obviously the industry is concerned that the most recent research published by economists from the World Bank has advised governments throughout the world that the most cost-effective way to reduce tobacco consumption is by using fiscal policy - substantially raising the price of tobacco products.
But what about the smuggling issue? The recent announcement by the European Commission that it believes two of the biggest tobacco companies in the world actively support the smuggling of cigarettes and that it intends to sue them in order to recoup lost taxes is welcome. However, it should not come as a surprise that tobacco companies are engaged in smuggling. At the end of 1998, R J Reynolds, a multinational tobacco company, paid a $15 million fine and pleaded guilty to smuggling cigarettes between the US and Canada. In recent weeks the UK government has ordered an official inquiry into the activities of British American Tobacco following an extensive amount of information from investigative journalism which implicates that company in smuggling. Other countries such as Italy, Germany and Columbia are also contemplating legal action because of the apparent role of the tobacco industry in smuggling.
What is patently clear to anyone who has investigated the smuggling of cigarettes is that it is the tobacco industry itself that is clearly involved in criminal activity. Adequate resources need to be provided to the Customs and Excise officials so that they can deal with these criminal activities. In addition, the tobacco industry should be forced to pay the full duty at the point of manufacture and to produce evidence of the intended final destination of their exports. Rather than tinkering with fiscal policy in order to reduce the real price of tobacco products, governments, the Irish one included, need to continue to substantially raise the real price of tobacco products at Budget time. It is important that these taxes are then used in order to adequately finance support structures to help current smokers quit. - Yours, etc.,
Dr Fenton Howell, ASH Ireland, Northumberland Road, Dublin 4.