WINDHOEK – CEO of the Tobacco Institute of Southern Africa (TISA), Francois van der Merwe, expressed concern at the growing trend to introduce cigarette packaging regulations that encroach on existing legal trademarks. “Any measure that goes beyond what is necessary to educate the public about the dangers of tobacco by limiting trademarks of legal products, runs the risk of achieving many unintended consequences for years to come. Extreme regulations, such as standardised packs as in Australia will make it difficult to differentiate between tobacco products and will make counterfeiting easier, leading to a further rise in illicit trade,” said van der Merwe.
The illicit trade in tobacco products is already of considerable proportions in the Southern African region, affecting all stakeholders throughout the tobacco value chain. “Any increase in illicit trade due to extreme regulation which is not based on evidence and science, and on which full consultation has not taken place, will have disastrous negative consequences for countries in the region,” remarked Van der Merwe.
In 2011, Namibia’s Ministry of Health and Social Services tabled proposals to introduce cigarette packaging restrictions that would see both graphic and text health warnings taking up a significant percentage of the pack, making it one of the first countries in Southern Africa to do so.
Meanwhile, SADC members Zimbabwe, Zambia and Malawi have registered their concerns around the impact of extreme tobacco packaging legislation, with all three having notified the WTO of their interest in becoming third parties to the Ukraine dispute on tobacco plain packaging. This is on the basis of the contribution of tobacco to their economies, a point on which they refuse to be mute participants and powerless negotiators in international forums where the outcome impacts their economies.
Tobacco is grown in six of fifteen member states of the Southern Africa Development Community (SADC). Malawi, Mozambique and Zambia are key Burley Tobacco producing nations, while South Africa, Tanzania and Zimbabwe produce Virginia Flue Cured Tobacco. Zimbabwe ranks globally as the fourth largest producer of Virginia Flue Cured Tobacco after China, USA and Brazil.
In all of the five tobacco growing member states, tobacco is a key export earner and a significant contributor of between 3-10 % to the GDP of those countries.
According to a recent study on the Tobacco Value Chain in SADC by NKC Independent Economists, farm production on over 440 000 hectares employs 3.66 million people with 16.95 million dependants while formal and informal retailing employs over 330 000 people with more than one million dependants. Closer to home, within SACU, tobacco wholesalers and retail enterprises employ over 180 000 workers with almost 630 000 dependants. Tax revenues generated by the tobacco value chain totalled US$1.57 billion (about N$15.7 billion)during 2011. Eight processing facilities contributed to US$200 million (about N$2 billion) in tobacco and related product exports in 2011.
While Namibia may have no interest in the significance of tobacco as a crop or a commodity, the way the debate plays out raises a bigger question about policy prioritisation within Africa. Particularly, because the tobacco issue is rapidly tailgated by less visible WTO exchanges on the labeling of alcohol and the health consequences of sugar consumption, it remains to be seen whether those debates evoke similar responses outside the “cut and paste” tobacco control legislation as it is currently manifesting in the sub-region.
Ukraine and Honduras are reviving a dispute at the World Trade Organisation (WTO) challenging Australian laws that introduced so-called “plain packaging” requirements regarding the appearance and packaging of tobacco products. Inclusive of significant trademark restrictions, the legislation requires tobacco products to be sold in standardised, olive-green packs with large graphic health warnings on both sides of the pack.
The complainants are arguing that Australia’s measures violate certain international trade law principles – eroding the protection of intellectual property rights and imposing severe restrictions on the use of validly registered trademarks. Furthermore, they claim the measures constitute an unnecessary obstacle to trade and that the stated health objectives, to discourage smoking, can be achieved with less trade restrictive means.
The establishment of the WTO Panel in the Honduras dispute makes it the second such panel – one was established at the request of the Ukraine on September 28 2012. This brings the total to five countries – the Dominican Republic, Cuba and more recently Indonesia being the other complainants that have initiated challenges against the legislation.
These global developments put to test what Australia called “The World’s Toughest Anti-Smoking Law”. Countries like the UK and New Zealand have decided to postpone the implementation of similar regulations, until certainty is found on the legality of the measures at the multilateral level and the impact of such measures. The Ukraine dispute has received significant international support with, to date, 35 countries from around the globe reserving their rights to be third parties in the dispute.
By Staff Reporter