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June, 2007

New Hurtles in the Global Market...

While news of lawsuits and bans on smoking in public can hardly be called “news,” let alone unexpected (welcome to the club, Iceland), more examples of nanny-statism are popping up from, until-recently, relatively quiet corners of the market. Saudi Arabia—the kingdom in the heart of that tobacco-loving peninsula—recently announced a multi-billion lawsuit against “international tobacco companies.” Reuters reports the Ministry of Health will seek a US$2.67 bn lump sum payment plus about $133 mn in annual payments for an undisclosed period of years. No particular companies were named in the suit, but BAT and Altadis are among the international firms that do business in the kingdom. Meanwhile, the city of Dubai enacted a ban on lighting-up in all government buildings, schools, and colleges as part of a phased plan to stop all public smoking in the desert playground by 2009.

Across the Gulf and over the Himalayas, China—home to roughly 350 mn smokers (nearly one quarter of the population) as well as the 2008 Beijing Olympics—recently announced its Beijing Games will be smoke-free. While the move surely has a western audience partly in mind (in conjunction with etiquette-lessons for hotel staff and “anti-spitting” patrols), it’s having a real effect domestically: Chinese state media reported that dozens of metal pipe–wielding security guards “beat up” workers taking a cigarette break during the construction of the National Stadium as part of the strict ban on lighting-up near Olympic sites. The ban coincides with the launch of a two-year “smoke-free China” campaign. A campaign, it should also be noted, being supported with funds from a US$125 mn grant from New York City’s billionaire mayor Mike Bloomberg to promote “freedom from smoking” in developing nations.

The trend is even spreading into Africa—the Nigerian states of Kano, Lagos, and Gombe have joined together in a multi-billion dollar lawsuit against BAT for what it claims were marketing campaigns aimed at under aged smokers. Kenya’s high court temporarily struck-down a recently enacted ban as being too vague. Neighboring Tanzania and Uganda have also enacted bans on public puffing, but the laws are routinely flouted.

Many of these recent events undoubtedly stem from politicians and appointed bureaucrats looking for unpopular scapegoats to feed into public coffers. These are challenges that will only proliferate thanks to the promise of billion-dollar litigation payments. And thanks to million-dollar initiatives pushed by the likes of Mr. Bloomberg, the new world of tobacco consumption may very well consist of outright bans in public buildings, with private businesses forced to provide separately-ventilated areas for those who dare to indulge. These are challenges the industry can survive. But if the West is leading the way in such matters, a recently-introduced Liverpool city council ruling that will curb smoking in private residences may be a troublesome sign of things to come. This is the point when the industry must take a stand and continue to fight for the rights of adult smokers. If the public seems disinterested in fighting to keep the state’s hand out of personal activities in one’s own home, just remind them of one thing: their unpopular habit may be next.

- Evan D. Dashevsky

Tobacco International - June, 2007

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