English
Italiano 2006 – Is Big Tobacco heading for its KO in the EU?
Philip Morris is trying to introduce its "Minimum Price" policy in all the European Community countries.
The “Stop Smoking” campaigns are working; smokers of all ages are quitting. And here comes… the competition!
Big Tobacco can't afford any loss of its market share, because it has very high fixed costs and an enormous structure. It has to fund expensive advertising campaigns directed especially to young people, and eliminate, often with unethical methods, its competition, in order to avoid a progressive and inexorable defeat.
That's why Philip Morris is trying to neutralise the more economical cigarettes using every possible means, by imposing its concept of price increases. This idea is called the "Minimum Price", and it affirms that only economical cigarettes should be subjected to price increases, so that they will no longer be "economical". Brilliant!
A cosmopolitan multitude of parasites drink at the trough of Big Tobacco: including merchants, journalists and politicians, and these make up an important share of its expenditure. Legal expenses to bring suits against its competitors are also very high, and then therès advertising, another colossal item on the budget. All this has to be paid by somebody…
But what about the cigarette prices wère paying today? Are they fair prices? Is what the World Health Organization has declared true, that in spite of the fact that cigarette prices have increased constantly in these past decades, the percentage that goes to the State in taxes has decreased on average to about half of what it was in 1965?
In the light of these objective declarations, maybe it's time to inform and sensitise consumers on how the prices are determined for the products they buy. Then we could block the crooked manoeuvres of multinational makers and their occult supporters.
"The Brilliant Idea" of Big Tobacco
The "minimum price", that Philip Morris is naively trying to impose all over Europe, is an absurd idea; the superficiality and the short-sightedness with which Big Tobacco has launched itself into this losing battle is astounding.
This policy is supposed to force the producers of cigarettes sold at cheaper prices to raise their prices to a minimum decided by the Government. It appears at first glance that, doing this, they will earn more. But, in fact, they won't, because consumers, finding all cigarettes at the same “minimum” price, will inevitably choose the more popular and more advertised brands.
Take Pall Mall or L&M, for example, these are medium price products, respectively of BAT and Philip Morris; after the introduction of the "Minimum Price" in Italy, that obliges other cigarette makers to raise their prices, these brands find themselves in the most economical price bracket.
So, this price increase doesn't increase the revenue either of the State or of the competition, but… only of Big Tobacco. On the other hand, a simple increase of taxes would lead to a price increase of all cigarettes. It would put money into State coffers, and in the end, in the pockets of all of us, instead of only those of the big cigarette producers.
The "Explanations" of Big Tobacco
1. The "Minimum Price" is supposed to make young people smoke less, as it is believed that they generally buy cheaper cigarettes.
But this "explanation" doesn't hold water: a tax increase, too, with the consequent increase of all cigarette prices would raise the price also of the economic ones, those they say young people buy most.
Furthermore, looking more closely, this is a perfect example of those shams of Philip Morris, that want to make people think it's trying to protect the health of teenagers. In fact, young people make up one of the most important brackets of Philip Morris's business, and it's precisely towards teenagers that Big Tobacco continues to direct its advertising; without them it couldn't survive:
- Herès a Philip Morris memo of 1979: "Marlboro dominates in the 17 and younger age category, capturing over 50 percent of the market".
- "Because of our high share of the market among the youngest smokers, Philip Morris will suffer more than the other companies from the decline in the number of teenage smokers." (Myron E. Johnston, Philip Morris researcher).
- A study into Tobacco Advertising and Consumption remarks that: "Approximately 60 per cent of smokers start by the age of 13 and fully 90 per cent before the age of 20. These statistics translate into the need for more than 5,000 children and teenagers to begin smoking every day (in the USA) to maintain the current size of the smoking population". Tye, Warner, Glantz, 1990
2. The "Minimum Price" would direct to consumers towards the brands of Big Tobacco, that are "less harmful for the health".
Big Tobacco says: our cigarettes are more expensive, so they are also of better quality, therefore less harmful to the health. This theory of Big Tobacco is really puerile, it has been repeated by the mass media without checking the facts as if it were unquestionably true. In fact, such statements should be denounced.
Actually, Big Tobacco has never allowed consumers to know anything about the ingredients and the quality of their products; this is all top-secret information, starting from the ammonia included in products.
- Revealing the ingredients of their cigarettes would be a ruinous idea for Big Tobacco, starting from the tobacco itself: according to the World Health Organization, thanks to the introduction of new technologies, additives, reconstituted tobacco and other materials, the tobacco leaf content in cigarettes has gone from 2.28 lbs per 1,000 cigarettes in 1960, to 0.91 lbs in 2000. Marvels of science!
- Additives enable Philip Morris to use cheaper tobaccos in their cigarettes: "Philip Morris people often state in public that additives are important to them with regard to controlling smoke chemistry and taste. Indeed, their leaf people have been known to say that the additives are one reason that they can buy some cheaper tobaccos. Casings are an obvious choice of a vehicle for use of such additives." (BAT, February 1985, The Unique Differences Of Philip Morris Cigarette Brands)
Actually, the price paid up to today for a packet of Marlboros with ammonia has nothing at all to do with the quality of the product: the price is determined by the advertising messages, icons and slogans and profits.
Italy: Nobody sees, nobody hears, nobody speaks…
In this country, Big Tobacco is the boss and, as always, it gets what it wants. The government, in perfect harmony with Philip Morris, raised the "minimum price" first to 3.00 euro in July 2005, and then to 3.10 euro in January 2006; and more increases are in sight.
But what can Philip Morris have given in exchange to its occult supporters in Italy to have been granted such an important favor? Probably some squalid sop, like what has happened in the past. Our professional politicians and our managers, with their Master's degrees from New York (considered very chic in Italy) have never been taught to check their accounts and not be taken for a ride.
The "Minimum price" in effect in Italy today is doing colossal harm to the collective interests, there is an enormous business going on behind the backs of the consumer-sponsors. The leaders of all this should be denounced and tried. And it is all happening in absolute silence: not a single article, not a single comment, not a single criticism, no body has said a word.
The only exception is the REF Institute of Milan (Ricerche Economia Finanza), that accused the measure of violating European regulations on the free determination of prices: "It is an obstruction to free competition, the European Union will intervene as it has already done against Greece and France".
Spain: Big Tobacco a drift
In Spain, the government didn't accept Philip Morris' absurd proposal; instead of fixing a “minimum price”, it increased cigarette taxes. So, prices to the public increased, but on all cigarettes, and it was the State that increased its revenue. This is sensible!
With the impetus of a student, Philip Morris reacted, and instead of raising its prices by 4%, it lowered them by 15%, that is, 50 eurocents. An enormous sacrifice! The typical move of one who finds his back to the wall, who has the vital need to avoid losing his market share.
The “student” Philip Morris didn't even consider the result that tobacco sellers in Spain would be forced to sell at a price lower than what they paid. So, many of them refused to sell Marlboros. What a chaotic situation!
This reaction, that also reduced the Statès revenues on Marlboros, the most sold in Spain, also probably had a polemic significance against the Spanish government, that had not accepted Philip Morris's request for a "minimum price".
The minimum price idea was gross but even more gross was Marlboro's reaction. Has Philip Morris perhaps grown too bigheaded; does it need some regulation?
Big Tobacco needs, for its survival, a European market that is "drugged", and to reach this objective in the European Community, it has to try to get a sort of paradoxical "State aid", obtainable only with manoeuvres that take place behind the citizen's back.
But fortunately, the unacceptability of the "minimum price", and the reasonable refusal by even one of the States of the European Union, is enough to make Philip Morris's attempts null and void in the entire EU, and perhaps, even to force Italy, where the manoeuvre was successful, to reconsider.
If this is not enough, in April 2007, Yesmoke Tobacco, will be putting its “Yesmoke” and “Born to Smoke” cigarettes, made in Turin, on the European market, and the company is ready to intervene directly by legal means as injured party to gain its free-market rights. According to its attorneys, the possibility of victory is 100%.
Prevent Thefts
Philip Morris is asking the European Community to set up obstructions to free market competition (in exchange for what?), which would benefit foreign corporations and damage European companies.
In the past, the United States Trade Representative (USTR) threatened foreign countries with sanctions on goods they exported to the US unless US cigarette companies were given free access to their markets. No other US agricultural product received the same attention, and all the nations capitulated to the US's demands. Again, all behind the citizens' backs.
But today, when Consumer Protection and information on the world of tobacco is beginning to be fashionable, certain business techniques are becoming more "unpresentable" in modern democracies, and unacceptable for informed consumers.
This type of situation points out the vital role information plays as a starting point to make consumers responsive and responsible, and to change them from unknowing sponsors to arbitrators of the situation. It is with free and complete information that we can prevent further thievery of sums, we mustn't forget, that have harmed citizens enormously.
This information should include the truth about cigarette additives and consumer rights, and the truth on the occult world of Big Tobacco supporters, and finally, the whole truth on the colossal smuggling and fiscal evasion of Philip Morris that is still unpunished. All this, Yesmoke has amply documented.
Correct information, objective and complete, would also demolish the subtle and slimy slogans of Big Tobacco which, besides setting prices outside of the market, have led to the success of the product among adolescents and women.
The knockout blow
"They have to find a way to feed the monsters they've built", was the analysis of Marketing Week in 1998. After its " Minimum Price " demands have been refused also in Italy, what will be the Philip Morris' next undercover game to feed the monster?
As we wait, is seems only right that in a democratic society, where the political world, the mass media and that galaxy of organisations that are fighting against the multinationals, should begin to support strategies that are less folkloristic and technically more efficacious to control this avaricious enemy, that has never before been within reach as it is today.
Let's make Marlboros cost too much! A tax increase with a consequent price increase for all cigarettes is the reasonable and fair alternative to Marlboro's absurd "minimum price": This would inevitably encourage smokers to quit, or to move towards cheaper, and perhaps less harmful brands. It would also help to but Philip Morris back in its place!
This could be a splendid K.O. blow for the tobacco Giant…. Wouldn't that be grand?
More info
- Big Tobacco - “Young adult smokers”
- Big Tobacco - Ammonia technology
- Big Tobacco - Advertising
- Puffing up Profits
- Who Sets the Price …in Marlboro Country?
- Big Tobacco Mafia in Italy
- Ferrari Guilty!
- Italy - 37.5 billion dollars lost
No Comments