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How come cigarettes are produced and new factories are opened in Europe, but not in Italy?
Until a few years ago, 95% of the cigarettes sold on the Italian market were manufactured in Italy. The Ente Tabacchi Italiano that used to own all the Italian brands even manufactured Marlboros for Philip Morris here, before it was sold to British American Tobacco in 2004.
Today 99% of the cigarettes sold in Italy (including Logista Spa, that handles all the distribution) is the property of a cartel of foreign companies, which have now moved almost all their production into other countries; it is a sector worth 14 billion a year in tax revenues.
This behavior of the Italian State is unreasonable because it has sold all the Italian brands of cigarettes to foreign companies and it seems indifferent to the fact that these companies have moved their production to other countries leaving many Italian workers without jobs.
In fact, the Italian State, blocking free competition with the Minimum Price prevents new manufactures, who would like to invest in the Italian cigarette market, from producing and paying taxes in Italy. At the same time, it is allowing foreign cigarette producers to make enormous profits, knowing that they do not pay taxes in Italy.
What is more, the Italian State has lined up us side by side with foreign makers against Italian producers, and it is combating against the European Union that says that the Minimum Price “safeguards the producers of cigarettes, damaging the tax revenues.
It is a typical Italian scenario
Philip Morris has all its cigarettes manufactured by a foreign associated company; from this it acquires the products at an exorbitant price so that it can then sell them on the Italian market legally declaring absurdly low profits.
If Philip Morris manufactured its cigarettes in Italy the real production costs would be counted and especially, there would be limits to any royalty payments.
Looking at Japan Tobacco, we see that it is operating, always legally, in an even more artful way; it is selling its cigarettes in Italy directly through a foreign company with headquarters in Holland, and in Italy it does not even fill in a tax declaration.
Japan Tobacco Italia srl, with headquarters in Milan, does not pay even two symbolic cents of taxes, because officially it does not handle the sale of cigarettes, but only their “promotion”.
In this scenario, the role of the Italian institutions is paradoxical, because in effect, they are acting to defend this state of affairs.
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