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Italiano Who gets the money?
A minimum price for all cigarettes. They've succeeded only in Italy.
Three Euro on August 1st 2005, 3 euro 10 eurocents on October 14th , 3 euro 20 cents on last February 7th. The minimum price of a pack of cigarettes, almost without being noticed, has soared in the past months "in an effort to safeguard public health". And they say it's going to keep going up in Italy.
But seeing that everyone was opposed to this, starting from the Antitrust (the Authority that guarantees free competition on the market) and the Codacons (the Consumer Defence Association), and seeing that Italy is one of the countries where cigarettes are cheapest, wouldn't it have been better to raise the taxes, not the price, and on all cigarettes?
These price increases are putting more money in the pockets of the tobacco multinationals and they do nothing to help the country's tax revenues. An increase in cigarette taxes would mean an increase in the Statès income and less profits for the multinationals; they would then be forced to reduce their prices to stay competitive.
Which is fairest: increase the prices or increase the taxes? Is it better to give our money to Philip Morris or to our country?
… And there is probably someone, in the meantime, who has bought himself a Yacht?
Big Tobacco is riding high in Italy, where it has managed to do the impossible: the price of cigarettes - and the producers' profits - have climbed and continue to climb undaunted, without anyone saying anything.
According to the Antitrust Authority, that guarantees market competition, fixing a minimum price is contrary to regulations that defend competition. Because of this, the Authority sent notification to the presidents of the two Chambers, to the Prime Minister and the to Minister for the Economy.
According to Lega Italiana per la Lotta contro i Tumori - the Italian Anti-Cancer League, the minimum price favours one or more manufacturing companies, while the Codacons recommended an increase of all cigarette prices.
"It is an obstruction to free competition, the European Union will certainly intervene", said the REF (Ricerche Economia Finanza - Economic Finance Research), that accused the provision of violating European regulations on the free determination of prices. But no one paid any attention.
And except for a few distracted comments when the price was set at 3 euro, nothing more has been heard. The price climbed higher and continues to climb, with absolute silence of the Italian press and of all the political forces - of the Government and also the Opposition.
The tactics of Big Tobacco
The minimum price provision will very likely lead to the closure of any company that offers cigarettes that have not benefited from decades of colossal advertising campaigns and those "mythical" slogans.
The mechanism is perverse and flagrant: the minimum price obliges the manufacturers of cigarettes sold at lower prices to raise their prices up to the minimum dictated by the State: in theory, they should earn more.
But, in fact, this doesn't happen, because the cheapest cigarettes on the market today, thanks to this law, cost the same as Winstons, Pall Malls and L&Ms, and consumers, finding all packs at the same price, inevitably choose the ones that are most famous and most advertised.
If we go on this way, wèll reach a single price for all cigarettes, and that will be the price of Marlboros. A terrific deal for Big Tobacco! …. but not much good for the coffers of the State!
Smoke Marlboros!
"We are protecting the health of our young people!" they say, but this is a crude and untenable justification. The general objective of "safeguarding health" stated, in fact, in the text of the regulation is not enough, in the opinion of the Antitrust, to justify the limits imposed on free competition that this regulation imposes on the market.
The Antitrust says that young people don't seem to be very interested in the price of cigarettes and, therefore, these increases have no noticeable effects on the levels of cigarette consumption. It would be much more effective if the money were spent on information campaigns to warn smokers about the health risks deriving from tobacco addiction.
Youths today, when they start smoking don't buy the cheapest cigarettes, but the ones that are most advertised, and they don't smoke two packs a day, just a few cigarettes are enough. What counts is getting them to start, and Big Tobacco knows this very well: cigarette advertising has always been studied specifically to tempt young people, from the Marlboro Country Cowboy to Joe Camel.
But, according to Sergio Baronci, general secretary of the Italian Tobacconist Federation -Federazione Italiana Tabaccai (FIT), "This regulation will help to combat juvenile smoking because boys and girls tend to buy low-cost cigarettes". What study is Signor Baronci basing this statement on? The only data that we have today show that the cigarettes young people smoke most are Marlboro Lights!
Always according to Baronci, this price increase will certainly make cheap cigarettes less appealing to smokers and these are usually the most harmful brands.
So, basically what he is saying is that Marlboros, with their ammonia and reconstituted tobacco should be "less harmful for the health". And no one has denounced him!
The State Coffers
The year 2005, explained the REF, was a difficult period of passage for the market of processed tobacco: the imposition of the minimum price led to a drop of sales, and therefore, said the institution, it would be very difficult to reach the hoped-for target of an increase in tax revenues.
As for the prospects of the processed tobacco market, the REF predicted for 2005, a decrease of sales between 8% and 9%, with the overall cigarettes market that would stop at around 90 million kilos.
And so, we saw the most significant drop in sales recorded in the past 30 years, even greater than the market volumes lost back in the period when there was the explosion of smuggling, toward the end of the 1980s and early 90s. And all this has led to a great loss also in tax revenues.
And the irony of this situation is that the minimum price imposed today goes to benefit precisely those Tobacco Manufacturers who used smuggling in the past as their primary method of penetration into the Italian market. It's crazy!
Corruption or lunacy?
The determination of cigarette prices, and the taxes imposed, is a very important problem, not only because we are dealing with figures that, alone, are equivalent to one of our so-called "financial manoeuvres".
The problem involves us citizens in a direct way: it obliges us, in fact, to pay every day to the multinational manufacturers of tobacco, a price that has no relation to the quality of the product; we are paying to provide advertising messages, icons, slogans and disproportionate profits. Without considering that no one has ever made the slightest effort to look into the past crimes of these companies in Italy, including tens of billions of euro of damage to the Italian State with tax evasion and smuggling.
Why, with such premises, have our legislators done so great a favour to Big Tobacco - and so much damage to the revenue of our Nation? Who decided and supported all this? What is the role of the Italian State Monopoly - Monopoli di Stato Italiani? Why have all the politicians remained silent? Why has there been absolutely no information on this situation?
It may be a mistake to say that, to obtain a result like this, "someone must have paid", but it is more than legitimate to suspect that there must be someone who has let himself be corrupted.
Isn't all this enough to make someone feel the need to look into and clarify what is going on?
A similar state of affairs is usually found only in countries that are backward and not democratic.
Isn't there anyone in our country who is able and willing to defend us citizens in cases like these?
More info
- Big Tobacco Mafia in Italy
- Smuggling + ammonia = Marlboro
- Ferrari guilty!
- Italy - 37.5 billion dollars lost
- Is Big Tobacco heading for its KO in the EU?
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