Tobacco.org

• Moldova officials behind counterfeit cigarette smuggling to EU 

According to a just-released investigative report, Moldova is increasingly at the center of cigarette counterfeiting and smuggling in Europe. Business is booming thanks to the country's new location right on the European Union's border after Romania (which Moldova used to be part of until 1940) joined the EU on 1 January 2007.

Tobacco smuggling is now one of the primary drivers of crime and corruption in the country, which is the poorest nation in Europe. Worldwide, tax losses could amount to $50 billion, according to the Framework Convention Alliance, a consortium of non-profit groups seeking to stop smuggling. . . . Online sellers from Moldova sell counterfeit Marlboros and other imitations of Western brands and ship them to their customers in Europe and the USA via the post office and courier services. It is illegal in almost all countries to import cigarettes without paying custom and excise fees. To circumvent customs, they label their cigarette boxes with fake duty-paid stamps and also falsify the description of the package contents.

NewPort group, a company from the capital of Moldova (address: Albisoara 84/5-23, Chisinau), writes on an online trading web site: "Our company is interested in exporting cheap cigarettes to poor countries in Asia or Africa. We are producers for more then 50 years already. Our production factory is situated in Central-Eastern Europe. Companies interested, please feel free to contact us." . . .

The Organized Crime & Corruption Reporting Project, a coalition of investigative reporters from EU member states and other European countries, has documented the organized crime business of tobacco smuggling, and particularly the involvement of government officials in the region. According to the researchers, politically connected figures in Moldova control a stake in the state tobacco monopoly but remain hidden behind a shield of official secrecy.

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GUREZ: Tobacco Industry - bankrupt but promising 

Year by year, numerous anti-smoking campaigns are carried out all over the world. However the number of smokers does not decrease, on the contrary, it grows. Moldova is not an exception. A recent study shows that the rate of mortality from illnesses caused by consumption of tobacco products in the Republic of Moldova is 2.2 times higher than in Europe and makes up 864 persons per 100,000, while the share of smokers at present makes up 46%. Even sadder is the fact that the rate of tobacco consumption among children of up to 10 years of age and adolescents is very high. Thus, according to national studies carried out among pupils aged 13-15, at present 24% of boys and 10% of girls smoke.

It would seem that the high number of smokers is produced by the well-developed tobacco industry. . . .

Certainly, the intention of the government to develop a branch that used to be extremely profitable in the soviet period is grounded, especially since export demand is quite high. On the other hand, each person has the right to choose whether to smoke or not. And as long as the number of those who do is sufficiently large in Moldova and abroad, tobacco industry is worth being developed.

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• Moldova supplies tobacco to Russia through third countries 

Since Russia's ban on imports of plant products from Moldova, imposed in May 2006, the republic has been supplying tobacco to Russia through third countries, a source in Moldovan tobacco company Moldova-Tutun told RBC. The source did not name the countries, but said that Moldova intended to supply some 3,000 tonnes of tobacco to Russia this year. The total of Moldovan tobacco exports is expected at 6,300 tonnes. Previously Russia accounted for 65-70 percent of Moldovan tobacco exports.

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Moldova will nearly quadruple farm subsidies in 2006 

The worth of farm subsidies in Moldova will be increased nearly four times next year - to 220 million leus (about $17.194 million) - from the amount set aside in the budget for this year - 60 million leus, local media have said.

The Minister of Agriculture and Food have said that the increase in subsidies was necessitated by an increase in fuel prices, which has to be compensated to the farmers.

He said that out of the 220 million leus, 5 million will go to development of tobacco farming,

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• Pushing up smoking incidence: plans for a privatised tobacco industry in Moldova 

It is evident from the tactics revealed here that countries undertaking tobacco industry privatisation and the organisations advising them need to ensure a transparent process and a truly competitive tender in order to maximise potential revenue gains. To minimise the harms they should more cautiously assess joint venture proposals and their true effects on employment, and seek to prevent the predicted increase in consumption likely to arise through the growth of advertising and decline in prices by implementing effective tobacco control policies particularly comprehensive advertising bans and adequate taxation rates. The case of Thailand, which was forced to open its market to cigarette imports as a result of a General Agreement on Tariffs and Trade (GATT) ruling, shows that comprehensive advertising bans and steep tax increases can be implemented despite opposition and prevent increases in smoking prevalence.74 Cigarette consumption, however, continued to increase until the economic crash of 1997,75 not least because of the TTCs aggressive tactics, slashing prices, and exploiting legislative loopholes.74

Our findings also raise a more general issue about the role that international financial organisations play in promoting tobacco industry privatisation. We would argue that empirical studies of the health and economic effects of privatisation are needed to properly inform this debate. These should inter alia examine the effects on employment, trade balance (given the TTCs use of non-local leaf), and creation of demand, and the long-term effects on health and economy. Meanwhile, a precautionary approach should be pursued. Ideally, health impact assessments should be undertaken before individual privatisations. Loan conditions should ensure that public health is protected and that corrupt TTC and government activity is minimised. Such objectives would be advanced by making the implementation of tobacco control policies and open, competitive tenders pre-requisites for privatisation. Otherwise these organisations will simply serve to propagate the TTC's relentless expansion and exploitation of yet more vulnerable populations and the further spread of the global tobacco epidemic.

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• Exposed: Tobacco Companies Efforts to Influence Industry Privatisation, The Lancet 

A paper in this week's issue of The Lancet highlights how two tobacco companies attempted to influence plans to privatise the state-owned tobacco industry in Moldova.

Moldova, a small, agriculturally dependent state of 4*3 million people is Europe's poorest country. In October 2000, after pressure from the International Monetary Fund the Moldovan government approved a bill to privatise its tobacco industry.

Anna Gilmore (London School of Hygiene and Tropical Medicine, UK) and colleagues analysed internal tobacco industry documents on Moldova made public through litigation. The documents suggest that although a competitive tender for the state owned monopoly was later announced, British American Tobacco (BAT) and the German manufacturer Reemtsma each initially sought to secure a closed deal. . . .

Dr Gilmore comments: "It is evident from the tactics revealed here that countries undertaking tobacco industry privatisation and the organisations advising them need to ensure a transparent process and a truly competitive tender in order to maximise potential revenue gains. To prevent the predicted increase in consumption likely to arise through the growth of advertising and decline in prices effective tobacco control policies, particularly comprehensive advertising bans and adequate taxation rates, should be implemented before privatisation occurs."

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Tobacco trouble in Moldova 

Moldova, Europe's poorest country, has so far resisted pressure to privatise its tobacco industry. To inform the ongoing debate about tobacco industry privatisation, Anna Gilmore and colleagues examined the policies pursued by transnational tobacco companies in Moldova, by assessing internal industry documents. Their findings highlight the potential for tobacco industry privatisation to undermine tobacco control and promote cigarette consumption.

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RESEARCH AND PRACTICE / Prevalence of Smoking in 8 Countries of the Former Soviet Union: Results From the Living Conditions, Lifestyles and Health Study 

Conclusions. Smoking rates among men in these countries have been high for some time and remain among the highest in the world. Smoking rates among women have increased from previous years and appear to reflect transnational tobacco company activity.

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MOLDOVA: Tobacco Plantation Land To Tripple 

To improve the tobacco production sector, the land used should be not less than 15 thousand hectares. Last year, the plots with tobacco was only 5.4 thousand hectares, against 9.1 thousand ha in 2002. As a result, the gross production of green tobacco leaf shrank to only 60 thousand tons (almost 1.5 times less than 2002), and Moldovan tobacco-fermentation and cigarette factories were working with only 61 percent of their technical capacity.

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Tobacco Plantation Area To Triple in Moldova 

To improve things in the tobacco sector, the plantation area should be not less than 15 thousand hectares. Such a task was set to responsible officials by Prime Minister Vasile Tarlev at the Thursday's special working meeting he convened to discuss situation in the sector. . . .

Mr. Mihai Machidon, Director General of the Moldova-Tutun agri-industrial department, indicated several essential reasons of the tough situation in the sector: lack of raw materials, enterprises' debts, shortage of circulating capitals with both farms and fermentation factories, high wear and tear of equipment, and lack of means that prevents re-equipment.

In order to improve the situation, the sector's flagship - Chisinau cigarette factory Tutun-CTC - will increase the volume of investment in crediting of tobacco farms.

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Confiscated Cigarettes To Be Sold, Not Burnt 

Cigarettes, confiscated by Customs or other controlling organs, shall no more be annihilated as is the practice currently, but shall be realized, according to two bills submitted by the Government and MP Valeriu Calmatui and approved by parliament in the first reading today.

The bill drafters think it is not normal that the State itself ruins a property that can well be used much more rationally. Such items can be sold, with proceeds to be transferred to the State Budget. . . .

However, opponents subjected both bills to a sharp criticism. They believed that the interests of foreign cigarette manufacturers would be thus violated.

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Russian News Ticker: Russia, Moldova agree on sugar, tobacco free trade 

The Moldovan government approved Wednesday an agreement with Russia on sugar and tobacco free trade, the government press service said. Moldova will be able to start exports of white sugar produced from domestic beet to Russia without any restrictions from the start of 2005.

Next year, Russia will provide a 100,000-tonne import quota for Moldovan white sugar.

Moldova will also be able to start duty-free exports of tobacco to Russia then.

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Tobacco Journal - News 

Ukrainian weekly describes cigarette smuggling across Moldovan border 

Due to a depressed economy, many residents of areas near the Ukrainian-Moldovan border have turned to the relatively lucrative business of smuggling cigarettes and alcohol across the border. Journalist Oleksandr Fomyn accompanied two smugglers on a run across the border for cigarettes and listened to their experiences in the illegal trade. The following is an excerpt from the article published in the Ukrainian weekly newspaper 2000 on 6 December:

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Trans-Dniester 'Nation' Resents Shady Reputation  

Some also say that the region is a hotbed of smuggling and a potential haven for terrorists. "I can assure you," Mr. Marakutsa said emphatically, "that neither terrorists nor smugglers will find a place on our territory." . .

The Trans-Dniester Republic is unique, the experts say, in that it is rooted not in religion or ethnicity, but in its ability to turn a fast and often illegal buck. . .

Or look at trade: after the Trans- Dniester Republic and Moldova briefly set up a joint customs operation, 1998 figures uncovered by Mr. Nantoi showed that Trans-Dniester, with but one-sixth of Moldova's population, imported 6,000 times as many cigarettes as the rest of the country.

Mr. Nantoi said he believed that most of the cigarettes were illegal knockoffs of Western brands, illicitly made in Ukraine and exported through the Trans-Dniester Republic as far as Germany. [This graph only]

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