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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• 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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• 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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