While global integration and economic crisis are major challenges to Vietnamese enterprises, rampant illicit trade in tobacco is the biggest and most uncontrollable challenge to cigarette companies. For years, the tobacco industry has not been alone in this tough battle. But, to hold back the illicit trade in cigarettes, stronger engagement of central and local government and awareness of consumers in the country are essential.
Contraband tobacco has become a global issue
In 2015, the World Health Organisation (WHO) launched the message “Eliminating the illicit trade in tobacco” with its rising concerns about serious harm of contraband cigarettes. In Vietnam, the Vietnam Tobacco Association said, “The strict regulatory environment for domestic tobacco industry is inadvertently facilitating the rapid growth and expansion of contraband tobacco and creating an unfair competition environment. Tobacco smuggling is super-profitable. As contraband cigarettes evade 70 per cent of special consumption tax, 10 per cent of VAT, 135 per cent of import duty and 1 per cent of contributions to the Tobacco Harms Control Fund (to be raised to 1.5 per cent from May 1, 2016), they can be sold much cheaper than domestically produced cigarettes. Besides, smuggled cigarettes are not printed with health-harm warnings on the box or placed under any quality, safety and hygiene control, they pose serious harms to public health. According to analytical results from the Institute of Tobacco Economics and Technique and the Institute of Criminal Science under the Ministry of Public Security, some prohibited toxic substances like rat toxic poison, tar and nicotine are found in JET and HERO cigarettes (currently accounting for over 80 per cent of smuggled cigarettes in Vietnam) with the content much higher than allowable limits of the Ministry of Health. A JET and HERO cigarette reportedly has a Tar content of 19-20mg, a nicotine content of 1.9mg (respective maximum Tar and nicotine limits are 16 mg and 1.4 mg per cigarette).
The rampancy of tobacco trafficking and illegal transportation across provinces and cities is also a major challenge to social security and order. With a strong resolution to repel this serious problem, on September 30, 2014, the Prime Minister issued Directive 30/CT-TTg on strengthening measures to combat cigarette smuggling and a regulation on complete destruction of confiscated smuggled cigarettes (instead of exporting as earlier). This has brought in positive impacts. In response to the Prime Minister’s Directive, all central and local agencies engaged with a strong willpower. After more than a year, the amount of smuggled cigarettes reduced 30 per cent, thus helping the domestic tobacco industry regain the market, production and consumption. In 2015, tax revenue was VND17 trillion, an increase of nearly VND1,400 billion over 2014. This partly proved that contraband tobacco can be entirely wiped out if there is a proper participation and resolution of the Government, ministries and businesses.
Tireless attempts
Recently, the Government issued Decree 124/ND-CP under which the act of trading prohibited smuggled cigarettes will be criminalised at a level of keeping 500 boxes or more (instead of the previous 1,500 boxes). This means that a person may face a 15-year imprisonment for keeping 500 bags of tobacco.
The highly dissuasive decree will take effect on May 1, 2016 but tobacco trafficking and smuggling were seen spreading in the first four months of 2016. JET and HERO cigarettes are being blatantly sold in major cities and are accessible and affordable to everyone. Before this reality, the Vietnam Tobacco Association recommended the Prime Minister direct ministries, branches, localities to enforce Directive 30/CT-TTg on strengthening the fight against cigarette smuggling.
The Market Management Bureau was urged to guide market watchdogs to intensify inspections into cigarette trading and retailing to timely discover and handle violators.
Currently, Vietnam is fighting hard to put an end to dirty foods. From the perspective of consumption, contraband tobacco is a type of dirty food which needs to be informed to consumers for understanding and boycotting. The Vietnam Tobacco Association recommended central and local authorities to carry out Decree 124/2015/ND-CP dated November 19, 2015 on amendments and supplements to some articles of Decree 185/2013/ND-CP on sanctioning of administrative violations in trading, production, buying and selling of counterfeit goods and prohibited goods to protect consumers’ interests. At the same time, the Vietnam Tobacco Association also filed a request to the Government to ask the National Assembly for amendments to the Law on Tobacco Harms Control.
To bring governmental policies and regulations on contraband cigarette prevention into life, the Vietnam Tobacco Association asked local authorities to press their employees not to smoke smuggled cigarettes because it is helpful to smugglers and tax evaders. Only when there is a drastic change in consumer trends and choices - saying no to contraband tobacco, this fight will be over.
PV
Vietnamese
