SMOKERS, QUO VADIS?

Smoking is no longer a status symbol in our time.

I remember the old days when even sophisticated ladies were shown in the movies as brandishing long-stemmed cigarette holders to indicate their high social stature. Business tycoons had their cigars and tobacco pipes, and business meetings were filled with smoke. I used to be a military assistant to the late Executive Secretary Rafael Salas who used to carry along his tobacco pouch and pipe. On the other hand, we used to call ex-General and ex-President Fidel V. Ramos as “Tabacco” since he was in the habit of having a cigar stuck in his mouth.

These days, almost everywhere there are signs that prohibit smoking. Public conveyances, including the small tricycles, have the sign “no smoking” posted in their interiors. I have noticed that even the building where a tobacco company holds office has signs all over cautioning against smoking. There is also one municipality that prohibits smoking inside the house. Eventually, even smoking in the open spaces may be prohibited as cigarette smoke will add to the pollution and hasten climate catastrophes.

There was a time long long ago when tobacco was used for religious purposes. It seems that smoke emanating from tobacco symbolizes our worshipful spirits rising to the ever powerful deity in outer space. A scene had been memorialized when a peace process between the English colonists and Indians were consummated by smoking the peace pipe… and what was in that peace pipe but tobacco. That event was supposed to be during the time of Sir Walter Raleigh who introduced tobacco to England.

But developments in the industries made tobacco an ordinary commodity available to commoners and no longer an object as symbol of veneration. We now only have incense to produce smoke inside churches to rise to the skies.

Even as tobacco in cigarettes is being declared these days as dangerous to our health, instead of coming out with laws banning its use, our lawmakers still come up with laws that seek to make money out of it. And there are still big companies that compete and engage in “to the death struggles” to eliminate each other. Of late, House Bill 5727 being sponsored by Representative Abaya of Cavite seeks to reduce the different classes of cigarettes from four to one. All classes will be taxed P30 per pack regardless of quality. The new tax rate increases the High priced cigarettes by 2.5 times, the Medium by almost 4 times, and the Low by 11 times.

Lately, the international company, the British American Tobacco, is supporting a lobby to pass the Abaya bill in order to eliminate competition in the Philippines or to “level the playing field”. It has targeted the merged company, Philip Morris Fortune Tobacco Corporation, as its main opponent since BAT claims that PMFTC accounts for 94 per cent of the market.

The figures from the Bureau of Internal revenue for 2010 show otherwise. Assuming that PMFTC produces all the Medium and High priced cigarettes in the country, the data for 2010 show that it only produced 46 per cent of all cigarettes, while the Low end accounted for the rest, or 54 per cent. If the Low-priced cigarettes are included as products of PMFTC, the total quantity produced amounted to over 70 per cent only. On the other hand, in terms of revenues collected by the government, the combined Medium and High priced cigarettes accounted for 78 per cent.

Nonetheless, according to BAT this situation “levels the playing field” since it only produces cigarettes of the High end, namely, Lucky Strike and Pall Mall among others, in competition against PMFTC’s Philip Morris and Hope. The tax rates for the Low priced cigarettes will effectively wipe out or drown the manufacturers of this class, particularly the Mighty and the Associated Anglo American companies. These companies also produce the local brands that are packed in thirties, but are to be taxed at P30 per pack as well. These small companies may continue to survive by resizing their work forces. Or, they may sell out their facilities to BAT which claims and promises to install plants all over the country if the Abaya bill is passed.

If the Abaya bill is passed, heavily affected, as well, are consumers of the Low priced brands. As of now, these brands are taxed at P2.72 per pack but will have to eventually absorb the P30 tax rate. The economy has not improved the earning capacities of the consumers, and they therefore cannot afford the increased prices of cigarettes. They will have to look for alternative sources that may satisfy their cravings for nicotine. Under this situation, smugglers will find it lucrative to bring in their untaxed goods that may prove affordable than legitimate products. We may also expect brisk sales of cigarettes in the duty- and tax-free outlets at our airports.

The anti-smoking lobby may have occasion to rejoice since indications show that it is winning the war against smoking. They may even succeed in totally banning cigarettes, although lawmakers still would continue to “bleed” the industry to “death” with higher tax rates. However the retrenched workers, both in the direct or indirect sectors of the tobacco industry, may have to look for other means to earn their living. (I don’t see how BAT can prevail and survive the anti-smoking onslaughts by assailing its competitors instead of cooperating with them. Perhaps, its strategy is to appear being cooperative with the lawmakers in order to weave its way back and monopolize the local stream.)

For the tobacco farmers, they shall have to look for other agricultural products to plant, or invent a new way to use tobacco plants for medicine. Or possibly convert to producing snuff which still use tobacco but not to smoke it. We will see how the anti-smoking lobby will convert into an anti-snuff movement if only to persecute and exterminate the tobacco users.