THOUGHTS ABOUT CIGARETTE MAKING

Before I go on to write about the present status of the tobacco industry, particularly about cigarettes, I take the liberty of citing my experiences during World War II Japanese Occupation. I was about twelve years old then.

In our daily struggle to survive – my father who used to work in an American company, Koppel Philippines, and thereby unemployed – we had to engage in a variety of businesses. One day, my mother brought home a contraption for rolling cigarettes. Having relatives in Biñan, Laguna, she learned about the thriving industry at that time in manufacturing cigarettes that competed with the Japanese brands, like Pirate and Akebono. Furthermore, there were already difficulties in importing cigarettes—the priorities of the Japanese were for munitions and logistics—which encouraged the making of local ones. The contraption was basically a roller, with a canvass or thick oil cloth (the same as those used as table cloth in restaurants) which rolled the paper over a small pile of tobacco.

For a time, we had to experiment on how much tobacco we had to put to roll a passable stick. If too few, the cigarette would burn too fast. If too plenty, the stick becomes too tight and the smoker would have problems puffing at it. Then after the roll is done, we would have to trim off the tobacco strands that stick beyond the edges of the cigarette stick.

I also had some creative moments designing the packages. I copied the packages of the ones in the market, which were like oversized match boxes that had the cigarette sticks slide out instead of being tapped to let only a stick or two come out. I prided myself in illustrating the cover and lettering the brand (I can’t remember what names we came up with at the time). There was a time when I copied the designs of Chesterfield and of Camel cigarettes to decorate the packs.

That was the situation during the Japanese Occupation when cigarettes were made and rolled manually.

After so many decades, I had the opportunity to watch how cigarettes were manufactured by huge machines. No longer a few seconds to make a stick but now hundreds of sticks per second are spewed by gigantic rollers and packed and made to pass through stages where they are sorted, qualified, quantified and packed. The sticks and/or packs that do not pass quality standards are disposed, either to be recycled or thrown away.

I had the opportunity also to see the reports that detail how many packs are “removed” or produced, and how much taxes are imposed on every pack. And I learned that cigarettes are graded according to their qualities based on the tobacco mix they contain, that is from Low to Medium, to High and to Premium. The first three qualities are produced in million packs, while the Premium brands are practically ignored in the revenue collection reports most probably because these are the imported ones.

I do not remember how the cigarettes made during the Japanese Occupation were taxed. Possibly, the local packs remained untaxed, although the Japanese must have some system of collecting taxes for the commodities produced during those times.

On the other hand, the taxes (net of retail price) collected lately by the Bureau of Internal Revenue are based on the quality of the brands. The Low-priced brands are taxed at P2.72 per pack; the Medium-priced at P7.56; the High-priced at P12.00, and the Premium class at P28.30 per pack. Excepting some Low-priced brands, all are packed in twenties. Some Low-priced brands are packed in thirties; these are not available for sale in the cities but seem to be consumed in the rural areas because of their low prices.

By the way, I am a non-smoker. Thus I cannot say how to distinguish the quality of the cigarettes based on the tobacco blend they contain. I can only recall the experience I had as a plebe in the Philippine Military Academy when I thought the brand Matamis, which my mother sent me, is no different from Chesterfield or Lucky Strike and gave a stick to an upperclassman who asked for one. He made me eat it.

Going back to the present, I also learned that most of the consumers, except among the elite and the rich, buy their smokes by the stick. That is the reason why there are vendors along the Metro Manila thoroughfares that weave among the traffic selling cigarettes to the jeepney drivers and even lighting the sticks for them. I think the main reason for buying by the stick is to discourage panhandling from other smokers. As well, it is cheaper to buy by the stick than to have them by the pack. One can smoke the High-priced brand, like Marlboro, for P3.00 (the retail price along the Service Road in Bicutan) instead of paying P44.00 for one pack selling at any 7-11 store.

Now, in 2012, I learned that Congress is passing a law raising the taxes on cigarettes as part of the drive to discourage smoking but not necessarily making smoking a crime. The proposed law, the Abaya bill, removes the distinctions between brands – no longer Low, or Medium or High or Premium – but all under one class and taxed at P30.00 per pack of twenties. Obviously, this tax rate will raise the prices of the sticks. The new rate is a not-too-subtle way of penalizing smokers. In the example I cited above, Marlboro will no longer cost P3.00 but will perhaps reach P5.00 per stick to make it worthwhile to walk the streets to sell.

I do not think the jeepney drivers will demonstrate against this rate increase like they do against the rising prices of gasoline where they demand the abolition of the value-added tax. The government raises taxes in order to support its various operations (as well as the perks and "intelligence" funds of its high officials). In fact, the official reason for taxing cigarettes – which is a “sin” product -- is for the purpose of raising P60 billion, they say, to ostensibly serve the health program of the government.

If the Abaya bill is passed into law, I am quite sure that the production and revenue collection of cigarettes will suffer serious decreases, particularly among the Low-priced brands. In turn, the P60 billion target of the new law will never be reached.

However, there will be no serious decline in smoking. I suspect that there will be “cottage industries” in the rural areas that will produce “local” smuggled brands that will satisfy the cravings of the smokers. It is easy to make the hand-operated contraptions to roll the cigarettes. These will not require huge buildings but can be operated even in the small rooms in any hut in the provinces (or even in the cities).

I also suspect that the blended discards in the cigarette factories will find ways to reach these “cottage industries” and be converted to cheap high quality tax-free cigarettes. If I were a cigarette addict, I will try and contact somebody in a cigarette factory, say, La Suerte or Mighty, and buy me a small sack of tobacco blend which I can roll on my own at home.

While the government will be watching the entry of smuggled brands from outside the country, some local politicians will be tolerating, if not abetting, the local-smuggled ones to proliferate. The situation will be jueteng type of operations in the clandestine production of cigarettes, perhaps mostly in the hinterlands of the tobacco producing regions.