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Archive for March, 2013

Thailand leads the way with graphic health warnings

16 Mar, 13 | by Marita Hefler, News Editor

Thailand has long been at the forefront of tobacco control in Southeast Asia. On 8 March 2013, it took another step forward when the health minister Dr Pradith Sinthawanarong signed a regulation requiring 85% pictorial (graphic) health warnings on cigarette packs. Current pictorial warnings are 55%.

The regulation is expected to take effect in approximately six months, and will mean Thailand has the largest graphic health warnings in the world. Currently, Australia has the largest total area at 82.5% (75% of front and 90% of back). Uruguay has the largest overall with 80% on the front and back. Sri Lanka is set to also implement 80% warnings, pending regulations. Within the Southeast Asia region Brunei, Singapore and Malaysia also have pictorial health warnings.

Thailand new graphic health warning

The move has been warmly welcomed by tobacco control advocates in the region. Southeast Asia Tobacco Control Alliance (SEATCA) Director Ms. Bungon Ritthiphakdee said: “SEATCA is ecstatic and would like to convey our heartiest congratulations to Thailand for its leadership in tobacco control. Its enactment of rules to put in place the largest GHWs on cigarette packs speaks to its political will and example to safeguard the health of its people.

With this development, however, SEATCA warned that the tobacco industry and related groups including tobacco farmers will likely lobby to fight and block the regulation. Just last month, the Thai Tobacco Trade Association submitted a letter to the Ministry of Health, Thailand, opposing the new health warning policy.

“When countries strengthen their policies, there is no doubt the tobacco industry will challenge the legislation especially measures that reduce tobacco consumption.  They have tried to delay Tobacco Control laws that are stringent, fight tobacco tax increases, and dilute bans on tobacco advertising sponsorship and promotions time and again,” Ms Ritthiphakdee adds.

SEATCA has recently launched a regional campaign to counter tactics of the tobacco industry to create fear and use tobacco farming to create opposition to the introduction of effective tobacco control measures. The campaign website (http://www.saveourfarmer.org) contains information about the economic contribution and costs of tobacco farming, health and environmental hazards, and contribution to government revenue.

Good news despite the profit increase: analysis of BAT 2012 preliminary results

2 Mar, 13 | by Marita Hefler, News Editor

Pascal Diethelm

OxyRomandie, Switzerland

On 28 February 2013, British American Tobacco (BAT) published their preliminary results for 2012 and issued an accompanying news release in which the chairman of BAT expressed his satisfaction that BAT was able to deliver “strong profit growth in 2012, achieved through good pricing and an outstanding improvement in operating margin”. The press has mostly relayed uncritically BAT’s clamouring of their soaring profits – see for instance here.

One thing BAT did not highlight is the good news, from the tobacco control viewpoint, that this profit increase was exclusively achieved through pricing mechanisms in the context of a declining market across all regions of the world, as shown below:

2012 2011
Bns Bns Change
Asia-Pacific 188 191 -1.57%
Americas 142 143 -0.70%
Western Europe 129 135 -4.44%
EEMEA 235 236 -0.42%
World   (total) 694 705 -1.56%

(Bns = Billion sticks; EEMEA = Eastern European, Mediterranean and African region)

Overall, the number of cigarettes sold by BAT has decreased by 1.56%. Furthermore, although the rate of decrease varies considerably from one region to the other, it is notable that a decrease was observed in all regions of the world. The high decline of smoking in the European regions is not compensated by an increase in other parts of the world.

This is good news and shows a trend that is likely to become more marked in coming years as the full effect of the Framework Convention on Tobacco Control (FCTC) is seen. With a decrease of 1.56%, and expecting even greater decreases in coming years, achieving the WHO Global NCD Action Plan target of 30 x 25 (30% reduction of overall smoking prevalence by 2020) becomes within reach. A reduction of 1.56% for 13 consecutive years would translate into an overall reduction of 18%, assuming a linear correlation between prevalence and number of cigarettes smoked. To achieve the 30×25 target, an overall annual reduction of 2.8% in smoking prevalence is needed.

Of particular note is how BAT’s profit increase is distributed over the regions. At 7.4%, the Western European region contributes very little. By far the greatest contributor is the EEMEA region, which is responsible for 44% of the profit increase. This is also where the price of a pack of cigarettes is lowest, i.e. where the industry has the highest potential for price, and thus profit, increases. This illustrates one interesting aspect of the cigarette business. Relying on addiction which creates a rather inelastic demand for their product, the industry uses tobacco as a means of siphoning money from the pocket of addicted smokers in poorer countries to move it into the pockets of investors in rich countries. And they can increase the flow of money at will simply by enlarging the size of the tube!

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