Department of Health’s public consultation on sale of tobacco and e-cigarettes ‘flawed’, CSNA

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Irish government owns shares in tobacco companies worth €17 million



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19 January 2015

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The CSNA has issued a damning response to the Department of Health’s public consultation on legislation surrounding the sale of tobacco products and non-medicinal nicotine delivery systems (NMNDS).

In a fully comprehensive document, the newsagents’ association outlines why the government’s approach is fatally “flawed”.  What’s more, the CSNA highlights how the Irish government owns shares and bonds worth €17 million in tobacco companies, which would appear to go against the stated aims of its ‘Tobacco Free Ireland’ policy.

On 2 December, Minister for Health Leo Varadkar opened the public consultation until16 January 2015. The Department of Health said the drafting of the legislation was approved by the government in June 2014 and that its measures are in line with recommendations contained in ‘Tobacco Free Ireland’Ireland’s policy on tobacco control.

These include the introduction of a licensing system for tobacco products and NMNDS (including e-cigarettes), the prohibition of the sale of tobacco products from self-service vending machines and mobile units/containers. The legislation will also ban the sale of tobacco products by under 18 year olds and the sale of NMNDS, including e-cigarettes to, and by, under 18 year olds.

No consultation on ‘Tobacco Free Ireland’

However the CSNA has pointed that the policy objectives recommended by Tobacco Free Ireland were reached “without consultation”. As a result, the association believes the process is not a “realistic attempt” to “consider all potential options relating to the sale of tobacco products and NMNDS” and is in fact, a mere “box-ticking” exercise.

The association said: “We are most unhappy that there has been no opportunity offered by either of the Ministers for Health to engage with our association, which represents over 1,200 individual members in 1,500 stores throughout the Republic”. The group’s submission added: “There is a total absence of any discussion, between the Department of Health and the representative of retailers, vendors, publicans, hoteliers, restaurants and nightclub operators.”

What’s more, in its submission, the CSNA outlines that “any licensing bureaucracy will have significant set up costs” and breaks down the figures to show that “retailers would be contributing €6 million” towards covering the costs of setting up a retail licence fee system.

‘Unjust and punitive taxation’

If vending machines are to be banned, this would limit the number of retailers who could be charged to a maximum of 6,500 retailers. Each would therefore have to pay an average licence fee of almost €1,000 a year to achieve the nett figure of €5 million noted as “income” from the retailer licence fee, and this doesn’t even appear to take any account of the set-up costs.

The CSNA describes this fee as “not proportionate to any other licence fee levied on retailers in Ireland and would be considered by CSNA members to be unjust and punitive taxation”.

On the topic of banning vending machines, the association also highlights that fact that  many such machines are in pubs which retro-fitted their coin-operated self-service machines at a “very considerable expense” to themselves in 2009. It states that many of these businesses “incurred very significant borrowings” to finance this change.

Furthermore, the CSNA says it “not convinced that tobacco control actually needs to be carried out at the expense of hard working small businessmen who have complied with all previous regulatory and legislative requirements”. The fact that retailers convicted of selling tobacco to minors have not appeared before the courts again on a similar charge is pointed to as “proof that the existing sanctions do work”.

Government owns tobacco shares and bonds

The CSNA submission concludes: “As an addendum, but in the interests of ensuring that the Department of Health can assist the project of de-normalising tobacco, we are providing you with the most recent (2013) list of shares and bonds owned by the Irish government* in tobacco companies.* At present rate these have a value of €17 million. We are quite confident that in the National Pension Reserve Fund were instructed to immediately sell their shares and provide the value of this unethical investment to the department to assist in a range of cessation services it would be money well spent.”

Value €
BAT 75,766 shares 2..9m
Lorillard 8,439 shares 0.3m
Phillip Morris 50,961 shares 3.2m
Reynolds 7,868 shares 0.3m
Bat Holdings 1.48m Bonds 1.6m
Bat Finance 1.70m Bonds 1.8m
Imperial Finance 2.77m Bonds 3.23m
Phillip Morris 3.71m Bonds 3.65m

*(Source: National Pension Reserve Fund Annual Report 2013)

The full submission can be viewed here.




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