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Economics of Economics of Economics of Economics of Smokeless Smokeless Smokeless Smokeless Tobacco Tobacco Tobacco Tobacco Products Products Products Products Challenges And Strategies Challenges And Strategies Challenges And Strategies Challenges And Strategies For Tobacco Control For Tobacco Control For Tobacco Control For Tobacco Control

Economics of Smokeless Tobacco in India

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Hemant Goswami talked about the "Economics of Smokeless Form of Tobacco." This presentation is part of the talk about how smokeless variant of tobacco is overtaking the smoked version of tobacco. Strategies and possible actions are also being discussed.

Text of Economics of Smokeless Tobacco in India

  • 1.Challenges And Strategies For Tobacco Control Economics ofSmokeless Tobacco Products

2. Smokeless Tobacco? 3. Smokeless Tobacco Gutka Mawa Paan Masala Khaini Smokeless tobacco is a complex chemical mixture, including not Snusonly the components of the tobacco leaf but also chemicals Gul added during the manufacturing process. Smokeless tobacco contains the addictive chemical nicotine and more than 20 Bajjarcancer-causing chemicals, including the potent tobacco-specific Dantmanjannitrosamines. The National Toxicology Program of the National Institutes of Health (USA) has concluded that oral use of Other Chewing smokeless tobacco is a human carcinogen. Therefore, Tobacco Forms smokeless tobacco is not a safe alternative to cigarettes. In fact, smokeless tobacco use begins primarily during early Etcadolescence and can lead to nicotine dependence and increased risk of becoming a cigarette smoker. 4. India Global Scenario and Indias Role India All Forms Sweden - Snus Norway Snus USA/ Canada Growing markets Small consumption in other parts of the world 5. Prevalence of SmokelessTobacco - CanadaCanada 6. India- Consumption PatternIndia Overall Figures:- Above 10 Yrs who chew tobacco Rural 19.3 (M) 9.3 (F)NSSO 15 Urban 9.9 (M) 4.3 (F)years back(93-94) Above 15 Yrs who chew tobacco Rural 31.3 (M) 13.8 (F) NFHS 11 Urban 20.8 (M) 8.8 (F)years back(98-99) NFHS-2 (IIPS 2000 data on 30+) Men: 35.4% Females: 18.2% 7. Prevalence Youth Consumption of smokeless form of tobacco (GYTS) 14.6% State-level prevalence :: Example (2003) Delhi: 13.1(M) --- 2.5 (F) Rajastan: 19 (M) --- 3.8 (F) M.P: 40.3 (M) --- 14.4 (F) Bihar: 51.8 (M) --- 6.7 (F) Mizoram: 60.2 (M) --- 60.7 (F) Maharashtra: 34 (M) --- 18 (F) Tamil Nadu: 12.9 (M) --- 10.7 (F) 8. Exports - Production Smokeless tobacco exports: Approx: 252 Crores of Value Smokeless tobacco Production: Nearly 60% of all tobacco is smokeless. India produced a total of 725 million Kg of tobacco last year. 9. Export of Smokeless Tobacco2009 10. Benefit to the farmer? Farmershardly gets and benefit orany kind of livelihood support fromtobaccocultivation.Less than 1$ a KgFarmer get just aroundhalf of it 11. How is India doing otherwise?Economic Report for 2008-09 mentioned that both tobacco and alcohol are doing exceptionally well; Industrial Growth by Industrial Groups figures show that Beverages and Tobacco grew from 12% in 2007-08 to 15.5% [Weight 3]8.24: The IIP data indicate that the beverage and tobacco group recorded the highest growth (15.6%) among all two digit industrial groups during 2008-09; that too on top of a strong base. Among the industries subsumed under this product group, cigarette production marginally declined during 2008-09 [Page: 205-6: Economic Survey 2008-09)Among tobacco products, the growth came from Smokeless and Bidi sector 12. Revenue Taxation ModelChewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 (Amendment dated April 13, 2010) Useless rulesandimpractical collectionmethod.Encourages cheap tobacco 13. Faulty Taxation Model forPublic Health Objectives Central Excise Notification No 16/2010, Rate of excise dutyleviable under Section 3A of the Central Excise Act on chewingtobacco and branded unmanufactured tobacco (Feb 27, 2010) Sell CheapSuch kind of taxation Payharms the poor more thanless the rich. Encourages consumption of cheaplypriced tobacco and defeats the public healthpolicies on tobaccocontrol. 14. Opposite Directions Tobacco Board of India 15. Why Smokeless is Increasing? Increasing Market Wide Segment Less Restriction Virtually No Laws No Liability Easy Availability Easy Transportation Low manufacturing Cost Highly Addictive Repeat Customers New customers required by the tobacco industry to replace the 5 million dying every year. The survival of the industry depends upon this replacement by making new set of customers hooked to addiction (Assured repeat customers). 16. Market Scenario? Phillip Morris Altria already part of the smokeless market RJR aggressively promoting Snus for a long time now Imperial Tobacco also a part of the smokeless tobacco competitor GPI recently is in process of launching its first smokefree product in India. Already launched Pan Vilas, and set to launch a range of chewing products this year with an investment of up to Rs 125 crore. Lot of big players getting ready to launch their smokeless products 17. Future Challenges? Smokeless is projected as less harmful/ relatively harmless THIS IS ABSOLUTELY INCORRECTWe in India know it very well Philip Morris and U.S. Smokeless Tobacco Co., both parts of the Altria Group Inc., wrote to the FDA (In January 2010) suggesting that tobacco products be ranked on their harmfulness to health. This would most likely result in smokeless tobacco products being ranked as markedly less harmful than cigarettes. Philip Morris apparently claimed the plan would have a significant public-health benefit. 18. Industry Strategy? Grab the market and make gains in a market with no regulations and laws. Take advantage of low production cost, low procurement price and low taxations Get as many customers, as possible, within this decade To promote smokeless as less harmful; confuse the public, divide opinion among public health and government agencies; and play the same tricks as (they did) with Cigarettes 19. How to Tackle Them? Advocate for proper legislation important to bring all smokeless form within the scope of law. Important to have watertight regulations and firm policies. MoH has to play a bigger role. Role of Ministry of Commerce has to be transferred to MoH or another agency. Smokless has to be stopped completely Complete prohibition on use of smokeless tobacco products In the meantime enhanced taxes and rationalization of duties 20. What needs to be Done Urgently? I :- Move for State Government ban on use of smokeless tobacco. Ensurethat the intent of the Food Safety Act 2005 (to keep tobacco out ofthe definition of Food) is achieved; and it is treated as an adulterant.II:- Advocate with the Union Government to have the tobacco boardpolicy in unison with the Ministry of Health objectivesIII:- Work to make the Union Government completely prohibit chewingtobaccoIV:- Target Areca Nut too. Isolated success is less likely to come.V: Taxation :: Intermediately Ensure there is no smokeless tobaccovariant in less than Rs. 10 a pouch category (Within next 3 years).Taxation right from cultivation, to auction, to production, todistribution has to be tightened (and recovered). So that there is nocheap variant left. Increase in cost and taxation is not going to havethe same relationship; as that of cigarettes. The price is too low, andto achieve a dip in sale/ consumption as a result of price increase, theprice has to be increased many folds. 21. Thank YouQuestions& Answers