Carreras Limited, Jamaica’s sole licenced distributor of cigarettes, is cautioning that the impending tobacco regulations being promulgated by the Ministry of Health is going to seriously affect the legal cigarette trade.

The impending regulations will prohibit all forms of tobacco advertising, promotions and sponsorships; sales of all form of tobacco products to minors and increased taxes on tobacco products.

Speaking in an interview with The Jamaica Observer, Carreras Managing Director Marcus Steele, made known the position of the company on the proposed regulations.

“Carreras is declaring that it has no problems with regulations in general but any further regulations for the industry must be reasonable, sensible and practical…we are not afraid of regulations,” Steele stated.

While admitting to the necessity of regulating the tobacco industry, Steele emphasised, “we continue to implore the Government on the need for balanced and practical regulations that meets the Government’s national health objective, while recognising the legitimate commercial right of the legal tobacco industry to market and distribute its brands, as well as the decision taken by adult consumers to consume a legal product.”

The Carreras managing director made the point that most of the areas in which Health and Wellness minister, Christopher Tufton, has publicly indicated that he intends to regulate such as a ban on advertising is already covered under self-regulation. “We don’t advertise, that’s self-regulation,” he remarked.

According to Steel, “there may be the need for more regulations but not in the way it is currently being looked at and that is something the authorities have to look at very carefully.”

When asked about the adverse impact such regulation could have on the industry, the Carreras boss explained, “the more you press on the regulatory requirement on the legal side, it creates the opportunity on the illegal side and sometimes I don’t believe that the authorities understand the balance between the two.”

He noted that while Carreras awaits and prepares for the introduction of the new regulations, the company continues to observe its own internal marketing standards, as well as fully complying with the tobacco control regulations now in force.

REGULATIONS COULD FUEL THE ILLEGAL CIGARETTE TRADE

At the company’s recent annual general meeting, Steele asked the Government to be cautious with the impending regulations.

“Carreras cautions the Government on the unintended consequences of the proposal to implement further increases in excise on tobacco products, chief of which is creating a greater demand for cheap illegal cigarettes due to affordability issues, as the pricing gap between legal and illegal cigarettes widens.

“The resulting transfer of volumes from the legal to the illegal cigarette trade and the ensuing implications of a thriving illicit trade would only run contrary to the Government’s tobacco control efforts.

“Carreras is therefore calling on the Government to not only consider the World Health Organization dictates as it relates to implementing high levels of tobacco excise, but to implement a sustainable excise policy that fully considers the Jamaican market reality, vis-à-vis affordability issues that fuel an active illicit trade,” Steele said.

ROUTE TO MARKET IMPROVEMENTS

Steele at the annual general meeting reported much success in its route to market improvement to counter the illicit trade.

“Our most recent route to market improvements has brought a level of market control that allows Carreras the opportunity to properly defend against the illicit trade and improve our overall level of service.

“The company’s project team made a careful evaluation of the previous model and sought to build on the strengths of its distribution model and proposed some changes in areas not at optimum capacity. The most notably change was a return to motor vehicles, as the main point of distribution.

“These vehicles are now able to deliver effective, direct sales reach that addresses both out-of-stock and illicit trade concerns. Our sales teams have also been retooled with selling skills focused on productivity, efficiency and the drive for results,” Steele said.

The company noted that while these adjustments offer an opportunity to cover a wider geographical base, the sales teams are also able to do this in a safer and sustainable manner. The benefits to be derived from this new route to market improvements will provide the opportunity for Carreras to establish a distribution footprint that delivers on its objectives.