LEADING tobacco and cigarette distribution company Carreras Limited has cautioned the Government against an excessive regulatory regime that it says will be tough to implement and enforce, and will impose provisions that will put the tobacco industry at a disadvantage.

The tobacco marketer has also deemed the proposed new powers given to the portfolio minister to regulate product content as arbitrary, unpredictable, unjustified, and an excessive delegation of powers.“Jamaica is one of those markets that have a significant illicit component, not just on tobacco but other products,” managing director of Carreras, Raoul Glynn, said on Wednesday at a meeting of the joint select committee that is reviewing the Tobacco Control Act.

He stressed that the company took no issue with lawful, evidence-based regulation. However, the managing director warned that excessive regulation will cause more revenue losses, pointing out that government revenue lost to the tobacco black market in 2020 was $2.1 billion.

“What we saw happening in 2017 when there was a significant increase in the excise, you had an almost immediate jump in the illicit volume, so consumption remains the same because of a proliferation of very cheap products that doesn’t pay the taxes,” Glynn outlined.

Last year, he said, Carreras’ sales contributed $8.3 billion to Government coffers, but, the regulations as they are, will create an opportunity for illicit players to benefit much more than the legal market.

“I don’t think [it is] the intention of this Bill, [but] the legal market will pay the price… the illicit players will continue to flood the market,” he stressed.

The company says new category products and combustibles should be regulated separately, as to lump them with the same regulations for tobacco products would send an “incorrect and unhelpful message that both product categories have the same risk profile and perpetuate the misconception that tobacco and nicotine carry same risks”.

The Bill proposes to go beyond traditional tobacco products, to include prohibiting the use of electronic nicotine delivery systems, or e-cigarettes and other vaping devices in public spaces, although their emissions do not contain nicotine. This and other changes to the legislation is supposed to make Jamaica fully compliant with the World Health Organization Framework Convention on Tobacco Control.

Carreras pointed to evidence that new category products have contributed to reduced smoking prevalence in countries with a more flexible regulatory landscape. It referenced the United Kingdom’s House of Commons Science and Technology Committee, which found that e-cigarettes could significantly accelerate already declining smoking rate and are about 95 per cent less harmful than conventional cigarettes due to the absence of tar and carbon monoxide.

It noted also that the Canadian Government says switching from tobacco cigarettes to vaping products will reduce exposure to many toxic and cancer-causing chemicals.

The tobacco company insists that e-cigarettes should be regulated proportionately on an evidence-based approach, taking into consideration freedom to innovate, dialogue and responsible marketing freedoms.

Glynn noted also that the legislation, technically, places a ban on the sale of cigarettes in all public spaces, despite arguments that it does not.

The company dismissed the proposal to police product content through an ingredient reporting system, stating that this would impose an unnecessary, unworkable burden.

Furthermore, Carreras argued against the proposed prohibition on investment, which prevents individuals employed to a public body from investing in the tobacco industry. It said this would hinder thousands of shareholders from investing and supplementing their income.

Carreras also cautioned that the law puts small businesses at a severe disadvantage by prohibiting retailer incentives and promoting discounted products.

“What we have estimated is that 29 per cent of the revenue from illegal tobacco sales goes to these entities, and by saying that they can’t sell the product no longer is really taking away from them their commercial activity,” Glynn said. The company also lamented the introduction of a ban on acceptance of any sponsorship contribution, a provision which would affect its role as a corporate citizen.

According to its submission to the committee, over the past three years, Carreras has disbursed 125 tertiary scholarships valued at $30 million across multiple disciplines, and has invested over $250 million to empower adults through education.

“We do that not for any gain to the company, but we feel we have that corporate responsibility to contribute towards the growth and development of the nation,” the managing director said.