By Shauna Jemmott

DEMERARA Tobacco Company (DEMTOCO) has called on Government to ensure balanced regulation before approving the bill governing tobacco control.The company is concerned that the legislation, when it becomes law, will negatively affect its operations.

DEMTOCO Managing Director Maurlain Kirton, speaking at the conclusion of the company’s 82nd Annual General Meeting (AGM) Tuesday, said that after assessing the draft bill, the company held consultations with Government and the relevant stakeholders and had asked for “balanced regulation,” which will benefit all.

“We have been engaging the Government. There is a draft bill. The industry’s position on that (draft bill), as being shared with the Government in our engagement, is a request for balanced regulation. That means in simple layman’s terms, an opportunity for the co-existence of smokers and non-smokers with some level of restrictions,” Kirton told a Shareholder who had expressed concern.

Delivering the Managing Director’s review, Kirton recognised that tobacco consumption had seen some level of restriction globally, thus acknowledging the need for sound regulation.

But, she said, it is important that all stakeholders are involved in the process, so as to ensure an orderly marketplace, which serves the interests of both consumers and Governments.

According to Kirton, unintended consequences of flawed regulation must be avoided as these measures can result in consumers switching to cheaper, illegally trafficked products.

The company continues to engage Government on the issue of tobacco regulation, with a willingness to work with the regulators to provide balanced laws in support of their objectives, while maintaining consumers’ rights.

Additionally, Kirton said DEMTOCO also engaged authorities on the issues of illicit products and their impact on businesses and the wider community. Due to profit margins, relative ease of production, movement and low detection rates and penalties, cigarettes are some of the most commonly traded products on the black market.

Legitimate retailers and governments are also negatively affected as smugglers and criminals steal their trade and tax revenues respectively.

DRACONIAN
Speaking to the press after the event, Kirton said that though DEMTOCO is in support of regulations, the draft bill recommends ‘draconian’ measures, which pose a threat to the country’s revenue base and the survival of the company, as well as the livelihood of its workers.

“Those measures are intended to literally shut the industry down and a company that has been in existence for 82 years that contributes close to $4 billion to your revenue base. And of course you wouldn’t want to disrupt that revenue earning position. So there are a couple of things in there we are highly against.”

She said that the excessive increases in excise leads to increase in illicit trade, which affects border security. Also, the company is concerned too about consumer’s freedom to express their right in terms of choice, pointing to an intended ban of corporate advertising, promotion, and sponsorship. “It even goes to ban on corporate advertising, so a day will come when we will not be able to get this kind of conversation and this forum because we will not be able to use this logo ‘Demerara Tobacco’.

And then it goes even further, in terms of discrimination, as it relates to employment. So for example, should I leave Demerara Tobacco, I would not be able to seek employment for a minimum of five years in any Government organisation simply because I have been working with a tobacco industry. These are measures, which we perceive as an industry to be very draconian, and we have put forward our views and possible suggestions on how we move forward with a balanced regulation.”

She said that though the company had expressed its concerns to the relevant authorities in recent months, they have not yet received a response on what steps will be taken to ensure balanced regulation.
“I can’t sit here and say yes, I have a hundred per cent assurance that the industry’s concerns will be taken on board. However, we feel that the engagement will be of such (as) a big contributor to revenue base, a responsible company, that the concerns which we have presented, both formally and in writing, will be taken on board,” Kirton told reporters.

She added: “Measures, such as excessive increases, retail display bans and plain packaging do more to disrupt stable markets and little to further their intended aims. The unintended consequences of such regulations create ideal conditions for counterfeiters and smugglers to thrive, as demonstrated in other markets,” Kirton said.