Philip Morris, BAT Battle Putin’s Russian Smoking Crackdown
May 31, 2012 /Businessweek/ — Cigarette makers led by Philip Morris International Inc. (PM) (PM) and British American Tobacco Plc (BATS) are scrambling to derail Russian plans to halve smoking in the world’s largest tobacco market after China.
The companies, along with Japan Tobacco Inc. (2914), are trying to convince the government to scale back a plan to restrict the sale, advertising and public use of cigarettes, they said yesterday. BAT, Europe’s largest tobacco company, is seeking a “mutually acceptable decision,” it said in an e-mail.
President Vladimir Putin has backed curbs on smoking as part of a wider effort to stem the country’s population decline. A draft law published by the Health Ministry May 20 calls for outlawing all cigarette advertising immediately, ending retail sales at kiosks within 18 months and banning smoking in public buildings such as bars and restaurants in three years.
The World Health Organization estimates that about 39 percent of Russia’s 143 million people are habitual smokers, compared with 28 percent in China and 27 percent in the U.S. Smoking-related diseases kill 23 percent of Russian men and cause economic damages equal to 6.3 percent of gross domestic product, according to the Health Ministry, which says its draft law could save 200,000 lives a year.
Any legislative changes “should take into account the realities of the Russian market,” BAT said. Any new restrictions “should be reasonable, well thought-out and consistent,” the press service of the London-based company, the maker of Kent, Pall Mall and Dunhill brands, said in an e-mailed response to questions from Bloomberg.