Don’t forget the beedis

Editorial-June 28, 2014,

The dangers of smoking are well known and documented and given the information age we live in, it is only the stupid who will indulge in a habit the tobacco industry likes to call an ``adult choice.’’ We have today run a report elsewhere in this issue saying that Mr. Walter Laduwahetty, the President of the Sri Lanka Cancer Society, has written to Health Minister Maithripala Sirisena congratulating him for the campaign he has been running requiring the publication of pictorial health warnings on cigarette packets and pledging the Cancer Society’s support for this endeavour. More importantly, he has made a point we ourselves did in this space some time ago: that given the price of a single cigarette being over Rs. 25, very few people (especially in the less affluent segments of society) buy their smokes in packets. They can only afford a stick or two at a time and the health warnings on the cigarette packs will bypass them. Thus there will be no regular reminder that they are inviting illness by lighting up. That is why it is essential that all cigarette sellers, under pain of a stiff fine for non-compliance, should be made to display large pictorially explicit posters warning about the dangers of smoking at the point of sale. We hope the Minister of Health will quickly get moving on this matter.

Quite apart from that, beedis that are widely smoked in this country and, unlike cigarettes are barely taxed, are a forgotten factor in this debate. Obviously they are as dangerous to health as cigarettes and continue to be the low price alternative for smokers. A recent report by Nielsen, the world’s largest market research organization, said that that 2.88 billion beedi sticks and been sold here in 2012 against 4.31 billion cigarettes. Beedi now commands a 42% share of the tobacco market and there is hardly a peep about that danger and the harm it is doing to those who indulge in them! Added to that, the beedi industry hardly pays any taxes. There is a nominal customs duty on tendu leaf in which beedis are wrapped and that is about the whole story. According to available data, the range of tax incidence on a bundle of beedis is 8 to 10 percent against 60 to 80 percent on each packet of cigarettes. Total government levies on beedis runs at less than half a billion rupees per year. While theoretically VAT and the Nation Building Levy are also payable, whether this is in fact paid is anybody’s guess.

We do not have to labour the point that the Ceylon Tobacco Company PLC., the country’s monopoly legal cigarette manufacturer which last year paid Rs. 76.5 billion taxes to the government is a cash cow that has long been milked by the government. Excise duty on tobacco had been regularly increased in the annual budgets, or the gazettes which have been seized by finance ministers to pretend that they have not imposed hardship on consumers, to raise cigarette and liquor prices for as long as anybody can remember. Crippling taxes on tobacco and alcohol that prevail in this country today should no doubt be price sticks that beat down smoking and drinking. While CTC has been seeing its sales volumes falling in recent years, its profits have been rising. This could be party attributed to leaner production processes with more automation and a smaller factory workforce as well as industry price increases that have often accompanied higher excise duties imposed by the government. It is also likely that the growing beedi market is partly the result of the ever-rising cigarette price forcing smokers to look for a cheaper alternative. Similarly, drinkers too have resorted to kasippu, where no taxes whatever are paid, when arrack has become too expensive for them.

We do not know whether a single beedi does more harm to a smoker than a single cigarette. Obviously a beedi contains less tobacco than a cigarette as a single stick is both slimmer and shorter. Price-wise a beedi costs Rs. 2 against Rs. 28 for a Gold Leaf cigarette which by all accounts is the most popular. It would be useful if the Ministry of Health gets the tar and nicotine content of beedis analyzed and publish this information. As far as cigarettes go, these would be known and the information freely available. A Gold Leaf cigarette doubled in price from Rs. 14 to Rs. 28 in the six years between 2008 and 2014 while price of a single beedi went up only by 50 cents from Rs. 1.50 to Rs. 2 during this period. Naturally the focus is on the cigarette industry in relation to the health issue as it is much more visible than the cheaper alternative. But the fact remains that beedis, mostly smoked in the countryside, are as dangerous as cigarettes and there is no good reason for the anti-smoking propaganda and campaigns both of the government and other agencies to exclude the cheaper product from their sights. It is also necessary that this industry, which is legitimate unlike kasippu, is not let off the tax hook.