Demtoco director says ‘draconian’ tobacco laws could shutter operations

Demerara Tobacco Company Limited (Demtoco) is concerned that the long in the works Tobacco Bill, if passed, could severely affect the ability of the company to continue to operate.

This is according to Demtoco’s Managing Director Maurlain Kirton, who told shareholders at the company’s 82nd Annual General Meeting that it has shared with the government the “industry’s position,” which includes a request  “for balanced regulation that offers an opportunity for the existence of smokers and non-smokers with some level of restriction.”

“There are measures that [the tobacco industry] perceive to be very draconian,” Kirton later explained to reporters, while adding that as a result the company has “put forward possible suggestions on how to move forward towards a balanced regulation.”

She noted that her company is against excessive increases in the excise tax on tobacco, which could lead to illicit trade. Also of concern is the impact proposed bans would have on a consumer’s freedom of choice and the impact the advertising ban would have on the company’s continued existence.

“There is an intended ban on advertising and promotion and sponsorship. It even goes to a ban on corporate advertising so a day will come when we will not be able to have this kind of conversation in this forum because we will not be able to use that logo, Demerara Tobacco,” she said.

She further noted that the legislation in its present form even extends to discrimination as it related to employment.

“Should I leave, I would not be able to seek employment for a minimum of 5 years in any government organisation simply because I have been working with the tobacco industry,” she said.

Kirton believes that these draconian measures are “literally intended to shut the industry down.”

She noted that Demtoco, which has been in existence for 82 years, contributes close to $4B to the country’s revenue base.

Kirton is confident that the comments from the industry, which were officially shared with the government, “were taken on board.” She, however, noted that it has not been told what the next step in the development of the legislation is.

“I can’t sit here and say we have 100% assurance that the industry’s concern will be taken on board. However, we feel that exchange will be of such that… those concerns we have presented will be taken on board,” she said.

Kirton’s comment echoed those of Chairman of Demtoco’s Board of Directors Alan Bergin, who told shareholders that the company will continue to engage regulators and key stakeholders, offering their wealth of experience and knowledge so as to provide practical solutions to help regulators address key issues surrounding Demtoco’s products and thus shape balanced regulations.

Bergin also noted that for the year 2015 Demtoco delivered an increase of $20 million, with profit before tax of $2.85 billion compared to $2.83 billion in 2014. Overall profit for the year was reduced by $18 million compared to the previous year.

Government has signaled its intention to table the Tobacco Control Bill in the National Assembly. The bill will see a ban on smoking in public places and controls on tobacco advertisement.

Then Minister of Governance Raphael Trotman had told a post-Cabinet press briefing in November, 2015, that the bill will provide for the adoption and implementation of tobacco control policies in accordance with the World Health Organisation (WHO) Framework Convention on Tobacco Control.

He had said that the Tobacco Control Bill was aimed at protecting persons and future generations from the “devastating effects of tobacco use and exposure to tobacco smoke.”

At a policy level, Trotman noted, Cabinet has given approval for the bill to be considered by the National Assembly but it was at that time being reviewed by a Cabinet sub-committee that vets all bills before submission to the National Assembly.

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