Nadaleen Singh

Mod­er­ate. That's how Jean-Pierre du Coudray, man­ag­ing di­rec­tor of West In­dies To­bac­co Com­pa­ny Ltd (Wit­co), de­scribed the mid-Feb­ru­ary 2013 in­crease in the price of cig­a­rettes.

"It (the price in­crease) has af­fect­ed sales, but not sig­nif­i­cant­ly. I think our cus­tomers un­der­stand that to­bac­co is a com­mod­i­ty item. The price of that com­mod­i­ty is in line with glob­al de­mand and sup­ply and pric­ing. In 2012, we re­ceived a 14 per cent in­crease in our ma­te­r­i­al costs and we've had to pass on some of that costs. In fact, the price in­crease we took is on­ly a 4.5 per cent. We thought it was quite mod­er­ate."

Asked whether Wit­co is tak­ing ad­van­tage of its vir­tu­al mo­nop­oly of the lo­cal cig­a­rette mar­ket, du Coudray de­nied that Wit­co had a mo­nop­oly, which ex­ists when a com­pa­ny is the on­ly sup­pli­er of a par­tic­u­lar com­mod­i­ty, in T&T.

"No, we are a mar­ket leader be­cause it is an open mar­ket. Com­pe­ti­tion is free to come and they have come. We have no prob­lem with com­pe­ti­tion; we wel­come it be­cause it puts us on our toes."

Dun­hill, Marl­boro or Camel–these are all brands of cig­a­rettes avail­able on the in­ter­na­tion­al and lo­cal mar­kets, but which brand should the con­sumer choose?

The au­thor­i­ties in Aus­tralia have made it hard­er for cig­a­rette smok­ers to ex­er­cise the op­tion of choos­ing their brand, as the gov­ern­ment there in De­cem­ber im­ple­ment­ed a law that that re­moved the brand­ing from cig­a­rette and to­bac­co pack­ag­ing. Plain pack­ag­ing is sup­posed to make cig­a­rettes less at­trac­tive for smok­ers and non-smok­ers.

Du Coudray said that the is­sue of coun­ter­feit prod­ucts flood­ing the mar­ket is like­ly to be a big deal with the in­tro­duc­tion of plain pack­ag­ing as well as the loss of in­tel­lec­tu­al prop­er­ty from the own­er­ship of their lo­go.

Speak­ing to re­porters af­ter the April 4 an­nu­al gen­er­al meet­ing held at the Hy­att Re­gency Trinidad ho­tel, du Coudray said plain pack­ag­ing is not on the cards for Wit­co and the com­pa­ny does not plan to change its pack­ag­ing or brands.

"We are very hap­py with the strength of our port­fo­lio. Of course, we are a fast-mov­ing con­sumer goods com­pa­ny, so we al­ways lis­ten to what our con­sumers have to say. Any changes we make would be in line with our con­sumer feed­back and not with what the il­lic­it trade mar­ket is show­ing," du Coudray said.

In­tel­lec­tu­al prop­er­ty rights

Giv­en that it has been months since the leg­is­la­tion was im­ple­ment­ed in Aus­tralia, du Coudray said the trends in de­mand in the Aus­tralian mar­ket are sure to be looked at by man­u­fac­tur­ers glob­al­ly.

"At the end of the day, we have spent mil­lions and mil­lions of dol­lars in sup­port­ing our brands, and they are ba­si­cal­ly try­ing to take away our in­tel­lec­tu­al prop­er­ty rights."

Con­cern­ing reg­u­la­tion of the lo­cal mar­ket, du Coudray said T&T is far ahead of its Caribbean coun­ter­parts. On a wider scale, he added that reg­u­la­tion of a mar­ket must be done on a grad­ual ba­sis rather than "im­press­ing dra­con­ian mea­sures" on so­ci­ety.

"Cus­toms and Ex­cise cer­tain­ly have to be part of that equa­tion, po­lice and au­thor­i­ties; every­body has to be part of the equa­tion be­cause at the end of the day, you are tak­ing mon­ey away from the gov­ern­ment cof­fers (by non-pay­ment of tax­es) by these peo­ple avoid­ing tax­a­tion.

"We (at Wit­co) un­der­stand that our prod­uct is a con­tro­ver­sial prod­uct, we un­der­stand our prod­uct is linked to health risks, so we make sure the way we op­er­ate is as re­spon­si­ble as the way so­ci­ety ex­pects. We try to ex­ceed that ex­pec­ta­tion."

Hav­ing over reg­u­la­tion can do more harm than good and can make op­er­at­ing in the FM­CG (Fast-Mov­ing Con­sumer Goods) mar­ket a dif­fi­cult one.

"When these guys (the coun­ter­feit­ers) come in­to the mar­ket, they un­der­mine every­thing we've have done on the re­spon­si­bil­i­ty side be­cause they treat the prod­uct as a com­mod­i­ty and their ob­ject is just to turn (make turnover).

"What we see hap­pen­ing glob­al­ly is that the wheels of reg­u­la­tion is start­ing to slow down a lit­tle bit be­cause I think they recog­nise, prob­a­bly in some cas­es, they have gone too far.

"Gen­er­al­ly, the wheels are start­ing to slow­down (glob­al reg­u­la­tion) a lit­tle bit be­cause peo­ple are re­al­is­ing now that if they push too far, they would have neg­a­tive con­se­quences. They are tak­ing a step back and prob­a­bly look­ing to work with stake­hold­ers to come up with a more bal­anced ap­proach (to reg­u­la­tion)."

Ac­cord­ing to du Coudray, loss­es due to un­paid tax­es as a re­sult of coun­ter­feit goods "are es­ti­mat­ed to be up to US$40 bil­lion world­wide and the glob­al il­le­gal mar­ket is rough­ly equiv­a­lent in size to the world's third largest multi­na­tion­al to­bac­co com­pa­ny by vol­ume."

Though coun­ter­feit­ed prod­ucts have not start­ed to af­fect the lo­cal mar­ket, du Coudray said coun­ter­feit­ing of goods is hap­pen­ing in Pana­ma and Suri­name.

"If you were to do a lit­tle re­search in those two mar­kets, the le­gal busi­ness has re­duced sig­nif­i­cant­ly, the gov­ern­ment tax (col­lec­tion) has re­duced sig­nif­i­cant­ly and the on­ly peo­ple who are ben­e­fit­ting are the coun­ter­feit­ers."

Ex­plain­ing fur­ther on To­bac­co Con­trol Act, 2009, he said, Wit­co is pre­pared to di­a­logue with pol­i­cy­mak­ers in T&T on the way for­ward for the In­dus­try.

"We have spo­ken to the cur­rent ad­min­is­tra­tion on a num­ber of is­sues, that be­ing one of them, and we have ex­plained our po­si­tion and it's up to them to de­cide what they want to do."

Of the to­tal smok­ers in T&T, 70 per cent are male while 30 per cent are fe­male.

Size of pack Re­tail price

2012 in­crease

Du Mau­ri­er (20) $20

Broad­way (20) $18

2013 in­crease

Du Mau­ri­er (20) $21

Broad­way (20) $19

Gov­ern­ment's pol­i­cy: health

Ac­cord­ing to the Min­istry of Health's Web site, the Gov­ern­ment's po­si­tion on the To­bac­co Con­trol Act 2009 is: "As a sig­na­to­ry to the World Health Or­gan­i­sa­tion Frame­work Con­ven­tion on To­bac­co Con­trol (FCTC), T&T is com­mit­ted to pro­tect­ing the health of our pop­u­la­tion by join­ing the fight against the to­bac­co epi­dem­ic.

"Hav­ing re­viewed the dev­as­tat­ing health, so­cial and eco­nom­ic ef­fects of to­bac­co and ex­po­sure to to­bac­co smoke on in­di­vid­u­als and fam­i­lies and the costs to so­ci­ety, to the en­vi­ron­ment, and the so­cio-eco­nom­ic de­vel­op­ment po­ten­tial of the na­tion, the Gov­ern­ment passed the To­bac­co Con­trol Act 2009 in De­cem­ber 2009."

?