GEISHA KOW­LESSAR ALON­ZO

Philip Mor­ris T&T Ltd (PMTT) is rais­ing con­cerns that the Gov­ern­ment’s pro­posed 20 per cent cus­toms du­ty on va­p­ing de­vices and e-liq­uids could un­der­mine ef­forts to en­cour­age smok­ers to switch to smoke-free al­ter­na­tives, while at the same time strength­en­ing the il­lic­it mar­ket.

How­ev­er, the com­pa­ny says it sup­ports stricter mea­sures to pre­vent un­der­age ac­cess to va­p­ing prod­ucts, in­clud­ing rais­ing the le­gal age for to­bac­co and va­p­ing-re­lat­ed pur­chas­es to 21 years.

The po­si­tion was out­lined by Marisa Bernard, cor­po­rate af­fairs man­ag­er Cari­com, Philip Mor­ris T&T Ltd, in re­spons­es to ques­tions from the Sun­day Busi­ness Guardian on the bud­get mea­sures and the wider reg­u­la­to­ry frame­work be­ing de­vel­oped for va­p­ing prod­ucts.

De­liv­er­ing his fis­cal pack­age on Oc­to­ber 12, Fi­nance Min­is­ter Dav­en­dranath Tan­coo re­vealed ini­tia­tives to strength­en to­bac­co con­trols and reg­u­la­tions, in­clud­ing propos­ing to es­tab­lish a 20 per cent rate of cus­toms du­ty on va­p­ing de­vices and prod­ucts.

These mea­sures would take ef­fect from Jan­u­ary 1, 2027.

Tan­coo al­so stat­ed that va­p­ing in pub­lic places and the sale of va­p­ing prod­ucts to per­sons un­der the age of 21 would be pro­hib­it­ed.

While Bernard said the com­pa­ny is still eval­u­at­ing the full com­mer­cial im­pact of the pro­posed du­ty, she cau­tioned that tax pol­i­cy should care­ful­ly bal­ance rev­enue ob­jec­tives, pub­lic health goals and the need to curb il­le­gal trade.

“We are still as­sess­ing the com­mer­cial im­pli­ca­tions of the mea­sure. We recog­nise the Gov­ern­ment’s le­git­i­mate fis­cal and pub­lic health ob­jec­tives. PMTT sup­ports re­spon­si­ble, pre­dictable and ev­i­dence-based fis­cal poli­cies that pro­tect gov­ern­ment rev­enues while ad­vanc­ing pub­lic pol­i­cy ob­jec­tives. How­ev­er, dis­pro­por­tion­ate or abrupt tax in­creas­es can cre­ate un­in­tend­ed con­se­quences by widen­ing the price gap be­tween le­gal and il­le­gal prod­ucts and in­creas­ing the at­trac­tive­ness of the il­lic­it mar­ket. Il­lic­it trade is not on­ly a fis­cal or in­dus­try con­cern. It un­der­mines le­git­i­mate busi­ness­es, de­prives gov­ern­ments of tax rev­enue, and can con­tribute to broad­er se­cu­ri­ty chal­lenges by pro­vid­ing op­por­tu­ni­ties for crim­i­nal or­gan­i­sa­tions. 

“We be­lieve tax­a­tion should al­so take ac­count of the dif­fer­ent char­ac­ter­is­tics and dif­fer­ences of com­bustible and smoke-free prod­ucts, while main­tain­ing strong safe­guards against youth ac­cess. Our smoke-free vi­sion re­mains cen­tral to our long-term ap­proach, and we re­main com­mit­ted to work­ing col­lab­o­ra­tive­ly with the Gov­ern­ment and oth­er stake­hold­ers,” she ex­plained.

Il­lic­it trade re­mains a ma­jor con­cern

Bernard re­peat­ed­ly high­light­ed il­lic­it trade as one of the com­pa­ny’s biggest con­cerns, ar­gu­ing that high­er tax­es and reg­u­la­to­ry costs could un­in­ten­tion­al­ly ben­e­fit il­le­gal op­er­a­tors.

Ac­cord­ing to PMTT, sig­nif­i­cant dif­fer­ences be­tween the cost of le­git­i­mate prod­ucts and il­lic­it prod­ucts could cre­ate op­por­tu­ni­ties for un­law­ful trade, par­tic­u­lar­ly in an en­vi­ron­ment where il­le­gal to­bac­co prod­ucts are al­ready present.

“Our con­cern is that sig­nif­i­cant dif­fer­ences be­tween the cost and reg­u­la­to­ry bur­den of le­git­i­mate prod­ucts and il­lic­it prod­ucts can cre­ate op­por­tu­ni­ties for un­law­ful trade,” Bernard said.

She not­ed that il­lic­it trade ex­tends be­yond a busi­ness is­sue stat­ing, “That is par­tic­u­lar­ly im­por­tant giv­en the grow­ing pres­ence of il­lic­it trade in com­bustible cig­a­rettes, which re­mains a sig­nif­i­cant con­cern for our busi­ness and the le­git­i­mate mar­ket.

In re­la­tion to va­p­ing prod­ucts, con­sumers al­so need con­fi­dence that prod­ucts en­ter­ing the mar­ket com­ply with ap­pro­pri­ate prod­uct, qual­i­ty and reg­u­la­to­ry re­quire­ments.”

To ad­dress those risks, PMTT is ad­vo­cat­ing for what it de­scribes as a dif­fer­en­ti­at­ed and well-en­forced reg­u­la­to­ry frame­work.

The com­pa­ny wants au­thor­i­ties to im­ple­ment strong prod­uct stan­dards, mar­ket sur­veil­lance, bor­der con­trols and en­force­ment mea­sures tar­get­ing il­le­gal op­er­a­tors.

Seek­ing col­lab­o­ra­tion with Gov­ern­ment

PMTT says it is will­ing to work close­ly with Gov­ern­ment agen­cies to com­bat il­lic­it trade and strength­en mar­ket over­sight.

Bernard said the com­pa­ny would wel­come the op­por­tu­ni­ty to en­gage di­rect­ly with the Min­istry of Fi­nance, Cus­toms and Ex­cise Di­vi­sion and law en­force­ment agen­cies to share mar­ket in­tel­li­gence and dis­cuss en­force­ment strate­gies.

“Our ob­jec­tive is straight­for­ward: sup­port ef­fec­tive en­force­ment, pro­tect gov­ern­ment rev­enues and en­sure il­le­gal op­er­a­tors do not un­der­mine the le­git­i­mate mar­ket,”she said. 

Bernard said Philip Mor­ris be­lieves that a fair and well-en­forced op­er­at­ing en­vi­ron­ment is crit­i­cal to en­cour­ag­ing con­tin­ued in­vest­ment and sup­port­ing the Gov­ern­ment’s broad­er am­bi­tions for growth and di­ver­si­fi­ca­tion of the non-en­er­gy econ­o­my,” she stat­ed.

On whether the com­pa­ny an­tic­i­pates this du­ty would slow adult smok­er tran­si­tion from com­bustible cig­a­rettes to re­duced-risk al­ter­na­tives, Bernard not­ed that af­ford­abil­i­ty is an im­por­tant con­sid­er­a­tion for adult con­sumers.

“Our con­cern is not fis­cal mea­sures them­selves, but whether they ap­pro­pri­ate­ly dif­fer­en­ti­ate cig­a­rettes from com­pli­ant, sci­en­tif­i­cal­ly sub­stan­ti­at­ed smoke-free al­ter­na­tives that meet ap­plic­a­ble prod­uct, qual­i­ty and reg­u­la­to­ry stan­dards

“These prod­ucts are fun­da­men­tal­ly dif­fer­ent, and we be­lieve fis­cal pol­i­cy should re­flect those dif­fer­ences. If fis­cal mea­sures sig­nif­i­cant­ly re­duce the price dif­fer­en­tial be­tween cig­a­rettes and com­pli­ant al­ter­na­tives, they could dis­cour­age adult smok­ers from switch­ing,” she said.

Bernard added that the com­pa­ny’s po­si­tion is that fis­cal and reg­u­la­to­ry frame­works should sup­port adult smok­ers who would oth­er­wise con­tin­ue smok­ing in mov­ing to al­ter­na­tives with a low­er risk pro­file, while en­sur­ing high prod­uct stan­dards, full reg­u­la­to­ry com­pli­ance, and strict pro­tec­tions against ac­cess by mi­nors and un­in­tend­ed users.

Re­gard­ing PMI’s stance on us­ing fis­cal pol­i­cy to reg­u­late va­p­ing along­side tra­di­tion­al to­bac­co prod­ucts, Bernard said fis­cal frame­works should recog­nise that not all nico­tine-con­tain­ing prod­ucts are the same.

“Cig­a­rettes burn to­bac­co, cre­at­ing smoke, which is the main cause of harm (not the nico­tine),” she said adding, “Smoke-free prod­ucts do not cre­ate smoke. Reg­u­la­tion and tax­a­tion should there­fore re­flect those dif­fer­ences rather than treat­ing all nico­tine prod­ucts the same. 

“We be­lieve fis­cal pol­i­cy should dif­fer­en­ti­ate be­tween com­bustible cig­a­rettes and smoke-free al­ter­na­tives and be pro­por­tion­ate to their dif­fer­ent char­ac­ter­is­tics, while sup­port­ing pub­lic health ob­jec­tives and pre­vent­ing il­lic­it trade and un­der­age use.”

Strong sup­port for youth re­stric­tions

De­spite its con­cerns about tax­a­tion, PMTT ex­pressed strong sup­port for mea­sures aimed at pre­vent­ing youth ac­cess to va­p­ing and to­bac­co prod­ucts.

“Our po­si­tion is un­equiv­o­cal: mi­nors should not use nico­tine-con­tain­ing prod­ucts. PMI’s smoke-free prod­ucts are in­tend­ed for adults who would oth­er­wise smoke or use nico­tine prod­ucts. PMI ap­plies mar­ket­ing stan­dards in­tend­ed to en­sure its com­mu­ni­ca­tions are di­rect­ed to adult smok­ers and nico­tine users and works with re­tail part­ners on youth-ac­cess pre­ven­tion. PMI al­so sup­ports reg­u­la­tion and en­force­ment of min­i­mum-age re­quire­ments,” Bernard said.

PMTT al­so high­light­ed its Youth Ac­cess Pre­ven­tion pro­gramme, which aims to reach more than 3,500 re­tail out­lets across T&T in 2026.

The ini­tia­tive in­cludes ed­u­ca­tion­al ma­te­ri­als, re­tail­er guid­ance and in-store com­mu­ni­ca­tions aimed at re­in­forc­ing re­spon­si­ble re­tail prac­tices and age-ver­i­fi­ca­tion pro­ce­dures.

One of the ma­jor crit­i­cisms lev­elled against va­p­ing prod­ucts glob­al­ly is the con­cern that they may en­cour­age nico­tine ad­dic­tion among young peo­ple or in­di­vid­u­als who do not cur­rent­ly smoke.

PMI ac­knowl­edged that these con­cerns are le­git­i­mate and re­quire care­ful at­ten­tion.

“Those con­cerns must be tak­en se­ri­ous­ly. Nico­tine is ad­dic­tive, and young peo­ple and peo­ple who do not cur­rent­ly use nico­tine should not start. That is why we sup­port strong age re­stric­tions, re­spon­si­ble mar­ket­ing, ef­fec­tive re­tail con­trols and en­force­ment,” Bernard said.

Ad­dress­ing con­cerns about youth-ori­ent­ed ad­ver­tis­ing, she said it has im­ple­ment­ed glob­al mar­ket­ing stan­dards in­tend­ed to en­sure its com­mu­ni­ca­tions tar­get le­gal-age adult smok­ers and nico­tine users rather than mi­nors.

On whether PMI views the pro­posed re­stric­tion on sales to peo­ple un­der 21 Bernard stat­ed, “Ef­fec­tive im­ple­men­ta­tion and re­tail­er aware­ness will be es­sen­tial. For us, the key con­sid­er­a­tion is ef­fec­tive im­ple­men­ta­tion across the en­tire mar­ket.”

Wit­co cau­tious

West In­di­an To­bac­co Com­pa­ny (WIT­CO) says it is still as­sess­ing the im­pact of Gov­ern­ment’s de­ci­sion to im­pose a 20 per cent tax on va­p­ing prod­ucts and is not yet in a po­si­tion to de­ter­mine what the mea­sure will mean for its busi­ness op­er­a­tions.

Speak­ing fol­low­ing a post-bud­get dis­cus­sion on Oc­to­ber 13, host­ed by the T&T Man­u­fac­tures’ As­so­ci­a­tion (TTMA), WIT­CO’s Head of Cor­po­rate and Reg­u­la­to­ry Af­fairs Caribbean Ger­von Abra­ham said the com­pa­ny, which mar­kets the va­p­ing prod­uct Vuse in T&T, sup­ports ef­forts to reg­u­late the in­dus­try but needs more time to analyse the im­pli­ca­tions of the new tax.

Abra­ham de­clined to com­ment di­rect­ly on whether the 20 per cent tax could neg­a­tive­ly af­fect sales with­in the va­p­ing sec­tor.