DEAL
WITH BIG TOBACCO CALLS INTO QUESTION
JUDGMENT AND QUALIFICATIONS
The World Health Organization (WHO) will elect a new Director-General
at meetings held in Geneva from 6-9 November 2006.
There are currently 13 candidates. One of the leading candidates is Julio Frenk, the Mexican Health Minister.
In 2004, Frenk's health ministry signed an agreement with the Philip Morris and BAT. In exchange for a voluntary peso-a-pack contribution from the tobacco industry to a health insurance fund, Mexico will adopt some very modest tobacco control measures that fall far short of the mandates of the Framework Convention on Tobacco Control (FCTC, which Mexico has ratified). The agreement also ties the government's interests to the tobacco industry well-being, and terminates if the government imposes significant tobacco taxes.
Under the terms of the deal [1]:
- There will be a minor limitation on billboard ads for tobacco. The FCTC calls for a complete advertising ban.
- The companies agree to place warnings on cigarette packs. These warnings are ambiguously worded, smaller than mandated by the FCTC, and do not include graphic images as called for by the FCTC. Additional package inserts are confusing [2].
- The companies agree to donate one peso to the health ministry for every pack of cigarettes sold. This is a donation and voluntary, not a tax payment. As a result, it is tax deductible.
- The donations are to be paid only if sales remain "stable," and BAT and Philip Morris maintain control of at least 97 percent of the national market.
- The donations also terminate if tobacco taxes are raised. In other words, the donations are contingent on Mexico not taking the single most effective step to reduce tobacco use -- raising tobacco taxes.
Health Minister Frenk justified the deal on the grounds that it was the only way to ensure tobacco funds would be directed toward health, since there is no earmarking of taxes in the Mexican system [3]. But this claim ignores the fact that the government could simply have appropriated the additional funds raised from a tax to health purposes [4]. Questions have also been raised about whether the deal has in fact significantly boosted collected revenues from the industry [5].
Health Minister Frenk's deal makes the health ministry an effective partner with the industry, gives the tobacco industry a PR boost and political cover to deter future regulation, and directly undermines the government's ability to enact effective tobacco control measures.
As a February 2006 British Medical Journal article [6] noted:
Passing tobacco laws in Mexico is already politically difficult. This agreement will substantially raise the political hurdle to passing new tobacco legislation because the tobacco lobby will be strengthened by interests associated with the public health programme. The fund will become dependent on industry sales since the more cigarettes that are sold, the more money the fund will receive. The donation also provides the industry with an opportunity to improve its public image. The goal of tobacco control should be to limit industry activities and sales and to change society’s view of smoking and of the industry.
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[1] See Jonathan Samet, Heather Wipfli, Rogelio Perez-Padilla, Derek Yach, "Mexico and the tobacco industry: doing the wrong thing for the right reason?" British Medical Journal, February 11, 2006, at: http://nosmoking.ws/frenk/MexicoSamet.pdf
[2] See Ernesto Sebrie, University of California, San Francisco, " Mexico: backroom deal blunts health warnings. September 2006, at: http://nosmoking.ws/frenk/Mexico.doc
[3] See http://fctc.org/DG/response_Frenk.php
[4] See Ernesto Sebrie? and Stanton A Glantz, "The Tobacco Industry in Developing Countries Has Forestalled Legislation on Tobacco Control," British Medical Journal, February 11, 2006, available at: http://nosmoking.ws/frenk/BMJEditorial.pdf
[5] See Mexico, Paradise of Cigarette Manufacturers,” El Seminario [English version] August 2006, at: http://nosmoking.ws/frenk/Mexico_Frenk_Eng.doc
[6] See http://nosmoking.ws/frenk/MexicoSamet.pdf
For news clips on the Frenk-BAT/Philip Morris deal and more information, see: http://nosmoking.ws/frenk/
The Framework
Convention Alliance, an international coalition of tobacco control organizations,
has sent a survey to DG candidates asking for their views on a range of
tobacco control matters. The responses, including from Julio Frenk, are
available at: http://fctc.org/DG