Opportunities and risks of the proposed FCTC protocol on illicit trade.

Illicit trade in tobacco products presents a threat to public health because it undermines the use of tax and price policies, which are among the most effective mechanisms for reducing tobacco consumption. Parties to the WHO Framework Convention on Tobacco Control (FCTC) are in the final stages of negotiating a protocol aimed at strengthening international cooperation in the fight against illicit tobacco trade. While an effective multilateral response to illicit tobacco trade would make a significant contribution to global tobacco control, achieving this through the FCTC forum is challenging. First, while illicit tobacco trade is a health problem, the expertise, experience and capacity needed to combat illicit trade are not traditionally found in health agencies. The development of links with other agencies, both domestic and international, is critical to ensure both an effective response and an efficient use of limited governmental and non-governmental resources. Second, in many parts of the world, the tobacco industry cooperates closely with governments in the combating of illicit trade. This cooperation poses risks for tobacco control, particularly if relationships and norms of cooperation spill over into other areas of FCTC implementation. An examination of the industry's positioning suggests that it sees an opportunity to portray itself as 'legitimate' and 'responsible', a friend of governments, and a way to integrate itself into FCTC processes. This paper makes suggestions for moving forward in this challenging area towards ensuring that the approach taken actually reduces illicit tobacco trade, strengthens tobacco tax policies and does not operate to undermine the FCTC.

[Fiscal policy, affordability and cross effects in the demand for tobacco products: the case of Uruguay]. / Política fiscal, asequibilidad y efectos cruzados de precios en la demanda de productos de tabaco: el caso de Uruguay.

Uruguay, a country with a solid tobacco control policy since 2005 shows, contrary to expectations, an insignificant decrease in total tobacco products' sales in the last five years. The hypothesis is that on one side, changes in household income and the income elasticity of the demand for cigarettes were important countervailing factors in the demand of both products. The period 2005-2009 shows a large increase of 36% in household real income in Uruguay due to fast economic recovery after the 2002 crisis. The second factor is the interchangeability of roll your own and cigarettes and the impact on the demand of each product as a reaction to tax and price changes. The tax and price of roll your own tobacco remains substantially lower than that of cigarettes. This fact, and the increased substitution of roll your own for cigarettes seems to be the main reasons for the low impact of the policy of tobacco tax and price increases. This paper then consists of a revision of a 2004 study to estimate separate demands for both main tobacco products and obtain estimates for own price, cross price and income elasticities. Then, a simulation study was performed using the elasticities found and two scenarios of increases in household income: moderate (2.5% per year) and high (5% per year) confirming that countries where income is growing fast and with a potential for substitution towards cheaper products require substantial cigarette tax and price increases for a fiscal tobacco control policy to become effective.