ITP study delay offers boost to duty free tobacco

By Luke Barras-hill |

Duty free tobacco has secured an important result in the fight to defend the category against what it views as baseless allegations of involvement in illicit trade.   

The World Health Organization’s (WHO) Second Meeting of the Parties to the Protocol (MOP2) to Eliminate Illicit Trade in Tobacco Products (15-18 November) concluded last week.

In an encouraging development for duty free, no reference was paid to the launch of an evidence-based research study that takes as its basis the suggestion that duty free tobacco contributes towards illegal trading.

The WHO first postponed the study aligned to Article 13.2 of the Illicit Trade Protocol – part of the WHO Framework Convention on Tobacco Control (WHO FCTC) – in 2018.

At the time, the WHO Secretariat proposed the study should be carried out within five years of the protocol’s entry into force (September 2018) and commence immediately.

The Second Meeting of the Parties to the WHO’s Illicit Trade Protocol was due to take place at The Hague, Netherlands (15-18 November) but instead ran as a virtual gathering due to the ongoing impact of Covid-19.

LOOKING AHEAD TO THIRD MEETING

It had previously been decided at MOP1 that a roadmap on the duty free question would be produced within two years.

MOP2 was postponed last year due to Covid-19 and after initially being planned to take place at The Hague, Netherlands it was instead held in a virtual format.

This further delay to the study’s launch means the DF&TR tobacco sector is now looking ahead to MOP3, which is slated to take place in Panama in 2023.

An industry source close to the matter told TRBusiness: “Now that ITP parties have delayed discussion of Article 13.2 it is certain that it will be considered at MOP3 in 2023.

“With this in mind it is more important than ever that the travel retail industry continues to rebut inaccurate allegations that we are a contributor to illicit trade, and continues to remind ITP parties that our industry boasts one of the most transparent and secure supply chains in the world.

“Illicit trade causes our industry harm, just as it does any other industry, and we will continue to work closely with enforcement agencies across the globe to eliminate it in all its forms.”

UPDATE AT MEADFA CONFERENCE

It is reliably understood by TRBusiness that MOP3 is already being closely scrutinised by industry lobbying powers.

Establishing early dialogue ahead of 2023 is undoubtedly important given the apparent uncertainty over the WHO’s next move on ITP and any implications that entails for duty free.

The latest updates on the industry’s fight to defend duty free tobacco sales were shared during the MEADFA Conference in Dubai this week – click here for a detailed report of the programme – in a dedicated panel session aptly entitled, ‘Defending our Industry’.

Delegates to this week’s MEADFA Conference in Dubai were offered a timely update on the industry’s advocacy efforts in the face of pressing cross-category regulatory threats. The ‘Defending our Industry’ panel session was moderated by John Hume (pictured) and included contributions from MEADFA’s Rita Chidiac (below)

This was moderated by Hume Brophy partner John Hume and featured MEADFA Advocacy Working Group Chair Rita Chidiac and European Travel Retail Confederation (ETRC) Senior Counsel Ricardo Oliveira.

Oliveira called the MOP2 outcome ‘excellent’ for the industry after the WHO’s bold targeting of the duty free tobacco category, something which has been the case over many years.

“Of course, there is illicit trade in a number of products across the world in the domestic market; it is a problem for society, particularly government bodies,” he told MEADFA Conference delegates.

“However, it is a false allegation that our highly controlled channel is a ground for substantial contribution to illicit trade. That’s why we are fiercely fighting these untrue allegations.

“We are totally supportive of any measures on illicit trade around the world, but let’s do it right – where the problem really exists. It is a bit crazy to have an article in the ITP that only wants to ban tobacco in duty free.”

While the delay of the proposed WHO study on ITP, which serves as a policy vehicle for a possible future ban on tobacco duty free sales, has been welcomed by the trade the ETRC was keen to emphasise the urgency of the situation.

“The fact is in the next meeting of the parties that will take place in 2023, there will be no opportunity for delay,” warned Oliveira.

“That means this study will be commissioned; the wording of the article – suggests the outcome, which is completely unfair. Unfortunately, the results of this study will come against the industry.

“Therefore we need to be prepared as an industry from the start to really make it clear in the minds of policymakers that duty free has zero tolerance in this situation and is not a channel that contributes to this societal problem in the world.”

The Protocol aims to combat illicit trade in tobacco, which the WHO views as undermining tobacco control policies and public health.

Parties to the Protocol consist of countries and jurisdictions that together support activities aimed at stopping the illicit trade of tobacco products.

As of today, there are 64 parties and 54 signatories to the Protocol. Nearly all the parties attended MOP2 and 59 participated.

The next Meeting of the Parties to the Protocol (MOP3) is due to be held in Panama in 2023 coinciding with the Tenth Conference of the Parties to the WHO Framework Convention on Tobacco Control.

According to WHO FCTC, an estimated $47 billion annually is lost globally due to the illicit trade of tobacco products.

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