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Heartline Magazine July - September 2005
Tobacco Control in Barbados
Comment by By Adrian Randall, CEO of
the Heart Foundation of Barbados
The Framework Convention on Tobacco Control (FCTC) was
signed by Barbados but to date we have not yet ratified it, as now over seventy
countries have done. We look like being left well behind on this very important
issue. Indeed with the news from St. Lucia that a bill to ratify the FCTC is go
before their parliament on Tuesday 16th August with news also early last month
(July 7th) that Jamaica had joined Trinidad and Tobago in ratifying and
according to reliable press reports Guyana on the brink of doing so Barbados is
in danger of being no higher than in fifth place. So what is holding the process
up?
The FCTC clearly states that “each party should take account
of its national health objectives concerning tobacco control” in its tobacco tax
and price policies. The treaty recognises that raising prices through tax
increases and other means “is an effective and important means of reducing
tobacco consumption by various segments of the population, in particular young
persons.”
There is no growing of tobacco in Barbados, and
manufacturing of tobacco products is limited to a small cigar-rolling factory
employing a handful of people. British American Tobacco (BAT) is the main
tobacco company operating in the region, with about 94% of market share.
However, BAT cigarettes sold in Barbados are produced by the West Indies Tobacco
Company (WITCO) in Trinidad and Tobago, which country has of course already
ratified the FCTC.
Tobacco tax revenue in Barbados in 1999 was approximately
US$15 million, about 2% of all tax revenue. However, in 1999 the percentage of
the retail
price of cigarettes as taxes was only 38%, among the lowest
in the region
The implication of this relatively low ratio of tax to price
and of tobacco tax revenue to general revenue means that the majority of revenue
generated by cigarettes sales goes to multinational tobacco companies. The
government takes in a minimal percentage of revenue through tobacco tax when
compared to other countries in the region, and relative to the health and
economic burden of tobacco use and secondhand smoke exposure that is placed on
Barbadians.
Other than hospital care costs there is little data specific
to Barbados on the costs of tobacco use to the health system and to the economy
in terms of lost productivity. However, in countries that are net importers of
tobacco, as Barbados is, the elimination of tobacco production and consumption
is expected to significantly benefit the economy.
Why? Firstly, people who stop spending money on tobacco will
normally spend money on other goods, few of which carry the costs to the economy
that tobacco does. Secondly, cigarette production has become highly mechanized
and requires fewer and fewer employees. This is evidenced by the fact that in
many countries, cigarette production jobs have been lost even when production
and consumption were increasing. Thirdly, most of the profit from cigarettes
goes to the manufacturers, most of whom are multinational companies based in
just a handful of countries (notably the US, UK, and Japan).
Given this data, as well as the very small role of tobacco
production in the Barbados economy, it is reasonable to assume that tobacco use
imposes economic costs on Barbados in addition to the costs it imposes on the
health of its citizens.
There has not been a single instance where an increase in
tobacco tax has resulted in decreased government revenue. On the contrary, data
from dozens of countries clearly shows that when the tax on tobacco consumption
is increased, then the revenue from tobacco taxes increases. Although tobacco
consumption falls in response to higher prices, because tobacco is so addictive
the decline is small in proportion to the tax increase, guaranteeing stable
government income in the medium term at least.
Moves must be put in place to reduce the consumption of
tobacco products and cigarette smoking not only because of the health risks but
also because of the economic effect. The first meeting of the Conference of
Parties (the governing body of the FCTC) will be held in February 2006.
Countries must become a party to the FCTC before the Conference of the Parties
in order to participate as voting members. Barbados must not miss the boat on
ratification and should do so by late October/early November at the latest. This
will ensure that we have a place at the committee table and are able to enjoy
the economic opportunities available.
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