Parliament allows indirect advertising of cigarettes. How could this happen?
MPs say it's a "technical mistake", but they have no plans to correct it
The Ukrainian Parliament, once again, failed to pass an 'anti-tobacco' vote. On May 30th, amendment No. 174 to Draft Law No. 9206, proposing a ban on the visible placement of tobacco products and electronic smoking devices in retail locations, did not get the required number of votes. Only 158 Members of Parliament voted in its favour.
Tobacco companies exert influence on the parliament to prevent the synchronisation of Ukrainian anti-tobacco legislation with the requirements of the European Union. In January 2023, Verkhovna Rada relaxed restrictions on tobacco advertising by incorporating them into the Media Law. Now, lawmakers refer to it as a "technical mistake" and are expeditiously considering a new 'corrected' draft law numbered 9206. Mind, with the support of the Life NGO, decided to investigate how beneficial amendments favouring the tobacco industry found their way into legislation and whether the new draft law truly addresses the issue of a complete ban on tobacco products.
Editorial: We would like to clarify that any media outlet covering such topics faces conflicts of interest. On the one hand, tobacco companies constitute an active business sector and provide significant advertising revenue to outlets. On the other hand, public policies limiting tobacco consumption are popular in many EU countries. Therefore, in this article, we consciously avoid making judgments regarding the correctness of specific provisions and solely focus on describing the problem and the positions of the parties involved.
Thanks to the Media Law, tobacco companies have gained the opportunity to continue advertising their products, and some restrictions on advertising have disappeared altogether. In late 2021, the Verkhovna Rada adopted comprehensive amendments to a law that was meant to completely ban the advertising of any tobacco products from July 11th, 2023. However, these inconvenient provisions for tobacco companies were subsequently abolished by the law on Media passed on March 31st. It is referred to as a "technical mistake" in parliament. But is it really just a mistake?
What happened? The Draft Law "On Media" is a massive document, spanning several hundred pages. It modified or repealed the provisions of 312 other legislative acts.
Over two and a half years, 22 parliamentary committees worked on the draft. The main committee responsible for humanitarian and information policy actively conducted public discussions with media representatives, since they are primarily affected by this document. However, there was no dialogue with tobacco companies or anti-tobacco activists.
The proposals primarily came from media organisations. However, among the initiators of the amendments were well-known lobbyists from the tobacco industry, including representatives of the American Chamber of Commerce and the NGO Ukrainian League of Industrialists and Entrepreneurs.
The latter provided Mind with a copy of the letter sent by the Vice President of the Ukrainian League of Industrialists and Entrepreneurs, Ivan Petukhov, to the Verkhovna Rada, suggesting changes to the Draft Law "On Media." The letter did not mention anything about tobacco product advertising.
The text of the advertising law is presented in the version of the comprehensive anti-tobacco draft law. The lines modified by the Media Law are highlighted in green.
The main change is that the phrase "Any advertising and promotion of tobacco products is prohibited…" in Paragraph 1, Article 22 was replaced with "Advertising of tobacco products is prohibited: – a specific list of cases is added." In other words, while the previous law banned any form of advertising, the current law allows certain types.
For example, provisions stating that tobacco companies cannot be sponsors of various public events and media programmes were removed. Instead, the term "sponsorship" was introduced, which is not defined anywhere in the legislation. Therefore, this provision is effectively 'dead' and does not prohibit anything in practice.
This amendment, numbered 2175, was introduced by MP Mykyta Poturayev. He proposed the prohibition of sponsorship for programs and concerts only in cases where such events are primarily (!) intended for people under 21 years of age.
How did the 'technical mistake' occur? During repeated discussions on the Draft Law "On Media" in the session hall, not a single MP noticed amendments that lobbied for the interests of tobacco companies. "This person (Mykyta Poturayev – Mind), who, well, does an excellent job, professionally, beautifully," said Tymoshenko. "And, you know, today we all have a wonderful mood because no one was pushing anyone, but instead, we were making decisions," confessed Yuliya Tymoshenko, the leader of the parliamentary faction Batkivshchyna (All-Ukrainian Union "Fatherland").
The discussion on the Draft Law "On Media" lasted for over two years. On the far left is Mykyta Poturayev, the chairman of the parliamentary committee on humanitarian and information policy. There are suspicions in the public that the MP is a lobbyist for the tobacco industry. However, he dismisses these accusations as "completely unfounded."
During the discussion in the session hall, MP Mykola Kniazhytsky added that "80% of it is a normal law, and indeed, Mykyta Poturayev and all members of our committee did a lot to make it normal."
None of the 15 members of the Committee on Health paid attention to the provisions regarding tobacco advertising. But according to the head of this committee, Mykhailo Radutsky, he and his colleagues did not even consider this draft law. Therefore, no amendments were made. As a result, seven members of this committee also voted "for." As a result, the law was adopted with 299 votes from Members of Parliament.
During his conversation with Mind, Mykyta Poturayev argued that the media law would not affect the ban on tobacco advertising. "Nothing bad happened. If the new anti-tobacco provisions had not come into force at the time of the adoption of the "On Media" law, then these provisions were not threatened at all," he said.
And Mykhailo Radutsky refused to answer whether he and his colleagues from the committee had even read the Draft Law "On Media".
"That's up to the authors. Unfortunately, I am not the author of the law. Anything harmful that slipped through, we are now correcting with our colleagues," Radutsky said in a comment to Mind. "I am personally in favour of the fight against tobacco! If you are looking for foul, then I don't know what to tell you. Our committee is a consistent fighter against tobacco; this is our anti-tobacco law, and now another one, and we are the authors of the law to correct the weaknesses in laws that are not our profile."
Can this 'mistake' be corrected? He noticed the problem only after the Media Law came into effect. And now the MPs have a new task – to adopt a new law that would rectify this mistake.
"All these technical errors will be rectified by the bill amending the Advertising Law. It will be adopted in the nearest future for the final implementation of the EU Directive on Audiovisual Services," reassures Mykyta Poturayev. "Undoubtedly, all prohibitions regarding any manifestations of tobacco advertising and everything related to it will be preserved in Ukrainian legislation. Because these prohibitions fully comply with European standards. All tobacco restrictions are carefully and correctly taken into account there."
According to the MP, the committee unanimously supported this bill, and it has already been voted on in the first reading of the Verkhovna Rada in early May.
What does the new Bill No. 9206 change? When analysing the composition of the Media Law and the new Bill No. 9206, which is supposed to rectify the 'technical errors', it can be seen that it has hardly changed. However, MPs who previously worked in the medical field, such as Chief Oncologist of Chernigiv Valeriy Zub and Olga Stefanyshyna, an expert in patient rights protection, have joined the new bill.
However, upon familiarising oneself with the text of Bill No. 9206, it is evident that despite Poturayev's assurances, this document still weakens the restrictions for tobacco companies. For example, the MPs suggest allowing tobacco companies to sponsor programmes on current events.
Over the past three years, the number of smokers in Ukraine has been steadily increasing, according to the research conducted by the Kyiv International Institute of Sociology.
Furthermore, even if the new bill is passed today, it will only come into effect on January 1, 2024. Therefore, tobacco companies have won twice. Firstly, they have gained additional five months to advertise their products under the old, very lenient rules. And secondly, they have regained the opportunity to promote their products where the comprehensive anti-tobacco law prohibited it.
How does all of this correlate with Ukraine's European course? Ukraine is one of the largest tobacco product manufacturers in the world. It's not surprising because high taxes are not imposed on tobacco production here.
However, under the Association Agreement with the EU, Ukraine has committed to increasing the excise duty on tobacco product sales to the generally accepted level in Europe, at least 90 euros per 1,000 cigarettes, by 2025. Currently, the excise tax on cigarettes in Ukraine is 52 euros according to the current exchange rate.
Due to the change in the exchange rate of the hryvnia to the euro, following the current plan to increase the excise duty on cigarettes by 2025, we will have an excise of only 75 euros per 1,000 pieces.
According to YouControl data, the total revenue of Philip Morris Ukraine PJSC, A/T B.A.T.-Prilucky Tobacco Company PJSC, JTI International Company Ukraine PJSC, and Imperial Tobacco Ukraine PJSC in 2022 amounted to over 36 billion hryvnias. This amount is equivalent to half of the budget of the city of Kyiv for 2023.
The net income of the market leader, British American Tobacco Ukraine, increased to 25 billion hryvnias in 2022 compared to 2021.
Чистий дохід лідера ринку, British American Tobacco Ukraine, 2022 року зріс до 25 млрд грн, порівняно з 2021 роком.
Tobacco industry actors are trying to postpone the implementation of other provisions of the law. For example, the Ukrtyutyun association (Ukrainian Tobacco – Mind) has appealed to the president to "postpone the entry into force of the law on increasing the size of health warnings on packs of all tobacco products from 50% to 65% of the pack size during the period of war."
In Ukraine, the standard 'arguments' for such postponement are based on the claim that "if this provision (the introduction of standardised pack, the ban on electronic cigarette advertising, excise increase, etc.) takes effect right now, legal tobacco production will cease, and the market will be flooded with contraband. Consequently, the state budget will not receive substantial tax revenues paid by tobacco companies.
Also, during the development of the comprehensive anti-tobacco bill, the requirement for the creation of a special system to track illicit tobacco trade was removed. Tobacco product manufacturers argued that they lack the funds to implement this system.
And the parliamentarians listened to the business – although the implementation of this system requires a relevant directive from the European Union.
Therefore, on the one hand, tobacco companies publicly support the fight against smuggling, but on the other hand, they hinder the adoption of laws aimed at combating this smuggling.
In the financial report for 2022, Masamichi Terabatake, the President of JT Group, discusses the company's plan to achieve profitability in the production of so-called reduced-risk products (tobacco sticks without heating, electronic cigarettes, etc.) by 2028. He emphasises that one of the target audiences in this regard is adolescents. Philip Morris Ukraine, on the other hand, boasts of having 1 million IQOS users in Ukraine.
The WHO Framework Convention on Tobacco Control requires signatory countries, including Ukraine, to protect their health policies "from commercial and other vested interests of the tobacco industry."
However, Ukrainian tobacco companies still employ staff responsible for interacting with government authorities. It is stated in the report of independent auditors regarding the financial report of British American Tobacco Sales and Marketing Ukraine LLC.
"They (company employees – Mind) provide expert opinions to representatives of the legislative and executive authorities during the development of changes to the tax legislation," the auditors' report states. "The company is a member of leading business associations and supports dialogue with government authorities on tax policy and ensuring its transparency and predictability."
How are similar issues addressed in the world? Many developed countries strictly prohibit the advertising of tobacco products and electronic cigarettes.
In the United Kingdom, for example, legislators banned the advertising of e-cigarettes on radio, television, and public press back in 2016. This very law restricts the sale of e-cigarettes to minors and establishes packaging and labelling requirements. As a result, the number of smokers in the country continues to decline. Over the past decade, the number of deaths from smoking-related cardiovascular diseases has decreased by a third.
The ban on cigarette advertising has also affected the prevalence of smoking among young people. According to the National Institute for Health and Care Excellence, the number of child smokers in the UK decreased from 8% in 2010 to 3% in 2020.
For comparison, according to the Ministry of Health in Ukraine, 18.2% of children aged 13-15 use e-cigarettes.
Тютюнові компанії заявляють про те, що вбачають свою місію в тому, щоб споживачі тютюнових виробів активніше переходили на бездимні аналоги цигарок. В Україні зараз IQOS вживає близько 12% споживачів тютюнових виробів. Скріншот із презентації дослідження Київського міжнародного інституту соціології:
Ukraine ranks between Malaysia and Mexico in the Tobacco Industry Interference Index. The leader of the index is the United Kingdom. The cost of a pack of cigarettes speaks to the strength of the tobacco lobby in each individual EU country. For instance, in Luxembourg in 2022, one pack of Marlboro cigarettes cost 5.5 euros, in Ireland – 15 euros, and in Bulgaria – only 3 euros. Why is the price so low in Bulgaria? It's because the tobacco lobby is very strong in that country. By the way, in Ukraine, such a pack costs about 2 euros.
How is global tobacco lobbying developing? Both in Ukraine and in the United Kingdom, tobacco companies use the same lobbying techniques to influence legislation regarding the advertising of tobacco products and electronic cigarettes. For example, they fund research that can promote a positive image of tobacco products, hire lobbyists to influence policymakers and the public, and use the media to support their positions, among other tactics.
Tobacco companies claim that their mission is to encourage tobacco consumers to switch to smoke-free alternatives. In Ukraine, IQOS is currently used by around 12% of tobacco consumers.
For instance, British American Tobacco uses a lobbying firm to influence lawmakers in the UK and other countries and sponsored research aimed at confirming the positive properties of e-cigarettes. Philip Morris International spends millions of pounds on lobbying in the European Union to reduce restrictions on tobacco advertising and the sale of electronic cigarettes.
In Belgium, where smoking rates are among the highest in the EU, the same company attempted to increase its influence on the government by supporting political candidates and financing political parties during the discussion of legislation on tobacco products and e-cigarette advertising.
In Belgium, IQOS is not sold because the market is heavily regulated, and tobacco companies have not entered this market. Brussels, Belgium, 2023.
According to the National Institute on Health and Science of Ageing in Belgium, the ban on e-cigarette advertising and its regulation by the state has led to a decrease in the number of young people using these products. It has also helped reduce overall tobacco use among the population.
In the Netherlands, in 2019, tobacco companies approached the government to develop rules that allow e-cigarettes as an alternative to traditional cigarettes, as well as encourage the development of "reduced-harm tobacco products."
In the Netherlands, advertising of tobacco products and e-cigarettes is even prohibited at the point of sale. Therefore, cigarette packs are hidden in cabinets, and customers can only see them when purchasing the product. Amsterdam, the Netherlands, 2023.However, the Dutch Cancer Society (KWF Kankerbestrijding), which has long been fighting tobacco lobbying, actively works with the government and parliament to ensure the preservation of strict rules regarding the advertising of tobacco products and e-cigarettes. And the attempts by tobacco companies have failed miserably.
In contrast to Ukraine, where legislators are currently losing the battle for the nation's health.
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