Cigarette sales down 80m in 20 years

Cigarette sales have dropped by about 80 million in spite of an increase of 75,000 in the population over the past 20 years, the general manager of Central Cigarettes, Ronald Abela said in an interview.

Some 680 million cigarettes used to be sold locally in the early 1980s compared with 600 million last year.

"The anti-smoking lobby argues that the number of smokers is growing, but they mistakenly assume that imported tobacco is all for the local market. That assumption is wrong as we export a lot of what we produce," Mr Abela said.

"If one wants to check the number of cigarettes consumed locally, one has to look at the excise stamps we buy, not at the amount of tobacco that is imported."

EU directives issued recently stipulate that cigarettes for consumption in the EU (from 2004) as well as cigarettes destined for export (from 2007) should contain a maximum tar level of 10 mg, 1 mg nicotine and 10 mg carbon monoxide.

The EU also banned the use of misleading descriptions such as "mild" or "light" and that tobacco products will need to carry a general warning covering not less than 30 per cent of the surface saying "Smoking kills/Smoking can kill" or "Smoking seriously harms you and others around you".

In addition, there should be another warning covering not less than 40 per cent of the corresponding surface. These health warnings have to be in place by the end of September for current members of the EU and in time for accession for the candidates.

Asked about how these directives affected Central Cigarettes, Mr Abela said the cigarettes were produced from blends of tobacco received from its parent company in Europe, which produces cigarettes for the EU market. Hence the tobacco would already be made to EU specifications.

The minor problem was packaging, as it was ordered in bulk and the company would need to know quite a few months in advance the local helpline numbers and other related information to be able to order on time the proper printing on packets according to EU directives.

Asked whether EU membership would have any effect on the Maltese factory, Mr Abela said the factory mainly produced cigarettes for the local and North African markets.

"Our factory is too small to compete with larger ones. We have invested Lm1.5 million to upgrade the factory. The advantage of a small factory like ours is that we can be more flexible and produce short runs, small orders which are a headache for bigger factories. Access to European markets, whether through membership of the EU or through a Free Trade Agreement, would give us a chance to export to Europe," Mr Abela said.

Asked about the kind of hurdles they encountered, Mr Abela said the importation of counterfeit cigarettes and smuggled cigarettes was of concern.

"When you consider that over 70 per cent of the price of a packet of cigarettes is excise duty and VAT, it does not take long to realise the amount of money to be made from smuggling. The duty and VAT on a container full of cigarettes amounts to Lm400,000. One can imagine how tempting it is to smuggle cigarettes."

Asked about anti-smoking campaigns, Mr Abela thinks that many of them were counter-productive.

"The fact that you constantly tell youngsters not to do something has the opposite effect; they would want to try it even more. Peer pressure fuels the smoking habit among youths," Mr Abela said.

"There is a dip in cigarette sales after every budget whenever excise tax is raised. The sales never recover fully after that.

"Another thing we have noted following an increase in excise is that there is also a decline in the sales of king size cigarettes and an increase in the consumption of shorter cigarettes, which cost less," Mr Abela said.

The Central Cigarettes company was set up in 1972 when British American Tobacco, which had been in Malta since 1907, merged their local operation with Rothmans.