If the EU doesn’t divorce PMI, Codentify will only be the beginning of our problems.
In my previous posts I’ve expressed my honest support of the FCTC protocol, and today I would like to give you the counter-example of a REALLY BAD deal, that most likely will expire in a few months, and I certainly won’t miss it – I’m talking about the EU’s agreement with PMI:
In general, under this agreement PMI was obligated to pay the EU over $ 1.1 billion, to prevent illicit trade of their products (through several measures, such as creating the Codentify system, allowing governments access to their data, cooperating with customs, etc.).
Moreover, supporters of the renewal of this agreement claim that thanks to it, illicit trade of genuine PMI product had been reduced in 85% (and that’s seemingly impressive).
At this point skeptics would probably think – WHY IS IT BAD?
Let’s say I’m a very popular and successful teddy-bear manufacturer (bear with me), and I’m not only agreeing to pay over a billion dollars to help the authorities catch contraband teddy-bears, but also succeeding in doing so by 85%. Why in the world should you refuse continuing this arrangement?
The EU commission and its member states shouldn’t even consider renewal of the agreements for at least three good reasons:
1. Big Tobacco were no teddy-bear resellers in the first place:
Prior to the negotiations upon the initial agreement between PMI and the EU, the EU commission and member states had launched a huge lawsuit against PMI and two other Big Tobacco companies, for (and this is an actual quote):
“‘an ongoing global scheme to smuggle cigarettes, launder the proceeds of narcotics trafficking, obstruct government oversight of the tobacco industry, fix prices, bribe foreign public officials, and conduct illegal trade with terrorist groups and state sponsors of terrorism”
Normally I put the most problematic parts in bold, but here I found nothing to leave unmarked.
2. Big tobacco are definitely not teddy-bear resellers today:
Their product has more complexed relationship with authorities and regulators and have a much broader effects on a country’s budget than most industries’. Without diving into the debate on public health promotion strategies, but especially in countries that are highly invested in public healthcare policies – reducing nationwide smoking rates, are in the government’s best interests. It is not only about general fake products and tax evasions, and as I said in many of my previous posts – it is a decision between making the industry the solution (not even a part of it… the whole solution) and accepting it as (a major) part of the problem.
3. Possible renewal of the agreement will be used to legitimize the industry’s self-regulation. “If you agree to take our money, something we do must be working, right?”
Wrong. First of all, let’s address the issue of 85% decline in genuine PMI product seizures – the main part of the previous sentence is GENUINE PMI PRODUCT – although it is not clear from the agreement itself, but from what I’ve personally heard from my sources , it is up for PMI employees to decide if a package caught by customs are indeed genuine.
In parallel, while the amounts of seized genuine product is decreasing, the amount of what is called “cheap whites” cigarettes are rising rapidly. Therefore, it is not an example of the industries achievements, but of what happens when you allow it to influence regulation statistics…
Second, from a budgetary point of view, the money received from PMI goes directly to the EU commission and member state’s general budget. Which means it is not earmarked directly to tackle illicit tobacco trade. Hence, without using harsh words, it is PMI’s money paid to keep authorities and governments in a certain status, which benefits PMI directly – as opposed to a fine, or an obligation to sponsor independent regulatory measures that benefit public causes at PMI’s expense (which was, allegedly, the original plan…).
And last but not least, continuation of this agreement, at this stage, means total support for Codentify against any attempt for independent track & trace solution. From PMI’s perspective, it would be rational to argue that you cannot make the company pay these amounts of money to develop Codentify to match EU standards, and in the same time force it to invest additional efforts to integrate with an independent solution. The irrational decision is to allow this situation in the first place.
So where does the decision stand now?
Last month the European Parliament gave the commission a very clear say against the renewal of this deal – 414 MEPs voted against the deal, 214 backed it and 66 abstained. Now let’s hope that the European commission will not let the public and its brave representatives down.