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Carreras weighing costs of new cigarette labelling requirements

Published:Sunday | January 6, 2013 | 12:00 AM
Richard Pandohie

McPherse Thompson, Assistant Editor - Business

Local tobacco marketer and distributor Carreras Limited is now calculating the costs to implement the regional standard for the labelling of retail packages of tobacco products as it gets ready to adopt the requirements of the new pictorial health warnings by year end.

Managing director of Carreras, Richard Pandohie said the company received notification in December of CARICOM's decision to adopt the regional standards.

This means that Carreras, which currently uses text on retail packages warning of the likely impact on the well-being of users, it will also now be using pictures and pictograms, depicting diseases that may arise from the consumption of tobacco products.

Notification of the changes was made by the CARICOM Secretariat in a statement following the 35th meeting of the Council for Trade and Economic Development (COTED) in Guyana in December on the adoption of the regional standard for labelling of tobacco products.

Describing it as a historic decision, the Secretariat said the new requirements were presented by the Caricom Regional Organisation for Standards and Quality (CROSQ).

It said all member states present at the meeting, chaired by Jamaica's Minister of Foreign Affairs and Foreign Trade A.J. Nicholson, voted in favour of accepting the CROSQ's new requirements as the regional standard.

"CARICOM member states have now taken a major step in meeting a significant obligation under Article 11 of the Framework Convention on Tobacco Control (FCTC) to which most member states are signatories and which entered into force in February 2005," the statement said.

Article 11 calls on countries which are parties to the Convention, within three years after entry into force, to adopt and implement effective measures to ensure tobacco packages are labelled according to guidelines developed by the World Health Organisation's FCTC Secretariat.

"The Convention calls for parties to, among other requirements, implement rotating health warnings on tobacco packaging that cover at least 30 per cent - ideally 50 per cent - of the display areas, which may include pictures or pictograms," the CARICOM Secretariat said.

"In adopting the regional standard on tobacco labelling, CARICOM countries would have met this important obligation," it added.

"In so doing, CARICOM member states have also met the related obligation under the Port-of-Spain Declaration (2007) on Non-Communicable Diseases. All manufacturers, importers, retailers and other entities engaged in the production and or trade of tobacco products within any member state of CARICOM need to comply with the regional standards," the statement said.

No indication

The CARICOM regional standard requires that graphic health warnings and not just textual information be used on packages.

Pandohie said that adopting the new standard meant that Carreras would now have to introduce new labelling.

"My understanding is it's a regional agreement and this is essentially calling for the graphic health warnings. This is what it's really about, where you can have graphics on the packs, so we'll have to make changes to accommodate that," he told Sunday Business.

Pandohie said the December notification notwithstanding, there has yet been no indication whether the company would be required to have the new labelling in place within a specific period.

"I haven't gotten any official communication from the Bureau of Standards here, which I imagine would be the arm responsible for ensuring implementation," he said.

"We are working with a timeline of the fourth quarter of this year, but this of course is subject to official communication and discussion with the relevant authorities here," Pandohie added.

"Yes, it's going to cost us some money," he said, responding to queries about the possible extent of the costs to Carreras. "Apart from the fact that we have to put in the graphic health warning, it has a rotation timeline. So it will be costly."

He was unable to estimate the possible costs "at this stage" but said "we are working with our operations team now to put the costing together."

At the same time, Pandohie said the company would have to find internal ways to cut costs, saying "we really can't burden the customers with any more costs at this stage."

Carreras, with a market share of 98 per cent of the local tobacco industry, in a posting on its website, said for years it has been voluntarily observing codes of conduct related to many areas of the trade, including implementing the then new health warning requirement six months before the date of official gazetting in 2006.

The company currently markets and distributes four brands in Jamaica including Craven A.

Carreras and Mussons Jamaica Limited, which markets and distributes the Marlboro brand on behalf of Phillip Morris International, are the only authorised distributors of cigarettes in Jamaica.

A spokesperson at Mussons declined comment on the new regional standard until she was more au fait with the requirements. However, since Mussons only distributes on behalf of Phillip Morris, any decision on labelling would likely have to be made by the US company.