March 22, 2012 / 7:46 AM / 7 years ago

UPDATE 2-Bloomberg charity adds $220 mln to anti-smoking effort

* Legal support offered to help fight industry

* Countries follow NYC example, tobacco profits hurting

* May face opposition in China, world’s biggest consumer

By Sharon Begley

NEW YORK, March 22 (Reuters) - Michael Bloomberg’s charitable foundation will commit $220 million over the next four years to fight tobacco use globally, including for the funding of legal challenges against the industry.

Calling tobacco “a scourge all over the world” and accusing cigarette makers of “nefarious activities”, the New York City mayor told a news conference his foundation would focus on low-and moderate-income countries where nearly 80 percent of smokers live, like Russia, China, India, Indonesia and Bangladesh.

Bloomberg was set to announce the new funding for Bloomberg Philanthropies on Thursday at the 15th World Conference on Tobacco or Health in Singapore. The commitment takes the foundation’s total pledge to the cause to almost $600 million.

Smoking could kill about 1 billion people this century, authors of the fourth edition of the Tobacco Atlas said at the book’s launch in Singapore on Wednesday. The book is published by the American Cancer Society and World Lung Foundation.

Bloomberg’s initiative is likely to face opposition in China, the world’s largest producer and consumer of tobacco with more than 300 million smokers, from a powerful state monopoly and officials who fear a fall in tobacco profits.

The tobacco industry provides nearly one-tenth of tax revenues in China. According to the State Tobacco Monopoly Administration, the tobacco tax take in 2011 rose 22.5 per cent to 753 billion yuan ($119.09 billion). The state tobacco monopoly produced profits of 118 billion yuan in 2010.

For years, China has held half-hearted campaigns to stub out the habit. Last year, it said it would ban smoking at indoor public venues, but non-smoking signs are routinely ignored.

Although nearly 1.2 million Chinese people die from smoking-related diseases each year, the habit is considered an important part of socialising and Chinese cigarettes are among the cheapest in the world at less than a dollar a pack.

“As more and more people are prematurely affected by disease, disability and early death due to tobacco, social services such as medical care may be overwhelmed,” Michael O’Leary, the World Health Organisation’s China representative, said in emailed comments to Reuters.

Tobacco use cost China $28.9 billion in direct medical costs in 2008, more than four times the amount in 2000, the Tobacco Atlas says.


The initiative is a departure from Bloomberg’s efforts since 2007, which have focused on “what’s worked here” in New York, said Dr. Kelly Henning, director of the charity’s public health programs.

That included pressing local and national governments to raise cigarette taxes, persuading the entertainment industry not to film movie stars smoking, making nicotine patches widely available and lobbying for laws that ban tobacco advertising, sponsorship and smoking in public.

The New York City example is gaining traction overseas. This month, India increased its cigarette tax.

“We’ve been doing tax advocacy in India for the last year and have now seen 12 states raise their state-level value-added tax on cigarettes,” said Henning. “This increase is at the national level. We consider it a small step forward.”

India banned smoking in public places in 2008, and since last year all smoking scenes in films must be accompanied by an on-screen health warning.

According to an Indian government report, tobacco-related illnesses cost India $6.1 billion in 1999. The government earns about $1.4 billion in excise revenue from tobacco.


As anti-tobacco policies and laws are extended globally - they cover 2.2 billion people - they threaten cigarette makers’ profits and the industry is fighting back.

A case in point is Indonesia, where about 68 million people smoke and regulation is weak, said Tulus Abadi, a member of Indonesia’s National Commission on Tobacco Control.

Cigarette firms can advertise freely in the media and a regulation initiated three years ago to create smoke-free zones and new cigarette packaging has not been passed because of objections from the industry, Abadi said.

“Every time you want to make a regulation, it is very difficult because on every level of the bureaucracy they have been bought by the cigarette industry,” he said.

In Indonesia, most smokers are poor and a family’s spending on cigarettes comes second after spending on rice, the main staple, according to data from the Statistics Bureau.

To counter a decline in smoking in the United States, cigarette makers have relied on higher prices, cost cuts and growth in smokeless tobacco to keep profits rising.

They have also targeted overseas markets, especially China, Indonesia, and Russia, where a growing middle class can pay for branded products.

The Tobacco Atlas says the industry reaped profits of $35 billion in 2010.

Bloomberg Philanthropies helps countries such as Uruguay take on tobacco firms.

The South American country adopted a law in 2009 that required warning labels to cover 80 percent of the surface of cigarette packs - the most in the world - and that each brand have only one variant, among other restrictions.

In response, Philip Morris International and three affiliates filed a complaint with the International Center for Settlement of Investment Disputes, part of the World Bank, alleging that the restrictions harmed business operations and violated a bilateral investment treaty between Uruguay and Switzerland, where two affiliates are based.

Bloomberg is underwriting legal assistance for Uruguay, said Henning. “If industry wins this one, other countries will be terrified of adopting anti-tobacco measures,” she said.

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