Today I would like to discuss a little bit more about the economic implications of letting the tobacco industry self-regulate its taxes and its harm to the free market of tobacco products. I know some of my readers and supporters would just like to see this market shrink, but I’m committed to stay as objective as possible, and confront this issue as any other major market.
So first thing’s first, when I talk about “the industry”, you might think of a market with a large and diverse set of players competing with each other, to make the best product and to correspond to the governments demands in the best way, but unfortunately this is not the case with tobacco. “The industry” is already totally controlled by four major companies (which are PMI, BAT, JTI and ITG). Not surprisingly, these are also the companies united behind the DCTA solution and the promotion of Codentify.
Now why would competing companies unite in that way, if not against some “common enemies”?
• The first “enemy” is any REAL competition WITHIN the market. In a world where the LEGAL standard is Codentify, every new company in the market would have to adopt the “big four” companies’ rules. Moreover, there would be no problem to adjust the regulation standards in a way, that it would be practically impossible for a smaller player to enter the tobacco industry.
• The second “enemy”, as mentioned in many of my previous posts, are governmental authorities that are trusted with protecting the public from smuggling and tax evasions.
• And last but not least – us, the common people, represented by our elected governments… Making it harder for any smoking-related laws harder and harder to pass. And that’s without even starting to talk about cigarette prices in a market where REAL competition is taken out of the equation.
So the bottom line, if you’re the common cigarette smoker, DCTA and Codentify is simply one more step to limit your choices, centralizing the tobacco market in a way that no one genuinely competes for your money, and then making it more difficult to ensure your money doesn’t accidentally slip into the wrong hands.
If I’m a burger lover, I wouldn’t like McDonalds to regulate the standards for meat worldwide, I would like it to be subjected to the same rules and regulations as the local burger restaurant.
Just look at the DCTA’s official website:
No guys, you DON’T HELP GOVERNMENT RAISE TAXES, you are OBLIGATED to pay your taxes like any other industry! But the fact that you have taken control over more than 75% of the world’s tobacco products makes your generous HELP more needed, especially if you’re scheme to regulate your own taxes will succeed.