Jan 29, 2010

Boost in Md. cigarette taxes a boon for smugglers

Gov. Martin O'Malley promotes entrepreneurship. Kyun Hong seems to have answered the call.
According to comptroller's agents, he packed his Severna Park house with cigarettes and snuff bought across state lines and resold them to Baltimore retailers without paying Maryland's tobacco tax.
If he is a tobacco smuggler - he hasn't been convicted and didn't respond to a detailed message left at his house - he has competition. The doubling of Maryland's cigarette tax two years ago has inspired uncounted numbers of small businessmen to do what comes naturally: Buy low and sell high.
Nowhere else in the country do smugglers need to drive so short a distance to make so much money. Thanks to the abyss between Maryland's cigarette tax and those of its neighbors, a pop across the Potomac for a van-full of smokes can easily net $5,000, even if you split the profits with the Maryland stores that buy them.Lawmakers hoped to increase revenue and discourage smoking when it raised the tax. But it also seems to have energized the Maryland underworld and increased crime. The tax increase has delivered benefits, but its costs are rising, too.
Tobacco-smuggling busts roughly tripled in the first fiscal year after Maryland's tax went from $1 to $2 a pack. They're on track to equal those levels again this year, but traffickers nailed by tobacco-enforcement agents are probably only a teeny portion of what goes on.
Maryland may be No. 1 in the country in cigarette smuggling, according to calculations by Michigan's Mackinac Center for Public Policy, a pro-markets think tank.
Hard data on smuggling are nonexistent because so much is undetected. But Mackinac researchers compared legal cigarette sales with each state's actual level of smoking as shown by federal health surveys. The difference was probably smuggling.
They also accounted for tax increases and the proximity of low-tax states to project how higher taxes would boost smuggling. With next-door Virginia taxing smokes at only 30 cents a pack, the Mackinac center calculates, as many as half of all cigarettes consumed in Maryland these days are illegal.
People who supported the tax increase cheer what looks like an amazing plunge in Maryland smoking. But they're looking only at official figures.
"This shows that the dollar tax increase did exactly what public health advocates predicted," Vincent DeMarco, president of the Maryland Citizens' Health Initiative, said a few months ago.
Come on, Vinny. Legal sales have plunged because smokers and smugglers save $17 a carton by driving south and loading up the trunk.
The $2 tax has surely dissuaded some teens from starting to smoke, and for that reason alone, it can be defended. But the 18 percent drop in official cigarette sales that took place after the tax increase does not mean Maryland went on a health binge. Nationally, cigarette sales have been declining by 2 percent or 3 percent per year.
Meanwhile Maryland is nurturing another thriving, illegal industry. Enforcement agents seized $140,000 in illegal tobacco from Hong's house, said Jeff Kelly, director of field enforcement for Comptroller Peter Franchot.
"It was just piled up," he said. "It formed its own hallway. It was hard to get around."
Officials also got what might have been a good look at Hong's distribution system - a list of 54 Baltimore shops that they took to be customers or potential customers. That gives an idea of how pervasive illegal sales may be.
As of Tuesday, Franchot's people had visited most of the stores and busted half a dozen for having untaxed tobacco.
Tobacco smuggling isn't as violent as drug smuggling, but wait: According to Kelly, some dealers are switching from heroin and cocaine to tobacco because it's easier and just as lucrative. Sometimes law-enforcement officials report links between tobacco traffickers and terrorists.
These entrepreneurs aren't doing Maryland any good. Kelly's office has fewer than two dozen people to stop tobacco smuggling. The same folks have to track liquor and gasoline sales, too.
Last week, I wrote a column supporting an increase in Maryland alcohol taxes, so maybe you're wondering about the apparent flip-flop. But Maryland's booze taxes are way below those of its neighbors, and alcohol is harder to smuggle.
Like all politics, taxes are the art of the possible. The cigarette-smuggling boom shows yet again that policies have side effects, and Maryland does not operate in a smoke-free vacuum.

Jan 27, 2010

Local Man Arrested for Smuggling Cigarettes

An investigation by the Maryland Comptroller’s Office that spanned several weeks turned up 130,000 sticks of untaxed tobacco products, along with more than 2,600 illegal cigarettes.

Comptroller Peter Franchot says Kyun Hong from Severna Park is at the center of it all. Agents watched him transport a large quantity of tobacco products, but where he got it from is still unknown.

The Avenue Bar on Greenmount Ave. received a $500 citation in connection with the case, but the manager says he buys cartons of cigarettes from wholesalers and he doesn't know Hong.

"We expect all the cigarettes are good to sell for retail, but unfortunately those few cigarettes we had wasn't stamped," said Sung Kim, manager, The Avenue Bar.

Kim showed us the boxes he has now with a stamp saying "Maryland Tax Paid."
He plans to take his case to court. Caron Brace with the comptroller's office says these underground operations are more common than you may think. One reason may be the taxes on cigarettes - $2 per pack in Maryland versus 30 cents in Virginia.

"Especially in this economy, people are trying to get around whatever they can. But when you have another business down the street that is paying their taxes, it's just not fair," said Brace.

Sung Kim thinks he's being unfairly targeted. He calls himself a victim of the wholesaler.

"I don't know how in the world those things can happen, but it happened."

The Maryland Comptroller's Office says it lost more than $25,000 from this one operation.

The investigation is far from over. More businesses may be named, and the comptroller's office hopes to track down where Hong was getting the tobacco.
He is charged with transporting and possession of contraband cigarettes.

Jan 25, 2010

Booze and fags are fatal fire risk says senior Croydon firefighter

Giving up cigarettes and alcohol can significantly cut the risk of being involved in a fatal house fire, Croydon’s senior firefighter has said.
Borough Commander Kevin Biggs said almost a third of fatal fires in London homes are alcohol related, while more than one in three are started by cigarettes or other smoking materials. 
He said: “Health reasons aside – what better excuse do you have to stop smoking and cut back on alcohol? 
“When people are intoxicated they are more likely to take risks, their responses become slower and they can fall asleep easily. “It’s a lethal combination.” 
Common causes of house fires included people failing to put cigarettes out properly, and candles or cooking being left unattended after people have fallen asleep.

Jan 22, 2010

How Can We Reduce Tobacco Use?

What steps need to be taken to reduce the growing use of tobacco both in America and around the world? That’s a question that is addressed in a new American Cancer Society report which provides suggested policies, activities, and interventions designed to help make reduced tobacco use a reality.
The report, which was headed by Thomas Glynn, PhD, the American Cancer Society director of Cancer Science and Trends, notes that tobacco is used by at least 1.3 billion people around the world and that more than 14,500 people die each day as a direct result of its use. Based on figures from the National Cancer Institute, an estimated 430 people died of lung cancer each day in the United States in 2009. 
The new report includes a list of 21 challenges for governments, advertisers, healthcare providers, policy makers, and others to take up and follow through on to help reduce tobacco use. Among the items is one that the report says is the one most important action: increase and maintain support for the Framework Convention on Tobacco Control (FCTC). The FCTC, which is the first treaty negotiated under the auspices of the World Health Organization (WHO), was formed in response to the global problem of rising tobacco use to develop regulatory strategies. The treaty has been embraced by 168 parties thus far, according to the FCTC website.
Another challenge mentioned in the report is to reduce targeting of youth by tobacco company advertising. Youth-specific marketing is a top priority for the tobacco industry because they need to establish “replacement smokers” for those tobacco users who quit or die. It is also a well-established fact that the younger people begin to smoke, the more likely they are to continue smoking into adulthood.
Currently, the rate of tobacco smoking among teenagers is higher than it is among adults. According to a 2007 survey from the Centers for Disease Control and Prevention (CDC), 50 percent of high school students had tried smoking cigarettes. In 2008, more than 25 percent of children age 12 or older were using tobacco, which equals about 71 million teens who were smoking cigarettes. 
Increasing tobacco taxes is another challenge noted in the report. This tactic is considered perhaps the most effective way to reduce tobacco use. A 10 percent increase in the price of cigarettes is generally accepted to result in at least a 7 percent reduced demand for tobacco among youth and 4 percent among adults, according to the CDC.
Do you want to stop smoking? The report states a need for increased access to comprehensive treatment for tobacco smokers. If just 50 percent of current smokers were able to quit by 2020, the World Bank estimates that more than 180 million lives could be saved by mid-century.
Some of the other challenges presented in the report include: reduce tobcco use by physicians and other healthcare professionals, decrease tobacco targeting of women, reduce exposure to secondhand smoke, decrease illicit smuggling and trade of cigarettes, increase regulation of all tobacco products, and make health warnings on tobacco packaging more graphic. On this latter point, the FCTC guidelines call for graphic warnings on at least 50 percent of the cigarette package.
While the American Cancer Society provides a comprehensive list of challenges to reduce tobacco use, the authors also note that there are still additional items that could be included. The report notes that “Tobacco control is unique in the public health and disease control field because it encompasses such a wide range of issues.” These issues make reducing tobacco use a challenge that will require the efforts and talents of many people, working together, for quite some time to come. The complete list of 21 challenges is detailed in the report, published in CA: Cancer Journal for Clinicians.

Jan 21, 2010

Cigarette tax hike could lead to more smuggling

A recent increase in the private consumption tax (ÖTV) on cigarettes may lead to more cigarettes being smuggled into Turkey from neighboring regions and a consequent drop in the country's tax revenues.According to the corporate relations director of British American Tobacco, Tuna Turagay, speaking to the Anatolia news agency, the recent ÖTV hike has scared tobacco producers, as it may create further incentive to smuggle cigarettes from neighboring countries. While a pack of cigarettes costs TL 7 in Turkey (3.3 euros), it costs 1.13 euros in Syria and about 1 euro in Turkey's eastern neighbors. In Western European nations such as France, Spain, England and Germany, a pack of cigarettes ranges from 3.75 euros to 6.9 euros in England.
The share of smuggled cigarettes in total cigarette consumption in Turkey was 7 percent in 2007, meaning a tax revenue loss of $1 billion. This share is 27 percent in England “despite the fact that it is an island nation,” said Turagay. If Turkey were to have a similar percentage of smuggled cigarettes, the amount of tax revenue lost could be over $4 billion. He added that smuggled cigarettes make up 50 percent of the total in Quebec, Canada, and 36 percent in Malaysia, due partly to high prices of cigarettes in these areas. Turagay revealed that this figure was as high as 20 percent in eastern regions of Turkey and that they feared smuggling would spread into larger metropolitan cities such as Ankara and İstanbul.
Turagay also stated that these price increases would hurt the poor the most, noting that before the ÖTV hike, a smoker would spend 19 percent of the minimum wage on cigarette consumption, while this would swell to 23 percent with the tax increase. “It’s not easy for everyone to stop smoking, and with wages as they are, it’s much more attractive to consume smuggled goods. This is our main concern,” said Turagay.
Turagay called on the government and the cigarette industry to work hand-in-hand to address this issue and stated that the public should be informed about the risks involved in buying smuggled cigarettes. Recalling that every pack of cigarettes is approved by the Tobacco and Alcohol Market Regulatory Agency (TAPDK) before being put on the shelves, he said: “Smuggled cigarettes are not approved or tested by any agency [in Turkey]. This is risky for consumers. Therefore, the government, the private sector and the public need to fight this problem together.”

Jan 18, 2010

Mel Gibson's 'Hellish' War With Cigarettes

Mel Gibson has gone through a lot of drama in his long Hollywood career. But nothing seemingly comes close to finally quitting his 45-year smoking habit. Moving onto Day 9 without cigarettes, an edgy Gibson spoke to reporters at a press conference promoting his long-awaited return to the screen in 'Edge of Darkness.' The clear message was resuming acting: not so tough. Quitting the cancer sticks: "hellish." More on Mel's "torture" after the jump!

Jan 15, 2010

1,450 cartons of cigarettes seized at checkpoint

Immigration and Checkpoints Authority (ICA) officers have foiled another attempt to smuggle cigarettes into Singapore.
Some 1,450 cartons of cigarettes were found in compartments concealed in the ceiling of a bus ferrying factory workers at the Woodlands Checkpoint early Wednesday morning.
The potential customs duty and GST payable amounted to some S$110,000.
Preliminary investigations revealed that the Malaysian bus driver was promised 1,500 ringgit if he successfully delivers the contraband items. 
The driver claimed that he would only be given further instructions after he had sent all the workers to their workplaces.
The case has been referred to the Singapore Customs for further investigation.

Jan 11, 2010

Trying to quit smoking? Encouragement works better

In the same week that would-be quitters got the depressing news that they're at higher risk of developing diabetes for roughly a decade after stopping smoking, a study published Thursday in the Journal of the National Cancer Institute has made a remarkable discovery:
Positive messages are a better way to help you quit!
It turns out that phone counselors staffing Quitlines, which are an increasingly popular and effective way to support smokers in kicking the habit, might be more effective if they reframed their comments to be positive, a study conducted by Yale University researchers found.
So instead of telling a smoker in the grips of nicotine withdrawal, "you gotta resist the urge to light up, or else you'll be more likely to die an early and painful death," the counselor might say, "if you resist the urge to light up, you're very likely to live a longer life!"Whodathunkit?
Actually, the effectiveness of scary versus positive messages in discouraging people from smoking is very much an active subject of research right now. With its new regulatory powers over tobacco, the Food and Drug Administration is empowered to dictate that cigarette packaging has prominent warnings about the dangers of smoking or the importance of quitting. Amid growing evidence that scary, graphic images of blackened lungs and death actually backfire, the agency is deliberating just what kinds of messages will sway consumers best from buying cigarettes. 
The Yale study found that the consistent delivery of such "gain-framed" exhortations to quit made smokers using the quit-lines more likely to attempt a program of smoking cessation and more likely to have continued abstaining from cigarettes when they were contacted two weeks later. At the three-month mark, alas, the difference between the two disappeared--a testament, perhaps, more to the addictive powers of nicotine than to the weakness of positive thinking.
Even more remarkable, perhaps, is that these were would-be quitters who were taking antidepressants to aid in their effort. That may have made them more amenable to hopeful, positive messages encouraging them to stay the abstinence course.
Nevertheless, the authors of the study argued that positive messages of encouragement--which are neither more expensive nor more intrusive to deliver than messages that are scary or more neutral--are worth trying for states and institutions running quit lines. And their study showed that it's possible to get operators to deliver "gain-framed" messages consistently, with just a little training.
So, let's go back to that diabetes/quitting study published Monday in the Annals of Internal Medicine, and think how to "gain-frame" that message.
Old: "Hey, while you're jones-ing for that cigarette, you want to be careful not gain too much weight, because for the next three years, you're at much higher risk of developing Type 2 diabetes."
New: "You know, if you can just quit smoking now, you're going to lower your risk of developing diabetes to that of someone who never smoked in about 12 years!"
See? It's that easy!
Is giving up cigarettes your New Year's resolution, or have you done so in recent years? Here's the National Cancer Institute's guide to all things quitting, and here's the American Cancer Society's guide, also available in Spanish. And here's a guide to all the research that says you should do so. And if you think that packing on the pounds is an inevitable effect of quitting, check out this authoritative website.

Jan 6, 2010

New Year, New Resolve to Quit Smoking

With the new year comes a new push to help thousands of Kentucky smokers kick the tobacco habit once and for all. Many have already decided to stop smoking but need help. Former smokers admit quitting is not easy, but credit their success to the many tools already available for helping smokers succeed.
Irene Centers, program manager for Tobacco Prevention and Cessation in Kentucky, says one common problem is that smokers don't always know where to get help.
"First of all, nicotine is a very addictive drug and usually people make several quit attempts before they are successful."
More than 8,000 Kentuckians die of illnesses caused by tobacco use each year, says Centers. She says smoking is not only a health concern, but a financial concern for the state, and Kentucky's approach is to save lives and money by offering comprehensive tobacco cessation treatments.
"There are a lot of proven cessation treatments and medications, such as group counseling and phone counseling, which can double your chances of success."
The Quit Line, 1-800-QUIT NOW, offers one-on-one counseling for tobacco users. Other resources are available to smokers who are serious about making the change, she adds. 
"A lot of the local health departments and even employers often offer nicotine replacement therapy, either free or at a reduced cost, which is an excellent resource."
Quitting smoking is the single best thing a smoker can do to improve his or her health, according to the experts.

Jan 4, 2010

Selah armed robbery nets cash, cigarettes

For the second time this week, an armed robber took cash and cigarettes from a store in the Yakima area.
The incident was reported late Wednesday at the Shell gas station off Interstate 82 near the main gate to the Yakima Training Center.
Yakima County sheriff's deputies say a man knocked on the store's locked door just before 11:30 p.m. When an employee opened the door for him, he showed a gun and demanded money.
He received an undisclosed amount of cash and also took the cigarettes before he left, deputies said.
Immediately after, callers reported gunfire in the area. Authorities believe the robber may have fired the shots to intimidate the clerk and a witness at the store.
Deputies, state troopers and training center police soon arrived but could not locate the suspect.
He was described as a clean shaven, light complected Hispanic in his 20s, about 6 feet tall and 180 pounds. He was wearing a blue stocking cap, black coat and black jeans.
On Monday night, two men armed with machetes robbed the Yakima Walgreens store at 40th and Summitview avenues of cash and cigarettes.
In another robbery in which cash was taken, two men armed with guns held up the Shell station on South First Street in Selah on Tuesday night.