Budget Proposals 2018 and Tobacco

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Background

Image 1: Minister of Finance delivering the budget speech[3]

The budget debated and approved by the Parliament of Sri Lanka for the year 2018 had a proposition related to tobacco which may lead to serious implications on tobacco use and control as described below.

The Proposal for Licensing Companies to Import Cigarettes

The Minister of Finance Mangala Samaraweera proposed to issue licenses to import cigarettes and cigars. In the budget speech on 09 November 2017 (Image 1), he justified the proposal stating it was to prevent illicit cigarette trade. [4]

Implications

As of 2017 Sri Lanka only had a single company that manufactures and sells cigarettes – the British American Tobacco (BAT) subsidiary, Ceylon Tobacco Company PLC (CTC). (Also see Tobacco Industry Country Profile – Sri Lanka). The proposal will open the market for new tobacco companies in Sri Lanka. Global evidence shows that tobacco companies are in a constant look out for bigger market shares. Arrival of new companies in Sri Lanka and them competing for market shares will result in:[5][6]

  • use of new approaches and strengthening of already existing marketing strategies by the tobacco companies to attract users and non-users
  • introduction of competitive low prices resulting in increased affordability of cigarettes

Notes

  1. 1.0 1.1 Government of Sri Lanka. Office of the Cabinet website, 2017, accessed January 2018
  2. 2.0 2.1 Ministry of Finance official website. 2018, accessed January 2018
  3. L Wanniarachchi. Sri Lankan Finance Minister Mangala Samaraweera presents the 2018 budget to parliament in Colombo on November 9, 2017, AFP, Getty Images, 09 November 2017, accessed January 2018
  4. Parliament of Sri Lanka. Budget Speech 2018, 9th November 2017, accessed January 2018
  5. Campaign for Tobacco Free Kids. The Global Tobacco Industry, September 2017, accessed January 2018
  6. C Bates, A Rowell. Tobacco Explained, World Health Organization, undated, accessed January 2018