Industry Arguments against Tobacco Control Actions: Impact on Livelihoods

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Background

In its annual reports, the Ceylon Tobacco Company PLC (CTC) states that it generates around 150,000 livelihoods across its businesses (178,000+ in the year 2016, 181,000+ in the year 2015 and 148,000+ in the year 2014).[1][2][3] The figure reported in 2017 to the media by Michael Koest the CTC CEO was 300,000.[4][5] The reported figures were quoted in media as Industry Responses to Tobacco Tax Increase in 2016.[4][5]

Contradicting Evidence

The Number of Permanent Employees Increased in the Year 2016

The number of permanent employees of the CTC that solely depend on the company for their livelihood is low compared to the figure highlighted (0.14%). It also shows a downward trend for the last five years (Image 1). Even when the persons under ‘Direct Contracts’ (n=59)1 was included, the number of persons was 323 (264+59) in the year 2015, hundred times (0.17%) less than what was reported.[2]
Image 1: Trend of number of permanent employees of the CTC for the past nine years[1][2][6]

Media didn’t report the number actually laid off, even though the CTC officials stated to media that the percentage was 20%.[4] However, the number of permanent employees increased in 2016 to 273 from 264 in 2015.[3]

Global Evidence

According to global evidence all other categories of tobacco industry generated livelihoods are transferable to other livelihoods with little or minimal impact.[7] According to the CTC reports, the two livelihood categories with the highest numbers are the retailers and the farmers.[3] The impact on retailers, reportedly 72,000 in number, is minimal as the income from the cigarettes are less than 1% of their turnover.[3][7] Further, it is also proven that once tobacco goes out of market and the consumption reduces due to reduced availability, more money would be saved at the household level to be spent on other items that will be bought from the retailers, improving their economy.[7] The reported number of ‘individuals engaged in farming’ by the CTC is 20,000 in 2015 whereas the figure reported as ‘farmers’ was only 9,200 in the year 2014.[1][2] The figure remained 20,000 in the year 2016 as well.[3] What global scientific evidence suggest is that moving away from tobacco cultivations are beneficial for livelihoods of farmers rather than detrimental, when done in organized manner with government support.[8] Local evidence also suggest that tobacco farming, while causing many adverse consequences to farmers’ health, cultivating land and the environment, is less economical compared to other crops.[7][9]

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Notes

  1. 1.0 1.1 1.2 Ceylon Tobacco Company. Ceylon Tobacco Company Annual Report 2014, 2015, accessed March 2017
  2. 2.0 2.1 2.2 2.3 Ceylon Tobacco Company, Ceylon Tobacco Company Annual Report 2015, 2016, accessed March 2017
  3. 3.0 3.1 3.2 3.3 3.4 Ceylon Tobacco Company. Ceylon Tobacco Company Annual Report 2016, 2017, accessed March 2017
  4. 4.0 4.1 4.2 Daily Ft. Taxes hit - CTC announces 20% layoff of employees, 03 January 2017, accessed March 2017
  5. 5.0 5.1 Sri Lanka Mirror. CTC announces job cuts, 04 January 2017, accessed March 2017
  6. Ceylon Tobacco Company PLC. Annual Report 2012, 2013, accessed March 2017
  7. 7.0 7.1 7.2 7.3 N Arunathilake, M Opatha. The Economics of Tobacco in Sri Lanka. Economics of Tobacco Control Paper No. 12, 2003 Tobacco Free Initiative/World Health Organization
  8. World Bank. The Economics of Tobacco Use & Tobacco Control in the Developing World Brussels: Europian Commission, WHO & World Bank, 2003
  9. MTCP Thennakoon, DAM De Silva, Market Window Analysis: A Case of Tobacco, Paddy and Big Onion Farmers in Galewela, Sri Lanka. Sabaragamuwa University Journal, 2012 11(1):p95-108