Cigarettes are the most successive consumable good in Pakistan. It is not uncommon to see people of various ages purchasing cheap cigarette packs from their local khokhas.

We thought it would be a good idea to exam and look at how tobacco became so popular in Pakistan.

Is Tobacco really that popular here?

Yes, it is. According to a study conducted by the Sustainable Development Policy Institute (SDPI) on national treasury versus public health in 2018-19, it was learned that there are above 23.9 million tobacco users in the country, out of which 125000 are dying every year because of tobacco related diseases. Lung cancer in Pakistan is caused directly by tobacco in 90% of cases. This is a pretty alarming rate, one that most countries would be concerned about.

How is tobacco even manufactured in Pakistan?

Like most of you, I didn’t really know much about the tobacco industry in Pakistan. I know what the Pakistan Tobacco Company (PTC) is, and I know we have taxation and laws to display a warning, but that’s really as far it goes. What I was surprised to know is that there are two major transnational companies that dominate the Pakistani market, creating a monopoly of sorts.

British American Tobacco (BAT) established PTC in 1947. PTC “inherited the business previously conducted by Imperial Tobacco Co., Tobacco Manufacturers India and ILTD [Indian Leaf Tobacco Development]. The brands that run under this company include John Player Gold Leaf (JPGL), Capstan and Gold Flake.

Philip Morris (PM) entered the Pakistani market in August 1967, obtaining interests in Premier Tobacco Industries Ltd (PTI) through its purchase of the British holding company Godfrey Phillips Ltd. The brands this company runs include Dunhill, Benson & Hedges and Marlboro.

There is no shortage of domestic tobacco companies in Pakistan, including Sarhad Cigarette Industries Ltd and Souvenir Tobacco Co. Ltd. However, transnational tobacco companies have been the dominant force in the manufacturing, marketing and sale of tobacco products in Pakistan.

How do these companies operate?

The operations of tobacco companies have always been a little sketchy, to say the least. After their actions were revealed within the West, we saw a ripple effect of countries passing tobacco regulation laws. BAT and PM were concerned that the United States litigation would cause governments in the region to “seek to embark on a ‘let’s catch up’ approach with the objective of introducing all forms of tobacco control measures”.

According to one study, BAT’s strategy in Pakistan was to combat this potential upsurge in government tobacco control efforts was to communicate points in BAT “position papers on smoking and health” within the company as well as to “educate our allies, government and regulators on our stances”.

Preemptive Lobbying and misleading the public by controlling the narrative is what their plan was.

How do they go about this?

They use simple yet effective marketing strategies to keep themselves afloat. They concentrate on constantly improving brand image by creating associations with community projects. BAT, for example, ventured into edibles oils and implemented afforestation plans. Another part of their strategy was to lobby government officials to ensure taxation was low. While taxation has been implemented now, for a long period of time, the taxes on cigarettes was low. And it still in, at least in comparison to other countries. Tobacco companies have lobbied hard, with many being accused of using wealth as a way to control tobacco regulation. However, these aren’t the only methods they have used to controlled the narrative.

Did they really mislead the public by falsified science?

Yes. They, like in America, fought hard against science communities by creating their own narrative about tobacco. According to a research paper, BAT’s “practice of science”, or the interpretation of scientific data that BAT used to reach its conclusions on the effects of ETS (environmental Tobacco Smoke), is highly problematic.

Its criticisms ignore the weight of the scientific literature that supports the conclusion that second‐hand smoke exposure causes disease and premature death.

This includes sudden infant death syndrome, acute respiratory infections, ear problems and more severe asthma in children, and adverse effects on the cardiovascular system and coronary heart disease and lung cancer in adults. The conclusion that ETS should be resolved through accommodation has also been refuted, with determinations that there is no risk‐free level of exposure to second‐hand smoke, and separating smoker and non‐smokers, cleaning the air, and ventilation systems cannot eliminate exposure to second‐hand smoke. PTC’s effort to “promote a rational, science‐based debate on ETS” in Pakistan was based on faulty science.

How do they get away with marketing to the youth?

Transnational tobacco companies deny marketing to young people in Pakistan. However, tobacco control advocates argue that their marketing events appeal to and attract young people, such as concerts, use of bright colours and creating an association with youth heavy content. To further its apparent commitment to prevent underage smoking, PTC and PTI publicly announced, with support from the Minister of Finance, a youth smoking prevention programme in Pakistan.

It has been shown that tobacco industry marketing does appeal to youth and that company‐sponsored youth smoking prevention programmes are designed to be counterproductive.

These companies have also greatly benefited off of the lack of regulation on tobacco sales, meaning it is easy for teenagers and children to get their hands on tobacco. You may think that tobacco companies have complete control of the situation. However, especially in recent years, these companies claim to face a major problem.

Is illicit trading really a thing?

A major argument used by tobacco companies to defend low taxation is saying that people will revert to non-regulated, illicit cigarettes, making the government lose out on tax revenue all together. While this may seem ridicules; it’s was perceived as the truth in Pakistan. As more regulations was being imposed on the tobacco, illicit tobacco trading was perceived to have become more popular.

In January 2017, the Federal Board of Revenue (FBR) constituted a joint committee for the monitoring, vigilance, and scrutiny of the cigarette/tobacco sector in response to the rise in illicit consumption, and in recognition of the links between tobacco smuggling and financing terrorism.

The committee, known as the Inland Revenue Enforcement Network (IREN), was tasked with monitoring and developing strategies to combat the illegal cigarette trade. In the first year of operation, IREN seizures amounted to Rs. 1.63 billion non-duty-paid cigarettes and raw tobacco. In July 2017, the FED was restructured with the introduction of a third low-tax-tier in an attempt to encourage producers of illicit tobacco to formalise and become better regulated. However, over time the task force realized that these companies exaggerated their claims, as a way to avoid taxation.

What is the government doing about all of this?

As a result in 2018, the government took a hardline stance against tobacco, by implementing laws that regulated them. Taxation was increased and the picture and warning must be placed on the front (top) of the pack in Urdu and on the back (top) of the pack in English. The warning must comprise 50% of the pack. The size of the warnings must increase to 60% by June 1, 2019. (The increases in size announced in SRO 127(E)/2017 (to 50% and, subsequently, 60%) replace the 2015 notification (SRO 22(KE)/2015) that would have increased the size to 85% of packaging. This notification, however, was delayed several times and, ultimately, never implemented.

With the government putting an effort into curbing cigarette sales, taxation is a major tool that the government doesn’t want to take. There needs to be more regulation on the lobbying efforts in Pakistan in general, but particularly tobacco.