RISING COSTS: Latin American governments can expect to see a continued rise in healthcare costs as smokers from the 80s and 90s continue to experience increasing health issues, the author points out. (Photo: Wilhelm Heinz/IDB)
Latin America's per capita consumption of tobacco will drop over the next four years due to new laws and increased enforcement.
BY JIM DALY
Countries throughout Latin America have been increasing the number of laws controlling labeling and public smoking. In the midst of growing health concerns and increased global pressures to establish and enforce tobacco legislation, some Latin American countries are strongly pushing new legislation as it relates to bans on tobacco, while others are making moves to expand previous legislation that was rarely enforced.
Much of this legislation stems from the World Health Organization’s (WHO) Framework Convention on Tobacco Control (FCTC). This enforcement comes at a time when many Latin American countries are recovering from economic difficulties requiring governments to focus on recovery and less on smoking regulation.
STRONGER LABELING RESTRICTIONS
In an effort to increase the population’s awareness of health issues that arise from smoking, many Latin American countries have instated labeling legislations requiring written warnings and images on tobacco packing. Labeling cigarettes as “light”, “ultra light” and “mild” has become a major target for cigarette packaging. Legislators believe that the “light” labeling can mislead consumers into thinking that the product is better for them than the alternative. Brazil has been at the forefront of tobacco control with one of the most extensive tobacco legislations in Latin America. Brazil was the one of the first countries to prohibit the printing of the “light”, “ultra light” and “mild” expressions on cigarette packages. Brazil was among the first countries in Latin America to introduce mandatory picture-based health warnings in an effort to dissuade consumers from purchasing the products. These labels, which cover at least 50% of the cigarette packs, boldly depict the consequences that one can expect from smoking and are used to display information about these health risks.
Other countries have followed suit. In November of 2006, Chilean authorities placed their recently enacted tobacco laws into effect, requiring all packs of cigarettes to include health warnings informing consumers about the diseases and risks related to smoking on 50% of both their main faces. As an additional measure, all cigarette packs must include a list of ingredients and the messages contained on the packs are required to be approved by the health secretary of state. In Venezuela, the government requires a warning message that covers 33 percent of the packaging for cigarettes. These warning messages must be authorized by the Ministry of Health. In early 2008, Mexico increased their labeling regulations by requiring packages to include specific unhealthy side effects caused by smoking cigarettes. In Colombia, a proposal for a law increasing the size and presentation of health warnings on cigarette packages is expected to pass in the latter half of 2008.
CHANGES TO PUBLIC SMOKING
Many Latin American countries are also stepping up their laws for smoking in public areas. Several governments have passed laws to curb public smoking in the past but are now making a real attempt to improve those laws and enforce them. In May 2007, Chile implemented requirements for restaurants and bars larger than 100 m2 to establish designated smoking areas. Mexico’s recent legislation on public smoking went into effect on April 1, 2008. This new law has been well enforced and establishments breaking the law are now being shutdown for non-compliance. Brazil has renewed its attempt to enforce previous public smoking laws. In February of 2008, Brazil proposed to end public smoking completely in restaurants. Argentine lawmakers have been making attempts to update past legislation on public smoking. They are currently considering a bill that would not allow designated smoking areas and eliminate public smoking areas all together.
Tobacco smoking is directly and indirectly responsible for a large number of deaths each year across Latin America. For example, in Brazil, according to the Brazilian Institute of Statistics, roughly 45 percent of heart attacks, 85 percent of emphysema, 25 percent of strokes, and 30 percent of cancer deaths are related to tobacco smoking. It will take a number of years to realize the full impact of enforced laws today to see future improvements on these rates. Governments can expect to see a continued rise in healthcare costs as smokers from the 80s and 90s continue to experience increasing health issues.
CONSUMPTION FORECAST
Latin American governments have seen the statistics on smoking-related diseases and the amount of money spent on them each year. As Latin American economies continue to recover and develop over the next few years it can expect to see greater strides in enforcement of underage smoking, smoking in public places, labeling and even contraband. The restrictions in advertising near schools and sporting events are setup to make a preemptive attempt to stop adolescents from becoming smokers in the first place.
Per capita consumption (sticks per person) is expected to drop over the next 4 years due to new laws and increased enforcement. By enforcing these laws, newer smokers will most likely cut back or stop smoking altogether. Even with the decline of per capita stick consumption there will continue to be a stronger growth in the unit prices (per stick) of cigarettes. These unit price growths are attributed to increased taxes intended to make cigarettes less attractive to consumers.
The FCTC was an excellent starting point for many countries and as more changes occur to tackle this global health concern, lawmakers in Latin America will continue to develop, expand and improve legislation related to tobacco bans as a way of ensuring the health of their country's citizens. It will be interesting to see the future outcomes of these decisions and how they will benefit these societies.
Jim Daly is research manager of Euromonitor International. He wrote this article for Latin Business Chronicle.
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