Smokeless Europe

President Jacques Chirac is pursuing his "war on tobacco" with the passion one might expect of a man who struggled to quit the deadly habit. Already France's 14 million smokers face big, boldface new warnings that smoking kills and, perhaps only slightly less worrisome to a Frenchman, can damage sperm, reduce fertility and cause impotence. Come January, the last of three rolling tax hikes will have raised the price of a pack by more than 50 percent to about 5.50--nearly 2,015 a year for a pack-a-day smoker. That helps to explain why the amount of tobacco consumed in France has begun to drop substantially for the first time in decades--particularly among men.

Indeed, the tobacco industry is under attack all over Europe, where half a million people are believed to die from tobacco-related illnesses each year. Ireland is set to ban smoking in public places--including pubs and restaurants--as of the new year. European Union Health Commissioner David Byrne has promised legislation banning smoking in the workplace across the Continent. New limits on tobacco advertising and the tar and nicotine content of cigarettes went into effect in June, and the EU is preparing to eliminate 1 billion in subsidies to the tobacco industry. Through-out Western Europe cigarette consumption is either just holding steady or beginning to fall, as in France, Germany and Spain.

In response, French tobacconists have staged a series of increasingly radical protests, culminating on Oct. 20, which marked the latest tax increases, with the nation's first "day without tobacco" demonstrations. The tobacconists' confederation says 95 percent of members closed their shops. Some vendors lit carton-burning bonfires. Earlier, 100 angry vendors closed the border with the tiny duty-free Pyrenean nation of Andorra (where cigarettes sell at 40 percent of French prices). Confederation leaders say Chirac's war threatens 200,000 jobs in French tobacco fields, and claim to have collected 4.3 million signatures protesting the new taxes. Radical tobacconists are threatening to disrupt elections by refusing to distribute ballot stamps, a task they perform in some rural districts. Members of the right-wing National Front party are even attempting to mobilize angry smokers--who tend to be conservative--against the center-right government.

These protests look increasingly like the desperate moves of an industry in retreat. France first required small warning labels in 1991, but most smokers just ignored them, joking that France is not California. Until the late 1990s the government held stock in the Seita tobacco company, which once held a near monopoly on tobacco sales in France. Seita eventually merged with a Spanish rival to become Altadis. In a sign of how much attitudes have changed, the French state launched its first big lawsuit against the tobacco industry this summer, seeking more than 18.6 million in compensation for the cost of caring for alleged tobacco victims. The targets of the suit: Philip Morris, JTI Reynolds, Rothmans and Altadis, which argued that it has always placed the required warnings on its cigarette packs and funded health studies.

Last month the judge decided in favor of the industry--which shows mainly that Europe is less inclined than America to make social policy in court. An Altadis spokeswoman says the company has fought 20 smaller legal actions in France, Spain and Poland, and lost eight of them. However, she says, multibillion-dollar awards in the United States are much larger than those in Europe, where suits are not judged by a jury and tend to be "discouraged" by the courts. The bigger threat comes from other corners. "Tobacco is a public enemy. It's a matter of a fight without concessions to prevent tens of thousands of deaths," French Health Minister Jean-Francois Mattei declared as an anti-smoking bill including the new taxes cruised through the National Assembly this summer. "We will act on every front to progressively rid our society of tobacco."

Taxes are a favorite weapon of the cigarette war across Europe. In France, the rolling hikes to date have made its cigarettes the most expensive in mainland Europe, spurring a 9.8 percent first-quarter decline in sales. Anti-tobacco forces expect sales to fall by an additional 10 percent. Germany plans a series of three tax hikes that will add 1 to the price of a pack by mid-2005. The Altadis spokeswoman, however, says sudden tax hikes historically have little impact, other than to promote smuggling from countries where taxes are lower and to "disorganize the official markets."

Even Spain, notoriously pro-cigarette, is on the offensive. When the U.S. movement against tobacco first hopped the Atlantic more than a decade ago, travelers joked that Spain was about to impose smoking sections in restaurants: one for smokers, one for chain smokers. Yet last month Spain began placing its own dire death and impotence warnings on cigarette boxes. With the rest of the EU, it is preparing to further dramatize the warning labels with photographs of cancer victims and blackened lungs (an approach pioneered by health-conscious Canada). Even a pack-a-day smoker like Barcelona stockbroker Oscar Alvarez, 35, expects Spain to ban smoking in his workplace in coming years. "Nobody should have to suffer through the smoke for eight hours a day," he acknowledges.

It's hard to know just how badly European tobacco companies are hurting, in part because many were until recently controlled by the states that are now attacking them. The companies still generally refuse to discuss the health effects and don't break out full financial results for their cigarette businesses. In recent years, for example, Altadis has closed six of 17 cigarette factories and laid off 9,000 workers, while moving into overseas markets like Morocco and new businesses, like convenience stores. It reported strong profits last year, with expectations for more this year, but the market seems less sure. Altadis stock has fallen 8 percent since May, before France's Parliament passed its latest legislative assault on tobacco.

Smokeless Europe | News