Date: Thu, 14 May 98 09:43:56 CDT
From: Jonathan Dushoff <firstname.lastname@example.org>
Subject: Big Tobacco in Taiwan
The glory days of Taiwan's pub-hopping, cigarette-dispensing
Marlboro Girls may be numbered. Politicians and anti-smoking
organizations alike are challenging the legality of the promotional
methods favored by international tobacco companies in Taiwan as well
as pushing for a new cigarette tax to discourage teen smoking. In a
story that combines the classic Taiwan elements of sex, money,
marketing and the grail-like quest for WTO membership, Phelim Kyne
looks at the island's penultimate showdown with Big Tobacco
The conference room at the John Tung Foundation's Taipei offices
on Fushing S. Road is now referred to informally by staff there as
the gift room. There piled high on the large central table
normally host to strategy sessions of Taiwan's long-time
anti-smoking lobby group sits a wide selection of the promotional
gifts that frequently accompany foreign tobacco companies in
The haul includes such things as radios, watches, engraved metal letter openers, lighters and compact discs. They are all high quality, stylish and according to John Tung CEO Dr. Yeh Ching-chuan, patently illegal.
This is the kind of thing that students really like, Dr. Yeh
Ching-chuan says ruefully, picking up a black pencil case from a table
piled high with cigarette gift paraphernalia.
This is packaged
together with two packs of Mild Seven cigarettes, he adds, before
How many adults are interested in buying a
Last month Taiwan's anti-smoking lobby went on the offensive
against what it insists are the depradations of an international
tobacco industry determined to make up for losses in their traditional
markets in Europe and North America by grooming a new generation of
young Asian smokers.
This is a kind of (reverse)
discrimination, Yeh says.
The tobacco companies are trying to
do in Taiwan what they can no longer get away with in the West.
Such an allegation is backed up by statistics of the World Health Organization. According to WHO, American cigarette companies already sell 85% of their products overseas. By 2020, WHO predicts tobacco-related deaths worldwide to jump to 10 million per year, with 2/3 of the victims in third world countries in Asia and Africa.
The dispute over the behaviour of foreign tobacco companies in Taiwan
is just the latest in a long string of controversies that have
surrounded the industry since foreign cigarettes first went on sale
legally on the island eleven years ago. While the concession by the
ROC government in 1987 to end its longtime embargo on foreign tobacco
products ended years of international criticism of Taiwan's
closed markets, Taiwan's jousts with big tobacco had only
Between 1987 and 1992, ROC government attempts to limit both the
amount of foreign tobacco products that proceeded to flood into Taiwan
and the the extent that such products could be advertised fuelled
successive threats of
Special 301 trade sanctions and
retaliation by the US government.
301 was used (against Taiwan) as
a form of economic blackmail, comments New Party Taipei City
Councillor Jeffery Y.K. Hsu, a local anti- tobacco advocate.
put a lot of pressure on the (ROC) government to be more open to
However, sustained lobbying by the John Tung Foundation, culminating in a three day full page ad campaign in America's leading newspapers in 1992 that pitched Taiwan's case directly to the American people, eventually brought relief. That year, the US government pledged that it would no longer use 301 to pressure Taiwan to allow advertisements and public promotions by foreign cigarette companies.
Unfortunately, the years of virtually unregulated foreign cigarette advertising and promotions in Taiwan since 1992 have taken their toll.
In the countries where US pressure opened foreign markets, once the
markets were pried open and advertising of foreign cigarettes was
allowed, there was a 10% increase in smoking over and above what would
have been expected from other factors, noted Judith Mackay,
Executive Director of the Asian Consultancy on Tobacco Control in the
July/Aug 1997 issue of the Multinational Monitor.
There was of
course a marked shift toward the foreign cigarettes, she added.
A glance at government statistics suggest a more positive picture in
The overall number of Taiwanese that smoke has actually
gone down in the past ten years, notes Dr. Yeh, noting that
government statistics show the percentage of the population that
smokes has gone from 32% to 29% between 1988 and the present. Yeh
cautions that such a reduction is
still far too small.
More worrying for Yeh and his colleagues at John Tung is the increasing popularity of smoking amongst Taiwanese youth. Statistics show a whopping 33% increase in the number of teenage smokers since 1993 alone.
But with 65% of the 700 million packages of cigarettes sold in Taiwan
each year consisting of domestic brands such as Long Life, why is it
that foreign cigarette companies are getting the rap for the
increasing numbers of teen smokers?
Long Life smokers are mostly
explains Lin Ching-li, PR Director at John Tung.
lao yen chang (
old smoke guns) type of smoker,
Young people are
not being attracted to smoking by brands produced by the Taiwan
Lin's opinions are echoed by Taipei City Councillor Jeffery
There is no advertisement or promotion for Taiwan
Monopoly Bureau cigarettes at all, he explains.
companies are very competitive and use extremely ‘tricky’
ways to attract new customers.
It was just such ‘tricky’ advertisement methods that Taiwan's new Tobacco Hazards Control Act was designed to short-circuit. Passed into law last September, Article 9 of the law prevents tobacco companies from virtually all advertising and promotional activities. However, according to Yeh, Lin and Hsu, the provisions of the law are being widely ignored by international tobacco companies, including Philip Morris, RJR Nabisco, Davidoff, and Japan International Tobacco.
All of this is illegal, Yeh says, motioning to the stacks of
tobacco promotional gifts piled high on the table in front of him.
The law forbids companies from putting the brand names of
cigarettes on promotional products, and requires that such gifts be
worth no more than 25% of the value of the cigarettes they are sold
For emphasis, Yeh takes out a Marlboro wristwatch, the Philip Morris
product's name emblazoned on both the watch face and strap. The
watch itself is a technological wonder to behold: a manly
multifunctional model complete with miniature compass and lighted
This watch was sold with a carton of cigarettes that cost
NT$400, Yeh says.
That means this watch only cost (Philip
Does that seem possible to you?, he adds.
Another example of the creative accounting employed by Taiwan's
foreign tobacco companies is an AM/FM transistor radio complete with
twin speakers that was sold with two cartons of 555 cigarettes for
The radio is a great deal for NT$200, Lin Ching-li
Such violations of regulations governing the conduct of international
tobacco companies abroad are apparently not unique to Taiwan.
Whenever they can get away with it, the tobacco transnationals show
nothing but contempt for the law and regulations of any country,
noted an editorial in the June 1997 edition of the Multinational
Compounding the problem of the international tobacco companies
flaunting of ROC laws has been a pronounced tendency by the the
government to turn a blind eye to such excesses.
Enforcing the law
has not been a government priority, Yeh says measuredly.
the six months that the law has been in effect, not a single violation
(of the law) has been pursued by the government.
While admitting the efficacy of the Tobacco Hazards Control Act has so far been spotty, John Tung representatives have high hopes in another proposed law that they feel will even more effectively curtail teenage smoking on the island. A proposal currently making its way through the Legislative Assembly calls for a tax increase of 10% on imported tobacco brands.
Citing American studies that have have shown that an increase of just
1% in the price of a package of cigarettes can reduce the number of
smokers in the 12-17 age bracket by 1.2%,
Yeh has high hopes for
the potential positive effects of a tobacco tax increase.
A 10% increase will have a significant deterrent effect on young
people who otherwise may be tempted (by low cigarette prices) to take
up smoking, Yeh explains.
Even if (the tax) doesn't reduce
the number of present smokers, the (tobacco) tax proceeds will be
devoted to health and non-smoking education that will prevent an
increase in future smokers.
According to Yeh, a tobacco tax increase is long overdue when viewed
in relation to the rates which cigarettes are taxed in most other
Taiwan has some of the lightest cigarette taxes in the
developed world, Lin says pointing out that cigarettes taxes in
such places as Norway, Denmark and Canada are 200%, 85% and 70%
respectively, respectively, compared to a paltry 40% of the per pack
price in Taiwan.
Taiwan's tobacco tax rates rank poorly even in the Asian region,
with Japan and Hong Kong charging 60% and 40% respectively.
proposed 10% tax increase (on cigarettes) will bring the tobacco tax
rate up to 50%, still far lower than most other (developed)
countries, Dr. Lin notes.
Unfortunately, still-fresh memories of previous Taiwanese anti-smoking
legislation rumbled by the the big stick of US 301 trade sanctions
have until just this week made John Tung representatives wary of the
success of the tax proposal.
We have to convince AIT [American
Institute in Taiwan, the unofficial embassy—JD] that this is a
non-discriminatory tax increase that is aimed strictly at
improving the health of the nation rather than infringing on the
rights of foreign (tobacco) companies,
Other more far-ranging concerns have plagued the tobacco tax increase
There is some fear on the part of the (ROC) government
that the (tobacco) tax may hurt Taiwan's chances for entry into
the WTO, Yeh says. Such an outlook is clearly a worry for
(The tobacco tax) is not and should not be a trade issue,
This is a matter of the health of our country.
Yeh's fears about AIT opposition to the proposed new tobacco tax
were put to ease this past Thursday when representatives of the John
Tung Foundation and six other groups that support the new tax met with
AIT trade officials.
AIT has told us that they are extremely
supportive of the new tax, Lin Ching-li enthused during a phone
interview with the China News on Friday.
AIT also says that they
can forsee no connection between the new tobacco tax and the question
of Taiwan's entry into the WTO.
For Dr. Yeh at the John Tung Foundation, such a development is a
hopeful sign of a future in which the effects of tobacco use play a
far less serious role in Taiwanese society than it presently does.
We're striving for an eventual recognition of the ability to
breathe fresh air as a fundamental human right, Yeh says.
Controlling and reducing the consumption of tobacco products is an
important step toward that goal.
Meet Mr. Chen Geh-yuan, the not-so-public face of the international tobacco industry's ROC lobby organization, the Taiwan Tobacco Institute.
Godfather of the Taiwan's tobacco industry,
Mr. Chen's responsibility is an unenviable one: to act as a
spokesperson for an industry reviled internationally for its direct
connection to the deaths (based on WHO estimates) of three million
people worldwide each year and notorious domestically for its repeated
and ongoing violations of Taiwan's Tobacco Hazards Control Act.
Taiwan Tobacco Institute materials fancifully describe the Institute
information exchange about all aspects of foreign tobacco
company operations in Taiwan. Unfortunately, actually getting hold of
the Institute, let alone any information it purportedly exists to
exchange, is a daunting task.
For one thing, The Tobacco Institute isn't the kind of
organization that will give its number out to just anyone. Look under
institute in either of Taiwan's major
English language directories and you'll come up flat. Try under
cigarette and you'll fare no better.
The frustration created by such a fruitless search is soon surpassed by surprise that all international tobacco companies in Taiwan are similiarly unlisted, a curious act of modesty for an industry that sells approximately 245 million packages of cigarettes on Taiwan each year.
Once acquired, however, the number of the Taiwan Tobacco Institute soon puts me through to a Ms. Cheng. Polite, helpful and sympathetic, Ms. Cheng's phone demeanor, the antithesis of that of the average Taiwanese receptionist, immediately set off alarm bells off in my mind. In soothing yet resolutely professional tones, Ms. Cheng assured this reporter that an interview request with Mr. Chen would be forwarded to him posthaste and that the spokesperson himself would quickly be in contact with me.
Over the next eight days, I renewed my phone liason with Ms. Cheng on a frequently twice- daily basis. The spokesperson, alas, was unfailingly either in a meeting, out of the office, taking the day off or otherwise inexplicably available.
On the eighth day, Ms. Cheng's patience had worn as thin as my
own. On the occassion of my second call of the day, after exchanging
ritual phone obsequesies and dutifully taking my usual message (by
that time she knew it by heart, pro that she is) Ms. Cheng added,
He's not willing to see you, she confided, adding,
told me this last week.
I shouldn't have been surprised. I had, after all, been warned.
Mr. Chen's contact with the media are all very one-way,
John Tung Foundation PR Directon Lin Ching-li warned.
interview situations in which he has to answer questions.
Chen Geh-yuan's Taiwan Tobacco Institute is the local subsidiary of The (US) Tobacco Institute, based in Washington DC. Since 1958, The Tobacco Institute, along with its sister organization, The Council for Tobacco Research, have been entrusted by their sponsors, the American cigarette manufacturers, to present the case of American tobacco to the American public and their political representatives.
The success of both organizations have been, say their critics, a
textbook study in media manipulation. Described by Business Week
magazine of having run
The longest running misinformation campaign
in business history, The Tobacco Institute and The Council for
Tobacco Research can congratulate themselves for having staved off
regulation and outright prohibition of tobacco products in the US more
than thirty-four years since the first US Surgeon General's report
on the connection between cigarette smoking and lung cancer.
There has never been a health hazard so perfectly proven as
smoking, Michael Pertschak, former head of the US Federal Trade
Commission once commented with regard to the lobbying efforts of the
US tobacco industry,
and it's a measure of the Council (for
Tobacco Research's) success that it is able to create the illusion
of controversy in what is so elegantly a closed scientific case.
The prospect of a meeting with Chen Geh-yuan, head spin doctor for the Taiwan Tobacco Institute, filled me with an almost euphoric sense of anticipation. I longed to hear him explain away the pencil box giveaways with packs of smokes, the hip but illegal Marlboro wristwatch, the interview process for those siren-like cigarette girls and the catalogue of other sections of the ROC's Tobacco Hazards Control Act the industry he represents had been accused of violating.
I decided to take the international tack. Sensing that that
Chen's masters in the US would be less than pleased by his refusal
to meet with local media to
exchange information on foreign
tobacco companies activities in Taiwan, I faxed The Tobacco Institute
in Washington asking them to intercede on my behalf.
While awaiting their response, I read one of the only articles written in the local Chinese- language media about Chen Geh-yuan and the Taiwan Tobacco Institute. It painted a picture of a successful businessman (27 years of experience working with British tobacco companies in Taiwan) with a certain individualistic flair.
Forsaking suits and ties for the mandarin collar
dress, Chen personally disdains cigarettes (
Not strong enough,
is the manful quote), preferring to manage the PR affairs of
international tobacco in Taiwan inhaling and emittting the more
distinctive fragrances of imported Cuban cigars.
completely agrees with the goals of the John
Tung Foundation, and perceives the essence of his position as ensuring
that the foreign tobacco companies he represents
obey the laws of
(Chen) contacted us a couple of years ago offering to hold a joint
non-smoking activity, Dr. Yeh Ching-chuan, CEO of the John Tung
Foundation recalls, shaking his head. He basically said
put up the money, you run the activity. The galling irony of such
an offer, which was refused, was not lost on anyone at John Tung.
We all got a good laugh out of that one, Yeh adds.
Days later, a fax from The Tobacco Institute arrived, apologizing that The (US) Tobacco Institute could only involve itself with tobacco-related issues within the United States. Instead, the fax suggested that the head offices of the US cigarette companies themselves be contacted. Helpfully, a list of the addresses and phone numbers of the top American cigarette companies were included.
Unfortunately, there were no fax numbers included, and since China News management looks askance at cavalier long-distance phone bills, I refaxed The Tobaccco Institute asking for the fax number of the biggest company, Philip Morris.
After a week I received a terse message from The Tobacco Institute in Washington that their policy forbade the communication of fax numbers of the cigarette companies. At the bottom of the sheet was a spooky warning that transmission of the contents of the fax was a violation of some arcane US law. The message was clear: you're not going to get another peep from us.
Resigned to the prospect of never getting the Taiwan Tobacco Institute's side of the story, I decided to settle for a picture of the TBI sign outside its swank, Taipei business district office.However, unlike every other office on that floor, and in the rest of the building for that matter, The Tobacco Institute posts no sign next to its door.
I peered nervously through the glass door, hoping for a surreptitious farewell glimpse of Ms. Cheng before heading to the elevator, trying to ignore the cloying smell of cigar smoke and the low rumble of mocking laughter that seemed to emanate from the office walls behind me.
Taipei New Party City Councillor Jeffery Y.K. Sheu is well-acquainted
with the crowds of attractive young women who, wearing custom-made
uniforms that advertise the cigarette company that they represent,
make the rounds of Taipei's bars giving away
cigarettes to all who want them.
What (the cigarette girls) do is illegal, Sheu declares,
pointing out the section of Article 9 of the Tobacco Hazards Control
Act that details
using cigarettes as gifts as a contravention
of the law.
The use of
cigarette girls is by no means limited to Taiwan.
According to the US anti- smoking NGO Infact, Taipei's cigarette
girls share the same mission as Eastern Europe's
Girls, who cruise concerts and discos passing out free cigarettes
to patrons. Those who accept a light for that cigarette are rewarded
with a pair of Marlboro cigarettes. In Buenos Aires, young women in
khaki safari gear and cruise from nightspot to nightspot in a jeep
sporting a yellow Camel logo on a similar mission of free cigarette
However, the international aspect of Taipei's cigarette girls are
cold comfort for Sheu. Instead, he's masterminding an effort to
ensure that Taipei's cigarette girls are run out of town and
eventually off of the island.
It's a problem of
enforcement, Sheu says with regards to the high density of
cigarette girls in Taipei and the other numerous violations of the
Tobacco Hazards Control Act.
According to Sheu, the Taipei City Governmnet has simply not been
doing its job.
The (Taipei City) Bureau of Health is responsible
for seeing that the law is enforced, but they've not done
anything, Sheu exclaims, noting that in the six months since the
law came into effect there have been no legal action taken against the
violators of the Act's provisions.
Those days, Sheu says confidently, are definitely over.
met with the head of the Taipei City Bureau of Health and he's
agreed that action must be taken against the illegal advertising and
promotion methods that Sheu says can be found
Like a sherrif in a lawless prairie town somewhere in Marlboro
Country, Sheu is determined to draw a line in the sand and force
foreign tobacco companies to abide by ROC laws.
We have to
challenge the (foreign) tobacco companies, Sheu says.
they are practicing is a kind of ideological indoctrination that has
As an example of such
indoctrination, Sheu points out a
Davidoff advertisement off of Chienkuo N. Road.
That Davidoff ad
doesn't have a cigarette in the picture, but their purpose is easy
to see - promoting a cigarette brand.
One of the more inventive and elaborate foreign cigarette company
advertisements in Taipei is the Mild Seven Times cafe in the
city's Ting Hao district.
We're the first and only Mild
Seven cafe in the world, the owner, Mr. Lee , explained proudly in
a phone interview.
Such news is no surprise to John Tung Foundation CEO Dr. Yeh
That kind of operation isn't allowed in most
other countries, he says, adding
it's illegal according to
ROC law as well. The Mild Seven Times logo is, Yeh says, a prime
brand stretching, in which cigarette names are
applied to a variety of other consumer items.
Lee, who opened the cafe four years ago, claims to pay royalties to Japan International Tobacco (which produces Mild Seven cigarettes) for the privelege of using the Mild Seven trademark, and professes confusion at the suggestion that his operation may be illegal.
How can it be illegal? he asks.
My cafe doesn't have
anything to do with advertising cigarettes or encouraging people to
smoke. However, Lee's response to a request from the China
News that he supply his full name indicates that he might not be
completely ignorrant of the legal ramifications of his cafe.
It'd be better not to use any names, he said shortly before
Back at Taipei City Government, Sheu is adamant that Lee's cafe
has got to go.
The name will have to be changed, Sheu says.
If they refuse, we'll deny them a business license.
Suggestions that such overt action against the interests of
international tobacco might attract the wrath of the well-funded
Taiwan Tobacco Institute and its shadowy spokesperson Chen Geh-yuan
has Sheu practically rubbing his hands in anticipation.
I want to
challenge (Chen), Sheu says with a glint in his eye.
him to be the one to be trying to get in touch with me.
Sheu stresses that ideally, foreign tobacco companies will be
humiliated into compliance with the Tobacco Hazards Control Act.
want to convince them that these are shiao ren
tactics that are unbefitting of large, international companies, he
Taipei citizens, Sheu says, won't have to wait long to see the he
effects of his campaign to rid the streets of illegal foreign
By the end of next month the illegal
advertising in Taipei will be gone, he promises. Such success, he
says, will be a good example for the Central Government to apply to
the rest of Taiwan.
The rest of Taiwan will be able to learn from this he
experience at controlling illegal cigarette promotions,
Taipei will be the leader and show the rest of Taiwan how it
should be done.