Ukraine's leading English-language newspaper since 1995

With the multinational tobacco giants producing tens of billions of cigarettes more than Ukrainians smoke each year, an illegal trade has flourished with contraband sales at home and smuggling abroad. Yaroslav Debelyi Nation pays stiff price in lives and health from tobacco use.

In Ukraine’s billowing clouds of cigarette smoke, the air is starting to clear a little.

“Big Tobacco,” the multinational industry that has racked up heavy profits and faced light regulation in Ukraine since 1991, no longer has free reign to ride roughshod over public health.

In the span of eight months, the industry has been hit with three tax hikes. Also, the Verkhovna Rada is advancing legislation that will require health warnings – including pictures – that cover 50 percent of a cigarette pack. Support also appears to be building for a total ban on indoor smoking in public places, including workplaces and restaurants. And anti-tobacco activists are pushing for a comprehensive advertising ban as well.

“Ukraine represents the only positive anti-tobacco trend witnessed in the [ex-Soviet] Commonwealth of Independent States,” said Mykola Polishchuk, a presidential adviser and former health minister at the forefront of lobbying for tougher anti-smoking measures.

Public health advocates, however, still face an uphill battle against a well-financed industry and their legal but deadly products.

Even with the tax hikes, Ukraine still has some of the cheapest cigarettes in the world. Prices range form $0.47 to $1.30 a pack, in sharp contrast to Germany’s average price of $5 per pack and $10 in the United Kingdom. Higher prices are proven to be the most effective way to cut smoking, because they prompt smokers to quit and discourage others from starting.

With 120,000 people dying prematurely each year of tobacco-related illnesses and up to 40 percent of adults smoking, few nations suffer more from tobacco use – the leading cause of preventable death worldwide – than Ukraine. Tobacco smoking, combined with alcohol consumption and traffic accidents, account for 94 percent of mortality in Ukraine, a recent World Bank study has found.

But a determined national coalition of 50 non-profit organizations and several high-level politicians have scored rare and recent successes. The stepped-up activism has helped the public better define public health friends and foes when it comes to tougher tobacco-control measures.

Among the foes identified by public health advocates are:

* Former Finance Minister Mykola Azarov, a close associate of ex-Prime Minister Victor Yanukovych, was one of the most vociferous opponents of the tax hikes. He also has historically opposed stronger tobacco-control laws, according to Hanna Hopko, a regional advocacy coordinator for the Kyiv office of the Campaign for Tobacco-Free Kids. The Party of Regions stalwart heads the Finance and Banking Activity Committee, arguably the most influential in the legislature. Azarov’s office could not be reached for comment by the time this edition of the Kyiv Post went to press.

* Another influential lawmaker, Serhiy Teryokhin, who leads on tax and customs issues, sided with Bloc of Yulia Tymoshenko colleagues in hiking cigarette taxes recently, despite historically repeating the tobacco industry’s arguments against excise tax hikes on tobacco.

* The normally respected Dzerkalo Tyzhnia newspaper, also known as the Weekly Mirror, has often criticized government anti-tobacco measures while sourcing only pro-tobacco politicians such as Azarov and former Finance Minister Victor Pynzenyk, as well as tobacco-industry trade groups such as Ukrtiutiun. Three articles published this spring, ahead of parliament’s vote on the excise tax hike, predicted increased cigarette smuggling into Ukraine from neighboring Russia and Moldova and less government revenue due to production decreases if cigarette taxes were raised. The articles also blamed “grant-consuming” non-governmental organizations for harming the tobacco industry through public advocacy efforts. Maria Denysenko, assistant to the newspaper’s chief editor, said she doesn’t believe the newspaper’s coverage has been unfair.

The tobacco industry, in arguing against hiking cigarette taxes in Ukraine, says higher prices would lead to the loss of jobs in the nation’s cigarette-production factories. But the argument doesn’t wash with Nataliya Toropova, an activist in the Coalition for Tobacco-Free Ukraine, which consists of 50 NGOs throughout Ukraine.

“Laying off the 4,000 Ukrainian employees in the country’s tobacco companies is better than seeing 120,000 people die from tobacco use each year,” said Toropova, who also works in the Kyiv office of the Campaign For Tobacco-Free Kids.

The tobacco industry also warns of increased illegal smuggling of cigarettes into Ukraine from nearby Russia and Moldova if taxes are raised.

“We do understand that the authorities may be interested in additional budget revenues through increasing excise rates. At the same time we firmly believe that any changes in taxes should be reasonable, well grounded, take into account purchasing capacity of people and levels of taxation and pricing in the neighboring countries, specifically, Russia and Moldova,” said Andriy Kryl, head of corporate affairs for British American Tobacco Ukraine. “Still what can be seen already is the increased number of smuggled cigarettes’ seizures on our territory due to excise and price differences in Ukraine and neighboring countries (the lowest price for a filtered cigarette pack in Ukraine is Hr 4.40, while in Russia – Hr 2.32 and in Moldova – Hr 1.71). The similar situation is with the seizures of counterfeited cigarettes. Under abrupt and constant tax increase legitimate industry simply cannot compete with the illegal market.”

In fact, however, the flow of smuggled cigarettes mainly goes the opposite way – out of Ukraine to other nations. Ukraine has become a leading source of cheap, smuggled cigarettes, especially destined to Western Europe, where the contraband undermines relatively stronger public-health policies in place there.

Between 2003 and 2008, tobacco production in Ukraine increased one-third from 96.8 billion to 129.8 billion, according to http://akcyz.com.ua.

Ukraine’s cigarette consumption and legal exports topped 100 billion sticks in 2008, according to Ukraine’s Ministry of Health. Tobacco companies (mainly Japan Tobacco International, Philip Morris International and British American Tobacco) manufactured 130 billion cigarettes. The excess 30 billion cigarettes contributed to an illicit trade conservatively worth $2.1 billion annually, according to an article published by the Washington, D.C.-based Center for Public Integrity. The trade benefits everyone from manufacturers to organized crime.

Since the tax increase took effect in May 2009, tobacco industry observers haven’t seen evidence of tobacco-running into Ukraine. “Every time there has been a tax increase on tobacco, we haven’t seen the contraband ‘scare’ bear fruit,” said Polishchuk, the former health minister.

While the fight to change public perception and counter tobacco industry misinformation will be a protracted one, progress is being made.

Veteran advocate Konstantin Krasovsky, who heads the tobacco control unit of the Ukrainian Institute of Strategic Research at the Health Ministry of Ukraine, said a stronger anti-tobacco movement has emerged for a combination of reasons.

Krasovsky said that anti-tobacco professionals have established themselves as bona fide experts, with a strong command of facts and figures, helping to win over politicians and the public. Krasovsky has meticulously maintained a database of international tobacco figures and statistics ranging from production output to the price of cigarettes in other countries.

In addition, “building strong relationships with members of parliament, gaining their support and signatures” has improved with time, Krasovsky said. “Tobacco companies once dictated the tax rates, but we’ve proven them to be liars. Now the roles are reversed. We are the experts and we’ve shown that all they care are about profits.”

Polishchuk, who has been at the forefront of the anti-tobacco movement for years, said the battle is far from over. He lamented that many politicians still care more about budget revenues than public health or reversing Ukraine’s grim demographic situation and high mortality rates.

But minds are being changed.

“In the March vote, I was the flag bearer,” said Polishchuk. “When my assistants spotted a possible swing vote, I would talk to the parliamentarian in person and find common ground with him. But everyone helped out.”

On June 11, the Verkhovna Rada advanced legislation that would require 50 percent of a cigarette pack to bear strong text and pictorial warnings on the consequences of tobacco addiction. Such packaging would be the first of its kind in the former Soviet Union and would vault Ukraine into a leadership position on the issue, putting the nation on par with Canada, the first nation to initiate pictorial warnings in 2001.

“Despite the fact that more countries are using pictorial warnings, 9 out of 10 people in the world do not have [see] pictorial warnings on tobacco packages. This represents a tragic underuse of a simple, cost-effective strategy that can vastly reduce tobacco use and save lives,” said Dr. Marc Danzon, the World Health Organization’s regional director for Europe.

Despite the ban on tobacco print advertising coming into effect in 2010, part of Ukraine’s obligations since joining a global anti-tobacco treatment, a comprehensive advertising ban is needed to stop the industry’s marketing, promotions and sponsorships, Toropova said.

Moreover, smoking is still permitted in many public places, leaving even non-smokers’ health at risk because of second-hand smoke. The ubiquitous tobacco kiosks are effectively standing billboard advertisements, while the top displays at many check-out counters in groceries are cigarettes.