Tuesday, 21 March 2017

Tobacco retailing in France

Big Tobacco hides behind tobacco retailers

In France, for much of the 20th century the entire tobacco industry – manufacturing, wholesaling and retailing – was contained in a state monopoly, SEITA (Société d’exploitation industrielle des tabacs et des allumettes). Like many other state tobacco monopolies, SEITA was broken up and passed into private hands at the end of the 20th century. Only a vestige of the former SEITA remains in the hands of the state – tobacco retailing. While the individual retailers are nominally independent business persons, their very existence as tobacco retailers relies on the authorization of the French government and their numbers are strictly limited. Currently there are about 25,500 tobacco retailers in France.

Those retailers have a trade association, the Confédération des buralistes. The French tobacco control organization, the Comité national contre le tabagisme (CNCT), has documented how this trade organization gets money from the tobacco industry and serves as its mouthpiece. The Confédération maintains a veneer of financial independence from the tobacco industry. But like all veneers, it is only a thin layer. The tobacco industry overpays the Confédération for various goods and services like advertising in trade magazines and newsletters, producing pamphlets and participation in conferences.

Canadian readers will recognize a similar pattern, where tobacco retailers are also beholden to the tobacco industry and where tobacco manufacturers have a lot of influence over retailers. Tobacco companies fund provincial and national convenience store associations and then use them as fronts to lobby against tobacco control measures.  The strategy has been largely successful. According to a previously secret internal tobacco company document, the lobbying strategy yielded no new tax increases and no new anti-tobacco regulations.

Publicly controlled tobacco retailing in France is in trouble

While the former SEITA was mostly privatized in the 1990s, the French state, through the Ministry of the Economy and Finance, maintained monopoly control over tobacco retailing and continues to hold that monopoly control to this day. From a public health point of view, the state-controlled monopoly system has a fatal flaw. The government control of the retail system is in the hands of the Ministry of the Economy and Finance, not the Ministry of Health and the former rarely or never consults the latter about how to govern tobacco retailing. The governance provided by the Ministry of the Economy and Finance has been examined, and found woefully wanting.

Tobacco retailing slammed by the Cour des comptes

Canadian readers will be familiar with the reports of the Canadian Auditor General that document government waste and misspending. The Cour des comptes serves a similar function in France. In its Annual Report,issued in February 2017, the Cour des comptes was particularly scathing in its criticism of the governance of tobacco retailing in France. As of 2015, the Ministry of the Economy and Finance had issued 25,492 contracts to individual tobacco retailers, and only those retailers are allowed to sell tobacco in France. In addition, there are eight programs that offer a variety of government subsidies to tobacco retailers. These subsidies are meant to help cover the costs of increasing store security, to help with diversification of services offered by the retailer, and to serve as supplementary retirement income, among other purposes. All were found to be poorly targeted and poorly controlled. There was evidence of fraud and there was little evidence that any public purpose was being served.

One activity that the Finance Minister requires of the tobacco retailers seems laudable. By a regulation renewed on January 16, 2017, tobacco retailers are required to undertake both initial training and in-service government-sponsored training on how to run their businesses. On both occasions, the training include modules on “public health issues concerning tobacco, tobacco’s place in society and the health hazards of tobacco use. ” But the Cour des comptes found fault with its past implementation. No information is collected on the quality of the supposedly obligatory training in public health issues. There is no proof available to the Cour des comptes that the training even occurs with the required regularity. (2017 report of the Cour des comptes, footnote 272).

The Cour des comptes found the whole system so out of touch with public policy that it called for nothing less than wholesale reform of the entire system:
“With regard to tobacco retailing, the central objective of current public policy favours public health. Recent policy decisions seek to reduce tobacco consumption. At the same time, various programs of support for tobacco retailers are being developed and implemented by the Customs Authority or the Ministry of the Economy and Finance, in close collaboration with the tobacco retailers’ association (Confédération des buralistes) that co-manages some of the programs. The Ministry of Health is absent from these processes.
“This lack of cohesion in public policy results in inappropriate support to the tobacco retailing profession. The system needs to be completely rebuilt. ” (author’s translation)
Advice to France:  Do not throw the baby out with the bathwater

In the face of such a damning assessment by the Cour des comptes, one might be tempted to give up on public administration of tobacco retailing and privatize the whole sector. We would urge France to reject this option. Canadian experience, where tobacco retailing has always been in private hands, shows that, as bad as the problems might be in France, they could be worse. In Canada, Big Tobacco has gained near complete control over tobacco retailing by eliminating distributors and putting retailers under direct contract. In addition to using tobacco retailers’ associations as lobbyists, Big Tobacco controls the prices that retailers can charge for cigarettes. The Quebec Coalition for Tobacco Control (Coalition québécoise contre le tabagisme– CQCT) has documented how retailers are forced to sell some brands at high prices and others at low, discount prices. The discount brands are prices so low that the intended deterrent effect of tax increases has been completely subverted. Under Canada’s private-sector distribution system, retailers, both individually and collectively, have become foot soldiers in Big Tobacco’s war on tobacco control measures. As it considers how to reform tobacco retailing, France should not consider privatization as a viable option.

More advice to France:  Reform tobacco retailing and give it a public health purpose

There can be no doubt that the system of tobacco retailing in France is badly in need of reform. But, at the very least, France has a system, and it can be reformed. The Cour des comptes has pointed the way towards constructive reform of tobacco retailing. Here are some suggestions for reform, largely inspired its recent report:
  • Maintain government control of tobacco retailing, but align the operation of tobacco retailing with the government’s public health goal of reducing tobacco consumption.
  • Include the Minister of Health as one of the Ministers responsible for the administration of tobacco retailing.
  • Ensure conformity with all public health and tobacco control laws and regulations by every tobacco retailer.
  • In conformity with Article 5. 3 of the Framework Convention on Tobacco Control (FCTC), prohibit retailers, either individually or collectively through their trade associations, from receiving any direct or indirect payments or any other form of in-kind consideration from the tobacco industry or its representatives. (As agents of the state, retailers should be considered part of the government’s tobacco control system and therefore subject to the FCTC requirement for non-interference of the tobacco industry.).
  • Require tobacco retailers and their employees to undertake training in how to give brief, effective advice on smoking cessation and how to refer smokers to community smoking cessation resources. Monitor the effectiveness of their smoking cessation work and develop a system of incentive payments for notable success in their work on providing smoking cessation advice and referral.
  • Encourage diversity in the goods and services offered by tobacco retailers.
  • End all subsidies described as ineffective by the Cour des comptes. Partially replace such subsidies with new ones that will contribute to the government’s goal of reducing tobacco consumption.