Lebanon Businessnews News
 

No smoking!
Tobacco turnover at $660 million in 2011
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The tobacco control law will be enforced fully starting Monday, September 3. As of this date, all forms of tobacco smoking, including shisha, will be prohibited in enclosed public places.

By ‘enclosed public places’, the law means “all roofed areas bordered by more than two walls.” This includes cafés within malls and restaurants which have outdoor weatherproofed spaces, not to mention pubs, nightclubs, and of course shisha cafes.

The anti-smoking law imposes heavy fines on violators. Any smoker in a closed public place will pay a $90 fine (equal to 20 percent of the minimum wage or $450), while the restaurant or café owner would pay a fine ranging from $700 to $2,000.

Restaurants, cafés, and night-clubs were critical of the legislation banning smoking. The Syndicate of Owners of Restaurants, Cafés, and Night-Clubs said the law, as is, will have a negative effect on tourism and the hospitality sectors. “The syndicate supports the public smoking ban, however the current law is incomplete as it does not take into consideration special exemptions and permits for Shisha cafes and nightlife (places) that are applied in developed countries such as the UAE, Qatar, the US, France, and Germany,” the syndicate said in a statement.

Around 47 percent of men and 32 percent of women in Lebanon are smokers, as per World Health Organization figures.

A study carried out by Ernst & Young upon the request of the syndicate said the smoking ban is expected to result in an overall drop of $280 million in revenues for the restaurants, cafes, pubs, and nightclubs sector. It said these enterprises make $735 million in annual revenues, representing an estimated two percent of GDP. It also said the ban will likely cut down annual tourist spending by $46 million, and bring about the loss of about 2,600 full-time jobs.

The anti-smoking law has banned tobacco advertising since March this year. Television, radio, and outdoor advertising have all been prohibited. According to George Jabbour, president of the Advertising Agencies Association, advertisements of tobacco products totaled $4 million in 2011. This figure represents a minor share, less than four percent, of the annual advertising sector’s revenues.

The tobacco sector made $662 million in total sales in 2011, up from $565 million in 2010, and $472 million in 2009.

The external trade of tobacco is monopolized by a state-run authority, the Régie, which imports packaged cigarettes, and exports locally produced tobacco, which it buys at a subsidized rate.

The Régie sells the imported products to a network of around 450 licensed distributors. In 2011, the Régie imported 600 million packs of cigarettes, down from 725 million in 2010.


Cigarette Imports Quantity (in million packs) Value (in million USD)
2009 450 166
2010 725 205
2011 600 235

Reported by Hanadi Chami

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Date Posted: Aug 31, 2012