Suggestion: Formulate tobacco-control policies based on the conditions of reasonableness, gradualness, and predictability, and avoid excessive restrictions fostering the growth of illicit tobacco trade.

The Executive Yuan approved amendments to the Tobacco Hazards Prevention and Control Act (THPCA) on January 13 of this year. The bill, which is now before the Legislative Yuan, includes mandatory expansion of Graphic Health Warning Pictorials and Texts (GHW) to cover 85% of tobacco product packaging, a prohibition on flavored tobacco products and slim cigarettes, a total ban on “cigarette-like” products, as well as other tobacco control measures. Although the stated objective of these amendments is to seek to improve Taiwan’s public health standard, it is important to consider their overall social impact, the capacity of law enforcement agencies to conduct effective enforcement, and whether the purported public health effects would actually be achieved.

There are two common regulatory approaches to restricting a product. The first is to forge a consensus through consultation with the related stakeholders, including consideration of the social costs of the restrictive measure, and then to gradually implement and adjust the measure, taking the public response into account. The other approach is to formulate a policy and then immediately put it into effect in the market, which reduces the administrative costs involved. For this THPCA amendment, the Taiwan government clearly adopted the second approach; it declined to conduct any dialogue with the public during the policy formulation process.

One of the unreasonable provisions of the amendment is the expansion of GHW to cover 85% of the packaging. This percentage is substantially higher than the 50% (or no less than 30%) stipulated in the WHO’s Framework Convention on Tobacco Control (FCTC). The proposal limits lawful brands’ product information to the remaining 15% of the packet, which may make it more difficult for consumers to distinguish legitimate from counterfeit products. In addition, these amendments will inevitably lead to transaction disputes as lawful businesses object to the serious undermining of their trademark rights and the negative impact on the distinctiveness and characteristics of their products.

Furthermore, the proposed ban on tobacco additives is being sought without any substantiated proof of its effectiveness, and it would also reduce the ability of legitimate businesses to innovate and improve their products. As the opportunity to distinguish among different products in the lawful market is diminished, many consumers are likely to turn to illicit markets to meet their demands, with the result that illicit traders are given the incentive to take greater risks. This in turn increases border inspectors’ workload and reduces the overall inspection quality.

Whenever tobacco-control policy is drastically revised, the volume of illicit trade increases. In 2012, for example, the government made known its intention to raise the excise tax and health surtax on tobacco products by a total of NT$25 per packet. In the following year, the volume of confiscated illicit tobacco increased exponentially by 8 million packs. In 2017, when the excise tax was hiked by NT$20 per packet, the volume of confiscated smuggled cigarettes increased by more than 11 million packs compared to the previous year. And the number of illicit tobacco packs confiscated in January this year, following the government’s first public announcement of its timetable for enacting the proposed new amendments, reached 8.22 million packs, an increase of 4.5 times compared to the same period in 2021. People’s anticipation of the legislative direction is clearly one of the major reasons for the increase in criminal illicit trading.

Another egregious aspect of the proposed amendments is the prohibition it would impose on selling tobacco products with a net weight of the content per vending unit less than 15 grams. The government asserts that this provision is in line with a principle set forth in the WHO’s FCTC. However, Article 16 of the FCTC merely provides that the member states shall endeavor to “prohibit the sale of cigarettes individually or in small packets.” The FCTC contains no minimum weight requirement. The amendment clearly deviates from the text of the FCTC, as no other country in the world requires a minimum weight per vending unit.

There is still opportunity for the shortcomings in the proposed revisions to be rectified by the Legislative Yuan. Even more importantly, the problems with the amendments in terms of both content and process should be taken as a lesson for policymakers when adopting future tobacco-control measures. The approach needs to be reasonable, gradual, and based on solid scientific evidence. The overall socioeconomic impact (including the effect on the growth in illicit trade) must be taken into consideration, as well as the adherence to international practices and standards. Otherwise, the policy risks infringing on the rights of both consumers and legitimate businesses.