OREANDA-NEWS. On 13 July 2009 was announced, that Japan Tobacco International (JTI) supports long-term planning of legislative changes on the tobacco market, Alexander Avazashvili, JTI Export Markets Corporate Affairs and Communications Director said in an interview.

“JTI meets the requirements of local markets with scrupulous attention, however, we advocate long-term frameworks for all legislative changes pertaining to the tobacco market in any country that we work with, whereas decision-making must be open, transparent and subject to preliminary discussions with representatives of the tobacco industry,” Avazashvili said.

Long-term planning will facilitate forecasting of budget revenues, while tobacco companies will be enabled to plan their investments and business activity, he said.

Some issues cannot be tackled by the state independently, Avazashvili said, citing the example of cooperation between JTI and law-enforcement units across the globe aimed to combat all forms of tobacco contraband and circulation of counterfeited cigarettes.

Commenting on the recent rise in the excise tax rate in Belarus, Avazashvili said: “it is up to the state to decide which taxes to impose and when to raise them.”

“We do not mind an increase in excise taxes, and we are ready to discuss our position with the state. We are interested in having a two-way communication channel. JTI advocates at least three-year tax planning, though,” he said.

“Decision-making regarding excise rates must be very subtle, because hikes in taxes may result in consumers’ changing their preferences to cheaper brands and encourage smugglers, therefore the state will be short of the revenue target despite increases in excise rates,” Avazashvili said.

According to him, JTI supports a strategy when excise tax rates in one country should be harmonized with those in neighboring countries with roughly the same household incomes and spending capacity in order to avoid disbalance and prevent flows of counterfeited cigarettes.

The company’s policy regarding smuggled cigarettes is conclusive and unconditional: “ seized smuggled cigarettes must be destroyed.”

“JTI is interested in operating in a legal market of tobacco goods in order for state budget to receive tax revenues, which eventually are used to finance social projects. On the other hand, smuggled cigarettes are at least of questionable quality, because of unknown supply chains and storage conditions, etc. Should consumers try cheaper contraband products, they may think the company has problems with quality, which may harm our reputation,” Avazashvili said.

Commenting on JTI’s plans in Belarus, Avazashvili said JTI planned to start production of Monte Carlo Super Slims cigarettes at Grodno Tobacco Factory Neman.

“We inked the agreement with Neman in February 2009, and production of Monte Carlo Super Slims, a new product for Belarus, will start shortly,” he said, adding that Belarus would become the third country in the world to sell that brand variety.

Avazashvili went on to say that JTI had plans to localize some other brands from the JTI portfolio. JTI was the first international tobacco company to start producing international cigarette brands in Belarus under the state import-substitution program together with its partner Tabak-Invest.

“The first two brands, Monte Carlo and Magna, were launched by Tabak-Invest in 2005, and in 2006-2007 production of JTI's Global Flagship Brands Winston and Camel were started. JTI accounts for more than 70% of Belarus’ cigarette output in the scope of the import-substituting program,” Avazashvili said.

Japan Tobacco International is a subsidiary of Japan Tobacco Inc., the world’s third largest global tobacco company. It produces three of the top five worldwide cigarette brands: Winston, Mild Seven and Camel. Other international brands include Benson & Hedges, Silk Cut, Sobranie of London, Glamour and LD. With headquarters in Geneva, Switzerland. Japan Tobacco International has more than 22,000 employees and operations in 120 countries.