JTI
Facing regulatory threats JTI stresses the importance of differentiating the duty free industry from other channels when it comes to government regulations by JAS RYAT
J
TI’s ‘The Future of Brands’ stand returned to the TFWA Asia Pacific exhibition in Singapore in May. Its message was simple, yet powerful, encouraging delegates to envisage a world where brands are ruled by excessive regulatory initiatives. Asia Duty Free connected with Har Ying Pan, Corporate Affairs Manager at Japan Tobacco International, Worldwide Duty Free Asia, to get an understating of how Asia differs from the rest of the world when it comes to regulation. Pan was elected to the Board of the Asia Pacific Travel Retail Association on 15 May 2019 and also took on the role of treasurer. With APTRA’s primary focus being advocacy and the protection of the duty free industry, Pan’s wealth of experience in corporate affairs makes her an ideal candidate to support APTRA in the defense of all categories in the duty free industry in Asia Pacific. In contrast to Europe, the regulatory approach in Asia Pacific is more fragmented as different regulations and approaches exist in each country. Australia, for instance, was the first country in the world to introduce plain packaging in 2012. JTI viewed this as a failed regulation, as it did not meet the public health objective to reduce smoking and also contributed to increased illicit trade. “We are clearly seeing a significant increase in regulatory threats to other
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categories, confectionery and liquor in particular, for example the recent allowance restriction on liquor in Singapore arrivals, the discussions in South Korea around graphic health warnings on liquor and the labeling requirements for confectionery in Sri Lanka and the Philippines,” explained Pan. “JTI, the tobacco industry and, in fact, the duty free industry are not against regulation,” she continued. “We support proportionate and sensible regulation that meets the needs of the consumer, the desire for transparency, the public health objectives of the regulator but respects the legitimate rights of business.” The duty free industry needs to move faster in discussions with the governments across the region when highlighting the differentiation this industry offers as compared to domestic retail. Pan underscores the importance of letting governments know, “who we are, what we do, how we contribute to the economy, and that we are well controlled and transparent.” The duty free channel plays an integral role in JTI’s revenue stream, according to Pan. It is important to ensure the future of duty free arena, and to have regulations that support the industry. “The duty free channel is very much recognized and appreciated by JTI. The channel is the window to the world, an incredible opportunity for JTI to respond to the
Har Ying Pan, Corporate Affairs Manager at Japan Tobacco International, Worldwide Duty Free Asia
desires of our consumers who expect to find their brands for sale when they travel internationally,” she commented.
Protocol Update
At the first official World Health Organization meeting of the countries that have ratified the Illicit Trade Protocol (ITP), the 48 countries agreed that the WHO should produce a roadmap in November 2020 for carrying out the evidence-based research into the extent to which duty free contributes to the illicit trade of tobacco products. “JTI continues to be fully supportive of measures to combat illicit trade and in essence supports the Protocol,” shared Pan. “However, due to a lack of understanding of the duty-free industry, there are proposals within the Protocol that could damage the legitimate and already well-controlled duty free retail channel, whilst failing to address the real problems, such as the illegal misuse of ‘duty free’ labelling. During MOP1 [Meeting of the Parties] it was decided that more time was needed to properly assess and understand the channel. The next MOP will take place in November 2020.” In Asia Pacific there is a handful of countries that have ratified the Protocol and will monitor further developments.