A previously confidential parliamentary hearing has been made public, exposing that tobacco giant Philip Morris used the session to advocate for reduced taxes on legal cigarettes. The company was controversially summoned to testify before a Senate committee investigating the burgeoning illicit tobacco trade on Monday.
The hearing was conducted behind closed doors, with the broadcast cut off, drawing criticism from anti-smoking advocates. A draft transcript obtained by AAP reveals that Philip Morris executives argued the crisis would ease if the government lowered taxes on its products.
'Today, the tax on a legal $37.95 pack of 20 cigarettes is at least $34, while illicit cigarettes sell for half this,' the company representative, whose name was redacted, stated. 'If the parliament wants to materially reduce illicit tobacco and bring consumers back into regulated channels, that gap must be narrowed.'
The same speaker also noted that 'on almost any street corner you can find a packet of comparable illicit product for between $12 and $25'. Philip Morris asserted it was 'very credible' that all legal tobacco sales would become unviable by 2030 unless excise duties were lowered.
The Illicit Tobacco & E-cigarette Commissioner estimates the illicit market accounts for 50-60 per cent of all tobacco sales, representing $4-7 billion in transactions. Philip Morris argued that the growth of the illicit market was driven by 'three forces acting together: price, access and enforcement'.
Given that four million Australians consume nicotine, the company contended it was better for public health, community safety, and the government's budget if they did so legally. 'We are not here to contest public health objectives. We are here to provide evidence on where regulation is failing and what will restore regulatory control,' the speaker said.
Laura Hunter, chief executive of the Australian Council of Smoking and Health, likened Philip Morris' testimony to 'inviting mosquitoes into a hearing on malaria'. She told AAP: 'You had a tobacco giant warning about pressures on its business while profiting billions from products that kill 66 Australians every day. You'd almost think their real crisis was their tax bill.'
Philip Morris has not responded to requests for comment. The company's appearance in Canberra was controversial as the government and public health advocates believe it contravenes an international treaty Australia signed in the mid-2000s. However, the Liberal-controlled committee allowed Philip Morris executives to give evidence and granted a closed-door hearing.
Senator Leah Blyth from South Australia, the committee chair, stated it didn't 'make sense to have an inquiry into illicit tobacco and not hear from all entities impacted'. After dissent from Labor and Greens committee members, it was agreed the transcript would be made public. As of Thursday afternoon, it had yet to appear on parliament's website.
Philip Morris said it appeared before the Senate as a 'legal, taxed and regulated company working toward a smoke-free future'.
