Monday, March 14, 2016

Vietnam's tobacco wars

Image result for jet hero cigarettes
A longstanding tobacco dispute is now unfolding in in Vietnam. Indonesian tobacco company Sumatra Tobacco Trading Company (STTC) owns the brands JET and HERO. Their cigarettes are sold widely in Vietnam and have been for many years. The problem is that they are all smuggled. Vinataba, Vietnam's state owned tobacco company and the Vietnam Tobacco Association say that JET and HERO cigarettes account for 80-90 percent of the 22 billion cigarettes smuggled into Vietnam each year. Because they are smuggled there are no health warnings and they do not comply with local tobacco standards. In effect such massive smuggling harms the legitimate market.

STTC are a shrewd trademark operator and registered both brands all over the world, and have 67 different marks in Vietnam! Vinataba has applied to revoke STTC's marks for non use. Vinataba has also sought to register JET and HERO trademarks at the NOIP although why is unclear. The NOIP is due to make a decision on the revocation. However as is common in Vietnam they require assistance from another ministry, the Ministry of Science and Technology, asking them to review the use of STTCs marks. 

STTC has responded that it wants to invest in Vietnam, but tobacco manufacturing is restricted. So it can only make limited sales to some state-owned enterprises and via duty-free shops at borders and airports. They deny the smuggling. But given these are some of the most popular brands in Vietnam, they cannot be completely unaware.

Image result for jet hero cigarettes
This dispute has been brewing for years, with complaints at the extent of smuggling growing louder. Smugglers of JET and HERO products have been arrested in the past; however border enforcement is weak and corruption and bribery rife. Local tobacco farmers complained in 2014 of the negative effect of smugglers - HERO was specifically cited.  In 2014 precise HERO and JET smuggling routes were reported on, describing the warehouses in Bangkok, the routes to Laos and Sihanoukville in Cambodia before the products are hand carried across the border into Vietnam for onward distribution. Reports sait it has been going on for decades.  

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