Mexico tightens restrictions on tobacco

January 20, 2023 laura.speyside No Comments

Mexico tightens restrictions on tobacco advertisement, sales, and consumption

Context

In 2004, Mexico was the first country in the Americas to ratify the World Health Organization’s Framework Convention on Tobacco Control (WHO FCTC) which asserts the importance of implementing demand reduction strategies.[i] In compliance with its obligations under this Convention, the Mexican Congress issued the General Tobacco Control Law in 2008. However, this new law adopted the measures of the WHO FCTC, “only partially” according to experts such as Dr. Juan Arturo Sabines, Pan American Health Organization (PAHO) National Consultant on tobacco control. The law failed to fully comply with the WHO FCTC because, for example, it mandated the creation of smoke-free public spaces, but still allowed the existence of areas where people could smoke indoors, preserving the hazard of second-hand smoke.

On December 14, 2021, the Congress approved amendments to the General Tobacco Control Law mandating the establishment of 100% smoke-free environments and a total ban on the advertising, promotion, and sponsorship of tobacco products.[ii] The decree amending the law was published on the Federal Official Gazette on February 17, 2022[iii] and established the obligation of state and municipal authorities to adapt their local provisions to the new text of the law. Notably, the decree did not mandate the adjustment of Federal regulatory provisions. Nevertheless, on December 16, 2022, a series of amendments to the Regulations of the General Law for Tobacco Control were enacted by President López Obrador.[iv] The following are the key aspects of the new Regulations.

Amendments to the Regulations of the General Law for Tobacco Control

The amended Regulations entered into force on January 15, 2023 and establish the following measures:

Tobacco advertising and promotion in any media is prohibited.
All sponsorships by tobacco companies are prohibited.
Advertisement on social networks, through influencers, on streaming services or as subliminal advertising in television and movie productions is prohibited and sanctioned.
The display of tobacco products at any point of sale is prohibited.
Tobacco consumption is prohibited in any outdoor space where there is “collective concurrence”, i.e., where a group of people gather.
Tobacco consumption is also forbidden in spaces such as: “patios, terraces, balconies, amusement parks, playgrounds or places where children and adolescents stay or congregate, urban development parks, sports parks, beaches, show and entertainment centers, courts, stadiums, arenas, shopping malls, markets, hotels, hospitals, health centers, medical clinics, places of religious worship, places of consumption or service of food or beverages, transportation stops”.[v]
Restaurants and bars are not allowed to sell beverages or food to clients while smoking.
The amended Regulations do not establish specific restriction on the vaporizers, e-cigarettes, and other devices, but their use is included on the new definition of “smoking”. Thus, the new restrictions apply to both the consumption of traditional cigarettes and the use of other devices to consume tobacco.

Tobacco consumption in Mexico

The Ministry of Health (MoH) estimated in 2021 that there are
According to the Mexican National Public Health Institute (INSP) approximately 15 million people smoke in the country.[vi] The average tobacco consumer in Mexico smokes 7.4 cigarettes per day and spends 287 Mexican pesos (approximately 15 USD) per month on tobacco products, and the approximate age at which adolescents start smoking is 14 years old.[vii]
The MoH estimates that every year 65,000 Mexicans die due to diseases related to tobacco consumption.[viii]

The tobacco industry in Mexico

During 2021, 2.3 million cigarette packs were purchased in Mexico.[ix]
Two companies hold 98% of the tobacco market in Mexico, British American Tobacco (34%) and Phillip Morris International (64%).
Between 2015 and 2019, the tobacco industry in Mexico increased its sales from 878 million pesos (approximately 46 million USD) to 1.246 billion Mexican pesos (approximately 65 million USD). This means that, in less than two decades, the number of people who consume tobacco increased from 9 to 15 million.[x]
Establishments dedicated to the manufacturing of tobacco products represent less than 0.1% of the manufacturing sector. Employment in the sector ranges from 0.01 % and 0.05% of the number of total workers nationwide in the manufacturing sector. [xi]
However, the Business Coordinating Council (CCE) and the National Association of Supermarkets and Department Stores (ANTAD) have estimated that cigarette sales account for more than 15% of the monthly sales of the more than 6,000 stores registered with the National Institute of Statistics and Geography (INEGI). These businesses generate more than 2 million jobs that provide a livelihood for 5 million people and supply 52% of the national demand of consumer goods.[xii]
According to Hiram Vera Rivas, president of the National Council of the Tobacco Industry (CONAINTA), almost 20% of cigarettes consumed in Mexico were smuggled, leaving tax losses of 13.5 billion pesos (approximately 710 million USD), almost a third of the taxes that the Mexican Tax Administration Service (SAT) should be receiving. Irregular products usually come from China, India, Vietnam, Cambodia, and the United Arab Emirates[xiii] and COFEPRIS has issued a Sanitary Alert on this topic. [xiv]

Different perspectives

International Organizations
- In May 2022, Director General of the WHO, Tedros Adhanom Ghebreyesus, gave Mexico a Special Award for the actions undertaken to protect the Mexican population from the health risks of tobacco consumption.[xv] Following the publication of the amendments, Dr. Adhanom congratulated Mexico and called on other countries to follow its footsteps.[xvi]
- The PAHO has welcomed the step and applauded the Mexican government for implementing the ban. This Organization had constantly advocated for a better implementation of the WHO FCTC and had provided technical assistance to the Mexican Congresspeople interested on introducing bills.
Mexican Health Authorities
- The MoH has declared that the new Regulations will prevent 49,000 premature deaths due to tobacco consumption and 292,000 new cases of associated diseases.[xvii] As of January 16, it has not announced additional measures to prevent tobacco-related mortality and morbidity.
- COFEPRIS announced its support for the implementation of the new Regulations and that it will commit to its enforcement by performing inspections in situ and monitoring the media.[xviii]
- In June 2022, President López Obrador issued an order banning the commercialization of vaporizers and e-cigarettes, which COFEPRIS backed by issuing a sanitary alert on the alleged hazards presented by those devices.[xix]
Industry organizations
- The following industry organizations have announced that companies will start amparo proceedings to challenge the new regulations.[xx] Their main argument is that the Executive power, via the Ministry of Health, is exceeding its powers and enacting measures that should be discussed by Congress.
  - National Chamber of the Transformation Industry (CANACINTRA),
  - Business Coordinating Council (CCE),
  - National Chamber of Restaurants and Seasoned Food Industry (CANIRAC),[xxi]
  - National Association of Supermarkets and Department Stores (ANTAD),[xxii]
  - Confederation of Industrial Chambers of the United Mexican States (CONCAMIN), and
  - National Tobacco Industry Council (CONAINTA).[xxiii]
- According to the National Association of Small Business Owners (ANPEC), tobacco products account for 25% of their sales, so the enforcement of the new Regulations will be extremely detrimental to this sector. [xxiv] This organization estimates that the measures endanger 1.2 million small businesses and offered business owners counseling to challenge the new Regulations.[xxv]

Possible implications

President López Obrador and Federal health officials are likely to divert the debate on the lack of access to public health institutions and medicine shortages blaming the consumer good industry on the poor health outcomes of the Mexican population.
Federal health authorities will insist that the new Regulations represent a success against commercial interests and will be dismissive of legal proceedings that challenge them.
COFEPRIS will back the President’s speech and could publicize the enforcement of the new Regulations, but the shortage of human and economic resources will not allow constant implementation actions.
Although the new Regulations tighten restrictions on the use of vaporizers or other devices to consume tobacco, no further measures on use of these products when the substance consumed is tobacco-free have been announced.

Speyside insights

The MoH and COFEPRIS may endorse further policies to decrease the demand of consumer goods that are considered to increase health risks such as vaping devices and warning labeling on trans fats. These issues are considered priorities by the Health Committee at the House of Representatives, so they are likely to be discussed by Congress during 2023.
Industry organizations and businesses will challenge the new provisions mostly based on economic arguments. These are unlikely to be successful if it is confronted with arguments from the authorities based on the human right to health. Arguments based on the division of powers and the need for legislative action may be more successful.
Convenience store chains and other formal businesses are likely to abide by the Regulations, while smaller businesses or independent vendors that are not supervised by regulatory authorities may seize the opportunity to increase irregular sales. It is common for street vendors and small shops to offer single cigarettes to passersby. This conduct was already prohibited by the Regulations, but it is not effectively enforced, and this situation may remain unchanged.

Sources

[i] https://www.paho.org/en/stories/mexico-long-road-tobacco-control

[ii] Between 2008 and 2021, there were over 100 initiatives to amend the General Tobacco Control Law that failed to be approved. See: https://www.paho.org/en/stories/mexico-long-road-tobacco-control

[iii] Decreto por el que se reforman, adicionan y derogan diversas disposiciones de la Ley General para el Control del Tabaco. https://www.dof.gob.mx/nota_detalle.php?codigo=5643187&fecha=17/02/2022#gsc.tab=0

[iv] Decreto por el que se Reforman, Adicionan y Derogan diversas disposiciones del Reglamento de la Ley General para el Control del Tabaco. https://www.dof.gob.mx/nota_detalle.php?codigo=5674791&fecha=16/12/2022#gsc.tab=0

[v] Article 65 Bis.

[vi] https://elpais.com/mexico/2023-01-15/mexico-prohibe-la-exhibicion-y-la-publicidad-de-los-cigarros.html

[vii] https://www.insp.mx/control-tabaco/proyecto/economic-cost-of-tobacco-into-the-mexican-health-system-to-avoid-financial-and-disease-burden-by-fully-implementing-mpower-policies

[viii] https://www.gob.mx/salud/prensa/223-el-tabaco-agente-que-dana-la-salud-el-medio-ambiente-y-a-las-sociedades

[ix] https://www.milenio.com/milenio-foros/con-sellos-holograficos-garantizan-la-autenticidad-de-los-cigarrillos

[x] https://mundi.io/exportacion/industria-tabaco-mexico/

[xi] https://mundi.io/exportacion/industria-tabaco-mexico/

[xii] https://latinus.us/2023/01/16/anpec-asesoria-negocios-ampararse-nueva-ley-control-tabaco/

[xiii] https://www.forbes.com.mx/dos-de-cada-10-cigarros-son-de-contrabando-calculan-perdidas-fiscales-por-13500-mdp/

[xiv] https://www.milenio.com/milenio-foros/con-sellos-holograficos-garantizan-la-autenticidad-de-los-cigarrillos

[xv] https://newsweekespanol.com/2023/01/mexico-prohibe-publicidad-tabaco-medios/

[xvi] https://www.ejecentral.com.mx/oms-celebra-nuevo-control-de-tabaco-bravo-mexico/