CEPS/Philip Morris MoU Questioned

Accra, Nov 26, GNA 96A few weeks after the signing of a Memorandum of Understanding MoU) between the Customs Excise and Preventive Service (CEPS) and Philip Morris International (PMI), a cigarette manufacturer based in Switzerland, industry players have questioned the basis for the deal prompting some to call for a second look at the entire document.

The MOU, signed on November 7, 2006, seeks to eliminate the illicit trade of tobacco products, including the distribution and sale of counterfeit and smuggled cigarettes into the country, but the players led by British American Tobacco (BAT) have questioned the moral right of PMI to go into the agreement.

Speaking with the Ghana News Agency in Accra, Mr Tony Okwoju, Corporate Affairs Director of BAT said they welcome the essence of the MOU, "but this should lead ultimately to a complete reduction or elimination of the presence of Bond Street cigarette, a key brand of Philip Morris from the Ghanaian market" Mr Okwoju argued that it was quite interesting that PMI, a company with no known registered office or contact in Ghana is going into agreement with CEPS.

Asked how BAT rates the MoU, Mr Okwoju said Bond Street is the number one smuggled product in Ghana, but noted that it was agreeable if the MOU goes to help stop the presence of Bond Street in Ghana. "Smuggling is costing the government approximately 45 billion cedis per annum so anything that will honestly help to stop this is welcome" Investigations by the GNA showed that Bond Street, a Philip Morris product, was common on the Ghanaian market even though it had been boldly listed for sale only in Togo with health warnings stated in French.

Some of the vendors could not display the product because according to them, "we do not want trouble." Mr Okwoju said, PMI's statement at the signing indicating that they have been conducting research in Ghana "should show them that that the cigarettes most smuggled into Ghana is Bond Street.=94 For more than 10 years, Bond Street has been illegally brought into Ghana and openly sold.

From a negligible figure in 1995, it currently controls 10 per cent of the market share translating into more than 25 billion cedis in loss of revenue to the state.

Industry sources confirm that Bond Street is imported legally into Lome, Togo at lower cost with part of the unusually large quantities finding their way into Ghana and neighbouring countries through unauthorized routes.

Mr. Okwoju noted that the MoU places too much responsibility and commitment in the path of CEPS, even though it is supposed to be common purpose and equal roles for the two bodies complementing each other. "They have to take a second look at the whole document," he said. Other players said the Ministry of Finance and Economic Planning and CEPS who were all present at the ceremony should have seen that PMI's objective for signing the MoU was to check counterfeiting of its brands and not to stop smuggling of its genuine brands into Ghana. They also questioned the basis for which PMI signed the MoU since they are not legally registered in Ghana.

When contacted Ms Annie Anipa, Public Affairs Manager of CEPS said the MoU with PMI is out to buttress CEPS's interest in stamping out smuggling and counterfeiting of the product on the Ghanaian market. "It is in this light that after busting the 15 containers of counterfeit cigarettes of PMI following a tip-off on July 2005, we agreed to collaborate with them to arrest the situation when they offered to bear the cost of destruction and help fight the menace. She said PMI is a multinational company based in Switzerland with Lawyers in Ghana who confirmed that the bust was counterfeit. She mentioned similar collaborative efforts with BAT, which, she said, was going on well.

Asked if CEPS was not giving in too much in the MOU, Ms Anipa said it was basically, among others, to provide each other with information, training in knowing counterfeit products while "PMI was also to provide the list of genuine brands so that, if confronted with problems 93we could determine the authenticity of the product."

When told that Bond Street was on the Ghanaian market bearing French labels and health warnings, Ms Anipa indicated that it was important to establish that what is on the market is fake or genuine. "If there is smuggling, it is incumbent on all, especially those on the frontier stations, including persons selling nicodemously to bring this to their notice. This does not prevent CEPS from collaborating with others to stamp out the practice.

"In fact, the World Customs Organization supports such public private collaborations to help customs do its work worldwide. 26 Nov. 06