September 1, 2008

Cigarette Mafia Exist in Iran As Well – Official

Text of report by Iranian newspaper Jam-e Jam website

Text of report by Jaam-e Jam on 30 August

[Text of interview published in Jaam-e Jam newspaper on 30 Aug 08.]

Although using tobacco is dangerous and prohibited, still the tobacco business is a profitable one. Perhaps this is the reason that it has one of the biggest mafias in the world following narcotics and arms. Mahmud Abtahi, General Director of Iran Tobacco Company gives information about the cigarette mafia in Iran and interest of American producers to cooperate

- Does the general director of Iran tobacco company smoke?

- No, not at all. He is against smoking and strongly advises those who smoke to quit. Particularly ladies, who follow the new fashion of smoking recently.

- Then how do you fulfil your duties with this belief? Isn't there a contradiction?

- Iran Tobacco Company is a trading company with unlimited possibilities, a lot of money and production and employment opportunities. This is true that I am not a smoker and I am against smoking, but I have the responsibility of developing this company. So I differentiate my personal opinion and professional duties. I know that development of tobacco industry is to the benefit of Iran and can bring a lot of economic-export opportunities to the country.

Unfortunately there is this thing at high levels that you call contradiction. Many decision makers know about the benefits of tobacco industry, but do not support it. It is considered a bad thing. The tobacco sphere is in an ambiguous position. There are no laws prohibiting planting tobacco, producing cigarettes and exporting, but there in an unwritten law not to support it. Tobacco planting is worth paying attention to. We produce a tobacco in northern regions that is better than the American ones.

Isfahan's golden tobacco is really a gold and has a high demand in the world. But because of lack of attention the rate of tobacco production has decreased by years. Recently 84 per cent of Iran's tobacco has been imported. I am sure that if the tobacco industry develops, it will pass oil production. Do you know any other sphere that can bravely promise that? I am not for smoking and I do not smoke. I manage a production. There are about 12m smokers in Iran. If we don't produce cigarettes for those people, it will come from abroad and the currency of this country will flow out. Isn't it enough to protect the tobacco industry? Unfortunately this contradiction hinders this development.

- One of the widespread problems is smuggled cigarette. Do you have any figures on it?

- Fortunately the numbers are decreasing. In 2005 about 10.9 billion cigarettes were smuggled. In 2006 it decreased to 8.5. For 2008 we have planned to bring it down to 3.73 billion.

- What policies were implemented?

- Iran Tobacco Company is following Majlis decision to make the cigarette import tax lower to bring it in to the legal realm. The taxes are set up based on the prices both in and out of the country. We minimized state's benefit to ensure that the treasury would get at least some input. This was a success. In fact, it was not only an economic gain. It also had a health and standard benefit. We are able to check that the cigarettes do not have illegal essences, expired tobacco etc. Then we provide holograms. Cigarettes without holograms can cause cancer and other problems. We fight cigarette smuggling both directly and indirectly. The direct fight is through the law enforcement forces who continue their regular work. The indirect fight is increase of internal tobacco planting and cigarette production. Another way is to standardize the companies who are committed to import cigarettes to Iran and covering a certain percentage of Iran's market. The world cigarette business is strange. There is a lot of money in it. US exported 212 billion cigarettes in 2003.

- It is clear that large tobacco companies are ready to do anything to gain new markets and maintain their places in existing one.

- They are really ready for anything. That is why we should control them. I can bring an example. You know that light cigarettes are in fashion now. US have increased a menthol essence in them and have increased its consumption. According to their survey, about 40 per cent of America's youth are addicted to them. The producers announce that light cigarettes are less harmful. But the reality is different. With every cigarette the relevant part of brain becomes active and needs nicotine everyday. So the person is addicted anyway. Or if a person who used to smoke a regular cigarette smokes a light one, it does not change much. The same part of the brain needs a certain amount of nicotine. So what happens is that the person consumes more cigarettes to get that amount of nicotine. As a result the amount of nicotine remains the same, but the producers profit several times more. I bring that example for you to understand to what extent immorality can go. Now, we face such thing in Iranian markets.

- What brands or countries are ready to have cooperative production?

- Most of the brands that can be found in Iran are ready to cooperate.

- Which brands having what percentage of market?

- There are 29 foreign brands in Iran's market. The official figures say that legal imports of those cigarettes in 1385 [2006- 2007] was 312m Euros. The following year, it went down to 298m Euros. Winston is covering the largest, 47.8 per cent of market. Other known brands such as Marlboro, Kent, Pall-mall, Three stars, Pine, Magna etc... Each has a portion of the market [figures not given].

- If the US and Iran do not have economic relations, how is it that an American company has the largest portion of Iran's market?

- This brand and generally American brands to not enter Iran directly. A Japanese company called GTI exports them. They export also Marlboro, Monde and More. Their exports reach 4.5 billion cigarettes. Montana is exported by a British American company called BIT.

- Among the requests you have received for cooperative production is there any American companies?

- Yes there were. They lined up for it. But we consider US our enemy. We watch their steps. If we are not sure the product that comes from US does not have bad intentions, we will not trust them. We have not given license production to any American company. But they are interested and have sent us their proposals.

- Recently some officials spoke about cigarette mafia in the country. Is there anything like that? Who are they?

- When we speak of cigarette mafia, we should know that it's a world mafia linked to capitalists and Zionists. The world economy knows three spheres where dirty money exists. First is narcotics, second is weapons and the third is cigarette. This mafia is a world network that does any unclean thing to sell cigarette and get the market. It does not have a conscious. Sure, they also exist in Iran.

- Hasn't the information ministry given you any information?

- Information ministry controls the tobacco market very carefully. They know foreign tobacco companies. Sometimes we get news from them. There is a large ongoing security project on cigarettes. The figures speak for themselves. In 1384 [2005-2006] about 35m smuggled cigarettes were seized. It decreased to 25m in 1385 [2006-2007]. But a year later suddenly it reached 200m. However, I cannot give you any names.

- You said that cigarette companies do anything to get a proportion of the market. Can you give some examples for Iran?

- For example, some companies who were not allowed to sell in our markets, sent their products in containers into the country. They left them in a place. Then they somehow informed our security forces about the containers. The state sold the cigarettes and sent the money to treasury according to former regulations. After a while the company would apply to us and ask for a portion in the market because their product was sold for three months. They would insist that they were not informed about how their product had entered Iran.

However, today it is decided that a smuggled tobacco cannot be sold in the country. This resulted in decreases in such requests. Also we proposed joint production idea and said that whoever wants a part of Iranian market should come to the country with production equipment.

- You left a question unanswered. Are there political groups benefiting from tobacco business or involved in cigarette mafia?

- I cannot give a straight answer to that. All I can say is that one should look for roots of messes in political sphere in fields such as tobacco. Creation of false expenses and waste of resources were done in such places. But the ninth government tried to stop that. An area such as tobacco is not sweet as they used to be. Whatever comes goes to the treasury. Those managers who were not honest were dealt accordingly. The cases that exist in tobacco sphere are mostly about these issues.

Originally published by Jaam-e Jam, Tehran, in Persian 30 Aug 08.

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