Introduction

Bangladesh, officially called the People's Republic of Bangladesh, is a small South Asian country, sharing its land borders with India and Myanmar. A home to 163.7 million people[1], Bangladesh is the eighth most populous country in the world with a landmass spanning 1,47570 square kilometers. Dhaka is the capital and the largest city in Bangladesh.

Bangladesh has recently made significant progress in a number of socio-economic sectors. According to Bangladesh Economic Review 2019, the per capita national income now stands at $ 1909. The percentage of people living under poverty line (earning less than $1.90 a day) now stands at 11.3 in 2019-2020 which was 44.2 percent in 1991, as per a World Bank report[2]. In 2019-20, the country reached a GDP growth rate of 8.13 percent[3], the second highest growth rate in South Asian region[4].  The average life expectancy stands at 72 years in 2017. Infant mortality rate dropped to 24 per 1000 live births. The average literacy rate reached 72.6 percent. According to Annual Primary School Census 2018, the net enrollment rate is 97.85 percent.

Prevalence of Tobacco Use

The World Health Organization (WHO) conducted two Global Adult Tobacco Survey in Bangladesh in 2009 and 2017. According to GATS 2017[5] findings, tobacco use in Bangladesh is in decline. Currently (as of 2017), 35.3 percent (37.8 million) of adults, aged 15 y/o and above, in Bangladesh use tobacco, a number which was 43.3 percent in 2009. The relative decline is 18.5 percent in a period of 8 years. As per GATS 2017 report, the prevalence of tobacco use among women is 25.2%, and among men, it is 46%.

In Bangladesh, the use of tobacco can be categorized into two types: smoked (cigarettes and bidis) and smokeless (jarda, gul etc). Among Bangladeshi adults, the percentage of smokeless tobacco users is 20.6% (female consumer 24.8%, male 16.2%), and the percentage of smokers is 18% (male consumer 36.2%, female 0.8%).

Apart from gender, the prevalence of tobacco use also varies based on income and area. A new aspect revealed by GATS 2017 is that currently the lowest income people have a much higher rate (48%) to use tobacco than the highest earning class (24%). The rural population has more tobacco users (37.1%) than the urban dwellers (29.9%). Among the eight divisions of the country, Mymensingh has the highest percentage of tobacco users (48.2%).

As of 2017, only 0.2 percent of adult population use emerging tobacco products such as e-cigarette, vape products, although the number is on the rise.

Costs to the Nation

Tobacco has been ranked as the fifth major contributing factor behind premature deaths in Bangladesh. The use of tobacco causes around 126,000 deaths in Bangladesh a year.  The financial loss incurred per year due to tobacco use exceeds BDT 158.6 billion. A study published by Bangladesh Cancer Society says that in 2017, the total economic cost of tobacco use from lost productivity and direct healthcare costs of smoking-related illnesses was estimated at BDT 305.6 billion in 2017-18, meanwhile tobacco tax revenues from Supplementary Duty and VAT were only BDT 228.1 billion in the same year.[6]

Moreover, numerous studies have found out that in Bangladesh, households with tobacco consumers have to spend more on health care and less on clothing, housing, education, energy, and transportation and communication, compared to ones that are tobacco-free. According to GATS 2017, the average monthly expenditure for bidi has increased by 50% in the preceding eight years for each individual smoker. Currently, a cigarette smoker spends on average BDT 1077.7 per month for cigarettes. On the contrary, the average monthly expenditure for education and health of a household is only BDT 835.7 (Household Income and Expenditure Survey 2016). Tobacco Atlas says, a smoker in Bangladesh, on average, spends around 10% of his monthly income on tobacco. 

Child health is also under threat because of tobacco use. A recent study conducted among school children of Dhaka has found out that due to passive smoking, 95 percent of school-going children have higher levels of nicotine than permissible in their bodies.[7] Another study has revealed the excruciating fact that child laborers constitute 50-70 percent of bidi factories’ workforces.[8]

A study titled ‘Tobacco and Poverty: Observations from India and Bangladesh’[9] conducted by PATH Canada suggests that tobacco growing is a significant cause of deforestation in Bangladesh, accounting for over 30% of annual deforestation, putting the country third internationally in terms of the severity of the problem[10].

Despite a ban on smoking in indoor workplaces by the tobacco control law (Smoking and Tobacco Products (Usage) Control Act 2005 (Act No. XI of 2005), 8.1 million people become victims of passive smoking at work regularly, which is quite frustrating. The exposure to passive smoking at home still stands at 40.8 million, which is 39 percent of adults (15 y/o and above).

Tobacco Control Measures

The Government of Bangladesh signed the Framework Convention on Tobacco Control (FCTC) in 2003 and ratified the treaty the following year. In order to initiate the implementation of the treaty, the Smoking and Tobacco Products (Usage) Control Act was formulated in 2005. The Act was later amended in 2013 to make it more effective and time-fitting. The Rules of this law were adopted in 2015. The implementation of the FCTC was also incorporated in the 7th Five-Year-Plan (2016-20) with a view to mainstreaming tobacco control issues in the development process and the realization of Sustainable Development Goals (SDGs).

Tobacco Price and Tax Measures

The government imposes three types of indirect taxes on domestic cigarettes: a uniform value-added (VAT) of 15 percent, a variable supplementary duty (excise tax) that presently ranges from 57 percent to 65 percent, and a health development surcharge of 1 percent. Total taxes thus range from 73 percent of the retail price for low-end cigarettes to 81 percent for premium brand cigarettes.

Tobacco taxation in Bangladesh, without any fixed taxation and pricing policy as of May 2020, is a complex multi-tiered ad-valorem excise tax which includes large variations in tax rates depending on the type of tobacco product (cigarettes, bidis, and smokeless tobacco); the product characteristics (filtered or non-filtered); and the cigarette brand type (low, medium, high and premium priced brands). The premium and high segments are more heavily taxed than the lowest segment. Most importantly, bidi and smokeless tobacco products are taxed at a much lower rate than other product types.

A World Bank report suggests that despite having some of the world’s highest tax rates, cigarettes in Bangladesh are one of the cheapest in the world due to incompetent tax structure. According to the paper, ‘the gaps between brands in the different tiers categories create incentives for smokers to substitute less expensive brands in response to price increases and for manufacturers to position brands between price slabs to avoid paying higher taxes.’[11]

Smoke Free law

According to the Section 4 of the Smoking and Tobacco Products Usage (Control) (Amendment) Act 2013, if any person smokes in the ‘Public Place’ and ‘Public Transport’ mentioned in the Act, he shall be punishable with fine not exceeding three hundred takas and the penalty shall be doubled for each subsequent violation.[12] According to GATS 2017, despite a ban on smoking in indoor workplaces, 8.1 million people become victims of passive smoking at work on a regular basis, which is quite frustrating. Still, about 48 million (39%) Bangladeshis are exposed to passive smoking at home, with the majority being women (37%). Almost 25 million adults are exposed to passive smoking while using some public transports. And yet, the 100% smoke-free public places are not completely free of smoking, as 12.7%, 8.2% and 50% of the people are exposed to passive smoking in health care facilities, schools and restaurants (surrounded on four sides) respectively.

Graphic Health Warning (GHW)

According to the section 10 of the Smoking and Tobacco Products Usage (Control) (Amendment) Act 2013, it is mandatory to print GHW on at least 50% of the main display area of tobacco packets, containers, or cartons[13]. This came into force on 19 March 2016. However, the tobacco companies’ lobby managed a temporary permission to print the GHW on lower 50% space of tobacco packets (though the law suggested printing the GHW covering the upper 50% space of tobacco packets.

According to GATS 2017, the number of tobacco users noticing health-related warning messages on packets or containers of tobacco products has increased substantially compared to the past. On the other hand, almost half of the consumers of smokeless tobacco have stated that they did not see any GHWs or other health warning messages on their packets or containers.

TAPS Ban

According to the Section 5 of the Smoking and Tobacco Products Usage (Control) (Amendment) Act 2013, tobacco products advertisement and promotion are prohibited and sponsorship is controlled.¹² Any tobacco industry sponsorship under the Corporate Social Responsibility programs shall not use the tobacco company’s name, sign, trademark, or symbol of any producer of tobacco or tobacco product. However, tobacco companies frequently promote their brands using display boards, posters, gift items offered to retailers, price declaration posters and through other ways.

According to GATS 2017, almost 54% of the population have seen advertisements of cigarettes or bidis, while nearly 21% have seen some advertisement of jarda or gul (chewable tobacco). In the last 30 days predating the survey, 40%, 37% and 25% of the people have seen tobacco companies’ advertisements, promotion or sponsorship of cigarettes, bidis and smokeless tobacco products respectively.[14]

Ban on Sale to Minor

According to the Section 6A of the Smoking and Tobacco Products Usage (Control) (Amendment) Act 2013, no person shall sell tobacco or tobacco products to any person under the age of eighteen, or engage or cause to be engaged any such person in the marketing or distribution of tobacco or tobacco products.¹²  

Cessation

As of May 2020, tobacco cessation service is not available in public hospitals, though counseling service is available to a little extent in a very few private hospitals. According to GATS 2017, the number of smokers receiving advice from a health-care provider to quit tobacco use has rounded up to 65.8% in 2017, which was 52.9% in 2009. Likewise, the amount of smokeless tobacco users receiving similar suggestion has increased from 47.9% to 57.2% in the same period.

Tobacco Industry in Bangladesh

British American Tobacco, formerly known as Imperial Tobacco, is the first multinational tobacco company in Bangladesh. The company started its operations in Bangladesh in 1910 and had its first depot in Armanitola, Dhaka in 1947.[15]

Cigarette industry

There are currently (2020) 12 cigarette manufacturing companies in operation in Bangladesh, with British American Tobacco Bangladesh (BATB), Japan Tobacco Inc. (JTI) and Abul Khair Tobacco Company Ltd being the largest three players. BATB is the frontrunner in cigarette market with 62 percent of market share, followed by JTI that holds 21 percent of market share.[16] JTI infiltrated into the cigarette market of Bangladesh in 2018 through a 1.47-billion-dollar acquisition of Dhaka Tobacco Industries (DTI). In its press release on the acquisition deal, JTI mentioned Bangladesh as ‘the eighth largest cigarette market in the world, with volumes exceeding 86 billion units and growing by about 2% year-on-year.’[17] Philip Morris International (PMI) entered Bangladeshi market in 2008, although PMI presence is considerably limited compared to other multinational companies present in the local market. According to a report titled ‘Sales and distribution of Philip Morris Bangladesh Limited’[18], ‘Dhaka Tobacco Industries which is a sister concern of Akij corporation helps PMI with production and distribution.’ A Forbes report[19] also says, ‘Akij produces […] Philip Morris’ Marlboro as a contract manufacturer.’ This refers to the arrangement between Akij Corporation and PMI BD before the acquisition of Dhaka Tobacco Industries (DTI) by JTI. The available PMI brands are Marlboro Red, Marlboro Gold and Marlboro Advance.

There are four price tiers of cigarette brands in Bangladesh: Low, Medium, High and Premium. According to a 2018 National Board of Revenue data, the Low tier brands constitute 70.77 percent of the total cigarette market. 

Almost the entirety of cigarettes consumed in Bangladesh is locally produced, with imported cigarettes constituting less than 1 percent of the market. Similarly, cigarette exports are minimal, accounting for less than 1% of production in most years.[20]

According to a World Bank study¹⁹, Derby (BATB) was the most popular cigarette brand in 2017 with market share 28%. It is followed by Pilot (BATB), Navy (DTI), Hollywood (BATB), Star (BATB) and Sheikh (DTI). Together, the top six brands accounted for over 68% of cigarette consumption in 2017.

Bidi industry

Bidi production is more fragmented than cigarette manufacturing. The top four firms account for a little less than 50% of the market. Most of the bidi factories in operation are household-based. The number of bidi factories in Bangladesh as stated in various studies, ranges from 117 to 9,624.¹⁹ The brand ‘Akiz Bidi’ is the most popular among other bidi brands.

Wages for bidi workers are very low, most bidi workers live in poverty, and many children are also involved as unpaid assistants in household bidi production. Working in the bidi factories stands fourth among the government-listed 38 hazardous jobs prohibited for children.¹⁹

In 2019, the National Board of Revenue (NBR) released a report titled ‘The Revenue and Employment Outcome of Biri Taxation in Bangladesh’. The report stated that in 2012-13, the tax-paid sale of bidi was 51.19 billion sticks which decreased by 26.7 percent to 37.53 billion in 2016-17. A total of 32,180 persons worked in 198 functional bidi factories in Bangladesh; 94 percent of whom are employed on a temporary daily labor basis. According to the report, ‘bidi factories contract out bidi rolling and tobacco dust filling to contractors who them commission the work to their family laborers; this segment totaled 134,927 workers...An overwhelming majority (75%) of these contract workers were women and children.’[21]

Smokeless Tobacco Industry

Like the bidi industry, the production of smokeless tobacco (jarda and gul) in Bangladesh is quite fragmented and unmonitored. According to Tobacco Industry Watch BD, there are currently more than 400 SLT brands in Bangladesh[22]. Hakimpuri Zarda and Eagle gul are the most popular brands of SLT products.

Emerging Tobacco Products

Global Adult Tobacco Survey (GATS) 2017 survey reveals that at least 0.20 percent of adult population (15 y/o and above) use e-cigarettes on a regular basis in Bangladesh. Since GATS is conducted on the adult population (15 y/o and above) and excludes children and adolescents, the use of such items among children, particularly school-goers, is still undocumented.

Tobacco Cultivation in Bangladesh

The northern districts of Rangpur, Lalmonirhat, Kushtia and also the hilly tracts of Chattogram are considered to be hotspots for tobacco cultivation. In 2014, tobacco was cultivated on 108,000 hectares of land whereas the number was 70,000 hectares in 2013, showing a 38,000-hectares jump.[23] Reports on tobacco farming in daily newspapers suggest that tobacco farming is increasing in the areas as the farmers are getting different facilities from the companies. A journalist's investigation on five districts of Lalmonirhat in 2019 found out that ‘to encourage the farmers to cultivate tobacco on fresh lands in five upazilas, especially Aditmari upazila, they (farmers) have been given seeds free of cost and assured of purchase of their produce from their doors at fair prices by the tobacco companies.’[24]

A World Bank study reports, ‘tobacco leaf production increased from about 40,000 tons in 2000-2009 to about 80-90 thousand tons in 2011-2018... While the recent rise in tobacco growing in Bangladesh was likely to have increased the number of tobacco farmers in the country, the overall share of agricultural employment in tobacco growing is likely to be less than 0.5%.’ The report also states, ‘In 2017, the government imposed 25% export duty on tobacco aiming to discourage their production and consumption as the items are injurious to health; however, in 2018 this export duty was reduced to 0%.’¹⁹

There have been widespread reports that government subsidized fertilizers are actually being used to cultivate tobacco in rural areas[25].

The existing tobacco control law (amended 2013) addresses the issue of tobacco cultivation, ’12. DISCOURAGING    THE    PRODUCTION    AND    USAGE    OF    TOBACCO   AND   RELATED   CROPS   - For   motivating   in   gradually   discouraging the production and use of tobacco products and for the purpose of   discouraging   the   establishment   of   tobacco   products   industry, and   production and  cultivation  of  tobacco  crops  the  Government  will  formulate  necessary policy.’ However, as of May 2020, no such policy has been formulated. 

Illicit Trade of Tobacco Products in Bangladesh

According to the World Bank report titled ‘Confronting Illicit Tobacco Trade: A Global Review of Country Experiences’, ‘Bangladesh’s illicit cigarette trade incidence is roughly estimated at about 2 percent of total cigarettes sold in the market, as compared with 50 percent for Latvia, 38 percent for Pakistan, 36 percent for Malaysia and 17 percent for India....The estimated revenue loss from illicit trade is about Taka 8 billion ($100 million), which is 4 percent of total tobacco revenues.’[26]

The report also states that ‘In the case of biris, smuggling and counterfeit issues are believed to be negligible. Despite Bangladesh’s large border with India, industry experts judge that biri smuggling from India is not a major issue for two reasons. First, biri production in Bangladesh is very cheap. Secondly, the biri leaf used in India, known as tendu leaf, is generally not preferred by Bangladeshi consumers.’¹⁷ 

However, the World Bank findings contradict with tobacco industry’s claim that if tobacco taxes are increased, it would lead to an influx of smuggled cigarettes into the country. According to The GATS Atlas data, the average cost of 20 manufactured cigarettes among current smokers, based on PPP (purchasing power parity), is much lower in Bangladesh than in other countries.[27] In Bangladesh, the cost stands at USD 1.2 where the cost is USD 2.9 in India, thus invalidating the claim of illicit tobacco trade.