English/Policy

The Tobacco Lobby Contributes to Renzi, and Then Gets a Tax Discount | Il Fatto Quotidiano [UPDATE]

100,000 euro by British American Tobacco, and the expected increase in excises disappears.

fatto_lobby_tabacco_bat_pmi

Matteo Renzi’s Open Foundation has changed its face. It is no longer the foundation that bets on the rise of a politician, but it is now the personal coffer of the Prime Minister. Among other things, 2014 was a fundraising record year: 1,2 million euros, 50% more than the 800,000 euro of 2013 and the exact double of the 600,000 euros made in 2012. Why it is economically worth supporting it? One answer comes from the list of donors that yesterday Mr. Alberto Bianchi [a lawyer extremely close to Mr. Renz, NdT], president and treasurer of the foundation, has partially disclosed. Donors that are radically different from the ones of the past.

Past donors like small business owners, SMEs and Renzi’s loyalists, have been replaced by medium and large companies, which fortunes often depend on the decisions of the government headed by Renzi. One case among all the others is British American Tobacco (BAT), which donated 100,000 euro to the Open Foundation. It is a story of time and details. The payment, as shown by financial statements, was made after July 1, 2014. A few weeks earlier, the prime minister had met with Nicandro Durante, BAT’s big boss. Reason: expecting an increase in excise duties announced by the government with a decree reorganizing the whole tobacco excise system, down by two years [due to a 1% VAT increasea and to the economic crisis, which brought a growth of tobacco smuggling, NdT] but that was showing signs of recovery. Then, why raising taxes?

SINCE THE BEGINNING OF JULY all tobacco lobbies were in a turmoil. And they were doing their job. The announced increase met the needs of the market leader, Philip Morris. The American giant has long pushed for a general measure penalizing low-end brands (such as BAT’s Lucky Strike and Pall Mall), to the advantage of those high-end, as its Marlboro, raising the fixed component of the excise duty (that is the same for all and therefore penalizes more who sells at lower prices). PMI put on the plate the 600 million euros investment for a new factory in Crespellano, Bologna (then opened and proudly welcomed by Mr. Renzi last October).

Already in October 2013, in a Government’s provision draft was introducing a 40 cents increase on cheaper packages, but the draft did not get through the approval of the Board of Ministries. In “Tobacco” Legislative Decree drafts that were circulating in late June, however, a robust increase [of the fixed component of the excise duty] reappeared: up to 30%.

 

So, the meeting between the CEO of BAT – which holds a 18% Italian market share – and the prime minister is explained. Times were tight because the text had to be introduced to the Board of Ministers on 10 July. But then, it did not happen, and for two times. It entered the pre-Board meeting and exited, twice. On 31 July it was finally approved. But the increase was significantly reduced: the fixed component of the excise duty only oes from 7.5 to 10%, far from the 30% increase requested by Philip Morris. But, PMI obtained a 50% discount on new generation cigarettes [the so called Reduced Risk Products, using a device calle iQOS, NdT] to be produced in Bologna. In October (a few days before the opening of the Crespellano factory, when the text was before the Parliamentary Committees), BAT – which ten years ago bought the Italian Tobacco Body for a 2,3 billion euros price – announced an investment plan of one billion in five years [which never happened, as of July 2015, NdT]. Translated: everything ended almost painless.

Source: Il Fatto Quotidiano

UPDATE

ANSA_Big Tobacco contribution: M5S, Renzi to report on Open Foundation funding

As well as Vedrò Foundation, connected to the past Prime Minister Enrico Letta, was funded by gambling lobbies, then rewarded with the famous 2.5 billion amnesty in the IMU Decree, so today we found out that even the Open Foundation of the current Prime Minister Matteo Renzi is funded by lobbies like British American Tobacco (BAT), which in 2014 donated the Foundation 100,000 euro “. This was declared by the Five Stars Movement (M5S) Senate speaker Bruno Marton that, in a note, asked the Prime Minister to report on this in the Senate.

According to a report published today by the newspaper Il Fatto Quotidiano, last July, when the reorganization of excises on tobacco was ongoing, the CEO of the big tobacco met Renzi and subsequently – according to Il Fatto, as Marton noted –  the game ended with BAT obtaining a taxation on low-end cigarette brands lower than expected, thus avoiding a big loss of money. Considering the news emerged from this investigation – Marton continues -, we are asking: is it normal that a Prime Minister allows its foundation to be funded by large economic groups, directly interested on the Government’s policy choices? These are legitimate questions that, if unanswered, could cast worrying shadows on Government’s action. For this reasons, we ask premier Renzi to report to the Parliament and to reassure Italians that decisions at Palazzo Chigi are only taken in the interest of the citizens, and not in favor of lobbies that are feeding its own Foundation” concludes the Five Stars’ leader at the Senate.

The Senate’s majority, driven by PM’s Democratic Party rejected the request to debate the issue.

2 thoughts on “The Tobacco Lobby Contributes to Renzi, and Then Gets a Tax Discount | Il Fatto Quotidiano [UPDATE]

  1. Pingback: Chi sostiene La Scala di Milano? Japan Tobacco | ATTUALITA' DAL MONDO DEL FUMO ELETTRONICO

  2. Pingback: Italy’s Big Tobacco lobbying war, and the favours to Philip Morris | La Notizia |

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