The reputation of Switzerland is at stake

mardi, 31.05.2016

SICPA. Interview with the Group’s Director of Corporate Affairs Christine Macqueen. On the very sensitive topic of tobacco traceability*.

Interview: François Schaller*

Christine Macqueen: The head of corporate affairs and communications of the security technology group based in Lausanne-Prilly comments on the political decisions that will be taken in Switzerland and in Europe for cigarette traceability. A topic which is particularly sensitive for the industry.

Based in Lausanne-Prilly since 1927, the SICPA Group does business globally and is known for its security inks which protect against counterfeiting most of the world’s banknotes, passports and other sensitive documents. Every year SICPA also assures the authentication and secure and independent traceability of some 80 billion consumer products, such as wine, beer, soft drinks and tobacco products. The EU and Switzerland are currently finalizing regulations on the traceability of these products. The Group has technological solutions to offer. The tobacco manufacturers are promoting their own system. Interview with Christine Macqueen, Corporate Affairs Director for the Group.

The question of traceability for consumer products, tobacco in particular, has been much in the news during recent weeks. Where has the parliamentary process in Europe and Switzerland got to?

The Swiss and European Parliaments are currently deciding the future regulation of tobacco products, in particular in relation to illicit trade. Food traceability has been of particular interest to citizens because of the scandals of recent years, but the need for traceability of tobacco products is more complex. Public bodies see tobacco not just as a fiscal or security problem but also as a problem for public health.

Because the black market for cigarettes has become huge with the continual increase of tobacco prices for consumers.

The World Health Organisation considers than 10-12% of the 6000 billion cigarettes sold every year in the world are illicitly traded. According to the WHO and the anti-tobacco associations, the cigarettes which feed this parallel trade are made and sold by the major tobacco manufacturers themselves.

Illicit trade is not linked to counterfeiting?

For most products, yes. For tobacco, for the most part, no. This is why the WHO sees it as indispensable to control production and the tobacco manufacturers’ supply chains. The implementation of independent traceability for tobacco products is one of the key points in the WHO treaty, the Framework Convention on Tobacco Control (FCTC) which came into force in 2005 and has been ratified by 180 states, as well as its Protocol ‘to eliminate the illicit trade in tobacco products’ adopted in 2012.

The tobacco manufacturers question the protocol.

It has been signed by 54 states and ratified by 17. The European Parliament will take a decision on the subject of EU ratification on 7 June. The second European Directive on Tobacco Products came into force last week and has increased attention on these problems. The Swiss Parliament will decide on the draft law on Tobacco Products on 9 June.

There is much at stake for SICPA.

We are very conscious of the stakes as far as illicit trade is concerned and we are aligned with WHO recommendations in our range of solutions. For the last 10 years SICPA has been the only company which has successfully deployed independent traceability systems on an industrial scale. Perhaps this is the reason why it seems we are much focused on the topic.

The Swiss political process seems to have fallen behind that of the EU. Is it possible that Switzerland could go in a different direction than the EU, or in an opposite direction?

In the case of Switzerland it seems to us that it is important that the future law on Tobacco Products follows the European and international trend, being a legal basis for the introduction of independent traceability – in the interest of public health, industry and consumers. The international reputation of Switzerland, which has its own illicit trade issues, is directly concerned. Although Switzerland has signed the FCTC, it has still not ratified it and seems to be behind in regulation. Notably compared with its European neighbours. The draft Swiss law on Tobacco Products, when compared with other European countries, will be one of the most liberal. Switzerland, the home of the international HQs of two tobacco companies and host for the WHO should be setting an example.

How exactly do your traceability solutions for the tobacco industry work?

Our Track & Trace systems have modules which mark, trace and authenticate: they provide key information to government authorities, at point of sale as well as to the consumer. These different aspects are complementary and are necessary to fight the illicit tobacco trade effectively as recommended by international bodies such as the WHO.

There is more than the WHO and health. The fiscal stakes are high.

An irremovable fiscal mark is affixed to each pack of cigarettes; the mark combines visible and invisible security features (for authentication) and an individual and unique code (for traceability) which is activated on the production line. The code is applied, the data is collected and registered in a central database which is available to the government authorities – all under the control of the State and not that of the producers, including production data: name of the product, taxation level, place and date of manufacture, etc.

We have very effective solutions which provide a combination of both material and digital security, to protect against fraud. Purely digital systems are vulnerable to counterfeiting: non secure printed codes can be copied. Material-based security is of course one of SICPA’s areas of particular expertise – we have been supplying security inks and solutions to states for more than 50 years.

The industry does not want independent solutions of this type. Why?

Article 8 of the WHO Protocol is however very clear: traceability solutions must be totally independent of the tobacco manufacturers, who may under no circumstances be responsible for developing or implementing the traceability solutions for their products. Nor can they be, a rather logical point, both ‘controller’ and ‘controller’. This no doubt explains their nervousness as more states ratify the Protocol.

Your technology is not in doubt.

The effectiveness of our technology has been fully proven. We have faced resistance by some manufacturers, even disinformation campaigns, since our first system was deployed in 2007, but all our government contracts have been renewed or extended to other products. Today we have programmes in the US, Canada, Turkey, Morocco, Brazil, In Malaysia and in many other countries. The effectiveness of our solutions and their impact on illicit trade and fiscal revenues has been praised by international organisations such as the WHO and UNICRI (United Nations Interregional Crime and Justice Research Institute).

Do you see other new applications for your solutions?

There is rising demand for authentication and secure traceability solutions – on the part of governments and also industries, as well as consumers themselves who are more and more careful and concerned about what they consume. Illicit trade and counterfeiting translate into a loss of fiscal revenue for states, a reduction in turnover for companies, and also often public health risks. We are at a turning point with the impending implementation of international treaties which encourage the adoption of secure traceability solutions which are interoperable and cross-border. These systems can be applied to all products affected by illicit trafficking: food products, spare parts or pharmaceuticals. These technological and legal developments are aimed at protecting consumers, who have to be our top priority.

* English translation of an interview published in French in «L’Agefi» on Monday 30th May 2016.


 
 

 


...