Skatteudvalget 2020-21
SAU Alm.del Bilag 49
Offentligt
2281252_0001.png
November 12, 2020
Open meeting of the Tax Committee with the tobacco industry
Opening Statement from JTI, delivered by George Metsis:
Mr chairman, members of the parliament,
I would like to thank you for the invitation to this meeting and look forward to an
open and honest discussion.
My name is George Metsis and I am General Manager for JTI Denmark since February
this year. Over the last 15 years I have worked with JTI in various positions, in 6
different countries in Europe and North America.
JTI, which stands for Japan Tobacco International, was formed in 1999 when the
former Japanese tobacco monopoly started expanding internationally. Today, JTI has
operations in over 70 countries and employs 50.000 people. Our major shareholder
is still the Japanese Government. We have been operating in Denmark since 2005 and
as a responsible, global company, our track record with the Danish authorities has
been impeccable.
As the time I have available is short, I will only touch upon a few elements that I
believe are important.
 SAU, Alm.del - 2020-21 - Bilag 49: Materiale fra møde med tobaksbranchen den 12. november 2020
The Excise tax increase by 47% in April 2020, following 6 years with no excise increase,
created a very exceptional situation. Most European markets increase excise tax
annually by reasonable amounts. Large tax shocks are rare and discouraged since they
disrupt the legitimate market and often lead to increases in non-domestic duty paid
products as consumers look for low priced products elsewhere.
Prior to this ear s e ise hike, a prote tio rule
was established, allowing
manufacturers to increase their purchases of tobacco stamps only by 5% versus
regular purchases. Obviously, JTI adhered to that rule. However, this also means the
market will continue to have stock at the old prices after April 1st. Indeed, products
from all manufacturers, that were released for consumption before April 1st,
remained on sale after that date.
JTI did that tra spare tl a d o ti ued selli g its old pri e i e tor , that as
ahead of April 1st released for o su ptio
, as the law required. Other industry
players opted for the alternative and non-ordinary route of stocking up the trade with
old pri es i e tory
ahead of April 1st. This is why,
e ludi g JTI s sales, igarettes
sales in March 2020 from the manufacturers to the trade, were equivalent to 4
months of sales.
JTI s ra ds ere graduall sold out a d the e d of Jul
almost all
our products were being sold at new prices. JTI was certainly not the last
manufacturer having products in the market at old prices.
Both pra ti es ere i JTI s ie o plia t ith the regulatio s a d had
exactly the
sa e o
er ial effe t, a el produ ts ith old pri es to e graduall phased out
over a period of 3 to 4 months, a timeframe, which is reasonable. And obviously, if
we accept that at least one of the two practices is legal, given that both have exactly
the same commercial outcome, we cannot reasonably argue that one or more
manufacturers would have deliberately selected an illegal route to achieve that same
commercial outcome.
 SAU, Alm.del - 2020-21 - Bilag 49: Materiale fra møde med tobaksbranchen den 12. november 2020
JTI supports the 7 initiatives proposed by the Government including strengthened
control efforts to prevent sales to minors, increased fines in case of non-compliant
products and establishing a cut-off sales date for products with old tax stamps. The
latter is a practice that exists in other EU countries and ensures level playing field and
smooth transition. I would also like to highlight again that smaller, but more frequent
excise increases give predictability to all parties and ensure smoothest transition and
perhaps a bit longer, but much safer and effective path towards what the Government
wants to achieve. This, together with a suggestion for certain very important
inconsistencies of the excise tax law to be addressed, are my main supplementing
ideas to the Go er e t s list.
With that said, I d o e agai like to tha k the Chairman
and the Committee for the
invitation, and I hope we can have a frank and constructive discussion.