Dilemma regarding ‘death sticks’

Just came across one report called Economics of Tobacco and Tobacco Taxation in India (a Bloomberg initiative) which claims that almost two crores lives could be saved in India over the next few decades if the taxes are raised on bidis and cigarettes. It also says that internationally 65-80 percent of cigarette’s retail price could be attributed to taxes which are very low in India i.e. 9 percent for bidis and 38 percent for cigarettes.
Basic theme of the report is that higher prices will discourage youth from taking up smoking and force current smokers to quit. Report also goes on to mention some figures as to how the revenue of the government will increase manifold and thousands of lives will be saved after doing this: 10% rise in the price of tobacco is expected to reduce bidi consumption by 9.1% and cigarette by 2.6% and if India increases its tax rate on bidis from Rs 14 to Rs 98 per 1000 sticks (from 9% to 40% of retail price) and on cigarettes from Rs 659 to Rs 3691 per 1000 sticks (from 38% to 78% of retail price), 18.9 million lives will be saved.
But I have my own reservations about the claims made by the report. One of them being the price elasticity mentioned in it as I doubt whether a 10% increase will have any impact on cigarette sales as mentioned (I am not considering the bidi sales as non-cigarette tobacco products accounting for 85% of the tobacco consumption contributes only 15% of the total tobacco taxes) as someone who has been smoking for a while is not likely to quit smoking just because the price has increased. Even if we assume that this data on elasticity is true, the increase in price that is suggested in the report is practically impossible to implement overnight. One worse scenario that is possible is something which happened in Canada when similar price increase was undertaken. Suddenly there was a boom in the contraband cigarettes market there. Illegal sale of cigarettes not only led to the loss of revenue for the government in the form of taxes, it also made it possible for minors to buy cigarettes easily and cheap in the black market. Occurrences of cigarette butts being found near schools and playgrounds increased drastically. So obviously illogical increase in the retail price of cigarettes could lead to the same in India as well and at the same time minor increase in the price just for the sake of it would not impact consumption. It will increase revenue for sure but may not serve the actual purpose i.e. decrease in consumption.

Zandu balm leads to pain for the makers of Dabangg

Recent controversy surrounding the movie Dabangg has provided much needed fodder to the channels which were almost on the verge of extinction due to dearth of any public disputes. Movie, that has created history at the box office by minting a whopping Rs 14.40 crore on the first day it was released in more than 2,000 theatres, has been issued notice by Emami for using the words ‘Zandu balm’ in one of its songs.
What is puzzling me is the fact that there was an article in the newspaper that mentioned an agreement between the company and the producers regarding the usage of these terms in the song, despite this the company has threatened to take producers to the court. In fact, there was also some news of launching an ad featuring the song along with the product. I am not sure as to who is at fault but I don’t see any reason why Emami is making an issue out of it. Zandu balm which enjoys monthly sales of about 20 crores has made nearly 25 crores within a month after the song was released! Shopkeepers interviewed in certain rural areas have actually experienced increase in sales and even the officials of the company have attributed success of the product to the song. Then why all this fuss, it is hard to imagine.

Ice-cream to boost libido

trendwatching.com recently came out with an issue called ‘Maturialism’ focusing on the new-age consumer and how he doesn’t shy away from trying out products that would have scared his grand parents off to death! One thing that drew my attention the most was the UK ice cream brand The Icecreamists which has recently come out with an x-rated flavor: The Sex Pistol! Just the mention of the‘s’ word for an ice cream brand would lead one to conclude that it is illogical and absurd, but that is not all. One of the ingredients used for making this ice cream is a tree called ginkgo biloba known more for its aphrodisiac qualities! And this particular flavor is considered to be so effective that sales were restricted to one per person during its launch! And you thought Viagra had no alternative.
I just wonder what would happen if this brand was to be launched in India? We would see a new flavor sex pistol just below kesar pista! One more reason for the so-called protectors of Indian traditions to create havoc, news channels creating a special one hour programme every two hours, may be a debate in a parliament as to whether consumption of ice cream should be banned in the public places and what not. Whereas I completely agree that product like this should be consumed at home strictly but a bigger question is whether we are ready to accept it? Not at this stage I guess.

Food for thought

I have always loved stumbling upon new sites while surfing the internet. If you do that consistently chances are that you would come across certain sites where every article you read would be weirder than the last one that you would have read. So I thought of sharing some news with my readers (i.e. I, me and myself), as the last time there was a hit on my blog was when I uploaded my previous post!
I was just checking out some product launches that have hit the headlines recently when I came across some of the weirdest products one could imagine. One of them being The Jesus toaster where the toaster toasts the image of Jesus Christ on bread! I don’t understand the kind of people the product is targeting: people who believe in god or people who are atheist. As a believer in god I would never like to eat anything with a Ganesha or a Krishna print on it, so people who believe in god are out. And someone who doesn’t believe in god will never spend money on anything like it, so even they are out. The toaster that is being sold at almost $40 has received some good reviews from the general public with many believing it to be a brilliant innovation but how that initial feedback is converted into sales remains to be seen.