Uruguay’s President, Who Won a Fight With Big Tobacco, Is Now Targeting Alcohol

  • Uruguay plans to sell state alcohol producer by 2020
  • Vazquez to decree uniform plain packaging for tobacco products

Uruguay’s President Tabare Vazquez is taking his crusade against cigarettes to alcohol, while doubling down on tobacco regulation after a court threw out a dispute with Philip Morris.

The government will issue a decree next week requiring all tobacco producers use the same plain wrapper, becoming the seventh nation to do so, the 77-year-old oncologist said in an interview in his Montevideo office overlooking the Rio de la Plata on Thursday. Lawmakers could pass government-sponsored legislation to increase control over Uruguay’s loosely regulated alcohol industry as early as this year, he said.

Tabare Vazquez

Photographer: Erica Canepa/Bloomberg

“We don’t want to implement prohibition like the one that failed in the U.S. We want a holistic law” that includes prevention measures, Vazquez said. “We got to the point where people on the boardwalk where selling alcohol from the back of their cars.”

The nation of 3.4 million people successfully fought units of Philip Morris International Inc., which sought damages for regulations Vazquez imposed on the tobacco industry during his first term as president from 2005 to 2010. While Uruguay is pushing to more tightly regulate food, liquor and cigarettes, Vazquez has overseen the implementation of a controversial law legalizing cannabis in all its forms. Authorized pharmacies began selling recreational pot to registered consumers this year.

The World Bank’s international arbitration court dismissed the case brought by the seller of Marlboros outside the U.S. last year and ordered the company to pay Uruguay’s legal costs. The decision was seen as setting a precedent for governments to set public health policies without fear of being sued.

Uruguay has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg, founder of Bloomberg L.P., which owns Bloomberg News.

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In the last decade, tobacco use fell 14 percentage points to about 22 percent in 2016, according to a government study. The government has raised taxes multiple times on tobacco products and collected about $200 million in levies on such goods this year through September.

Sales of tobacco products were about 1 percent of gross domestic product last year. As of 2017, The U.K., Ireland, Australia, New Zealand, Norway and France were the only nations to require plain packaging. 

In a nod to Uruguay’s public health credentials, the World Health Organization hosted a noncommunicable disease summit this week in Montevideo. Noncommunicable diseases are chronic illnesses such as cancer, diabetes, and heart disease that can’t be passed from person to person.

Health, Rights First

Uruguay plans to sell the consumer alcohol unit of state-owned refiner Ancap before 2020, Vazquez said. The government is also in talks with alcoholic beverage producers and retailers to head off potential legal disputes related to alcohol regulation.

‘We are going to try to not get into that situation,” Vazquez said. “But if that happens, for us human rights and the right to life and health are above any trade agreement.”

The government’s plan to require key nutritional labeling on the front of food packages has encountered some resistance from local industry, said Vazquez, who didn’t rule out a tax on sugary drinks.

Vazquez is trying to forge a regional consensus for preventing and treating noncommunicable diseases among the member countries of the Mercosur trade bloc ahead of the United Nation’s General Assembly next year. The presidents of Chile and Paraguay pledged their support for his initiative during the WHO summit this week, Vazquez said. He will speak to Argentina’s Mauricio Macri and Brazil’s Michel Temer later.

‘‘All of these measures we are thinking about have very little or almost no fiscal impact because they are mainly educational and informational measures,” Vazquez said. “They don’t’ require large economic investments.’’

— With assistance by Jennifer Kaplan, and Sam Chambers

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