Iran’s sanction-free tobacco sector benefitting others: Expert
Foreign companies who avoid investing in Iran citing threats of American sanctions continue to inject money into the country's lucrative tobacco sector as it remains exempt from the bans, says an expert.
Behzad Khosravi Adinehvand told the IRIB News on Sunday that Japanese and South Korean companies had remained active in Iran’s tobacco sector while they keep refraining from helping Iran cope with sanctions that have affected its vital industries like pharmaceuticals and the automotives.
He said companies from Japan and South Korea have invested around $150 million in a year in cigarette production and tobacco processing in Iran under licenses issued by American and British companies .
“No one is there to ask officials from Japan and South Korea why you are able to invest in the cigarette sector ... but avoid doing the same in the automotive sector and in the pharmaceuticals?” said Adinehvand.
The expert criticized the duplicity in the way the American sanctions are enforced, saying the lucrative tobacco industry in Iran has been categorized as part of the food sector so that foreigners can keep profiteering from a huge demand that exist for international brands in the country.
He said Winston cigarettes had an annual share of around $3 billion in the Iranian market, while Marlboro pockets nearly $1 billion, adding that other subsidiary brands and companies from Japan and South Korea sell another $3 billion worth of cigarettes and tobacco products inside Iran.
Adinehvand said demand for tobacco in Iran had soared five-fold over the post 10 years to reach 10,000 tons a year, a major incentive for foreign companies to increase investment in the country.
He said Iran’s production of cigarettes could only respond to less than a third of the domestic demand which is around 100 billion cigarettes a year, or five billion packs of 20.
The expert said the Iranian government had a meager share of the revenues generated in the $4.2-billion cigarette industry in the country although studies suggest that national health agencies spend more than $2.5 billion annually on treatment of diseases caused by smoking.
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