During the last few years the Regie was clear about its will to further expand tobacco industry. The result was manufacturing local brands, and later some international brands at the Regie’s plants, covering the needs of local and nearby markets. Hence, its agreement with Imperial Tobacco allowing the production of all of the company’s brands, except for Davidoff that would be later manufactured under the supervision of the company’s international experts.
The agreement is a first step toward further cooperation with other international companies, according to the Regie’s member of the Administration Committee Mr. Georges Hobeika. The Regie had renewed its plants, with a cost of USD 35,000,000, and is now ready to accomplish such mission, making it a regional tobacco manufacturer.
In the Lebanese market, the brands of Imperial Tobacco occupy 15% of sales, which means 10,000 boxes yearly. The agreement, within which Imperial Tobacco provides raw materials, allows the Regie to manufacture as same the imported quantity. The revenue would be the additional profits of production cost, estimated by 20% of importation and sales.
However, being a public establishment engaged in supporting and producing Lebanese tobacco, is it allowed to the Regie to manufacture foreign brands? The Regie’s General Manager and Chairman Mr. Nassif Seklaoui clarifies: “Tobacco monopoly regulations that were set time ago are still applicable. Thus, the monopoly’s priority is to increase national income, allowing the support and purchase of Lebanese tobacco at favorable rates. In addition to its farming and trade, one of the ways enhancing national income is tobacco manufacturing; an exclusive right of the Regie. Regarding manufacturing’s equipment and procedures, the Regie had achieved notable progress, especially after being granted the ISO certification. Thus, international tobacco companies, such as Imperial Tobacco, the manufacturer of Gauloises and Gitanes among others, expressed their interest in manufacturing their brands in our plants and through our teams. Not to mention that the manufacturing process is done within the monopoly regulations, i.e. the Regie, increasing our profits and allowing us to further support Lebanese tobacco. Doubtlessly, manufacturing foreign, as well as national, brands is exclusively a Regie’s right.”
During the last five years the Regie provided national reserve with 75.5% of tobacco sector revenues, approximately USD 2,666,000,000. These numbers are the result of progressive work toward a sustainable tobacco sector, through pioneer and practical steps aiming to achieve “distinction, while the nation is about to collapse”. According to Seklaoui, the Regie was able to achieve two ambitions; quality system and social responsibility”. He clarifies that his vision of quality is to “lead the Regie toward distinction among other public establishments and enhance its presence in public life through supporting activities on the economic, social, and environmental level.”
However, the money that the Regie uses in social responsibility projects belongs to the national reserve, so does it have the right to spend it in such way? Does the CNSS or the EdL have the right to do the same? Seklaoui replies that since it had become one of the leading public establishments in Lebanon, providing 7.5% of the national reserve’s income, and considering its developmental role on the economic level, the Regie launched in 2016 a sustainable development plan on the economic, social, and environmental level, an achievement no other public establishment has yet reached. Such orientation is not optional anymore for the economic sector; companies around the world are adopting it; positively affecting quality and development, waste reducing, and illegal trade fighting.” Moreover, Seklaoui points that “the Regie is the first public establishment in Lebanon to obtain ISO 9001:2015 certification; an accomplishment that would be noticed through initiatives and agreements with international tobacco companies.”
In order to execute the strategy that was approved by the MoF, Seklaoui says that the Regie “had devoted no more than 2‰ of its budget to support rural communities engaged in tobacco farming along the North, South, and Bekaa. The process partly finances projects of local municipalities, such as water collecting ponds, agricultural roads, water canals, public libraries, etc… These projects are listed on our annual budget that is subject to the approval of the MoF.”
As per the right to donate some of the Regie’s money, the Ministry of Justice’s committee of legislation and consultation grants the monopoly system the right to “donate to charities within the frame of aids. Thus, the Regie is acting accordingly following the approval of the Minister of Finance and the government delegate’s recommendation. Therefore, the establishment’s legal condition differs from that of the CNSS’s or the EdL’s.
The article originally appeared in Annahar newspaper