Tobacco companies have noticed the differences in regulatory environment. Tobacco companies have found Calisto to be least restrictive for their product; less taxes, no labels and no anti-smoking advertising are all lower regulatory burdens for tobacco producers. Tobacco companies targeting Calisto is a form of regulatory arbitrage. Regulatory capture theory does not apply as there was no mention of tobacco companies or industry employees participating as tobacco regulators. The use of pricing mechanism did not curb tobacco usage. |
