Author: Staff Writer

Japan’s 2013 leaf tobacco crop will be grown on 9,245 ha, down by 134 ha or 1.4 per cent on that of this year.

The flue-cured production area will be 5,926 ha, down by 51 ha or 0.8 per cent; the Burley production area will be 3,291 ha, down by 82 ha or 2.4 per cent; and the domestic variety production area will be unchanged at 28 ha.

The Leaf Tobacco Deliberative Council announced yesterday its annual determinations for local tobacco cultivation areas and grower prices for 2013 in response to a proposal submitted by Japan Tobacco Inc. earlier in the day.

The council comprises no more than 11 members appointed by JT with the approval of the Minister of Finance from among representatives of leaf tobacco growers and academics.

JT said the council was in general agreement with its proposal.

The leaf tobacco grower price will be set at an average for all leaf types of ¥1,906.47 per kg, an increase of 0.84 per cent on that of the previous year.

Tobacco smoking is expected to be banned in all restaurants and other public facilities in Seoul by 2020 as the city seeks to make the metropolis ‘smoke-free’, according to a story in The Korea Times.

Seoulis currently playing host to the fifth meeting of the parties to the World Tobacco Organization’s Framework Convention on Tobacco Control.

According to a revised law that is due to become effective on December 8, tobacco smoking will be banned at about 80,000 restaurants, cafés and bars of more than 150 square meters in size. And the ban will be applied to smaller eateries in 2015.

The city will designate an additional 5,517 bus stops as no-smoking areas next year, and 1,305 areas around schools in 2014.

Along with these measures, the city will urge the central government to raise cigarette prices, which it believes is one of the most effective ways of curbing the smoking rate.

Reynolds American Inc. says that the Reynolds American Foundation will donate $140,000 to the American Red Cross to help provide relief to victims of Hurricane Sandy, which hit the east coast of theUS at the end of last month.

‘Recovery efforts continue in the areas affected by the storm and all seven chapters of the Heart of Carolina Region of the Red Cross in North Carolina have been busy helping deploy more volunteers to the impacted areas, as well as asking for financial support for the relief effort,’ RAI said in a note posted on its website.

“Our thoughts are with the folks who are having to endure such hardships as a result of the devastating storm,” said John S. (Tripp) Wilson, president of the foundation. “Our hope is that this donation will support continued relief efforts for the people and communities affected by Hurricane Sandy.”

The international (excluding China) tobacco industry cigarette volume forecast through 2015 ranges from stable to a continued modest annual decline of up to 1.3 per cent, according to Philip Morris International’s chairman and CEO, Louis Camilleri.

Addressing investors yesterday at the Morgan Stanley Global Consumer & Retail Conference inNew   York, Camilleri said that PMI expected further growth in non-OECD markets, driven mainly by favorable demographics, to be offset by a continued long-term decline in OECD markets.

IncludingChina, PMI expects the international cigarette market to be stable to increasing by up to 1.1 per cent a year.

PMI expects to meet its mid- to long-term annual organic volume growth target of one per cent for the full-year 2012

Meanwhile, Camilleri said that PMI had completed an exploratory clinical study for the first of its three ‘Next Generation Product (NGPs) platforms’ and planned to initiate a further eight next year.

Ground-breaking for PMI’s first NGP manufacturing facility inEuropewas planned to take place in the middle of next year, he added.

PMI plans to invest heavily during the next three years to establish an initial annual NGP capacity of about 30 billion units.

Commercialization of the NGPs is planned for 2016-2017.

EU health commissioner-designate Dr. Tonio Borg, has said that his top priority as health commissioner would be to forward a revised version of the EU’s tobacco products directive for inter-service consultation in January 2013, according to a story in the Malta Star, relayed by the TMA.

Borg was speaking yesterday before the European Parliament at a hearing for his candidature

The much-delayed commission proposals for the revision of the tobacco directive have been delayed once more due to the resignation of former EU health commissioner, John Dalli.

Borg reportedly said that tobacco products “should look like tobacco products,” and that a “high-level of consumer protection” was expected of the EU with regards to policing such items.

Borg’s candidature is scheduled for a vote by the full EU parliament at its November 19-22 plenary meeting.

Bulgaria’s National Association of Tobacco Growers has threatened to declare a ‘zero year’ if buying companies don’t increase tobacco prices, according to a Novinite story relayed by the TMA.

A zero year is presumably a year when no tobacco is produced.

Growers in Andhra  Pradesh, India, employed such a tactic about 10 years ago when they declared a ‘crop holiday’. The move, also prompted by disappointing prices, met with some success even though the Andhra growers produce flue-cured, a type that is normally widely available in big quantities.

The disappearance ofBulgaria’s oriental tobacco would be a different matter given that some observers believe oriental is heading towards being in short supply.

Tobacco producers are suspicious about the reasons for the delay in the country’s leaf purchasing season and the fact that there has been little variation in purchase prices, which are well below their expectations.

The season typically starts at the end of the summer and concludes at the end of October, but this year the sales are just beginning.

The Dominican Republic has requested the establishment of a panel under the dispute settlement procedures of the World Trade Organization to consider a challenge toAustralia’s plain packaging measures for tobacco products, according to a Marketwire report.

The country’s representatives have asked that this request be included on the agenda of the WTO Dispute Settlement Body meeting on December 17.

From December 1,Australiawill require that all tobacco products be sold in ‘plain packaging’ – packaging designed on behalf of the government to be as ugly as is possible. Packs will be a standardized olive color, without logos or other design features, and with brand and variant names in a standardized font and position.

The requirement will prevent tobacco products from using their trademarks and geographical indicators.

‘These unprecedented measures will undermine theDominican Republic’s tobacco industry, in particular its premium cigar sector,’ the report said. ‘By prescribing standardized plain packaging, the tobacco market will be driven towards commoditization, with declining prices, and increasing – rather than falling – consumption and illicit trade.

‘TheDominican RepublicsupportsAustralia’s health objectives. However, plain packaging will undermine those health objectives, failing to curb consumption, while destroying the market for Dominican producers.Australia’s plain packaging measures do not, therefore, withstand scrutiny under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Agreement on Technical Barriers to Trade (TBT).

“Tobacco has been an intrinsic part of the Dominican culture and heritage for centuries, and the tobacco sector is vital for our development,” said Luis Manuel Piantini, theDominican Republic’s ambassador to the WTO.

“Our producers have made enormous investments – including in intellectual property – to turn theDominican Republicfrom a simple tobacco leaf exporter into one of the world’s leading producers of premium cigars and the world’s largest exporter of cigars. This is a significant achievement for a small developing economy.

“Plain packaging will wipe away these achievements – our premium cigars will be dressed as discount products, which people will continue to smoke; prices will ultimately fall, affecting the livelihood of more than a hundred thousand Dominican workers and their families.

“The TRIPS and TBT agreements protect our commercial and development achievements.”

Duty-free tobacco sales were given a reprieve yesterday with the adoption of an international illicit trade protocol that did not include a ban on such sales, according to a story by Nicole Mezzasalma for DFNI.

The protocol, which does call for further scrutiny of these sales in the future, was adopted at the fifth Conference of the Parties of the World Health Organization’s Framework Convention on Tobacco Control, which is currently meeting inSeoul.

Once the protocol has been ratified by at least 40 countries, it will come into effect and become binding on countries that have ratified the convention.

Lorillard said yesterday that its board of directors had declared a three-for-one split of Lorillard common stock. The stock split, it added, would be effected through a 200 per cent stock dividend.

“Since becoming an independent publicly traded company in 2008, Lorillard has consistently grown its business and financial results, and those results have largely been reflected by a higher stock price,” said Murray S. Kessler, chairman, president and CEO.

“Today’s announcement demonstrates the board of directors’ continued confidence in the company’s brands and strategic direction, along with our ongoing commitment of creating value for Lorillard shareholders.”

Lorillard shareholders of record at the close of business on December 14 will receive two additional shares of Lorillard stock for each share then owned.

The additional shares will be distributed from January 15.

Delegates to the World Health Organization’s tobacco meeting inSeoulthis month have been warned that they risk causing harm by not taking account of the benefits offered by some cigarette alternatives.

According to a TMA report, South Korea’s JoongAng Daily has carried a column by Jeff Stier, senior fellow at the National Center for Public Policy Research in Washington, DC, who warns that delegates at the 5th Conference of the Parties (CoP5) to the WHO Framework Convention on Tobacco Control (FCTC) risk harming smokers by considering bans on less harmful alternatives to cigarettes such as e-cigarettes and smokeless tobacco. These alternative products have been shown to help smokers quit cigarette smoking.

Stier made the point that papers prepared by ‘unnamed WHO bureaucrats’ used ‘specious arguments and agenda-driven science’ that departed from the WHO’s original mission to fight tobacco-related harm across the globe and that tried to prohibit some of the least harmful forms of nicotine while letting cigarettes remain legal.

If WHO’s own analysis has determined that cigarette smoking is the most dangerous but ‘dominant form of tobacco use’, cigarette smoking should be the top target when reducing the harm from tobacco use, Stier was quoted as saying.

However, the FCTC delegates are now considering bans on lower-risk products, he said.

Stier urged FCTC parties to consider draft guidance just published by the National Institute for Health and Clinical Excellence (NICE) in theUK, which says ‘most health problems are almost entirely caused by other components in cigarettes, not by the nicotine’.

Since nicotine was addictive but was not the harmful component in tobacco, nicotine addiction should not be conflated with tobacco use, Stier said. Recognizing that difference was critical to understanding tobacco harm reduction, he added.

Meanwhile, according to another TMA report, Clive Bates, the former executive director of Action on Smoking and Health UK and founding member of the Framework Convention Alliance, has warned that the papers prepared by the FCTC Secretariat do not properly consider the role of smokeless tobacco products and electronic nicotine delivery systems as ‘credible alternatives to smoking’ with ‘potential positive health value’ in reducing the burden of smoking-related disease.

Bates, in an open letter (clivebates.com) to delegates attending the CoP5 meeting on November 12-17, said that strategies to address nicotine addiction had to take real-world behavior into account and ‘use any possible strategy to reduce the harm caused by tobacco’, because a ‘crude “quit or die”’ philosophy’ had no place in a WHO health treaty.

He wrote also that banning or over-regulating nicotine-containing products that had low risks relative to cigarettes would only result in the FCTC protecting the cigarette market and “unwittingly doing the dirty work of the cigarette industry.”

Bates says that with a ‘complete abstinence’ approach, many older, often poorer smokers will continue to smoke, and a health treaty should not be denying people addicted to nicotine access to products that reduce health risks.