Author: Staff Writer

  • On demand

    On demand

    New printing technology simplifies primary, secondary packaging processes for Top Tobacco

    By Paul Schildhouse

    The roll-your-own cigarette and pipe tobacco industry is a small but growing segment of the tobacco industry. Sales have increased over the past five years, according to the U.S. Alcohol and Tobacco Tax and Trade Bureau. Since 1987, Top Tobacco, with headquarters in Lake Waccamaw, North Carolina, USA, has manufactured roll-your-own cigarette and pipe tobacco products for individuals who prefer to make their own cigarettes or smoke a pipe instead of purchasing machine-made products.

    Because Top Tobacco offers a variety of products, package sizes and package types, the company uses variable data printing solutions that allow it to customize both primary and secondary packaging and avoid storing preprinted materials. Top Tobacco utilizes small-character continuous inkjet printers, laser printers and large-character marking systems from Videojet Technologies Inc.

    Richard Hopkins, plant engineer for Top Tobacco, says the decision to use variable data printing systems has brought a huge advantage for Top Tobacco. Hopkins estimates the ability to print variable data on demand has increased uptime compared with previously used printing methods and has allowed Top Tobacco to purchase generic films, foils and shipping cases. Information required on each product is preprinted onto the packaging, but Top Tobacco no longer needs to store preprinted packages or cases for each product brand and size.

    Advantages

    Before installing continuous inkjet printers for primary packaging, Top Tobacco used a variety of printing methods for coding on polypropylene or foil pouches, including inked embossed rollers and hot-inked embossed rollers. The rollers required line operators to remove the typeset and change it for each new product on a production line. In addition, Top Tobacco had to devote warehouse space to storing preprinted corrugated cases in a variety of sizes to ship its products to retail outlets throughout the United States.

    “Having generic packaging requires less management of preprinted packaging to ensure the right packages are used every time,” Hopkins says. “Plus, we now use considerably less floor space to store a few case sizes instead of dozens of cases with different sizes and different information.”

    Requiring fewer preprinted cases and packaging has made it easier for Top Tobacco to forecast its packaging needs, so suppliers can be placed on a set schedule to regularly deliver more materials. This enables Top Tobacco to avoid unplanned orders for packaging materials.

    Ensuring fresh product

    Prior to distribution for retail sale, Top Tobacco packages cigarette and pipe tobacco into cans, polyethylene pouches or foil pouches, with product sizes ranging from 0.35 ounces to 1 pound. The cans and pouches are then packed into cardboard shipping cases, palletized and shipped to Top Tobacco’s distribution center in Glenview, Ill.

    Cans and pouches containing Top Tobacco’s products are imprinted with production date codes using Videojet 43s inkjet printers and Videojet 3320 laser coders. With the Videojet printers, dates can be automatically changed and Top Tobacco can print production dates that include hours and minutes, which was not previously possible with the rollers.

    The cartons used for shipping the cans and pouches of tobacco are coded by Videojet 2320 large-character printers. The cartons require printing on two adjacent sides, so one side of the box is printed first, and then the box is bump-turned to allow for printing on the adjacent side. The boxes are marked with product-specific alphanumeric codes and barcodes for tracking and production dates.

    “The date codes printed on each pouch or can are referenced by our sales force to ensure customers are getting the freshest product available,” Hopkins says. “Warehouse personnel check the date codes regularly to make certain that product is properly rotated through the warehouse during distribution to keep fresh product moving out to retail outlets.”

    The barcodes on the corrugated cases enable distributors to easily keep track of products entering and leaving the distribution center. Therefore, it is essential the codes are crisp and clear so barcode scanners can read the codes the first time without requiring multiple scans, which can hinder productivity.

    Intuitive interfaces

    All the Videojet printers are used continuously during Top Tobacco’s production hours. Each production line has its own set of printers, which are preloaded with variable data coding requirements for each product produced on that line. When a product changes on a line—which occurs approximately once per week—the operator needs only to select the job product code from the preloaded list.

    “Changing products is very simple with the Videojet printers,” Hopkins says. “The operators require very little training or assistance because selecting a job is about as easy as selecting a song on a jukebox.”

    In addition to the intuitive printer interface, Top Tobacco also appreciates the long periods between maintenance required by the Videojet printers. Hopkins notes that common maintenance tasks are easy to learn and perform as a result of the self-diagnostic features available on the printers. The printers display help screens to walk operators through routine maintenance, which reduces downtime that can shut down an entire production line.

    “Whenever you can decrease the amount of time a technician must spend with a piece of equipment, you have gained an advantage,” Hopkins says. “Since these printers need less attention from our technicians, our operators are able to handle product changeovers and our maintenance personnel can concentrate on other tasks.”

    Top Tobacco also consulted with Videojet when determining the appropriate printers to use on its production lines and to select the best inks for its substrates. For example, because the pouches can come in various colors, Top Tobacco uses both blue and black ink in the Videojet 43s printers. The blue ink shows up better on darker colors, and Videojet helped ensure the ink would be compatible with both the printer and the substrate.

    “Videojet has always been available to us whenever we’ve had challenges with new packaging or needed to consult a field technician,” Hopkins says. “The technicians are well-trained, and our representatives really know their products and have demonstrated a real dedication to ensuring we are investing wisely in our printing technologies. We feel like Videojet is a true partner.”

    By choosing variable data coding systems, Top Tobacco has been able to spend less time worrying about coding processes and packaging materials and more time focusing on its core service of producing and distributing fresh, quality tobacco products.

     

    Paul Schildhouse is secondary packaging product manager at Videojet Technologies Inc.

     

  • Fanning out

    Fanning out

    The Indian group of companies that includes Chaitanya Packaging now also supplies rotary dies for use on packaging and converting machines.

     

    By George Gay

     

    As I traveled with T.R. Prabhu, the chairman of a group of companies that includes Chaitanya Packaging, between some of his factories and godowns on the outskirts of Guntur, India, he made the point that somebody had to provide meaningful employment for the people who lived in the numerous and populous villages we were passing through.

     

    He made his comment after I had expressed curiosity about the rate of increase in the number and diversity of the businesses that made up his group. Prabhu had just mentioned that he was about to start a company that would build machinery, and I knew that the print was hardly dry on the business cards for his Diehard Dies Pvt. Ltd. enterprise.

     

    The group’s flagship business is the 19-year-old Tulasi Seeds, which produces vegetable seeds, with emphasis on chilies, and hybrid cotton seeds in a process that incorporates technology licensed from Monsanto. “We are the third-largest cotton seed company in India,” said Prabhu. “It’s all sold in India at the moment, but we are looking for opportunities to go to Africa.”

     

    Surprisingly for a man who controls a number of diverse businesses, Prabhu talks with expertise and in detail about each of them, almost as if he is in daily control of them all. And he speaks and acts with precision, often repeating what he has said in different ways to ensure the meaning is clear.

    Another of his enterprises cultivates about 400 acres of land with vegetables and fruit, especially lemons and mangoes.

     

    And, as is mentioned above, his new venture is Diehard Dies, which he started to put in place in November 2009. This company uses machinery imported from Germany and raw materials imported from Europe to produce flat and rotary dies for use on converting and packaging machines for folding cartons and corrugated boxes. Diehard Dies, Prabhu explained, was the first company in India to make such rotary dies.

     

    “In addition, we make flexible steel label-cutting dies, and we are the first company in Southeast Asia to do that,” he said. “This is a 100 percent export business.

     

    “Making flexible dies is a very difficult manufacturing process that requires a high degree of precision. The labeling industry is very automated and needs sophisticated dies. No other company in the Middle East or Africa can produce such dies, so my target comprises customers in all of the countries of these regions—50-60 companies in South Africa alone.”

     

    Diehard Dies offers also embossing blocks, gold-finishing bocks and Braille embossing dies in a range of materials including brass, copper and magnesium.

     

    Meanwhile, the group includes a company that manufactures stationery under the Tulasi brand name and what Prabhu describes as a “small” software company based in Hyderabad.

     

    Packaging

     

    But the number-two company in the group, measured in turnover, and the company of most interest to the tobacco industry, is Chaitanya Packaging, 65 percent of whose output is bought by tobacco companies.

     

    Chaitanya, which produces C48 cases under the Power-400 brand name, supplies 75 percent of India’s demand for these 200 kg cases, and exports them to Bangladesh, Dubai (for cut rag), Malawi, the Philippines, Tanzania and Turkey.

     

    Chaitanya started its C48-case exporting business with sales to Bangladesh about six years ago, and by last year some 40 percent of its output was destined for sale overseas. And perhaps that figure has increased by now. When I spoke with Prabhu, he was in discussions about possible export sales to Indonesia, Malaysia, Thailand and Zimbabwe.

     

    So was Chaitanya successful, I asked? “Yes,” was Prabhu’s short answer.

     

    And why was that? “We are continuously upgrading the box making machinery we use, which is imported from Taiwan,” he replied. “We are continuously modernizing so as to increase productivity and quality. Chaitanya is an ISO9001:2008 certified company.”

     

    And what about the group as a whole; was that successful too? “Highly successful because of continuous R&D to improve productivity and quality,” he said.

     

    Overall, the group’s annual turnover is about INR3 billion ($65 million). And that figure is expected to reach $100 million within about two years.

     

    As well as having a big turnover, the group is highly profitable, according to Prabhu, but at the moment this level of profitability is largely down to the seeds business. The packaging business was not particularly profitable because it competed in a very competitive marketplace and margins were thin, he said.

     

    Finally, I asked Prabhu how he saw the future of the tobacco industry as it related to his packaging business.

     

    “From what I see the tobacco industry will be doing about the same acreage in the next 10 years,” he said. “It may not grow overall, though I think it will grow year on year in India. So I foresee good business for Chaitanya Packaging. My target is to grow its sales turnover by at least 50 percent during the next two or three years. We can do it—with more competitive prices and better qualities.”

    That’s good news for Chaitanya, good news for the group and good news for locals looking for employment.

  • Long march

    Long march

    China remains the world’s biggest producer and consumer of tobacco products. Succeeding there requires an equally big commitment.

    TR Staff Report

    Despite growing health awareness and attempts to clamp down on smoking, the Chinese tobacco industry continues to thrive. Industry sales and government tax collections increased almost 17 percent in 2010, according to the State Tobacco Monopoly Administration. But those juicy figures don’t necessarily translate into easy money for foreign manufacturers and suppliers. As many have found, success in China requires patience, determination and a long-term commitment.

    The Chinese tobacco industry earned nearly RMB600 billion ($90.66 billion) from sales and taxes in 2010, up from RMB513 in its previous fiscal year. According to Research and Markets, there are about 410 million smokers in China, about one-third of the population. That means the country has more smokers than the United States has people. As China’s economy continues to grow, smokers are demanding more medium- and high-grade cigarettes, which carry higher profit margins and tax rates.

    In 2009, the government raised taxes on premium cigarettes (those costing more than RMB7) to 56 percent from 45 percent. The tax on lower-grade cigarettes jumped to 36 percent from 30 percent. As a result, the median price of a pack of cigarettes in China is now RMB5.

    At the same time, Beijing has come under pressure to address from health advocates to crack down on tobacco consumption. When China signed up to the World Health Organization’s Framework Convention for Tobacco Control, in 2005, it agreed to restrict smoking by 2011, in part through public smoking bans, price increases and higher taxes.

    But according to a recent report, Tobacco control and China’s future, China has fallen short of meeting its obligations.

    The report, which was issued by a group of Chinese health advocates, officials and economists, laments that China only last year announced a ban on smoking at primary and secondary schools. And it wasn’t until May that the government banned smoking in state-owned hospitals and government buildings.

    What’s more, compliance has been lax. The authors note that smoking remains rampant in hospitals and government offices, while attempts to ban advertising for cigarettes on radio, television and in newspapers have failed because of legal loopholes.

    The report attributes the lack of progress to an inherent conflict of interest: the STMA is responsible for both tobacco sales and the implementation of anti-smoking laws. The authors also cite widespread ignorance about the health risks of smoking.

    So despite efforts to clamp down on tobacco consumption, China is likely to remain the world’s single-biggest tobacco market for years to come, making it an attractive destination for Western tobacco companies and their suppliers, who are facing stagnating sales at home.

    But attractive is not the same as easy. Even though China joined the World Trade Organization in 2001, foreign cigarette makers are still finding it challenging to do business here. Tariffs remain high, limiting cigarette imports. Reported imports were valued at only $76.02 million in 2009, according to Research and Markets. Illicit traders, meanwhile, are doing brisk business: The value of the smuggled market is estimated at $5 billion annually.

    In 2005, Philip Morris International announced a deal to manufacture small quantities of Marlboro cigarettes under license in China. But the creation of joint ventures between foreign and Chinese cigarette makers remains off-limits, as does local production by non-Chinese companies. British American Tobacco learned this the hard way in 2003, when the STMA spoiled its plans to open a mainland factory.

    China justifies its restrictions on foreign tobacco investments by pointing to the saturation of the local tobacco market. There is no need for additional cigarette production capacity, according to the official line.

    If anything, the STMA wants production capacity to come down. Since the turn of the century, it has been closing unprofitable factories and encouraging less viable plants to merge into bigger, more efficient enterprises. The numbers of factories and cigarette brands have come down consistently in recent years. There are reportedly 30 factories today, compared with 150 several years ago. Research and Markets says the number of cigarette brands was 150 at the end of 2009, down from 758 in 2002.

    Domestic taste preferences also limit the appeal of international brands, which tend to be American-blend cigarettes. Chinese smokers prefer Virginia-style cigarettes, and sales of American-blend brands remain concentrated in the coastal, urban areas, where Western expatriates tend to live.

    Roger Penn, director of Mane’s tobacco business unit, says his company worked on developing an American-blend cigarette for China many years ago, but the concept never caught on. Even as Chinese consumers become more receptive to foreign trends, they are unlikely to embrace American-blend cigarettes in large numbers. Penn draws an analogy with Canada, another Virginia market. “Canada borders a major American-blend market, the United States, but Canadian smokers have not made the transition,” he says. In the wake of Canada’s ban on tobacco ingredients, a switch to American-blend cigarettes is more elusive than ever.

    While foreign suppliers to the tobacco industry face fewer restrictions than do foreign cigarette makers, they too find doing business in China challenging. Still, with the right combination of persistence and tact, it is possible to succeed, as the experience of some companies suggests.

    NCD Infrared, a supplier of moisture testing equipment, entered China in the 1980s and has managed to grow its business ever since. Today, the company has a market share of between 80 and 90 percent in China. Its Chinese division employs 40 people.

    “Perhaps the biggest challenge is finding the right partner,” says Ian Benson, sales and marketing director at NDC Infrared. “You need to invest in a mainland network,” says Benson. “Working through a Hong Kong-based agent is not enough.”

    After finding a suitable local partner, suppliers must show serious commitment. The relationship does not end with the sale. “The Chinese appreciate a long-term approach,” says Benson. “You must look after your installed base.”

    According to Benson, competing on price only is not a winning strategy in China. “The Chinese are extremely discerning customers. They want the best in the world. Our prices are higher than those of the competiton, yet we are still successful.”

    And it helps, of course, if your company offers products for which demand is rising. Take filters, for example. Chinese cigarettes contain higher levels of tar than those sold in many other countries. The majority of Chinese cigarettes have tar levels greater than 10 mg. In neighboring Japan and Korea, by contrast, 7 mg is the norm.

    The STMA intends to reduce the tar level of Chinese cigarettes by 0.5 mg every year. The challenge is reducing tar levels while maintaining the unique smoking characteristics of Chinese cigarettes. A relatively simple option would be to increase filter lengths, but this increases the use of materials such as cellulose acetate and thus increases cost.

    Filtrona has developed a number of solutions to address such concerns. The company’s ROA filter, for example, uses less raw materials but offers the same retention and pressure drop as a conventional mono-acetate filter. The company has also developed a technology to make paper taste like more expensive acetate. According to Filtrona’s sales director for China, Paul Morris, the modified paper filter has higher retention properties than does cellulose acetate, allowing Chinese cigarette manufacturers to economically reduce tar levels without compromising the natural taste characteristics of their cigarettes.

    China’s sheer size makes it a powerhouse in the tobacco industry—one that Western suppliers will go out of their way to court. But while much has been made of cultural differences, these are ultimately outweighed by the similarities. Like their counterparts in Europe and the United States, Chinese cigarette manufacturers want to offer superior products and stellar service—but at a price that does not break the bank.

     

     

  • Tax to the max

    Tax to the max

    The challenge of squaring public health with government revenue objectives

    By George Gay

    I think that I should declare an interest. It has to be said that I am not an objective observer when it comes to taxation. I tend to the view of the 19th century French economist Frédérick Bastiat, who apparently defined taxation as state-sanctioned plunder. Don’t get me wrong—I am quite prepared to admit that governments have to indulge in a little plundering. I just wish they would be more open about it.

    In the normal way of things, marauders storm ashore, sack part of your village and plunder much of what isn’t nailed down, but they leave enough standing to allow regeneration—so there will be something to plunder when they return. And, to be fair, governments largely follow the marauders’ code on plunder. They take just enough to render their victims too weak to protest but strong enough to continue indulging in all of those pursuits that are taxable—every pursuit you can think of, that is.

    Tobacco taxation is a different matter, however, because here governments have been plugging the idea that their policies constitute a moral crusade, and there is nothing so crushingly pitiless as a moral crusade. In this case, the marauders’ code can be consigned to the flames because governments are increasing taxes on tobacco not to fill the holes left in their coffers by profligate spending, you understand, but because they want to help the very people they are taxing. It almost brings a tear to your eye.

    But not quite. There’s something odd about this moral crusade. The line we are fed is that taxation is raised to the point where people can no longer afford to consume tobacco products, and, because consuming tobacco is bad for them, their not being able to do so must offer a benefit. Under a system of “tax to the max,” the sinners are saved and proudly take their places behind the gleaming banner of health and vitality.

    Assumptions

    The first thing that has to be said about this nonsense is rather obvious but is nevertheless worth saying. This tax to the max policy is based on the view that one group of people know best and must be allowed to impose the totality of their beliefs on another group; it is, after all, a crusade. And it seems to stand no matter how much evidence comes to light to question these beliefs.

    Following on from that, a few people, I think, would agree with me that the decision to launch such crusades are made with those in the vanguard having exaggerated the negative aspects of tobacco consumption—sometimes grossly so—and ignored the positive aspects of it. And more than a few people would agree that the crusade is launched on the assumption that—against all the evidence put forward by the crusaders themselves—tobacco consumers are able to give up these products.

    One common riposte to this last criticism has it that addicted consumers who are no longer able to afford to buy tobacco products can avail themselves of quit products, sometimes at no direct cost to them, though the success and failure rates of these quit products are normally not mentioned.

    But this is not quite right. The evidence coming out of Japan at the moment would tend to indicate that these products are not always around when they’re needed. Writing in The New York Times last month, Hiroko Tabuchi described how Japanese health professionals and many of the nation’s smokers were grumbling because, three months after the imposition of a massive tax rise on cigarettes, it was still difficult to get supplies of Pfizer’s quit-smoking drug Chantix.

    I don’t think that you have to be a cynic to wonder why, given that one of the stated aims of the tax hike had been to get people to quit, the government did not work with the providers of quit products to ensure adequate supplies; or am I expecting too much?

    Still; the shortages might have been a mixed blessing for some. On the same day as the Tabuchi story, Kent Faulk was describing in The Birmingham Post how nationwide in the U.S. 1,200 lawsuits were being brought against Pfizer in relation to Chantix. Smokers and their families allege that Chantix left would-be quitters with a variety of psychological problems, allegations that Pfizer denies.

    Bankrupt crusade

    One thing that is certain is that the outcome of the moral crusade isn’t guaranteed; otherwise, given the figures often quoted for the number of people who “want” to quit tobacco, it would be easy for a government to put the taxation on tobacco products up by a million percent, hand out quit aids and watch the massed ranks of crusaders lead all of the former tobacco users into the promised land.

    So what is wrong here? Well, just about everything, but I want to look at only a couple of issues. Firstly, if you want to examine how bankrupt is the moral crusade that is built upon the policy of tax to the max, you need look no further than Canada, though what has happened there has happened in some other countries also, to a greater or lesser extent. Canada’s tobacco taxation policies have encouraged the illicit trade to such an extent that, overall, this trade now accounts for about one-third of the market. In one province, it accounts for nearly 50 percent of cigarette sales.

    The general response to this situation is not to reduce tobacco taxation but to try to increase enforcement and, presumably, in the process, criminalize rising numbers of people. You have to wonder at what point the authorities will admit that the volume of illicit sales indicates that a significant minority of the country’s population believes that tax to the max policies are unfair. At what point will they wonder if these people haven’t got a case? At what point will they ask themselves whether putting more and more people on the wrong side of the law truly represents a moral crusade? At what point will they be moved to reconsider what sort of a society they want to foster?

    I fear it will be a long time. This is not the first time in recent memory that Canada has found itself in a similar situation. And, coincidentally, as I was writing this piece, Imperial Tobacco Canada issued a press note lamenting the Minister of Health’s decision to abandon her commitment to tackle the nation’s contraband.

    The press note said that the Royal Canadian Mounted Police had reported recently that there were now 50 illegal cigarette factories and more than 300 smoke shacks selling tobacco on First Nations reserves in Canada.

    After announcing in September that tackling illegal tobacco was her priority, the note said, special-interest anti-tobacco groups, most of them funded by her own department, lobbied the minister heavily to focus on increasing the size of health warnings on legal products.

    “Three months ago, the minister of health said illegal tobacco was her priority,” said a clearly frustrated John Clayton, who is vice president for corporate affairs at Imperial. “However, she has done nothing to crack down on the illegal trade since then. Instead, she caved in to the pressure of a handful of anti-tobacco groups.”

    Questions

    At first sight, the phrase “tax to the max” looks straightforward enough, but stare at it for long enough and a number of questions start to arise. Two obvious questions are: What is the max and who determines what is the max? But, to me, the most interesting question is, what is tax? In the EU and elsewhere, tobacco consumers are being forced to pay hundreds of millions of euros to fund various initiatives to combat the illicit trade in tobacco. I’m not sure what this money is called by those who receive it—whether it is referred to as a penalty, fee, contribution, bonanza, lottery prize or whatever—but, basically, it is a stealth tax levied on the consumers of licit products that is handed over to various agencies to fund seemingly predictably unsuccessful attempts to reduce the illicit trade in tobacco that is a direct result of the price of cigarettes being too high. Is this rational? Is this fair? Is this all part of the moral crusade? To me it looks like a dog chasing its tail.

    Meanwhile, in the U.S., most consumers of licit products are made to make payments—through the manufacturers of the products they consume—under the Master Settlement Agreement (MSA), though, as far as my memory serves me, no tobacco consumer ever agreed to making such donations. Again, this is put forward as being part of some moral crusade, but it is far from that. The agreement is spun as being a punishment on the tobacco manufacturers, but, again, it is not; it is a tax on tobacco consumers. And it wouldn’t be so bad if all or at least most of the money raised from this tax went to fund tobacco control programs, as you might rightly expect, but it does not.

    By the way, if you aren’t convinced that MSA payments are just taxes by another name, you would do well to check out what is going on in Texas at the moment. According to a story by Gary Scharrer for the online version of The Houston Chronicle, Texas is one of two states (the other being Florida) that are parties to the MSA but that don’t require companies that were not signatories to the agreement to participate in it.

    But Texas has a problem: a budget deficit of more than $20 billion, according to recent estimates; so Altria has suggested that part of this hole could be plugged by drawing the non-participating companies into the “agreement.”

    Here is what Scharrer quoted Justin Phillips, a spokesman for Global Trading, a small tobacco wholesaler based in Enid, Oklahoma, USA, as saying: “The big tobacco companies are trying to shift the market share to their favor by placing a tax [my emphasis] on smaller companies that were not involved in the (late 1990s) settlement.”

    As is hinted at above, the max in tax to the max cannot be limitless. The max is simply the level that allows governments to wheedle as much money out of tobacco consumers as they possibly can, but it involves a difficult calculation. Governments have to be on their guard that they don’t overstep the line of diminishing returns—the point at which the theoretical increase in revenue from increased taxes is wiped out by people refusing to buy tax-paid products. So what this means is that in those jurisdictions where tobacco tax is purportedly increased to the max to try to stop people smoking tobacco, tax levels are largely determined by the strength of the illicit trade. The moral crusade is being led by gangs of criminals. Quite.

    Bailouts

    At this point and somewhat uncharacteristically, I’d like to take a diversion to examine what seems to me to be an inconsistency in many governments’ taxation policies. As is described above, these governments say they increase the taxation that has to be paid by the consumers of tobacco products because those consumers are addicted to a product that has a negative effect on the health of society. The thrust of these increases is aimed at breaking the bonds of this addiction and thereby increasing the health of the community.

    The trouble here is that there is at least one other group of people who may be closely equated with tobacco consumers but who are treated in a completely different way. I’m talking, of course, about a certain class of banker. These bankers are addicted to a product that—as has been proved beyond any question in the recent past—has a negative effect on the health of society. But the reaction of governments in this case is not to try to break the bankers’ addiction to greed but to feed it. Although governments wouldn’t dream of handing tobacco products to nicotine addicts, they seem not to think twice about throwing money at those addicted to greed.

    Why is there this divergence of approach? It’s difficult to say, but the only real difference that I can see between the tobacco users and the bankers is that the former are, in the main, relatively poor financially and therefore powerless, while the latter are relatively rich financially and therefore powerful.

    Ireland is one country where smokers have been pilloried and taxed to the max and beyond, and where the bankers have failed comprehensively; so in the normal way of things, the former are helping to bail out the latter. I have written elsewhere in this issue about Ireland, but the story from that country is so monumental that it bears repeating. At the end of last year, the Minister of State for Health, Áine Brady, told the Dáil that currently 29 percent of the population smoked despite a ban on tobacco smoking in public places, the abolition of packs of fewer than 20 cigarettes, the ending of in-store displays and advertising, and the retail price of cigarettes being, at €8.55 ($11.06) a pack, “the highest in the world.” In 2004, 27 percent of the population smoked.

    Clearly, not only does the tax to the max crusade against tobacco fail the test of morality, it fails the test of efficacy. It is a failure, but that won’t make any difference. Most governments seem not to be concerned about such failures.

    At this point, it would be interesting to turn the focus to Japan, where, normally, they seem to take an orderly approach to things, including tobacco taxation. Well, that was the case until last year when, in the run-up to an unprecedented tax increase on Oct. 1, which, together with a manufacturer’s increase by Japan Tobacco, raised the retail prices of some brands by 40 percent, the market was thrown into chaos.

    In September, cigarette sales, at 37.4 billion, were up by 88 percent on those of September 2009, due to a last-minute rush ahead of the excise increase. But sales were said to be down by 70 percent in October, and one estimate had it that this year they could be down by 17 percent to 180 billion. They could even fall to 165 billion.

    You have to wonder what would convince a government to decide—it cannot have been unaware of the consequences—to create such chaos in a market where it has the major financial stake. The charitable interpretation might be that it genuinely wanted to cut smoking in a country where a lot of men continue to indulge in the habit. And, to be fair, if this were the intention, then it has been successful, at least for the time being. Although about 20 percent of people who quit smoking in light of the Oct. 1 tax hikes quickly returned to their habit, by the beginning of November 62 percent of those who stopped smoking due to the price increases had not smoked a single cigarette in the meantime.

    I’m still not convinced, however. Call me cynical, but I have a funny feeling that this will end up doing little else but increasing the government’s revenue from tobacco taxes. Still, I’m willing to eat my words if it turns out that both the incidence of smoking and tobacco tax revenue fall.

     

     

  • After Uruguay

    After Uruguay

    The FCTC Conference of Parties’ recent meeting has put the spotlight back on tobacco ingredients. But the case for a ban remains flimsy.

    By John Luik

    With the fourth session of the Conference of the Parties to the World Health Organization’s Framework Convention for Tobacco Control (FCTC) in Punta Del Este, Uruguay, at the end of November, cigarette ingredients have again assumed center stage in the tobacco control playbook.

    While the session dealt with a variety of issues, the most important was without doubt Article 9 of the FCTC—regulation of the contents of tobacco products. Article 9 states, “The Conference of the Parties, in consultation with competent international bodies, shall propose guidelines for testing and measuring the contents and emissions of tobacco products and for the regulation of these contents and emissions.”

    According to the WHO press release of Nov. 20, the conference decided that “flavoring ingredients that increase attractiveness of tobacco products should be regulated in order to reduce the number of new smokers, especially among youth.”

    According to the working group on Articles 9 and 10, “Tobacco products are commonly made to be attractive in order to encourage their use. From the perspective of public health, there is no justification for permitting the use of ingredients, such as flavoring agents, which help make tobacco products attractive.” Based on this claim the working group recommended that “Parties should either prohibit or restrict ingredients that may be used to increase palatability, such as sugars and sweeteners, flavoring substances, and spices and herbs …. Parties should prohibit or restrict ingredients that have coloring properties, such as inks and pigments ….”
    Nothing new

    While ingredients are only now attracting significant attention, the issue is not new. In July 1999, AHS/UK issued the report Tobacco Additives: Cigarette engineering and nicotine addiction, written by Clive Bates and Martin Jarvis of the United Kingdom, and Greg Connolly of the Massachusetts Tobacco Control Program, who is now a member of the Food and Drug Administration’s Tobacco Scientific Advisory Committee.

    In that report, the authors noted that EU regulations permitted “over 600 additives” to be used in the manufacture of tobacco products under a loose and decentralized regulatory framework. “Although tobacco additives are generally screened for their direct toxicity, there is virtually no assessment of the impact additives have on smoking behavior or other undesirable external consequences.”

    According to ASH, most additives were not used prior to 1970 and most are “not necessary.” The primary concerns that emerged from the report were that additives 1) posed a potential risk to users; 2) increased the addictiveness of cigarettes through “free nicotine” and 3) increased the attractiveness of cigarettes, particularly for children.

    The report argued that in response to the ineffective regulatory regime for additives—it referred to the 1997 U.K. voluntary agreement—a new regulatory framework was needed in which “the manufacturer is obliged to demonstrate that no additional harm arises from tobacco product design decisions such as the use of an additive. This should include the impact of additives on smoking behavior, passive smoking and fire risks.” Included in this new regulatory framework would be the 1) disclosure of all additives, 2) disclosure of the purpose of all additives, 3) disclosure and all research on all additives, and, most significantly, granting regulators the “power to challenge any of the existing 6,000 additives currently allowed and to have them removed until the manufacture is able [to] show that no extra harm to the public arises as a direct or indirect result of the additive.”

    The ASH report gained considerable traction as a blueprint for ingredient regulation. For example, a 2001 report prepared for the New Zealand Ministry of Health by Jeff Fowles proposed that New Zealand adopt a “regulatory framework for tobacco additives along the lines proposed by Bates et al.”

    According to Fowles, the tobacco industry would need to justify the use of additives that have a pharmacological effect, numb peripheral nerves (menthol for instance) or affect the absorption of nicotine.

    In a 2003 article in Tobacco Control, Borland argues that the harmfulness of tobacco products can be reduced in three ways—“by making it less toxic per unit used; by making it less addictive per unit used; and/or making it less palatable.” He asserts that the “regulatory framework needs to progress on all three.” In the mind of the anti-tobacco movement, ingredient regulation would address all three of Borland’s objectives: If one accepts the charges about ingredients, it would make cigarettes less toxic, less addictive and less palatable (read: attractive) to smokers.

    By far the biggest push to the ingredients regulatory bandwagon came in 2009 when the Canadian government passed bill C-32, which was so broadly drafted that it would cover all flavorings in cigarettes sold in Canada. The ban effectively banned the sale of American-blend cigarettes in Canada. In the United States, meanwhile, the FDA was given regulatory authority for the ingredients issue. The legislation required the immediate removal of certain flavors along with the mandate to examine and decide on the use of menthol.

    Lacking legitimacy

    While the ASH and Fowles reports called for ingredients regulation at the national level, the FCTC has been driving regulation on a global scale. Part of the problem is that anti-tobacco activists don’t seem to understand how cigarettes are produced. Unable or unwilling to distinguish between characterizing and noncharacterizing flavors, they have argued to ban both.

    However, banning noncharacterizing flavors would do little to advance the cause of public health. The flavors give cigarettes no distinctive taste yet are essential in the production of American-blend cigarettes, which account for the majority of cigarette sales outside of China. Is it a coincidence that the noncharacterizing flavors that would be banned under some proposals are used in the leading tobacco brands?

    But amid this regulatory fever, the fundamental question remains as to whether any of these claims are justified. Is there a case for the regulation of tobacco ingredients? The working group on Articles 9 and 10 cites four reasons for regulation: the ad hoc and ineffectual nature of the current regulatory scheme; the toxicity of certain ingredients currently used in cigarettes, the fact that certain ingredients make cigarettes more attractive, particularly to young smokers; and the role of ingredients in promoting and maintaining cigarettes’ addictiveness.

    While these are the “stated” problems, the deeper issue is that the ingredient issue offers the anti-tobacco movement a powerful way to control and ultimately change the composition of cigarettes, in effect to make them fundamentally unattractive. And this has the potential to be a more serious threat to the industry than, for instance, plain packaging. But just how legitimate are these claims about ingredients?

    First, the claim that the existing regulatory framework is loose, ad hoc and ineffectual is at variance with the facts. In the U.K. for instance, the voluntary agreement requires manufacturers to supply the Department of Health with a list of all ingredients and the reasons for their use. Moreover the current regulatory framework for ingredients is regularly updated. Germany has banned two ingredients in the past nine years, while allowing the use of other ingredients for only limited periods.

    Second, the claim that ingredients increase the toxicity of cigarettes is not supported by scientific evidence. Over the past 20 years, industry experts have published some 20 different ingredients toxicology studies. Lemus et al. published a study of the toxicological properties of cigarettes with varying amounts of vanillin in 2007 (Inhalation Toxicology) and Renne et al. published a study of the toxicological effects of flavoring and casing in mainstream smoke. (Inhalation Toxicology, 2006)

    British American Tobacco has published a series of scientific studies examining the toxic effects of 482 ingredients. None of these published studies has supported the claim that ingredients represent an additional toxic risk to smokers or nonsmokers. In a recent review of the ingredient most commonly a focus of regulatory concern, menthol, Daniel Heck from Lorillard found “that menthol employed as a cigarette tobacco flavoring ingredient does not meaningfully affect the inherent toxicity of cigarette smoke.” (“A review and assessment of menthol employed as a cigarette flavoring ingredient,” Food and Chemical Toxicology 2010)

    Third, there have been no credible scientific studies supporting the claim that certain ingredients make smoking more addictive. Indeed, the scientific and regulatory consensus about addiction is that it is nicotine, not some other ingredient that leads to addiction. Indeed, the ASH study does not cite any published scientific studies confirming that cigarette ingredients in some way “engineer” tobacco addiction.

    Furthermore, the recently completed report on the Addictiveness and Attractiveness of Tobacco Additives by the EU’s Scientific Committee on Emerging and Newly Identified Health Risks (SCENIHR) published on Nov. 12, 2010, found no evidence that current tobacco ingredients have rewarding or reinforcing properties or are in themselves addictive. As the report notes, “In the peer-reviewed scientific articles assessed, there is no documentation for certain individual additives to cause addiction directly.” (p. 41)

    Fourth, the claim that certain ingredients make smoking more attractive, particularly to children, is questionable on at least four grounds. First, the entire concept of attractiveness, as used in the ingredients debate, is both vague and unscientific, something that the SCENIHR report itself acknowledges when it notes that it is “necessary to perform experimental studies to assess the attractiveness of tobacco additives objectively.” But there are currently neither scientific criteria of what constitutes attractiveness nor studies demonstrating that certain ingredients promote or enhance attractiveness. Indeed there are no animal models that would allow for the assessment of attractiveness. As SCENIHR notes, “It remains difficult to distinguish the direct effects of these additives from the indirect effects such as the marketing towards specific groups.” The risk is thus that a subjective notion without scientific foundation—attractiveness—is being used as a convenient way to ban certain ingredients.

    Second, there are no scientific studies linking smoking initiation with certain cigarette ingredients. Indeed, there are no studies showing that removing certain ingredients will make cigarettes less attractive to young people and reduce youth smoking. There are thousands of studies of youth smoking, yet none of these studies suggest that young people begin smoking because of the effect of certain cigarettes ingredients in making smoking attractive.

    Third, there are no scientific studies establishing that smokers find it more difficult to quit or fail to quit because of certain cigarette ingredients.

    Fourth, current prevalence levels and smoking patterns refute the “ingredients make smoking more attractive” argument. For example, if ingredients make smoking more attractive, one would expect to find higher prevalence rates in countries with cigarettes containing more flavor ingredients. Yet this is not the case. In France, Italy, Denmark and Switzerland, the tobacco market is dominated by cigarettes with high levels of ingredients, yet these countries have lower rates of smoking prevalence than the United Kingdom, where smokers prefer cigarettes with fewer flavorings. The world’s largest tobacco market, China, is dominated by Virginia cigarettes, which depend less on ingredients than do American-blend cigarettes.

    The Winston problem

    Finally, there is the “Winston problem” pointed out by Michael Siegel (The Rest of the Story, July 27, 2010). Winston cigarettes are “100 percent tobacco with no additives.” To heath activists, this should make them more acceptable than other cigarettes. However, anti-tobacco campaigners went “beserk” over Reynolds’ advertising campaign, complaining to the Federal Trade Commission, which forced Winston to carry a disclaimer noting, “No additives does not mean a safer cigarette.”

    But according to the claims of the activists about additives and toxicity, this is precisely what removing additives should accomplish. More crucially, no additives should mean a cigarette that is substantially less appealing to smokers, particularly young people, according to this logic.

    As Siegel notes, “Here then, is the fascinating conundrum for the WHO and the FCTC working groups. If they argue that there is a public health justification for banning all cigarette additives, then they must acknowledge that Winston cigarettes are a significant public health advancement …. On the other hand, if they refuse to acknowledge that Reynolds’ Winston cigarettes are a public health advancement, then they are admitting that there is no public health justification for their proposed regulations that would ban all cigarette additives.”

    While ingredient regulations have little scientific support, one can nevertheless foresee their potential effect in terms of the tobacco marketplace and product innovation. In the marketplace, ingredient regulation could easily lead to the growth in the illicit trade since there will be a substantial demand for and profit to be made in supplying smokers with traditional products.

    The assumption behind radical changes in tobacco ingredients is that smokers will simply accept them because they have no other choice. But this is folly. There is an enormous illicit tobacco market that has the ability and the incentive to provide smokers with precisely the sort of cigarettes they want- irrespective of any FCTC regulation. What the anti-tobacco activists fail to understand is that they cannot change the preferences of smokers by regulatory fiat.

    In terms of product innovation, particularly the development of reduced exposure/risk products, the inability to use ingredients, particularly sugars, will make it more difficult for these products to achieve mass market appeal. This is because flavorings are necessary to compensate for the lower tar levels that these products will likely have. Reduced exposure products with greater harshness and an unattractive taste will hardly fulfill the public health objective of harm reduction.

    Of course, this may well be the real objective of the anti-tobacco movement. The goal might be to make both conventional cigarettes and reduced exposure products so unattractive that fewer smokers will choose to smoke them. In this sense the arguments about toxicity and addictiveness are simply red herrings designed to divert attention from the larger project of engineering unpalatable cigarettes through substantially changing ingredients. An expansive reading of Article 9 of the FCTC might sanction this.

    The trouble with this is that it amounts to prohibition by another name. But prohibiting tobacco, either directly or by stealth, is neither possible nor desirable, as even the most dedicated anti-tobacco regulator must recognize. Unfortunately the absence of science, hidden agendas and disregard for unintended consequences on display at Punta Del Este strongly suggest that they don’t.

     

     

  • Ground-breaking

    Ground-breaking

    Cross Creek’s seeds offer unparalleled disease resistance.

     

    By Brandy Brinson

     

    When tobacco plants grown from Cross Creek’s seeds break ground, they are more likely to resist diseases and nematodes than plants grown from other seeds. The company has collaborated with international breeders to develop flue-cured and burley varieties that are showing resistance at previously unheard-of levels.

    “We are now finally able to introduce varieties with increased yield, quality and disease resistance,” says Sam Baker of Cross Creek Seed. “Our collaboration with international breeders has allowed us to stockpile germplasm and use private breeding lines to release these varieties.”

    Sam’s brother Ed Baker says, “We have tons of flue-cured varieties offering nematode resistance at rates never been seen before. And the burley we’ve introduced has more resistance to bacterial wilt or Granville wilt than any other burley variety in the world.”

    This U.S.-based company in Raeford, North Carolina, was started as a tobacco farm by the Bakers’ father, Eddie Baker, and has evolved into a seed company. Today, Cross Creek Seed is a fully integrated seed company that grows, cleans, pellets and packages its own seed. The company produced seed for Northup King, Novartis, Syngenta and Gold Leaf Seed Company long before it became an independent seed enterprise.

    Cross Creek still maintains its family roots even though it is gaining a greater international presence. “We’re unique in that we’re a privately owned company—we are not owned by a big multinational conglomerate—that offers services and varieties on the international stage not found in smaller companies,” says Sam. Cross Creek Seed works with its partner coating company Cross Creek Coating, also in Raeford, to provide a melt-coat pellet that sets the standard for tobacco pellets.

     

    Special varieties

    The flue-cured varieties CC35, CC 13 and CC 33 were released about three years ago. The need for superior nematode resistance, brown spot resistance and varieties that are slow ripening is especially great in southern Africa—particularly Zambia, Malawi and Tanzania—as well as in Kenya. Tests in Zambia were recently completed and sales have increased dramatically ever since, says Ed. Tests in Malawi are now being conducted.

    The demand for disease-resistant burley varieties is especially prevalent in the burley growing regions of Guatemala and the Philippines, where there are severe problems with wilt, says Sam. Previously, he says there was “nothing on the market to compensate for it.”

    He says that historically, on a scale of 1 to 10, burley varieties had a rating of 2 or 3 for wilt disease resistance. “Ours has a 9.4-9.7 on disease resistance.”

    The success in the field has caused Cross Creek’s sales to surge 500 percent from the first year to the second year. They expect sales to double again this year. “These products have taken our international sales from one-fourth of our total sales to 40-45 percent,” says Ed.

     

    K 326

    The forefather of today’s flue-cured products is the K 326 seed. “It’s an oldie but a goodie,” says Sam. “It’s the backbone of every flue-cured product and one of the most planted varieties in the world. It still makes up a huge market share for us.”

    Cross Creek’s reputation for selling a quality K 326 product is the reason the company has been able to gain a foothold in the market and expand its market share, says Sam. Bill Earley, breeder of K 326, is considered the father of modern flue-cured tobacco and was an integral part of Cross Creek Seed. Earley chose Cross Creek Seed to plant the very first crop of K 326, where it has been produced ever since. Earley became an exclusive consultant to Cross Creek in 2000 because he believed the company had the experience and quality control to continue producing the K 326 he expected as the breeder. This belief was well–founded, as Cross Creek Seed has never had a complaint about off-type plants in K 326, says Sam.

    “That was our building block. When we started, initially people could see that ours was the only true and original type on the market. That’s the reason we’ve been able to grow our market share,” says Sam.

    After Earley passed away in 2006, Sam says that left only one other person who was as knowledgeable about K 326—Eddie Baker. “My father knows more about K 326 than anyone on the planet because he has grown it, studied it and looked after it for 30 years, longer than any other breeder or producer in the world.”

    Expansion

    Today, Cross Creek continues to grow. The company now has active sales and ongoing trials in 27 countries.

    Cross Creek commercially offers about 40 different flue-cured lines, 11 varieties of burley and 10 varieties of dark air-cured, as well as Wisconsin-type, Maryland-type—“just about any type of tobacco,” says Sam—and additional varieties of all types in various trials. In 2006, Cross Creek Coating was recognized as having an organic tobacco pellet and plans on offering certified organic tobacco seed and pellets for sale shortly. Burley varieties sold have been screened for low converters, and all varieties are tested for GMO.

    The company is well-prepared to handle expansion. Seeing a growth rate of 500 percent in one year might leave some companies scrambling to keep up, but Cross Creek has managed the growth with ease. “Seed production has never been an issue for us,” says Sam.

    The real challenge lies in meeting customers face to face, something the company believes in. Ed and Eddie are busy circling the globe—going to Africa this month, Argentina next, through eastern Europe the next and back to Asia after that.

    “That’s been the biggest challenge,” says Ed. “The issue of production is in place, the issue of shipping is in place.” He says making contacts in person is the most important part of doing business. “There’s so much advertising on paper that people are skeptical. If you go have a face-to-face meeting, it shows a belief and a confidence in your product that doesn’t necessarily translate on paper.” Being in constant contact with customers is important to Cross Creek.

    As demand increases, the company may expand its production overseas. “Everything for the U.S. is produced in the U.S.,” says Ed. For the international markets, Cross Creek also produces some in Africa and in Chile as well.

    “I do see potential for increased production outside the U.S.,” he says. While production outside the U.S. can be less expensive, he says that more importantly, some places are stricter on imports from the U.S.

    For example, Sri Lanka has restrictions on U.S. seed due to blue mold concerns. There is no blue mold in Chile, so seeds produced in Chile can be shipped to Sri Lanka. Another issue is import tariffs—there are large import tariffs on U.S. shipments to some African countries.

     

    Steam sterilization

    A side business that Cross Creek has been developing in the U.S. involves the sterilization of trays. Farmers have traditionally used methyl bromide to clean their trays, but as it is being phased out, steam offers a good alternative. More U.S. farmers are turning to steam as methyl bromide becomes more restricted and expensive. The price is expected to double this year.

    The business was born out of necessity for Cross Creek’s own production. “We have so many acres of transplants, we had to guarantee that the quality remains constant,” says Ed. “Steam sterilization is the hot new thing.”

    The company engineered a new, efficient tray-washing device. They also poured a concrete slab and placed three refrigerated, insulated trailer units on it. They removed the cooling systems and installed a commercial heater on a 2-inch gas line to run the units at the same time. The water is heated for 30 minutes to steam the trays at 160 degrees Fahrenheit for one hour. Once the trays are steamed, they are sealed in plastic until they are ready for use.

    Cross Creek is not only steaming its own trays but has developed a business steaming other farmers’ trays as well. This year, about 10 farmers will bring their trays to Raeford for steaming, and Ed expects to expand that business next year.

    The company is also selling the steam sterilization units. Next up will likely be a portable sterilization unit that can be transported to various farms.

    Steam sterilization is conducted during winter months, while seed production is ongoing year-round—growing in the summer months, cleaning in the fall, pelleting and packaging in the winter and seeding in the spring. Tray sterilization must be conducted during the U.S. winter months from mid-December through mid-February when heat and humidity are not issues.

    Ed says this wasn’t supposed to be a side business; it just developed naturally as Cross Creek aims to be a full-service provider.

    The need for this type of technology could expand outside the U.S. as more countries move toward float-tray technology. “When the methyl bromide runs out, they will have to go to some type of float bed system; they will be forced into greenhouse technology,” says Sam. Farms would do well to look to Cross Creek as an example.

  • And the winners are…

    And the winners are…

    Tobacco Reporter and BMJ present their annual Golden Leaf Awards.

    TR Staff Report

    Representatives of Universal Leaf Tobacco Co., Iggesund Paperboard, Amcor Rentsch, Manifattura Italiana Tabacco, Godioli E Bellanti and the EDAPS Consortium collected their 2010 Golden Leaf Award trophies during a festive ceremony in the ballroom of the Royal Gardenia Hotel in Bangalore, India. The event was one of many highlights of the 2010 Global Tobacco Networking Forum, which took place Oct. 4-9.

    George Hendrata, CEO of the Golden Leaf Awards’ exclusive sponsor, Indonesian paper manufacturer BMJ, congratulated the recipients on their achievements in areas such as product quality, customer service and corporate social responsibility.

    Tobacco Reporter representatives Noel Morris and Elise Rasmussen then called the individual winners on stage and presented them with their trophies. The event was enlivened by spirited Indian dancers, who moved their bodies to the beats of traditional Indian music and more modern tunes such as “Jai Ho” from the Oscar-winning movie Slumdog Millionaire.

    This was the fifth edition of the awards program, which was created in 2006 by BMJ and Tobacco Reporter to recognize tobacco companies and their suppliers at a time when recognition for those working in tobacco is in short supply.

    The organizers honor companies and individuals in five categories—most impressive service initiative, most promising new product introduction, most exciting newcomer to the industry and most outstanding service to the industry, as well as most committed to quality, an award sponsored by BMJ.

    The previous ceremonies were held in Bali (2006), Paris (2007), Rio de Janeiro (2008) and Bangkok (2009). The 2011 Golden Leaf Awards will be presented in Prague during the TABEXPO trade exhibition and Congress.

    Please look for entry forms on Tobacco Reporter’s website and in its print edition as of January 2011.

    Most impressive public service initiative

    Universal Leaf Africa received a Golden Leaf Award in the most impressive public service initiative category for its community-support programs in Mozambique. The company’s social responsibility initiatives comprise a number of areas based upon the needs of each region, such as health, environmental conservation and education.

    Mozambique is an important leaf tobacco sourcing area for Universal Leaf. The company has built, repaired, supplied and furnished schools to provide access to elementary and secondary education. Within the last year alone, Universal has built four new schools, along with two teachers’ houses, in Mozambique. Because villages in rural Mozambique tend to be isolated, the provision of teachers’ houses is as fundamental as the construction of the school itself. Good living conditions attract qualified teachers and encourage them to stay.

    Two additional schools have been refurbished, creating a good learning environment for about 3,200 students.

    In addition, Universal has provided schools with basic needs, such as potable water and proper bathrooms. This eliminates the need to travel long distances to water sources and protects students from exposure to harmful waterborne bacteria, which in turn improves school attendance.

     

    Most exciting newcomer

    Manifattura Italiana Tabacco received a Golden Leaf Award in the most exciting newcomer category. Remarkably, while being the “new kid on the block,” the company claims to be the oldest tobacco factory in Europe.

    Founded in 1769, Manifattura Italiana Tabacco was previously owned and operated by the Italian tobacco monopoly.

    Today, the company has new owners—a group of Italian investors. The company’s mission is to produce high-quality, tailor-made Italian cigarettes. Its strengths are flexibility, “quality without compromise,” substance and style.

    Based in Chiaravalle in Italy’s central region of Marche, Manifattura Italiana Tabacco owns three Italian brands—Futura, 821 and Linda. Its flagship brand, Futura, has recently undergone a redesign, and the company is in the process of developing new brands with international appeal.

    The company is well-equipped for this task. In addition to a modern primary department with a capacity of 12 million kg per year, it operates a highly automated secondary department with an annual capacity of more than 5 billion cigarettes.

    Going forward, Manifattura Italiana Tabacco’s goals are to strengthen its brands domestically and internationally.

    “We are proud and excited about this unexpected award—especially because it comes from such a prestigious organization,” says Luca Cecconi, sales manager of Manifattura Italiana Tabacco.

    “Manifattura Italiana Tabacco is the oldest cigarette factory in Europe and the biggest independent in Italy. We want to set a new benchmark for made-in-Italy premium cigarettes.

    “Tailor-made products, superior quality standards and creativity lead our day-by-day jobs.”

     

    Most outstanding service to the industry

    Godioli E Bellanti received a Golden Leaf Award in the most outstanding service to the industry category. Based in Citta di Castello, Italy, the company has been designing, manufacturing and supplying tobacco machinery to customers worldwide since 1923.

    Proud to serve the tobacco industry with its tailor-made processing lines and equipment, Godioli E Bellanti’s sales and service are characterized by reliability, quality and competitive pricing. Thanks to these qualities, the company is able to retain existing customers and attract new ones.

    To respond to changing customer requirements quickly, Godioli E Bellanti has a flexible structure that allows it to combine the best of its in-house resources with specialized outsourcing.

    The company continues to invest in its people, recruiting qualified engineers and technicians to strengthen its lead. Godioli E Bellanti operates a professional international sales network with agents in all countries where a permanent presence is required.

    Godioli E Bellanti is also a good corporate citizen. Among other initiatives, it maintains strong relationships with local universities and supports local cultural and sporting events.

    CEO and sales director Lorenzo Curina was ecstatic by the news of the award.

    Because he was traveling on business at the time of the ceremony, Curina received news through a text message to his telephone. “We were so excited,” he says. “It has been really emotional, calling shareholders, exchanging SMS [messages] with sincere and close friends.”

    Godioli E Bellanti immediately added the Golden Leaf Awards logo to its website. “We wanted the world to know that even a company like Godioli E Bellanti—which is not big like the multinationals, but works silently with continuity, commitment quality and professionalism—is appreciated.”

    According to Curina, the people that count noticed. “We felt ourselves repaid,” he says. “Hopes and dreams came true.”

    BMJ most committed to quality award

    The EDAPS Consortium received a Golden Leaf Award in the BMJ most committed to quality category.

    The company said it was proud to have won the most prestigious Golden Leaf Award, and that it was ready to prove the quality of its products and solutions on new international markets.

    To secure collection of excise duties on tobacco products and protect against counterfeiting, EDAPS has developed a comprehensive solution that uses forgery-proof tax and control stamps with holographic security elements (HSE), combined with a track-and-trace information system.

    In the production of the HSEs, EDAPS’ member company, Specialized Enterprise “Holography”, uses state-of-the-art technologies, including electronic lithography and advanced demetallization technology. EDAPS solutions have enabled government agencies to more than double excise tax collections from cigarettes and tobacco products. EDAPS can help the tobacco industry restore revenues being lost through illicit trade.

    The quality of the products and the experience of EDAPS on highly secure ID documents and IT systems have been recognized by organizations such as the ICAO, OSCE and Interpol as some of the best in the world. The EDAPS-produced De Beers Diamond Passport provides for the first time a forgery-proof certification of De Beers diamonds and jewelry items.

    EDAPS now brings all this experience and knowledge to the world of tobacco products protection.

    EDAPS says the Golden Leaf Award will encourage it to continue raising the bar for excellence in quality and security of its products and solutions for the tobacco industry.

    Most promising new product

    Iggesund Paperboard and packaging converter Amcor-Rentsch won a Golden Leaf Award in the most promising new product category. Iggesund had asked Amcor to design a pack that would challenge its paperboard to the maximum.

    Not one to shy away from a challenge, Amcor-Rentsch came up with a complex pack featuring both round corners and unusual curves. Dubbed the “diamond pack,” Amcor-Rentsch’s experimental pack features a whopping 112 crease lines (compared with perhaps 20 for a conventional round-corner pack).

    The higher the number of creases, the greater the stress placed on the paperboard. Iggesund’s Invercote paperboard passed the test comfortably.

    The diamond pack offers cigarette manufacturers another opportunity to set their products apart in an increasingly crowded marketplace. As regulators restrict advertising and health warnings occupy ever-larger areas of the pack’s real estate, the shape and “feel” of packaging will play an even greater role in establishing brand identity.

    “Receiving the Golden Leaf Award was a very pleasant surprise to us,” says Carlo Einarsson, marketing communications director of Iggesund Paperboard. “The award was also a great endorsement of the fact that designer freedom really is important and counts. The Diamond Pack, being round, square and diamond shaped in one, is a great testimonial of an exciting and unconventional packing solution. It looks pretty nice and apparently we are not the only ones who think so!”

    Invercote was also used for Tobacco Reporter’s cover this month.

  • Meeting of Minds

    Meeting of Minds

    Photo: ttinu

    Created only two years ago, the Global Tobacco Networking Forum concept once again proves its value to a rapidly changing industry.

    By George Gay

    One of the many advantages of attending a TR Global Tobacco Networking Forum (GTNF) is that you come to realize not everybody sees things the way you do. I was reminded of this in October when I attended a GTNF session that discussed the possibility that all ingredients other than tobacco might be banned from the cigarette rod. I had expected most people—with the obvious exceptions of those involved in supplying these ingredients and their associated equipment—to be celebrating, at least from a business point of view. But this was not the case. So in the spirit of discussion engendered by the GTNF, I will use a couple of paragraphs to describe what my reasoning was and wait for your responses.

    If those in authority who put themselves forward as being concerned about the health of cigarette smokers force the tobacco industry to remove ingredients other than tobacco from cigarettes, then those cigarettes will appear to the consumer to be somehow improved. For one thing, they will appear to be and, to some extent will be, more “natural.” And given the way the mind works, it’s not a long stretch from “improved” and “natural” to “safer,” and nor is it a long stretch from “safer” to “safe.”

    So if the World Health Organization’s Framework Convention on Tobacco Control (FCTC) comes down in favor of removing ingredients other than tobacco from cigarettes, then it will, de facto, be encouraging the introduction of the first official PREPs—though in this case purportedly reduced exposure products. And, in doing so, it will inevitably involve the media and so provide a cigarette marketing push the likes of which will not have been seen before; or it will if you accept the idea that smokers crave reduced-risk products. What’s not to like about that?

    But even as I’m writing this I’m starting to see that there’s a small fly in the ointment of my argument. Consumers are going to be torn between these “improved” products and the traditional ones that though no longer available from licit manufacturers will be provided with much alacrity by illicit operators.

    Why is it that some people in the tobacco control business are willing to put forward schemes that will do little if anything to reduce tobacco use but everything to improve the competitiveness of the illicit trade—in the case just considered, by wiping out its competition? Tobacco control is clearly something of a misnomer. Apparently, a group of researchers suggested during the Asia Pacific Conference on Tobacco or Health in Sydney recently that governments should reduce the amount of tobacco available for sale by 5 percent each six months—a cast-iron business plan for the illicit trade if ever I heard one.

    The illicit trade was another of the subjects much in evidence at the October GTNF held in Bangalore, India. I cannot disclose what went on at the forum because, in a successful effort to encourage open debate, the rules stipulated that what was said during the sessions was not reported. If you want to find out what is said, or if you want to have your say, you have to turn up. And, in any case, I didn’t get to the illicit trade sessions. One problem—if a problem it is—with the GTNF concept is that, with four simultaneous sessions in progress, you have to make some difficult choices. Twenty-four sessions were shoehorned into six four-session time slots spread over two afternoons, with the mornings being reserved for plenary sessions at which the more traditional, formal presentations were made.

    The illicit trade needs to be discussed. From outward appearances, combating this trade is such an unmitigated disaster that you have to assume either there is no will to put a stop to it or that some of those involved are incompetent on a hitherto unimagined scale.

    Nearly all of the problems and, therefore, the solutions, lie with governments, which often seem completely out of touch with reality. Examples are legion, but I saw a story just this morning that reported the German government as saying it planned to raise tobacco taxes during the next five years to make up for falling tobacco tax revenues as Germans smoked less, opted for cheaper brands or turned to smuggled products. So, if I’m not mistaken, the plan is to charge honest smokers to make up for a shortfall in revenue caused in part by dishonest ones. This sounds like a descent into madness. Already, manufacturers are required under various agreements with governments to dig enormous black holes called “hoping to combat the illicit trade in tobacco” holes, and shovel in smokers’ money. This is neither sensible nor fair.

    Could it be that there are too many accountants, lawyers and law-enforcement people looking at the contraband issue and not enough psychologists, sociologists and, dare I suggest it, ordinary people?

    In my view, even the tobacco industry does itself few favors in respect of contraband, though at least it has the excuse of having few options; it just has to keep those holes filled. A number of manufacturers have been making the point that only criminals benefit from the illicit trade, a claim that seems to take a wholly unnecessary waltz through the contraband minefield wearing a pair of magnetized boots.

    The question that anybody hearing this will ask herself is: Who are the “criminals?” Clearly, they comprise the counterfeiters and those who smuggle and or sell any form of illicit cigarettes. But when you think about those who buy and consume illicit cigarettes, you venture on to tricky ground. Either you fudge the answer by saying that these people aren’t really criminals and, in the process, condone what they do and, in effect, the illicit trade; or you say that they are criminals and admit that they benefit from the trade. Of course, some consumers do so benefit, but do we need to underline this?

    There is another difficulty too. If you believe that governments raise taxes so as to take the retail prices of cigarettes beyond the point at which smokers can afford them in an effort to eliminate smoking, then you have to believe that the illicit trade provides the only brake on this policy; so the illicit trade is of indirect benefit to the licit trade, which, by definition, isn’t criminal. And it goes further. Governments, which, technically, are not criminal, benefit too because they don’t really want to see a lot of people quitting tobacco since this would cause their tax revenues to fall; so the illicit trade provides a convenient fig leaf behind which they can hide this embarrassment.

    “Watershed”

    What is at stake here is the truth, a slippery concept if ever there was one. As somebody once said, truth is probably not a terribly useful concept and can lead to martyrdom. I was reminded of this at the GTNF when—I suppose I shouldn’t report this—on a number of occasions a still was shown from the 1994 video of seven U.S. tobacco executives standing and swearing before the Waxman Hearings that they believed nicotine was not addictive.

    This was portrayed as a watershed: the moment when the rest of the industry recognized the ideological error of the soon-to-be-martyred executives and turned to embrace the great truth that nicotine is addictive. But of course it was no such thing. We are still scrapping over whether nicotine is addictive. As I write this piece, there is a court case going on in the U.S. at which the plaintiff’s lawyers say their client was addicted while the tobacco manufacturer being sued says she wasn’t. Interestingly, the tobacco manufacturer claims there is no better proof that she wasn’t addicted than the fact that she hasn’t smoked for 14 years. Isn’t that what those seven executives were getting at?

    In fact, the major thing that has been achieved by changing the definition of addiction and moving to a position where those people who have a say in formulating tobacco policies agree that nicotine is addictive, is that smokers now believe they have a cast-iron excuse for not quitting because they pick up on the new addiction label while hanging like limpets to the old definition of that word.

    We all hold on to old ideas and, getting back to what I wrote at the beginning of this piece, this is one reason why the GTNF is a product for its time: It provides a forum during which ideas that are no longer useful can be shaken out. And the Bangalore event certainly had some shakers and movers. It attracted, from around the world, more than 200 delegates representing most aspects of the tobacco industry and including a number of representatives of the major manufacturers. And it also ttracted a number of people from outside the industry.

    One idea that I believe the industry needs to give an airing, if not a shaking, concerns whether the major tobacco manufacturers are fighting the wrong battles—or not enough battles. The tobacco industry is enormously competitive in the marketplace, and this can be seen reflected in the sorts of areas where the major manufacturers take their stands. They have made it clear through their actions that they are prepared to put up a fight against display bans and, in the future, it will become clear that they will be willing to go to war over plain packaging.

    But in my view, there is a danger in tobacco manufacturers aiming so much of their firepower at display bans and plain packs (both of which were discussed at some length at the GTNF) because while display bans and plain packs might be pointless and even, in the case of plain packs, unlawful, their pointlessness means they do not threaten the existence of the tobacco industry.

    However, the existence of the industry is threatened by attacks on the integrity of tobacco products and the imposition of smoking bans. To an extent, measures that attack the product are slightly easier to deal with because usually, though not exclusively, they are the product of national or international initiatives; so they present a very visible, large target. On the other hand, smoking bans, which for some time have been moving from public indoor places to public outdoor spaces and private indoor and outdoor places and spaces, are more invidious. They often play leapfrog at a local level, gradually building a momentum that allows tobacco out-of-control people to claim that it is confusing having some places where bans exist and some where they don’t. And you don’t need me to tell you that at this point they don’t lobby for doing away with the bans altogether.

    And this is a problem for the tobacco industry. While its big guns are fighting display bans and plain packs at the national level, smokers are being left with nowhere to smoke by local regulations and employer rules, and, in some places, a diminishing number of places to buy licit cigarettes, even assuming they could afford them. There is no point defending the right to display cigarettes to people who cannot afford these products, find a shop to buy them or a place to enjoy them.

    The industry needs to mobilize whatever resources it can muster against tobacco smoking bans and in support of product integrity, and generally against untruthful anti-smoking propaganda. This isn’t to say that it shouldn’t continue to work with people in the tobacco control community (let’s call them antibodies, and the out-of-control people busybodies) where such cooperation is possible and is aimed at the good of smokers and not the destruction of the industry. But just as it fights display bans and plain packs while it is working with tobacco control, it should be willing simultaneously to oppose smoking bans and other unnecessary controls.

    Call to Arms

    Appeasement is not the answer. A recent report in New Zealand calls for limits to be placed on the amount of tobacco that is imported, the number of outlets that can stock tobacco products and sales. It calls for tobacco to be sold in plain packaging and for the banning of retail displays and vending machine sales. And it recommends that tobacco companies be forced to fund the purchase of products to help smokers kick the habit.

    In France and elsewhere, calls are being made for exceptional taxes to be levied on tobacco company profits. And in Norway there is a proposal to increase to 20 the minimum age at which tobacco can be purchased. And once it is 20, there will be another study to show that it should be 22, and then 24 …. As the none-too-happy married couple once explained, in the end they decided to stay together until their children were dead.

    Nevertheless, there is one small candle flame flickering at the end of the tunnel. Last month, a story in The West Australian told how Western Australia’s (WA) tough new anti-smoker laws were not being enforced by councils amid growing concerns about the cost of such enforcement. This is an encouraging sign given that Australia’s economy, and especially the economy of WA, boosted by its mining industry, has been doing well of late. If the people of Australia cannot afford such laws, what about those in countries with less robust economies? As somebody once said, you should never let a good economic crisis go to waste.

    The tobacco industry should develop a strategy for exploiting concerns over anti-smoker regulations based on their costs and the assaults that they mount on freedoms. It should develop a strategy based also on pointing out whenever possible the distortions that busybodies pedal on a regular basis and that have been absorbed untested into the general media’s lexicon.

    Manufacturers have been successful at mobilizing quickly various parts of the industry against the threat of an ingredients ban; now it needs to do so in respect of public- and private-places smoking bans. But this time it will be harder because it will need to mobilize industry people, cigarette consumers and others. The localized nature of the smoking ban assaults make them just too numerous to be handled any other way. This sounds difficult, and it is, but we shouldn’t throw in the towel. There are groups of people around the world already fighting against bans, including those to do with smoking, but they could do with some support and encouragement.

    Every person who works for the tobacco industry, and anybody else who is interested in harmonious co-existence within societies, should be provided with information to counter the distortions trotted out by the busybodies; so they may use that information whenever they comment on website stories, whenever they write letters to the editor, whenever they talk with politicians, whenever they talk with other people. We all need to become much more vociferous ambassadors for the tobacco industry.

    But I would make four points here. The first is that we will never present a united front if some within the industry encourage regulation because it is a handy weapon to have aimed at their competitors.

    The second is that whatever information we put out must be the truth as best it is known, even at the risk of creating martyrs.

    The third, and perhaps the most important, is that the industry needs professional help in dealing with the general media.

    And the fourth is that GTNF events could be ideal rallying points for the industry; for the discussion and dissemination of vital information. All that is needed is a little more active participation by those who have the most to lose if the busybodies have their way—and that means all of us.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • And the winners are…

    And the winners are…

    Announcing the 2009 Golden Leaf Awards winners

    TR Staff Report

    Representatives of Sopariwala Exports, Filligent Ltd., U.S. Flue-Cured Tobacco Growers Inc. and Andromeda Forwarding received their Golden Leaf Awards trophies during a festive ceremony in the Globe restaurant on the 23rd floor of the Centara Grand Hotel in Bangkok.

    Against the breathtaking backdrop of Bangkok’s nighttime skyline, George Hendrata, CEO of Indonesian cigarette paper manufacturer BMJ, congratulated the winners with their achievements in areas such as product quality, customer service and corporate social responsibility. BMJ is the exclusive sponsor of the Golden Leaf Awards.

    The winners expressed their appreciation and told the audience about the efforts that contributed to their recognition.

    This was the fourth edition of the awards program, which was created in 2006 by BMJ and Tobacco Reporter to recognize tobacco companies and their suppliers for outstanding achievements in five categories—most impressive public service initiative, most promising new product introduction, most exciting newcomer to the industry, most outstanding service to the industry and the BMJ most committed to quality award. In addition to their trophies, winners of the Golden Leaf Awards received a $1,000 donation to a charity of their choice.

    The first three ceremonies were held in Bali (2006), Paris (2007) and Rio de Janeiro (2008). The next event will take place in Bangalore, India, in fall 2010. Please look for entry forms on Tobacco Reporter’s Web site and in its print edition.

    Most impressive public service initiative

    Sopariwala Exports received a Golden Leaf Award in the most impressive service initiative category. As one of India’s largest exporters of tobacco and tobacco products, Mumbai-based Sopariwala believes it should give back to the society from which it gained its knowledge and wealth so that others benefit as well.

    The company runs several charitable trusts—the South Bombay Public Charitable Trust and Aishabai & Haji Abdul Latif Charitable Trust. Sopariwala Exports has taken a particular interest in education because it believes education is the surest route for people to overcome the devastating effects of poverty. The challenge is particularly pressing in India, where literacy remains below the threshold level of 75 percent.

    The company has adopted more than 16 municipal schools, with a total student capacity of 23,000. Among other initiatives, Sopariwala has helped its schools attract better-qualified teachers and provided vocational courses. Since starting its program in 1998, the passing percentage of board-examinations has increased threefold. At one of the schools, the passing percentage has even increased to 100 percent—from a paltry 34 percent before.

    Sopariwala Exports has also adopted a “children’s village” at Lonavla, based on the concept of the international SOS Village Movement. The village provides a home for orphans and destitute children, offering all basic amenities and opportunities to help them develop their full potential.

    In addition to its education initiatives, Sopariwala Exports provides free medical aid to the poor and the needy, scholarships for higher studies on merit and coaching classes for public service office entrance examinations.

    Currently, the company is in talks with various technical institutes for a partnership that would allow children with an inclination toward technical education to enroll.

    Most promising new product introduction

    Filligent Ltd. received a Golden Leaf Award in the most promising new product introduction category. A Hong Kong biotech company, Filligent launched a new cigarette filter in the third quarter of 2009 that it says reduces biological activity of mainstream cigarette smoke by 30 percent compared with a leading “lights” cigarette as measured by the Ames assay using TA-100.

    In addition, the new filter, called Gen4B Microblue, reduces several key mainstream smoke constituents when compared to the leading light cigarette. Crucially, this is done without effecting a change in the cigarette smoke taste.

    The Gen4B Microblue has a dual-filter segment construction containing special granules in the tobacco side filter segment. The granules produced by Filligent USA are the same size as carbon granules normally used in cigarette filters and can be mass-produced on standard dual-plug filter-making equipment.

    The Gen4B granules may be blended with standard activated carbon granules to accomplish mainstream gas phase constituent reduction. The new filter can be produced by Filligent USA, or Filligent can supply the granules to filter or cigarette manufacturers for production in their own operations.

    Most exciting newcomer to the industry

    Shisha shop Arabian Nights received a Golden Leaf Award in the most exciting newcomer to the industry category. Arabian Nights is a first-of-its-kind shisha shop featuring an elite showroom of shisha and its accessories. The store provides a wide array of shishas sourced from around the world.

    Based in Mumbai, India, the shop now has 12 exclusive branded retail chain outlets in India. It has established showrooms in the country’s major metropolises and is planning to move into second- and third-tier cities in India. It also has plans to establish itself internationally.

    The Arabian Nights shisha shop is an initiative of Sopariwala Exports.

    Most outstanding service to the industry

    U.S. Flue-cured Tobacco Growers Inc. won a Golden Leaf Award in the Most outstanding service to the industry category. With the drastic changes in the U.S. tobacco industry in 2009, including a considerable tax increase, U.S. Flue-cured Tobacco Growers decided it had to quickly change the way it ran its business—so it could stay in business.

    In response to the challenges, the company developed a strategic program to save money while improving customer service. Among other changes, the company eliminated its sales force and set up “master distributors” to sell its products.

    While the company had to overcome some skepticism about its plans at first, employees, customers and business partners today appear very pleased with the changes. The best evidence of this is the sales figures of Flue-cured Tobacco Growers’ flagship brands, which the company says have grown “tremendously” since implementing the program.

    BMJ Most committed to quality award

    Bimo Italia SpA won the BMJ most committed to quality award. Bimo entered the international cigarette wrapping market in 2002 as a small regional producer of shrinkable BOPP film. The gradual installation of faster wrapping machines and greater expectations for wrinkle-free pack appearance challenged traditional BOPP manufacturing know-how.

    With a series of dedicated certifications and in-house learning procedures, Bimo succeeded in establishing itself as a respected BOPP producer for the cigarette industry, increasing volumes five-fold and reducing proportionately claims and problems for its customers through product quality and consistency.

    The company has certifications from ISO (9001 and 14001), the British Retail Council and Institute of Packaging and the American Institute of Bakers, among others.

    In 2008, British American Tobacco awarded Bimo its coveted Business Enabler Survey Tool (Best) certification. The Best certification uses 108 criteria for measuring suppliers’ performance, including employee rights and training, process control, quality production, financial controls and the supplier’s ability to trace its own raw material sources.

    People’s choice award

    For the third year in a row, Andromeda Forwarding took home the People’s Choice Award. As happened during previous editions of the Golden Leaf Awards, the judges were overwhelmed by a large number of customer nominations for Andromeda Forwarding—a recognition in its own right. The repeated wins by Andromeda prompted one judge to suggest renaming the trophy the “Bart Award,” after Andromeda’s CEO Bart Brouwerens.

  • And the winners are

    And the winners are

    gla-2008
    The winners of the 2008 Golden Leaf Awards, along with Tobacco Reporter’s then-publisher, Noel Morris, in Rio de Janeiro

    Golden Leaf Awards winners accept trophies in festive atmosphere

    Representatives of Universal Leaf Tobacco, Tobaccotoday, U.S. Flue-Cured Tobacco Growers and Andromeda Forwarding received their Golden Leaf Awards trophies at a festive ceremony held during Tobacco Reporter’s first Global Tobacco Networking Forum at the Intercontinental Hotel in Rio de Janeiro.
    George Hendrata, CEO of the Golden Leaf Awards exclusive sponsor, BMJ, accepted the trophy on behalf of ITC Printing and Packaging, which had won the prestigious BMJ “most committed to quality” award but was unable to send representatives to the forum.

    The other winners were recognized in the categories “most promising new product introduction” (Flue-Cured Tobacco Growers); “most impressive service initiative” (Universal Leaf); “most outstanding service to the industry” (Universal Leaf again); and “most exciting newcomer to the industry” (tobaccotoday.info).

    For the second year in a row, Andromeda Forwarding took home the “people’s choice” award. The company had been nominated by a whopping 44 business partners—12 more than in the run up to the 2007 Golden Leaf Awards. In addition to their trophies, winners of the Golden Leaf Awards received a $1,000 donation to a charity of their choice.

    Following the awards ceremony, festively (and scantily) dressed Brazilian dancers took over the stage and encouraged the crowd to join in. Many participants eagerly did so, with some displaying remarkable levels of stamina on the dance floor. As the evening wound down, many agreed it was an event worth repeating. They can look forward to the next Golden Leaf Award ceremony, which will be held during the TABINFO exhibition and congress in Bangkok, Thailand, Nov. 11-13, 2009.