Author: Staff Writer

R.J. Reynolds Tobacco said yesterday that it had sold the historic Reynolds Building in Winston-Salem, North Carolina, for $7.8 million to a partnership comprising the PMC Property Group and Kimpton Hotels & Restaurants.

The building is to be converted into a mixed-use building comprising a “boutique hotel, restaurant and upscale apartments.”

“From the beginning our goal was to take extra time, care and effort ensuring we did this the right way,” said Andrew D. Gilchrist, president and chief commercial officer at RJRT.

“We wanted to come to the best result not only for us but also for the city of Winston-Salem and the building itself, considering its historic significance.

“We are confident that we have found the right owners to successfully transform this beautiful building while still honoring its place in the community, and once again make the Reynolds Building a centerpiece of downtown activity.”

Located in downtown Winston-Salem, the Reynolds Building is a 22-story art-deco style building completed in 1929.

Designed by the highly acclaimed New York architectural firm of Shreve and Lamb, the Reynolds Building was selected as the 1929 Building of the Year by the National Association of Architects and later served as the model for the Empire State Building.

It looks increasingly likely that Reynolds American (RAI) will acquire Lorillard, according to a research note issued by Bonnie Herzog, managing director of beverage, tobacco and convenience store research at Wells Fargo Securities (WFS).

In part, Herzog’s position is based on news reports that came out yesterday afternoon indicating that RAI was in “active discussions” to buy Lorillard.

But it is based too on WFS’s RAI-Lorillard merger analysis published on March 3 and on the belief that such a merger would be value creating for the shareholders of both RAI and Lorillard.

Herzog said also that British American Tobacco could either acquire or, more likely, form a strategic partnership with the combined RAI-Lorillard entity.

Given that it formed a partnership, BAT would be likely to contribute capital to help finance the deal and maintain in the combined entity the 42 percent stake it has in RAI.

E-cigarettes are considerably more effective than over-the-counter treatments such as nicotine gum and patches at helping people to quit smoking, according to a story in The Independent quoting the results of a new study by researchers at University College London (UCL).

One leading expert was quoted as saying it would be “perfectly reasonable” for the devices, which would soon be licensed as medicines, to be prescribed on the National Health Service (NHS).

Despite concerns that the recent rise in popularity of e-cigarettes might be renormalizing smoking, UCL professor Robert West said that these devices had proven to be highly efficient quit-smoking aids, which could “substantially improve public health.”

The UCL study looked at the success rate of nearly 6,000 quitters. Those who used e-cigarettes were 60 percent more likely to report succeeding than either those who tried to quit with over-the-counter nicotine replacement therapies, or those who quit without help.

E-cigarettes were found to be as effective as prescription medicines, but the group of smokers with the highest quitting success rate were those who used free NHS stop-smoking services.

Zippo Manufacturing Company (ZMC), maker of the Zippo® lighter, and its subsidiary ZippMark, said on Tuesday that they were suing LOEC Inc., a wholly owned subsidiary of Lorillard, for alleged trademark infringement, according to a ZFC press note issued through PRNewswire.

Zippo’s lawsuit, in the U.S. District Court for the Central District of California, seeks to prevent LOEC from selling its e-cigarettes under the brand name “blu” because of Zippo’s ownership of the trademark BLU® for its line of blue-flame butane lighters.

“Despite our attempts to resolve this matter amicably, Zippo has been compelled to seek the court’s assistance to protect our Blu trademarks,” said Zippo president and CEO Gregory Booth.

“Zippo is instantly recognizable because we have long understood the value of our brand and the need to vigorously protect it against use by others.

“Our Blu trademarks are similarly valuable and will be similarly protected.”

Zippo’s trademark infringement claim was said to have come in response to LOEC seeking a declaratory judgment of non-infringement.

Japan Tobacco Inc. said today that it would grant scholarships to 11 students from Asia as part of its 2014 Asian Scholarship Program (ASP) for human resource development in the region.

Aiming to promote international exchange and human resource development in Asia, the JT ASP was established in 1998 to offer financial support to Asian students.

Through the program, Asian graduate school and doctoral course students currently or imminently financing their own studies at 37 universities and colleges selected by JT throughout Japan will receive ¥150,000 each month for up to two years.

Every year JT awards scholarships to about 10 applicants, and a total of about 20 scholarship students study in each round of the program. There will be 21 scholarship students during this fiscal year, a number that includes the newly granted 11 students: four men and seven women.

A total of 194 students have been awarded scholarships since 1998.

As well as supporting study and research in Japan, JT offers also several opportunities to experience Japanese culture, establish networking with young JT employees and visit JT facilities.

“As a good corporate citizen, the JT Group has established various key areas for social contribution activities in the JT Group Social Contribution Policy, focusing on social welfare, arts and culture, environmental protection and disaster relief,” JT said in a note posted on its website.

“The JT Group will continue to conduct various social contribution activities including the JT Asian Scholarship Program.”

So far this sales season, Zimbabwe’s average flue-cured price, at $3.18 per kg, is more than 14 percent down on that of the same period of last year, $3.71, according to a story in News Day.

No explanation was given as to why the prices paid to farmers were down so dramatically.

The latest figures issued by the Tobacco Industry and Marketing Board (TIMB) indicate that this season 151.5 million kg of flue-cured has been sold for $481.8 million. The sales comprised 109.5 million kg sold under contract and 42 million kg sold at auction.

By the same stage of last season, 118.8 million kg had been sold for $440.6 million.

At least 180 million kg of flue-cured is expected to be sold this year, up from 166 million kg last year.

Universal Corporation yesterday reported net income for the fiscal year ended March 31, at $149.0 million or $5.25 per diluted share, increased on that of the previous year’s $132.8 million or $4.66 per diluted share.

Segment operating income, which excludes certain one-off items, was $175.2 million, down by $57.6 million or 24.7 percent.

The reduction in segment operating income was primarily attributed to weaker margins in Brazil from higher green-leaf costs, increased currency “remeasurement” and exchange costs, and higher sales of carryover and uncommitted inventories in fiscal year 2013.

Revenues of $2.5 billion for fiscal year 2014 were said to have been increased by 3.3 percent compared with those of the previous year, as slightly lower volumes were offset by higher prices.

“We performed well in the face of a challenging environment this year, and our underlying business and customer relationships remain strong,” said George C. Freeman III, chairman, president and CEO, in announcing the results.

“Given the larger crops this year, shipping volumes in the second half of fiscal year 2014 exceeded those in the comparable period last year. These increased volumes partially offset lower levels of carryover volumes in the first half of the year, weaker margins in Brazil, and negative foreign currency ‘remeasurement’ and exchange loss comparisons this year …”

Meanwhile, Universal’s board of directors declared a quarterly dividend of $0.51 per share on the common shares of the company, payable on Aug. 11 to shareholders of record at the close of business on July 14.

In addition, the board declared a quarterly dividend of $16.875 per share on the company’s Series B 6.75% Convertible Perpetual Preferred Stock, payable on June 16 to shareholders of record as of 5 p.m. Eastern Time on June 1.

The board set the date of the annual meeting of shareholders as Aug. 5, 2014.

More than 1.2 million counterfeit Rizla booklets have been seized in China following an initiative led by Imperial Tobacco’s Group Security team.

The illicit products (pictured) were captured during a series of raids by the authorities in the provinces of Guangdong and Jiangxi.

“Lengthy investigations by Group Security into a number of smuggling networks targeting African and European markets played a crucial role in the success of the raids,” said a note posted on Imperial’s website.

“An initial swoop was made by the Chinese authorities on an underground packing house following weeks of surveillance.

“Subsequent raids were then made on a second packing house as well as two printing workshops and a fully stocked warehouse.”

Imperial said that counterfeit Rizla products had a serious impact on its sales, particularly in African markets such as South Africa and Senegal.

The Muscat Governorate plans to extend a ban on smoking tobacco in public places, according to a story in the Times of Oman.

The governorate is a region of Oman that includes the country’s capital, also known as Muscat.

Smoking has been banned since April 2010 in enclosed public places such as shopping malls, cafés and restaurants, but the extended ban would include places such as beaches and parks.

A report by the Ministry of Health was said to have shown that almost 70 percent of the sultanate’s residents suffered from some kind of curable disease related to smoking.

The consumption in the U.K. of tobacco products that have not had U.K. duty paid on them is said to be on the rise again, according to a story by Guy Bentley for City A.M, quoting figures from HM Revenue and Customs.

Non-U.K.-duty-paid (NUKDP) products accounted for 16 percent of the cigarette market during the financial year 2012–2013, while NUKDP products accounted for 48 percent of the roll-your-own tobacco market.

These figures were said to represent the first increase in the consumption of NUKDP products in recent years, though the story did not indicate what the previous consumption levels were.

The story suggested that the increase had been caused by tax increases since 2010 and said that a significant proportion of the increase was down to black market activity.

Counterfeit hand-rolling tobacco is said to be a growing problem.