Author: Staff Writer

The U.S. government has come under fire for considering appropriating millions of dollars that otherwise would be paid by tobacco manufacturers to tobacco growers.

This is not taxpayer money, but the government is in a position to appropriate it because the money passes through the hands of the U.S. Department of Agriculture (USDA).

“The U.S. government is considering withholding millions in non-taxpayer dollars owed to North Carolinians that depend on this income as part of the landmark tobacco buyout settlement,” according to a press note issued by the North Carolina Farm Bureau (NCFB).

“In 2004, the American Jobs Creation Act established the Tobacco Transition Payment Program (TTPP) to help tobacco producers transition to the free market. The program eliminated the tobacco quota and price support system in exchange for 10 annual payments to producers from 2005–2014. The “assets” once held by farmers and quota holders were replaced by legally binding contracts with the USDA, which manages the collection and distribution of TTPP funds. Only the 2014 payment is outstanding for completion of these contracts.

“Where TTPP payments differ from most other federal programs appropriate for sequestration is that these payments are not taxpayer funded; rather, they are funded through fees that are assessed to tobacco companies. [The] USDA’s only role is to pass along the fees collected from tobacco companies and distribute them to contract holders.”

“It does not matter whether the U.S. government decides to hold hostage all or just a portion of the millions of non-taxpayer dollars owed to N.C. tobacco farmers; our state’s economy and its largest industry—agriculture—will be negatively impacted,” said Larry Wooten, president of the NCFB. “We understand the fiscal realities that led to the sequestration of funding for other federal programs, but North Carolina citizens, in good faith, signed these binding contracts with their own government, and many have already factored these payments into their business plans for 2014. We believe the federal government is incorrect in considering sequestering a portion of the tobacco buyout payments owed to farmers in 2014.”

“While North Carolinians are owed the largest portion of the 2014 TTPP payments, farmers and quota holders in all 50 states are also owed money from the federal government,” the press note said. “If paid in full, the 2014 payments would total approximately $1 billion. OMB [Office of Management and Budget] officials have declined to confirm just how much of the payments they are considering withholding.”

A digital review of the TFWA World Exhibition 2013 has been made available at

http://www.tfwa.com/inreview/TFWA-World-Exhibition-in-Review.

The TFWA (Tax Free World Association) event, which included an exhibition, conference, workshops and social events, was held in Cannes, France, on Oct. 25–26.

Factory managers from all of Imperial Tobacco’s production sites worldwide recently gathered at Santander in Spain. This was the first time that such a gathering had taken place.

“The event was an opportunity to celebrate achievements in the last 12 months, and awards were handed to those factories with outstanding results in safety, quality and reliability,” according to a note posted on the Imperial website.

During the event, Chief Executive Alison Cooper shared her insights into the business, while group manufacturing, research and development director, Walter Prinz, and his management team outlined the key challenges for the year ahead.

The event, which provided participants with an opportunity to visit Imperial’s cigar factory in Cantabria, was attended also by other guests, including Fernando Dominguez, director premium cigar.

Jacques Bouende, lead factory manager for West and Central Africa, said that the event had been “a great way to get to know those doing the same role and build up our network of contacts around the world.”

Japan’s 2014 leaf tobacco crop will be grown on 8,964 ha, down by 2.7 percent on the area under tobacco this year, 9,245 ha, which was down by 1.4 percent on that of 2012.

The flue-cured production area, at 5,805 ha, will be down by 98 ha or 1.7 percent; the burley production area, at 3,135 ha, will be down by 144 ha or 4.4 percent; and the domestic variety production area, at 24 ha, will be down by 3 ha or 11.1 percent.

The Leaf Tobacco Deliberative Council announced last week its annual determinations for local tobacco cultivation areas and grower prices for 2014 in response to a proposal submitted by Japan Tobacco Inc.

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

The council was said to have been in general agreement with JT’s proposal.

The average grower price for all types will be set at ¥1,906.47 per kg for the 2014 crop.

This was the same price that was set for this year’s crop, which itself was increased only by 0.84 percent on that of the previous year.

Including the results of its international tobacco business and its nontobacco businesses, JT’s April–September revenue, announced on Oct. 31, increased by 9.6 percent to ¥1,159.1 billion.

Operating profit was up by 30.8 percent to ¥347.4 billion, and the profit attributable to the owners of the parent increased by 40.5 percent to ¥237.1 billion.

The day before the announcement of its first-half consolidated results, JTI said that it was cutting its domestic workforce by about 1,600 people, and closing factories, sales offices and its vending machine division.

Tobacco control advocates in Southeast Asia are calling for tougher rules to ban cigarette-company contributions and sponsorships, according to a story in The Philippine Star.

The director of the Southeast Asian Tobacco Control Alliance, Bunon Ritthiphakdee, said tobacco companies were making sponsorship a part of their corporate social responsibility (CSR) programs so as to skirt around laws and policies banning such activities.

“These CSRs are nothing more than disguised marketing campaigns, and should therefore be exposed and stopped,” she said in a statement.

“If we understand the agenda behind tobacco industry CSRs, we can also be more effective in monitoring and regulating such activities under the global tobacco treaty, the WHO Framework Convention on Tobacco Control.

“National and regional measures are needed to make the public aware that the tobacco industry’s CSR activities are as toxic as cigarette smoke,” she added.

Ritthiphakdee said that among the countries of the region, only the Philippines, Thailand and Vietnam had legislative measures in place to ban CSR activities and/or the publishing of CSR activities.

The Philippines’ education department, she claimed, had issued a circular to restrict interaction of officials with the tobacco industry and that included a prohibition on the tobacco industry contributing funds.

Thailand, through a Cabinet decision, had banned both donations by tobacco companies to government agencies and the publishing of CSR activities.

And a tobacco control law passed in Vietnam last year had banned tobacco-industry CSR activities related to culture and sport, she added.

R.J. Reynolds Tobacco Co says that it has transformed its non-corporate website intended to inform adult tobacco consumers, retailers and wholesalers about tobacco tax issues.

The site, www.transformtobacco.com, has added a new e-mail alert feature that allows individuals to sign up to receive electronic notifications anytime an alert is issued for their state.

“This new feature will make it much easier for people to stay informed and take action on tobacco-related issues that affect them,” said Bryan Hatchell, director of communications.

“We are continuously searching for ways to transform the tobacco industry and making it easier for people’s voices to be heard will certainly help achieve that goal.”

Transformtobacco.com is mobile device friendly. It has an interactive state-by-state map with key information, links to social media channels (www.facebook.com/transformtobacco and www.twitter.com/transformtob), and fully-updated content on tobacco issues.

Visitors to the site can quickly connect with their legislators via a toll-free call or e-mail (determined by ZIP code) following the steps for ‘ongoing relationship-building with elected officials’.

The managers of Reynolds American Inc. and its operating companies are due to discuss the companies’ performance and plans during presentations to the investment community on Nov. 18.

The presentations will be webcast in listen-only mode at www.reynoldsamerican.com from about 9 a.m. Eastern Time.

Registration is available under Events & Presentations at the Investors section of the above website.

A replay of the webcast will be available on the website.

The Jakarta city administration is to target students and low-income residents in a new anti-smoking campaign funded by cigarette tax revenue, according to a story in The Jakarta Post.

Starting from next year, the city is expected to receive about IDR400 billion (US$35.2 million) a year in revenue from cigarette excise tax.

“We are currently discussing and fleshing out the anti-smoking programs, which comprise not only curative but also preventive measures,” the head of the Jakarta Health Agency, Dien Emmawati, was quoted as saying.

“Most smokers in the capital are low-income residents so we will focus on educating them. We will also target students.”

Dien said the funds allocated for anti-smoking programs would be distinct from those allocated for financing the city’s health care program, which this year amounted to IDR1.2 trillion.