Author: Staff Writer

Swedish Match reported today that its sales during the third quarter to the end of September, at SEK3,230 million, were increased by 1 percent on those of the third quarter of 2012.

Operating profit from product areas, which excludes a share of the profit from the Scandinavian Tobacco Group, declined by 11 percent to SEK836 million.

Operating profit, which includes a share of the profit from the STG, declined by 10 percent to SEK924 million.

And basic earnings per share were down from SEK3.41 to SEK3.15.

CEO Lars Dahlgren said that key factors in the drop in operating profit had included a sharp fall in the operating profit for other tobacco products, reflecting the adverse competitive pricing developments in the U.S. cigar market, a restructuring charge relating to Scandinavian snus operations, as well as adverse “mix effects” within SM’s snus and snuff product area.

About 17 percent of Finns aged 15–64 smoked daily last year: 21 percent of men and 14 percent of women, according to an Esmerk Finnish News story quoting Finland’s National Institute for Health and Welfare.

At the same time, 12 percent of boys and girls aged 14–18 smoked daily.

Daily smoking has been declining among men, women and young people aged 14–18 since the mid-2000s.

Last year, the volume of tobacco products delivered for taxable consumption was down on that of the previous year: 3 percent down in the case of cigarettes and 1 percent in the case of cigars.

And the consumption of tax-free cigarettes, which account for about 11 percent of total consumption, fell by 9 percent on that of the previous year.

Meanwhile, vaping is yet to catch on in Finland in a major way. Last year, less than 1 percent of men and women were said to have used e-cigarettes on a daily basis.

Logic Technology said yesterday that Raz Rahman had joined its key executives team.

In a press note, the e-cigarette company said that in his role as Northeast regional director, Rahman would lead the “rapid business development of Logic brands by accelerating distribution and improving market presence to further establish Logic as a category leader.”

Rahman spent 22 years with Altria sales and distribution, retiring from the company this year.

Over the course of his career, he held various leadership positions, most recently leading a team of 80 sales managers expanding Altria’s presence in his markets.

In his previous role, Rahman was the director of trade relations for the company, helping further Altria’s relationship with the wholesale and retail trade, as well as with organizations including the National Association of Convenience Stores (NACS) and the American Wholesale Marketers’ Association (AWMA).

Imperial Tobacco’s business in the Netherlands has been recognized by trade partners for its field sales excellence, according to a note posted on the company’s website.

Imperial said that it had won the Distrifood Field Sales Team of the Year award in the non-food category for the fourth time, ahead of firms such as Mars and Nestlé, and ahead of other tobacco companies.

“These awards are based on the results of a nationwide survey of more than 2,000 Dutch retailers, who praised our field force for their professionalism, retail engagement and category knowledge,” the note said.

“This is not just recognition for our field sales team; all of our people have played an important role in this achievement,” said Ronald van Bilsen, head of sales.

“As we like to say in the Netherlands, together we can achieve more.”

A member of the European Parliament has questioned the ethics of tobacco manufacturers moving into the e-cigarette business.

Marc Tarabella, a Belgian MEP, noted in a preamble to questions he asked of the European Commission that all of the main cigarette companies had already bought “one or several electronic cigarette brands.”

The objective of these companies was clear, Tarabella said: to be completely in control by offering “both the evil and the remedy.”

“This is a serious problem,” he said.

“With such practices, ethics risk going up in smoke.”

Tarabella asked:

1. What is the Commission’s reaction?

2. Is there not a conflict of interest, or an ethical problem? What does the Commission plan to do?

The Commission will reply in writing at a later date.

Cyprus has become the 36^th country to have ratified an international protocol aimed at eliminating the illicit trade in tobacco products, according to a story in the Famagusta Gazette.

The protocol was adopted with much fanfare in November at the fifth Conference of the Parties to the World Health Organization’s Framework Convention on Tobacco Control, which was held at Seoul, South Korea.

The WHO opened the protocol for signature in January when the organization’s director-general, Margaret Chan, apparently told delegates attending the ceremony that one of the most joyous moments of her life had been the unanimous adoption of the protocol, despite efforts by the tobacco industry to prevent it from passing.

In fact, the protocol is almost certainly broadly welcomed by the tobacco industry, for which the illicit trade is a fierce competitor. The industry would like to see the speedy implementation of one of its commitments—the establishment an efficient international track and trace system for tobacco products.

And it would almost certainly like to see the protocol broadened to encompass certain manufacturing materials.

The protocol is due to enter into force 90 days after the 40th FCTC participating country has ratified it.

Japan Tobacco Inc. today announced the nationwide, early-December launch of two new Seven Stars products offering the “ultimate in taste.”

Seven Stars Real Rich is said to offer the ultimate in rich flavor and aroma, while Seven Stars Real Smoke is said to provide the ultimate in deep flavor and aroma.

In a note posted on its website, JT said that since its launch in 1969, Seven Stars had consistently offered “unique value in terms of flavor, aroma and design,” and as a result had become extremely popular among consumers.

In fact, a Seven Stars product occupies the No. 1 slot on Japan’s domestic volume sales table. And now, with 10 products in its lineup, the brand is one of the most popular in Japan.

Seven Stars Real Rich is said to use only selected leaf tobacco to produce a rich and mellow flavor and aroma with no roughness.

Its pack uses the basic Seven Stars design, but gives it a “deep red base tone rendered in sophisticated hues, representing the rich aroma and depth of the product.”

Seven Stars Real Smoke uses tobacco blended so as to produce a “full smoke sensation that is sharp yet has depth.”

It also uses the basic Seven Stars design, but in this case adapted with “bold black hues as the base tone, symbolizing a product with a rich and full smoke sensation together with a roasted flavor.”

Smokers of long or ultra-long cigarettes are at greater risk of lung and oral cancer than are the smokers of regular and king-sized cigarettes, according to Researchers at the Harvard School of Public Health (HSPH), Center for Global Tobacco Control.

“We found that smokers of long or ultra-long cigarettes have higher concentrations of tobacco specific carcinogens in their urine than [do] smokers of regular or king-size cigarettes,” said Constantine Vardavas, M.D., senior research scientist at the HSPH.

According to a MarketWired report sourced from the American College of Chest Physicians (ACCP), Vardavas and colleagues compared urine tests among 3,699 smokers of regular, king-sized and long or ultra-long cigarettes using data from the National Health and Nutrition Examination Surveys (NHANES) from 2007–2010.

Smokers of king-sized cigarettes accounted for 53 percent of the smoker population, smokers of long or ultra-long cigarettes constituted 31.5 percent, and smokers of regular-sized cigarettes made up the remaining 15.4 percent.

The researchers found that smokers of long or ultra-long cigarettes had significantly higher levels of NNAL—an indicator of a tobacco-specific carcinogen—in their urine.

In addition, researchers found that older smokers, non-Hispanic blacks and females had a greater tendency to smoke long or ultra-long cigarettes.

“While the significant risks of smoking are well known and accepted, very little information exists on the health risks of different sizes of cigarettes,” said Darcy Marciniuk, M.D., Fellow of the College of Chest Physicians and President of the ACCP.

Philip Morris USA’s domestic cigarette shipment volume during the third quarter to the end of September, at 34.1 billion, was 1.2 percent higher than it was during the third quarter of 2012.

Marlboro volume was increased by 1.5 percent to 29.4 billion, while the volume of the company’s other premium brands was down by 7.4 percent to 2.0 billion and its discount brand volume was up by 5.1 percent to 2.7 billion.

In presenting third-quarter and nine-month figures yesterday, Altria said that PM USA’s third-quarter reported domestic cigarettes shipment volume had increased by 1.2 percent primarily due to “one extra shipping day, changes in trade inventories and retail share gains, partially offset by the industry’s rate of decline.”

“After adjusting for calendar differences and changes in trade inventories, PM USA estimates that its third-quarter 2013 domestic cigarettes shipment volume was down approximately 3 percent and that total cigarette category volume declined approximately 3.5 percent in the same period,” Altria said.

PM USA’s domestic-market retail share during the three months to the end of September, at 50.7 percent, was increased by 0.2 of a percentage point on that of the third quarter of 2012.

Marlboro’s market share was unchanged at 43.7 percent, while the share of the company’s other premium brands was down by 0.1 of a percentage point to 3.1 percent, and the share of its discount brands was up by 0.3 of a percentage point to 3.9 percent.

USSTC and PM USA’s combined domestic smokeless products shipment volume during the third quarter, at 212.8 million cans and packs, was up by 9.5 percent on that of the three months to the end of September 2012.

Shipments of Copenhagen and Skoal taken together were up by 10.5 percent to 192.0 million packs and cans, while shipments of other brands were increased by 1.5 percent to 20.8 million packs and cans.

Altria commented that for the third quarter of 2013, USSTC and PM USA’s combined reported domestic smokeless products shipment volume had increased by 9.5 percent primarily due to one extra shipping day and volume growth for Copenhagen and Skoal.

“After adjusting for an extra shipping day, trade inventory changes and other factors, USSTC and PM USA estimate that their combined domestic smokeless products shipment volume grew approximately 4 percent for the third quarter of 2013,” Altria said.

USSTC and PM USA’s retail share of the domestic smokeless products market during the three months to the end of September, at 55.1 percent, was down by 0.3 of a percentage point.

Copenhagen’s share increased by 1.3 percentage points to 29.6 percent, while Skoal’s share fell by 1.2 percentage points to 21.2 percent, and the share of the companies’ other brands fell by 0.4 of a percentage point to 4.3 percent.

Middleton’s cigar shipment volume during the first three months, at 320 million, was increased by 6.0 percent on that of the three months to the end of September 2012, as Black & Mild volume increased by 4.4 percent to 311 million and other-cigar volume rose by more than 100 percent from 4 million to 9 million.

Middleton’s retail share during the third quarter, at 29.7 percent, was down by 1.1 percentage points on that of the three months to the end of September 2012, with Black & Mild’s share down by 1.1 percentage points to 29.5 percent and the share of other brands unchanged at 0.2 percent.

Altria’s 2013 third-quarter reported diluted earnings per share (EPS), at $0.70, were increased by more than 100 percent on those of the third quarter of 2012, while its adjusted diluted EPS, which excludes the impact of special items, increased by 12.1 percent to $0.65.

Altria’s third-quarter net revenues increased by 5 percent to $6.6 billion primarily due to higher net revenues from the smokeable and smokeless products segments, and higher gains on asset sales in the financial services business. Altria’s revenues net of excise taxes increased 6.6 percent to $4.8 billion.

“During both the quarter and the first nine months, our strategies and diverse business model continued to produce strong results,” said Marty Barrington, chairman and CEO of Altria.

“Our businesses are on track against their full-year plans, and Altria remains focused on creating long-term value for shareholders.

“In addition to producing strong results in our core businesses, we’re developing innovative tobacco products for adult tobacco consumers. We’re pleased with Nu Mark’s lead market launch in Indiana of its MarkTen e-vapor products. Further, Nu Mark plans to expand distribution of MarkTen to Arizona in December.”

Molins PLC said yesterday that its order intake and sales had been broadly as expected and, in the year to date, remained ahead of those of last year.

Performance in the period also had been broadly in line with expectations, the company said in issuing an interim management statement for the period from July 1 to Oct. 23.

“Each of the three divisions [Tobacco Machinery, Scientific Services and Packaging Machinery] has an order book that supports the anticipated level of sales in the fourth quarter, and the board’s expectation of group performance for the year as a whole remains unchanged,” the statement said.

“There has been no significant change in the financial position of the group since 30 June 2013.”

The company’s half-year results to June 30 were announced on Aug. 29 and reported here on Aug. 30 (see “First half sales up sharply at Molins”).