Author: Staff Writer

The U.S. faces several unresolved public policy crises including a federal government shutdown, and yet officials are trying to create a problem where none exists, according to the Consumer Advocates for Smoke-free Alternatives Association (CASAA).

“Some U.S. Senators and state attorneys general, as well as the Centers for Disease Control and Prevention (CDC), have launched a bad-faith campaign against electronic cigarettes (e-cigarettes), the low-risk alternative to smoking,” according to a CASAA press note released through PRNewswire.

“E-cigarettes are being used almost exclusively by adult smokers and former smokers in order to quit or reduce their smoking habit. Nevertheless, these officials are irresponsibly misleading the public into believing that e-cigarettes pose an extraordinary danger to youth when there is absolutely no evidence to support that claim.”

The government attacks began with the CDC releasing statistics showing that a relatively small number of students, most of whom were already smokers, had tried e-cigarettes. The CDC’s reporting of these results was described as “misleading, to put it charitably” by Carl V. Phillips, Ph.D., scientific director of CASAA, an all-volunteer consumer group dedicated to protecting access to low-risk alternatives to smoking. “Obviously kids experiment with forbidden and often hazardous behaviors, from dangerous driving to illicit drugs,” Phillips said. “Of all the experimenting they do, these low-risk products are hardly the one to worry about.

“The results showed only that a few kids had tried one puff from an e-cigarette, not that any had become habitual users, let alone that it was causing any of them to engage in the actual risky behavior, smoking.”

But the CASAA press note said that this was exactly what the CDC had implied. “With no evidence to support the claim in the data and no reason to believe it was true, CDC touted its results as implying that the availability of e-cigarettes to adult smokers was somehow causing young people to smoke,” the note said.

“This launched a flurry of misleading claims and demands for banning this public health miracle. This includes senators demanding e-cigarette manufacturers respond to questions in what long-time anti-smoking campaigner, Bill Godshall, executive director of Smokefree Pennsylvania, observed were “typical ‘gotcha’ questions, designed so that any answer can be used in anti-e-cigarette propaganda”.

Phillips further commented that the questions were “disturbingly reminiscent of the Senate’s McCarthy-era witch-hunts.”

Meanwhile, CASAA Vice President Kristin Noll-Marsh said that consumers and industry were in complete agreement in supporting bans on sales to minors. “Unfortunately, some anti-tobacco organizations have endeavored to block such bans and then use the absence of restrictions on sales to youth as an excuse to ban sales to adults,” he said. “They do this even though cigarettes are legal and widely available. The sad truth is that children who want to smoke have no trouble acquiring cigarettes.”

“E-cigarettes are estimated to be about 99 percent less harmful than smoking,” CASAA said. “This has led to speculation about why officials are intent on eliminating them.

“The federal and state governments derive a large amount of revenue from cigarettes, profiting far more than the tobacco companies do from each pack sold. Attacking e-cigarettes could serve as a public relations ploy in an era where the government is increasingly considered unable to solve important problems. Deceptively casting e-cigarettes in the same light as smoking may represent a preliminary effort to support high taxes on this low-risk alternative as a revenue-generating measure as opposed to serving any real public interest.

“The U.S. Food and Drug Administration (FDA) has indicated that it will soon start regulating e-cigarettes, a move that could be beneficial to consumers by improving the quality of the products. But if [the] FDA yields to the demands of officials who are more interested in politics than science, it could spell the end of the most important public health innovation in a generation.”

“Ironically, the cigarette companies would benefit most from restrictive regulation,” said CASAA’s president, Elaine Keller. “It would be a travesty if our government were to choose to protect cigarettes from this low-risk competitor. Restrictive regulations would also favor the low-end e-cigarettes that tobacco companies have recently introduced over those offered by the smaller competitors. This would have a devastating impact on consumers since the smaller competitors offer the kind of higher-quality products that are responsible for millions of smokers switching over the last several years.”

Northern Ireland (NI) is the regional counterfeit capital of the U.K., according to a BBC Online story quoting the results of a PricewaterhouseCoopers (PwC) report that looked at the economic impact of counterfeiting.

People in NI were said to have admitted buying more fake clothing and accessories, films, music and alcohol than those in other regions. (Presumably, the survey methodology ruled out the possibility that the people of NI might be more honest when answering questions than are those in other regions.)

More than half of those surveyed in NI said they “sometimes” bought fake items—the highest regional percentage in the U.K.

And 64 percent of those who bought counterfeit products said they did so because they could not afford the real thing, a claim that rings true in the case of cigarettes given that the U.K. government raises taxes so as to make these products unaffordable.

The report, Counterfeit Goods in the UK—Who is buying what, and why?, said adults regularly bought counterfeit alcohol, cigarettes, medicines, films and music, clothes and car parts.

Mark James, of PwC’s anti-counterfeiting team, was quoted as saying that counterfeit goods impacted on profit and jobs, yet people increasingly saw it as a normal, consumer choice.

“The digital economy and global supply chains have made tracking counterfeit goods and measuring their economic damage fiendishly complex,” he said.

Meanwhile, The Scotsman reported that, according to the report, Scottish consumers were less likely than people in other parts of the U.K. to buy counterfeit goods. Thirty-two percent of people in Scotland admitted they sometimes bought fake clothing and accessories, compared with 53 percent of people in NI and 41 percent of people in the U.K. overall.

But the newspaper said that whereas 9 percent of respondents in Scotland owned up to buying fake cigarettes, only 6 percent of those in NI did so.

A report by Rebecca Smithers for The Guardian pointed out that, across the U.K. as a whole, 13 percent of people admitted to buying “imitation branded cigarettes, despite the obvious health risks of such products.”

A tobacco smoking ban in enclosed public places, including coffee shops, restaurants and bars, went into force in Lebanon on Monday, according to an Agence France Presse story.

Such a ban took effect a year ago in airports, hospitals and schools, but has now been expanded to include all enclosed public places.

The new anti-tobacco law includes also a ban on tobacco advertisements.

Smokers caught lighting up in an enclosed public space face a $90 penalty, while restaurant owners who turn a blind eye to offenders could be fined anything from $900 to $2,700.

Japan Tobacco Inc. is relaunching its Zerostyle Blue Mint and Zerostyle Bitter Leaf smokeless tobacco products.

The Zerostyle product line started life in 2010 as a non-lit, cigarette-shaped product, or “pipe,” containing a replaceable cartridge with tobacco and flavors. It had a tapered mouthpiece and removable cap.

Zerostyle is often referred to as a “snuff” and the category was recently expanded to include snus.

Zerostyle Blue Mint and Zerostyle Bitter Leaf will now be sold as Zerostyle Stix Blue Mint and Zerostyle Stix Brown Flavor, respectively.

In addition, the Zerostyle brand line will feature two new products: Zerostyle Stix Pink Flavor and Zerostyle Stix Green Mint.

The Stix descriptor seems to be a way of differentiating the original Zerostyle cigarette-shaped product from the more recent Zerostyle snus product.

The four new and relaunched products will go on sale from early November in Tokyo, Kanagawa, Saitama, Chiba and selected retail stores nationwide.

In a note posted on its website JT said there would be no change to the “flavor, aroma, or soothing straight mint taste in the transition to Zerostyle Stix Blue Mint. The flavor and aroma of Zerostyle Stix Brown Flavor, however, will be updated, resulting in a product with a subtle sweetness and a pleasant hint of bitterness,” the note said. “The new Zerostyle Stix Pink Flavor is a product that boasts a mild sweetness and light aroma. Zerostyle Stix Green Mint, the other new product, gives consumers a faintly sweet and fresh mint flavor.”

The launch and relaunch is accompanied by the introduction of five new types of “specialized colorful holders.”

Lorillard said yesterday that it had acquired all of the assets and operations of Skycig, a U.K.-based electronic cigarette business.

In a note posted on its website, Lorillard said the acquisition provided it with a major U.K. electronic cigarette brand and, along with its U.S. electronic cigarette brand, Blu Ecigs, “a global presence in the rapidly growing worldwide e-cigarette category.” “Skycig is expected to benefit from Lorillard’s significant sales, marketing, regulatory, research and development expertise to further strengthen its competitive position in the U.K. e-cigarette market,” the note said.

Lorillard is paying £30 million in cash immediately and will pay an additional amount of up to £30 million in 2016 contingent on the “achievement of certain financial performance benchmarks.”

“Skycig is a leading premium brand of electronic cigarettes in the U.K.,” said Lorillard. “From its formation in 2011, it has achieved strong growth and has procured exceptional control over the manufacturing process, providing it with a unique ability to develop and commercialize high-quality products and meet continued developments in the regulatory environment.

“Skycig will operate as a separate operating subsidiary under Lorillard’s ownership, and it is Lorillard’s intention to retain Skycig’s current management team and its current business locations in Great Britain.”

“It has been Lorillard’s mission to be first and best in the electronic cigarette category, and with the acquisition of Skycig, our mission is now a global one,” said Murray Kessler, Lorillard chairman, president and CEO.

“We believe that with the addition of Skycig, Lorillard is uniquely positioned to lead the global e-cigarette industry to reach its full potential, and to do so in a responsible manner.

“We firmly believe that e-cigarettes may present the most significant harm reduction option ever made available to smokers in the U.S. and abroad, and we look forward to working with regulators around the world to confirm this conclusion.”

Doctors and academics in Thailand have together formed the National Alliance for Tobacco Control (NATC) in order to strengthen the country’s anti-smoking messages, according to a story in the Bangkok Post.

The alliance, officially launched on Tuesday, said that its first mission was to support the public health policy of enforcing bigger health warning images on cigarette packaging.

NATC representative, Somsri Pausawasdi, president of the Physicians and Public Health Personnel Network for a Non-Smoking Society, said the formation of the alliance was prompted by a lawsuit launched by tobacco interests against the Public Health Ministry recently.

The lawsuit opposed a regulation requiring cigarette companies to increase the size of cigarette-pack health warnings from 55 percent to 85 percent of the front and back surfaces.

The regulation was scheduled to take effect today, but the Central Administrative Court ordered the ministry to suspend its enforcement while the court considered the lawsuit.

Wanchai Supachaturat, a member of the Medical Association of Thailand, said the tobacco companies opposed the change because they feared it could lead to a drop in the number of smokers, and thus cut into their profits.

In September, the ministry filed an appeal with the Supreme Administrative Court asking that the ministry be allowed to require the bigger health warnings.

Shehzad Munim yesterday became the first Bangladeshi to take over as managing director of British American Tobacco Bangladesh (BATB), according to a story in The Daily Star.

Prior to his latest appointment, Munim worked as the marketing director for BAT’s South Asia region.
Munim joined BATB after graduating from the Institute of Business Administration of Dhaka University in 1997.

In 16 years at BAT, he has served in senior management roles in Australia, Bangladesh, New Zealand and South Asia, based in Pakistan.

The Malaysian government has raised the excise duty on tobacco by 14 percent ahead of its 2014 budget due on Oct. 25, and the country’s biggest cigarette manufacturer has described the move as “shocking and disappointing,” according to a story by Pauline Ng for the Business Times.

The increase was gazetted on Friday.

“Such a move will exacerbate the already high levels of illegal cigarettes in Malaysia and dampen all efforts that have been taken thus far to address this national scourge,” British American Tobacco Malaysia managing director Stefano Clini said in a statement on Sunday.

Over the years, the Confederation of Malaysian Tobacco Manufacturers has highlighted the growth of illicit cigarettes, which are estimated to account for at least a third of the total market in the country and to cost the government more than MYR2 billion in lost taxes.

Meanwhile, a taxation expert was quoted in a story in The Star as saying that excise tax hikes needed to be implemented gradually to avoid destabilizing the legal cigarette market.

International Tax and Investment Centre President Daniel A. Witt said an increase that was too high implemented over too short a term could shock the market and create a demand for black market goods.

“Increasing excise tax should be done in a predictable way to stabilize the legal market, meaning those who can be taxed,” said Witt, who presented the Asia-11: Illicit Toba­cco Indicator 2012 study to the media on Monday. Asia-11 is a report on the illicit cigarette trade among 11 countries in 2012.

Alliance One International says that it has fulfilled its obligations under separate settlement agreements with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).

On Aug. 6, 2010, Alliance entered into agreements with the DOJ and the SEC to resolve those agencies’ respective investigations relating to violations under the Foreign Corrupt Practices Act, which involved conduct occurring prior to the merger that formed Alliance in May 2005.

These settlements required the company to retain an independent compliance monitor for a term of three years.

And on Sept. 30, it fulfilled its obligations under the agreements, “including the successful and on-time completion of its compliance monitorship,” Alliance said in a note posted on its website.

The Alliance note is at http://phoenix.corporate-ir.net/phoenix.zhtml?c=96341&p=irol-newsArticle&ID=1860336&highlight=.

Philip Morris International said yesterday it had entered into a definitive agreement to acquire 49 percent of the shares of United Arab Emirates-based Arab Investors-TA (AITA) for $625 million.

Through this acquisition, PMI will secure an almost 25 percent economic interest in the Société des Tabacs Algéro-Emiratie (STAEM), a joint venture that is 51 percent owned by AITA and 49 percent owned by the Algerian state-owned Société Nationale des Tabacs et Allumettes SpA, the market leader.

“STAEM, with which PMI has had a successful partnership since 2005, manufactures and distributes under license PMI’s Marlboro and L&M brands, which together hold a significant share of the international trademarks sold in Algeria, placing PMI’s brand portfolio as the second largest in the market,” PMI said in a note posted on its website. ‘This equity investment in AITA will provide PMI with enhanced earnings from Algeria and is projected to be accretive to PMI’s earnings per share as of 2014.”

Commenting on the deal, Miroslaw Zielinski, PMI’s president, Eastern Europe, Middle East & Africa region and PMI Duty Free, said that Algeria, with the fourth-largest GDP in Africa and an estimated cigarette market of 30 billion units, held tremendous potential for future growth.

“This agreement confirms our confidence in the Algerian economy, the cigarette industry and their long-term prospects. Over the last five years, Algeria has been a key driver of the growth of our premium brands in North Africa, and the investment we are announcing today will significantly enhance our prospects in the country.

“Our new partnership with the UAE-based investors, from whom we are acquiring the 49 percent interest in AITA, also opens additional business opportunities in Egypt and certain other North African and Middle Eastern markets where there is potential for further expansion.”