Author: Staff Writer

KT&G said yesterday that it would launch South Korea’s first low-ignition propensity (LIP) cigarettes later this month, according to a story in The Korea Herald.

The company says it has developed independently a “blue band” system for producing LIP cigarettes, a system that applies chemicals to the cigarette paper.

It has five patent applications submitted or pending in respect of the blue band technology.

The LIP paper is due to be used from July 23 on three of KT&G cigarettes within its The One brand of products.

It will then be rolled out to the rest of the company’s cigarettes.

Cigarettes in Korea are not required by law to have LIP paper.

The Nepalese government is looking to increase excise duty collection on tobacco products by 23 percent during fiscal year 2013-2014, according to a story in Republica.

In its 2013-2014 budget brought down on Sunday, the government said it expected to raise RS6.82 billion from excise duty on tobacco products during the year.

During the 2012-2013 financial year that ended yesterday, the government had targeted collecting RS5.54 billion.

In the meantime, the government has decided to require that excise duty stickers be included on tobacco products.

The U.K. government is coming under heavy fire for abandoning—for the time being at least—the idea of introducing standardized tobacco packaging.

The government put the matter out to public consultation and, following that consultation, decided to await the outcome of Australia’s pioneering adoption of standardized packaging.

Quoting the government’s summary report of the public consultation, Forest (Freedom Organisation for the Right to Enjoy Smoking Tobacco) said that 665,989 responses had been received from 24 separate campaigns. Around two-thirds of campaign responses received were from people who were opposed to the introduction of standardized packaging (427,888 responses) and one-third of campaign responses received were from people who supported standardized packaging (238,101 responses).

But those in favor of standardized packaging have cried foul because of the presence in the corridors of power of Lynton Crosby.

Crosby works for the Conservative party, one of two parties in the ruling coalition, as an election strategist.

He is not employed to advise on policy, but some people are not happy that, according to The Times, his lobbying company, Crosby Textor (CTF), has been advising Philip Morris.

Nor are they happy that, according to a BBC story, CTF was employed by British American Tobacco in Australia; though the company was quoted as saying that the CTF did not work on BAT’s campaign against plain packaging in that country.

Since Dec. 1, Australia has required that all tobacco products be sold in packaging designed on behalf of the government to be as ugly as possible. Packs are hugely dominated by graphic health warnings, are otherwise a standard olive color, have no logos or other design features, and have brand and variant names in a standardized font and position.

As things stand, the EU could well adopt a new Tobacco Products Directive that would include a requirement that would render cigarette packs close to being standardized. Packs would have to carry graphic health warnings covering 75 percent of their front and back surfaces.

The European economic and social committee (EESC) has said that changes to the EU’s Tobacco Products Directive proposed by the European Commission would have serious consequences for jobs, the economy and tax revenues.

The committee adopted an opinion on the commission’s review of the directive following what was described as a heated debate at its July 10-11 plenary session.

In a press note, the committee said the tobacco sector employed almost 1.5 million people in the EU; it promoted rural and economic development and was one of the few major export sectors still to maintain a positive balance, both at the EU level and in many member states.

“The EESC today argued that the changes proposed by the Commission would have serious consequences for jobs, the economy and tax revenues, thereby breaching other fundamental EU objectives such as full employment and restored growth,” the committee’s press note said. “However, the European Economic and Social Committee is also fully aware of the risks that tobacco poses to public health. It is crucial that health takes priority over all economic considerations, though skepticism remains on how effectively the European Commission’s proposed measures help the gradual process of quitting.

“The Committee stresses the importance of school-based educational and counseling strategies at EU level to ensure that every child or young person is informed of the realities of smoking and its harmful effects. It is strongly in favor of promoting public education and awareness-raising campaigns concerning the serious health effects of exposure to environmental tobacco smoke.”

Disease prevention should not be neglected, said José Isaías Rodríguez García-Caro, rapporteur of the EESC opinion on “Manufacture, presentation and sale of tobacco and related products.” “However, as a player of the internal market, tobacco also involves jobs and the industry,” he said. “Health and economic considerations must both be considered.”

The press note made the point that tobacco production contributed to rural employment. “The current tobacco leaf harvest in the EU amounts to 250,000 tonnes of tobacco per year and provides employment to 400,000 people,” the note said. “The EESC acknowledges the threat that may be caused to employment in agricultural areas where no other alternatives have been developed and where CAP [Common Agricultural Policy] subsidies are no longer available. The cohesion and structural funds, regional funds and funds for research and innovation should be used effectively to minimize these labor market risks and implement training schemes for workers, together with scientific, technical and innovation support for enterprises and farms.

“The EESC notes that the proposal on the inclusion of health warnings, covering 75 percent of both faces of the cigarette pack, together with the new text covering 50 percent of the sides, is not based on definitive scientific evidence. In addition, this change in packaging may threaten jobs in the packaging industry, which remains a sector of great economic importance in several European countries. It would also undermine the legitimate intellectual and industrial rights of manufacturers to use their registered trademarks.

“According to the EESC, allowing differentiation only on the basis of price will reduce the attractiveness of producing high-quality tobacco in the EU, since all products will end up almost the same. Standardizing format and taste could likely lead to an increase in tobacco smuggling, satisfying public demand through unregulated channels. Member state tax authorities already lose 10 billion euro in tobacco tax receipts every year. In addition, the absence of any quality control of such products will severely compromise consumer safety.”

The revisions to the EU Tobacco Products Directive, as endorsed by the environment, public health and food safety committee, would ban almost 38 percent of Poland’s current cigarette sales, according to a Polish News Bulletin story.

The new directive is due be decided upon at a plenary session of the EU parliament in September, but, for the time being, Poland’s concerns center on the proposed bans on the sale of menthol and slim cigarettes.

MEP Malgorzata Handzlik believes that most menthol- and slim-cigarette smokers will simply switch to other formats and that the drop in sales due to the bans will be about 5 percent.

But some in the tobacco sector believe that the presence of illicit menthol and slim cigarettes will mean that the drop in licit cigarette sales could be as high as 30 percent of the market’s total value.

Under such a revised regime, it is expected the annual turnover of small- and medium-sized stores selling tobacco would be cut by PLN8.6 billion; tobacco grower sales would fall by PLN40 million, and tax revenues would drop by PLN8.85 billion.

Campaigners in the U.K. who opposed the introduction of standardized tobacco packaging are celebrating following the government’s announcement that it has abandoned—for the time being—moves to introduce such packaging.

“We are delighted,” said Hands Off Our Packs campaigner Angela Harbutt. “The government conducted a public consultation on plain packaging in 2012 and half a million people opposed the measure.

“Ministers have listened to ordinary people. This is good news for those who believe in consumer freedom and are opposed to excessive regulation.

“It is vital that the government now represents the opinion of the British public at European Union level, where unelected bureaucrats are recommending a series of measures that will severely restrict consumer choice on tobacco.”

The Hands Off Our Packs campaign is owned and managed by Forest (Freedom Organisation for the Right to Enjoy Smoking Tobacco). Forest is supported by British American Tobacco, Imperial Tobacco Ltd. and Gallaher Ltd. (a member of the Japan Tobacco Group of Companies).

But while Harbutt was celebrating, she still found time to criticize the use of taxpayers’ money to support anti-tobacco campaigns. “We faced a vast state-funded campaign in favor of restricting branding on cigarette packaging, but hundreds of thousands of consumers fought back,” she said.

“Taxpayer-funded groups claiming to represent the public have no genuine support base and are wholly reliant on government grants.

“We are pleased that their hysterical and self-serving demands have in this instance been rejected.”

Forest said that, according to the government’s summary report of the public consultation, 665,989 campaign responses were received from 24 separate campaigns. Around two-thirds of campaign responses received were from people who were opposed to the introduction of standardized packaging (a total of 427,888 responses) and one-third of campaign responses received were from people who supported standardized packaging (238,101 responses).

“We’ve done the maths and including what the Government calls ‘detailed’ responses (2,424 in total), 64 percent of respondents are opposed to plain packaging,” Forest said in a press note. “Of course our opponents are trying to ignore the public response (odd, since it was a public consultation) and are focusing on the fact that 53 percent of the ‘detailed’ responses support plain packaging.
“Actually, that’s hardly a ringing endorsement for standardized packaging, especially when a quick glance at the report reveals the large number of state sector organizations that submitted a ‘detailed’ response.”

The report is available at https://www.gov.uk/government/consultations/standardised-packaging-of-tobacco-products.

If Australia wins the international litigation on plain packaging of cigarettes, countries of the EU will probably follow its example, according to a Baltic Business Daily story quoting European Commissioner for Health Tonio Borg.

“I believe that, if Australia wins the international litigation, more European states will declare their intention to introduce plain packaging,” Borg said after a meeting of EU health ministers in Vilnius, Lithuania.

There was no mention of what Borg thought would happen if Australia lost the litigation, or, indeed, if standardized packaging proved ineffective.

Since Dec. 1, Australia has required that all tobacco products be sold in packaging designed on behalf of the government to be as ugly as possible. Packs are hugely dominated by graphic health warnings, are otherwise a standard olive color, have no logos or other design features, and have brand and variant names in a standardized font and position.

Tobacco manufacturers have filed a number of complaints against Australia.

Among EU countries, Ireland is the only one to have announced its intention to follow the Australian example.

The European Parliament’s environment, public health and food safety committee has voted to back the European Commission’s proposal to classify electronic cigarettes as medicinal products.

For many people, this proposal is the most health-negative of the raft of proposed revisions to the Tobacco Products Directive put forward by the commission at the end of last year.

In its response to the proposed revisions, Parliament’s legal affairs committee said, in part, that Article 18 prohibited nicotine-containing products such as electronic cigarettes containing a certain nicotine level if they were not authorized pursuant to the Medicinal Products Directive. “It is, however, quite unclear if these products (which are much less harmful than tobacco products) even fall under the scope of the Medicinal Products Directive,” the committee said. “For products which do not fall under the Directive, this would effectively constitute a ban. Banning products which are less harmful than tobacco products and which can be a means of smoking cessation is certainly not in line with the public health aims of the proposal.”

Before Wednesday’s vote by the environment committee, a group of vapers wrote an open letter to the chairman of the environment committee, Matthias Groote, calling for a rethink on the proposal for regulating electronic cigarettes.

The group said that for 5 million to 7 million people within the EU, electronic cigarettes had provided and continued to provide a viable alternative to smoking tobacco cigarettes.

And it asked Groote and his committee to imagine how many lives could be saved if electronic cigarettes were allowed to continue to flourish.

However, the group expressed concern that what it called this positive story was about to come to an abrupt halt because of the commission’s proposal. “By regulating e-cigarettes as a medicinal product, and by banning flavours, the Commission and its supporters in Parliament and Council are effectively banning e-cigarettes, as the Parliament’s own Legal Affairs Committee has made clear,” it said.

The group made the point that whereas electronic cigarettes were safe, tobacco cigarettes killed 700,000 people in the EU each year and neither the commission nor Parliament were proposing to ban them.

In fact, the commission and the environment committee are proposing that some cigarettes should be banned: slim cigarettes and those with characterizing flavors, including menthol.

It also voted in favor of graphic warnings covering 75 percent of the fronts and backs of cigarette packs, though it did not accept a proposed amendment seeking the imposition of standardized tobacco packs.

The proposals still have to go before a plenary session of Parliament.

Japan Tobacco Inc.’s domestic cigarette sales volume during June, at 9.5 billion, was down by 4.2 percent on its June 2012 volume, 9.9 billion, which itself was up by 10.7 percent on that of June 2011, according to preliminary figures issued by the company today.

Volume during April-June, at 29.3 billion, was down by 0.2 percent on that of April-June 2012, 29.4 billion, which itself was up by 59.5 percent on that of April-June 2011.

JT’s market share stood at 60.7 percent in June, at 60.5 percent during April-June, and at 59.6 percent for the full year to the end of March.

JT’s domestic cigarette revenue during June, at ¥52.1 billion, was down by 4.3 percent on its June 2012 revenue, ¥54.4 billion.

Revenue during April-June, at ¥160.9 billion, was down by 0.5 percent on that of April-June 2012, ¥161.8 billion.