Author: Staff Writer

The Philippines-based LT Group is to look to its core businesses of tobacco and liquor for further growth, according to a story in The Philippine Star.

“We will focus on our core business and fully capitalize on our market leadership position to benefit from the strong demand in growth in consumer-focused businesses,” the group’s president, Michael G. Tan, told reporters yesterday.

Non-core businesses, such as Philippines Airlines, would end up on the selling block, he added.

Not that everything in the tobacco business is as Tan would like it, according to a story in the Inquirer.

Next to oil smuggling, the illicit trade of cigarettes had become a key concern of the Philippines, with the government set to lose a potential revenue of P8 billion this year, he said.

Speaking yesterday to reporters after the annual stockholders meeting of LTG, Tan said the underground domestic manufacturing of cigarettes and the smuggling of products from abroad had been fueling the illegal trade in cigarettes.

And in other Asian countries, he added, the illegal tobacco trade had grown to “astronomical proportions”.
LTG is a key partner in the country’s leading cigarette-maker Philip Morris Fortune Tobacco Corp.

The Irish Presidency of the EU says that its revised version of the European Commission’s proposed Tobacco Products Directive is ‘a balanced compromise that should be agreeable to the majority of the member states’.

The Presidency is proposing a reduction in the combined picture and text warnings for cigarettes, roll-your-own and water pipe tobacco from 75 per cent to 70 per cent on the front and back surfaces of packs.

Under the proposals, member states would decide whether or not to apply these warnings to other smoking tobacco products.

In a move that will greatly please tobacco manufacturers, the Presidency is proposing that slim cigarettes should not be banned, as they would be under the Commission’s proposals, which were made public at the end of last year.

Meanwhile, the Presidency has sought to clarify the position on flavors while keeping the thrust of the Commission’s proposal. Additives essential for the production process (e.g. sugar lost during the curing process) would not be prohibited, while those that result in a characterising flavour or increase addictiveness and toxicity would be prohibited. Tobacco products other than cigarettes, roll-your-own tobacco and chewing tobacco would be exempted from the flavor prohibitions.

However, under the new proposals, member states would be able to introduce stricter national measures in certain areas, such as additives or certain aspects of labelling when these were justified for public health reasons.

Discussion of the Presidency’s proposals will take place during the Employment, Social Policy, Health and Consumer Affairs Council meeting on Friday.

The Norwegian Heart and Lung Patient Organization, LHL, has called for Norway to become tobacco-smoke free, according to a story in The Nordic Page.

LHL’s secretary general, Frode Jahren, was quoted as saying that now was the time to face up to the fact that smoking killed, and so prohibit the sale and importation of tobacco and cigarettes.

The Nordic Page story said that tobacco smoking was the major risk factor for both early death and loss of healthy-life years in Norway.

Estimates from the National Institute of Public Health showed that each year about 5,100 people died from smoking related diseases. And ‘hundreds’ of people died each year from diseases caused by passive smoking.

The story went on to claim that tobacco had no health benefits: it was simply a poison that killed.

Although the number of smokers had decreased in Norway significantly since 1973, daily or occasional smoking was said still to be common among more than a million Norwegians aged 16-74.

While conceding that the fight against smoking had yielded significant results, Jahren said the situation called out for stronger measures than had been employed in the past.

And based on the available knowledge, prohibition was the only logical answer.

The introduction of a sales and importation ban held out the prospect of significant health benefits for individuals and economic benefits for society, Jahren added.

The prevalence of tobacco smoking in the US fell from 18.9 per cent in 2011 to 18.0 per cent in 2012, according to estimates based on data from the 2012 National Health Interview Survey and previous surveys.

Smoking fell from 24.7 per cent in 1997 to 20.9 per cent in 2005, and from 20.6 per cent in 2009 to 18.0 per cent in 2012.

Last year, 20.4 per cent of men and 15.8 per cent of women were current smokers, while 25.3 per cent of men and 19.1 per cent of women were former smokers.

At the same time, the number of men and women who had never smoked stood at 54.3 per cent and 65.2 per cent respectively.

Taking men and women together, smoking was most common among those aged 18-44 (20.3 per cent), while the smoking prevalence among those 45-64 was 19.5 per cent and the prevalence among those over 65 was 8.9 per cent.

For adults aged 18 and over, and for the age groups 18–44 and 65 and over, men were more likely than women to be current smokers.

Alliance One International’s sales and other operating revenues during the year to the end of March, at $2,243.8 million, were increased by 4.3 per cent on those of the previous year.

Tobacco sales were up by $94.1 million, primarily due to higher green costs caused by smaller crops in African countries and Brazil in respect of the fiscal 2013 crop.

At the same time, processing and other revenues decreased 1.1 per cent to $95.1 million due to a smaller crop in Brazil.

Gross profit decreased by 0.9 per cent to $285.2 million and gross profit as a percentage of sales decreased from 13.4 per cent to 12.7 per cent mainly due to higher per-kg processing costs incurred because of the smaller African crops – higher costs that were not fully passed on to the customer.

Gross profit and core operating results were impacted, too, by $14.3 million of foreign exchange hedge expenses, which compared with a $6.0 million gain last year.

Commenting on the results, Pieter Sikkel, CEO and president, said the company was encouraged by its sales improvements this year.

However, he added, there remained significant opportunities to improve the company’s performance and there were further objectives to meet as part of its reaching its goals.

“Strategic investment remains a primary focus and this year we deployed $39.9 million to further improve factory efficiencies and enhance our supply chain,” he said. “Investment in farmer agronomy programs, which support secure compliant sustainable supply as embraced by our customers, continues to be a key component of our plans.

“Total demand for tobacco, while shifting, is stable and supply remains tight in Burley and higher quality flavor tobaccos.

“Our balance sheet is well positioned with inventories at year-end of $903.9 million and uncommitted inventory well within our stated range of $50-$150 million…”

SKYCIG, a UK electronic cigarette provider, has set up a website to help vapers write to their MEPs (members of the European Parliament) and oppose proposed changes to the EU’s Tobacco Products Directive (TPD).

One of the European Commission’s proposed changes to the TPD would effectively emasculate the electronic cigarettes now on sale in the EU and encourage the users of these products to return to consuming traditional cigarettes.

In a statement issued through PRNewswire, SKYCIG, which is a member of the ECITA (Electronic Cigarette Industry Trade Association), said that the UK’s MHRA (Medicines and Healthcare Products Regulatory Agency) recently announced its intention to have electronic cigarettes classified as medicinal products and to require them to be licensed by 2016: similar proposals to those put forward by the Commission.

SKYCIG said that these strict MHRA regulations would make electronic cigarettes more difficult for users to access than their ‘undisputedly more harmful counterparts, traditional cigarettes’.

But it pointed out that the most industry operators believed that, in the long term, revisions to the EU’s TPD would take precedence over the MHRA announcement – and hence the focus on MEPs.

“As an ECITA member, SKYCIG firmly oppose the views of MHRA and feel that this is an unjustifiable restriction on a product which has the potential to save lives as an alternative to traditional cigarettes,” said Douglas Mutter, operations manager, SKYCIG. “This campaign will hopefully bring some common sense to the debate and encourage better enforcement of current regulations without the need for unnecessary medical classification,” he added.

SKYCIG’s dedicated ‘write to your MEP’ webpage is at http://www.skycig.co.uk/ecita.

Philip Morris International expects a decision to be made this month or next on a challenge by Uruguay as to whether an international tribunal set to hear bilateral investment treaty complaints has jurisdiction over the matter.

In 2010, three Philip Morris International companies (PMI) initiated international arbitration proceedings against Uruguay under the Uruguay-Switzerland Bilateral Investment Treaty (BIT), according to a statement posted on PMI’s website.

The BIT provides protections for investments made in Uruguay, including brands, intellectual property, and ongoing business enterprises.

PMI claims that two regulations implemented by Uruguay in 2009 breach the protections guaranteed by the BIT and damage their investments in the country.

The statement by PMI is at: http://www.pmi.com/eng/media_center/company_statements/Pages/uruguay_bit_claim.aspx

Imperial Tobacco employees in the US are helping to raise funds to support families in Oklahoma affected by last month’s devastating tornado.

And Commonwealth – Altadis has pledged to match the donations made by its employees to the American Red Cross Oklahoma Disaster Relief Fund.

The idea came from Bonnie Marks, fleet supervisor in Travel & Fleet Management, who said that employees felt they had to help in some way.
About 24 people, including seven children, were killed when the category five tornado tore through Moore, a suburb of Oklahoma City.

“It’s great to see that our people care enough to lend a helping hand to those left devastated by events in Oklahoma,” said Kevin Freudenthal, region director Americas.

Police in Rawalpindi have arrested 15 shisha smokers around the city following a crackdown on smoking in public places, according to a story in the Daily Times.

And it seemed that the 15, if found guilty, would be going to jail.

According to the Times’ story, the Lahore High Court had ordered the provincial government to enforce a ban on shisha cafés and smoking in public places.

The smokers were arrested in three raids that involved the city police, the bazaar police and the airport police.

Various shisha-smoking paraphernalia was seized during the raids.

Some police officers in the Indian city of Bengaluru are being ‘over-zealous’ in enforcing a ban on tobacco smoking in public places, according to a story in the Deccan Chronicle.

The paper said there had been complaints that some people had been made to pay Rs500, more than twice the Rs200 stipulated under the law.

There had been reports, too, of failures on the part of the police to issue receipts when imposing on-the-spot fines.

And some smokers said that when they had asked for receipts they had been invited to the police station to collect them.

In one incident, a group of college students each paid Rs200 without getting a receipt after two constables took their pictures and threatened to give the pictures to the students’ parents.

In all incidents, the people had been smoking where tobacco smoking was banned.

A senior police officer was quoted as telling the Chronicle that his force had not received any complaints.

If a complaint were received, the force would take the necessary action, he added.