Category: News This Week

The U.S. state of Vermont has recovered $8.3 million in penalties under a settlement with R.J. Reynolds Tobacco over deceptive advertising, according to a VTDigger.org story quoting a statement from the attorney general’s office.

The settlement is the result of a 2005 lawsuit over the company’s marketing of its Eclipse brand of cigarettes.

A Vermont judge in 2010 ruled that Reynolds had intentionally misled customers through direct mail marketing, print and Internet advertisements, and advertisements on the cigarette packs that touted Eclipse as a reduced-risk cigarette.

One message said that because the tobacco in Eclipse was heated rather than burnt, the product produced less toxic smoke than did other cigarettes. That “may present less risk of cancer, chronic bronchitis, and possibly emphysema,” Reynolds claimed in advertisements.

Such unsubstantiated claims were found to have violated Vermont’s consumer protection laws and the state’s 1998 consent decree pursuant to the Master Settlement Agreement.

Reynolds was said to have made its deceptive “less risk” claims in print advertisements placed in nationwide publications, on a website promoting the product, in direct mail materials sent to Vermont consumers and on Eclipse packs sold in Vermont.

Hong Kong customs seized 38 million cigarettes between January and November last year, well up on the seizures made during 2012, according to a Hong Kong government information press note.

The figure given for 2012 was 27 million, but it was not clear whether this figure covered the January–November 2012 period or the full year to the end of December.

The final figure for 2013 will certainly be a lot higher than 38 million because customs initiated a major crackdown on smuggling during the final weeks of December.

However, the seizures are just the tip of the iceberg, according to according to a story in the South China Morning Post.

Luisa Tam Han-may, executive director of United Against Illicit Tobacco, said that while customers were talking about a 41 percent increase in seizures, this was the figure only for successful seizures. It wasn’t an indication of how big the whole trade was.

One in every three cigarettes smoked in Hong Kong in 2012 was illicit—the second highest proportion of 11 Asian countries—Tam said, citing a British study.

That proportion suggests sales of 1.8 billion illicit cigarettes annually, an astonishingly high figure given that anyone involved in dealing with, possession of, selling or buying illicit cigarettes is liable to the maximum penalty of a $1 million fine and imprisonment for two years.

Malaysia’s extension of illicit cigarette trade penalties to cover buyers is not expected to have any material impact on the earnings of local tobacco companies, according to a story in The Star quoting analysts and industry observers.

An Affin Investment Bank research bank had Malaysia’s illicit cigarette trade accounting for 34.5 percent of the total market as at the end of 2013, compared with 20 percent in 2002.

“The key culprit for the rampant illegal activities was due to an increase in cigarette prices over the years as a result of higher excise duties,” said Affin, which is maintaining its underweight rating on the tobacco sector for now.

“We leave our forecast unchanged for now pending updates from management of the tobacco companies relating to the success of this initiative.”

Amendments to the Control of Tobacco Product Regulations 2004, which took effect on Jan. 1, stipulate that it is not only illegal to sell cigarettes in packs that do not carry government health warnings and pictures; it is also illegal to buy them.

Under the amendments gazetted last June, the buyer, just like the seller, could face a maximum fine of MYR10,000, two years in jail or both.

The RHB Research Institute was quoted as saying that while the amendments amounted to a positive attempt to curb the illicit cigarette trade, the problem would continue given the lack of enforcement of regulations.

The institute said that the recent 14–17 percent increase in licit cigarette prices was not helping the situation.

It forecast that the industry’s licit sales would contract by 10 percent during 2014.

The prevalence of smoking in Turkey is dropping “at unprecedented rates’, according to a story in the Hürriyet Daily News quoting World Health Organization figures.

Adult smoking prevalence is said to have decreased from 32.2 percent, or 16 million, in 2008, to 27.1 percent, or 14.8 million, in 2012, the WHO said in its global tobacco epidemic report for 2013.

“Although Turkey has had a long tradition of tobacco use and a high smoking prevalence, particularly among men, tobacco use is now declining at unprecedented rates,” said the report.

Smoking among men fell from 47.9 percent in 2008 to 41.5 percent in 2012, while the number of women smokers fell from 15.2 percent to 13.1 percent.

Turkey has been named as the only country that protects its entire population of 75 million people with every measure introduced by the WHO in its fight against tobacco.

Nevertheless, overall more than a quarter of Turkey’s adults continue to use tobacco.

Enforcement of Vietnam’s anti-tobacco law, which came into force in May, is proving difficult, in part because many smokers don’t know about the new rules, according to a VietnamPlus story.

The law prohibits smoking on buses and airplanes, in indoor public places and at bus terminals, train stations and ports.

It requires, too, that separate smoking areas be provided on ships and trains.

However, it is common to see people smoking cigarettes in many public places, such as bus terminals and train stations, and, by doing so, making themselves liable to fines of VND100,000–300,000 (US$4.70–14.20).

Ho Huu Hoa, deputy director of the legal department of the Ministry of Transport, admitted that smoking was still rampant in many offices, stations and on public transport.

However, Hoa said the ban had been effectively implemented at airports and during flights, showing that enforcement was not an impossible task.

Tripling tobacco taxes globally would cut smoking by a third and prevent 200 million premature deaths this century from lung cancer and other diseases, according to a Cancer Research UK review published in the New England Journal of Medicine on Wednesday.

‘Boosting the tax by a large fixed amount per cigarette would narrow the price gap between the most and least expensive cigarettes, so it would encourage people to quit smoking altogether rather than switch to a cheaper brand, and would help stop young people from starting,’ according to a Cancer Research Campaign report.

‘This would be especially effective in low-to-middle-income countries where the cheapest cigarettes are relatively affordable. But it would also be effective in richer countries: France halved cigarette consumption from 1990 to 2005 by raising taxes well above inflation.’

“The two certainties in life are death and taxes,” said the review’s co-author, Professor Sir Richard Peto, Cancer Research UK epidemiologist based at the University of Oxford. “We want higher tobacco taxes and fewer tobacco deaths. It would help children not to start, and it would help many adults to stop while there’s still time.”

Nepal’s Supreme Court has dismissed a petition by tobacco companies and directed the government strictly to implement the anti-tobacco provisions of the Tobacco Product Control and Regulatory Act, according to a story by Ananta Rajluitel for The Himalayan Times.

Section 9 of the Act requires the Ministry of Health and Population (MoHP) to ensure that at least 50 per cent of a tobacco pack’s surface be given over to warnings about the dangers of tobacco use.

The tobacco companies petitioned the court to challenge the MoHP’s mandatory provision that 75 per cent of the surface area be given over to such messages.

But the bench said that since the Act clearly stated that more than 50 per cent of the pack’s surface had to be devoted to health warnings, the MoHP was within its rights to require that 75 per cent be devoted to such messages, keeping in mind the health and welfare of the public.

The bench said the demands of the petitioner companies were against the public health and larger public interest and need not be considered.

Cigar smoking could all but disappear from Britain within little more than a decade if the current decline in the habit continues, according to an Electronic Telegraph story quoting the Financial Times.

The Telegraph story said that UK’s consumption of cigars had fallen by four-fifths over the past two decades and could die out altogether by 2026 on current trends.

Soaring duty rates, bans on smoking in enclosed public places and anti-tobacco campaigns in general are believed to have contributed to the fall in the popularity of cigars.

British smokers bought 2.1 million kg of cigars in 1992 but this fell to 0.4 million kg last year, according to figures from HM Revenue & Customs.

Imperial Tobacco estimates that there are only about 300,000 regular cigar smokers left in Britain, down from 700,000 a decade ago.

Malaysians can be jailed for buying illicit cigarettes under new regulations that took effect on Wednesday, according to a story in The Star.

Amendments to the Control of Tobacco Product Regulations 2004 stipulate that it is not only illegal to sell illicit cigarettes; it is also illegal to buy them.

Under the amendments gazetted in June, the buyer, just like the seller, faces a maximum fine of RM10,000, up to two years in jail, or both.

Bulgaria’s National Association of Tobacco Growers has threatened to stage protests from next week unless sales of classical oriental tobacco start in earnest, according to a Novinite story.

Tsvetan Filev, chair of the association, said on Tuesday that growers wanted tobacco buying companies to start purchasing their ‘Basma-type’ tobacco by January 5.

Otherwise, he said, they would hold mass rallies in front of the companies’ headquarters, block arterial roads, and set fire to bales of tobacco on January 6.

Filev was said to have told Darik radio that so far buyers had bought only 300 tonnes of the 13,000 tonnes of Basma-type tobacco estimated to have been produced.

He said he was concerned that the delay in buying would reduce the tobacco’s quality, 70 per cent of which had been packed into bales.

All of the country’s production of Virginia and Burley tobacco was said to have been bought, along with 60 per cent of the Kaba Kulak oriental tobacco.

After several years of stability, the international market for classical oriental tobacco is in some difficulty. Each of the four countries that grow classical oriental tobacco – Turkey, Greece, the FYR Macedonia and Bulgaria – have this year produced bigger crops than were anticipated.

And, for a number of reasons, the major end-users of oriental tobacco are looking this year to reduce their purchases.

Such a situation is putting downward pressure on grower prices, and this is likely to cause delays to the start of purchasing.