Category: News This Week

  • Filipino smokers outflank sin tax

    Implementation of the so-called sin tax law in the Philippines has not reduced the consumption of licit products by as much as had been expected because many smokers have shifted to lower-priced brands, according to a story in the Philippine Star.

    And in any case, Jo-ann Latuja, a senior economist with the private think tank Action for Economic Reforms (AER), said AER had found that previous estimates of the reduction in smoking that would follow the introduction of the higher tax rates most likely had been overstated.

    According to industry estimates, 25 percent of the smokers of premium and sub-premium brands have switched to one-peso brands since the sin tax law took effect last year.

    These estimates indicate also that the average daily consumption rose to 14.13 cigarettes per smoker in the second quarter of the year from 13.53 cigarettes per smoker in the first quarter.

    For 2013, the government expects to raise PHP64.5 billion from the tobacco industry, made up of PHP51.6 billion in excise tax, PHP6.2 billion from VAT, and PHP6.7 billion from corporate income tax.

  • Competing for rubbish in Morocco

    More than 100 Imperial employees in Morocco recently volunteered to clean up a popular beach in their free time.

    The event was part of an on-going commitment to environmental protection by Imperial’s subsidiary, Société Marocaine des Tabacs (SMT).

    Sacks of litter were removed from Les Sablettes beach near to Imperial’s Aïn Harrouda factory by SMT in partnership with the Mohammed VI Foundation for Environmental Protection.

    To add a competitive edge to the event, the volunteers were divided into six teams to see who could collect the largest amount of rubbish.

    “We’ve been presented with two awards for our efforts in the past and once again volunteering to clean up the beaches has proved a huge success,” said Asmaa Faouzi, internal communications manager, Morocco.

    “It was great to see so many people give up their weekend to participate. Their enthusiasm and determination reflected our values and underpinned the commitment of our company to protect and enhance the environment.”

  • European Parliament gives vote of confidence to electronic cigarettes

    There were mixed reactions to the European Parliament’s handling of the commission’s proposed new Tobacco Products Directive (TPD), which was voted on yesterday, but the electronic cigarette industry seemed full of praise for MEPs.

    In a press note issued yesterday, Gamucci, the electronic cigarette manufacturer and supplier, said the parliament had listened to reason in voting to reject plans that would have seen medical regulation applied to electronic cigarettes.

    “We want to thank those MEPs who took the time to listen and to understand the industry’s point of view as well as the views of many thousands of electronic cigarette smokers,” said Chief Executive Tony Scanlan.

    “Electronic cigarettes have been described as potentially the greatest breakthrough for public health in decades. It would have been a sad day if our politicians had ignored the growing evidence that for many adult smokers these can be life-changing products.”

    Meanwhile, Taz Sheikh, co-founder of Gamucci, was already looking beyond the TPD to what might happen in the U.K. “We are in favour of an effective and well-regulated market for our products, but we believe that applying onerous and costly medical regulation would be misguided and ill-informed,” he said. “We hope that the U.K. government and the MHRA [Medicines and Healthcare Products Regulatory Agency] take note of today’s vote and think again.”

    There was much the same reaction from another electronic cigarette manufacturer and supplier, E-Lites, which said that the EU Commission’s plan to ban e-cigarettes which were not licensed as medicines had been blocked by the parliament. MEPs had rejected the commission proposal, which had been backed by the Socialist Group’s Linda McAvan.

    Corporate Affairs Director Charles Hamshaw-Thomas, described the parliamentary vote as a fantastic result for public health and the millions of smokers around Europe who were switching to e-cigarettes. Without such a vote, he said, “We would have been in the absurd position of the EU making it much harder to make and sell e-cigarettes than tobacco cigarettes which are vastly more harmful”.

    “Common sense has prevailed and following this decision in the European Parliament, we now hope to work with the EU Commission and national governments to agree appropriate regulations for e-cigarettes which reinforce existing consumer protection rules,” added Hamshaw-Thomas. “The aim is to maximise the enormous health benefits of these products which are hugely popular with smokers seeking to reduce their tobacco dependency.”

    The reaction from the traditional tobacco industry was more muted, however. “Today’s vote in the European Parliament has introduced marginal improvement in some areas, but has still failed to take into account the views of millions of EU citizens, including our employees, retailers, tobacco growers and adult consumers who will be impacted by these measures,” said Philip Morris International EU Region President Drago Azinovic.

    “It remains the case that members of the European Parliament have voted to ban an entire segment of the legal market despite the inevitable increase in illegal trade that this will fuel.

    “They have failed to provide a workable framework for reduced harm products and have also continued to include oversized graphic health warnings and pack standardization—even though the risks of smoking are already well known—and without apparent concern for property rights that the EU Charter protects.

    “There remain several important steps before this directive passes into law, and we hope that decision makers will take the opportunity to apply common sense and adopt a directive that is—as any EU legislation must be—necessary, proportionate and supported by credible evidence.”

    According to a story in Malta Today, the vote was welcomed by the European health commissioner, Tonio Borg, of Malta, who said the amended TPD text would now go for negotiations between the European Council of ministers and MEPs.

    Once the legislation is approved by the council and parliament, EU member states will have 18 months in which to translate the directive into their national laws.

    U.K.-based Forest (Freedom Organisation for the Right to Enjoy Smoking Tobacco) campaigners said consumers would have “mixed feelings” following the parliamentary vote.

    “MEPs voted against a ban on slim cigarettes and rejected a ban on all smaller pouches of roll your own tobacco,” Forest said in a press note. (The European Commission wanted to ban pouches of 12.5 g and 25 g but MEPs voted to allow 20 g pouches.)

    “The Parliament approved a ban on menthol cigarettes but voted to delay implementation for five years.”

    “Consumers will have mixed feelings,” said Angela Harbutt, campaigns manager of Forest, which runs the No Thank EU campaign.

    “We welcome the fact that some products have been reprieved while menthol cigarettes have been given a stay of execution, but consumers are still angry that the EU is trying to restrict or ban products they have purchased and enjoyed for many years.

    “Prohibition doesn’t work and banned products will almost certainly be available on the unregulated black market. Law-abiding consumers will be at a serious disadvantage and it won’t help children because criminal gangs don’t care who they sell to.”

    Harbutt came down hard on the parliament’s decision to increase the size of the health warning to 65 percent of the pack.

    “Increasing the size of the health warning is gesture politics,” she said. “It won’t stop people smoking because everyone already knows about the health risks of smoking. It’s incredibly patronising, even to teenagers, and the impact on smoking rates will be negligible.”

    Harbutt accused the European Parliament of ignoring the concerns of consumers and retailers.

    Forest, which is supported by British American Tobacco, Imperial Tobacco Limited and Gallaher Limited (a member of the Japan Tobacco Group of Companies), this week revealed that a letter writing campaign, opposing the Commission’s revisions to the TPD, had generated almost 45,000 letters to MPs and MEPs in the U.K. alone.

    Meanwhile, some of the harshest criticism of yesterday’s vote came from within the parliament. According to another Malta Today story, the Greens blamed intense tobacco industry lobbying for the revisions made to the TPD.

    “This is a shameful day for the European Parliament, as a centre-right majority, led by the EPP group, has done the bidding of the tobacco industry and voted for weaker rules, which are totally at odds with citizens’ interests and public health,” said the Greens’ public health spokesperson Carl Schlyter. “It is scandalous that the centre-right in this house seems to be more concerned about the profits of the tobacco industry than the health of EU citizens.”

  • Reynolds to host results webcast

    Reynolds American Inc. is due to host a conference call webcast following the release of its third-quarter 2013 financial results before the market opens on Oct. 22.

    The webcast, at www.reynoldsamerican.com, is due to start at 9 a.m. Eastern Time. It will be in listen-only mode.

    The speakers will be President and CEO Daniel M. Delen, CFO Thomas R. Adams, and vice president of investor relations Morris L. Moore.

    Registration for the conference call is at www.reynoldsamerican.com, where a replay will be made available.

    Call-in numbers are 877-390-5533 (toll-free) and 678-894-3969 (international).

  • Does the US need another MSA?

    The United States Supreme Court yesterday denied a request from Philip Morris USA (PM USA) and other tobacco companies to review the constitutionality of the trial structure being used in the Engle progeny cases in Florida.

    The Engle progeny cases stem from a 2006 Florida Supreme Court decision that decertified a class action but allowed former class members to file individual lawsuits and rely on general findings from the first class action.

    Yesterday’s decision was made in respect of Douglas v. Philip Morris USA et al.

    “Today’s decision does not diminish our ability to put forth a vigorous defense,” said Murray Garnick, senior vice president and associate general counsel, Altria Client Services, speaking on Monday on behalf of PM USA. “We have strong legal and factual defenses and remain committed to defending ourselves in each of these cases.”

    “Although we are disappointed by the decision, we will continue to challenge the constitutionality of these trials as appropriate. “Even under the current rulings, we have demonstrated our ability to manage these cases over the last five years. Not only has a substantial number of cases been dismissed or otherwise resolved before trial, but juries have returned verdicts in favor of PM USA in approximately half of its cases tried to verdict.”

    Meanwhile, a story by Richard Craver for the Winston-Salem Journal suggested that the tobacco manufacturers’ exposure nationally could now be such that they would have to seek another Master Settlement Agreement.

    Such an agreement was seen as being in the best interests of everyone concerned. It would provide closure for those who were suffering from tobacco-related diseases; it would ensure that the manufacturers were not forced into bankruptcy; and, because the manufacturers were not bankrupted, it would keep money flowing to state governments that had become increasingly dependent on tobacco income to bolster their general funds.

    Craver’s piece is at:

    http://www.journalnow.com/business/business_news/local/article_4eb4074a-2f79-11e3-b5bb-001a4bcf6878.html

  • New Mevius design to make an impact

    Japan Tobacco Inc.’s Mevius Impact One 100s box is being given a pack redesign that will be rolled out across Japan from early November.

    While the cigarette delivers only 1 mg of tar, it is said to provide—as its name implies—an “impactful smoking experience,” so its flavor and aroma are being maintained.

    According to a note posted on JT’s website, the cigarette is manufactured using selected Burley leaves “to create a harmonious blend of richly flavored tobacco, which preserves the characteristic smooth flavor of the Mevius line.”

    The pack redesign will see the adoption of silver as the background color, which is meant to position the cigarette with consumers as a low-delivery, rich-flavor product.

    Otherwise, the new design will fall into line with that of Mevius’ 15 core products, which, in November last year, were given a redesign that was said to have proved popular with consumers.

  • Bulgaria considers relaxing smoking ban

    Bulgaria’s ruling party, the BSP, is working on a proposal to ease the country’s ban on tobacco smoking in public places, according to a Standart News story.

    Standart said the most likely outcome would see smoking permitted in bars but banned in offices.

    The BSP party leader, Sergey Stanishev, is said to have made a promise to the voters in his constituency of Stara Zagora that the full ban would be lifted.

    The plan is said to have the support of nationalist Ataka MPs, who had already submitted a draft proposal for the elimination of the smoking ban.

    They argue that the ban has put thousands of people out of work without reducing smoking.

    Bulgaria has never seemed completely at ease with its smoking ban, but any move to relax it is likely to be met with fierce opposition from the EU.

  • Biggest smoking-related event for years

    A fine-cigar auction in London already scheduled for Nov. 19 is to be followed by The Spectator Cigar Smoker of the Year Dinner.

    The dinner will be hosted by British journalist, broadcaster and cigar fan, Andrew Neil.

    “This will be the biggest smoking-related event to take place in the U.K. for years,” said Mitchell Orchant, managing director, C.Gars Ltd.

    “Some of the most famous and wealthiest cigar smokers in the world will be celebrating with fine wine, food and, not least, premium cigars on Boisdale’s smoking terrace overlooking the Thames.”

    The evening will start with C.Gars’ 9th auction, at which more than 400 lots of vintage, rare and mature cigars will go under the hammer at 5 p.m. And for the first time at such an auction, cigar collectors around the world will be able to place bids online (at www.cgarsltd.co.uk).

    The event, bringing together Boisdale and C.Gars, will include the inaugural Spectator magazine dinner.

    The evening will recognize various aspects of the cigar world, with awards categories including those for cigar producers, retailers, cigar terraces and writers; and culminating in The Spectator Cigar Smoker of the Year.

  • Proposed new tobacco directive would cause “massive” job losses in Germany

    Tobacco companies in Germany have warned of massive job cuts should the EU force companies to place larger health warnings on cigarette packs, according to a Handelsblatt story.

    The works councils of Philip Morris, British American Tobacco, Reemtsma (Imperial Tobacco), Japan Tobacco International, von Eicken, Landewyck and Lekkerland said the introduction of new rules under the proposed new Tobacco Products Directive (TPD) would lead to the elimination of as many as 100,000 jobs in the country.

    The EU parliament is due to vote on the proposed TPD, which includes, too, recommendations on banning and restricting a wide range of tobacco and nicotine products, on Oct. 8.

  • Ireland to denormalize smokers in its quest for tobacco-free status by 2025

    A proposal to reduce the prevalence of smoking in Ireland from the current 22 percent of the population to less than 5 percent by 2025 has been published by the Minister for Health, James Reilly, according to a story in the Irish Times.

    The proposal broadly sets out the government’s aims but a detailed action plan with timelines has yet to be developed.

    Tobacco Free Ireland (a country is deemed in some quarters to be tobacco free if the smoking population is lower than 5 percent), would seek to further denormalize smokers.

    It would include an annual excise duty increase on tobacco products over five straight years.

    And it would prohibit smoking within the campuses of primary schools, secondary schools and child care facilities, while promoting tobacco free campuses for all tertiary institutions.

    In all, the proposal sets out 60 recommendations aimed at cutting the rate of smoking, one of which would require tobacco manufacturers to offer their cigarettes in standardized packaging.

    Meanwhile, according to a Sunday Times story, an Irish-based lawyer for Philip Morris International has warned that Ireland will face compensation claims running to hundreds of millions of euro if it introduces a requirement for standardized tobacco packs.

    Alistair Payne, of Matheson solicitors, was quoted as saying that if Ireland did not allow tobacco companies to use their branding it would breach the intellectual property rights of the companies. He said these rights were guaranteed under the Irish constitution and the European Convention on Human Rights.