Category: News This Week

British American Tobacco says that it has maintained its position as industry leader in the Dow Jones Sustainability Indices (DJSI) for the 12th year running.

In a note posted on its website, BAT said that the DJSI tracked the economic, environmental and social performance of leading sustainability-driven companies worldwide and were based on the co-operation between Dow Jones Indices and RobecoSAM, a sustainability investment specialist.

“The DJSI have a double impact,” said Guido Giese, head of indices for RobecoSAM. “They enable investors to integrate sustainability into their portfolios, and at the same time they provide an engagement platform that encourages companies to adopt sustainable best practices. We encourage active participation in our corporate sustainability assessment each year, and this year we were happy to see a 31 percent increase in participation from companies in emerging markets.”

Meanwhile, BAT said that a detailed assessment of a company’s performance covered both general and industry specific criteria, including the reduction of greenhouse gas emissions, energy consumption, water use and waste generation, and the integration of sustainability strategies into core businesses.

“Our overall score was 87 percent, consolidating our position as industry leader,” the note said.

“We scored a maximum 100 percent rating in five key categories—risk and crisis management, combating smuggling, environmental policy/management systems, human capital development and responsible marketing policies.

“We exceeded our own business measure target by scoring better than the sector average in all categories, and we also achieved best scores for the industry in 12 of the 19 categories.”

“British American Tobacco was the first tobacco company included in the Dow Jones Sustainability Indices 12 years ago and we have been included each year since,” said Kingsley Wheaton, group corporate and regulatory affairs director. “This shows that our employees and operations across the group have consistently met the standards required of a sustainable international business.”

U.S.-based White Cloud Electronic Cigarettes said yesterday that it had been accepted as a member of Coresta, the organization that promotes international cooperation in research into tobacco and related matters.

Based in Paris, France, Coresta, which was founded in 1956, now has 140 members in more than 50 countries.

“We have joined Coresta to participate in collaborative international work,” said Rob Burton, director of corporate and regulatory affairs at White Cloud.

“It is our aim at White Cloud to support science and evidence-based regulation in this sector whilst manufacturing products to the highest possible standards, using the best available technology and ingredients; either ourselves, or in collaboration with the most qualified partners.”

White Cloud, which was formed in 2008 and is located in Tarpon Springs, Florida, describes itself as a vertically integrated manufacturer and marketer of electronic cigarettes.

Japan Tobacco Inc.’s domestic cigarette sales volume during August, at 10.4 billion, was down by 1.7 percent on its August 2012 volume, 10.5 billion, which was increased by 2.6 percent on that of August 2011, according to preliminary figures issued by the company today.

Volume during April–August, at 50.2 billion, was up by 0.2 percent on that of April–August 2012, 50.1 billion, which was increased by 21.7 percent on that of April–August 2011.

JT’s market share stood at 60.8 percent in August, at 60.6 percent during April–August, and at 59.6 percent for the full year to the end of March.

JT’s domestic cigarette revenue during August, at ¥57.0 billion, was down by 1.7 percent on its August 2012 revenue, ¥58.0 billion.

Revenue during April–August, at ¥275.5 billion, was down by 0.1 percent on that of April–August 2012, ¥275.7 billion.

The Malaysian government has said that it will “continue helping small-time tobacco farmers seek an alternative source of income,” according to a story in The Star.

This commitment was made in the wake of the April 1 decision by cigarette manufacturers to stop buying local tobacco, said Datuk Noriah Kasnon, deputy plantation industries and commodities mi­­nister.

Noriah said the tobacco industry in Malaysia was in transition due to changes taking place in international trade and the increase in awareness about public health.

“The need to restructure the tobacco industry is in line with the country’s commitment to liberalize the market under the Asean Free Trade Area (AFTA) and the control of tobacco use under the World Health Organization (WHO) Framework Convention on Tobacco Control,” she said.

“I’ve been made to understand that the LKTN (National Kenaf and Tobacco Board) is in the process of implementing several programs to help rural tobacco farmers who are less competitive to switch to other economies, such as kenaf planting.”

Noriah, who was speaking at the launch of the 2013 Tobacco Seminar in Putrajaya on Tuesday, said the export value of tobacco and its products had increased by 48.7 percent to MYR1.57 billion in 2012 compared with MYR1.06 billion in 2011.

But the export value for the first half of this year, at MYR579.04 million, was down by 18.7 percent on that of the first half of 2012, MYR711.92 million.

“The tobacco industry contributed MYR3.52 billion to the country’s tax income last year, compared with MYR3.42 billion in 2011, which was an increase of 2.8 percent,” said Noriah.

“The amount was contributed through tax collection such as excise duty, import duty, sales tax and corporate taxes.”

The U.S. Food and Drug Administration is calling for public comments on menthol in cigarettes to be submitted by Nov. 22.

Specifically, the FDA is requesting information to inform its thinking about potential regulatory options such as tobacco product standards and sale and distribution restrictions.

The FDA conducted what it refers to as a “preliminary independent scientific evaluation of existing data and research on menthol cigarettes,” which addresses the association between menthol cigarettes and various outcomes, including initiation, addiction and cessation.

And it has commissioned three further studies: one about genetic differences in taste perceptions in tobacco use; one about the exposure to smoke-related toxins and carcinogens created by menthol and non-menthol cigarettes, and one about the effects of compounds delivered by menthol and non-menthol cigarettes and their effect on addiction and toxicants.

Altria said yesterday it had been named a member of the Dow Jones Sustainability North America Index (DJSI North America), “recognizing the company’s ongoing progress in responsibly managing its business practices.”

“For the second year in a row, Altria’s commitment to corporate responsibility has been recognized by this leading business organization,” said Jennifer Hunter, senior vice president of corporate affairs, Altria Client Services.

“Being named to DJSI North America reflects our progress against our mission and recognizes that our employees and our businesses continue to make important progress in addressing the expectations of our many stakeholders.”

The DJSI North America comprises North American sustainability leaders identified through a corporate sustainability assessment.

The index represents the top 20 percent of the largest 600 North American companies in the Dow Jones Global Total Stock Market Index based on long-term economic, environmental and social criteria.

There is more about Altria’s approach to responsibility at http://www.altria.com/Responsibility/At-A-Glance/Pages/default.aspx.

Altria said yesterday that Philip Morris USA expected to receive a credit of about $145 million, plus interest, following the findings of an arbitration panel looking into payment disputes relating to the U.S. Master Settlement Agreement.

“An arbitration panel has determined that six out of 15 states failed in 2003 to diligently enforce laws that require escrow payments from the cigarette manufacturers that have not signed the Master Settlement Agreement (MSA),” Altria said in a note posted on its website. “The states enacted these Non-Participating Manufacturer (NPM) escrow laws after the MSA was signed in 1998. Manufacturers that participate in the MSA … receive downward adjustments in their MSA payments if, among other things, states fail to diligently enforce NPM escrow laws.”

As a result, PM USA expects to receive a credit of about $145 million, plus interest, against its next year’s MSA payment. This is the full remaining amount available to PM USA as part of the 2003 arbitration.

The panel’s decision does not affect the 22 states and jurisdictions that joined a December 2012 settlement of the NPM adjustment disputes.

Meanwhile, R.J. Reynolds Tobacco said the arbitration panel had determined that it was entitled to about $266 million in disputed payments from Indiana, Kentucky, Maryland, Missouri, New Mexico and Pennsylvania.

“We are pleased that the arbitration panel found that six jurisdictions failed to meet their diligent enforcement obligations under the MSA,” said Martin L. Holton III, executive vice president and general counsel for Reynolds. “Between today’s rulings and a settlement reached with 22 jurisdictions earlier this year, R.J. Reynolds should recover nearly $549 million with respect to its 2003 NPM adjustment claim.”

The announcements of the arbitration panel’s findings are at http://www.altria.com/Media/Press-Releases/Pages/PressReleaseDetails.aspx?reqID=1854037 and http://files.shareholder.com/downloads/RAI/2320600200x0x690190/5d76d4b4-7d8d-40ba-ab23-bfc3ce5b5ffa/R.J._Reynolds_receives_favorable_rulings_from_arbitration_panel.pdf.

A problem arises with a company’s having a hiring policy that disqualifies smokers on the basis of a nicotine test because the applicant might be an e-cigarette or smokeless-tobacco user.

For instance, from next month, anybody looking to work for Flagler County, Florida, USA, will have to pass a nicotine test, according to a story on Watchdog.org (Franklin Center for Government & Public Integrity).

A failed test would automatically disqualify a candidate and prevent him or her from working for the county for one year. The policy is being introduced under the guise of reducing the cost of health insurance.

But Gregory Conley, a volunteer legislative director for Consumer Advocates for Smoke-free Alternatives (CASA), says that conflating tobacco use and nicotine with costs associated with smoking is bad policy.

“Mountain climbing has a far higher risk of death or injury than smoke-free nicotine usage,” said Conley. “But there are no public employers banning mountain climbers from gaining employment.”

CASA is an Alabama-based advocacy group dedicated to protecting access to reduced-harm alternatives to smoking, including electronic cigarettes and smokeless tobacco, the use of which would trigger a failed nicotine test under Flagler County’s new hiring ban.

According to Conley, a carbon monoxide test would be more effective than a broad-based nicotine test for identifying smokers.

“Considering that 99 percent of all disease and death caused by tobacco is caused by inhaling smoke from cigarettes, punishing people who are using smoke free nicotine products—including Nicotine Replacement Therapy—is patently absurd,” said Conley.

Transnational tobacco companies have taken a cynical approach to European investments in smokeless tobacco products, according to a ScienceDaily story on new research by Silvy Peeters and Anna Gilmore from the University of Bath, U.K., and the U.K. Centre for Tobacco Control Studies, published this week in PLOS Medicine.

ScienceDaily reported that the study had found that these companies’ European investments in smokeless tobacco, such as snus, had not been driven by a concern for the health impacts of smoking but “purely by business interests.”

The researchers analyzed internal tobacco industry documents that have been made available by litigation alongside contemporary industry documentation to examine the historical interests of transnational tobacco companies.

The authors concluded that by investing in snus and recently nicotine, transnational tobacco companies had eliminated competition between cigarettes and lower-risk products, thus helping to maintain the current market balance in favor of highly profitable cigarettes.

At the same time, these companies had ensured their long-term future should cigarette sales decline further and profit margins be eroded.

The ScienceDaily story is at http://www.sciencedaily.com/releases/2013/09/130910205429.htm.

The PLOS Medicine piece is at http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1001506.