Category: News This Week

South Africa’s health minister, Aaron Motsoaledi, has said that the government will not let up on its attempt to eliminate smoking in South Africa, according to a story in The Post.

Tobacco, he added, made no positive contribution to humanity. All it did was death, he added.

Motsoaledi was speaking in Pretoria at the release of the SA National Health and Nutrition Examination Survey by the Human Sciences Research Council (HSRC).

According to the survey, also known as SANHANES-1, tobacco control policy had succeeded in halving the number of adult smokers during the past 20 years.

But while there had been a marked reduction in the prevalence of smoking in the country, the report cited exposure to environmental tobacco smoke as a major cause for concern.

The Post said that in its recommendations, SANHANES-1 called for the “expeditious implementation of legislation proposing a total ban on tobacco.”

Universal Corp. is branching out into liquid nicotine for electronic cigarettes.

The company said yesterday that its subsidiary, Virginia Tobacco Co. Inc. had joined Avoca Inc., one of the world’s premier botanical extraction companies, in the formation of AmeriNic Inc.

It said the new business would produce high-quality, U.S. pharmacopeia (USP) grade liquid nicotine in the U.S. using fully traceable and compliant tobaccos.

AmeriNic expects to begin production of liquid nicotine before the end of the calendar year.

“We continually evaluate opportunities to meet the evolving needs of our customers and our industry,” said George C. Freeman III, chairman, president and CEO of Universal.

“The electronic cigarette industry is developing rapidly, and as a leader in leaf tobacco sourcing and agronomic research, we are pleased to bring our expertise to this dynamic market.

“We believe that the best source of liquid nicotine is tobacco and that AmeriNic Inc. has the capability needed to build a supply chain to provide the highest-quality product at a competitive price.”

Universal Corp.’s net income for the first quarter of fiscal year 2014, which ended on June 30, at $58.3 million ($2.05 per diluted share), was up from $23.1 million ($0.81 per diluted share) during the three months to the end of June 2012.

Net income included a gain of $81.6 million before tax ($53.1 million after tax, or $1.98 per diluted share) resulting from a favorable outcome of litigation by the company’s operating subsidiary in Brazil related to previous years’ excise tax credits.

Excluding that nonrecurring gain, first quarter net income decreased by $17.9 million.

In announcing the results, George C. Freeman III, chairman, president and CEO, said that, as expected, carryover shipments of tobacco were considerably lower in the first quarter of this fiscal year as shipments of the smaller crops grown in fiscal year 2013 were substantially completed by March 31, 2013.

And Freeman said that Universal was expecting a reduction in the overall volumes shipped during fiscal year 2014 compared to those of fiscal year 2013.

“We are also watching crop development as the seasons unfold, particularly in the United States, where crop sizes have been negatively impacted by recent high levels of rainfall,” he said.

“Burley crop levels are down from earlier projections in some origins, exacerbating the undersupply conditions expected for that type of tobacco this year.

“In addition, global demand is strong, and we are seeing volatile green tobacco prices in Brazil that have disrupted markets and pressured margins there.

“Changes in shipment timing, crop sizes and market pricing are not unusual in our business, and we still expect fiscal year 2014 to be a solid year,” he added.

Universal Corp.’s board of directors has declared a quarterly dividend of $0.50 per common share payable on Nov. 12 to shareholders of record at the close of business on Oct. 15.

In addition, the board has declared a quarterly dividend of $16.875 per share on its Series B 6.75% Convertible Perpetual Preferred Stock (Series B Preferred Stock) payable on Sept. 16 to shareholders of record as of 5 p.m. Eastern Time on Sept. 1.

Effective with the payment of Universal’s common stock dividend on Aug. 12, the company will adjust the conversion rate on its Series B Preferred Stock. The adjusted conversion rate on the Series B Preferred Stock will be 21.9014 common shares per $1,000 of liquidation preference of Series B Preferred Stock. The new rate will be equivalent to a conversion price of about $45.66 per common share.

DSB, the Danish national rail provider, is to impose a tobacco smoking ban at all train stations from July next year, according to a story by Sigrid Neergaard for The Copenhagen Post.

The ban will apply even on uncovered platforms and to DSB staff.

There was no mention of how the ban was to be enforced and no information about what penalties would apply to those ignoring the ban.

Two Toronto doctors are looking for investors to put up about $3 million to take their nicotine inhaler from the prototype phase and put it into the hands of cigarette smokers unable to quit their habit, according to a story by Madhavi Acharya-Tom Yew for the Toronto Star. (The full story is at http://www.thestar.com/business/2013/08/03/toronto_doctors_seek_investors_for_nicotine_inhaler.html.)

Arthur Slutsky and Noe Zamel, who specialize in pulmonary medicine, have developed Nico-Puff (www.nico-puff.ca), which is an inhaler that looks and feels like a cigarette but which, according to them, is much safer than even electronic cigarettes.

Zamel is director of the Mount Sinai Hospital Pulmonary Function Laboratory and director of the Toronto Western Hospital Pulmonary Research Laboratory. Slutsky is a vice president of research at St. Michael’s hospital and professor of medicine, surgery and biomedical engineering at the University of Toronto.

Nico-Puff has no battery and contains only powered nicotine and lactose, which is commonly used in inhalation drugs that treat asthma.

There is no combustion and no smoke. The user inhales, but nothing that is exhaled impacts nearby individuals; so, in theory, Nico-Puff could be used by somebody sitting in the middle seat of an airplane.

Because users inhale the nicotine, blood nicotine levels peak much faster than is the case with nicotine patches or chewing gum.

Nico-Puff is disposable; it is made of paper with a plastic filter containing nicotine powder. It looks a lot like a cigarette.

“We wanted to make it look like a cigarette,” Slutsky said. “There’s something about hanging out with friends and holding something and putting it up to your mouth. There’s a physical addiction and a social addiction.”

Slutsky would ideally like to see people off cigarettes completely. “That clearly would be the best thing to do. The trouble is there’s many people out there who smoke who have tried multiple times to stop and just can’t. For them, a harm-reduction approach makes a lot of sense.”

Later in the story, he pointed out that, by itself, nicotine focused attention and improved alertness, with few negative side effects. “It has some pretty good properties in relatively small doses,” he added. “It’s the dirty delivery system that makes cigarettes incredibly harmful.”

Nico-Puff’s makers say that while they could launch the device in other parts of the world, current regulations would make it difficult to get it on the market in Canada. Because it contained nicotine, Nico-Puff would fall under the Food and Drugs Act in Canada, so its makers would be required to conduct extensive scientific and clinical studies to prove its safety. That could take another three or five years and be very expensive.

That’s frustrating to Nico-Puff’s creators, but also to David Sweanor, adjunct professor of law at the University of Ottawa and an expert on tobacco and nicotine issues in public health.

Sweanor, who is not an investor, has known the researchers for years, and is familiar with their careers and their device. These are very impressive people “at the top of their field,” Sweanor was quoted as saying. “This is the sort of product we need, coming from exactly the sort of people you’d like to see it come from. It’s not Big Tobacco saying, ‘We’ve come out with something, trust us.’”

New Zealand’s associate health minister, Tariana Turia, is aiming to cut, perhaps to zero, the number of duty-free cigarettes people may bring into the country, according to a story by Lynley Bilby for The New Zealand Herald.

Turia apparently intends to seek cabinet approval for the necessary law change during the next few months.

Travelers “avoided” between $55 million and $66 million in tobacco duties last year, according to official estimates, and that could rise to $84 million in 2016 unless the allowance is cut.

Ministry of Health officials are looking to copy Australia by lowering the duty-free limit from 200 cigarettes to 50; to copy Hong Kong by allowing arriving passengers to be in possession of only a single open pack of up to 19 cigarettes; or to eliminate the duty-free allowance entirely.

While R.J. Reynolds Tobacco is to keep offering for sale its dissolvable tobacco products, they are not going to be made available outside of the limited markets to which they are currently confined, according to a story by Richard Craver for the Winston-Salem Journal.

After spending more than four and a half years in five test markets, the products (a pellet called Camel Orbs, a twisted stick the size of a toothpick called Camel Sticks,  and a film strip for the tongue called Camel Strips) have struggled to gain consumer traction.

By comparison, Reynolds needed just two and a half years, from April 2006 to October 2008, to take its Camel Snus products from test markets to national distribution.

The dissolvable products remain in limited distribution in Charlotte and Denver and are marketed through Reynolds’ age-verified consumer website at www.cameldissolvables.com.

However, Reynolds spokesman Richard Smith was quoted as saying there were no plans for marketing beyond these channels.

“We’ve found in our conversations with adult tobacco consumers that while there’s strong interest in the category, a different product form may present a better option over the long term,” he said.

Japan Tobacco Inc. said today that none of the domestic flue-cured tobacco it had tested in prepurchase tests for radioactive materials had exceeded its standard value (radioactive cesium: 100Bq/kg).

The company has been conducting at each stage of its production process a number of tests for radioactive materials in Japanese leaf in order to allay consumer concern over the accident at the TEPCO Fukushima Daiichi nuclear plant following the earthquake and tsunami in March 2011.

Prepurchase testing of this year’s flue-cured tobacco has now been completed, but the company said it would continue with its scheme of testing after purchase, and testing and monitoring a number of times at each stage of its production process.

Meanwhile, testing of the country’s native tobacco and burley tobacco is scheduled to be initiated from September.

Australian smokers should be forced to carry a “smartcard license” with which to buy cigarettes so health authorities can track their behavior and better target quit messages to them, according to a story by Julia Medew for The Age, quoting health and legal academics.

In an article published in the Medical Journal of Australia, the University of Sydney Law School’s professor, Roger Magnusson, and the chief executive of the Cancer Institute of NSW, professor David Currow, said a licence scheme could also make it harder for children and adolescents to buy cigarettes.

Building on a similar licensing proposal from anti-smoking crusader and professor Simon Chapman, last year, Magnusson and Currow said adult smokers could be forced to buy a smartcard license embedded with age and identity-verifying information. “Retailers would then be required to reconcile all stock purchased from wholesalers against a digital record of retail sales to licensed smokers,” Medew’s story said. “This would help to create a database of smokers and their cigarette purchases, while also creating an incentive for retailers to comply with laws that prohibit tobacco sales to children.”

While Chapman last year proposed a scheme under which smokers would have had to have sat a pre-license test on the risks of smoking, and would have been subjected to limits on how many cigarettes they could buy, Magnusson and Currow said a simpler system was required.

They said that their proposed smartcards would enable health authorities to detect patterns and variations in smokers’ behavior and to develop more sophisticated, individualized communications to assist them to quit.

They would enable rigorous evaluation of smoking cessation programs, ensuring that public health dollars were focused on evidence-based strategies that yielded the best returns.

Some critics of the scheme say it could exacerbate the stigma attached to smoking through the creation of “registered addicts,” but the opposite is also possible. Referring to licenses as smartcards could make them the next must-have accessories.