Category: News This Week

  • RAI expanding e-cig operations

    Reynolds American Inc.’s experiment with making e-cigarettes is about to move to a larger distribution scale, the company said Thursday at its annual shareholders meeting.

    The company provided several strategic updates during formal remarks by Daan Delen, its CEO and president, and during a question-and-answer session that wasn’t consumed by farm-worker issues, according to the website equities.com.

    Reynolds also said it has placed links on its website — www.reynoldsamerican.com — under the corporate governance header where its 2012 political-oriented contributions are listed. Delen said the company opted for more disclosure after getting requests from various stakeholder groups.

    R.J. Reynolds Vapor Co. remains in test markets with its internally developed Vuse e-cigs with no reported sales numbers. Vuse is being sold at Tarheel Tobacco stores at 6311 Stadium Drive in Clemmons, 3193 Peters Creek Parkway in Winston-Salem and in Danville, Va.

  • Seoul may link cigarette prices to inflation

    South Korea may link cigarette price hikes to the growth of consumer inflation in an effort to reduce smoking and secure more revenue, reports The Korea Herald.

    Tobacco prices have been frozen at KRW2,500 ($2.28) per pack for more than eight years. The health ministry earlier said average cigarette prices need to be raised to KRW7,000 per pack to reduce the country’s smoking rate to what it called a desirable level.

    However, an official at the finance ministry argued for a more moderate approach, saying increases by more than KRW2,000 could have unintended side effects.

    Korea’s overall smoking rate dropped from 28.8 percent in 2005 to 27 percent in 2011, according to health ministry numbers.

  • Supreme Court denies cert in cig labeling case, FDA plans new rules

    The U.S. Supreme Court denied a writ of certiorari filed by the tobacco companies challenging the advertising regulations promulgated pursuant to the Family Smoking Prevention and Tobacco Act.

    While the Court’s cert denial allows a previous 6th Circuit decision to stand, the contested rules may never be enforced. The Solicitor General declined to file a writ of certiorari in the D.C. Circuit case and in a letter from U.S. Attorney General Eric H. Holder Jr. noted that the FDA plans to engage in “new rulemaking consistent with the Tobacco Control Act.”

    Because the FDA has indicated that it plans to engage in new rulemaking, the tobacco companies have effectively avoided compliance with the stringent new rules.

    The tobacco companies made two separate challenges to the rules. In the U.S. District Court for the District of Columbia, R.J. Reynolds, Lorillard, and Liggett Group, among others, sought an injunction against the enforcement of the new requirements. The U.S. District Court agreed that the “mandatory graphic images unconstitutionally compel speech” and that the tobacco companies would “suffer irreparable harm absent injunctive relief pending a judicial review of the constitutionality of the FDA’s rules.” The FDA appealed, but the D.C. Circuit Court of Appeals affirmed.

    At the same time, another group of tobacco companies filed a facial First Amendment challenge to the rules in their entirety – and got an entirely different result. A federal court judge in Kentucky upheld the rules, and the U.S. Court of Appeals for the Sixth Circuit affirmed, holding that “the Act’s warnings are reasonably related to the government’s interest in preventing consumer deception and are therefore constitutional.”

    The defendants then filed cert with the U.S. Supreme Court, which the justices denied in late April.

     

  • Smoking goes airside at Aberdeen airport

    The establishment of an airside smoking shelter at Aberdeen International Airport in Scotland is expected to help reduce the number of full terminal evacuations caused by people smoking in areas where smoking is banned, according to a story by The Scotsman.

    The shelter, which is adjacent to the main departure lounge, will provide passengers who have been processed through security and are waiting for their flights with somewhere to have a cigarette before takeoff.

    The smoking shelter was erected after more than 400 people who took part in a survey last year said they would like to see an airside facility installed at the airport.

    “It is designed to reduce the number of full terminal evacuations,” an airport spokeswoman was quoted as saying.

    Many such evacuations, which cost thousands of pounds, were caused by passengers lighting up in prohibited areas, activating smoke alarms and causing major disruption and delays, she said.

    “Interestingly, even 61 percent of non-smokers who took part in the survey said they supported an airside smoking shelter,” the spokeswoman added.

  • Ousted retailers could be compensated

    The Hungarian government is considering what it should do to compensate tobacco-product retailers who missed out when tobacco retail licenses were recently put out to tender, according to an All Hungary Media Group story (AHMG).

    Legislation passed in September last year provided for the establishment of a state monopoly of the retail sale of tobacco products from July 1, 2013. The process, overseen by the National Tobacco Trade Non-profit (NTTN) organization, has involved putting out for tender a limited number of tobacco retail concessions.

    Prime Minister Viktor Orban apparently told public radio Kossuth the government was working to ensure that people whose livelihoods depended on selling tobacco products, but who had failed in their bids for licenses, stayed in business.

    And ruling Fidesz party group leader Antal Rogan said he supported the idea of compensation.

    But asked whether plans were afoot to ban family members of local council officials from getting licenses, Rogan said such a move would create more problems than it would solve.

    Meanwhile, NTTN has refused a socialist MP’s request for access to documents containing bids submitted for the recent tenders.

    The company rejected Csaba Toth’s request to view the bids, arguing that even though NTTN was publicly owned, it was not a state agency and so it did not have to disclose such information.

    Toth said he would appeal to the National Development Ministry.

    Opposition parties have sharply criticized the government for the tobacco tender, alleging that Fidesz party members had influenced the process.

    Earlier this year, the NTTN was forced to announce a second tender in 1,417 communities from which no applications had been received during the initial tender.

  • ‘Lighting up’ given whole new meaning

    Hand-rolling tobacco intercepted by customs officers as it was being smuggled into the U.K. is to be burned in an incinerator to help generate electricity for the national grid, according to a story by the Western Morning News.

    But the electricity generated is unlikely to blow any fuses – only 150 kg of tobacco is to be burned.

    The tobacco was detected by a trading standards sniffer dog at a parcel office in Plymouth, Devon, last year.

    It was hidden inside camping refrigerators, one of which also contained £38,770 in shrink-wrapped cash, part of the proceeds from a previous shipment.

  • E-cigarette firm appoints supply-chain VP

    The e-cigarette company FIN Branding Group has appointed Joe Cipolla as its vice president of its supply chain.

    The company said that Cipolla would oversee the “end-to-end supply chain with responsibility for procurement through distribution and warehousing, and maintain relationships with FIN’s internal partners and vendors.”

    Before joining FIN, Cipolla served as the senior director of business strategy and supply chain for Campbell Soup Foodservice. And prior to that, he spent 13 years with Kraft Foods where he served as director of global supply chain strategy, finance and capital.

    “As we move components for our brand globally, having someone of Joe’s caliber on our team is an important part of our growth strategy,” said FIN chairman and CEO Elliot B. Maisel.

    “He understands the critical nature of an effective and efficient supply chain, and we are excited to have him on our team.”

  • New president for Lorillard’s blu eCigs

    The e-cigarette company, blu eCigs, acquired by Lorillard last year, has appointed Jim Raporte as its new president.

    The company said that, with more than 30 years of experience across tobacco, food and business services industries, Raporte was set to lead blu eCigs’ “functional operations” and help drive its transition from an emerging startup to a large scale second-generation company.

    Raporte will work closely with blu eCigs founder and previous president, Jason Healy.

    Healy is said to have chosen to step down as president and hand over the reins of the company he created in 2009 to Raporte so as to focus on the company’s creative marketing and product development efforts.

  • Altria to webcast annual meeting

    The Altria Group is due to host a live audio webcast of its 2013 Annual Meeting of Shareholders on May 16 starting at 9 a.m. Eastern Standard Time.

    Directions for pre-event registration are at www.altria.com.

    An archived copy of the webcast, which will be in listen-only mode, will be made available at www.altria.com.

  • RAI increases quarterly dividend

    Reynolds American Inc. said yesterday that its board of directors had approved a 6.8 percent increase in the quarterly cash dividend on the company’s common stock, taking it from $0.59 per share ($2.36 per share annualized) to $0.63 per share ($2.52 per share annualized).

    The dividend will be payable on July 1 to shareholders of record on June 10.

    “This increase is in line with the company’s policy of returning about 80 percent of net income to shareholders in the form of dividends, and underscores our commitment to returning value to shareholders,” said CFO Thomas R. Adams.