Category: News This Week

  • Supreme Court declines to hear cigarette label case

    The legality of placing graphic warnings on cigarette packages appears to have been settled when the U.S. Supreme Court declined today to hear an appeal on the labels from a group of tobacco manufacturers, according to a story in the Winston-Salem Journal.

    However, it remains unclear what the warning labels will look like or when they will debut.

    A federal appeals court in Cincinnati ruled in March 2012 to uphold parts of the 2009 Family Smoking Prevention and Tobacco Control Act, which restricts how tobacco products may be marketed. The FDA’s labels would cover the top half of cigarette packs.

    The manufacturers, including R.J. Reynolds Tobacco Co. and Lorillard Inc., petitioned the U.S. Supreme Court in October to review that case. Reynolds did not have immediate comment today on the decision.

    The nine labels – which include images of dead bodies, diseased lungs and gums, and cigarette smoke drifting around an infant — were chosen by the FDA in June 2011. The labels had been slated to debut last September.

  • Where there’s smoke, there’s still profit

    When the three major U.S. tobacco companies report their first-quarter results this week, investors can find comfort in two themes that have remained consistent for years: Cigarette volumes will fall, but profits will rise, according to a story in The Wall Street Journal.

    For the past three years, cigarette volumes have dropped around 3 percent to 4 percent annually, and analysts who follow the sector expect that trend to continue as more Americans quit smoking. But market leader Altria Group Inc. and smaller rivals Reynolds American Inc. and Lorillard Inc. keep posting higher core profits.

    Analysts expect both trends will continue as all three companies are projected to report modestly higher earnings for the first quarter, though volume could decline more steeply than historical trends, due to higher payroll taxes and still-high unemployment.

    The tobacco industry’s ability to consistently raise list prices and aggressively buy back shares have been the greatest drivers to their profitability gains. Smokeless tobacco products, including snuff and snus, have seen higher demand to help offset declining demand for traditional cigarettes. Lorillard and Reynolds are also in the early stages of selling e-cigarettes, which both have said offer potential for long-term growth. Battery-powered e-cigarettes turn heated nicotine-laced liquid into a vapor mist, and come in several flavors.

  • Tobacco magnate Cartes wins Paraguay presidential poll

    Horacio Cartes, a Paraguayan tobacco magnate, faced various challenges during his presidential bid, which he won decidedly last week. He was pressed to explain why antinarcotics police officers apprehended a plane carrying cocaine and marijuana on his ranch in 2000; why he went to prison in 1989 on currency fraud charges; and why he had never even voted in past general elections.

    Still, voters across the country seemed ready to give Cartes the benefit of the doubt, handing him a solid victory in Paraguay’s presidential election on Sunday. He took 46 percent of the vote against 37 percent for his main opponent, Efraín Alegre of the ruling Liberal Party, with about 80 percent of the voting stations reporting. Electoral authorities declared Cartes the winner, according to an article in The New York Times.

    Cartes’s victory returns the presidency to the conservative Colorado Party — which held a tight grip on power for six decades, until 2008 — and opens a new phase of international scrutiny of Paraguay, the landlocked nation with a long reputation as a haven for smugglers.

  • Cigarette addiction saves lives

    David Henneberry, an avid boater and member of the Watertown Yacht Club, walked outside to smoke a cigarette just after Massachusetts Gov. Deval Patrick  lifted the curfew on Boston, MA, USA, residents at 6 p.m. Friday, April, 18.

    Puffing away, Henneberry noticed the tarp that covered his rare, 22-foot  pleasure cruiser—a white Seahawk with blue trim and a fiberglass hull, reported  the New York Daily News—wasn’t on correctly, according to a story posted on on the talk radio station WBZT’s website.

    “Then he saw that one of the straps was hanging loose,” his stepson Robert Duffy told the Daily News. “He picked it up and saw it had been cut. He  found it incredibly odd.”

    Henneberry got a small ladder, climbed up to reach the boat deck, and flipped back his tarp “and saw a pool of blood,” Duffy added. “And then he saw what he thought was a body.”

    Henneberry jumped off the ladder and ran inside, dialing 911 as he went. The “body” was the second Boston bombing suspect, 19-year-old Dzhokhar  Tsarnaev — alive.

    Within minutes, Duffy said, police arrived and moved his stepdad and mother to a neighbor’s house.

    The entire city had been on lockdown all day as police embarked on a massive manhunt for Tsarnaev who’d escaped a shootout around 1 a.m. Friday and was nowhere to be found since.

    Apparently shots were exchanged at some point when police moved in, Duffy  said.

    Not in spots Henneberry apparently appreciated: “I just heard they wound up  shooting a couple of rounds through his boat,” Duffy told the Daily  News. “He’s not going to like that, he’s real anal about it.”

  • E-cig company gets green certification

    ProSmoke is the now the only company in its industry to be certified by the Green Business Bureau. This award is only given to companies that are both environmentally responsible and commercially beneficial to the environment and society, according to a story on PRNewswire.com.

    The Green Business Bureau certifies businesses as environmentally friendly organizations in order to increase the credibility and visibility of that company and to foster environmental awareness. The green practices that ProSmoke has implemented over the years have earned the company the classification of being a certified business by the Green Business Bureau. The businesses that are certified by the Green Business Bureau also save on energy and material costs, in addition to being environmentally friendly.

    In addition to already preventing millions of cigarette butts from polluting the environment, ProSmoke has implemented practices such as minimizing product packaging, offering environmentally friendly shipping materials, using green approved PET recycled materials with their disposable e-cigarettes and including a page on the website for green advocacy, education, information, and other resources. The company states it is dedicated to providing customers, and the rest of the industry, with an environmentally friendly option for manufacturing and using tobacco alternatives.

  • 2013 Pakistan Tobacco profits 202 percent higher than 2012

    The Pakistan Tobacco Company has announced its results for the quarter ended March 31, 2013, recording stellar earnings of Rs1.09 billion as compared to only Rs359 million earned in the same period of the preceding year (translating into 202 percent growth). The company has also announced an interim dividend of Rs2 per share alongside the results, according to a story in the The International Herald Tribune.

    The company’s net sales for the period improved nearly 28 percent over the same period of the previous year, and it recorded a 45 percent higher gross profit at Rs2.72 billion. Meanwhile, its selling and distribution expenses dropped 33 percent over the previous year to Rs597.49 million, while administrative expenses remained more or less flattish at Rs331.72 million. At the same time, its operating expenses grew 17 percent to Rs136.53 million, while operating income also registered a rise of 144 percent to Rs20.99 million. All these factors meant the company retained more of its gross profits than the previous year, as its net finance costs also registered a drop of an impressive 96 percent to Rs1.66 million.

    The company paid a total of Rs15.26 billion in excise, sales and income taxes for the period.

  • Boston’s JFK library fire caused by careless smoker, not terrorists

    The fire at the JFK Presidential Library and Museum in Boston Monday was caused by the careless disposal of smoking materials, city fire officials said.

    Boston officials had initially feared that the fire at the library might have been connected to the bombings at the Boston Marathon, because it was ­reported just six minutes after the explosions went off in Copley Square, according to The Boston Globe.

    “In light of what had just happened at the finish line — and the library is of course a high-profile place in Boston — it caused a lot of speculation,” Boston Fire Department spokesman Steve MacDonald said. “It took a while to get to the facts.”

    The fire broke out in an HVAC system in a section of the complex that opened in 2011 and houses offices, a classroom, and some archival material, he said Monday. The building was evacuated. No injuries were reported.

  • NC tobacco tax totals turn down

    North Carolina, USA, is catching up with a lot of other American states in collecting less tax revenue on cigarettes and other forms of tobacco.

    In the first nine months of fiscal 2013, which began in July, state revenue collections were $190 million, down 6 percent from the $202 million that came in during a comparable period in 2011.

    The state puts a 45-cent tax on a pack of cigarettes and a 12.8 percent tax on other tobacco products, according to a story in The Business Journal of the Greater Triad Area.

    The revenue collection figures are considered a good measure of consumption trends. North Carolina saw its tobacco revenue jump by 2.2 percent in fiscal 2012, which ended last June, Meanwhile, across the country during those same 12 months, the 50-state tobacco collection figure was dropping by nearly 1 percent, according to the U.S. Census Bureau.

    The federal government, which also collected fewer tobacco taxes in its fiscal 2012, credited anti-smoking programs for the decline.

    If Congress ultimately agrees with the Obama administration’s plan to slap an extra 94 cents in taxes on a pack, expect revenue collections to continue downward.

  • Cigar makers hope to snuff out FDA efforts

    Cigar makers are trying to snuff out an effort by the Food and Drug  Administration to regulate their products for the first time.

    The FDA said in its regulatory agenda for the year that it would propose rules in April to expand federal oversight of tobacco products under the Family Smoking Prevention and Tobacco Control Act. The news was welcomed by tobacco giants, such as Altria, that want all tobacco products to be brought under the same regulations, according to a Washington, D.C. regulation blog The Hill.

    Sellers and makers of premium cigars — often hand-rolled, slow-burning and made with aged tobacco leaves — say the FDA is overreaching, and are hiring lobbyists to fight back.

    Glynn Loope, the executive director of Cigar Rights of America, said the  FDA’s move is “a classic case of going beyond congressional intent.”

    “When Congress passed the original Tobacco Control Act, it was really to address two primary points: youth access to tobacco and chemical addition. Premium cigars don’t meet that criteria,” Loope  said.

    Another trade group for cigar retailers and manufacturers agreed that the FDA  is distorting the law.
    “It’s our belief that the act was to prevent youth from smoking and curtail the health effects for youth,” said Bill Spann, CEO of the International Premium Cigar & Pipe Retailers Association.

    Spann said FDA meddling could have a devastating impact on cigar shops. The group has warned that regulators could ban walk-in humidors and seasonal cigar blends, restrict store advertising or even place graphic warning labels on the ornate cigar boxes that are coveted by collectors.

    The pushback against FDA rules is also coming from overseas.

    In February, the Cigar Rights of  America organized a letter from the ambassadors of the tobacco-growing nations Honduras, the Dominican Republic and Nicaragua to officials at the White House,  State Department and the FDA, warning that new regulation would threaten thousands of jobs and “raise the specter of political and economic consequences within our region.”

  • Easy street: smoke smugglers net nearly $2 million a truckload

    Wanna make a quick $1,944,000? Buy a truckload of cigarettes in Virginia and sell them in New York.

    Yeah, it’s illegal. But that’s how much can be made from selling a tractor trailer’s worth (that’s 800 cases, each holding 600 packs of cigarettes) of low-tax Virginia cigarettes in high-tax New York, based on estimates from the Bureau of Alcohol, Tobacco, Firearms and Explosives.

    And that’s exactly what criminals are doing, according to a story posted on CNN.com

    In 2011, more than 60 percent of all cigarettes sold in New York were smuggled in from another state, according to the Mackinac Center for Public Policy, a free-market think tank. That’s up from about 36 percent in 2006.

    It’s not just happening in New York. Mackinac says 15 states have smuggling rates that top 20 percent. Add in counterfeit cigarettes from overseas, and ATF estimates the lost government revenue at more than $5 billion a year.

    Mackinac and others pin the blame on rising state taxes, and say things could get even worse if President Obama’s proposed 94-cent-a-pack cigarette tax hike goes through. Anti-smoking groups say the smuggling numbers are inflated, and that the public health benefits of fewer smokers – the ones dissuaded by pricey packs – far outweigh any lost revenue or other effects of smuggling.