Category: News This Week

Japan Tobacco International said today that it welcomed a proposal by some members of the European Parliament for a special inquiry into tobacco lobbying at the European Commission.

“Open and transparent lobbying activities to inform elected officials and civil servants over policy decision-making clearly serve the public interest,” said Thierry Lebeaux, head of EU affairs at JTI.

In a note posted on its website, the company said it hoped that such an inquiry ‘would be given all ways and means to carry out a full investigation into lobbying practices and solidly question all lobby groups, whether from commercial or not-for-profit organizations’.

In 1996, JTI said, the European Parliament was the first to introduce regulation of lobbyists leading to the adoption of a code of conduct.

“Despite strengthening it over time with various measures, some elected officials are now under the impression that the process is being abused,” said Lebeaux. “We would welcome the opportunity to participate and demonstrate our perfect compliance with the European Transparency Initiative and the European Parliament’s Code of Conduct for lobbyists”, he added.

The European Commission and Parliament had recognized that all interested parties had the right to argue their case and present their point of view to EU institutions, all in the public interest, according to the JTI note. ‘Preventing any party from doing so abuses the rules. Using the non-binding and wildly misapplied guidelines on Article 5.3 of the Framework Convention for Tobacco Control as means of excluding and censoring tobacco companies is intellectually dishonest. As the Commission rightly underlined earlier this month, “Those Guidelines contain no specific compulsory requirements on holding meetings or on the publicity of such meetings”.

‘JTI is one of several interested groups – with relevant expertise – seeking to inform government bodies about the revision of the Tobacco Product Directive.

‘Elected representatives and officials should have unfettered access to the facts, information and opinions that all of these groups can provide, even if only to reject them.’

“Only through clarity and openness can the EU achieve sound public policies and appropriate regulation for any industry,” said Lebeaux.

Indonesia’s National Commission on Tobacco Control (KNPT) has called on the House of Representatives to draft a new bill aimed at protecting consumers from the adverse impacts of tobacco, according to a story in The Jakarta Post.

The commission wants the House to drop plans for the tobacco bill that is already scheduled for inclusion in this year’s legislative program.

Speaking during a meeting with the House Legislative Body on Wednesday, KNPT commissioner, Hakim Sorimuda Pohan, said the country already had a number of regulations on tobacco production and trading, but lacked regulations that could mitigate the impacts of smoking on the country’s more than 60 million smokers.

The House has previously rejected two bills aimed at tackling the negative impacts of tobacco.

Meanwhile, the Indonesian Consumers Foundation believes that the current bill was given the go-ahead as a result of intense lobbying by the Indonesian Tobacco Society Alliance in an attempt to protect the nation’s tobacco industry.

On Wednesday, tobacco farmers staged a protest demanding that the House continue deliberating the bill, arguing that it would protect them from the global anti-smoking campaign.

KT&G is putting one million limited-edition packs of its The One Impact cigarette on the market for a four-week period, according to a story in The Korea Herald.

The outer packaging of The One Impact Maxim Edition was designed in collaboration with Maxim, said to be the world’s best-selling men’s monthly magazine.

The aim is to attract young adult male smokers in their 20s and 30s, who comprise about 70 per cent of The One Impact sales.
This is the first limited-edition version of The One Impact brand, which was launched in 2011 as a low-tar (1.0 mg) product and which is available in five permanently-available versions.

The One Impact Maxim Edition, which also delivers 1 mg of tar, sells for the same price as regular versions of the brand: Won2,500 per pack.

One of the organizations that contributed to New Zealand’s public consultation on standardized packaging for tobacco products is concerned that the decision to go ahead with imposing such a requirement will set a precedent for other products, according to a Yahoo! New Zealand News story.

The New Zealand government has said that it is to push on with plans to bring in such a packaging requirement for tobacco products, though it will not implement it until the resolution of World Trade Organization disputes involving Australia, the only country so far to have introduced such packaging.

The chief executive of the Association of New Zealand Advertisers, Lindsay Mouat, said that if the government could step in to legislate over cigarettes, it could be pushed into legislating in other areas too.

“Some may take this as an opportunity to seek plain packaging in other sectors, such as alcohol, fast food, carbonated beverages and the like,” he said.

Mouat added that plain packaging meant brands lost their identity. “It limits the opportunity for those brands to introduce new products, products that may be considered better for you,” he said.

“In actual fact, it has some unintended consequences of reducing choice for consumers.”

But opposition leader, David Shearer, supports the policy, and does not believe it is vulnerable to the intellectual property arguments being mounted by tobacco companies.

In any case, he said, New Zealand was willing to take on the tobacco companies.

“The most important thing is that our population stays as healthy as they possibly can,” he said.

Chile’s anti-tobacco lobby is looking forward to the imposition of a new law that is due, from March 1, to ban tobacco smoking in enclosed public places such as pubs, restaurants and discos, according to a UPI story quoting The Santiago Times.

Co-ordinator Lezak Shallat, of Chile’s Free Tobacco organization, said smoking cost the country $2.5 billion in health expenses.

Chile had the highest smoking rates in the Americas and, among young people, it had the highest smoking rates in the world, Shallat said.

But at least some business organizations are opposed to the tobacco smoking ban.

President Fernando de la Fuente, of the Chilean Association of Gastronomy, told a news conference the legislation would hit local businesses the hardest.

He said that 40 per cent of venues in the Santiago metropolitan area did not have outdoor terraces and therefore would have to ban smoking completely. Sales were expected to drop as a result, de la Fuente added.

The Japanese government’s sale of a $10 billion stake in Japan Tobacco Inc. is expected to kick off within days after bankers met on Tuesday to discuss details of  the sale, according to a Reuters story quoting ‘sources close to the deal’.

Japan’s Ministry of Finance, which owns just more than 50 per cent of the company, has been planning to sell up to one-third of its holdings to raise funds for rebuilding areas devastated by the earthquake and tsunami that struck the country on March 11, 2011.

Japan’s parliament in 2011 passed a set of bills including those providing for tax hikes and government sales of its shares in state-owned companies to help finance the $270 billion it expects to spend rebuilding the northeast coastal areas where the earthquake and tsunami hit.

The conditions for a sell-down have improved in recent months, with Japan’s stock market rising by more than 30 per cent during the past three months and JT’s shares up 36 per cent.

Government officials were quoted by Reuters as saying the timing for the sale had not been decided. However, the estimated proceeds of a sale were incorporated into the budget for the fiscal year to the end of March.

Japanese law requires that the government holds at least one-third of JT’s shares.

Malawi’s tobacco selling season is due to open in the middle of March, according to a Zodiak Malawi story quoting the Tobacco Control Commission (TCC).

The TCC chief, Dr. Bruce Munthali, said that tobacco sales at Lilongwe, Limbe and Chinkhoma would start during the second week of March, while the Mzuzu auction floors would open in April.

Last year the country sold only 79 million kg of tobacco, far below the 237 million kg sold during 2011.

But Munthali said he was “very optimistic” that tobacco production this season would be double that of last season, partly because of the helpful rains that had fallen.

There was hope, too, that Malawi would produce quality tobacco, he added.

Munthali has appealed to farmers to take care of their tobacco and avoid mixing it with non related materials; so as to reduce rejection rates.

Swedish Match’s sales for the year to the end of December, at SEK12,486 million, were up by seven per cent on those of 2011.

And sales during the fourth quarter of 2012, at SEK3,148 million, were up by three per cent on those of the fourth quarter of 2011.

Calculated in local currencies, sales for the full year increased by six per cent and for the fourth quarter by four per cent.

Operating profit from product areas (excluding net profit from SM’s share in STG and larger one off items) for the full year increased by nine per cent to SEK3,666 million, while fourth-quarter operating profit from product areas fell by two per cent to SEK883 million. In local currencies, operating profit from product areas for the full year increased by eight per cent and was flat for the fourth quarter.

Operating profit (including net profit from SM’s share in STG and larger one off items) amounted to SEK4,062 million for the full year 2012, up from SEK3,702 million in 2011, and to SEK986 million in the fourth quarter of 2012, down from SEK1,022 million during the fourth quarter of 2011.

Basic earnings per share increased for the full year by 18 per cent to SEK14.33 and for the fourth quarter by 15 per cent to SEK3.93.

While opposing the planned introduction of standardized packaging for tobacco products in New Zealand, two multinationals have welcomed news that the country is to delay a decision on implementation until the resolution of World Trade Organization disputes involving Australia, the only country so far to have introduced such packaging.

‘In her official statement earlier today [February 19] announcing New Zealand’s plans regarding standardized packaging, Health Minister Tariana Turia said, “the Government will wait and see what happens with Australia’s legal cases, making it a possibility that if necessary, enactment of New Zealand legislation and/or regulations could be delayed pending those outcomes,” Philip Morris International said in a note posted on its website.

‘This announcement demonstrates that the New Zealand government recognizes the significant international trade issues with standardized packaging and will not implement it until the pending international legal challenges to Australia’s law are resolved.

‘There is no credible evidence that standardized packaging will lower smoking rates, but strong evidence that it will jeopardize jobs, benefit the black market for cigarettes, and is a breach of international trade rules that have already made Australia’s policy subject to WTO action.’

PMI said there were three avenues of litigation that had been and are being pursued against the Australian government in relation to this legislation: one at the domestic level and two at the international level. While the domestic case had been decided, the international cases remained open and unresolved.

‘Currently three countries have initiated proceedings against Australia before the World Trade Organization (WTO) on the ground that the standardized packaging legislation is contrary to Australia’s obligations as a WTO member,’ the PMI note said. ‘Philip Morris Asia (PMA) is also suing Australia for multiple breaches of its Bilateral Investment Treaty (BIT) with Hong Kong. Decisions in these cases are expected within two to three years.

‘In broad terms, these cases will examine a number of issues, including:

* ‘Whether there is any valid evidence that standardized packaging will reduce smoking rates;

* ‘Whether there are effective, less restrictive alternatives that Australia could have implemented instead;

* ‘Whether standardized packaging breaches Australia’s international trade and treaty obligations

* ‘Whether the Australian government will need to pay compensation to PMA.’

BRITISH AMERICAN TOBACCO RESPONDS

Meanwhile, Kingsley Wheaton, director of corporate and regulatory affairs at British American Tobacco, said that his company understood the reasons why the New   Zealand government had taken the pragmatic step of deferring its decision regarding plain packaging.

“The New Zealand government has listened to the many arguments for and against this regulatory measure and has acknowledged both the importance of the issue to its trade obligations, as well as the impending World Trade Organization challenge that Australia is currently facing,” he said.

“We support reasonable and evidence-based regulation but there is still no credible evidence to suggest plain packaging will support the New Zealand government’s stated public health objectives. In fact, ill-thought through regulation, like plain packaging, brings with it the very real threat of serious unintended consequences, such as a rise in the number of smokers willing to turn to the black market.

“Furthermore, plain packs play right into the hands of the counterfeiters who are ready and waiting to supply people, regardless of their age, with cheap tobacco products.

“We remain opposed to the plain packaging of tobacco products not only because of the lack of credible evidence to suggest it will deliver its policy aims but also due to the likely and serious unintended consequences.”

In an attempt to put some clear water between the UK and New Zealand, where both governments have been considering the question of standardized packaging for tobacco products, campaigners say that developments in New Zealand are not relevant to the UK, where the government has yet to make a decision.

The campaigners say that reports that the New Zealand government is to follow Australia and introduce standardized packaging for tobacco products would “infuriate” consumers in New Zealand.

“The decision will infuriate thousands of people who took part in a public consultation in New Zealand because the majority were against plain packaging,” said Angela Harbutt, of the UK’s Hands Off Our Packs campaign, which is managed by Forest.

“In contrast we expect our government to take into account the enormous level of opposition to plain packaging in the UK. This includes consumer and retail groups, packaging and design companies, retired and serving police officers.

“The UK consultation on standardised packaging attracted 700,000 responses, half a million opposed to plain packs. It would be extraordinary if the government ignored that level of protest. People would rightly ask serious questions about the political process.”

Harbutt said that tobacco control legislation in Australia and New Zealand was not relevant to the UK.

“New Zealand has been forced into alignment with Australia,” she said. “The Trans-Tasman Mutual Recognition Arrangement (TTMRA), an agreement whereby goods that can be legally sold in New Zealand may also be legally sold in Australia, and vice versa, would have seriously undermined Australia’s plain packaging experiment. They couldn’t let that happen.”