Category: News This Week

Thailand is aiming to become the country with the largest cigarette-pack health warnings, according to a story in The Nation.

At present, its warnings are said to take up 55 per cent of a pack’s surface area, but that is set to rise to 85 per cent, the country’s Public Health Minister, Pradit Sinthawanarong, said.
After a meeting with the national tobacco control board, Pradit said the board had agreed to issue a ministerial declaration increasing the size of the warnings.

The declaration will come into effect 180 days after publication in the Royal Gazette.
The warnings will include 10 pictures depicting laryngeal cancer, heart failure, stroke, oral cancer, sexual dysfunction, lung cancer, emphysema and chronic bad breath.

Warnings were said to cover 82.5 per cent of the pack in Australia, 80 per cent in Uruguay and Sri Lanka, and 75 per cent in Brunei and Canada.

Corporate Europe Observatory (CEO) has submitted a formal complaint to the EU Ombudsman about the European Commission’s handling of what has become known as ‘Dalligate’.

The former European Commissioner for health and consumer affairs, John Dalli, resigned in October in circumstances that were examined by OLAF, the European Anti-fraud Office, and that are still being investigated. Dalli strenuously denies any wrongdoing.

In its complaint, CEO alleges that the Commission has been guilty of secrecy, the selective release of documents and failure to fulfill its obligations under EU transparency legislation.

On 26 October 2012, CEO requested access to “all documents related to Commissioner Dalli’s resignation over the issues covered in the OLAF investigation, including all minutes (and other notes) of meetings, all correspondence (including by email), both internal and external, and any other documents held by the Commission on these matters’.

The CEO alleges that the Commission has refused to disclose the most important of these documents.

And it alleges that ‘the Commission has unduly refused access to documents, failed to provide clarity about which documents falling under the scope of request actually exist and used delay tactics’, in what amounts to ‘a pattern of serious maladministration’.

The incidence of smoking in Slovenia is declining but nearly a quarter of the country’s population still smokes, according to a story in Slovenska Tiskovna Agencija quoting figures from the latest survey by the Public Health Institute (IVZ).

The survey, which was conducted during 2011 and 2012 among 7,500 respondents between the ages of 15 and 64, found that 24 per cent of Slovenians smoke, a figure that includes 27 per cent of men and 21 per cent of women.

Helena Koprivnikar, of IVZ, said that almost 80 per cent of smokers smoked every day and that 93 per cent of smokers consumed only one kind of tobacco product.

Ninety six per cent of smokers consume factory-made cigarettes, smoking on average almost 16 a day, nine per cent roll their own cigarettes, and just above one per cent smoke cigars.

A member of the European parliament has asked whether newly imposed limits by Spain on the import of cigarettes across the La Línea de la Concepción border with Gibraltar amount to discrimination.

In a written question to the European Commission, the English MEP, Sir Graham Watson, said that, under the rules, introduced at the start of the year, people living within a radius of 15 km of the border – residents of Campo de Gibraltar in southern Spain, who include a sizable number of British people – would be allowed to bring only 80 cigarettes per month across the border, instead of 200 cigarettes.

Citizens who resided in all other parts of Spain would continue to be allowed to cross the border with 200 cigarettes, he said in the preamble to his question.

The MEP asked whether the Commission was aware of this new restriction.

‘Whilst Article 8(2) of the directive [directive 2007/74/EC, which lays down quantitative limits for alcohol and tobacco products exempt from VAT and excise duty] allows Member States to implement lower quantitative limits on tobacco products for non-airline travellers, does the Commission consider such a limited geographical restriction, confined to residents of Campo de Gibraltar, to be:

* in line with the directive, which refers to restrictions applied to Member States as a whole?

* discriminatory against residents of Campo de Gibraltar?

* indirectly discriminatory against the sizable minority of non-Spanish EU citizens and cross-border workers in the area?’ he asked.

Philip Morris USA’s cigarette shipment volume during the 12 months to the end of December, at 134,874 million, was down by 0.2 per cent on that of the 12 months to the end of December 2011.

Marlboro shipments were down by 0.7 per cent to 116,377 million while shipments of other premium brands were down by 8.0 per cent  to 8,629 million.

Discount brand shipments were increased by 15.3 per cent to 9,868 million.

In reporting its full-year and fourth-quarter results yesterday, Altria said that, after adjusting for an extra shipping day and changes in trade inventories, PM USA’s 2012 volume was essentially unchanged; while total industry volume was down by about three per cent.

PM USA’s share of the retail cigarette market during the year to the end of December, at 49.8 per cent, was up by 0.8 of a percentage point.

Marlboro’s share was up by 0.6 of a percentage point to 42.6 per cent while that of the company’s other premium brands was down by 0.3 of a percentage point to 3.4 per cent.

The company’s discount-brands share was up by 0.5 of a percentage point to 3.8 per cent.

Middleton’s cigar shipments during the year to the end of December, at 1,237 million, were down by 0.7 per cent on those of the year to the end of December 2011.

Shipments of Black & Mild were down by 0.6 per cent to 1,219 million while shipments of other brands were down by 10.0 per cent to 18 million.

The company’s share of the domestic retail cigar market was increased by 0.5 of a percentage point to 30.2 per cent, with Black & White’s share was up by 0.5 of a percentage point to 30.0 per cent and the share of its other brands was unchanged at 0.2 per cent.

Meanwhile, PM USA and USSTC’s combined smokeless product shipments during the year to the end of December, at 763.3 million, were increased by 3.9 per cent on those of 2011.

Copenhagen shipments were increased by 10.8 per cent to 392.5 million while Skoal shipments were up by 0.6 per cent to 288.4 million.

Other-brand shipments were down by 12.0 per cent to 82.4 million.

PM USA and USSTC’s combined share of the retail market in smokeless tobacco increased by 0.3 of a percentage point to 55.4 per cent.

Copenhagen’s share was increased by 2.2 of a percentage point to 28.4 per cent while Skoal’s share was down by 0.6 of a percentage point to 22.2 per cent.

The share of the companies’ other brands was down by 1.3 percentage points to 4.8 per cent.

Altria’s full-year reported diluted earnings per share grew by 25.6 per cent to $2.06 while its adjusted diluted earnings per share increased by 7.8 per cent to $2.21.

“Altria delivered strong results and returns for its shareholders in 2012,” said Marty Barrington, Altria’s chairman and CEO. “Altria grew its full-year adjusted diluted earnings per share by 7.8 per cent behind the business performance of our operating companies, complemented by higher earnings from our equity investment in SABMiller.

“Despite a continuing, challenging external environment, our tobacco operating companies’ premium brands had an excellent year as our companies continued investing in their long-term success. These companies grew their adjusted operating companies’ income and gained retail share in cigarettes, cigars and smokeless tobacco for the full year of 2012.”

Dr. Elizabeth E. Bailey, is to retire from the board of directors of the Altria Group following completion of her current term. She will not stand for re-election at the 2013 annual general meeting of shareholders.

Bailey, who has been a board member since 1989, currently serves as a member of the Compensation, Finance and Nominating, Corporate Governance and Social Responsibility committees.

She is the John C. Hower Professor Emerita of Business and Public Policy at the WhartonSchool of the University of Pennsylvania.

“Dr. Bailey’s contributions have made Altria a stronger company and we thank her for her service to our shareholders and our employees,” said Martin J. Barrington, Altria Group’s chairman and CEO.

Universal Corp is due to webcast a conference call at www.universalcorp.com from 17.00 hours Eastern Time on February 5 following the release of its results for the third quarter of fiscal year 2013 after market close on that day.

The conference call, which will be in listen-only mode, will be hosted by Candace C. Formacek, vice president and treasurer.

A replay of the webcast will be available at www.universalcorp.com until May 5; and from between 20.00 hours on February 5 until February 19 by dialing (855) 859-2056 and using the telephone identification number 96220109.

Philip Morris International is due to host a live audio webcast at www.pmi.com starting at 13.00 hours Eastern Time on February 7 to discuss its 2012 full-year and fourth-quarter results, which will be issued at mid-morning of the same day.

During the webcast, Louis C. Camilleri, chairman and CEO, and Jacek Olczak, CFO, will discuss the company’s results, the outlook for 2013, and answer questions from the investment community and the news media.

The live webcast will be in a listen-only mode.

An archived copy of the webcast will be available until 17.00 hours on March 8 at www.pmi.com.

Japan Tobacco Inc’s domestic cigarette sales during the nine months to the end of December, at 89.4 billion, were increased by 10.5 per cent on those of the nine months to the end of December 2011.

The 2011 figure was negatively impacted by the manufacturing and distribution challenges JT faced following the earthquake and tsunami in March of that year.

JT’s market share was up from 54.9 per cent during April-December 2011 to 59.6 per cent during April-December 2012, and reached 60.1 per cent in December 2012.

Core revenue for the domestic tobacco business increased by 10.2 per cent to ¥502.8 billion and adjusted EBITDA was up by 13.3 per cent to ¥226.9 billion.

JT’s consolidated results included first nine-month figures for Japan Tobacco International, which saw its shipments during the period January 1, 2012 to September 30, 2012, at 327.9 billion, increased by 2.6 per cent on those of the equivalent period of 2011.

Excluding the effects of acquisitions (Haggar Cigarette & Tobacco Factory Ltd and GrysonNV), shipments grew by 1.2 per cent to 323.4 billion.

Global flagship brand shipments increased by 5.1 per cent to 202.5 billion.

JTI’s core revenue increased by 3.0 per cent to ¥702.9 billion and its adjusted EBITDA was up by 4.2 per cent to ¥266.0 billion.

JT’s total (including also its pharmaceutical, beverage and food businesses) consolidated revenue grew by 4.0 per cent to ¥1,608.4 billion and its adjusted EBITDA increased by 8.5 per cent to ¥494.5 billion. Operating profit was up by 13.2 per cent to ¥411.7 billion.

“Our tobacco businesses performed strongly,” said Mitsuomi Koizumi, president and CEO. “Internationally, we have continued to deliver a robust performance amid a challenging environment, demonstrating the soundness of our strategic focus on top line growth and broadening the earnings base. In Japan, our market share has recovered steadily, driven by efforts to strengthen brand equity.

“The transition to Mevius from Mild Seven has started smoothly. This is a pivotal step to realizing our growth strategy with the long-term aim of Mevius becoming the number one global premium brand.

“Looking ahead, we will continue to pursue quality top line growth by prioritizing business investment for sustainable medium to long-term profit growth.”

Meanwhile, JTI reported separately that its cigarette shipments during the year to the end of December, at 436.5 billion, were 2.5 per cent up on those of January-December 2011.

At the same time, global flagship brand shipments were increased by 4.8 per cent to 268.8 billion.

Core revenue was up by 5.4 per cent to US$11,817 million and core revenue per 1,000 cigarettes was increased by 2.7 per cent to US$27.3. Adjusted EBITDA grew by 9.1 per cent to US$4,302 million.

Tobacco growers from the states of Andhra Pradesh and Karnataka are asking the Indian government to ensure that they are represented in the group currently being formed to attend the next working session of the World Health Organization’s Framework Convention on Tobacco Control, according to a story in the latest issue of the BBM Bommidala Group newsletter.

In a letter to Prime Minister, Manmohan Singh, and the ministers of agriculture, commerce, health and family welfare, and external affairs, the growers said their presence at the meeting of the sixth Conference of the Parties (CoP6) was vital, especially in respect of discussions on reducing tobacco crop sizes.

CoP6 is due to be held in Moscow, Russia, in 2014.

The growers say that they need to be heard because they are the key stakeholders.

They are concerned that five large tobacco-producing countries, including Argentina, the US and Zimbabwe, are not parties to the convention and so stand to gain if tobacco production is curtailed in countries such as India.