Category: News This Week

  • Concerns over Imperial Tobacco’s long term incentive plan for executives

    Investors in Imperial Tobacco have raised questions over planned changes to its executive compensation structure, according to a story in the Electronic Telegraph.

    Discussions on the proposals, which could allow the board to change the amount directors get in share options and awards without recourse to investors, were understood to be continuing.

    A spokesman for Manifest, one of three shareholder bodies concerned about the proposals, said there were no individual participation limits associated with the plan. “Until there’s a binding vote on remuneration policy for shareholders [coming into force in 2014], there’s therefore no shareholder say on the participation limits, which means technically the company can set policy on individual participation where it likes until then,” he added.

    Pirc, another shareholder body, was said also to be concerned about the long term incentive plan (LTIP). It said some of the plan’s earnings-per-share targets were not challenging enough.

    A spokesman for Imperial Tobacco said that the intended limit of the LTIP awards would be 200 per cent of annual salary for the chief executive, and 150 per cent for the finance director. Alison Cooper, the chief executive, is said to have received a package of £2.69 million for the year to September 2012.

    The full story is at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/9813574/Imperial-Tobacco-faces-investor-revolt-over-bonus-revamp.html.

  • Altria to host results webcast

    The Altria Group is due to host a live audio webcast at www.altria.com starting at 0.900 hours Eastern Time on January 31 to discuss its 2012 fourth-quarter and full-year business results.

    The results will be issued by means of a press release about 07.00 hours on the same day.

    During the webcast, chairman and CEO, Marty Barrington, and executive vice president and CFO, Howard Willard, will discuss the results and answer questions from the investment community and news media.

    Pre-event registration at www.altria.com is necessary for accessing the webcast, which will be in listen-only mode.

    An archived copy of the webcast will be available at the same website.

  • China’s tobacco industry increases its government contributions in 2012

    Tax payments by China’s tobacco companies last year, at Yuan864.9 billion (US$137.7 billion), were up by 15.7 per cent on those of 2011, according to a Xinhua Newswire story.

    In addition the industry provided the government with profits, which, at Yuan716.6 billion (US$114.1), were increased by 19 per cent on those of 2011.

    In announcing these figures at a national work conference, Jiang Chengkang, head of the State Tobacco Monopoly Administration, said too that the tobacco industry was turning greener.

    Energy consumption per Yuan10,000 of value-added output fell by 14.8 per cent year on year to 25.3 kg of standard coal in 2012.

    And the industry’s total chemical oxygen demand and sulfur dioxide emissions decreased by 3.7 per cent and 10.9 per cent respectively.

  • Russians oppose ban on smoking in public places, want more quit advice

    Most Russians do not support the government’s move to impose a complete ban on tobacco smoking in public places and believe its emphasis should be on helping smokers quit, according to an RT TV/TV Novosti story.

    An anti-smoking bill is due to be tabled for its second reading at the State Duma, Russia’s lower house of parliament, on January 25.

    According to a survey conducted by the LevadaCenter in November, the results of which were published yesterday, only between 18 and 31 per cent of respondents supported an outright tobacco smoking ban in workplaces, airports, restaurants, bars and hotels.

    Up to 75 per cent believe public smoking should be restricted to specially designated areas.

    About 55 per cent of respondents said the government should focus more on informing smokers about how to quit their habit.

    And only 20 per cent said higher prices, taxes and fines were effective anti-smoking measures.

    The Duma passed the anti-smoking bill at its first reading last month, but since then Russian lawmakers have proposed adding further restrictions to the bill, in particular to a ban on work-place smoking rooms and on showing cigarettes on television and in films.

  • Strong tobacco auctions in Karnataka

    Tobacco prices at the auction sales in the Indian state of Karnataka have hit a high of Rs152 per kg, according to a story in the latest issue of the BBM Bommidala Group newsletter.

    By the end of the 75th day of sales, growers had sold more than 44 million kg of leaf at an average price of Rs121.45 per kg.

    Bright grade leaf, which is generally preferred by the major tobacco companies, is fetching about Rs140.91 per kg, up from about Rs118 per kg last year.

  • Research will focus on addressing the problem of menthol use in Minnesota

    Two new research projects are to look at how to address ‘the problem of menthol use in Minnesota’.

    According to a PRNewswire story, the ClearWay Minnesota (CWM) board of directors has approved two new research grants totalling $360,628 that will fund studies at the University of Minnesota and the Public Health Law Center examining menthol cigarettes in Minnesota.

    “We know menthol cigarettes increase smoking initiation among youth, make it harder for smokers to break free of addiction, and are disproportionately marketed to ethnic minorities,” said CWM CEO, David Willoughby.

    “These new studies will help identify ways to address the problem of menthol use in Minnesota.”

    Another grant, also for a menthol-focused research project, was approved by the board in November.

  • JT’s domestic cigarette market share over 60 per cent in December

    Japan Tobacco Inc’s domestic cigarette sales volume during December, at 10.3 billion, was down by 4.5 per cent on its December 2011 volume, 10.8 billion, which itself was increased by 10.4 per cent on that of December 2010, according to preliminary figures issued by the company today.

    Volume during the nine months, April-December, at 89.4 billion, was up by 10.5 per cent on its April-December 2011 volume, 80.9 billion, which was down by 24.3 per cent on that of April-December 2010.

    JT’s market share stood at 60.1 per cent in December, at 59.6 per cent during April-December 2012, and at 54.9 for the full year to the end of March 2012.

    JT has suffered huge volume swings in recent times because of an unprecedented, mainly tax-driven price hike on October 1, 2010, and the massive disruption caused to the company’s manufacturing and distribution operations following the earthquake and tsunami of March 11 2011.

    JT’s domestic cigarette revenue during December, at ¥56.6 billion, was down by 4.6 per cent on its December 2011 revenue, ¥59.3 billion, which was up by 9.8 per cent on that of December 2010.

    Revenue during April-December, at ¥492.0 billion, was up by 10.6 per cent on its revenue during April-December 2011, ¥444.7 billion, which was down by 4.0 per cent on that of April-December 2010.

  • Imperial seeking group marketing director to replace Roberto Funari

    The Imperial Tobacco Group has announced that its group marketing director, Roberto Funari, will leave the business on January 30.

    Funari joined Imperial in 2010 and has been responsible for the strategic development of the group’s brand and product portfolio worldwide.

    His successor is being recruited externally, a process that is said to be well underway.

    “I’d like to thank Roberto for the contribution he’s made to the success of our sales growth strategy,” said chief executive, Alison Cooper.

    “He leaves group marketing in a strong position and the team will continue their focus on building consumer insights and developing innovations to drive the long-term growth of our total tobacco brands.”

  • US governments show little interest in investing in tobacco control projects

    The latest American Lung Association (ALA) ‘State of Tobacco Control Report’ lambasts both the tobacco industry and tobacco control.

    The annual report is said to track ‘progress’ on key tobacco control policies at the federal and state level, assigning grades based on whether laws are adequately protecting citizens from the ‘enormous toll tobacco use takes on lives and the economy’.

    “We are faced with a deep-pocketed, ever-evolving tobacco industry that’s determined to maintain its market share at the expense of our kids and current smokers,” said Paul G. Billings, ALA senior vice president for advocacy and education. “State and federal policymakers must battle a changing Big Tobacco and step up to fund programs and enact policies proven to reduce tobacco use.”

    In a press note issued through PRNewswire, the ALA said, in part, that the federal government’s progress on tobacco control during the past several years had nearly ground to a halt in 2012.

    ‘Most notably, the Food and Drug Administration (FDA) failed to exercise its oversight authority allowing for the proliferation of a new generation of tobacco products aimed at hooking youth smokers,’ the note said.

    ‘State governments continued their years of inaction by again failing to invest income from tobacco taxes and tobacco settlement payments into programs proven to keep youth off tobacco and help current smokers quit. According to the U.S. Surgeon General’s report, if states begin to invest in tobacco prevention programs, youth tobacco use could be cut in half in just six years.

    ‘Smoking costs the American public almost $200 billion every year in healthcare costs and lost productivity and wages – a staggering bill that the country can ill afford.’

    The ALA said that despite receiving $25.7 billion in tobacco settlement payments and tobacco taxes in 2012, more than 40 states had received an F for not investing even half of what is recommended by the US Centers for Disease Control and Prevention in proven tobacco prevention programs.

    ‘States and the federal government have also failed to raise taxes on tobacco products other than cigarettes. This led to a surge in the consumption of certain cheaper tobacco products, including flavored cigars that are popular among already vulnerable populations – youth, low income communities, Hispanics and LGBT.’

    Later, the press note quoted from preliminary data from a report by the National Institute on Money in State Politics, called ‘Big Tobacco Wins Tax Battles’, to make the point that the tobacco industry was hard at work making campaign contributions to candidates for political office and bankrolling efforts aimed at defeating ballot initiatives.

    ‘Candidates for state office during the 2011-2012 election cycle accepted $53.4 million and the industry spent a whopping $46 million to defeat Proposition 29, which would have increased California’s cigarette tax by $1.00 per pack,’ the note said. ‘In addition, according to the Center for Responsive Politics, the tobacco industry contributed over $3.7 million to candidates for federal office.’

  • Researching electronic cigarettes

    Fumus Electronic Cigarettes, a UK-based supplier of electronic cigarettes, is commissioning research into some of the issues surrounding these relatively-new products.

    According to a Journalism.co.uk story, Fumus has asked TeessideUniversity, Middlesbrough, to undertake two research projects for which it is now looking for volunteers nationally.

    The first research project is seeking 100 or more adult smokers who want to quit smoking tobacco and who are prepared to use electronic cigarettes as an aid to achieving that goal.

    The second research project is centred on smoking in the workplace. For this research the university is looking for employers who are prepared to allow their employees who smoke to use electronic cigarettes in the workplace.

    This second research project will try to measure whether allowing the use of electronic cigarettes and, therefore, cutting out smoke breaks, leads to any improvement in a company’s productivity and/or to relations between smokers and non smokers.

    Fumus spokesperson, Jim Gillespie, said that his company had been selling electronic cigarettes in the UK since 2009 and had received many e-mails and testimonials from customers thanking Fumus for helping them to quit smoking.

    “The UK government is investigating the use of e-cigs this year, so we felt it was appropriate to commission some independent research that we can share with government, to hopefully assist them in making an informed decision on the use of e-cigs in the UK,” said Gillespie.