Category: News This Week

  • Australia’s plain packaging an “anomaly”

    Morgan Stanley analysts believe the spread of plain packaging beyond Australia may be “very slow.”

    Capital markets have been concerned that Australia’s plain tobacco packaging law–the world’s first–could spread to other nations, ultimately commoditizing the tobacco category by hurting brand equity and reducing manufacturers’ pricing power.

    The analysts base their optimism on the facts that there is no evidence that the measure will reduce tobacco use or youth initiation and that such legislation appears both “extreme and disproportionate.”

    They also point out that plain packaging will “almost certainly” fuel the black market, thus reducing tax revenues, and that the legislation arguably violates various international trade rules.

    The analysts suggested that the nation’s geographic positioning may have led policy makers to believe that the country would be largely immune to contraband.

    Although the Commonwealth still faces strong legal challenges under a Bilateral Investment Treaty with Hong Kong and the World Trade Organization, the failure of the industry’s constitutional challenge in the country’s High Court “reflects the unique nature of Australia’s ‘protection’ of trademarks and intellectual property,” the analysts said.

  • E-cigarettes may surpass NRT sales

    Euromonitor International believes the value of the global trade in electronic cigarettes may soon exceed that of non-prescription nicotine-replacement products. In a recent report, the market intelligence provider estimated the worldwide e-cigarette market at $2 billion, compared with $2.4 billion for the NRT market, excluding prescription sales.

    The report also highlights the increasing involvement of traditional tobacco companies in e-cigarettes. As examples, it highlights the ventures of Lorillard, which acquired Blu eCigs for $135 million in April 2012, and Swisher International, which launched its own brands of e-cigarettes and e-cigars this year.

    Euromonitor predicts that by 2050, e-cigarettes and other non-combustible smoking alternatives will be worth 4 percent of the overall tobacco category.

    E-cigarettes are currently largely unregulated across the world, according to the report, although some countries, such as Argentina, have banned them, while others, such as the United States, have classified them as tobacco products.

    There is speculation that the EU is planning to ban e-cigarettes that are not registered pharmaceutical products, the article said.

    “Should any future legislation clamp down on e-cigarettes that are not registered pharma products, tobacco companies such as BAT with their pharma-approved devices and those companies with the financial clout to afford the approval process will be poised to pick up the slack,” the article said.

  • FlexLink opens distribution center

    FlexLink Systems inaugurated new international distribution (IDB) and engineering centers near Poznan, Poland, on Nov. 22.

    With the new operations, FlexLink has “insourced” its delivery services and combined it with complementary services to keep full control of the delivery performance to its customers. The combined operations holds capacities in engineering, pre-assembly of conveyor systems and product handling functions, warehousing and the international distribution center.

    The location also hosts the local sales unit, FlexLink Systems Polska, serving the Polish and Baltic markets.

    “The investment in the new IDC operations demonstrates FlexLink’s commitment to offer the best delivery capability in its business,” said FlexLink CEO Mattias Perjos,.

  • Judge spells out “corrective statements”

    A U.S. federal court has spelled out the “corrective statements” District Court Judge Gladys Kessler ordered tobacco companies to make in 2006 when she found them guilty of violating civil racketeering laws and engaging in fraud to deceive the American people about the health risks of smoking.

    The order requires tobacco companies to make corrective statements about the adverse health effects of smoking and secondhand smoke, the addictiveness of nicotine, the lack of health benefits from smoking “light” and “low-tar” cigarettes, and the companies’ manipulation of cigarette design and composition to ensure optimum nicotine delivery.

    The corrective statements must be made through newspaper and television advertising, on the companies’ web sites and on cigarette packaging.

  • Anti-smoking campaigns should be tailored to smoker occupations

    There is a higher incidence of smoking among South Korea’s young, male white-collar workers than among young, male blue-collar workers, according to a story in The Korea Times quoting the results of a university survey.

    The survey found that 62.6 per cent of young (19-34 years of age) men working in services and sales were smokers, while the figure for those working in crafts and machine operation was 62.2 per cent, and that for those engaged in the agricultural, fishing and forestry industries was 50.9 per cent.

    The survey was conducted amongst 9,283 workers aged between 19 and 34 from 2008 to 2010.

    It was headed by Kim Sung-roul, a health science professor at SoonchunhyangUniversity.

    In the case of women, 23.0 per cent of those involved in the service industry were found to be smokers, compared to 6.5 per cent for managers and professionals, 9.5 percent for those involved in crafts and machine operation, and 16.7 per cent for those working in the agricultural, fishing and forestry industries.

    Kim said that the results of the survey had shown that anti-smoking campaigns should be tailored for workers from different industries so as to boost the effectiveness of those campaigns.

  • Plain tobacco packaging ruled out in Malaysia – for the moment

    Malaysia’s health ministry has no plans to introduce plain packaging for cigarettes, according to a story in The Star quoting the deputy minister, Datuk Rosnah Abdul Rashid Shirlin.

    “The Ministry supports the action of the Australian government in implementing the plain packaging as a move to reduce smoking there,” she said in answering a question in parliament.

    “However, we have no intention at the present moment to follow suit in view of the dispute between the Australian government and the tobacco industry at the international level.”

    The deputy minister said that comprehensive studies carried out by the Australian government had showed that branding and packaging of tobacco products could influence consumers, particularly young people, to smoke.

    She added, however, that such warnings were effective only in respect of new smokers – not those who were regular smokers.

  • Better times finally arrive for Kentucky and Tennessee Burley growers

    Burley tobacco growers inKentucky and Tennesseeare reaping some of their best paydays since plunging into the free market, according to a story by Bruce Schreiner for Associated Press.

    The growers are capitalizing on what were said to be tight leaf supplies and a quality crop that bounced back from an early-season drought.

    Will Snell, a University of Kentucky agricultural economist, was quoted as saying that growers who had endured a tough growing season had been rewarded with Burley prices near or at $2 per pound so far during the marketing season.

    Those prices nearly matched the prices Burley fetched in 2004, the last year growers sold their crop under federal production and price controls dating back to the Depression era.

    The full story, published on line in The State Journal is at: http://www.state-journal.com/local%20news/2012/11/20/tobacco-farmers-see-rebound-in-leaf-prices.

  • Business wants smokers moved on, along with their antisocial entourage

    A Facebook campaign to extend a tobacco smoking ban in the central business district of an Australian town is said not to be about smoking but about antisocial behavior, according to a story by Patrick Billings for the Examiner.

    The campaign, launched by Watson’s Showcase Jewellers in Launceston, Tasmania, is said to have garnered thousands of supporters.

    Store owner, Neil Watson, said smoking bans in local malls had pushed groups engaged in antisocial behavior to congregate outside his store, where there were several public benches.

    Watson said his staff had been threatened when asking groups to move on and the environment had left customers intimidated.

    In a posting on Facebook, the business said the campaign was not directed at youth or smokers, but the behavior associated with the smoking area outside its shop.

    Although Watson wants the smoking ban extended, he concedes that this will move the problem rather than solve it.

  • Government likely to be unmoved by smoking ban protest in Sofia

    About 2,500 people turned out yesterday to protest outside the parliament building in Sofia, Bulgaria, against the tobacco smoking ban that was imposed in enclosed public places in June, according to a Sofia Globe story.

    The protest was organised by a hotel and restaurant association and on social networks. Organisers object to what they described as the huge financial losses suffered by the hospitality sector because of the stricter anti-smoking laws.

    Before June, all establishments bigger than 70 square meters had to have separate smoking and non-smoking areas, while smaller establishments had the choice of being either fully-smoking or non-smoking. Since then the ban has been total.

    It seems unlikely that the protest will change the government’s mind. Previous campaigns by restaurant and bar lobby groups and an attempt by a group of independent MPs to table legislation to revert to the previous law have met with a government response that there will no backtracking.

  • EU health commissioner in waiting says tobacco directive is first priority

    Dr. Tonio Borg says that he is looking forward to starting work as European Commissioner for Health and Consumer Affairs, with the tobacco products directive being the first item on his agenda, according to a story by Keith Micallef for the Malta Independent.

    The European Parliament on Wednesday approved Borg’s nomination by 386 votes to 281 with 28 abstentions. The European Council was expected to approve the appointment within a matter of days.

    Borg is replacing John Dalli who resigned last month.