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Monthly Archives: March 2010

Profits Up at PT Gudang Garam Despite Anti-Tobacco Drive

Despite the growing anti-smoking campaign, the nation’s two largest cigarette makers delivered strong profits in 2009 as demand continued to increase.

PT Gudang Garam, the second-largest producer, announced on Tuesday an 84 percent jump in 2009 net profit to Rp 3.45 trillion ($379.5 million) from Rp 1.88 trillion in 2008. The company is owned by the Wonowidjojo family, one of the country’s richest.

Rival PT HM Sampoerna, the largest producer, announced late last week that net profit increased by 31 percent to Rp 5.08 trillion last year, from Rp 3.89 trillion a year earlier. The company is controlled by US tobacco giant Philip Morris International.

“Gudang Garam posted significant profit growth as sales rose while operating expenses declined,” said Akhmad Nurcahyadi, an analyst at PT Bank Negara Indonesia Securities.

He said demand for cigarettes has remained high with annual growth of 1 percent to 2 percent.

Gudang Garam said its sales rose 8.9 percent to Rp 32.97 trillion last year, compared with Rp 30.25 trillion a previous year.

HM Sampoerna reported a 12.3 percent growth in sales to Rp 38.97 trillion, compared with Rp 34.68 trillion in 2008.

Yohan Setio, an analyst at PT Mandiri Sekuritas, said the consolidation of the company’s distribution operation helped improved Gudang Garam’s profit margin.

Cigarette companies are one of the largest employers and taxpayers in the country. The industry directly employs about 824,000 families.

Gudang Garam paid income tax of Rp 1.34 trillion last year, compared to Rp 775.8 billion a year earlier, while HM Sampoerna’s income tax outlay was Rp 2.1 trillion in 2009, up from Rp 1.9 trillion in 2008.

But amid pressure from health campaigners, the government has begun an increasingly anti-smoking campaign, causing concern among tobacco companies.

Earlier this month Muhammadiyah, the nation’s second-largest Muslim organization, issued a fatwa banning its followers from lighting up.

Both the organization and antitobacco campaigners have targeted cigarette advertising as one of the main culprits behind a generation of new smokers.

The Health Ministry is now drafting proposal to ban cigarette makers making direct communication with consumers, including promotions.

“It is extreme to forbid cigarette makers from promoting as it would hurt all stakeholders including tobacco farmers,” Muhaimin Moefti, head of the Indonesian Non-Clove Cigarette Producers Association (Gaprindo), told the Jakarta Globe.

He said the central government must ensure balanced and comprehensive regulation of the cigarette industry, rather than letting the regional governments and organizations create their own regulations or fatwas.

Sudaryanto, head of the Indonesian Tobacco Alliance (Amti), said he supported some government regulation of the tobacco industry.

“We agree not to sell cigarettes to children, but we do not agree if the government forbids us to make direct contact with our consumers,” he said.

Amti consists of tobacco and clove farmers across the country, cigarette manufacturers and traders.

Anti-tobacco campaigners have urged the government to forbid tobacco promotion in “public spaces” such as television. The coalition stated that there are only three countries in the world that still allow tobacco promotion in public spaces, including Indonesia.

Sudaryanto said the anti-tobacco campaign has yet to significantly affect the industry and tobacco farmers.

“But we need to anticipate the possible loss [of income],” Soedaryanto said.

Last year , Indonesia had an estimated 212,600 hectares of tobacco plantations spreading across eight tobacco centers in North Sumatra, West and Central Java, Bali, East Nusa Tenggara and South Sulawesi.

In the 2010 state budget, the government forecast Rp 55.9 trillion of excise revenue, mostly from cigarette companies, up from Rp 48.44 trillion last year.
Thejakartaglobe, March 30, 2010

Cuba looks to women for cigar sales

Havana, Cuba – Faced with a two-year slump in sales, Cuban cigar makers have unveiled a new weapon in the cuban cigars makerhunt for consumers: Julieta, a slim smoke made just for her.

The global recession, combined with anti-smoking laws, have put the squeeze on Cuba’s hand-rolled stogies, one of the quintessential symbols of privilege.

International sales fell 8 percent in 2009 to $360 million following a 3 percent drop in 2008, according to Habanos S.A., a joint venture between Cuba and Britain’s Imperial Tobacco Group.

Julieta, with its handsome gold and red bands, impressed distributors at Havana’s annual cigar festival.

“I think to come up with a product that is appealing to women in terms of it’s size, it’s blend, it’s packaging, can only be positive,” said Jemma Freeman, of the UK-based Hunters & Frankau distributors.

“I think it’s the right thing to do, I think there’s a demographic out there hat’s interested in smoking cigars, particularly women,” she added as she it up.

But others, like Cigar Aficionado’s James Suckling, were not optimistic.”It’s a bit of a girly cigar,” he said puffing on the thin cigar. “I find it little bit patronizing really. I mean the women I know who smoke enjoy great cigars just like the cigars that guys smoke.”

Women represent less than 10 percent of current consumers, something Habanos vice-president Manuel Garcia hopes to change.

Habanos produces 27 premium brands that can fetch more than $500 a box.

They get their start in the western province of Pinar del Rio, thanks to a combination of soil, climate, humidity and hundreds of years of tobacco-growing tradition.

“We’re looking at another quality year,” plantation director Maria Luisa Alvarez told CNN as she walked among the neatly planted rows of leaves.

The tobacco is then hung up in wooden drying houses that dot the lush countryside.

The cigars themselves are hand-rolled in traditional factories and converted mansions in Havana amid the clatter of tiny guillotines and the rich smell of tobacco.

Cuban stogies dominate the market for high-end cigars despite the U.S. trade embargo, which bans their sale in America.

Some U.S. consumers still manage to get their hands on the coveted merchandise, and even turned up at the recent Havana cigar festival, despite travel restrictions.

“It’s been a dream come true for me to be in the land where it all happens,” said a man, who declined to give his name.

“I hope in the not too far future, trade opens up and that Americans can enjoy like the rest of the world a product that they really desire,” he said.

Cuban cigar makers no doubt agree, considering the United States is by far the biggest market for stogies.
By Shasta Darlington, CNN
March 31, 2010

Is Philip Morris a Buy?

Back in April 2009, I pitched Philip Morris International (NYSE: PM) as “the place to be for investors who crave long-term stability.” Shares trade nearly 40% higher today, but are they still a buy?

The good, the bad, and the unfiltered
Valuation is essential when developing an investment thesis, but price-to-earnings ratios are meaningless unless considered in conjunction with a company’s business fundamentals. Below, I’ve highlighted key aspects of Philip Morris’ operations, separated into clear pros and cons.

Burning bright

* My colleague Colleen Paulson recently detailed the beginning of what looks to be the company’s rebound. The main point here is that Big Phil’s cigarette volume rose 0.5% in 2009’s fourth quarter, or 0.4% when excluding acquisitions. Earlier in the year, that metric wasn’t looking so hot.
* The recent volume gain is modestly encouraging in absolute terms, yet it’s a total blowout compared with the mid-to-high single-digit declines turned in by domestic players Lorillard (NYSE: LO) and Reynolds American (NYSE: RAI), and the 11.4% rout suffered by former parent Altria (NYSE: MO).
* In the third quarter of 2009, Philip Morris’ volume performance lagged that of global competitor British American Tobacco (NYSE: BTI), whose markets include the U.S. However, for the full year and the fourth quarter, Philip Morris edged out its rival (based on organic volume), once again proving the benefit of operating with zero exposure to the U.S. consumer.
* Finally, Philip Morris’ recent dividend increase and its massive $12 billion share-buyback program speak to both management’s confidence and the likely stability of future shareholder returns.

Ashes to ashes?
But selling tobacco products on the international stage is not a risk-free enterprise.

* I previously described the demand-killing effects of government-mandated excise taxes — a headwind that Philip Morris, as a global player, is hardly escaping. Since then, Japan has announced a major tax hike, and Philip Morris recently told investors that excise taxes are among the “key factors” influencing net revenue.
* Also acknowledged by management is the threat posed by the World Health Organization’s Framework Convention on Tobacco Control — essentially a worldwide tobacco cessation program that’s expected to prompt “significant regulatory developments” in coming years.
* China, India, Bangladesh, and Vietnam comprise some of Philip Morris’ key growth markets. As such, an investment in Philip Morris is essentially a bet on the ongoing health of these emerging economies. While investors’ expectations for these nations routinely transform the stock performance of commodity names such as Freeport-McMoRan Copper & Gold (NYSE: FCX) and Vale (NYSE: VALE) into a chutes and ladders game, Philip Morris shares should exhibit less volatility. Nonetheless, if emerging-markets growth stalls, I expect that governments will turn to tobacco as a tax cash cow, much as developing Eastern European nations such as the Ukraine have.

Pinning down a price
Management expects currency-neutral earnings-per-share growth of 12% to 15% in 2010, followed by 10% to 12% long-term currency-neutral EPS gains.

Given the external risks — taxes, regulation, and foreign exchange — I’m not comfortable putting anything higher than a 15 P/E multiple on 2010 estimates. Assuming the high end of company guidance, that gives us a target price of roughly $57 a share.

With shares changing hands at $52.50 today, plus the 4.5% dividend yield, investors could pull in a mid-teens total return, versus what I judge to be at least 10% downside in the event of negative developments.

All told, Philip Morris is indeed a buy, although not a strong one.

Future of menthol cigarettes under review

WASHINGTON, – U.S. advisers heard evidence on the effects of menthol cigarettes on Tuesday as they began a year-long review

of the popular but controversial flavoring under the government’s new tobacco powers.

Smoked by about 19 million Americans, minty cigarette-store.biz/cigarettes-news/tobacco-manufacturers-are-against-menthol-cigarette-ban from health advocates who say the taste can be more enticing and possibly addicting than regular cigarettes.

At the start of a two-day public meeting, a committee of outside experts that advises the Food and Drug Administration began hearing data on menthol’s impact on smokers’ use and health. The panel is due to issue a report by March 2011.

Menthols account for more than a quarter of cigarette sales and are a top choice among black smokers. A U.S. government survey showed 83 percent of adult black smokers chose menthol, compared with 23 percent of whites.

FDA scientists presented findings to the panel from data stretching back decades in some cases on the health effects, marketing and use of menthol cigarettes.

A key question for the panel is whether menthol lures children or others to pick up a smoking habit more than regular cigarettes. Anti-smoking activists say menthol’s mild anesthetic property masks the harshness of tobacco, making it easier to start smoking and harder to quit.

Dr. Joshua Rising, an FDA scientist, said research showed menthol was a more likely choice for younger people just starting to smoke compared with others who had been smoking for at least a year. But limited data “do not suggest that menthol cigarettes are associated with an earlier age of initiation,” he said.

The FDA could eventually ban or phase out menthol cigarettes, although some anti-smoking advocates and industry analysts are skeptical that will happen. Stronger warnings also are a possibility.

“Clearly the issues won’t all be easy,” FDA Commissioner Margaret Hamburg told the panel, which also will tackle the use of dissolvable tobacco products and other matters at future meetings. Tuesday’s meeting was the panel’s first.

Any government action against menthol could be a blow to Lorillard (LO.N), the nation’s third-largest cigarette company and maker of top-selling menthol brand Newport.

The 2009 law that gave the FDA oversight of tobacco products banned other cigarette flavors such as chocolate, clove and fruit that could lure children. But Congress exempted menthol, the most popular flavoring with about 27 percent of the cigarette market, and instead called for an FDA review.

Dr. Jonathan Samet, the chairman of the FDA panel, said the advisers “got a first glimpse” of the available research and face the challenge of determining “which of these studies are relevant to the current questions.”

Officials from the manufacturers were expected to speak to the panel on Wednesday. Altria Group Inc’s (MO.N) Philip Morris unit sells menthol versions of its Marlboro brand, while Reynolds American (RAI.N) markets menthol-flavored Camels.

Lorillard said in a statement there was no evidence menthol cigarettes were more addictive or harmful than others.

“The science is clear and compelling that there is no differing health risk between menthol and non-menthol products,” Lorillard Senior Vice President Bill True said.

Altria had no comment ahead of the company’s presentation to the committee, spokesman William Phelps said.

Reynolds spokesman David Howard said the company would participate in the menthol review and “believed that collaboration and open dialogue is the best approach.”

The FDA advisory committee is a 12-member panel that includes three nonvoting industry representatives. A second panel meeting is set for summer and will include an analysis of industry documents.
By Lisa Richwine, Reuters
March 30, 2010

States looking at smokes to plug budget shortfalls

SANTA FE, N.M. – Cash-strapped states are hitting smokers hard in the pocketbook, raising cigarette taxes to help plug budget shortfalls.

So far this year, legislators have voted to raise cigarette taxes by $1 per pack in Utah and 75 cents a pack in New Mexico, according to a report in USA Today. At least a half dozen other states are considering increases, including tobacco-growing South Carolina and Georgia. In 2009, 14 states and the District of Columbia raised cigarette taxes.

So much action is unusual: This is only the 10th time since 1950 that so many states have raised cigarette taxes at once, according to the Centers for Disease Control and Prevention.

“The main motivation at the moment for most legislators is revenue,” Pete Fisher of the Campaign for Tobacco-Free Kids, an anti-smoking group, told the newspaper. “The budget situation has certainly increased the number of states considering them.”

The average state cigarette tax is $1.34 per pack. That’s on top of the federal tax, raised last year to $1.01 per pack. Rhode Island has the highest state tax at $3.46 per pack; South Carolina’s is lowest at 7 cents. About 46 million Americans smoke, the report stated.

Increased taxes will push smokers to buy in states where cigarettes are cheaper or turn to smuggled products, Frank Lester, spokesman for cigarette-maker Reynolds American, told the newspaper. Most smokers have low to moderate incomes and one-quarter of them fall below the poverty line, he said, adding, “People are struggling.”

Budget woes trumped cigarette-maker influence this month in New Mexico, said state Rep. Gail Chasey, a Democrat, whose previous tax increase proposals fizzled. Democratic Gov. Bill Richardson on Wednesday signed the new 75-cent tax.

Among other states considering tax increases:

* Washington: State lawmakers in special session are poised to raise the state’s tax by $1, bringing it to more than $3 a pack.
* South Carolina: House lawmakers this month voted to raise the tax by 30 cents per pack; the Senate is considering an increase.
* Georgia: A bill to raise by $1 the state’s current 37-cent tax has the 91 votes it needs to pass if it gets to the House floor, said Rep. Ron Stephens, the Savannah Republican sponsoring the bill. But it’s stuck in committee and could die. “Bringing up any new tax in an election year is death—especially for a Republican,” he said. If it doesn’t pass this year, Stephens says he’s sure it will next year.
* Kansas: Gov. Mark Parkinson, a Democrat, has proposed raising the state’s 79-cent-per-pack cigarette tax by 55 cents. A Senate taxation committee last week voted down a 30-cent increase, but the state’s budget deficit makes some increase likely before the session is over, said Sen. Les Donovan, the committee’s Republican chair.

For every 10% price increase, cigarette consumption drops by 3% to 4% among adults, and double that among youth, said Terry Pechacek, associate director for science at CDC’s Office on Smoking and Health. “It is one of the most reliable and effective strategies,” he told the newspaper.

Regulation Menthol tobacco by FDA

Lots of smokers, lots of racial overtones, lots of interest. There’s so much interest in menthol cigarettes and their regulation, in fact, that the Food and Drug Administration’s newly created scientific advisory committee on tobacco products will be webcasting its inaugural meeting — focusing entirely on menthol in tobacco — on Tuesday and Wednesday, March 30 and 31. The panel is expected to tackle the question of whether and how mentholation of cigarettes should be regulated by the FDA. You can check the meeting out here.

First, a few facts from a comprehensive collection of research on menthol and tobacco produced by the National Cancer Institute: Menthol cigarettes account for 26% of all cigarettes sold in the United States. Among adult African Americans who smoke, nearly 7 in 10 smoke menthols. Smoking menthols is biggest among black women and 18- to 30-year-olds. Latinos also appear to be drawn to the frosty taste and sensation of menthols: Among Latinos who smoke almost 3 in 10 smoke menthols, compared with about 22% of non-Latino whites.

Those facts mean that any regulation of menthol in cigarettes will weigh more heavily in minority communities — a sensitive subject for public policy. African Americans have the highest rates of lung cancer of any racial or ethnic group, and black men are far more likely than males of any other ethnic group to die of it.

Beyond those glaring demographic facts, there’s a lot of uncertainty about the role of menthol in cigarettes. Does menthol induce young people, and especially young African Americans, to take up the habit? Does it make it harder for those who smoke them to quit? Does the frosty flavoring prompt those who smoke menthols to drag harder or inhale more deeply? And are menthols any more cancer-causing than unmentholated cigarettes? These questions — to which research has provided contradictory and incomplete answers — will be discussed by the FDA’s advisory committee, the membership of which is listed here.

Menthol is derived from the oil of peppermint, and it’s also known as mint camphor. As luck would have it, it’s a compound that in used in embalming, and in masking the smell of decomposition. The first brand of menthol cigarettes, Salem, was introduced by R.J. Reynolds Tobacco Co. on the American market in 1956, just as researchers outside the tobacco industry were beginning to collect evidence of cigarettes’ dangers.

Vapor from E-cigarettes pose questions for tobacco users

They look like regular cigarettes. Users say they feel like regular cigarettes.

Mark Gandhi likes his because he can smoke it as needed without bothering those around him.

“It’s worth trying, even for $14,” he said. “This is the closest thing a guy can get to an alternative cigarette.”

They’re called electronic cigarettes. Manufacturers market them as less harmful alternatives to smoking. But the verdict on their safety is still out, with physicians and health care providers skeptical and concerned about the product.

Sometimes called “e-cigarettes,” they are battery-operated devices that use cartridges filled with nicotine, other chemicals and often a flavor, such as mint. The user inhales the nicotine after the electronic cigarette turns it from a liquid into a vapor.

Gandhi, owner of Discount Smokes and Liquor on Main Street in Webb City, said there are several positive characteristics of electronic cigarettes.

They generally do not contain tar and other cancer-causing agents, and they do not emit secondhand smoke, he said.

“There’s no such thing as a healthy cigarette,” he said. “But if you look at the adverse side of it, it’s much better than the regular cigarette.”

Health risks

Annie Nawab, a pulmonologist with St. John’s Regional Medical Center in Joplin, said health care professionals don’t know enough about electronic cigarettes to render a verdict on them.

The primary cause for concern, she said, are the unknown risks of vaporized nicotine in one’s body. She also said that effects of chemicals and “fine-print ingredients” in the electronic cigarette are also unknown.

“We don’t have enough medical data to know what vaporized nicotine can do,” she said. “If you don’t know enough about it, then that’s something that should not be publicized as a safe therapy.”

Tobacco dust seen to boost Philippines aquaculture industry

MANILA, Philippines – Thanks to tobacco dust, inland fish products from the Philippines may regain access to foreign markets.

Fish exports particularly milkfish and tilapia which used to be among the country’s dollar earners had been banned in the US and Europe after they were found to contain chemical pesticide residues due to the extensive use of chemical pesticides.

Officials of the National Tobacco Administration (NTA) which developed and commercialized tobacco dust are upbeat claiming the local aquaculture industry would bounce back to life with the use of tobacco dust.

Field trials conducted by the NTA in Bulacan and Bataan fishponds reportedly showed that tobacco dust, an organic fertilizer cum molluscicide, is a safe alternative to chemical pesticides.

The tobacco agency, in line with FIELDS, a special program of the Department of Agriculture (DA) to enhance agricultural productivity, has implemented projects including the development of other industrial products derived from tobacco, some of which have been commercialized under the administration of President Arroyo..

FIELDS which stands for Fertilizer, Irrigation, Extension, Loans, Driers and Seeds, was launched a few years ago by President Arroyo and implemented by then Agriculture Secretary Arthur Yap.

Fertilizer

NTA Administrator Carlitos Encarnacion reported the agency’s production of an organic fertilizer which is now commercialized as Tobacco Dust Plus. It promotes the growth of ‘lablab’ (algae) that is used at the same time as “molluscicide” to eliminate snails and other pests in fishponds.

The environment-friendly product is being patronized by fishpond owners to replace chemical pesticides and holds great promise in making Philippine fish products safe and acceptable in foreign markets where they had been banned earlier for containing chemical pesticide residues.

A tobacco dust processing plant was established by NTA in Sto. Tomas, La Union in July last year and since then has been churning out dust materials from poor-grade tobacco leaves which upon application of a special technology yields a standard 1.3-percent nicotine content.

With an annual dust requirement of 400-million kilos by fishponds nationwide including 100-million kilos in Region III alone, market demand is encouraging, to the economic benefit of the farmers who mainly supply the raw material for the La Union plant.

Under NTA’s Integrated Farming and Other Income Generating Activities Project (IFOIGAP), fertilizer assistance was extended to an average of 15,738 tobacco farmer-cooperators tilling 10,230 hectares for rice and tobacco yearly .

For rice and high value crops, a yearly average of 1,247 farmer-cooperators using an average of 1,167 ha. were similarly assisted.

Irrigation

For irrigation, the tobacco agency provided 150 pump and engine sets to tobacco farmers’ associations apart from securing the National Irrigation Administration’s nod for the tapping of its “Balikatan sa Patubig” by tobacco farmers who are also engaged in rice farming.

Extension

Extension services provided by the tobacco agency involved education and technology training coupled by on-farm technical supervision.

An average of 48,484 tobacco farmers utilizing an average farm area of 29,671 ha. were assisted yearly for the past nine years. Of the figure, 32.46% were under the agency’s Tobacco Contract Growing System.

For the nine-year period covered by the report, an average of 1,893 farmers growing rice after tobacco on 1,517 ha. were similarly assisted yearly.

Their total palay harvest on the average reached 6,643,150 kilos a year valued at P99,494,312 .

Their production boosted the farmers’ income and helped ensure food security.

Six tobacco-based cooperatives with 156 members harnessed during the agency’s stewardship of the Multiline Food Processing Plant in Santa, Ilocos Sur were also assisted by NTA . In turn, they earned additional income for raising hogs and poultry.

Trainings on quality tobacco production were extended yearly to an average of 350 tobacco farmer-leaders and extension workers while the Cooperative Development Authority was tapped to conduct leadership training activities to farmer cooperatives officers.

Loans

An average of P157 million has been extended yearly in production assistance to farmers under the Tobacco Contract Growing Scheme (TCGS) or a total of P1.4 billion during the period. NTA tapped various funding sources including the buyer-firms, the DA’s Agricultural Credit and Productivity Corp., other government financial agencies, farmers’ cooperatives and local government units.

A P100-million loan assistance package for the rehabilitation or construction of curing barns has been approved for implementation by Yap which will serve the farmers in good stead as they continue producing tobacco.

The barn will be highly beneficial for its novelty. As a multipurpose grain drier cum tobacco curing barn, it is also applicable for rice, corn, beans, onions, vegetables, and garlic.

Apart from this, NTA has been defraying P39.5 million yearly for barn repair and fuel assistance costs benefitting 3,500 farmers.

The novel drier officially known as Grain Drier with Curing Barns will be available in two-months’ time, Encarnacion said.

Seeds

The NTA along with the tobacco buying sector and the Bureau of Plant Industry produce an average of 750 kilos of market-preferred seed varieties annually to replace the old and degenerated ones for distribution to the farmers. 48,000 farmers are served yearly with the new seeds covering more than half of the target tobacco hectarage for the year. The agency likewise has seed provision or a buffer stock to be made available when typhoons destroy standing plants.

Some hotels are banning smoking

After President Obama’s negative comments about Sin City and his subsequent mea culpa (“I love Vegas — always have!”), I realize that this might not be the most prudent way to start a column. But how do you fire up a discussion about smoking in hotels without mentioning America’s capital of secondhand smoke?

Azita Arvani recently returned from a trade show in Las Vegas, where she requested a nonsmoking room at her resort. It didn’t matter.

“Smoke came in through the central air conditioning units,” said Arvani, a Los Angeles technology consultant. “I usually don’t have any problems with hotels and smoking. Except when I go to Las Vegas.”

That makes two of us. I’ve never been to Nevada’s largest city without spending at least a few moments of every day gasping for fresh air.

And that includes my last visit in January, when I couldn’t escape the cloud of carcinogens that seemed to follow me almost everywhere I went.

There’s good news for nonsmoking hotel guests: The scales are about to tip in your favor this summer when Wisconsin’s Act 12 takes effect, and the Badger State becomes the first in the nation to ban smoking in all hotels. Wisconsin joins a long list of other states that have, to one degree or another, limited hotel guests’ lighting up. In fact, only 13 states have no smoking restrictions, according to Ryan Patrick, an analyst at MayaTech Corp. in Silver Spring who tracks state legislation for various public buildings, including hotels.

“Many hotel chains have also banned smoking at their hotels voluntarily,” he said. Among them are Westin Hotels & Resorts, which became the first smoke-free brand in early 2006. Marriott followed later that year, and Sheraton Hotels & Resorts put up the “no smoking” signs in 2008.

Not everyone is happy with the limits. Some hotel owners, for example, believe that going smoke-free might hurt business. The Wisconsin Innkeepers Association, a trade group for the state’s hotels, is trying to amend Act 12 to allow hotels to designate up to a quarter of their rooms as smoking.

“Customers are asking for smoking rooms,” said Trisha Pugal, the association’s president. “We’re afraid if there are no smoking rooms, they’ll go over to another state or they will smoke in the rooms, anyway.”

Guests who smoke aren’t likely to be pleased, either. “With any rule or regulation, someone will find a way around it,” said Derek McElroy, the general manager for the Doubletree Hotel Boise Riverside in Boise, Idaho.

Here’s how smokers circumvent the rules: After checking in, they light up in their rooms and flush the evidence down the toilet. Then they phone the front desk to complain about the odor of cigarette smoke, and when an employee offers to move them, they decline, saying they’ve already unpacked.

“However, the guest has just established that it was a previous guest who smoked in the room — not they — and any chance of charging the smoking fee has gone out the window,” McElroy told me. “And God save the poor desk clerk who goes back in the records to back-charge the previous guest who stayed in that room.”

Nonsmoking guests in adjoining quarters don’t have a lot of options when they’re hit with noxious fumes, even with the new laws, said Kathleen Dachille, director of the Legal Resource Center for Tobacco Regulation, Litigation and Advocacy at the University of Maryland School of Law. Your best bet is to complain immediately.

Typically, a hotel will offer to move you to another room or, if the property is full, send you to another hotel without charging you extra, a process known as “walking” in the hotel industry. “If none of these remedies work, you send a letter to corporate and they’ll send you a voucher for a free room,” Dachille added.

Given the new rules, can an aggrieved guest find relief in court? Not really, Dachille said. You might have a claim under the Americans With Disabilities Act, involving so-called “third-hand” smoke, or smoke residue left on surfaces and objects even after a cigarette has been extinguished. But it would be a tough fight and probably not worth the effort, she said.

Still, on balance, more hotels than ever are in the nonsmoking camp today.

“Smokers are a dying breed,” said Travis Johnson, who manages the Morgan hotel in San Simeon, Calif., and who notes that cigarettes can be an expensive habit for the unfortunate traveler with a nicotine addiction. If guests at the Morgan are caught lighting up, they’re charged a $150 cleaning fee.

I, for one, am breathing easier now that smoking in hotels is on its way out. I’ve lost count of the number of smoking rooms I’ve stayed in. The odor of stale cigarettes takes weeks to wash out of my clothes. I don’t begrudge smokers their right to puff away — just please, not in the bed I’m about to sleep in.

Turns out that even some Las Vegas resorts are sensitive to their image and are doing everything they can — short of banning cigarettes — to ensure that nonsmoking guests don’t have to breathe lungfuls of toxic air.

The hotel I stayed in, the upscale Aria Resort & Casino in the gleaming new CityCenter, reportedly has a special ventilation system that’s designed to keep cigarette smoke away from blackjack dealers.

I’d call that a winning hand.

By Christopher Elliott, Washingtonpost
March 28, 2010

Altria Lose Fight on Flavor Tobacco Ban

NEW YORK — Manhattan Federal Judge Colleen McMahon cut off an effort by Altria Group’s to halt a ban here on flavored tobacco products, while it fights the city ordinance.

The company, which is the parent of Skoal and Copenhagen maker U.S. Smokeless Tobacco Co., sued the city claiming only the federal government can regulate the sale of tobacco products, and stated the law also blocked state and local governments from enacting their own laws governing what is in tobacco products or what kinds of products may be sold, the Richmond-Times Dispatch reported.

McMahon ruled that federal law included language that does not limit the power of states or local governments to exact stricter measures than Congress did or the FDA will, the report stated.

The 2009 law bars the sale of flavored cigars and chewing tobacco except in tobacco bars, according to a report by the New York Daily News. It does not cover menthol of wintergreen, but does address flavored including vanilla, chocolate, honey, candy, fruit-flavored and spiced.

“This decision … is not only a win for the children of New York City,” City Council Speaker Christine Quinn told the Daily News. “Our law is a good progressive law that will protect our youngest New Yorkers. If tobacco companies think they can fight common-sense legislation, this court decision clearly shows otherwise.”

Altria spokesman John L. Marshall Jr. told the Dispatch the company still believes the ordinance is invalid because it imposes product standards that differ from federal law.

“The city should allow the FDA to consider these issues in due course in the context of a regulatory process that allows for public comment and agency consideration of scientific evidence,” Marshall said.

Tobacco, alcohol taxes rise

While an increase in the tobacco tax has caused some to light up with joy, others are fuming.

As of midnight Wednesday, smokers will be paying 2.7 cents more per cigarette due to a 14.75-per-cent increase in the tobacco tax. The tax on a package of cigarettes is going from $4.50 to $5.25.

Taxes on cut/loose tobacco are going up by 21 cents per gram and cigars by 100 per cent of the retail price, subject to the existing minimum and maximum tax amounts per cigar.

In what will likely be the most controversial move, subject to the passing of legislation, First Nations individuals could be seeing a significant decrease in the amount of cigarettes they can purchase tax-free. If the government gets its way, on-reserve, tax-free cigarette purchases will be limited to one carton per customer per week — down from three.

That’s already met with criticism from the Federation of Saskatchewan Indian Nations, which claims the move will cost First Nations businesses millions in lost revenue.

“This is a serious infringement on Treaty Rights without the benefit of meaningful consultation,” FSIN Vice Chief Morley Watson said in a written statement. “The Province has extended its authority beyond its jurisdiction. The Province is unilaterally changing quotas on how much tobacco First Nations people can purchase. This is Indian Agent mentality. The old Indian Agent would tell us how much grain, wood, fence posts and other goods we could produce and provide for our families.”

While Health Minister Don McMorris said he understands First Nations people might be upset by the proposed change, as far as the government’s concerned, it’s strictly about health.

“I’m going to look at what is better for the health of our general population, how to reduce some of the harmful effects of tobacco use, and that is my only goal is to reduce those harmful effects,” he said. “I can understand some of their frustration, but I also understand the costs that it has to the health care system.”

Donna Pasiechnik with the Canadian Cancer Society was thrilled with the government’s direction.

“We recognize that smoking rates are very high among First Nations people,” she said. “We know the importance of price in reducing tobacco use and so no smoker was not affected by these measures today.”

From a business perspective, Colin Craig, Prairie director of the Canadian Taxpayers Federation, also praised the government’s announced intention to reduce the number of tax-free cigarettes sold on First Nations, stating: “If you can level the playing field between activities on reserve and off, I think that’s a step in the right direction.”

McMorris said he’s “very confident” the legislation will pass.

But NDP health critic Judy Junor wasn’t enthusiastic about either the proposed legislation or the increase in tobacco tax. While she acknowledged tax increases do lead to decreased smoking, she claimed the decrease is “marginal.”

“People will just do without something else,” she said. “People who are truly addicted, they’re going to go find another way to get the cigarettes and that will be less food, shelter costs, clothing, school supplies, whatever.”

All in all, the tobacco-related changes would mean $35.7 million more in revenue for government.

Meanwhile, the beverage alcohol price increase means an estimated $18.1 million more for the province’s General Revenue Fund.

Effective April 1, most 750-millilitre bottles of premium spirits will go up by 50 cents; 1,140-ml bottles by 75 cents; and a dozen bottles of beer by 75 cents.

Higher-end wine and spirits will also increase in price by about five per cent, although cheaper wine products (below $20) in the 750-ml size won’t change in price.

The alcohol price increases are the result of changes to the Saskatchewan Liquor and Gaming Authority’s markup structure.
March 25, 2010, The Regina Leader-Post

New Cigarette Brands: Tobacco Marketing Strategies

Conformity of cigarettes TUTUN-CTC to quality indicators and hygienic norms are proved to be true by the Declarations of the conformity which have been given out by accredited laboratory or certificates of conformity, issued by competent authorities, on the basis of our laboratory results. TUTUN-CTC is the first the enterprises with a tobacco profile in Republic Moldova which has the integrated system of management: quality – environment – health and safety in work, on the basis of the international standards ISO 9001, ISO 14001, OHSAS 18001, the certificated in National Authorities of Certification, and also by the Romanian company SRAC and English company IQNet.

Now TUTUN-CTC works in two basic directions: manufacture of tobacco raw materials and manufacture of cigarettes.

Considering the global market tendencies in tobacco product development, they performed the modernisation of the technological processes at Tutun-CTC enterprise.

In order to increase the quality indicators and the efficiency of finished products, the tobacco goods, the company was deduced on a new modern level of technical equipment. They installed the most advanced equipment for the preparation of cut mixtures. It stands to mention that the line on tobacco processing exercises a dominant influence on the quality of cigarettes. Thanks to the introduction of new technologies in this area it allows manufacturing the products being in the excessive demand, and less harmful for the consumer’s health.

Vladimir Capcelea, the manufacture director of J.S.C. Tutun-CTC, commented in detail on the last innovations in manufacture of tobacco goods.

Company TUTUN-CTC released to market new brands concept of the middle class with high quality indicators, as the famous international brands similar and higher-price segment.

1. Avalon
2. Beratt
3. Focus
4. Prefect
5. Ritm
6. Wind

The advantages of new brand are the careful selection of high-quality tobaccos of various growth origins of Burley, Virginia and Oriental type and the special components, offering the rich balanced pure taste and the refined, thin and pleasant aroma and also the usage of modern technology, materials and the equipment, and also effective filtering system in the construction of cigarettes, including the combined triple charcoal acetated filter – “Triple Acetate + Coal Filter”.

California to vote on legalizing marijuana

An initiative to legalize marijuana and allow it to be sold and taxed will appear on the November ballot, state election officials announced Wednesday, triggering what will probably be a much-watched campaign that once again puts California on the forefront of the nation’s debate over whether to soften drug laws.

The number of valid signatures reported by Los Angeles County, submitted minutes before Wednesday’s 5 p.m. deadline, put the measure well beyond the 433,971 it needed to be certified. Supporters turned in 694,248 signatures, collecting them in every county except Alpine. County election officials estimated that 523,531 were valid.

The measure’s main advocate, Richard Lee, an Oakland marijuana entrepreneur, savored the chance to press his case with voters that the state’s decades-old ban on marijuana is a failed policy.

“We’re one step closer to ending cannabis prohibition and the unjust laws that lock people up for cannabis while alcohol is not only sold openly but advertised on television to kids every day,” he said.

Lee, tapping $1.3 million from his businesses, has put together a highly organized campaign that he emphasized Wednesday would be led by a team of experienced political consultants, including Chris Lehane, a veteran operative who has worked in the White House and on presidential campaigns.

“There’s all kinds of big professional politicos who are coming on board now to take it to the next level,” Lee said.

Opponents have also started to put together their campaign. “There’s going to be a very broad coalition opposing this that will include law enforcement,” said John Lovell, a Sacramento lobbyist who represents the California Police Chiefs Assn. and other law enforcement groups. “We’ll educate people as to what this measure really entails.”

The measure, like the medical marijuana initiative, could put California on a collision course with the federal government. The possession and sale of marijuana remain a federal crime.

This month, President Obama’s drug czar, R. Gil Kerlikowske, decried legalization in a speech to police chiefs in San Jose.

The initiative would allow adults 21 or older to possess up to an ounce for personal use.

Possession of an ounce or less has been a misdemeanor with a $100 fine since 1975, when Atty. Gen. Jerry Brown, who was then governor, signed a law that reduced tough marijuana penalties that had allowed judges to impose 10-year sentences.

Legalization supporters note that misdemeanor arrests have risen dramatically in California in the last two decades. The initiative would also allow adults to grow up to 25 square feet of marijuana per residence or parcel.

But the measure, known as the Regulate, Control and Tax Cannabis Act, goes further, allowing cities and counties to adopt ordinances that would authorize the cultivation, transportation and sale of marijuana, which could be taxed to raise revenue.

Supporters hope this feature will win over voters watching local governments jettison employees and programs in the midst of a severe budget crisis.

Three other marijuana legalization initiatives have been floated this year but are not expected to qualify for the ballot. One failed, one was withdrawn and one remains active.

Lovell said that the initiative would lead to increased marijuana use, cause the same kind of social ills as alcohol and tobacco and put more demands on law enforcement. He said voters are distressed by the medical marijuana law. “Neighborhoods feel very uncomfortable with these locations that have a lot of dope and a lot of cash,” he said.

Lee countered that the state’s experience with medical marijuana shows “the sky didn’t fall.” He said the measure would allow police to focus on serious crime, undercut Mexican drug cartels and make it harder for teenagers to buy marijuana.

Underscoring the importance the backing of law enforcement will play, Lee’s campaign on Wednesday highlighted the support of retired Orange County Superior Court Judge James P. Gray, a former L.A. County deputy sheriff and Torrance police officer.

With polls showing that a slim majority of voters support legalization, the legalization campaign will be trying to appeal to a slice of undecided voters who are mostly mothers. “It’s always easier for people to say no than to say yes for an initiative,” said Mark Baldassare, the pollster for the Public Policy Institute of California.

Lee hopes to raise as much as $20 million. He will probably be able to tap a handful of wealthy advocates who have supported efforts to relax drug laws, including multibillionaire investor George Soros and George Zimmer, founder of the Men’s Wearhouse. Zimmer has donated at least $20,000.

Lovell said he expected to raise less than his opponents but would have enough to get his message out.

Some facts about marijuana:

Marijuana is the third most popular recreational drug in America (behind only alcohol and tobacco), and has been used by nearly 100 million Americans. According to government surveys, some 25 million Americans have smoked marijuana in the past year, and more than 14 million do so regularly despite harsh laws against its use. Our public policies should reflect this reality, not deny it.

Marijuana is far less dangerous than alcohol or tobacco. Around 50,000 people die each year from alcohol poisoning. Similarly, more than 400,000 deaths each year are attributed to tobacco smoking. By comparison, marijuana is nontoxic and cannot cause death by overdose.

In Oregon, marijuana is legal for medical purposes, and marijuana advocates are working on their own ballot initiative for the November election. The Oregon Cannabis Tax Act will comprehensively reform cannabis and hemp laws by regulating and taxing adult commercial use in Oregon, while promoting hemp cultivation. We need to collect 125,000 signatures by July 2, 2010 to secure a spot on the November ballot.

Prohibition does not work; prohibition is a historical and contemporary failure. Marijuana should be legalized, taxed and regulated for medical and recreational purposes. Drug use and abuse should be treated as a medical problem, rather than a criminal problem. The war on drugs is a war on Americans. Let us end the assault on our friends and neighbors.

Drinkers and smokers face above-inflation tax rises on alcohol and cigarettes

Tax on most alcoholic drinks will rise by two per cent above inflation from midnight on Sunday. The average price of a pint of beer will increase by 2p, a bottle of wine by 10p and a bottle of spirits by 36p.

Cider drinkers were given the most punishing “vice tax” as the Chancellor unveiled a 10 per cent rise. The price of a 750ml bottle of sparkling cider will go up by 9p.

Mr Darling said the move addressed a “long-standing anomaly” whereby cider attracted less duty.

“Super-strength” ciders are to be redefined as made wine from September and subjected to an extra £2 per litre tax in an attempt to prevent alcohol abuse. The decision followed a Conservative plan to levy more tax on strong cider and beer to deter binge -drinking by teenagers.

The tax rises were criticised by the National Association of Cider Makers. The Wurzels, the West Country band who had a hit with I am a Cider Drinker, said in a statement that they were “very upset”.

Mr Darling announced that Labour’s “alcohol duty escalator”, which sets rises in drink duty above inflation, will continue until 2015, collecting a further £300 million. It had been due to end in 2012.

Drinks industry groups accused the Government of “piling misery” on beleaguered drinkers and pubs.

Brigid Simmonds, the chief executive of the British Beer and Pub Association, said Mr Darling had now increased tax on beer by 26 per cent since 2008, collecting £761 million while 4,000 pubs had closed. “This latest beer tax hike piles on the misery for Britain’s hard-pressed pubs and beer lovers,” she said.

“It is also a snub to voters, who by a majority of two to one wanted the Chancellor to scrap the beer tax escalator.”

Mike Benner, the chief executive of the Campaign for Real Ale, said: “Today’s Budget is a charter for the large supermarkets who irresponsibly promote alcohol as a loss leader at the expense of our nation’s community pubs, real ale and responsible pub goers.”

Mr Darling also announced that tobacco duty would increase by one per cent above inflation and then by two per cent each year until 2014. This means that the average price of a packet of 20 cigarettes will rise by 15p. It follows an 18p rise during the temporary VAT cut last year, which was not removed when VAT returned to its regular rate.

Deborah Arnott, the chief executive of Action on Smoking and Health, said: “Raising the price of tobacco is one of the most effective ways of reducing smoking.”

Producers claimed that the price rise would drive smokers to buy from smugglers who imported cheap cigarettes from eastern Europe illegally. It is estimated that one in seven cigarettes smoked is smuggled.

Christopher Ogden, the chief executive of the Tobacco Manufacturers’ Association, said: “On Jan 1 the Government imposed the largest tax increase on tobacco products in 10 years and now, less than three months later, taxes are to rise again.”

Skoal and Copenhagen maker loses fight over city ban on flavored tobacco

An effort to extinguish the city’s ban on flavored chewing tobacco is up in smoke.

The maker of Skoal and Copenhagen smokeless tobacco sued the city claiming only the feds can regulate the sale of tobacco products.

Manhattan Federal Judge Colleen McMahon shot them down Wednesday, saying federal law allows communities to set their own policies about access to tobacco.

“This decision … is not only a win for the children of New York City,” said City Council Speaker Christine Quinn.

“Our law is a good progressive law that will protect our youngest New Yorkers. If tobacco companies think they can fight common-sense legislation, this court decision clearly shows otherwise.”

The 2009 law bars the sale of flavored cigars and chewing tobacco except in tobacco bars.

It does not cover flavored cigarettes or menthol chewing tobacco but focuses on flavors favored by teens – vanilla, chocolate, honey, candy, fruit-flavored and spiced.

U.S. Smokeless Tobacco Manufacturing Co. could not be reached for comment.

Poll Shows Support For Tobacco Tax Hike

Topeka – A poll released Tuesday shows more than two-thirds of Kansas voters would support a tobacco tax hike.

The survey of 500 likely Kansas voters was backed by a coalition of groups including the American Cancer Society, American Heart Association, American Lung Association, Tobacco Free Kansas Coalition, and the Campaign for Tobacco-Free Kids.

The poll showed 69 percent of Kansas voters support raising the tobacco tax by $1 per pack to cut the state’s budget deficit. The support comes from a broad-based coalition of voters, including 71 percent of Republicans, 73 percent of Democrats, and 59 percent of Independents.

“Kansans understand the difficult choices our leaders face as they deal with the State’s budget woes. We know that many legislators are reluctant to support any tax increase, but 69 percent of Kansas voters want them to raise the tobacco tax instead of making deeper cuts to critical programs like education, roads, and services,” said Chris Masoner, Legislative & Government Relations Director in Kansas for the American Cancer Society. “These results show that, regardless of party, voters across Kansas understand raising the tobacco tax is a smart way to help plug the hole in our budget.”

Kansas voters strongly prefer the tobacco tax over other options, such as sales and income taxes, for addressing the state’s budget woes.

Out of more than a dozen proposals tested, the tobacco tax and alcohol tax are the only two favored by a majority of voters to help address the budget shortfall. While 71 percent support increasing the tobacco tax for this purpose, a majority opposed other options such as increasing state sales and income taxes, taxing utilities, churches, and non-profits, and reducing funding for health care, education, social services or highway maintenance.

The survey also found among Kansas voters:
·54 percent are more likely to support candidates who favor the $1 proposal, while just 25 percent are less likely to do so.
·80 percent support using part of the revenue brought in from the tax to fund programs to keep kids from smoking.
·81 percent favor taxing other tobacco products such as cigars and smokeless tobacco at a rate comparable to cigarettes.

“Raising the cigarette tax by $1 per pack will not only reduce possible cuts to important programs and services, but will also encourage more Kansans to quit smoking and prevent more Kansas kids from becoming future smokers,” said Mary Jayne Hellebust of the Tobacco Free Kansas Coalition. “It’s a win-win situation.”

A recent report by the Campaign for Tobacco-Free Kids and other public health organizations found that a $1 increase in Kansas’s tobacco tax would raise nearly $75 million in new annual revenue. Such an increase would also prevent 21,600 Kansas kids from smoking, save 10,000 state residents from premature, smoking-caused deaths, and save $492 million in tobacco-related health care costs. Increasing the tax rate on other tobacco products would raise an additional $23 million in new revenue, for a total of nearly $98 million.

The survey was conducted by the national polling firm Public Opinion Strategies. The statewide poll has a random sample of 500 likely Kansas voters and was conducted March 17 to March 18, 2010. The poll has a margin of error of +/- 4.38 percentage points.

Smoking ban at beaches and parks approved

California lawmakers voted Monday to ban smoking at 278 beaches and state parks in one of the nation’s far-reaching regulation of Smoking on Beachtobacco.

The new legislation calls for fines up to $100 for those caught smoking at a state beach, or in a designated section of a state park. However, smoking will still be allowed in some parking lots and campgrounds.

The smoking ban passed the state Assembly today and now goes back to the Senate, which already approved the measure, for some minor amendments. The vote followed party lines, with Republicans opposed to the ban because they feel it is unwarranted meddling in legal behavior.

Gov. Arnold Schwarzenegger has not yet indicated publicly indicated whether he will sign the legislation.

Experts warn that new “smoke-less” tobacco products are still dangerous

DULUTH – The tobacco industry is offering new products and finding new ways to attract and keep customers. However, health advocates say the new products are just as dangerous, and the customers are getting younger and younger.

“Most 6-year-olds, if you queried them, they would know who Joe Camel is,” said Michele Hughes of the Douglas County Health Department.

Now, with the introduction of new smokeless tobacco alternatives, there are new ways that young adults can get hooked to nicotine.

“They’re out there as the ‘good guy’ or look, these aren’t quite as harmful, but indeed these are deadly products that lead to a lifetime of addiction and this is an industry that is out for our youth,” said Pat McKone of the American Lung Association of Minnesota.

Many new tobacco products are more appealing to younger customers, with bright packaging, candy flavors and the illusion of a “safer” nicotine delivery source. McKone warns that these products are tricks.

The alternative products include forms of snuff, chewing tobacco, e-cigarettes or snus, which are spit-less tobacco pouches that users place under their upper lip.

“These products are to enable people to keep using nicotine and nicotine delivery systems until they can get out to smoke,” said McKone.

The popularity of these products has increased as more states have adopted smoking bans for workplaces and businesses. Minnesota’s ban is already in place and in July, Wisconsin will follow suit.

“80% of current adult smokers started between the ages of 14 and 15 years old so if we can not get those kids access to tobacco, that’d be very good,” added Hughes

With the continuing push of new tobacco products, health professionals say it’s more important than ever to educate young people.

“They aren’t safer,” said Hughes, “I mean you can ingest them as well and get stomach cancer. Any kind of tobacco has carcinogenic side effects.” In addition to stomach cancer, some of the new products have also been linked to oral and pancreatic cancer.

By Tracee Tolentino & photojournalist Adam Jagunich, FOX 21 News

Growing Your Own Tobacco

In spite of this weekend’s snow and cold, spring is here in Chicago, and the last frost will probably be in early May. That, along with the longer days, sunshine and warmer weather, means local gardeners are getting ready for planting season. And for those of us that grow tobacco, now is the time to get the plants ready. A relative of the tomato, tobacco is a fun and easy plant to grow, if cared for properly. In spite of its associations with the South and the Caribbean, tobacco can be raised in climates even farther north than Chicago. If you can grow tomatoes, you can grow tobacco. And even if you don’t smoke, tobacco is an interesting, attractive plant, and will flower later in the summer, and will be fragrant in the afternoon.

To get started, you’ll need a few basic things:

* High-quality fertile potting soil
* Planting trays (you can use cardboard egg cartons if you like)
* Fresh water
* Tobacco seeds

Everything you need for your tobacco garden can be picked up at a local garden supply store – I like Adams and Son, but any garden center in the city should have what you need. You can cut corners on the materials if you like (substituting cardboard egg cartons for planting trays, for example), but generally speaking, you’ll be glad you put down a few extra bucks now when you have tall, healthy plants in July. You’ll also need to get tobacco seeds. You may be able to find ornamental tobacco seeds (nicotiana alata) at a garden center in the city, but you’ll most likely have to order a packet of smoking tobacco (nicotiana tabacum) seed online. I ordered an envelope of White Stem Orinoco from the New Hope Seed Company in Tennessee.

Mix the soil with water in a large mixing bowl. Be careful not to get the soil too wet – you want moist soil, not mud, and you don’t want to drown the seeds. Mix the dirt well, breaking up clumps of dirt and dry patches, and fill the cells of the seed tray with the damp soil. Fill each cell with soil, but don’t pack it too hard or the seeds won’t be able to take root later on.

Tobacco seeds are incredibly small, about the size of a pin prick, so you’ll need to be careful to lightly sow them into the flat with overdoing it. Lightly sprinkle those seeds over the soil mix, making sure they’re in good contact with the soil, but not covered. Lightly water the seeds into the soil, and set them somewhere where they will get full sunlight. It should take one to two weeks for the seed to germinate, but if they don’t start growing right away, be patient, as some varieties take longer. Along the way, make sure that you don’t cover your seeds with dirt, as they need sunlight to germinate. Although tobacco is a hardy plant, it is also very delicate when it is young. Don’t cover the cells with cellophane, and make sure you keep the soil damp, but not too soggy, and never let the soil dry out.

Over the next eight weeks the weather will get steadily warmer, but the Chicago climate probably won’t be hospitable to outdoor planting just yet. We’ll check back on the plants when they’re ready to be transplanted.

New York Association of Convenience Stores Wins Freeze on Tobacco Fees

ALBANY, N.Y. — The New York Association of Convenience Stores (NYACS) and its members won a temporary reprieve from higher tobacco retailing fees March 19, when the Appellate Division of State Supreme Court again restored a restraining order blocking an increase in the tobacco dealer registration fees c-stores and tobacco retailers pay the state, NYACS stated.

A week prior to the order, Justice Thomas Feinman reinstated increases in retail tobacco dealer registration fees enacted by Gov. David Paterson and the legislature last year. Under that schedule, 24,000 retailers would pay registration fees of $1,000 to $5,000 per location per year, depending on annual gross sales of all products. Fees in the past cost $100 annually.

Five retail trade associations filed the legal challenge, and Judge Feinman issued a temporary restraining order in September, pending his ruling on a motion for a more permanent freeze. Earlier this month, he ruled the trade groups lacked “standing” to bring the action, denying the motion and reinstating the new fee schedule.

The trade associations then filed an appeal, and Appellate Division Associate Justice John Leventhal restored the restraining order, pending a decision on the associations’ new motion for a preliminary injunction. This process is expected to take at least four to six weeks, and a hearing is scheduled for March 31, NYACS stated.

“That means retailers should not pay any additional fee amount to the Tax Department until further notice,” James Calvin, president of NYACS, said in a statement. “The $100-a-year fee remains in effect. Don’t let anyone tell you differently.”

In the meantime, NYACS and other associations are lobbying for a more modest fee increase proposed by Sen. William Stachowski and Assembly William Magee, which would set the fee at $200 per store, plus a $100 surcharge for each active point on the store’s tobacco enforcement record, to a maximum $400 fee per store per year.

Reynolds sets out pay totals

Susan Ivey, the top executive at Reynolds American Inc., received a modest raise in salary, the company said in a regulatory filing yesterday.

However, her total compensation jumped 68 percent to $16.4 million because of an incentive payment based on Reynolds’ 2009 performance, as well as a cash settlement from a 2007 incentive plan that vested at the end of last year.

Ivey, the chairwoman, chief executive and president of Reynolds, was paid $1.27 million, up $17,250. Ivey already was near a set company cap for salary before 2009, the company said.

In regards to non-equity incentive-plan compensation, Ivey received a 64 percent increase to $8.5 million.

Her total compensation package included $6.2 million in unvested long-term performance units granted in 2009, which depend on performance over the next three years.

In 2008, she received about $2.2 million in the same category.

In 2009, Ivey vested in about $1.8 million in restricted stock, and received $198,217 in other compensation.

Listed among all other compensation for Ivey is $79,000 in a payment that replaced the company’s former executive perks program and $11,509 for the value of personal flights on company owned or leased aircraft.

For the full year, Reynolds reported net income of $962 million, down 28.1 percent, or diluted earnings of $3.30. Excluding charges, it had net income of $1.35 billion, down 3.8 percent, or diluted earnings of $4.64.

During the year, Reynolds dealt with several factors that contributed to a sales decline. Some were related to consumers smoking less and buying discount brands in response to higher state and federal excise taxes, and also having less disposable income.

“For a public company the size of Reynolds, the compensation appears to be right in line if not somewhat low on the salary side,” said Peter Tourtellot, the managing director of Anderson Bauman Tourtellot Vos & Co., a turnaround-management company in Greensboro.

“Most people think when they see a number like $8 million that it is all cash, but they are stock awards with restrictions that I think are in the interest of all shareholders. If the company does well and the share price increases, the chief executive benefits but so do all the shareholders.”

Thomas Adams, the chief financial officer, received a 4 percent raise in salary to $533,882. Daniel Delen, the president and chief executive of R.J. Reynolds Tobacco Co., was paid $814,600 in salary, up 4 percent. Judy Lambeth, its general counsel, received a 3 percent raise in salary to $564,850. Jeff Gentry, the chief scientific officer for Reynolds Tobacco, was paid $450,418 in salary.

In terms of non-equity incentive-plan compensation, Adams received $983,573, Delen $2.9 million, Lambeth $1.8 million and Gentry nearly $1.1 million.

By Richard Craver, Journalnow
March 23, 2010

Prisoner sues after he is banned from smoking

Lawyers acting for Jack Richard Foster claim the staff at High Down prison, Surrey, breached their client’s human rights by submitting him to ”cruel and unusual punishment”.

They argued that, as a tobacco addict and habitual smoker, he should have been given nicotine skin patches, chewing gum or some other means to satisfy his nicotine craving during the period the smoking ban was in force.

Philip Rule, appearing for Foster, said at the High Court in London today the case also raised concern over the adequacy of the guidance given by Justice Secretary Jack Straw concerning the denial of nicotine to prisoners as a punishment for breaches of discipline.

Mr Justice Collins adjourned the case so that more information could be gathered. He said it should come on for a full hearing in June-July this year.

He described the legal issue raised as ”quite an important one for the future”.

Foster faced his smoking ban at High Down in February 2008 when he was aged 19 and the jail was providing accommodation for him as a young offender.

His punishment for swearing at a prison officer included seven days’ loss of tobacco, as well as 14 days’ loss of canteen privileges and seven days’ loss of earnings.

His legal team argued there were more appropriate ways of disciplining him without violating his fundamental rights. The prison authorities were under a duty to offer ”nicotine replacement therapy” to prisoners if tobacco was withdrawn as a punishment.

In the case of Foster, his ”mental vulnerabilities” were well known and it should have been provided because of the potentially adverse consequences on his well-being and behaviour.

Mr Rule told the court today: ”The governor should have appreciated how much harder it was on him because of his various problems.”

He said depriving Foster of tobacco without providing nicotine substitutes amounted to ”cruel and unusual punishment” in breach of a statutory duty imposed by the 1688 Bill of Rights, as well as a violation of his rights under the 1998 Human Rights Act.

If his case succeeds, the court was told Foster intends claiming damages under the European human rights convention.

The judge said: ”I can see that for the future, from your client’s point of view, this problem could come up again – if he is still smoking, as I imagine he is.”
22 Mar 2010, Telegraph

FDA to have greater tobacco and cigarette control

Starting Tuesday, June 22 the Food and Drug Administration will have far greater control over how tobacco and cigarettes are marketed, distributed and sold. The announcement on Thursday, March 18 was made by Kathleen Sebelius, the US Health and Human Services Secretary.

It is a decision which many have been waiting for in the anti-tobacco activist camp. Indeed since the Cigarette Companies managed to thwart the attempts of the FDA to restrict the tobacco industry in 1996, there has been considerable support generated for the legislation.

The Family Smoking Prevention and Tobacco Control Act as it is known was passed in June 2009 by the US Congress. It was sponsored by Henry Waxman, (Democrat, California) and will formally go into effect on June 22, 2010. It states its purpose as follows,

“To protect the public health by providing the Food and Drug Administration with certain authority to regulate tobacco products, to amend title 5, United States Code, to make certain modifications in the Thrift Savings Plan, the Civil Service Retirement System, and the Federal Employees’ Retirement System, and for other purposes.”

The passing of the legislation, which regulates the $89 billion tobacco industry with its strong lobby is indeed a momentous event. Howard Koh, assistant secretary for health dubbed the event as “truly a historic announcement in our country’s public health history”. So how will the new legislation affect the tobacco companies?

1. The FDA will ban tobacco companies from sponsoring sports or entertainment events. The name of major tobacco companies will no longer feature along with major entertainment or sporting events which receive large amounts of publicity.

2. Tobacco companies will be unable to give free cigarette samples away. There will be no giveaways of non-tobacco items when you buy tobacco as well. So there will be less incentive to buy the cigarettes, and you will not be able to try out a new brand for free.

3. Sale of “kiddie packs” or those with less than 20 cigarettes will be prohibited. This is said to be a major factor which makes cigarettes more affordable according to many public health experts. By eliminating these small sized packs it is hoped that the habit becomes more expensive and less appealing to teenagers.

4. The FDA will be also able to forbid the sales of tobacco products to children who are under 18 years of age. Over the counter sales will require photo identity cards. Tobacco product vending machines are to be placed in adult only facilities. Self service displays of cigarettes will need to move behind the counter in retail stores.

5. The legislation is to be enforced using federal help against violators. There is a provision for stringent punitive action against stores found violating the law. These measures range from warning letters to criminal penalties to those concerned.

How effective the legislation will be is yet to be seen. With R.J. Reynolds Tobacco and Lorillard, (tobacco producers) already challenging the new law in the state of Kentucky. The appeal of the FDA is still pending, and it is going to be a long and bloody battle.

Alison Cooper: lighting up Imperial Tobacco

It was in front of 200 Imperial Tobacco staff over dinner in the Spanish town of Marbella that it hit her. “I proposed a toast to him and suddenly it felt very real – the realisation that he really is going,” Alison Cooper says. “It’s weird thinking of Gareth not being there any more.”

Gareth Davis’s departure after 14 years as chief executive of Imperial Tobacco will mark the end of an era at the Bristol-based company. In May this year he hands the baton to Cooper, his chief operating officer since last March and an Imperial staffer for 11 years.

A larger-than-life character who has turned Imperial into the world’s fourth-largest cigarette manufacturer, Davis will be a hard act to follow. Cooper, 17 years his junior and a mother of two, suggests there might however be more continuity than meets the eye.

“We’re informal. I had canapés at Buckingham Palace the other night and still had my pasty at Paddington on the way home. That’s very much Gareth’s style as well,” Cooper says.

The love of a pasty, a pint and the occasional cigar apart, the City should not expect a Davis carbon copy. “I’m probably more collaborative. I wouldn’t say that’s not Gareth’s style but it’s certainly one of my hallmarks. I like dialogue.”

It was in that spirit that Cooper gathered her top managers together in Marbella this month to explain that life would be different under a new boss: “We need a change in mindset. Tobacco has been traditional in the way it has operated. We want to move from being a tobacco manufacturer to an FMCG [fast moving consumer goods] company.”

It might be jargon-heavy but in the world of Imperial that’s a radical statement. As the company prepares to update shareholders on its latest trading tomorrow, the City will be looking for news on the integration of Altadis, the Franco-Spanish cigarette group bought for £11bn in 2007. Such deals have been the trend in tobacco land in recent years as the principal players have competed to consolidate the industry. With the major plays now complete, the focus is shifting.

“In recent years at Imperial it’s been about deal, cost out, integration; deal, cost out, integration,” Cooper says. “This is the logical next move. We’ve acquired assets; the next stage is leveraging them. The focus now is out-and-out on driving sales.”

Cooper is upbeat about the reception from her managers, but the 43-year-old needs little backing. “If there’s a direction I want to go then that’s where we’re going and I expect people to line up behind me, get stuff done and done quickly,” she says. “Historically some people have described me as harsh but fair. I’m quite direct,” she adds with a smile.

That is typical of Cooper – a mixture of the informal and the corporate, the light-hearted and the driven, high heels and cigars.

“If I didn’t wear a skirt, I’d probably be one of the boys,” she says. A tomboy then? “That’s more like me. I do like my pint of Guinness.”

It is that make-up which has in all likelihood helped drive her to the top of a male-dominated industry. Cooper will become only the fifth female chief executive of a FTSE 100 company, but all the more striking for coming from the world of cigarettes.

“It’s not something I ever think about. It’s an ‘And?’ It’s a shrug of the shoulders,” Cooper says.

She’s not a Harriet Harman disciple then? The minister for women and equality has vowed to break up the old boy’s network in British business.

“Boards should make selections on the basis of merit,” Cooper says. “I’m appalled by the idea of forced distributions on boards. I find that rude to women. I don’t think it’s the old boys’ network that she’d depict.”

That dismissal rings true considering Imperial’s wider relationship with the Government. The tobacco industry is under political siege and while much of the regulation that has been introduced has proved sensible – whether bans on smoking in public places or sports advertising – at times Labour seems determined to all but wipe out the industry.

Andy Burnham, the health secretary, has set a pre-election pledge to bring the smoking population down from 21pc of British adults to 10pc by 2020.

It is a pledge to which Cooper gives short shrift. “It’s a headline-grabbing quote. We recognise we’re an industry with a controversial and risky product and we have always supported sensible regulation,” she says. But she points out that a core of smokers will carry on regardless. “They can have every risk in the book thrown at them, but actually they enjoy smoking and choose to smoke A key focus will be holding back the tide of ridiculous regulation.”

Cooper is savvy enough to know that tobacco will never be feted by the Government or the general public. Her first goal is merely to promote joined-up thinking. She says that excessive regulation will start a dangerous trend for both consumers and the Government – the spread of the illicit trade, with either non-duty paid or counterfeit cigarettes being shipped in from eastern Europe.

“The Government has got to think about whether it wants this product in the hands of a responsible industry or in the hands of crooks.”

In Ireland a combination of regulation and high excise duties has handed illicit products a 30pc share of the market. The same could easily happen in the UK, where the Government currently takes more than £10bn a year in excise duties.

A further frustration for Cooper is the lack of any dialogue between Imperial and the Department of Health. “There is a huge reluctance to talk to us,” she says.

It might well take a change of Government to alter the regulatory status quo and Cooper isn’t backward in nailing her colours to the Tory mast.

“It will make a difference if we end up with a different colour government,” she says.

She is more upbeat about her standing in the City. She joined Imperial from what is now Pricewaterhouse Coopers in 1999 to work in M&A support and strategy planning and is well known to analysts and institutional shareholders. Nevertheless she’s taking nothing for granted.

“I’ve talked to many of the investors since day one, but I would be naive to think that following a handover there isn’t a bit of a proof-of-the-pudding period,” she says.

One focus will be persuading many in the City that Imperial – with a 45pc share of the UK market with brands including Lambert & Butler and Davidoff – is as attractive an investment play as British American Tobacco, its more emerging markets-focused, London-listed rival.

She explains that while much of the developed world is seeing volume declines of 1pc to 2pc a year, the more aggressive excise regimes allow for price increases to maintain profits. She points out, though, that the group is investing in Eastern Europe, the Middle East and in Africa.

Potential acquisitions – which Cooper insists will be limited to bolt-on deals for at least a few years – could come in Algeria, Lebanon, Taiwan and Thailand.

In the meantime the focus will be on paying down the Altadis debt, driving sales and finding the odd politician to talk to.

Cooper will need plenty of pasties to keep her going.

WHO global pact against tobacco smuggling stalled

A global pact to halt smuggling and counterfeiting of tobacco products, which costs governments up to $40 billion a year in lost taxes, has become bogged down over ways to trace products, officials said on Friday.

The agreement would also ban duty-free sales of cigarettes, popular with international air travellers, but which health campaigners claim are often diverted into illicit trade.

The aim is to reach agreement in Geneva by Sunday ahead of a meeting in November in Uruguay where the pact could be adopted.

But by Friday, debate had not even begun on duty-free sales.

Campaigners have accused multinational tobacco companies and duty-free lobbyists of trying to derail the week-long negotiations being held among officials from 168 countries under the auspices of the World Health Organisation (WHO).

“There is a consensus that track-and-trace measures are needed to combat traffic in illicit products,” Vijay Trivedi, policy advisor to the WHO Framework Convention on Tobacco Control (FCTC) secretariat, told Reuters.

“The devil lies in the detail,” he said.

UNIQUE SERIAL NUMBERS

The closed-door talks have stumbled over discussions of details, mainly a “tracking-and-tracing” system for tobacco products at the heart of the new treaty, formally a protocol to the 2005 Framework Convention on Tobacco Control.

The draft treaty would require countries to license tobacco manufacturers and retailers and set up the tracing regime with a global data base.

Within three years of adoption, all unit packets of cigarettes would have to be marked with unique serial numbers.

Philip Morris International, (PM.N), which sells Marlboro cigarettes and is the world’s largest non-state-owned tobacco firm, and British American Tobacco (BATS.L), the world’s second-biggest cigarette maker, say that they would back a protocol with effective measures against illicit trade.

PASSING ON THE COST

But they say that a tracking system must cover all countries and producers and warn its cost will be passed on to smokers.

“I would say it would cost hundreds of millions of dollars for the industry to implement,” Pat Heneghan, global head of anti-illicit trade at BAT, told Reuters.

“There are also physical challenges with high-speed production of tens of thousands of cigarettes per minute to get the code on every pack and registered in a data base at that speed,” he said.

Goekhan Aladag, director of regulatory and fiscal affairs at Philip Morris International, said that it began tracking and tracing 10 years ago at the level of master cases, which contain 50 cartons each. The system is now implemented in 124 countries.

“We are implementing carton tracking in risk markets,” he said, naming Russia. “We’re working to extend it to pack level.”

Tobacco kills 5.4 million people a year from cardiovascular disease, cancers, diabetes and other illnesses, the WHO says.

Illicit trade cheats governments of lost tax revenues and undermines efforts to reduce tobacco use and save lives. “It is a double whammy for governments,” said Trivedi.

“Having a licensing system on a global scale would be a significant improvement in combating illicit trade and would wipe out a significant portion of smuggling,” a Western government official at the talks told Reuters.

“The biggest issue of contention is whether you have to license retailers,” he said.

The 2005 treaty obliges governments to protect their populations from exposure to tobacco smoke and reduce demand through price and tax measures, regulating packaging and labelling of tobacco products and curbing tobacco advertising and sponsorship.

“There is still a lot of optimism that a decision can be reached. But it will take a lot of work and negotiations,” said Gigi Kellett of Corporate Accountability International. “We want to make sure an effective protocol comes out at the end.”

Airports, airlines and duty-free operators are fighting the ban on duty-free tobacco sales. In a joint statement they said $3 billion in annual revenue would be lost despite “no evidence whatsoever” that products intended for duty-free are diverted.

Smoking Gun Found in Tobacco Bill

An anti-tobacco group on Thursday reported a current lawmaker and two former legislators to the National Police, accusing them of eliminating a clause designating tobacco as “addictive” in a health bill passed last year, and claiming to have a signed document implicating the three in the crime.

The Coalition Against Corruption of the Anti-Tobacco Clause said that the three House of Representatives lawmakers, before ending their tenure last year, had ordered that the clause designating tobacco as an addictive substance be excised.

“What we have are hard evidences and not just mere indications. We have a document signed by those people ordering the State Secretariat to ‘mutilate’ the clause,” said Kartono Muhammad, a member of the coalition, also known as Kakar.

“We demand justice and that the police investigate this case. What is the motive to ‘delete’ a clause from the health bill. This is a systematic crime and should not happen again in the future,” he said.

The three accused were named as Ribka Tjiptaning from the Indonesian Democratic Party of Struggle (PDI-P), Mariani Baramuli Akib and Asiah Salekan, both from Golkar Party.

Kartono said police considered the act a crime that could be charged under the Criminal Code, and that the report to the police was delivered after the Ethics Council of the House of Representatives concluded its investigation, saying the deletion of the clause was not just an administrative matter.

Meanwhile Tjiptaning, who led the House committee responsible for deliberating the health bill, said that she was ready to face the complaint.

“I have clarified it to the House’s Ethics Council so it would be better to ask them.”

Tjiptaning had previously claimed that the elimination of the clause was only an administrative error, saying the House had mistakenly delivered an older draft of the bill to the State Secretariat.

Mariani told the Jakarta Globe that the accusation was ridiculous and unfounded. She said the article had only been discussed a little further to accommodate the request of some organizations that had asked the commission to reconsider the anti-tobacco legislation.

“I’m not crazy. I would never deliberately omit an article in a law that has been passed by the plenary because it’s a violation against the Constitution,” she said. “But it is our duty to consider everybody’s importance.”

Mariani said she could not understand the reason behind the accusations because the article in question was eventually mentioned in the health law that was passed in September.

“The health law is complete, there is no missing article, so I cannot understand why would they sue us,” she said.

Kakar is made up by a number of nongovernmental organizations, including the Indonesian Consumer Protection Foundation (YLKI), Indonesia Corruption Watch, the Indonesian Tobacco Control Network and the National Commission for Child Protection (Komnas Anak).

The case was reported to the Jakarta Police in December but was dropped when authorities said that a case with the potential for nationwide ramifications should be dealt with by the National Police.

The Jakarta Police also said that they had difficulties finding an appropriate violation to fit the accusation.
March 18, 2010 Thejakartaglobe

FDA takes first major steps against tobacco

WASHINGTON — The federal government took its first sweeping regulatory actions Thursday to combat tobacco use in the United States — particularly among youth.

The federal Food and Drug Administration issued regulations banning the sale of cigarettes and smokeless tobacco to minors and ending most vending-machine and self-service sales of tobacco products.

The regulations also prohibit all remaining tobacco industry sponsorships of sports and entertainment events, outlaw the sale of packs with fewer than 20 cigarettes, and bar the giveaway or sale of items with tobacco logos.

In addition, audio ads for tobacco products will not be allowed to include music or other sounds that aren’t voices.

The FDA also is asking for public comment on ways to restrict outdoor advertising of tobacco products.

“The historic rule that we’re issuing today … will help our kids stay healthy by making it harder for the tobacco companies to target them with harmful and addictive products.” Health and Human Services Secretary Kathleen Sebelius said at a press conference.

Public health and anti-smoking groups praised the FDA’s new rules Thursday.

Matthew Myers, president of the Campaign for Tobacco-Free Kids, said in a statement that the regulations are a“long-overdue step to stop the tobacco industry’s predatory targeting of our children that continues even today.”

Cheryl Heaton, president and CEO of Legacy, an anti-smoking group, said in a statement that the rules were a key step “toward reducing the influence of Big Tobacco on today’s youth, and helping to further create a culture in which young people reject tobacco, and smokers receive the tools and support they need to quit.”

Roger Quarles, president of the Burley Tobacco Growers Cooperative Association, based in Lexington, Ky., said the new rules were “no big shock.”

“As leaf growers, we don’t manufacture a consumer product, so we’re pretty much neutral on this,” he said.

As to whether the new rules would affect consumption of tobacco products, Quarles said: “It could have a slight impact but, quite frankly, I think it would be very minimal.”

The regulations are nearly identical to those the FDA tried to impose in 1996. The Supreme Court subsequently struck them down, on grounds that the agency had no specific authority from Congress to regulate tobacco products.

Congress last year granted the FDA that authority in landmark tobacco-control legislation that President Barack Obama signed last June.

One regulatory provision being challenged in court requires tobacco ads in teen-oriented publications to be in black and white only. A federal judge in Kentucky ruled against the provision, and the FDA said it will not enforce it while an appeal is pending.

The new federal regulations provide a uniform set of rules for companies and retailers to follow. Until now, for example, there has been no federal ban on the sale of tobacco products to minors, though there are state prohibitions.

The rules will be published in The Federal Register Friday and take effect June 22, exactly a year after Obama signed the legislation.

The government actions are being closely watched in tobacco-growing states such as Kentucky, the nation’s second-largest producer.

Penalties for violating the new regulations include fines, seizures of property and criminal prosecutions. Enforcement will be done by the FDA, as well as by state agencies that contract to work with the FDA.

Some of the new rules are similar to provisions in a 1998 settlement among the states and major tobacco companies. But the regulations are more comprehensive, covering all tobacco companies, not just those in the settlement, according to anti-smoking advocates.

In addition, the new regulations in many cases go farther. For example, the national settlement outlawed some, but not all, events sponsored by tobacco companies. The new regulations impose a full ban.

The FDA already has taken steps to restrict some forms of tobacco products. Last September the agency complied with the new anti-smoking law by banning cigarettes with candy, fruit, clove or herb flavors.

“For too long, our country has been forced to endure the overwhelming disease and emotional costs of tobacco,” said Assistant Health and Human Services Secretary Howard Koh, a physician.

Almost 450,000 Americans die every year from smoking-related diseases, and treatment of those diseases costs $100 billion.

Bill Phelps, spokesman for Philip Morris USA, the nation’s largest cigarette maker, said the company is reviewing the new regulations.

David Howard, spokesman for R.J. Reynolds Tobacco Co., said the manufacturer anticipated the rules because the new law required them.

Pointing to a University of Michigan survey, Howard said tobacco use among young people has declined almost 50 percent since 1996.

“We look forward to working with the FDA on this and on matters of interest moving forward,” he said.

Reynolds is one of the companies challenging the black-and-white-only rule for advertising, arguing that it is an infringement on free speech rights.

Golden Leaf grant supports Triangle North

Triangle North, overseer of four tax-advantage business parks in Franklin, Granville, Vance and Warren counties, has received a $50,000 grant from the Golden Leaf Foundation to support its marketing efforts.

“We believe we are on the threshold of a new economic future for four counties, with Triangle North creating jobs and opportunity in the same way Research Triangle Park did for our region and state,” said Danny W. Wright, chairman of the Kerr-Tar Regional Economic Development Corp., which owns and develops Triangle North.

The Golden Leaf grant will supplement funds provided by the North Carolina Rural Economic Development Center, business investors and others that are supporting Triangle North’s marketing strategy.

The strategy focuses on identifying companies in targeted industries, such as life sciences, technology, aviation and defense technologies and contracting, that are likely to expand and are interested in locating in the Research Triangle region.

The Golden Leaf Foundation manages North Carolina’s portion of the national monetary settlement with big tobacco.

State laws applicable to electronic cigarettes

Electronic cigarettes are an example of when technology has surpassed the rules and regulations, said Sgt. John Laws of University Police Department.

With electronic cigarettes becoming more familiar to people, Martin Lau, a graduate student in graphic design, said he was thinking about buying one.

“A pack of cigarettes is about $6 to $7,” he said. With those e-cigs, a carton is $20.”

Lau said the state may take action on the issue.

“If e-cigs prove to become a problem, (the state) will deal with it,” he said.

According to Section A of California Government Code Section 19994.35, “No tobacco product advertising shall be allowed in any state-owned and state-occupied building excepting advertising contained in a program, newspaper, magazine, or other written material lawfully sold, brought, or distributed within a state building.”

This means any advertisements for products containing tobacco or that are prepared with the leaves of plants of the nicotiana family are illegal within state buildings, according to section C of the same government code.

“I think in the long run you will not be able to smoke e-cigs indoors, because at one time people were able to smoke regular cigarettes indoors,” said senior business major Jansher Ashraf. “I think it’s just because e-cigs have not caught up with the law.”

In the state of California, each college and university is responsible for making its own rules and regulations, including the distance a cigarette can be smoked from a campus building, according to California Education Code, Section 89031.

Section 89031 states, “The trustees may establish rules and regulations for the government and maintenance of the buildings and grounds of the California State University. Every person who violates or attempts to violate the rules and regulations is guilty of a misdemeanor.”

At SJSU, Laws said the rule is a lit cigarette must be a minimum of 25 feet away from all campus buildings.

“We have not encountered any issues with students smoking too close to a building,” he said.

The penalty for smoking closer than 25 feet from a campus building is a citation of $ 1,000, and it is charged as a misdemeanor, Laws said.

“This is usually not our first response when dealing with this rare situation,” he said. “Usually we just give a warning.”

Lau said he is aware how it may bother some people to smoke too close to a building.

“I wouldn’t go next to a door and do it,” he said. “It’s rude.”

If e-cigs become popular and people use them often and become a problem, something will be done, Ashraf said.

“At some point, you will find somebody who has a problem with them and sure enough, a group of legislators will decide (a law) on e-cigs,” he said.
Thespartandaily

Tobacco Rule Proposed in ’95 to Go Into Effect

WASHINGTON — Fifteen years after the Food and Drug Administration first proposed banning the sale and marketing of tobacco products to teenagers, top government officials announced Thursday that they would finally put the rule into effect.

The rule was hugely controversial when first proposed in 1995 and was never adopted by the agency because of a Supreme Court ruling that legislation was needed to empower the F.D.A. to regulate tobacco products. That legislation was passed and signed by President Obama last June. The rule goes into effect on June 22.

The tobacco industry adopted most of the rule’s provisions in 1998 as a result of litigation. And every state bans tobacco sales to minors, although enforcement provisions vary widely. The new rule provides consistent enforcement mechanisms across the country.

“The historic rule we’re issuing today will help our kids to stay healthy,” Kathleen Sebelius, the Health and Human Services secretary, said at a news conference.

Other provisions not adopted by the industry are still contentious and may end up in court, and even those that are not controversial may lead to changes across the country. For instance, the rule prohibits tobacco companies from using color advertising in store displays, a provision that a federal judge in Kentucky recently found unconstitutional.

The rule also bars sponsorship of sporting or entertainment events by tobacco companies, even by smokeless tobacco products. It would not allow non-tobacco products to have the same names as those on tobacco products and it restricts outdoor advertisements near schools.

Anthony Hemsley, a spokesman for Commonwealth Brands, said his company supports a ban on the use of tobacco brands on non-tobacco products. The point of the rule is to prohibit products like Marlboro clothing that provide marketing messages through means other than advertising.

But unless a product has been on the market since the first day of 1995 — around the time the rule was first proposed — it must be removed from the market.

Commonwealth sells Fortuna cigarettes while a separate company sells Fortuna rice crackers, Mr. Hemsley said, claiming that under the rule one would have to change its name.

“You can’t pick an ancient date and then try and remove hundreds of brands that companies have invested in over the years,” Mr. Hemsley said. “If they try to enforce that, we’ll end up back in the courtroom.”

The rule also bans the sale of packages with fewer than 20 cigarettes, bans all vending, self-service displays or other impersonal sales in areas that have not been restricted to adults only and bans free samples of tobacco products.

F.D.A. inspectors will ensure compliance, and the agency will contract with state agencies to provide even more inspectional oversight, said Dr. Margaret Hamburg, F.D.A. commissioner. Violations could lead to warning letters, fines and seizures.

“These are all important new activities that will make a real difference,” Dr. Hamburg said.

Separately, the House passed legislation on Thursday requiring those who sell tobacco products over the Internet to collect state sales tax, prohibits the distribution of cigarettes through the mail, and mandates that age and identification be checked at purchase and delivery. The measure, which already passed the Senate and is expected to be signed by President Obama, was opposed by some Indian tribes that sell discounted cigarettes over the Internet.

By GARDINER HARRIS
Published: March 18, 2010