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Monthly Archives: December 2012

British American Tobacco makes his move in the emerging electronic cigarette market

Posted by admin on December 20, 2012 None comments

The introduction of plain packaging in Australia is a threat to the tobacco industry. Now it turns out that the European Union considers the watered-down version of the same with images and health warnings occupy 75 percent of the cigarette pack, while the individual states will be allowed to introduce a simple legislative package.

BAT_logoAnd it’s not over for Europe. Russia, the largest tobacco market after China, is considering legislation that could see tobacco advertising and smoking illegal in public places, such as restaurants, bars and hotels closed. It also banned the stalls and shops at the stations from the sale of cigarettes. If passed, the restrictions will be phased in, and is expected to be fully operational in 2016.

At this junction, it is good to remind ourselves that only four tobacco companies, including British American Tobacco (BTI), Imperial Tobacco (ITYBF.PK), Japan Tobacco (JAPAF.PK), and Philip Morris International (PMI), control more than 90 percent of Russian sales of tobacco products. Cigarette market is estimated at about $ 22 billion in 2011, the euro Monitor International. As I said in my previous article, the same four also have substantial sales in the rest of Europe.

Obviously, after the introduction of the European Union is almost plain packaging with the introduction of Russia on tighter regulation of tobacco would hurt revenues (and possibly dividends) of all actors on the international tobacco companies with significant activities in Europe.

Therefore it is not surprising that some of the biggest players in the tobacco industry seeking to develop reliable products, which are an alternative to smoking.

British American Tobacco makes his move

I have already alluded to the interests of British American Tobacco in the development of so-called electronic cigarettes, its chief financial officer Nicandro Durante claiming earlier in September that the size of the market of tobacco alternatives could be up to 40% of Bat in time by 20 years.

Last year Nicoventures, British American Tobacco subsidiary, was established to focus on the fact that this is “the development and commercialization of innovative regulatory approved nicotine products.”

With today’s announcement, British American Tobacco made its first serious step to the acquisition of CN Creative, Manchester-based Company that specializes in the design and manufacture of non-combustible cigarettes are for smokers offer a less risky alternative to cigarettes.

According to Sky News acquisition is considered a cost of tens of millions of pounds; the purchase is clearly far-reaching strategic significance for the group.

CN Creative regarded as one of the pioneers of some of the world’s most popular electric cigarette brands. Aannouncement made by British American Tobacco, the company has its own research and development facilities, and currently has a number of electronic cigarette products on the market, as well as new, innovative electronic cigarette technology in development.

Among the products of Manchester-based company is weaving, which she claims is the best in the world of electronic cigarettes, selling in 26 countries around the world, including in the UK. CN Creative also produces ECOpure, nicotine products, and is developing a new generation of products called Nicadex, the company says that “there will be drugs under the regulatory framework as a smoking cessation device / drug use.”

Kingsley Wheaton, Director of Corporate and Regulatory Affairs at British American Tobacco, said:

“Our core business is, and will remain, tobacco, but we have always been clear that our goal is to provide those adult smokers who are looking for a safer alternative to cigarettes with a range of lower-risk products that will meet their diverse needs.

“We believe that the innovative electronic cigarette technology that CN Creative developed over the past few years will help us get closer to achievin

Tobacco firms held a quiet meeting with senior EU officials

Posted by admin on December 18, 2012 None comments

Tobacco lobbyists and senior European officials Commission held several meetings quiet for at least the past two years, according to the Brussels-based pro-transparency group Corporate Europe Observatory (CEO).
Among them there are people out-of-office commission Chief Jose Manuel Barroso, its General Secretariat and others in the administration of the Commission on Health and Consumer Affairs (DG Sanco).

cigarettes304Fraud EU Olaf says undisclosed meeting with the tobacco industry, are a direct violation of the articles of the Framework Convention of the World Health Organization’s Tobacco Control.
Olaf chief Giovanni Kessler reportedly told Euro-MPs at a private meeting in October that the Convention was mentioned in John Dalli, which is focused around his contacts with Swedish Match, the company that makes the kind of mouth tobacco called snus.
Commission guidelines echo the WHO.

Its internal rules stipulate that officials “have to interact with the tobacco industry only when and to the extent strictly necessary” and must “ensure that such interaction is transparent.”
Dally meeting with a young lawyer in his office, in the company of Silvio Zammit, a Maltese businessman and mayor of the small, to discuss the draft of the EU tobacco and chewing is an “informal contacts with several tobacco companies,” said the spokesman of the commission.
However, the Director General of excavated at least five different meetings, as well as outside of official channels between tobacco lobbyists and other senior officials of the EU Commission.
One of the meetings held with the Swedish Match and people within their own Barroso General Secretariat in September, a month before Dally lost his job.

Transparency of NGOs said Swedish Match has met with officials of the General Secretariat of William and Jean Sleath Ferriere, and Antti Maunu of DG Sanco to explain his views “about the current situation with regard to chewing and what we see as a logical step to take in the future, which control for all smoke-free tobacco products in the EU. ”
In June, Clara Martínez Alberola’s office Barroso met with Spyros Pappas (unregistered lawyer / lobbyist firm of Pappas & Associates) and Patrick Hildingson Brussels European Smokeless Tobacco Council.

In December 2011, tobacco lobbyists from the German-based Bundesverband der Zigarrenindustrie and Dutch-based European Association of cigars Barroso met with Cabinet officials Guillaume Morel and Klaus Henning.
Another meeting was held in June 2010 between Philip Morris International and member of the Secretariat Barroso John Watson.
Watson wrote in a letter at the time, Philip Morris gave him some documents that he will transfer to colleagues. He then says Philip Morris would “write to the SD [CEO] trade and Sanco”.
Philip Morris also met with Watson and Marianne Klingbeil, another official of the General Secretariat, in May 2010 at a conference in London.
“Meetings Dalli tobacco lobbyists in his office in Malta were not clear, but it may be a reason for the resignation Dalli? Does the Commission have a rigorous approach around contacts with tobacco lobbyists, as prescribed in the rules of the WHO? Answer, apparently, is not to be” , said the CEO.

The Commission, for its part, confirms the above meeting took place, but said that they were not carried out behind closed doors.
“No rules have been broken. EU rules in place for contacts with the parties concerned have been met. These are compatible with the WHO recommendations,” said commission spokeswoman Pia Ahrenkilde Hansen in an email to EUobserver.
She told the Commission that site uncovered documents relating to the proceedings after the freedom of information, including the CEO.
But the CEO, who had learned about some of the meetings of the EU’s freedom of information law, said watchdogs should have led the Commission to disclose these meetings, make a formal request for documents.

“If you have to ask for the documents – and you’re lucky if you get them – that is not the type of transparency in accordance with the WHO rules,” CEO Olivier Hoedeman told this website.
Hoedeman noted that DG Sanco publishes most of the meeting minutes and the tobacco industry on the site.
“Everyone else should do the same,” he added.

Tobacco Australia Plain Packaging Law

Posted by admin on December 13, 2012 None comments

In less than two weeks and only because of tobacco products in Australia plain packaging law will face a test of the effectiveness and credibility as the company launches its marketing stickers smell labels on cigarette packs.

In Anthony Rosario, General Manager Box Wrap, label Production Company, said that they were created with the smell of stickers based on the perception of smokers that their rights have been self respect the law.

“People feel that they have the choice to rip them,” Mr. Do Rosario said.

Tobacco inAustraliaplain packaging law, which came into force on December 1, ruled that the bags or boxes of tobacco, regardless of the brand or manufacturer, must be packaged in a simple olive green and contains visible health warnings without individual trademarks.

Based at Yatala, dramatic innovations from Gold Coast were seen by many as a complete disregard for existing law.

“We are just a sticker company, which is no different from a cigarette case,” Mr. Do Rosario said.

Australian Medical Association (AMA) has called on the Australian federal government to immediately put an end to the company and its marketing blitz because its ultimate goal is to hide the health warnings on tobacco boxes, which defeats the purpose of the law, which is to educate the people of the negative effects of smoking.

“Those graphic health warnings are there for a very important reason. More than a million Australians have died because they smoked, but I think that hiding these warnings, I think that the federal government will act very quickly, and to ban those products,” Steve Hambleton, AMA president, said.

“It’s morally wrong for a business to profit from the sale of goods in respect of goods which are deadly when used as the manufacturer intended.”

Federal Health Minister Tatyana Plibersek, in turn, said that she believes that the law is effective.

“The fact that they make stickers proves that we do with tobacco packaging simple law comes into force,” she told reporters inMelbourneon Wednesday.

However, she said that she has asked lawyers to investigate, if the production and sale of stickers violate laws tobacco plain packaging.

“I think it is important for Australians to have the freedom of choice,” Mr. Rosario Do arguing.

But such arguments around plain packaging legislation.

“That there is a very good reason. We believe that it will reduce smoking inAustralia, another notch, so we do not want to see anything that can really get around the law,” said Dr Hambleton.

Mr. Do Rosario said their package labels will be sold in the online store for $ 8.75. Plans to expand them physically for sale in stores in early 2013 conducted.

Vaporizes tobacco tax a smokescreen

Posted by admin on December 11, 2012 None comments

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When Chancellor reached the end of his Autumn Statement on Wednesday without mentioning the debt cigarettes, smokers undoubtedly exhaled a sigh of relief. This meant a temporary reprieve from paying more than £ 8 for a package 20.

But another important threshold has been violated, which is threatening the ability of tobacco companies to raise package prices to offset falling volumes. According to research invested, it now takes more than half an hour of work at the average wage of production in order to afford a pack of cigarettes. In 1992, it took only 17 minutes.

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This measure shows the availability of a trend that many smokers may not have noticed: every time the government increases the debt of tobacco companies put their money on.

“If the tax is increased by 12p, they will increase the price of the package is 13p, so the operating margin at the top, too,” says Ed Salvesen, an analyst at broker Brewin Dolphin. “Smoker says that it is only the government’s why it’s rare to get a price increase at any time, except after the budget when it is headline news.”

The use of tax changes as a smoke screen to allow price increases for tobacco companies to keep their profits, cigarette consumption in theUKandEuropecontinue to fall.

A tobacco analyst, who asked not to be named, described the relationship between tobacco companies and the government as a “cozy conspiracy.”

“When the tax goes up HMRC is happy, and the price goes up, so that companies are happy,” said the analyst.

Tax is not only positive for the tobacco companies, however. According to market research group Euromonitor, it is also the main reason why the number of cigarettes smoked in theUKfell from 51bn in 2006 to 44.8bn in 2011.

However, during this five-year period, Imperial Tobacco – the largest tobacco company in theUKmarket share, with the JPS and Windsor Blue – managed to increase its margins by theUKwith 62 percent to 67 percent. In addition, Japan Tobacco International – manufacturer of Silk Cut and the second-largest tobacco company in theUK, has increased its global field by more than 10 percentage points to 35 percent.

But some industry observers warn cigarette affordability is fast approaching a tipping point.

“People will stop smoking when prices are at a certain point, or many people will trade down,” Mr. Salvesen said. “[Tobacco] shareholders are becoming more concerned about where they will be in five years.”

Volumes are falling rapidly inWestern Europe. Euro Monitor reports that the number of cigarettes consumed in Western Europe fell 92bn units 629bn between 2006 and 2011, led by a steep decline inSpainandPortugal, and higher taxes, combined with economic stagnation.

Imperial and JTI remain heavily exposed to these markets – with Imperial received more than half of their net income from the EU, and 43 percent of JTI reservations for 2012 earnings before interest, taxes, depreciation and amortization in the region.

In contrast, only 22 percent of the adjusted income British American Tobacco in the last financial year came fromWestern Europe.

Martin Deboo, analyst at Investec, said: “In the mature markets ofEurope, the volume is reduced by about 3 percent a year; it will definitely be negative for companies whose business is concentrated there.”

In response, the Imperial contributes chopped rolling tobacco, such as Golden Virginia brand. Although roll their own cigarettes, usually less profitable than premium cigarettes, they still offer a higher return than the value brands of cigarettes.

“There’s a lot of down trade of cigarettes and fine cut we are looking to grab as much as those consumers as we can,” said Alex Parsons, Imperial spokesman.

Innovation is another tactic companies use to convince recession-hit smokers pay more for the same cigarettes.

In November last year, Imperial, presented the package “slip-Tec”, which opens with a sliding mechanism for its Lambert & Butler brand. The company also introduced a different price within the same brand. For example, smokers Fortuna in Spain you can buy cheaper soft pack instead of more expensive hard pack, giving them an alternative to trade down to cheaper brands.

But some industry claims there is a greater threat than availability: plain packaging for cigarettes, which are discussed in theUKand other EU countries.

Shane MacGuill, tobacco analyst at Euromonitor, said: “What is the key to the tobacco companies’ earnings inEurope, the ability to innovate and” premium “their products. Neutral package will remove the ability of the company will no longer be able to communicate” premiumisation with their consumers. “

Big Tobacco Means Big Yields

Posted by admin on December 7, 2012 None comments

High yield stocks exploration for dividend portfolio influenced tobacco companies. I am a former of smoker , and the trend today consist of more people that is quitting then people that starts to smoke. When I was high school teacher, the big majority of the kids thought it was cool to smoke on the backgrounds of the schools. A lot of the students are waiting there 18 years because they could buy cigarettes by there self.

1. Altria Group- is holding company for some companies, most of whom make tobacco products Philip Morris USA is the largest tobacco company, with such brands like Marlboro, Parliament cigarette and Virginia Slims. The largestUSAmanufacture and maker of smokeless tobacco products. Today cigarette industry volume is expected decline in some years. Cigarette industry volume is expected to decline over next some years. Altria sees revenue rising to 7% annually as higher product pricing. Altria currently trades at 15.4 times earnings, and its dividend yield to 16% of the writing. The company’s history of its dividends increasing every year from 2008 till 2009.

2. RAI being the second largest tobacco company produced such brands likePall Mall, Camel, Kool, Winston and Doral cigarettes. Altrias sales volume is expected to decline. The growth is expected of camel and American Spirit brands. Since growth is expected to be slightly lower than Altria, it makes sense that shares are trading at 14.8 times earnings, slightly less than Altria. The yield is higher, however, currently at 5.4%.

3. LO being the third largestUSAtobacco company includeMaverick,KentandNewport. The best growth of these three companies. Lorillard expected raised of sales volume till 5% this year. In 2011 Maverick rose till 15% and the main brands grew till 6%. LO trades at the lowest multiple groups at only 14.5 times of earnings in 2013. Lorillard currently yield 6% and also has a grate rising record of its dividends.

In conclusion these three companies seem to be the most attractively and valued nowadays. One person observed that some investors have a moral conflict with investing cigarette manufactures. There high dividends are a refund of some thousands of dollars during 20 century.

Electronic Cigarette advertising can become the next Great Frontier

Posted by admin on December 5, 2012 None comments

When you work as a brand builder, one has to admire that cigarette industry has been able to perform. If right or wrong, they have created some of the most iconic brands in the world, with the help of some great creative agencies, of course. I do not smoke, but I know a lot and understand the accompanying habits and rituals. A few months ago, I was with a friend who’s an avid chain smoker and he pulled out an electronic cigarette and began puffing. Slick little device was intriguing because it seemed very simple and elegant solution.

Soon after, I began to see and hear more about these products. Blu Cigs, certainly the most complex e-cigarette brands with advertising with Stephen Dorff, an attractive young actor, who was a smoker for over twenty years. In one TV spot, shot in black and white, is Steven James Dean (on the beach, for some reason), and says that he’s just so cool, using its Blu. The campaign centers on the slogan “rise from the ashes.” (I’ll save my criticism of this creative later).

My curiosity was piqued, of course, so I decided to investigate how the other brands in this seemingly competitive environment imagine. Their images reflect the name literally-with sexy hipsters dressed to impress and delight some steam at the club.

Ever smoke a different approach and is focused on mass so if you’re a girl-next type of bag or desperate souls like, this product is for you. Optima cigarettes created an image that is more similar to that developed in the back of the Berlin underground techno club. I guess they are allowed to smoke in these enterprises Star Trek.

And then there’s green smoke, the obvious way to play the non-sexual side of smoking. The list goes on, but you get the idea. Each of these brands is trying to find the right way to present themselves smokers. And they fail.

Let’s look at the market. According to the Centers for Disease Control and Prevention, 20% of adults smoke. That’s about 46 million people. Cigarette industry spends billions in advertising. Smoking costs the health care system in the United States about $ 190 billion a year. Passive smoking costs more than $ 10 billion. So, obviously, there is great potential here, and we just say the U.S. numbers.

I’ve never worked at a tobacco bill, but obviously, in my non-tobacco influence the brain that changes the mentality of this vast and diverse audience will be a massive enterprise. We are basically talking about every type of person on the planet. I can not help it, but the brand builder in me loves the idea of the problem.

And for manufacturers of these products, the revenue opportunity is huge. This means more money for creative agencies? Of course, Big Tobacco has many E-cigarette brands and you can not have one without the other, but at least it’s a change in the right direction.

This leads me to my criticism creative with Blu Cigs and others. Smoker’s life is very different than it was in the 50’s, when smoking was widespread and more widely accepted. Blu Cigs and others forget that fact. None of these brands look or seem genuine, not to mention reflect real life. It is a strange combination of the brand and style of the bad influences of commercials for alcohol energy drinks, plus a huge missed opportunity.

Where explicit images of real people who looked me in the eye and telling me your story? Maybe it’s okay to not do so, sexuality and desire all the time. Maybe, Blu CIGS missed using his celebrity as a representative of a celebrity. If they had humanized him, made him Relatable, he would have made more sense. Just put it in front of the camera and get him to talk, unscripted. He smoked for twenty years, and now he is using your product. This is quite convincing.

Despite this, all of these brands are not able to communicate healthy lifestyle. Even if they say they do it passively or entered in the wrong context. The product is innovative. I believe that the first brand to get it right will have a huge advantage. And, hopefully, they will not use the slogan, as cliché as “rising from the ashes.”

Big Tobacco accused in a new smoke screen

Posted by admin on December 3, 2012 None comments

Tobacco companies have been struck down for the second time for their failure to comply with the new plain packaging rules for a few days before the entry into force of the law.

Health Minister Tatyana Plibersek requires two industry giants – Imperial Tobacco and British American Tobacco (BAT) – surrounded remove watermarks from their cigarette papers, which appear to make it look more sophisticated.

The new rules require regular paper.

And she also said BAT, to stop inserting the obvious links tourist destination in the party coding on their cigarettes.

Coding for cigarettes read LDN, NY, AUS or OZ so, said the minister was designed smokers to think about “the glamour of travel.”

“There is a clear set of rules about what is allowed and if we allow changes, the tobacco companies will push the boundaries,” she told News Limited.

Its just one of a number of methods tobacco companies are already using to undermine the new rules, which on Saturday demanding that all cigarettes will be sold in a package with a gray health warnings cover 75 percent of the front panel.

Ms Plibersek attacked tobacco companies in September for making “joke” when they began issuing new simple packages that claimed, “It’s what’s inside that counts.”

Meanwhile, the anti-tobacco lobby group Action on Smoking and Health, said Imperial Tobacco was released this month, roll your own smokers with free cans stamped with the old original packaging as “Champion”.

But two weeks before the start of plain packaging, a new brand of cigarettes was launched under the name “Ice” – the name of the drug trafficking, according to ASH CEO Anne Jones.

Imperial Tobacco denied JPS Ice was a drug reference, with a representative saying that “its mint flavored cigarettes and the term ‘Ice’ is a common descriptor used by industry to distinguish similarly flavored cigarettes.”

The minister also accused Philip Morris of “deliberately trying to create chaos” around the introduction of plain packaging, refusing to exchange branded packets belonging to small businesses to easily packed bags.

Domenico Greco of combined and multimodal Business Association said the company was not a replacement package if small business is purchased less than 4,000 cigarettes a week.

That would leave a lot of businesses with $ 2,000 – $ 20,000 worth of dead stock “in the busiest time of the year,” and he called on the government to allow enterprises to eight weeks to sell the old original packaging.

The company did not address accusations Association head, but spokeman Chris Argent said:” Philip Morris is working with the federal government and retailers to ensure a smooth transition to plain packaging”

The Minister said that its main purpose is tobacco companies, and that small business of shopkeepers who break new cigarette pack just laws, which will come into effect on Saturday, is likely to be “educated” than fined up to $ 1 million in sales branded tobacco.

“If we had a large chain of deliberately flouting the rules of tobacco imported from abroad with all the wrong labels, then we would go for the maximum sentence,” she said.

“If we have a small mom and dad shopkeeper who got some old stock they sold two days after the due date, we will take education as a first step,” she said.