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Big tobacco makes one more attempt to advertise to kids?

In the 1950s and ’60s, it was open slather for tobacco companies to target teens.

“One of the most important customers today is the youthful novice in smoking,” declared an article in the Tobacco Trade Journal of Queensland in 1954.

“He is your customer of the future and special efforts should be made to cultivate him.”

The “model age” for smoking initiation in Australia, the industry held, was 15 years.

“Statistics show that 12 per cent of the population in Australia are teenagers and represent 16 per cent of the total purchasing power,” said the journal in 1964. “The importance of wooing this group with advertising is therefore evident”.

Teenagers the industry found, were “most responsive to advertising, and when it appears in a form slanted to them directly, it becomes a valuable springboard for capturing this lucrative market”.

But the steady attention of health authorities and governments, including creeping advertising bans from 1976 in Australia, have shut down these more blatant approaches to getting kids hooked.

Subtler techniques have been required.

In 1984, as Philip Morris tried to spruik its flagging Marlboro brand, it lamented that it lacked appeal to younger smokers and should “concentrate on sampling and promotion” to give young smokers “first-hand experience with the product”.

Across the industry, packaging was carefully designed to denote cool. Cartoon character Joe Camel, for example, was the “ambassador of smooth,” with his shades, his social ease and his high jivin’ lifestyle, and was clearly designed to be a hit with the kids.

Tobacco companies also got around advertising bans by sponsoring sporting events such as the Winfield Cup rugby league and Formula One to create an aura of success. Product placement in movies acted subliminally to reinforce the pro-smoking message.

“Incidental positive smoking imagery,” found the British Medical Journal, can “generate the … consumer effects attributed to … advertising”, and adolescent smokers were “particularly attuned” to it.

“Such imagery increased their urge to smoke and reduced their desire to quit.”

The latest challenge for big tobacco is plain packaging. Through FOI laws, perhaps, they are seeking once again to find a way to keep schoolkids and teens buying what they’re selling.


Big Tobacco Means Big Yields

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.

Big Tobacco accused in a new smoke screen

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.

Cigarette ads face extinction: What will Big Tobacco Do?

Australia recently implemented “plain packaging” laws that radically alter and regulate the cigarette packaging. Similar motions have been raised – and rejected – in the United States, while countries such as New Zealand and the United Kingdom have expressed an interest in the legislation. China, the largest cigarette market in the world, openly aims to completely ban cigarette advertising, and raising taxes on tobacco products. Within a few weeks, Russia’s second-largest cigarette market in the world can begin the persecution of tobacco, and that could spell trouble for top manufacturers.

The World Health Organization estimates that 39% of the 143 million people in Russia are habitual smokers. A pack of cigarettes Marlboro – production by Philip Morris International cost about $ 2 in the country. Russian health regulators proposed to increase the tax on cigarettes in 1000 to 510 rubles in 2012, to 4,000 rubles by the end of 2015. Berenberg Bank analyst Eric Bloomquist believes that raising taxes only can reduce cigarette consumption by 20% in Russian.

Producers clearly attacked the proposed legislation. BAT along with Philip Morris generate about a third of its global sales in Eastern Europe, Africa and the Middle East block. JT is based in the former Soviet Union, 46% of its global sales. Amount of money tobacco companies spend on lobbying for those who are trying to push the bill through. “Russia is the second-largest tobacco market after China, in spite of the huge difference in their population. So it is not surprising that the producers so much attack the new law,” said Dmitry Yanin, chairman of the Confederation of Consumer Societies.

Other U.S. cigarette manufacturers like Lorillard and Altria Group will not necessarily be hit as hard. The companies focus more on the U.S. market than Philip Morris and BAT. But mounting resistance to smoking cigarettes abroad can fuel the continuous ranging debate in the US.

Big Tobacco: a comparative analysis to investor’s growth and income

On Thursday, September 20th, Citigroup analysts upgraded shares of Altria Group (MO). The company raised its rating on the stock from neutral to buy and install $ 39.00/share target price. As a result, updates shares MO reacted very nice trade up 2.38% from the opening of trading on Thursday. However, I would like to take a closer look at the tobacco industry as a whole and not only to study income and operating profit from Altria Group, but to compare them with some other names in the industry, such as Philip Morris International (PM), Reynolds American Inc ( RAI) and Lorillard, Inc (LO).

Overview: Altria Group Inc.

Altria Group, Inc, through its subsidiaries, is involved in the production and sale of cigarettes, smokeless products and wine in the United States and abroad. It offers Matlboro online, smokeless tobacco products in Copenhagen, Skoal, Red Seal, Husky, and Marlboro Snus brands, cigars mainly in the Black and mild brand, and pipe tobacco. The company also produces and sells blended table wines under the Chateau Ste. Michelle and Columbia Crest names, and distributes Antinori wine and Villa Maria Estate, and Champagne Nicolas Feuillatte in the United States. In addition, it owns a portfolio of leveraged and direct finance leases rail and road transport, aircraft, energy, real estate and manufacturing. The company sells its products to tobacco primarily to wholesale customers, including distributors, large retail organizations, such as chain stores, as well as the armed forces. Altria Group, Inc sells its products to the wine to restaurants, wholesale clubs, supermarkets, liquor stores and mass merchandisers. The company was founded in 1919 and is headquartered in Richmond, Virginia.

Profit Margin comparison: Tobacco companies

Overall, in my opinion, tobacco industry has some of the best of the average rate of profit, I’ve seen especially when compared to some other branches I have written articles about. The average profit margin of the four companies featured is pretty impressive 23.41%. Over the past 12 months, Altria Group has demonstrated a profit of 25.68%, which puts the company second in three other companies I featured. Of the three other companies Philip Morris led the group with a profit margin 27,06%, Lorillard, Inc came in a strong third showing a profit of 24.08% and Reynolds American last with a mediocre return on 16.81%.

Operating margin comparison: Tobacco companies

As was the case with profits margins, and, in my opinion, the Tobacco industry also has one of the highest average operating margins I’ve seen since I started writing articles comparative some time ago. The average operating margin of four companies featured is quite remarkable 40.78%. The good thing about these numbers is the fact, Altria Group, Inc demonstrated a strong 42.23% operating margin in the past 12 months, but the bad thing is that the operating margin of Defense is only the third place in the group. From the point of view of the other three companies, the rooms are all very well. Lorillard, Inc is the leader of the pack, taking into account the company showed an operating margin of 44.52%, and the Philip Morris came second, demonstrating an operating margin of 43.44%. It should be noted that the Reynolds American is the last among the four companies featured just because the company only managed to show an operating margin of 32.92%.

Final Analysis

Of the four companies featured there are two strategies to consider when it comes to the tobacco industry: growth and income. All four of these companies have shown strong earnings and operating margin for the last 12 months, which from the point of view of growth, of course, the potential long-term investors should consider. In terms of the income of all four companies have shown a very solid crop, and should be considered on the basis of these figures. As of Friday’s close outs were the following companies: Reynolds American Inc. 5, 40% ($ 2.36), Altria Group 5,30% ($ 1,76), Lorillard, Inc 5,20% ($ 6.20), and Philip Morris 3.70% ($ 3.40). In my view, both angles have to give excellent returns over the next 3-5 years are based not only on each of the outputs of the company, but is based on a combination of each company’s growth and stocks income.

Big Tobacco spends less to sell a product

Tobacco business leaders spent less money on advertising and promotion of cigarettes and smokeless tobacco products in recent years, according to the latest data from the Federal Trade Commission.

Numbers released Friday show marketing of cigarettes fell by more than 5% to $ 8.05 billion in 2010, the latest year available, from a year earlier. Meanwhile, cigarette sales fell by about 3% to 281.6 billion cigarettes in the same period.

As in previous years, most of the money spent on cigarettes of about 81%, or $ 6.49 billion, was paid for discount retail and wholesale reduce cigarette prices to consumers, the average price for a pack continued to grow to $ 5, 73 in 2010. Consequence of the rise in prices of major federal tax increase on tobacco products in 2009, in conjunction with various state tax increases.

In 2009, the Food and Drug Administration have also been given the authority to regulate the industry, which include additional marketing restrictions, including a ban on tobacco companies sponsoring athletic, social and cultural events or offering free samples or branded merchandise. Several other changes in tobacco marketing is being challenged in federal court.

According to the latest figures, the money spent on marketing smokeless tobacco products fell by almost 10% to $ 444.2 million from 2009 to 2010, sales increased by 6.5%. The company has spent about 19%, or $ 95 million, a discount to wholesalers and retailers to reduce prices for consumers in 2010.

Advertising and promotion of smokeless tobacco have reached all-time high of $ 547.9 million in 2008, tobacco companies seek cigarette alternatives for sales growth as tax hikes, smoking bans, health problems and social stigma make the cigarette business tougher.

The share of Americans who smoke has fallen dramatically since 1970, from nearly 40% to 20%, according to the Centers for Disease Control and Prevention.

Big tobacco tax hike unfair

When you drill down through the hype, Proposition B’s outrageous and unfair 760 percent tax increase, the largest tax increase in Missouri’s history, is not about education or health care. It is a responsible policy of tax, of the correct size and scope of government and politicians to spend even more of your tax dollars. Just follow the money.

Misleading statistics. While this may serve as political cover and spark emotions, tobacco and health statistics are not relevant to the debate Prop B, because not a single cent of Prop B must be spent actually treatment of tobacco-related diseases. Not one penny. Shouldn’t a “sin tax” be used to cure the “sin”?

Education funds will be diverted – again. When it comes to the state budget, what is happening in the front door could just as easily go back. No matter what supporters say, the state budget is an annual game shell, and there is no guarantee Prop B would actually increase funding for education. Remember that all the broken promises of education funding, which came from lotteries and casinos? Do not be fooled again.

Prop B is destructive to the economy of the State of Missouri, because tobacco is cheaper than half of our states overseas and benefits Missouri retailers compared to other boundaries of the four states will be significantly reduced. This leads to a massive reduction in cross-border sales of tobacco and petrol, beer and other products, causing a small family business to close and people lose their jobs.

The middle class will pay $ 67 million tab. Proponents themselves predict if Prop B passes, 157 million fewer packs of cigarettes to be sold in Missouri every year. Leading economist expects lower sales of cigarettes only result in $ 67 million per year reduction in sales and other tax revenue for state and local coffers. There is no free lunch. The middle class will be paying this $ 67 million a year tab for all, as always.

Prop B sets the panel of nine unelected and unaccountable bureaucrats that unilaterally and without legislative oversight will monitor hundreds of millions of tax dollars. Prop B allows even those political insiders in the pocket of the tax money and use it to enrich their special interests friends.

Nowadays consumers in Colombia pays 46 percent tax rate ($ 1.39) by $ 3 packs of cigarettes, 37 percent ($ 1.47) by $ 4 pieces and 31 percent ($ 1.54) $ 5 pcs. Taxes include a 17-percent state tax on tobacco, $ 1.01 federal tax on tobacco and local and state sales taxes.

Just outside touch politician or special interest groups would dare say these tax rates are too low and should be massively increased.

State the problem requires a state wide solution. All Missourians benefit from essential public services, such as public education, so that all Missourians have to pay their fair share, and “skin in the game.”

Attempt to finance education of most tax minority populations, such as smokers, bad public policy, it lacks serious leadership, smacks of political desperation, and the ever-shrinking funding source does not generate nearly enough revenue to adequately fund education.

It would be like taxing railroad companies to pay for prisons or hospitals tax to pay for roads and bridges. It just does not make any sense.

Enough. You know, when you’re at home and watch the news or read the newspaper and think, ‘Wow, the government more and more out of control than ever? “Well, this is your chance to do something about it.

MPCA continues to support a reasonable increase in tobacco taxes, allowing Missouri retailers maintain their competitive advantage of our higher tax on taxable state border.

However, all Missourians, smokers and non-smokers, we can agree that while education deserves to be adequately funded and tobacco products deserve to be fairly taxed, Prop outrageous and unjust B 760-percent increase tax is too big and too dangerous.

California cigarette tax proposal sunk Big Tobacco

The influx of money from tobacco companies leads to a shift in the electorate to vote against the proposal cigarette tax

California Proposition 29 ballot initiative to add $ 1 tax on a pack of cigarettes, has failed to work in the state ballot on Tuesday. The vote was so close; it took more than three days to determine the outcome. That vote was so close, both sides were divided by 53,000 votes out of 3.8 million ballots cast on Thursday, said the powerful impact of cash in swaying voters.

In March, a statewide poll of 67 percent of Californians supports a tax that will fund the cancer and tobacco-related health research. The proposal was majority support in all age groups and political affiliations. But as the date of the vote approached, and the money from Big Tobacco glove, voter attitudes began to change.

March 1, the cost of those who are against it, to support 29 was $ 9 million, depending on the application state elections. From March 1 to May 18, they spent $ 40 million.

It costs coincided with a significant shift in the electorate in moderation. May 23 poll, published in the same group, non-partisan Public Policy Institute of California showed that support for Prop 29 has fallen 14 points in March.

The opposition has raised more than $ 47 million, or 96 percent of which came from the big tobacco companies and their subsidiaries, according to campaign finance nonprofit MapLight. Although exact figures are not expenses will be available until July, it is safe to assume that it is not 29, the main opposition groups have continued to spend heavily in the last few weeks before the vote.

“Tobacco companies will not spend more than $ 40 million during this period, not having received what they wanted, they seek a return on investment,” said Daniel Newman MapLight. “This is extremely spent on advertising to convince California, not necessarily to teach their proposals.”

Pro-Prop 29 coalition led by the American Cancer Society and the Lance Armstrong Foundation, $ 12.3 million spent only about one quarter more, as against.

However, the rejection of Prop 29 was not entirely due to the money, said Shaun Bowler, a professor of election and voter behavior at UC-Riverside.

“The intuition is that advertising has been effective,” says Bowler. “But there were these other things that she spoke, a kind of prevailing winds, and went to Big Tobacco, this time.”

On the one hand, the turnout was relatively low and relatively conservative, so the electoral bloc was predisposed to be against the new tax. On the other hand, the group to “no” vote by any initiative in a better position, since they only need to manage to raise doubts in the minds of voters. As a result of the initiative is not 60 percent of the time, says Bowler.

However, the large discrepancy of cash, coupled with a simultaneous shift in voter opinion, it is difficult to ignore.

“Of course, this is no accident,” says Newman. “The resources on both sides were very unbalanced; voters do not even get information.”

Tobacco crackdown

The crackdown on cold stores selling several types of tobacco that is harmful to health is a good move, especially the herb that gives one a temporary high.

Selling cigarettes to children should be a crime, with a hefty fine and I agree.

What is confusing is that cigarettes and alcohol are also harmful and why aren’t they confiscated?

These poor Asian workers find it hard like normal smokers to give up the habit since they have been using it for years – it feels like a bottomless pit. It’s freedom of choice and they are aware of the dangers, but nonetheless they continue. What they choose to put in their bodies is their choice. Who are we to tell them otherwise? Confiscate herbs that give the effect of narcotics and leave the tobacco for these people who can’t do without it.

Please, don’t misunderstand me. I am not promoting smoking, I am trying to get across what some Asian labourers that use tobacco have told me.

I had a friendly conversation with them and asked them what they would do if tobacco was eradicated. They said it was not easy since they had been on it since childhood and it was cheaper than cigarettes which they couldn’t afford.

I explained health hazards, but their reply surprised me: “Cigarettes and alcohol are also bad, why are they not seizing them? Allah Kareem.

It never dawned on me to think of this comparison and it got me thinking seriously. They are right! There are more pressing problems like prostitution, illegal money lenders, drugs and so on. What astonished me was that they were aware of the dangers, but the crackdown depressed them. It is a dilemma for them. I know I should not have empathised with them as they are harming themselves and can’t help it. But I did and started writing this because I felt their despair.

My question is: why are they not confiscating cigarettes, alcohol, hard drugs like cocaine, hashish, opium, etc, easily available here? What is worse, the cheap tobacco or hard drugs? I don’t advocate any of the above, but these labourers should have a choice of affordable tobacco since everyone else is enjoying this habit and much more.

The bottom line is: it is up to people if they choose to drink, smoke or use drugs. I am not here to judge or force my views on them, all I can do is educate them on the dangers.

If the government wants to ban, let it first get its priorities straight and ban everything that is harmful, not just concentrate on cheap tobacco or hassling Bahraini herbalists that deal with alternative medicine that has been here from time immemorial and has helped thousands in their ailments, including myself.

Concentrate on more profound problems like prostitution that is rampant, not forgetting terrible medical problems that come along with it. Eradicate these problems first, but leave the cheap tobacco for poor labourers whom Bahrain can’t do without!

Philip Morris – comedy of errors

I don’t get to see the dandy Marlboro men, riding a horse anymore – According to a popular survey, Philip Morris, formerly known as Lakson Tobacoo Company, spent an astounding $6.4 million on publicity in 1998, making itself the third largest business advertiser in Pakistan that year. Thanks to the good three minutes cigarette TV advertisements back in the 90s for giving us ‘the taste of adventure’. Come to think of it, I still cannot trace back to the time when my ears last heard a fast forward – shrill voiceover coming straight from an electronic advertisement saying, ‘Smoking is injurious to health – Ministry of Health’.

Adding to my miseries, I don’t even get to see the dandy Marlboro men, finely suited; riding horses, driving jeeps, climbing mountain peaks and attractively sliding cigarettes from a cigarette pack. To top it off, my dilemma worsens when I can’t figure out a better ringtone that can replace the spell-binding background music of the famous cigarette advertisements of our times.

In the case of cigarette advertisements, the ban in Pakistan was imposed from approximately, the year 2002; since then the government of Pakistan outlawed open advertisement of cigarettes through both print and electronic media.
Even when cigarette advertisements were not banned in Pakistan, public service messages against smoking were regularly telecasted on electronic media. One very famous commercial, of 2 minutes, 17 seconds, pretty long to bear at this point in time, we all remember; ‘Wasim bhai, ap thaktay nahi hain? Jee nahi,mein cigarette nahi peeta.’ (Even though, I can bet, that out of all the good things that he does, he definitely is a good smoker.) Today, the same celebrity can be juxtaposed, with a voiceover warning about the dangers of smoking. Hail the excessive media exposure and advancement in time that have changed our perception towards things.

Just recently, as I was going through a print magazine, my eyes caught the full page view of my long lost ‘handsome hunk’, surfing through the sea on a graceful horse. Yes, it was none other than ‘The Marlboro Man’. I instantly wanted to thank the company for bringing back my childhood memories, but the Tobacco Control Cell of Pakistan apparently, did not like the dude’s presence on mass media. The cell lifted a ban on cigarette advertisements under the Prohibition of Smoking in Enclosed Places and Protection of

Non-Smokers Health Ordinance, 2002, but Philip Morris did not even seem to research well before making such a major blunder. Good lord, Pakistan Tobacco Company – the major competitor of Philip Morris, did not follow their stars.
The Prohibition of Smoking in Enclosed Places and Protection of Non-Smokers Health Ordinance, 2002, governs multiple areas of tobacco control, including restrictions on public smoking, sales to minors, and tobacco advertising, promotion and sponsorship.

According to the Presidential Ordinance, “Notwithstanding anything contained in any other law for the time being in force, no person/company shall advertise tobacco and tobacco products in any media, in any place and any public service vehicle.” This makes the recent promotional advertisement campaign by Philip Morris, a clear violation of these rules and regulation.

In another recent incident, the company evaded millions of rupees worth of taxes by short payment of federal excise duty and sales tax in their imported Matlboro online. For which Federal Board of Revenue (FBR) has issued show-cause notice to Phillip Morris, asking them to pay evaded tax amounting, Rs300 million.

Despite the aforesaid cases, the giant cigarette company keeps on beating out products across the Fast Moving Consumer Goods (FMCG) spectrum. The tobacco company is also involved in Corporate Social Responsibilities (CSR). CSR promotes the view that “firms should strive to make a profit, obey the law, be ethical, and be a good corporate citizen.” Ironic, how a cigarette manufacturing company rates environment, health and safety management as their top priorities. Whereas, tobacco is the only consumer product that kills one half of its users when used as directed. Let’s not get into the debate, the idea that tobacco companies can be ethical while promoting a disease-producing product is fundamentally contradictory.

By Maheen Syed

Battling Big Tobacco: Physician activism vital on smoking’s new frontiers

It’s no coincidence that the small South American country of Uruguay had a physician as president when it began implementing some of the strongest tobacco-control policies in the world five years ago. Dr Tabaré Vásquez, an oncologist, became president there in 2005 and proceeded to turn the nation of just 3.5 million people into a leading example of how to try to curtail cigarette consumption.

He achieved this through methods that are widely acknowledged to work by those advocating for global tobacco control: banning smoking in public places; increasing taxation on and subsequently the price of cigarettes; banning advertising, sponsorship, and promotion by tobacco companies; restricting the use of misleading words on cigarette packs; and making smoking-cessation programs and products widely available.

But the tobacco industry fought back [1], with Phillip Morris bringing an international lawsuit against the government there, “not because Uruguay is an important market but because its policies could spread over the world,” explained Dr Walter Reyes Caorsi (Casa de Galicia Hospital, Montevideo, Uruguay) during a session on global perspectives on tobacco control at the recent American Heart Association (AHA) 2011 Scientific Sessions. Although Vásquez is no longer president of Uruguay, his successor, José Mujica, says he plans to continue the strong tobacco-control policies established by his predecessor

Next in line to face the wrath of this industry—and a widely expected lawsuit—is likely the Australian government, which is hoping to enact, by the end of this month, a law that stipulates that cigarettes can be sold only in plain packaging.

And that, Matthew L Myers (president, Campaign for Tobacco-Free Kids [CFTFK], Washington, DC) told heartwire at the meeting, means staying one step ahead of the cigarette companies, which will never stop attempting to fight those trying to effect change and which will keep pushing to expand their markets in any way they can.

“The evidence shows that restricting tobacco use is perhaps the most important way to reduce CVD globally,” says Myers. But he notes that it is important for people to understand “that we are at very different stages around the world: in developed nations, we are beginning to see tobacco use decline among both men and women. But in low- and middle-income countries, we are seeing both very high rates of smoking among men and, even more disturbing, dramatically increased smoking rates among women.”

And he warns that while the global public-health community’s focus is on trying to reduce the number of male tobacco users in developing countries—where frequently the majority of men smoke—the tobacco industry is unashamedly targeting women and children in those nations, most of whom do not currently smoke but whom industry sees as ripe for the picking.
What we are seeing now in emerging markets we’ve seen for 80 years in the developed world. The move to make smoking glamorous, to make smoking part of a new freedom, a new independence, a new economic wealth among women, is found in every low- and middle-income country that is beginning to prosper.”

According to Myers, health professionals have “huge political clout” that they don’t often put to use. “We have seen, where leaders of the health community become involved, demand change, support change, speak out, that in fact they can counteract the tobacco industry. Doctors need to be talking to their public officials about the impact of tobacco use and supporting the policies that we know work. They need to be speaking to the media. They need to be talking to their patients about both direct smoking and secondhand smoke.”

Johanna Ralston (CEO, World Heart Federation) agrees. Observing that not every country is as lucky as Uruguay to have had a physician as president, she said, “One of our priorities is to further engage the cardiovascular community in this space, so please do get more involved . . . cardiologists have an important role to play.”

Dr Hans Stam (CEO and executive director, Netherlands Heart Foundation) was equally as impassioned when he revealed the disaster that has befallen his country when a smoker became minister of health, rolling back a number of public-health policies limiting tobacco use. “Both the problem and the solution are outside the normal medical framework. But there is probably nothing we can do that will have a greater impact,” he urged.

“We need to remember that the tobacco industry won’t quit trying to change the perception of what smoking is really like,” Myers emphasized. “The task for all of us is to make sure that before they get there, we get there.”

By Lisa Nainggolan

Bloomsbury to launch ‘The Tobacco Keeper’

The Tobacco Keeper is for anyone who seeks to understand the Middle East. The book written by Ali Bader and translated by Amira Nowaira will be published by Bloomsbury Qatar Foundation Publishing on December 5.

Long-listed for the International Prize for Arabic Fiction (IPAF) in 2009, The Tobacco Keeper is an ambitious and exciting novel, written by one of the rising stars of Arabic literature. It spans five decades of turbulent Middle East history, making it essential reading ‘for anyone who seeks to understand the Middle East’ said Baghdad News in a review.

A former member of Saddam’s army, now working as a journalist, returns to Baghdad to unravel the mysterious circumstances surrounding the death of the celebrated violinist Kamal Medhat, whose body has been found near the Jumhuriya Bridge in the occupied city.

With the help of a book of poetry and a bundle of the musician’s letters, the journalist discovers an extraordinary secret. The man known as Kamal Medhat had lived three lives, under the assumption of three separate identities; as a man as a Jew exiled in Israel, a Shia Muslim while in Iran and a Sunni Muslim on his return to Iraq.

The Tobacco Keeper examines the malleability and instability of identity. It highlights the complexity of the social make up of Iraq, and the persistent lack of cultural homogeneity despite attempts by the Ba’athist regime to enforce it.

‘In The Tobacco Keeper Ali Bader displays the courage to reveal the Arab world’s political maladies. He has confirmed with this novel that he is not only one of the Arab world’s most remarkable writers, but also one of the major writers of world literature.’ Akhbar Al Adab, Cairo.

Ali Bader is an award-winning Iraqi novelist, essayist, poet, scriptwriter and journalist who has written ten novels, two poetry collections and several works of non-fiction. He fought in the Iran- Iraq war as a conscript and more recently worked as a war correspondent covering the Middle East. He lives in Belgium.

Tobacco blamed for GEPF’s performance

Investments in tobacco shares have been blamed for the underperformance of the Government Employees Pension Fund (GEPF), which contributes more than 90 percent of the R1 trillion in assets managed by the Public Investment Corporation (PIC).

The underperformance, however, was slight as the GEPF posted a 15.3 percent return for the year to March, compared with the benchmark performance of 15.5 percent. The 2010/11 annual report noted that this was the 100th anniversary of the PIC, but also marked the year in which its assets exceeded R1 trillion.

Chief executive Elias Masilela said that in terms of revised Treasury rules, the GEPF’s mandate now allowed for 5 percent of its assets to be invested offshore and 5 percent in Africa. It has R25 billion invested in offshore equities.

Daniel Matjila, the chief investment officer, reported that composite equities of the GEPF delivered a negative return of 20 basis points net of costs. “This was due to the poor performance of British American Tobacco, which was formally included in the equity benchmark,” Matjila said.

It acknowledged an overweight position in equities and bonds, but noted that the property portfolio – about 3 percent of GEPF investments – returned 15.7 percent, pushing the market value of the GEPF property portfolio to R31.2bn as at March this year, compared with R26.9bn a year earlier.

Among its properties are 50 percent shares in the Menlyn Mall in Pretoria and Cavendish Square in Cape Town and a 50 percent share in the V&A Waterfront, purchased last year. The latter’s value is just short of R5bn.

The listed property component produced a return of 22 percent against a benchmark gain of 15.4 percent. Listed property makes up 40 percent of its property portfolio, with the remainder being indirectly or directly held properties.

GEPF assets under management grew from R818bn to R923bn in the year under review. The PIC’s managed assets jumped to R1.032 trillion, from R910.9bn in 2010. This includes the assets of the Unemployment Insurance Fund (UIF), the Compensation Commissioner Pension Fund and the Compensation Commissioner Fund. The GEPF has 1.2 million contributors and 300 000 pensioners.

Between 2000 and 2011, assets under management had grown steadily, increasing at a compound rate of 15 percent a year against average inflation of 6 percent. This implies a real growth rate in assets of 9 percent a year over the period.

The UIF’s investments returned 9 percent for the year, an outperformance of the benchmark by 74 basis points, while the Compensation Commissioner Pension Fund’s assets returned 10.2 percent, 34 basis points better than the benchmark. The Compensation Commissioner Fund’s assets returned 8.4 percent, 42 basis points above the benchmark.

The Isibaya Fund underperformed its benchmark by 30 basis points with a return of 17.4 percent.

By Donwald Pressly

Big tobacco brings in top silk

THE federal government is set to get a taste of the legal might it could eventually face in court as it pushes ahead with its plan to force all cigarettes to be sold in plain packs from mid-2012.

British American Tobacco Australia (BATA) will wheel out one of the nation’s most expensive lawyers tomorrow to front a Senate inquiry examining Labor’s legislation.

Allan Myers QC will join BATA chief executive David Crow in giving evidence regarding a bill that will amend the Trade Marks Act.

The Gillard government hopes the change will protect plain packaging from a legal challenge.

“Allan Myers is one of Australia’s leading lawyers,” BATA said in a statement today.

“We are hopeful the (Senate) committee will listen to his considered opinion about these draft laws which, in our opinion, are simply bad law.”

The lower house passed Labor’s two plain packaging bills last month and they are expected to easily pass the Senate with the support of the Greens.

Big tobacco argues there’s no evidence to suggest the world-first move will actually deliver health benefits.

But a House of Representatives health committee has rejected that argument, finding “criticisms of the evidence base … were insubstantial and, on the whole, superficial”.

BATA today said the fact that Labor wanted to amend the Trade Marks Act meant Health Minister Nicola Roxon was not confident the Tobacco Plain Packaging Bill would stand on its own two feet.

“Plain packaging is such a risky piece of legislation in so many ways,” company spokesman Scott McIntyre said in a statement.

“Unfortunately, if it passes through the Senate, we’ll be taking the federal government to court to protect our valuable trademarks which are worth billions of dollars.”

Tobacco firms don’t want kids to smoke

Philip Morris USA, U.S. Smokeless Tobacco Co. and John Middleton do not want kids to be able to buy or use any tobacco products. We support our retail partners’ efforts to educate store clerks that it’s not OK to sell tobacco products to kids. And we encourage states to enforce their laws and hold store owners and clerks accountable for selling tobacco to minors.

Our companies supported the 2009 law giving the FDA the authority to regulate tobacco products, reduce underage tobacco use and enforce retailer compliance with laws limiting access to tobacco products by minors. Under federal law, it’s illegal to sell tobacco products to minors.

Additionally, we support the enactment of state legislation that would prohibit the purchase or possession of tobacco products by minors or the use of false identification by a minor during an attempt to purchase tobacco products. Oregon has such laws on the books, and they should be enforced.

Government, public health, parents and tobacco companies share the goal to eliminate underage tobacco use. We hope that the tobacco industry, the federal government and the states can work together to keep tobacco products out of kids’ hands.

Paige Magness
Director of corporate responsibility, Altria Client Services
Richmond, Va.

Big Tobacco sues FDA, smoking warning labels absurd

The head honchos at Big Tobacco recently filed suit in the U.S. District Court of Washington, D.C., against — interestingly enough — the federal government.

The plaintiffs, led by J.R. Reynolds Tobacco Company, allege that the government’s newly revealed, mandatory, graphic (read: grotesque) warning labels on cigarette packages — one of the extensive regulating powers granted the Food and Drug Administration by the Family Smoking Prevention and Tobacco Control Act of 2009 — infringe upon their constitutional rights.

I know what you’re saying — it’s a patently open-and-shut case, more smokescreen litigation, mere smoke-and-mirrors politics. You’re right. Big Tobacco is blowing smoke, for all intents and purposes.

But I’m breathing it — I’m with the plaintiffs.

I do buy what Big Tobacco’s selling. No — really, I do. Cartons of it. I don’t smoke like a chimney. I smoke like a burning pile of tires. I’ve smoked more than the Orient Express. I’ve ashed more than Mount Vesuvius.

As a matter of fact, comedian Bill Hicks routinely joked that he wouldn’t just go through two packs of cigarettes each day — he’d go through two lighters. I’m at three — no joke.

Incidentally, Hicks is dead. However, he didn’t die from the adverse effects of cigarette smoking. You know, the ones that deter me — and the approximately 2,200 new smokers every day, according to the Centers for Disease Control and Prevention — from lighting up.

But if you don’t know — if, like many smokers, you haven’t yet deduced that cigarette smoking can kill you — you’re in luck.

“With these new warnings,” Health and Human Services secretary Kathleen Sebelius clarified, decisively clearing the acrid, smoky air that has choked the American public for far too long, “every person who picks up a pack of cigarettes is going to know exactly what risk they’re taking.”

What a relief. It’s about time we were apprised of the risks of cigarette smoking. But what exactly are these new warnings? I’m chain-smoking, Secretary Sebelius — I’m just dying to know.

“These labels are frank, honest and powerful depictions of the health risks of smoking and they will help encourage smokers to quit, and prevent children from smoking,” Sebelius said.

Which, of course, is exactly what’s printed on cigarette packages now.

Something like this, I believe: “Surgeon General’s Warning: Let Your Government Do the Thinking, America. We Know What’s Best for You.”

For me, that’s frank, powerful and honest.

But not for the government, which asserts that cigarette packages ought to exhibit a graphic image of the effects of smoking, that warning labels ought to cover 50 percent of the packaging and that they ought to prominently display the smoking cessation telephone number, 1-800-QUIT-NOW, which “will allow it to be seen at the time it is most relevant to smokers, increasing the likelihood that smokers who want to quit will be successful.”

You know, because there’s a lot of digits in that phone number, and it has no discernible pneumonic device. Smokers are forgetful, after all — especially those trying to “quit now.”

What’s more is that the FDA has designed nine such warning labels, presumably to enhance its collectability. Take note, Fleer, Topps, Upper Deck — this is how you ought to market trading cards.

There’s a word for what this all amounts to: encroachment.

Another: absurdity.

Nevermind the constitutionality of the FDA’s newly revealed graphic warning labels. In Big Tobacco v. Big Brother, there’s something bigger at stake. We ought to choose sides carefully, as such, for the fact that we still have just that.

A choice.

By Phil Sweeney

Altria subsidiary to idle snus plant in York County

Altria Group Inc.’s U.S. Smokeless Tobacco Co. subsidiary is idling a manufacturing plant in York County that makes a special brand of smokeless tobacco called snus.

Production is being moved elsewhere as part of a consolidation, the company said.

The shutdown of the plant, which is near Busch Gardens, will affect 41 employees, said a spokesman for Henrico County-based Altria, the nation’s largest tobacco company and parent of cigarette maker Philip Morris USA.

The factory makes snus, a type of pouch smokeless tobacco that Philip Morris USA sells under the Marlboro brand name.

It is one of several alternative tobacco products the company has introduced in recent years as it and other cigarette makers look for products to replace declining U.S. cigarette consumption, especially smokeless brands that can be used where public smoking is banned.

The plant will be idled by the end of October, said Ken Garcia, an Altria spokesman. He said the company will try to place as many employees as possible in jobs at other operations.

“The facility itself is going to remain idle while the company evaluates its future needs,” Garcia said.

The company did not say where it would move the production. U.S. Smokeless Tobacco also has plants in Kentucky, Tennessee and Illinois.

Altria acquired U.S. Smokeless Tobacco’s parent company UST Inc., the nation’s top maker of snuff tobacco, in 2009 for $10.4 billion. The deal gave Altria a leading position in the moist smokeless tobacco category, which, unlike cigarettes, has seen growth in the United States.

While U.S. Smokeless Tobacco has its own snuff tobacco brands such as Copenhagen and Skoal, the company manufactured Marlboro Snus at the York plant for Philip Morris USA.

The York plant has been through several transformations as part of Philip Morris USA and Altria.

Originally opened in 1978 as a cigarette machine repair plant, the factory was later converted to manufacture another alternative tobacco product — the Accord, an electronic cigarette that Philip Morris test-marketed in the 1990s with little success.

The company closed the plant in 2004, but in 2007 it made a $100 million investment to equip the factory for production of snus.

The company added 33,000 square feet to building, making it 139,000 square feet.

The plant also was equipped with tools for making snus tobacco, including adding a cold-storage room to chill and store tobacco leaf at 40 degrees to prevent it from degrading.

By: John Reid Blackwell (804) 775-8123

Big Tobacco Is Smoking Hot at the FDA

WASHINGTON (CN) – The nation’s biggest tobacco companies are smoking hot at a new FDA rule that will force them to put graphic images – such as a dead body on an autopsy table and diseased body parts – on cigarette boxes and ads. Big Tobacco says such forced speech is unconstitutional.
“Such ‘warnings’ are unprecedented,” the companies say in their federal complaint. “Never before in the United States have producers of a lawful product been required to use their own packaging and advertising to convey an emotionally charged government message urging adult consumers to shun their products.”
The five plaintiffs include R.J. Reynolds, Lorillard, and the Liggett Group. They sued the U.S. Food and Drug Administration and the Secretary of Health and Human Services.
The rule, which falls under the Tobacco Control Act, will take effect Oct. 22, 2012. It will require all cigarette packages made, starting a month before the deadline, to display the new text and graphic warnings, which must take up 50 percent of the front and back panels of a cigarette box and the top 20 percent of cigarette ads, according to the complaint.
The warnings must contain messages, such as “cigarettes cause cancer” and “smoking can kill you,” as well as “color graphics depicting the negative health consequences of smoking.”
The tobacco companies say the proposed images are not based upon facts.
“They were to appear in color and they included cartoon images, as well as disturbing, technologically enhanced photographs that used actors to maximize an emotional response from viewers,” the complaint states.
The cigarette makers say the FDA acknowledges that the warnings were selected “not to inform consumers of facts that they do not know, but rather to make consumers ‘depressed, discouraged, and afraid’ to buy tobacco products.”
They claim that FDA Commissioner Margaret Hamburg acknowledged that the warnings are meant to turn every pack of cigarettes into a mini-billboard for the government’s anti-smoking campaign.
“This is precisely the type of compelled speech that the First Amendment prohibits,” the companies say. “While the government may require plaintiffs to provide purely factual and uncontroversial information to inform consumers about the risks of tobacco products, it may not require plaintiffs to advocate against the purchase of their own lawful products.”
They cite a 1977 Supreme Court ruling that prohibits the government from compelling companies to use their private property as mobile billboards.
Commonwealth Brands and Santa Fe Natural Tobacco are the other two plaintiffs.
The companies say the new rule violates their First Amendment rights and the Administrative Procedure Act. They want the government enjoined from enforcing the rules.
Big Tobacco has challenged several aspects of the Family Smoking Prevention and Tobacco Control Act since it became federal law in 2009. It has initiated legal battles across the country over the law, claiming that provisions that regulate how tobacco may be advertised and marketed, and the mandated warnings, restrict speech.
The tobacco companies in this case are represented by Noel Francisco with Jones Day.


Tobacco companies will try to get Ontario lawsuit dismissed

TORONTO — Tobacco companies targeted in a $50-billion lawsuit by the Ontario government are expected to argue they’re outside the province’s jurisdiction.

The director of the anti-smoking group Ontario Campaign for Action on Tobacco, says Premier Dalton McGuinty’s office told him a motion is set to be introduced in Superior Court on Monday.

Michael Perley says he has been told the 14 companies named in the suit will argue the province has no jurisdiction to sue them because they’re controlled by foreign firms.

Ontario is taking legal action under a provincial law that allows the tobacco companies to be sued to recover health care costs linked to smoking-related diseases.

A 2005 Supreme Court of Canada ruling upheld a similar law passed in British Columbia.

Governments in Ontario, B.C., New Brunswick, and Newfoundland and Labrador have filed cost-recovery lawsuits against tobacco makers.

The tobacco companies did not immediately respond to emails.

Lorillard: The Only U.S. Tobacco Stock Worth Owning

How many times in the last three years have we, as an investing community, heard the familiar tune to trade up in quality and buy companies that are large cap names with strong balance sheets and good international exposure?

Guess what? The worst performing stocks over the last five months have been in the industrial sector. Tobacco stocks, while higher than they were several years ago, still offer the unique combination of earnings growth and consistently increasing dividends that few sectors in the S&P 500 can boast. Better yet, these stocks have been consistent performers no matter what the mood of the market.

The key? Find the names that have strong balance sheets and consistent revenue growth so that they generate increasing greater revenue streams that lead to greater earnings and higher dividends in a low growth economy.

I have maintained for several quarters now that, despite popular fanfare, Lorillard (LO) is a significantly better buy than its two competitors Reynolds (RAI) and Altria Group (MO). This past earnings report, while a little under the radar since everyone has been watching the industrials so closely, separated LO from its underperforming, overdebted tobacco peers in a way that has not been seen in years. MO was a core holding of mine for several years between 2008-2011; I recently sold MO at around 25 and bought LO in the 70s only after doing a good deal of research. I would like to share my research as I see continued upside in LO’s share price and dividend while MO and RAI seem to be topping out at these prices.

A couple facts: Valuation-wise these stocks look similar even though LO is seeing earnings revisions modestly higher while RAI and MO are seeing lower revisions due to higher costs and lower sequential cigarette shipments than in recent earnings reports. LO is valued at approximately 13x the average estimate for next year’s earnings while RAI is also valued at approximately 12.5-13x next years earnings estimates. MO is valued slightly lower at around 12-12.5x next year’s average earnings estimate.

The difference is simple. LO has 2 billion in cash, 1.7 billion in debt, and 1-1.2 billion in annual free cash flow. LO pays its dividend out of cash that it generates through its core cigarette business, which is shipping 5 million more cigarettes per year and increasingly taking market share from the only two significant industry peers, Reynolds (RAI) and Altria (MO).

These trends are powerful and likely to be sustained if not accelerated given that LO is only 10% of a market where MO is approximately 50% and RAI is nearly 30%. Altria has 12 billion in debt, approximately 4 billion in free cash flow, and about 2 billion in cash on its balance sheet. Reynolds has around 5 billion in debt and about 1-1.3 billion in free cash flow. Reynolds and Altria both pay around 80% of their free cash flow in dividends while LO only pays about 65%, despite having the stronger balance sheet, better revenue growth, and superior debt profile.

Do the math or, better yet, look at the companies’ respective history of returning cash to shareholders via buybacks and dividends over the last several years. LO has increased its dividend by 30% for three straight years and increased its share buybacks, while RAI and MO have increased their respective dividends by less than half that rate during the same time span; MO has even had to suspend its share buyback program and take out an additional 3 billion line of credit (a free cash flow machine?). MO and RAI have had no market share gains of more than .5-.7% over the last couple years and have relied on price increases and cost cutting to accomplish the revenue gains that their with new products could not.

Additionally, Reynolds and Altria are still trying to grow their revenue to sustain and grow their dividends despite their stagnating-to-declining core cigarette businesses which boast margins in the 40-50% range. Their answer? Borrow at 6-8% to buy lower margin, slower growth businesses in the smokeless and chewing tobacco industries. LO’s business plan is to keep growing its high margin cigarette business and ignore the possibility of using cash for any primary use other than the two best ways tobacco companies can return money to shareholders: Through dividends and buybacks.

Lorillard just increased its share buyback program in the last year to around half a billion after increasing its dividend by 30%. LO is a high growth cash cow in a market that is a regular monopoly and it is the only company at a 15 billion dollar market cap who can continue to grow and take market share without having to borrow or compromise its 35-45% operating margins which come in at 3-4x that of the average S&P 500 company. LO also relies on youth and blue collar smokers more than RAI and MO, whose primary consumers consist of older smokers. Youth and blue collar smokers are two groups of individuals that are seen as likely to smoke at similar or higher rates in the near future.

This is one of several reasons (in addition to LO being a smaller company) that the LO management team has put greater emphasis on the innovation of new and better products, like the recently successful maverick cigarette, while RAI and MO are trying to minimize losses with price increases.

The catch? While the supposed Achilles heel here is that since the FDA has been mandated to conduct a review of menthol flavored cigarettes per the 2008 bill called the Tobacco Regulation and Control Act, a possible menthol ban could be looming. To be fair, a menthol ban would essentially crush LO overnight as nearly 95% of the companies revenue comes from its flagship Newport brand.

But let’s look at this issue reasonably. I manage money and trade, but I also have a law degree and follow politics very closely. LO is a 15 billion dollar company that is employing thousands of workers and making payment under the tobacco settlement agreement between the big three (prorated to market share). Translation: The more money that LO makes, the more money municipal, state, and federal authorities will see (100 billion in tobacco bonds have been issued at the state level already).

Also, the original 2008 legislation banned coconut, chocolate, and other flavors which companies could use to entice kids to smoke tobacco, but did not ban menthol. Why? Because the co-sponsors of the bill knew that a bill banning menthol was dead on arrival given how popular the cigarette is in minority communities and that is a cash cow for every broke state and local government imaginable.

Additionally, the most misunderstood part of the 2008 legislation – besides the way it side-stepped menthol – is the mandate that it passed to the FDA by requiring further studies on the effect that menthol cigarettes can have on addiction and health. The FDA panel, which was commissioned to study the effects of menthol, is obligated to give a recommendation to regulatory authorities, but the authorities have no timetable whatsoever on which they must act on the recommendation, and no obligation to follow the recommendation whatsoever.

By they way, the FDA panel, which did not even recommend banning menthol, has said that none of their core conclusions will be changed in subsequent revisions that may or may not be done. Also, the only studies that have been commissioned so far show that menthol poses no greater health risks than other forms of tobacco, and there is similarly no evidence in any existing studies showing that menthol is more likely to lead to addiction either.


I don’t think conventional valuation models work here. It’s easy to say that LO has a 4.5-5% dividend and 10-12% growth, so a valuation of 12.5-13x next year’s average earnings estimates is rich, but remember, this company is growing in an industry that is a regulated monopoly, since no market or advertising of tobacco products is allowed anymore. LO is also generating free cash remains at 75-80% of its growing annual revenues. I’d bet this company continues to be rewarded with a premium valuation.

Given that the company is steadily increasing market share, has a pristine balance sheet, a great management team, and a relatively small market cap, this should be a safe and lucrative bet.

Quake Disruptions Hit Japan Tobacco Results

TOKYO—Japan Tobacco Inc. on Thursday reported year-to-year revenue and operating profit declines in the first quarter due to the disruption of its tobacco sales in the wake of the March 11 disaster. But the company doesn’t expect there to be a prolonged impact and forecasts full-year profit gains on its solid performance overseas.

The company, commonly known as JT, also separately said it agreed to buy a leading tobacco maker in Africa, in a deal valued at $450 million, marking the company’s latest steps to ramp up its global presence.

The world’s third-largest tobacco company by sales volume after Philip Morris International Inc. and British American Tobacco PLC, said its group operating profit declined 9.5% to ¥71.98 billion ($922.9 million) in its fiscal first quarter.

While JT was already suffering from year-to-year declines in sales in volume after a tobacco tax rise took effect Oct. 1, the March earthquake and tsunami took a further toll on its performance. JT had to temporarily suspend shipments of all its cigarettes brands due to a shortage of filters and other supplies. It resumed tobacco shipments with a focus on certain key brands from April.

Since then it has then streamlined its lineup to a total of 73 brands, compared with 97 previously. All 73 brands will be available without shipment limitations from Aug. 1.

The company’s net profit rose 2.4% to ¥22.71 billion in the April-June quarter from a year-earlier profit of ¥22.18 billion. But the gain was somewhat exaggerated by a lower corporate tax burden.

JT posted revenue of ¥588.18 billion for the quarter, showing a 0.1% decline from ¥588.55 billion a year earlier. Effective from the just-ended quarter, JT has decided to provide revenue data excluding the tobacco tax, which makes up a large proportion of tobacco prices and often helps distort the size of its business. Tobacco taxes currently make up about 60% of the price of a ¥410 pack.

Meanwhile, JT said it will acquire Haggar Cigarette & Tobacco Factory Ltd., which has more than 80% market share in the Republic of Sudan, aiming to tap into demand in a market with potential for growth. Hagger Cigarette & Tobacco also has a presence in South Sudan. The deal will be completed in November.

JT, which previously didn’t issue a detailed full-year earnings outlook, said it now estimates an 11% rise in net profit to ¥161 billion and a 0.5% gain in revenue to ¥2.446 trillion for the fiscal year ending March 2012.

“We recognize the quake impact was only a one-off, special factor for this fiscal year and the impact was mostly realized in the first quarter,” said JT’s executive deputy president, Munetaka Takeda.

JT estimates its global operations centered on flagship brands such as Winston and Camel will continue to serve as its profit engine for the full year. Its April 2007 purchase of Gallaher, which owns the Benson &Hedges and Silk Cut brands, helped the company in markets such as Russia and the Middle East.

Mr. Takeda also said a share buyback is an option that JT would take if the Japanese government, the biggest shareholder of JT, moves to sell its stake.

His comments come amid talks in political circles that the ruling Democratic Party of Japan is leaning toward unloading a portion of its 50.01% stake in JT, to fund quake and tsunami reconstruction. Some lawmakers have also said that the government may consider another tobacco tax increase.

JT has said it will use retained earnings to repurchase its own shares with the aim of broadening its management options, leaving open the possibility that it will go ahead with a share buyback to avoid share dilution should the government sell its JT shares.

By Hiroyuki Kachi

Spanish price war drags on Imperial Tobacco

Spain’s tobacco price war is continuing to drag down profits at Imperial Tobacco, in spite of the cigarette maker winding back forecasts of the impact from intense competition.

In June, Imperial, which owns the Davidoff, West and Gauloises cigarettes brands, warned that full-year adjusted operating profits in the region could be as much as £110m ($180m) lower than previously forecast.

But on Tuesday, the FTSE 100 group said an improvement in prices in the region and a one-off £20m saving at its logistics arm would lessen the full-year impact of the price war to £70m.

In January, Spain became the latest European country to implement a ban on smoking in public places. The country’s struggling economy further compounded the situation for tobacco companies, with smokers having less disposable income to fund their habit.

In response, Imperial was forced to cut its prices in Spain to compete with British American Tobacco’s drive to promote its Pall Mall cigarette brand, resulting in Imperial’s profit warning last month.

Updating the market for the nine months to June 30, Imperial on Tuesday said that tobacco net revenue had risen by 2 per cent, in spite of a 3 per cent fall in cigarette volumes.

Increases in volumes of habanos cigars and cans of snus – powdered tobacco that is placed between the teeth and lip – failed to prevent the group reporting a slip of 2 per cent in total stick equivalent volumes.

“We grew volumes of our global strategic cigarette brands Davidoff, Gauloises Blondes and West with good performances in emerging markets and we also achieved further excellent progress with JPS,” said Alison Cooper, chief executive.

“We made strong fine cut tobacco gains in a number of EU markets and we also increased volumes of our luxury Cuban cigars, despite difficult conditions in Spain.”

Davidoff volumes rose by 6 per cent, driven by increased popularity in Taiwan, Ukraine, Saudi Arabia and Russia.

Imperial recently brought forward plans for share buy-backs and in May announced the launch of a programme to repurchase £500m of shares a year.

Analysts had expected the tobacco group to begin buybacks in 2012, after it had paid down debt related to its 2007 purchase of Altadis to about 2.5 times earnings before interest, tax, depreciation and amortisation. At the end of last year, net debt stood at 2.9 times ebitda.

Shares in Imperial Tobacco, which have risen by 15 per cent over the past 12 months, was down 4p at £21.48 in London on Tuesday.

By Mark Wembridge
Financial Times

BAT Australia is offering free luxury holidays in Fiji to shopkeepers who push its products

The tobacco company offered 100 holidays on the Coral Coast, Fiji’s most exclusive enclave, to IGA stores and other retailers to sell more cigarettes.

To be eligible, the shopkeepers had to sell at least 10,000 cigarettes between 11 April and 5 June – or lift sales by five per cent.

To win, retailers also had to promise never to run out of stock of BATA cigarettes. With pictures of sandy beaches, golf courses and exotic Fijian dancers, the BATA competition promises winners “guest speakers and industry experts from the world of retail, themed dinners, a range of great activities, five-star luxury accommodation plus opportunities to win other amazing prizes.”

The holiday is taking place this weekend, from 22-25 July.

It is illegal for tobacco companies to advertise directly to consumers or run consumer competitions – but they can run promotions for retailers, in what anti-smoking groups say is a “loophole” that must be closed.

BATA are the makers of Winfield, Dunhill, Benson & Hedges, and Holiday. Anti-smoking group Ash Australia described the promotion as exploitation of retailers by the tobacco industry. Ash chief Anne Jones said: “The retailers are being used as the front line for the tobacco industry. These are incentives for retailers to sell products that cause disease, and they should be banned.”

However, BATA spokesman Scott McIntyre said the promotion was legal. He added: “BATA values the relationships we have with our retailers – which is why we have organised a number of industry experts and guest speakers to engage with them about best-practice retailing, improving customer service and growing their business.

“The program applies to 100 of the 30,000 plus retailers in Australia.”

The Sunday Telegraph can also reveal rival tobacco giant Imperial has given retailers a “cheat sheet” on campaigning against the federal gov- ernment’s proposed plain-pack laws, due to be voted upon in August.

The Imperial Tobacco pamphlet urges retailers to claim they are afraid of the plain-pack laws being extended to other products.

“Next could be food and drink. Where will it stop?” the Imperial pamphlet asks in a series of pointers for retailers to include in their submissions to a House of Representatives committee presently considering the plain-pack laws.

“When sending your submission, you may choose to include views such as: There is no evidence anywhere in the world that plain packs will work (and) if cigarettes are not on display, plain packaging does not make sense and is bureaucracy gone mad,” the pamphlet said.

Imperial did not respond or comment on The Sunday Telegraph’s questions.

By Claire Harvey
The Sunday Telegraph

Tobacco’s influence runs deep

SACRAMENTO — When Assemblyman Isadore Hall shelved a bill last week that would have required most workplaces to be smoke-free in California, it was just a small example of the tobacco industry’s long reach into the California Legislature.

Hall, chairman of the Government Operations committee, killed the bill, SB 575, when the author, Sen. Mark DeSaulnier, D-Concord, objected to an amendment that tobacco companies sought: an exemption for employer-owned businesses.

Hall, a Los Angeles Democrat, has received $7,800 in campaign contributions from tobacco companies.

Though the amount in campaign contributions from tobacco companies to Hall was a relative pittance, his relationship with lobbyists was probably the more important factor, said Tracy Westen, CEO and founder of the Center for Governmental Studies.

“Campaign contributions open the door, and once the door is open, it’s a full-court press,” Westen said. “And tobacco lobbyists present some of the most sophisticated arguments you’ll find.”

A report released Tuesday by the American Lung Association in California showed that large tobacco companies wielded their influence in subtle and blatant ways as they tried to maintain their grip on the state’s booming cigarette market.

Over the past decade, Big Tobacco — led by Philip Morris — spent nearly $100 million lobbying legislators and contributing to campaigns in California. A large chunk of that — $62 million — went into defeating Proposition 86 in 2006, a statewide initiative that would have imposed a $2.60 tax on each pack of cigarettes.

Tobacco spending, while significant, pales in comparison to the expenditures of the California Teachers’ Association, which threw $211.8 million into campaigns from 2000-2009, according to a report by the Fair Political Practices Commission. The California State Council of Service Employees spent $107.5 million, and Pharmaceutical Research and Manufacturers of America spent $104.9 million.

The difference is that tobacco is protecting a single product, while teachers and unions have a varied slate of issues they pursue, Westen said.

“This is the most highly regulated product in terms of safety — we know more about its dangers than virtually any other product,” Westen said. “The more we know its dangers, the more they feel they have to spend to convince us we ought not to regulate or tax it.”

Philip Morris USA spokesman David Sutton declined to comment on the report.

Over the most recent two-year election cycle, from 2009-10, tobacco interests spent $9.3 million on lobbying and campaign contributions in California. Most of the recipients are Republicans — all 54 current legislators who have never taken money from tobacco interests are Democrats.

But tobacco companies know the value of winning over Democrats, who have wide majorities in both houses of the Legislature.

DeSaulnier, the author of the smoke-free workplace bill, which was approved in the Senate, said he was surprised when he found it in Hall’s committee, rather than the Labor committee, where it was originally headed.

“He asked for it,” said DeSaulnier, a former restaurant owner who helped write some of the state’s earliest local ordinances against smoking in the workplace as a Contra Costa County supervisor.

DeSaulnier said that he objected to Hall’s amendment because he has seen how larger businesses use the employer-owned exemption as a cover to skirt the law. He had already provided an exemption for tobacco shops.

“I thought that had taken care of that concern,” DeSaulnier said. “To be honest, I don’t know why he inserted that amendment.”

Hall did not respond to a request for an interview.

The main target for tobacco companies is the perennial effort to raise taxes on cigarettes and other tobacco products. Increasing taxes — which is paid for with a higher price tag on cigarettes — reduces consumption and prevents children from starting to smoke, said Paul Knepprath, vice president of advocacy and health initiatives for the American Lung Association in California.

“So they spend heavily to defeat any increases in the tobacco tax,” he said. “They know that California is the No. 1 consumer market for cigarettes in the country. They know we have the ability to set the standard for tobacco policies that reduce consumption and smoking. So, they know it’s important to protect their interests.”

In 2009, as the Legislature considered a cigarette tax increase in budget talks, the tobacco industry spent $750,000 in lobbying expenses in the second quarter alone, from April through June.

It is all being done with the expectation that their interests are covered in the Capitol, said Knepprath.

“The reality is that in politics and in public policy, money talks,” Knepprath said.

“If it didn’t, Big Tobacco would not be spending the way they do to influence the legislative process.”

Philip Morris was also a big player in the voter-approved Proposition 26 ballot initiative campaign last fall, contributing $1.75 million to the measure. It required a two-thirds vote in the Legislature on any attempt to raise fees.

Why was tobacco interested? Perhaps to head off a movement among a number of cities, including San Francisco, to adopt so-called cigarette mitigation fees.

Those fees would have provided revenue to clean up after cigarette butts, which advocates say are proven toxic pollutants.

But they would have resulted in higher prices for cigarettes and reduced smoking — taboo for tobacco companies.

By Steven Harmon

BAT Kenya’s first half pretax profit up 14.2 pct

NAIROBI, July 7 (Reuters) – British American Tobacco Kenya posted a 14.2 percent rise in pretax profit for the first six months of the year, buoyed by higher sales.

Pretax profit rose to 1.6 billion shillings ($17.83 million) from 1.4 billion shillings in the six months ending June 2011, the company said.

Gross turnover rose by 50 percent to 9 billion shillings from 6 billion shillings in same period of a year before, while total turnover rose by 3.1 billion shillings to 9 billion shillings, the cigarette manufacturer said.

“Profit before tax improved by 14 percent reflecting higher domestic and export volumes, the impact of cut rag (semi-processed leaf) exports offset by lower domestic pricing and resultant margins arising from the need to protect our competitive position,” BAT said in a statement.

The company said underlying revenue on domestic and export cigarettes grew 15 percent reflecting higher total volumes coupled with an exchange rate benefit on exports revenue.

Earnings per share rose to 11.65 shillings from 10.23 shillings in the first half of 2010, the company said.

BAT has proposed to pay an interim dividend of 3.50 shillings per 10 shillings ordinary share.

By Mark Denge

Philip Morris force Gillard to back down on its plain-packaging legislation

International tobacco giant Philip Morris will take legal action to try and force the Gillard government to back down on its plain-packaging legislation.

“We don’t take legal action lightly, but we have no other option. We believe we have a very strong legal case,” spokeswoman for the company, Anne Edwards, told the Australian newspaper on Monday.

The legal action by the company, which manufactures brands such as Marlboro and Peter Jackson, will occur under a bilateral investment treaty between Australia and Hong Kong.

The company will argue that because it’s Australian operation is owned by Philip Morris Asia (PMA), which is based in Hong Kong, the plain-packaging legislation will adversely impact upon an investment protected by the treaty.

The notice of claim to be served on Monday will start a three-month period of negotiation and if there is no resolution the matter will proceed to arbitration.

“PMA will be seeking the loss in value of its investments in Australia that will result from plain packaging,” Ms Edwards said.

“The damages may amount to billions of dollars.”

Federal Health Minister Nicola Roxon has pledged to introduce and pass the legislation this year and have it operational by January.

The legislation will ban all commercial branding from cigarettes, mandating olive-green packaging with prominent health warnings.

Tobacco settlement said to be near

A settlement appears in the works that could allow major tobacco manufacturers, such as R.J. Reynolds Tobacco Co., to keep billions in disputed Master Settlement Agreement money.

Multiple media sources reported Wednesday that 46 state attorneys general are reviewing a proposal to resolve the manufacturers’ claims that they have been hurt by nonparticipants of the landmark 1998 MSA agreement.

The four largest U.S. tobacco companies and the attorneys general agreed in 1998 to an MSA that would settle the states’ Medicaid lawsuits against the tobacco companies for recovery of their tobacco-related health-care costs. The agreement protected the companies against liability from lawsuits over the harm caused by tobacco use. Also, the companies agreed to curtail or cease some tobacco marketing practices, as well as to make payments to the states for some of the medical costs of people suffering from smoking-related illnesses.

The N.C. Attorney General’s Office and Reynolds declined to comment on the potential settlement.

The ripple effect of any settlement could be huge, even beyond its impact on the manufacturers, since many states use MSA money to pay for health care and economic-development initiatives. Some states have issued billions of dollars in bonds that are supported by the MSA money.

The MSA requires participating manufacturers to pay $206 billion to the states to resolve any liability related to health-care cost lawsuits.

It also set marketing limits on the companies — a pivotal part of the dispute.

The MSA has enabled cigarette makers that are not a part of the MSA to sell their products for less than the bigger manufacturers, grabbing significant market share. According to the National Association of Attorneys General, the U.S. market share of nonparticipating companies was 6.5 percent in 2010.

The manufacturers have said a provision allows them to pay less if they have lost market share to nonparticipants.

Since 2006, Reynolds has paid $12.34 billion in settlement money and also withheld $2.95 billion that’s been placed in an escrow account. It released $445 million from the account in February 2009 but still considers it part of the amount in dispute.

In July 2010, a panel of three former federal judges was established to arbitrate the nonparticipating-manufacturer adjustment for 2003. Reynolds said its portion of the 2003 money was $615 million. Reynolds spokesman David Howard said the case is in the discovery phase of the process.

Christopher Growe, an analyst with Stifel Nicholas & Co., estimates Reynolds could keep up to $3.5 billion in withheld payments, while Altria Group Inc., the parent of Philip Morris USA, could keep up to $2 billion.

“This apparent settlement would not only satisfy the arbitration over the 2003 MSA payments, but potentially lead to a complete settlement handling payments through 2010 as well,” Growe said.

One beneficiary of the MSA money is the Golden Leaf Foundation, created by the legislature to distribute tobacco funds to aid programs in agriculture, job creation and retention, and workforce preparedness. Another recipient is the state Health and Wellness Trust.

For example, Golden Leaf received $68 million in fiscal year 2010. From that money it provided $2.25 million toward buying equipment for projects involving Caterpillar Inc., NS Aviation LLC and Timco Aerosystems.

Dan Gerlach, president of the foundation, had no comment on the potential settlement.

Missing out on the disputed money also could remove a potential source of revenue for the state. The Republican-led General Assembly approved transferring $17.5 million of the foundation’s settlement money to the General Fund for the next two fiscal years.

Growe said he has expected a settlement to be reached since a third-party analysis consistently has backed the manufacturers’ view of lost market share.

Growe said some manufacturers may not get a refund, but rather a credit toward future annual payments.

Either way, Growe said, resolving the dispute in this manner would help stimulate the manufacturers’ bottom line and share prices, at least in the short term.

Growe said he expects the nonparticipating manufacturers to fight what settlement is reached.

“This is no doubt a blow to small manufacturers and Native American tribes selling cigarettes,” Growe said. “But it levels the playing field from a pricing standpoint and could serve to lift the deep-discount prices in the market.”

By RICHARD CRAVER (336) 727-7376

Tobacco giant wants to ship more PHL products

Having captured 92 percent of the Philippine cigarette market, Philip Morris Fortune Tobacco Inc. (PMFTC) on Monday bared plans to maximize the capacity of its Batangas plant by exporting more of the company’s products.

“The company believes it has satisfied the local demand. It is now focusing on increasing the export of excess production to other affiliates in the world,” said PMFTC official for public affairs and contributions Amy Eisma on the sidelines of the 5th Bright Leaf Awards in Pasay City.

PMFTC spokesperson Elmer Mesina explained that the company has identified new sites for tobacco expansion in Visayas and Mindanao “to support the company thrust of expanding exports to other affiliates.” It is also testing soil compatibility and weather conditions in Visayas and Mindanao, PMFTC said.

The company is now exporting raw tobacco to South Korea and Malaysia.

PMFTC also said cigarette shipments to Thailand have remained steady despite a pending case filed by the Philippine government before the World Trade Organization regarding Bangkok’s policy on imported cigarette taxes.

Meanwhile, anti-smoking advocates have called for an increase in cigarette tax and make smoking less affordable for children and teenagers. Smoking is a P400-billion a year industry in the Philippines and ends up worsening poverty, according to government statistics.

City blames Big Tobacco for cigarette black market

City Hall for the first time is directly blaming Big Tobacco for the burgeoning black market of bootleg cigarettes on city streets.

Newport maker Lorillard, the country’s No. 3 tobacco company, consciously oversupplies the Poospatuck Indian reservation on Long Island — knowing full well bootleggers buy in bulk and then flood city neighborhoods with unstamped, cheap smokes, a city official told The Post.

“If Afghanistan is the seed of the heroin trade, then Lorillard is like that with cigarettes,” said Eric Proshansky, a deputy chief in the city Law Department. “Lorillard knows its cigarettes are being bootlegged into the city, and they have refused to stop supplying the reservation, and that’s because they know . . . [the trade is] boosting their sales tremendously.”

Marlboro maker Philip Morris discontinued business with wholesalers supplying the Poospatucks in 2008, leaving Lorillard as the chief supplier, according to the city.

In four months in 2010, 2.25 million cartons were sold to Indian shops on Long Island — 1.7 million of them Newports, according to the city. Officials said 5 percent of the national volume of Newports flows through the reservation, whose tribal council declined comment.

Proshansky said the black market was “absolutely” part of Lorillard’s marketing strategy.

“Newport is a big brand in New York City, and so this is a way of getting cheap cigarettes into the city,” he said. “If cigarettes are expensive, people don’t buy them.”

A pack of legal, taxed, state-stamped Newports goes for upward of $14 at a legitimate Manhattan retailer. The Post purchased illegal, unstamped Newports at a 125th Street bodega last week for $6.50. The clerk said the butts originated with “the Indians.”

The cigarette maker remains defiant.

“We have spoken to Lorillard on many occasions and asked them to stop supplying the Poospatucks, and they have refused,” Proshansky said.

The incendiary comments are the city’s first salvo against Big Tobacco.

When asked if the city would follow its tough talk with a precedent-setting lawsuit against the nation’s oldest tobacco company, Proshansky would only say, “We never talk in advance about what we’re trying to do.”

The city is currently suing an array of Poospatuck shops for illegally selling smokes to non-tribesman, and, separately, it is suing wholesalers for supplying untaxed smokes to the reservation.

The prospect of a legal battle against Lorillard is murky. The cigarette giant legally sells smokes to wholesalers, who supply the Indian shops — which are immune from a $4.35 state tax.

The tax dodge may soon end.

A state law passed last year would compel tribes to pony up and collect taxes on smokes sold to nontribe members. But the Indians sued, lost and last week appealed to keep the law from taking effect immediately.

The measure would also limit the number of cigarettes that could be made available to tribes based on their populations.

It is illegal to sell untaxed smokes to nontribe members — but without enforcement, the practice continues, with buyers hauling away as many cartons as they can carry.

Bootleggers buy in bulk from the Indians — for as low as $37 a carton of unstamped Newports, $78 less than the $115 they would fetch in NYC legally.

The butts usually end up in poor neighborhoods like Harlem and the South Bronx.

The state and city lose $420 million in uncollected taxes because of the illegal pipeline.

Officials also fear the bootlegged butts end up in the hands of minors.

“Untaxed cigarettes undermine the efforts to protect the public’s health and prevent youth from starting smoking,” said Susan Kansagra, of the city Health Department’s Bureau of Tobacco Control.

The Greensboro, NC-based Lorillard — which reported net sales of $5.9 billion last year — insists it’s doing nothing illegal.

“Lorillard has strictly followed the New York tax law and regulations and has only sold cigarettes to state-licensed wholesale dealers, not directly to Native American retailers,” said spokesman Gregg Perry.

“New York has always had the power to shut down the trade in untaxed cigarettes on Native American reservations but has chosen not to do so.”

Big tobacco wants Malaysia to lobby Australia

Big tobacco has enlisted the aid of a former United States ambassador to the World Trade Organisation (WTO) to help it fight the Gillard government’s plan to introduce plain packaging for cigarettes.

Peter Allgeier, who now works for a Washington-based consultancy firm, has been lobbying Malaysia to pressure Canberra to drop the plan, ABC television reports.

“There are several opportunities forthcoming for Malaysia and other like-minded governments to persuade Australia not to proceed,” Mr Allgeier has written in an email to Kuala Lumpur.

The former ambassador argues Malaysia could raise concerns with the WTO’s technical barriers to trade committee or at the next meeting of the organisation’s intellectual property rights council.

In January, AAP reported Philip Morris wanted a clause added to the Trans-Pacific Partnership Agreement (TPPA), now being negotiated, which would allow the company to sue the federal government if Australia introduced plain packaging.

Philip Morris has lobbied the US trade representative regarding the TPPA.

Health Minister Nicola Roxon said she has not been approached by Malaysia on the issue, but said Mr Allgeier’s appointment demonstrated just how far big tobacco is prepared to take its fight.

“But we won’t be frightened off because big tobacco is hiring lobbyists or looking at ways to influence the action we’re taking,” she told ABC television.

She said it was not for her to answer whether Malaysia has been enlisted because of its current negotiating power over the proposed asylum seeker swap deal with Australia.

The government has received plenty of international support over its plain packaging bid, and Ms Roxon said she was not about to listen to any of the detractors.

“Most countries would think that the laws we make for our country are a matter for us.

“So it’s neither here nor there if particular congressmen or parliamentarians in other parts of the world don’t like what we’re doing.”

Ms Roxonis also confident the legislation stands up to legal scrutiny, amid threats from big tobacco to take the government to court over intellectual property violations.

“What the big tobacco companies are doing with all this very noisy huffing and puffing is making clear to most of the community their fears that this measure will work,” she said.

“It will affect their profits and that means it will save lives.”