ZIMBABWE has raked in more than US$7 million from tobacco sales since the marketing season began last month, the Tobacco Industry and Marketing Board has said.

In a statement, TIMB acting chief executive Dr Andrew Matibiri said since the beginning of the marketing season more than two million kg had been sold.

“A total of 2 090 234kg from both auction and contract systems with an average price of US$3,46 have been sold at the value of US$7 235 981,” he said.

Dr Matibiri said some of the crop was rejected from the auction and sales floors owing to a number of factors that included bad handling, being too wet and poor quality.

Deliveries on the auction floors have been slow because the marketing season started two months earlier than normal resulting in most farmers being caught unawares as they were still busy working in the fields.

During the opening week of the marketing season, sales averaged between 300 and 400 bales per sale.

The crop’s prices at the auction floors have been firming since the onset of the selling season.

Analysts have attributed the firming of the tobacco price to the floods that hit Brazil recently resulting in reduced yield in that country.

Zimbabwe, this year targets to sell 75 million kg of the golden leaf compared to the 56 million sold in 2009.

Out of last year’s sales, the country realised more than US$168 million and this year 17 000 farmers have registered with TIMB to grow tobacco compared to the 10 000 during the 2008/9 farming season.

The remarkable increase in tobacco growers is attributed to huge returns that farmers realised from the previous season.

NEW DELHI: Government is all set to ban foreign direct investment (FDI) in cigarette manufacturing. A cabinet note towards this end has been prepared by the commerce and industry ministry and circulated among the other ministries of the cabinet committee on economic affairs (CCEA).

A ban on FDI in manufacturing of cigarettes will affect existing foreign players’ future investment plans in the country. However, it will not affect their existing investments in Indian ventures. At present, three major global players — British American Tobacco (BAT), Japan Tobacco and the Altria Group — have large investments in India. The cabinet note also proposed to prohibit franchise operations for foreign companies to manufacture cigarettes for domestic consumption. It has proposed to allow FDI in SEZs for exports.

According to the note, all the major ministries have given their approvals to ban FDI in cigarette manufacturing. In its comment, which was sent to the commerce and industry ministry on February 3, finance ministry supported the ban. While, the Planning Commission has also approved the ban, health ministry suggested to include cigarette in the list of activities that are prohibited for FDI. At present 100% FDI is allowed in the sector with prior government approval.

If the cabinet approves the proposal, it will affect the plan of Japan Tobacco, which owns brand like Camel, to increase its stake in Indian venture from 50% to 75%, with an investment of $100 million. At present, the rest 50% in the company is owned by KK Modi group.

Similarly, BAT wants to increase its stake in ITC from 31.8% to 51%. Earlier in 1996-97, BAT’s move to hike stake was thwarted by the financial institutions’ nominees on the company’s board. Now, if the ban is approved by CCEA, BAT cannot increase its stake in ITC and it will continue to be a fully professionally-managed company without any promoter. In Godfrey Philips India, Altria group owns 25% stake. The company has recently launched its iconic brand Marlboro in India.

The move to ban FDI in cigarette manufacturing was initiated through a cabinet note dated January 23, 2009. The CCEA, however, deferred the proposal and decided for further inter-ministerial consultation. As the inter-ministerial consultation is now over, the commerce department has moved the note to CCEA again for approval.

Philip Morris has announced that it will file a law suit in Oslo, Norway, aimed at stopping a ban on the open display of cigarettes mandated by Norwegian law; a ban similar to one in effect in Iceland, and introduced in Ireland, all Canadian provinces, and New South Wales, Australia. But they seem to be blowing smoke with a nutty legal theory, says the public interest law professor behind litigation against against tobacco who has been called “Mr. Antismoking.”

Philip Morris plans to argue that the Norwegian law violated the European Economic Area (EEA) Agreement; an agreement which allows Norway, Iceland, and Liechtenstein to participate in the Internal Market in Europe. The Agreement generally bans “quantitative restrictions on imports and all measures having equivalent effect” [Article 11]. However it explicitly exempts “measures justified on grounds of public morality . . the protections of health . . .” [Article 13]

Philip Morris says it plans to argue that Norway’s law is an import restriction which is not justified by “protections of health” because it hasn’t yet produced any drop in cigarette consumption. But, says public interest law professor John Banzhaf, this argument makes no sense for several reasons.

FIRST, the Agreement exempts measures justified on the basis of health, but does not require that there be definitive proof that they work. Norway, like many other countries, mandates a wide variety of warnings, disclosures, etc. designed to protect public health, and it would be virtually impossible to validate their effectiveness.

Indeed, any such legal requirement would make it much too expensive to pass new health measures, argues Prof. Banzhaf. Furthermore, such a reading of the law would prevent any governmental experimentation with new health measures. That apparently is what Philip Morris argues, since their press release states that “we believe that the government should focus on proven techniques.”

SECONDLY, says Banzhaf, the display ban has been in effect in Norway only since January 1, 2010. It is highly unlikely that any measure seeking to reduce cigarette consumption by changing public perceptions would not only have a measurable impact in less than three months, but also that the effect could be scientifically validated within that very short period of time. Any such construction of the EEA agreement would place an impossible burden on virtually any health measure, says Banzhaf, much less any laws being justified under the Agreement based upon more general grounds like “public morality.”

In Iceland, which prohibited the public display of tobacco products in 2001, the percentage of smokers (aged 15 and above) was slashed from 25% in 2001 to only 20% in 2005 — a remarkable 20% decline. But Philip Morris says this doesn’t show that such bans are effective health measures because, in their words, “other tobacco preventive measures [were] introduced at the same time,” so there’s no way to single out the effect of the display bans.

As a THIRD point, Banzhaf suggests that this may be the silliest argument of all. It suggest that a government which might adopt 2 or 3 different health measures related to smoking at the same time — e.g., display bans, stronger warnings, graphic images, etc. — could never prove that any one was responsible for a decline in consumption, and so all such measures would be illegal under the EEA Agreement if Philip Morris has its way.

“Philip Morris almost certainly knows the law suit has virtually no chance of success. But filing it may serve as a warning to other countries considering similar display bans that Philip Morris will try to delay them in court, and make defending its law suits very expensive,” says Banzhaf.

The ultimate irony is that cigarette companies would not worry about display bans, much less file law suits directed at such measures, unless they believed that the bans would in fact cut sales, and ultimately their profits. Perhaps the best argument that the bans are justified by health concerns is the very fact that Philip Morris is so upset about them, says Prof. Banzhaf, Executive Director of Action on Smoking and Health (ASH).

PROFESSOR JOHN F. BANZHAF III
Professor of Public Interest Law at GWU,
FAMRI Dr. William Cahan Distinguished Professor,
FELLOW, World Technology Network, and
Executive Director and Chief Counsel
Action on Smoking and Health (ASH)
America’s First Antismoking Organization
2013 H Street, NW
Washington, DC 20006, USA
(202) 659-4310 // (703) 527-8418

http://ash.org/

Since gaining a tremendous share of market from supermarkets and drug stores in the last decade, the c-store industry’s share of the tobacco category, particularly cigarettes, has been stable. But last April’s increase in federal excise taxes (FET), further restrictions on public smoking and changing consumer preferences are stirring the pot.

On the radar: Some headway by the drug channel in cigarette sales, and greater consumer interest in other tobacco products (OTP), which is lifting sales at tobacco outlet stores and infiltrating convenience store strategies.

According to industry market share figures provided by c-store wholesaler Eby-Brown Co., the c-store/gas segment holds a 67-percent share of the cigarette market, up from 55 percent in 1998. Tobacco outlets account for 10 percent of the market — the same as a decade ago — and supermarket and grocery combined account for 9 percent, down from 22 percent. The drug channel accounts for 5 percent, up 1 percentage point, while liquor stores and “all other” retail sites maintained market share at 3 percent and 6 percent, respectively.

Sales in the last 10 months, though, have been shaken by unexpected, fast-changing shifts in consumer demand following the FET increase.

At United Refining Co. of Pa., operator of more than 290 Kwik Fill/Red Apple Stores and 25 Smoker Outlets tobacco stores, cigarette volume fell quickly, as smokers cut back or went to other sources, such as the Internet or Native American stores, after the FET increase, according to Cliff Brazie, director of retail marketing at the company. However, thanks to rethinking the generic category, aggressive promotional activity and additional buydowns, the retailer recovered to within 3 percent of last year’s cigarette volume.

Sales in Kwik Fill/Red Apple Stores were strong last January through March, fell drastically after federal and state tax increases, whimpered through the summer, then began moving again last September. “We moved as many promotions out of Philip Morris and R.J. Reynolds as we could,” Brazie said. “The Indian reservations can’t tap into these promotions, so offering $2 off a pack was significant for our customers.”

Lorillard’s buydown allowances also helped the chain, especially on the Newport brand. Particularly powerful was the introduction of Liggett’s Pyramid, which Kwik Fill/Red Apple began promoting in June. The stores displayed 38- by 48-inch signs outside that read “You deserve a bailout too,” offering Pyramid at a very competitive price.

“They were the least expensive cigarette I could offer our customers,” Brazie said.

Despite such creative marketing by c-store operators, the industry continues to buzz about Walgreens’ attempts to increase its cigarette sales and the drug channel’s threat. Total tobacco and tobacco accessory unit sales in drug stores (with at least $1 million in sales) grew nearly 12 percent for the 52 weeks ending Nov. 28, 2009, according to Nielsen. Unit sales of cigarettes were up nearly 14 percent, while chewing tobacco unit sales rose 10 percent.

Indeed, drug store customers spend almost twice the amount on cigarettes as on cold/allergy remedies, according to The Nielsen Co. Tobacco also accounted for nearly $3 billion in sales as of August 2009, an increase of 18 percent from the year before.

But some industry players see little threat from drug stores. “It will be a battle between the c-store channel and the tobacco outlet channel to win over the consumer who has been abandoned by drug, grocery and mass merchant,” said Frank Davoli, director of purchasing for South Bend, Ind.-based Richmond-Master Distributors Inc., a supplier that owns and operates 10 Bonkers c-stores and 37 Low Bob’s Discount Tobacco stores, plus has another 85-plus Low Bob’s Discount Tobacco licensee sites.

Shoring up the discount tobacco channel: growing demand for OTP products. OTP sales were up nearly 5 percent in c-stores for the 52 weeks ending Oct. 31, 2009, according to Nielsen. Behind this growth was a 5.7-percent increase in cigars, 7.7-percent gain in papers and 4.1-percent bump in smokeless tobacco.

The April FET increase has some consumers moving to smokeless, cigars and pipe tobacco, which roll-your-own smokers are using instead of higher-priced cigarette tobacco, Davoli noted. Also on Davoli’s watch list: Camel Snus, which gained wider distribution last winter, and new dissolvable products by R.J. Reynolds Tobacco Co.

The tobacco store channel has shrunk in recent years, accounting for 12 percent of the tobacco market today, down from a high of 16 percent in 2001, after which manufacturers no longer offered the channel special allowances based on the size of their inventory. Even so, survivors are positioned to gain market share, as they offer more variety and adults shop freely in stores that require consumers to be of legal age to enter, Davoli noted.

To keep up with the quick-changing dynamics of the tobacco category, Richmond-Master Distributing changes tobacco planograms daily. “It sounds nuts, but we went through a three-to-four month period where even the manufacturers were caught short on OTP products,” Davoli said. “We thought the excise tax increase would wipe the OTP category out, but we saw the opposite. We learned a big lesson: Consumer moves are not always predictable and we better move fast.”

One prime example was huge increases in pipe tobacco sales. “We reset the roll-your-own and pipe tobacco section five times between April and January,” Davoli said.

The emergence of large-filter cigars also happened quickly. “As little cigars increased at retail more than $1 a pack, many shoppers shifted to large-filter cigars,” Davoli said. “That is a segment that popped up overnight. If you were an operator who was aware of that, you gained new customers. But reaction time had to be very quick.”

At United Refining’s convenience stores, Brazie has seen “a nice increase” in sales of cigars of all types and of Copenhagen Wintergreen, “which has soared. Our customers see cigars as a treat they deserve, unlike cigarettes. Now Swisher and other OTP makers are stepping up with promotions and new products, making the segment very competitive.”

A change in the tobacco company’s strategies has led Brazie to adapt new cigarette sets in the convenience stores and Smoker Outlet sites. “We had 8 feet of cigarette packs and 10 feet of cartons in our Smoker Outlet sites. We are adjusting our sets to provide more room for new opportunities in OTP.

“Manufacturers are emphasizing OTP now, wanting us to take out cigarette SKUs,” he said. “They want us to scale back on cartons and scale up on OTP — for good reason.”

By Barbara Grondin Francella, Csnews
March 01, 2010

Raising prices in spite of the recession buoyed profits at British American Tobacco, which makes Dunhill, Kent and Lucky Strike cigarettes.

Revenue for the year to December 31 rose 17 per cent to £14.2bn, boosted by acquisitions and favourable foreign exchange movements as well as higher cigarette prices. Pre-tax profit rose almost 11 per cent to £4.08bn.

Like-for-like volumes fell 3 per cent, but this was outweighed by rising prices for most of BAT’s brands in most countries.

Paul Adams, chief executive, said: “We do think the worst is over in terms of declining industry volumes and downtrading. ”

Sales of three out of BAT’s four core brands grew, but Kent, the company’s premium brand, suffered a 4 per cent drop in sales.

Diluted earnings per share rose 11 per cent to 136.3p and the total dividend rises 19 per cent to 99.5p after a final of 71.6p (61.6p). Rival Philip Morris International announced this month that it would return more than $12bn (£7.9bn) to shareholders via a buy-back. But BAT said its share buy-back programme would remain suspended.

“We’ve given more money to shareholders in dividends this year than in dividends and a share buy-back last year,” said Ben Stevens, finance director. “We’re not indicating that there’s a big acquisition out there, we’re just committed to maintaining our triple B-plus credit rating.”

Mr Stevens said that if BAT was to make acquisitions they would be in North Africa and Asia.

BAT, world’s second-largest listed tobacco company, said it was on track to achieve its target operating margin of 34 per cent by 2012. This year, it saved £239m of its £800m cost-saving target for 2008-12.

The shares fell 51p to close at £21.80.

Swedish Match North America is stepping up its efforts to introduce Americans to snus, the traditional Swedish dipping tobacco.

The Chesterfield County-based company has expanded by sixfold the number of stores where it sells snus, even as it ended a joint venture with Lorillard Tobacco Co. to test demand, company officials disclosed yesterday.

This winter, it has crews at Vail and Aspen, Colo.; Jackson Hole, Wyo.; and other ritzy ski resorts, passing out silvery sample cans of its General brand snus.

Snus, which is a type of snuff made from tobacco cured by steam instead of heat in the usual American way, could become one of the hottest new tobacco products on the market. It has a different aroma than moist snuff and does not require users to spit.

Last week, Michael E. Szymanczyk, chairman and chief executive officer of the nation’s No. 1 tobacco company, Henrico Countybased Altria Group Inc., said expanding spitless tobacco products was a top priority.

Altria sells a brand of snus using its potent Marlboro brand name, while No. 2 Reynolds American Inc. sells snus named for its flagship Camel cigarettes.

But Stockholm-based Swedish Match AB thinks it has an important edge — it has been making snus for more than 200 years.

“It’s safe to say that there is a demand for the real thing from Sweden there in the U.S. market,” Lars Dahlgren, president and CEO of the parent company, told analysts yesterday.

“We see that in e-commerce channels, we see that in stores, and they are well-informed U.S. consumers. They are prepared to pay a premium for their real authentic and Swedish type of products,” he added.

Swedish Match’s now-ended joint venture with U.S. cigarette-maker Lorillard Tobacco Co. experimented with marketing snus from cigarette racks in Georgia and Ohio.

“The market has moved on a bit since we went into that,” Swedish Match AB Vice President Emmett Harrison told the analysts.

He said the company now sells snus from refrigerated cases in more than 600 stores, rather than jockeying for space on the same shelves as cigarettes. Snus keeps fresh longer when refrigerated.

The number of stores carrying Swedish Match’s snus is up from just 100 stores at the start of the year, Rich Flaherty, Swedish Match’s locally based president-U.S. sales, said by e-mail after the conference call ended.

Swedish Match believes the U.S. market for snus is running at about 16 million to 18 million cans a year, Harrison said. In contrast, Americans buy more than a billion cans a year of moist snuff.

Meanwhile, Swedish Match expects overall U.S. demand for snuff will continue to grow, probably by about 5 percent this year.

Swedish Match plans to launch peach-flavored Timber Wolf brand pouches next month, Dahlgren said.

Earlier, Swedish Match reported worldwide profit last year rose 39 percent to $435 million, as net sales rose 13 percent to just less than $2 billion.

In the United States, its sales of moist snuff rose 5.9 percent during 2009, buoyed in part by its sponsorship of Ron Hornaday’s No. 33 Chevy in the NASCAR Camping World Truck Series as well as of the Bassmaster fishing series.

The company’s mass-market cigar sales rose 23 percent in 2009, while premium brands increased 3 percent.

Its loose-leaf chewing tobacco sales declined 9.3percent, hit hard by steep tax increases in Texas and Florida.

SALT LAKE CITY — Should state lawmakers raise the tobacco tax or dip further into the rainy day fund to save education? A powerful business group says lawmakers should do both, but the governor and some legislators aren’t so sure.

It’s not often the state’s leading business group, the Salt Lake Chamber, calls for new taxes; but that’s exactly what it did Wednesday.

The Chamber is urging state leaders to hike the tobacco tax $1 from its current rate of 69 cents. It says that will raise about $40 million a year and help prevent potential higher education layoffs of nearly 1,400 faculty members and staff.

“My fear is that all this investing we’ve done in education over the last decades is going to come to a halt and we’re going to lose that competitive advantage that we have in our workforce, which is our No. 1 tool we have in our toolbox for economic development,” says Jeff Edwards, president and CEO of the Economic Development Corporation of Utah.

The Chamber also wants lawmakers to tap into the rainy day fund for $50 million to meet new, lower revenue projections.

“Ladies and gentleman, it’s raining. We need to make sure that we take care of our children and our young adults. We need to make sure that we’re not taking a step backwards,” says Lane Beattie, president and CEO of the Salt Lake Chamber.

Many lawmakers seem ready to look at either option.
“Increasing the tobacco tax from its current rate of 69 cents per pack of cigarettes to the national average of approximately $1.40 would generate an estimated $40 million for the state.” -Salt Lake Chamber

“The battle over there is how much is it going to be? So, is a dollar the amount in the Senate?” asks Rep. Paul Ray, R-Clearfield. “I’d like to think we’re going to be able to keep it as a dollar as we go through; when all is said and done, we’ll come out at $1.70 a pack here in Utah.”

“When you have a business organization step up and call for targeted tax hikes, I think it’s significant,” says Senate Minority Leader Pat Jones, D-Salt Lake City.

Others worry about drawing too much from the rainy day fund, or upping anyone’s taxes.

“Where do you get the money from? And if by taking the money away from taxpayers, and thereby chill the recovery that were occurring, then you just spiral further in debt,” says Sen. Lyle Hillyard, R-Logan.

Gov. Gary Herbert reiterated his “no new tax” stance Wednesday, telling the Deseret News he’s prepared to veto a cigarette tax. He said it would hurt the state’s economic recovery. Instead, the governor favors taking more from the rainy day fund and delaying some road projects.

February 24th,
By John Daley

WASHINGTON — A group of Republican and Democratic lawmakers has joined a U.S. tobacco industry battle with the Harper government over accusations Ottawa is seeking a global ban on American-style blended cigarettes.

The fight, which was triggered last year by Canada’s new anti-smoking legislation, has escalated amid claims Health Canada is now pursuing international restrictions on flavouring ingredients that remove the harsh taste of burley tobacco in Marlboro and other popular U.S. brands.

The conflict features tobacco industry charges of Canadian “duplicity” and claims that “rogue” bureaucrats have a hidden agenda to eliminate American-style cigarettes from the global market.

Health Canada, meantime, contends Canada’s goal is simply to bar cigarettes with flavours — such as vanilla, licorice and chocolate — added to appeal to youth.

In the past month, seven members of Congress from districts in Kentucky, Virginia and Indiana have written to Prime Minister Stephen Harper asking him to intervene. Specifically, they fear Ottawa is using Canada’s restrictions as a model for new prohibitions being considered for the World Health Organization’s Framework Convention on Tobacco Control.

“We believe Canada’s approach has gone too far,” Indiana congressmen Baron Hill and Brad Ellsworth wrote in a Feb. 4 letter to Harper. “If your government pushes these provisions through the FCTC process, the result could devastate the burley farmers in our state.”

The dispute with Canada began with Parliament’s passage of the Cracking Down on Tobacco Marketing Aimed at Youth Act, which prohibits the addition of flavours designed to market cigarettes and little cigars to children and youth.

The bill bans a variety of candy and fruit-flavoured tobacco products with flavours like tropical passion, cherry or chocolate.

But U.S. lawmakers and producers of several American-style brands — including Marlboro, Camel and Winston — said the Canadian law also sideswipes cigarettes blended with burley, a harsh-tasting air-cured tobacco.

They contend “mild” flavourings added to those brands mitigate the naturally sharp taste of burley, without adding any of the flavour’s characteristics to the cigarette itself.

Canada’s legislation is “so broad that it bans traditional blended products containing burley tobacco, even though they taste like tobacco, and not like the confectionary or fruit flavours which could be marketed to young people,” Representative Ed Whitfield, a Kentucky Republican, wrote in a separate Jan. 25 letter to Harper.

Philip Morris International, one of the world’s largest tobacco companies, has been heavily involved in organizing opposition in Congress to the Canadian law.

A bigger concern for the cigarette makers, however, are draft guidelines for the international Framework Convention on Tobacco Control that were circulated at a meeting in Amman, Jordan last October.

Canadian officials were among the “key facilitators” for a working group that proposed nations “prohibit or restrict the use of flavouring substances” in cigarettes.

“From the perspective of public health, there is no justification for permitting the use of ingredients, such as flavouring agents, which help make tobacco products attractive,” according to a copy of the draft guidelines.

Health Canada spokesman Philippe Laroche said Canada was one of 24 countries involved in the WHO working group. The draft guidelines “are not modeled after any one country’s particular approach” to tobacco control, he said.

But Kentucky farmer Roger Quarles, president of the Burley Tobacco Growers Co-operative Association, called Health Canada “a rogue government agency” that is being “less than forthcoming” about its actions.

“Health Canada is once again showing duplicity on the issue of banning blended cigarettes that contain burley tobacco,” said Quarles.

“The fact is Health Canada’s efforts, if successful, will wipe out an entire category of legitimate tobacco products under the guise of a candy-flavored ingredients ban.”

Quarles said the better approach is a more limited ban on ingredients with “characterizing flavours” that make cigarettes taste more like candy than tobacco. The U.S. Congress passed legislation along those lines last year.

“Canada could have followed this responsible model, but Health Canada has a larger agenda and that is to take American-style cigarettes off the market,” Quarles said.

In a response to questions about the Canadian legislation first posed last October, Health Canada said U.S. manufacturers “may be required to reformulate” their cigarettes to continue selling them in Canada.

Some of the ingredients known to be used in American-style blended cigarettes include vanilla, honey, chocolate, coconut and maple, Laroche said.

The addition of those flavours make the cigarettes “more appealing to youth and this is exactly the kind of tobacco industry marketing tactic that we want to prevent in order to protect our vulnerable youth,” he said.

While American-style cigarettes represent less than one per cent of the market in Canada — where milder flue-cured tobacco is favoured among smokers — but they are dominant in other places around the globe.

About 80 per cent of the U.S. burley crop is exported.
By Sheldon Alberts, Canwest News Service

SATIRIST Auberon Waugh argued that smokers are heroes because they die young and don’t clutter up hospitals, put a terrible strain on their children, or spend everything they have on nursing home fees.

The late great Waugh is quoted in The Cigarette Book as suggesting that “passive smoking” is no more a danger to health than “passive hamburgers” or computer games.

Here at last is a book by Camden authors Chris Harrald and Fletcher Watkins that celebrates the glory of one of the most disgusting, dangerous habits known to man, with fascinating nuggets of information and a wry sense of humour.

Famous writers like Camden Town’s own dear Beryl Bainbridge, as well as Martin Amis and journalist Lynn Barber, own up to their fag addiction.

Ms Bainbridge is described as a “true folk hero” among smokers. Her closely observed novels owe much – as she would be the

first to say – to the kick-start effect of her cigarettes. “You’re sitting at that damned machine, you know, you’re stuck and you light up and you put it out and you light up.”

When she tried to give up smoking: “…suddenly all the words drifted out of my head.”

Amis says in a quote taken from the Paris Review: “I think someone must have told me at some point that I write a lot better when I’m smoking.”

Lynn Barber from the Observer is a shameless two packs a day smoker. “Cigarettes have given me constant, reliable pleasure for over 40 years,” she says.

Stalin, according to writer Simon Sebag Montefiore, was a “furious” smoker who decreed that only he would be allowed to light up at important meetings. No doubt this would increase the feeling of stress and unease among his underlings.

The legendary Soho boozer and smoker, the late Jeffrey Bernard, fell on his head in the street – not for the first time, by any means – and needed 17 stitches. When he was in the Middlesex Hospital, again not for the first time, his doctor brought a group of students to his bedside announcing: “This gentleman is Mr Jeffrey Bernard, who closes his veins each day with 60 cigarettes and opens them again with a bottle of vodka.”

Poet, drinker and bon viveur Dylan Thomas is reported as seeing a sign in a Swansea pub: “Please don’t drop cigarettes on the floor as they burn the hands and knees of customers as they leave.”

This can be compared with the official sign seen hanging over a urinal in a US military bathroom: “Please don’t throw cigarette butts in toilets.” And scrawled underneath: “It makes them soggy and hard to smoke.”

Who remembers Dr Kildare, played by dashing Richard Chamberlain? In 1961, in the early episodes, we’d see him handing a cigarette to a patient, and together they would light up and bond in smoke.

More recently, Britain’s most famous smoker is probably Bet Lynch from Coronation Street, played by Julie Goodyear. When Ms Lynch finally left the show, the Manchester Evening News calculated that in 26 years the fictional character smoked 569,400 cigarettes.

Actor Sir Laurence Olivier (1907-89) had a cigarette brand-named after him. The deal for Olivier-tipped cigarettes, made by Gallaher, the makers of Benson & Hedges, was that he received two pence for every 1,000 cigarettes sold. He was given a £2,000 advance against the first year’s royalties – money for old smoke.

He also received 500 packs of 20 every week, for his own use and to distribute to his friends – a handsome 10,000 cigarettes a week.

Olivier was loyal to his brand. Ian McKellen remembers starting work at the National Theatre Company founded by Olivier and finding that “there was a cigarette machine only ever filled with the Olivier brand, although it was capable of dispensing half a dozen different ones.”

Everyone of a certain age remembers the 1959 TV advertisement “You’re never alone with a Strand.”

It featured a moody man, who looked like a cross between Frank Sinatra and James Dean, in a raincoat and hat. The music was a big hit, but the campaign was a failure.

People associated the brand with the wrong kind of loneliness – a loser’s loneliness rather than the Dean/Sinatra kind.

US President Lyndon Baines Johnson managed to manipulate the Senate with a phone in one hand and a cigarette in another. An observer described him at a dinner party “chain smoking one cigarette on top of another and pouring down Scotch whiskey like a man who had a date with a firing squad.”

When he finally gave up he was asked if he missed smoking.

“Every minute of every day”, was the poignant reply.

Perhaps the greatest question of all is: Why do people smoke? Many smokers fail to provide a satisfactory answer, beyond mumbling about habit. Writer David Krough says there’s none of heroin’s ecstasy, alcohol’s sudden brightening of personality, or marijuana’s giddiness: “To the casual, non-smoking observer, it’s as if smokers have gotten the worst of both worlds: drug addiction, without drug euphoria.”

• The Cigarette Book. By Chris Harrald and Fletcher Watkins. ­Quartet £17.50

Tanzania exported tobacco worth Sh239 billion ($184.07 million) between September 2008 and October 2009.
The crop earnings have outstripped those of cotton.

The country earned $504.3 million from exporting tobacco, coffee, cotton, cashew nuts, tea and cloves during the period.

Tobacco accounted for 36.5 per cent of traditional exports, the Bank of Tanzania’s economic review for November 2009 showed.
But the World Health Organisation (WHO) reports that tobacco use causes 5.4 million deaths around the world each year, mainly from cancer and heart diseases.

It warns that the number of deaths will rise to 8 million annually by 2030 unless urgent action is taken.

Overall, about four per cent of Africans are smokers.
But the rate is much higher in some countries. At least 20 per cent of men use tobacco in Algeria, Burkina Faso, Comoros, Gambia, Kenya, Mauritania, Mauritius, Mozambique, Namibia, So Tom and Prncipe, South Africa, Tanzania, and Zimbabwe, according to WHO data.

Women in Africa smoke less than men, but female smoking already exceeds eight per cent in Burkina Faso, Comoros, Namibia, S�o Tom and Prncipe and South Africa.

Smoking costs the UK’s National Health Service five times as much as previously thought, Oxford University researchers have calculated.

Reports show that Tanzania collected Sh340 billion in taxes from tobacco in the last five years.
It garnered Sh52 billion in 2003/4 and Sh90 billion in 2007/8.

During the year ending October 2009, the value of traditional exports increased by 31.8 per cent to $504.3 million from the level recorded during the corresponding period in 2008, largely due to a rise in export volumes of coffee, tobacco and cloves, read the BoT review.

In its November 2008 review covering September 2007 and October 2008, tobacco was in the second position and accounted for 18 per cent of traditional exports worth $375.1 million.

But in the year ending October 2009, cotton accounted for 21.4 per cent of traditional exports, followed by coffee at 23.2 per cent, cashew nuts at 10.2 per cent, tea at 5.8 per cent and cloves three per cent.

The government is encouraging farmers to increase output from 58,702 tonnes in 2008/9 to 60,000 tonnes in 2009/10.
Main tobacco buyers and exporters include the Tanzania Leaf Tobacco Company, Alliance One and Premium Active Tanzania.

An excise tax hike on tobacco that went into effect Jan. 1 should have led to a 2.50 Kč (13 U.S. cents) price increase per pack of cigarettes, but many smokers are unlikely to see an increase in the price of their preferred brand due to the decision of one Czech tobacco industry leader.

Philip Morris, the largest tobacco distributor on the Czech market, has decided not to pass on the tax increase to smokers of its flagship, Marlboro brand, but will pay the tax themselves. Other premium cigarette manufacturers are unlikely to raise their prices as a result.

Philip Morris will increase the price of its nonpremium cigarettes, however, according to Andrea Gontkovičová, director of corporate affairs for Philip Morris Czech Republic, but there will be a delay before existing stocks with lower excise tax stamps are sold and the more expensive cigarettes hit stores, she said.

Smokers of premium brands may have been spared the latest excise tax increase, but more are on the way. The EU has called for further excise tax increases of 90 euros per 1,000 cigarettes before 2014, which will lead to an approximate increase of 12 Kč per pack in the Czech Republic, depending on the exchange rate, said Kamil Provazník, executive at Imperial Tobacco Czech Republic.

Cigarette prices

Excise taxes on cigarettes have steadily increased the average cost per pack of budget cigarettes, but smokers of premium cigarettes are spared the latest increase

Budget cigarettes
Dec. ‘03: 31.5 Kč
Dec. ‘07: 49 Kč
Dec. ‘09: 56 Kč
Jan. ‘10: 58.5 Kč

Premium cigarettes
Dec. ‘03: 53 Kč
Dec. ‘07: 74 Kč
March ‘09: 82 Kč
Jan. ‘10: 82 Kč

“The trend of excise tax increases will continue, and we will set our prices based on new tax rates,” he said. “It is not good or bad, but a necessity. We simply follow the rules.”

The 2010 budget passed by Parliament included a 2.50 Kč excise tax increase on each package of cigarettes, in hopes of generating needed revenues beyond the 40 billion Kč the government collects annually on tobacco taxes. Cigarette manufacturers usually pass on the tax, meaning increased state revenues come from smokers’ pockets. Philip Morris’ decision is an anomaly, but a welcome one for Marlboro smokers.

Gontkovičová explained that excise taxes already have an “extensive” effect on the price of cigarettes, accounting for up to 80 percent of the final price for the consumer, a percentage that has risen steadily over the past half-decade.

“Over the past five years, cigarettes have been a subject of continuous dramatic tax increases, which have put the legal market under serious pressure,” she said. “It is in this context that we make the final decisions on the pricing, including our flagship Marlboro.”

Philip Morris’ decision is clearly good news for those who smoke Marlboros but will also translate to savings for those who favor other brands as well. Due to the highly competitive nature of the Czech cigarette market, of which five companies hold 95 percent dominance, smaller cigarette manufacturers – such as Imperial Tobacco, which produces and distributes Davidoff, Rizla and Gauloises, among others – are forced to follow Philip Morris’ lead on pricing.

Imperial Tobacco will not increase prices on most brands of cigarettes this year as a result of Philip Morris’ decision, explained Provazník.

“Because Imperial is No. 3 on the Czech market, we must follow the price decision of bigger competitors,” he said. “So, if Philip Morris absorbs the cost of higher excise taxes, we can’t behave differently and increase the price of our cigarettes because we are simply a smaller company.”

The 2010 tax hikes come just two years after the largest tobacco excise tax increase in history raised prices an average of 6 Kč per pack. As prices continue to increase, many smokers are switching to cheaper brands and loose tobacco, meaning that every crown counts for tobacco producers.

Provazník conceded that the Czech tobacco market is “aggressive,” but hesitated to use the phrase “price war,” saying, “We aren’t in a war; we are in a free market.”

“All new prices are registered with the Finance Ministry,” he said. “What we are seeing are simply reactions to tax increases.”

Philip Morris is the particular focus of EU tobacco taxes, which are calculated around “the price category most in demand,” according to EU tax directives. The Czech Republic’s most popular brand of cigarette is Petra, produced and distributed by Philip Morris. According to Alessandro Tschirkov, EU affairs manager for the Confederation of the European Community of Cigarette Manufacturers (CECCM), tobacco producers throughout Europe must comply with EU tax directives but are free to decide whether to increase prices.

“Member states have autonomy to a certain extent, but they have to comply with requirements set out in the directives. These refer to minimum levels of excise duty, etc,” he said.

One unintended consequence of rising European tobacco taxes has been the increase of counterfeit branding and illegal smuggling of cigarettes from East European countries not subject to EU tax laws. EU agents recovered almost 750 million contraband cigarettes in 2009, including 8,500 cartons of Ukrainian cigarettes Austrian police discovered in a truck driven by a Czech man June 26. Such activity is bound to increase as excise taxes continue to swell, according to Lászlo Kovács, EU commissioner for taxation.

“High price and tax differentials are indeed [some] of the main reasons behind the substantial amounts of smuggling, in particular of cigarettes, from certain neighboring countries into the European Union,” he said.

By Stephan Delbos, praguepost.com
February 10, 2010

Lorillard Inc., the nation’s third-largest cigarette maker, saw less of a decline in cigarettes sold in the fourth quarter than its competitors. One of its value brands posted big gains and its Newport menthol brand stood up to heightened competition.

Still, Lorillard, whose other brands include Kent, True and Maverick, said Monday that its fourth-quarter profit fell as it faced higher manufacturing costs and other expenses.

The company, based in Greensboro, N.C., saw the number of cigarettes sold fall 4 percent during the period, compared with its estimate of a total industry decline of 7.4 percent.

Lorillard saw a 6.5 percent decline in volumes for its Newport brand, but a 39.7 percent increase in its value-priced Maverick brand. Some smokers have traded down to cheaper cigarette brands during the recession in an effort to cut spending.

Newport’s share of the U.S. menthol segment grew by .06 percentage points to 34.61 percent of the market.

Despite the Food and Drug Administration’s pending study on the public health impact of menthol, the segment is stronger than regular cigarettes in a shrinking market, and Lorillard’s top competitors — No. 1 Philip Morris USA, owned by Richmond, Va.’s Altria Group Inc., and No. 2 Reynolds American Inc., based in Winston-Salem, N.C. — have ramped up efforts to grab some of the menthol market.

While Chief Executive Martin L. Orlowsky acknowledged the other companies’ interest in menthol, he said in a conference call that none of the entries into the market have been “game-changers or factors of any consequence.”

Lorillard’s earnings dropped 6 percent to $242 million, or $1.52 per share. That narrowly beat the $1.51-per-share estimate of analysts surveyed by Thomson Reuters.

It said it had fewer shares outstanding in the current quarter, which boosted its earnings per share by 9 cents.

Sales climbed 27 percent to $1.38 billion. About $270 million of the growth was due to April’s 62 cents-per-pack federal excise tax increase. Excluding excise taxes, sales rose 2.2 percent to $932 million.

Lorillard, which was spun off from Loews Corp. in June 2008, said its revenue benefited from higher average prices, but that was somewhat offset by selling fewer cigarettes and spending more on promotions.

Its shares fell 70 cents to $73.80 in afternoon trading Monday.

Full-year profit climbed 7 percent to $948 million, or $5.76 per share.

Annual net sales rose 25 percent to $5.23 billion from $4.2 billion. Removing excise taxes, sales grew 5.6 percent to $3.69 billion.

Lorillard, the oldest continuously operating U.S. tobacco company, was the last of the country’s top tobacco companies to report its fourth-quarter results.

Results from the three tobacco makers, who account for about 90 percent of the U.S. cigarette market, show steep volume declines as tax increases, smoking bans, health concerns and social stigma make the cigarette business tougher.

Marlboro maker Altria Group shipped 11.4 percent fewer cigars and cigarettes. Reynolds American, which makes Camel and Pall Mall, saw volume decline 7.6 percent.

Those declines have have caused some tobacco companies to focus on cigarette alternatives — such as snuff and chewing tobacco — for sales growth.

Lorillard said Monday that it plans to enter the moist smokeless tobacco market, but did not elaborate. It also said it will discontinue a joint venture with Swedish Match for its Triumph Snus — small pouches like tea bags that users stick between the cheek and gum.

THE 2010 tobacco marketing season will start in two weeks’ time in a move that is a departure from tradition where the floors open towards the end of April or early May.

According to a statement released by the Tobacco Industry and Marketing Board, two floors, Tobacco Sales Floor and Zitac, will open on February 16.

Burley Marketing Zimbabwe, bought by Savanna Tobacco last year, did not register to sell tobacco this year.

TIMB chairman Mr Njodzi Machirori told guests during a luncheon to mark the end of the 2009 tobacco marketing season last week that the decision to open the floors early was in response to a request from growers and contractors.

“This decision was reached after the board’s consultations with auction floors as a result of the pressure we have been receiving from contractors and their farmers to open early,” said Mr Machirori.

However, he pointed out that they were concerned that the call for the early opening of auction floors was coming from farmers and contractors that had not sold their crop in the previous marketing season.

“It is illegal for any farmer to hold on to tobacco unless he declares it to us and cures it from fungal attacks since there are various diseases that affect the crop.

“It has been learnt that most contractors have been holding onto the crop for speculative reasons.

“We do not allow that as a board, as the nation needs to gather all tobacco produced in a season in order to accrue maximum benefits from the crop,” he said.

TIMB chief executive Dr Andrew Matibiri said farmers had said that they wanted the floors to open early in order to ease their cashflow constraints as well as their ever-increasing overheads.

“Most farmers at the moment have cash constraints and by opening the floors early they can quickly sell their tobacco and offset their loans as well as reduce their interest.

“Besides, farmers will also cut on expenses and losses that come with keeping tobacco that is ready for the market now, until April or May,” he said.

Dr Matibiri said that by opening the marketing season early, they will effectively deal with the congestion that usually comes at the beginning of each marketing season.

He said contractors also wanted the marketing season to open early to allow farmers to quickly repay their loans so that they could, in turn, also repay their loans to banks.

“This allows for the contractors to secure fresh funding for the next season well ahead of time,” he said.

Other issues considered were that by opening early, farmers could start mobilising funds for their seedbeds which should be in place by June or July as opposed to the previous case where the seedbeds became due when farmers have no money.

Dr Matibiri said they also wanted farmers to have money ahead of the winter cropping season for crops such as wheat.

“If farmers sell their tobacco early, they can manage to finance their winter crops such as wheat on their own,” he said.

TIMB set a target of between 80 million kg and 100 million kg of tobacco to be grown this year.

However, a total of 65 202 hectares has been put under tobacco this season, of which 11 000ha was under irrigation.

The hectarage under tobacco will yield 77 million kg, which is about three million kg short of the TIMB target.

About 45 percent of the crop is set to be sold under auction with the balance being sold under contract. There were 28 000 farmers that sold their tobacco last year and TIMB has so far registered 21 000 farmers this year.

A total of 42 million kg of tobacco was produced last year although the total amount sold by the end of the marketing season was 58,5 million kg with the balance coming from the remainder of the crop that remained unsold during the 2008 marketing season.

The 58,5 million kg brought in just over US$175 million as prices peaked above an average of US$2,97 per kg.

Last year’s marketing season was a success due to the adoption of the multiple currency system which saw growers being paid US$10 000 in cash for their sales soon with the remainder of their proceeds being deposited into their bank accounts.

This saw a marked increase in deliveries and the disappearance of problems that had plagued previous marketing seasons that were characterised by farmer protests at the floors.
3 February 2010, Allafrica

A month ago, Columbia officials were ready to take a local business to court for violating the city’s smoking ban – a first for a Midlands local government.

Now, City Council members are poised to change the law Wednesday to exempt the business from the smoking ban.

The amendment to the city’s smoking ban would exempt cigar bars – defined as a bar that “generates 35 percent or more of its annual gross income from the sale on the premises of cigars, tobacco products and other paraphernalia.”

The amendment would apply only to cigars and pipes – not cigarettes – and the city’s business license division would have to determine a cigar bar’s eligibility by reviewing the bar’s financial documents, which must first be approved by a certified public accountant.

“Clearly, if somebody is going into a cigar bar, they are going there to smoke,” said Councilwoman Tameika Isaac Devine, who supports the change. “The whole intent behind the ordinance still remains true because restaurants and other places were the primary places we were concerned about.”

Councilman E.W. Cromartie, however, criticized the move as nothing more than a “backdoor way to have smoking in bars.”

“That guts the whole essence of the ordinance if we allow bars to be in a position to have people smoking in them,” Cromartie said.

The city’s smoking ban, which has been in effect since October 2008, has always exempted retail tobacco stores, defined as stores that sell tobacco products and other products that are “merely incidental.”

The Tobacco Merchant on Bower Parkway was covered under that definition. But over the summer, owner Bill Slicer installed a bar and began serving alcohol to his customers while they smoked cigars and pipes.

City officials argued that once The Tobacco Merchant began serving alcohol, it became a bar, which was not covered under the city’s smoking ban.

Darryl Smalls, Slicer’s attorney, argued The Tobacco Merchant was not a bar, but a retail tobacco store whose sales of alcohol were “merely incidental.”

Brenda Kyzer, who as the city’s business license administrator is tasked with enforcing the city’s smoking ban, asked City Council members Jan. 6 to file a lawsuit against the bar to force compliance with the city’s smoking ban.

City Council members did not discuss the issue Jan. 6. Instead, council members discussed the issue in a closed-to-the-public meeting Jan. 13 – citing legal advice – but took no action.

The amendment to the city’s smoking ban was placed on the agenda Friday for City Council’s next meeting, at 9 a.m. Wednesday at City Hall.

City Council members approved a smoking ban in 2008 that included bars and restaurants over the objections of bar owners. An earlier version of the bill had exempted bars, but that version did not pass.

Devine said changing the smoking ban is the right move.

“The whole intent behind the ban was to keep places that just general people go – restaurants and other paces like that – away from second-hand smoke because they didn’t want to be around it,” she said.

But the city’s original smoking ban was also intended to protect bartenders and restaurant wait staff, who have to be exposed to second-hand smoke.

Devine said she did not think the city had enough cigar bars so that the only option for a nonsmoker would be to work in one. She said the 35 percent requirement would discourage existing bars from converting to cigar bars.

“I don’t think anybody is going to go through that expense to allow smoking in their establishment,” Devine said.
By ADAM BEAM

LONDON—British American Tobacco PLC warned Sunday that the U.K. government faces a “huge fight” from the tobacco industry if it moves ahead with plans under consideration that would only allow cigarettes to be sold in plain, unbranded packages.

A spokeswoman said the government measures, due to be announced in a Monday speech by Health Secretary Andy Burnham, would encourage criminals to mass produce fake products since there would be no way for a purchaser to differentiate one brand from another, resulting in the “perverse outcome” of cigarettes becoming more accessible to young people.

Mr. Burnham is to lay out the government’s “tobacco control strategy” Monday–a series of measures designed to half the number of smokers in the U.K. by 2020, to around 10% from 21%.

Bans on cigarettes in vending machines and policies to encourage people to stop smoking in homes or cars they share with children are also under consideration.

BAT said packaging is fundamental to consumer choice, and that there’s no meaningful evidence to suggest plain packaging would cut the number of smokers.

“If the government tries to introduce plain packaging it will have a huge fight on its hands. Brands are valuable corporate assets and the government risks breaching various legal obligations relating to intellectual property rights, international trade and European law,” the BAT spokeswoman said.

Chris Ogden, chief executive of trade body the Tobacco Manufacturers’ Association, said in a statement that imposing plain packaging would “do nothing to meet public health policy objectives but will instead impose further unwarranted restrictions on legitimate businesses and private citizens alike.”

By MARGOT PATRICK

Davidoff Cigarettes pays tribute to femininity with a new design, elegant and refined, produced in collaboration with fashion designer Luisa Beccaria.

Gold and blue are the colours that have restyled the famous long and narrow pack. Ruches, pleated tulle and embroidery now grace the pack, which has thus been transformed into a style accessory in its own right.

Davidoff Slims Cigarettes, the ultimate in smoking luxury, were created for a demanding and selective female public that love quality and style in all its manifestations. It was for women like this, who wish to stand out from the crowd in every way that the Slims Limited Edition styled by Luisa Beccaria was designed.

Luisa Beccaria’s maison stands for “Made in Italy” excellence, the magic and elegance of sartorial fashion, the glamour of Hollywood stars. “We’re really excited about this collaboration with Luisa Beccaria. With these packs she’s captured and enhanced the sophisticated style of Davidoff Slims,” said Muhannad Jabi the General Manager of Imperial Tobacco M.E. – the owners of Davidoff Cigarettes.

While Luisa Beccaria said she was “honoured that Davidoff Cigarettes came to me for this collaboration. It was great fun rethinking design patterns for these packs instead of for fabric”.

The Davidoff Slims Cigarettes styled by Luisa Beccaria are available as an international limited edition.

The Davidoff Slims Cigarettes Limited Edition styled by Luisa Beccaria will be available to view and purchase in Kuwait in January 2010.

© 2010 Al Bawaba

Jan. 20 – Japanese stocks fell for a third day, led by brokerages after Credit Suisse Group AG lowered its investment rating on the industry.

Nomura Holdings Inc., Japan’s largest brokerage, sank 3.8 percent and Daiwa Securities Group Inc. lost 2.4 percent after Credit Suisse cut its rating to “market weight.” Securities companies had the biggest decline among the Topix index’s 33 industry groups. Mitsui O.S.K. Lines Ltd., operator of Japan’s largest fleet of iron-ore ships, dropped 2.1 percent on concern China’s government will rein in stimulus to prevent a bubble.

The Nikkei 225 Stock Average fell 0.3 percent to close at 10,737.52 in Tokyo. The broader Topix dropped 0.5 percent to 944.72, erasing a 0.7 percent advance. Stocks on the Topix trade at 37 times estimated earnings this year, more than twice as expensive as their U.S. and European counterparts.

“Current share prices have fully reflected an expected surge in earnings,” said Yoshihiro Ito, senior strategist at Okasan Asset Management Co., which oversees the equivalent of $8.2 billion. “There remains uncertainty, and the market climate will likely be turbulent into March.”

The Topix, which had the lowest return among benchmark indexes in the world’s 20 largest stock markets in 2009, has risen the most this year as investors bet a weaker yen will boost earnings.

Companies in the gauge are projected to turn profitable in 2010 after posting an average loss of 40 yen per share in the past 12 months, according to data compiled by Bloomberg. Earnings per share are estimated to gain 64 percent for companies in the Standard & Poor’s 500 Index in the U.S. and 353 percent for those in Europe’s Dow Jones Stoxx 600 Index.

By Masaki Kondo and Toshiro Hasegawa

Analysts warned State-owned Enterprises (SOEs) to move cautiously Thursday after China’s State Tobacco Monopoly Administration (STMA) quickened the pace of its entry into the domestic real estate market.

China Real Estate Business reported Monday that Zhongwei Real Estate, launched last month with registered capital of 3 billion yuan ($439.5 million), was founded by China Shuangwei Investment, a subsidiary of the STMA, Zhejiang Tobacco Monopoly Bureau (Corp) and China Tobacco Yunnan Industrial Corp. The publication did not identify its sources in the report.

A recruiter surnamed Zheng at Zhongwei Real Estate said Thursday that the company has already started operations and is in need of more employees.

The STMA, along with the China National Tobacco Corporation, is responsible for centralized management of the country’s tobacco industry, but it has already been involved in the real estate market. The agency’s bureaus in Fujian, Yunnan, Guandgdong and Zhejiang provinces, as well as the Inner Mongolia Autonomous Region, have all operated property businesses.

The Zhejiang Tobacco Monopoly Bureau has eight subsidiaries or branches developing properties, and it also owns a listed company named Sunny Loan Top, whose top 10 shareholders are from the STMA.

Last August, the STMA released a notice saying it would expand the number of areas in which it does business. And the China Tobacco Society, affiliated with the STMA, also set up an industry development commission in 2008 to do professional research, including real estate research.

“Via Zhongwei Real Estate, all the properties that are owned by the subsidiary corporations will be integrated,” Zhou Yangmin, a tobacco analyst and chairman of the Yangming Consulting Institute, said Thursday.

The STMA and the China National Tobacco Corporation are not the only State-owned companies entering the real estate industry as a sideline to their main business operations, Zhou said. He noted that it is a negative trend for such companies to focus on reaping huge real estate profits instead of concentrating on their major businesses.

“The State-owned enterprises have the responsibility of doing business in sectors with lower profits that private firms prefer not to do,” Zhou said.

China Real Estate Business quoted unnamed sources as saying that in the second half of this year, Zhongwei Real Estate will “take positive actions” to set up a property operation platform and the company will seek to get listed in the near future.

Zheng Xinye, a professor with Renmin University of China, said that if the company’s operations are irregular, there is the potential risk that State-owned capital will disappear.

In 2007, the STMA started to spin off some of its affiliated companies that majored in “non-tobacco” businesses, including the securities, automobile and hotel industries. But “This move of setting up a real estate company would possibly be a regression in the reform process,” Zhou said.

The tax and profits of the domestic tobacco industry in 2009 amounted to 513.11 billion yuan ($75.17 billion), up 12.2 percent over the previous year. Zhang Lianxiu, an STMA spokesman, said Thursday that 416.34 billion yuan ($60.99 billion) in tobacco taxes were collected in 2009, up 26.2 percent over 2008.

Source: Global Times

BEIJING, Jan. 14 — Combined profits and taxes in China’s tobacco industry in 2009 topped 513.11 billion yuan (75 billion U.S. dollars), a rise of 55.9 billion yuan from a year ago, Zhang Xiulian, spokesman with the State Tobacco Monopoly Administration, said Thursday.

Industrial and commercial taxes paid by the industry last year reached 416.3 billion yuan, up 26.2 percent year on year, said Zhang at the annual news conference of the tobacco industry.

The rise of taxes and profits were made possible by a major tobacco tax hike, despite curb of production.

In June, the government raised the tobacco consumption tax by 36 percent to 56 percent, depending on different tobacco classes.

To further curb smoking in line with the law and international treaties China has ratified, the Ministry of Commerce and the State Administration of Taxation (SAT) issued a circular on August. 10, 2009, declaring an end to tax breaks on promotional spending for tobacco firms.

China has also promised to ban all forms of tobacco promotions since January, 2011.

BRUSSELS, – One of the world’s largest tobacco companies pushed EU policy to emphasize business interests ahead of public health, a study indicates.

Researchers at the universities of Bath and Edinburgh in Britain say they found evidence the cigarette giant British American Tobacco created a front group in the mid-1990s to shape EU policy in its favor, the EUobserver reported Wednesday.

The academics say they came to that conclusion after examining some 700 internal documents from the tobacco manufacturer. The study was funded by the Smoke-Free Partnership and Cancer Research UK.

They say BAT led a group of chemical, food, oil, pharmaceutical and other firms in a multiyear lobbying campaign aimed at shaping the European Union’s impact assessment system.

As a whole, impact assessments work by assigning monetary values to both the costs and benefits of a particular policy.

BAT was worried about the imposition of restrictions against public smoking and tobacco advertising, researchers say.

64 Tobacco has opened at 134 Forest Hill Road in the Forest Hill Center, next to Subway.

Donnie and Teresa Allen and Charlie and Catrina McDaniel are the partners in the business, which sells cigarettes, regular and premium cigars and other tobacco product, such as chewing tobacco, snuff and dip.

The store also sells lottery tickets.

Donnie Allen said he has worked in retail sales for years, including managing a tobacco products store in Winston-Salem for a year as well as managing a retail furniture store.

Allen said there are a couple of other tobacco shops in Lexington, “but we’re basically trying to have the lowest cost and still stay in business and offer good customer service.”

Business hours are 10 a.m. to 7 p.m. Monday through Friday; 9 a.m. to 6 p.m. Saturday; and noon to 6 p.m. Sunday. The telephone number is 300-8101.

- Vikki Broughton Hodges

The Seneca Nation of Indians is publicly lobbying against a proposed federal regulation that it fears would severely damage Indian-operated cigarette sales and manufacturing operations.

Billboards along the I-190 in downtown Buffalo make pleas to Sens. Charles Schumer and Kirsten Gillibrand to vote against the federal Prevent All Cigarette Trafficking Act bill that the Seneca Nation and other Indian tribes feel will all but shut down mail-order cigarette sales. If enacted, the bill could see more than 1,000 people locally lose their jobs, the Senecas say.

Many feel the bill is being championed by major cigarette manufacturers as an attempt to shut down or severely limited Indian-operated cigarette businesses.

“We applaud the goal of halting rogue tobacco smuggling, but it’s wrong to wipe out legitimate jobs in the process,” said Barry Snyder, Seneca Nation president. “Tobacco trade is a key component of the Seneca Nation economy.”

Snyder said if the PACT legislation is approved, the Seneca Nation could lose as much as 65 percent of its import/export revenue from cigarette and tobacco sales. Proceeds from those sales help fund health and education programs for the Seneca Nation.

Snyder noted the Seneca Nation uses state-of-the-art stamping and enforcement measures that ensure compliance with a rigorous set of internal regulations. Among the regulations are: retailer authorization, minimum pricing standards and a ban on sales to minors.

The Seneca Nation also works closely with Federal Bureau of Alcohol, Tobacco and Firearms Enforcement on all matters related to cigarette sales.

Besides the billboards, the Seneca Nation’s Foreign Relations Committee has been working with lobbyists on rallying defeat for the PACT act.

“The PACT Act is being portrayed as a tool to fight cigarette smuggling,” Snyder said. “In reality, it will kill legitimate, treaty-sanctioned Native American commerce, causing significant economic harm.”

The private consumption tax hike implemented by the government on tobacco has been reflected in cigarette prices.

Philip Morris and British American Tobacco significantly increased the prices of the cigarettes they produce.

Philip Morris SA, the international tobacco company’s joint venture with Sabancı Holding in Turkey, announced Monday it is raising the price of its tobacco products by at least 15 percent effective immediately.

“With the Cabinet’s decree published in the Official Gazette on Dec. 31, 2009, the tax rate on tobacco has been increased by more than 30 percent. This situation, which has a direct impact on our production cost, forced us to modify the cost of our products. Therefore, the retail price of our products produced in the İzmir Torbalı facilities has been increased by at least 15 percent starting Jan. 4, 2010,” the company said in a statement. The price hike brings the price of Marlboros to 7 Turkish Liras from 5 liras. The price of Parliament Reserves climbed to 7.50 liras from 6.50 liras.

British American Tobacco Turkey also increased the price of its products. As of Monday, a pack of Samsuns has a price tag of 4.20 liras, while Kents costs 7.00 liras. Japan Tobacco, the third leading company in the sector, is also expected to increase the price of its products.

Cigarette sellers in Bulgaria – legal and illegal – were bracing for increased demand for cigarettes as New Year price increases loom. Already, some foreign brands produced under licence are being sold at higher prices.

A report by bTV said that from the beginning of next year, prices of cigarettes would go up by an average of 40 per cent.

Smokers were not yet stocking up, sales people said.

Following up claims that the increases in excises would stimulate the illicit economy, bTV sent a team with a hidden camera to Sofia’s Zhenski Pazar (Women’s Market) where “literally every step” cigarettes without excise labels were offered to the team.

On December 25, Bulgarian news agency Focus said that some foreign cigarette brands were already being sold at higher prices in some Sofia shops.

Packets of 20 Marlboro were being sold at 4.20 leva, up from 3.90 leva, for example.

Some shops had the same brands with different prices. New stocks had been sent marked at higher prices, retailers said.

Focus quoted the Philip Morris Company as saying that the new prices had been registered with the Finance Ministry, and were “intermediate” prices aimed at a smoother transition to the new prices that would take effect from January 1 2010.

Earlier in December, Dnevnik calculated that popular domestic brands now costing 3.40 leva for a packet of 20 would increase to 4.50 leva.

According to Dnevnik, someone smoking a packet of Victory a day, who under the old prices would have spent 1241 leva a year on the habit, would with the new prices pay 1620, about 30 per cent more.

Alternatively, Dnevnik said, to spend the same sum as in 2009, that smoker should smoke about five fewer cigarettes a day.

The cheapest Bulgarian brands will see the highest price increases. Arda, currently sold for 2.30 leva, will cost 3.76 leva.

TOPEKA, Kan. — Gov. Mark Parkinson will propose increasing Kansas’ tobacco taxes next year, a spokeswoman said Wednesday.

The Democratic governor’s plan is likely to face strong opposition in the Republican-controlled Legislature, although the Senate’s top leader said he’d support the idea.

Parkinson spokeswoman Beth Martino said the governor hasn’t settled on how much of an increase he’ll propose. But she hinted that he’s considering asking legislators to bring Kansas’ cigarette tax up to the national average.

Kansas’ cigarette tax is 79 cents a pack. The national average for states and the District of Columbia is $1.34 a pack, according to the Washington-based group Campaign for Tobacco-Free Kids.

“He is going to pursue a tobacco tax of some sort,” Martino said. “He is still looking at the options.”

Martino said Parkinson has not decided whether to ask legislators to dedicate the new revenues to health programs, or use it to help the state balance its budget for fiscal year 2011, which begins July 1.

Legislative researchers estimate that increasing the cigarette tax by 55 cents, to $1.34 a pack, would raise about $88 million during the next fiscal year. The state also imposes a 10 percent tax on other tobacco products, but doubling it would raise only $5 million during the next fiscal year.

Parkinson said last week that he’s not planning to propose deeper cuts in spending to avoid a budget deficit for fiscal 2011. The state has had five rounds of cuts and other adjustments to keep the budget balanced for the current fiscal year.

He said he’s considering proposals to eliminate exemptions to the state’s sales tax and eliminate tax breaks granted in previous years. And he didn’t rule out raising some tax rates.

Senate President Steve Morris, a Hugoton Republican, said a cigarette tax increase would have the best chance of any proposal to raise tax rates.

“I would support it,” Morris said. “I think it’s probably the only tax increase that would have the possibility of getting through the Legislature.”

But many GOP legislators, particularly House conservatives, worry any revenue-raising measures will slow the state’s economic recovery and hurt struggling families.

House Taxation Committee Chairman Richard Carlson, a St. Marys Republican, said states typically raise taxes near the end of recessions — only to see revenues boom upon recovery.

“I’m going to be very cautious about looking at tax increases,” Carlson said. “I think Kansas will grow out of this recession. We just need to look at it in the long-term.”

Merchants also worry about losing business to other states. While Colorado and Oklahoma have higher cigarette taxes, Nebraska’s is lower, and Missouri’s, at 17 cents a pack, is second-lowest in the nation, behind only South Carolina.

Public health advocates have long argued that Kansans will support higher tobacco taxes if the money is used for health care programs.

But in 2002, when legislators boosted the cigarette tax from 24 cents, they did it to help close a budget shortfall. When then-Gov. Kathleen Sebelius outlined a plan in 2004 to raise tobacco taxes for health care, legislators ignored the proposal for several years.

Sellers of cigarettes and other tobacco products are likely to be given a 10–month grace period to stock up on packaging with required health warnings and display signage, the Ministry of Health has confirmed.

The new Tobacco Law comes into force on 31 December, banning smoking in public places, bars and offices.

Under the new law, cigarettes must carry large graphic health warnings and signage outlining the dangers of smoking must be erected at points of sale in stores and outlet.

Minister Mark Scotland said the ministry had initially envisioned a timeframe of 1 May next year for tobacco dealers to fully comply with display and packaging requirements and for cigar bars to install required ventilation systems, but was aware that they may have difficulty meeting this deadline.

“Accordingly, the ministry is proposing to allow the registered tobacco dealers a period up to the end of October 2010 to take the necessary steps to become fully compliant with the display and packaging provisions, and similarly for the cigar bars to be fully compliant with the ventilation requirements,” Mr. Scotland said.

He stressed that there was no plan to postpone the ban on smoking in public places.

The proposal is for the tobacco dealers and cigar bars to comply with the initial registration deadline of 1 May, 2010, but they would not be expected to be fully compliant with the display and packaging requirements at the time of initial registration, the minister added.

Under the new law passed by the Legislative Assembly in October, anyone selling tobacco products needs to apply for a Certificate of Registration. Submission for renewal of applications must be made by 1 November each year.

Mr. Scotland said once dealers register, they can use the first 10 months of next year to sell off their existing non–compliant packages, and to make the necessary changes to their display areas, prior to their registration renewal submission at the end of October 2010.

Concerns arose not long after it hit the market. External studies seemed to confirm what industry insiders feared: The product could pose a public health risk. But as sales soared, whistleblowers who didn’t leave their jobs were forced to keep quiet. Companies maintained a posture of denial as a mountain of damning evidence, some of it from their own investigations, kept growing. Bowing to pressure, some consented to warning labels and other notices, but still insisted that claims of product-related injuries and deaths remained unproven.

It’s a familiar story. And in the latest installment of its “Driven to Distraction” series, the Times lays out in detail how, in this case, it was the mobile phone industry that continued to market its product for use in a manner long believed to be hazardous to its customers and the population at large. The result: As far back as seven years ago, the Times reports, “drivers using cellphones were causing 2,600 fatal crashes a year in the United States and 570,000 accidents that resulted in a range of injuries, from minor to serious.” Now a lawsuit, among the first of its kind, has been filed against Samsung and Sprint Nextel by a woman whose mother was killed by a distracted driver in Oklahoma City in 2008.

Of course a key issue is the line between provider and motorist responsibility. The driver in this case, who pleaded to misdemeanor negligent homicide, does not blame the cellular industry. “It’s our choice if we’re going to talk on the cellphone while driving or walking down the street or in the office,” he said. “The cellphone companies don’t say you should talk on the phone and drive.”

Actually, they do — and, as the Times reveals, they always have. It’s certainly true that “the mobile device has moved well beyond its origins as a car phone,” to paraphrase industry reps, but cellphone manufacturers and sellers are advertising the benefits of talking while driving to this day, even as they inch toward acknowledgment of the inherent dangers.

The CTIA, the industry’s trade group, supports legislation banning texting while driving. It has also changed its stance on legislation to ban talking on phones while driving – for years, it opposed such laws; now it is neutral.

“This was never something we anticipated,” said Mr. [Steve] Largent, head of the CTIA, adding that distracted driving is a growing threat now that more than 90 percent of Americans have cellphones. “The reality of distracted driving has become more apparent to all of us.”

This supposed revelation comes nearly 50 years and thousands of casualties after Motorola developer Martin Cooper testified of the earliest mobile phones: “There should be a lock on the dial so that you couldn’t dial while driving.”

Jakarta – The Indonesian government plans to limit domestic cigarette production as of 2015 to total only around 260 billion pieces in line with its 2007-2020 Tobacco Product Industry (IHT) roadmap, an official said.

“The growth of cigarette production will be flat or up a bit at around three to five billion cigarettes a year,” the director of tobacco and beverage industries of the industry ministry, Warsono, said here on Monday.

He said cigarette production in 2008 reached 240 billion and is expected to total 245 billion cigarettes in 2009.

Based on the roadmap, he said, the industry would focus on the aspect of manpower supply and income balance the short-term (2007-2010) period.

The excise system meanwhile will be made simpler through grouping of factory categories, specific imposition of excise duty and the handling of illegal cigarettes, he said.

He said in the mid-term (2010-2015) priority will be put on income and health aspects while in the long-term more priority will be given to the health aspect than manpower and income.

“In every period the health aspect will always be included in line with the Framework Convention on Tobacco Control (FCTC),” he said.

He said the FCTC was aimed at protecting the future generation from the health threat from tobacco/cigarette consumption through the reduction of tobacco/cigarette consumption and production.

The head of the finance ministry`s customs and excise II policies, Djaka Kusmartata, meanwhile said that in 2010 the target of income from cigarette excise in the national budget was set at Rp55.9 trillion, up from Rp54.4 trillion in 2009 and Rp49 trillion in 2008.

“The foreign exchange income from cigarette exports in the past five years rose an average of 24 percent,” he said.

The government has set the excise duties for tobacco products at an average of 15 percent which will be effective as of January 1, 2010 while import tariff of tobacco products will be set at 40 percent with an excise duty of Rp325 per cigarette, he said.

According to records up to 6.1 million people including two million farmers are involved directly or indirectly in the tobacco/cigarette product industry.

In addition to it, there are also 1.5 million clove farmers relating to the industry and 600,00 workers in cigarette making industry, one million cigerette retailers and one million workers in cigarette-related industries such as printing, advertisement, distribution and transportation services.

Based on the industry ministry`s data the number of cigarette makers in the country now reaches 3,250 units and 95 percent of them categorized under small-and medium-sized industries.

The director of seasonal crops of the directorate of plantations of the ministry of agriculture, Agus Hasanuddin, said that his office continued striving to diversify the country`s tobacco plantations.

“The government will limit the land used for tobacco plantations. While the land reaches 298.78 hectares in 2009 it will be reduced to 290.6 hectares in 2010,” he said.

The ministry of agriculture will conduct counseling on the importance of diversifying tobacco farms into farms of other crops such as coffee or corn.

In general the tobacco product industry roadmap is about how the government accomodates differences in the interests of stakeholders and certainty in doing business.

Agus said what was important was supervision of the allocation of cigarette excise duty for tobacco producers and cigarette makers.

The value of cigarette excise duty in 2009 reached Rp860 billion and in 2010 is expected to increase to around Rp1.1 trillion or around two percent from the target of cigarette excise revenue for 2010 set at Rp55.9 trillion.

Starting next year, the number of cigarette makers and tobacco plantation companies to receive the cigarette excise duty involves 19 regions up from five regions before.

Agus said the funds were meant for increasing campaign on awareness of tobacco farmers on health issue, diversification commodities and improvement of institutions.

British American Tobacco South Africa (Batsa) has attacked the National Council Against Smoking for issuing a statement that was “deliberately mischievous, provocative and misleading” regarding a constitutional challenge launched by the company against certain provisions of the recently promulgated Tobacco Products Control Amendment Act.

Batsa has filed an application before the North Gauteng High Court to have the legislation amended to allow one-to-one communication with its consenting adult smokers.

The ban came into operation last August.

The company said: “This is a matter between Bat South Africa and the Department of Health and we believe that sensationalising the issue in the media will not help to reach an amicable solution. To the contrary, it will only serve to further mislead the public.”

The council said that if the prohibition of one-to-one communication was declared unconstitutional, “such a contorted interpretation would expressly disregard the direct intentions of Parliament”.

Parliament amended the act to outlaw the “smoking parties” organised by the industry, said the council. The purpose of the “smoking parties” was not to convey accurate, factual information about tobacco products such as the price, but to make smoking appear social, cool, fun and an exciting experience, and so increase sales.

“Increased sales meant increased death and disease,” said the council.

It said one-to-one communication would mean that the industry would be able to use techniques known as viral or guerrilla marketing to target teenagers. “The section being challenged was specifically designed to protect youth from advertising campaigns designed to get them to start smoking or to smoke more,” said the council.

Batsa said that it had not taken any legal action anywhere in the world in relation to tobacco advertising bans. It had in fact accepted and complied with the law in all cases.

“This constitutional challenge in the South African High Court is an attempt to defend our rights as a manufacturer of a legal product to be able to communicate with our existing adult consumers. We do not and will not at any time in the future under any circumstances market to children. Smoking is risky and we agree that the sale and consumption of tobacco products must be regulated and, in particular, we support the ban of tobacco products to the under-aged.”

Batsa said one-to-one communication, which was the issue it was challenging, did not refer to parties or any other events. It was the one remaining avenue of communication which enabled consenting adult consumers of its products to receive information from the company about a product or brand they had chosen to purchase.

“In our court application, we have recommended that the Department of Health regulates how we conduct this information,” it said.

Salim Young, a legal director at Batsa, said: “We have on various occasions engaged with various regulators, including the Department of Health, on this matter in an attempt to avert any legal action. Our preference is still to resolve the matter amicably and through negotiation, but at this stage we have no option but to litigate.”

Batsa said it supported and was committed to sensible and enforceable tobacco regulation, and there were a number of provisions in the legislation that it supported.

The SA Medical Association also joined the fray by supporting the council.

It hoped the courts, such as their international counterparts, would issue a ruling that protected the broader public interest, especially in view of the fact that the right to health was enshrined in the constitution.

December 6, 2009
By Wiseman Khuzwayo

Tenants from the city’s senior housing complexes put out a call to arms yesterday. They plan to fight for the right to continue to hang American flags from their apartments and to smoke within their units.

“HUD don’t care, housing don’t care, we’re like slaves to them,” an angry Ann Musk said in opening remarks to about 50 Warwick Housing Authority tenants gathered at the Meadowbrook Terrace community room.

The group is troubled by the authority’s action to forbid smoking at all its housing complexes, both inside individual units and anywhere on authority property, by Jan. 1, 2011. New tenants must agree to the condition immediately and the newly constructed Shawomet Terrace will be smoke-free when it opens later this month. In addition, Meadowbrook tenants have been advised because of recently renovated decks they will no longer be permitted to hang decorations, including flags. Flags are allowed if placed in a stand.

But it was more than the smoking and flag bans that riled residents. During a 45-minute organizational meeting, tenants complained that their units have not been painted; that plumbing leaks; drains back up; electrical fixtures have not been repaired and that there is mold in their apartments. Also, they complained that the authority keeps imposing new restrictions.

“They keep taking things away from us,” said Gerry Greene. Greene quit smoking after a heart attack, but said she knows how much smoking can mean to people.

“Smoking, that’s all we’ve got left,” she said. “I don’t know how much more dignity they can take away.” Greene reasons those who smoke should be “grandfathered” in and be permitted to smoke in their units as long as they live there.

Although she smokes two packs of cigarettes a day, Musk focused on the prohibition of hanging flags. She questioned how many would want to stick a flag “in a pot of dirt” and said she would take the issue to Senator Jack Reed and the Veterans Administration.

“They’re messing with the wrong girl when they’re messing with my husband’s flag,” Musk said turning from the audience to hide her tears.

Reached after the meeting, Michael Lyckland, executive director of the Warwick Housing Authority, said that there is a no smoking trend for the Housing and Urban Development funded housing units across the country.

“They are encouraging [smoke-free units]. It is not a mandate,” he said.

Lyckland cited safety and health as major reasons for the policy. But the safety and health reasons failed to fly with the tenants. No one had any recollection of complaints from non-smoking tenants and as for safety, questions were raised as to the dangers of candles, if not unit stoves. Jen Brosnahan also questioned how the authority would cope with tenants who medically use marijuana. Would they be forced out of the complexes?

Also, she asked, would the authority pay for smoking cessation programs?

Lyckland said he hadn’t thought of Brosnahan’s question about medical marijuana.

“We’ll have to see what HUD’s policy is in general,” he said suggesting that while the use of the drug is allowed in Rhode Island, the federal government may have restrictions.

“The big issue is smoking,” said Robin Whalen, “this is my civil liberty.”

Whalen addressed the issue of enforcement, asking where tenants would go if their leases were voided for smoking.

“We’re all there because we can’t go anywhere else,” she said.

Noting that she doesn’t live in the federally subsidized housing by choice, Whelan said, “This is the wasteland. This is the bottom of the rung. I have no place to go.” Complex tenants pay rent on the basis of their income.

“If I pay rent I want to be able to smoke where I want,” Whalen added.

As Musk, who ran the meeting, called on people around the room, complaints shifted from the smoking and flag bans to the condition of housing units and what tenants said was a lack of maintenance. There were numerous complaints about mold and the lack of what tenants believe should be periodic upkeep, including painting.

While there is no set guideline, Lyckland said yesterday if a unit is occupied for a long period it will be painted. Otherwise, he said, as a practice a unit is repainted when tenants move out and before new ones move in. He estimated about 20 percent of the more than 500 city elderly housing units are repainted every year.

He said the cleaning and primer that must go into repainting the unit of a smoking tenant makes upkeep of those units more costly.

As the meeting started to break up, Whalen vowed, “This is the beginning of the fight.” Yet, as people left, there was no announced plan for a follow-up meeting. Musk said she would be circulating a petition.