The District of Columbia’s Chief Financial Officer Natwar Gandhi learned a hard lesson this week after assessing the fiscal forecast for 2010: D.C. smokers weren’t happy with the city council after it upped the cost of cigarettes, and responded by depriving the District of millions in tax revenue.

Any nicotine fiend who’s dodged puddles of upchuck in Adams Morgan on a Friday night or maintained a distance of 30 feet from downtown office buildings on a weekday could have predicted that smokers would flee to Maryland and Virginia. And according to a report released Wednesday by Gandhi, that’s exactly what happened after the D.C. Council raised taxes on cigarettes from $2.00 to $2.50 a pack in mid 2009.

In a report addressed to D.C. Council Chairman Vincent Gray and Mayor Adrian Fenty, Gandhi wrote, “The 50-cent increase in the cigarette tax rate was projected to increase revenue but also decrease volume. Collections year-to-date point to a more severe drop in volume than projected.”

How severe?

“The estimate for cigarette tax revenue is revised downwards by $15.4 million in [fiscal year] 2010 and $15.2 million in [fiscal year] 2011.”

Annie Chen, the owner of North Sea China Restaurant on 18th St. NW, noticed the drop almost immediately: Since the tax increase was put into effect, Chen has sold smokes to her customers in Adams Morgan at a pre-increase price. “Some places sell for $8,” she slyly reminded me Wednesday night. “But we sell for $7.30. Otherwise you all go to Virginia and Maryland.”

North Sea doesn’t rely on cigarette sales — that’s what the food is for — but the extra revenue is significant enough that Chen would rather reduce her profit margin than lose customers. “I just want to make customers happy,” she said.

Smoking commuters have always fallen into two distinct camps: those who are willing to buy their cigarettes in D.C. despite the high costs, and those who religiously wait until they’re back home in Maryland or Virginia to stock up. Washington City Paper reporter Mike DeBonis suspects that Gandhi and the council failed to take this possibility seriously during a closed-door meeting in July 2009.

“The cigarette tax was literally a no-brainer. I don’t remember much debate at all,” DeBonis, who also covered the tax, wrote in an e-mail. “Part of the blame, if not most of the blame, is on the CFO people who made the cig-tax revenue estimate. Somehow they forgot to consider that Maryland smokers would defect.”

In Wednesday’s report, the CFO’s office expressed frustration that the tax hike hadn’t gone as planned, and suggested that all it had in the way of an explanation was “anecdotal evidence” that Maryland residents, who paid more for cigarettes in their home state prior to the hike in D.C., “have shifted purchases back to Maryland now that District taxes are higher.”

A staffer at the CFO’s office spoke to the Daily Caller on background about the agency’s attempt to find a sweet spot between taxing too little and driving people to other purchase in other states. “The anticipation was that we’d lose some smokers and we’ll collect more money from the people who keep buying,” the staffer said, citing Virginia as an example of a state that has dealt well with increasing excise taxes. “When the federal excise tax went up, Virginia assumed a 12 percent decline. They’ve seen about 7 percent decline.” The staffer also said that the CFO’s office is aware that “Buyers will go where the price is cheapest.”

In the conclusion to his section on the cigarette tax hike, Gandhi seemed to acknowledge this economic reality as well, writing, “Future increases in the tax rate will likely generate less revenue rather than more.”
By Mike Riggs, The Daily Caller

Mumbai: Golden Tobacco has moved closer to developing its land in Vile Parle, Mumbai. At a board meeting on February 16, the company approved the memorandum of association (MoU) for joint development of the property.

Golden Tobacco did not reveal the name of the company it has signed the MoU with, but said it was a “reputed” builder.
Sanjay Dalmia, chairman of Golden Tobacco, could not be reached for comment.

However, talking to CNBC-TV18, Dalmia said the company had mega plans to enter the real estate market, particularly housing.
The company was in a legal tangle with Pramod Jain, one of the shareholders, moving the Company Law Board against the resolution passed by the company board and subsequently by the shareholders through the extra-ordinary general meeting held on January 18.“I have taken my petition back,” Jain told DNA Money on Wednesday, but declined to give further details.

Reacting to the news, the stock was locked in at the upper circuit of 5%, at Rs 139.65, at close of trading on Wednesday.

BALTIMORE – R.J. Reynolds Tobacco Company will end its use of cartoons and brand name merchandise and restrict its marketing practice for its tobacco product brands in Maryland following a settlement with state Attorney General Douglas Gansler.

Gansler alleged that R.J. Reynolds’ Camel Farm marketing campaign’s alleged use of cartoons and brand name merchandise was in violation of the 1998 Tobacco Master Settlement Agreement and Consent Decree. In addition to ending its campaign, R.J. Reynolds will pay the state of Maryland $150,000.

“In its Camel Farm campaign, Reynolds turned a blind eye to its obligations under the MSA to never again use cartoons or to give away branded trinkets to promote its deadly products in Maryland,” Gansler said.

“These dangerous tobacco industry tactics sabotage efforts by public health professionals, doctors, parents and educators to prevent smoking among youth and young adults.

“This settlement holds Reynolds accountable for bringing the Camel Farm campaign to Maryland in the first place and, by specifying and clarifying the MSA’s restrictions on cartoons and giveaways, prevents Reynolds from evading these important protections in the future.”

Reynolds is prohibited by the 1998 MSA from using cartoons or distributing brand name merchandise to promote its cigarettes. In Dec. 2007, Maryland and eight other states filed actions against Reynolds that challenged the company’s marketing tactic. That action arose from a marketing campaign that promoted Camel cigarettes to young adults by supporting indie rock and independent record label bands and their music.

“Maryland’s settlement with Reynolds is one of several efforts by many States, including parallel litigation brought by the Attorneys General of California, Connecticut, Illinois, Maine, New York, Ohio, Pennsylvania and Washington, to monitor and enforce the life-saving concessions we won in the 1998 MSA,” Gansler said. “Big Tobacco requires big enforcement by the States.”

Maryland is the only state to date to have reached a settlement resulting in the termination of Reynolds’ Camel Farm marketing campaign.

R.J. Reynolds will, under terms of the settlement, terminate the Camel Farm program and refrain from ever distributing any of the marketing materials created in connection with the campaign again.

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

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.

In a big white warehouse just south of the Centre College campus, there are 1 million pounds of tobacco waiting to be sold. It could be part of one of the best tobacco crops in decades, but one warehouse owner is concerned a flooded tobacco market could be bad news for farmers.

Jerry Rankin, owner of Farmers Tobacco Warehouse in Danville, said the amount of tobacco on the open market this year is abnormally high — he estimates as much as 25 million pounds of the crop is available for anyone to purchase.

Normally, farmers contract with major tobacco companies for a large amount of their tobacco. But in March of this year, a major tobacco company cut many farmers’ contracts by 25 percent, while some growers lost their contracts entirely, Rankin said.

Farmers who already had made decisions about what they were growing went ahead with their tobacco crops, hoping to turn a profit on the open market, he said. Other farmers who had been growing other crops switched to tobacco after seeing their peers make a good profit on tobacco last year.

“The supply is quite a bit more than the demand this year, and there’s a lot of farmers running around trying to find where to go (with their tobacco),” he said.

No more floor space

Last year, Farmers Tobacco Warehouse sold about 4.7 million pounds of tobacco. This year, Rankin expects to sell a lot more — anywhere from 5.5 million to 7 million pounds.

The tobacco sold at the warehouse is auctioned off to the highest bidder. Rankin said it boils down to simple supply and demand.

The warehouse is packed with 1 million pounds of tobacco. Floor Manager W.M. Alford is taking names and numbers of farmers with tobacco because there’s no more space.

The warehouse’s first auction of the year is Monday, which is when the tobacco community will learn just how much the tobacco is going to sell for, he said. Alford said last year tobacco sold for about $1.55 a pound.

About one-third of the current stock is expected to be sold on Monday, with two more auctions scheduled for Nov. 23 and Dec. 3. The warehouse probably won’t be finished selling until sometime in February.

Rankin said it’s potentially an unfortunate situation for farmers because this year’s tobacco crop is outstanding, especially compared to the past two years’ crops, which had too much color and weren’t a good consistency for smoking.

Not since 1982 has Kentucky had as plentiful and high quality a crop, he said.

“The color’s good in it, the moisture’s good in it. It’s fancy tobacco,” he said. “You can drive the wheels off your car, and you won’t find a better crop.”

High-quality crop

Enough rain during the growing season and plentiful humidity during the curing season made for excellent tobacco this year, and many local farmers handled their tobacco professionally, which keeps the quality up and makes it more valuable, Rankin said.

However, while much of this year’s crop is high quality, Rankin said some of the crop was housed in cool weather, got dirty or was left in the field due to rain. As much as 15-20 percent of this year’s crop could be of poor quality.

That could be good news for farmers with high quality crops, because it would shrink the market back to a good size and keep tobacco prices up where they normally would be. But it would be bad news for farmers who are unfortunate enough to have a bad crop this year, because they’ll be left with essentially nothing, Rankin said.

What it comes down to is waiting for Monday, to see what the tobacco sitting in the warehouse sells for.

“I think there’s a lot of tobacco companies and dealers out there that’s seeing a home run, and it’s going to be a situation where the farmers out there will suffer,” Rankin said. “That’s my opinion; I hope I’m wrong.”

Copyright: AMNews.com 2009, By BEN KLEPPINGER

Golden Tobacco (GTC), a company promoted by Delhi-based industrialist Sanjay Dalmia, is facing a hostile takeover attempt by investor Pramod Jain, who does not want the company’s assets to be encumbered after Mr Dalmia defaulted on loans to a host of lenders. The company’s open offer will commence on December 30 and close on January 18, 2010, subject to the clearance by market regulator Sebi.

Mr Jain’s JP Financial Services said it had advanced Rs 8.5 crore as inter-corporate deposits against the pledge of various securities that includes 8.9 lakh equity shares of Golden Tobacco. Mr Jain made the open offer at Rs 101 a share. The Golden Tobacco scrip closed 4.99% up at Rs 109.40 a share on BSE on Thursday.

“Due to the default in repayment obligations, JPFSPL has invoked the shares of Golden Tobacco,” said Mr Jain. He added that the company has acquired another 71,034 shares from the stock markets. Together, the company, along with persons acting in concert, hold 11.39 lakh shares representing 6.47% of GTC’s shares, the open offer document said.

Mr Jain told ET NOW that as a shareholder he did not want the assets of the company to be encumbered to set off against the personal liabilities of the promoters. “By launching an open offer, I have made sure that the company’s assets are not transferred to any of the bankers who lent funds to the Dalmias,” he added. GTC has a land bank worth Rs 600 crore at Vile Parle in Mumbai, which is attracting attention from Mr Dalmia’s lenders.

ET, in its edition dated November 7, reported that Indiabulls and the Dalmias were planning an out-of-court settlement after the Dalmias defaulted on a loan. Indiabulls had lent Rs 225 crore to seven Dalmia group companies, according to an FIR filed by Indiabulls against Dalmia with the Mumbai police in July this year.

The Dalmias are also fighting a legal battle in the Bombay High Court against L&T Finance which sold Dalmia’s pledged shares in the open market after the promoters failed to meet the margin calls. In the last one year, stock exchange data show that Mr Dalmia’s stake has come down from 37% to 27% in Golden Tobacco. When contacted, Mr Dalmia, in a statement, said: “In terms of shareholding, the promoters shareholding along with that of our friends are at comfortable levels.”

Meanwhile, another drama was played out at the Bombay High Court where Mr Dalmia’s application seeking to quash the FIR against him by Indiabulls came up. The division bench of Justice JN Patel and Justice Amjad Sayed did not extend the interim relief granted by the Delhi High Court, which expires on November 15.

The court will be hearing the arguments of the prosecution as well as Mr Dalmia’s counsels on Friday. He has been accused of breaching the Sections 420 (cheating) and 120-B (conspiracy) of the Indian Penal Code. There are 15 accused in the Indiabulls case, including Mr Dalmia and the seven companies, which took loans from Indiabulls.

Indiabulls filed the case for alleged fraud by the borrowers, which provided bogus additional security for the loans taken, which Indiabulls said were promoter companies of the Dalmias.

Interestingly, the value of the land in Bijwasan in Delhi, which was mortgaged as additional security, was worth Rs 70 crore. But Indiabulls found that the land was not owned by the borrowers, and hence, filed a police complaint against Dalmia and 14 others.

13 November 2009, Indiatimes

BLANTYRE — Sales of Malawi’s main cash crop tobacco dropped nine percent to 433 million dollars (293 million euros) this year, as prices at the auction floor fell by nearly a quarter, the country’s crop watchdog said Wednesday.

“The tobacco market suffered some price setbacks and average prices were down by 23 percent per kilo this year,” Bruce Munthali, general manager of the Tobacco Control Commission, told reporters.

Despite a record harvest of 208 million kilos of burley tobacco, average prices dropped to 1.86 dollars per kilo, from 2.42 dollars last year, he said..

Malawi is the world’s biggest exporter of burley, which is a thin-leafed variety dried in the open. The industry employs about 500,000 people.

The impoverished southern African nation produces 22 percent of the global supply of burley, which Munthali said could give the nation an edge in luring more buyers.

“Market control puts Malawi at a competitive position in burley production and could help in attracting more buyers into the market,” Munthali said.

The crop known as the “green gold” fetches up to 70 percent of the country’s foreign exchange.

PLANS to set a minimum price for all alcohol sold in Scotland were thrown into fresh doubt last night after the European Court of Justice opposed a similar policy on tobacco. The court’s advocate-general ruled against proposals by Ireland, France and Austria to set a minimum price on cigarettes, saying it would break competition laws by benefiting manufacturers.
The drinks industry in Scotland last night claimed the ruling would apply to alcohol as well, and said that ministers should therefore drop their plans immediately.

But health secretary Nicola Sturgeon hit back, insisting the court’s ruling on tobacco was “irrelevant” and SNP ministers would press ahead regardless.

The row centres on Scottish Government proposals to set a minimum price on all alcoholic drinks, with 40p per unit widely expected. At that rate, a bottle of vodka – which contains 26 units and can cost less than £7 – would retail at a minimum of £10.40. Large bottles of cheap cider, which sell for less than £3, would more than double in price.

Ministers say the radical moves will reduce the social harm caused by alcohol, both in terms of crime and healthcare.

The announcement yesterday from the European Court’s advocate-general is regarded as a clear indication of the full panel’s final judgment.

The court repeated previous European Commission rulings that the best way to meet public health objectives was through taxation and excise duties, saying this would not interfere with the setting of prices.

The Scotch Whisky Association’s chief executive, Gavin Hewitt said: “Austria, Ireland and France have been told clearly today that minimum pricing is a breach of EU law. The Scottish Government must recognise the legal situation and drop this proposal, which would be hugely damaging to Scottish jobs.”

But Ms Sturgeon last night said: “It is entirely inappropriate and irrelevant to translate an opinion on tobacco to the totally different issue of minimum pricing of alcoholic products.”

Ms Sturgeon added: “The issue here is ending a situation where bottles of chemical cider are sold for £3, or bottles of industrial vodka for less than £7.

“These are the products favoured by problem drinkers and are exactly the ones that will be targeted by minimum pricing, not quality products sold at responsible prices.”

But one drinks industry source added: “Are they now really saying minimum pricing on cigarettes, which are proven to kill you, will be illegal under EU law, but that minimum pricing on alcohol won’t be?”

Both the Liberals and the Conservatives say they will oppose minimum pricing, but the legislation could still pass, as Labour has still to decide its position.

Scottish Tory deputy leader Murdo Fraser said: “This ruling is a complete hammer-blow for the SNP and their obsession with blanket minimum pricing.”

22 October 2009 Scotsman

The state Supreme Court has issued a ruling that would allow the state to collect higher taxes on cigarettes sold by Osage Nation tobacco stores.

However, the Oklahoma Tax Commission said Monday that it already has a new deal with the Osage Nation requiring it to pay a tax of 66 cents per pack.

The state tax on cigarettes is $1.03, but tribal stores pay lower rates, ranging from 6 cents per pack for those along Oklahoma’s borders to 86 cents per pack for some tribes. The state had wanted to charge the Osage Nation 86 cents per pack, but the tribe argued that it should be paying much less.

The Supreme Court last week overturned an injunction that barred the state from collecting the higher rate. The justices ruled that a lower court didn’t have jurisdiction to stop the Tax Commission from collecting 86 cents per pack from the tribe’s licensed tobacco retailers.

“We are pleased with the results and consider the matter closed,” commission spokeswoman Paula Ross said.

“In this case, and there are so many, we said the court lacked jurisdiction to stop us from doing what we’re doing. Since then, we have negotiated a new compact with the Osages for a general compact rate of 66 cents.”

The Osage Nation did not immediately return a call seeking comment Monday.

The tribe had been paying 58 cents per pack based on a so-called “favored nation” clause in its compact with the state. That provision allowed Osage Nation retailers to pay a lower tax rate if another tribe within 35 miles of its smoke shops was paying less.

The Osage Nation’s rate was based on the Pawnee Nation’s, which ended its compact in 2008. The state then started charging Osage Nation retailers 86 cents per pack.

Osage-licensed retailer Feather Smoke Shops LLC sued, saying the favored nation clause entitled it to the most favorable tax rate enjoyed by any other tribe. The retailer contended the most recent such compact was for the Kaw Nation and allowed for a 26-cent tax rate.

In the court’s majority opinion, Justice Joseph Watt wrote that the Osage compact required that any dispute not resolved by good-faith negotiations within 30 days be submitted to binding arbitration.

“The Tribe and the State agreed to federal arbitration under these circumstances, and we will not rewrite the compact,” Watt wrote.

Justice John Reif concurred with portions of the majority opinion but disagreed that the dispute was subject to arbitration.

“I reach this conclusion because the undisputed material facts show that the state, through the actions of the Oklahoma Tax Commission, is simply in breach of the unambiguous ‘favored nations’ provision of the compact,” Reif wrote.

October 5, 2009

LILONGWE, – The Malawi government on Tuesday announced a deportation of four foreigners working for three tobacco companies, finally effecting its threats of expulsion of foreign tobacco buyers, for alleged continuing buying tobacco at low prices.

Malawi’s Immigration Department Chief Elvis Thodi told state radio Malawi Broadcasting Corporation on Tuesday that four expatriates working for Limbe Leaf, Alliance One and Premium TAMA tobacco companies had been issued with immediate deportation orders.

The four expelled expatriates include chief executive officers for Limbe Leaf and Alliance One, Kelvin Stainton and Collin Armstrong respectively. The other two affected expatriates are Vande Merwe of Limbe Leaf and Alex Mackay of Premium TAMA.

“The four people have been issued with deportation orders because they have been working against the government development agenda.. Their Temporary Employment Permits have since been revoked,”said Thodi without explaining the government agenda that the expatriates were contravening.

Copyright © 2009 Sept. 8 – Xinhua

Saratogans hoping to quit smoking might receive a little bit of help from the city if a new zoning ordinance amendment regulating the number of tobacco retailers in Saratoga is approved.

The Saratoga Planning Commission spent close to two hours discussing the topic at its public meeting last week in the Civic Theater at city hall. The Saratoga City Council asked the commission to review the proposed amendment and give any recommendations it found necessary to add.

The ordinance would require any new tobacco retailers to obtain a conditional-use permit and would limit the density of retailers in the city. The ordinance states that tobacco retailers could not be within 500 feet of each other and must be 1,000 feet away from schools, public or private.

There was also discussion on whether to create a buffer between the retailers and city parks.

Although all of the commissioners indicated some level of support for the regulation, not all agreed with how the ordinance was written and questioned how the rules could affect future development in the city.

“I have to say that on these density limit issues, I have some real concerns, primarily because we’re about to enact this at the same time that we’re redeveloping two huge parts of the city, one being Quito and the other the downtown,” said commissioner Joyce Hlava. “And when I look at the map, it really looks like there are very few commercial centers anywhere in town where you can sell cigarettes.”

Hlava stated she was “in no way a supporter of cigarettes” and said she quit smoking close to 30 years ago.

She did say, however, that supermarkets such as Safeway, and pharmacies like Walgreens or CVS sell tobacco products and can usually be found in close proximity in shopping centers.

“If I was looking at this totally long range, I would have to say, who knows how this is going to limit us in the future,” she said.

Commissioner Mary-Lynne Bernald looked at the ordinance as a way of creating a healthier city.

“We’re talking death sticks here,” she said.

“I did listen to what we had to say about supporting the businesses coming into the community,” she added, “but do we want to allow companies that are selling death sticks to our children … coming into the community? And is this something that we want to promote? If we cut back on this sort of thing, then we have the chance of making a statement to our citizens.”

Bernald asked the commissioners if they believed that any retailer needed to sell cigarettes in order to keep their business afloat. Commissioner Manny Cappello said in most likelihood the answer is yes.

“I think that if we were to put a moratorium in Saratoga, for example, we would force some retailers to not even put a store in Saratoga because of this,” he said. “There are certain businesses, like gas stations, pharmacies and markets, where it is a piece of their business. What percentage it is, I don’t know.”

The only change the commission made to the policy was to add that any tobacco retailer that could not meet all of the proposed criteria would be able to go in front of the planning commission. The commission then could approve a conditional-use permit if the business met the current planning findings.

The amendment will go forward for a vote by the city council.

Copyright © 8 Sept, 2009 Mercurynews

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In the latest example of how not even Democrats are cozying up to Gov. David Paterson these days, Craig Johnson, the Long Island Democrat who heads the Senate Investigations Committe, wants hearings on the lack of tax collections.

This comes in the wake of a story earlier this week in the Buffalo News noting that Paterson has quietly written off the estimated $65 million it could have gotten by taxing Native American cigarette sales.

Republican Sen. Joe Griffo of the Utica area also decried the lack of tax collection in a recent release.

Here’s Johnson’s statement on the upcoming hearings, followed by Griffo’s release.

Senator Craig M. Johnson, chairman of the Senate Standing Committee on Investigations and Government Operations, announced today plans to hold a hearing on the state’s long-unsuccessful attempts to collect taxes from cigarettes sold to Non-Native Americans on Indian reservations.

This move was prompted by news that the Paterson Administration has quietly written off collecting this revenue — a move that is in direct violation of a law that the governor himself signed last year. The failure to collect this revenue is costing the state $65 million this year, according to the state Office of the Budget.

Non-collection of this tax revenue from Native American retailers has long been an issue in New York that has confounded several administrations. Senator Johnson, however, contends that the current economic crisis, and budget deficit, make a resolution vital.

“We literally can’t afford to look the other way, nor should the state Department of Taxation and Finance ignore a law that is barely a year old,” Senator Johnson, (D-Nassau,) said. “This Committee wants to be helpful in finding a solution, but the public also deserves to know where things stand between the state and Native American retailers and why there has yet to be an agreement.”

Other states – most recently Florida – have been able to reach tax collection agreements with their local Indian nations on this issue.

Senator Johnson was joined in this call for a hearing by fellow committee members Deputy Majority Leader Jeff Klein, (D-Bronx/ Westchester,) and Senator T. William Stachowski, (D-Lake View.) Both senators sponsor legislation that would stem the sale of tax-free cigarettes and further strengthen enforcement of current laws.

“Our state has already lost hundreds of millions of dollars by not cracking down on Native American cigarette retailers. It’s time to stop losing money and start collecting it,” said Deputy Majority Leader Klein. “I believe a public hearing is the next logical step and the best way to find a solution to this problem.”

“I absolutely agree with calling for a public hearing on the issue of collecting state taxes on sales made on native territories,” Senator Stachowski said. “Governor Paterson has repeated time and time again that we are faced with a financial deficit of record proportions. The Supreme Court of the United States has ruled that the collection of taxes is legal on Indian lands, so why would we not pursue this?”

The hearing will take place in Albany this Fall. It will be set pending scheduling and the date of the Governor’s expected special session.

And Griffo:

Senator Joseph A. Griffo (R,C, I- Rome) today condemned the Executive’s action to end efforts to collect sales taxes on cigarette sales to non-Indians at Indian-owned businesses.

“This is wrong on multiple levels,” Griffo said. “First and foremost, the tax should be collected. The law of this state says sales of tobacco products to non-Indians should be subject to sales tax. “I don’t know how the Administration can pick and choose which laws they want enforced. Existing law is intended to be abided by, not to be negotiated. I can’t imagine what would happen to employers that went 14 years without obeying the law. We can’t just ignore the law. If the Administration thinks the law is wrong, the redress open to him is to go through the political process to enact a new law, not to simply give up on making the law work.”

Griffo also noted disappointment with the Governor’s inconsistency. “Last year, the governor signed a bill to collect the taxes. This year, he says he will not work to collect the taxes. This is another example of the inconsistent leadership that has governed by stops and starts. How can we move this state forward when in instance after instance, we keep flopping back and forth or going in circles?”

Griffo said the tax is not a Native American issue. “The rise of the Oneida Indian Nation from poverty to prosperity is a great chapter in their history and the history of our region. The real issue in this case is the fiscal impact local residents face from the loss of tax revenue in cigarette sales purchased by non-Indians. ”

Griffo noted that according to some estimates, New York fails to collect $400 million a year in sales taxes on cigarette sales to non-Indians at Indian-owned businesses. “What this can mean to the state, and also to the local communities in Oneida County that should have been sharing in this money for 14 years, is very important given our current fiscal crisis,” Griffo said. “This is also a very important issue for the small convenience stores located near Indian-owned businesses. There should be a level playing field for them in which to compete.”

Copyright © August 20, 2009 Timesunion

Millions of taxpayer dollars are going up in smoke as the Patrick administration moves to buy a pricey high-tech cigarette tax-stamping system despite little evidence of counterfeit butts in the Bay State, lawmakers charged yesterday.

Gov. Deval Patrick – who has wrangled with the state’s two major zoos over $4 million in state funding – plans to shell out nearly $5 million over the next three years for the new digital stamper.

“I’ve looked at this issue, and quite frankly (administration officials) don’t seem to have made the case that we need to move to this technology,” said Rep. Antonio Cabral (D-New Bedford), who co-chairs the legislative committee on bonding.

“The money would be better spent somewhere else on local aid or restoring any of the services we had to cut,” Cabral said.

Sicpa, a Swiss company, has been awarded a $4.7 million contract for digital equipment to stamp cigarette packs instead of the stickers used now. The state is expected to spend $800,000 in fiscal year 2010 because the system won’t be implemented until midway through the year.

“This is another example of an incredibly mismanaged government. On the one hand you have the governor making unwise budget cuts that are turning services upside down, but on the other hand the state’s wasting millions on useless contracts,” said Senate Minority Leader Richard Tisei (R-Wakefield).

But Robert Bliss, spokesman for the state Department of Revenue, said the new system would protect millions in funding the state receives every year from a 1998 tobacco settlement. If tobacco companies believe the state isn’t protecting their profits, they can file a lawsuit and potentially hand over less cash, Bliss argued.

The Bay State is expected to collect a total of $2 million from tobacco companies under the settlement.

Bliss also frets that the state may see a spike in counterfeit cigarettes, despite only 1,800 cigarette packs out of 117,000 seized in the state had the fake stamps.

“While we have not seen a tidal wave of them, we are beginning to see some cases,” Bliss said. “We figure where there’s a few caught, there might be more coming down the road.”


Copyright © 2009 Bostonherald

The cigarettes I buy are $9.99 a carton for the product. I pay $12.65 a carton in taxes. Just three years ago I paid $15 for a carton, tax included.

Now it seems the government wants to go after people who are overweight by adding extra tax on cola and other sugary drinks. I hope the tax is as high as what I’m forced to pay in pursuing my happiness in smoking a cigarette in my home.

Will the next tax be on the tanning beds, now considered a big health problem contributing to skin cancer?

You can get really drunk on a 24-pack of beer for $15, not to mention the side effects and health problems. Let’s slap at least a $10 tax on that!

Watching the evening news is like an old episode of “Lost in Space” with the robot. “Warning! Warning! Danger!”

What’s on the rise in America? Lost jobs, illegal immigration and homelessness. Warning! Danger!

The proposed London smoking ban is more than just a public health issue. The ban goes too far in affecting the rights of business owners. Is smoking unhealthy? Yes. Is smoking illegal? No. It seems like government agencies enjoy receiving tax revenue from the sale of tobacco, but are concerned about the smoker’s health and encourage them to stop smoking. Kind of a double standard here. What would the government do if no one bought tobacco and the tax money dried up?

If no one is allowed to smoke 20 or 25 feet in front of a public building, then no one could smoke outside in downtown London. Reason being, all the buildings downtown are public buildings and you can’t move 20 or 25 feet without being in front of another public building. Has anyone thought about how this will affect the World Chicken Festival and will the smoking police be out in force?

If our local restaurants do not want smoking in their facility, then go buy a $1.50 “No Smoking” sign.

I do not smoke. I have also worked for many years in health care. I just believe it is ironic that a community whose agricultural base for over 100 years has been tobacco would be even considering a smoking ban. Does that mean you can’t even light up in the tobacco warehouse if the ordinance passes? I also find it ironic that a city council member whose family profited from the tobacco farmers for decades in this community would even consider the proposal of a smoking ban. The tobacco farmers do have the option of boycotting any business that does not support them or their enterprise.

Business owners have the right to determine whether or not they should allow smoking on their property. Smokers and non-smokers have a right to patronize the business that has smoking or not.
Copyright © 2009 Thetimestribune

The Dutch government has dropped spot checks on smoking in small cafes after bar owners won two legal victories in their fight against a ban on their premises, the health minister said Wednesday.

Ab Klink said in a letter to members of parliament that action taken to fine offenders had also been suspended temporarily.

Appeal courts at Leeuwarden in the north and Den Bosch in the south have found in favour of landlords of cafes, restaurants and hotels without staff, who said the law did not oblige them to implement a smoking ban.

The ban on smoking in the hotel, restaurant and catering industry was introduced a year ago with the aim of protecting employees from the dangers of second-hand smoke inhalation.

Several thousand small bars and cafes in the Netherlands united late last year to defy the smoking ban and create a joint legal defence fund, arguing they lacked the floor space and money to erect separate smoking-only areas.

Prosecutors have taken the cases to a higher court for a definitive ruling.

The New York Health Department is proposing city tobacco retailers post signs with graphic images such as cancer-ravaged throats and black lungs in an effort to discourage smoking, health officials said Wednesday.

The signs – the first of their kind in the country – would include health risk warnings and information on how to quit, said Sarah Perl, assistant commissioner of the city’s Bureau of Tobacco Control.

“You’re going to see what a blackened lung looks like; you’re going to see what mouth cancer looks like; you’re going to see what it looks like when you have throat cancer,” Perl said. “They’re going to have to think, ‘Do I really want to pay 10 bucks for mouth cancer?’ ”

The city Board of Health will hold hearings and vote in September on the proposal. Officials expect opposition from many of the city’s 12,000 tobacco retailers and the cigarette industry.

Jim Calvin, president of the state Association of Convenience Stores, said a new law giving the Food and Drug Administration more tobacco control is sufficient. “I’m not sure we would be eager to give up additional wall space and advertising space for posters and signs and images,” said Calvin, whose group represents 7,700 stores statewide.

President Barack Obama signed a law Monday allowing the FDA to lower the amount of nicotine in tobacco products; forbid ads geared toward children; ban sweetened cigarettes that appeal to youngsters; and prohibit “light” and “low tar” labeling.

The Health Department said its proposal is aimed mainly at adult smokers and would complement the new federal law.

“Tobacco is an addictive drug,” health commissioner Dr. Thomas Farley said.With John Valenti
Copyright © 2009 Newsday

Comprehensive indoor smoking bar proposed by Westfield City Council triggered heated discussions among anti-smoking advocates and business owners.

Saul Lemke took a dramatic part of his savings and retirement fund to open his own business, a bar named Bucky’s Grill, which was launched just two months ago. However, nowadays it is on the brink of inevitable closure.

The reason of such concerns is rather simple – the majority of Bucky’s patrons are regular and inveterate smokers, who come to the bar to have a drink and a smoke. Therefore, the recently introduced proposal to implement a citywide indoor smoking ban, including eating and drinking establishments would lead to significant revenue drop and probable bankruptcy of this cozy place as well as other restaurants.

While taking part in a public hearing held in the City Council, Lemke told councilors that he thinks his bar would enter in city’s history as the shortest-lived bar ever.

However, Bucky’s owner was almost alone in his claims as the number of people who spoke in favor of the ban was twice as more as those who were against it.

Ken Kingshil, the Westfield Mayor and the author of the proposal said that according to his estimations the majority of the residents support the ban.

There were almost 80 people at the hearing in the City Council. The Councilors heard about 20 of them, but they consider continue hearing constituents at the next hearing. The Mayor said that they have received more than 200 e-mails regarding the proposed regulation; therefore the authorities want to hear all the opinions. Kingshill added that the date of final voting over the ban has not been specified yet.

Nevertheless, four of the seven councilors were against the ban, when it was proposed back in May. One of them stated that implementing a ban on smoking in such public places as bars, restaurants, work places and the majority of hotel rooms in the city was too much interference into the life of citizens from the Council.

Another two members admitted they would back it in case they would have received enough evidence that the majority of people support it, and it would not hurt the city’s economy.

The Westfield Mayor said that the provisions of the ordinance could be amended depending on the public feedback.

Several authorities consider that the ban should not be so restrictive, and they should impose a less strict ban, like in Indianapolis where it is permitted to light up in establishments that do not let teenagers under 21 inside.

A less strict restriction would as well save such businesses like Bucky’s Grill and thus help to save jobs that are so precious these days.

According to the proposal’s author, the regulation was introduced in order to protect non-smokers who work in bars and are exposed to secondhand smoke.
However, not many of such employees need the measure as they understand that it would inevitably hurt their salary, tips and even the work itself.

Jackie South, who has been working at the Carey Tavern for the last 6 years, said that although she has never lighted up in her entire life, she is against the ban since it would probably lead to loosing her job.

But the issue of personal rights was the principal argument of both sides of debate.

“The smoking ban would bring back the right to enjoy clean air,” stated Ana Gonzales, a Westfield teacher who doesn’t smoke and favors the ordinance. She added that if people want to smoke they should have only two options: to smoke in their homes or outside, and not expose everybody around to their smoke, sitting in the bar.

However, another non-smoker, Eva McAdams said since she does not smoke, she does not visit smoky places, but goes to other restaurants. So the main issue is to respect other person’s fundamental rights. She added that America is a democratic and free country where people are free to make their own decisions, and if smoking is still legal they should decide to smoke or not by themselves.

A discriminatory bill currently pending in the Canadian Parliament would endanger agricultural jobs and could signal a worldwide movement against Virginia burley. If passed, the bill would essentially ban all burley exports from the U.S. to Canada, resulting in far-reaching, negative implications for the burley growing industry.

The Virginia tobacco industry generates hundreds of millions of dollars each year. Virginia tobacco farms are typically small family farms with few alternative crops capable of generating the per acre returns necessary to support their operations.

“More than 900 Virginia farmers depend on the production of tobacco to support their farming operations and rural communities,” said Wayne Pryor, President of the Virginia Farm Bureau Federation. “Farm sales of tobacco in Virginia will exceed $70 million in farm value this year, and this bill would have a devastating impact on Virginia agriculture.”

The original intent of the bill (Canada Bill C-32) was to ban only candy-flavored little cigars. But it has been written so broadly that it will apply to all cigarettes and will ban all flavorings used with Virginia-grown burley, effectively prohibiting the manufacture and sale of American blend cigarettes – with Virginia-grown burley tobacco – in Canada. American blend cigarettes contain burley tobacco and use certain ingredients to aid in the manufacturing process and to provide the products with their distinct taste. Unlike the products that are supposed to be targeted by the bill, these American blend cigarettes do not have a fruity or sweet odor or flavor.

According to agricultural leaders, banning the flavorings effectively bans the sale of the American blend cigarettes. “This isn’t about tobacco control, this is about arbitrary discrimination against one type of tobacco versus another,” said Pryor. “There are certainly ways for the Canadian government to achieve their goal of banning fruit-flavored products aimed at kids without wiping out the market for American burley tobacco and threatening American jobs.”

“No less than the future of the burley tobacco growing industry is at stake. If other countries follow Canada’s lead, the market for American- style tobacco products will be nonexistent outside the U.S.,” said Pryor.

Dean Wallace, the Executive Director of the Council for Burley Tobacco, recently wrote to Canada’s Minister of International Trade to express opposition to this bill.

“C-32 would ban the vast majority of U.S. cigarette exports to Canada and prohibit Canadian companies from manufacturing American blend cigarettes. Additionally, it would deny tobacco farmers an opportunity to sell burley to any company for use in Canadian products,” Wallace said in his June 4 letter.

“The bottom line is this legislation has been written too broadly and is threatening to impose far-reaching, negative implications on Virginia burley growers. We are asking our elected officials in Washington D.C. to take notice of this pending action in Canada and do everything in their power to stop it,” said Pryor.
Copyright © 2009 Prnewswire

Economic crisis affected the income of a lot of companies except tobacco companies. Tobacco companies remain unaffected to the global economic downturn, said scientists.
According to a recent data released by Sampoerna, an Indonesian tobacco company whose cigarette brands are smoked by millions of Indonesians, cigarette sales totaled 59.6 billion sticks between January and March this year as against 53.5 billion sticks recorded in the same period last year.
Around 59.7 percent of the first quarter sales comprised machine-rolled clove cigarettes, 32.2 percent hand-rolled clove cigarettes and 8 percent machine-rolled non-clove cigarettes. While order a 2.5 percent ascend in sales volume to 18.1 billion sticks from 17.7 billion, the market share of Sampoerna-branded cigarettes fell to 24.3 percent from 25 percent.
The consolidated market share of the Sampoerna brand and the Philip Morris brand was also very slightly down to 29 percent from 29.5 percent. But the Philip Morris market share rose to 4.7 percent from 4.5 percent. Sampoerna is controlled by US biggest cigarette company, Philip Morris.
The cigarette sales of the Sampoerna Company have declined slightly, but the Indonesian company didn’t want to explain the cause of this decline.
The company’s president director, Kevin Douglas Click, said only that he was glad if the sales would remain stronger this year. As it is known Indonesia is a refuge for smokers as Vice President Jusuf Kalla which said that the country had the cheapest cigarette prices in the world due to its low excise taxes.
Apart from Sampoerna and Philip Morris, the Indonesia also houses five other famous large tobacco companies: PT Gudang Garam, PT Djarum, PT Nojorono, PT Bentoel, and PT British American Tobacco (BAT) Indonesia. The BAT Indonesia’s principal activities are manufacturing, marketing and distributing cigars, cigarettes and other products made from tobacco.
Sampoerna’s rival openly listed BAT, which sells international brands including Lucky Strike, Pall Mall, Dunhill, Ardath, Kansas and Commfil, said researchers.
Nevertheless, the company suffered a decline in its market share during the first quarter of the year to 2 percent down from 2.5 percent compared to the same period last year.

An Essay published this week in the open access journal PLoS Medicine calls for the President Obama to “make a strong public commitment” to tobacco control by mobilizing US Government departments and agencies to achieve a coherent policy after eight years of neglect.

In their paper, Thomas Novotny and Joshua Yang, researchers in tobacco control and public health from San Diego State University and University of California San Francisco respectively, emphasize the huge potential for the US Government to reduce tobacco mortality and morbidity if action is co-ordinated across agencies. Presently tobacco use is the leading preventable cause of death in the United States – responsible for at least 443,000 deaths between 2002 and 2004 – and exacerbates health disparities in the country, with African Americans, Native Americans, people in poverty and those with lower educational attainment suffering from a higher burden of the diseases and disabilities that result from smoking.

Critically the authors argue that simple tobacco control measures – such as creating smoke-free environments, and engaging a mass media public education campaign – can come at little cost to the government. Programs that do require investment, such as providing comprehensive smoking cessation services and expanding regulation over tobacco products, marketing and promotion, could eventually yield economic return. Smoking is currently a huge fiscal burden, resulting in the loss of $96.8 billion in productivity losses and over $75 billion in annual US medical expenditures.

The paper outlines the agencies that can play an important part in a revitalized approach and stress three key tobacco control issues that should be prioritized to frame a national policy coherence plan. Firstly, the ratification of the first ever global health treaty, the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC) – which was not sent to the Senate by President George W. Bush – could act as a framework for national policy. The bill to grant the US Food and Drug Administration (FDA) regulatory authority over tobacco products, recently passed by the US House of Representatives, should contain the strongest possible language without concessions to the tobacco industry. And thirdly, the authors point towards settling the case that the Department of Justice brought against the tobacco industry, currently in appeal, which orders the industry to cease false and deceptive activities.

“We believe this change in direction is based on sound science, is acceptable to the almost 80% of non-smoking Americans and the 70% of smoking Americans who want to quit, and in the best fiscal and health interests of the United States”, say the authors. Furthermore, by implementing the FCTC the United States can demonstrate international commitment to tobacco control and spur other countries to implement the treaty.

Funding: Financial support for this project was provided by National Cancer Institute Fellowship Funding CA-113710-02 (JSY). The funder had no role in the preparation of the manuscript.

Copyright © 2009 Medicalnewstoday

A coalition of bar owners in Iowa has decided to drop its lawsuit over the state’s tobacco ban, but a spokesman says the fight is not over.

After the decision of bar owners, a Polk County judge last week dismissed the lawsuit that challenged the constitutionality of the tobacco ban. It was filed by several groups of bar owners on July 1, 2008, the same day the Iowa Smokefree Air Act went into effect.

The lawsuit claims the smoking ban, which prohibits smoking cigarettes in nearly all public places including bars and restaurants, is unconstitutional for several reasons.

Brian Froehlich, of Wilton, is with the Iowa Bar Owners Coalition. He says the groups are redirecting their efforts and will support the bars that are going to court to protect their businesses.

Exemptions from the smoking ban in Kansas City, Kan., come easy — fork over an annual $250 fee and let your patrons light up.

The owners of 69 businesses, nearly all restaurants and bars, have bought the right to create smoker-friendly havens since the ban took effect Feb. 24. They’ll be able to purchase that right through 2011, when the city’s Unified Government will eliminate the paid exemption.

But that option isn’t for everyone. Take Bob Breitenstein, owner of Breit’s Stein and Deli in the Strawberry Hill neighborhood.

Breitenstein hasn’t tried to escape the ban. Not yet, anyway. He didn’t create a designated smoking section or opt to allow smoking after 9 p.m., as the city requires for exemption-seeking businesses that also cater to minors.

“I have kids that come in here and eat lunch, and I didn’t think taping off a few tables would work,” he said. “Tape on the floor isn’t going to stop the smoke from going over.”

Breitenstein said that his decision wasn’t based on principle and that if business began to slide he would probably purchase an exemption.

“I’m not doing it to make a statement,” he said. “I kind of have a problem with some of the freedoms that are taken away.”

Although Breitenstein has noticed that five or six smoking regulars don’t hang out as long as they used to, he said that sales have kept pace with last year’s. On nice enough days, he said, smokers have the option of taking their drinks and cigarettes to a patio behind his building.

That’s where Cory Kraft of Kansas City, Kan., found refuge Thursday evening when the rain let up and the sun was trying to poke through the clouds.

Holding a cigarette, Kraft said Breit’s has attracted a loyal crowd, much of it made up of Bishop Ward High School graduates like him. When the smoking exemption was proposed, Kraft said, customers thought Breitenstein would get one.

“But he didn’t, and nobody cares.”

According to the Unified Government’s business license department, Kansas City, Kan., has 316 restaurants and bars. Of those, more than 50 have purchased exemptions.

That percentage may appear low. But not when the city’s broad definition of a “restaurant” is considered — it includes caterers, snack bars and fast-food restaurants, institutions that aren’t likely to allow smoking in the first place.

The list of exempted businesses includes well-known watering holes, such as Sammy’s Tavern and Johnny’s Sports Bar. Several venues at the Legends in western Kansas City, Kan., are welcoming smokers — Jazz: A Louisiana Kitchen and Pin-Up Bowl among them.

Businesses that don’t serve food or alcohol, such as Cross-Lines Retirement Center and Strasser True Value Hardware, have purchased exemptions.

Strasser’s general manager, LeRoy Andrews, said his store had a smoking room in the back of the building with a large fan that pulled the air outside. Andrews wanted to keep the room the only place in the building where smoking is allowed because he didn’t want smoking employees to congregate in front of the building.

“I see it all over,” he said. “It looks bad.”

Although the exemptions are only available through 2011, advocates of an all-out ban argue that the city could face pressure to extend that deadline.

“When you look at Wyandotte County, 69 businesses is pretty significant,” said Theresa Ruiz, regional government relations director for the American Cancer Society in Kansas City.

“It’s just the beginning. As more and more of them get approved, it opens up opportunities for loopholes.”

The owner of Sammy’s, located just a few blocks from Breit’s, said she felt as if she had to purchase an exemption because the city’s ordinance exempted casinos and private clubs.

“I think it’s terribly inequitable,” Joni Bocelewatz said. “If smoking is bad, then it’s bad for everyone, including those in private clubs and casinos.”

Now Bocelewatz considers the $250 fee the cost of doing business.

“We’d have lost some customers,” she said.

Smoker Ronald Matthues of Kansas City, Kan., agrees. If nonsmokers don’t want to be exposed to secondhand smoke, they don’t have to enter Sammy’s.

To underscore that point, Matthues motioned to a sign with a skull and crossbones on the tavern’s front door.

“You see that sign?” he said. “It says, ‘Warning, smoking permitted.’ ”

• Over the period from 2008/09 – 2011/12 HMRC will ensure that tobacco activity will make one
of the largest single contributions to its overall objective of reducing revenue losses from criminal
attacks. HMRC recognises that the UKBA seizure target is critical to this commitment, and that
UKBA cannot achieve that target without strong support from HMRC, especially from Investigation,
Intelligence and the development of technological profiling, such as the Freight Targeting
System (FTS).
• Tobacco (cigarettes and HRT) is therefore among the top operational priorities for Criminal
Investigation (CI) and Risk & Intelligence Services (RIS). Tasking and co-ordination activity in both
CI and RIS will clearly reflect this.
• HMRC RIS will continue to provide intelligence products to inform and enhance UKBA’s border
activities in respect of excise duty controls. These intelligence products will be derived from HMRC’s
ongoing responsibility for tackling excise fraud within the UK and overseas and will complement
those delivered by UKBA’s own intelligence capacity in respect of goods threats presented by different
modes of international transport following the transfer of border-related intelligence staff from
HMRC to UKBA management structures in April 2008.
• HMRC’s Criminal Investigation (CI) and Risk & Intelligence Service (RIS) are strongly committed
to supporting UKBA in the delivery of its frontier excise targets. Working in collaboration with
UKBA representatives CI and RIS will continuously evaluate the effectiveness of their contribution to
the delivery of those frontier excise targets with the aim of achieving the necessary impact on UKBA’s
frontier excise delivery commitments.
• In particular, HMRC RIS and UKBA Intelligence will engage regularly to agree specific risk and
intelligence requirements, and will produce quantitative and qualitative measurements of the impact
of HMRC and UKBA intelligence products to inform further joint planning for frontier
operational activities.
• RIS will also apply its full range of intelligence collection assets, including covert sources and the
Overseas Liaison Officer network, in support of its priorities which will include excise fraud.
• Criminal Investigation will aim to adopt at least 95% of frontier referrals that meet the agreed
adoption criteria.
• HMRC alcohol and tobacco policy leads will meet regularly with UKBA colleagues to discuss
possible legislative or policy options that arise out of border activity and will actively consider any
proposals from the UKBA for policy or legislative changes that would enhance border activity on
alcohol and tobacco.
• HMRC will extend FTS to container traffic by October 2008.

A decade of seeking traction in the tobacco market has produced little success for Star Scientific Inc. Last year it posted an $18 million loss on sales of only $500,000.

But its commercial failures belie some technological innovations that have made Star Scientific something of a pioneer in the industry’s hottest market: lower-carcinogen smokeless tobacco. And now its stock price is rising amid hopes of an imminent payoff for shareholders.

Those hopes — and possibly Star’s survival — hinge on the outcome of a patent-infringement lawsuit that is scheduled to go to trial in U.S. District Court in Baltimore in May. In the suit, Star charges that tobacco-purveyor R.J. Reynolds infringed on Star patents covering a carcinogen-lowering process for curing tobacco. . . .

In one measure of the importance of legal strategy to Star’s fortunes, its president is Paul Perito, a former senior partner in the law firm of Paul, Hastings, Janofsky & Walker LLP. And the lawyer who successfully represented Star in 2008 at the U.S. Court of Appeals for the Federal Circuit was Carter G. Phillips, a Sidley Austin LLP managing partner who has argued 56 cases before the U.S. Supreme Court.

Still, the merits of Star’s case against Reynolds remain to be decided. And if it prevails, Reynolds would almost certainly appeal, while even the most generous verdict would leave Star a David in an industry of Goliaths.

Source: Online.wsj

New York City – With the federal government raising new taxes on cigarettes, a new study shows that internet tobacco sales are cutting a deep hole into the city’s tax revenue.

Representative Anthony D. Weiner (D – Brooklyn and Queens), a member of the House Judiciary Committee, and State Senator Jeff Klein (D – Bronx), Deputy Majority Leader, released a new report today showing that New York City is losing up to $150 million in revenue from untaxed cigarettes purchased over the Internet. Weiner announced Congress will soon consider legislation to ban the mailing of cigarettes – effectively shutting down these websites.

When purchasing cigarettes in a retail store, consumers pay $2.75 per pack for the State excise tax and $1.50 per pack for the City excise tax. There is also an 8.375% sales tax that the consumer pays on the entire sale price. So a carton of cigarettes includes a combined $4.25 City and State tax plus sales tax. Smokers buying cigarettes online are still required to pay these City, State and sales taxes, but cigarette sites almost never report the sales to state and local governments.

This week the federal cigarette excise tax was increased from 39 cents to $1.01 to help fund an expansion of the State Children’s Health Insurance Program. The average price per pack in New York City will now approach $10. While the higher cigarette taxes will help curb the deadly consequences of smoking, an unfortunate consequence of increased cigarette taxes is greater incentives for black market sites.

Highlights of New Online Cigarette Sales Analysis

- With city smokers representing between 10% and 20% of the state’s online cigarette purchasers, the city is losing between $50 million and $150 million in taxes each year.

- According to this analysis, New York State loses between $370 and $500 million a year in tax revenue from cigarette sales via online cigarette sales.

- The average cost of a carton of Marlboro cigarettes on the internet is $41.76. The average cost of a carton in New York City with all taxes and fees is approximately $95.

- The City loses out on an average $18.50 per carton in untaxed cigarettes sold over the internet. The average annual tax revenue lost is as much as $148 per New York City smoker.

- Of the more than 2.7 million smokers statewide, an estimated 1 million, or 28%, live in the city.

According to data from the New York State Department of Tax and Finance and a recent report from the New York Association of Convenience Stores, Native Americans in New York State sell approximately 30 and 40 million cartons of cigarettes. Additionally, based on market data New York State tribes represent approximately 90% of sales over the Internet. Due to the highest cigarette excise tax in the nation of $42.50 per carton, industry experts suggest that New York City consumers represent between 10% to 20% of the sales online.

As a result, Rep. Weiner’s office estimated that 3 million to 8 million cartons of cigarettes are purchased online by New York City residents. This translates into $50 – $150 million annually in revenue lost by New York City from cigarettes sold over the Internet.

Congress will soon consider Weiner’s Prevent All Cigarette Trafficking Act, which makes it a felony for selling tobacco in violation of any state tax law and effectively ends internet tobacco smuggling by requiring the United States Postal Service to stop shipping cigarettes. FedEx, UPS, and DHL have already agreed not to mail tobacco.

Rep. Weiner said, “Cigarette smuggling means one thing for New York: lost revenue. It’s time to pull the plug on these backdoor internet sales.”

Senator Klein said, “The sale of cigarettes over the Internet with no restrictions and without collecting taxes jeopardizes the health and welfare of our children and robs our state blind. During these tough fiscal times, taxing cigarettes sent through the mail would bring in millions of dollars in critical revenue that could help get New York back on the road to recovery.”

Source: Weiner.house

The top secret, invitation-only event staged by cigarette brand Peter Stuyvesant is being held on Tuesday night at the Queen’s Theatre, a non-smoking venue belonging to the History Trust of SA.

The party comes just months after the Sunday Mail revealed the brand’s company, Imperial Tobacco, had been courting trendy Adelaide shops with cash incentives and corporate entertainment in return for stocking Peter Stuyvesant cigarettes in specially designed dispensers.

Information about the party has been scarce since invitations went out last month and invited guests have been unwilling to talk about the top-secret event.

The invitations, which requested guests wear special wristbands to the event and provide photo ID for entry, were delivered in a stainless steel box with a free packet of Peter Stuyvesant cigarettes. Under the SA Tobacco Products Regulation Act, promotion of a tobacco product through free samples can earn a fine of up to $5000.

Senator Nick Xenophon described the cigarette industry as “parasitic” and urged the Government to cancel the event.

“This event seems contrary to State Government policies, and I think the Government should pull the pin on them,” he said.

“They need to throw the book at them. This is a parasitic industry trying to worm their way around current laws . . . it just shows you how hollow Imperial Tobacco’s expressions of regret were a few months ago when the Sunday Mail blew the whistle on them.”

The State Government has spent about $39 million in the past 10 years on reducing tobacco consumption. But in an emailed statement, Substance Abuse Minister Jane Lomax Smith said she would not “interfere” with Tuesday’s party.

“While we are making life tougher for cigarette companies, we wouldn’t interfere in the affairs of a legitimate business running a private function in a no-smoking venue,” she said.

The annual Peter Stuyvesant secret VIP party has become legend among A-listers. Supposedly held in a different city every year, the party is labelled one of the biggest and most lavish on the corporate calendar.

Cancer Council SA CEO associate professor Brenda Wilson said “we are disappointed that despite overwhelming evidence of the connection of smoking and lung cancer, cigarette companies continue to promote this addictive habit”.

Imperial Tobacco could not be contacted.

Source: News.com.au

On April’s Fools Day the federal tax on cigarettes and other tobacco containing products would be raised.  Each cigarette pack would cost 62 cents more expensive than now. Thousands of customers and employees of cigarette shops have already felt the burden of increased prices on their pockets. However, the most amusing jokes for these people are yet to come.

New York State Governor David Paterson proposed to increase the annual fee that stores have to pay in order to obtain the right to sell cigarettes among other products. This proposal has already triggered a wave of anger from shop owners. The actual registration cost is $100.

According to the officials, should this proposal be approved, the increased fees would come into force next year. With the revenue is expected to reach as much as $20 million within the next year period.

Monique Sands, Governor’s spokesperson stated that the fee increase should be regarded as an attempt to collect more benefit to state treasury, and the governor hopes that the cigarette retailers would understand him and situation the state budget has been facing.

She also said that they would never decide to tax people more if it was a usual budget year. However, with the difficult economic situation in the country has contributed to severe budget cuts they had no choice.

In accordance with Governor’s proposal, the new registration fee would be connected with stores’ gross profits. Stores that generate less than a million annually would have to give $1,000 to the treasury each year. Stores that gain up to $10 millions each year would have to pay $2,500. And finally, stores gaining more than $10 million in gross profits would be required to fork out $5,000 annually.

Patrick Moore, Newsstand Operators Association chairman declared that the officials simply do not think about diminutive cigarette retailers like sidewalk news stands that largely rely on cigarette sales. Therefore, the fee would beat them into pieces since they could not afford to pay for the license.

Mr. Moore added that people would risk loosing too many regular clients if they would not sell cigarettes along with newspapers. However, paying $1000 would be a larger-than-life price for them and would see many people get out of the business and become jobless. He said that the proposal is unfair and even devastating for people in the times of economic downfall.

Peter McDougal, the 59-year-old Red Pipe store manager complained that up to a half of stores would simply remove cigarettes from their stores. He mentioned that he has been very much against this discreditable proposal.

Mr. McDougal said that although he was born in times of economic recession when life was very difficult, officials had lowered prices instead of taxing everything. He mentioned that if authorities proceed with tax increases, the country would never ever overcome recession. “I was born in the recession. I know what is exactly a recession,” said the manager.

Proposal opponents consider that the approval of this bill would lead to strengthening of cigs market, since many people would try to find other ways to buy less expensive cigarettes. Street gangs earn millions each year selling counterfeit cigarettes. In addition, state treasury loses almost $1 billion each year to tax-free cigarettes made and distributed across Indian reservation territories.

Source: Ourcigarettes.net