The tobacco auction season opened in Harare, Zimbabwe, on Tuesday, two months earlier than had been customary, with 800 bales or some 80,000 kilograms of leaf going under the hammer on two auction floors.

Chief Executive Andrew Matibiri of the Tobacco Industry and Marketing Board told VOA that the flue-cured tobacco was selling at a healthy average of US$4 per kilogram compared to the selling price of US$3 a kilo last year.

Matibiri said: “The 2010 flue-cured tobacco auction sales started today and contract sales are expected to start this Wednesday.”

He said auction sales would be conducted twice a week and contract sales were expected to depend on tobacco supplies.

Matibiri said it is expected that 77 million kilograms of tobacco will be sold this year with 45 percent or close to 40 million kilograms selling through the auction system, and the rest being disposed of under contracts.

He said the early-than-usual auction season opening was intended to help leaf farmers to repay loans ahead of time and prepare for the next season.

“Farmers are expected to unlock the value of their tobacco instead of keeping it for two months in their barns,” said Matibiri, adding that “now they can sell it as they cure it.”

Agricultural expert Renson Gasela said while the season was off to an early start, this year’s projected crop of 70 million kilograms would fall well short of the 237 million kilograms sold one decade ago in 2000. That was the year land reform began, driving hundreds of white growers off their property.

He said it would take time for the current occupiers of farms to increase the production of tobacco to significant levels.

Tobacco production posted a 16 percent increase between 2008 and 2009 from 48.8 million kilograms to 56.6 million kilos.

Harare press reports said somewhat more than 22,000 growers have registered to sell their tobacco this season compared with 28,000 in 2009.

CHARLESTON — Lawyers starting a giant product liability trial against cigarette makers couldn’t find enough open minds to fill the jury box.

Circuit Judge Arthur Recht of Wheeling called off the trial on its third day, after only six of 650 prospective jurors qualified for service.

Recht said on Feb. 4 that he would start trial in June with a jury pool of 2,000.

“It is a very polarizing issue,” he said. “Everybody has a view and the more time goes on, the views become more solidified.”

Phase one of the trial in this case wouldn’t address the individual facts or claims in the more than 1,000 suits filed. Phase two would identify victims and award damages. The cases were consolidated for mass litigation in 2000.

The complaint alleges the defendant companies — Philip Morris, RJ Reynolds, Brown & Williamson and Lorillard — could have made safer cigarettes and deceived everyone about health risks.

The current plaintiffs allege that Philip Morris, RJ Reynolds, Brown & Williamson and Lorillard designed defective products and deceived consumers. The trial would determine liability. If jurors hold the companies liable, a second jury would award damages. The trial would focus on corporate conduct and not on individual circumstances.

Defense counsel have included Pamela Campbell, Henry Jernigan, Brace Mullett, Teresa Thompson and Jeff Furr.

Lead plaintiff counsel is Kenneth B. McClain, of Humphrey, Farrington and McClain in Independence, Mo., plus Scott Hall of the same firm. Local counsel includes Cindy Kiblinger and Tim Barber.

Recht said that when he held a tobacco trial in 2001, it took three days to pick a jury.

“The passage of time has made this even more subject to controversy,” he said.

Recht presides over tobacco cases by appointment of the mass litigation panel of the West Virginia Supreme Court of Appeals.

Although the cases came from many counties, the jury pool came entirely from Kanawha County.

Each prospective juror received a questionnaire with more than 100 questions.

Lawyers studied the responses and excused hundreds of prospects.

Prospects that looked like they might qualify received notices to report to Recht’s court.

Recht summoned them one by one to explain the answers on their questionnaires.

Lawyers excused a woman who said people have no right to sue over diseases that are listed on the warning label of a package.

They qualified a woman who said she doesn’t jump to a conclusion until she knows the whole story.

They needed more like her, but they didn’t find many.

Recht said, “It was a disappointment for me and for everybody because schedules have been arranged for months.”

Kanawha Circuit Court case number: 08-C-5000

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.

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.

Many growers remain undecided as to how they’ll approach tobacco production in 2010, especially considering that some have seen bad crops in recent years.

The future of tobacco production in Florida and Georgia — hammered already in recent years by decreasing demand and poor crops — took another blow recently when Philip Morris USA announced it no longer would be purchasing tobacco from the two states.

Philip Morris USA officials held a meeting on Oct. 14, in Alma, Ga., with more than75 growers from Georgia and Florida attending. Growers were informed of the decision by Philip Morris USA to “no longer offer contracts for the purchase of tobacco in Georgia after the 2009 season.”

Growers who are operating on a one year contract will not be offered a new contract for 2010. Growers who hold three or five-year contracts will continue to be able to produce and sell tobacco until the completion of their contracts, if they have met the requirements of their contracts and continue to have contracts in good standing.

The location of a buying point for the remaining production after 2009 was in question with the current receiving station not currently under contract for use. Three other Philip Morris USA buying points located in Lumberton, N.C., Wilson, N.C., and Danville, Va., will continue to buy tobacco from growers in those areas.

Since that meeting in Alma, there have been no updates from Philip Morris USA, says J. Michael Moore, University of Georgia Extension tobacco specialist. “Growers and grower groups are working with other concerns that might have an interest in purchasing Georgia tobacco,” says Moore, adding that he has heard talk of a possible interest form JTI, Japan Tobacco International Leaf Services, which is establishing a burley and flue-cured processing plant in Danville, Va.

JTI Leaf Services, which is the international tobacco unit of Japan Tobacco, Inc., produces two of the top three worldwide cigarette brands — Winston and Mild Seven. Its other brands include Camel and Benson & Hedges. JTI recently announced it plans to spend $19.5 million to build the plant, creating 39 full-time jobs and 150 seasonal jobs when fully operational.

Nothing is for certain at this point, says Moore, and it’s too early to tell what Philip Morris USA’s competition might do. The three other buyers of Georgia and Florida tobacco include R.J. Reynolds Tobacco, Alliance One International and U.S. Tobacco Cooperative.

“North Carolina had a tremendous crop this year with an abundance of tobacco left over. Some companies are saying they won’t buy above what they contracted for, but some are buying at a cut-rate price,” says Moore. “Storage facilities could be filled to capacity going into next season which will affect demand. We hope other companies will step in and buy Georgia tobacco.”

Many growers remain undecided as to how they’ll approach tobacco production in 2010, he says, especially considering that some have seen bad crops in recent years.

“Even before the Philip Morris USA announcement, one producer — after having three bad crop years in the last five — decided to sell his barns and equipment and put in more than 100 acres of blueberries. They figured they could produce blueberries with less labor and fewer headaches than they could produce tobacco. More growers will probably consider whether or not to continue in tobacco production if they don’t get any contract offers through January,” says Moore.

Philip Morris USA was purchasing 40 to 50 percent of Georgia’s tobacco crop, he says. Georgia tobacco sales totaled $69.56 million in 2008.

This year’s crop was hammered by, among other things, tomato spotted wilt virus.

“Thirty to 35 percent of the state’s plants showed symptoms of the disease, and yield reductions were in the 15-percent range. That was over and above the damage incurred by not getting the crop transplanted on time due to excessive rain during the spring. Once the crop was transplanted, an additional flooding rain damaged it further, causing more losses.”

Coffee County is the largest tobacco county in Georgia, producing about 2,000 acres of it each year. That county’s Extension director, Eddie McGriff, says, “We figured something was up because they were grading tobacco hard this year. A lot of quality tobacco they were down grading, and we were concerned about that.”

Nov 23, 2009
By Paul L. Hollis

Imperial Tobacco Polska (ITP) is boasting that it overtook the second largest player on the market, British American Tobacco Polska (BAT), but the latter is denying the claim.

The legal market for cigarettes in Poland is worth zł.20 billion, but according to forecasts it should shrink in 2009.

ITP reported that throughout the period of May through the end of October, its market share rose to 27.4 percent and in this way it is now 1.1 percent ahead of BAT.

According to ITP, the growth is the effect of focusing on three strategic brands as well as improving cost efficiency and its distribution network.

“We rapidly adjusted to the changes on the market. Presented results are a success, which was achieved thanks to effective trade policy, a developed distribution network and the involvement of our employees,” said Dominic Brisby, president of ITP.

According to BAT, the quoted period is too short to provide reliable proof of losing the second position on the market and for the last 10 month period BAT is still ahead of ITP.

Source: Puls Biznesu

CHARLESTON- A compliance check Monday evening resulted in 11 retailers being found in violation of tobacco regulations for selling tobacco products to a minor.

The Charleston Police Department reported that it conducted a compliance check in which a minor was sent to all 19 tobacco retailers in town to purchase tobacco products under police supervision. The compliance check was funded by a state grant.

Hucks, Mike and Stan’s, Indio Cigar Factory, Lefty’s Holler, Murphy’s USA, Citgo, Discount Smoke Shop, The Panther Paw, Gateway Liquor, County Market, and Marathon/Mach 1 were found to be in violation for selling tobacco to the minor and the clerks were cited for city ordinance violations.

Lanman’s BP Station, Campus Liquor, Casey’s General Store, CVS Pharmacy, East Side Package, Walgreen’s Pharmacy, and Walmart all were in compliance. The Veterans of Foreign Wars post was closed to the public during the hours the compliance check was conducted.

November 18, 2009 Jg-tc

A decline in demand is not keeping R.J. Reynolds Tobacco Co. from raising the list price on its cigarette brands by 6 cents or 8 cents a pack for wholesale customers.

The price increase, announced yesterday, will take effect Monday.

David Howard, a spokesman for Reynolds, said that the company doesn’t comment on its pricing strategy, but the decision comes five days after Philip Morris USA announced a price increase of 6 cents a pack, which went into effect yesterday.

Reynolds is raising list prices less than a week after reporting that its cigarette-shipment volume fell 11 percent in the third quarter to 20.6 billion cigarettes. Reynolds said that the industry decline was 12.6 percent.

Howard said that the list price is increasing 6 cents a pack for its growth brands – Camel and Pall Mall – and also for Doral, GPC, Kool, Misty, Salem and Winston. All but GPC are considered as support brands.

The list price is being raised 8 cents a pack for its other brands, which include Capri, Eclipse, Lucky Strike, More and Vantage.

Charles Norton, the portfolio manager of the USA Mutuals Vice Fund, said that Reynolds is likely to be able to sustain the third price increase related to its cigarettes since September 2007.

In March, Reynolds raised the list price in the range of 41 cents to 78 cents a pack for wholesale customers, including 41 cents to 44 cents for most of its growth and support brands.

The increase was in response to Congress passing the 62-cent increase in the federal excise tax to pay for expansion of the State Children’s Health Insurance Program. That tax increase went into effect April 1.

In September 2007, Reynolds raised its cigarette prices by a range of 5 cents to 15 cents a pack, including 15 cents for Camel.

“Strong pricing power is one of the underpinnings of our positive view of tobacco, which is a much more important driver of earnings than volume,“ Norton said.

Reynolds said in its third-quarter report that it had a slight market-share drop in cigarettes to 28.2 percent. The market share for Camel, the lead Reynolds cigarette brand, dipped slightly to 7.7 percent. Pall Mall’s market share was at 5 percent, up 2.3 percentage points from a year ago.

A temporary price discount in the spring on Pall Mall attracted smokers wanting to spend less on cigarettes in the recession. Even after the discount ended in May and prices were raised to counter the excise-tax increases, Pall Mall maintained a higher market share.

The company began another discount promotion for Pall Mall on Oct. 5.

Reynolds also raised its full-year earnings projections last week to a range of $4.60 to $4.70 a share – from $4.40 to $4.60 – as a sign of confidence in its strategies.

By Richard Craver
October 29, 2009

Guwahati: A task force comprising personnel of Guwahati Municipal Corporation and Assam Tobacco Control Cell has been constituted to stop tobacco consumption in the state.

GMC’s chief health officer Dr Banajit Choudhury today said the task force would visit public establishments like hotels, restaurants, discos, bars, libraries, cultural halls, public buildings etc. for monitoring and compliance of the smoke free law.

It has also been decided to advertise in newspapers about the ban on sale of tobacco products to and by minors, sale of tobacco products within 100m of educational institutions and ban on prominent advertisement of tobacco products.

The GMC would select some educational institutions to create awareness in the first phase, Choudhury said adding raids would be conducted near some educational institutions for violation of the law and issue anti tobacco message in Property Tax forms and receipts.

October 14, 2009 Dnaindia

OTTAWA, CANADA – Following just days after Ontario filed a $50 billion lawsuit against tobacco manufacturers, Quebec announced earlier this week that it too plans to file suit against the tobacco companies and seek reimbursement for the cost of treating tobacco-related diseases, Reuters reports.

Quebec would become the fourth of Canada’s 10 provinces to sue its country’s tobacco companies, which are units of foreign entities that include Philip Morris International Inc., British American Tobacco and Japan Tobacco.

Imperial Tobacco Canada Ltd. (ITC), a unit of British American Tobacco, responded to Quebec’s intention, labeling it a hypocritical reaction from a government that licenses the industry.

“The government in Canada, including the government of Quebec, is a senior partner of this for many decades — they have been for more than 50 years — and they have been aware of the risks associated with tobacco for more than 50 years,” said ITC spokesman Eric Gagnon. “It’s sheer hypocrisy by the government of Quebec when we know that (they)…are the ones issuing licenses to sell the tobacco product. They are the ones legislating the industry.”

Radio-Canada said that Quebec would file the suit in January and estimated that it would seek $30 billion (CDN).

“Our claim is that information was hidden and this led people to continue to use tobacco products,” said Quebec Provincial health Minister Yves Bolduc. “This had consequences, such as enormous health-care costs that we had to bear.”

ITC’s Gagnon said that the companies would not settle out of court and that a court battle would likely be a lengthy one.

“This is going to be very long,” Gagnon said, noting a case in British Columbia has been ongoing for nine years with a trial date set for 2011.
Oct 8, 2009

The single worst factor contributing to a shorter life span is smoking — 11 fewer years of life on average.

The single factor most contributing to reduction of purchases of products is raising the price.

Despite the urgings of public health advocates, Louisiana this year failed to raise its low tax rates on tobacco products. Even in Mississippi, where Gov. Haley Barbour was a longtime lobbyist for tobacco companies, the tax was raised this year.

It’s past time to raise the tax and provide an at-the-register incentive for young people not to buy a pack of cigarettes.

Smoking is one of the key negative factors in children’s health that is cited in a recent report by researchers at LSU’s Pennington Biomedical Research Center. In a 2008 survey, one in five seniors in Louisiana high schools reported having smoked cigarettes in the previous 30-day period.

The long-term costs for the public are substantial in health-care outlays over time. But the cost to individuals in disease and death is more important.

In a capitalist society, the price “signal” remains important. And many states — almost all have higher taxes on tobacco products than Louisiana — have decided to raise tobacco taxes to deter youth smoking.

Louisiana’s cigarette tax is only 36 cents per pack.

Price is important, Pennington health researcher Peter Katzmarzyk said. “I am from Canada, and we have a very healthy tax on cigarette consumption,” he told the Press Club of Baton Rouge. “This has really turned the tide. Cigarette taxes are a very useful method of changing the health status of smokers.”

The Legislature rejected proposed tobacco tax increases in 2005 and again this year. In 2011, the next time a legislative session is to be devoted to fiscal issues, we hope this trend is changed.

Sure, the state needs additional tax revenue as the impact of a sharp downturn in tax receipts. But the major issue is deterrence of a deadly and insidious habit.

Copyright © Sep 16, 2009 2theadvocate

Smoking will become an even more expensive habit for Connecticut residents next month.

The state budget — which became law this past weekend — has increased the tax on cigarettes from $2 to $3 per pack. The measure is part of an effort to reduce the state’s roughly $8 billion deficit over the next two years. But while some fear the increase will have a disproportionate effect on Connecticut’s poor, some Yalies find the idea of the tax almost comical.

“I think that the Connecticut government is kidding itself if it thinks a $1 tax hike will curb smoking in any way,” Alexander Shaheen ’13 said.

In recent years, the state has raised the tax several times. In 2002, it went to $1.11 from 49 cents; in 2003, to $1.51 from $1.11. The most recent increase, to $2 from $1.51, was passed July of 2007.

The current tax, legislators say, will help balance the state’s budget with additional expected revenue. According to the Connecticut Office of Fiscal Analysis, the new tax will result in a revenue gain of $99.3 million in fiscal year 2010 and $117.6 million in fiscal year 2011. The strategy also includes a one-off “floor tax” on all unsold inventories of tobacco products come Sept. 30, which the Office of Fiscal Analysis estimates to bring in an additional $8.8 million in revenue.

But some local business owners said they fear the tax might stunt their sales numbers. Bill Raffaele, tobacco specialist at the Owl Shop in New Haven, said he was “almost certain” that cigarette sales would fall after the tax goes into effect.

“It’s horrible,” he said. “Absolutely horrible. They’re singling out one product.”

Opponents argue that the tax will be especially burdensome to the poor, who make up a large number of Connecticut smokers. The state has yet to announce whether the revenue generated from the new tax will be used to fund anti-smoking campaigns or health-related programs.

For many Yale students, however, the $1 increase will be a negligible change. Of the four students interviewed, who all said they smoked, only one said the tax would cause a change in habit.

“I’m accustomed to paying $10 for a pack of cigarettes,” said Benjamin Singleton ’13, a student from New York City. “Still, this new effort from the government to curb smoking will probably cause me to at least try to cut down.”

None of the students interviewed concluded that the new tax will cause a significant financial burden.

The new cigarette tax is slated to go into effect Oct. 1.

Copyright © September 8, 2009 Yaledailynews

British American Tobacco (AMEX:BTI) is trading 2.7% higher (up $1.64 to $62.37) today on volume of 89,449 shares. The stock has traded within a 52-week range of $43.26 and $69.30.

British American Tobacco is currently above its 50-day moving average of $59.29 and above its 200-day moving average of $52.81.

SmarTrend is bullish on shares of BTI and our subscribers received an Uptrend alert on April 30, 2009 at $48.51, which has returned 28.6% to date.

9/1/2009 Write to Chip Brian at cbrian@tradethetrend.com

A Katowice resident has put the tobacco industry on alert with the filing of a lawsuit this month against Philip Morris Polska and Zakłady Przemysłu Tytoniowego in Radom.

Stanisław Lubicz-Sienicki is seeking zł. 10 million ($2.56 million) in damages from tobacco firms for the death of his mother, who died of lung cancer this summer and smoked Popularne and Marlboro brands of cigarettes, according to press reports.

Despite the slew of cases that have beleaguered Philip Morris and other producers in the United States, the lawsuit here caught Polish tobacco producers by surprise. But lawyers and tobacco makers downplayed the impact of the suit and said Lubicz-Sienicki and, perhaps others, face a steep uphill battle here.

“Frankly, we are surprised that there is such a case in Poland because the fact that smoking is damaging is universally known in our country,” said Robert Wyszyński, a legal adviser with Phillip Morris Polska. “Despite the fact that it is universally known, Mr. Lubicz filed a claim.”

U.S. courts, which have been more receptive to plaintiff’s claims, allow for class-action lawsuits, whereby a person can significantly broaden claims against tobacco makers. Not so in Polish courts, where the burden of proof in this case is more rigorous, according to industry members.

“The Polish system simply does not permit class action, so the wave of suits that came in the U.S. can’t come here,” said Jan Wierzbicki, director of corporate affairs at cigarette maker Reemstma Polska.

Moreover, the burden of proof establishing a link between cause and effect is much more rigorous here, he said. “In our system you have to prove a clear cause-and-effect relationship,” Wierzbicki said.

In practice, that means a general link between smoking and cancer is not enough. “The basic concept is that you know what you are doing when you smoke,” said Stanisław Dwernicki managing partner at law firm Gide Loyrette Nouel Polska.

Moreover, considering knowledge of the health hazards and warnings on cigarette packs and advertisements, producers can argue consumers are aware, responsible agents for their own actions.

“Producers say, ‘I have informed you, I have informed all of Poland, so I am in compliance with all the laws. In that case, I don’t have any (responsibility) for results that the client should die of cancer,’ ” Dwernicki said.

Philip Morris is mum on the lawsuit. “We did not receive officially the contents of the suit filed in court by Mr. Lubicz,” Wyszyński said. “We don’t want to comment until we are able to get to know the arguments used by Mr. Lubicz.”

In filing the suit, Lubicz-Sienicki has requested that the court waive its normal fees, which can run to 5-8% of the amount of damages sought. Lubicz-Sienicki said he is seeking a waiver because he does not want to benefit directly from the case, but would send settlement money to charity.

“The man has based his waiver request on the fact that he wants to create a foundation that will help people that have suffered because of smoking,” said Andrzej Almert, spokesman for the district court in Krakow, where the case is being considered.

Regardless of the outcome of the fee-waiver motion, the case itself is likely to move forward slowly. The court calendar in Krakow is booked for the next three months, Almert said. In addition, given the complicated medical and scientific nature of the case, the court will seek expert opinions before deciding the case. “For sure it won’t end quickly,” he said.

Regardless of delays, the Lubicz-Sienicki lawsuit has put the tobacco industry on notice.

From Warsaw Business Journal, 23rd August 2009

The Russian tobacco market has been showing a curious trend recently. The cheapest and premium class cigarette brands currently enjoy the biggest demand in Russia. Many tobacco companies focus their efforts on the inexpensive segment and resume the production of Soviet brands, BFM.ru business portal said.

“According to our estimates, the reduction of the Russian tobacco market during the first half year made up 3-4 percent,” Kingsley Wheaton, the managing director of British American Tobacco Russia (BAT Russia) said. The sales of cheap cigarettes are growing, but they are growing in the premium segment of the market too, he said.

Another participant of the Russian tobacco market – Philip Morris – also reported a growth in the sales of its low price segment cigarettes (Bond Street). The sales gained 35 percent during the second quarter of the year – Optima cigarettes went 23 percent up. More expensive brands of the company demonstrated negative dynamics in their sales. Marlboro dropped by 19 percent with Parliament losing 4.3 percent.

BAT Russia took account of the changing demand and launched two new brands – Capri slim cigarettes (prices at $0.8 per pack) and The Golden Fleece (Zolotoye Runo), – a legendary Soviet brand which the company relaunched in April (priced up to $0.48 per pack).

The cigarette brands with the Soviet past from another company, Nevo-Tabak, also managed to improve their sales. The sales of such brands as Arktika, Troika and Leningad improved considerably during the recent six months.

“BAT Russia is not a pioneer when it comes to the launch of iconic Soviet cigarettes. This has been happening on the market of alcohol beverages too. One may recollect the fight of the Moscow Distillery Cristall for such well-known Soviet brands as Pshenichnaya and Stolichnaya. Dairy companies design Soviet-style packaging to win customers’ attention to their products. They hope that the Soviet style packaging will make many recollect their past and buy the product that they know, not something new that they never tried before,” Sergey Tishenko, a senior expert with Business System Development Auditing Company says.


Copyright © 2009 Marketoracle

Lagos — The Comptroller-General of the Nigeria Customs Service, Dr. B.E. Nwadialo, has commended the British American Tobacco Nigeria (BATN) for its commitment to the development of the Nigerian economy, especially through employment generation and prompt payment of taxes and duties to the government.

He made the commendation during a media chat held after an inspection tour of BATN’s state-of-the-art factory in Ibadan, Oyo State recently.

Describing BATN as a good corporate citizen, the Customs boss who was accompanied on the tour by top officers of his organisation, said that his command has been impressed with the company’s commitment to the development objectives of the Federal Government through its prompt payment of taxes and duties to the government, pointing out that BATN has never defaulted.

He also disclosed that BATN has for some time now been assisting the Nigerian Customs in its job of policing the nation’s territorial borders. This, he said followed the signing of a Memorandum of Understanding (MoU) between the company and the Nigeria Customs Service.

He recalled that during the signing of the MoU in Abuja, BATN had donated 10 Hilux 4×4 vans to the Customs command to help it in its fight against smuggling across Nigerian borders, especially the fight against counterfeit and fake commodities.

Nwadialo noted with delight that the gesture has improved the command’s operations at the borders with numerous cases of seized contraband goods widely reported in the media. He also pointed out that the proper policing of the borders, with the aid of the tobacco company, have helped improve the earnings generated by the command on behalf of the Federal Government.

He reiterated the harmful effects of smuggling, saying that smuggling does not only impact negatively on the fortunes of companies like BATN and the government, but also the health of the citizens who are affected by such fake and adulterated products.

He said that apart from the donation of the vans, BATN has also contributed a lot to the training of officers and men of the command, by sponsoring their participation in international workshops on piracy and smuggling.

The Managing Director of BATN, Simon Welford, reiterated the commitment of the company to the Federal Government’s and the overall development of the Nigerian economy. He said that as partners in progress, the company was associating with the 7-Point Agenda of President Yar’Adua.

According to him, the partnership with the Nigeria Customs was BATN’s own way of contributing to the development of the Nigerian economy, and ensuring that the country attains its aim of being one of the top 20 economies in the world in the near future.
Copyright © 2009 Allafrica

The New Brunswick government has won a preliminary battle in its lawsuit against several big tobacco companies, which were fighting to block a team of outside lawyers from working on the court case.

The province is seeking millions of dollars in damages for health-care costs resulting from people smoking, and is suing companies including Rothmans, Benson & Hedges, Philip Morris, R.J. Reynolds and Imperial Tobacco.

New Brunswick Court of Queen’s Bench Judge Thomas Cyr rejected a preliminary motion filed by 15 tobacco companies named in the lawsuit that sought to remove the team of lawyers representing the province.

The province’s legal team consists of private practitioners Philippe J. Eddie and Chris Correia from New Brunswick, as well as the firms Siskinds LLP, Fasken Martineau DuMoulin and Bennett Jones from Ontario, Richardson, Patrick, Westbrook & Brickman of South Carolina and Martin & Jones of North Carolina.

The lawyers are seeking unspecified millions in damages. If they’re successful, the legal team will divide up to 25 per cent of any financial award or settlement.

That contingency-fee arrangement was the problem, according to the tobacco companies. The tobacco industry lawyers argued there was a conflict of interest between the government lawyers’ potential private financial gain and their duty to act impartially in the public interest when the province hired them.

But Cyr ruled that a civil lawsuit is not the same as a criminal prosecution, which requires Crown attorneys on the public payroll to be impartial.

“The assertion advanced by the defendants that all government lawyers have a duty distinct from any owed by non-government lawyers to act ‘impartially’ is, in my view, incorrect,” Cyr’s decision stated.

“The public interest duties applicable to government lawyers in civil litigation matters are distinct from those applicable to Crown prosecutors in that government lawyers acting in civil litigation matters are not subject to a duty of impartiality.”

The tobacco companies also said the agreement to give the legal team a cut of any financial windfall was against the law and the Constitution.

Cyr rejected those arguments, too, but he wrote that there appeared to be no precedents for this kind of situation anywhere in Canada, which could make the case ripe for appeal.
Copyright © 2009 Cbc

Investment bankers handling the recent sale of $100 million in convertible notes for Morrisville-based tobacco supplier Alliance One will exercise a $15 million overallotment, signaling a favorable investor reaction.

The sale of the original notes took place through a private placement to large institutional investors in early July. It’s one of several financial moves by Alliance One (NYSE: AOI) in recent weeks to refinance existing debt and obtain new operating capital.

The firm, with a global employee roster of 4,700, processes and distributes burley and flu-cured tobacco used in cigarette production in the Americas, Europe and the Far East.

The notes, both the original $100 million batch and the overallotment, convert to Alliance One common shares. The company says it will take some of the proceeds from the note sale to enter various hedging activities to minimize dilution of existing shareholders.

Copyright © 2009 Bizjournals

Concern over illicit trade in tobacco products and its social implications has come to the fore at the World Health Organisation’s (WHO) Intergovernmental Negotiating Body meeting in Geneva, aimed at strengthening tobacco control.

A UAE delegation was engaged in the multilateral negotiations, as part of the third session of the Intergovernmental Negotiating Body on the “Protocol on Illicit Trade in Tobacco Products”. The protocol is being deliberated under the Framework Convention on Tobacco Control (FCTC).

The UAE delegation, led by Faisal Ali Al Mansouri, UAE Revenue Administration Director, and Azza Mohammad Al Suwaidi, Chief of Taxation, UAE Ministry of Finance, included representatives from the UAE Ministry of Health and the UAE Federal Customs Authority.

Commenting on the occasion, Al Mansouri said, “The UAE pledges firm support to the coordinated global effort against illicit trade in tobacco products. The negotiations set the pace for measures to control the supply chain of tobacco, enhance effectiveness of regulatory agencies and safeguard public health.”


Copyright © 2009 Gulfnews

Around here, if you’ve got Georgia on your mind it’s a good bet you’ve got a pack of cigarettes in your pocket.

Or, if you’re Tom Richter a couple of cartons in your car.

He lives in Tallahassee, just twenty minutes down the road. And, he’s stocking up only two miles over the state line, where he’s saving twenty bucks in tax.

Richter says, “You have two or three smokers in a family, then obviously to come over here, probably could save you a few bucks.”

Legally, you’re only allowed to buy two cartons across the border. You’d think that limit would be enough to keep many people from driving up here. But, cigarettes aren’t the only smokin’ hot deal to be had. The cheaper gas and good old southern hospitality can be the clincher.

And convenience stores along the Georgia border are taking advantage of it. Packing their shelves deep with tobacco products.

But, what’s going boom in Georgia is going bust in Florida.

It’s too early to tell, but retailers worry about losing a big chunk of their business.

Even though state law is strict about the two-carton limit… Convenience store owners in Georgia tell us they have no way to enforce it.


Copyright © 2009 Wctv

Japan Tobacco International (JTI), the third largest player on the Romanian cigarette market, has a 30 million-euro investment underway in two new production lines on the Romanian market. This is the only major investment project announced on the Romanian cigarettes market in 2009. “We intend to invest 30 million euros in two new production lines in boosting the plant’s degree of automation by mid-2010.
We expect an around 25% increase in our production capacity against 2008, following these investments,” said Gilda Lazar, Corporate Affairs and Communications Director within JTI Romania, Bulgaria and Croatia. The JTI plant in Pipera (Bucharest) currently exports one in five cigarettes to 35 markets, with company forecasts indicating a rise in volumes delivered to foreign markets by around 15% next year. JTI Manufacturing, held by JTI on the Romanian market, posted a 1,406 million-RON (382 million-euro) turnover last year, up 35% against 2007, and a 20.4 million-RON (5.5 million-euro) net profit, according to data provided by representatives of the manufacturer.
Copyright © 2009 Zf

On May 27, CNN’s Carol Costello reported on tobacco company R.J. Reynolds new dissolvable “smokeless products.” Noting that critics call them “tobacco lollipops” that are aimed at getting “kids hooked on nicotine,” Costello reported that “R.J. Reynolds will soon test three new products — Camel sticks that dissolve as you suck them, minty tobacco strips that look like breath strips, and orbs — flavored, dissolvable tablets that some say look and taste exactly like candy.”

On the Senate floor yesterday, Sen. Richard Burr (R-NC) came to the tobacco company’s defense, claiming that it wasn’t trying to deceive anyone; it’s CNN’s fault for labeling Camel Orbs as candy. Burr charged that CNN “mischaracterized the product” because “it’s not candy flavored”:

BURR: But when CNN did their story. Take a guess on the angle that they took. They labeled it as candy. Candy! Even though it’s not candy flavored. They said it was candy. … No, they said it was candy. That’s where they labeled it. … They portrayed Reynolds America as being deceptive and luring children. No candy. It’s not going in the candy section. It’s in the tobacco section where smokeless and stick products is.

Later in his speech, Burr responded to Sen. Jeff Merkley’s (D-OR) criticism that some of the dissolvable tobacco products are in containers shaped like cell phones to attract kids. “Let me assure you, Mr. President, if a cell phone doesn’t work, children don’t want it,” said Burr.

While Burr might claim that the Orbs aren’t “candy-flavored,” the fact is that they come in “mint and cinnamon flavors” known as “fresh” and “mellow.” Additionally, the tobacco industry has a well-documented history of using flavored tobacco to market their products to children:

Documents from the tobacco industry also contradict these claims. A report from R.J. Reynolds in 1985 stated: “Sweetness can impart a different delivery taste dimension, which younger adult smokers may be receptive to, as evidenced by their taste wants in other product areas.” A Brown & Williamson report from 1972 suggested consideration of developing cola-flavored and apple-flavored cigarettes. The report also suggested a sweet-flavored cigarette and stated: “It’s a well-known fact that teenagers like sweet products. Honey might be considered.” If flavored products were appealing to youth then, what has changed to make them less appealing to youth now?

Burr’s speech today follows his earlier claims that regulating tobacco by the FDA would contradict the agency’s mission to protect public health since there is no healthy way to use tobacco. Burr, whose hometown Winston-Salem is also the home of R.J. Reynolds, is the second-highest recipient of campaign contributions from Big Tobacco.

Copyright 2009 Thinkprogress

The clock struck an hour past noon; the field was sweltering hot, without the hint of a breeze. But the tobacco farmers from Samberan village, a three-hour drive from the East Java capital of Surabaya, still went out to work the second shift that day.

The month of April is when the farmers start the five-month-long process of farming tobacco.

“It’s much easier to take care of a baby than to handle a tobacco plant,” said Iskak, who has been growing tobacco for more than 30 years and owns less than a hectare of land.

Tobacco is high maintenance, he said, and it takes several processes to get it to harvest, from land tilling to nurturing seedlings for a month before they take root. The plant requires just the right amount of water and is highly sensitive to the weather, especially rainfall patterns. Climate change has created headaches for the farmers, causing some of their crops to fail and degrading the quality of the surviving plants.

Then there’s the numerous attacks by pests in the past few years. “It used to be only caterpillars, but now there are fleas as well,” said Kadi, another farmer. “And insecticide just doesn’t work.”

On top of these troubles, after decades of growing and supplying tobacco to cigarette producers in Bojonegoro, including Gudang Garam, Dji Sam Soe, Wismilak and 369, the farmers seem little better off.

Insufficient Incomes

Government officials and tobacco companies argue that millions of people are dependent on the industry for their livelihood, but research shows that the farmers’ incomes are far below the national average and many of them, stuck in a cycle of poverty, seem eager to switch crops.

Tobacco use has increased almost sixfold from 35 billion cigarettes consumed in 1971 to 202 billion in 2004. However, land for tobacco cultivation only increased from 170,000 hectares in 1971 to 200,000 hectares in 2004.

Less than half of the 466 farmers in this village of 2,000 people own their land; the rest are peasants, earning Rp 30,000 ($2.85) or less a day. Many farmers are still living in homes with dirt floors.

Even those who own land say they wind up with meager profits. Farmers need to have at least Rp 18 million to plant a hectare of tobacco, Iskak said, with the money sometimes obtained by taking out a loan.

“A hectare of land produces about 1.5 tons, and if the quality is good, it’s sold for about Rp 13,500 a kilogram, or a total of Rp 20 million,” he said. “That only leaves us Rp 2 million profit, or Rp 400,000 a month.”

Big producers like Gudang Garam hold sway in villages like Samberan, leasing the farmers the land, lending them fertilizers and seeds, and deducting money from their crop payments.

But farmers say they have no say in the selling price and are at the mercy of the companies in other ways. Last year, Gudang Garam declined to buy the entire harvest of tobacco in Samberan, saying the quality was not good enough. The farmers were then forced to sell their tobacco for only Rp 3,000 to Rp 4,000 a kilogram, far below the market price, to traders who apparently resold the supply to the tobacco factories in the area, also below market price.

Last year’s losses forced Abdul Somad, a middleman between the farmers and the factories, to quit. He had received fertilizer and seeds from Gudang Garam to distribute to the farmers and later collected the harvested tobacco, receiving a commission from the company.

“I collected tobacco produced by 60 farmers, covering 25 hectares. Last year was tough because the company didn’t want to buy tobacco, leaving me with millions of rupiah in losses,” he said, adding that he would rather find a new job.

Not Worth the Risks

Farmers in other regions face the same situation, according to recent research by the Demographic Institute at the University of Indonesia’s School of Economics. Indonesia has 198,000 hectares of tobacco plantations, the vast majority in East Java, Central Java and West Nusa Tenggara, where the research was conducted.

The study shows that most farmers have worked for an average 16.82 years, farming 7.14 hours a day, but only earn Rp 413,374 a month — less than half the national minimum wage of Rp 883,693 a month. Women and children also work on the plantations and receive smaller wages.

Most of the farmers, regardless of whether they own their land, stay in modest houses with either dirt or cement floors.

“Such a low income is not worth it compared to the risks taken by farmers, like climate change, pests and price decreases,” said researcher Abdillah Ahsan. “Buyers also decide the prices and quality of tobacco and there is no standard set on them.”

There are about 40 grades of tobacco, according to the research, but no set determining standard, so it’s up to buyers to decide. In many cases, he said, they manipulate farmers by saying the tobacco they sell is of the lowest grade.

Farmers also complain, Abdillah said, that the price of fertilizers, insecticides and seeds are rising but the price of harvested tobacco remains stagnant. The maximum price is Rp 25,000 a kilogram.

Widening Wealth Gap

The farmers’ lack of fortune is in strong contrast to those of the cigarette giants. PT Hanjaya Mandala Sampoerna reported Rp 9.10 trillion in sales in the first quarter of 2009, while Gudang Garam had Rp 7.65 trillion in sales.

Cigarette czars Michael Hartono and brother Budi Hartono, producers of Djarum, are the richest men in Indonesia with a collective wealth of $1.7 billion, earning them a place on Forbes magazine’s global billionaires list for 2009.

The Indonesian Clove Cigarette Producers Association and Gudang Garam could not be reached for comment.

Tulus Abadi, from the Indonesian Consumers Foundation, said new regulations on tobacco farming were urgent given how it’s practically controlled by the cigarette industry without any intervention by the government.

“Tobacco farmers have only been used as politicking tools and [ammunition] against tobacco critics,” he said. “The cigarette industry always manipulates the number of farmers.”

Figures from the Central Statistics Agency (BPS) in 2005 showed that there were 683,000 tobacco farmers, 258,000 people working in the cigarette factories and some one million more involved in distribution and trade.

But Industry Minister Fahmi Idris said that at least 12 million people depended on the cigarette industry for their livelihoods, and cited this as the reason why it was difficult for Indonesia to sign the World Health Organization’s Framework Convention on Tobacco Control, which provides a framework for controlling tobacco production and sale. State revenues from the tobacco industry totaled Rp 52 trillion in 2006, making it Indonesia’s largest taxpayer.

Indonesia joined 167 other countries in signing the treaty in 2004, but remains one of only four nations that have failed to ratify it. Without ratifying the treaty, there are no limits on tobacco production, while farmers remain powerless and have no bargaining power in setting tobacco prices.

“Cigarette producers can stock up tobacco for two years, unlike farmers. When asked to pay a higher price, they say they won’t buy the tobacco and that importing it is much cheaper,” Tulus said.

About 35 percent of Indonesia’s tobacco supply is imported, mainly from Zimbabwe.

Difficult Switch

The Demographic Institute’s research shows that about 65 percent of tobacco farmers want to find other jobs or businesses, even when they own their own land.

In Samberan, some farmers have already tried planting other crops. Last year, Bojonegoro district launched a project for farmers to plant melons and corn. The harvest was good but no marketing strategy was in place, so they couldn’t sell their produce at premium prices. Some melons and corn were never sold and rotted.

“There is also a problem with a lack of infrastructure, particularly water. So when the dry season comes, we can only plant tobacco,” Iskak said, adding that fertilizer was also scarce because most supplies were going to newly established plantations in the area.

The farmers’ dependency on cigarette factories remains high. Many women work as cigarette rollers, earning Rp 20,000 a day.

“If the cigarette factories are closed, for example, the economy of this village will subside and the unemployment rate will soar as tens of thousands of people in this district work at the factory,” said Azis Zainul Abidin, a teacher in Samberan who helped with the Demographic Institute’s research. “But farming [other crops] can be empowering; it can replace the cigarette factory in the economy.”

Abdillah urged the government to issue policies that can improve farmers’ welfare, for example, by providing alternative jobs. These, he said, can be combined with an increase in the tobacco excise tax and the additional state revenue can be allocated to help farmers switch to other crops.

Copyright © 2009 Thejakartaglobe

No one is debating the fact that smoking is harmful to your health. But like a lot of things that are harmful it remains legal. The debate in Michigan is centered on two viewpoints and one “wild card.” The position of those who are opposed to the any type of ban is about “choices” versus “public health” the position taken by the anti-smoking organizations and other public health groups. The “wild card,” and probably the reason legislation has not been enacted in Michigan, is because of the casinos — particularly the casinos owned by Native American tribes — who are sovereign nations and would not be mandated by a smoking ban law. This would essentially give them a competitive advantage over other casinos and entertainment venues in Michigan.
Lisa Danto is the coordinator for the Traverse Bay Area Tobacco Coalition, an organization whose mission is “to reduce tobacco use and exposure to tobacco smoke within Benzie, Grand Traverse, and Leelanau Counties, through advocacy, education, and awareness.” Danto has been active in the movement since 2003, and while legislators have been dragging their feet, she and others have not. She has helped to spearhead 279 restaurants and bars in a three-county area to eliminate smoking 100% from their establishments.
“It is our biggest accomplishment as an organization. In fact Traverse City leads all Michigan cities with the most smoke-free restaurants and bars, and Grand Traverse County with 203 establishments now smoke-free ranks in the top 10,” said Danto. “Sure, I know some would argue that based on our success of these establishments voluntarily imposing a ban that legislation is not needed. I disagree completely.”

A new study presented today suggests that the risk of getting lung cancer from smoking has increased over time due to changes in cigarette design.

Up to one half of current lung cancer occurrence could be attributable to cigarette design, according to David Burns and Christy Anderson of the University of California at San Diego School of Medicine.
Consequently, the study concludes, lung cancer rates could be reduced by up to 50 percent through more regulatory control of cigarette composition.

Burns and Anderson presented their study today at the meeting of the Society for Research on Nicotine and Tobacco in Dublin, Ireland.

The study examined lung cancer rates as well as changes in the design and smoke composition of both American and Australian cigarettes over the last four decades. Both countries saw a rise in the use of low tar cigarettes, as well as the introduction of ventilated filters.

The major known difference in cigarettes between the two countries is the level of tobacco-specific nitrosamines, a lung-specific carcinogen that causes adenocarcinoma–one of the four major cell types of lung cancer. Nitrosamines are found in far higher levels in American cigarettes than in Australian cigarettes, the study reports.

increase in the overall incidence of lung cancer in the U.S. has largely been driven by an increase in risk in adenocarcinoma. By contrast, adenocarcinoma makes up a smaller percentage of lung cancer cases in Australia, where age-specific lung cancer death rates are lower than in the U.S.

David Sutton, a spokesperson for tobacco company PhilipMorrisUSA, said his company has been aware of concerns over nitrosamines for some time and has taken steps to reduce the levels of the carcinogen in tobacco.
For instance, the company requires its tobacco growers to use indirect heating systems during the curing process to prevent the tobacco from being exposed to the combustion gases that increase the presence of nitrosamines. For growers that do not use a heat-based curing system, PhilipMorrisUSA requires the use of a tobacco seed that has been shown to produce less nitrosamines.

Sutton said today’s presentation of the study did not give enough data to explain why the level of nitrosamines may be higher in American-grown tobacco versus Australian-grown tobacco.

“It’s impossible to get a significant conclusion,” he said. “When the full study is published, we’ll evaluate it.”

He added that PhilipMorrisUSA has for eight years supported tough but reasonable regulation of tobacco and supports the medical consensus that cigarettes are harmful to one’s health.

“There is no safe cigarette,” he said.

Source: Cbsnews

More than 8,000 sick smokers in Florida have sued the tobacco industry for misleading claims, but on Tuesday, two legislative committees pushed through bills that will cap how much the industry is required to set aside in the event it loses those cases.

The House Finance and Tax Council and the Senate Judiciary Committee passed similar bills that would shield Philip Morris, R.J. Reynolds Tobacco and Lorillard from having to post hefty bonds as they face an avalanche of lawsuits from smokers.

The measures would allow the three companies to set aside a total of no more than $100 million in bond money in order to appeal the verdicts. Under state law, when a company loses a lawsuit and wants to appeal, it must post a bond for the judgment’s entire amount.

Trial lawyers complained the measures will remove the financial incentive for the tobacco giants to pay their judgements or settle their cases. Instead, they said, it will encourage the companies to pursue endless appeals and delays designed to financially break plaintiffs or wait until they die.

Promoters of the bills — House Finance and Tax Council chairwoman Ellyn Bogdanoff and Melbourne Republican Sen. Mike Haridopolos — said the measure is needed to give the industry financial certainty, and to protect the state’s annual $205 million payment by the tobacco companies as part of the landmark 1997 settlement.

”As far as I’m concerned, the plaintiffs are going to be paid,” said Bogdanoff, R-Fort Lauderdale.

But of the nearly 3,000 cases pending since the court closed the door to individual cases last year, only four have come to trial — including the case of Elaine Hess of Fort Lauderdale, the widow of 40-year smoker Stuart Hess who died of lung cancer at age 55 in 1997.

Keith Teel, a lawyer representing the three tobacco giants, said that with the average lawsuit yielding a $19 million jury award, the industry faces posting bonds worth $45 billion — unless the Legislature passes the bills.

”That’s just not tenable to continue to make the payments to the state as a matter of cash flow,” he said.

Hess, however, won $8 million in damages.

Teel noted that the bill also punishes tobacco companies if they fail to pay a judgement; they would no longer be protected by the cap and would have to post bonds for the total amount of pending judgements against them.

Robert Hanrech, a Miami lawyer representing some tobacco plaintiffs, said that in a Feb. 26 Goldman Sachs statement to shareholders, one tobacco company said the 8,000 claimants stemming from the class action lawsuit ”fails to pose a significant threat.” ”This would be a bailout for tobacco,” he said. Steve Barnes, a Tampa attorney who also represents tobacco plaintiffs, told lawmakers Tuesday the bill was not needed. Barnes said U.S. tobacco companies made $81.8 billion last year.

He described delaying tactics that have resulted in many sick smokers dying before their cases reach court. If their spouse dies as well, ”the claim goes away,” he said. He said the cases have a name in the industry: a dead-dead case.

Source: Miamiherald

Swedish Match North America asks: Are you interested in a modern smokeless tobacco product? Are either you or a loved one a cigarette smoker who is looking for a change? The original Swedish Snus by Swedish Match North America just launched a bold new website full of information. General Snus is a premium, smoke-free tobacco product that can be enjoyed discreetly anytime, anywhere.

Invented by the Swedes over 200 years ago, Snus is an effective alternative to more traditional smoked tobacco. Scientifically shown to be a less harmful alternative to cigarette smoking, Snus allows users to enjoy tobacco without emitting harmful second hand smoke or falling victim to public smoking bans.

General, the worldwide leader, is carefully crafted with select tobaccos from a recipe that has been nurtured since 1832. Available in a variety of portions and flavors, General Snus lasts up to two hours compared to many American competitors that last only 20 minutes.

ABOUT SWEDISH MATCH: Swedish Match is a global Group of companies with a broad assortment of market leading brands in smokeless tobacco, cigars and pipe tobacco, matches and lighters. Some of our well known brands include Red Man, Timber Wolf, Longhorn, Macanudo, Partagas, Cohiba and Borkum Riff. Swedish Match North America is headquartered in Richmond, VA, with manufacturing facilities in Owensboro, KY, Dothan, ALA, and the Dominican Republic.

They call them Akwesasne and Kahnewake tips, and they come in unlabelled clear plastic baggies — 200 king-size smokes to a bag.

They are the product of unregulated black market factories on Mohawk land. Smokers say they are nasty and rough on the lungs, but they are really, really cheap.

At the moment, at the roadside smoke shacks on the Kahnewake Mohawk Territory, outside Montreal, they cost $10 a baggie, or five cents a smoke, which compares with $10 for a pack of 25 legal cigarettes off the reserve, or 40 cents a smoke.

This 800 per cent price differential is the reason millions of Canadians are smoking tips, and thousands of Canadians are engaged in the contraband tobacco trade — smuggling cheap native cigarettes in cars, vans, boats and snowmobiles, hawking them from the trunks of cars at factory gates, on street corners, in schoolyards and under the counter at convenience stores.

It is a huge black market trade, and it is growing rapidly.

Last year, 13 billion illegal cigarettes were sold in Canada, according to Imperial Tobacco, which is losing hundreds of millions of dollars worth of sales to the native cigarettes and pushing Ottawa to clamp down.

In 2006, illegal smokes had 16.5 per cent of the market, 22 per cent in 2007 and 32.7 per cent in 2008. Imperial says that amounts to $2.5 billion in federal and provincial taxes evaded in 2008.

Imperial says 95 per cent of the smokes come from clandestine factories on reserves, mostly from the New York State side of Akwesasne, the centre of a massive spiderweb of smuggling operations. The riverside Mohawk community of Akwesasne straddles three borders, Ontario, Quebec and New York State, and it is a smugglers’ paradise.

Smugglers there, both Mohawks and non-native, pick up easy money smuggling the smokes across the St. Lawrence River to Cornwall Island in faster boats than the Mounties have.

“If they come out with a new boat, within hours there’s a better boat,” said Andrew Carroll, managing editor of the Cornwall Standard Freeholder. “A day later, the smugglers have a boat that can go faster than that. They’re always a step ahead.”

From Akwesasne, the smokes are smuggled in small car and van loads to other Mohawk communities: Kahnewake and Kanesatake, near Montreal, Six Nations, near Hamilton, and Tyendinaga, near Belleville, Ont.

The Mounties have increased enforcement in an effort to stem the tide of Akwesasne tips, but they aren’t winning the war.

“There’s 110 vehicle trips a day coming from here,” says Sgt. Michael Harvey of the Cornwall RCMP.

“Fifty-nine boats bring all the cigarettes to the Canadian side. Then 110 vehicles take them to the smoke shacks. And on a good day, with all the law enforcement groups in this area working, we can seize 15 vehicles out of 110.”

When they’re busted, first-time offenders get fines, but that cost is absorbed as part of the cost of doing business.

While the RCMP like to point to the involvement of organized gangs like the Hells Angels, it seems clear that many of the smugglers are small-timers moving a few hundred baggies at a time.

A Mohawk cigarette trader in Kahnewake, who spoke on condition that her name not be used, sells one or two boxes to a Nova Scotian once a month or so, charging him $10 a baggie, or $500 for a box of 50. He comes in a rental car and makes the run to Nova Scotia, where he’s retailing the cartons, likely for about $25 a carton, a $750 markup on every box of 50 baggies.

“We don’t know where they’re going,” the woman said. “Along the way, wherever he has friends. I never ask him.”

The Mounties say there are 105 organized crime groups in Canada involved in the tobacco trade, from mom-and-pop operations that only deal in cigarettes to violent groups, including the Italian mafia, Hells Angels, Asian street gangs and Jamaican posses.

The Mounties can point to a growing list of busts involving gangsters and illegal tobacco. The most recent was March 12, when they charged 22 people, including two Hells Angels and two Kahnawake Mohawks, in connection with a cigarette and methamphetamine ring around Quebec City.

This kind of thing makes even the Mohawks who are involved in the business nervous.

The Mohawks of Kahnawake have mixed feelings about the trade. Although it employs many people on the reserve, they don’t want gangsters on the streets.

In Akwesasne, police have seized AK-47s and rocket launchers, several people have been killed during police chases with smugglers, and Hells Angels ride down the street in their colours.

In Kahnawake, Mohawks say, there are whispers about the Angels, but they are not seen in the community.

“They say they’re here, but I don’t know where,” said the Mohawk cigarette trader. “We always hear talk, but we don’t actually know where. Why invite them anyways? Isn’t that the sort of relationships you can’t ever get out of?”

Kahnawake have twice voted against casino proposals because they fear organized crime.

Joe Delaronde, press attache for the band council, said the community won’t protect people doing business with gangsters.

“That’s the kind of thing people here don’t like either. That kind of stuff strikes a nerve everywhere. We’ve said, on the record, anybody who’s involved with organized crime like that, we’re not going to go out of our way to (protect). If you’re involved with those kind of people, we don’t want you here.”

John Thompson, who has studied illegal tobacco as president of the Mackenzie Institute, said he thinks the people running the cigarette business have made a conscious decision to be peaceful in recent years because they’ve learned violence is bad for business.

“Fourteen, fifteen years ago, there were truck hijackings and killings. No sign of it this time. I think pretty well all the distribution is on the Indian reserves, and if you’re doing it on your own, you really are on your own. There’s no tractor-trailer trucks coming off the Indian reserves. It really is independent organizers picking up their own stuff. I don’t think the native reserves would be willing to tolerate wholesale distribution to organized crime. No gunfights. Keep it low.”

Mr. Thompson said the only way to reduce the trade is to lower taxes on legal cigarettes, an idea that no politicians support. “If you keep putting prohibitive sin taxes on a product, of course a black market will develop,” said Mr. Thompson.

As the Mohawk cigarette dealer puts it: “Are they going to buy a carton at $87.50, plus tax, or a baggie for 10?”

Source: Thechronicleherald

For more than a century, the Sharp family of eastern North Carolina has grown tobacco, nicknamed the “golden leaf” for reasons that went beyond the cured plant’s rich color.

But last week, the federal tax on a pack of smokes more than doubled. Pender Sharp says cigarette makers had already cut back orders in anticipation, leaving him to wonder if Sharp Farms and thousands of fellow growers across the South will be forced to hire fewer seasonal workers or lay off full-time employees.

Driven in part by bans on public smoking and the relentless efforts of health advocates, cigarette sales in the U.S. were already expected to drop 4 percent this year. Industry analysts say the decline could be twice that after an increase in the federal excise tax from 39 cents to $1.01 per pack took effect Wednesday.

Growers say some tobacco buyers are cutting back orders by as much as 25 percent and, in some cases, trying to renegotiate existing contracts to buy less than originally agreed. Sharp says Philip Morris USA and Reynolds American cut orders for his crop by 5 percent after the tax increase passed in January.

“It also will be a 5 percent cut to all the vendors that I buy tires, fuel, repairs and equipment from. It has a huge ripple effect in the community,” said Sharp, who raised 1.5 million pounds of tobacco on 500 acres last year. “There’s nothing else we’re doing that comes even close to yielding the profits that tobacco yields.”

For generations, tobacco growers were a protected class, as lawmakers across the South defended the golden leaf as stridently as politicians from Michigan and New York do automakers and Wall Street. It remains a huge business: The tobacco crop in North Carolina alone, where farmers produce nearly half the value of the entire U.S. output, was worth $686 million last year.

But lawmakers don’t look out for Big Tobacco as they once did. In 2004, Congress eliminated a tobacco quota and price support system that dated to the Depression. On Thursday, the U.S. House approved legislation that for the first time would give the government powers to regulate tobacco products. Last week, South Carolina’s House OK’d an increase of 50 cents a pack, up from 7 cents. If enacted, the extra revenue would help pay for fund health insurance for low-income workers.

In Raleigh, where there were spittoons North Carolina General Assembly until the mid-1980s and a smoky haze in the halls until a few years ago, House members voted this week in favor of a limited ban on public smoking. They’re also considering a once unthinkable $1 per pack increase in the state tobacco tax, which until 2005 was only a nickel. Other states have also approved or are considering tax increases.

In her first month in the U.S. Senate, North Carolina Democrat Kay Hagan railed against the federal tax increase, which will pay for an expansion of a children’s health insurance program, saying it could cost the state 3,000 jobs and up to $36 million in revenue.

Then she voted for it anyway, citing her support for the children’s health care, a decision tobacco growers like Sharp have trouble understanding.

“If we have programs and services that are necessary and good for all the people of North Carolina and all the people in this nation, then let all the people pay for it,” Sharp said. “Don’t target a few tobacco growers and consumers of tobacco products to pay for programs and services that benefit all of society.”

It’s a blow felt in the sandy soil fields of eastern North Carolina that are just OK for sweet potatoes, cotton, soybeans, but fantastic for tobacco. Production dropped by 27 percent to roughly 645 million pounds in 2005, the year after the quota system came to an end, but has slowly recovered in the past few years, boosted by exports and new marketing tactics.

In the face of efforts to curb cigarette sales, the nation’s biggest tobacco makers are trying to convert smokers to alternatives such as moist snuff, chewing tobacco and snus — teabag-like pouches that users stick between their cheek and gum.

Growers are also looking to sell their crop overseas, and a group called the U.S. Tobacco Cooperative that buys tobacco from 3,500 growers in five Southeast states has a unit that exports American leaf to China.

But Tommy Bunn, the co-op’s president, said competition from countries like Brazil and Malawi, where production costs are lower than in the U.S., limit farmers’ ability to use exports as a solution to declining domestic cigarette sales.

“The export market is only so large. New customers are hard to reach and there’s a lot of competition out there,” Bunn said. “We are out there all the time trying our best to crack the doors on new markets.”

Such concerns don’t sway the health advocates who are winning their fight with Big Tobacco. Eric Lindblom, director for policy research at the Campaign for Tobacco-Free Kids, said the smokeless options the industry is counting on to maintain demand — and which will be taxed at one-eighth the new rate on cigarettes — only serve to keep people from stopping outright.

Stanley Smith, who grows about 50 acres of tobacco in Stokes County near the Virginia border, bristles at the sharp increase in the cigarette tax.

Still, along with the leaf he sells for export, he’s experimenting with a purple sweet potato that’s rich in antioxidants and sold in upscale groceries. For the past few years, he’s been among former quota beneficiaries receiving annual payments to help them retire or ease into a new crop.

“The tobacco farmers in the United States are receiving money under the Tobacco Transition Payment Program, which tells us through that name that we need to transition from tobacco into something for the future,” he said.

Vinnee Tong and Michael Felberbaum, both of the Associated Press, and The Post and Courier contributed to this report.

Source: Postandcourier

The makers of a controversial anti-smoking ad let a 4-year-old boy lose sight of his mother so that he would cry on camera. But they insist that the child was not harmed and the child’s anxiety lasted a matter of only a few seconds.

“Toward the end, he lost sight of his mother, and he did shed some real tears … but it was a very brief moment,” Fiona Sharkie, the executive director of the Australian anti-smoking organization that produced the ad, told TODAY’s Matt Lauer Friday. “Within seconds of those tears being shed, he was in his mother’s arms and giggling.”

The ad is part of a series of graphic — some would say disturbing — anti-smoking television commercials being run in New York City by the department of health.
Source: Today.msnbc.msn