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WHO accused of hypocrisy over illegal trade stance

| May 29, 2015

Campaigners are accusing the World Health Organization (WHO) of ‘hypocrisy’ for making illegal trade a theme of World No Tobacco Day (May 31).
According to WHO, one in every ten cigarettes and many tobacco products consumed worldwide are illicit.
WHO wants governments to ratify the Protocol to Eliminate Illicit Trade in Tobacco Products and has called on the public, academia and other sectors to take action to make their countries parties to the protocol.
“There’s a simple reason why illicit trade is such a problem,” said Simon Clark, director of the consumer group Forest. “Tobacco control campaigners repeatedly demand massive hikes in tobacco duty. This not only boosts the illegal tobacco trade, it drives elderly and low-paid smokers into poverty.
“Let’s end this hypocrisy now. What we need are sensible, pragmatic policies that don’t discriminate against law-abiding consumers who buy their tobacco from legitimate retailers.”
Forest denounced also standardized packaging and the EU ban on menthol cigarettes.
“Prohibition doesn’t work,” said Clark. “Criminal gangs will be only too happy to meet demand for flavoured cigarettes. As for plain packaging, that’s going to be a godsend for black marketeers.
“Instead of berating others for the growth of illicit trade, the tobacco control industry should look closer to home.”

WTO notification of Norway’s plain packaging plan

| May 29, 2015

Norway’s Ministry of Health and Care Services has proposed the imposition of a requirement for all tobacco products to be sold in standardized packaging, according to a World Trade Organization notification.
It has not been decided when the measure should be adopted or when it should come into force. Comments are being invited.
‘Standardized tobacco packaging involves a uniform layout and design on all tobacco packaging, as well as a ban on manufacturers’ logos, trademarks, images, colours or other forms of advertising,’ the notification states.
‘Packaging shall only have one solid colour, and some of the products will be required to have specific packaging materials. Brand names and variant names, as well as manufacturer information, shall have standardized colour, placement, font and size. The ministry also proposes standardization of other elements such as barcodes, packing material, etc. The packaging shall retain the mandatory health warnings and other information in accordance with current legislation.
‘The ministry furthermore proposes that the design of tobacco products and smoking accessories should be standardised to a certain extent, including the colour of the cigarette paper and snus portions, as well as the specification of brand names and variant names.
‘A legal basis for standardizing the packaging of tobacco surrogates is also proposed, but specific regulations are not proposed at this time. Tobacco surrogates include herbal cigarettes and herbal snus, among others.’
The notification says that the overarching objective of the proposal is to reduce the number of children and youngsters who begin smoking and using snus, in order to protect them from the harmful effects of tobacco use.
‘More specifically the objective is to make tobacco products less appealing by limiting the advertising effect of the packaging, increasing the impact of the mandatory health warnings, as well as minimising the risk that the packaging design gives misleading information about the harmful health effects of tobacco,’ it said.
‘It is assumed that the measure will also contribute toward a moderate reduction in the use of tobacco among adults by helping people to quit smoking and using snus, and by helping to prevent relapse among those who have quit.
‘It will also have the effect of denormalizing tobacco products and tobacco use.

Ukraine re-examining plain packaging challenge

| May 29, 2015

Ukraine’s trade minister has met with a delegation of health groups following a remark by Prime Minister Arseniy Yatseniuk that he doubted the appropriateness of a legal challenge filed against Australia’s standardized packaging legislation, according to an Interfax story relayed by the TMA.
Ukraine’s 2012 challenge, along with those of Cuba, the Dominican Republic, Honduras and Indonesia have been lodged with the World Trade Organization.
During the meeting, the minister of Economic Development and Trade Aivaras Abromavicius and deputy minister Natalia Mykolska were told by representatives of anti-smoking and health groups that the continuation of the dispute at the WTO could affect the international image of Ukraine.
Members of the Ukrainian Center for Tobacco Control, the Media Law Institute, the Ukrainian World Congress, the Campaign for Tobacco Free Kids, and the Bloomberg Initiative to Reduce Tobacco Use attended the meeting.
Abromavicius was said also to have met with Australia’s ambassador to Ukraine.
The countries challenging Australia’s standardized tobacco legislation argue that it comprises a barrier to trade and infringes tobacco firms’ intellectual property rights.

Imperial Canada challenges Nova Scotia menthol ban

| May 29, 2015

Imperial Tobacco Canada has filed a legal challenge against Nova Scotia’s menthol ban, which is set to take effect on May 31.
“By prohibiting the sale of menthol cigarettes, the government of Nova Scotia has stepped beyond its legislative authority, which leaves us with no other choice than to bring this matter in front of the courts,” said Caroline Ferland, vice president of corporate and regulatory affairs in a statement issued through Canada Newswire.
“The Nova Scotia government’s decision to default to knee-jerk regulation rather than fact-based regulation informed through meaningful public consultation will only exacerbate the already well-established illegal tobacco problem in the province.”
Imperial said that menthol products had been on the market for more than 80 years and that they were preferred by older people. Menthol had twice been exempted from tobacco flavor bans by the federal government because of a lack of evidence demonstrating it was attractive to youth.
‘In addition, banning menthol tobacco products will not eliminate them from the Nova Scotia market,’ Imperial said. ‘Instead of buying them from responsible retailers who comply with the law, the adult smokers who choose to smoke menthol products will turn to criminals to purchase their products.
‘There are currently more than 35 brands of menthol cigarettes available on the illegal tobacco market and the RCMP has identified more than 175 criminal organizations in Canada who profit directly from the sale of illegal tobacco.’
“It is not often that illegal tobacco dealers get a new business opportunity presented to them on a silver platter,” said Ferland.

Beijing smokers braced for new era of restrictions

| May 29, 2015

Indoor smoking and tobacco advertisements will be banned in public places in Beijing as part of new tobacco control regulations due to come into force on Monday, according to a story in the China Daily.
The restrictions, which were adopted in November by the Beijing People’s Congress, are among the toughest of their kind in China.
They forbid smoking in all indoor public places, including workplaces, and within some outdoor areas, including schools.
The authorities will be paying particular notice to the implementation of the regulations in schools, airports, metro and bus stations, restaurants and scenic spots.
Tobacco retailing certificates will not be issued to shops within 100 meters of kindergartens, primary and middle schools, and children’s activity centers. Shops in these areas that already have certificates will not able to continue to sell tobacco when their current certificates expire.
Beijing airport announced on Tuesday that all its smoking rooms would be closed and replaced with 11 outdoor smoking areas from June 1. In addition, outdoor smoking areas of 1.5 square meters and marked with yellow lines will be set up in more than 600 bus stations across the city. Smoking will be banned in all metro facilities, including cabins and stations.
Smoking will be banned in scenic areas with ‘key cultural relics’, but outdoor smoking areas will be made available in other scenic areas.
Tobacco advertising will be banned on radio and television, in films, as part of mobile communications and on the Internet. No tobacco advertisements will be allowed in public places, including on public transport and outdoor areas.

EU’s illegal trade falling but still substantial

| May 28, 2015

The scale of the EU’s illegal trade in cigarettes remains ‘sizeable’, with 56.6 billion illicit cigarettes consumed there last year – about 10.4 percent of total consumption, according to a press note posted on Philip Morris International’s website, citing the latest annual report by KPMG.

The report was prepared for British American Tobacco, Imperial Tobacco, Japan Tobacco International and PMI.

‘This illegal market costs taxpayers and communities more than €11 billion a year in lost tax revenue,’ the note said. ‘If combined, the thousands of transactions made by criminals involved in the illegal tobacco trade would equate to them being the fifth largest cigarette supplier to EU consumers.’

The source and type of products available on the illicit tobacco market are said to have continued to evolve, though the upward trend of illegal trade levels in the EU has been reversed in recent years. For example, last year, more than eight out of 10 of the illicit cigarettes consumed in the EU originated outside the EU, which is a 10 percent increase compared to the situation during 2013. In contrast, flows within the EU continue to decline, driven by improved industry supply chain controls and narrowing price gaps between EU member states.

“Overall levels of illicit cigarette consumption in the EU remained essentially flat during 2014, however the illegal tobacco market remains sizeable and continues to evolve,” said Robin Cartwright, a partner at KPMG. “Our research shows that while this is a problem that touches every member state, caution is needed particularly in countries that share borders with non-EU countries where cigarettes are cheaper and where we continue to see high illicit cigarette consumption levels.”

‘Illicit whites,’ which are cigarettes that are generally produced legally in a country but are smuggled into other countries where they have limited or no legal distribution, are said to be proliferating across the EU. According to KPMG, while smuggling of well-known brands has become less common, the number of illicit whites has grown exponentially from virtually zero in 2006 to 37 percent of all illicit cigarettes last year.

‘The illegal cigarette market continues to deprive member states of much needed revenues, hurts legitimate businesses, and fosters crime in local communities,’ said the press note. ‘Eliminating the illegal tobacco industry requires governments, law enforcement agencies, manufacturers and retailers to work together to stop the criminals responsible for this illegal trade.’

BAT, Imperial, JTI and PMI remained committed to these efforts and together with law enforcement continued to invest in combating this problem, the press note said.

Additional findings in the KPMG report include:

* Illicit whites brand flows grew by eight percent to 21.1 billion cigarettes last year, with consumption of such products being most prevalent in Poland, Italy, Spain and Greece;

* Last year, 10.4 percent of all cigarettes consumed in the EU were illicit, compared to 10.5 percent in 2013 and 11.1 percent in 2012;

* Total illicit cigarette volumes declined by 3.3 percent last year to 56.6 billion cigarettes.

The 2014 KPMG study on the illegal cigarette trade in the EU, Switzerland and Norway is available on KPMG’s website: http://kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Pages/the-illicit-cigarette-market.aspx.

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