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Archive for July, 2013

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Volume down at JT (slightly) and JTI

| July 30, 2013

Japan Tobacco Inc.’s volume cigarette sales during the three months to the end of June, at 29.3 billion, were down by 0.2 percent on those of the three months to the end of June 2012.

Comparing the same periods, industry volume was said to have declined by 2.0 percent; so JT’s market share increased from 59.6 percent to 60.5 percent.

The share growth was driven by sales of Mevius (the brand known as Mild Seven up until February), which was the subject of sales promotions and new version launches that included Mevius Premium Menthol Option with a capsule filter.

Core revenue for the domestic business during the three months to the end of June, at ¥165.2 billion, was down by 0.1 percent on that of the three months to the end of June 2012, while adjusted EBITDA was down by 1.1 percent to ¥75.8 billion.

JT’s consolidated results for the first quarter included January–March figures for Japan Tobacco International, which saw its shipments during January–March 2013, at 92.6 billion, fall by 6.4 percent from those of January–March 2012, 98.9 billion.

Comparing the same periods, global flagship brand shipments fell by 4.5 percent to 58.4 billion.

Although volumes were down, JTI reported that its year-on-year market share continued to grow “in almost all key markets, including France, Italy, Spain, Taiwan, Turkey and the U.K.”

Core revenue for the international business during the three months to the end of March, at ¥252.3 billion, was up by 16.4 percent on that of the three months to the end of March 2013, while adjusted EBITDA was up by 23.8 percent to ¥99.0 billion.

JT’s consolidated first-quarter revenue for all of its businesses, at ¥547.9 billion, was up by 7.0 percent on that of the first quarter of 2012. Adjusted EBITDA, at ¥177.2 billion, was up by 13.6 percent and operating profit was up 13.9 percent to ¥146.5 billion.

“We have made a solid start to the new fiscal year,” said JT President and CEO Mitsuomi Koizumi. “Internationally, a strong price/mix drove continued profit growth despite unfavorable volume due to industry contraction. In Japan, Mevius continued to drive steady market share growth, demonstrating that the rebranding of Mild Seven to Mevius has been completed successfully.

“Looking ahead, despite a challenging business environment, we are confident that we can achieve the Business Plan 2013 targets, pursuing quality top-line growth.”

Meanwhile, JTI reported separately that its cigarette shipments during the three months to the end of June, at 109.0 billion, were down by 3.9 percent on those of the three months to the end of June 2012, 113.5 billion.

At the same time, global flagship brand shipments were down by 0.3 percent to 69.5 billion.

Core revenue was up by 3.8 percent to US$3,112 million.

Japan’s smoking prevalence falls

| July 30, 2013

A study conducted in May has put the prevalence of smoking among Japanese adults at 20.9 percent, down 0.2 of a percentage point on that of a year earlier.

Smoking among men was down by 0.5 of a percentage point to 32.2 percent, while smoking among woman was up by 0.1 of a percentage point to 10.5 percent.

These figures, published today by Japan Tobacco Inc., were taken from the Japan Smoking Rate Survey, which has been conducted annually since 1965.

Using total population figures from the Statistics Bureau of the Ministry of Internal Affairs and Communications, JT calculates that Japan’s smoking population comprises 21.95 million people, down from 22.16 million last year.

Smoking among men has fallen from 16.50 million to 16.23 million, while smoking among women has risen from 5.66 million to 5.72 million.

JT put the declining trend of smoking in Japan down to the country’s aging population, growing awareness about the health risks associated with smoking, the tightening of smoking-related regulations and a tax and price hike in October 2010.

The May 2013 survey was conducted using a stratified two-stage method, by mailing questionnaires to about 32,000 adult men and women nationwide. JT collected 19,630 (61.2 percent) valid responses from the total population surveyed.

FOREST launches campaign against proposed EU directive diversions

| July 30, 2013
Forest shows the way ahead.

Forest shows the way ahead.

The U.K. smokers’ lobby group FOREST has launched a campaign to fight an EU directive that will ban tobacco products that are currently legal and severely restrict consumer choice.

In announcing its latest initiative, FOREST said the No Thank EU campaign would give retailers and consumers the opportunity to register their opposition to the proposed regulations that included a ban on menthol cigarettes and 10-packs.

As proposed, the revised Tobacco Products Directive (TPD) would outlaw, too, smaller pouches of roll-your-own tobacco, restrict the size and shape of cigarette packs and impose larger health warnings on all tobacco products.

“Prohibition doesn’t work,” said FOREST campaigns manager Angela Harbutt. “Retailers will be robbed of income from outlawed products. Denied choice, consumers will be driven to the black market where there will be a flourishing trade in banned goods.

“The Directive is proceeding with indecent haste. Members of parliament have been denied the opportunity to scrutinize the proposals, yet the impact on retailers and consumers in Britain is potentially enormous.

“Regulations like this should be a matter for elected politicians in Westminster, not unelected bureaucrats in Brussels. We urge retailers and consumers who share our concern to make their opinions known by supporting our campaign.”

The launch of the No Thank EU campaign follows the success of FOREST’s Hands Off Our Packs campaign, which generated a huge response to the government’s consultation on plain packaging of tobacco. More than 420,000 people registered their opposition to the policy, more than 265,000 of them via FOREST.

FOREST is supported by British American Tobacco, Imperial Tobacco Limited and Gallaher Limited (a member of the Japan Tobacco Group of Companies).

Further information on the new campaign is at: www.NoThankEU.com.

Regional smokeless tobacco ban sought

| July 29, 2013

Representatives of 10 South and Southeast Asian countries attending an anti-tobacco meeting in Delhi, India, have called for a ban on smokeless forms of tobacco, according to an Indo-Asian News Service story.

The representatives, from Bangladesh, Bhutan, India, Indonesia, the Maldives, Myanmar, Nepal, Sri Lanka, Thailand and Timor-Leste (East Timor), were attending a regional meeting of the World Health Organization’s Framework Convention on Tobacco Control (FCTC).

The meeting, organised by India’s health ministry in collaboration with WHO SEAR (Southeast Asian region), reviewed implementation of the FCTC and major developments related to the treaty in the region and internationally.

The meeting was said to have facilitated inter-country exchanges on implementation achievements and challenges, including the identification of best practices and the ways of further promoting their dissemination and use.

It reviewed instruments available for implementation of the convention, particularly the guidelines and reporting system.

Representatives decided to raise awareness of the newly adopted protocol to eliminate the illicit trade in tobacco products and to promote its signature and ratification, an official said.

And they called for the introduction of “strong” legislation banning smokeless tobacco.

It is generally accepted that the harm caused by tobacco is mainly the result of the inhalation of tobacco smoke containing chemicals created during the burning process.

Growth of China’s luxury market seen as opportunity for Indonesian cigar tobacco

| July 29, 2013

An Indonesian company looking to boost its non-sugar revenues sees cigar tobacco as its ticket into the Chinese market for luxury goods, according to a story in The Jakarta Globe.

Perkebunan Nusantara X (PTPN X), which is the country’s largest sugar producer, spotted an opportunity to expand its tobacco arm after exports were 44 percent above target during the most recent quarter.

The state-owned company sold 634 tons of unmanufactured tobacco overseas during the second quarter and expects its annual export of unmanufactured tobacco to be worth RP296 billion ($29 million).

M. Cholidi, corporate secretary at PTPN X, said in a statement on Friday that the company was focusing on producing Besuki Na Oogst, a type of tobacco that was ideal for cigar making. The cigar market was relatively unaffected by worldwide anti-smoking campaigns, Cholidi said.

PTPN X’s biggest markets for tobacco were countries of Europe and the U.S., but it continued to seek out new markets.

And one of those is China, where a rising affluent class had boosted demand for high-quality cigars.

PTPN X is expanding its tobacco plantations accordingly. The company’s growing area under tobacco reached 1,296 hectares at the end of June, up 17 percent from that of last year.

Mayoral campaign targets menthol

| July 29, 2013

Chicago Mayor Rahm Emanuel has asked the Chicago Board of Health and the Chicago Department of Public Health (CDPH) to undertake a series of initiatives aimed at curtailing the use of menthol cigarettes by young people in Chicago, according to a press note issued by the Campaign for Tobacco-Free Kids (CTFK) through PRNewswire.

The board and the department will host a series of town hall meetings to identify innovative, community-driven strategies to reduce menthol cigarette use among young people.

In addition, the CDPH is due to launch in October a tobacco-prevention campaign that will focus on menthol cigarette use.

CTFK said the mayor’s initiative had come days after a 153-page report by the U.S. Food and Drug Administration had found that menthol cigarettes led to 1) increased smoking initiation among youth and young adults, 2) greater addiction and 3) decreased success in quitting smoking.