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Category: Breaking News

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Sporting role for Thailand’s smokers

| February 25, 2015

Thai smokers, who already contribute to the Thai Health Promotion Foundation and the Thai Public Broadcasting Services, will soon be providing money to help the country’s sporting efforts, according to a story in the Bangkok Post.

Retail prices for cigarettes and alcoholic drinks are said to be likely to go up by several baht next month as producers pass on a new two percent sports tax.

The Sports Act passed by the National Legislative Assembly in January and pending publication in the Royal Gazette will require manufacturers and distributors of tobacco products and alcoholic beverages to contribute to a new sports fund at a rate equivalent to two percent of the excise taxes they pay the Finance Ministry each year.

The ministry will collect the money and give it to the sports fund.

The Thailand Tobacco Monopoly, which earns about six billion baht annually in net profit, apparently told the media that its contribution to the sports fund would be about 2.8 billion baht annually.

The monopoly currently contributes 1.6 billion baht to the Thai Health Promotion Foundation and Thai Public Broadcasting Services.

Swisher sets up vapor business

| February 24, 2015

Swisher International is creating a new company, E-Alternative Solutions (EAS) to develop, market and distribute for the rapidly growing vapor market. Swisher’s senior vice president for sales and marketing will serve as the CEO of EAS.

“We have been carefully reviewing the e-cigarette space for a while through market research, customer feedback and in-depth reviews of the technological landscape,” says Miller. “Thanks to Swisher International’s world-class capabilities in combination with the best-in-class team we are assembling to lead EAS, we have the ambition to become a market leader in the evolving e-alternative category—just as Swisher has in the tobacco market for over 150 years.”

Jacopo D’Alessandris will serve as EAS president. D’Alessandris has almost 20 years of marketing and general management experience in consumer-packaged and electronics-goods products. Most recently he served as chief marketing officer for the consumer division of Philips North America. Prior to joining Philips in 2006, D’Alessandris was a global executive at L’Oreal for 10 years in various leadership roles in Europe and Latin America.

“I am excited to join the Swisher family to lead its sister company EAS,” said D’Alessandris. “The e-cigarette and vapor space has been growing rapidly but is still in its infancy. Breakthrough technology and innovative marketing, coupled with Swisher’s expertise in the tobacco space will be the key ingredients I will focus on to build EAS’ success.”

Initially, EAS will offer two proprietary liquid vapor product lines. The products are currently being tested in select markets and sold online. These liquids, which are used in electronic vapor devices, are manufactured in the U.S. using high-quality ingredients and the highest levels of quality control, according to EAS.

 

Wording dispute over tobacco companies’ mea culpa

| February 24, 2015

The US’ biggest tobacco companies have asked a federal appeals court to set aside a series of court-ordered ‘advertisements’ saying they lied about the dangers of smoking, according to an Associated Press story.

The companies told a three-judge panel of the US Court of Appeals in Washington that they are ready and willing to pass along factual public health information about cigarettes, but said they would not go along with being forced to underwrite an ‘advertising’ campaign that would have the companies brand themselves as liars.

The statements imply “that we’re still engaged in aspects of wrongdoing … (and) that we do things that we don’t do,” Miguel Estrada, an attorney representing the tobacco companies, told the panel.

The requirement that the companies issue a mea culpa stems from a civil case the government brought in 1999 under RICO, the Racketeer Influenced and Corrupt Organizations Act.

In 2006, US District Judge Gladys Kessler ordered the largest cigarette manufacturers to publicly admit that they had lied for decades about the dangers of smoking.

The companies in the case include the Altria Group, owner of Philip Morris USA; R.J. Reynolds Tobacco Co, which is owned by Reynolds American, and Lorillard.

The ‘advertisements’ would be in all cigarette packs sold for 12 weeks over the course of two years, in TV spots once per week for a year, in a separate newspaper ‘advertisement’ by each company, on company websites indefinitely and at certain retail outlets.

The full story is at: http://www.dailynews724.com/new-mexico/tobacco-companies-fighting-over-claims-on-smoking8217s-effects-h407804.html.

MEP opposes Commission’s e-cigarette tax plans

| February 24, 2015

The member of the European Parliament representing North West England, Paul Nuttall, has spoken out against news that the European Commission is ‘considering hiking up tax on healthier electronic cigarettes,’ according to a note posted on the website of the UKIP party, of which Nuttall is deputy leader.

The Commission is said to have asked excise duty experts from across the EU to consider the ‘best way to achieve fiscal equal treatment’ of electronic and tobacco cigarettes.

“I am a great fan of e-cigs and UKIP has been very supportive of the practice because it is healthier and a source of jobs for innovative British companies,” said Nuttall, who is described as a new e-cig convert. ‘The British government must stand up against these measures and UKIP undertakes to oppose any legislation from the EU to put tax on electronic cigarettes.

“I have never seen a private pleasure that the EU does not want to tax. Of course this move will hike up the cost of vaping e-cigarettes, and thus push more people back to ordinary and less healthy cigarettes.

“This move unmasks the EU’s real intent of its Tobacco Directive which was to tax all cigarettes more and help governments make more money. To paraphrase Ronald Reagan, ‘The EU’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

South Korea holding the line on huge price increases

| February 24, 2015

In the face of widespread opposition, a senior politician in South Korea on Monday took a step back from his efforts to introduce low-price cigarettes, according to a story in The Korea Times.

Ruling Saenuri Party floor leader, Representative Yoo Seong-min, had instructed the party’s policy committee on February 17 to review ways to introduce cheap, low-quality tobacco products to soothe low-earners’ discontent over January’s WON2,000 (about 80 percent) cigarette price hike.

But the move attracted widespread criticism in political circles, including from members of his own party.

“We don’t have an immediate plan either to introduce or cancel the plan,” Yoo told reporters. “We are now reviewing it at an idea level.”

Lawmaker Chung Woo-taik argued that such an inconsistent policy would only arouse public mistrust toward the government.

He said the government had justified the increase in tobacco prices as a way of protecting people’s health, while critics had claimed that it had been designed to secure the revenue needed to implement President Park Geun-hye’s welfare pledges.

“Introduction of low-price cigarettes would only prove that the government raised the price to actually boost taxes,” he said.

Timing of SC share acquisition proposal ‘compelling’

| February 24, 2015

British American Tobacco is evaluating a possible public tender offer to acquire up to all of the 24.7 percent of Souza Cruz shares that are not owned by BAT, and to delist the company.

In a press note posted on its website yesterday, BAT said any offer for Souza Cruz’s shares would be at a price per share of R$26.75, to be paid in cash, in Brazilian reals, and to be reduced by any dividend paid by Souza Cruz.

‘A price of R$26.75 per share would represent a premium of 30.0 percent to Souza Cruz’s volume weighted average closing share price over the three months to Friday 20 February 2015 (being the last trading day before the date of announcement)’, the press note said.

‘The consummation of the offer is still subject to, inter alia, BAT’s board approval and the finalization of an appraisal report by an independent evaluator which is required in accordance with the relevant Brazilian rules.

‘There can be no certainty that any offer will be made, the related terms of any such offer nor that any delisting will occur.’

Erik Bloomquist, a senior analyst, consumer staples, at Berenberg, said the timing of BAT’s proposal was compelling for four reasons:

1) ‘the real is near a 10-year low relative to sterling;

2) ‘interest rates are near five-year lows with attractive rates available for highly rated corporates;

3) ‘tax headwinds in the SC business could dissipate substantially in 2016; and

4) ‘in our opinion, SC is one of the jewel businesses in BAT.’