Tobacco Reporter

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Korea to ban product discriptors

editor | June 30, 2014

Cigarette makers in South Korea will be banned from using such words as light, low tar and pure on cigarette packaging from next year, reports The Korea Times.

The Ministry of Strategy and Finance announced revised decrees on Sunday to forbid tobacco makers from using such misleading words on packages or in advertisements.

The rules will go into effect on Jan. 22. Violators will face up to a year in jail or a fine of up to WON10 million.

The rules also call for cigarette manufacturers to make low-ignition propensity cigarettes beginning July 22, 2015.

Manufacturers who fail to produce fire-safe cigarettes after that date could have their licenses revoked.

Zimbabwe sales near to 2001 peak

editor | June 30, 2014

Zimbabwe sold nearly 190 million kg during the 2013–2014 season, surpassing the target of 180 million kg, reports New Zimbabwe, quoting the Tobacco Industry and Marketing Board (TIMB).

Auction and contract sales fetched a combined $604.7 million.

Although auction marketing is set to end soon, contract sales would continue until further notice, TIMB added.

In 2013, 166 million kg of tobacco worth $616 million was sold.

TIMB chief executive officer Andrew Matibiri said he hoped the remaining crop to be sold under the contract system would push production figures for 2014 to 200 million kg.

If met, the target would be slightly lower than the country’s peak production of 231 million kg in 2001.

China has been the largest buyer of Zimbabwean tobacco over the past years.

Philippines to audit Mighty Corp.

editor | June 27, 2014

The Philippine Bureau of Internal Revenue (BIR) has started an audit on the tax payments of cigarette manufacturer Mighty Corp., reports ABS-CBN News.

BIR personnel have been assigned to Mighty’s manufacturing facilities to ensure they are complying with tax payments.

The investigation follows allegations that the company has been underdeclaring its production volume, resulting in billions of pesos in foregone revenues for the government.

Mighty produces the Mighty Menthol and Mighty Filter brands. In February, it defended its pricing as a “marketing” strategy and noted that the company pays no royalties to foreign parents, giving it a cost advantage.

PMI buys Nicocigs

editor | June 27, 2014

Philip Morris International has purchased Nicocigs, a leading U.K.-based vapor company whose principal brand is Nicolites. The transaction is not subject to regulatory approval and is not material to PMI’s 2014 consolidated financial position.

“This acquisition is complementary to our previously announced agreement for the license and distribution of Altria Group’s e-vapor products,” said Drago Azinovic, PMI’s president, European Union region.

“In addition, it provides PMI with immediate access to, and a significant presence in, the growing e-vapor category in the U.K. market, as well as a strong retail presence, which further complements the current restructuring of our distribution arrangements in the U.K.”

Nicocigs was founded in 2008 and is headquartered in Birmingham, U.K. The company employs a field force of approximately 40 sales representatives, and its products are distributed to more than 20,000 points of sale within the U.K.

Nicocigs 2014 April year-to-date retail share was 27.3 percent according to Nielsen.

Low compliance with health warnings requirement

editor | June 27, 2014

The majority of cigarette packs in Indonesia do not comply with the country’s new graphic health warning requirements, according to a report in The Jakarta Post.

The Drug and Food Monitoring Agency (DFMA) said only 13.44 percent of cigarette packages circulating in the market bear the pictorial warnings that became mandatory on June 24.

Under a presidential regulation on tobacco control issued last year, cigarette makers must allocate 40 percent of cigarette packaging for text and pictorial warnings about the health effects of smoking.

The DFMA and regional food and drug offices in 31 regions monitored the implementation of the new tobacco-control rules during the two days following their enactment.

Of the 2,270 cigarette packages monitored, only 305 or had pictorial warnings. There are 3,363 cigarette brands, produced by 672 companies, registered with Indonesia’s Customs and Excise Directorate.

Health Minister Nafsiah Mboi said that cigarette makers should recall all products that did not display the pictorial warnings.

The ministry said that there would be penalties for companies that failed to comply with the new policy, ranging from written warnings and reprimands to the revocation of their business licenses.

Nafsiah said companies that missed the deadline would be issued warnings, and those that failed to comply could eventually be fined up to $42,000. Their executives could face up to five years in prison.

The country’s biggest cigarette producer, Philip Morris-owned Sampoerna, said it began distributing products with the new warnings on June 23, but it needed more time to clear out existing stock.

A national survey in 2012 found that 67 percent of all Indonesian males over age 15 smoked—the world’s highest rate—while 35 percent of the total population lit up; a figure surpassed only by Russia.

Savanna to set up factory in Mozambique

editor | June 25, 2014

Savanna Tobacco of Zimbabwe plans to set up a factory in Mozambique, reports Newsday. According to Chairman Adam Molai, the company will invest at least $2 million in equipment and marketing.

“We have been exporting a lot of finished cigarettes into Mozambique,” said Molai. “We are seeing opportunities to pack our cigarettes in that market.” Savanna exports 85 percent of its products.

Molai expected that by year’s end company volumes would be up 40 percent compared with 2013. He said the company has the capacity of producing 4.5 billion sticks of cigarettes, but currently it was utilizing 72 percent of that capacity.

The chairman said the company had increased the value it got from products by 10 times since it began operations in 2002.