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UK government, tobacco firms on collision course

| March 12, 2015

The UK’s lower house yesterday voted by 367 to 113 in favor of requiring that cigarettes and roll-your-own tobacco should be sold only in standardized packaging from May next year, according to a Telegraph story relayed by the TMA.

The measure now has to be debated by the country’s upper house.

The requirements would apply only to England initially, but Wales has indicated that it would follow suit, while Scotland and Northern Ireland are considering the issue.

A Reuters story indicated that a YouGov opinion poll conducted in February found that 72 percent of the British public supported standardized tobacco packaging while 15 percent opposed it.

British American Tobacco said yesterday that it would start a legal challenge against the UK government if the upper house also supported the bill.

“This legislation is a case of the UK government taking property from a UK business without paying for it,” said Jerome Abelman, corporate and regulatory affairs director, in a press note posted on the company’s website. “That is illegal under both UK and European law.

“Legal action is not something we want to undertake, nor is it something we enter into lightly – but the UK government has left us with no other choice after running what can only be described as a flawed consultation process. Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation.”

In a note to editors after the end of the press note, BAT admitted that it had not been successful in its challenge of Australia’s standardized packaging legislation, which came into effect in December 2012. But it said that that failure had been due to a ‘unique requirement in the Australian constitution that meant it would only win the case if it could prove the Australian government had received a benefit by removing its brands’. ‘That requirement does not exist in the UK’, BAT said.

Imperial Tobacco said also that it would ‘regrettably be left with no choice’ but to challenge standardized tobacco packaging legislation should it pass into law.

Meanwhile, writing on Spiked, Patrick Basham of the Democracy Institute wrote that a court settlement in favor of the tobacco industry could cost the UK treasury up to £12 billion.

If the legal bill to the country’s taxpayers, which include the tobacco companies, is that high, a lot of people will probably want to know why the government, which is seen as a business-friendly government, seemed to ignore the results of its consultation process, why it didn’t go along simply with EU requirements for an increase in the size of health warnings, and why it rushed the proposals through just before the country was going to the polls in a general election, which is due in May.

At least they will expect that the £12 billion is recouped not through dumping more austerity on ordinary people, but through some other means – perhaps a windfall tax on tobacco companies, which both of the major parties have alluded to in the recent past.

Malawi’s leaf smugglers threatened with arrest

| March 12, 2015

Malawi’s Tobacco Control Commission (TCC) has warned cross border traders that they will be arrested if they are found to be smuggling leaf tobacco out of the country, according to a Star Africa story.

Traders are said to have been smuggling leaf tobacco to Zambia and Mozambique because the prices that are offered on the auction floors in Malawi are low compared to those in neighboring countries.

TCC CEO Bruce Munthali said on Tuesday that smuggling tobacco would cripple the nation economically because it depended on tobacco to be a major earner of foreign exchange.

“There are reports that some unscrupulous business people are smuggling the product to neighboring countries; therefore we have issued out a stern warning stressing that once caught they will face the law,” he said.

Those doing the smuggling might be regarded as unscrupulous business people but tobacco farmers in Malawi are possibly desperate to increase their incomes.

This was suggested by a report earlier this week that the government of Malawi had licensed three leaf dealers from China, Egypt and South Africa to participate in the 2015 marketing season.

The move was aimed at increasing competition and came after an Anadolu Agency story in October had said that tobacco growers felt they were between a rock and a hard place: falling prices on the one hand and government apathy on the other.

One grower quoted in the story said that buyers were not giving farmers a fair deal; they were taking away the tobacco at a price of their own choosing.

Another said that he was paid an average of £0.80 per kg for his tobacco, which was not enough to repay the loans he took out to buy the agricultural inputs he needed.

AOI to supply processed Brazilian Burley to PMI

| March 12, 2015

Alliance One International said yesterday that the company’s subsidiary, Alliance One Brasil Exportadora de Tabacos (AOB), was to supply Brazilian Burley to Philip Morris International Management (PMIMSA), as PMIMSA adopted a new leaf supply arrangement in Brazil.

Previously, Philip Morris Brasil Indústria e Comércio had directly contracted and purchased a portion of its Burley tobacco from Brazilian growers. But beginning with the 2016 crop, PMIMSA would purchase this processed Burley directly from AOB. The arrangement was expected to provide enhanced supply chain efficiencies while reducing sourcing complexity. It was said to reflect PMIMSA and AOI’s commitment to Brazilian growers and their communities, and PMIMSA’s intention of remaining a major purchaser of Brazilian tobacco.

AOI and its predecessor companies have operated in Brazil for more than 60 years.

“Alliance One is committed to developing solutions that enhance efficiencies and reduce complexity in our customers’ supply chains, while providing increased value to our stakeholders,” said Pieter Sikkel, president and CEO of AOI. “This arrangement with PMIMSA illustrates that dedication. As a result of this arrangement with PMIMSA, we expect to see benefits for our company beginning in FY2017.

“The sustainability of our grower communities is vital to the success of Alliance One and our customers, and we are excited to further support the tobacco supply chain in Brazil through this new leaf supply arrangement. From working with farmers during the growing season through processing and delivery, we focus on providing customers with a high-quality product that is produced in a compliant manner. We will continue to help growers implement the principles of Good Agricultural Practices as well as our Agricultural Labor Practices code. Alliance One is committed to achieving safe and fair working conditions on farms where we contract.”

Australia told to harness e-cigarettes’ quitting power

| March 12, 2015

There seem to be signs that the tide is turning once again in favour of electronic cigarettes.

A report yesterday told how New Zealand’s ban on electronic cigarettes with nicotine had come under fire from a visiting health professional from Australia, where a similar ban is in place.

Now, another report describes how Australia has been urged to approve the use of electronic cigarettes.

According to a story in the Daily Telegraph relayed by the TMA, Simon Breheny, director of the Legal Rights Project at the business economics think tank Institute of Public Affairs in Melbourne, said the Therapeutic Goods Administration should recognize the benefits of electronic cigarettes, which Breheny described as possibly the “greatest tool in the fight against lung cancer”.

He said the use of the devices should be approved in recognition of the therapeutic benefit they offered to thousands of Australians who were trying to quit smoking.

The current law banned the sale of electronic cigarettes using claims that they have a therapeutic benefit, but studies had shown that they could save lives.

Breheny cited an article in the Journal of Public Health from August 2014 that found that electronic cigarette use could “reduce the number of cigarettes smoked and withdrawal symptoms”.

Another study in BMC Medicine in 2014 had said there was no doubt that smokers switching to electronic cigarettes substantially reduced the risk to their health.

Electronic cigarettes and other reduced risk products should be seen as the “latest in cutting-edge tobacco quitting devices, and the government should make room for life-saving innovations”, Breheny said.

B.C. restricts use and sale of e-cigarettes

| March 11, 2015

British Columbia, Canada, will ban the sale of e-cigarettes to minors and prohibit e-cigarette use in buildings throughout the province by the end of 2015. The crackdown on vapor products is intended primarily to prevent minors from being exposed to such products and the unknown health effects they may have on users in the long term, according to Health Minister Terry Lake.

The new legislation bans the use of e-cigarettes inside all public buildings where traditional cigarette use is currently banned, including restaurants, bars, coffee shops, workplaces, hospitals, schools and movie theaters. The ban also covers vaping on all public and school properties, although health authorities are permitted to set aside specific areas for vaping as they have in the past for traditional smoking. Whether the use of e-cigarettes in parks is permitted will be determined by bylaws passed by local municipalities.

Vapers caught using e-cigarettes in restricted locations could face fines ranging from $58 to $575, while those caught selling e-cigarettes to minors risk a $575 fine.

The legislation also forbids businesses that sell e-cigarettes to advertise such products to youth, and those business that are caught selling e-cigarettes improperly could face administrative sanctions of up to $5,000.

Ban on e-cigarettes with nicotine “frankly bizarre”

| March 11, 2015

New Zealand’s ban on electronic cigarettes with nicotine has come under fire from a visiting health professional from Australia, where a similar ban is in place.

According to a story by Josh Fagan for Stuff.co.nz, University of Queensland Professor Wayne Hall, who is due to make a presentation at an electronic cigarette symposium at the University of Auckland tomorrow, will join other experts in calling for the prohibition to be lifted.

Hall was quoted as saying that the law created an “absurd situation” where people were resorting to the black market to buy products that delivered nicotine in a less harmful way than did normal tobacco cigarettes.

“You can buy cigarettes wherever you like but you’re not allowed to buy something that’s probably a great deal safer, at least in the short term,” he said. “It does seem a pretty silly policy.”

Hall said the government needed to acknowledge the widespread use of electronic cigarettes by reversing the ban and regulating these products to ensure their safety.

The Ministry of Health’s senior tobacco control advisor, Brendon Baker, said the ministry was “stuck in the middle somewhat” between wanting to encourage people to quit smoking, but not having enough evidence to recommend electronic cigarettes as a safe alternative.

University of Auckland associate professor Chris Bullen agreed that more research was needed but said the current law was “frankly bizarre”.

“It’s not a particularly logical or helpful policy,” he said.

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