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Reynolds’ first-quarter volume down

| April 24, 2014

R.J. Reynolds’ domestic-market cigarette volume during the first quarter to the end of March, at 14.3 billion, was down by 3.8 percent on that of the first quarter of last year, 14.9 billion.

Total growth brands volume was up by 1.2 percent from 9.6 billion to 9.7 billion, driven by a 2.5 percent increase to 4.9 billion in sales of Camel. Sales of Pall Mall, the other growth brand, were down by 0.1 percent to 4.8 billion.

Other brand sales were down by 12.9 percent from 5.3 billion to 4.6 billion.

Reynolds’ share of the U.S. retail market, at 26.7 percent was up by 0.1 of a percentage point. The share of its growth brands was said to have been increased by 0.7 of a percentage point to 19.4 percent, while the share of its other brands was down by 0.6 of a percentage point to 7.2 percent.

Reynolds’ cigarette market performance was reported yesterday by Reynolds American Inc., which also reported Santa Fe and American Snuff figures.

Santa Fe’s domestic-market cigarette (Natural American Spirit) volume during the first quarter to the end of March, at 0.8 billion, was up by 10.7 percent on that of the first quarter of 2013.

And Natural American Spirit’s market share rose by 0.2 of a percentage point to 1.5 percent.

Sales of American’s moist snuff cans during the first quarter of 2014, at 116.9 million cans, were increased by 10.7 percent on those of the first quarter of last year.

Sales of Grizzly were up by 12.1 percent to 106.4 million, while sales of other brands were down by 1.6 percent to 10.5 million.

American’s share of the U.S. market, at 34.6 percent, was up by 0.8 of a percentage point. Grizzly’s market share was up by 1.1 percentage points to 31.5 percent, while the share of the company’s other brands was down by 0.2 of a percentage point to 3.1 percent.

RAI’s reported operating income during the first quarter of 2014, at $590 million, was down by 33.5 percent on that of the first quarter of last year, $887 million. Adjusted operating income was down by 3.6 percent to $665 million.

Reported net income was down by 28.5 percent to $363 million, and adjusted net income decreased by 3 percent to $386 million.

Reported net income per diluted share was down by 27.2 percent to $0.67, while adjusted net income per diluted share was unchanged at $0.72.

“Reynolds American’s reportable business segments continued to make excellent progress in the first quarter, with strong market-share gains on all their key brands,” said Daniel M. Delen, president and CEO of RAI.

“As we previously noted, R.J. Reynolds Vapor Company is investing heavily in the expansion of its highly differentiated Vuse Digital Vapor Cigarette this year, and this spending impacted RAI’s first-quarter earnings and margin as expected.”

Delen said that first-quarter performance reflected three key strengths of RAI’s operating companies: excellence in innovation, superior engagement with adult tobacco consumers and efficient execution. “These strategies are not just effective for success in a transformative environment; they also form the core of our companies’ competitive advantage,” he said.

Meeting to discuss leaf’s carbon imprint

| April 24, 2014

One of the two focuses of this year’s meeting of the European Association on Tobacco Research and Experimentation (AERET) will be the carbon imprint of leaf tobacco production. The other will be biodiversity.

AERET’s annual meeting is due to be held in Kraków, Poland, June 10–12.

June 10 and 11 will be dedicated to technical debates, including those on continuing tobacco-crop protection projects, tobacco varieties, experimentation programs, integrated pest management and blue mold.

June 12 will be dedicated to the statutory requirements of the organization.

Mugabe threatens tobacco growing ban

| April 23, 2014

President Robert Mugabe has warned farmers that tobacco production will be banned in Zimbabwe if they continue to cut down trees to provide fuel for curing their crops, according to a story on NewZimbabwe.com.

In his Independence Day speech on the weekend, Mugabe said tobacco growers were causing desertification.

“Our people are growing tobacco and want to make money out of it, but on the downside we have seen massive deforestation leading to desertification in some areas,” he said.

“We are saying to them, ‘use coal or we will stop tobacco production.’”

The land reform program promoted by Mugabe has seen a big increase in the number of tobacco growers, but they are generally poorly resourced and have had to turn to the forests for curing fuel.

“We would rather have no tobacco than have deserts and no trees,” said Mugabe.

Disagreement over regulation timing

| April 23, 2014

If Denmark’s health minister, Nick Hækkerup, has his way, parliament will “soon” be taking action to curb the increasing use of e-cigarettes in the country, according to a Copenhagen Post story.

“It concerns me that children are using strawberry- and licorice-flavored e-cigarettes,” Hækkerup wrote in a statement to parliament’s committee on health.

“It doesn’t matter whether or not they contain nicotine; it is still a concern.”

Hækkerup called on parliament to begin discussing possible regulation of the use of e-cigarettes.

Social Democrats’ health spokesperson Flemming Møller Mortensen said that it was too soon to sound the alarm.

“It is hard to regulate when we know as little as we do now,” he was quoted as saying.

But Niels Them Kjær, spokesperson for the cancer society, welcomed Hækkerup’s suggestion.

“It has been a grey area for a while, so it is a positive sign that the minister is looking to regulate it in some way,” Kjær said.

Anti-tobacco vigilantes to be let loose

| April 23, 2014

A new anti-tobacco law that is expected to be issued “soon” will grant judicial powers to some anti-smoking volunteers to detect and report violations of the law, according to a story in The Peninsula quoting an official of Qatar’s Supreme Council of Health (SCH).

The proposed law, which will amend an existing law, will ban smoking in cars, ban the use and sale of chewing tobacco such as sweika and increase fines for tobacco smoking in public places where smoking is banned.

Tariq Salahuddin, head of the legal department at the SCH, provided information about the proposed new law while speaking during an anti-smoking workshop organized by the Ministry of Awqaf and Islamic Affairs on Sunday.

The workshop was aimed at strengthening the role of imams and preachers in curbing smoking.

Meanwhile, a proposal to set up an association in Qatar for combating tobacco smoking is awaiting approval from the state cabinet, said Dr. Ahmed Mohamed Al Mulla, head of the Smoking Cessation Clinic at the Hamad Medical Corporation.

The story said that about 35 percent of those who had attended the smoking cessation clinic had quit their habit, which is an exceptional success rate.

Hungary asked to alter tax-change rules

| April 23, 2014

The European Commission has warned that it might refer to the European Court of Justice Hungarian legislation that runs counter to an EU directive regulating tobacco trade.

In Hungary, tax rates are included on tobacco products packaging, and when taxes change, packs with the old tax rates cannot be sold after 15 days of the new tax rate coming into force.

The commission says, however, that excise duties are harmonized under an EU directive that does not allow the restriction of the trade in tobacco products once they are released for consumption.

The commission has asked Hungary to change its legislation, a request that takes the form of a “reasoned opinion”: the second stage of an infringement procedure.

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