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Japan to abolish tax discount for low-income workers

| December 19, 2014

Japan’s government plans to abolish a lower tax rate that traditionally has been applied to a number of tobacco products popular among the elderly and low-income workers, according to a story in The Japan News.

The tax advantage will be phased out over several years from fiscal 2015.

Six brands owned by Japan Tobacco Inc, including Wakaba, attract only about half the level of taxes applied to other products.

Because these brands are popular among the elderly and low-income workers, their special tax treatment has been seen in the past as a social policy.

But consumption of the six brands has grown sharply since a tobacco tax hike in 2010, and purchases by people other than long-time users have been increasing, a health ministry official was quoted as saying.

The Liberal Democratic Party’s tax panel has given approval to the plan to abolish the concession to the elderly and the financially less well off, and the LDP and its coalition partner, Komeito, will include the abolition in a fiscal 2015 tax reform outline it aims to adopt on December 30.

E-cigarette quit role noted but age limit to apply

| December 19, 2014

The UK government announced on Wednesday that it was conducting a consultation on draft regulations that would prohibit the sale of electronic cigarettes to those less than 18 years of age.

The regulations would make it an offence also for an adult to buy electronic cigarettes for a person younger than 18.

They would apply to ‘nicotine inhaling devices’, which are taken to include electronic cigarettes, nicotine refill cartridges and nicotine liquids.

Products that are licensed as medicines by the MHRA (Medicines and Healthcare Products Regulatory Agency) are not included.

Public Health Minister Jane Ellison said that while the government recognized the role that electronic cigarettes could play in helping adult smokers quit, it wanted to protect young people and children from the harmful effects of addiction to nicotine, which most electronic cigarettes delivered.

There was a risk that electronic cigarettes could be appealing to children as use and awareness of these products increased.

The new regulations, which would bring electronic cigarettes into line with other age-restricted products such as tobacco and alcohol, were supported by responsible electronic cigarette manufacturers and retailers.

Electronic cigarette manufacturers, retailers and public health professionals had called for a minimum age of sale to be introduced, the minister said.

Cigarette companies hit by chilly winds from Russia

| December 19, 2014

Companies that sell cigarettes, food, alcohol, and beauty products to Russians are increasingly feeling the effects of the country’s economic downturn, according to a story by Joe Miller for BBC Online.

Miller said that Philip Morris, which accounted for almost a quarter of all the cigarettes sold in Russia, had seen its shares decimated in the past month.

But Bonnie Herzog, managing director of beverage, tobacco and convenience store research at Wells Fargo Securities, said that she believed the recent pullback in the stock had been overdone.

Herzog said that PM’s valuation was attractive based on its dividend yield.

PM was in solid shape to fund dividend increases and share buy-backs despite greater foreign exchange headwinds.

Meanwhile, a Reuters report on Wednesday said that Japan Tobacco Inc shares had tumbled.

‘Japan Tobacco, which is highly exposed to crisis-hit Russia, dived 7.8 percent on heavy volume and contributed a hefty negative 10 points to the Nikkei,’ the Reuters report said. ‘It was the fourth most traded stock by turnover.’

Goldman Sachs was quoted as saying that Russia contributed 20-25 percent of JT’s operating profits and that a one percent rouble depreciation reduced its profit by almost ¥3 billion.

The rouble had fallen 20 percent since the start of the week and more than 50 percent this year, Reuters said.

FDA holds key to tobacco related animal testing cut

| December 18, 2014

Guidance from the US Food and Drug Administration could reduce the number of tests currently carried out on non-human animals in support of tobacco product applications.

This was one of the messages that came out of a workshop sponsored by the FDA and intended to identify in vitro models and assays for tobacco toxicity testing.

The workshop, which was held last week, was attended by representatives of the FDA, industry, academia and NGO’s, including PETA (People for the Ethical Treatment of Animals).

They met, in part, to discuss the modern and humane in vitro models that are available to replace crude and inaccurate animal tests for evaluating the role of tobacco exposure in causing lung disease, specifically chronic obstructive pulmonary disease (COPD).

“Some of the models discussed included 3-D human airway cell cultures, which can be exposed to whole cigarette smoke to measure its effect on cell functioning, and tissue cultures derived from precision-cut human lung slices,” said Joseph Manuppello, PETA’s International Science Consortium advisor.

“Julia Hoeng, a researcher with Philip Morris Products SA, cited public comments on FDA guidance from PETA as evidence of the rapid advancement of the field in recent years,” he added.

Workshop participants agreed that guidance from the FDA specifically on in vitro test methods would likely reduce animal testing conducted in support of tobacco product applications.

A report from the workshop will be presented at a Society of Toxicology ancillary meeting on March 23 in San Diego, California.

Ban on tobacco smoking in private cars a step nearer

| December 18, 2014

Legislation banning tobacco smoking in England is likely to be extended to private vehicles carrying children and young people under the age of 18, according to a statement by the Department of Health published on the GOV.UK website.

The government said yesterday that it had responded to a consultation on proposals to make private vehicles tobacco smoke free when carrying young people by laying the necessary regulations before parliament.

According to the statement, the majority of respondents to the consultation were said to have agreed that reducing young people’s exposure to second-hand smoke was important.

‘We will introduce the regulations to allow new rules to come into force in October 2015, subject to parliamentary approval,’ the statement said.

‘The changes would become part of the existing [tobacco] smoke-free laws and would make it an offence to smoke or to fail to prevent smoking in a private vehicle with someone under the age of 18 present. The proposed regulations would not apply to a driver on their own in a car.’

Meanwhile, UK Public Health Minister Jane Ellison said that second-hand smoke was a “real threat” to children’s health and that the government wanted them to grow up free from the risks of smoking.

“The only effective way to protect children is to prevent them breathing second-hand smoke and our plans to stop smoking in cars carrying children will help us to do this,” she said.

“We’ll now debate the regulations in parliament and, if approved, the rules should come into force next year.”

Travel retail conference to be held in Shanghai

| December 18, 2014

The second TFWA China’s Century Conference (CCC) is due to be held at the Jing An Shangri-La Hotel, Shanghai, on March 10-12. The first CCC event was held in 2013.

CCC events are designed to explore the commercial opportunities resulting from the rapid development of aviation and transport infrastructure within China, and to deepen delegates’ understanding of Chinese travellers and their evolving tastes and expectations.

Among the topics that the 2015 event will address are the new Shanghai Free Trade Zone and its implications for foreign investment; new aviation infrastructure developments such as the Beijing Daxing International Airport; the economic reforms being undertaken by the new Chinese leadership; and whether or not the slowdown in the luxury goods market will have a lasting impact on duty free and travel retail.

Online registration for the 2015 conference, which is being organized by TFWA in partnership with the Asia Pacific Travel Retail Association, is now open.

Further details are at tfwa.com.

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