Just say no
Greece could ‘lose’ more than €1 billion a year in tax revenue to the sale of illicit cigarettes by 2019, according to a story in the International Business Times citing Euromonitor figures.
Illicit cigarettes were said to have accounted for 21 percent of the cigarettes consumed in the country last year, up from 18 percent in 2013.
And it was suggested that illicit cigarettes’ share of the market could exceed 25 percent by 2019, given further tax hikes and the continuing use of Greece as a transit hub.
The figures are based on an average cigarette price of €3.80 per pack as of 2014 and an average tax burden of 85 percent of the retail sales price.
Greece was said to have ‘lost’ about €740 million in 2014 and €565 million in 2013 to the illegal cigarette trade.
Euromonitor’s tobacco analyst Shane MacGuill was quoted as saying that the growth in the illegal trade was fueled by tax and price increases, along with the expanding availability of illicit white cigarettes from the United Arab Emirates and Eastern Europe.
The government and industry needed to curb demand for illicit products by moderating tax hikes and informing consumers about the nature of the illegal trade, MacGuill said.
The industry launched in 2014 a campaign against illegal trade called ‘Say No to Illicit Tobacco Products’, and Finance Minister Yanis Varoufakis included combating cigarette smuggling in a list of reforms submitted to eurozone officials in February as part of a deal to secure an extension on the country’s economic rescue deal.
However, some people are of the opinion that the rescue deal, and particularly the associated austerity package, is further impoverishing the people of Greece and therefore making it more, not less, likely that some will be forced into the arms of the illegal trade.
Without disclosing the names of the companies, the government of Malawi said it had licensed three leaf dealers from China, Egypt and South Africa to participate in the 2015 marketing season that started on March 4, according to a story by Thula Chisamba for Malawi24.
The move is aimed at increasing competition in a country where many growers believe that they are not being treated fairly.
An Anadolu Agency story in October 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.
Meanwhile, Bruce Munthali, chief executive of the Tobacco Control Commission, was quoted by Chisamba as saying that licensing the three buyers would create “stiff competition” on the market and deliver fairer prices to farmers.
Tobacco growers welcomed the move.
Zimbabwe’s flue-cured tobacco growers sold 775,997 kg of leaf at an average price of US$1.55 per kg during the first three days of the marketing season that opened on March 4, according to a Newsday Zimbabwe story citing figures from the Tobacco Industry and Marketing Board (TIMB).
During the corresponding period of the previous marketing season, 940,864 kg was sold at an average price of US$2.41 per kg.
The TIMB attributed the volume decline to delayed rains that hit production, and to growers withholding their crop in the face of low prices, which were down by nearly 36 percent on those of the previous season.
And the previous marketing season was not a good one for growers. A Zimbabwe Standard story in March 2014 quoted growers as describing prices as ‘low by any standards’ and ‘daylight robbery’. A Zimbabwe Herald story, also published in March 2014, said that seasonal average prices were so far 29.7 per cent lower than those of 2013.
Growers are no doubt finding it difficult to come to terms with successive price decreases of 29.7 percent and 36 percent, given that the prices of cigarettes don’t seem to be going down.
A legal analysis has found that the UK’s proposed standardized tobacco packaging legislation is compatible with European law, according to a story posted on the website of Cancer Research Campaign.
Professor Alberto Alemanno, co-author of the report, which was funded by Action on Smoking and Health (ASH) and Cancer Research UK, said there was such strong evidence to support the new law that any challenge from the tobacco industry would be unlikely to succeed.
“Our analysis demonstrates that under current EU law the UK government is entitled to regulate the packaging of tobacco products well beyond what the EU prescribes, said Alemanno, of HEC (Hautes Etudes Commerciales business school), Paris.
“The UK government therefore enjoys considerable freedom of action in regulating the presentation of tobacco products, particularly given the overwhelming evidence of the harm that tobacco consumption causes.
“There is also a carefully established and strong evidence base supporting the introduction of standardized packaging. For these reasons, we believe that any challenge by the tobacco industry against standardized packaging under European law is unlikely to succeed.”
The report said also that the proposed regulations were on safe ground in relation to trademarks and the rights of people within the EU – neither of which prevented EU countries from introducing new public health legislation.
South Korea’s KT&G said yesterday that it had become the first company anywhere to introduce a 100 mm super-slim cigarette that includes cigar leaf, according to a story in the Korea JoongAng Daily.
The company said that Bohem Cigar’s blend included 20 percent cigar leaf from South America and Cuba, and that the filter contained a capsule that provided a ‘different taste for smokers’.
“The local super slim cigarette market is steadily growing, particularly among consumers who are in their 20s and 30s,” said Kwon Min-seok, head of the Bohem department at KT&G.
Currently the super slim sector accounts for about 30 percent of the domestic cigarette market.
Iggesund Paperboard has expressed delight at what it sees as ‘almost an explosion of digitally printed folding cartons’.
“For a company like ours which offers stiff paperboard of the highest quality this is a terrific development,” said Fredrik Lisinski, who is responsible for developing the company’s sales to the digital print market.
In a press note, Iggesund said that strong brands, led by Coca Cola, had shown that the intelligent personalisation or regionalisation of packaging and labels could drive sales. Presses designed for higher grammages as well as new finishing equipment were opening up new possibilities. At the same time, larger sheet formats were paving the way for better economies of scale for digital printing.
“In addition, new applications are appearing that were previously unimaginable,” Lisinski said. “Fifteen – or even 10 – years ago, who could have thought that a print run of five calendars featuring photos of someone’s grandchildren or three copies of a photo book could form the financial backbone of a printing firm.”
Invercote, which is Iggesund’s flagship product, is said to have paved the way for digital printing on thicker paper materials since the technology was introduced in 1993. ‘Today’s Invercote G is certified for a variety of digital print technologies and is recognised as the market leader by digital printers when they need a thicker or stiffer material than usual,’ the press note said.
And the rapid development of digital presses and increasingly widespread interest in using digital print on packaging has led Iggesund to take the next step with Invercote. “The upgraded Invercote G that we’re rolling out into the market this spring will give us a complete portfolio of products for digital applications,” Lisinski said.
The intelligent personalisation or regionalization of packaging and labels could drive sales.