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English smokers fall below 20 percent

| February 13, 2014

The smoking prevalence in England has fallen below 20 percent for the first time in about 80 years, according to a report posted on the BMJ website, quoting research carried out at University College, London.

The latest figures come from a large national surveillance study that has been tracking smoking prevalence in England since 2006.

Each month, a representative sample of about 1,800 people aged 16 years or older is randomly selected to complete a computer-assisted survey with a trained interviewer.

In 2013, 22,167 adults were surveyed, and the prevalence of cigarette smoking was found to be 19.3 percent.

More detailed data are available at

TRP and Kentucky Cut Rag complete merger

| February 12, 2014

Tobacco Rag Processors (TRP) and Kentucky Cut Rag, a wholly owned subsidiary of G.F. Vaughan Tobacco Co., have completed merger of their cut-rag operations. The combined company will operate out of Tobacco Rag’s Wilson, North Carolina, USA, headquarters. Derek Vaughan and Conrad Whitaker will join Tobacco Rag as consultants under long-term agreements.

“We are extremely pleased with the combination of our two businesses,” says TRP CEO Davis Miller. “Kentucky Cut Rag and its team are well known in the industry for providing top-quality blends and excellent customer service. The addition of Derek and Conrad to our team as well as a stronger partnership with Vaughan Tobacco Company further ensures our access to top-quality Brazilian and U.S. tobaccos, enabling us to continue providing our customers with consistent blends at competitive prices.”

“We at Vaughan Tobacco Company are excited with the merger of Kentucky Cut Rag and Tobacco Rag,” says Derek Vaughan, CEO of G.F. Vaughan Tobacco Co. “Our two companies share common values and a strategic vision of innovation and quality-driven performance aimed at helping our customers deliver superior products and reduce costs in a competitive market.

“Our customers will benefit from the investments Tobacco Rag has made in a state of the art dry-ice expanded tobacco operation, upgraded primary equipment and an enhanced blend development and quality control team. Conrad and I are excited to be a part of the team that will continue to lead the cut-rag industry for years to come.”

Nicolites inches closer to “medicine” label

| February 12, 2014

An e-cigarette manufacturer is a step closer to seeing its product classified as a medicine—a move that could see the firm supplying the devices for National Health Service (NHS) prescriptions, according to a story in The Birmingham Post.

Nicolites said it was “well advanced” in talks with the medicines regulator over plans to have its products prescribed by medical professionals.

It is one of two known manufacturers—alongside Nicoventures, a subsidiary of British American Tobacco—to apply for a license from the National Institute for Clinical Excellence, the NHS body responsible for setting down guidance on specific kinds of treatment and care for people using the NHS in England and Wales.

The news—which comes shortly after Nicolites received a major boost with Tesco Express, the second-largest retailer in the world measured by profits, signing up to sell its products—stands to give Nicolites a competitive advantage since it could market its product as a “medicine.”

Nikhil Nathwani, managing director of Nicolites, said the company hoped to achieve marketing authorization sometime this year.

New managing director at Parkside

| February 12, 2014

Parkside Flexibles (Europe) has appointed Nick Smith as its managing director, effective April 1.

Smith succeeds CEO Lawrence Dall, who died in September last year.

Prior to joining Park Flexibles, Smith worked at Sun Chemicals, where he held several positions, including that of managing director of the firm’s U.K.-Nordic division.

Smith holds a degree in economics from Loughborough University and an MBA from Cranfield University’s School of Management.


Reynolds’ domestic cigarette volume down by 6.8 percent last year

| February 12, 2014

R.J. Reynolds Tobacco’s U.S. domestic cigarette volume during the year to the end of December, at 64.2 billion, was down by 6.8 percent on that of 2012, 68.9 billion.

Camel volume fell by 1.4 percent to 20.9 billion, and Pall Mall volume fell by 2.7 percent to 21.3 billion, so the company’s total “growth brands” volume was down by 2 percent to 42.2 billion.

The volume of RJR’s other brands was down by 14.8 percent to 22 billion.

Reynolds American Inc., whose business sectors take in RJR, Santa Fe and American Snuff, announced its full-year and fourth-quarter results yesterday.

RJR’s volume during the fourth quarter to the end of December, at 15.6 billion, was down by 8.6 percent on that of the fourth quarter of 2012, 17.1 billion.

Camel volume fell by 3.5 percent to 5.1 billion and Pall Mall volume fell by 6.6 percent to 5.3 billion, so the company’s total growth brands volume was down by 5.1 percent to 10.4 billion.

The other-brands volume fell by 14.8 percent to 5.2 billion.

RJR’s share of the domestic cigarette market during the year to the end of December, at 26 percent, was down from 26.5 percent during 2012.

Camel’s share was increased by 0.3 of a percentage point to 8.8 percent and Pall Mall’s share rose by 0.4 of a percentage point to 9 percent.

The share held by the company’s other brands fell by 1.1 percentage points to 8.3 percent.

Meanwhile, Santa Fe’s cigarette (Natural American Spirit) volume during the year to the end of December, at 3.6 billion, was increased by 15.1 percent on that of 2012, while its volume during the three months to the end of December, at 0.9 billion, was 9.6 percent up on that of the three months to the end of December 2012.

Santa Fe’s share of the retail market during 2013, at 1.4 percent, was up by 0.2 of a percentage point on that of 2012.

American Snuff’s volume during the year to the end of December, at 465.8 million cans, was up by 6.5 percent on that of 2012.

Grizzly volume increased by 7.7 percent to 419.3 million cans, while sales of the company’s other moist snuff products fell by 3 percent to 46.5 million cans.

American’s volume during the three months to the end of December, at 121.7 million cans, was up by 8.2 percent on that of the three months to the end of 2012.

Grizzly volume was increased by 9.6 percent to 109.8 million cans, while the volume of the company’s other brands fell by 2.5 percent to 11.9 million cans.

American’s share of the moist snuff market during the year to the end of December, at 33.2 percent, was increased by 0.8 of a percentage point on that of 2012.

Grizzly’s share was up by 1.2 percentage points to 30.1 percent, while the share of other brands was down by 0.3 of a percentage point to 3.1 percent.

RAI had net sales of $8,236 million during the 12 months to the end of December, 0.8 percent down on those of 2012.

Reported operating income was increased by 41.5 percent to $3,132 million, while adjusted operating income was up by 5.5 percent to $3,021 million.

Reported net income was increased by 35.1 percent to $1,718 million, while adjusted net income was up by 3.4 percent to $1,744 million.

And reported net income per diluted share was up by 40.2 percent to $3.14, while adjusted net income per diluted share was up by 7.4 percent to $3.19.

“Reynolds American delivered growth in fourth-quarter earnings and margin despite lower-than-expected wholesale inventory levels,” said Daniel M. Delen, president and CEO, in announcing the results.

“This performance wrapped up a successful year for all our reportable business segments. Our companies continued to make progress in their strategy to transform the tobacco industry, while demonstrating solid fundamental business dynamics and excellent execution in a challenging economic environment. I’m particularly pleased with the market-share gains on our companies’ key brands, which were driven by strong brand equity and efficient execution of their strategies.”

Delen said that a 2013 highlight was the “exciting performance of R.J. Reynolds Vapor Company’s Vuse digital vapor cigarette, which presents a superior option for adult smokers as they consider switching to smoke-free alternatives.”

Vuse is now widely available in Colorado stores—its first major market—and the brand’s recent expansion in neighboring Utah is said to be progressing smoothly.

“Vuse is a highly differentiated product that symbolizes the very best of our companies’ rich history of innovation,” said Delen. “Vuse is already the market leader in Colorado and importantly, the brand is driving significant category growth in the state. In Utah, early indications are that consumers there also appreciate the brand’s distinctive features.”

Looking ahead, Delen said that RAI and its operating companies were well positioned for profitable growth in 2014.

“We will continue to invest in Vuse in 2014 as we expand the brand into national distribution,” he said. “This is further evidence of our companies’ focus on building their businesses for sustainable long-term success.

“RAI’s commitment to delivering value to shareholders was again evidenced by the 6.3 percent increase in our dividend that we announced today, and we remain focused on finding new opportunities to return value to our shareholders.”

Public smoking ban might include shisha

| February 12, 2014

The health ministry of India is considering extending the existing ban on smoking tobacco in enclosed public places to cover shisha, according to a story in the latest issue of the BBM Bommidala Group newsletter.

The ministry appears to be concerned that the consumption of shisha is growing, especially among young people.

Nevertheless, the ministry is said not to be considering a total ban.

Although, under proposed rules, clubs and lounges would not be allowed to serve shisha in places where food was also served, those with seating for 30 people or more, and hotels with more than 30 rooms, would be allowed to set up special enclosures for shisha smoking.

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