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PM USA’s cigarette volume down but share up

| February 2, 2015

Philip Morris USA’s cigarette shipment volume during the 12 months to the end of December, at 125,390 million, was down by 3.0 percent on that of the 12 months to the end of December 2013, 129,312 million.

Marlboro shipments were down by 3.0 percent to 108,023 million while shipments of other premium brands were down by 8.7 percent to 7,047 million.

Discount brand shipments were increased by 1.5 percent to 10,320 million.

PM USA’s share of the retail cigarette market during the year to the end of December, at 50.9 percent, was up by 0.2 of a percentage point.

Marlboro’s share was up by 0.1 of a percentage point to 43.8 percent while that of the company’s other premium brands was down by 0.2 of a percentage point to 2.9 percent.

The company’s discount-brands share was up by 0.3 of a percentage point to 4.2 percent.

In reporting its results on Friday, Altria said that PM USA’s 2014 fourth-quarter and full-year reported domestic cigarettes shipment volumes had declined by 3.0 percent and 1.7 percent respectively, primarily due to an industry-wide decline, partially offset by retail share gains. ‘When adjusted for trade inventory changes and other factors, PM USA estimates that its fourth-quarter and full-year domestic cigarettes shipment volume decreased approximately two percent and three percent, respectively, and that total industry cigarette volumes declined approximately 2.5 percent in the fourth quarter and 3.5 percent for the full year of 2014,’ it said.

Middleton’s cigar shipments during the year to the end of December, at 1,271 million, were up by 6.1 percent on those of the year to the end of December 2013, 1,198 million.

Shipments of Black & Mild were up by 5.9 percent to 1,245 million while shipments of other brands were increased by 19.0 percent to 25 million.

The increase in cigar shipments during the full year and the fourth quarter (3.9 percent) was said to have been driven primarily by Black & Mild’s strong performance in the tipped cigars segment, including with Black & Mild Jazz.

The company’s share of the domestic retail cigar market was down by 0.1 of a percentage point to 29.0 percent, with Black & White’s share down by 0.3 of a percentage point to 28.6 percent but with the share of its other brands increased by 0.2 of a percentage point to 0.4 percent.

Meanwhile, PM USA and USSTC’s combined smokeless product shipments (cans and packs) during the year to the end of December, at 793.3 million, were increased by 0.7 percent on those of 2013, 787.5 million.

Copenhagen shipments were increased by 5.3 percent to 448.6 million while Skoal shipments were down by 5.0 percent to 269.6 million.

Other-brand shipments were down by 3.2 percent to 75.1 million.

PM USA and USSTC’s combined share of the retail market in smokeless tobacco increased by 0.2 of a percentage point to 55.2 percent.

Copenhagen’s share was increased by 1.5 percentage points to 30.8 percent while Skoal’s share was down by 1.0 percentage point to 20.4 percent.

The share of the companies’ other brands was down by 0.3 of a percentage point to 4.0 percent.

In presenting Altria’s results, chairman and CEO Marty Barrington said that Altria had delivered another year of strong business results and excellent returns for shareholders.

“We grew adjusted diluted EPS [earnings per share] by almost 16 percent in the fourth quarter and by 8.0 percent for the full year, in line with our long-term EPS goal,” he said. “We increased the dividend for the 48th time in 45 years. Altria also produced total shareholder return of 34.5 percent, well above returns for the S&P 500 and the Food, Beverage and Tobacco Index.

“Our business results were anchored by a very strong performance in the smokeable products segment, complemented by contributions from our diverse business model. “We’re also pleased with the steady progress Nu Mark is making as it builds e-vapor category leadership; Nu Mark successfully executed its national launch of MarkTen, which is now available in over 130,000 retail stores.”

Turkey’s anti-tobacco plans to target leaf growers

| February 2, 2015

In another crackdown on smokers, Turkey’s health ministry is planning to introduce measures that will make it compulsory for people to show identification cards when buying tobacco products, according to a story in the Hurriyet Daily News. It is already illegal for tobacco products to be sold in Turkey to those under 18 years of age.

As part of the National Tobacco Control Program 2015-2018, the sale of unpackaged single cigarettes will be banned, as will tobacco smoking at the entrances of shopping malls and cinemas.

The Hurriyet story, which cited a Sabah newspaper report, said the program included plans to ‘regulate the packaging of tobacco products’, and those aimed at banning covers used to conceal health warnings.

Tobacco product taxes were to be revised.

At the same time, the ministry is planning to develop its quit-smoking services, in part using web application services.

The government is planning also to give incentives to leaf tobacco producers who agree to stop growing tobacco. Those who quit tobacco production would be offered ‘alternatives to produce’, the Hurriyet story said, without going into details about what those alternatives might be.

Plain packaging – a sham becoming a shambles

| February 2, 2015

In the UK, as many as 100 Conservative MPs are expected to vote against plans to impose standardized packaging for cigarettes and fine-cut tobacco, according to a story in The Daily Telegraph.

There was widespread surprise in January when a junior health minister, Jane Ellison, said MPs would be given a vote on the plans during the current session of parliament, which is due to end on March 30. Ellison said standardized packaging was a “proportionate and justified response” because of the health risks associated with smoking.

However, many observers had assumed that the legislation would not be introduced until after May 7, when the UK is due to go to the polls in a general election, and there seems to have been confusion within the government’s ranks.

The cabinet is split over the plans and at least two senior cabinet ministers were said not to have been forewarned of the announcement.

Some opponents of standardized tobacco packaging are aggrieved that the government has not yet published the report on its 2014 consultation on the measure.

And one Conservative MP has warned that the government must publish the report quickly “[i]f the consultation process is not to be dismissed as a sham…”

Whatever happens, the vote is likely to go in favor of standardized packaging because the issue is backed by the opposition Labour Party and the Conservative Party’s coalition partner, the Liberals.

Electronic cigarette taxation up for discussion

| February 2, 2015

An EU ‘high level working party’ is due to meet on Thursday to discuss electronic cigarette taxation.

According to a note from the general secretariat of the Council of the EU, item five on the meeting’s agenda reads: ‘Tax treatment of new tobacco products and related products, such as electronic cigarettes and novel tobacco products’.

A representative of the presidency is due to make a presentation before there an exchange of views is held.

Imperial supports e-cigarette regulation in Canada

| January 30, 2015

Imperial Tobacco Canada has entered the debate about electronic cigarettes, which are not approved for sale in Canada but which are available for purchase.

In a letter published in the Montreal Gazette, Caroline Ferland, vice president corporate and regulatory affairs, said Imperial fully supported the introduction of a regulatory framework that would allow the legal introduction of electronic cigarettes into the Canadian marketplace. ‘We feel it is of utmost importance that this framework puts product quality and consumer safety as a priority, while reflecting the unique nature of the product – that they are not tobacco products and should thus not be regulated in the same way’ she said.

‘Currently, any nicotine-containing e-cigarettes must be approved by Health Canada before entering the market. At this time no such products have received regulatory approval, yet nevertheless products are being sold across the country due to a lack of enforcement.

‘We encourage Health Canada to act quickly in implementing a regulatory framework that allows the commercialization of such products.’

Smoked and disorderly in Seoul

| January 30, 2015

In various parts of the world, smokers have been seen as smelly and not normal, whatever that might mean, and now a councilman in Seoul, South Korea, apparently feels that those who smoke on sidewalks are socially disorderly.

According to a story in The Korea Times, Seoul Metropolitan councilman, Nam Jae-kyung, of the ruling Saenuri Party, is pushing to ban smoking on city sidewalks and streets where school buses operate.

Nam has submitted a bill to the council’s Health and Welfare Committee calling for such areas to be added to the no-smoking zones outlined in the city’s Road Traffic Act.

“I am ultimately pushing for all streets to be designated as no smoking zones,” Nam said.

“Smoking in the streets is not only a matter of health rights, but of maintaining basic social order.”

The revision bill will be discussed by the council in March and, if passed, could go into effect in mid-April.

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