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Budget boost for Canadian bootleggers

| February 14, 2014

Canada’s National Coalition Against Contraband Tobacco (NCACT) has expressed disappointment that the 2014 federal budget “increased the lucrative nature of contraband tobacco while also failing to provide meaningful measures to stop it,” according to a Canada Newswire story.

“By increasing the difference in price between the legal and illegal market, the government is effectively putting money in the pockets of gangs,” said Gary Grant, a spokesman for the NCACT and a 39-year veteran of the Toronto Police Service.

“The RCMP estimates that there are about 175 criminal gangs that are involved in the contraband trade, using it as a cash cow to finance their other illegal activities, including guns, drugs and human smuggling.

“In fact, just yesterday [Feb. 11], 12,000 illegal cigarettes, along with drugs and cash, were seized by the Gatineau police a short distance from parliament.”

Contraband tobacco is said to be a prime source for youth smoking.

“Illegal cigarettes are cheap, easily accessible, and the criminals who sell them don’t check for ID,” said Grant.

“Unfortunately, this year’s budget will do little to stop this. If anything, it creates conditions under which contraband tobacco can flourish. $4.03, the size of the tax increase, is actually the cost of the cheapest baggies in some smoke shacks.”

The budget does allocate nearly $92 million over five years to enhance contraband tobacco enforcement, mostly focused on high tech equipment to monitor the porous border between Quebec, Ontario and the U.S.

However, the budget contained no new funds to deal with the thriving domestic smuggling trades.

Meanwhile, Canada Newswire reported in a separate story that the Frontier Duty Free Association (FDFA), which represents Canada’s land border duty-free shops, had expressed concern that the “huge excise tax increase on tobacco products” would work counter to government revenue goals, health strategies and Canada’s economic interests.

“We understand and support the government’s need and desire for a balanced budget and the goals of Canada’s tobacco health strategy, but a tax shock of this magnitude, which was brought in without any prior consultation or warning, is a major blow to our stores,” said Abe Taqtaq, FDFA president.

The 2014 budget increased the federal excise tax on duty-free cigarettes from $15 per carton to $21.03 per carton, a 40 percent increase that was applied overnight.

“Our members are troubled about the unintended consequences of this tax increase since it threatens to divert sales away from our members’ stores to the illicit market, which in turn jeopardizes both the government’s revenue and public health goals,” said Taqtaq.

JT’s domestic volume up in January

| February 14, 2014

Japan Tobacco Inc.’s domestic cigarette sales volume during January, at 8.8 billion, was increased by 3.6 percent on that of January 2013, 8.5 billion, according to preliminary figures issued by the company today. The January 2013 figure was down by 0.8 percent on that of January 2012.

Volume during April 2013–January 2014, at 98.5 billion, was up by 0.6 percent on that of April 2012–January 2013, 97.9 billion, which was increased by 9.4 percent on that of April 2011–January 2012.

JT’s market share stood at 60.7 during January, at 60.8 percent during April 2013–January 2014, and at 59.6 percent for the full year to the end of March 2013.

JT’s domestic cigarette revenue during January, at ¥48.3 billion, was increased by 3.4 percent on its January 2013 revenue, ¥46.7 billion.

Revenue during April 2013–January 2014, at ¥540.4 billion, was increased by 0.3 percent on that of April 2012–January 2013, ¥538.7 billion.

Kenya clamps down on tax stamp abuse

| February 14, 2014

The Kenya Revenue Authority (KRA) has started a campaign of tobacco-retailer inspections aimed at catching out those using fake or superseded excise stamps, according to a story in The Star.

The KRA phased out the-now superseded excise stamps in November 2012 and introduced a new generation of less easily forged stamps last year so as to curb tax evasion.

“Some of the traders are affixing genuine stamps on … tobacco products supplied to major hotels and supermarkets while using fake excise stamps on the … tobacco products sold at drinking dens in the slums and low income areas,” said the KRA in a statement on Wednesday.

The tax collection agency said those found with fake or outdated stamps would be prosecuted.

Renewed interest in Bulgartabak

| February 14, 2014

Livero Establishments, a Lichtenstein-registered company, has expressed an interest in buying the 79.8 percent stake in Bulgartabak owned by the Russian bank, VTB, according to a Reuters report by Tsvetelia Tsolova and Oksana Kobzeva quoting Bulgaria’s competition watchdog.

VTB acquired Bulgartabac for €100.1 million, €100,000 above the minimum asking price, when BT Invest, a company owned by VTB, was left as the only bidder in the privatization process launched by the Bulgarian government.

“The commission has received a notification for the intention of Lichtenstein-registered Livero Establishments to acquire control over Austria’s BT Invest,” Bulgaria’s Commission for Protection of Competition was quoted as saying.

Draconian penalties for e-cigarette sales

| February 14, 2014

Taiwan’s Food and Drug Administration (FDA) said on Thursday that e-cigarettes constituted a banned drug, according to a story on Focus Taiwan News Channel.

There are no regulations under which individuals could be punished for owning or using electronic cigarettes, but importers, producers and sellers could face fines, though none of them have been fined so far.

The FDA deputy director-general Chiang Yu-mei was quoted as saying that using e-cigarettes in public places was not regulated under the Tobacco Hazards Prevention Act.

She suggested, however, that while smokers of e-cigarettes were not breaking the law, members of the public could report them via a hotline to assist the government in tracking down the source of these devices.

Under the current regulations, manufacturers or importers of e-cigarettes containing nicotine face a maximum fine of TWD$10 million and a prison sentence of up to 10 years, while vendors face a maximum fine of TWD$5 million and up to seven years in jail for providing drugs for which regulatory approval has not been obtained.

Even importing or selling nicotine-free electronic cigarettes renders a person liable to fines of TWD$10,000–TWD$50,000 under provisions of the Tobacco Hazards Prevention Act that bans objects shaped like cigarettes.

Imperial backs environment project

| February 14, 2014

Imperial Tobacco is supporting a wildlife conservation project to help save endangered species in the Philippines.

The company, which has its headquarters in Bristol, U.K., is backing a scheme led by the Bristol Zoo to preserve the unique forest habitat of the island of Negros.

During their time in the Philippines, the zoo’s Neil Maddison and Nigel Simpson met with the factory management team at Imperial’s Philippine Bobbin Corp. subsidiary near Manila to explain how the project team was working with the local community to ensure that residents and wildlife could live alongside each other.

“We have employees here who come from Negros and are keen to help support these activities,” said factory manager Carlos Saez-Diez Reberdito.

“The work not only focuses on the conservation of endangered species but also the island’s environment and people.”

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