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Tobacconists thrive on declining market

| September 18, 2014

In a story for Bloomberg Businessweek, Patrick Clark poses an interesting question: Why are specialist tobacconists thriving in the US when the market for their products is shrinking?

Smoking in the country has been declining for decades, Clark points out, but retailers specializing in tobacco sales are booming.

The number of tobacco shops in the US apparently doubled between 1998 and 2012, to more than 9,000, according to Census data.

That growth coincided with rising cigarette taxes, indoor smoking bans, and other policies aimed at reducing the habit.

The share of US smokers within the overall population fell from 23.5 percent in 1999 to 19 percent in 2011, according to the Centers for Disease Control.

Interviews with industry experts and smoking researchers don’t lead to a single, clear answer to Clark’s question, but the full story includes some suggestions and insights:

Call for annual above-inflation tax rises

| September 18, 2014

The Malaysian Public Health Specialists Association (PPPKAM) has urged the government to comply with its commitment in the World Tobacco Organization’s Framework Convention on Tobacco Control (FCTC) by increasing the tax on tobacco products every year starting with Budget 2015, according to a Bernama story.

The PPPKAM’s president, Dr Mohamed Rusli Abdullah, said in a statement that non-tax-related increases in the retail prices of cigarettes were ‘for the sake of profiting by the industry’.

He said the WHO and the World Bank had proposed periodic increases in tobacco taxes to ensure that the prices of all tobacco products rose by at least five percent more than the rate of inflation every year.

Price hike will hit those on low-incomes

| September 17, 2014

A group of smokers in South Korea has called on the government to shelve its plan to hike cigarette prices, saying the increase would be a further burden on low-income people, according to a Yonhap News Agency report.

Last week, the government announced it would try to raise the price of cigarettes by about 80 percent, from WON2,500 per pack to WON4,500 per pack, starting next year. The plan requires parliamentary approval before it can go into effect.

“We oppose the push for a sharp increase in cigarette prices,” members of ‘I Love Smoking’, an on-line community of smokers, said during a news conference in front of the National Assembly in Seoul on Monday.

“Low-income people will have no choice but to bear the brunt of the planned jump in cigarette prices.

“The government should drop the plan and come up with a more acceptable solution.”

The smokers’ group said it would stage an on-line campaign to collect smokers’ signatures in a bid to thwart the government plan.

Officials said that the price hike plan was aimed at cutting the country’s high smoking rate, but critics claimed that it might be designed to increase tax revenue.

LOGIC is top seller in convenience stores

| September 17, 2014

LOGIC Technology reported on Monday that it had maintained its leading unit share position in sales of electronic cigarettes through US convenience stores in August.

In citing results from Nielsen’s C-Track Database, it said too that it had continued to maintain a strong hold on the number two position for dollar sales. ‘Currently, LOGIC leads the category in total US unit share at 23.3 percent, the company said in a press note issued through PRNewswire.

‘In total US dollar share, LOGIC holds a close second at 22.7 percent.

‘Despite major tobacco companies introducing new electronic devices to the marketplace nationally, LOGIC continues to elevate its sales in unit and dollar share.’

Reynolds American, with a 22.1 percent share, was in second place in convenience store unit sales of electronic cigarettes nation-wide in August, while Lorillard was in third spot, with 21.2 per cent.

Lorillard, with 30.5 percent, maintained its number one position in respect of dollar sales in convenience stores nation-wide in August, while LOGIC was second, Reynolds, with 15.5 percent, was third, and Philip Morris was fourth, with 11.7 percent.

Korea health insurer sues tobacco firms

| September 17, 2014

The case being brought by South Korea’s state health insurer against tobacco companies has opened in the Seoul district court, according to a story in The Korea Herald.

The National Health Insurance Service (NHIS) filed the lawsuit in April against KT&G, British American Tobacco and Philip Morris seeking damages of WON53.7 billion ($52 million) to offset treatment costs for diseases linked to tobacco smoking.

The hearing started on Friday. This is the first lawsuit in South Korea to be brought by a state-run organization against tobacco firms.

Earlier this year, the Ministry of Strategy & Finance expressed doubts about the action. ‘Although fully in agreement with the principle, the National Health Insurance Service will have a hard time to prove criminal intent on the part of the tobacco company’, the ministry said at that time.

On April 10, just days before the NHIS submitted its lawsuit to the Seoul district court, the Supreme Court rejected a suit filed by about 30 lung cancer patients and their families against KT&G. The country’s highest court said there was a “lack of proof” that the patients contracted lung cancer solely because of smoking. The court said also that smoking, ultimately, was a choice, not a compulsion.

Despite the Supreme Court case, the NHIS has been openly confident about its lawsuit, arguing it has enough medical evidence to prove the link between tobacco use and lung cancer.

JT in Dow Jones Sustainability Index

| September 17, 2014

Japan Tobacco Inc. has been included for the first time in the Dow Jones Sustainability Index (DJSI) Asia Pacific, one of the most prestigious stock indices for socially responsible investment (SRI), JT announced today in a press note posted on its website.

‘The DJSI is a collaborative initiative by S&P Dow Jones Indices of the United States and RobecoSAM2 of Switzerland,’ the press note said.

‘It assesses the sustainability performance of companies, based on economic, environmental and social criteria.’

Of about 600 major companies in the Asia-Pacific region, including Japan, 148 companies, including 65 Japanese companies, were named in the DJSI Asia Pacific this year.

‘In accordance with its management principles, the JT Group, which sells products in more than 120 countries and regions, balances the interests of consumers, shareholders, employees and wider society, fulfills responsibilities towards them, and aims to exceed their expectations,’ JT said.

With this in mind, the company added, the JT Group worked to help solve sustainability issues in countries where it operated and would continue to carry out various initiatives to contribute to the sustainability of societies.

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