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BAT to appeal against oversupply fine

| November 17, 2014

British American Tobacco is to appeal against a fine imposed by the UK’s HM Revenue and Customs (HMRC) for allegedly oversupplying the Belgium market with hand-rolling tobacco that then found its way to the UK.

In a statement issued to the media, BAT described the fine as unjustified.

The £650,000 fine came to light through a story by Jamie Doward for the Observer Sunday newspaper.

Doward said that HRMC had refused to identify the company, citing ‘taxpayer confidentiality’, but that in response to questions from the Observer BAT had confirmed it was the firm recently fined for oversupplying hand-rolling tobacco to Belgium.

This was said to have been the first time HMRC had acted against a tobacco company in this way.

However, an HMRC spokesman was quoted as saying that it was now looking closely at the other major UK tobacco companies to check whether they were acting illegally.

In its response, BAT said that it was devoting considerable resources to stem the illegal supply of overseas product to UK consumers but that it was impossible to be 100 percent effective given that it was not a law enforcement agency and UK consumers were perfectly entitled to shop for cheaper products outside the UK in the EU single market.

‘The UK is caught in a perfect storm of high domestic tobacco taxes, which encourage consumers to either buy illegal tobacco or to shop for cheaper products outside the UK, combined with EU single market laws allowing the free movement of goods for consumers,’ BAT said in a press note.

‘There are two types of people bringing tobacco products into the UK from overseas: smugglers who want to make illegal profits; and genuine consumers exercising their right as EU citizens to buy any product for personal use in EU countries where the prices are cheaper than the UK. It is impossible for tobacco companies, who sell through retailers, to identify which shoppers are legitimate and which are intending to smuggle. After all, we are a business not a law enforcement agency.

‘We make every effort to control our supply chain and have collaborated and co-operated with … HMRC for many years in this area. However, we are not a law enforcement agency and cannot be expected to effectively police smuggling throughout Europe.

‘In addition, we cannot stop UK consumers exercising their right to buy products from other EU countries. In this respect, we are providing a perfectly legal supply to a legitimate demand.

‘We have an in-house team dedicated to addressing the smuggling issue and we go well beyond our legal obligations, investing significant resources over many years to tackle tobacco smuggling.

‘We also co-operate with HMRC wherever we can providing useful information regarding intelligence we have gathered on the illicit trade in tobacco. We believe this … collaboration is important in fighting the battle against criminal activity.

‘We are very surprised and disappointed to have received an unjustified and inappropriate fine given we have been in constant contact with HMRC regarding this matter and have informed them of progress made at every step of the way.

‘We will defend ourselves vigorously against the penalty and, as such, we are appealing what we believe to be an unjustified fine.

‘We believe we all need to come together to fight tobacco smuggling and British American Tobacco remains committed to working with governments, law enforcement and customs agencies to combat all forms of this crime.’

Alberta exempts menthol from flavor ban

| November 17, 2014

Alberta has made a menthol U-turn by exempting it from its law banning flavored tobacco products, according to a story by John Cotter for The Globe and Mail.

Health Minister Stephen Mandel said the law, which is due to be phased in, would still protect young people from the dangers of other flavored tobacco.

After studying the situation during the year since the law was passed, the government had decided that banning menthol would not be well accepted by adults who enjoyed menthol products, Mandel said.

“You need to deal with the realities of the world and we made an effort to deal with flavored tobaccos and I think that we are quite restrictive in that area,” he said.

“The decision was made that menthol would be one we leave out at this point in time.”

Cotter reported that health, medical and anti-smoking groups had said that exempting menthol was a mistake, because menthol was the most popular flavour with young people.

JTI’s domestic volume down in October

| November 17, 2014

Japan Tobacco Inc’s domestic cigarette sales volume during October, at 9.6 billion, was down by 5.5 percent on that of October 2013, 10.2 billion, according to preliminary figures issued by the company on Friday. The October 2013 figure was increased by 2.0 percent on that of October 2012.

Volume during January-October, at 93.5 billion, was down by 3.2 percent on that of January-October 2013, 96.7 billion, which was down by 0.4 per cent on that of January-October 2012.

JT’s market share stood at 59.7 percent during October, at 60.4 percent during January-October and at 60.5 percent during January-December 2013.

JT’s domestic cigarette revenue during October, at ¥54.4 billion, was down by 2.4 percent from its October 2013 level, ¥55.8 billion.

Revenue during January-October, at ¥524.3 billion, was down by 1.2 percent on that of January-October 2013, ¥530.6 billion.

Blu e-cigarette comes with more juice

| November 17, 2014

Blu eCigs is scheduled to launch its new blu PLUS+ Rechargeable Kit nationwide in US retail stores today.

The new product is said to use a pre-filled tank system that holds more e-juice and delivers more consistency from drag to drag than is the case with other products.

Blu uses, too, a new flavor formulation that, according to a publicity note ‘perfectly combines taste and nicotine strength’.

‘And while the battery in the blu PLUS+ Rechargeable Kit is larger, it lasts twice as long, and features rapid battery recharging; so users are never left waiting to use their e-cig,’ the note said.

Republican control of US Congress might slow advance of tobacco regulation

| November 14, 2014

Having a Republican-controlled US Congress might not lead to a winding back of Food and Drug Administration oversight of tobacco products, according to a story by Richard Craver for the Winston-Salem Journal quoting analysts and industry observers.

But it might mean a push for fewer new regulations at a time when the FDA is deliberating on what to do with ‘alternative tobacco products’, including snus, electronic cigarettes and other vapor products, cigars, pipe tobacco, nicotine gels, water-pipe tobacco and dissolvable products.

In mid-term elections earlier this month, Republicans, who traditionally have favored less regulation on corporations, won a majority in the Senate and, in doing so, took full control of Congress.

Some Democratic senators have dominated recent congressional hearings on tobacco products with demonstrative demands for FDA action to curtail most marketing of electronic cigarettes and an end to the use of most flavorings. They label electronic cigarettes as a ‘gateway to addiction’ for young people.

A key to the future could come to light in January when the FDA expects to receive a report from the Institutes of Health on tobacco products, particularly on whether to raise the national age restriction for sales from 18 to 21.

“I have to think that if a process is in hand, and a decision is on schedule to be made in January, then the FDA process should go ahead,” said Stephen Pope, managing partner of Spotlight Ideas in London.

“That said, given that the decision will be reached so close to the new Senate being called to order, appeals are likely in the expectation that a GOP-led [Republican (Grand Old Party)-led] Senate and Congress would advocate less, not more, legislation and regulation.”

Craver’s story is at: http://www.journalnow.com/business/business_news/local/gop-senate-may-cool-fda-tobacco-regulations/article_13aba07d-ef3d-5025-a3c4-d7b781284845.html

President parries minimum price plan

| November 14, 2014

The Philippines’ President, Benigno Aquino, seems to have rejected a proposal for the government to adopt a minimum price for cigarettes, according to a story in The Philippine Star.

Even though at least some of his economic managers have supported the proposal, Aquino says he prefers a deregulated tobacco industry.

“I just heard it now,” he was reported as telling reporters in an interview at the Horizon Lake View Resort in Myanmar, where he was attending the 25th Association of Southeast Asian Nations Summit. “Can it be done? I think that’s not allowed.

“I find the concept really strange,” Aquino added, noting that the government could ‘put a cap on’ prices only during emergencies.

A senior pro-administration lawmaker has filed a measure seeking to stop the dumping of very cheap tobacco products on the market by adopting a minimum price for cigarettes.

Eleandro Madrona, chairman of the House committee on accounts, was quoted as saying that a minimum price would prevent unscrupulous tobacco firms and their agents such as wholesalers and retailers – even smugglers – from offering very cheap cigarettes to young people.

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