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Kentucky MSA payment dispute settled

| June 13, 2014

Philip Morris USA and other cigarette manufacturers have reached an agreement with Kentucky to resolve non-participating manufacturer (NPM) adjustment disputes under the Master Settlement Agreement (MSA), according to a note posted on the company’s website.

This brings to 23 the number of MSA states (including the District of Columbia and Puerto Rico) that have settled these disputes.

“We think this resolution is good for the Commonwealth of Kentucky and for PM USA,” said Denise F. Keane, executive vice president and general counsel, at Altria, on whose website the note also appeared.

“We have always said we are open to resolving these disputes in a manner that makes sense to the states and to us, and that remains the case.”

“Under the settlement announced today [Thursday], Kentucky will receive its share of funds that have been set aside over a number of years in a disputed payments account, which will have the net effect of offsetting reductions in Kentucky’s MSA payment earlier this year,” the note said.

“PM USA and the other companies will receive credits against future MSA payments.

“In September 2013, an arbitration panel determined that six states—including Kentucky—failed to diligently enforce laws in 2003 requiring NPMs to make escrow payments.”

WHO dictating tobacco tax policies

| June 12, 2014

The World Health Organization appears to be dictating tobacco taxation policy in a number of countries, including South Korea.

According to a story in the Korea Herald, the Ministry of Health and Welfare said yesterday that it planned to raise cigarette prices, which have been fixed at WON2,300-2,500 a pack for the past 10 years.

Later in the Herald piece, a Welfare Ministry spokesperson, Im Jong-gyu, was quoted as saying that the Finance Ministry understood why prices should be increased.

Meanwhile, the announcement of the proposed price increase was said to have come about two weeks after the country received a notice from the World Health Organization that Korea should raise cigarette prices by 50 percent.

The WHO advises countries that have signed its Framework Convention on Tobacco Control that their tobacco tax should represent at least 70 percent of the retail price. But tobacco tax in Korea, which has signed the treaty, amounts to about 62 percent of the retail price of cigarettes.

Philippines to require graphic warnings

| June 12, 2014

A Philippine legislative committee on Tuesday approved a bill that would compel cigarette manufacturers to include graphic health warnings on their packs,  according to a story in The Gulf Today.

The committee, composed of senators and congressmen, passed the bill directing the Department of Health to issue 12 templates of pictures and illustrations that warn about the dangers of smoking.

The full Senate and House of Representatives are expected to formally pass the bill before it is signed into law by President Benigno Aquino III.

The warnings will occupy the lower half of the front and back panels of cigarette packs.

The current written warning says that smoking is dangerous.

The bill requires also that the Department of Education include information about the hazards of smoking in school curriculums.

Anti-tobacco propaganda too scary

| June 12, 2014

Television stations in South Korea have rejected government anti-smoking propaganda as being too graphic, according to a story in The Korea Times.

The Ministry of Health and Welfare had wanted to use what the paper called an “unprecedentedly realistic anti-smoking ad,” similar to those used in Australia, New Zealand and the U.K.

But when the advertising agency hired to produce the propaganda contacted broadcasters with sample propaganda from Australia in order to check whether they would accept such a level of negativity and fear, the broadcasters were said to have been not very enthusiastic.

The Australian propaganda shows a severed artery that oozes fat when squeezed.

“The advertisement would last 40 seconds, and the broadcasters said it would be difficult to show body parts for as long as the Australian ad does,” said an official at the health ministry.

Reflecting feedback from the broadcasters, the agency filmed propaganda that features a softened message. It will be aired, beginning June 26.

The ministry official said that the propaganda would still be “threatening and negative” enough.

But Choi You-jin, a professor at Dongguk University, said that a “public service advertisement” should be “pre-tested” by members of the public rather than by broadcasters.

Cheers, Brazil!

| June 12, 2014

This story, provided by Iggesund Paperboard, has only a paper-thin connection to tobacco, but it provides TR with an opportunity to show support for that great tobacco-producing nation, Brazil, as it kicks off the World Cup finals today.

Apparently, the Taittinger champagne house is supplying the official champagne for this year’s World Cup. The company has developed a limited-edition Brut Réserve NV and a gift carton especially for the competition.

“The gift carton is a version of the packaging that won Carton of the Year award in 2012 at the Europe-wide ProCarton/ECMA packaging awards,” said an Iggesund press note. “The winning carton was decorated with round holographic effects representing champagne bubbles. In the new World Cup version, these bubbles have been transformed into beautiful holographic footballs.

“The World Cup gift carton is made of Iggesund Paperboard’s Incada 235 g/m2 paperboard, and the conversion is by Le Sanglier, which specializes in gift cartons for champagne. The foil lamination is by API. Even the bottle is specially produced for the event, with the World Cup trophy depicted on a gold label.

“Taittinger is one of only a few champagne producers still being run by the family whose name is on the label. Their champagnes are characterized by a dominant note of chardonnay, which contributes to the elegance and sophistication.”

“It’s a momentous occasion for us to be associated with such a major event as the football World Cup,” said Clovis Taittinger, who is the company’s export director. “We’ve used the latest in both printing technology and 3D printing to create both the unique bottle and the carton.”

When the final is played at Maracanã Stadium on July 13, president, Pierre Emanuel Taittinger, will be present to ensure that,Champagne picture2 when the victors are crowned, the bubbles really flow.

JT acquires e-cigarette brand E-Lites

| June 11, 2014

Japan Tobacco Inc. said today that it had concluded an agreement to acquire all outstanding shares of the U.K.-based e-cigarette supplier Zandera, known for its E-Lites brand.

Founded in 2009, Zandera sells what JT described as the most recognized range of high-quality rechargeable and ready-to-use e-cigarettes in the U.K.

“Our investment in Zandera provides the JT Group with an excellent entry-point into the fast-growing e-cigarette category,” commented Masamichi Terabatake, Japan Tobacco International’s executive vice president and deputy CEO.

“With E-Lites’ well-established brand and product portfolio, we are able to offer adult consumers another important extension to our growing range of emerging and innovative products, such as tobacco vapor pods (Ploom).”

JT said the executive management team of Zandera would remain with the JT Group post-acquisition to allow the group to leverage the team’s extensive knowledge and experience of the e-cigarette industry, their understanding of the product, technology and regulatory landscape.

“With access to the JT Group’s global distribution muscle as well as their research and development expertise, proven commitment to quality assurance and vision for emerging products, we look forward to growing the business and further enhancing E-Lites’ product offering,” said Adrian Everett, Zandera’s co-founder and CEO.

The transaction will be funded by the group’s existing cash and loan facilities and is expected to have a minor effect on its consolidated performance and cash flows for the fiscal year 2014.

JT expects to complete the acquisition during the second quarter of the fiscal year 2014, following regulatory clearance.


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