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Mugabe threatens tobacco growing ban

| April 23, 2014

President Robert Mugabe has warned farmers that tobacco production will be banned in Zimbabwe if they continue to cut down trees to provide fuel for curing their crops, according to a story on

In his Independence Day speech on the weekend, Mugabe said tobacco growers were causing desertification.

“Our people are growing tobacco and want to make money out of it, but on the downside we have seen massive deforestation leading to desertification in some areas,” he said.

“We are saying to them, ‘use coal or we will stop tobacco production.’”

The land reform program promoted by Mugabe has seen a big increase in the number of tobacco growers, but they are generally poorly resourced and have had to turn to the forests for curing fuel.

“We would rather have no tobacco than have deserts and no trees,” said Mugabe.

Disagreement over regulation timing

| April 23, 2014

If Denmark’s health minister, Nick Hækkerup, has his way, parliament will “soon” be taking action to curb the increasing use of e-cigarettes in the country, according to a Copenhagen Post story.

“It concerns me that children are using strawberry- and licorice-flavored e-cigarettes,” Hækkerup wrote in a statement to parliament’s committee on health.

“It doesn’t matter whether or not they contain nicotine; it is still a concern.”

Hækkerup called on parliament to begin discussing possible regulation of the use of e-cigarettes.

Social Democrats’ health spokesperson Flemming Møller Mortensen said that it was too soon to sound the alarm.

“It is hard to regulate when we know as little as we do now,” he was quoted as saying.

But Niels Them Kjær, spokesperson for the cancer society, welcomed Hækkerup’s suggestion.

“It has been a grey area for a while, so it is a positive sign that the minister is looking to regulate it in some way,” Kjær said.

Anti-tobacco vigilantes to be let loose

| April 23, 2014

A new anti-tobacco law that is expected to be issued “soon” will grant judicial powers to some anti-smoking volunteers to detect and report violations of the law, according to a story in The Peninsula quoting an official of Qatar’s Supreme Council of Health (SCH).

The proposed law, which will amend an existing law, will ban smoking in cars, ban the use and sale of chewing tobacco such as sweika and increase fines for tobacco smoking in public places where smoking is banned.

Tariq Salahuddin, head of the legal department at the SCH, provided information about the proposed new law while speaking during an anti-smoking workshop organized by the Ministry of Awqaf and Islamic Affairs on Sunday.

The workshop was aimed at strengthening the role of imams and preachers in curbing smoking.

Meanwhile, a proposal to set up an association in Qatar for combating tobacco smoking is awaiting approval from the state cabinet, said Dr. Ahmed Mohamed Al Mulla, head of the Smoking Cessation Clinic at the Hamad Medical Corporation.

The story said that about 35 percent of those who had attended the smoking cessation clinic had quit their habit, which is an exceptional success rate.

Hungary asked to alter tax-change rules

| April 23, 2014

The European Commission has warned that it might refer to the European Court of Justice Hungarian legislation that runs counter to an EU directive regulating tobacco trade.

In Hungary, tax rates are included on tobacco products packaging, and when taxes change, packs with the old tax rates cannot be sold after 15 days of the new tax rate coming into force.

The commission says, however, that excise duties are harmonized under an EU directive that does not allow the restriction of the trade in tobacco products once they are released for consumption.

The commission has asked Hungary to change its legislation, a request that takes the form of a “reasoned opinion”: the second stage of an infringement procedure.

PMI’s volume down in first quarter

| April 22, 2014

Philip Morris International’s cigarette shipment volume during the first quarter of 2014, at 195.961 billion, was down by 4.4 percent on that of the first quarter of last year, 204.947 billion, though, excluding the unfavorable impact of estimated inventory movements in the quarter, the company reported, its volume decreased by about 2 percent.

Volume was down in all of PMI’s regions. It was down by 2.5 percent in its Asia region to 70.801 billion, mainly reflecting a lower market share in Indonesia, a lower market share and the adverse timing of PMI shipments in Japan, partially offset by total market growth driven by retail trade and consumer purchasing in anticipation of the April 1 consumption tax increase, and lower share in Pakistan, partially offset by the results in the Philippines being driven by a favorable comparison with those of the first quarter of 2013.

Volume was off by 2.9 percent in the EU to 41.705 billion, mainly reflecting lower total markets, partially offset by market share growth.

It was down by 4.8 percent in Latin America and Canada to 21.449 billion, due largely to the unfavorable impact of price increases in Mexico.

And it was down by 7.2 percent in Eastern Europe, Middle East and Africa (EEMA) to 62.006 billion, due mainly to a lower total market in Russia and unfavorable estimated inventory movements across various markets within the region, partially offset by Turkey.

Marlboro shipments of 65.9 billion were down by 4.1 percent, due primarily to unfavorable estimated inventory movements in the EEMA region and Japan, lower share in Japan, and a lower total market in the EU and Mexico, partially offset by the company’s performance in the Philippines.

L&M shipments of 21 billion were down by 5.8 percent; Parliament shipments of 9.9 billion were up by 1.2 percent; Bond Street shipments of 9.3 billion were decreased by 6.3 percent; Chesterfield shipments of 8.8 billion were increased by 14.3 percent; Philip Morris shipments of 8 billion were down by 5.4 percent; and Lark shipments of 6.8 billion were down by 0.3 percent.

PMI’s shipment volume of other tobacco products (OTP), in cigarette equivalent units, was down by 1.1 percent, mainly due to declines in the pipe tobacco and snuff categories in Southern Africa that offset slight growth in the fine-cut category.

The total volume of cigarettes and OTP was down by 4.3 percent.

PMI’s market share was said to have increased in a number of key markets, including Algeria, Australia, Belgium, Brazil, Canada, France, Germany, Greece, Korea, Poland, Russia, Saudi Arabia, Spain, Thailand, the U.K. and Vietnam.

PMI said that its reported diluted earnings per share, at $1.18, were down by $0.10 or 7.8 percent on those of the first quarter of 2013, or, excluding the effects of currency factors, were up by $0.06 or 4.7 percent on those of the first quarter of 2013, $1.28.

Adjusted diluted earnings per share, at $1.19, were down by $0.10 or 7.8 percent from $1.29, though excluding currency factors, adjusted diluted earnings were up by $0.06 per share, or 4.7 percent.

Reported net revenues, excluding excise taxes, were down by 8.8 percent to $6.9 billion, or by 1.6 percent, excluding currency factors.

Reported operating companies’ income was down by 12.9 percent to $3.0 billion, or by 3.7 percent excluding currency factors.

Adjusted operating companies’ income was down by 12.3 percent to $3.0 billion, or by 3.1 percent excluding currency factors.

Reported operating income was down by 13 percent to $3 billion.

“Our first-quarter results were in line with our expectations, given the known challenges we face in Asia and inventory distortions,” said André Calantzopoulos, CEO.

“While currencies remain volatile, we have recently witnessed an improvement in their unfavorable impact on our business, and accordingly, together with the restructuring charge [Australia], we are increasing our 2014 full-year reported diluted earnings per share guidance by $0.07.

“Based on our expectation of robust pricing, market share growth momentum and early signs that the operating environment is improving in Europe, combined with our continued investments for the long term, we remain confident in our constant-currency adjusted diluted EPS growth rate of [6–8 percent] for this year.”

Bergerac R&D in cost-cutting sights

| April 22, 2014

As part of its cost-cutting plans, Imperial Tobacco intends to “offload” its research center in Bergerac, France, according to a story in Le Figaro.

Imperial said last week that it was proposing to close its cigarette factories at Nottingham, U.K., and Nantes, France, as part of a cost optimization program aimed at delivering savings of £300 million a year from September 2018.

It said the projects, which are planned to be “implemented progressively” during the next two years, were aimed at strengthening its competitive position.

The “European restructuring projects” could see 900 jobs axed.

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