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Tax inspection proposal a non-starter

| July 2, 2014

A group that supported the passage of the Philippines’ so-called sin tax law has said it is willing to assist the government in conducting inspections of tobacco companies’ facilities to determine their level of compliance with regulations, according to a story in The Philippine Star.

Maricar Limpin, president of the Framework Convention on Tobacco Control Alliance of the Philippines, said the alliance was supportive of a proposal that aimed to tighten the government’s watch on cigarette companies amid reports of sales of illicit tobacco products.

The idea apparently came from the tobacco industry, however, when PMFTC asked the Bureau of Internal Revenue to install third-party inspectors in all cigarette manufacturing facilities 24 hours a day, seven days a week, to ensure that manufacturers were paying all of the taxes due.

But the idea seems unlikely to get off the ground because the proposal as it currently stands would violate the tax code, according to BIR commissioner Kim Henares.

“The National Revenue Code said that it’s only the commissioner and the officers who can be involved in excise tax functions and doing functions of surveillance, so we cannot have third-party [inspectors],” she said.

Graphic warnings await court ruling

| July 2, 2014

Ceylon Tobacco Co. (CTC) has said it will not include graphic health warnings on its cigarette packs until the Supreme Court has ruled on its appeal against the warnings, according to a story on Colombo Page.

The Supreme Court has rescheduled its hearings on the appeal filed by CTC for July 11.

CTC, in a stock market disclosure, said that it would continue to produce and supply cigarettes to the market in their current packaging until a further decision was made by the Supreme Court on July 11.

The company filed an appeal with the Supreme Court last month against a lower court ruling that required it to display graphic warnings on its cigarette packets.

The lower court had dismissed a writ application filed by CTC against the government’s legislation requiring the inclusion of graphic warnings covering 80 percent of the main surfaces of cigarette packs, but the court directed the Ministry of Health to amend the regulation by reducing the warnings to between 50 percent and 60 percent.

The amended regulations, which include pictorial health warnings covering 60 percent of the front and back panels of cigarette packs, were due to be implemented July 1.

“As a responsible corporate citizen, CTC always supports balanced regulations and conducts all its business activities in compliance with all existing laws and regulations in the country,” CTC said in a disclosure.

Hauni buys Garbuio Dickinson

| July 1, 2014

Hauni Maschinenbau has acquired the Garbuio Dickinson Group, a primary equipment specialist. The transaction was closed on June 30, 2014. Both companies will continue to act independently, using their existing brands. Mansueto Favaro, Garbuio Dickinson’s managing director, will continue to be responsible for the company’s operating business as member of the management board.

According to Hauni, the acquisition will benefit the R&D and service capabilities of both companies. The deal complements the current product portfolios of both firms and will therefore create more options for integrated solutions for increased customer satisfaction.

“Garbuio Dickinson and Hauni will jointly develop innovative products and solutions for the future,” says Hauni CEO Christopher Somm. “This will serve all our customers in a market that is heavily driven by new trends and challenged by increasing international regulation. We are pleased to welcome Mansueto Favaro and his team in our organization. Jointly we will strive to meet our customers’ high expectations by creating substantially more added value for our customers.”

“In a market driven by consolidation, Garbuio Dickinson starts the new partnership from a solid position,” says Favaro. “In Hauni we see the ideal partner to open up new and long-term perspectives for our organization and to inspire our customers with outstanding innovations.”

The Garbuio Dickinson Group employs more than 300 people in Italy, the United Kingdom, Indonesia and the United States. The group also maintains a joint venture in India to serve the local and neighboring markets.


NDC merges with Beta LaserMike

| July 1, 2014

NDC Technologies New LogoNDC Infrared Engineering and Beta LaserMike have merged to create NDC Technologies. Both companies are recognized global leaders in near-infrared (NIR), nucleonic, optical, X-Ray, laser, microwave, ultrasonic and process-control technology for non-contacting measurement and control solutions. The combination strengthens the new company’s position in the marketplace by offering a more comprehensive portfolio of gauging solutions across a multitude of industries. 

In the tobacco industry, NDC Technologies will continue with its comprehensive range of NIR moisture and multicomponent tobacco gauges for quality assurance and process control in tobacco leaf processing, primary tobacco processing and reconstituted sheet tobacco.

Applications include the measurement of moisture, nicotine, sugars and temperature in a host of tobacco processing applications such as whole leaf in the GLT or primary, strips, blended strips (lamina), redried cut lamina, final blend, water-treated stem, cut rolled stem, redried stem, expanded tobacco, roll-your-own tobacco, shorts, pipe tobacco, cigar filler and reconstituted sheet tobacco.

Headquartered in Irwindale, California, USA, NDC Technologies is part of Spectris, a leading supplier of productivity-enhancing instrumentation and controls based in England.

NDC Technologies expects the pooling of research and technology resources to help it streamline product development and rapidly address the evolving needs of industry and customers. The combined company brings together teams of experienced employees with strong customer relationships and a commitment to customer excellence. According to NDC Technologies, the merger will increase the distribution channels and customer care network, expanding the company’s reach to better serve customers around the globe.


TRP-Swisher cut-rag venture

| July 1, 2014

Tobacco Rag Processors (TRP) and Swisher International are setting up a joint venture to operate, among other businesses, a cut-rag processing facility in the Dominican Republic. The cut-rag processing operation, TRP Dominicana (TPRD), will produce cut rag for cigar, cigarette and RYO customers in the Caribbean region and other nearby markets. TRP will manage TRPD and leverage its processing expertise as well as supply chain and administrative infrastructure.

“We are delighted to announce the formation of our new venture with Swisher International,” says Davis Miller, CEO of Tobacco Rag. “Swisher has been a valued customer and partner of Tobacco Rag Processors since our inception. TRP Dominicana is a meaningful piece of our long-term strategy of geographic and product diversification that further ensures our leadership position in the global cut-rag market.”

“The establishment of TRP Dominicana puts us in excellent position to serve the growing base of cigar manufacturers in the Dominican Republic and surrounding markets,” added Bobby Johnson, president of tobacco rag at TRP. Our local processing operation, combined with our global sourcing capabilities and dry ice expanded tobacco operation, will enable us to provide customers with high-quality tobacco blends that will reduce their finished-product costs.”

TRPD will be based in the industrial free zone of Santiago. Construction recently started and is expected to be completed later this year. Operations are expected to begin in the first half of 2015. In the meantime, TRP will continue to supply customers located in the Dominican Republic from its Wilson, North Carolina, USA, processing plant.


PMI seeking judicial review of EU’s TPD

| July 1, 2014

Subsidiaries of Philip Morris International have filed papers seeking review of the EU’s Tobacco Products Directive (2014/40/EU) by the Court of Justice of the European Union (CJEU).

The TPD, which governs the laws, regulations and administrative provisions of the member states concerning the manufacture, presentation and sale of tobacco and related products, entered into force on May 20 and member states are required to bring into force by May 20, 2016, the laws, regulations and administrative provisions necessary to comply with the directive.

“We believe that the EU’s Tobacco Products Directive disrupts the balance that the EU treaties establish between the union and the member states, said Marc Firestone, PMI’s senior vice president and general counsel.

“The directive claims to improve the internal market in tobacco products, but its provisions go in the opposite direction. The directive includes a mix of product bans, mandates and delegations of authority that raise serious questions under the EU treaties about consumer choice, the free movement of goods and competition.

“There is no disagreement that there should be strict regulation of tobacco products, but measures need to make sense and, above all, honor the EU treaties. We very much hope that this matter is referred to the EU’s highest court for a careful, objective review.”

PMI said in a note posted on its website on Sunday that it had filed its papers in the English courts, which had proven to be a fast and efficient forum for private litigants to obtain references to the CJEU on issues involving EU law.

“PMI is seeking review,” it said, “of whether the directive complies with the EU treaties in the following areas:

* Legal Competence: The EU has power to take measures that are genuinely intended to improve the internal market. PMI contends that several provisions in the Directive run counter that objective. For example, the Directive bans menthol cigarettes—a product that is currently legal in all 28 Member States. By making it illegal for adult smokers in the EU to purchase the product they prefer, the Directive disrupts the internal market and creates incentives for illicit trade.

* Fundamental Rights: The Directive appears to ban truthful and non-misleading claims on the packaging of tobacco products. PMI intends to seek review of whether this ban respects the fundamental rights of consumers to information about the products they are choosing.

* Delegated Acts: The Directive delegates a number of powers to the Commission to enact rules on essential aspects of the Directive. PMI intends to seek review of whether these delegations comply with the EU Treaties.”

PMI said that the review process was expected to take “up to two to three years.”

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