Breaking News

Illicit cigarettes flooding SA’s borders

| February 18, 2014

Counterfeit cigarettes are among the illicit goods most likely to be smuggled across South   Africa’s borders on a daily basis, according to a Mondaq story.

The story said that the illicit trade in counterfeit and genuine cigarettes had grown at a “phenomenal pace” and that cigarettes now comprised one of the most prevalent and problematic counterfeited items available on the black market.

Low production costs and high levels of demand had made counterfeit cigarettes one of the region’s most trafficked goods, with some reports recording that the trade in illegal cigarettes had outgrown sales of narcotics.

Every year, over ZAR4 billion in tax revenue was “lost” to sales of counterfeit cigarettes.

According to the Tobacco Institute of Southern Africa, more than 60 percent of all counterfeit cigarettes originate in Zimbabwe, partly due to poor border controls between the two countries.

Packs of counterfeit cigarettes are sold for about ZAR10 a pack, while packs of licit cigarettes retail for about ZAR30.

The story is at odds with a study published at a month ago, which found that, with the exception of 2010, there was no evidence that the illicit trade in cigarettes in South Africa was significantly undermining government revenue.

“Claims that illicit trade has consistently increased over the past 15 years, and has continued its sharp increase since 2010, are not supported,” the study concluded.

Smokers’ lobby can now get some sleep

| February 18, 2014

Smokers, who, in recent years, have been finding it increasingly difficult to book suitable accommodation, now have, a website that specializes in smoker-friendly hotels, according to a story by Joe Sharkey for The New York Times.

“We don’t offer nonsmoking rooms, so if you’re a nonsmoker, you’re not for us,” said Shawn Bradley, who runs the site but whose background is in Web development.

Bradley’s company says it has smoking rooms available for booking at 100,000 hotels around the world, from Beijing, where there is lots of choice, to New York, where it’s slim pickings.

The accommodation problem for smokers is particularly acute in the U.S., but even there lots of hotels—especially those in the lower mid-level and economy niches—set aside rooms for smokers. “Many chains still offer them,” said Bradley.

But hotels tend to keep quiet about allowing smoking, so booking a smoking room can be frustrating and time-consuming—hence the Smoketels site, which opened for business in November.

Trade agreement package questioned

| February 17, 2014

The New Zealand government has blocked an attempt by Labour to have parliament ask for the release of the full agreed text of the Trans-Pacific Partnership (TPP) free trade agreement before it is signed, according to an Independent Newspapers story.

Labour leader David Cunliffe said he was “disappointed, but not surprised.”

One of the immediate, specific worries over the treaty concerns the issue of standardized packaging for tobacco products.

“There may be benefits for New Zealand exporters in the agreement but without the release of the full text, we have no way of knowing their extent and nature,” said Cunliffe.

“The government must also reveal whether or not the text makes it more likely New Zealand could be sued by multinational corporations such as tobacco companies.”

But Trade Minister Tim Groser said he would not negotiate the agreement “through the media.”

“We’ll look at any proposal, but the No. 1 thing for the New Zealand government to ensure is that it doesn’t limit any future New Zealand government’s ability to legislate on public health,” said Groser.

Groser said the government was “fully expecting” a legal challenge over standardized packaging regardless of the TPP agreement.

Youth camp policy for fighting addiction

| February 17, 2014

Although Turkey had had success in fighting substance abuse, it remained one of the top 10 tobacco-using countries, according to a story in today’s Zaman quoting a report by the Turkish temperance organization Yeşilay.

The report, which includes data on a number of addictions, said Turkey had 16 million smokers above the age of 15.

Yeşilay complained of a lack of financial resources and a lack of interest within the private sector and nongovernmental organizations in being part of the solution to all forms of addiction.

A Yeşilay representative said the organization’s only regular income came from property rents, which was insufficient for the organization to realize its goals.

It has proposed the provision of counseling services that allow close contact with at-risk groups, guidance services, treatment centers, rehabilitation centers and youth camps, and it wants to be able to build its fieldwork capacity.

Lorillard to webcast presentation

| February 17, 2014

Lorillard is due to webcast its presentation at the Consumer Analyst Group of New York (CAGNY) Conference in Boca Raton, Florida, from 5:30 p.m. to 6:30 p.m. Eastern Time tomorrow.

Murray S. Kessler, chairman, president and CEO, and David H. Taylor, CFO, will participate in the conference.

Their presentation will be available through the Investor Relations section of Lorillard’s website at

The presentation will be available in an archived format for 30 days following the event.

Budget boost for Canadian bootleggers

| February 14, 2014

Canada’s National Coalition Against Contraband Tobacco (NCACT) has expressed disappointment that the 2014 federal budget “increased the lucrative nature of contraband tobacco while also failing to provide meaningful measures to stop it,” according to a Canada Newswire story.

“By increasing the difference in price between the legal and illegal market, the government is effectively putting money in the pockets of gangs,” said Gary Grant, a spokesman for the NCACT and a 39-year veteran of the Toronto Police Service.

“The RCMP estimates that there are about 175 criminal gangs that are involved in the contraband trade, using it as a cash cow to finance their other illegal activities, including guns, drugs and human smuggling.

“In fact, just yesterday [Feb. 11], 12,000 illegal cigarettes, along with drugs and cash, were seized by the Gatineau police a short distance from parliament.”

Contraband tobacco is said to be a prime source for youth smoking.

“Illegal cigarettes are cheap, easily accessible, and the criminals who sell them don’t check for ID,” said Grant.

“Unfortunately, this year’s budget will do little to stop this. If anything, it creates conditions under which contraband tobacco can flourish. $4.03, the size of the tax increase, is actually the cost of the cheapest baggies in some smoke shacks.”

The budget does allocate nearly $92 million over five years to enhance contraband tobacco enforcement, mostly focused on high tech equipment to monitor the porous border between Quebec, Ontario and the U.S.

However, the budget contained no new funds to deal with the thriving domestic smuggling trades.

Meanwhile, Canada Newswire reported in a separate story that the Frontier Duty Free Association (FDFA), which represents Canada’s land border duty-free shops, had expressed concern that the “huge excise tax increase on tobacco products” would work counter to government revenue goals, health strategies and Canada’s economic interests.

“We understand and support the government’s need and desire for a balanced budget and the goals of Canada’s tobacco health strategy, but a tax shock of this magnitude, which was brought in without any prior consultation or warning, is a major blow to our stores,” said Abe Taqtaq, FDFA president.

The 2014 budget increased the federal excise tax on duty-free cigarettes from $15 per carton to $21.03 per carton, a 40 percent increase that was applied overnight.

“Our members are troubled about the unintended consequences of this tax increase since it threatens to divert sales away from our members’ stores to the illicit market, which in turn jeopardizes both the government’s revenue and public health goals,” said Taqtaq.

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