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JTI’s UK chief joins debate about duties

| January 7, 2014

Jorge da Motta, the U.K. chief executive of Japan Tobacco International, believes Scottish ministers would think again about bringing in anti-tobacco policies if the Scottish government received directly the duty levied on tobacco sales in Scotland, according to a story by David Maddox for The Scotsman.

Da Motta was said to have told Scotland on Sunday that he believes control over duties would make members of the Scottish parliament think again over bringing in anti-smoking measures such as the display ban in shops, plain packaging and the banning of smoking in publicly accessible buildings.

He believes that these measures are harming small businesses in Scotland and that his comments reflect concern in the industry that Holyrood, the Scottish parliament, is leading the way on tobacco control and then being followed by Westminster, the U.K. parliament.

Da Motta made it clear he was not taking sides in the debate on the Scottish independence referendum due to be held on Sept. 18, but argued that even in the event of a no vote, further devolution should see duties delivered to Holyrood.

“In post-referendum Scotland, whether it is devo-max [maximum devolution] or independence, a new era of responsibility could see Edinburgh collecting tobacco duty, and with that Holyrood will have to quickly learn about the unintended consequences of regulation draining the public purse of much-needed money,” he said.

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New law said to herald end of smoking

| January 7, 2014

In bringing in strict new anti-tobacco regulations on Jan. 21, the UAE is, in some respects, leapfrogging the policies of many countries that would normally be regarded as being fiercely anti-tobacco.

The UAE will from that date ban smoking in private cars containing people under the age of 12 years, and it will introduce penalties for underage smoking, according to a story in The National, Abu Dhabi.

In addition, the law will ban the growing or manufacture of tobacco for commercial purposes.

It will ban tobacco-product advertising and prohibit tobacco products from being displayed near sportswear, health products, food, electronic products and any items aimed at young people.

And it will ban the sale of tobacco products from vending machines, within 100 meters of places of worship and within 150 meters of kindergartens, schools, universities and colleges.

It sets out technical standards, including those to do with large front-of-the-pack health warnings, which have to be met by imported tobacco products.

Shisha cafés will have to be at least 150 meters away from residential areas and their opening times will be restricted. Shisha cafés will not be allowed to serve customers younger than 18, and they will be forbidden from delivering shishas to apartments.

Dr. Wedad Al Maidoor, head of the national tobacco control committee at the Ministry of Health, believes the strict controls on where cigarettes may be sold, point-of-sale policies and the ban on tobacco advertisements will mean smoking will eventually die out.

Settlement made over Eclipse claims

| January 7, 2014

The U.S. state of Vermont has recovered $8.3 million in penalties under a settlement with R.J. Reynolds Tobacco over deceptive advertising, according to a story quoting a statement from the attorney general’s office.

The settlement is the result of a 2005 lawsuit over the company’s marketing of its Eclipse brand of cigarettes.

A Vermont judge in 2010 ruled that Reynolds had intentionally misled customers through direct mail marketing, print and Internet advertisements, and advertisements on the cigarette packs that touted Eclipse as a reduced-risk cigarette.

One message said that because the tobacco in Eclipse was heated rather than burnt, the product produced less toxic smoke than did other cigarettes. That “may present less risk of cancer, chronic bronchitis, and possibly emphysema,” Reynolds claimed in advertisements.

Such unsubstantiated claims were found to have violated Vermont’s consumer protection laws and the state’s 1998 consent decree pursuant to the Master Settlement Agreement.

Reynolds was said to have made its deceptive “less risk” claims in print advertisements placed in nationwide publications, on a website promoting the product, in direct mail materials sent to Vermont consumers and on Eclipse packs sold in Vermont.

Huge illicit trade in Hong Kong despite threat of jail sentences for offenders

| January 6, 2014

Hong Kong customs seized 38 million cigarettes between January and November last year, well up on the seizures made during 2012, according to a Hong Kong government information press note.

The figure given for 2012 was 27 million, but it was not clear whether this figure covered the January–November 2012 period or the full year to the end of December.

The final figure for 2013 will certainly be a lot higher than 38 million because customs initiated a major crackdown on smuggling during the final weeks of December.

However, the seizures are just the tip of the iceberg, according to according to a story in the South China Morning Post.

Luisa Tam Han-may, executive director of United Against Illicit Tobacco, said that while customers were talking about a 41 percent increase in seizures, this was the figure only for successful seizures. It wasn’t an indication of how big the whole trade was.

One in every three cigarettes smoked in Hong Kong in 2012 was illicit—the second highest proportion of 11 Asian countries—Tam said, citing a British study.

That proportion suggests sales of 1.8 billion illicit cigarettes annually, an astonishingly high figure given that anyone involved in dealing with, possession of, selling or buying illicit cigarettes is liable to the maximum penalty of a $1 million fine and imprisonment for two years.

Jail sentence threat unlikely to have much effect on Malaysia’s illicit trade

| January 6, 2014

Malaysia’s extension of illicit cigarette trade penalties to cover buyers is not expected to have any material impact on the earnings of local tobacco companies, according to a story in The Star quoting analysts and industry observers.

An Affin Investment Bank research bank had Malaysia’s illicit cigarette trade accounting for 34.5 percent of the total market as at the end of 2013, compared with 20 percent in 2002.

“The key culprit for the rampant illegal activities was due to an increase in cigarette prices over the years as a result of higher excise duties,” said Affin, which is maintaining its underweight rating on the tobacco sector for now.

“We leave our forecast unchanged for now pending updates from management of the tobacco companies relating to the success of this initiative.”

Amendments to the Control of Tobacco Product Regulations 2004, which took effect on Jan. 1, stipulate that it is not only illegal to sell cigarettes in packs that do not carry government health warnings and pictures; it is also illegal to buy them.

Under the amendments gazetted last June, the buyer, just like the seller, could face a maximum fine of MYR10,000, two years in jail or both.

The RHB Research Institute was quoted as saying that while the amendments amounted to a positive attempt to curb the illicit cigarette trade, the problem would continue given the lack of enforcement of regulations.

The institute said that the recent 14–17 percent increase in licit cigarette prices was not helping the situation.

It forecast that the industry’s licit sales would contract by 10 percent during 2014.

Turkey’s smoking population tumbling

| January 6, 2014

The prevalence of smoking in Turkey is dropping “at unprecedented rates’, according to a story in the Hürriyet Daily News quoting World Health Organization figures.

Adult smoking prevalence is said to have decreased from 32.2 percent, or 16 million, in 2008, to 27.1 percent, or 14.8 million, in 2012, the WHO said in its global tobacco epidemic report for 2013.

“Although Turkey has had a long tradition of tobacco use and a high smoking prevalence, particularly among men, tobacco use is now declining at unprecedented rates,” said the report.

Smoking among men fell from 47.9 percent in 2008 to 41.5 percent in 2012, while the number of women smokers fell from 15.2 percent to 13.1 percent.

Turkey has been named as the only country that protects its entire population of 75 million people with every measure introduced by the WHO in its fight against tobacco.

Nevertheless, overall more than a quarter of Turkey’s adults continue to use tobacco.

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