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Universal sees opportunities for growth

| February 7, 2014

Universal Corp’s net income for the third quarter to the end of December was $38.6 million or $1.36 per diluted share, up from $35.5 million or $1.25 per diluted share during the three months to the end of December 2012.

Segment operating income during the third quarter of fiscal 2014, at $74.6 million, was up by 18 per cent on that of the previous third quarter, on combined earnings improvement in every segment.

At the same time, consolidated revenues increased by 13 per cent to $767.8 million on higher overall volumes, mainly due to the current season’s larger African crops, partly offset by lower volumes in Brazil.

Meanwhile, net income for the nine months ended December 31 was $122.3 million or $4.31 per diluted share, compared with $106.6 million or $3.75 per diluted share for the same period of the previous fiscal year.

Segment operating income was $130.3 million for the nine-month period to the end of December, a decrease of $55.6 million from that of the nine months to the end of December 2012.

Revenues increased by two per cent to $1.9 billion for the first nine months of fiscal year 2014, on slightly lower volumes at higher prices.

George C. Freeman, III, chairman, president, and CEO said that one of Universal’s strengths was the ability to manage its business well in uncertain global markets.

“While it is still very preliminary, the current outlook for the 2014 crops, which will impact our fiscal year 2015 results, indicates increased production in some origins,” he said.

“At the same time, there are possible reductions in cigarette manufacturers’ needs due to lower cigarette sales in Europe and the United States. However, our uncommitted inventories remain at relatively low levels.

“Our focus remains on efficiently managing our business and positioning ourselves to meet the needs of our customers and suppliers while delivering consistent results to our shareholders.

“We believe that there are opportunities to grow our business by investing in projects that bring additional value and services to our customers.

“We continue to make good progress on the programs announced in October to expand our leaf production and processing capacity in Mozambique and to enhance production efficiency in several other origins…”

Dioxins undetectable in cigarette MSS

| February 7, 2014

New research from Essentra Scientific Services (ESS) has found that dioxins are not present at detectable levels in cigarette mainstream smoke.

The new research, carried out by Dr. William Guthery, analytical chemist at ESS, drew on an innovative gas chromatography-tandem mass spectrometry analysis to demonstrate that dioxins, which are cited by the US Food and Drug Administration as harmful and potentially harmful constituents, were not present at detectable levels in the American-blend and Virginia cigarettes tested.

ESS, which is part of the Filter Products division of Essentra plc, has now published its latest findings into the levels of chlorinated dioxins and furans found in mainstream cigarette smoke.

The full paper is available as a free download from:

Bhutan says tobacco ban must end

| February 6, 2014

Bhutan’s Upper House resolved that the country’s ban on the import of tobacco must end. In a majority resolution on February 3 the house said the ban on import and sale of tobacco products must end to control the black market, reports the Bhutan News Network.

Bhutan had gained fame for being the first country to completely ban on manufacturing, import and sale of any tobacco products. However, the government also received harsh criticism for sending a monk behind bar for years on charge of carrying tobacco products.

After public outcry over the harshness of the law, the first elected parliament of the country showed some leniency towards tobacco consumers. Many send to jail for selling tobacco were subsequently released on king’s order.

The country recently lifted its ban on the import of furniture and alcohol.

Now, the National Council comes with proposal that the tobacco import ban must end, though the resolution says the ban must continue on production of tobacco products within the country.

The resolution should pass through the National Assembly before it becomes the law.

No. 2 U.S. drugstore to stop selling smokes

| February 6, 2014

CVS Caremark Corp. said on Feb. 5 that it would stop selling tobacco products at its 7,600 stores by October of this year, becoming the first national drugstore chain in the United States to take cigarettes off the shelf. Public health experts called the decision by the No. 2 U.S. drugstore chain a precedent-setting step that could pressure other retailers to follow suit.

“Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health,” said Larry J. Merlo, president and CEO, CVS Caremark. “Put simply, the sale of tobacco products is inconsistent with our purpose.”

The company estimates that it will lose approximately $2 billion in revenues on an annual basis from the tobacco shopper.

“CVS Caremark is continually looking for ways to promote health and reduce the burden of disease,” said CVS Caremark Chief Medical Officer Troyen A. Brennan, M.D., M.P.H. “Stopping the sale of cigarettes and tobacco will make a significant difference in reducing the chronic illnesses associated with tobacco use.”

CVS said it will recover some lost sales by promoting stop-smoking aids, possibly including e-cigarettes.

“As a leader of the health care community focused on improving health outcomes, we are pledging to help millions of Americans quit smoking,” said Merlo. “In addition to removing cigarettes and tobacco products for sale, we will undertake a robust national smoking cessation program.”

Walgreen Co., the U.S.’s top-retailer, said Feb. 5 that it was not making the same move at this time. “We will continue to evaluate the choice of products our customers want,” Walgreens said in a statement. In May, a Walgreen executive was quoted as saying the company, which focuses its branding on health, was continuing to sell cigarettes to stay competitive with other drug store chains, convenience stores and grocery stores.


No fire in smoking impeachment plan

| February 6, 2014

A proposal that the Philippines’ President, Benigno S. Aquino III, should be impeached because of his tobacco smoking seems unlikely be realized, according to a story in the Manila Bulletin.

While the president had not quit smoking, he had followed the smoking ban in government offices and other public areas, presidential communications secretary, Herminio Coloma Jr, was quoted as saying.

Coloma made his remarks after a Civil Service Commission (CSC) official had warned that Aquino’s smoking in government premises could be grounds for impeachment.

CSC assistant commissioner, Ariel Ronquillo, reportedly claimed that the president had violated the smoking prohibition in government buildings.

But Coloma countered that the president had always been supportive of the MMDA’s (Metropolitan Manila Development Authority) efforts to reduce the hazards of smoking. “The president is following all of the laws of the land regarding this matter,” he said.

“The president has not violated any of these rules.”

Aquino has repeatedly rejected calls by concerned groups to lead by example and quit his smoking habit, saying that for him smoking is a way to relieve stress.

Ground prepared for standardized packs

| February 6, 2014

The Northern Ireland Assembly voted on Monday to accept the introduction of standardized packaging for cigarettes, according to a BBC Online story.

Assembly members voted on a legislative consent motion on the Children and Families Bill, which will allow the UK government in Westminster to legislate to impose standardized packaging in Northern   Ireland.

Health Minister Edwin Poots said the vote provided for Northern Ireland to participate in what might happen in the rest of the UK.

In addressing the argument that standardized packaging would make no difference to the number of people starting to smoke, Poots said there was evidence suggesting that “to do nothing was not satisfactory”.

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