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First Bangladeshi MD at BAT Bangladesh

| October 2, 2013

Shehzad Munim yesterday became the first Bangladeshi to take over as managing director of British American Tobacco Bangladesh (BATB), according to a story in The Daily Star.

Prior to his latest appointment, Munim worked as the marketing director for BAT’s South Asia region.
Munim joined BATB after graduating from the Institute of Business Administration of Dhaka University in 1997.

In 16 years at BAT, he has served in senior management roles in Australia, Bangladesh, New Zealand and South Asia, based in Pakistan.

Excise rise ‘shocking and disappointing’

| October 2, 2013

The Malaysian government has raised the excise duty on tobacco by 14 percent ahead of its 2014 budget due on Oct. 25, and the country’s biggest cigarette manufacturer has described the move as “shocking and disappointing,” according to a story by Pauline Ng for the Business Times.

The increase was gazetted on Friday.

“Such a move will exacerbate the already high levels of illegal cigarettes in Malaysia and dampen all efforts that have been taken thus far to address this national scourge,” British American Tobacco Malaysia managing director Stefano Clini said in a statement on Sunday.

Over the years, the Confederation of Malaysian Tobacco Manufacturers has highlighted the growth of illicit cigarettes, which are estimated to account for at least a third of the total market in the country and to cost the government more than MYR2 billion in lost taxes.

Meanwhile, a taxation expert was quoted in a story in The Star as saying that excise tax hikes needed to be implemented gradually to avoid destabilizing the legal cigarette market.

International Tax and Investment Centre President Daniel A. Witt said an increase that was too high implemented over too short a term could shock the market and create a demand for black market goods.

“Increasing excise tax should be done in a predictable way to stabilize the legal market, meaning those who can be taxed,” said Witt, who presented the Asia-11: Illicit Toba­cco Indicator 2012 study to the media on Monday. Asia-11 is a report on the illicit cigarette trade among 11 countries in 2012.

Alliance completes monitoring obligation

| October 2, 2013

Alliance One International says that it has fulfilled its obligations under separate settlement agreements with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).

On Aug. 6, 2010, Alliance entered into agreements with the DOJ and the SEC to resolve those agencies’ respective investigations relating to violations under the Foreign Corrupt Practices Act, which involved conduct occurring prior to the merger that formed Alliance in May 2005.

These settlements required the company to retain an independent compliance monitor for a term of three years.

And on Sept. 30, it fulfilled its obligations under the agreements, “including the successful and on-time completion of its compliance monitorship,” Alliance said in a note posted on its website.

The Alliance note is at http://phoenix.corporate-ir.net/phoenix.zhtml?c=96341&p=irol-newsArticle&ID=1860336&highlight=.

 

PMI acquisition will up Algerian earnings

| October 1, 2013

Philip Morris International said yesterday it had entered into a definitive agreement to acquire 49 percent of the shares of United Arab Emirates-based Arab Investors-TA (AITA) for $625 million.

Through this acquisition, PMI will secure an almost 25 percent economic interest in the Société des Tabacs Algéro-Emiratie (STAEM), a joint venture that is 51 percent owned by AITA and 49 percent owned by the Algerian state-owned Société Nationale des Tabacs et Allumettes SpA, the market leader.

“STAEM, with which PMI has had a successful partnership since 2005, manufactures and distributes under license PMI’s Marlboro and L&M brands, which together hold a significant share of the international trademarks sold in Algeria, placing PMI’s brand portfolio as the second largest in the market,” PMI said in a note posted on its website. ‘This equity investment in AITA will provide PMI with enhanced earnings from Algeria and is projected to be accretive to PMI’s earnings per share as of 2014.”

Commenting on the deal, Miroslaw Zielinski, PMI’s president, Eastern Europe, Middle East & Africa region and PMI Duty Free, said that Algeria, with the fourth-largest GDP in Africa and an estimated cigarette market of 30 billion units, held tremendous potential for future growth.

“This agreement confirms our confidence in the Algerian economy, the cigarette industry and their long-term prospects. Over the last five years, Algeria has been a key driver of the growth of our premium brands in North Africa, and the investment we are announcing today will significantly enhance our prospects in the country.

“Our new partnership with the UAE-based investors, from whom we are acquiring the 49 percent interest in AITA, also opens additional business opportunities in Egypt and certain other North African and Middle Eastern markets where there is potential for further expansion.”

Indonesia steers for FCTC ratification

| October 1, 2013

Indonesian Health Minister Nafsiah Mboi has said that her government will strive to ensure that Indonesia ratifies the World Health Organization’s Framework Convention on Tobacco Control (FCTC), according to a story in The Jakarta Post.

The minister said that President Susilo Bambang Yudhoyono had agreed in principle to ratification but wanted firstly to see the government speaking with one voice on the subject. “So I think we will get there, but not yet,” she was quoted as telling the Post on Saturday.

Indonesia had been active in formulating the FCTC in 2002–2003, Nafsiah said. “So we know that Indonesians actually believe that the FCTC is a good tool for all countries within the WHO family to protect people from negative impacts of smoking,” she added.

Meanwhile, Indonesia has been told that a cigarette and tobacco advertising ban is essential in the fight to curb smoking addiction, according to another story in the Post.

“The tobacco industry is too strong, even if you implement any tobacco control regulation,” Rob Moodie, a professor of public health at the University of Melbourne, was quoted as saying on Saturday.

Moodie said that through advertisements, cigarette smoking became a part of normal life. “A constant barrage of advertising reminds people that it’s cool to smoke, you’re a better person if you smoke, you’re a more attractive person if you smoke, all of these things,” he said.

New cigar house launched in US

| October 1, 2013

U.S. entrepreneur Joe Baker and the Florida-based company Palomino Cigars and Imports have together launched the House of Burgess Cigars Ltd.

Silvio Palomino is a longtime importer and distributor of premium Dominican cigars and owner of Palomino Imports. He has been providing private-brand cigars to brand owners across the U.S. since 1990.

Baker, of Cleveland, Ohio, who is a former publisher of Cigars In Review magazine, said that the new business’ importing and distribution arm would be based in West Palm Beach, Florida, while the company headquarters would be in Cleveland.

The partnership includes among its offering several brands already in existence: La Renia, Santa   Ana, Palomino and Boca del Monte.

And for the Christmas season, it will be releasing the flagship cigar line that will feature the House of Burgess name and logo.

The new brand will be available with Connecticut, maduro and Corojo wrappers. And it will be launched in double robusto, toro and torpedo shapes, with other sizes to be released early next year.

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