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Smoking down by 16-17 percent in Russia

| June 15, 2015

Russians are smoking less because of the implementation of an anti-tobacco law, according to an Interfax report quoting the Rospotrebnadzor press service.

‘The measures taken to implement Russian legislation on public health protection from the impact of tobacco smoke and the consequences of tobacco smoking have helped reduce tobacco consumption by 16-17 percent,’ the press service was quoted as saying. There was no indication in the version of the report that TR saw of when the decline in consumption occurred.

Nevertheless, Rospotrebnadzor said the implementation of the anti-tobacco law had helped make ‘a significant contribution to the reduction of the death rate from illnesses associated with tobacco consumption such as cardio-vascular illnesses, lung diseases, and cancer’.

Lorillard becomes a wholly owned subsidiary of RAI

| June 15, 2015

Reynolds American (RAI) on Friday completed its acquisition of Lorillard and, in doing so, ‘significantly strengthened, balanced and diversified’ its brand portfolio.

As a result of the acquisition, Lorillard is now a wholly owned subsidiary of RAI, and former Lorillard shareholders will own about 15 percent of RAI’s common stock.

In a note posted on its website, RAI said its operating companies now had key brands across major industry categories: Newport, Camel, Pall Mall and Natural American Spirit in combustible cigarettes; Grizzly in smokeless tobacco; and VUSE in the vapor market.

‘In the acquisition, former Lorillard shareholders will receive $50.50 in cash and 0.2909 of a share of RAI common stock for each share of Lorillard common stock they owned,’ RAI said. ‘In the related divestiture transactions, subsidiaries of RAI have sold the KOOL, Salem, Winston, Maverick and blu eCigs brands, and other assets and liabilities, to ITG Brands, LLC, a subsidiary of Imperial Tobacco Group, PLC, for total consideration of approximately $7.1 billion in cash.

‘Additionally, British American Tobacco p.l.c. maintained its approximately 42 percent ownership in RAI through an equity investment of approximately $4.7 billion.’

“As a result of this acquisition, Reynolds American has a significantly strengthened, balanced and diversified portfolio of iconic brands across all key categories – the most balanced in the industry,” said Susan M. Cameron, RAI’s president and CEO.

“The transaction supports RAI’s efforts to lead the transformation of the tobacco industry. The synergies, improved operational efficiencies and higher sales volumes generated by this combination will better position RAI’s operating companies to fuel continued investment in brand building, R&D and innovation for the long-term future of the company.”

Papastratos exports up ‘significantly’

| June 15, 2015

Philip Morris International’s Greek subsidiary Papastratos said recently that the company’s exports rose ‘significantly’ last year, partially offsetting the decline in the domestic cigarette market, according to a story by Anestis Dokas for Kathimerini, relayed by the TMA.

Chairman Nikitas Theofilopoulos said the company’s plant at Aspropyrgos, west of Athens, exported to more than 30 countries.

The company announced in December that it was investing €25 million for the installation of seven new production lines and for a new tobacco processing unit.

Theofilopoulos said the company was also reorganizing and improving its distribution network in Greece for the first time since 1950.

He said the target was to have soon the most modern and most reliable distribution network in the country, the only one that would be able to distribute products to 25,000 sales points across Greece on a daily basis.

JT publishes sustainability report

| June 15, 2015

Japan Tobacco Inc. has published the JT Group Sustainability Report FY2014, outlining its sustainability initiatives and performance for the year ending 31st December, 2014. The report is available at http://www.jt.com/csr/report/index.html.

JT said the report contained Standard Disclosures from the Global Reporting Initiative (GRI) G4 Sustainability Reporting Guidelines. However, it was not yet ‘in accordance’ with the Guidelines. But it was aiming for its FY2015 report to be in accordance with the GRI G4 ‘Core’.

“We are only at the beginning of our journey and we recognize that there is much more to do,” said Mitsuomi Koizumi, president and CEO of JT.

“We must – and will – make further strides on sustainability if we are to continue our success.

“As we implement improvements in the years to come, we look forward to an even more prosperous future that will benefit not only the Group but society in general.”

Bidi packs undergo “face-lift” to attract smokers

| June 12, 2015

A number of bidi makers in India have introduced their products in sleek new packaging with filters, exotic flavors and organic ingredients in an effort to attract urban smokers searching for a cheaper alternative in light of a recent rise in cigarette prices, according to The Economic Times. The traditional hand-rolled “cigarettes” wrapped in tendu leaves are also being advertised via new social media campaigns and recently launched websites.

Anwar Ali, owner of Bigarette Co.—which manufactures bidi brands Bigarette, Black Swan, Sumo, 8 AM and Enigma—said bidi is quickly becoming a product of choice for urban consumers looking for less expensive products after the government raised the excise tax by 25 percent for cigarettes of length 65 mm or under and by 15 percent for cigarettes longer than 65 mm.

According to brand strategy expert Harish Bijoor, bidi makers want to make their category “aspirational by Anglicising the brand names and repositioning the bidi as the Indian version of hand-rolled cigar,” and added that “[a] vernacular brand name is always downmarket for Indian consumers and hence the need to launch newer brand names.”

Poll finds vaping rates rise with income

| June 12, 2015

A Reuters/Ipsos poll of 5,679 adults conducted between May 19 and June 4 found that use of cigarettes as well as e-cigarettes/vaporizers increases with income. According to the survey results, 12.4 percent of all adults with incomes greater than $75,000 per year reported using vapor devices, compared with 10.6 percent of adults whose income was $50,000 to $75,000 per year, 10 percent of adults making $25,000 to $50,000 per year and 8.9 percent of adults with incomes less than $25,000 per year. Of adults under the age of 40, 21.6 percent reported that they smoke cigarettes, while 15 percent reported that they vape.

Of the vapers, 70.5 percent indicated that they took up vaping within the past year, whereas 29.5 percent reported that they had started vaping more than one year ago. The percentage of Americans who reported smoking combustible cigarettes or vaping was 23.7 percent, compared with 19 percent for cigarette smoking alone.

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