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Hong Kong urged to scrap plan for huge warnings

| July 1, 2015

Cigarette companies are urging the Hong Kong government to scrap its plans to increase the size of graphic tobacco health warnings to 85 percent of pack surfaces, according to a story in the South China Morning Post relayed by the TMA.

The companies are opposed also to a requirement that packs carry a warning that ‘tobacco kills up to half its users’.

They noted that a study by Dr. Kevin Tsui Ka-kin of Clemson University in South Carolina, US, found that there wasn’t a correlation between enlarging warnings and the reduction in the number of smokers.

Tsui Ka-kin said there had been little impact on smoking prevalence after the government first introduced health warnings on tobacco packaging in 1994 or when the pictures were enlarged in 2000 and 2007.

Currently, health warnings must cover at least 50 percent of the surface of cigarette packs in Hong Kong.

The Food and Health Bureau is recommending increasing the size of the warnings from early next year.

Proposals for the imposition of 85 percent warnings have triggered serious industry challenges in other countries.

Zimbabwe’s grower prices down, export prices up

| June 30, 2015

So far this year, Zimbabwe has earned more than US$270 million from the export of 49.4 million kg of leaf tobacco, according to a story by Oliver Kazunga for the Chronicle, citing figures from the Tobacco Industry and Marketing Board up to June 26.

During the equivalent period of last year, Zimbabwe was said to have earned US$141.2 million from the export of 38.8 million kg of tobacco.

China has been Zimbabwe’s main customer this year, buying 20 million kg of tobacco for US$170.8 – for an average price of US$8.54 per kg.

South Africa was the second biggest customer buying 6.7 million kg of tobacco for US$19.9 million, an average price of US$2.97 per kg; and Indonesia was in third place buying 3.2 million kg for US$13.4 million, an average price of US$4.19 per kg.

But while the overall average export price for Zimbabwe’s tobacco has gone up, year on year, from US$3.64 per kg to US$5.46 per kg, grower prices have gone in the opposite direction.

The Chronicle story said that contract grower sales had been depressed in respect of both volume (down by 14.3 percent) and average price (down by 6.3 percent).

Auction volume sales were said to be down by 8.1 percent but the average auction price was not mentioned.

However, according to a story in The Herald earlier this month, prices have remained below those of last season.

The Herald story said that growers had so far this season sold 160 million kg of flue-cured for US$473.983 million – for an average price of US$2.96 per kg.

At the same point of last season, 177 million kg of flue-cured had been sold for $564 million – for an average price of $3.18 per kg. That represents a reduction in grower prices of 6.9 percent year on year.

Meanwhile, according to the Chronicle story, 97,452 growers have registered to produce tobacco next season, down nine percent on the 106326 growers who had registered during the same period of 2014.

Hungary’s tobacco wholesale system under scrutiny

| June 30, 2015

The EU Commissioner for Internal Markets, Elzbieta Bienkowska, has said that the European Commission could launch an infringement procedure against Hungary over suspected discrimination in its granting of the country’s exclusive wholesale tobacco license, according to a Portfolio.hu story relayed by the TMA.

The license was granted to the consortium of BAT and Tabán Trafik without an open tender having been launched, a decision that was challenged by Imperial Tobacco Magyarország, JTI Hungary and Philip Morris Magyarország.

“There are other tobacco monopolies in Europe, but nowhere else is it so visible that only people with a good contact with the government have the possibility to sell the tobacco,” the commissioner reportedly said.

The EC’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs [small- and medium-sized enterprises] asked the Hungarian government for a report on the wholesale tobacco monopoly issue this spring, but experts in Brussels were reportedly not convinced by the government’s arguments.

Hungry is said to be being investigated over a new tax on the tobacco industry that the country introduced earlier this year.

Registration opens for annual Cannes duty-free show

| June 30, 2015

Registration for the TFWA [Tax Free World Association] World Exhibition and Conference 2015 has opened at tfwa.com.

The event is to be held at Cannes, France, on October 18-23.

Meanwhile, the 2015 MEADFA (Middle East and Africa Duty-free Association) Conference is due to take place on November 23-24 at the King Hussein Bin Talal Convention Centre in Jordan.

Organized by TFWA on behalf of MEADFA, the event is said to be the duty free and travel retail industry’s leading conference in this region.

The Middle East’s duty free and travel retail industry grew faster than that in any other part of the world in 2014, according to Generation Research, experiencing a 5.8 percent increase.

Registration for the MEADFA conference is due to open online in September.

Further details can be found at tfwa.com.

JT Group to hold investor conference in London

| June 30, 2015

The Japan Tobacco Group is due later this year to hold an investor conference focusing on its tobacco business.

The conference will be held Hyatt Regency, London, the UK, from 08.30 on September 18.

‘The conference will include an update on its global tobacco strategic focus and investment for sustainable future growth, JTI’s business performance, and the growth in the CIS Region,’ according to a note posted on the group’s website.

The speakers will include Akira Saeki, JT executive deputy president, president Tobacco Business; Roland Kostantos, JTI senior vice president Finance, IT and CFO; Kevin Tomlinson, JTI regional president CIS; Antoine Ernst, JTI general manager Russia; Dean Gilfillan, JTI general manager Kazakhstan, Central Asia and Mongolia; and Paul Holloway, JTI general manager Caucasus.

Hungary looking at plain packaging and special levy

| June 29, 2015

Hungary is considering the introduction of standardized packaging for tobacco products and the imposition of a special tax on tobacco companies, according to a story in Hungary Today.

A proposal on these matters is expected to be tabled in parliament later this year. But, according to the current plans, the construction of Budapest’s new hospital would be financed by a special tax levied upon tobacco companies.

Standardized tobacco packaging was implemented in Australia towards the end of 2012; Ireland and the UK are in the process of implementing standardized-packaging legislation; and some other countries are considering the introduction of such legislation.

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