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Tobacco tax revenues diverted to paintball activities

| January 27, 2015

Taiwan Solidarity Union (TSU) lawmakers yesterday accused the government of using tobacco tax revenues to sponsor festivals and print calendars instead of focusing on smoking prevention and health promotion, according to a story in the Taipei Times.

“Each year, the government collects about NT$20 billion [US$638.2 million] in tobacco taxes, which are supposed to be spent on smoking prevention, health promotion and relevant studies,” TSU caucus whip Lai Chen-chang told a press conference in Taipei.

“While 70 percent of the money is spent in these areas, the other 30 percent has become some sort of pocket money for different government agencies to spend on unrelated matters.”

Lai cited a private foundation headed by a former Chinese Nationalist Party (KMT) legislator that he said had been allocated tobacco-tax funds several times to print calendars and a gourmet guidebook.

“The money is supposed to be spent on smoking prevention and other health-related activities, but these publications are not only unrelated, but also carried the names of KMT candidates,” Lai said.

“It is just unbelievable how public money has become funding for a particular party’s election campaigns.”

Lai said the government had used the money also to sponsor the Dragon Boat Festival, the Lantern Festival and paintball activities.

E-cigarettes to be confined to carry-on baggage

| January 27, 2015

Airline passengers should add electronic cigarettes to the list of items that may not be stored in their checked luggage, according to a story by Alan Levin for Bloomberg.

The US Federal Aviation Administration (FAA), which already bans flammables and explosives in checked baggage, is now warning airlines about the fire risk from electronic cigarettes.

And while the safety alert is voluntary, typically most airlines follow such guidance.

Levin said electronic cigarettes mainly used lithium cells to heat liquid nicotine into a vapor, and the FAA advisory was the latest to point out the dangers of such battery-powered devices.

‘It cited two recent fires started by e-cigarettes, including one in the cargo hold of a plane at Boston’s Logan Airport in August and a Jan. 4 incident where luggage sitting in the baggage area at Los Angeles International Airport burst into flames,’ he said.

The FAA stopped short of banning the items in carry-on luggage, saying that if a fire were to break out in the passenger cabin, it would be spotted and extinguished faster than if it were in the cargo hold.

Buyers want only flavor tobacco from Zimbabwe

| January 27, 2015

Preparations for Zimbabwe’s 2015 flue-cured marketing season have started with merchants indicating they will not be buying low-grade tobacco this season, according to a story by Elita Chikwati for the Zimbabwe Herald.

The Tobacco Industry and Marketing Board chairperson, Monica Chinamasa, was quoted as saying that buyers wanted good cured leaf and would not accept scrap and primings because this sort of tobacco could be obtained cheaper elsewhere.

“Farmers are aware of this position and they should present a high quality crop to get good prices,” she was quoted as saying.

“Merchants want the Zimbabwean tobacco for its unique flavor. We produce a good flavor because of the good climatic conditions.”

Chinamasa said the TIMB had yet to decide on an opening date for sales, but added that the auction floors had already registered to operate this year.

KT&G profit soars ahead of tax hike

| January 26, 2015

KT&G Corp. reported net income of KRW813.8 billion ($751.9 million) in 2014, up from KRW559.3 billion in 2013, reports The Korea Times.

Operating profit went up 15.6 percent on-year to KRW1.17 trillion last year, and sales gained 7.6 percent to KRW4.11 trillion.

The solid performance was attributable to increased sales in the local market ahead of a sharp rise in the tobacco tax, which nearly doubled the average price of cigarettes to KRW4,500 won per pack starting Jan. 1.

KT&G’s net profit soared 121.3 percent to KRW174.4 billion in the October-December period from a year ago, the company said.

Operating income gained 28.9 percent on-year to KRW287.2 trillion in the last three months, and sales rose 6.4 percent to KRW1.05 trillion, it said.

Health fears voiced over loss of EU leaf from blends

| January 26, 2015

In asking a number of questions about the state of leaf tobacco production in the EU, the Hungarian member of the European parliament, Norbert Erdős, has again raised the issue of whether certain types of cigarettes are less harmful than are others. Such issues are more usually raised in respect of genuine as opposed to counterfeit cigarettes.

In a preamble to three written questions for the European Commission, Erdős said that it was well-known that EU producing countries grew smaller quantities of better quality tobacco than did the major exporting countries of the developing world. He said that production in the EU was more stable and the tobacco more easily traceable. And he said that these characteristics mitigated the health consequences of smoking.

‘As part of the reform of the CAP [Common Agricultural Policy], contrary to the opinion of the European Parliament, the Commission has brought about a total halt to EU support for tobacco production from 2015,’ Erdős wrote. ‘European tobacco production, which takes place under controlled conditions, will fall significantly, and so imports of tobacco products from outside the EU, produced with fewer controls, as well as illegal imports, may increase significantly.

‘I therefore have the following questions for the Commission:

  1. ‘What effect will the halting of EU subsidies for tobacco production have on smoking and on public health? How does the Commission propose to prevent imports of less tightly controlled or illegally imported tobacco from gaining ground?
  2. ‘How will the Commission guarantee that generic (neutral) packaging does not lead to a price war between processers, who will do anything to maintain their market position, pushing down procurement prices for raw materials, thus squeezing out better quality tobacco?
  3. ‘How does the Commission propose to resolve the issue of employing the (mostly unskilled) people who have lost their jobs thanks to the phasing out of tobacco production?’

According to Erdős, tobacco production provides a livelihood to 80,000 growers and employs 350,000 seasonal workers every year, most of them in poor regions of Bulgaria, Greece, Hungary, Italy, Poland, Romania and Spain.

NZ tax hike lifts interest in home-grown tobacco

| January 26, 2015

In the city of Tauranga, New Zealand, smokers who grow their own leaf tobacco are making money by using websites and social media pages to sell tobacco plant seeds to others looking to reduce their costs of smoking following a recent 10 percent tax hike.

According to a story by Rebecca Savory for the Bay of Plenty Times; while it is illegal in New Zealand to sell or gift home-grown tobacco plants, people can legally grow tobacco for their own use and sell and buy the seeds.

Individuals may process up to 15 kg of home-grown tobacco per adult per year for personal use. This equates to between 50 and 100 cigarettes per person per day, depending on tobacco content.

Savory reported that searches for tobacco seeds on Trade Me had recently increased by 10 percent on those of a year ago and that tobacco seeds comprised the top tobacco-related search during the past 12 months.

Commercial tobacco manufacturers are unlikely to take fright, however. Searches for tobacco seeds in New Zealand routinely increase through December and peak in the middle of January.

And interest in growing tobacco at home regularly increases with tobacco price hikes.

The main problem is that it is difficult to process a palatable tobacco product from home grown plants.

Whether or not home grown tobacco offers a health benefit or deficit is another story.

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