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Greensboro hoping Imperial can reignite KOOL & Co

| June 11, 2015

A lot is riding on whether the majority of the US Federal Trade Commission (FTC) is correct in believing that Imperial Tobacco has the ability not only to maintain but ultimately to grow the market share of the US brands that it is due to acquire tomorrow.

According to a story by Mark Sutter for the Triad Business Journal; when the FTC voted 3-2 in late May to give its blessing to the acquisition of Lorillard by Reynolds American (RAI), one of its key findings was that, by requiring the merged company to divest certain brands and facilities to Imperial, a ‘sufficient’ competitive balance would be maintained within the tobacco industry.

‘Imperial is getting an experienced team with knowledge of brands and customers,’ the approving majority of the FTC commissioners said in a written opinion. ‘The evidence shows that Imperial can grow the market share of these brands through discounting and other promotional activity. Imperial has a successful track record of repositioning cigarette brands in other jurisdictions and growing the market share of those brands.’

The Reynolds/Lorillard merger is due to go ahead tomorrow at the same time as Imperial’s ITG Brands is due to acquire from the merged company the KOOL, Salem, Winston and Maverick cigarette brands, along with the blue eCigs electronic cigarette brand and other assets.

Sutter said that, in Greensboro, North Carolina, much depended on Imperial’s making a success of these brands.

Under the deal, the UK-based company was acquiring Lorillard’s headquarters on Green Valley Road and its Market Street manufacturing plant, and it was taking on its local work force of nearly 2,000.

Lorillard had not only been one of the city’s biggest private employers, but also one of its biggest property taxpayers. Its employees were annually among the most generous contributors to the United Way and other causes.

In her written dissent, FCT commissioner Julie Brill laid out the perils and challenges that lie ahead for Imperial given that, as expected, the deals go ahead.

She pointed out that while Imperial was getting only RAI and Lorillard’s weakest brands, Reynolds was picking up Newport, the country’s top-selling menthol cigarette.

Winston, KOOL and Salem were declining and unsuccessful, with a combined market share that had gone from 14 percent in 2010 to eight percent in 2013.

Finally, Brill argued that while Imperial was one of the largest tobacco companies worldwide and had had success overseas in reviving and repositioning brands, its track record in the US so far was poor.

In 2007, she said, it had bought another tobacco company, Commonwealth, and at that time had expressed aspirations to grow its brands in the US. Instead, Commonwealth’s market share had dwindled since that acquisition.

The full story is at:

Indonesia unlikely to ratify the FCTC any time soon

| June 11, 2015

Indonesia seems unlikely any time soon to ratify the World Health Organization’s Framework Convention on Tobacco Control (FCTC).

According to a Tempo story, Widyastuti Soerojo, the chairperson of the Tobacco Control Special Agency and the Association of Indonesian Health Experts (IAKMI), has questioned President Joko ‘Jokowi’ Widodo’s commitment to tobacco control.

“I can say that the tobacco control efforts will be harder in Jokowi’s tenure,” Widyastuti said during a workshop on tobacco control in Jakarta on Tuesday. Joko Widodo has been president of Indonesia since October last year.

Widyastuti expressed the view that the government had not been supportive of the public’s health but had rather focused on cigarette-industry profits.

Meanwhile, Hakim Sorimuda Pohan, an executive of the National Commission for Tobacco Control, said that Jokowi had shown his support for the cigarette industry since the latter took office.

A week after being named by Jokowi as Industry Minister, Saleh Husin had visited Djarum, one of the largest cigarette producers in the country, to convince the company that the government would not ratify the FCTC.

The reason was that the FCTC would threaten the cigarette industry and tobacco farmers, Hakim added.

Court wants growers shifted away from tobacco

| June 11, 2015

The High Court of Karnataka state, India, has directed the Indian and state governments to co-operate in jointly framing a policy for encouraging tobacco growers and workers to shift to other industries, according to a story in the latest issue of the BBM Bommidala Group newsletter.

The order is directed particularly at those working in the bidi sector.

And the court wants the governments to step up their actions aimed at reducing the consumption of tobacco.

Acting Chief Justice Subhro Kamal Mukherjee and Justice Ram Mohan Reddy passed the order while considering a PIL (Public Interest Litigation) petition filed by the Cancer Patients’ Aid Association.

The petition claimed that instead of reducing the production of tobacco, the authorities were promoting it by offering subsidies.

The government counsel apparently claimed that no subsidies were being given to tobacco growers, but that ‘a small amount is being assigned as incentive to licensed tobacco farmers’.

PMI declares quarterly dividend

| June 11, 2015

The board of directors of Philip Morris International today declared a regular quarterly dividend of $1.00 per common share, payable on July 10 to shareholders of record as of June 25.

The ex-dividend date is June 23.

Beijing smoking ban will boost vapor, says e-cig inventor

| June 10, 2015

Hon Lik, the Chinese inventor of the modern e-cigarette, has predicted that Beijing’s new public-places smoking ban will prompt many consumers to switch from smoking to vaping. Although China’s e-cigarette market is still relatively small compared to those in other countries and smoking rates in China remain high, the ban—which took effect June 1—could be the push smokers need to quit combustible cigarettes.

Anyone who violates the ban on smoking in restaurants, hotels, hospitals, schools and certain outdoor public places will be fined CNY200 ($32.35). Other cities in China are expected to follow suit by implementing similar smoking bans as governments seek to improve public health.

AMA remains opposed to e-cig’s smoking-cessation claims

| June 10, 2015

The American Medical Association (AMA) has announced a new policy that will further strengthen its support of the regulatory oversight of e-cigarettes. The update is an extension of the organization’s existing policy, which calls for all e-cigarettes to be subject to U.S. Food and Drug Administration regulations that apply to cigarettes and smokeless tobacco products.

The AMA’s new policy calls for laws and regulations that would set the minimum legal age to buy e-cigarettes and e-liquids at 21; mandate child-resistant containers for e-liquids; and enforce laws against the sale of tobacco products to minors. The existing policy also seeks a ban on claims that e-cigarettes are effective tools for smoking cessation.

“Improving the health of the nation is AMA’s top priority, and we will continue to advocate for policies that help reduce the burden of preventable diseases like cardiovascular disease and type 2 diabetes, both of which can be linked to smoking,” said AMA president Robert M. Wah.

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