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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 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

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

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.

Singapore display ban would bring host of problems

| June 29, 2015

Retailers in Singapore have said that a proposal to ban shops from displaying cigarettes will result in a host of problems, according to a story by Melissa Lin for the Straits Times.

Retailers are expecting to encounter confusion, longer transaction times and added business costs should the rule be implemented.

But most business owners said it was unlikely to affect sales much.

Under the proposed amendments to the Tobacco (Control of Advertisements and Sale) Act, retailers would have to keep tobacco products out of the sight of customers, in opaque storage units.

The measures were not practical given that shops sold more than 100 types of cigarettes, said Hong Poh Hin, vice-chairman of the Foochow Coffee Restaurant and Bar Merchants’ Association.

“Now, customers can point at a cigarette pack and we know where it is,” he said. “But if there’s a curtain covering the packs and my worker is new, how will they know where to find the correct pack? It’s not efficient.”

Another amendment to the Act will allow retailers to show, upon request, text-only price lists of tobacco products, which are currently prohibited because they are deemed to be a form of advertisement.

Alan Tay, chairman of the Singapore Mini Mart Association, would like to see the authorities go one step further. He said they should allow brand logos to be put on the price lists. Many mini-mart employees were Chinese-educated and might not be able to match the spoken brand names to the ones on the packs. “Quarrels are bound to happen when workers sell the wrong pack to customers,” he said.

Lilienne Chong, merchandise director at 7-Eleven, said many of its franchisees were small and medium-sized enterprises “already facing a very challenging operating environment”. “While we are fully supportive of the fundamental objectives behind the display ban… business will be affected,” she said.

Meanwhile, a 30-year old manager who has been smoking since he was 15 and who has been trying to quit smoking for seven months, said the measures were not good enough. “I don’t need to see the pack to crave a cigarette,” he said. “What matters most is the smell.”

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