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India considers raising legal age to 25

| August 26, 2014

India’s national government is considering raising the legal age for tobacco use from18 to 25, according to a story in the latest issue of the BBM Bommidala Group newsletter.

The Minister of Health, Harsh Vardhan, constituted a committee last month to suggest changes to the country’s Cigarettes and Other Tobacco Products Act 2003, and the committee’s report is due by the end of this month.

Other measures believed to be under consideration are a hike in the penalties for smoking in public places where such activity is banned, eliminating branding from cigarette packs, increasing the size of health warnings and banning tobacco advertisements at point of sale.

Meanwhile, the Supreme Court of India has issued a notice to the Indian government and all states and union territories calling for a complete ban on cigarettes and bidis.

Following the hearing of a Public Interest Litigation, a bench including the Chief Justice of India, R.M. Lodha, directed the government to respond to the petition that indicated the country was spending about Rs300 billion annually on treating tobacco diseases in both the public and private health sectors.

The tobacco-related health costs accounted for 25 per cent of total public spending on health and much more than the revenue earned from tobacco.

Spain’s sales almost halved in five years

| August 26, 2014

Cigarette sales have dropped dramatically in Spain during the past five years, according to an El Pais story quoting Finance Ministry and cigarette industry figures. More than 90 billion cigarettes were sold legally in Spain half a decade ago, but last year those sales were down to 47.5 billion, a drop of 47 percent.

The trend was attributed to tougher anti-smoking legislation, tax hikes and a loss of consumer purchasing power as a result of the economic crisis.

The downturn in sales of licit products has led to a spike in tobacco smuggling and a search by consumers for cheaper alternatives, such as roll-your-own cigarettes and pipe tobacco.

Another tobacco trade surplus likely

| August 26, 2014

South Korea has recorded a tobacco-trade surplus every year since 2004, and that surplus looks set to increase this year, according to a story by The Hankyoreh Media Co.

This is despite the fact that the value of tobacco imports increased by about 59 percent from US$249 million during 2003 to US$395 million last year. Between 2003 and 2013, the value of South Korea’s tobacco exports more than doubled from US$237 million to US$553 million.

In 2003, the country recorded a trade deficit in tobacco trade, but since then it has recorded a surplus that has risen nearly six-fold from US$27 million during 2004 to US$158 million last year.

And already during the first half of this year, the country has recorded a surplus of US$123 million. The United Arab Emirates accounts for 31 percent of South Korea’s tobacco exports.

Imperial sales see small decline

| August 19, 2014

Imperial Tobacco Group reported a small decline in nine-month revenue on Aug. 18 and said it was on course to complete its acquisition of a pack of U.S. cigarette brands from Reynolds American and Lorillard, according to CBS News.

Imperial, maker of JPS and Gauloises, said sales fell 1 percent to GBP4.75 billion ($7.95 billion) in the nine months to June 30. It said its guidance of “modest” growth in adjusted earnings per share remained unchanged.

Imperial last month agreed to buy a number of cigarette brands including Winston, Kool and Salem from Reynolds and Lorillard for $7.1 billion as part of a planned $25 billion merger between the two U.S. companies. In a surprise move, the deal also included Blu e-cigarettes, the No. 1 selling brand in the U.S.

Added to its existing portfolio, the new brands would make Imperial the third-largest player in the U.S. tobacco market–if the deal is successful. Imperial said it expected to complete the transaction in 2015, without providing more specific details.

“I’m pleased with the continued improvement in the quality of our sales growth,” said Chief Executive Alison Cooper.

Warnings have graphic effect on market

| August 15, 2014

Graphic health warnings that were applied to cigarette packs from June are already starting to take their toll on sales in Indonesia, according to a story in The Jakarta Post.

Muhammad Guntur, the owner of the Janur Kuning cigarette factory in Kudus, Central Java, was quoted as saying that his cigarette sales had fallen by 10 percent since the government regulation requiring the inclusion of pictorial health warnings had come into force.

He put the decline down to consumers’ discomfort at seeing the images of cigarette-caused health problems.

Consumers, he added, had tended to shift to lower-quality cigarettes, which were exempt from pictorial-warning requirements.

But Guntur doesn’t think that smokers will be put off for long. “We are sure that such a decline is temporary in nature because smokers will eventually get used to seeing such horrible images,” he said.

Cigarette manufacturers have been given until August 24 fully to implement the pictorial-warning requirement.

Ireland under pressure on plain packs

| August 15, 2014

Associations representing German advertisers and brand owners have written to the Irish ambassador in Berlin saying plans for standardized tobacco packaging would, if implemented, have ‘devastating’ economic implications for Irish companies, according to a story by Juno McEnroe for the Irish Examiner.

The associations have warned also that the tobacco market would be ‘swamped’ with counterfeit products and that this would ‘endanger’ people’s health.

And the German Brands Association has apparently told the ambassador that ‘banning brands’ on tobacco goods would upset consumers and might well lessen their acceptance of the health warnings.

Meanwhile, the Irish Prime Minister, Enda Kenny, is facing pressure from German MEPs and other EU politicians to scrap Ireland’s plans for standardized packaging for tobacco products.

The full story is at: http://www.irishexaminer.com/analysis/german-brands-turn-up-heat-on-plain-cigarette-packaging-279202.html.

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