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Volume sales down at JT and JTI

| October 30, 2014

Japan Tobacco Inc.’s domestic cigarette sales volume during the six months from April to September, at 53.5 billion, was down by 10.2 percent on that of April-September 2013, 59.6 billion.

In announcing this morning its consolidated results, JT said that volume sales had suffered a temporary slowdown following a tax hike in April.

Core revenue had declined by 7.0 percent (from ¥335.8 billion to ¥312.4 billion) and adjusted operating profit had declined by 7.4 percent (from ¥131.2 billion to ¥121.5 billion) due to the lower sales volume, partly offset by cost reductions.

JT said that it had taken steps to strengthen brand equity, including the launch in July of four new Seven Stars variants and, in September, of two Peace variants.

Mervius had shown steady market share growth driven by the Premium Menthol Option line and, overall, market share had recovered from 59.1 percent in April to 59.9 percent in April-September.

Meanwhile, Japan Tobacco International’s total cigarette and cigarette-equivalent shipment volume during the six months from January to June, at 190.6 billion, was down by 5.6 percent on that of January-June 2013, 202.0 billion.

Within that total, GFBs (global flagship brand) shipment volume was down by 4.0 percent to 123.0 billion.

The total and GFB volume declines were blamed on industry contraction in France, Russia and Spain, on first-quarter trade-industry adjustments in some markets, and on intense price competition in the ‘value’ segment of Turkey’s market.

The company reported that its year-on-year market share had increased in the key markets of France, Spain, Turkey and the UK, while, in Russia, GFBs’ share had continued to increase and their value share had been stable.

JTI’s core revenue and adjusted operating profit in US dollars at constant foreign exchange grew by 4.2 percent and 11.7 percent respectively, with robust price/mix compensating for the overall volume decline.

Core revenue and adjusted operating profit on a reported basis increased by 0.6 percent and 3.3 percent respectively. And as a result of the currency depreciation against the US dollar, core revenue and adjusted operating profit in Japanese Yen grew by 7.6 percent (from ¥559.7 billion to ¥602.0 billion) and 10.4 percent (from ¥199.2 billion to ¥219.9 billion) respectively.

Including the results of its other businesses, JT’s April-September revenue increased by 1.3 percent to ¥1,174.4 billion and its adjusted operating profit increased by 3.0 percent to ¥328.3 billion.

Operating profit was down by 11.6 percent to ¥307.1 billion and the profit attributable to the owners of the parent decreased by 7.5 percent to ¥219.3 billion.

JT’s president and CEO, Mitsuomi Koizumi, said that against the backdrop of significant industry contraction, JTI’s business fundamentals remained strong, driving market share gains in most key markets. “Pricing continues to be the main driver of earnings growth and the decline in total shipment volume has slowed down,” he said. “Our international business is on track for a double-digit profit increase.

“In Japan market share has steadily recovered from the tax increase impact. While the operating environment is increasingly competitive, we strive to achieve further market share gains through brand equity strengthening initiatives.”

JTI reported separately that its total cigarette shipment during January to September, at 296.6 billion, was down by 4.9 percent on that of January-September 2013, with GFB volume down by 2.2 percent to 194.3 billion.

Trade treaty under further attack

| October 30, 2014

Medical specialists in New Zealand are warning that health outcomes for Māori will suffer a setback if the government signs up to the Trans Pacific Partnership (TPP), according to a story by Laura Bootham for Radio New Zealand.

They are demanding that the government release details of the TPP negotiations so that it can be independently reviewed by the sector.

Ten health organisations and prominent specialists argue that the government is being negligent if it does not take into account its potential impact on Māori.

Oncologist George Laking, of Whakatōhea, said that under the agreement companies, such as tobacco companies, could sue the government if they believed their intellectual property rights were at risk. But that would put Māori at risk, he added.

Laking said health reforms such as those promoted by former Maori Party co-leader Tariana Turia, who advocated the introduction of standardized tobacco packaging, could be threatened.

He said international trade treaties had frequently been used by commercial interests that worked against public health interests. “… we’ve particularly seen this with the tobacco industry taking legal action, for example, against the government of Australia over previously signed trade treaties when the country wanted to introduce plain packaging,” he said.

“Any lawsuit that had a chilling effect on tobacco control measures could jeopardise the Smokefree 2025 target which is very important in terms of reducing smoking amongst Māori.”

Laking complained that the process was not transparent to civil society organisations. Only participating governments and industry interests had been party to the draft documents; so it hadn’t been possible to scrutinize those documents independently, from the point of view of indigenous health and indigenous sovereignty.

The full story is at: http://www.radionz.co.nz/news/te-manu-korihi/258085/maori-health-fears-under-tpp.

Poland recognizes Imperial’s contribution

| October 30, 2014

Imperial Tobacco’s subsidiary in Poland has been presented with an award recognizing the significant contribution it makes to the nation’s economy. In a note posted on its website, the company said that Imperial Tobacco Polska Manufacturing (ITPM) was named an ‘Ambassador of the Polish Economy’.

Organised by the country’s Business Centre Club in conjunction with the Polish government, the awards celebrate the contribution made by international businesses.

The award in the Exporter category was accepted by corporate and legal affairs manager Poland, Grażyna Sokołowska, at a ceremony held at the Ministry of Foreign Affairs in Warsaw.

“I’m delighted to accept this award on behalf of ITPM because it recognises the value which we bring to the country’s economy,” said Sokołowska.

“It also recognises us as a responsible business making a valuable contribution to the social fabric of the nation through our various community projects.”

US town’s health board looks at sales ban on all tobacco and nicotine products

| October 29, 2014

The health board of a small town in the US is studying a proposal to prohibit the sale of any product with tobacco or nicotine, according to a WFXT-TV FOX25 report quoting a Boston Globe story.

If the proposal is accepted, Westminster (population 7,277 in 2010 according to Wikipedia), in Worcester County, Massachusetts, will become the first community in the US to ban all tobacco sales.

The list of banned items will include cigarettes, chewing tobacco and electronic cigarettes.

The board’s proposal reportedly cites research that suggests nearly 500,000 adults in the US die prematurely each year because of smoking.

The board said also that it wanted to stay ahead of tobacco companies’ slick marketing and new products that target young people, such as 69-cent bubble-gum-flavored cigars.

Store owners are reportedly furious and are circulating petitions to block the proposal, saying banning this legal product would drive them out of business.

A public hearing on the plan has been scheduled for November 12, when residents will be able to voice their opinions.

In order for the ban to be enacted, the three-member board of health reportedly has to take a vote on it.

Growing resistance to trade agenda

| October 29, 2014

An Australian ministerial statement claiming ‘significant progress’ on the proposed Trans-Pacific Partnership negotiations but with no details or further meeting plans shows that the Australian government might be making shameful concessions in exchange for dubious market access deals, according to a Scoop story quoting Dr. Patricia Ranald, co-ordinator of the Australian Fair Trade and Investment Network (AFTINET).

Ranald said a recently leaked draft text showed the US still wanted longer and stronger patents on medicines, more internet controls, and special rights for foreign investors to sue governments over changes to domestic laws.

“It is significant that, although Australia hosted the negotiations, the meeting was chaired by the US trade representative, exerting maximum pressure for concessions to the US agenda,” she said.

“There is growing resistance to this agenda, and to the secrecy of the negotiations, from Australian civil society, as shown not only by our network of 60 community groups, but by recent statements from organisations like MSF, (Doctors without Borders) and the Australian Medical Association.

“US proposals will result in extension of the current twenty-year patents on medicines, meaning even more delays in the availability of cheaper generic medicines. This will lead to increased costs to government subsidies through the PBS [Pharmaceutical Benefits Scheme] in Australia, and pressure for higher prices at the chemist.”

Ranald said Trade Minister Robb had been desperately trying to discredit critics of the TPP, but these voices were too strong.

“The inclusion of Investor-State Disputes (ISDS) in the TPP would mean that US companies will be able to sue Australian governments if they allege that changes to domestic laws will ‘harm’ their investment,” she said.

“John Howard [Australian prime minister, 1996-2007] did not agree to this in the Australia-US free trade agreement, which is why the Philip Morris tobacco company had to find an obscure Hong Kong investment agreement with ISDS to sue our government over our plain packaging legislation.

“ISDS in the TPP would give US companies open slather to sue Australian governments…”

Clampdown on smokers in Malaysia

| October 29, 2014

One hundred and seventy nine people have been fined so far for smoking tobacco in air-conditioned premises, shops and shopping complexes, under a clampdown by Malaysia’s Health Ministry that started on September 30, according to a Bernama report.

The health director was reported to have said the operations included checks on 888 air-conditioned premises.

He said the operations were conducted ‘to protect the public from the dangers of passive smoking especially in air-conditioned premises’, and to provide a reminder to smokers not to smoke in prohibited areas.

The smokers were fined RM250 each and 17 owners of air-conditioned premises were each fined the same amount for failing to display no-smoking signs or for displaying signs that did not meet the necessary specifications.

Those who fail to pay their fines within the specified period will be charged in court and, if found guilty, could be fined up to RM10,000 or sentenced to jail for up to two years.

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