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RAI declares quarterly dividend

| July 18, 2014

Reynolds American’s board of directors yesterday declared a quarterly cash dividend on the company’s common stock of $0.67 per share ($2.68 per share annualized).

The dividend is payable on October 1 to shareholders of record on September 10.

In making the dividend announcement, RAI said that it was the 41st consecutive quarterly cash dividend that the company had declared since it became a public company on July 30, 2004.

‘RAI’s policy is to return about 80 per cent of the company’s current-year net income to shareholders in the form of dividends,’ the company said.

Policies plainly not working in England

| July 17, 2014

Conservative candidates in marginal seats, including public health minister, Jane Ellison, risk electoral defeat because of the government’s nanny state policies, according to a new survey* of English voters commissioned by the Democracy Institute, which describes itself as a politically independent think tank.

Conducted before and after this week’s cabinet reshuffle, the poll was said to have found tepid Tory support in much of England, especially in regions containing the most marginal seats. Conservative candidates continued to be threatened by a relatively popular UKIP, a second choice for a growing number of voters.

“These results suggest UKIP’s outspoken opposition to many of the government’s public health proposals has the potential to shift, in small but critical ways, the electoral sands,” said Patrick Basham, who directed the survey.

“David Cameron’s tenuous hold on the keys to No 10 is threatened, in part, by voters who tell us they’re tired of government telling them what, how, and when they should eat, drink, and smoke,” added Basham, who has conducted campaign and policy polls in the UK, East Africa, Australia, North America, and the Middle East.

The poll found that a majority of voters – 54 per cent to 38 per cent – opposed the introduction of plain cigarette packaging. And it found that a plurality of voters (42 per cent) was less likely to vote for a party that supported plain packaging. More than two-thirds (68 per cent) feared that plain packaging would encourage smuggling, and one-third (34 per cent) of smokers admitted that plain packaging would make them more likely to buy their cigarettes on the illicit market.

Meanwhile, a majority (51 per cent) thought the tobacco industry made a negative contribution to the economy, while 53 per cent said the industry also played a negative societal role.

“Our poll surprisingly finds plain packaging’s as unpopular as the tobacco industry itself,” said Basham. “While Big Tobacco remains a political pariah, plain packaging could prove an electoral albatross, in tandem with other nanny state-style initiatives, weighing down the Conservative vote.”

*The fieldwork for the survey of a randomly selected national telephone (landline and mobile) sample of 1,050 English voters (including 500 voters in marginal seats) was conducted by the Democracy Institute’s polling unit from July 9 to 11 and July 14 to 15, 2014.

The national poll has a margin of error of +/- 3% (95% confidence interval). The sub-sample of marginal seats has a margin of error of +/- 4% (95% confidence interval). The sub-sample of smokers has a margin of error of = +/- 6.5% (95% confidence interval).

To ensure a representative sample, the results were weighted for key demographic variables including, but not limited to, gender, age, education, income, region, and mobile phone-only households.

Only 12.8 per cent of Australians smoking

| July 17, 2014

According to a US Campaign for Tobacco-free Kids story, Australian health officials yesterday reported that Australia’s smoking rate had dropped by more than 15 per cent – from 15.1 per cent in 2010 to 12.8 per cent in 2013 – ‘following the implementation of a landmark law requiring that cigarettes be sold in plain packaging’.

And a story by Harriet Alexander for The Age reporting the same drop in the incidence of smoking seemed to make the point that the smoking decrease had coincided with the introduction of standardized tobacco packaging laws.

Standardized tobacco packaging was introduced in Australia on December 1, 2012.

Geoff Neideck of the Australian Institute of Health and Welfare, which conducts the survey (National Drugs Strategy Household Survey) every two to three years, was quoted in The Age as saying that the results continued a longer trend that had seen smoking rates halved since 1991.

Threat to single cigarette sales in India

| July 17, 2014

The Indian Health Ministry is considering whether it should ban the sale of single cigarettes, according to a story in the latest issue of the BBM Bommidala newsletter.

In fact, such a ‘ban’ might be a case of enforcing one already in place since the ministry said the country’s Tobacco Act prohibited the sale of any tobacco products not in a package incorporating mandatory health warnings and tar- and nicotine-delivery information.

The ministry said that single-stick sales provided an added attraction for underage people and the poor, who could not afford to buy cigarettes by the pack.

If the Indian government doesn’t act, the government of the Indian state of Himachal Pradesh might. It, too, is considering banning the sale of single cigarettes,

The Health and Family Welfare Minister, Kaul Singh Thakur, said cigarettes sold by the stick did not carry health warnings and were often bought by school and college students who could not afford to buy full packs.

Meanwhile, the state is planning to increase the VAT on cigarettes from the existing 36 per cent to 50 per cent.

Last year, VAT was increased on cigarettes and cigars from 18 per cent to 36 per cent, and on bidis from 11 per cent to 22 per cent.

Zimbabwe grows biggest crop in 14 years

| July 17, 2014

Zimbabwe’s flue-cured production has surpassed 210 million kg for the first time in 14 years, according to a story in NewsDay.

The last time output surpassed 210 million kg was in 2000 when it reached 227,726,000 kg.

By July 15, the day of mop-up sales, 210,598,690 kg had been sold for $668,002,625; at an average price of $3.17.

During the same period of last year, 159,852,776 kg had been sold for $590,116,320; at an average price of $3.69.

The 14.9 drop in average price is likely to be of concern to farmers because a growing proportion of the crop is now sold under contract (the figure is already more than 50 per cent) rather than across the country’s three auction floors, and contract prices have generally been higher than auction prices.

In May, representatives of the auction floors told the Parliamentary Portfolio Committee on Agriculture, Lands and Mechanisation that in the absence of funding from banks, farmers had to grow their crops under contract.

“Banks stopped funding farmers and it is contractors that fund them, which kills business at auction floors,” Premier Tobacco Floors managing director, Philemon Mangena, told the committee.

Meanwhile, Tobacco Industry and Marketing Board statistics show that 106,456 growers have so far registered to grow the 2014-15 crop, up from the 91,278 who had registered up to the same time last year.

SE approval for S&M’s Riverside

| July 16, 2014

S&M Brands has received substantial equivalent orders from the U.S. Food and Drug Administration on its redesigned Riverside cigarette brand. S&M Brands is one of the few companies, behind Lorillard, that has navigated the Tobacco Control Act to obtain approval of a new cigarette tobacco product, and the first to obtain approval of a full line of king and 100s in regular and menthol.

“We are treating this as a milestone in the industry, for our company and the industry as a whole,” says Steven Bailey, president, S&M Brands.

“Introducing a new tobacco product under FDA regulation is an arduous, technical and scientific process that takes substantial time and resources. We felt, however, that improving our Riverside product was paramount for our adult customers, so our excellent in-house team, together with our outside consultants, worked tirelessly with the FDA to navigate the substantial equivalent process.

“We believe this achievement demonstrates that our company is staffed up for regulatory compliance to be around for our distributor and retail partners and customers for the long haul.”

The redesigned Riverside brand will be distributed to retailers and available to consumers by Oct. 15, 2014.

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