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A plague of low flue-cured prices afflicting growers

| April 28, 2015

Lower farm prices are plaguing flue-cured tobacco growers around the world, according to a story in the most recent issue of the India-based BBM Bommidala Group newsletter.

The story reported that prices had fallen by 14 percent in Brazil, 10 percent in Zimbabwe, eight percent in the US and four percent in Tanzania.

And in the Indian state of Karnataka, with flue-cured auctions nearly finished, the average price was said to be down by more than 16 percent on that of the 2013-14 sales season.

With about 100.12 million kg of an estimated 103.50 million kg Karnataka crop having been sold, the average price stood atRs108.68 per kg, down from Rs129.92 per kg during the 2013-14 season.

The highest bid for Karnataka flue-cured this season was Rs169 per kg.

The generally lower flue-cured prices were put down to oversupply.

China to crack down on tobacco advertising

| April 28, 2015

China’s revised Advertisement Law, which has been approved by the Standing Committee of the National People’s Congress, bans tobacco product advertising in the mass media, in public places, and on public transportation, according to a Reuters story relayed by the TMA.

The law, which is due to take effect on September 1, prohibits advertisements that target minors and specifically bans tobacco advertising in schools and educational materials.

It bans also the use of tobacco brand logos and trademarks in support of other products and services.

The law targets also the way in which products other than tobacco are advertised.

Graphic details missing from Kenya’s warnings

| April 28, 2015

In an application before Kenyan High Court Judge Mumbi Ngugi, British American Tobacco Kenya has said it is unable to comply with the country’s Tobacco Control Regulations 2014 because the Ministry of Health has yet to publish technical details of the Act, according to a story by Carol Maina for The Star.

The act requires, among other things, that cigarette manufacturers print graphic health warnings on packs from June 1.

However, the company’s attorney, Walter Amoko, told the court that the petitioner was unable to start making preparations for printing health warnings because it did not know exactly what was required.

The company is opposing the directive on the grounds that it believes it is unconstitutional. ‘The Tobacco Control Act requires the manufacturers to contribute two percent of the value of tobacco products manufactured or imported to the Tobacco Control Fund,’ BAT said in documents submitted to the court. ‘It is discriminatory, unfair, unreasonable, oppressive and punitive to the tobacco industry.’

In response to BAT Kenya’s petition, Health Cabinet Secretary James Macharia said the ministry had no further role to play and that tobacco companies had no option but to comply with the regulations.

Macharia declined to supply documents sought by BAT Kenya, saying what was being sought was before the National Assembly.

“The regulations were tabled in parliament on December 11, 2014, and thus they are a matter that has been seized by the National Assembly and the ministry has no further role to play but await the report from Parliament,” he said.

BAT Kenya’s head of legal affairs Simukai Munjanganja reportedly said the firm would not comply with the regulations in the absence of the technical information sought.

Nine new Seven Stars on Japanese horizon

| April 28, 2015

Japan Tobacco Inc says that it is to introduce across Japan nine redesigned Seven Stars products.

The Seven Stars brand, which includes 14 products in all, is the tobacco sales leader in Japan.

The redesigns, which are due to appear in the middle of June, have targeted the products’ packaging; so there have been no changes to the flavor and taste delivered by the products.

The changes have been made in respect of six regular and three menthol products: Seven Stars 10, Seven Stars 10 Box, Seven Stars 7, Seven Stars 7 Box, Seven Stars 4, Seven Stars 1, Seven Stars Menthol 12 Box, Seven Stars Menthol 8 Box, and Seven Stars Menthol 5 Box.

Growers’ earnings down by 24 percent in Zimbabwe

| April 27, 2015

By day 33 of Zimbabwe’s flue-cured sales, volume sales were down by seven percent from those of the same period of the 2014 season and earnings from those sales were down by 24 percent, according to a story in The Herald.

This season, tobacco growers earned US$129 million after selling 50 million kg of flue-cured, while last season they earned US$170 million from the sale of 54 million kg, the Herald reported, citing Tobacco Industry and Marketing Board figures.

Prices this season have been depressed since the opening day of the 2015 sales season when the average price was US$2.80 per kg, down from US$3.15 per kg the previous season.

The decline in prices has been attributed to the poor quality of the lower leaves as a result of unhelpful weather, but a more likely explanation is probably to be found in the supply/demand situation.

Illegal trade agreement has no liability release clause

| April 27, 2015

The European Commission has said that the 2010 anti-fraud co-operation agreement between British American Tobacco, EU member states and the Commission does not include a clause releasing the company from ‘any civil claims arising out of past conduct relating to illicit trade’.

The Commission was replying to a question by Bart Staes, a Belgian politician and MEP for Flanders.

In a preamble to his question, Staes said that on July 15, 2010, BAT had signed an agreement with the EU to combat the illegal trade in tobacco.

‘A press release from Her Majesty’s Revenue and Customs in the UK suggests that the BAT agreement has a discharge clause that releases the company from past liability for smuggling, noting that “the manufacturers (BAT) are released from any civil claims arising out of past conduct relating to illicit trade”,’ Staes said.

‘On the OLAF website no information is provided on the existence of such a clause.’

Staes asked the Commission to confirm or deny that such a clause exists in the 2010 tobacco agreement concluded between BAT and the EU.

‘The Commission would like to inform the Honourable Member that such a clause does not exist in the 2010 anti-fraud Cooperation Agreement concluded between British American Tobacco, Member States and the EU,’ the Commission said in its written reply.

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