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BAT looking for new auditors in wake of PwC lawsuit

| March 3, 2015

British American Tobacco said yesterday that it had launched a competitive tender to appoint new external auditors for 2015 onwards. Three firms had been invited to take part in the tender process: Deloitte, Ernst & Young, and KPMG.

PricewaterhouseCoopers (PwC), which had been BAT’s auditors since the tobacco company listed on the London Stock Exchange in September 1998, was not seeking re-appointment as the group’s auditors at the 2015 AGM.

‘This situation has arisen as a result of proposed litigation by a Group subsidiary against PwC,’ BAT said in a note posted on its website. ‘The potential claims against PwC, which have been assigned to the Group, arose from work carried out by PwC in relation to the audit of the accounts of a third party. These claims do not concern the audit of any BAT Group company.’

Writing in The Independent, Simon Neville said BAT had ‘dumped’ its auditors PwC and taken them to court over a potential $1bn (£651m) US environmental damages bill.

Neville’s piece is at: http://www.independent.co.uk/news/business/news/british-american-tobacco-drops-and-sues-pwc-over-pollution-scandal-10081476.html#.

Dominican Republic worried about plain-packs plans

| March 2, 2015

The Dominican Republic last week voiced concerns at the World Trade Organization (WTO) about the proposed introduction of standardized tobacco packaging in Ireland and the UK, according to a CAN story.

In a statement at the WTO’s Council for Trade-Related Aspects of Intellectual Property Rights (the TRIPS Council), the Dominican Republic’s Ambassador to the WTO, Luis Manuel Piantini, noted the UK government’s announcement of its intention to submit a standardized packaging proposal to parliament for approval before the UK elections in May.

Piantini also noted recent statements by the Irish government that it would continue its consideration of standardized packaging legislation in the Irish parliament.

Since Piantini made his statement, standardized packaging legislation has been passed in Ireland and now awaits being signed into law by the president, after a technical vote in the upper house.

The Dominican Republic is currently in dispute over standardized packaging regulations with Australia, which is the only country to have introduced such rules.

Since December 1, 2012, Australia has required that all tobacco products be sold in packaging designed on behalf of the previous Labor government to be as ugly as is possible. Packs are hugely dominated by graphic health warnings, are otherwise a standard olive color, have no logos or other design features, and have brand and variant names in a standardized font and position.

‘By stripping our brands and trademarks from packaging, the [Australian] policy precludes our tobacco producers from differentiating their premium products from competitors in the marketplace, which has been extremely detrimental to our industry,’ said Dr. Katrina Naut, the Dominican Republic’s director general of foreign trade, in a press statement issued through GlobeNewswire in December.

‘It is our hope that this case will be swiftly resolved at the WTO before other countries consider similar policies that have no impact on public health goals while at the same time putting the livelihood of our economy at risk.’

Italy’s new tax said to hand advantage to big boys

| March 2, 2015

Electronic cigarette firms in Italy have said that a new tax that doubles the price of e-liquid refills will hurt their industry while unfairly helping major tobacco companies such as Philip Morris International, according to a story by Sara Ledwith and Martinne Geller for Reuters.

The tax, which was adopted in January, is set at half the rate of that applied to traditional cigarettes.

The controversy centers on the fact that the lower rate is applied to both electronic cigarettes and to products that contain tobacco that is not burned during consumption, such as Marlboro HeatSticks, which PMI is launching in Italy.

Electronic cigarette companies say applying the discount to tobacco products is unfair and is designed to help the major tobacco companies.

The electronic cigarette companies and industry experts say also that the method of calculating the tax is too complicated and gives an unfair ‘discount’ to PMI’s products.

“It’s unjust,” said Massimiliano Mancini, president of ANAFE-Confindustria, a national trade association of electronic cigarette and e-liquid producers. “It’s clear that this legislation has been drafted for other interests than just taxing the e-cigs.”

Philip Morris would not comment on whether the new law gave it an advantage. “We have shared our views with the government via public hearings just like our competitors and others,” a spokesman told Reuters by e-mail.

Davidoff acquires farmland, announces new factory

| March 2, 2015

Oettinger Davidoff said on Friday that it had acquired farmland in Nicaragua’s Condega region and in the Jamastran valley of Honduras.

The company said too that it had acquired land for the purpose of building a new cigar factory in Danli, Honduras, because the growth in demand for Camacho and other Honduran brands had outgrown the capacity of its current factory, which will be divested.

“Our acquisition of over 150 ha of land in Condega, Nicaragua, and in Jamastran, Honduras, represents a further strengthening of our crop-to-shop philosophy, which is an anchor of our global strategy,” said CEO and board member Hans-Kristian Hoejsgaard.

“I am equally delighted that a splendid new Camacho (Agroindustrias Laepe) factory designed by Honduran architect Gonzalo Nunez Diaz and including expansive visitor accommodation will underpin the growth trajectory of the Camacho, Room101 and Baccarat brands.”

Meanwhile, Javier Plantada, senior vice president global production, said he was “particularly delighted” with the quality of the farmland the company had been able to acquire. The land would not only provide tobacco of “top notch” quality, but would allow the pursuit of an innovation agenda and experimentation with new and existing seeds.

The plot of land for the new factory in Danli covers almost 450,000 square feet (41,000 m2). The factory will, in phase 1, cover more than 185,000 square feet (17,300 m2), reflecting the 60 percent growth in production output the company has had in the past three years.

“We simply outgrew our Agroindustrias Laepe facilities,” Plantada said.

Taiwan’s smoking-while-driving rules due July 1

| March 2, 2015

Restrictions on people smoking while driving in Taiwan are to be brought in from July 1, according to a story in the Taipei Times.

Some details of the new regulations were given towards the end of last year but at that time it was not known when they would be imposed.

According to the Times, motorists who smoke and drive and consequently affect other motorists are liable to face a fine of up to NT$600.

The paper explained that other motorists could be affected by the ashes or smoke from the cigarettes of smoking drivers.

And drivers could be deemed to be in breach of the regulations if the lighting or littering of cigarettes threatened the safety of other road users.

But according to a story in The China Post in December, the sequence of actions involved in smoking while driving, such as lighting a cigarette, exhaling smoke and holding a cigarette, are all punishable acts under the new rules.

The Post said that according to the text of the amendments, the critical point was whether others were affected by these acts, which were most applicable to busy roads.

Green light for plain packaging in Ireland

| February 27, 2015

Irish lawmakers have passed legislation mandating plain packaging for tobacco products. The bill is expected to be signed into law by Ireland’s president after a technical vote in the upper house next week.

Scheduled to take effect in May 2017, the new law will ban all tobacco branding, including logos and colors, and require tobacco products to have a uniform packaging with graphic health warnings.

“We are creating legislation which will be historic and will be of real importance to the area of public health,” the Minister for Children, James Reilly, told parliament. “We are on the verge of being the first country in the EU to pass a law on plain packaging.”

JTI Ireland said it would take legal action if the legislation is enacted. “We have made our views known to the government many times so they should come as no surprise,” a JTI Ireland representative said after the vote. “If this proceeds we will go to court to protect our rights.”

Reilly signaled the government would proceed regardless. “We in this house will not be intimidated by such action,” he said. “We will pass such laws as we believe to be correct,”

Ireland is the second country to require plain packaging. Australia introduced similar legislation in 2012. Britain is also considering plain packaging.

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