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Philadelphia turns to smokers to pay for education-budget shortfall

| September 25, 2014

The Senate in Pennsylvania, US, has approved by 39-11 a $2-per-pack cigarette tax for Philadelphia to help close the School District’s budget gap, according to a story in the Philadelphia Public School Notebook.

Superintendent William Hite was quoted as saying that with the cigarette tax and an earlier-approved one percent sales tax surcharge for schools, the District would net more than $170 million “in recurring and predictable revenue instead of one-time funding”.

The notebook story said that providing it were implemented in October (the story was written before the governor had signed the bill, though he had promised to do so quickly), the cigarette tax was expected to generate $49 million this year for schools and as much as $80 million annually until 2019, when the cigarette tax provision is due to expire.

The sales tax surcharge provides the District with a fixed amount of $120 million annually. Both taxes are on Philadelphia residents only, but they required state approval.

Hite said the District had been counting on receiving this revenue just to balance this year’s bare-bones budget, and that failure by the state to act on the tax would have triggered another round of mass layoffs.

With the anticipated proceeds from the new tax and $32 million in cuts made in August, the District’s budget is balanced, according to District spokesperson Fernando Gallard. “But as we keep saying, what we have in schools is inadequate at best.”

The story, at http://thenotebook.org/blog/147706/2-pack-cigarette-tax-finally-approved, is notable for the number of people who are thanked for making the cigarette tax possible and for the absence of any thanks for the smokers who will pay the tax.

Zimbabwe’s prices down 14 percent

| September 25, 2014

Zimbabwe’s 2014 flue-cured tobacco marketing season has ended with the final sales volume hitting 216.2 million kg, according to a story in The Herald. This year’s volume sales were 30 percent up on those of 2013, 166.5 million kg; and earnings were increased by 12 percent from USS612.1 million to US$685.2 million.

However, while deliveries and the total value of sales were up, growers had to put up with an average price that was down by 14 percent from US$3.67 per kg to US$3.17 per kg.

Of the total volume delivered this year, 76.5 percent, or 165.5 million kg, was contracted tobacco, while 23.5 percent or 50.7 million kg was sold over the auction floors.

France looks at introducing plain packs

| September 25, 2014

The French government is to propose legislation on the introduction of standardized packaging for cigarettes, according to a story in The Local quoting a Les Echos report.

The standardized packs with their dominant graphic warnings would be aimed at deterring young people from taking up the habit.

Health Minister Marisol Touraine was due to present the proposed legislation at a cabinet meeting today before announcing it at a press conference.

“It denormalizes tobacco, like the ban on smoking in public places that has not changed consumption significantly, but has changed the order of things,” said Bertrand Dautzenberg, president of the French Office for the Prevention of Smoking.

Touraine’s bill would seek also to extend the country’s public smoking ban to include the use of electronic cigarettes.

PM USA welcomes Price case decision

| September 25, 2014

The Illinois Supreme Court yesterday granted review in the Price case to decide whether its 2005 dismissal of that case against Philip Morris USA should remain in place.

In 2003, a Madison Circuit Court judge sitting without a jury found that PM USA had deceived Illinois smokers in purchasing Marlboro Lights and Cambridge Lights cigarettes and imposed a $10.1 billion judgment.

But in 2005, the Illinois Supreme Court reversed the judgment in favor of PM USA.

‘In April, an intermediate state appellate court overturned a decade-old decision of the Illinois Supreme Court dismissing the Price case,’ according to a PM USA note posted on its website yesterday. ‘The appellate court further held that, as a result of the case being reopened, the original judgment should be reinstated. That decision remains stayed while on appeal.’

“The Illinois Supreme Court has already once ordered judgment to be entered in PM USA’s favour,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of PM USA.

“We believe that there are compelling reasons why the Illinois Supreme Court should do so again and reverse the intermediate court’s unprecedented ruling.

“We look forward to the opportunity to present our arguments before the court.”

The case is Price v. Philip Morris Incorporated: case number 00-L-112.

Storm blows up over windfall tax plan

| September 24, 2014

The UK’s tobacco industry was said to have reacted with ‘fury’ to a plan by the opposition Labour Party leader, Ed Miliband, to impose an additional tax on Britain’s tobacco companies to help pay for National Health Service (NHS) spending, according to a story in The Guardian.

Imperial Tobacco said Labour’s plans to raise at least £150 million by taxing companies according to market share amounted to an attack on a legitimate business sector.

A spokesman for the company said the idea was totally unwarranted and unjust, and should be dismissed immediately.

“The idea put forward today [Tuesday] fails to acknowledge the wider contribution made by Imperial to society, and will place further pressure on jobs and livelihoods,” the spokesman said. “Earlier this year we announced the closure of our Nottingham cigarette factory, citing in part the impact of excessive tobacco regulation and taxation.”

The Guardian said the industry argued that it contributed £12.3 billion a year to the exchequer, while the costs of smoking to the NHS were estimated at between £2.7 billion and £5.2 billion.

The industry trade body, the Tobacco Manufacturers’ Association, also opposed the Labour Party’s plan. “This anti-business idea is illogical and ignores a major cause of lost tobacco tax, the illegal market,” said Giles Roca, director general.

Meanwhile, Miliband told delegates at the annual party conference in Manchester that it was fair to impose additional costs on an industry that makes “soaring profits on the back of ill health”.

The UK is due to hold a general election on May 7 next year.

The full story is at: http://www.theguardian.com/business/2014/sep/23/uk-tobacco-firms-protest-labour-cigarette-tax-pay-nhs.

Russians comply with smoking bans

| September 24, 2014

The overwhelming majority of Russian cafés and restaurants are obeying the ban on tobacco smoking in public places, according to an ITAR-TASS story quoting results of monitoring conducted by Consumers International, an international consortium of consumer-advocacy groups.

Between 93 and 94 percent of the monitored cafés and restaurants were found to have been observing the smoking ban.

But the hospitality sector was said to be less compliant. Violations were exposed in almost 34 percent of inspected hotels; ashtrays were found in just over 32 percent of hotels, and more than a quarter of inspected hotels were offering rooms for smokers or had smoking rooms.

Russia’s most recent anti-tobacco laws came into force on June 1, 2013, and June 1, 2014.

Nikolay Gerasimenko, a deputy chairman of the health committee of the Russian State Duma, said on Tuesday that the popularity of smoking was going down.

“Cigarette production has decreased,” he told a news conference. “The process began three years ago but proceeded rather slowly – by not more than three percent a year. The biggest slump in production took place in the first quarter of 2014 after excise duties had been raised.”

Gerasimenko cited the results of polls conducted by the WCIOM polling agency that indicated the number of smokers had decreased by seven percent during the first six months of the current year.

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