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Smoke-free products deliver benefits of quitting

| May 11, 2015

In a commentary in the Signal Tribune, California, a health expert has hit out against US tobacco policy that insists on smokers quitting tobacco and nicotine altogether.

Dr. Brad Rodu is a professor of medicine and holds an endowed chair in tobacco harm reduction research at the University of Louisville James Graham Brown Cancer Center.

Rodu argues that switching to snus or electronic cigarettes yields almost all of the health benefits of quitting smoking altogether.

His piece is at:

Some doubt that China’s tax rise will reach smokers

| May 11, 2015

China announced on Friday that it would raise the wholesale consumption tax on cigarettes from Sunday, according to a Xinhua News Agency story citing a statement jointly issued by the Ministry of Finance (MOF) and the State Administration of Taxation.

The tax rate imposed on cigarette wholesalers on the basis of taxable prices was due to be increased from five percent to 11 percent, and wholesalers would have to pay an additional Yuan0.005 (less than US 1¢) for each cigarette they sold, the statement said.

There was no explanation of why the tax increase was being imposed.

The MOF’s Research Institute for Fiscal Science said that if the higher tax were passed on to cigarette consumers, they would pay seven percent more for the average pack of cigarettes. According to a story in The Star, Kuala Lumpur, also announcing the tax rise, a tax increase in 2009 had not been passed on to consumers.

If the increase is passed on, it is expected to cut cigarette consumption by four to five percent and add Yuan100 billion to annual tax revenue, according to statistics from the research institute.

Last year, the industry paid Yuan911 billion in taxes, which amounted to 8.8 percent of total tax revenue. This year the industry is expected to hand over more than Yuan1 trillion.

Smokers might not be popular but their taxes are

| May 11, 2015

The government of Bangladesh has been told that it should increase tobacco taxes in order to achieve its revenue target for the next financial year, according to a story in The Daily Star.

“We have to put more emphasis on taxation of tobacco products..,” said Ahsan H. Mansur, executive director of the Policy Research Institute, which describes itself as a private, non-profit, non-partisan research organization dedicated to promoting a greater understanding of the Bangladesh economy.

Mansur was speaking at a seminar on ‘Fiscal policy for 2015-16 budget in the context of the Seventh Plan’ co-organised by PRI and UKaid at the PRI office in Dhaka.

Focusing on the tobacco sector was said to be needed to achieve the revenue target since the implementation of structural reforms in VAT and other areas of taxation had not yet gained momentum, Mansur said.

The weighted average prices of bidis and cigarettes were quite low in Bangladesh and increasing the rate of taxation on them was the only way to reduce smoking and generate 20 percent year-on-year growth in revenue from tobacco products.

Mansur said that, in line with global best practices, Bangladesh should move to a uniform tax structure for all smoked tobacco products.

The Finance Minister, A.M.A. Muhith, said the government would consider during upcoming budget discussions the proposals made by the PRI.

Regulations challenge must await implementation

| May 11, 2015

Kenya’s Attorney General has hit out at an attempt by British American Tobacco Kenya to stop the implementation of the Tobacco Control Regulations 2014, which is due to come into force on June 6, according to a story by Caroline Rwenji for The Standard.

Through a state counsel, AG Githu Muigai reportedly said that the case filed by BAT Kenya was premature and illogical because the regulations were yet to be effected.

High Court Judge, Mumbi Ngugi, declined to issue temporary orders stopping the implementation of the tobacco regulations next month and instead directed that the matter proceed to hearing on June 27.

BAT Kenya went to court under a certificate of urgency seeking to have the regulations quashed on the grounds that they were unconstitutional.

The company’s head of legal affairs, Simukai Munjanganja, was said to have argued that the cost of compliance with the new regulations was huge and would negatively impact the company.

EU moves closer to joining illegal trade protocol

| May 11, 2015

The European Commission decided last week to recommend that the EU should join an international agreement it believes is set one day to become the key multilateral instrument in the fight against the illegal trade in tobacco products, according to an EU press note.

The proposal is that the Council, with the consent of the European Parliament and on behalf of the EU, concludes the Protocol to Eliminate Illicit Trade in Tobacco Products under the World Health Organization’s Framework Convention on Tobacco Control (FCTC Protocol).

Then, all member states would either ratify or accede to the FCTC Protocol to become parties.

Once this process was over, the FCTC Protocol would have 29 EU signatories.

It needs to be ratified by 40 signatories to enter into force.

So far, the FCTC Protocol, which was agreed in 2012, has seven parties (Austria, Gabon, Mongolia, Nicaragua, Spain, Turkmenistan and Uruguay).

The EU signed the FCTC Protocol on 20 December 2013, which is the first step towards the EU becoming a party to the agreement.

Value of Swedish Match’s sales up sharply in Q1

| May 8, 2015

Swedish Match’s (SM) sales during the three months to the end of March, at SEK3,368 million, were up by 12 percent on those of the three months to the end of March 2014, SEK3,014 million.

Operating profit was up by about 18 percent to SEK1,014 million, while operating profit from product areas, which excludes SM’s share of the Scandinavian Tobacco Group’s (STG) net profit, was increased by seven percent to SEK866 million.

Sales and operating profit from product areas were negatively impacted by trade destocking of snus in Scandinavia following excise tax increases on January 1, while operating profit was positively affected by an adjustment of SM’s share of net profit in STG of SEK56 million.

Earnings per share (EPS) were up by 26 percent to SEK3.86, while EPS excluding the STG adjustment were increased by about 17 percent to SEK3.40.

In announcing the first quarter interim report, CEO Lars Dahlgren said that a strong underlying US performance and currency effects had more than offset expected lower results in the Scandinavian snus business. “We successfully gained share in the growing value priced segment in Sweden but volumes in Scandinavia were affected by trade destocking during the quarter,” he said.

“The US represents an important and significant market to Swedish Match. During the first quarter all of our US businesses delivered an impressive performance, which when coupled with the significantly stronger US dollar, was a key factor behind our good growth in operating profit.

“Cigars in the US had a very strong performance with both volume growth and an improved mix…

“Chewing tobacco volumes declined but improved pricing and lower costs more than offset the impact of the lower volumes.

“Our US moist snuff volumes rose five percent driven by strong growth in the pouch and tub segments. Spending behind snus in the US was lower but volumes continued to show a positive trend.”

Dahlgren then turned to SM’s modified risk tobacco product applications currently before the US Food and Drug Administration, selected parts of which were the subject of hearings by the Tobacco Products Scientific Advisory Committee in early April. “We are in many respects pleased with the committee hearings and feel that the scientific evidence discussed supports our modified risk applications for our General snus in the US,” he said. “We expect to hear back from the FDA in the coming months.”

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