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SM and PMI to dissolve smokeless joint venture

| July 17, 2015

Swedish Match and Philip Morris International have mutually agreed to dissolve their joint venture agreement relating to the sale of smokeless tobacco products outside Scandinavia and the US.

The joint venture, SMPM International, which was owned on a 50/50 basis by Swedish Match and PMI, was established in 2009.

In a press note, Swedish Match said there was a small but growing demand for snus in current joint venture markets but that the development of these markets had taken longer than the parties to the agreement had initially anticipated.

‘As a consequence the parties have mutually agreed to dissolve the joint venture,’ the press note said.

‘Swedish Match and PMI will now focus on independent strategies for the commercialization of snus in the former joint venture territory. Trademark licenses will revert to the original owners, and separate transitional agreements have been signed whereby Swedish Match will supply snus products to PMI for certain markets and PMI will perform distribution services on behalf of Swedish Match in Canada and in Russia.’

Lars Dahlgren, president and CEO of Swedish Match was quoted as saying that the hard work and efforts of all involved in the SMPM International joint venture were appreciated.

“We have attained valuable insights, and are pleased to see that snus has been viewed by many outside of our core markets as a viable alternative,” he said. “We look forward to continuing to build our knowledge and work toward further developing our snus business globally.”

Swedish Match’s second quarter sales increased

| July 17, 2015

Swedish Match’s sales during the second quarter to the end of June, at SEK3,644 million, were up by nine percent on those of the second quarter of 2014, SEK3,339 million.

Operating profit, excluding SM’s share of net profit from the Scandinavian Tobacco Group (STG) and larger one-off items, increased by nine percent to SEK937 million, while operating profit including SM’s share of STG profits and larger one-off items, increased from SEK941 million to SEK1,021 million.

Basic earnings per share (EPS) were up from SEK3.27 to SEK3.62, while adjusted EPS was up from SEK3.27 toSEK3.79.

BAT welcomes BSI vaping-product guidelines

| July 17, 2015

British American Tobacco has welcomed vaping-product guidelines issued yesterday by the British Standards Institution (BSI).

The guidelines set quality and safety standards for vaping products, including electronic cigarettes and e-liquids.

“We are supportive of the BSI specifications for e-cigarettes and believe that they have the potential to grow this important category by giving the appropriate assurances to consumers on product quality and safety,” said Donato Del Vecchio, head of BAT’s Legal and External Affairs for Next Generation Products.

“Although these specifications are voluntary, we believe that all manufacturers have an obligation to their consumers to deliver the best in product quality and safety.

“As such, we support the principles of the BSI guidelines and we are currently auditing our supply chain to work towards ensuring full compliance to these voluntary standards.

“We’ve always said that we want to see a regulatory framework for e-cigarettes that ensures consumer safety and product quality whilst allowing for the appropriate levels of innovation, marketing and distribution freedoms that we believe are required to enable this important category to grow.

“We are confident in the robust practices and procedures that we have in place around product safety and quality standards for our e-cigarette Vype. We see delivering quality products as vital in ensuring the growth of this important category.”

Smokers have reduced risk of Parkinson’s disease

| July 16, 2015

When compared with non-smokers, smokers have a 36-50 percent reduced risk of contracting Parkinson’s disease, according to a Helsingin Sanomat story citing research carried out in Finland.

The story, relayed by the TMA, said also that consuming coffee reduced the risk of Parkinson’s disease by 33 percent.

The researchers, who were based at the University of Helsinki and the Helsinki University Central Hospital in Finland, said the exact cause of the risk reduction was currently unknown.

They said, however, that drinking coffee and smoking were associated with the growth of the bacterial population in the gastro-intestinal tract, which played a key role in the synthesis of certain vitamins.

The researchers have yet to examine whether there is a causal effect between these simultaneously occurring changes and Parkinson’s disease.

E-cigarette vapor performs like air in human airways

| July 16, 2015

Vapor from two different types of electronic cigarettes had no cytotoxic impact on human airway tissue, according to a eurekalert.org story citing new research published in Toxicology in Vitro (DOI: 10.1016/j.tiv.2015.05.018).

Scientists at British American Tobacco and MatTek Corporation were said to have used a unique combination of tests to investigate the potential adverse effects of electronic cigarette vapor on airway tissue, along with the adverse effects of cigarette smoke on such tissue.

“By employing a combination of a smoking robot and a lab-based test using respiratory tissue, it was possible to demonstrate the ability to induce and measure aerosol irritancy and to show that the different e-cigarette aerosols used in this study have no cytotoxic effect on human airway tissue,” said BAT spokesperson Dr. Marina Murphy.

This new methodology could be used to help develop product standards for electronic cigarettes in the future.

‘E-cigarette vapour can contain nicotine, humectants, flavourings and thermal degradation products, so it is important to understand the potential impact on biological systems,’ the eurekalert story said. ‘Until now, there have been no aerosol studies of potential adverse effects of e-cigarette vapor on in vitro models that so closely mimic the structure, function and exposure of normal human airway tissue.’

Meanwhile, the results of the research showed that while cigarette smoke reduced cell viability to 12 percent (near complete cell death) after six hours, neither of the electronic cigarette aerosols caused any significant decrease in cell viability.

Despite six hours of continuous exposure, the results in the case of the electronic cigarette vapors were similar to those obtained when control cells were exposed only to air.

The eurekalert story is at: http://www.eurekalert.org/pub_releases/2015-07/raba-atr071415.php.

Indonesia wary that excise hike would hit smoking

| July 16, 2015

In a reversal of the received wisdom on tobacco tax, the Indonesian government has said that it will not be increasing excise on cigarettes because such a rise might make them unaffordable for many people, according to a story in The Jakarta Globe.

The director general of the Finance Ministry’s Directorate General of Customs (DGC), Heru Pambudi, was quoted as saying that care had to be taken in respect of imposing higher tariffs when cigarette production was declining.

If tariffs were raised, some consumers would not be able to afford cigarettes and production would decline even further. A drop in cigarette production was one of three factors that would hurt overall customs and excise revenue this year.

The DGC, which has raised its revenue target from tobacco excise this year despite missing last year’s target, says that for now it will try only to ensure tobacco companies complied with their excise obligations.

The customs office earned Rp112 trillion ($8.41 billion) from tobacco excise in 2014, short of its target of Rp116 trillion. This year, it has raised its target by more than a quarter to Rp142 trillion.

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