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Indonesia seen as tobacco-tax battle ground

| May 8, 2015

A professor of public health at the University of Indonesia’s School of Public Health, Hasbullah Thabrany, has warned that Indonesia has become a main target for the tobacco industry, according to a story in The Jakarta Post.

“It seems that we are in a battle ground, where tobacco company owners are among the country’s richest people, making money from poor people addicted to their product,” Hasbullah said.

The National Commission on Tobacco Control, together with civil and health groups concerned with tobacco control in Indonesia, has urged the government to ignore pressure from the tobacco industry and the International Tax and Investment Center, which is seen as fighting for the cigarette industry’s agenda.

Hasbullah said that if the government wished to regain its sovereignty over the economy, it had to implement a pro-people economic policy.

US tobacco farm workers on ‘subminimum wages’

| May 8, 2015

A farm labor advocacy group was due yesterday to conduct a street protest for the eighth consecutive year outside the headquarters of Reynolds American Inc, according to a story by Richard Craver for the Winston-Salem Journal.

The protest was scheduled to begin shortly after the end of Reynolds’ annual shareholder meeting.

The protest is said to be the most public way that the Farm Labor Organizing Committee (FLOC) can try to influence Reynolds executives to take a more active role with tobacco suppliers on worker safety issues. According to the North Carolina Growers’ Association, FLOC represents about 2,000 farm workers in the state.

FLOC is said to have identified a number of problems at tobacco farms, including fatalities, subminimum wages, child labor, and the lack of water and breaks during work. Studies by Wake Forest Baptist Medical Center researchers have documented such conditions.

Three FLOC-supported shareholder proposals were due to be presented at yesterday’s meeting.

Meanwhile, Craver reported that in December Reynolds and the Altria Group confirmed that contracts with tobacco growers prohibited – starting in 2015 – the hiring of anyone under the age of 16 to work in their fields.

And those aged 16 and 17 will be required to receive safety training and wear appropriate personal protective equipment, as well as provide written parental authorization prior to beginning employment.

The policies will not apply to minors working on their family farms.

Craver’s report is at:

RAI announces 44th consecutive quarterly dividend

| May 8, 2015

Reynolds American Inc. reported that shareholders had re-elected five directors at the company’s annual meeting yesterday; approved, on an advisory basis, the compensation of named executive officers; ratified the appointment of KPMG LLP as the independent registered public accounting firm for RAI’s 2015 fiscal year; and defeated two shareholder proposals.

In addition, RAI’s board of directors declared a quarterly cash dividend on the company’s common stock of $0.67 per share ($2.68 per share annualized). The dividend will be payable on July 1 to shareholders of record on June 10.

RAI said that this was the 44th consecutive quarterly cash dividend since RAI became a public company on July 30, 2004.

Quebec to hold consultation on tobacco act changes

| May 7, 2015

Imperial Tobacco Canada has come out in support of the ‘intention behind the amendments to the Quebec Tobacco Act’, but believes certain measures will not achieve the government’s public health objectives and, in some cases, will be counterproductive.

According to a CBC News story relayed by the TMA, the junior minister for public health, Lucie Charlebois, on Tuesday tabled Bill 44 that would ban electronic cigarette use in public places; outlaw the sale of these devices to minors; prohibit tobacco smoking inside vehicles carrying young people under the age of 16; expand the smoking ban in enclosed public places to bar and restaurant patios, and to common areas in buildings of two to five apartments; and ban flavored tobacco products. Also under the bill, retailers ‘repeatedly’ caught selling tobacco products to minors could be fined up to C$250,000 (US$ 208,000), while businesses that allowed customers to smoke on patios could face fines of up to C$100,000 (US$ 83,200).

A public consultation is due to be held on the proposals before members of the National Assembly vote on the bill.

“We applaud the Government of Quebec for making sure there is ample time for consultation on the amendments, and we look forward to being part of the process,” Caroline Ferland, vice-president of corporate and regulatory affairs at Imperial said in a statement issued through Canada Newswire. “We are hopeful that the government will be receptive during the consultation process and recognize the difference between fact-based evidence and emotional cries for change”

Imperial said that in its proposed amendments to the act, the government intended to ban the sale of menthol cigarettes; a ban that would serve only to fuel the illegal tobacco trade while not contributing to reaching any of the government’s health objectives. “Although we agree with many of the proposed measures, such as a ban of fruity-, candy- and confectionary-flavored tobacco products, there is no fact-based evidence to support a ban of menthol products,” said Ferland. “Prohibiting menthol will drive adult consumers to the illegal tobacco market where over 35 menthol brands are already available.”

Imperial has a problem, too, with the government’s intention to regulate electronic cigarettes as tobacco products. It said that such an approach failed to take account of the unique nature of these products, which did not contain tobacco.

“We recognize the potential health risks associated with smoking and support reasonable, evidence and fact-based regulation of tobacco products, especially those intended to keep tobacco out of the hands of youth,” said Ferland. “We fully support Minister Charlebois’ stated intention of the bill: to protect youth, and we look forward to being part of the discussion process.”

Dr. Richard Massé, director of public health at Montréal’s health and social services agency and the Coalition Québécoise pour le contrôle du tabac, also welcomed the bill, but he argued that the measures did not go far enough – did not require standardized tobacco packaging.

According to a story in the Montreal Gazette relayed by the TMA, Massé commended the government for following the ‘precautionary principle’ in banning electronic cigarette use in indoor public places.

Meanwhile, Suzanne Dubois, executive director of the Quebec division of the Canadian Cancer Society, commended Charlebois’ “courage in putting an end to the sad strategies of the tobacco industry”.

One Montreal bar and restaurant owner had other ideas, however. According to a story by The Canadian Press, Peter Sergakis, who owns 40 establishments in the Montreal area, predicted that business would drop by as much as 15 per cent if Quebec went ahead with the plan to ban smoking on outdoor patios.

Sergakis said the proposed rules would result in clients opting to stay home at a time when business was already slumping. “The consumer has no money and instead of going to bars and restaurants two or three times a year, they’re going once because everything is so expensive,” he said.

“With no smoking on patios there will be even less people coming.”

Russian cigarette market predicted to fall sharply

| May 7, 2015

The Russian cigarette market could decline by 8-12 percent to 289-277 billion this year, primarily driven by an increase in taxes and the weakening of the domestic economy, according to an ITAR-TASS story relayed by the TMA.

Sergey Kiselev, vice-president of corporate affairs and communications at JTI Russia, said that the decline in the domestic cigarette market, which began in 2013 when the overall market shrank by 5.4 percent, had accelerated sharply in recent years.

JTI expects legal cigarette sales to decline by 9-12 percent, while Philip Morris Sales and Marketing estimates that the market could fall by 8-10 percent.

No excise to be levied by Manitoba on e-cigarettes

| May 7, 2015

The provincial government of Manitoba, Canada, is not going to increase taxes on electronic cigarettes even though smokers switching to these products is said to comprise the major reason why a C$1-per-carton excise increase on regular cigarettes is predicted to result in a 12 percent drop in tobacco revenue, according to a story by The Canadian Press.

The government raised tobacco excise in last week’s budget.

Barry Draward, an assistant deputy minister of finance, said the main reason for the drop was people switching from tobacco to electronic cigarettes, which attracted only eight percent provincial sales tax.

Draward said the jury was still out as to whether electronic cigarettes were an alternative form of tobacco cigarettes or stop-smoking aids, and that there could be tax implications.

“It would be a health [department] decision, regardless,” Draward said. “If they’re saying it’s a cigarette replacement, then, in my opinion, we’ve got to tax it, but we don’t know that yet.”

However, Jodee Mason, a spokeswoman for Finance Minister Greg Dewar, said the province was not going to raise taxes on electronic cigarettes.

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