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Dividend dependent on Sri Lanka’s Super Gain Tax

| February 16, 2015

Ceylon Tobacco Company’s (CTC) sales in Sri Lanka fell by 11 percent last year, according to a Colombo Page story quoting a CTC financial statement.

At the same time, its government contributions during the 12 months to the end of December fell by four percent to Rs73.6 billion.

The downturn seems to have been partly the consequence of competition from products in the ‘non-regulated’ segment, and partly the result of an increase in bidi volumes, which, according to Sri Lanka Customs statistics, have grown by almost 200 percent since 2008 and which now account for about 42 percent of total tobacco consumption in the country.

Meanwhile, CTC said it was awaiting further clarification on the base and application of the one-off Super Gain Tax announced as a part of the government’s interim budget proposals on January 29 before determining its impact on cash flow and its ability to distribute a final dividend for 2014.

Call for TPPA proposals to be discussed in public

| February 13, 2015

A New Zealand health expert has said that the proposed Trans-Pacific Partnership Agreement (TPPA) would effectively prevent governments from enacting health policies for fear of being sued, according to an Independent Newspapers story.

New Zealand health advocates and their counterparts in some of the other countries involved in the TPPA negotiations have, through The Lancet medical journal, raised concerns about the agreement.

The TPPA is being negotiated between 12 Pacific Rim countries and would affect an estimated 700 million people.

Twenty seven signatories from Australia, Canada, Chile, Malaysia, New Zealand, the US and Vietnam have called for the public release of details of the trade deal and public discussion about its consequences on access to healthcare.

Dr. Erik Monasterio, co-lead author and senior clinical lecturer at the University of Otago, Christchurch, said information made available on Wiki Leaks about the trade deal had shown that the TPPA would allow corporations to extend the patent period for branded medications and that this would delay the entry of generic – and cheaper – alternatives on to the market.

The TPPA would effectively prevent governments from enacting health policies for fear of being sued, Monasterio said.

“The Investor State Dispute Settlement mechanism allows corporations to sue governments – if they put into place polices that will interfere with the value of their profit,” he added.

JT’s cigarette volume down in January

| February 13, 2015

Japan Tobacco Inc’s domestic cigarette sales volume during January, at 8.3 billion, was down by 6.1 percent on that of January 2014, 8.8 billion, according to preliminary figures issued by the company today. The January 2014 figure was up by 3.6 percent on that of January 2013.

JT’s market share stood at 59.5 percent during January, and at 60.4 percent during January-December 2014.

JT’s domestic cigarette revenue during January, at ¥46.8 billion, was down by 3.2 percent from its January 2014 level, ¥48.3 billion.

Wales to ban smoking in cars carrying young people

| February 13, 2015

A ban on tobacco smoking in cars carrying young people will be imposed in Wales on October 1, Health Minister Mark Drakeford has confirmed.

According to a BBC News story, the ban, which will come in on the same day as one in England, will not include electronic cigarette vaping.

Health charities were said to have welcomed the move to ban smoking in cars carrying someone under the age of 18.

The police will be responsible for enforcing the ban as part of their road safety duties, and people caught flouting the new law will face a £50 on-the-spot fine.

Not too many people are likely to be caught, however.

A BBC News story of a few days earlier told how, according to government figures, the number of traffic police in England and Wales and fallen by 23 percent in four years – from 5,635 at the end of March 2010 to 4,356 at the end of March 2014.

The motoring organization, the RAC, was quoted as saying that the figures meant those breaking laws “will not get caught”.

The Home Office said crime had fallen by more than a fifth under the current government.

‘This is your mother: I’m disappointed in you’

| February 13, 2015

Researchers at two universities in Western Australia have developed a plastic case into which smokers can place their cigarettes but remove them only at the cost of hearing some form of quit smoking message, according to a story.

Smokers can record their own voice, that of somebody else or any other sound that reminds them of the reasons why they want to quit, and that soundtrack will play every time the case is opened.

Associate Professor Paul Chang from Edith Cowan University’s School of Psychology and Social Science said the idea was to tap into the smoker’s own motivations for quitting.

“To change behaviour, it is very important for people to have their own personal motivation to do so,” he said.

“The hope is that by reminding smokers of their own personal reason for quitting every time they open the packet will give them a powerful motivation to quit once and for all.

“One thing I think that could be particularly effective for parents who smoke would be to get their children to record the message encouraging them to kick the habit.”

Others might think that a more effective message for young men would be one from their mothers that said, in a resigned manner: “I’m afraid I’m rather disappointed in you”.

The other university involved in the study was Curtain University.

The story is at:

Lorillard loses cigarette volume but gains share

| February 12, 2015

Lorillard’s domestic wholesale cigarette shipment volume during the 12 months to the end of December, at 38,535,460,000, was down by 2.0 percent on that of 2013, 39,325,216,000.

Including shipments to Puerto Rico and US Possessions, shipments were down by 2.3 percent to 39,014,140,000.

Shipments of Newport cigarettes fell by 1.4 percent to 32,900,591,000, while shipments of full price brands taken together decreased by 1.5 percent to 33,175,733,000; with shipments of Kent down by 13.1 per cent to 131,670,000 and shipments of True down by 12.8 percent to 143,472,000.

Shipments of price/value brands decreased by 5.3 percent to 5,359,727,000, with shipments of Old Gold down by 9.4 percent to 395, 910,000 and shipments of Maverick down by 4.9 per cent to 4,963,817,000.

Lorillard’s market share during 2014, at 15.1 percent was up by 0.3 of a percentage point on that of 2013, with Newport’s share up by 0.3 of a percentage point to 12.9 per cent.

Menthol cigarettes last year held a 31.7 percent share of the US market, up by 0.3 of a percentage point from that of the previous year, and Lorillard held a 40.3 percent share of the total US menthol segment, up by 0.1 of a percentage point. Newport’s share of the US menthol segment was 37.1 per cent, up by 0.1 of a percentage point.

Meanwhile, during the three months to the end of December, Lorillard’s domestic cigarette shipments, at 9,646,722,000, were down by 1.0 percent on those of the three months to the end of December 2013, 9,748,031,000. Including Puerto Rico and US possessions, shipments were down by 0.9 percent to 9,762,102,000.

Newport’s shipments during the final quarter were down by 0.6 percent to 8,251,008,000, and total full price brand shipments were decreased by 0.7 percent to 8,317,404,000. Total price/value brand shipments were down by 3.4 percent to 1,329,318000.

Lorillard’s net sales during the 12 months to the end of December, at $6,990 million, were up by 0.6 per cent on those of the previous 12 months period.

Reported operating income was up by 2.6 percent to $2,108 million while adjusted operating income was up by 5.3 percent to $2,138 million.

Reported net income was up by 0.6 percent to $1,187 million while adjusted net income was up by 4.1 percent to $1,216 million.

Reported diluted earnings per share were up by 4.1 percent to $3.28 while adjusted diluted earnings per share were up by 7.7 percent to $3.36.

“Lorillard finished the year in impressive fashion, delivering strong fourth quarter financial and operating results, marked by continued robust cigarette pricing realization, the 12th consecutive year of market share gains and tight cost controls – resulting in 13 percent adjusted earnings per share growth in the quarter and almost eight percent in the full year,” said chairman, president and CEO Murray S. Kessler, in announcing the results.

“Once again, Lorillard shareholders were rewarded with another year of double-digit total shareholder returns as measured by EPS growth and the dividend yield. These results in 2014 are even more remarkable in the context of our continued investments in building the blu eCigs brand both domestically and internationally and without the benefit of share repurchases in the second half of 2014, which have been discontinued as a result of our pending acquisition.

“Overall, we are very pleased that the fundamentals of our cigarettes segment continue to lead the industry, owing to the ongoing market share gains from our flagship Newport brand, while at the same time our electronic cigarettes segment continues to be at the forefront of product innovation and consumer acceptance in the burgeoning e-cigarette category.

“It should also be noted that these solid results have been accomplished while we have been working diligently towards completing our previously announced combination with Reynolds American. Assuming the transaction is approved, it would deliver significant and immediate value to Lorillard shareholders, while also providing for meaningful upside opportunity for Lorillard shareholders through their approximate 15 percent ownership of the combined company.”

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