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Tobacco industry has little to fear from EU TPD proposals

| May 9, 2013

The European Commission believes that its proposed revisions to the Tobacco Products Directive would, if adopted, have limited adverse impact on the tobacco industry – and some positive impacts.

“The adoption of the proposal for a revised Tobacco Products Directive was preceded by a thorough impact assessment, including an assessment of the economic impacts on the tobacco industry, their upstream suppliers (e.g. growers, ingredients suppliers, paper industry) and downstream distributors (wholesale, retail),” the commission stated in a written answer to questions posed by the Czech MEP, Ivo Strejček.

“It is estimated that the proposal will result in a reduction in the consumption of tobacco products of no more than 2 percent within a five year period following the transposition of the Directive. The adverse impact on the industry would therefore remain limited. Jobs lost in the production of cigarettes would be offset by the creation of jobs in other sectors, reflecting ex-smokers’ expenditure on such sectors.

“In addition, the proposal is expected to lead to some benefits for the industry through reduced production costs as a result of harmonization (one … production line instead of different production lines to comply with different national rules) and through the expected reduction in illicit trade (as a result of the proposed measures on tracking and tracing of products). Even the most specialized tobacco retailers do not generate more than 50 percent of their revenues from tobacco products, thus the impact is not expected to be disproportionate.”

The commission said that to avoid imposing an unnecessary burden on small- to medium-sized enterprises, pipe tobacco, cigars and cigarillos were exempted from the stricter labelling and ingredients rules that the revisions proposed for other tobacco products. The proposal, it added, was neutral in respect of the different types of tobacco, Virginia, Burley and oriental. This meant that smaller farms involved in Burley and oriental tobacco production would not be affected.

Cuba joins fight over Aussie plain packaging rules

| May 6, 2013

Cuba has become the latest country to launch a legal attack on Australia’s landmark plain packaging rules for tobacco at the World Trade Organization (WTO).

The laws came into effect last December and mean cigarettes can only be sold in brown packages with graphic health warnings. The WTO says Cuba has requested consultations with Australia on the legislation, which covers all tobacco products, not just cigarettes. Under the 159-nation WTO’s rules, requesting consultations is the first step in an often complex trade dispute settlement process which can last for several years.

The laws have already been challenged at the WTO by Cuba’s fellow cigar-producing nations Honduras and the Dominican Republic. In addition, the Ukraine has filed a suit at the Geneva-based body, which oversees its member nations’ respect for the rules of global commerce, according to the Australian news company ABC.

All the plaintiff countries maintain that Australia’s packaging law breaches international trade rules and intellectual property rights.

In the event that the WTO’s disputes settlement body finds in their favor, it would have the power to authorize retaliatory trade measures against Australia if the country failed to fall into line. The dispute with Australia marks the first-ever challenge by Cuba against a fellow member since it joined the global body in April 1995, four months after the WTO was founded in its current form.

The plain packaging laws have won wide praise from health organizations which are trying to curb smoking. But the government has faced a string of court challenges from tobacco firms.

Besides trade and intellectual property concerns, tobacco companies say there is no proof that plain packaging reduces smoking and have warned that the law sets a precedent that could spread to products such as alcohol.

A nickel a butt adds up

| May 3, 2013

Redemption programs have dramatically reduced the amount of bottles and cans that go into the waste stream. Now a restaurant owner in Portland, Maine, U.S.A. wants to do the same with cigarette butts, according to a story reported on WLBZ.

Mike Roylos says he’s tired of dealing with butts outside the Spartan Grill. “They’re everywhere. I sweep. They come back. Customers track them in on their shoes,” laments Roylos.

When the city’s new smoking ordinance failed to stop the butt barrage, Roylos decided to take matters into his own hands. He came up with the “No Butts Now” campaign.

He supplies a basket of baggies for the public to collect cigarette butts in Monument Square. Using donations from grateful customers, Roylos will buy the butts back for five cents a piece.

Sure, it’s a little gross..but a nickel’s a nickel. Billy O’Rourke lives a few blocks away at the Oxford Street Shelter and he went right to work as soon as he heard about the campaign. .

“It’s an opportunity for us homeless guys to be a productive part of society and make a few extra dollars,” said O’Rourke.

They may be tiny, but those butts add up.

UK plain packaging plan goes up in smoke

| May 2, 2013

U.K. Prime Minister David Cameron has scrapped plans to force all cigarettes to be sold in plain packs, according to a story published today in The Sun.

Health ministers had been considering the move for a year. Proponents had insisted making packages bland would put smokers off — and stop kids from picking up the habit.

Cameron initially backed the plan, but has been persuaded it would damage the packaging industry. There were also concerns it could cost £3 billion in lost tax revenue and tie up the Commons in bitter arguments.

Cameron has now ordered the proposed law to be pulled from next week’s Queen’s Speech.

A Whitehall source said: “Plain packaging may or may not be a good idea, but it’s nothing to do with the government’s key purpose. The PM is determined to strip down everything we do so we can concentrate all our efforts on voters’ essentials. That means growth, immigration and welfare reform.”

Officials in Australia, the first to enforce uniform packaging, have admitted there was still no evidence that they cut smoking.

Japan Tobacco tops competition, forecast beats estimates

| April 25, 2013

Japan Tobacco, the world’s best-performing cigarette maker this year, forecast a record profit that beat analyst estimates and raised its projected annual dividend by 35 percent on rising overseas sales and a weaker yen, according to Bloomberg News.

Net income will probably be ¥415 billion ($4.2 billion) for the year ending March 2014, the Tokyo-based company said today in a statement. The outlook is higher than the ¥412 billion average of 18 analyst estimates compiled by Bloomberg.

Japan Tobacco, which aims to make its Mevius the No. 1 global premium brand, is benefiting as a weaker yen boosts the value of overseas revenue, which accounted for about 48 percent of the company’s total in the last fiscal year. Asia’s biggest listed cigarette maker also said it would raise its payout ratio to 50 percent by fiscal 2015, one year earlier than previously planned, to support shareholders.

BAT sales up 5 pct, driven by global brands

| April 25, 2013

British American Tobacco reported revenue growth of 5 percent at constant rates of exchange in the first quarter ended March 31, adding that global drive brand cigarette volumes grew by 1 percent.

The report stated:

  • Revenue growth of 1 percent at current rates of exchange.
  • Cigarette volumes from subsidiaries fell 3.7 percent to 160 billion, with a decrease of 3.4 percent for total tobacco volumes.
  • Board confident of another year of earnings growth in line with long term strategic goals.
  • Pricing environment remains strong despite difficult trading conditions in many parts of the world, notably southern Europe.
  • If current exchange rates persist for the rest of the year, the currency headwind that adversely impacted the quarter will reverse.
  • Group has sufficient financing and facilities available for the foreseeable future.
  • There have been no material events, transactions or changes in the financial position of the Group since the year end.
  • -Shares closed Wednesday at 3548 pence valuing the company at £68.25 billion.