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TTM wary of decreasing market share

| April 25, 2013

The Thailand Tobacco Monopoly (TTM) has gradually lost market share to imported cigarettes since the country lifted the tax barrier two decades ago, says director-general Torsak Chotimongkol.

Local cigarettes still claim 76 percent of the market, but foreign cigarettes are likely to gain one percentage point to 25 percent by the end of this year, according to a story in the Bangkok Post.

Torsak said TTM is trying to regain market share in the middle- to upper-income markets dominated by imported cigarettes, while also keeping its low-income base. “We need to protect our share from imports, as our margin is quite thin,” he said.

TTM cigarettes make up 33 percent of the market, legally imported cigarettes make up 12 percent, smuggled smokes contribute 10 percent and roll-your-own tobacco comprises 45 percent, said Torsak.

Roll-your-own tobacco has gained rapidly as a result of the tax waiver for local breeds of tobacco, while the tobacco produced by TTM is taxed at THB1,000 a kilogram.

Last year TTM had total sales of 36 billion units for THB70 billion, and this year will likely be similar.

“If TTM can expand overseas, our sales may reach THB100 billion, as we are now attempting to enter into Japan, the U.S. and Europe to build up our brand,” said Tanusak Lekuthai, deputy finance minister.

Vietnam’s anti-smoking law to take effect May 1

| April 25, 2013

Vietnam’s law on the prevention and control of smoking takes effect on May 1, 2013, according to the Health Ministry, according to a story in VietnamPlus.

The law, with five chapters and 35 clauses, regulates measures aimed to reduce the demand for tobacco, control supply and prevent tobacco harm, said the ministry at a conference in Hanoi on April 23.

According to Deputy Minister of Health Nguyen Thi Xuyen, in the coming time, the implementation of the law will focus on enforcing the smoking ban in agencies, government offices, schools, hospitals and a number of public places.

Regulating cigarette advertisement, promotion and funding will be another focus, she added.

According to the World Health Organisation (WHO), Vietnam is one of 15 countries with the most smokers in the world. About half of all male adults (15 years old and above) in the country are smokers.

Earlier, on January 25, 2013, the Prime Minister approved the national strategy to combat tobacco’s negative impacts by 2020.

China: HongyunHonghe launches cigarette-processing unit in Africa

| April 25, 2013

HongyunHonghe Tobacco Group, in southwest China’s Yunnan Province, recently launched its cigarette-processing unit for Africa at the Walvis Bay port in Namibia.

The project is intended to produce HongyunHonghe’s Yunyan, Honghe, Honghe and Honghe brands for sale in Africa.

The annual production capacity of the unit could reach 1 billion cigarettes.

Lorillard’s 1Q profit up 47 pct on higher pricing, e-cig sales, lower costs

| April 25, 2013

Lorillard’s first-quarter profit jumped 47 percent as higher prices, e-cigarette sales and lower legal expenses from a longstanding legal settlement offset a decline in traditional cigarette sales.

The nation’s third-biggest tobacco company on Wednesday reported earnings of $328 million, or 86 cents per share, for the period ended March 31, up from $223 million, or 57 cents per share, a year ago, according to the Associated Press.

Excluding one-time items, earnings were 66 cents per share, beating Wall Street expectations by 2 cents. That excludes a benefit of 23 cents per share in credits for disputed payments under the 1998 Master Settlement Agreement, in which some cigarette makers are paying states for smoking-related health care costs.

Revenue excluding excises taxes rose 6 percent to $1.12 billion, matching analyst expectations, according to FactSet.

Its shares rose $1.29, or about 3 percent, to $43.07 in morning trading.

Where there’s smoke, there’s still profit

| April 22, 2013

When the three major U.S. tobacco companies report their first-quarter results this week, investors can find comfort in two themes that have remained consistent for years: Cigarette volumes will fall, but profits will rise, according to a story in The Wall Street Journal.

For the past three years, cigarette volumes have dropped around 3 percent to 4 percent annually, and analysts who follow the sector expect that trend to continue as more Americans quit smoking. But market leader Altria Group Inc. and smaller rivals Reynolds American Inc. and Lorillard Inc. keep posting higher core profits.

Analysts expect both trends will continue as all three companies are projected to report modestly higher earnings for the first quarter, though volume could decline more steeply than historical trends, due to higher payroll taxes and still-high unemployment.

The tobacco industry’s ability to consistently raise list prices and aggressively buy back shares have been the greatest drivers to their profitability gains. Smokeless tobacco products, including snuff and snus, have seen higher demand to help offset declining demand for traditional cigarettes. Lorillard and Reynolds are also in the early stages of selling e-cigarettes, which both have said offer potential for long-term growth. Battery-powered e-cigarettes turn heated nicotine-laced liquid into a vapor mist, and come in several flavors.

Cigarette addiction saves lives

| April 22, 2013

David Henneberry, an avid boater and member of the Watertown Yacht Club, walked outside to smoke a cigarette just after Massachusetts Gov. Deval Patrick  lifted the curfew on Boston, MA, USA, residents at 6 p.m. Friday, April, 18.

Puffing away, Henneberry noticed the tarp that covered his rare, 22-foot  pleasure cruiser—a white Seahawk with blue trim and a fiberglass hull, reported  the New York Daily News—wasn’t on correctly, according to a story posted on on the talk radio station WBZT’s website.

“Then he saw that one of the straps was hanging loose,” his stepson Robert Duffy told the Daily News. “He picked it up and saw it had been cut. He  found it incredibly odd.”

Henneberry got a small ladder, climbed up to reach the boat deck, and flipped back his tarp “and saw a pool of blood,” Duffy added. “And then he saw what he thought was a body.”

Henneberry jumped off the ladder and ran inside, dialing 911 as he went. The “body” was the second Boston bombing suspect, 19-year-old Dzhokhar  Tsarnaev — alive.

Within minutes, Duffy said, police arrived and moved his stepdad and mother to a neighbor’s house.

The entire city had been on lockdown all day as police embarked on a massive manhunt for Tsarnaev who’d escaped a shootout around 1 a.m. Friday and was nowhere to be found since.

Apparently shots were exchanged at some point when police moved in, Duffy  said.

Not in spots Henneberry apparently appreciated: “I just heard they wound up  shooting a couple of rounds through his boat,” Duffy told the Daily  News. “He’s not going to like that, he’s real anal about it.”