Category Archives: Tobacco News
Cigarette volumes have been dropping for many years, but that has not prevented cigarette makers from launching their wallets for advertising and promotion dollars.
As outlined by the Federal Trade Commission, the biggest tobacco firms invested $8.37 billion in 2011 on advertising and special offers in comparison to $8.05 billion in 2010. The boost primarily came from an uptick in investing in price discounts, or discounts paid to cigarette stores so as to lower the price of cigarettes to customers. Particularly, investing in price discounts raised from $6.49 billion in 2010 to $7 billion in 2011.
Price discounts were the greatest investing category in 2011, as it has been annually since 2002.
At the same time, the quantity of cigarettes marketed to bulk suppliers and retail dealers in the USA dropped from 281.6 billion in 2010 to 273.6 billion in 2011.
Cigarette producers have also increased advertising and promotion investing on smokeless tobacco products — from $444.2 million in 2010 to $451.7 million in 2011. Just like cigarette advertising, price discounts form up the biggest investing category for smokeless — making up $168.8 million.
But, in contrast to cigarettes, the vending of smokeless tobacco products is on a rise. The dollar value of sales by tobacco companies went up from $2.78 billion in 2010 to $2.94 billion in 2011. The weight of smokeless tobacco sold increased from 120.5 million pounds in 2010 to 122.7 million pounds in 2011.
The information from the commission’s newest tobacco says, “The Federal Trade Commission Cigarettes Report for 2011″ and “The Federal Trade Commission Smokeless Tobacco Report for 2011.” The FTC has released the cigarettes report regularly since 1967 and the smokeless tobacco report regularly since 1987.
The chief at Aberdeen International Airport has decided to establish a special airside smoking zone at the busy airport to enable smokers to use a cigarette before boarding their planes.
The smoking zone was opened to the travellers on May 9, along with the major departure area, for customers who have been processed through security and are awaiting their flights. The smoking zone was set up after over 400 people who participated in a review in 2012 said they would like to see an airside facility established at the airport.
An airport spokeswoman mentioned: “It is created to lower the number of full terminal evacuations. Many such evacuations are created when travellers smoke in prohibited areas, activating the smoke alarms at a cost of a lot of money per evacuation and leading to major disruption and delays.
“Unexpectedly, even 59% of non-smokers who participated in the study said they backed an airside smoking zone.”
She added: “Since that review was done the airport team have been working on the task, to guarantee it is accessible, compliant and secure, and on May 9 the facility was presented to the passengers for the first time – before the planned timescale. It is hoped that the smoking zone will also, as an added benefit, encourage travellers to spend more of their airport visit staying in the departure area, reducing instances of smoking before the terminal building.”
But the spokeswoman also explained: “Those people who try, they will pay a fee of £1, with the money being used to support the maintenance and servicing of the facility.”
Kevin Douglas, the Terminal Operations Manager at Aberdeen International Airport, said: “The smoking zone was created in accordance with Scottish legislation, and of course is compliant from a safety and security viewpoint. We are a securely controlled and regulated business, and establishing smoking airside area must agree with it tight controls.
“We hope that the facility will be well received by our clients and will minimize or remove the difficulty related to smoking in a restricted area, such secondhand smoke.”
The British authorities is still looking at banning branding on cigarette packages despite the fact that it disregarded recommendations from its legislative agenda presented in parliament on Wednesday, Prime Minister David Cameron said.
Britain had seemed to become the first European nation to make tobacco companies to remove brand names and to use standardized packaging, a move opposed by the cigarette makers, which sees it as affecting their earnings.
Queen Elizabeth made no reference to the strategies in a speech placing the government’s legislative plans for the year ahead, attracting criticism from opposition lawmakers and dissatisfaction from anti-smoking groups.
Nevertheless, Cameron told parliament that the authorities were still looking at the issue.
The Department of Health carried out four months of consultations in 2012 to collect evidence on whether plain tobacco packaging would help young smokers stop smoking and help existing smokers forget the habit.
In 2012, Australia enforced a law declaring tobacco products have to be sold in olive green packages with graphic health warning labels.
Cuba, whose high class cigars are world famous and feature exclusive packages, released a challenge against the Australian law at the World Trade Organisation last week.
Despite its lack from the government’s plans, the chief of the opposition Labour Party suggested to help speed through any proposed regulation.
Miliband also asked the role of government adviser Lynton Crosby in the decision, indicating his consultancy firm had worked with cigarette makers.
A spokesman for David Cameron said Crosby cannot influence over the contents of the Queen’s speech.
Campaign groups wrote to Health Minister Jeremy Hunt indicating dissatisfaction over the lack of the plan from the government’s programme.
“The failure to bring forward regulation fatally undermines the Government’s credibility on public health concerns,” said the letter from the Smokefree Action Coalition, an alliance of over 100 health organisations.
Cigarette makers such as Philip Morris and British American Tobacco are worried about that standardized packaging would eat into sales of higher margin brands and say it would lead to the global black market in tobacco.
Imperial Tobacco shares have grown slightly since reports published in the British media that Cameron had dropped the initiative.
Supermarkets were banned from displaying cigarettes and other tobacco products after new rule became effective on April, 29.
Public Health Minister Michael Matheson states that this step is the “right step” to discourage the younger generation from start smoking.
The open display ban was implemented as part of the Tobacco and Primary Medical Services (Scotland) Act 2010, which will also touch on the sale of cigarettes from vending machines banned.
England, Wales and Northern Ireland have already introduced identical bans to avoid supermarkets from displaying cigarettes and tobacco products.
Stores that do not conform could be charged of a criminal offence or receive a fixed fine from trading standards officers.
“These bans are the right move to avoid teenagers in Scotland from try using cigarettes,” Mr Matheson said.
“It is well known that smoking is related to a variety of disease and is the major preventable cause of ill health. Annually, tobacco consumption is connected with more than 54,000 hospital admissions in Scotland.
“For this reason it is so necessary that this government works to improve health by lowering the amount of people who prefer smoking and evidence demonstrates that adolescents encountered with the advertising of cigarettes are more likely to start smoking.”
The Scottish Government’s Tobacco Control Strategy also supports the launch of standardized packaging.
Vicky Crichton, senior public affairs manager in Scotland for Cancer Research UK, claimed: “The following move is to get rid of all branding from cigarette packs. This would mean an end to the attractive, slickly designed packs that can appeal young adults into considering tobacco isn’t dangerous and would make all tobacco brands look the same.”
The Tobacco Retailers’ Alliance – which refers to more than 26,000 shopkeepers across the UK – has spoken out against the new rule.
TRA Scotland spokesman Geoff Barrett, who is a merchant in Glasgow, explained: “There is still no trustworthy data that launching this ban will prevent youngsters from smoking.
“That’s not really unexpected as we all know youngsters smoke because of peer pressure or because friends or families are smokers.
“Rather than burdening retailers with yet more rules and limitations, the Scottish Government should evaluate the problem of tobacco smuggling, which is very prevalent across Scotland and which is a major source of tobacco for Scotland’s young smokers.
“It also doesn’t make any sense that the UK Government is still considering standardized packaging before this latest restriction on display has even been introduced in Scotland, let alone evaluated.”
Supersmarkets are characterized as those with a relevant floor area exceeding 280 square metres. Smaller retailers have until April 6, 2015 to conform to the display ban.
Smokers in the USA will certainly tell about the enormous price inconsistencies for cigarettes state to state.
The key cause for high cigarette prices is the varying excise taxes (SET) that each state sets on a pack of cigarettes.
Citi’s Tobacco team directed by Vivien Azer expects SETs to only turn into an growing trouble for the cigarette makers.
The big tobacco companies assume much more challenging SET conditions in 2013, comparable to those observed in 2011 and 2012. On a weighted-average basis, Reynolds American expects the SET level to boost $0.10 pp, or +7% relative to the $1.40 pp SET average noticed in 2012.
In fact, year-to-date there have been laws for cigarette excise tax increases recommended in 23 states (though several have been unsuccessful, remarkably in Nebraska, North Dakota and Wyoming), and decreases suggested in three states. Surprisingly, there have been suggestions in each of the three biggest states by consumption (Texas, California and Florida), as well as several proposals as part of budgetary bills (i.e., in Massachusetts, Minnesota and New Hampshire).
Assuming no modifications to the volume contributions by state, it is considered that the best-case scenario for 2012 to be an approximately 1% drop (-$0.02 pp) in the weighted-average cigarette SET rate, and a 36% boost (+$0.52 pp) in the worst-case scenario. Additionally, U.S. President Obama has planned to raise the federal excise tax on cigarettes by 94.6 cents per pack on January 1, 2014 (+94% from the current rate of $1.01) and to index the tax rate to inflation beyond 2014. It remains to be seen whether this proposition will be accepted by U.S. Congress, though early indications suggest Republicans are opposed.
Here’s a map of the state excise tax rates. New Yorkers who often pay over $10 per cigarette pack won’t be shocked by the high tax rate in its state. Meantime, the cheapest cigarettes are sold in Missouri.
Altria Group Inc. made an announcement that it would create its own variation of e-cigarettes in the second half of 2013 amid signs the battery-powered gadgets, which turn heated, nicotine-laced liquid into vapor, are starting to go sales of regular cigarettes in the U.S., less than 10 years after appearing.
The CDC reports that more than 20% of adult smokers were users of e-cigarettes in 2011.
Altria, which is the manufacturer of popular Marlboro cigarettes and the owner of around half of the U.S. cigarette market, is playing catch-up to smaller competitors. Reynolds American Inc., being the second largest cigarette company, said it intends to broaden distribution of its Vuse e-cigarettes after providing them to test markets recently. Lorillard, which is the third biggest tobacco manufacturer, spent around $135 million a year ago to buy Blu Ecigs, a leading e-cigarette company.
U.S. retail sales of electronic cigarettes presented about $500 million in 2012, about 0.5% of the entire tobacco market, but are set to achieve $1 billion in 2013. Lorillard revealed that first-quarter sales of its Blu Ecigs leaped to $57 million, sequentially growing from $39 million.
Altria said its cigarette volumes dropped 5% in the first quarter from 2012. Lorillard and Reynolds said that e-cigs led to the approximated 6.2% industry decrease in regular cigarettes volumes over the same period, increasing from the typical 3% to 4% drops posted in recent times.
Electronic cigarette users say they choose this product to other smokeless tobacco products as it more closely mimics regular cigarettes.
Smokeless cigarettes have mostly evaded taxes and regulations – including bans in public areas – until now. The only state that presently taxes e-cigarettes is Minnesota, although bills are pending in Oklahoma, Rhode Island and Vermont. At least a dozen states have presented bills to forbid the sale of e-cigarettes to those under 18, according to the National Association of Tobacco Outlets.
The Food and Drug Administration said in January it intended to suggest regulations for tobacco products it doesn’t presently supervise, including cigars and e-cigarettes, by April but has yet to release them. An FDA spokeswoman also said “further research is needed” on the “potential health benefits and risks” of e-cigarettes.
Cigarette kiosks in Scotland’s bigger stores and markets will soon enough obtain a very distinctive look
The Scottish authorities’ ban on the cigarettes display, and other tobacco products, takes effect on April 29 this year.
According to the new regulations, which are part of The Tobacco and Primary Medical Services (Scotland) Act 2010, bigger shops must guarantee that tobacco products are not sold on the tobacco displays where they can be seen by everybody and it also establishes a limitation on the size of any temporary display.
Tobacco products vending machines will also be prohibited on the same day.
Smaller retailers will be allowed until April 6, 2015, to conform to the ban on tobacco displays as they may need additional time to make the required modifications on cigarette deals.
Councillor Tom Cook, Spokesperson for Improving Community Safety stated “The Trading Standards Service is in charge locally for guaranteeing compliance with the new regulations and our Officers have been dealing with businesses affected providing advice during the transition period. They will be visiting again in due course to ensure compliance.
“These new regulations are part of a persisted range of actions being launched by the Scottish authorities in their commitment to protect the health and welfare of people. It is considered these measures will discourage the younger generation from starting smoking and help to assist those who are trying to stop smoking.”
Pipes, bongs and hookahs could soon disappear from shelves in Florida
Rep. Darryl Rouson is supporting HB 49 that takes away exclusion in existing law that permits cigarette stores to sell smoking pipes. His bill would prohibit the selling all pipes in Florida.
Nevertheless, the St. Petersburg Democrat’s bill does not presently present any exclusion for various kinds of pipes, such as corn cob.
Pipes made from metal, wood, ceramic and more would be banned as would hookahs, chamber pipes and bongs. These can presently be bought from tobacco retailers if the shop’s yearly gross income from the product does not surpass 25 %. If the bill switches into law, those pipes would have to disappear from shelves by October 1 of this year.
Sale of hookahs would also be prohibited. But, the hookah cafes that have appeared in a lot of cities, often as adjuncts to bars of restaurants, would not have to be closed.
Rouson’s bill would make the sale of the pipes penal by no more than a year in prison and any following infractions would lead to no more than five years in prison. The Division of Alcoholic Beverages and Tobacco could also fine the retailer as much as $1,000 per pipe, Rouson mentioned. The division could also postpone or revoke the retailer’s license.
Luke Lirot from the Law Offices of Lirot in Clearwater represented many smoke stores in court that challenged the constitutionality of present law regarding smoking gadgets. Their challenge of the law failed, but an appeal to that ruling is now on approval. He and his client prepare to challenge Rouson’s bill if it makes it into law.
Sen. Kelli Stargel has an identical bill (SB 1140) that would allow pipes to stay on the shelf if the purpose of the seller is that the gadget be used for tobacco products. Her bill particularly protects pipes that are mainly made of corn cob, briar, clay or meerschaum while Rouson’s presently does not.
Rouson said he is ready to unite his bill with Stargel’s to involve the exemptions that hers holds for certain types of pipes.
Youngsters to be prohibited from using electronic cigarettes in Italy
Youngsters have been prohibited from using electronic cigarettes in Italy, a world leader in the growing start-up industry.
Last week the health ministry approved an ordinance banning the sale of e-cigarettes to those under 18, the same age limit for tobacco products, modernizing a prior ordinance that set the age limit for e-cigarettes at 16. The health ministry said that the gadgets, despite promoting a safer alternative to regular cigarettes, still surpass acceptable daily levels of nicotine when smoked moderately, citing the European Food Safety Authority (EFSA).
The ban is set up until October this year when it will require being re-evaluated. Meanwhile, Balduzzi requested further study into the dangers of electronic cigarettes by Italy’s Higher Health Institute. The information was received warmly by Brescia-based electronic-cigarette maker Ovale, which during 2012 has sold over one million gadgets, opened 400 shops and employed 1,000 workers in Italy, leading the world in the strong industry.
In March, France’s Health Minister Marisol Touraine said she had requested a research evaluating the effects of using e-cigarettes.
Electronic cigarettes first appeared in China in 2003 as an alternative to regular cigarettes. It is an electronic inhaler that simulates the act of smoking by producing mist and with the tip of it lighting up.
A number of countries, including Colombia, Panama and Uruguay, have prohibited the smokeless electronic cigarettes, with lawmakers suggesting there was no evidence they helped smokers stop smoking.
New York celebrated 10th anniversary of smoking ban public places such as bars and restaurants
On March 27, New York City Mayor Michael Bloomberg celebrated 10th anniversary of smoking ban public places such as bars and restaurants.
“Ten years ago when New York City banned smoking in restaurants and bars, many forecasted the end of the hospitality, restaurant and tourism industries,” Bloomberg stated.
Critics of the step anticipated smoking ban would harm the restaurant and bar earnings, but the Health Department review said there are now some 6,000 more restaurants and bars in New York than there were ten years ago.
The New York’s Smoke-Free Air Act became operative a little over a year into Bloomberg’s first term as mayor in 2003 and banned smoking inside bars, restaurants and most office buildings.
The following year, New York began offering free nicotine replacement therapy to smokers attempting to stop smoking and in 2011 extended the smoking ban to the New York’s parks and beaches.
As outlined by the review unveiled on March 27, the percentage of adult smokers decreased by about a third to 13% in 2011 from 19 % in 2002. The review, published by the city’s Health Department, also said the percentage of youths aged 18 who smoke slipped by about half to 9%.
Bloomberg’s period, which will end in 2013, has been marked by his efforts to boost New Yorkers’ health by trying to stimulate them to eat less salt, trans fats and calories in general, among other actions.
A week later, Bloomberg released his strategy to demand stores to hide cigarettes and tobacco products from tobacco displays, reasoning that would protect youth from advertising efforts.
Some store proprietors and tobacco companies have criticized the strategy as unnecessary extra regulation that would break the free speech provision of the U.S. Constitution.
Bloomberg also suggested a minimum price of $10.50 for a cigarette pack in order to some smokers would find smoking too costly to keep. The two bills are now before the city council.
Ronald Bayer, a professor of public health at Columbia University, called Bloomberg’s health projects a “major achievement” and said his attempts to make smoking less socially appropriate were an effective and legitimate use of his office.
He said it remains at question how much further government could go to discourage smokers to stop smoking.