Tag Archives: tobacco industry
On April 17, Philip Morris International will present its 2014 first quarter earnings. Experts do expect data from Philippines, where an increase in indirect taxes implemented in 2013 affected negatively tobacco industry.
Experts say that Philip Morris business in European Union, Eastern Europe, Middle East and Africa was affected by numerous anti-tobacco regulations. Russia is company’s biggest tobacco market in the region and all regulations in this country do greatly affect Philip Morris sales volume.
These days Philip Morris International is a leading international tobacco company. Tobacco products manufactured by the company are sold in more than 180 countries worldwide. Its most popular and successful brand is Marlboro. Except the USA and China, Philip Morris holds more than 28 percent of the total cigarette market in the world. Till 2008 Philip Morris International was an operating company of Altria Group.
Representatives of Philip Morris International say that 47% of total volume decline are attributed to its operations in the Philippines. Thus due to significant increase of indirect taxes in the country, the company was forced to increase prices on Marlboro cigarettes by 60%. As a result, Philip Morris International recorded a excessive decline in cigarette shipments to the market in 2013. Today more and more people are looking for discount cigarettes online as it is most beneficail and convenient.
The World Health Organization (WHO) is prompting governments to unite forces against tobacco industry and is accusing the Big Tobacco of attracting ore and more smokers to its products.
“Big Tobacco is using lawsuits in order to try and overthrow national laws and international conventions intended for eradicating tobacco sales,” said WHO director general Margaret Chan.
“It is awful to think that an industry known for its actions could be allowed to outdo what is in the public’s interests,” Chan stated at the WHO recent meeting held in the Philippine capital.
“It is difficult to any country to carry the financial load of such kind of litigation, buy most of all for a smack one,” she said.
“Tobacco industry has enough money to hire best lawyers, because big money can do more than any moral or public health arguments and crush even the most powerful scientific evidence.”
Chan called the countries at the forum of Western Pacific nations to fight back the present situation.
“I prompt all these countries unite forces and hold our grounds because we should never permit the tobacco industry to have the best of it,” she said.
Chan reminded the successful attempt undertaken in the Philippines in order to raise taxes on smoking products, declaring that the WHO was “preparing” to support other countries that decided to take the given measures.
However Chan didn’t specify how the WHO would help countries to struggle the tobacco industry.
WHO has for many years called for ban and restrictions on cigarette advertising and sponsorship, as well as bans on smoking in public places and higher taxes.
For instance in Australia, Prime Minister Julia Gillard’s government plan to introduce a one-of–a-kind legislation that would compel all cigarette producers to sold their products in plain packaging January 1, 2011.
Despite of the fact, Philip Morris has started legal action, stating that Australia’s plans infringe international trade obligations and said it expects billions of dollars in compensation if plain packaging takes effect.
Australian Department of Health Secretary Jane Halton declared that her government was resolute to implement the plan, despite the undermining activities of tobacco companies.
“We are ready to withstand the attack of big tobacco but we understand that it will be a rather difficult and complicated struggle,” Halton told the WHO delegates.
According to WHO data, about 3,000 people die each day from tobacco consumption in the Western Pacific region.
This covers such countries as: Australia, Brunei, Cambodia, China, Japan, Malaysia, Mongolia, Philippines, Singapore, South Korea, South Pacific island and Vietnam.
Camel has decided to lower the price of its main cigarette packets, when just 20 days ago, the company had their price 15 cents.
In this way, tobacco company thus responds to the price war of tobacco which is registering especially in the last month.
As published by the official State Bulletin (BOE), Camel Blue 20 passes cost 3.65 euros per packet, with a price of 3,75 euros was established on July 11.
The rest of Camel cigarettes packets will have the same price, with the exception of the Camel Shorts that now cost 3.50 EUR 3,60 euros.
Want your partner to kick the butt?
Well, then buy him a pooch, for a new study has found that smokers are more likely to quit cigarettes for the sake of their pet’s health rather than their own.
Exposure to passive smoking has been associated with lymph gland, nasal, and lung cancers; allergies; eye and skin diseases; as well as respiratory problems in cats and dogs.
For the study, the researchers set up an online survey for pet owners resident in south eastern Michigan, quizzing them about their and their partners” smoking behaviours, and what they knew about the effects of second hand smoke on their pets.
The findings revealed that nearly one in three of the smokers i. e. 28.4 pct said that knowing that smoking was bad for their pets” health would spur them to give it up.
Almost one in 10 said this would prompt them to ask their partners to quit, while around one in seven said they would tell their partner to smoke outdoors.
These figures were even higher among non-smokers, more than 16pct of whom said they would ask their partner to quit, while around 24 pct said they would tell their partner to smoke outdoors.
According to the authors, public health campaigns targeting smokers would do well to focus on the detrimental impact of second hand tobacco smoke on pets.
The research is published in Tobacco Control. (ANI)
The tobacco company offered 100 holidays on the Coral Coast, Fiji’s most exclusive enclave, to IGA stores and other retailers to sell more cigarettes.
To be eligible, the shopkeepers had to sell at least 10,000 cigarettes between 11 April and 5 June – or lift sales by five per cent.
To win, retailers also had to promise never to run out of stock of BATA cigarettes. With pictures of sandy beaches, golf courses and exotic Fijian dancers, the BATA competition promises winners “guest speakers and industry experts from the world of retail, themed dinners, a range of great activities, five-star luxury accommodation plus opportunities to win other amazing prizes.”
The holiday was taking place from 22-25 July.
It is illegal for tobacco companies to advertise directly to consumers or run consumer competitions – but they can run promotions for retailers, in what anti-smoking groups say is a “loophole” that must be closed.
BATA are the makers of Winfield, Dunhill, Benson & Hedges, Pall Mall and Holiday cigarettes. Anti-smoking group Ash Australia described the promotion as exploitation of retailers by the tobacco industry. Ash chief Anne Jones said: “The retailers are being used as the front line for the tobacco industry. These are incentives for retailers to sell products that cause disease, and they should be banned.”
However, BATA spokesman Scott McIntyre said the promotion was legal. He added: “BATA values the relationships we have with our retailers – which is why we have organised a number of industry experts and guest speakers to engage with them about best-practice retailing, improving customer service and growing their business.
“The program applies to 100 of the 30,000 plus retailers in Australia.”
The Sunday Telegraph can also reveal rival tobacco giant Imperial has given retailers a “cheat sheet” on campaigning against the federal gov- ernment’s proposed plain-pack laws, due to be voted upon in August.
The Imperial Tobacco pamphlet urges retailers to claim they are afraid of the plain-pack laws being extended to other products.
“Next could be food and drink. Where will it stop?” the Imperial pamphlet asks in a series of pointers for retailers to include in their submissions to a House of Representatives committee presently considering the plain-pack laws.
“When sending your submission, you may choose to include views such as: There is no evidence anywhere in the world that plain packs will work (and) if cigarettes are not on display, plain packaging does not make sense and is bureaucracy gone mad,” the pamphlet said.
Imperial did not respond or comment on The Sunday Telegraph’s questions.
History of Tobacco Regulation
*This section is based in part on a paper prepared for the Commission by Jane Lang McGrew, an attorney from Washington, D.C.
Since 1613, when John Rolfe introduced a successful experiment in tobacco cultivation in Virginia (Morison, 1965 : 52) the leaf has assumed major social, industrial, economic and medical implications. Consequently, persons concerned with tobacco on a commercial or personal basis have been subject to a variety of different regulations over the past 360 years.
Tobacco has been attacked by social observers and medical authorities for the damage it has allegedly done, to the social and physical condition of man. Yet it has also provided a substantial source of revenue to the state and Federal governments of the United States.
As is now the case with alcohol, tobacco has long been subject to regulatory controls over the quantity and quality of production. On the other hand, sumptuary laws affecting tobacco have been far fewer-and weaker-than those aimed at alcohol. In fact, there has never been a time when tobacco was prohibited throughout the United States although consumption under certain circumstances has been forbidden at various times in different jurisdictions.
Tobacco-associated today with smoking of cigarettes, and to a lesser extent, of pipes and cigars-has been popular at times for both snuffing and chewing. Indeed, until about 1870 cigarettes were relatively rare in the United States, and almost all tobacco consumed domestically was chewed during the mid-19th century (Gottsegen, 1940: 9-10).
What ever the preferred mode of consumption, however, the, commodity has always been the subject of debate respecting the appropriate governmental attitude.
On the one hand, proponents of the leaf stress its social benefits and its economic and industrial significance. Some enthusiasts even endorse its alleged medical and psychological benefits. Opposed are those who cite the health hazards of smoking and others who are convinced of its immorality.
Most sumptuary restrictions were fostered by the latter group in an effort to suppress the habit.
Those who seek to institutionalize and foster use of the drug focus on the regulation of the quantity and quality of production.
This section does not attempt to weigh the merits of the various regulatory schemes. Rather, it will trace from John Rolfe’s day the three threads of regulation which have circumscribed both the producer and consumer of tobacco in the United States.
Cigarettes are one of the most heavily taxed consumer products in the United States.
Federal, state and local governments collect more money from the sale of cigarettes than retailers, wholesalers, farmers and manufacturers combined.
In FY2009, alone, between federal tax, state and local taxes, and tobacco settlement payments, the government raked in more than $38 BILLION:
- $8.5 billion in federal excise taxes
- $20.3 billion in state excise taxes
- $8.8 billion is state settlement payments
Since FY1997, the weighted state average tax has gone up 197.5% — from 32.1¢ to 95.3¢ as of January 2008.
From 1997-2010, there have been 121 state excise tax increases as well as the District of Columbia.
Total state excise tax revenues have risen 115%, from $7.3 billion in FY1997, to $15.7 billion in FY2009.
Cigarette Retail and Taxes
As of March 2010, the average retail price of a package of 20 cigarettes (full-priced brands), was $5.27, up from 4.53 in 2007, including federal, state and municipal excise taxes.
Payments to the government, on average, for 55 percent of the retail price of cigarettes.
Around 64% of all tobacco sales occur in the nation’s 145,119 convenience stores, according to a National Association of Convenience Stores (NACS) study.
The average convenience store sells about $438,000 worth of cigarette each year. In addition, cigarette sales are the number one in-store item for these stores, comprising about 36% of merchandise sales.
After years of huge tax increases, enough is enough.
Tobacco worth US$345,2 million has been sold through the auction and contract market at a seasonal average price of US$2,78 per kilogramme.
At day 105 of the tobacco selling season, 125,7 million kg had been sold compared to 107 million kg the same period last season.
The Tobacco Sales Floor, which opened earlier than other auction floors is leading in sales with more than 31,6 million kg.
Boka Tobacco Floors and Millennium Tobacco Floors have recorded sales of 14,7 million kg and 9,5 million kg respectively.
Order has returned at the three auction floors as few farmers continue to deliver their crop for sale.
Millennium marketing and financial manager Ms Kudzayi Hamadziripi said there was less activity at the auction floors as tobacco deliveries have drastically dropped.
“Tobacco deliveries are still trickling in and the volumes have continued to decrease.
“We are now averaging 400 to 500 bales per day and there is uncertainty the volumes may reach the target of 170 million kilogrammes,” she said.
From the surveys carried out by MTF, most farmers no longer have tobacco and it seems this year’s projections were exaggerated. A local tobacco expert said the estimates were reached at considering the amount of seed sales and this does not necessarily translate to tobacco planted.
“There is need for the tobacco industry to come up with correct projections as these help stakeholders in planning for the season,” she said.
Last season the tobacco output target was revised upwards three times.
Least year more than 120 million kg were sold during the tobacco selling season and this year the industry was expecting 170 million kg of the golden leaf to go under the hammer.
From the current deliveries and speculations that the season might end early next month, there are possibilities that the targeted figure will not be met.
This year is the second time that the country has passed the 100 million kg mark, an indication that the country is regaining its status as one of the world’s major tobacco producers.
Tobacco growers are angered over the prices offered at the auction and are demanding government to urgently step in on the given issue.
This year, the number of registered tobacco farmers increased to 60 000 due to profitable revenues from a good crop.
Zimbabwe Tobacco Farmers Union President Nicholas Kapungu declared that the current prices offered at the auction were serving to discourage new farmers from growing tobacco next season.
“We have a lot of farmer who grow tobacco for years, but these prices are nothing more than a sabotage. The last week prices were fluctuating between US$0, 80 and US$1, 20 depending of the crop quality,” stated Kapungu.
“As a union we are even not informed when the authorities choose buyers. Government is not thinking about needs of farmers, as being a union we urge authorities to respond to our plight”.
Official statistics from the Tobacco Industry and Marketing Board demonstrated that 87 million kg of tobacco worth US$231 million had gone under the hammer at the mean price of US$2, 65 by day 62 of the selling season.
Such increased prices offered at various auctions stood at US$4, 50, US$4, 85 and US$4, 46 respectively.
Farmers complained about the lower prices at the auction floors and called government to undertake urging actions.
Mrs. Makuvamombe from Macheke declared that she had brought four bales to the auctions in April and after the tobacco was auctioned, one bale in a strange way disappeared although indications were that it had been sold at a profitable price.
“I believe government officials should intervene because such marketing system is not fair,” she stated.
She also criticized other farmers for corrupting buyers not to pay equitable prices for certain bales that deserve more increased prices.
One more farmer declared that he had withdrawn his bales from auction after the prices became quite unprofitable. The costs for crop stipulated until the final sale was amazing and did not correspond to what he had expected in terms of price offered.
“I brought eight bales and was charged US$25 per bale. Also I had to look for commissions and weight charges before all my bales were auctioned at less than US$2 per kg,” he stated.
Boka Floors representative of the Rudo Boka declared that it was not in the interest of the auction to overcharge farmers but called authorities to train farmers showing them how premium quality crop should be produced.
Approximately 90% of the auctioned tobacco from Zimbabwe is meant for the export market.
“A lot of countries as Brazil and Malawi have produced tobacco in large quantities, so that will probably affect the world market prices,” Hillary Mombeshora spokesman for Millennium Tobacco Floors stated.
Cigarette makers including Altria Group Inc. (MO)’s Philip Morris USA unit are appealing a judge’s ruling that oversight of the industry resulting from a 1999 racketeering case is necessary and will continue.
The defendants, which also include Reynolds American Inc. (RAI)’s R.J. Reynolds Tobacco and Lorillard Inc. (LO)’s Lorillard Tobacco, notified U.S. District Judge Gladys Kessler in Washington today that they are challenging her authority to oversee the case in an appeal.
Kessler ruled June 1 that her involvement wasn’t ended by a 2009 law that empowered the U.S. Food and Drug Administration to monitor the industry and establish restrictions on the sale, promotion and distribution of tobacco products.
In her ruling, Kessler said the cigarette makers continue to challenge the law that created the FDA’s regulation of the industry and if they prevail, “it will be all the more necessary for them to be restrained by this court from any future violations” of the Racketeer Influenced and Corrupt Organizations Act.
She ordered the companies to stop marketing cigarettes as “light” and “low- tar” and to make statements about the health effects of smoking in newspapers and magazines and on cigarette packages.
British American Tobacco Plc (BATS), Europe’s largest cigarette maker, was dropped from the lawsuit in March after Kessler said a 2010 ruling by the U.S. Supreme Court in a securities case restricts the U.S. from finding liability in “what is essentially foreign activity.”
“We look forward to presenting our arguments to the appellate court,” said Steven Callahan, a spokesman for Altria. Greg Perry, a spokesman for Lorillard, didn’t immediately respond to an e-mail message seeking comment. Representatives at Reynolds American’s public relations department didn’t immediately reply to a phone message seeking comment.
Charles Miller, a Justice Department spokesman, declined to comment.
The case is U.S. v. Philip Morris USA Inc., 99-cv-02496, U.S. District Court, District of Columbia (Washington).
Ballot measure is that measure which could save billions of dollars, said supporters who proposed $1-per-pack tax on cigarettes. But they are being outspent by a tobacco company that has prepared to stand up for the campaign.
Sponsors of the California Cancer Research Campaign informed legislators and staff last week, representing research demonstrating that the ballot measure, if passed, could reduce state costs on health and the rate of tobacco-related diseases.
According to the nonpartisan Legislative Analyst’s Office the ballot measure could raise $855 million in its first year. Nearly half the funding will go to cancer study and the rest to campaigns to reduce cigarettes use and avert unlawful cigarette sales. Voters could cast ballots on the measure in 2012, or as soon as June if Gov. Jerry Brown prospers in getting a special election set to extend some taxes.
Researchers of the University of California forecast that the cigarette tax could be reduced by 11 percent in the rate of smoking people in the state. If the ballot measure does not pass, the current number of smokers of 12.9 percent could rise by 9 percent by 2016, researchers added.
Researches made a conclusion that the ballot measure could save the lives of 4,174 citizens of California between 2012 and 2016. Health cost savings might range from $3.3 to $28.2 billion, they said.
Researchers warn that cuts in California smoking and lung cancer rates may meet with failure if smoking prevention efforts don’t be supported.
A group called Taxpayers Against Out-of-Control Spending, which is funded by the Altria Group, which owns the Philip Morris tobacco company is working against the ballot measure.
There are other supporters’ names at the group’s website. The group criticizes the per-pack tax, citing concerns about funds being spent out of state and accountability to taxpayers.
David Sutton, a spokesman for Altria, said that they are against additional targeted taxes on tobacco and that he funded the group to “evaluate our options regarding this measure.”
During the first three months of this year, opponents outspent supporters by more than a 2-to-1 margin. Altria spent $1.2 million, and the supporters – $424,000.
Cigarette-manufacturers spend money on pollsters, campaign consultants and a famous political attorney.
Rhys Williams, a spokesman for the California Cancer Research Act campaign, said supporters would be against any effort to move the funds to solve state budget crises.
“The ultimate goal of California Cancer Research Campaign is to eliminate smoking”, Williams said.
According to 2009 Centers for Disease Control data, California smoking rates are among the lowest in the U.S. at 12.9 percent. The highest rates of 25 percent are in Kentucky and West Virginia. The proposed $1-per-pack tax on cigarettes is expected to increase cigarette prices to nearly $6 to $7 per pack, depending on the brand.