Japanese cigarette maker wants preferential tax eliminated

British American Tobacco, the world’s second-largest cigarette maker, has asked the government to remove the preferential treatment the products of PMFTC Inc. and other old cigarette brands to level the playing field in the Philippines.

James Lafferty, general manager of British American Tobacco Philippines, said the company was open to any increase in the excise tax rates and a change in the structure of the so-called sin taxes if it would allow new entrants like BAT to do business in the country.

“We just simply want the government to level the battle field in order for us to destroy the monopoly. Monopoly, as you can see, is never good for the economy,” Lafferty said referring to PMFTC, which controls 94 percent of the domestic tobacco market.

Old brands under the present excise tax scheme enjoy a preferential tax treatment, or P12 in excise tax for every P32 pack of cigarette. The government granted the tax rate on tobacco companies operating in the country before 1996.

Companies that came in after 1996 like BAT, however, are levied an excise tax of P28.30 per pack despite selling its cigarettes for P32 a pack, the same as that of PMFTC.

“If you came in just after 1996, or specifically in 1997, which happened in our case, we have to pay higher excise tax even if we are selling the product at the rate of PMFTC,” Lafferty said. “This is the most unfair thing that I ever seen.”

Smoke free outdoor dining plan

A ban on smoking in outdoor dining areas in Australia has been seen as a landmark step across the Tasman, and the concept of a similar ban in Tauranga has some support.

New South Wales state government last week announced a ban on smoking in playgrounds, public sports grounds, swimming pools, bus stops, taxi ranks and entrances to public buildings. The legislature also dictates that smoking in outdoor eating areas will be banned by 2015.

The idea of smoke-free public areas in Tauranga has support from local health authorities, but some dining establishments fear a move to restrict smoking could potentially drive their customers away.

In two weeks' time, the Tauranga City Council is meeting to discuss whether or not to introduce new smoking rules for the city.

Melanie Desmarais, health promotion manager of Waikato/Bay of Plenty for the Cancer Society, said the idea of introducing rules to restrict smoking in Tauranga had substance.

"There are over 30 councils throughout New Zealand that have already adopted similar policies. The evidence seems to suggest it does work," she said.
"Quite often, too, even smokers will welcome further restrictions - it's basically another reason to quit."

But unlike NSW, any rule changes to smoking in Tauranga would likely only be educational. The council is unable to introduce bylaws to enforce smoking laws, but can initiate a courtesy drive for residents to follow.

Mrs Desmarais pointed to a number of cases in nearby towns that have proven successful for various reasons. A similar drive against smoking in playgrounds and parks in Rotorua had public backing of 85 per cent. A policy introduced in Opotiki last year has led to a 60 per cent drop in cigarette litter. In Hamilton, a recent survey showed 94 per cent of people were in favour of outside smoking restrictions, including 89 per cent of smokers.

Even though the restrictions were merely a courtesy, with correct city-wide education, Mrs Desmarais said they could be successful.

Cheryl Steiner, strategic planner at Tauranga City Council, said the council would decide on March 13 whether to adopt a smoke-free policy for the city.

"First they need to determine what they want to do. Councils around New Zealand have developed policies, but what it applies to can vary. In terms of the scope [of any smoke-free policy for Tauranga City Council] ... that's yet to be determined," she said.

But some eateries and smokers questioned whether restrictions mirroring those in NSW would be beneficial, if they did get passed.

Smoker Cameron Keogh was dining at a Strand restaurant yesterday lunchtime. Mr Keogh, owner of World's End pub in Fraser Cove, said smokers needed to be accommodated at diners too.

"I agree with no smoking inside but there needs to be a zone for the smokers. I think [introducing a ban outside restaurants] would be an unfair change.

"[But] I agree with sports fields. I've played sports and you can smell it on the field," he said.

Fellow smoker Scott Hampton said banning smokers from outside dining areas would be a breach of their rights.

"We do have rights too. Designated zones for smokers outside - you can't get any more fresh air than outside. You're [talking about] taking someone's freedom of choice away," he said.

Shona Seth, manager of the Crown & Badger, said further smoking restrictions on pubs could drive customers away. "I think it definitely could, [with us] being a pub. Even non-smokers smoke when they drink," she said.

Toi Te Ora Public Health medical officer of health Jim Millar said the public health service's current stance did not extend explicitly to restaurants and cafes - they simply wanted to halt tobacco use for the next generation.

"We are looking to encourage non-smoking as being the normal thing to do."

More medical marijuana charges

The proprietors of Cannabis Outreach Services in Lacey have each been charged with 25 counts related to allegations of selling marijuana at the medicinal cannabis collective they operate in the 5700 block of Lacey Boulevard.
Dennis Coughlin, 68, and Jami Bisi, 50, were each charged in Thurston County Superior Court with 11 counts of unlawful delivery of marijuana within 1,000 feet of a school bus stop; 12 counts of unlawful use of a building for drug purposes; and two counts of unlawful possession of marijuana with intent to deliver within 1,000 feet of a school bus stop, according to their charging documents.
Coughlin and Bisi are scheduled to be arraigned at 10 a.m. Tuesday in Thurston County Superior Court. Their attorney, Douglas Hiatt, could not be reached for comment.
Coughlin and Bisi are the seventh and eighth individuals to face criminal charges in the aftermath of Nov. 15 raids on five Thurston County medical marijuana collectives by detectives with the Thurston County Narcotics Task Force.
The proprietors of three other collectives raided that day also have been charged in Thurston County Superior Court with crimes related to the alleged sale of marijuana.
The proprietor of one Thurston County medical marijuana collective that was raided has yet to be charged with a crime. That establishment is The Healing Center, located on Capitol Way in downtown Olympia.
On Tuesday, Thurston County Prosecuting Attorney Jon Tunheim said he has no reason to believe that the proprietor of The Healing Center won’t also be charged with crimes related to the alleged illegal sale of marijuana.
Tunheim said one of his deputy prosecuting attorneys is systematically reviewing all of the criminal cases that were compiled after the raids.
According to court records, three detectives with the Thurston County Narcotics Task Force obtained medicinal marijuana authorizations in their undercover names between August and November 2011, and then purchased marijuana at Cannabis Outreach Services on 11 occasions, court papers state.
Defense attorneys for the proprietors of several other medical cannabis collectives that were raided Nov. 15 in Thurston County have taken exception to the detectives’ first obtaining valid medical marijuana authorizations. They have said the conduct amounts to impersonating a valid medical marijuana patient and committing “apparent fraud.”
Chief Thurston County Criminal Deputy Prosecuting Attorney Andrew Toynbee has said in response that it is a common, legal practice for undercover detectives to use “ruses” during undercover operations.
During the raid at Cannabis Outreach Services, narcotics detectives seized more than 22 pounds of marijuana, in addition to six marijuana plants, court papers state.
Cannabis Outreach Services delivered marijuana to “in excess of 1,000 customers,” court papers state. An individual answered the phone Tuesday at Cannabis Outreach Services, but Coughlin and Bisi were unavailable for comment.

Fewer Teens Exposed to Tobacco Smoke in Cars: Report

Although fewer kids are being exposed to smoking while riding in cars, more than 20 percent of nonsmoking teens still are, U.S. health officials report.

Secondhand smoke can be particularly intense in a closed space, such as inside a car, and poses a significant health risk, the researchers noted.

"There have been marked decreases in exposure to smoking in cars," said report author Brian King, an epidemic intelligence service officer in the Office on Smoking and Health at the U.S. Centers for Disease Control and Prevention. "That decrease occurred whether they were nonsmokers or smokers," he noted.

"But what is alarming is that, despite that decrease, we are still seeing large levels of exposure, particularly among nonsmokers," King said. "One in five nonsmokers is still exposed to secondhand smoke in that environment."

The drop in smoking in cars is probably a mix of several factors, including fewer people smoking and smoke-free laws that also have a spillover effect on limiting smoking in homes and cars, King noted. In addition, there have been changes in the attitudes about social acceptability of smoking, especially when nonsmokers are present.

"We know that there is no safe level of secondhand smoke," King said.

The best way to eliminate secondhand smoke exposure is to implement 100-percent smoke-free environments, he added.

"Implementing voluntary smoke-free policies in your vehicle or expanding existing smoke-free policies that also include motor vehicles could help reduce that secondhand smoke exposure," King said.

Four states already have laws that prohibit smoking in cars when there are children aged 16 or younger inside. These states are Arkansas, California, Louisiana and Maine, along with Puerto Rico.

The report was published in the Feb. 6 online edition of Pediatrics.

Using data from the National Youth Tobacco Survey, which looks at smoking among U.S. students in grades 6 through 12, the researchers found that from 2000 to 2009, the number of children exposed to smoke in cars had declined.

Among nonsmoking students, the exposure to smoke in cars went from 39 percent in 2000 to 22.8 percent in 2009, and among smoking students it went from 82.3 percent in 2000 to 75.3 percent in 2009, King's team found.

But, that means that in 2009, over 22 percent of nonsmoking students and 75 percent of smoking students were still being exposed to secondhand smoke in cars, the researchers added.

Secondhand smoke can lead to acute respiratory infections, middle ear disease, delayed lung growth and more severe asthma, the authors noted.

Commenting on the study, Danny McGoldrick, research director at the Campaign for Tobacco-Free Kids, said that "it's great news that youth exposure to secondhand smoke in cars has declined significantly, but there is still much work to do to protect the many students who are still exposed. We support the call for the adoption of voluntary and legislative policies prohibiting smoking in cars with kids," he added.

It is especially critical that states and communities adopt comprehensive smoke-free laws that include all workplaces and public places, McGoldrick said.

"These laws heighten awareness about the dangers of secondhand smoke, and prompt the adoption of voluntary smoke-free policies in nonpublic places, like homes and cars," he added.

All Licensed Tobacco Auction Floors in Harare

TOBACCO growers will sell their crop at auction floors in Harare only this year because all firms that applied for licences to operate in other provinces failed to meet stipulated standards.

Tobacco Industry and Marketing Board chairperson, Mrs Monica Chinamasa, yesterday said companies out of Harare could not meet the requirements although some had already put up structures.

She said the decentralisation of tobacco auction floors had now entered the second phase.

She said the first phase of decentralisation was done by TIMB, which decentralised its offices to provinces to enable farmers to book and register nearer to their farms.

"It is a long process, which cannot be completed in a single season.

"This season some companies in Karoi and Mvurwi applied for licences but could not meet the standards required to operate auction floors," she said.

Marcopine Auction Floor in Karoi had its premises inspected while the Mvurwi premises were reportedly not yet ready for the 2012 tobacco-selling season.

Mrs Chinamasa said TIMB does not licence individuals but premises.

"There are critical areas that we consider for a premise to get a licence.

"We consider the holding place for growers, clinic, eating places, security, banking facilities, ablution facilities, alternative sources of safe water and electricity among other things," she said.

She said these requirements needed capital and this was where some willing companies were failing.

"We are encouraging companies to open auction floors outside Harare as we want to bring services closer to farmers.

"We would want to make life easy for farmers and decentralisation is one way of achieving it," said Mrs Chinamasa.

This season, TIMB licensed four auction floors - Tobacco Sales Floor, Boka Tobacco Auction Floors, Millennium Tobacco Floors and Premier Tobacco Auction Floors.

Mrs Chinamasa said the licensed auction floors were all compliant in the areas of security, ablution facilities, banking facilities, clinics, IT systems and waiting areas.

These floors have a combined selling capacity of 36 000 bales per day.

The floors have enough capacity to sell all auctions tobacco in less than 50 selling days provided the growers book in advance to avoid congestion.

Just like last year, the tobacco-selling season will this year open in February.

It is slowly becoming a tradition for the floors to open as early February as TIMB endeavours to cushion farmers who are in dire need of ready cash.

TIMB is optimistic prices will be good this time around to avoid a repetition of what happened last season when marketing of the golden leaf had to be temporarily halted as farmers protested low prices.

The tobacco industry is preparing to receive tobacco volumes in the region of 150 million kilogrammes this season.

Zimbabwe is slowly moving towards regaining its status as one of the major producers of the golden leaf in the world.

Smoke ban cuts home smoking too

The smoking ban introduced in Ireland nearly eight years ago has led to less smoking at home, according to a new European study.

After the workplace smoking legislation was introduced, there was 25% increase in the number of smokers in Ireland who banned smoking in their homes.

Researchers found that home smoking bans were more likely to occur if the smoker planned to quit smoking, when there was a birth of a child, and if the smoker supported the public smoking ban.

It is widely believed that public smoking bans either cause an increase in the amount of smoking at home as smokers try to compensate or encourage smokers to enforce the same restrictions at home.

However, the recent study supports the latter theory.

"Opponents of workplace or public smoking bans have argued that smoke-free policies, albeit intended to protect non-smokers from tobacco smoke, could lead to displacement of smoking into the home and hence even increase the second hand smoke exposure of non-smoking family members and, most importantly, children," according to the the researchers.

For the study, researchers focused on four European countries - Ireland, Germany, France, the Netherlands - before and after smoking bans were implemented.

The percentage of smokers who banned smoking at home after the smoking ban was introduced increased significantly in all of the countries: 17% in France, 38% in Germany and 28% in the Netherlands.

Participating in the study were 4634 smokers in the four countries with smoke free legislation. In addition, 1080 smokers in the UK were also surveyed - this served as comparison country at a time when no public or workplace smoking ban had come into force.

The findings were based on two waves of the International Tobacco Control Policy Evaluation Project (ITC Project) Europe Surveys.
 The surveys were conducted between 2003/4 and 2008/9, depending on when the bans took effect.

Tobacco Farmers Eye Rich Pickings

ZIMBABWE'S tobacco farmers could make rich pickings when the auction floors open next week as the world's main competitors expect low yields owing to floods.

Tobacco Industry and Marketing Board chief executive officer Dr Andrew Matibiri said Brazil and the United States had their crops swept away by floods.

He said the situation will create a deficit in the world market.

Dr Matibiri was giving oral evidence before the Parliamentary Portfolio Committee on Agriculture, Water, Lands and Resettlement chaired by

Chikomba Central MP Mr Moses Jiri (MDC-T).

Goromonzi North MP Cde Paddy Zhanda (Zanu-PF) had asked Dr Matibiri to speak on how Zimbabwe's tobacco would fare.

Dr Matibiri said Zimbabwe, Brazil and the US were the three countries producing flue-cured tobacco, and the floods that affected the other two countries leave Zimbabwean farmers with an advantage.

"It is estimated that Brazil's production will be down by about 150 million kg, while the American crop has also been affected by 50 million kilogrammes and these are Zimbabwe's two main competitors," said Dr Matibiri.

Avoid last season's chaos at tobacco auction floors

"This means Zimbabwe's tobacco is likely to be sold at a premium."

Dr Matibiri said last year China imported 120 million kg of tobacco, of which 40 million kg came from Zimbabwe, and it still wanted more of Harare's flue-cured tobacco.

Testifying before the same committee, TIMB chairperson Mrs Monica Chinamasa said selling tobacco will be hassle-free this marketing season following the licensing of four auction floors.

When last year's season opened, she said, only one floor - Tobacco Sales Floor - was operating thereby creating huge congestion.

"We have toured these four auction floors to assess their preparedness and had a checklist of critical areas and we were quite happy," Mrs Chinamasa said.

"Their banks were also there to say they are ready to pay farmers. It will take only two hours before farmers are paid once they deliver their crop."

Mrs Chinamasa said each auction floor will have a minimum of three banks on site.

Asked what they were doing to ensure that tobacco growers registered ahead of the marketing season, Mrs Chinamasa said that was a perennial challenge despite awareness campaigns being done.

She said 35 000 farmers had so far registered, compared to 66 000 that did so last year.

"You will still have a certain percentage of growers not registering, what can you do? You can't send them away, but assist them. But they will be delayed," said Ms Chinamasa.

Mhondoro-Ngezi MP Cde Bright Matonga (Zanu-PF) said during last year's sales, growers complained about corruption and favouritism, particularly by police officers controlling queues who allowed their superiors to jump the queues.

Mrs Chinamasa said such complaints arose because there was only one floor operating.

She said they were assessing applications by two more firms to open auction floors.

Untaxed Tobacco Charges

A downtown Johnson City store has been shut down for selling untaxed tobacco and a variety of other violations.

The JC Police Department raided the One Stop Shop on Main Street and allegedly seized a large amount of untaxed tobacco and cigars. The search followed a long investigation into the sale of black market tobacco. In addition, police say the owners did not have workers compensation insurance for the employees. The store was also cited for code, fire safety and health violations. It's been shut down by the Workmen's Compensation Board and criminal charges are pending.

Ottawa health board recommends smoke-free city property

The Ottawa Board of Health has recommended that smoking be banned on all city property in an effort to make the capital a healthier city.

The board said in a news release the ban would include parks, beaches, and restaurant patios in an effort to reduce second-hand smoke and smoking rates.

"Tobacco use continues to be the leading cause of preventable death and disease," said Dr. Isra Levy, Ottawa's Medical Officer of Health. "In Ottawa, almost 1,000 smokers and non-smokers die each year due to tobacco-related illness."

"I really wanted to protect people's health while they're out trying to enjoy themselves, specifically for our young people," said Ottawa councillor Stephen Blais, who put forward the motion. "I think focusing on bar and restaurant patios and focusing on recreational places such as parks and beaches should really be the hardest part of the focus."

Blais said the motion will make Ottawa a non-smoking leader again.

"We were ahead of the curve, unfortunately we've gone behind the curve over the last number of years," he said. "A number of jurisdictions like Chicago, New York, the entire province of Alberta banned smoking on patios a number of years ago."

The recommendations also include increasing stop-smoking services and programs and focusing on lowering the number of youth who start smoking.

This come after three months of public consultations which the board said showed strong support for these changes.

"They realize that one's right to smoke . . . shouldn't impede your right to live a healthy and active lifestyle," Blais said. "Second-hand smoke contains 70 per cent more tar and over 4,000 deadly chemicals so people want to be health-conscious and enjoy public spaces in their own way."

A 2011 Ipsos-Reid survey said over 70 per cent of respondents were in favour of making those areas smoke-free.

Health Canada seizes flavoured smokes

Health Canada tobacco inspectors have raided three Quebec-based importers and seized millions of flavoured smokes popular with young people.

The seizures are the first against importers under the revised Tobacco Act, which prohibits the retail sale of cigarettes, little cigars and blunt wraps in packages of less than 20.

The Act also bans certain additives, such as those used to create flavours such as chocolate and bubble gum in the smokes.

The seizures took place at warehouses belonging to Casa Cubana in the Monteal suburb of St-Laurent, Groupe Tabac Scandinave in Boucherville, and Distribution GVA Inc. in Laval.

More than 25 million of the smokes across 41 product lines were allegedly seized there. Health Minister Leona Aglukkaq says in Ottawa that the measures are aimed at protecting children and youth from marketing that encourages them to smoke.

Dutch carrier KLM to resume inflight sales of liquor and tobacco

KLM Royal Dutch Airlines is to resume inflight duty free sales of liquor and tobacco on board its flights from 1 February. The airline said the move was in response to consumer demand. The carrier de-listed liquor products in 1984, and tobacco in 1986, and has not featured either category in its inflight range since then.

“KLM constantly adapts its sales assortment on board to the wishes of its passengers,” said Paul Elich, Executive Vice President of KLM Inflight Services. “By buying alcohol and cigarettes on board, passengers no longer have to carry heavy bags around the airport. It makes no difference to the weight on board.”

The assortment will be limited to begin with, featuring spirits brands Courvoisier XO Cognac and Johnnie Walker Black Label Scotch whisky. The bottles will be delivered on board in sealed plastic bags, said KLM. The cigarettes in the assortment are Marlboro Red and Marlboro Gold.

KLM’s web shop will also offer a broader assortment, which passengers can order online and then pick up on board.

The liquor & tobacco items will only be available on intercontinental routes and not on intra-EU routes.

Speaking later to The Moodie Report, Director Inflight Sales Koos Kruijswijk said: "KLM (through KLM Tax Free Services) used to sell these categories in its airport shops at Schiphol, so we were serving the passenger need on the ground until 2007, when Schiphol Group took over that business. We have since seen passenger demand grow. And since the introduction of our web shop liquor and tobacco have been among the most searched-for products. That prompted us to re-introduce the products."

Kruijswijk said it was "difficult to judge" how much incremental revenue the new items would add to the offer, but said: "We are confident there will be an increase in sales. We may increase the range later but it depends on the results. We have two leading cigarette lines and two premium liquor products for now."

Research and Markets: Pricing In The Global Tobacco Industry: Prices Will Rise But Will Profits Follow?

The effect of price rises on cigarette volumes and the level of price elasticity of demand - the extent to which higher prices make smokers consume less - is becoming increasingly vital to the tobacco industry, as is the related concept of pricing strength and the question - how long can the industry keep increasing value sales while profits fall by persuading consumers to trade up rather than trade down?

The Pricing in the Global Tobacco Industry: Prices Will Rise but Will Profits Follow? global briefing offers an insight into to the size and shape of the Tobacco market, highlighting major industry trends and categories as well as the factors affecting operating environment. It identifies the leading companies and brands, offers impartial, strategic analysis of key factors influencing the market - be they new product developments, legislative restrictions or pricing influences. Forecasts illustrate how the market is set to change and where it is headed.

Product coverage: Cigarettes, Cigarettes Including RYO Stick Equivalent, Cigars, Smokeless Tobacco, Smoking Tobacco.

Data coverage: market sizes (historic and forecasts), company shares, brand shares and distribution data.