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August 8, 2008

Holiday cigarettes to go up in smoke

The tradition of bringing back hundreds of cheap cigarettes from holidays abroad is about to go up in a puff of smoke.

Proposals are currently being examined which would see a dramatic increase in the tax on tobacco throughout the EU region. The moves are being made after research by the World Bank showed that burning a hole in people’s pockets is the best way to reduce the level of smoking.

Experts say that the proposed increase would cut the number of smokers by an average of 10pc over the next five years.

It is thought that changes will have the biggest impact in Poland where they expect more than 20pc to give up as a result of price increases.

The proposal outlined by Taxation Commissioner, Laszlo Kovacs, is for a gradual increase in EU minimum taxation levels on cigarettes and fine-cut tobacco up to 2014.

It would also remove loopholes that allow some cigarettes or fine-cut tobacco to be presented as cigars, cigarillos or pipe tobacco and so benefit from a lower tax rate.

The plan also aims to bring tobacco taxation levels in line across all 27 EU member states.

At the moment, the difference in taxation can be as high as 600pc leading to intra-EU tobacco smuggling especially in the new member states.

The level of smuggling varies across the EU and accounts for up to 9pc of the EU tobacco market. But in some major markets this is as high as 20pc. The countries most susceptible to illegal tobacco are those closest to Russia and other markets that do not impose high tax on cigarettes.

Mr Kovacs said it would also make the taxation rules more transparent, and create a level playing field for manufacturers and give flexibility to member states to set minimum taxes.

July 18, 2008

Tobacco industry ‘manipulating menthol cigarettes

Washington - A new study has found that manufacturers are deliberately manipulating menthol content in cigarettes to attract young people.cigarettes

Researchers from Harvard School of Public Health found that the tobacco industry is intentionally adjusting menthol to create a milder experience for the first time smoker.

Menthol covers the harshness and irritation of cigarettes, allowing delivery of an effective dose of nicotine, the addictive chemical in cigarettes.

"For decades, the tobacco industry has carefully manipulated menthol content not only to lure youth but also to lock in lifelong adult customers," said Howard Koh, Professor and Associate Dean for Public Health Practice at HSPH and a co-author of the paper.

A team of researchers led Jennifer M. Kreslake, a research analysis from the Tobacco Control Research Program at HSPH analysed the internal tobacco industry documents on menthol product development, and conducted laboratory tests to measure menthol content in U.S. brands, examined market research reports

She also drew data from the 2006 National Survey on Drug Use and Health, an annual nationally representative survey among U.S. residents aged 12 years and older

The industry documents revealed that tobacco companies researched how controlling menthol levels could increase brand sales among specific groups.

The companies determined that products with higher menthol levels and stronger perceived menthol sensation suited long-term smokers of menthol cigarettes while milder brands with lower menthol levels appealed to younger smokers.

According to a 2006 study, 43.8 percent of current smokers aged 12 to 17 years reported that they used menthol cigarettes as did 35.6 percent of current smokers aged 18 to 24 years.

By contrast, 30.6 percent of smokers older than 35 years reported menthol use.

The authors suggest, "to protect the public health, tobacco products should be federally regulated, and additives such as menthol should be included in that regulation."

"This is another example of the cynical behavior of the tobacco industry to hook teens and African Americans to a deadly addiction. This is after the industry told the American public it had changed its marketing practices. The FDA bill provides the vehicle to end the hypocrisy and save the lives of the young and a targeted minority group," said Gregory N. Connolly, Professor of the Practice of Public Health and director of the Tobacco Control Research Program at HSPH.

The study appears in the online "First Look" section of the American Journal of Public Health.

May 20, 2008

Imperial Reports Lower Profit, to Raise $10 Billion

Imperial Tobacco Group Plc reported a 45 percent drop in first-half profit on costs for buying Altadis SA and said it will sell stock worth 4.9 billion pounds ($10 billion) to current investors to help fund the takeover. Net income dropped to 233 million pounds in the six months through March from 421 million pounds a year earlier, the Bristol, England-based company said today in a statement. That missed the 370 million-pound median estimate of five analysts surveyed by Bloomberg.
Imperial agreed to buy Madrid-based Altadis in July of last year, months after unveiling the acquisition of U.S. cigarettes maker Commonwealth Brands. Most of the Spanish company’s sales come from its domestic market and France, adding to its allure for Imperial, which is expanding in new locations because its main U.K. and German markets are shrinking.
“The focus will be to see how Altadis is performing,'’ Rogerio Fujimori, an analyst at Credit Suisse in London, said yesterday. The takeover gave Imperial, Europe’s second-largest cigarettes maker, cigarette brands including Gauloises and the world’s largest manufacturer of cigars.
Davidoff
Investors will have the right to buy one new share for every two held as of May 15, said Imperial, the maker of Lambert & Butler and Davidoff cigarettes. It will sell 338.7 million new shares for 1,475 pence each, 44 percent less than yesterday’s closing price in London trading.
Imperial rose 16 pence, or 0.6 percent, to 2,618 pence in London yesterday. The stock has slipped 3.5 percent in 2008, while larger competitor British American Tobacco Plc, the maker of Pall Mall cigarettes, is little changed. The cigarette maker had said costs related to the Altadis purchase would lop 110 million pounds from first-half profit. The drop in earnings is “all because of this exceptional charge,'’ Fujimori said.
Imperial had said it would sell as much as 5 billion pounds of stock by July to help finance the takeover and retain its investment-grade credit rating. The company has raised its stake in Logista, the Spanish cigarette distributor controlled by Altadis, to about 97 percent following an offer to minority investors this month.

May 12, 2008

New Cigarettes Igniting Controversy

It may sound like an oxymoron…a fire safe cigarette. But they are real and they are law in two states in our area. That means every pack sold is labeled FSC or fire safe cigarettes. The Marlboro cigarettes are made to go out on their own and the new law has plenty of people fired up.
At cigarette stores across Kentucky, three letters are igniting quite the controversy. "I don’t really care for them. They don’t taste the same anymore," says Danny Scott. His cigarettes taste different because they are FSC. It’s not a brand, but rather a brand new rule in Kentucky that all cigarettes sold be fire safe.
So they go out on their own. If you see the initials FSC on a pack of cigarettes it means each one has special paper to slow the burning process. Simply put, if you’re not puffing, it’s going out. "If you are just sitting here talking like you and me are and you’ve got one lit, don’t take fifteen seconds and it’s out," says Scott.
Actually, we tested that theory and it took an unattended cigarette five minutes and 41 seconds to go out. But it’s not the inconvenience most people complain about."It doesn’t give me a headache just gives me a copper taste in my mouth. It’s nasty," says smoker Jewell Robertson. It may be nasty, but Deputy Fire Marshall Greg Cherry says the new law basically boils down to safety. "We realize they are going to be an inconvenience to some people but the overall big picture is that they end up saving property and possibly lives," Cherry says.
For Danny Scott, there is another option, "We’ll buy them in Missouri or Arkansas, that way they’re not fire safe," he adds. But he may not have that option for long because Missouri is close to adding the three letters to their Marlboro cigarettes too.
Kentucky and Illinois have laws on the books that require cigarettes sold to be fire safe. Legislation is pending in both Missouri and Tennessee.

April 29, 2008

Tax hike on cigarettes ‘could curb smoking’

The Federal Government’s top adviser on preventative health, Dr Rob Moodie, says increasing the tax on tobacco would be a very effective way to curb smoking.

The Government is set to reap $2 billion in extra revenue after it increased the tax on the sweet, ready-mixed alcoholic drinks which it says are responsible for a significant rise in binge drinking, particularly amongst young Australian women.

Dr Moodie, chairman of the National Preventative Health Task Force and professor of global health at Melbourne University’s Nossal Institute, says it is time to act as there has been little movement in the price of cigarettes in the past decade.

"One of the major successes, I guess, in Australia’s battle with tobacco over the last 10 to 20 years has been an increase in price - gradual - but it hasn’t increased over the last 10 years," he said.

"It’s now time we did increase the cost of cigarettes, [which are] after all, the major killer in Australia.

"We know that if for example we added an extra 2.5 cents to every cigarette stick, that would across the board drop consumption by nearly 3 per cent.

"It’s a major contribution to public health."

Dr Moodie says that increasing tax on cigarettes could be instituted relatively rapidly.

But a recent study published in the American Journal of Public Health questioned the effectiveness of price increases to cut consumption, and raised concerns about the burden placed on poorer smokers.

Dr Moodie says funding for quit smoking programs would address these concerns.

"Certainly the work that Quit Victoria have been doing on this, still shows that there is a very close relationship between price and consumption," Dr Moodie said.

He says money raised by this increased tax, suggested at the recent 2020 summit, should go towards a national preventative health agency.

April 4, 2008

Who benefits from tax on cigarettes?

You support taxing my cigarettes an additional $1 per pack for the benefit of two things you like: providing money to programs that help poor Floridians, and discouraging smoking.
I would prefer taxing the Orlando Sentinel $1 a copy, for the benefit of two things I like: reducing property taxes in Central Florida, and discouraging people from reading Orlando Sentinel editorials that propose raising my taxes.
Both ideas are crazy, because they advocate a funding source for a desired program that would cause income from that source to decline. In fact, both ideas will produce zero income for the first goal if the second goal is attained. But both ideas are politically viable because they tax a minority group of people for the benefit of a larger group of people.
If you truly want to achieve the dual benefits envisioned by your editorial, you should seek a reliable funding source for the government programs you like, and call for making cigarettes illegal. If your position really is that enough smokers will keep smoking to fund your desired program, then you are simply advocating a regressive tax, and should say so plainly.

March 31, 2008

Oz to get ‘fire-proof’ cigarettes

A meeting of emergency services ministers in Canberra on Wednesday deliberated upon the need for introducing "fire-proof" cigarettes that get extinguished on their own as the smoker drops the butt, a measure that may help reduce the risk of fires in homes and the bush.
New South Wales (NSW) Emergency Services Minister Nathan Rees moved the resolution to make the reduced fire risk (RFR) cigarettes, which are already produced overseas in Canada and New York, mandatory under the Trade Practices Act as early as next year.
"We hope this will be law by early 2009, requiring all cigarettes manufactured and sold throughout Australia to be self-extinguishing," the Daily Telegraph quoted him as saying.
"Every day’s delay is another day we live with the risk that someone will be killed or injured or homes or bush land destroyed because cigarettes keep burning when they are dropped or thrown from a car window," he added.
Each year, around 4500 fires are caused by cigarette ignitions in Australia. Fires, directly attributed to cigarettes, claimed about 65 lives between 2000 and 2005.
A significant decline has resulted in fire deaths in New York since the introduction of RFR cigarettes in New York in 2004, according to preliminary data.
According to NSW Fire Brigades, a normal cigarette dropped on furnishings may start a fire in less than 18 minutes, whereas an RFR cigarette extinguishes on its own.
Rees said that some people in the industry had expressed non-acceptance to the introduction of the RFR cigarette, complaining about costs, difficulties in testing, and compliance and production lead times.
"NSW does not accept that the industry needs an 18-month to two-year time frame to introduce these cigarettes, which are already being produced and sold in Canada and a number of states in the US," he said.
The newspaper report says that the Australian tobacco industry is concerned that no testing has been done to ensure that the cigarettes do not pose a further risk to smokers’ health.

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