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Tobacco One, Inc. announced today that they have purchased a regionally popular cigarette brand from a Mexico City businessman for cash plus common stock. The previous owner will stay on as a consultant to Tobacco One, Inc. for a minimum two-year term.

The brand was first introduced in Mexico City in 2006. It remained a regional brand until recently when Tobacco One’s international marketing team finished a three-month feasibility study focusing on national expansion and consumer acceptance. During this study, Tobacco One in partnership with the Mexico City marketing firm Integra Marketing, S.A. de C.V. obtained numerous commitments that will result in expanded distribution nationwide.

Currently, the brand is sold throughout Mexico City in premier retailers. Recently, these global chains have authorized the brand to immediately expand to all of their locations nationwide. This new authorization will add approximately 90 club locations, 120 big-box style stores and 80 super-centers to the brand’s current base of participating retailers. This new rollout will feature the brand at over 4,000 cash register locations within these new stores. This program will be implemented during the months of July and August, 2008. Tobacco One, Inc. will provide the necessary resources and manpower needed to expand this brand into each targeted trade class in all major population centers throughout the country.

"Along with the new expansion, and the additional contracts currently under review, Tobacco One, Inc. expects unit volume over the next 12 months to exceed 200 million sticks (cigarettes) for the cigarette brand, resulting in revenues of over $12 million, and net earnings (EBITDA) of nearly $3 million or 25%," stated Shawn Ulizio, Tobacco One’s President and CEO. He continued, "The new brand is clearly positioned to be a market leader in Mexico’s newly emerging discount cigarette price tier, and Tobacco One is nicely positioned to dominate in this specialized tobacco category."

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.
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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.

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Number of tobacco sold in Germany for the first quarter of 2008 continued to go down according to the Federal Statistical Office on Wednesday.
Some 22 million cigarettes were taxed, 8.7 percent fewer than the same three-month period in 2007. That year the number of cigarettes sold had already gone down by 2.1 percent. Total tobacco sales reached €5.7 billion, an overall reduction of 8.2 percent.
These numbers don’t necessarily correspond to reduced cigarettes consumption, though, because Destasis estimates about one-fifth of cigarettes are smuggled into the country, and therefore not taxed.
In contrast to cigarette figures, pipe tobacco sales were up by three times as much as the previous year, though the category makes up only a small portion of of total tobacco sales.
Cigar and cigarillo sales were down 35.9 percent.
Most German states instituted a public smoking ban at the beginning of 2008, though Destatis did not directly connect this to its tobacco sales figures.

Shopkeepers could be banned from displaying cigarettes under Government plans.
The Department of Health said it was launching a consultation to look at ways to stop children smoking. In a bid to cut the number of smokers and prevent children taking up the habit, ministers have drawn up proposals including a bar on displaying tobacco products and the removal of pub vending machines.
Measures making it easier to sell nicotine replacement gums and patches are also on the table. The proposals follow on the July introduction of the ban on smoking in public places.
According to the Department of Health, the strategy - coupled with wider smokefree legislation - will save hundreds of lives. Someone who starts smoking at 15 is three times more likely to die of cancer due to smoking than someone who starts in their late twenties, the department said.
Public Health Minister Dawn Primarolo said: "Children who smoke are putting their lives at risk and are more likely to die of cancer than people who start smoking later. It’s vital we get across the message to children smoking is bad. If that means stripping out vending machines or removing cigarettes from behind the counter, I’m willing to do that." According to the latest figures from the Office for National Statistics, the proportion of adults who smoke has dropped by two per cent from 24 to 22 per cent. About 165,000 smokers quit between April and September - an increase of 28 per cent compared with the same period the previous year.
The Government has set a target of reducing the proportion of smokers in England to 21 per cent by 2010. In this year’s Budget, Chancellor Alistair Darling increased the duty on tobacco, adding 11p to the price of a packet of 20 cigarettes and 4p to five cigars. He said the Government was continuing the five per cent reduced rate of VAT on smoking cessation products beyond June 30.
Mark Littlewood, communications director of liberal think tank Progressive Vision, said: "Cigarettes are a product for adults and steps need to be taken to prevent youngsters buying them. But banning the display of cigarettes would be petty, pointless and patronising."

Self-extinguishing cigarettes could be mandatory from next year, following a meeting of emergency services ministers in Canberra.
A final decision will be up to Treasurer Wayne Swan but federal Attorney-General Robert McClelland said a commitment was reached at the meeting.
"We have committed to implementing a national standard for the introduction of reduced fire-risk cigarettes," he told reporters in Canberra.
"We’re making recommendations to the treasurer," Mr McClelland said.
"The reality is that while there is commitment from all governments to implement it, there will be some consultation with industry.
"The timetable we have asked treasury to work towards is early 2009."
Mr Swan will have the final call because making the change mandatory would require an amendment to the Trade Practices Act.
NSW Emergency Services Minister Nathan Rees, who initiated the debate, said 67 people died last year from fires started by cigarettes.
"This issue has been around since 2005," Mr Rees said.
"In NSW, we have up to 20 deaths each year directly attributable to cigarettes that can’t extinguish themselves and that’s in addition to property damage which in some cases is up to $80 million a year."
A spokesman for the Australian arm of British American Tobacco said the company was broadly supportive of the aim.
"British American Tobacco supports the goal of reducing the incidents of fires caused by the careless disposal of lit cigarettes," spokesman Bede Fennell told AAP.
"We have been an active participant in the consultation process with the ACCC and Standards Australia and are grateful of the opportunity to ensure the practicalities of such a change and all unintended consequences are ironed out."
Mr Fennell warned smokers not to treat the new cigarettes as "safe".
"It is important, however, that smokers are aware that cigarettes produced to meet the proposed reduced-fire risk standard are not fire safe and all lit cigarettes should be carefully disposed of."

Results of a new survey from the Tobacco Retailer Inspection Program (TRIP) found minors staged to by tobacco were successful in their purchase nearly 13% of the time.
Aaron Jones with TRIP says even though it’s the first time the rate has increased in several years it’s still a big improvement over seven years ago when 40 percent of state retailers sold cigarettes products to minors.
In Indiana it is illegal for a clerk to sell tobacco products to anyone under the age of 18.
Jones says TRIP conducts over 6,600 unannounced inspections of retail outlets across the state each year. An inspection team consists of a minor without an ID, an adult assistant and an excise police officer. The minor attempts to buy a cigarettes product and if successful, the officer issues a violation notice to both the clerk and the store.
Fines range from $50 to $500 depending on the store’s violations history.
Tobacco retailer inspections usually occur on evenings or weekends because the minors recruited for the inspection teams are in school on weekdays and most of the police officers work only part-time as inspectors.

LONDON: The warning ‘Smokers Die Younger’ doesn’t seem to ring a bell with superstar Daniel Radcliffe who has been nicknamed ‘Harry Puffer’ by his co-stars for puffing about 20 cigarettes a day.
The young wizard rushes to light a stick whenever the director yells "Cut" and has now been advised by one and all on the set of the new Hogwarts movie to kick the butt.
The teenage star finishes around a pack per day and has pals, including fellow Potter star Rupert Grint, pretty worried.
"Daniel has recently been smoking up to 20 cigarettes a day. Every time they call ‘Cut’, he lights up. It’s disgusting. Friends and co-stars including Rupert Grint have been warning him about the dangers of smoking. But he doesn’t take any notice," The Sun quoted a source, as saying.
Also worried are the producers of the final flick in the series, who believe that his puffing habits may destroy his schoolboy image. They have now warned him not to be seen smoking in public.
"He’s been having late nights out with stars like Kevin Spacey and Stephen Fry and seems to have picked up bad habits from the luvvie set," revealed the source.
In fact, Radcliffe was so nervous doing a stunt himself and turned to his cigarettes while his double was absent.
"He was sparking up constantly," said the source.