*Convenience Store Update - hanging tobacco signs from the ceiling..

September 20, 2008 - the Philip Morris USA Retail Leaders 2008 Agreement, at present only involves the checkout counter and the wall behind the counter - the "power wall".

R.J. Reynolds Tobacco is now hanging promotion displays from the ceiling surrounding the checkout counter.

* September 23, 2008 - Went back to c-store to take additional photos of R.J Reynolds Tobacco signs hanging from the ceiling. The owner told me another Secret Shopper came in the store to determine if he would push the sale of Camel SNUS. He did mention Camel SNUS and won a $10 Walmart gift card. The owner did remark he made more with the gift card then he does with Camel SNUS in a whole month - he seldom sales a can. New standalone Camel SNUS sign.

It is well known that kids exposed to the tobacco-saturated stores perceived significantly easier access to cigarettes, believed more peers tried and approved of smoking, and expressed weaker support for tobacco-control policies. We know that Mike Szymanczyk now the CEO of Altria, Inc. has stated that Philip Morris owes their success to the ability to connect with adult tobacco consumers through the in-store experience and the development of one-to-one relationships using their database of 25 million adult cigarette smokers (Remarks, Investor Presentation, 3/11/2008). We must take the former away from tobacco companies by ridding retail outlets of tobacco signs (all promotional material) and placing tobacco products under the counter or go to generic packaging for all tobacco products.

Examples of related news briefs" Big 3 cigarette companies continue to compete for c-store space - the PM T-SET.. and Link Between Convenience Stores and Tobacco Use....

The word on the street - regarding Camel Crush is that when the filter is squeezed to release the menthol - the menthol is not distributed evenly. The R.J. Reynolds salesperson recommends rolling the filter back and forth with your fingers. This fellow reminds retailers there will be a slew of new smokeless tobacco products coming such as - "nicpic" - the tobacco containing toothpick coming soon; some examples.

Camel Crush coupons by mail - not as good as the Camel Snus coupons - no free give aways - the latter is part of the public awareness/education campaign to sell people on sucking tobacco. We know lots about menthol cigarettes - you're either a menthol smoker or a regular smoker - years ago some regular smokers switched to menthols (a cold remedy) when they had a cold.

Lorillard can also be demanding in determining the amount of convenience store space they must have. There is no formal agreement like with Philip Morris - it depends on the percent of Lorillard cigarettes sold. The greater the percentage the more space is required. Lorillard sends $100 to the retailers each month plus a small percentage based on the number of cartons sold. Lorillard's largest selling brand is Newport, the second largest selling cigarette brand in the United States and the largest selling brand in the menthol segment of the U.S. cigarette market. Maverick is Lorillard's up and coming discount cigarette.


Addicted to Nicotine - You're Sick and Need Medical Help..

September 19, 2008 - Germany's Federal Medical Society is proposing that nicotine addiction be classified as an illness in a bid to help the country's smokers quit.
The idea behind the proposal is to increase the pressure on smokers by labeling them as sick and in need of medical help. It is also a way of getting smokers off the weed and on to the road to recovery by providing professional help.

Approximately 140,000 people die annually in Germany (in 2004 Germany had a population of 82.5 million) from smoking-related illnesses.

Related news briefs: Nicotine – in any form – not safe..;

Reference: German Doctors Want Smoking Classified as a Sickness, Deutsche Welle - World.DE, 9/17/2008.

Any interest Lorillard to acquire Swedish Match - NOT

September 18, 2008 - Altria - UST, Reynolds American - Conwood, Lorillard - Swedish Match - NOT.

Two years ago, RJ Reynolds acquired Conwood LP, the second largest marker of smokeless tobacco products for $3.5 billion. Earlier this month, Altria Group announced the acquisition of UST, the nation’s largest smokeless tobacco products company, for $11.7 billion.

That leaves Swedish Match as the largest remaining independent producer of smokeless products. Analysts suggest that Lorillard Inc., the number three tobacco company in the U.S., would be a logical takeover candidate, reports Reuters. Unlike other potential buyers, Greensboro, N.C.- based Lorillard has a large distribution system in the U.S., where much of Swedish Match’s sales are located.

We doubt if Lorillard would be interested in the market for Swedish Match outside the United States, e.g., the marketing of snus in Scandinavian countries (i.e., Sweden and Norway) and selling Cricket lighters in Russia. Altria has worked to do with UST, they've been losing market share in the smokeless tobacco market for years. Michael E. Szymanczyk - Chairman and Chief Executive Officer at Altria has indicated a little tweaking is necessary for the UST's premium brands - Copenhagen and Skoal to return these brands to some modest share growth. (Altria Group, Inc. Agrees to Acquire UST Inc. - Altria Group and UST Conference Call, Seeking Alpha, 9/10/2008.

As we know, the growth in moist snuff is in the price value/discount brands. The largest brands for Swedish Match on the US market are Timber Wolf and the discount brand Longhorn . By far the greatest growth has come from Reynolds/Conwood's Grizzly. In the second quarter 2008 Grizzly brand accounted for almost half of the industry's total moist snuff growth of 7.7% compared with the previous year's quarter.RAI CEO: 'Solid Quarter Keeps Company on Track', PR Newswire, 7/30/2008) Comparison U.S. Smokeless Tobacco Players: No. 1 UST and No. 2 Conwood..

Swedish Match makes a SNUS product called Triumph for Lorillard. The Lorillard salesman tells us that Triumph SNUS sales have gone poorly and it doesn't cost Lorillard anything to sell this pouch tobacco.

Reference: Could Swedish Match Soon Be in Play? - Analysts are speculating that Swedish Match, which has its North American headquarters in Richmond, may attract a takeover bid by James A. Bacon, richmond.com, 9/17/2008.


Philip Morris International (PMI) completes buyout of Rothmans..

September 18, 2008 - PMI said Wednesday, 9/17, 2008, it had completed its buyout of Canadian cigarette maker Rothmans Inc. PMI said owners of about 47 million shares, representing about 68 percent of the company, had accepted its offer of 30 Canadian dollars (about $28.16) per share. It will pay for those shares on Friday. The company also extended its offer by 10 days to allow shareholders to tender remaining shares.

Canada-based Rothmans has a 60 percent stake in Rothmans, Benson & Hedges Inc. (RBH), which makes and sells cigarettes including Benson & Hedges, Craven A and Mark Ten. Philip Morris International owns the remaining 40 percent of RBH.

Related news briefs: Philip Morris International (PMI) gets all clear to acquire Rothmans Inc..; Philip Morris International (PMI) extends deadline on offer to buy Rothmans..; PMI’s Rothmans acquisition clears competition hurdle..; Rothmans reports loss for latest quarter..; PMI can't use the Marlboro brand name in Canada..; PMI - Rothman creating legal and public relations headaches..; Philip Morris International to buy Toronto based Rothmans Inc.. and Canada tobacco firms admit aiding smuggling...

Reference: Philip Morris Int'l completes buyout of Rothmans, International Business Times, 9/17/2008.

Lifestyle Has Large Impact on Women’s Health..

September 18, 2008 - Women who adopt a healthy lifestyle could halve the risk of premature death from chronic diseases such as cancer and heart disease according to a study on the website of the British Medical Journal.

Paper: Combined impact of lifestyle factors on mortality: prospective cohort study in US women, Rob M van Dam et al., BMJ 2008;337:a1440, published 16 September 2008.

Poor diet, lack of physical activity, obesity, alcohol consumption and smoking increase the risk of diseases including cancer and diabetes but little research has examined combinations of lifestyle factors in younger populations and women. Dr Rob van Dam and his team from the Harvard School of Public Health and Brigham and Women's Hospital, recruited nearly 80,000 women aged 34 to 59 years in 1980 who were part of the Nurses' Health Study in the US. They analyzed the data of over 1.5 million person-years follow up over a 24 year period.

Participants completed detailed follow-up questionnaires every two years about their diet, frequency of physical activity, alcohol intake, weight, how much they smoked, and disease history. Deaths were confirmed by next of kin and the National Death Index. Over the follow-up period the authors documented 8 882 deaths including 1,790 from heart disease and 4,527 from cancer.

The authors estimated that 28% of these deaths could have been avoided if women had never smoked and that 55% could have been avoided if women had combined never smoking, regular physical activity, a healthy diet and maintaining a healthy weight. Alcohol intake did not substantially change this estimate, although heavy alcohol consumption is linked to an increased risk of dying from cancer.

Smoking was found to be the biggest cause of premature death but all the other factors also contributed.

Interestingly, women with light-to-moderate alcohol consumption (up to 1 drink a day) were less likely to die from cardiovascular diseases than alcohol abstainers. The authors believe the results of this research indicate that more needs to be done to eradicate smoking and to encourage individuals to take regular exercise and eat healthily.They conclude that "even modest differences in lifestyle can have a substantial impact on reducing mortality rates."

Women: Half Of Early Deaths From Chronic Diseases Could Have Been Eliminated Through Lifestyle Changes
, scientificblogging.com, 9/16/2008.


Star Scientific wants to augment sales of their tobacco lozenges..

September 18, 2008 - Star Scientific, second quarter 2008, sales were down 23.6%. The company has hired Roger Grogman, former corporate vice president of marketing for the McLane Co. Inc., on an exclusive basis to consult with the company on marketing programs for its very low-TSNA dissolvable smokeless products, Ariva® and Stonewall®. Star recommends that the lozenges be used as a substitute for smoking when you can't smoke. Stonewall is recommended for heavy smokers (more than one pack per day) it contains approximately 4.0mg of nicotine and comes in 3-flavors: wintergreen, natural and Java blends. Ariva is recommended for smokers and contains approximately 1.5mg of nicotine and comes in one flavor: wintergreen blend.

Paul L. Perito, Star's chairman, president and COO, commented that the company believes Grogman's thoroughgoing knowledge of multiple product categories and business channels will provide significant value to the growth and expansion of the Ariva and Stonewall brands. "Roger's experience should complement nicely the inroads we have made in developing distribution with regional and national chains like Rite Aid, 7-Eleven, Food Lion and Smoker Friendly. In addition, though, we look forward to leveraging his expertise to enhance our efforts to communicate with adult consumers about the unique opportunity that very low-TSNA dissolvable smokeless tobacco offers to dependent smokers."

Note Star promotes these tobacco products as very low-TSNA dissolvable smokeless tobacco. Dr. Stephen S. Hecht, an internationally recognized expert on cancer-causing agents in tobacco, points out even with the pasteurization process used for the Swedish tobacco products does produce lower levels of nitrosamines than found in most American products, but the levels are not low. They are still 10-100 times higher than the levels of carcinogenic nitrosamines in any other consumer product. (Communication 1/25/2007)

Many more news briefs concerned with Star Scientific - do a random search..

Reference: Star Scientific Hires Grogman as Consultant Augments marketing plan for Ariva, Stonewall dissolvable smokeless products, CSP Daily News, 9/18/2008.


Deadline for Comments on Victoria Goverment Tobacco Control Strategy..

September 18, 2008 - In August, 2008 the Victorian Government - Australia released for comment the Tobacco Control Strategy 2008-2013. Submissions for consultation with health professionals, industry and the wider community must be received by today, Thursday, September 18, 2008.

One of the more controversial proposals is concerned with two options for point of sale bans: one is restricting displays to 1m square, the other is a total ban. Groups like Quit Victoria are needed to provide evidence in support of a total ban. The sticking point is how much it will cost small retailers to convert their displays if there is a total ban. As we know, the industry pays for most of the displays, but we need to try to find a retailer/s who will go on the record (anonymously if necessary) and state just how much the industry controls this space, including supplying all the display hardware. TobaccoWatch.org: besides the existing news brief library, provided supporting information to help achieve this goal such as comments from various tobacco company executives and a copy of the USA-Philip Morris retail leaders 2008 agreement. We even recommended tobacco control people assist retailers in converting existing displays. The State of Victoria is densely populated with approximately five million people with 70% of Victorians living in Melbourne and 11,000 retailers selling tobacco. Comment from Quit Victoria - thanks again for helping us in our work to counter the tobacco industry's tactics.

The neighboring State of New South Wales just approved total ban on tobacco displays in stores.

Click on image to enlarge..

Canada Tobacco Firms Smuggling Settlement Too Low..

September 17, 2008 - Physicians for a Smoke-Free Canada have asked the federal Auditor General Sheila Fraser to investigate the recent $1.1-billion settlement with Imperial Tobacco and Rothmans Inc. The anti-smoking organization wants Fraser to find out who negotiated the settlement, why it was so low and why no executives were criminally charged.

The physicians calculate that the smuggling-related activities of Imperial Tobacco and Rothmans Inc. during the early 1990s together cheated the Canadian government out of more than $4 billion. Added to this would be interest charges, penalties and fines.

Paul Finlayson, a former executive with Imasco (IMperial ASsociated
COmpanies) -- which was the holding company of Imperial Tobacco -- called the settlement "chump change" and stated that the government "didn't have the guts of a field mouse" to go after the tobacco companies.

In 1994, Canada reduced tobacco taxes in response to concerns about smuggling, causing the real price of cigarettes to fall by one-third. Teenage smoking increased from 16% to 20%. (Tobacco smuggling, Luk Joossens, globalink.org)

Reference: Physicians criticize tobacco agreement by William Marsden, Canwest News Service, 9/12/2008.

Click image to enlarge..


Baltic finance ministers reject EC suggestion to raise tobacco..

September 17, 2008 - At a meeting held in Trakai, Lithuania the Lithuanian Finance Minister, Rimantas Sadzius, Latvian Finance Minister, Atis Slakters, and Estonian Finance Minister, Ivari Padar, declared that each country should decide excise tax levels of tobacco products independently. On July 16, 2008 the European Commission proposed a gradual increase through 2014 in taxes on cigarettes and other tobacco products to try to persuade tobacco users to quit.

Take Estonia - from June 1 the excise tax on tobacco products increased in Estonia by 43%, which will raise the price difference of cheap cigarettes with those sold in Russia to nearly six times. Estonia was the first among the Baltic States to raise the excise tax on tobacco to the minimum level required by the European Union and the State will earn 20 kroons (1.81USD) of excise tax on a pack of cigarettes. Thus far consumers paid the State 14.2 kroons (1.28USD) per pack of cigarettes and this means that the price surge will be nearly 41%. In Russia, however, the excise tax is equivalent to 1.53 (0.138USD) Estonian kroons per pack. (Russia shares a border with Estonia, a former member of the USSR.)

According to a survey carried out by British American Tobacco, the proportion of illegal cigarettes in Estonia forms 19% of the total market volume. In 1994, Canada reduced tobacco taxes in response to concerns about smuggling, causing the real price of cigarettes to fall by one-third. (Tobacco smuggling, Luk Joossens, globalink.org)

Reference: Baltic finance ministers imposed veto on EC suggestion to raise tobacco and fuel excises, The Baltic Course, 9/12/2008 and Difference in prices of cigarettes in Estonia and Russia grows to almost six times by Juhan Tere, Baltic Course, Tallinn, 7/2/2008.

Baltic States.

Click on image to enlarge..

Croatia Aims at More Stringent Anti-smoking Laws..

September 16, 2008 - A Croatian minister declared on Thursday, 9/11/2008 that the government will forward a new and tougher anti-tobacco bill to parliament. The new bill aims at making anti-smoking laws more severe and also includes a ban on smoking in public.

"With the new law, we want to change people's (smoking) habits and protect non-smokers," Health Minister Darko Milinovic said.

The minister said tobacco kills some 10,000 every year while an additional 3,000 people die from passive smoking in Croatia, where 32 percent of the 4.4 million population are smokers. The cost in Croatia of medical treatment for the consequences of smoking are estimated at some 422 million euros (589 million dollars) annually.

The bill, which envisages fines of up to 2,800 euros, is likely to be forwarded to parliament by the end of the month. Once adopted, it will enter into force within the next six months.

The Balkans are home to Europe's most inveterate smokers, where 30 to 40 percent of all adults are gripped by the habit, a major cause of premature death, according to the World Health Organization.

Reference: Croatia Set to Back Anti-Smoking Bill, BalkanInsight.com, 9/9/2008.

Croatia ratified the
WHO Framework Convention on Tobacco Control (FCTC) Treaty on July 14, 2008.


Niger - possible prison for violating smoking ban..

May 1, 2008 - Niger's government has issued a decree enforcing a ban on smoking in public places and on communal transport. Niger's parliament passed the smoking ban in 2006, but the cabinet had not issued the decree to make it effective.

A BBC reporter in the capital, Niamey, says the ban can be applied with immediate effect. But he says it is not clear if there will be a period of grace during a planned public information campaign.

The law provides for fines ranging from 5,000 CFA ($11, £6) to 1,000,000 CFA ($2,170, £1,240), as well as prison terms for those who violate the ban. Shops and services that breach the ban can also have their licenses removed. The ban covers public transport and taxis, but not private vehicles. The government is planning a media campaign to inform people about the new measure.

Niger is one of the countries with the highest proportion of children exposed to second-hand smoke in 2000: India, China, Indonesia, Pakistan, Nigeria, Philippines, Vietnam, and Russia. (Youth Tobacco Use: A Global Perspective for Child Health Care Clinicians, Alexander V. Prokhorov, MD, PhD et al, PEDIATRICS Vol. 118 No. 3 September 2006, pp. e890-e903 (doi:10.1542/peds.2005-0810).

Children's Marlboro shorts bought in Niger. (Tobacco Control Journal, 2002)

Related news brief: July 22, 2008.

Reference: Niger cabinet passes smoking ban, BBC News, 9/12/2008.

Niger has ratified the
WHO Framework Convention on Tobacco Control (FCTC) Treaty.


Singapore - Introduction of Tobacco Stamp to combat contraband ..

Cigarettes sold in Singapore to bear new stamp (positioned close to the filter). From January 1, 2009, all duty-paid cigarettes sold in Singapore will be marked with the letters "SDPC" which stands for Singapore Duty-Paid Cigarettes, Singapore Customs announced on Wednesday, 9/10/2008. This means that anyone found buying, selling or smoking cigarettes without the "SDPC" marking could be jailed or fined. For every packet of duty-unpaid cigarettes, the offender can be fined 500 Singapore dollars (350 U.S. dollars).

High demand for contraband comes from high prices for cigarettes in Singapore. A pack of premium cigarettes costs more than S$11 ($7.65US), compared to just $S3
($2.09US) across the border in Malaysia; a contraband pack costs S$5 ($3.48US).

Contraband provides cheap cigarettes, which encourages smoking, discourage quitting, increases average daily consumption, prompts relapse, and encourages youth initiation. Tobacco smuggling undermines the potential effectiveness of higher tobacco taxes reducing government revenues and encouraging adults to continue smoking and children to start smoking cigarettes.

According to the Customs, Singapore is the first country to implement this regulation. "The availability of cheap duty-unpaid cigarettes will hamper our national effort to discourage smoking", said Fong Yong Kian, director-general of Customs. He added that the marking will serve as deterrence against the peddling and buying of contraband cigarettes and help Singapore officers in the enforcement efforts.

Travelers to Singapore are advised that they should keep the receipts for cigarettes bought elsewhere.

Reference: Cigarettes sold in Singapore to bear new stamp, People's Daily Online, 9/10/2008; Cigarette sticks to bear "SDPC" marking from next year, inSYNC (Singapore customs newsletter), 9/2008.

Tobacco in Singapore, Euromonitor International, 2/2008.

Philip Morris International (PMI) gets all clear to acquire Rothmans Inc...

September 15, 2008 - PMI today, 9/12/2008 received Canadian Ministry of Industry approval pursuant to the Investment Canada Act in connection with the company's proposed acquisition of Rothmans Inc.

The issuance of this approval satisfies the last remaining regulatory condition to the company's acquisition offer dated August 7, 2008. In connection with the determination of net benefit, the company provided certain undertakings, including pledges to continue to operate Rothmans, Benson & Hedges Inc.'s current manufacturing facilities in Canada, invest in their modernization and provide minimum employment assurances.

The company's offer to acquire Rothmans is open for acceptance until 11:59 p.m. (Vancouver time), at the end of September 16, 2008, unless extended or withdrawn by the company.

The offer documents are available on the SEDAR website at www.sedar.com, under the SEDAR profile for Rothmans Inc.

CONTACT: Philip Morris International Inc.
Investor Relations:
New York: (917) 663-2233
Lausanne: +41 (0)58 242 4666
SOURCE: Philip Morris International Inc.

Reference: Philip Morris International Inc. (PMI) Receives Investment Canada Approval for Rothmans Offer, Press Release, 9/12/2008.

Related news briefs: Philip Morris International (PMI) extends deadline on offer to buy Rothmans..; PMI can't use the Marlboro brand name in Canada..; PMI - Rothman creating legal and public relations headaches.. and Philip Morris International to buy Toronto based Rothmans Inc...