Lorillard - Newport

January 10,2009 - Lorillard is the third largest cigarette producer in the United States - mainly because of its golden asset - Newport menthol cigarettes. Newport, gives Lorillard 94% of its revenue, 92% of its volumes, 34% share of all menthol cigarette sales in the US, as well as an overall domestic tobacco market share of 10%. The only other cigarette in Lorillard's stable (Kent, Satin, True, Max, Old Gold)that shows growth is the price/value (discount) brand Maverick.
Lorillard was spun off from conglomerate Loews in June, 2008.

More on Menthol and Tobacco Smoking.

Reference: Quick Take: Lorillard Inc by Steve Alexander, Seeking Alpha, 1/9/2009.


Star Scientific Corporate Study Stonewall Lozenge in NRT..

January 10, 2009 - Star Scientific (SS) is pursuing the development of a low-cost botanical-based Nicotine Replacement Product (NRT) for both smoking and smokeless tobacco cessation. Dr. Curtis Wright, Chief Medical Officer of Rock Creek Pharmaceuticals, Inc., a subsidiary of Star Scientific, stated that we have to move beyond the current situation that makes NRT more expensive than continuing to use tobacco. The goal is to achieve higher quit and long-term abstinence rates for dependent smokers for whom conventional NRT smoking
cessation products have not been successful.

SS announced today, January 6, 2009 that Rock Creek in junction with its Star Tobacco, Inc. subsidiary, recently completed a study to determine the ability of
Stonewall(R) dissolvable smokeless tobacco to relieve cigarette withdrawal symptoms when compared to an over-the-counter nicotine replacement product.
The study, which included 49 cigarette smokers, was designed to measure 1) nicotine's effects and 2) relief from smoking withdrawal symptoms, using a 4mg NRT product and a 4mg Stonewall piece, along with placebos of each product. The NRT, Stonewall product and the two placebos were administered over the course of four sessions. Both the nicotine replacement product and the 4mg Stonewall product were much more effective than their placebos in reducing nicotine craving, confirming the preliminary results published in 2007 in the journal Tobacco Control.

Depending on results of bioequivalence testing, Rock Creek plans to seek FDA review for a botanical-based tobacco cessation product for use by adult tobacco users who smoke and/or use smokeless tobacco products. The company anticipates using the name CigRX(TM) as the trade name. There currently is no FDA-approved pharmaceutical product for smokeless tobacco cessation.

Reference: Star Scientific Announces Successful Completion of Product Satisfaction Study..

Some related Star Scientific News briefs: Star Scientific Files Third Quarter Financial Report..; Star Scientific wants to augment sales of their tobacco lozenges..; Star Scientific , second quarter 2008, sales down 23.6%..;Star Scientific Applauds Recent State Legislation - Banning Smoking in Cars with Children..

FDA Regulation Likely for Tobacco - Let's Do It RIGHT..

January 9, 2009 - It's been rumored that 111th (January 3, 2009, until January 3, 2011) U.S. Congress plans to move aggressively against the tobacco industry in coming months by regulating tobacco. The House of Representatives voted 326-102 last year to put the FDA in charge of regulating the health risks of tobacco. Bush administration opposed it, saying the measure would strain the agency and undermine its credibility. The measure didn’t get a Senate vote, although the chamber’s version had 59 co-sponsors, including Obama, then a senator from Illinois. "We hope for early action on the bill in the new Congress," Melissa Wagoner, a spokeswoman for Senator Edward Kennedy of Massachusetts, said of the landmark legislation, which Kennedy has promoted for years.

Obama staff says he hasn't decided what action he might take on the measures in the White House, but Congress-watchers say his election is a game-changer for tobacco regulation. President--Elect Barack Obama and Tobacco..

Regulation of the tobacco industry is absolutely necessary but let's do it RIGHT. It's time to take another look with less input from the major company (Altria controls over half of the U.S. tobacco market) congress is trying to regulate. As Senator Michael B. Enzi (R-WY) has pointed out, "Poison peddlers shouldn’t get to decide how we as responsible legislators fight the war against their deadly products."

The current bill called the Family Smoking Prevention and Tobacco Control Act or sometimes called the Altria Earnings Protection Act is the result of negotiations between the tobacco control group Campaign for Tobacco-Free Kids and Philip Morris (PM) - the biggest player in the tobacco industry. We worry that the legislation will be flawed because the biggest player in the tobacco industry has been directly involved in writing the bill that regulates their industry. The true motivation behind the FDA tobacco regulation bill may be a big company’s desire to kill off its smaller competitors. The watered-down terms in the current bill resulted from legislators' belief that the bill won't pass without PM's buy-in - this is NOT TRUE anymore. Matthew L. Myers, the head of the Campaign for Tobacco-Free Kids, has even said, “The election of Barack Obama changes everything.”

American Association of Public Health Physicians believes that this bill is so distorted (in its present form)in favor of Altria–Philip Morris that, if passed in its current form, it will do more harm than good in terms of future levels of teen smoking and future rates of tobacco-related illness and death. It can protect cigarettes or it can protect the public's health. It cannot do both. (Joel L. Nitzkin, M.D., M.P.H., FDA Regulation of Tobacco, New Eng. J. Med. 359: 2070-2071, (Nov 6) 2008.)

Many concessions have been granted to get tobacco companies to buy into this legislation weakening the bill even further, e.g., UST Inc. - now owned by Altria, the biggest U.S. maker of smokeless tobacco products and the North American unit of Swedish Match AB which also sells smokeless tobacco announced they would support the bill. The bill was amended to give smokeless companies the ability to give away free samples to adults under limited circumstances which hadn't been allowed in earlier versions of the bill.

Tobacco companies are hoping to persuade the new administration to go for "harm reduction" as a goal, rather than a push for smokers to stop completely.

All tobacco products with no exceptions are highly addictive and dangerous to health; as the World Health Organization tells us "Tobacco is Deadly in Any Form or Disguise." This conclusion was recently reinforced by Michael Leavitt, Secretary of U.S. Department of Health and Human Services when he wrote: "Tobacco products are not safe and cannot be made safe and there is no medically established public health benefit associated with tobacco" in a letter to Joe Barton, R-Texas the senior Republican on the Senate's Energy and Commerce Committee. In the legislation all tobacco products must be considered equally.

R.J. Reynolds is about to release three dissolvable flavored tobacco products in different dosage forms: a pellet like a Tic Tac candy, a toothpick laced with enough nicotine to addict the user for life and maybe the worst an edible film strip like a Listerine pocketpaks. Our kids are going to love this stuff. (STOP the Release of Dissolvable Tobacco Products..

Related news brief: Revise Senate's Version FDA Tobacco Regulation Bill.. - Many more references can be found in this news brief.

References: Kennedy Wants Cigarette Risks Regulated in Obama-Backed Bill by Rob Waters, Bloomberg News, 1/6/2009; Coming Down on Tobacco by DUFF WILSON, The New York Times, 1/5/2009.

C-store update: Altria to tweak sales of Skoal and Copenhagen/Chewing Tobacco/Free Cans Camel SNUS..

January 8, 2008 - Altria already moves to tweak sales of Skoal and Copenhagen. On Tuesday, January 6, 2009 Altria announced the acquisition of UST Inc. had been completed. UST, Inc. In our last few C-store updates we have been telling readers to Watch - Altria will tweak the UST's premium brands - Copenhagen and Skoal - to return these brands to some modest share growth., i.e. take market share back from Conwood's Grizzly. 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.

From February 1, 2009 to March 28, 2009 a Copenhagen and Skoal special price promotion (SPP) will take place. U.S. Smokeless Tobacco Brands, Inc. (USSTB), a UST affiliate, has designated the Philip Morris USA (PM) field sales force to represent USSTB at retail for the purpose of offering and executing a new Copenhagen and Skoal SPP. The USSTB representative that currently calls on accounts will continue to do so for matters unrelated to the SPP. The SPP promotional allowance will be available to retailers if they agree to reduce Copenhagen and Skoal January 2009 Retail prices by a least $1.00 per can for the duration of the promotion; agree to maintain interior and exterior signage displaying the new promoted prices on Copenhagen and Skoal - all single cans, rolls (5-can and 10-can) and store-funded multi-can deals (execpt specially packaged and marked single or multi-can promotions offered by USSTB); merchandise and sell single cans of Copenhagen and Skoal brands to adult consumers; etc.

Enticing minorities to give chewing tobacco a try. Large standalone chewing tobacco displays in a grocery store frequented mainly by Hispanics and African Americans. The display of specially priced Red Man and Beech Nut chewing tobacco located where every customer can readily see them and the bargain that is offered.

Camel SNUS - we have reported that R.J. Reynolds is giving away many more can of Camel SNUS that are being paid for. Recently, when talking with a c-store owner he tells us that he has boxes of cans of Camel SNUS to give away for free. Camel SNUS is suppose to go nationally anyday - if the stuff can't sell in the South it won't sell anywhere except when kids want to experiment with it to master the art of snusing.

Previous C-store update.


USA States Self-extinguishing Cigarettes Becoming the Norm..

January 8, 2009 - By the end of 2009, 14 states will join the 18 that already require vendors to purchase and sell only the fire-safe cigarettes, which are designed to go out if they are dropped or set aside, said Lorraine Carli, vice president of communications at the National Fire Protection Association and the Coalition for Fire-Safe Cigarettes.

States are circumventing more than 30 years of tobacco industry opposition to federal safe cigarette legislation (1st proposed in 1974) by passing their own laws that require the sale of self-extinguishing cigarettes. Sen. Dick Durbin, D-Ill., introduced federal fire-safe cigarette legislation in 2005 and Rep. Ed Markey, D-Mass., did so in 2006, according to Jessica Schafer, Markey's director of communications. She said the legislation was met with strong opposition from lobbying firms, and given the success at the state level, there is no plan to reintroduce it.

According to the U.S. Fire Administration, almost 1,000 smokers and non-smokers die annually in home fires caused by cigarettes and other smoking products. New York's 2004 fire-safe cigarettes law was the first. Lauren Rivera, with the New York Department of State, said in 2004 there were 31 smoking-related fire deaths. By 2006, the most recent data available, that number had dropped to 22.

David Howard, spokesperson for R.J. Reynolds stated they will start making all of its cigarettes fire-safe by the end of 2009. (NFPA applauds Reynolds American Inc. announcement of product-wide switch to “fire-safe” cigarettes Urges other tobacco companies to follow, National Fire Protection Assoc. 10/25/2007) Phillip Morris USA, the largest tobacco company, will not make all of its cigarettes fire-safe, but will "continue to work with the states," said spokesman David Sutton. Liggett Group, announced on March 25, 2008 that it will convert all of its domestic (US) cigarette production standards to meet all state fire safety standards by January 2009.

Fire-safe cigarettes may provide further incentive to once and for all stop smoking.

Reference: States push fire-safe cigarettes by Andrew Seaman, USA Today, 1/5/2009.

Some related news briefs: Dummies - Citizens Against Fire Safe Cigarettes..; Cigarettes “fire safe” in Minnesota as of December 1, 2008..; Fire - Safe Cigarettes for all 50 states - NOW.. and Switzerland could join EU requiring sale of only self-extinguishing cigarettes.. For other related news briefs do a random search..

Altria completes UST acquisition..

January 7, 2009 - Altria Group Inc said on Tuesday, January 6, 2009 it completed its $10.4 billion acquisition of UST, Inc. greatly expanding Altria's presence in the faster-growing smokeless tobacco segment. Altria, which owns Marlboro cigarette maker Philip Morris USA, will pay UST shareholders $69.50 a share and will also assume $1.3 billion in debt as part of the deal. UST net sales by segment 2005-2007.

Altria and rival Reynolds American Inc have been expanding the offerings of smokeless tobacco products in recent years as they try to find new sources of revenue in the face of a shrinking U.s. cigarette market. Altria held off on closing the deal until 2009 at the suggestion of its lenders, a sign of how tight the credit markets had become last fall. Altria shares were up 16 cents, or 1 percent, at $15.54 in Tuesday morning trading on the New York Stock Exchange.

Reference: UPDATE 1-Altria completes UST acquisition Reporting by Brad Dorfman, editing by Dave Zimmerman, Reuters, 1/6/2009.

Related news briefs (audit trail of events): UST shareholders approve proposed buyout by Altria..; Altria's Proposed Acquisition of UST Passes U.S. Regulatory Review..; Altria May Delay Purchase of UST Amid Tight Credit..; UST to become a wholly owned subsidiary of Altria..; Altria in advanced talks to buy UST, Inc..; Altria will continue to test Marlboro Smokeless Tobacco Products.. and Any interest Lorillard to acquire Swedish Match - NOT.


Utah - increase tobacco tax eliminate tax on food..

January 7, 2009 - Gov. Jon Huntsman Jr. endorsed a $2.30 tax increase on a pack of cigarettes, that would give Utah the highest state cigarette tax in the country with a goal of wiping out the remaining state sales tax on food.

Huntsman said that the $3 per pack tax (tax now 30 cents/pack, 34th lowest state tax rate in country, has not been increase since 2002) would bring in $120 million to $150 million in revenue, beyond the $60 million the current tax generates. This would be "more than enough" to eliminate the sales tax on food. That would cost about $75 million. In 2006 and 2007, lawmakers sliced the state's share of sales taxes on food from 4.75 cents to 1.75 cents. The governor's proposal would not affect local sales taxes on food purchases.

The governor does not intend for the cigarette tax increase to be used to offset the state's budget shortfall.

Improved health is cited by lawmakers who are already looking at increasing the cigarette tax. Utah has the lowest per-capita tobacco use rates in the United States, with about 170,000 adults and 20,000 18 or younger Utahns who smoke. More than 1,100 deaths were attributed to smoking last year in Utah, according to the state Department of Health.

Reference: Huntsman wants to push cigarette tax to $3 by Robert Gehrke, The Salt Lake Tribune, 1/7/2009 and Huntsman wants hefty smoke tax by Lisa Riley and James Thalman, Mormon Times - Deseret News, 1/7/2009.

Related news briefs: Utah Bars Go Smokefree January 1, 2009..; Utah moves from a tax based on the percentage of sales price to one based on the weight - independent of price of smokeless tobacco product..;
It's Illegal for Women to Smoke in Public..; States Need Quick Influx of Revenue – Think Tobacco Tax..

In Process - Some 2009 Predictions..

Altria completes purchase of UST, Inc. and moves to slow market share losses that have occurred over the lat 10 years. Most likely the price of Skoal and Copenhagen will be reduced to compete with Conwood's discount brand Grizzly.

Philip Morris International - targeting affluent people in developing countries. more spending money .. They see a market expansion opportunity in
developing countries, due to growing affluence in those countries;

Expansion legislation of the SCHIP (State Children's Health Insurance Program) program to provide health care to low-income children will be approved by the end of March 2009. The $35 billion expansion would enable the joint federal/state program to add 3 million children to its rolls, which currently includes about 6 million children whose families couldn't otherwise afford it. (SCHIP expansion legislation time to try again..

SNUS-like tobacco products will be phased out in the U.S.A.

U.S. The people will rise up and prevent companies like R.J. Reynolds from marketing dissolvable products like candy-like pellets, toothpicks and edible film strips all laced with nicotine - also to a lesser extent flavored cigars.

U.S. Time to make revisions to the Senate's Version of "The Family Smoking Prevention and Tobacco Control Act" (H.R.1108/S.625). No longer necessary to get the Altria's input. Senator Michael B. Enzi (R-WY) has pointed out, "Poison peddlers shouldn’t get to decide how we as responsible legislators fight the war against their deadly products." (Revise Senate's Version FDA Tobacco Regulation Bill...

U.S. - Passage of the legislation to prevent the United Postal Service from delivering tobacco products - PACT - Prevent All Cigarette Trafficking Act. (PACT Legislation now in the U.S. Senate Judiciary Committee..)

Health insurance - increase the penalty tobacco user shave to pay to obtain health insurance.

Keep on taxing all tobacco products.. States Need Quick Influx of Revenue – Think Tobacco Tax..

U.S. signed the FCTC in May 10, 2004 but never ratified.. President Obama will submit the World Health Organization's Framework Convention on Tobacco Control - first world health treaty - to the U.S. Senate for ratification. The Bush administration signed the treaty in May 10, 2004 (the treaty was signed by Health and Human Services Secretary Tommy G. Thompson), but has opposed some of the limits on marketing and has not sent it to the Senate. The United States is one of only two populous countries--the other is Indonesia, another major tobacco producer and consumer--that have not yet ratified the treaty. Read more...

2008 Highlights - tobaccowatch.org..

Disappointment with the sales of SNUS in the United States.
UST, Inc. Executives Very Disappointed in Sales of the Entire SNUS Segment..
Camel Snus sales have been weak at best but RJ Reynolds (RJR) said it will roll out Camel Snus nationwide beginning early next year. Philip Morris first SNUS entry Taboka Tobaccopaks had poor sales and was discontinued. Marlboro Snus (introduced in August 2007) being test marketed in Dallas and now also available in c-stores in Indianapolis have been poor. In addition Marlboro Smokeless Tobacco entry has not been widely accepted. Altria being financially disciplined in test marketing their smokeless products.. According to a Lorillard sales person sales of Triumph Snus (made by Swedish Match for Lorillard) have also been poor.

Dissolvable Tobacco Products - In January 2009 R.J. Reynolds Tobacco will start test marketing in 3-cities the first dissolvable tobacco products by a major company. Each product in convenient user-friendly dosage forms (a flavored pellet like a Tic Tac or Life Saver Holes, a flavored toothpick (is it peppermint toothpick or a peppermint toothpick laced with nicotine) and an edible film strip for your tongue just like Listerine pocketpaks) candy-like containing amounts of the nicotine to render the users (most likely kids) a slaves to this addictive substance for many years to come. STOP the Release of Dissolvable Tobacco Products..

EU Scientific Committee Concludes: Insufficent Evidence to Lift Ban on SNUS..

Altria Group, Inc. in December 2007 completed the acquisition John Middleton, a leading manufacturer of machine-made cigars such as Black & Mild. The Black & Mild Brand generates 23% of machine-made large cigarettes sales. Altria completes Middleton acquisition.. In March 2008 Altria cut the Middleton sales force indicating that John Middleton merchandising and promotional resources will be available through the PM USA sales organization." Middleton Sales Team Cut..

U.S. Supreme Court ruled that federal law does not preempt a state lawsuit brought by Maine smokers claiming that Altria, parent company of Philip Morris, fraudulently advertised health benefits of "light" cigarettes. U.S. Supreme Court Rules Against Big Tobacco..

Altria Group, Inc. spins-off Philip Morris International
- The New Philip Morris International (PMI) and the Marlboro Man is finally free to roam the globe unfettered by the legal and marketing shackles of the U.S. domestic market..

Without the Philip Morris International that contributed about two-thirds of Altria's $13.2 billion in operating profit Altria is left with the challenge in finding a source of growth to offset the decline in U.S. cigarette sales Altria takes all required steps to acquire UST, Inc. The transaction is expected to close during the first full week of January 2009. UST shareholders approve proposed buyout by Altria ..

Philip Morris International completes buyout of Canadian cigarette maker Rothmans Inc.

All tobacco sales banned in pharmacies in San Francisco and Boston.
San Francisco - Judge threw out a Walgreens attempt to stop the ban of tobacco sales in pharmacies..
; Boston bans cigarette sales in drug stores..

Wegmans a Rochester, N.Y.-based grocer’s decision to stop the sale of tobacco products at all 70 of its locations. Wegmans Food Markets and DeCicco Markets Praised..

Scandinavian Tobacco changes name to British American Tobacco Latvia.

Imperial Tobacco Gets Approval to Sell Brands in U.S..

FDA Tobacco Regulation Bill Overwhelmingly Passed U.S. House.. FDA tobacco regulation - bill distorted in current form..

Imperial tobacco completes acquisition of Altadis, S.A. (Alliance Tobacco Distributors) completed.

Tobacco control initiatives - positive(top 2):

Australia – the State of New South Wales (NSW) Former Premier MORRIS IEMMA: We're announcing the toughest and most sweeping reforms to tobacco laws in the nation and it's all about protecting the health of our children and our grandchildren." More New South Wales - Sweeping Anti-Tobacco Measures.. Tobacco control expert Professor Simon Chapman tells the ABC's Philippa McDonald tough new NSW laws are the biggest anti-smoking step in Australia since 1976.

Canada – the Province of Ontario: Ontario poised to ban flavored cigarillos..; Congratulations to the Canadian Provinces of Quebec and Ontario for Eliminating the Display of Tobacco Signs and Tobacco Products in Retail Outlets.; Canadian province of Ontario bans smoking in cars with kids under 16..

Tobacco Initiatives – Disappointments (4):

Indonesia, the world’s fifth largest cigarette market is the only Asian nation that has not signed or ratified the Framework Convention on Tobacco Control (FCTC), WHO's first-ever international health treaty. The country has been reluctant to sign FCTC because of concern about the impact on the economy. The tobacco industry provides jobs for seven million people and contributes about 10% to the government coffers. Indonesia to increase tax on tobacco products..

Netherlands the ban on smoking in bars and restaurants that began July 1, 2008 has so far been a failure. Netherlands - ban on smoking in bars and restaurants NOT enforced..

Britain new national tobacco control strategy placed on hold - measures to help cut smoking and drinking are expected to be shelved because of fears they will alienate voters during the recession. Even the matter of adults smoking in cars when kids are present, there are unlikely to be any further developments until the smokefree legislation is reviewed in 2010.

United States - A number of jurisdictions around the world such as Canadian provinces/territories and Australian states have already intervened to limit signs and displays of tobacco products and packaging at retail. Meanwhile in the U.S.A. - Philip Morris is hard at work competing for prime tobacco display space in c-stores around the country.

"Please get tobacco out of our kids faces," - Dr. Harley Stanton - elected as President of the Asia-Pacific Association for the Control of Tobacco.