Ban smoking laws are worthless if not enforced..

May 2, 2009 - It is safe to say that smoking is a big part of Egyptian culture. I was taken back the night we arrived to notice people smoking in our hotel lobby and that the rooms were stocked with ashtrays.

After I’d recovered from my first shock of seeing so many Egyptian smokers, I later noticed the cigarette packages outfitted with large, graphic warning labels. The labels here cover about half of the front of the package and consist of photos depicting various consequences of smoking -- a sad-looking man in a hospital bed wearing a respirator, a hospital patient with a tracheotomy drilled into his throat, and a child trying to avoid second hand-smoke around his parents. To me, these warning were just as shocking as they so graphically warned users of the effects of tobacco.

I later found out that in 2007 the Egyptian government passed legislation that extended bans on smoking in public spaces to include schools, government buildings, etc and ban the sale of tobacco products to minors. In spite of the law, it’s very common to see people on the street smoking who appear to be well below the age of 18.

This law also mandated a 10 percent increase in cigarette prices. You would assume the price could deter people from purchasing a pack of smokes but a pack of Egyptian cigarettes only sets you back about 50 cents to a dollar.

Funny thing is, these efforts to deter people from smoking with package warning labels and taxation don’t seem to be working. A study by the Central Agency for Public Mobilization and Statistic (CAPMAS)in Egypt found that pictures on cigarette packs has not affected the number of smokers, nor cigarette sales.

Seventy-six million Egyptians smoke and the population of the nation is just above 83 million; that should translate to 92 percent of the population here who smoke.

I think smoking bans and restrictions are great, but at this point I’m convinced that graphic warning labels aren’t going to work. (Egypt - warning pictures on cigarette packs - INEFFECTIVE...) As in Egypt, some of the world countries with the largest smoking populations require warning labels cigarette packages yet smoking prevails as a social norm.

Over the years I’ve periodically heard about possible legislation that would add a visual component to the current warning label on American cigarettes, but I’m not convinced. In the states, outreach campaigns and education may be much more effective reducing smoking rates than intimidating labels.

Egyptians suck down an estimated 50 billion cigarettes a year, which according to the World Bank makes it the largest tobacco consumer in the Middle East and North Africa, accounting for nearly one fourth of total consumption in the region and the 17th-biggest tobacco market in the world.

Relate news briefs: Egypt, CAPMAS Study Graphic Photos on Cigarette Packs - NOT EFFECTIVE..; Egypt - warning pictures on cigarette packs - INEFFECTIVE.. ; Egypt's fledgling anti-tobacco program to place images and warnings on cigarette packs..; Egypt Passes National Anti-Smoking Law...

Reference: Smoking can kill you, but maybe not if you are Egyptian, Submitted by Nikita Rocawich, Interact.com - Jacksonville, 05/01/2009.

Click on image to enlarge.., kids in Egypt smoking.

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Rhode Island retailers finding ways to avoid paying tobacco tax..

May 1, 2009 - The state tax in Rhode Island on cigarettes just was increased to $3.46 a pack, the highest in the nation. WPRI 12 Target 12 investigators have discovered some retailers will go to great lengths to pocket the tax money instead of paying it.

Dishonest retailers often buy cigarettes from Virginia where the tax is just 30 cents, then scratch the Virginia name away and sell the cigarettes at Rhode Island prices, pocketing more than 2 bucks a pack. The Virginia's stamp is almost identical to Rhode Island's. Rhode Island is in the midst of changing its tax stamp to make it more unique.

A state investigator visited 750 retailers last year, seizing cigarettes and making more than a dozen arrests. The Target 12 Investigators uncovered tax dollars going up in smoke in the two stores visited. They confronted cigarette sellers after discovering some may not be honest in paying cigarette taxes. - click on image below to listen to the video..



The legality of purchasing cigarettes (tobacco products) over the telephone, by mail order, or over the internet - frequently asked questions..

Reference: Cigarette tax cash going up in smoke RI changing tax stamp, making it more unique, Melissa Sardelli Reported by: Alex Diprato, WPRI.com, 5/1/2009.
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e-cigarettes - Company sues FDA for blocking imports of product..

May 1, 2009 - A Florida company that imports and distributes so-called electronic cigarettes has filed suit against the Food and Drug Administration (FDA), claiming the agency is illegally blocking imports of its product into the United States.

The suit, filed by Smoking Everywhere in the U.S. District Court for the District of Columbia, argues that the FDA has overstepped its regulatory authority by banning shipments of the devices and insisting they need to go through the drug approval process.

Smoking Everywhere’s lawyers from Thompson Hine point out that in 2000, the Supreme Court ruled that the FDA did not have the power to regulate ordinary cigarettes. Therefore, it shouldn’t be allowed to clamp down on their high tech counterparts, the lawyers argue. Makers market e-cigarettes as a risk-free way to get a nicotine buzz.

Using e-cigarettes is not tobacco smoking - it delivers inhaled vaporized nicotine from a small, plastic tube that heats up with the help of a tiny battery. Just like nicotine water, nicotine-laced lollipops and lip balm the FDA considers e-cigarettes illegal and to contain an unapproved drug. - tobaccowatch.org

Reference: FDA Sued Over Electronic Cigarette Embargo, Posted by Jordan Weissmann, BLT - Blog of Legal Times, 4/29/2009.

Related news briefs: e-cigarettes - FDA approval needed prior to marketing..; Canada - to launch an advertising campaign on the problem of tobacco smuggling..; E-cigarettes need to establish efficacy and safety - FIRST...

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Rock Hill and York County South Carolina smoking ban starts today..

May 1, 2009 - Smoking ban in effect as of today, May 1, 2009 for residents of Rock Hill and the unincorporated areas of York County. The decision to ban smoking in public buildings did not occur overnight. City and county officials first had to wait to see whether the state Supreme Court would approve smoking bans initiated in other cities before forging ahead.

Even many smokers, though knowing they would have to give up smoking in bars and restaurants, acknowledged that they had no right to inflict their habit on others. The consensus that public health trumps smokers' rights seems to be growing, not only locally but around the world. People should not be involuntarily exposed to secondhand (involuntary,passive, secondhand, environment tobacco, ETS) smoke.

While the bans include fines for both smokers and business owners who ignore the law, it is expected that compliance with the new rules will be largely voluntary. Neither the Rock Hill Police Department nor the York County sheriff's Office has enough personnel to scour the countryside looking for violators. Jim Baker, County manager: “We aren't planning to send out undercover smokers.”

Reference: Smoking ban in effect Smoking ban officially takes effect today in Rock Hill and most of York County, heraldonline.com, May 1, 2009.

Related news briefs: York County, South Carolina Council passes smoking ban..; Rock Hill, South Carolina Bans Indoor Smoking - it's official..; Cities/Counties South Carolina Smoking Bans, Latest Could Be Rock Hill...

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Russia - draft tobacco law being considered by Duma..

May 1, 2009 - In April 2008 Russia's lower chamber of parliament, the Duma (in the Russian Empire and Russian Federation corresponds to the lower house of the parliament), ratified the World Health Organization's Framework Convention on Tobacco Control. By ratifying the WHO's anti-tobacco pact, Russia will have to ban all tobacco advertising within five years. The pact also encourages enforcing bans on sales to minors, raising taxes on cigarettes, and widening bans on smoking in public places. The Duma decided to draft a new law as a follow-up to the World Health Organization’s Framework Convention on Tobacco Control. The law would become effective a year after its official publication. It contains transitional provisions regulating a gradual introduction of stricter requirements to the amount of hazardous substances in tobacco products and the size of health warnings on them.

An estimated 60 percent of Russian men and 30 percent of women smoke. Russia ranks fourth in the world in per capita tobacco consumption, behind Serbia, Greece and Bulgaria. One-third of Russia's population smokes. Every year 2.2 million people die in Russia including about 400,000 from smoking-related diseases.

The State Duma Committee on Health plans to submit a draft law limiting tobacco consumption in Russia to the Duma before the end of this year. The committee will also propose amendments to the Tax Code this autumn in a bid to raise cigarette excises, committee deputy chairman Nikolai Gerasimenko said. "We have already presented the document at the parliamentary hearings. It was drafted together with the Ministry of Health and Social Development and the Federal Service for Supervision of Consumer Protection and Welfare (Rospotrebnadzor)," he said.

The document bans the sale of cigarettes except in stores, bans smoking in public places, and bans tobacco advertising. "Total aggressive advertising prevents young people from making the right choice in favour of healthy life," State Duma deputy Sergei Markov said.

"It is necessary to raise cigarette excises gradually and constantly," he said. He believes these measures will help reduce tobacco consumption in Russia and prevent young people from taking to smoking for lack of money. Cigarettes are cheap in Russia—20 cents a pack for USSR brand cigarettes—and can be bought by minors at kiosks and from rows of street vendors lining the entrances to subway stations. At present cigarettes are sold at giveaway prices, even lower than the price for a loaf of bread or a liter of milk.

Lawmakers suggest increasing the tax to 70 percent of the retail price and more.
Specialists say that "if the tax is raised above inflation, all cigarette brands will become less affordable. The smokers using cheap cigarettes will have a smaller selection of replacements for their brands, which should encourage them to stop smoking." If the tax is raised from the current rate of 33 percent to 70 percent of the retail price, tax revenues will increase by 125 billion roubles a year and the number of smokers would decrease by 5.4 million, specialists say.

Earlier, the State Duma decided against passing amendments to the law that limits tobacco smoking in the country. Gerasimenko said the decision had not been lobbied by tobacco companies. It's a legal norm: if an existing law is altered by more than a quarter, it is better to write a new one, he explained.

Gerasimenko said the Duma would amend the federal law "On Tobacco Smoking" in order to increase health warnings on cigarette packs to 50 percent of their display area and introduce a total ban on tobacco advertising.

"The right to decide which bar or restaurant should allow smoking will be given to municipalities," he said.

The technical regulation for tobacco products adopted by the Duma in December brings the federal law "On the Limitation of Tobacco Smoking" in line with the Framework Convention on Tobacco Control of 2003 in terms of preventing the spread of smoking.
This regulation calls for a gradual reduction of hazardous substances in tobacco products: for filter cigarettes: 10 milligrams of tar, 1 milligram of nicotine (current levels are 14 and 1.2 milligrams); and for non-filter cigarettes: 13 milligrams of tar and 1.1 milligrams of nicotine (current levels are 16 and 1.3 milligrams). These requirements will apply three years after the enactment of the law. Earlier, a five-year transitional period was planned, but it was reduced on the initiative of the pro-presidential United Russia party.

The document also says that every pack of cigarettes will have to bear the main health waning in a black frame, reading "Smoking kills". In addition, additional health warnings may be placed on a pack, such as "Smoking causes infarctions and insults", "Protect children from tobacco smoke" or "Consult your doctor in order to quit smoking". The health warning should be made in "bold, clear and easily readable uppercase letters of the biggest possible size in black on white". The main health warning may not be less than 30 percent of the principal display area, and an additional health warning, not less than 50 percent.

Reference: Duma To Consider Draft Law On Tobacco This Year"> Duma To Consider Draft Law On Tobacco This Year, Alinga Consulting Group, 4/30/2009.

Related news briefs: Russia among top-10 smoking nations..; Russian lawmakers discuss smoking ban for restaurants and bars.., Russia passes new restrictions on tobacco.., British American Tobacco (BAT) Misleading Russian Consumers.., Russian State Duma (Parliament) ratified the framework convention of the World Health Organization (WHO) on tobacco control...

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North Carolina Senate Health Committee votes for stricter smoking ban..

April 30, 2009 - The committee voted Wednesday, 4/29 eliminating plans to exempt bars and nightclubs from the smoking ban restrictions. State Sen. Bill Purcell of Scotland County, a physician and leading advocate of the ban, hopes to bring the bill for a floor vote in the Senate as soon as today, 4/30.

Much of the rhetoric during the debate on the legislation echoed previous arguments. Proponents said a broad ban on smoking is necessary to protect the health of workers and the public. Opponents said individual business owners should decide whether to have smoking on their premises.

Tobacco manufacturing is a $23.9 billion industry in the state.

The revised bill addresses what restaurant owners describe as an inequity with a House version of the ban. That version would let smokers light up in businesses that exclude anyone under age 18. In practice, this would permit smoking in many bars but ban it in restaurants that operate bars. Restaurant owners argued that this would put them at a competitive disadvantage against bars and nightclubs.

If the proposed ban becomes law, smoking would become illegal in most places open to the public, plus most workplaces. It would have exemptions for cigar bars and tobacco shops. Also exempt: Actors portraying smokers on the set of a movie, television show or live stage show.

If the Senate approves the ban, the bill would return to the House for a concurrence vote. It’s not clear whether the House will concur, as the ban cleared the House only after the exemption for bars was added.

Related news briefs: North Carolina House poised to pass smoking ban..; North Carolina - ban on smoking in public places passes 1st test...

Reference: Senate committee approves stricter smoking ban by Paul Woolverton, FayObserver.com, 4/30/2009.


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Japan Tobacco International profits to fall this year..

April 30, 2009 - Japan Tobacco Inc., the world’s third-largest publicly traded cigarette maker, forecast profit will fall 19 percent this year as fewer people smoke in its home market and currency movements hurt its international earnings.

The maker of Camel and Mild Seven cigarettes is losing sales in Japan as the smoking rate falls and authorities introduce tighter tobacco controls (decline in total demand due to various factors including an ageing society, increased health consciousness and stricter smoking regulations). Earnings from surging overseas cigarette sales, helped by the 2007 takeover of U.K.- based Gallaher Group Plc, are being blunted by the strengthening of the yen against other currencies.

The company’s Japanese tobacco sales fell 4.8 percent to 3.2 trillion yen, including tax, last year. The percentage of Japanese men who smoke has fallen by half over the past 40 years to about 40 percent.

Overseas tobacco revenue rose 18 percent to 3.12 trillion yen in the year to December on higher sales of Winston and Camel cigarettes in counties including Russia, Italy and Spain.

Growth in overseas sales was blunted by gains in the yen, which gained 23 percent last year, the best performer among the 16 major currencies tracked by Bloomberg.

Note: The image has the words 10 years of success. JTI (international business of Japan Tobacco) was formed in 1999 when Japan Tobacco Inc. purchased, for USD 8 billion, the international tobacco operations of the US multinational R.J.Reynolds. In 2007, Gallaher, a FTSE (Financial Times Stock Exchange) 100 business, was acquired by Japan Tobacco for GBP 9.4 billion. At the time, this was the largest foreign acquisition by a Japanese company.

Reference: Japan Tobacco Profit to Fall on Smoking Decline, Currency Moves by Fergus Maguire, Bloomberg.com, 4/30/2009; JT Posts Record Net Sales and EBITDA for the Fiscal Year that Ended March 2009, Japan Tobacco Inc., April 30, 2009.
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United Kingdom to consider plain tobacco product packaging..

April 30, 2009 - on May 6th members of the House of Lords will vote on an amendment to the 2009 Health Bill to mandate plain packaging for all tobacco products. Plain packaging, also known as generic, standardised or homogeneous packaging, refers to packaging that has had the attractive promotional aspects of tobacco product packaging removed and the appearance of all tobacco packs is standardized.

A new study (Hammond et al. - session paper below) presented at the Joint Conference of Society for Research in Nicotine and tobacco (SRNT and SRNT-Europe) April 27-30, 2009, Dublin Ireland: has found a significant link between cigarette branding and ‘false beliefs’ among smokers and children. The authors argue that this link provides strong evidence for the introduction of plain packaging [3] for all tobacco products in the UK.

Lead author David Hammond said: “Research in the US, Canada, Australia and now the UK all support the case for tighter regulations on pack branding. Tobacco packages are portable advertisements that have long been used to reassure consumers about the risks of smoking. In this study, children as young as 12 reported significant levels of false beliefs about the risks of cigarette brands based upon the colours and words on UK packs. Plain packaging has great potential as a public health measure and I urge the UK Government to support this measure.”

PAPER CIGARETTE PACKAGE DESIGN AND PERCEPTIONS OF RISK AMONG UK ADULTS AND YOUTH: EVIDENCE IN SUPPORT OF PLAIN PACKAGING D. Hammond*1, M. Dockrell2, D. Arnott2, A. Lee1, S. Anderson3, and A. McNeill3,4; 1University of Waterloo, Canada; 2ASH, UK; 3University of Nottingham, UK; 4UK Centre for Tobacco Control Studies.

UK Cigarette packages that give the impression that some brands are less harmful than others are illegal in the EU and prohibited under Article 11 of the FCTC. This study examined consumer perceptions of leading UK brands and evaluated the impact of “plain packaging,” in which colours and other design elements were removed. A total of 516 adult smokers and 806 youth (aged 11 to 17) participated in an online survey in 2008. Participants were shown pairs of cigarette packages and were asked to compare the packages on 5 measures: taste, tar delivery, health risk, attractiveness, and either ease of quitting (adult smokers) or which brand they would choose if trying smoking (youth). Compared to “regular” brands, adults and youth were significantly more likely to rate packages with the terms “smooth,” “silver,” and “gold” as lower tar, lower health risk, and either easier to quit (adults) or their choice of pack if trying smoking (youth). For example, compared to Mayfair King Size, Mayfair Smooth was rated as lower tar by 64% of youth, lower health risk by 54%, while 39% of youth indicated that they would prefer Mayfair Smooth if they were to try smoking. Similar perceptions were reported by adult smokers; in addition, 31% of adult smokers rated Mayfair Smooth as easier to quit. The use of colours had a similar effect: for example, both adults and youth rated a light grey package as lower tar and lower health risk compared to darker grey and red packages, which were otherwise identical. Plain packaging—where the colour and design elements were removed—reduced these misperceptions, as well as the perceived attractiveness of brands. Overall, the findings indicate that considerable proportions of UK youth and adults hold misleading perceptions of risk based on package design. The findings suggest that removing the terms “light” and “mild” is insufficient to eliminate misleading information from packages, and that plain packaging regulations would increase compliance with existing EU law and FCTC guidelines. Supported by Action on Smoking on Health (ASH) with funding from the British Heart Foundation and Cancer Research UK. CORRESPONDING AUTHOR: David Hammond, Ph.D., Assistant Professor, University of Waterloo, Health Studies & Gerontology, 200 University Ave West, Waterloo, ON N2L 3G1, Canada; Phone: 519-888-4567 x36462;

Reference: Strong evidence supporting plain packaging for all tobacco products on the eve of Lords vote
ASH news release: Embargo: 00:00 Wednesday 29th April 2009

Related news briefs: Australia - National Youth Tobacco Free Day Friday - March 27, 2009..; UK Planned Curbs On Smoking to be Axed..; WHO FCTC Durbin Meeting (Nov 17-22, 2008) - Generic Cigarette Packaging Proposal..; Cigarette Graphic Warnings Most Cover Most of Package..; More New South Wales - Sweeping Anti-Tobacco Measures..; British considering banning logos on cigarette packs, other measures...
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Leo Burnett possible loss of jobs - Philip Morris may scale back advertising..

April 30, 2009 - Sources say Philip Morris International has signaled it is scaling way back its global spending on almost all of its key cigarette brands, including Basic, Parliament and Virginia Slims. Only Marlboro, reportedly, will continue to get anywhere close to the ad spending the iconic cigarette brand typically enjoys.

Philip Morris hired the Leo Burnett agency in 1955 to develop and advertising campaign for the Marlboro cigarette. Burnett famously helped transform the image of the Marlboro from a lesser brand targeting women to the most popular cigarette in the world with rugged cowboy imagery - Marlboro Man.

Because Philip Morris is not a major advertising presence in the United States, many people forget the giant cigarette maker is still a going -- and very profitable -- concern overseas, where Burnett has over many years been instrumental in helping fuel cigarette sales through its advertising.

Reference: Philip Morris pullback: Layoffs likely as 300 Leo Burnett jobs may go up in smokeLEWIS LAZARE Media & Marketing columnist llazare@suntimes.com, Chicago Sun Times, 4/30/20009.

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RAI CEO comments on the launch of Camel Dip and Camel SNUS market..

April 30, 2009 - From Question-and-Answer Session: Reynolds American Inc. (RAI) Q1 2009 Earnings Call Transcript.. Susan Ivey - Chairman, President and Chief Executive Officer of RAI.


Analyst: Over the past few years, you've talked about Camel being really appropriate for Snus, now that you're going into the traditional market MST, just curious as to what the initial consumer research that you've done around the transferability of the Camel brand has come up with so far? And I understand, obviously, test market is on its way but just curious on your initial thoughts there.

Susan Ivey: Sure. I'll talk a couple of minutes about Camel Dip. Our consumer research is actually very encouraging. The consumers validate that Camel has a strong heritage in tobacco pleasure, and that we believe the Camel trademark can bring innovation into the premium category of moist. So, we will go into a couple of test markets, Colorado and Florida this summer and get a read on that. As you heard me describe, we have a wide cut, and we have some innovative packaging which we hope will bring some new life to the premium segment, and at the redefined premium segment price point.

Analyst: Susan, quickly on that, what is, in your view, the difference between the Camel brand and the Marlboro brand? Clearly, Marlboro was a flop. So, I just wanted to see if you had an opinion on that.

Susan Ivey: I believe that Camel has proved through its national expansion of Snus and the learning's that we had in those lead markets can encompass total tobacco. Most important aspect is to ensure that you have a great product in the segment, and using Conwood's expertise in product development for moist, and the Camel trademark, we believe it is a winning combination.

Susan Ivey: So we continue to be confident in Camel's ability to grow, and to grow outside of its traditional cigarette portfolio with Snus, and as you heard today, we're going to test some Camel Dip.

Will the Camel trademark succeed where the Marlboro trademark failed..



Analyst: One last question on Camel Snus. Is the national rollout complete now? Is Snus in every point-of-sale where you want it to be?

Susan Ivey: I would say almost. The national rollout is almost complete. Obviously, as we were rolling it out in the first quarter, the price changes happened, and of course, the trade marketing teams had to help the retailers get through those price changes. But we are national. We're not in every store in every city where we want to end up, but we continue to be encouraged.

We think the timing is also very good for adults who are looking for an alternative either when they can't smoke but also when you look at the price point of Suns because it is taxed at the moist-snuff level. It has a very compelling price point. We're out there with trial programs with Camel Snus and we'll watch that. It is early days, but obviously, we had the confidence to go national because of the result of our rollouts over the last couple of years, and we'll keep you posted.

In an answer to another question CEO Ivey stated "that 40 percent of moist users are dual users (dual use between a smokeless product and cigarettes). It is a big number."

Related news breif: How's SNUS doing in the U.S. - will Susan Ivey tell us the truth??

Reference: Reynolds American Inc. Q1 2009 Earnings Call Transcript, Seeking Alpha, 4/29/2009.
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Greece starts anti-smoking campaign..

April 29, 2009 - Athens - Greece, one of Europe's heaviest smoking nations, on Wednesday, April 28th launched a six month anti-smoking campaign ahead of a ban outlawing smoking in most public places from July 1. Greece's health minister Dimitris Avramopoulos said the government launched a promotion campaign to help introduce restrictions on smoking in public places.

Avramopoulos: "With the drafting of a national action plan against smoking, our country has acquired a targeted and strategic policy for the promotion and safeguarding of public health.

The ban is only partial. Under the new law, smoking will be banned in public places such as schools, universities, state offices, hospitals and on all forms of public transport. Private offices, restaurant and bar owners will be required to designate smoking and non-smoking areas to safeguard public health.

The Health Ministry said the new law is aimed at saving the lives of an estimated 20,000 people who die of smoking-related diseases every year, adding that the habit costs the state more than 2 billion euros a year (2 654 800 000 U.S. Dollars).

According to a poll in the Greek daily Kathimierini newspaper, 62 percent of Greek smokers welcomed the planned measures. The opinion poll also suggested that the law will have an impact on bars and restaurants as a third or 34 per cent of smokers say they will visit them less often because of the new measures.

Interesting facts: Karella Tobacco Company, established in 1888, is Greece's largest cigarette maker and exporter (70% of business). Karella sold over 13.7 billion cigarettes in 2007 in over 65 countries. One in every 300 cigarettes smoked in the world is produced by Karella. In October 2003 the European Commission gave the green light for the Dutch subsidiary of Philip Morris to buy the manufacturing and distributing business of the Greek tobacco company Papastratos Cigarette Manufacturing S.A.

Related news brief: Greece May Have the Highest Cigarette Consumption Per Person in the World...

References: Greece launches anti-smoking campaign ahead of July ban, submitted by Mohit Joshi, TopNews.in, 04/29/2009; Avramopoulos: Smoking ban in effect July 1, Phantis.com, 4/29/2009.
(Hellenic Republic)
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Reynolds American first-quarter profit sharply lower.

April 29, 2009 - Reynolds American Inc. (RAI), the nation's second-largest cigarette company, charges related to the value of its trademarks sent its first-quarter profit sharply lower. Adjusted results beat analysts' estimates.

The Winston-Salem, N.C.-based maker of investment brands, Camel and Pall Mall cigarettes said cigarette volume was hurt as tobacco retailers and wholesalers cut their orders ahead of a one-time federal tax on their inventory. Higher prices and productivity helped offset that as well as increased pension expenses.


It is interesting to note for Q1 2008 RAI posted weaker-than-expected first-quarter profit due to declines in sales of cigarette brands on which it focuses less marketing (non-growth brands) and pressure from competitors amid the weak U.S. economy.

Sales dropped 7 percent to $1.92 billion from $2.06 billion — just below analysts' forecast of $1.97 billion. For the quarter, Reynolds said it saw a 10.5 percent decrease in its shipment volume to 18.7 billion cigarettes. The company said total industry volumes declined 10.4 percent in the period.

Tobacco sellers cut their orders since they had to pay a "floor" tax of 62 cents per pack on whatever they had on hand before a 62-cent-per-pack retail sales tax went into effect April 1.

Reynolds said the retail market share its Camel brand increased 0.1 to 7.6 percent compared with the year-ago period. The Pall Mall brand rose 0.6 to 2.9 percent.

Reynolds, like most cigarette companies, is trying to find new ways of selling tobacco as cigarette demand has fallen because of smoking bans, health concerns and social pressure. The industry is focusing more on cigars and smokeless products such as moist snuff, chewing tobacco and snus. R.J. Reynolds products: Camel Snus brand was expanded nationally and also introduced a dissolvable tobacco product called Camel Orbs in three test markets.

The company, which also owns smokeless tobacco company Conwood Co. Volume of Kodiak, Grizzly and Conwood's other moist snuff products grew less than one percent to 76.4 million cans compared with 75.9 million cans in the year-ago period. Grizzly, the nation's best selling moist-snuff brand delivered exceptional share growth, gaining 2.6 share points over the prior year quarter - strength was especially evident in the southeast.

The company plans to begin testing Camel Dip, a new moist snuff, in Colorado and Florida through Conwood this summer.

Reynolds American Inc. Q1 2009 Earnings Call Transcript, Seeking Alpha, 4/29/2009.

Reference: Reynolds American Q1 profit slides on charges by MICHAEL FELBERBAUM (AP Business Writer Michelle Chapman in New York contributed to this report), , 4/29/2009.
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Mississippi - tobacco tax likely to be approved May 6, 2009..

April 29, 2009 - House and Senate conferees agreed Tuesday, April 28th to recommend raising Mississippi's cigarette tax from 18 cents to 68 cents a pack, a compromise that would hold down the cost of car tags and send about $5 million into stop-smoking efforts across the state.

The full House and Senate are expected to pass the tax increase May 6 when they return from a month-long recess. Chief negotiators for each house predicted passage of the tax increase, which is expected to generate nearly $32 million -- when coupled with the current 18-cent-a-pack tax -- between its effective date of May 15 and the end of the 2009 fiscal year that ends on June 30.

The money generated will hold down car tag prices, which were expected to rise July 1 by $135 a year on a $20,000 car or light truck with no new tax revenue under a tax rebate formula. Gov. Haley Barbour has opposed taking any money from the rainy day fund, leaving a higher cigarette tax as the only viable option.

Going into Tuesday's meeting, April 28th Senate conferees had agreed to raise the tax to 64 cents a pack while the House wanted 75 cents. Spontaneous applause, led by a group of physicians in lab coats, broke out when the compromise of 50 cents was announced.

Dr. Karen Crews, director of the Oral Oncology and Biobehavioral Sciences Division of the University of Mississippi Medical Center said the tax increase should cut adult smoking by at least 2 percent over the next year and smoking by teenagers, who have less disposable income, by 6.5 percent. The increase is expected to result in a million smokers giving up the habit and prevent 2 million young people from ever starting, according to the Centers for Disease Control and Prevention. In Mississippi, the Campaign for Tobacco-Free Kids estimated that that state spends $8.37 in health care for every 18 cents, the current state cigarette tax rate per pack, collected in cigarette taxes.

Mississippi's cigarette tax increase comes on top of the federal government raising the tobacco tax April 1 from 39 cents to $1.01 per pack. (Besides federal tax increase - several states want to do the same..)

Reference: Mississippi cigarette tax likely to pass
Raising price of smokes 68 cents would offset cost of car tags by Phil West, Memphis Commercial Appeal, 4/28/2009.

Related news briefs: Mississippi - still chance for tobacco tax increase for July 1, 2009 budget..; Besides federal tax increase - several states want to do the same..; Mississippi - with federal stimulus package passed cigarette tax loses momentum..; Mississippi - tobacco tax increase may pass this time..; U.S. States Considering Tobacco Tax Increase...

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Louisiana - increase in tobacco tax probably doomed..

April 29, 2009 - A proposal for a $1-per-pack cigarette tax increase was snuffed out by the House Ways & Means Committee in an 11-7 vote Tuesday, April 28th signaling probable doom for any proposals to generate major new sources of tax revenue during the current lawmaking session.

Louisiana has a smoking ban in force:
As of January 1, 2007 the "Louisiana Smokefree Air Act," took effect prohibiting smoking in most businesses around Louisiana, leaving people to do as they'd like in their homes and cars (unless they're using their homes as day care facilities). Also - Louisiana has a smoking ban in force when children (kids) 12 and younger are in the car (automobile).

House Bill 75 by Rep. Karen Carter Peterson, D-New Orleans, was projected to raise nearly $200 million annually in state revenue while reducing consumption of the cancer-causing products. It encountered opposition in Gov. Bobby Jindal's stance against new taxes and from panel members for various reasons.

Rep. Mike Danahay, D-Sulphur, said he voted against the bill because it could potentially reduce retail sales in his southwest Louisiana district, which hosts many visitors from Texas driving in for the casinos and general travel. The state cigarette tax in Texas is $1.41 per pack, compared with Louisiana's current rate of 36 cents. Another argument made against the tobacco bill was the recent increase in the federal cigarette tax from 39 cents to just under $1.01 per pack, which took effect April 1.

The proposal had the support of many doctors and health-care advocacy groups, including the American Cancer Society, the American Heart Association, the American Lung Association and the Coalition for a Tobacco Free Louisiana.

In 2008 Louisiana has a state health ranking of 50; it was 49th in 2007.

Reference: Tobacco tax rejected by House panel by Robert Travis Scottt, nola.com, 4/28/2009; Tobacco Tax Increase:
Raise the Tax or Bear the Burden, Louisiana Budget Project, 4/27/2009.

Click on image to enlarge..

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U.S. Senate plans to expediate legislation for FDA to regulate the tobacco. industry.

April 28, 2009 - - The Senate plans to expedite legislation that would give the federal government the power to regulate tobacco products, reported The Courier-Journal. Senate Majority Leader Harry Reid (D-Nev.) has told supporters of the legislation, which passed the House on April 2 on a 298 to 112 vote, that the matter will be taken up before the end of May. Jim Manley, spokesperson for Reid, confirmed that Senate action is slated for next month. Manley said no final decision has been made on the legislative procedures in the Senate for considering the tobacco bill.


The only question is whether the House-passed bill, sponsored by Representative Henry Waxman (D-Calif.), will be taken up by the Senate or whether a separate and basically identical Senate measure will be voted on instead, said the report. Reid has invoked a Senate rule that allows the Waxman bill to be considered on the Senate floor without first being approved by the Senate Health, Education, Labor & Pensions Committee, whose chairman is Senator Edward Kennedy (D-Mass) but that the senator still intends to introduce his own measure, as he did last year.

As a sign of intensifying lobbying for the measure, supporters have begun running ads in Washington-based publications to urge senators to act, said the report.

If passed, the legislation would empower the FDA to restrict tobacco advertising and marketing—particularly any that it determines to be targeting children. The FDA also would have the authority to require larger and more graphic warnings on cigarette packs and demand disclosure of tobacco product ingredients. The agency would not regulate tobacco farmers and would not be allowed to ban tobacco. The cost of the regulation would be covered by fees imposed on the tobacco manufacturers and importers, the report said.

Just like in the House, an alternative bill has also been introduced in the Senate. The alternative bill, authored by Senator Richard Burr (R-N.C.) and Senator Kay Hagan (D-N.C.), would create a new government agency to regulate the tobacco industry rather than grant the authority to the FDA.

Reference: Senate Eager for FDA Bill
Accelerating tobacco regulation legislation; could vote on House version by end of May, CSP Daily News, 4/28/2009.

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Singapore - more people were smoking in 2007 than 2004..

April 28, 2009 - The National Health Surveillance Survey 2007 showed that 13.6 per cent of Singapore residents aged 18 to 69 smoked daily, compared to 12.6 per cent in 2004. The survey also found that about one in four males smoked daily, compared with one in 27 females. The males were lighting up 13 cigarettes a day on average, compared to nine cigarettes for females. Furthermore, daily smoking was most prevalent in young adults aged 18 to 29, with many of them experimenting with cigarettes at the age of 16.

As a result there is going to be a revamp of the mandatory counseling framework for underaged first—time smoking offenders. From May 1, first—time offenders will be required to undergo a mandatory brief online intervention that encourages them to consider quitting smoking. There will also be more concerted efforts to reach upper primary level students.

Targeting young adults is also a new initiative called the , where smokers get a redemption card when they sign up and they can redeem stamps when they attend quit smoking events or counseling sessions. With the stamps, they can redeem vouchers and discounts from a book store, hair salon and optician.

More information on various quit smoking initiatives is available at www.breathe.sg and www.hpb.gwov.sg/quit4life.

In Singapore, cigarette packs started carrying graphic images such as diseased lungs and bleeding brains in August 2004. Smokeless tobacco has been banned in Singapore.

Related news briefs: Singapore - Smoking increase despite public ban, price hike..; Singapore - Introduction of Tobacco Stamp to combat contraband...

Reference: Search: Online counseling to be mandatory for underaged smokers, , 4/29/2009.

Click on image to enlarge..
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How's SNUS doing in the U.S. - will Susan Ivey tell us the truth??

April 27, 2009 - Susan Ivey is chairwoman, president and chief executive of Reynolds American Inc. (RAI) will release first-quarter 2009 financial results on Wednesday, April 29, 2009. RAI President Susan Ivey

Yesterday in the Lorillard Tobacco Q1 2009 Conference Call Marty Orlowsky (Chairman, President and CEO of Lorillard) was asked to comment on their smokeless program.

Orlowsky: Well, I think we're experiencing a similar pattern as some of our competition as marketing or test marketing [SNUS] products. It's a relatively low level of interest that's being expressed by the consumers and we're just monitoring the situation as we move forward. I really don't have anything very specific to report. There have been no major changes to the consumer perceptions of that product.

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. Triumph SNUS..

UST, Inc executives prior to the company to be being acquired for the Altria Group. (UST Inc. was a holding company for its principal subsidiaries: USSTC and International Wine & Spirits Ltd.. USSTC is the leading producer and marketer of moist smokeless tobacco products.)

Dan Butler, former President of USSTC (United States Smokeless Tobacco Company) is very disappointed with the progress of the SNUS segment in total. The entire segment itself has gained very little traction, and we had plans to be more aggressive. Frankly, we are revisiting those because the size of this market and how slowly it's developing -- it's so tiny and taking so long to gain any traction. We've got almost seven years of experience with Revel SNUS (has been discontinued)and our competitors out there now for a couple of years -- we're struggling whether this segment is really going to take hold or not and whether an American consumer is really interested in this form of tobacco or not. (Within Altria Butler is president, U.S. Smokeless Tobacco Company (USSTC), the world's largest manufacturer and marketer of smokeless tobacco.)

Murray Kessler, former Chief Operating Officer of UST, we are very disappointed in the total performance of whether -- they call it Snus or we call it spit-free. We've been testing this thing now for seven years. The newer entrance [entrees], if you go back, is now, in original markets, is over two years, and it is not gaining the traction, given the level of investment that's been put there. Kessler has stated in the past that "Nine out of 10 smokers that try smokeless still reject the product." (Kessler is now Vice Chair of Altria Group, Inc.)

Reynolds American (RAI) for some reason still remains upbeat regarding Camel SNUS. A Reynolds spokesperson David Howard tells people that the company is confident in the performance of Camel SNUS. Howard: "Based on our learnings since test marketing, clearly we believe that it is viable product. We were pleased with results in terms of sales, and in terms of feedback from...smokers as well as our retail customers." It is a product that "we think is going to perform very well down the road."

In May 2008 R.J. Reynolds Tobacco (RJR) test marketing of Camel SNUS went from eight to 17 metropolitan areas.(s It Justified - R.J. Reynolds Tobacco Adding Test Cities for Camel SNUS Soon after Reynolds announced that Camel SNUS will be rolled out nationally early in 2009.

RJR has tried just about everything: from providing coupons, to stationing people at bars and c-stores, to running ads in various publications. Where has this got them - surely they've given away more cans of Camel SNUS than have been paid for. Now based on information from a c-store owner the RJR salesperson for the last 3-weeks has given him at no charge 25-cans of Camel Snus Frost and asked for him to pass them out to those people that may be interested in giving it a try. Well - the owner can't even give the stuff away, even to dippers finally (he tells us) someone came into to the store and asked for Camel SNUS Original flavor and when asked was willing to take a bunch of the free cans.
(Lots of news briefs in support of our point of view in the archive, here's a couple: C-store+ update..Camel SNUS, Camel ORBS and other news..; C-Store Update - How bad are Camel SNUS sales??) The flooding of the market with free cans of Camel SNUS doesn't seem to work.

RAI spokespeople to justify Camel dissolvables have stated that some smokers didn’t care for loose tobacco or pouched smokeless products, particularly ones they had to remove from their mouth after use - like SNUS. R.J. Reynolds has dropped the Camel SNUS Original and Spice flavors and now has two - Frost and a new flavor called Mellow and reduced the number of pouches per can from 20 to 15.

Altria/Philip Morris (PM USA) When Marlboro SNUS and Marlboro MST were introduced then Citigroup's Tobacco Analyst Bonnie Herzog told investors that PM USA will fully cement its place in the smokeless segment using the power of the Marlboro brand (8/21/2007). Well this did not HAPPEN.. Nik Modi, a UBS tobacco analyst has stated, "The Marlboro brand name is not as transferable as many originally believed." The guys that know the smokeless tobacco category tell us history clearly shows that it is difficult to extend brands from one category to another. (Marlboro MST / Marlboro SNUS - Philip Morris USA (PM) Trying to Paint a Rosie Picture..)

PM USA has been much more cautious with Marlboro SNUS. They have expanded into a new test market in Arizona during the first quarter of 2009 and the product was revamped based on consumer-driven insights and learnings from test markets in Dallas and Indianapolis. The new Snus contains new packaging, product enhancements and pricing, according to the company. We will have much more information on Marlboro SNUS after World Tobacco Free Day - May 31, 2009.

Taboka, PM USA's first attempt at a SNUS product had poor sales and was discontinued.

Reports from Canada indicate that the test marketing of du Maurier SNUS by Imperial Tobacco of Canada (a wholly owned indirect subsidiary of British American Tobacco) have not gone well.
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In Process: Lorillard, Inc. Reports First Quarter 2009 Results ..

April 27, 2009 - Net sales were $917 million in the first quarter of 2009, compared to $921 million in the first quarter of 2008. The 0.4% decrease in net sales reflects lower net unit sales volume and higher sales promotion costs accounted for as a reduction in net sales, partially offset by higher average unit prices.

Wholesale shipment volume in the first quarter of 2009 compared to the same quarter of 2008 for Lorillard and for the total industry was negatively impacted by tax-driven trade purchasing patterns in anticipation of the $0.62 increase in the federal excise tax on cigarettes from $0.39 to $1.01 per pack on April 1, 2009. This legislation included provisions that imposed this increase in excise taxes on inventory held as of March 31, 2009 (a "floor tax"). As a result, many wholesalers and retailers depleted their inventory levels as of that date to minimize any such floor taxes owed based on inventory. Additionally, the first quarter of 2009 contained one less shipping day than the first quarter of 2008. See attached table for details of Lorillard's wholesale shipments. On March 6, 2009, Lorillard increased its wholesale selling prices by $0.71 per pack to cover the increase in the federal excise tax and other costs.

Based on Lorillard's proprietary retail shipment data, Newport continued to increase its retail market share during the first quarter of 2009 by 0.2 share points from 9.9% in the first quarter of 2008 to 10.1% in the first quarter of 2009.

Newport trails only Altria Group Inc.'s (MO) ubiquitous Marlboro brand and dominates the menthol cigarette market. Lorillard's menthol market share rose to 34.5% from 32.2%. Wholesale volume dropped 7.6%, compared to what Lorillard said was a 10% decline industrywide. As such, market share of its Newport brand rose to 10.1% from 9.9%. It accounts for the vast majority of Lorillard's volume and nearly all of its profit. Newport trails only Altria Group Inc.'s (MO) ubiquitous Marlboro brand and dominates the menthol cigarette market. Lorillard's menthol market share rose to 34.5% from 32.2%.

Waiting on results of conference call to discuss the first quarter 2009 results of Lorillard, Inc. has been scheduled for 10:00 a.m. EDT, April 27, 2009. Lorillard Inc. Q1 2009 Earnings Call Transcript, Seeking Alpha, 4/27/2009.

Lorillard, Inc. and Subsidiaries
Selected Domestic Retail Market Share Data (1)


Three Months
Ended March 31,
2009 2008 Pt Change

Lorillard 11.4 10.8 0.6


Newport 10.1 9.9 0.2


Total Industry Menthol 29.4 28.9 0.5


Newport Share
of Menthol Segment 34.5 34.2 0.3

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Iran - over 45% of Iranians exposed to secondhand smoke..

April 27, 2009 - More than 31 million of the country’s total population are second-hand smokers, head of research center of Iran Anti-Tobacco Association (IATA) said here on Sunday.

Referring to the recent statistics from the Iranian Health Ministry and the World Health organization (WHO), Ali Abdollahinia said, “Over 45% of Iranians are exposed to passive smoking (secondhand smoke, environmental tobacco smoke, ETS, sidestream smoke, involuntary smoking).” Based on the figures, more than 10 million of Iranians are smokers, who light up over 58 billion cigarettes yearly. He referred to the increase in the average age of Iranian smokers, and said that over 24% of men and 2% of women over the age of 15 are smokers in the country. According to Abdollahinia, 3.2% of boy students and 1% of girl students aged between 13 and 15 are smokers. “On average, Iranians light up 14 cigarettes a day,” the researcher added.

Reference: Over 45% of Iranians exposed to passive smoking, mehrnews.com, 4/26/2009.

Distribution of age amongst Iranians.

Related news brief - Iran: Iran - graphic warnings cigarette packs..; Saudi court set to hear tobacco compensation case..; Cigarettes, bras and Bull semen: Just a few things the US exports to Iran..
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Tobacco industry has long targeted young people as "replacement smokers"

April 27, 2009 - Nearly half of the world's smokers live in three countries - China, India and Indonesia - and many are picking up the habit at a very young age. In China, one in 10 boys aged 14 are smokers, and in Indonesia a third of students report taking their first puff before the age of 10. As smoking rates decline in the West, the tobacco industry has been setting its sights on the developing world.

The World Health Organisation (WHO) says the tobacco industry has long targeted young people as so-called "replacement smokers" to take the place of those who quit or die. Susan Lawrence, head of China programs at the Campaign for Tobacco-Free Kids has told ABC Radio Australia's Connect Asia program the high smoking rates among adults in China make it more attractive to children. "The message that society sends them is that smoking is normal, that if you're in a public place, you're smoking," she said. "And there's this sense that this... is what men do. Grown up men smoke and boys who want to look grown up smoke.

Dina Kania, a youth advocate for Indonesia's National Commission for Child Protection in Jakarta, says the industry is aggressively targeting young people through sponsorship. "We have been doing tobacco industry surveillance since 2008 and it is very obvious and evident that they are targeting young people," she said. "They sponsor music events and we have monitored about 1,350 events sponsored by the tobacco industry and most of those events were attended by children and teenagers."

Ms Lawrence says while there are some advertising restriction in China, the promotions and sponsorships are clearly aimed at the country's youth. "There are a lot of schools in rural areas which carry tobacco brand names," she said."They do promotional events in shopping malls, bringing on very popular breakdancing routines or popular singers to entice crowds - and a lot of people in those crowds are kids."

Tax revenue: Ms Kania says Indonesia's government is hesitant to regulate the tobacco industry because of the tax revenue it provides - up to one-tenth of all government revenue in the country. "The myth of the profits made by the tobacco industry, of their contribution to our country, is very strong in our country," she said. "So that's why the Government won't buy our arguments, our tobacco control advocate arguments, because they believe the tobacco industry more than us."

But Ms Lawrence says in China, tobacco tax is about 40 per cent of the retail price, compared to the international norm of about 65 per cent of the price. She says subsidies on the cheaper cigarettes, aimed at the rural markets, are also allowing more children to afford to smoke - and increasing taxes and reducing subsidies do not hurt the poor. "I think that they actually help the poor in all sorts of ways," she said. "The poor are the most price sensitive group out there, so if you raise tobacco taxes, you're going to see an awful lot of those people either quitting smoking or sharply reducing their consumption of cigarettes. "Not only does it help with household incomes... but it also helps reduce tobacco-related illness, [which] can send people rapidly into serious poverty because there's no social safety net to cover big medical prices."

Parental responsibility: WHO's Framework Convention on Tobacco Control, adopted in 2003, sets out measures for countries to protect against the dangers of tobacco, including limits on taxation, government policies, advertising and distribution. There are 164 parties to the convention, including China, who ratified the agreement in 2005, and Ms Lawrence says the Chinese needs to live up to its commitments. "I just think it's awfully hard for parents, when the signals that society is sending is that smoking is normal and that in fact, in China, that to be a real man, you have to smoke," she said. "I think government really needs to play a role in taking on those messages." Indonesia has so far not signed up to the framework - the only South-East Asian WHO member not involved. Ms Kania says without the Government's help, the issue of smoking has grown too big for parents to deal with. "As parents of course, they do have the responsibility to prevent the children from smoking," she said. "But we should bear in mind that smoking can no longer be perceived as a private issue. "It has become an epidemic and there is a matter of public health and there's this giant tobacco industry that is selling and promotes its product aggressively to young people. "Efforts done by parents, it's so insufficient."

Reference: Tobacco giants 'targeting youth in developing world' by Joanna McCarthy, ABC Radio Australia, 4/22/2009.

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South Korea - smoking ban just about everywhere by end of 2009..

April 26, 2009 - Tobacco smoking is to be banned in many public places in South Korea (Democratic People's Republic of Korea) where previously it was the subject of restrictions, according to a Dong-a Ilbo (East Asia Daily) report.

The Health, Welfare and Family Affairs Ministry has announced that it will designate 16 types of public facilities as non-smoking areas under a government roadmap on anti-smoking policy: large buildings; performance halls; private academic institutes; large sales outlets; lodging facilities; schools; indoor sports facilities; medical institutions; social welfare centers; public transportation venues; public bathhouses; game arcades; large restaurants; comic book stores; government buildings; and childcare facilities.

A ministry official was reported as saying the new restrictions were likely to be passed by the National Assembly in June and, if so, to come into force by the end of the year (2009). Smoking will be banned as early as this year in all public areas and inside buildings.

The wide range of non-smoking facilities will mean a virtual smoking ban in all public areas.

Only three types of public facilities are designated smoke-free: school buildings excluding universities, medical institutions and childcare facilities. Other facilities have designated smoking areas, while smoking banned in offices, conference rooms, halls and lobbies.

Game arcades, comic book stores and restaurants allow smoking as long as over half their floor sizes are designated as smoke-free zones, but the plan is to ban smoking at those places completely.

The ministry plans to revise the Public Health Promotion Law to make public facilities smoke-free. Public facilities can separate smoking areas from non-smoking areas, but will be required go to smoke-free completely.

The local Korean tobacco industry is led by KT&G (Korea Tobacco & Ginseng Corp), British American Tobacco, Philip Morris and JT International while KT&G held the lion’s share again in 2007. In January 2008, Woori Tobacco Corp officially entered the market by launching its Wigo branded products. In 2006 KT&G was the dominant player in the Korean cigarette market with 80% market share. More - Tobacco in Korea.

South Korean steelmaker Posco, which employs 16,000 people, want to be smoke-free by the end of year.

Reference: Sweeping Smoking Bans Set for Year`s End, donga.com, 4/25/2009.

Related news briefs - Korea: Tobacco marketing in South Korea has been deliberately aimed at girls and young women..; Korea - smoking rates fall for men and women...
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Florida - House backs down on 45-cents-per-pack tax on Dosal Tobacco's low-cost cigarettes..

April 26, 2009 - As promised to protest the move, Dosal Tobacco's Opa-locka plant shut its doors Friday as 165 employees from around the state traveled to Tallahassee to protest a House plan to impose a 45-cents-per-pack tax on their low-cost cigarettes.

When they arrived, the news was good: House leaders had reversed their position. Rep. David Rivera, R-Miami, told the group he had received a commitment from Speaker Larry Cretul and Speaker Designate Dean Cannon that the House will not continue to push for the additional tobacco tax.

The proposal would have imposed a tobacco surcharge on companies, including Dosal, that were not part of a 1998 settlement agreement with the nation's largest tobacco companies. The state sued the tobacco industry to recover the cost of treating Medicaid patients suffering from cancer or other smoking-related illnesses. Bud Chiles, the son of the late Florida Gov. Lawton Chiles, said Dosal should be required to pay the state just as the nation's top three tobacco companies do. Chiles: "The way they've been able to increase their market share is by selling cheap cigarettes to kids and teenagers. They can afford 45 cents... That's a fair share to pay for the healthcare issues and illnesses they cause."

In the past 12 years, Dosal's market share in Florida has soared from 3 percent to 18 percent. The company sells cigarettes wholesale at about $1.95 per pack, after the 62-cents-per-pack increase in the federal cigarette tax. Major-brand cigarettes start at about $3.50 per pack wholesale in Florida. Dosal with its best selling brand 305s (area code in Miami) — which wasn’t part of the state’s landmark settlement with larger tobacco companies — has seen its share of the Florida market rise to about 13%. Meanwhile, larger tobacco companies’ market share has fallen from 97% presettlement to 85%. (Dosal Tobacco Feels Pack of Troubleby Amy Keller, Florida Trend, 3/1/2009)

Related news brief: Florida - House may accept Senate's $1-per-pack increase in a cigarette tax..; Florida senate votes 39-0 to raise tobacco tax..; Florida cigar makers fuming over possible tax increase..; Florida - besides tobacco tax increase Senate wants to restrict tax-free sales..; Florida Senate panel backs tobacco tax hike..; Florida tobacco tax hike gets 1st critical vote today.., Tobacco Free Florida Week - 2/27/2009 - 3/7/2009.., Florida's $2.3 billion deficit - increase tax on cigarettes???; States Need Quick Influx of Revenue – Think Tobacco Tax..; Times are Tough Save Money Quit Smoking...

Reference: Opa-locka tobacco firm wins reprieve on extra 45-cent tax Dosal Tobacco gets good news from Florida House leaders as workers protest a possible tobacco surcharge in Tallahassee by MARY ELLEN KLAS
Miami Herald/Times Tallahassee Bureau, 4/25/2009.
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Florida - House may accept Senate's $1-per-pack increase in a cigarette tax..

April 25, 2009 - In the latest closed-door offer to the Florida Senate offered by the House chief budget negotiator, Rep. Dean Cannon, the House abandons its no-taxes position and instead agrees to the Senate's $1-per-pack increase in a cigarette tax. But, in a slight to the Miami delegation and a nod to Tampa's lawmakers, it also imposes a new tax on tobacco companies that don't pay the state a settlement fee and eliminates the new $1-per-ounce tax on cigars.

On April 16, 2009 the Florida senate votes 39-0 to raise tobacco tax..

The measure is aggressively opposed by Dosal Tobacco, a non-participant in the tobacco master settlement agreement with the states, the home-grown Miami company that makes low-cost cigarettes. It was sued but dismissed from the state's 1994 lawsuit against Big Tobacco. Persuading the state to impose a fee on Dosal and other non-settling manufacturers has been a top priority of the nation's cigarette giants this session, next to killing the cigarette tax.

To protest the move, Dosal announced today that it will close its plant on Friday and bus all its employees and their family members to Tallahassee to send the message they don't want their jobs threatened by the legislature's budget fix.

Their concerns may be short-lived, however. Senate budget chief, J.D. Alexander, R-Lake Wales and Senate President Jeff Atwater have said they don't support the tax on nonsettling manufacturers like Dosal. As to the Cannon offer that trades cigars for cigarettes, Alexander said Thursday: "We're not too keen on that.''

The company has produced this television ad and will begin airing it in Tallahassee this weekend.

Related news brief: Florida senate votes 39-0 to raise tobacco tax..; Florida cigar makers fuming over possible tax increase..; Florida - besides tobacco tax increase Senate wants to restrict tax-free sales..; Florida Senate panel backs tobacco tax hike..; Florida tobacco tax hike gets 1st critical vote today.., Tobacco Free Florida Week - 2/27/2009 - 3/7/2009.., Florida's $2.3 billion deficit - increase tax on cigarettes???; States Need Quick Influx of Revenue – Think Tobacco Tax..; Times are Tough Save Money Quit Smoking...


Reference: House offers deal on tobacco tax that exempts cigars, by Mary Ellen Klas, tampabay.com, 4/23/2009.

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