Altria, RAI and PMI q2 2010 earnings boosted by higher prices..

July 24, 2010 - Some of the world's largest tobacco companies showed this week that even in a sluggish global economy they have the power to raise prices in most countries and beat earnings expectations.

Both Altria and Reynolds saw volume declines compared with a year earlier when retailers and wholesalers restocked following cuts they made to prepare for a one-time federal tax on inventory. Altria said its cigarette volume declined 10.2 percent, and Reynolds said its volume declined 9.5 percent. Lorillard reports q2 2010 results on Monday, July 26th.(Earnings Preview: Lorillard by MICHAEL FELBERBAUM, Associated Press - Bloomberg Businessweek, 7/23/2010)

Philip Morris International Inc (PMI) which sells Marlboro cigarettes outside the United States and Reynolds American Inc (RAI), which sells Camel and other brands in the United States, posted higher-than-expected quarterly profits on Thursday, July 22nd and raised their 2010 earnings forecasts. The results came a day after Philip Morris USA parent Altria Group Inc. raised its forecast for the year after the 2010 first half was better than expected.

The tobacco companies' figures helped mitigate concerns that a large increase in the U.S. tax on tobacco last year and high global unemployment would force a switch by consumers to lower-priced smokes.

"This industry is all about pricing," Morningstar analyst Phil Gorham said. "They've still got very strong pricing power." (Altria, Reynolds American and Swedish Match raise prices on moist snuff tobacco (MST)...)

The one exception is in Western Europe, where Philip Morris saw a 6.2 percent drop in cigarette shipments due to a weak economy in Spain, a declining market in Germany and tax increases in Greece. "Weakness in Western Europe was not very surprising," Gorham said. Places like Spain have very high unemployment and that killed demand, he said.

Still, Philip Morris is in many emerging markets where cigarette sales continue to grow and, unlike Altria and Reynolds, it is not exposed to the U.S. market, where smoking has declined steadily for years.

PMI, the world's largest non-state-controlled tobacco company, said profit was $1.98 billion, or $1.07 a share, in the second quarter, up from $1.55 billion, or 79 cents a share, a year earlier. Analysts on average forecast 97 cents a share, according to Thomson Reuters I/B/E/S. Revenue rose 14.3 percent to $17.4 billion. The company shipped 240.96 billion cigarettes in the quarter, up 8 percent from a year earlier. Part of the increase was fueled by customers stocking up in Japan ahead of a tax increase that takes effect October 1, 2010.

Reynolds American said profit was $341 million, or $1.17 a share, in the second quarter, weighed down by plant-closing costs, compared with $377 million, or $1.29 a share, a year earlier. Excluding one-time items, earnings were $1.32 a share, 2 cents above the average analyst estimate. Sales were little changed at $2.25 billion. In the 2009 second quarter, shipments were skewed higher by the timing of the U.S. tax increase. The company shipped 20.3 billion cigarettes in the quarter, down 9.5 percent from a year earlier, but key brands Camel and Pall Mall both increased market share. Reynolds also shipped 97.1 million cans of smokeless tobacco under brands like Grizzly and Kodiak.

Reference: WRAPUP 3-Tobacco company earnings boosted by higher prices by Brad Dorfman (Editing by Derek Caney, John Wallace and Robert MacMillan), Reuters, 7/22/2010.

Florida - individual cases against big tobacco can move forward, can rely on Engle jury findings..

July 23, 2010 - The verdict is in.. Back on July 13th we reported that about 4,000 cases, or about half of those filed after the Engle decision, are pending in federal court and have been put on hold until an appeals court can determine the constitutionality of allowing plaintiffs to rely on the Engle jury findings, according to Murray Garnick, a senior vice president and associate general counsel with Philip Morris parent Altria Group Inc. (Florida - jury awards smoker $21M from Philip Morris USA..)

Altria Group Inc.’s Philip Morris USA unit and other U.S. cigarette makers lost an appeal affecting about 4,000 Florida smoker suits in federal court. A federal appeals court in Atlanta today denied the companies’ request to block lower courts from applying a 2006 Florida Supreme Court decision they claimed deprived them of fair trials in death and injury suits filed in the state.

The companies said that a series of factual conclusions endorsed by Florida’s highest court in the 2006 “Engle” decision can’t fairly be used against them in individual smokers’ trials. The findings included those that cigarette makers conspired to hide information on smoking’s health effects and that they made false statements about their products.

The federal appeals court reversed a district court’s pretrial ruling and said the findings “must be given the same preclusive effect in this federal court case that they would be given if the case were in state court.” While the ruling limits how the findings can be used, it permits the federal cases, which were on hold, to go forward.

“We’re delighted,” said Samuel Issacharoff, who argued the appeal on behalf of the smokers. The ruling reaffirmed that plaintiffs in federal court will get the benefit of the Engle findings, he said.

The court also said that, because the Engle findings were so general, the individual smokers may have difficulty applying them to the facts in their cases. The companies argued that smokers were trying to apply the findings too broadly to avoid having to prove their cases.

Murray Garnick, Altria Client Services senior vice president and associate general counsel: “We are pleased that the appellate court has rejected arguments by plaintiffs that they have an automatic and unlimited right to use the findings. “In the court’s own words, plaintiffs have a ‘considerable task’ to show with ‘reasonable certainty’ that the facts they want to establish were ‘actually decided’ by the prior jury.”

Besides the 4,000 cases that were filed or transferred to federal courts in Florida, another 4,000 are pending in state courts. Today’s ruling, which doesn’t formally affect any of the state court cases, may be considered by judges hearing smokers’ claims in Florida courts.

Plaintiffs have won 18 of 21 cases tried in Florida state courts. In many of those cases, judges simply read the Engle findings to jurors and told them they were binding. Cigarette makers are appealing the state-court verdicts against them, claiming the judges’ improper instructions are responsible for the companies’ losing record in so-called “Engle progeny” cases. “None of the plaintiffs who have obtained verdicts in state court have complied with the requirements set forth by today’s rulings,” Philip Morris said in its statement.

The appeals court today declined to decide whether applying the Engle findings would violate the companies’ constitutional due process rights. The court said that district courts will have to apply Florida law and decide what facts in the plaintiffs’ cases are established by the Engle findings.

“The district court’s ruling that ‘the findings may not be given preclusive effect in any proceeding to establish any element of an Engle plaintiff’s claim,’ cannot stand, at least not at this time,” the court said in its ruling today.

“We’re actually really pleased with this,” said Stephanie Parker, a lawyer for Reynolds American Inc.’s R.J. Reynolds Tobacco unit. “We hope the state courts will follow the logic in this opinion.”

Ed Sweda, senior staff attorney with the Tobacco Products Liability Project, an anti-tobacco group, said his organization is glad that the appeals court didn’t agree with the lower court that the Engle findings must be excluded.

The Engle case is named after a Florida pediatrician named Howard Engle who was the lead plaintiff in a statewide class action filed in 1994 on behalf of smokers who were addicted to nicotine and developed cancer or other smoking-related illnesses as a result. In the first part of what was intended to be a three-phase trial, a Miami jury decided a series of common questions relating to the companies’ conduct and to the health effects of smoking. In the second phase, the jury awarded $145 billion in punitive damages to the class.

In 2006, the Florida Supreme Court rejected the $145 billion verdict and ruled that the case couldn’t continue as a class action. At the same time, Florida’s high court upheld most of the Phase I factual findings and said they would apply in all of the individual suits filed by smokers who had been part of the Engle class. The U.S. Supreme Court declined to review the case. The case is Brown v. R.J. Reynolds Tobacco Co., No. 08- 16158, 11th U.S. Circuit Court of Appeals (Atlanta).

Reference: Altria Loses Bid to Set Aside Evidence in 4,000 Florida Sick Smoker Suits by Bob Van Voris (rvanvoris@bloomberg.net), Bloomberg.com, 7/22/2010.

Some related news briefs in Florida:
Florida - jury awards smoker $21M from Philp Morris USA.;
Florida - can big tobacco survive all these lawsuits they continue to lose??;
Florida - big tobacco loses another case..;
Florida - jury awards $26.6 million to smoker's widow..;
Florida - 9 year old case, appeals court upholds $24.8 million award..;
Florida - $300 million jury award to former smoker overturned..;
Florida - jury awards $300 million in ex-smoker's suit..;
Florida - tobacco companies ask court to block ruling..;
Florida - plaintiff drops case to avoid paying legal fees for Philip Morris USA..;
R.J. Reynolds to appeal plaintiff's award of $30 million..;
R.J. Reynolds loses Florida court trial - widow gets $30 million..;
Broward County Florida jury awards widow of smoker $1.5 million..

U.S. - 7.6% of children live with a smoker but varies from state to state..

June 23, 2010 - Seven-point-six (7.6) percent of U.S. children live with someone who smokes tobacco at home but the number varies greatly among states, researchers found.

Gopal K. Singh and Michael D. Kogan of the U.S. Department of Health and Human Services, and Mohammad Siahpush of the University of Nebraska Medical Center, used data from the 2007 National Survey of Children's Health and state-level data on home smoking from the 2006–2007 Current Population Survey -- Tobacco Use Supplement.

The rates of children living with a smoker ranged from 1.1 percent for Utah and 1.9 percent for California to a high of 17.9 percent for West Virginia and 17.6 percent in Kentucky. After adjusting for sociodemographic factors, the researchers said children in Ohio, West Virginia, Kentucky and Pennsylvania had 12 times higher odds -- and those in Wisconsin, Missouri, Delaware and the District of Columbia had 10 times higher odds -- of being exposed to environmental tobacco smoke than children in Utah.

Reference: W.Va. child most apt to live with smoker, UPI.com, 7/21/2010.

WHO - IOC to work together to promote healthy lifestyles.

Click to enlarge..

July 23, 2010 - The International Olympic Committee (IOC) and the World Health Organisation (WHO) are to step up their collaboration and streamline their efforts to promote physical activity across the globe. Today, IOC President Jacques Rogge and WHO Director-General Margaret Chan signed a Memorandum of Understanding between the two organisations in Lausanne. The document names physical inactivity as one of the most important risk factors for non-communicable diseases, and outlines the joint way forward for the five years to come.

The organizations are teaming up to promote healthy lifestyle choices, including physical activity, sports for all, Tobacco Free Olympic Games, and the prevention of childhood obesity.

As outlined in a memorandum of understanding, signed Wednesday in Lausanne, Switzerland, the WHO and IOC will work at both the international and country levels to promote activities and policy choices to help people reduce their risk of non - communicable diseases such as cardiovascular disease, cancers and diabetes.

"This agreement with the IOC will help increase our ability and reach in addressing the diseases which are the leading causes of death around the world,' said the WHO Director-General, Dr. Margaret Chan. "Tackling these diseases is one of the major challenges for sustainable developm ent in the 21st century," she added. Non-communicable diseases kill nearly 35 million people each year, including almost 9 million under the age of 60.

Physical inactivity is ranked as the fourth leading risk factor for all deaths globally, contributing to 1.9 million deaths each year.

'The IOC and the WHO are both eager to promote healthy lifestyles and grassroots sports activities worldwide, and today's agreement is an important step to bet ter form synergies between our various initiatives in this field,' said the IOC President, Jacques Rogge. He added: 'It is about acting in concert to get everybody moving and thus reduce the risk of non-communicable diseases across all age groups.'

Almost 90 per cent of fatalities before the age of 60 occur in developing countries and can be largely prevented by reducing the level of exposure to tobacco use, unhealthy diet and physical inactivity. Non-communicable disease deaths are increasing in all regions of the world. If the trends continue unabated, deaths will rise to an estimated 41.2 million a year by 2015.

The organizations agreed to establish a follow-up group that will meet at least annually to further define, develop and maintain a programme of international cooperation and implement activities of common interest.

References: IOC and WHO strengthen partnership, Olympic News, Olympic.org, 7/21/2010; WHO And IOC Sign Agreement To Improve Health, Contributor: Voxy News Engine, Voxy.co.NZ, 7/22/2010.

Highlights - Altria q2 2010 earnings report..

July 23, 2010 -

Altria attributed the profit growth mainly to the reversal of tax reserves and associated interest, partially offset by lower operating income, and lower earnings from Altria's equity investment in SABMiller due primarily to special items.

Altria's reporting segments are Cigarettes, manufactured by PM USA, Smokeless Products, manufactured by USSTC and PM USA, Cigars, manufactured by John Middleton Co.; Wine, produced and distributed by Ste. Michelle, and Financial Services, provided by Philip Morris Capital Corporation (PMCC).

Cigarettes, manufactured by PM USA
Quarterly net revenues from Cigarettes fell 7.2% year-over-year to $5.59 billion, and revenues net of excise taxes dropped 5.8% to $3.74 billion. PM USA's reported domestic cigarette shipment volume declined 10.2% to 36.5 billion units from 40.6 billion units a year ago, due primarily to trade inventory changes. In the quarter, Marlboro achieved retail share of 42.8%, and PM USA's second-quarter cigarette retail share increased 0.7 share points.

Marlboro achieves record retail share of 42.8% in the second quarter of 2010, and PM USA's second-quarter cigarette retail share increases 0.7 share points, versus the prior-year period. The Marlboro Special Blend line extensions launched earlier this year were important contributors to this strong retail share performance.

Smokeless Products, manufactured by USSTC and PM USA
Copenhagen's second-quarter retail share increases 2.6 share points, and United States Smokeless Tobacco Company (USSTC) and PM USA's combined smokeless products second-quarter retail share up 1.8 share points, versus the prior-year period. Second quarter reported smokeless product shipments increased 9.2% versus the prior year period. Combined second quarter shipments for Copenhagen and Skoal, which grew 7.1%, helped drive these results. We are very pleased that overall smokeless products segment retail share grew in the second quarter on a year-over-year basis. Our primary driver of this retail share performance was Copenhagen and Skoal's combined retail share performance, which grew a very strong 1.3 share points in the second quarter on a comparable year-over-year basis.

Product initiatives contributed to Copenhagen and Skoal's strong combined retail share performance. Copenhagen Long Cut Wintergreen, Long Cut Straight and Extra Long Cut Natural helped drive the brand's strong second quarter retail share growth up 2.6 share points. Skoal introduced brand building programs on Wintergreen, Straight and Mint variants in the second quarter, which in conjunction with the Skoal up to Summer equity building campaign, helped strengthen the brand's retail share performance as the second quarter progressed.

In the Smokeless Products segment, revenues grew 4.6% to $390 million. USSTC and PM USA's combined reported domestic smokeless products shipment volume for the quarter increased 9.2% from last year to 181.9 million cans and packs. The smokeless products segment second quarter adjusted operating companies' income declined 5.2% versus the comparable year-ago period, primarily due to costs associated with the national expansion of Marlboro Snus.

Marlboro Snus - Can you comment on the Marlboro Snus based on your national efforts and what you're seeing with that product?
Mike Szymanczyk, CEO, Pres. Board Chair - well, it is early, distribution has ramped up. I always like to remind people, we view Snus as a long-term play, although it is – Now that you have two major players out there in the marketplace, it is actually pretty decent level of share in Snus relative to the whole smokeless category. And I think that it has had some impact on category growth rates. So, it's so far, so good. But this something where we will be for a while, giving cigarette smokers the opportunity to engage with Snus, give it a try, try it a second time, because it is a very different experience than smoking a cigarette.

So I think we have to have patience with our expectations of the Snus business. But we're out there now. We've got good distribution on the product. We're getting good consumer feedback. And really now it is just kind of doing the general marketing work that has to take place over time to engage with consumers.

Marlboor Snus - David Beran, Executive Vice President Chief Financial Officer Altria Group, Inc. - Marlboro Snus was launched nationally in the second quarter. We have a plan to get trial and awareness throughout the year.

Cigars, manufactured by John Middleton Co.
Black & Mild's second quarter retail share of the machine-made large cigar category declined by 2.4 share points, versus the prior year period to 27.9%. Black & Mild continued to meet evolving adult cigar consumer's preferences for variety by introducing Black & Mild Royale in both plastic and wood tip variants. Middleton intends to strengthen the brand's position in the marketplace through additional brand-building activities.

Altria Reports 2010 Second-Quarter and First-Half Results, Press Release, SOURCE: Altria Group, Inc., 7/21/2010.

Altria Group Inc. Q2 2010 Earnings Call Transcript provided by Seeking Alpha, 7/22/2010.

Q&A - Altria Group Inc. Q2 2010 Earnings Call Transcript provide by Seeking Alpha, 7/22/2010.

Highlights - PMI q2 2010 earnings report..

July 23, 2010 - PMI, the world's largest non-state owned tobacco company, shipped 240.96 billion cigarettes in the quarter, up 8 percent from a year earlier. Part of the increase was fueled by customers stocking up in Japan ahead of a tax increase that takes effect October 1, 2010.

The one exception is in Western Europe, where Philip Morris saw a 6.2 percent drop in cigarette shipments due to a weak economy in Spain, a declining market in Germany and tax increases in Greece. Places like Spain have very high unemployment and that killed demand.

Still, Philip Morris is in many emerging markets where cigarette sales continue to grow and, unlike Altria and Reynolds, it is not exposed to the U.S. market, where smoking has declined steadily for years.

Cigarette volume in the quarter was 241 billion units, up by 8% on a reported basis and by 0.3% excluding the additional 17.2 billion units generated by our business combination with Fortune Tobacco Corporation in the Philippines.

Shipments in the quarter were also boosted by the buildup of stocks at our distributor in Japan. At the end of June, the inventories at our distributor in Japan were approximately 3.4 billion units higher than at the same time last year.
We expect these stock levels to be sufficient to meet the forecasted higher demand from retailers and consumers ahead of the October tax and price increases. The depletion of these stocks will result in a significant reduction in shipments to Japan in the second half of this year. Finally, we expect the revaluation of inventory sales by our distributor to benefit our income during the fourth quarter of 2010.

Volume performance in the quarter was achieved thanks to our superior and broad brand portfolio. The volume of our top ten international brands increased by 3.6% helped, of course, by Japan. Not surprisingly, in the current economic environment, our low-priced brands have performed particularly well. In addition, our key premium and mid-priced brands are also performing solidly. Parliament achieved a volume growth of 2.3% in the quarter, with Japan, Korea and Russia more than offsetting the impact of tax-driven consumer down trading in Turkey. Marlboro volume declined by just 0.5%, as higher volumes in North Africa, the Middle East, Japan, Korea and the Philippines largely offset a decline in the EU region, attributable to a continued challenging environment for premium brands.

Chesterfield's vibrancy is confirmed by a 6.2% volume growth in the quarter, despite continued down trading in Spain, one of its key markets. Finally, L&M achieved a favorable volume overall, thanks to growth in Nigeria, Egypt, Germany, Greece, the Netherlands, Slovakia and Thailand, which compensated for volume declines in Eastern Europe and Turkey.

Our competitiveness is confirmed by our continued favorable share trends in both OECD and non-OECD markets.

Highlight the strong performance in Russia. Our market share grew by a further 0.2 share point to 25.5% in the second quarter, thanks mainly to the growth of mid-priced Chesterfield and low-priced Bond Street, as well as the resilient performance from above-premium priced Parliament, the volume of which was up in the quarter. It should be noted that Bond Street is now mostly gaining shares from competitive brands in the same pricing. Overall, in the second quarter, our volume increased by 4.9%, indicating that the total market is stabilizing. Consumer down trading continues to moderate in Russia, as evidenced by the fact that this year's second quarter 3.3% decline in the sales to the trade of PMI premium brands was the lowest in the last 18 months.

During the second quarter, we were able to grow our premium volume in several emerging markets, such as Algeria and Indonesia. These economies are generally emerging faster from the economic downturn than those in Europe, where price sensitivity remains high. Increased employment levels remain key to a global resumption of consumer up trading. We are also concerned about the growth of illicit trade in markets that have recently implemented significant excise tax increases, such as Greece, Pakistan, Romania and Turkey. Higher prices in nearly all key markets enabled us to achieve a favorable pricing variance of $341 million in the second quarter. Furthermore, we have just implemented a two-for-three ruble price increase in Russia.

PMI learned from the media last Friday, July 16th that the Ministry of Finance in Japan has approved Japan Tobacco’s application to amend its retail prices this coming October. The new price list represents increases of between JPY 100 and JPY 140 per pack for Japan Tobacco’s key brands, well above the excise tax pass-on of JPY 82 per pack. PMI’s distributor has also submitted a request to the Ministry of Finance for an increase on PMI brands effective in October and awaits their response.

PMI was more than able to offset the recent large excise tax in Australia and the higher VAT rate in Spain through higher prices. We are pleased that the Italian government has introduced through a decree a reinforced minimum excise tax system.

In Greece, if we had fully passed on the tax increases, the price gap between Marlboro and the lowest-priced brands would have expanded from EUR 1.20 to EUR 2.45. This would have rendered the brand completely uncompetitive, and therefore, we were forced to partially absorb these tax increases.

Marlboro has nevertheless been under pressure after significantly increasing prices in a difficult economic environment has resulted in consumer down trading and a sharp market contraction.

PMI has been able to largely offset share losses on Marlboro through the relaunch of L&M, which grew to a market share of 6.1% in June. The unfavorable price volume mix variance in Greece was a considerable drag on the EU region's OCI in the quarter.

Briefly review our results on a regional basis, starting with the EU region. The net revenues and OCI (Operating Companies Income) were down slightly excluding currency. More than 3/4 of our 6.2% volume decline in the EU region is attributable to lower total markets, in particular in Spain, where the market continued to decline at a double-digit rate.

Our year-to-date June cigarette share in Germany of 35.6% is 1.8 share points below the previous year's level but is showing a sequential improvement, and L&M remain the fastest-growing brand on the market.

In the EU region, excluding Greece, our favorable pricing variance in the second quarter was 1.2x our unfavorable volume mix variance. During this period, the share of Marlboro grew notably in Italy, the Netherlands, Poland, Portugal and Slovakia, while L&M increased its share notably in Belgium, the Czech Republic, Germany, Greece, the Netherlands, Slovakia, Spain, Sweden and Switzerland.

The EEMA region is expected to be a source of renewed strength for PMI going forward. It had a tremendous second quarter, with volume up 1.6%, net revenues increasing by 8.2%, excluding currency and acquisitions, and OCI, 16.9% higher on the same basis.

As mentioned previously, our business is very strong in Russia, where our profitability in the second half of the year is expected to be enhanced by the recent price increase. We have strong business momentum in North Africa behind both Marlboro and L&M. In Egypt, there has been an important structural improvement in excise taxes, though tax and price levels are now significantly higher than originally expected, which will have an unfavorable near-term impact on market demand.

The one market of concern is Turkey, where very large excise tax-driven price increases have resulted in a significant market contraction and consumer down trading. However, our market share now appears to have stabilized around 41%, the level prevalent as recently as 2008. And Lark is the fastest-growing brand in Turkey.

In Asia, volume was 5.2% ahead of last year, excluding acquisition, and essentially stable after taking into account the inventory buildup in Japan. Net revenues were 11.5% higher, and OCI was up by 14.7%, excluding currency and acquisition. We achieved higher prices in unit margins across several markets, in particular, Australia, Indonesia and Pakistan. Our business momentum in Korea continued, with volume growing by 15.9% and market share up by a further three share points to 16.6%.

In Indonesia, our volume decreased slightly, as price increases have slowed the overall market growth, while volume was lower in Pakistan, where the duty-paid market has declined significantly due to tax-driven price increases and the growth of illicit trade.

Asia is the growth engine for Marlboro. The brand gained volume in many markets, including Indonesia, Japan, Korea and the Philippines, and was supported by our Marlboro Fresh initiative, such as Marlboro Black Menthol and Marlboro Ice Blast.

Volume in Latin America and Canada increased by 0.9%, driven primarily by an increase in the size of the legitimate market in Canada, following more rigorous provincial legislation and most importantly, the improved enforcement. We achieved a slow market share performance with continued gains in Argentina and Mexico. Net revenues increased by 6.1% excluding currency, while adjusted OCI excluding currency was 0.5% higher, as we increased volume and higher prices were partly offset by higher leaf and manufacturing costs.

Our improved volume performance is based on our unmatched brand portfolio, though please keep in mind that our quarterly shipments in the second half are expected to be unfavorably impacted by this quarter's inventory buildup at our distributor in Japan.

Marlboro:
in Japan, Marlboro is doing well. It is up 0.2% a share to 10.8%. It has about double the young-adults smokers share than its actual market share. But it's not the only place where we see nice improvements in share increases of Marlboro. Give you a couple of examples: Korea would be up 1.2% share points to 6.8%; Poland would be up 0.7% to 10.2%; the Netherlands is up 0.8% to 34.7%; Italy is up 0.3% to 23%; Argentina, to go into Latin America as well, is up at 0.3% to 23.4%. So there is really good trends in many different places around the world. And we, of course, still also have a couple of places in the world where we have to continue on our work and with the good work that has been done there. The ones where Marlboro is really down is first of all those markets which were really hit by the economy, like Turkey, Greece and Spain. Turkey is down 2.5 share points to 8.1; Greece down 3.7 to 19.3; and Spain is down 0.6 to 14.8. So that is really the economy that drives the down trading in those markets. And then there is Germany, where we now are down to a share of 21.6, which is, however, sequentially stable over the last couple of months. That is not the economy. That is simply an overall price-sensitive market overall, where it’s really a bit more difficult to act. On the other hand, if you are being very successful in that market with L&M, which is our answer to the market situation there.

For the Philippines itself, maybe let me add a word there. It’s going really well. The market is growing, expected to grow 8% to 10% for the full year. Marlboro is going strong in the market, benefiting from improved distribution, so -- it has a share of market of 21% there. The integration is going really well. Cost-saving potential that we saw before the acquisition, more and more is confirmed. We see that, for example, in terms of tobacco usage. So it's going well. It's going nicely.

Attempts to buy pro-tobacco in Colombia?

Philip Morris International Q2 2010 Earnings Call Transcript by Seeking Alpha, 7/22/2010.

Q&A - Philip Morris International Q2 2010 Earnings Call Transcript by Seeking Alpha, 7/22/2010.

Highlights RAI q2 2010 Earnings Report..

July 23, 2010 - Reynolds American Inc. (RAI) said Thursday, July 22nd that its second quarter profit fell 9.5% from last year, hurt mainly by costs related to plant closings and change of sales force.

Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Co.; American Snuff Company, LLC; Santa Fe Natural Tobacco Co., Inc.; and Niconovum AB.

The company noted that higher cigarette and moist-snuff pricing, productivity gains and higher moist snuff volume more than offset lower cigarette volume.

Cigarettes..
R.J. Reynolds shipped 20.3 billion cigarettes in the second quarter, down 9.5% from a year earlier. Industry-wide cigarette volumes fell 7.1% in the second quarter, the company noted. In the 2009 second quarter, shipments were skewed higher by the timing of the U.S. tax increase. The company shipped 20.3 billion cigarettes in the quarter, down 9.5 percent from a year earlier, but key brands Camel and Pall Mall both increased market share. Reynolds also shipped 97.1 million cans of smokeless tobacco under brands like Grizzly and Kodiak.

R.J. Reynolds' two growth brands, Camel and Pall Mall, both posted second quarter cigarette share and volume gains. Camel's second quarter volumes increased 2.7% year-over-year, while its retail market share grew 0.3 percentage points to 7.8%. Pall Mall's second quarter volumes increased 9.7%, while its retail market share grew 1.8 percentage points to 7.0%.

R.J. Reynolds' total second quarter cigarette market share of 27.9% was down 0.8 percentage points from the prior year quarter. This was largely driven by the losses on its de-emphasized private label brands which now represent a total of only six tenths of a share point.

Excluding private label brands, the company’s volume performance was better than that of the industry with the decline of 6.9% in the quarter and 3.9% for the half. R.J. Reynolds' first-half cigarette shipment volume was down 6.3% compared with an industry decline of 4.9%. Camel and Pall Mall each reported second quarter cigarette volume and share gains. Those two growth brands now account for more than half of the company’s total share and volume. Their combined second quarter market share was 14.8% up 2.1 percentage points. Camel's second quarter cigarette market share of 7.8% was up three tenths of a point from the prior year quarter. Camel’s menthol styles including Camel Crush increased half a share point to 1.8 share of market in the quarter. Camel also continues to make progress as a total tobacco brand. Camel Snus remained stable at three tenths of a share on a cigarette equivalent basis and on a moist snuff equivalent basis; Camel Snus had a second quarter share of 3.5%.

Now turning to Pall Mall, which continues to deliver excellent performance. Pall Mall increased its second quarter market share to 7% that was up 1.8 percentage points from the year ago period and up 0.5 share from the prior quarter.

Smokeless products - American Snuff:
American Snuff Co. is the second largest U.S. manufacturer of smokeless tobacco products. Its key brands are Kodiak, Grizzly and Levi Garrett. The company's second quarter sales increased to $182 million from $169 million a year earlier.

American Snuff. American Snuff's second quarter adjusted operating income was $85 million down 7.1% from the prior year quarter. That decline was due to lower volume on roll-your-own and other non-core tobacco products which more than offset higher moist snuff pricing and volume. American Snuff also had higher second quarter costs relating to the timing of promotional spending and FDA compliance.

Grizzly's appeal among a broad base of moist snuff consumers is the recently introduced Grizzly 1900 Long Cut. A natural product with a traditional long cut, Grizzly 1900 Long Cut has performed well since its introduction earlier this year. American Snuff continues to focus on enhancing Grizzly's brand equity and value to consumers. The recent addition of embossed metal lids is improving the brand's quality perceptions among moist snuff consumers.

American Snuff's premium Kodiak brand, even though Kodiak share of shipments has experienced a modest decline in the first half of this year, the brand's volume has increased despite being significantly out promoted by other premium moist snuff competitors. Camel Dip the company's latest premium introduction is bringing innovation to the moist snuff category and is performing well. Camel Dip which leverages Camel's authentic heritage was expanded to selected outlets in 10 additional

American Snuff total moist snuff shipment volume grew 3% for the quarter, for the first half which eliminates the impact of trade inventory fluctuations; the company's moist snuff shipments increased 7.1%. As Susan mentioned, industry shipment were up about 9% for the quarter and the half while consumer off-take was up about 6%.

American Snuff's share of shipments for the second quarter was in line with the prior year quarter at 29.4%. Grizzly's second quarter shipment volume increased by 4.2%. For the first half, the brand continued to outpace industry consumption with a 7.6% increase. And Grizzly's share of shipments increased slightly to 25.5% in the quarter. The brand also improved its position in the fast growing pouch segment, accounting for nearly 25% of all pouch sales in the second quarter. Share of shipments for American Snuff's premium Kodiak brand declined 0.2 percentage point from the prior year quarter, and Kodiak's volume was down 5.5% in the second quarter but up 2.6% for the half. So that's an overview of American Snuff. Now we'll take a look at productivity.

Smokeless Products - Camel SNUS:
Camel Snus, the company’s first smoke-free product, was expanded nationally last year and its share is holding steady. Camel Snus have moved away from its introductory promotional offers to a simplified pricing strategy, and this will help R.J. Reynolds to focus more on consumer engagement and education of the Snus proposition. This summer, Camel Snus is introducing two new styles, Robust and Winterchill. Packed in larger pouches, these new products offer tobacco consumers a richer, more full body tobacco taste. Robust and Winterchill have performed very well in their initial test markets and appeal to both current Snus users who want more will take and moist-snuff users who like the convenience of a spit-free product.
(Camel SNUS - two new flavors now a total of four..)

All four styles of Camel Snus have also been upgraded to feature bold new packaging and are being sold in stores nationwide.

Smokeless Products - Camel Dissolvables:
Also building interest is Camel's new line of dissolvable products; Orbs, Sticks and Strips. Introduced in three lead markets last year, Camel Dissolvables are making further product and packaging improvements based on feedback from adult tobacco consumers. We’ve also learned that a broad range of adult tobacco consumers have a high level of interest in this new product concept.

RAI delivers strong second-quarter performance; Raises full-year guidance

Reynolds American, Inc. Q2 2010 Earnings Call Transcript by Seeking Alpha, 7/22/2010.

Q&A - Reynolds American, Inc. Q2 2010 Earnings Call Transcript by Seeking Alpha, 7/22/2010.

New Hampshire - sues 2-retailers that allow customers to roll their own cigarettes..

July 22, 2010 - New Hampshire has sued two businesses that allow customers to roll their own cigarettes (RYO) and that have avoided paying a two-cents per cigarette fee, the New Hampshire Union Leader reports.

According to the lawsuit, retailers Smoke N Discounts of Epsom and Tobacco Depot of Seabrook, recently installed cigarette-making machines that allow customers to make a carton of cigarettes in less than ten minutes, using pipe tobacco and other materials that the stores sell. According to New Hampshire Attorney General Michael Delaney, such an arrangement classifies the stores as cigarette manufacturers, and as such, they must comply with the Non-Participating Manufacturers Act and the Directory Act.

Under New Hampshire law, cigarette manufacturers must join the Master Settlement Agreement (MSA) of 1998, which requires tobacco companies to pay $50 million a year to cover Medicaid costs incurred by patients suffering from tobacco-related illnesses. The concern for the state is that unless it enforces the law by prosecuting retailers whose actions classify them as tobacco manufacturers, the tobacco companies will stop paying their annual $50 million settlement.

While New Hampshire requires cigarette manufacturers to join the MSA, it allows those who don't to pay into an escrow account an amount based on the number of cigarettes produced—about two cents per cigarette or $4 a carton. The state alleges that the retailers named in the suit, who did not join the MSA, have failed to make such a payment.

New Hampshire previously filed suit against a retailer engaged in similar roll-your-own practices, and a court ruled in the state's favor.

A temporary hearing has been set for August 27 in Merrimack County Superior Court.

References: Retailers Sued Over 'Roll-Your-Own' Cigarettes State argues that retailers should be reclassified as tobacco manufacturers, and thus liable for cigarette fee, NACSonline.com (National Association of Convenience Stores), 7/22/2010; State sues Tobacco Depot by Patrick Cronin (pcronin@seacoastonline.com), Seacoastonline.com, 7/23/2010..

New Hampshire - some related news briefs:
New Hampshire - high school students smoking less but smokeless tobacco and cigars use UP..;
New Hampshire - legislation to ban smoking on beaches filed..;
New Hampshire Cigarette Tax Goes Up By 25 Cents A Pack..;
New Hampshire - cigarette tax increase - ON HOLD..;
Massachusetts cigarette tax jumps $1 per pack..;
uly 1, 2007 - as of 7/1/2007 Smokers in five states will take a hit to their wallets as the tax increase..;

Scotland - bribing people to live a healthy lifestyle..

July 22, 2010 - Bribering people to live a more health lifestyle. The idea is simple: pay people to act now and governments will reap the rewards later in lower healthcare costs. Statistically speaking, people who shun harmful habits are more productive and have less need for expensive hospitals, doctors and medicines. By changing “habitual health-related behaviours,” says Theresa Marteau, director of the Centre for the Study of Incentives in Health and a psychology professor at King’s College London, those behind the schemes aim to make more people healthier for longer. Specifically, “they’re trying to tackle the big four that are responsible for most of the world’s premature deaths and illnesses — excessive eating, smoking, drinking and lack of exercise,” says Marteau.

Many in Dundee, Scotland are at risk from all four. Moira Christie had smoked for around 35 years by the time she joined her incentive programme, which is called Quit 4 U. The scheme is backed by Britain’s National Health Service (NHS) and was born out of a similar project, Give It Up For Baby, which aims to reduce shockingly high rates of smoking among mums-to-be in Dundee. In some of the poorest areas of the city up to 40 percent of pregnant women and half of all adults smoke, while rates of obesity and alcohol-related illness are among the highest in Europe.

Andrew Radley, a public health expert who along with colleague Paul Ballard has championed Quit 4 U and is now overseeing its expansion into other areas. “You therefore have to work with them to come up with motivators that are actually part of their way of thinking.”

Participants get 12.50 pounds ($19) on a grocery store card every week they stay off tobacco, building to a potential total of 150 pounds (228.85 USD) after three months. For mums-to-be who stay off cigarettes, the payments continue until the baby is three months old. Anyone who gets that far would take home 650 pounds (991.76 USD). Participants in both schemes commit to regular carbon monoxide breath tests to prove they’re not cheating.

The lure of extra cash has so far proved enough to get even some of the most die-hard tobacco addicts to quit. Margaret Robertson, a former 40-a-day smoker who attends the weekly breath test and support group sessions alongside Christie, is proud of the little nest egg she’s nurturing. “I’m letting it build up until Christmas. That’s when it’ll really help,” says Robertson, 61, who started smoking when she was 11 years old and has just completed her sixth smoke-free week in 50 years.

When Dundee’s first pilot project started in 2007, critics condemned the idea of incentives as little more than state bribery. So far, though, the results have been impressive: 12-week quit rates are more than double those achieved in any previous years. By the end of the first year, 55 mothers in the city of Dundee, which has a population of 140,000, had quit smoking using the incentive scheme, and 140 had quit across the coastal Tayside region of eastern Scotland. The year before, just six pregnant women had made contact with Tayside’s stop smoking services — and none of them stayed in touch beyond four weeks.

Even these pilots can be cost-effective, argue Ballard and Radley. They put the overall cost per quitter at 1,700 pounds (2,593.96 USD), which might sound a lot until you consider that smoking costs Britain’s taxpayer-funded health system some 5 billion pounds (7.6 billion USD) a year according to a 2009 study by Oxford University researchers. Globally, the World Lung Foundation estimates the annual cost of smoking is $500 billion in medical expenses, lost productivity and environmental harm.

“The whole methodology of this incentive scheme is defined by community-based research. It is driven by what is of most value to the target audience,” says Ballard. If you get it right, it can be “an approach that can really deliver results.”

There is no doubt Scotland can do with the help. A study published last month found that almost the entire adult population of Scotland — 97.5 percent — have habits that are deemed “dangerous to health” including smoking, heavy drinking, taking no exercise, being overweight and eating a poor diet. (PAPER: Scotland Unhealthy risk factors those with lack of education/ low income..)

The ‘Glasgow effect’ - Smoking rates are higher in Glasgow than in the rest of Scotland. Glasgow is known to have a poor health record. .

Ballard calls Dundee an “incredibly unhealthy” city in a “mega unhealthy” nation. In truth, the rest of the developed world is not much better. Obesity, smoking, alcohol and lack of exercise are causing more protracted and expensive diseases, and killing more residents of the rich world earlier, than anything else. The World Health Organisation (WHO) predicts that by 2015, around 2.3 billion adults worldwide will be overweight and more than 700 million will be obese.

In Europe, the WHO reckons obesity alone is already responsible for up to 8 percent of all health costs and between 10 and 13 percent of deaths. Experts predict that in Britain almost nine out of 10 adults and two thirds of children will be overweight or obese by 2050. By then the medical bill and loss of productivity could top 50 billion pounds a year.

Reference: Can bribery help you be healthy? by Kate Kelland, Health and Science Correspondent, REUTERS - TorontoSun.com, 7/15/2010.

Scotland - related news briefs:
Scotland - Imperial Tobacco in legal action to stop ban on cigarette displays and vending machine removal..;
Scotland - tobacco industry says massive increase in illegal cigarettes..;
PAPER: Scotland Unhealthy risk factors those with lack of education/ low income..;
Scotland - renewing efforts to stop pregnant women from smoking..;
Scotland - cigarette smoking quit attempts increase by 35%..;
Scotland - retailers can provide input on future to ban the display of tobacco..;
Scotland - campaigners want more to be done to protect young people from passive smoking..;
Scotland - government no plans to ban smoking in cars and public places used by children..;
Scotland - smokers will be banned from fostering or adopting children, comments from Professor Banzhaf..;
Scotland - parliament votes to ban retail cigarette displays and vending machines..;
Scotland - health minister urges smokers to quit..;
Scotland - some men beginning to lead a healthier lifestyle and therefore living longer..;
Scotland - self-reporting of smoking by pregnant women underestimates true number of pregnant smokers..;
Scotland - tobacco firms claim proposed display ban is unnecessary..;
"Glasgow effect" - prevalence of cigarette smoking impact on poor health..;
Scotland - tobacco industry will try to stop attempts to curb sales to young people..;
Scotland - cigarette vending machines removal..;
Scottish politicans most have the courage to protect the health of their constituents..;
Scotland - small businesses given extra 2-years to remove tobacco displays..;
Northern Ireland - assembly approves ban on display of tobacco items..;
Scotland to ban cigarette displays and outlaw cigarette vending machines..;
Bar workers who smoke also benefit from smoking ban..;
17 countries in the world ban indoor smoking - ENFORCEMENT..;
England, Wales to ban tobacco displays in shops..;
Definite Health Benefits of Smoking Bans..;
Northern Ireland raising age for sale of tobacco from 16 to 18 joining the other three United Kingdom (UK) countries..;
Scotland proposes to implement more measures to discourage tobacco use including the banning of tobacco displays..;
Raise Age to 21 to Purchase Tobacco Products...

Namibia - tobacco control act may take years to implement..

July 22, 2010 - Many Namibians are baffled by the Tobacco Products Control Act that was passed by Parliament in April.

According to a 2008 World Health Organization survey Namibia was the leader in Southern Africa with a startling 36 percent of men smoking - 29 percent on a daily basis. (Smoking in Africa, VOAnews.com, 11/302009)

Although Namibia has officially created a law that severely restricts smoking and in future will forbid the advertising of tobacco products in any and all ways, it will take time before the law will become operational. According to Windhoek ( (pronounced /ˈvɪnt.hʊk/, sometimes in German: Windhuk) is the capital and largest city of the Republic of Namibia) lawyer Pieter de Beer, a number of steps have to be taken in order for the law to be enforced. De Beer says the implementation of the Tobacco Products Control Act will “require a lot of planning” which will delay the implementation of the law.

“The law cannot be applied or implemented before the regulations have been drafted and published. Once the regulations are published, the public will be given a window of three months in which they can provide feedback and give their input into the regulations,” De Beer says.

The regulations are necessary to define stipulations contained in the Act, such as the exact distance smokers should stand away from doorways and windows while smoking in an open area. The stipulation that tobacco companies cannot sponsor events or display their products in advertisements needs to clarify how contracts will be phased out.

Another part that the law does not define clearly is an “outdoor public place”.
The regulations will have to specify which particular areas can be considered as such, and when and how this law applies.

The act itself states that once the regulations have been hashed out, a draft of the regulations will be made public and the public allowed to comment for three months.
Any person or business is then entitled to give feedback or input regarding the regulations to the Ministry of Health and Social Services. Following the three-month window, regulators will then take note of public opinion and where possible, amend the regulations.

De Beer says the impact of the smoking restrictions will be most severe on owners of social hot spots, such as restaurants or clubs, which according to the act, will become completely smoke-free zones. Even partially enclosed spaces, with just one wall or a roof overhead, are targeted by the law and will become smoke free.

For this reason, the three-month feedback period will possibly elicit a great deal of public opinion, and the revision of the regulations could extend the time before the law becomes enforceable.

Laws are rarely implemented in one go, and according to De Beer, the Tobacco Act will be implemented one part at a time. According to the Act, the Ministry also has to establish the Tobacco Products Control Committee. In addition, smoking inspectors, who will monitor and enforce the law, need to be selected and trained.

Reference: Smokers can relax for now by: JANA-MARI SMITH, Namibian.com.na, 7/20/2010.

Namibia - related news briefs:
Namibia - ready to implement the Tobacco Products Control ACT..;
Namibia - Tobacco Products Control Bill passes National Assembly..;
Namibia - parliament considers tobacco products control bill...

Arab countries exchange 'lessons learned' from tobacco control..

July 22,2010 - Arab countries shared the barriers and challenges they have faced while implementing new tobacco control policies during a workshop held at American University of Beirut (AUB), Lebanon.

The 4-day event entitled, "Framework Convention on Tobacco Control [FCTC] policies and their implementation in Arab countries," was held on June 28, 2010. It was co-hosted by the Tobacco Control Research Group at AUB, the Syrian Center for Tobacco Studies (SCTC), in collaboration with Framework Convention Alliance (FCA) in Eastern Mediterranean region, the Society for Research on Nicotine and Tobacco (SRNT), and Tobacco Free Kids.

Participants and trainers came from Jordan, Syria, Egypt, Yemen, Saudi Arabia, USA, Bahrain, and Iraq. They represented a variety of organizations that deal with tobacco control.

The workshop's main objectives were to identify the most recent evidence on interventions related to FCTC guidelines, specify main research methods needed for the monitoring and evaluation of FCTC policies, discussing application of FCTC interventions in Arab countries, sharing experiences of FCTC guideline implementation and developing a plan of action for participant countries.

Workshop sessions covered topics such as implementation of tobacco control laws, use of pictorial warnings, strategies to influence policy makers, and the water pipe, using regional case studies.

Participants discussed future strategies to move FCTC-related tobacco control plans forward in the region.

Reference: Arab countries exchange 'lessons learned' from tobacco control, Author: Wassim Mroueh (media@aub.edu.lb), Office of Communications, AUB, 7/20/2010.

Iran - won't be able to get a job in the execuiive branch of governemnt if adidcted to tobacco..

July 21, 2010 - People addicted to tobacco cannot get jobs with the government's executive branch, according to the semi-official Iranian Labour News Agency (ILNA), which cited a directive published Monday, July 19th by the Cabinet's information office. The directive -- intended to ensure that applicants are healthy physically and mentally -- follows the guidelines of the Law of the National Services Management, ILNA reported. The ban also applies to applicants addicted to drugs or alcohol, it said.

Rejected applicants can appeal to the medical council of the medical university of their province, the directive said.

Reference: Iran nixes smoking for executive aspirants by the CNN Wire Staff, CNN World, 7/19/2010.

Iran - news briefs:
Iran - cigarette smuggling hurting legal tobacco sales..;
Iran - surge in female smokers..;
Iran - 20% of fatalities caused by tobacco..;
Iran - 94% of drug seizures in world occur in Iran..;
Iran - over 45% of Iranians exposed to secondhand smoke..;
Iran - graphic warnings cigarette packs..;
Cigarettes, bras and Bull semen: Just a few things the US exports to Iran...

Vietnam - cigarette smuggling increases from year-to-year..

July 21, 2010 - Up to 800 million cigarette packs, or a fifth of the domestic consumption of tobacco, are smuggled into the country every year, according to the Vietnam Tobacco Association (VTA). The association estimated the loss of tax revenues annually to the government as a result of the smuggling at 3.5 trillion dong (US$183.7 million). VTA said the situation of smuggled cigarettes: in 2007 approximately 630 million how, in 2008 more than 700 million bags in 2009 and is 800 million bags.

The Mekong Delta city of Can Tho and Ho Chi Minh City (HCMC) are among the worst affected. Smuggled cigarettes account for 70 of the tobacco market share in Can Tho and 46 percent in HCMC. The police only discover and confiscate 1 percent of the smuggled cigarettes, the association said.

Vietnam has among the highest rates of male smokers in the world - 56.1 percent -- according to the World Health Organization. The Ministry of Health reported last year that 40,000 people died of smoking-related diseases a year, four times the road accident death tally.

But public awareness of the negative impacts of smoking, especially secondhand smoking, remains low.

References: 800 million cigarette packs smuggled annually in Vietnam, Vietnamnet.vn, 7/16/2010, Smuggled cigarettes as tax losses of about 3,500 billion VND, VNpress.org, 7/19/2010.

Some Vietnam related news briefs:
Viet Nam - smokers, vendors think tobacco control measures are a joke..;
Viet Nam - WHO increase cigarette tax to lower smoking rate..;
Vietnam - who will enforce smoking ban to start January 1, 2010??;
Vietnam - national campaign launched calling for smoking ban..;
Third Asian Indoor Games in Vietnam smokefree..;
Viet Nam - to ban smoking and increase tax..;
PMI's Future: From Remarks by Louis C. Camilleri, Chairman and CEO-elect and Andre Calantzopoulos, Chief Operating Officer-elect after the spin-off of..; (Viet Nam)

Jamaica - tobacco industry targeting women in poor, developing countries..

July 21, 2010 - Thousands of young Jamaican girls are lighting up as they become what the World Health Organisation (WHO) describes as "victims of an enticing tobacco advertising campaign". There are also fears that thousands more young girls could become hooked on cigarettes unless measures are implemented to counter the campaign by the tobacco industry.

The WHO and the local National Council on Drug Abuse (NCDA - Executive Director: Mr. Michael Tucker, ncda@cwjamaica.com) have both warned of the dangers facing young girls in developing countries, such as Jamaica, and have called for immediate action.

The World Health Organization (WHO) put cigarette advertising aimed at women at the center of its annual World No Tobacco Day, May 31, 2010. The organization says the tobacco industry is unscrupulous in its attempts to market cigarettes to young women in general, especially in the developing world.

Douglas Bettcher, the director of the WHO's tobacco free initiative, has stated that the prevalence of deadly diseases among smokers, such as cancer, emphysema, and heart disease, means the tobacco industry is "always looking for new populations, such as young women, to light up and support their profit motives." On the group's
Web site claims that "women are the main targets of the tobacco industry's efforts to win new consumers."

There is certainly more room for growth in the market for female smokers, statistics show. Across the world, just 9 percent of women and 40 percent of men currently smoke. Meanwhile, a WHO study of 151 countries shows 7 percent of adolescent girls smoke, compared with 12 percent of adolescent boys.

Female smokers are catching up to male smokers, according to statistics. In several countries - including, in Europe, Bulgaria, Croatia, and the Czech Republic - the number of female tobacco users outweighs the male users, the WHO study showed.

WHO takes aim at tobacco ads targeting women, Author: Jennifer Abrahmson, Editor: Rob Turner, DW-WORLD-DE, 5/31/2010.

Dr Ellen Campbell Grizzle, director of information and research at the NCDA, believes there is an urgent need for the country to coalesce around an anti-tobacco campaign designed to combat the current efforts of the tobacco industry to recruit new users in developing countries. "This is a market where girls are being seduced into smoking," she said.

Campbell Grizzle told The Sunday Gleaner that a great deal of the evidence on which the WHO relies comes directly from the tobacco industry and includes minutes of high-level meetings that have been leaked. There is a method to the marketing mechanism, as Campbell Grizzle explained. She said females have traditionally been a deterrent to males engaging in smoking. Now, it appears the tobacco manufactures are getting more girls to smoke, which they hope will eventually get more boys hooked on the habit. In the NCDA's latest quarterly publication issued last Monday, it was noted that the WHO pointed to evidence that tobacco advertising was increasingly targeting girls.

"Jamaica is in the crosshairs of that international marketing campaign (because it is) a poor, developing country with a lot of women," Campbell Grizzle told The Sunday Gleaner. "Stealthily, Jamaica women are being persuaded to join the ranks of tobacco-smoking converts. We must work together to correct this negative trend," said the council's quarterly update.

The update also revealed that the favourability ratings of smoking among Jamaican female adolescents had increased, mirroring the trend noted for males. "An increasing number of both males and females reported that 'boys and girls who smoke have more friends and are more attractive'. The findings show that Jamaican women are less likely to be a restraining factor over tobacco use at this time," read another section of the NCDA publication.

The spike in the number of young women taking a puff has narrowed the gap between male and female smokers. As the risk factors increase, Michael Tucker, executive director of the NCDA, believes the nation's young women need to be targeted in the country's anti-tobacco programmes.

A global youth tobacco survey conducted in 2006 among Jamaican teenagers classified 18 percent of females as current smokers of tobacco products. A similar survey five years earlier had put the female smokers at 14 percent. "This rise of four per cent over 2001 is of major concern," said Campbell Grizzle.

The NCDA also pointed out that an analysis of the clients seen in its treatment and rehabilitation centres indicated that tobacco was the onset drug for 24 percent of all clients who sought treatment.

Tucker added that 80 per cent of lung cancer in women was linked to smoking.

In the meantime, Chris Brown, Carreras' corporate and regulatory manager, said that Carreras did not target underage girls with the marketing of the smokes it distributes in Jamaica. "We do not market and distribute our products to minors. Our marketing and distribution of cigarettes is also not gender specific. We are a responsible tobacco company and we market and distribute our products to adults who have taken the decision to smoke," he said.

Carreras, a subsidiary of British American Tobacco Company (BAT), is the exclusive local distributor of cigarette brands Dunhill, Matterhorn, Craven A and Rothmans, with approximately 99 percent of market share. Musson Jamaica, which distributes Marlboro and Green brands, accounts for the remaining one percent of the market.

Reference: Targeting girls - Tobacco companies trying to get more females smoking as a ploy to increase smoking worldwide, Tyrone Reid (yrone.reid@gleanerjm.com), Sunday Gleaner Reporter, Jamaica-Gleaner.com, 7/18/2010.

Jamaica related new brief:
Jamaica - government collecting less tax from cigarette sales because of illicit trade...

Jamaica signed (24 September 2003) and ratified (7 July 2005) the
WHO Framework Convention on Tobacco Control (FCTC) Treaty.

WTO establishes panel to resolve dispute - Indonesia and USA have regarding clove cigarettes..

July 21, 2010 - As expected United States [government] rejected on Tuesday, June 22nd a call by Indonesia for a World Trade Organization (WTO) panel to rule on their dispute over the U.S. ban on clove-flavoured cigarettes. Under WTO rules, the defendant in a dispute is allowed to block the creation of a panel at the first request, but cannot obstruct it a second time. Indonesia's request is likely to go through at the next meeting on July 20, 2010. (WTO - US rejected call by Indoensia to rule on dispute on ban of clove cigarettes in the US..)

The WTO will rule on a dispute brought by Indonesia against the United States over a ban on sales of Indonesian clove cigarettes, trade sources said on Tuesday.

A panel was established on Tuesday, July 20th sources said after a meeting of the WTO's Dispute Settlement Body.

Washington (US government) has banned the production and sales of clove cigarettes under a health act that also blocks the sales of other flavoured cigarettes such as grape, coffee or strawberry, in a bid to prevent the young from getting hooked on smoking.

But Indonesia argued that the act had not been applied uniformly as it did not cover menthol cigarettes. Underlining the importance of the clove cigarettes industry to the country, Indonesia claimed that the livelihoods of over six million Indonesians depend directly or indirectly on their production.

Reference: WTO to rule on clove cigarette row, The Sydney Morning Heral - Agence France-Presse (AFP), 7/21/2010.

Directly related news briefs:
FDA regulations ban on clove cigarettes Indonesia may protest to WTO.., June 19, 2009;
Indonesia - trade minister officials want to meet with US counterparts to discuss ban on clove cigarettes.., November 4, 2009;
Indonesia - launches formal dispute with WTO over U.S, ban on clove cigarettes.., April 13, 2010.
Also,
U.S. - Importer tries to get around clove cigarettes ban.., September 24, /2009;
Clove cigars close but not cigarettes.., October 27, 2009;
Kretek International filed suit to prevent FDA from banning flavored cigars..., 11/24/2009;
Kretek International drops FDA lawsuit on clove cigars.., January 7, 2010.
Indonesia - on June 22nd will ask WTO to rule on US ban on clove cigarettes.., June 14, 2010;
WTO - US rejected call by Indonesia to rule on dispute on ban of clove cigarettes in the US.., June 23, 2010.

Had to add this great image.. Did banning clove cigarettes violate trade laws?, Posted By Joshua Keating, ForeignPlicy.com, 7/21/2010.

Click to enlarge..

Singapore - changes to the Anti-Smoking Bill passed in parliament....

Health Minister Khaw Boon Wan..
July 20, 2010 - Back on June 14, 2010 we indicated that we were waiting for a change in the tobacco legislation to address smokeless alternatives, which would include strips, lozenges, snus and nicotine candies. (Singapore - tobacco dissolvables now infesting this health conscious country..)

Singapore has now tightened the screws on tobacco control measures, in line with WHO standards. This comes as smoking has increased in recent years, particularly among young adults. Between 2004 and 2007, smoking prevalence increased from 18 per cent to 25 per cent among young men, and seven per cent to nine per cent among young women.

It's also to hit at tobacco companies who fight back against control measures with new and alternative products.

Health Minister Khaw Boon Wan introduced changes to the Anti-Smoking Bill passed in Parliament Monday, July 19th. There will now be a full ban on tobacco advertising, and companies will no longer be able to sponsor arts and cultural events. Arts organisations will have until year's end before the change comes into effect.

Health warning labels will be extended to outer packaging, such as the box that holds individual packages for retail. Misleading labels such as "mild" or "light" to imply the product is less harmful will also be prohibited.

Mr Khaw said tobacco manufacturers will be given a grace period of 12 months from the date of gazette to effect the necessary changes.

Speaking in Parliament for the first time since his heart bypass operation in May, he also showed examples of such products - a tin of oral snuff and a packet of smokeless e-cigarettes - to MPs.

The ban on smokeless tobacco products for oral use has also been expanded to cover more categories. Tighter restrictions, including a ban on alternative tobacco and nicotine products currently available abroad. These products include smokeless forms of tobacco such as oral and nasal snuff, electric cigarettes, tobacco substitutes such as nicotine water, and fruit and candy-flavoured cigarettes.

Khaw Boon Wan, Singapore Health Minister, said: "This is a pack of cigarettes, electrical cigarettes. It releases nicotine. It even lights up. And there are health warnings: 'Smoking is harmful for health. E-cigarettes are good for health.' Many of these products closely resemble confectionary items. Clearly the intent is for them to act as starter products that get young non-smokers addicted to nicotine."

Most of these are not available in Singapore, Health Minister Khaw Boon Wan told MPs (members of parliament) on Monday, July 19th during the debate on changes to the Tobacco (Control of Advertisements and Sale) Act.

We are glad that Dr. Khaw is doing well..

References: New ban on tobacco products by Janice Heng (janiceh@sph.com.sg), Straits Times.com, 7/19/2010; Singapore tightens tobacco control measures by Joanne Chan, ChannelNewsAsia.com - also VIDEO selection, 7/19/2010.

Singapore - some related news briefs:
Singapore - new stricter tobacco legislation - smoking..;
Singapore - tobacco dissolvables now infesting this health conscious country..;
Singapore - illicit cigarette trade down by 37 percent..;
Singapore - e-cigarettes are illegal..;
Singapore - record number of smuggling attempts for 1st part of 2009..;
Singapore - new measures to discourage smoking among the young..;
Singapore - more people were smoking in 2007 than 2004..;
Singapore - Smoking increase despite public ban, price hike..; Singapore - Introduction of Tobacco Stamp to combat contraband...

Cuban cigars - increased sales after a decline in 2009..

July 20, 2010 - Improved economies and new tactics to fight smoking bans have led to increased sales of Cuban cigars this year, after a decline of 7.7 percent in 2009, the exclusive international distributor of the world's favorite cigars said on Monday.

"Through the end of May sales rose in practically all regions and were up overall 4.3 percent and the tendency continued in June," Manuel Garcia, vice president of sales for Habanos S.A. told Reuters in an interview.

The two big exceptions were in Spain and Greece, where current economic crises have hit sales, he said.

Cigar sales are an important source of income for the cash-strapped communist-led island, garnering $218 million last year.

The company, a joint venture with British tobacco giant Imperial Tobacco Group Plc, expects demand for premium cigars to fall a few percentage points in the coming years. (mperial Tobacco Group to Enhance Joint Venture Altadis Had With Habanos Cigars..) (The Habanos, S.A. Corporation (Habanos S.A.) is a Cuban joint venture with the share capital owned 50%-50% by Cubatabaco, a Cuban Government company and Altadis, a Spanish company owned by IMPERIAL TOBACCO GROUP PLC, a British Tobacco Company.)

To boost revenues, it [Habanos Cigars] is targeting the highest end of the market and fighting what amounts to a guerrilla war against the global spread of smoking bans. "Smoking bans and the economic environment do not allow you to smoke more, so 'smoke better' is our motto," Garcia said.

"If you used to spend 15 euros ($18.75) a day or a week on three cigars, now you might spend 16 euros ($22.50) on two higher quality ones," he said. Last year the number of millionaires reportedly increased significantly as the world recovered from financial crisis, which was good news for luxury products like the famed hand-rolled Cuban cigar, the Habanos executive said. "The more people with money, the better it is for us, if they smoke that is," Garcia said.

Sales are strongest in the Asia-Pacific region, in particular China, where the number of wealthy is growing faster than in other regions.

"It is all about value added, collectibles, limited editions, exclusives," said Javier Terres, the company's development vice president, in the same interview.
Terres pointed to the company's latest limited edition of a specially cured Cohiba cigar, the Behike, that sells for at least 35 euros ($43.75) and has received twice the orders as the number available.

He said a significant reduction in tobacco planting and cigar production last year did not mean Habanos S.A. was on the ropes. (Cuba - slashes tobacco land, demand for cigars down..)

"Although Habanos sales dropped in 2009, its share of the premium cigar market improved," Terres said, "and now accounts for 71 percent of unit sales and 85 percent of value." The numbers exclude the United States market, where sales are banned under the longstanding U.S. trade embargo against the island.

Revolutionary Cuba has never been known for backing down from a fight, so it is no surprise that Habanos is striking back against smoking bans. "Our fundamental objective is figuring out how we can get around the bans and move forward in an extremely adverse environment," Garcia said. "Even if you have money you have to find a place where you can enjoy a cigar, as it is not like a cigarette that you consume in five minutes on the run," he said.

The company has wholesale distributors in 70 countries, 142 specialized outlets called Casas de Habanos that promote cigars and other Cuban merchandise such as rum and coffee, and thousands of retailers that specialize in their product.

Terres said they were all hard at work promoting what Habanos calls "Comfortable Outdoor Smoking Areas" and private cigar clubs in countries such as Germany and the United Arab Emirates. The creation of outdoor smoking areas had already reversed a downward trend in Britain, Terres said.

"The turn-around demonstrates the culture of the Habano continues to exist, but in a completely new environment," he said.

Reference: Cuban cigar dealer fights bans, hard times Cuban cigar sales rebounding from 2009 decline by Marc Frank (Editing by Jeff Franks and Alan Elsner), Reuters, 7/5/2010.

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Turkey - WHO presents Prime Minister Erdoğan with award..

The award was presented to PM Erdoğan by Zsuzsanna Jakab, WHO’s regional director for Europe.

July 20, 2010 - Prime Minister Recep Tayyip Erdoğan received a special award from the World Health Organization (WHO) for his championing of Turkey’s indoor smoking ban, which was implemented last year, on Monday, July 19, 2009 at a ceremony held at the Ankara Rixos Hotel.

Turkey - smoking ban a year later, goals are being achieved..

Interesting facts:

. The Council of State asked the Constitutional Court nearly two months ago to relax the smoking ban for kahvehanes, traditional Turkish teahouses where men gather to smoke and have tea, claiming that the ban violates personal freedoms and makes it more difficult for businesses to survive.

. nearly 92 percent of Turkey’s population approves of the smoking ban, which is a good indicator that our people prefer to side with an innovation to protect people’s health. Therefore, I believe that the Constitutional Court will make a decision beneficial for the Turkish people by rejecting the Council of State’s effort to relax the ban for kahvehanes,” Erdoğan said.

. The first phase of the law banning smoking went into effect on May 19, 2008. It prohibited smoking tobacco products in state buildings, including hallways and corridors, in all enclosed areas of educational, health, production, commercial, social, cultural and sports facilities and in public transportation vehicles, including taxis, buses, ferries and airplanes.

. On July 19, 2009, the law went into full effect, with restaurants, coffeehouses, cafeterias and bars also designated as smoke-free areas.

. Noting that the sales of cigarettes had decreased considerably following the smoking ban, Erdoğan underlined that the number of people going to hospitals due to smoking-related complications also decreased by 30 percent following the smoking ban.

. 2.5 percent of coffeehouse owners and 3.5 percent of their customers have quit smoking since Turkey extended the smoking ban to bars, restaurants and coffeehouses.

. Thirty-three percent of coffeehouse owners and 25 percent of their customers also have reported lighting up less frequently since the ban was introduced in this nation of heavy smokers, he noted.

. Tobacco consumption remains high in Turkey. The Health Ministry says up to 16 million adults -- or around 22 percent of the population -- are smokers.

Reference: PM Erdoğan receives WHO award for anti-tobacco efforts, Today's Zaman, 7/20/2010.

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Turkey - smoking ban compliance excellent and cigarette sales drop 15 percent..;
Turkey - two television stations successfuly challenge fines..;
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Turkey - hundreds of cafe owners demonstrate against smoking ban..;
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