C-store Update: Conwood's/Grizzly - No. 1 Price value/discount moist snuff..

October 11, 2008 - From 2000 to 2006 moist snuff sales have increased and now account for 71% of the smokeless tobacco market (HR Apert et al., Tobacco Control 17:332-338, 2008). The main growth in moist snuff tobacco is price-value/discount segment. RJ Reynolds Tobacco/Conwood has Grizzly and soon to be Philip Morris USA/UST,Inc has Husky. Grizzly outsells Husky 4 to 1 or even more.

Comparison U.S. Smokeless Tobacco Players: No. 1 UST and No. 2 Conwood...

Reynolds American stated that second-quarter growth of Conwood's Grizzly brand accounted for almost half of the industry's total moist-snuff volume growth of 7.7% compared with the prior-year quarter.

Altria wants to tweak the sales of UST's premium brands Skoal and Copenhagen to return these to at least modest share growth. C-store personnel are finding when the price of these premium brands are reduced - like the 2-cans for $6 promotion - those sucking on Grizzly will purchase the premium brands instead.

Secret Shoppers are becoming more frequent. This person asked the clerk about Camel Crush and then Camel Snus - the clerk gave the proper answer and won a $20 gift card. Tobacco companies expect retailers to play a significant role in selling their products.. - from PM USA Newsletter, November 2007.

Related news brief: C-store update - tobacco product displays at checkout counter..
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Imperial Tobacco Survey - Canadian Illegal Tobacco Trade..

October 11, 2008 - Based on a survey of 1,201 Canadians over a 3-day period Imperial Tobacco feels the federal government should make illegal tobacco one of its priorities. [Imperial Tobacco Canada (a wholly owned indirect subsidiary of British American Tobacco(BAT) - BAT is the largest stockholder in Reynolds American with approximately 42% of shares) dominates the Canadian cigarette market with at least 60 percent of sales.]

Illegal cigarette sales are costing the Canadian federal and provincial governments $1.6-billion a year in lost taxes. The provinces of Quebec and Ontario are by far the biggest consumers of illegal cigarettes. Nearly half (48.6%) of the
cigarettes bought in Ontario and 40% of those purchased in Quebec were illegal. Almost half of Canadians (47.9%) believe that youth access to illegal tobacco is a major problem.

As a result of the public opinion it is felt the government must propose practical solutions to counter the illegal tobacco problem. Perhaps, Imperial would like the government to again to reduce taxes on legal tobacco in order to lower the price of cigarettes and thus discourage contraband production and distribution.

It is interesting to note that that Imperial Tobacco Canada Ltd and Rothmans Benson & Hedges Inc have admitted aiding the illegal tobacco trade.

The Canadian federal government has recently introduced a tobacco stamp to combat contraband.

References: Canadians recognize that illegal tobacco sales are a problem for the country and look to governments for answers, CNW Group, 10/9/2008; Illegal cigarette sales costing the government, tobacco industry
by Nicole Feenstra, National Post, 8/2/2007 and Illegal tobacco trade not a priority in Canada, Tobacco Reporter, 9/10/2008.

Imperial Tobacco Canada is the same company that introduced Du Maurier Snus claiming that it fulfills it commitment to test market a reduced harm product, as compared to cigarettes in Edmonton retail outlets. Les Hagen of the lobby group Action on Smoking and Health noted that Alberta currently accounts for 40 per cent of the smokeless tobacco market in Canada. Hagen dismissed the company's efforts to portray snus as less harmful than cigarettes as "a hollow public relations gesture."
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Canada - Docs Want to Know More Tobacco Smuggling Settlement..

Physicians for a Smoke-Free Canada said Tuesday, October 7, 2008 the organization will lobby members of the Public Accounts Committee to hold hearings on the negotiations that led to a final $1.2-billion smuggling settlement between Canadian government and the country's two largest tobacco companies, Imperial Tobacco and Rothmans Inc.

The physicians last month asked auditor general Sheila Fraser for an investigation of the agreement, which was signed July 31, 2008 but she turned them down. Fraser said in a letter to the group that the government's decision to agree to the settlement was a policy decision. "Under the legislation that governs our work, we do not evaluate the merits of government policies," Fraser said.

Cynthia Callard, executive director of Smoke-Free Canada, said that the "wall of secrecy" that surrounds the agreement must be penetrated.

Reference: Lift cloud of smoke from tobacco smuggling deal: Doctors
Group says government let cigarette companies off the hook, Canwest News Service, 10/07/2008.
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Shell Signs Deal With 47 State AGs to Curb Minor Tobacco Sales..

October 10, 2008 - Attorneys general of 46 states and the District of Columbia entered into an agreement with Shell Oil that is designed to curb tobacco sales to minors. Shell and its joint venture, Motiva Enterprises, have agreed to adopt procedures designed to reduce sales of cigarettes to minors. (The four states that didn't participate in the settlement were Indiana, North Carolina, North Dakota and Wisconsin.)

Nationwide, the agreement affects more than 13,000 of Shell's 14,000 outlets. Under the agreement, Shell also will pay $100,000 for the costs incurred by the states in investigation and negotiation.


The agreement includes the following provisions:
* Retail personnel will receive training about the health risks associated with childhood tobacco use.
* Shell will administer independent compliance checks to monitor sales practices at certain Shell convenience stores, to ensure they are not selling tobacco to minors.
* States will impose sanctions against contract operators that sell tobacco to minors.
* Vending machines and self-service displays that sell tobacco products will be forbidden at Shell-associated c-stores.
* In-store tobacco advertisements will be limited to reduce youth demand for tobacco products.
* Shell will require all c-store operators to notify the company if tobacco products are sold to minors in violation of the law.

Other recent multi-state agreements cover gas station convenience stores selling fuel under the Conoco, Phillips 66 or 76, Exxon, Mobil, BP, Amoco, ARCO and Chevron brand names, and retail and pharmacy chains Kroger, 7-Eleven, Walgreens, Rite Aid, CVS and Wal-Mart.

Reference: Shell Signs Deal With 47 State AGs to Curb Minor Tobacco Sales, Convenience Store/Petroleum News, 10/9/2008 and Shell, 46 States and DC, to Curb Youth Tobacco Sales (Update2) by Andrew Harris, Bloomberg.com, 10/8/2008.

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San Francisco files brief to oppose bid by PM USA to block the banning of tobacco sales in pharmacies..

October 9, 2008 - Attorneys for the city of San Francisco made the argument in a brief filed with U.S. District Judge Claudia Wilken of Oakland Thursday (10/9/2008) that the city's ban on cigarette sales by pharmacies has nothing to do with free speech. Philip Morris USA (PM), the nation's largest tobacco company, claims the ban violates its First Amendment right of free speech by putting an end to cigarette advertising and displays in the pharmacy stores. PM argued in its September 25, 2008 lawsuit that the purpose and effect of the ordinance is "to suppress communications directed to adult smokers" in violation of the company's free-speech right.

Wilken will hold a hearing in Oakland on October 30, 2008 on the tobacco company's request for a preliminary injunction. Last month, she declined to grant a temporary restraining order that would have blocked the ban from going into effect on Oct. 1, 2008. A San Francisco Superior Court judge also refused to suspend the ordinance in a separate lawsuit filed by Walgreen Co., and the measure took effect as scheduled.

Lawyers from the office of City Attorney Dennis Herrera argued in today's filing that Philip Morris' free speech claim shows "no respect for the Constitution (and) no respect for the power of cities to protect the health of their citizens. The brief contends that if the measure "can prevent just a few young people from taking up smoking, becoming addicted to nicotine, and developing cancer, that would greatly outweigh any minimal, speculative financial loss that might be incurred by the tobacco industry.

Reference: San Francisco Says Smoking Ads Are Not Free Speech, NBC11.com, 10/9/2008.

Related news briefs: Philip Morris challenges San Francisco pharmacy tobacco ban..; Walgreen: San Francisco’s Tobacco Ban Is Unfair..; San Francisco - All Tobacco Products Banned in All Pharmacies..; San Francisco critical vote - bar tobacco sales pharmacies.. and SAN FRANCISCO Ban on tobacco at drug stores sought...
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