Bloomberg Grant: Tobacco Reforms in Pakistan..

October 25, 2008 - In Pakistan, some 57 tobacco manufacturers are currently operating in the country. Around 78% of the market share belongs to two corporate giants: Pakistan Tobacco Company, a subsidiary of British American Tobacco, and Phillip Morris International (PMI), which completed the acquisition of Lakson Tobacco Pakistan, in February 2007.

About more then 25 million Pakistanis smoke, and 1,200 youth start smoking each day in Pakistan. An estimated more then 100,000 die annually from tobacco-related illnesses. In Pakistan, more than 55.3 billion cigarettes are produced.


In Pakistan, round about 50 percent of the population is illiterate and the smoking is more prevalent among poor. Therefore, written warnings have very little impact on making decision to smoke a cigarette or not. In this context, the pictorial warnings advised in FCTC are very relevant. By now 17 countries of the world have introduced pictorial warnings on cigarette packs in their countries. Those include Australia, Belgium, Brazil, Chile, Canada, Hong Kong, India, Jordan, New Zealand, Panama, Romania, Singapore, Switzerland, Thailand, United Kingdom, Uruguay, and Venezuela.

In 2002, “Prohibition of Smoking and Protection of Non-Smokers Health Ordinance, 2002” was promulgated. The main features of the law include prohibition of smoking at pubic places like airports, railway stations, hospitals, educational institutions, offices, planes, restaurants, public transport, bus stands except for designated areas under notification; ban on smoking near educational institutions within area of 50 meters; prohibition of sale to minors below age of 18 years; regulations of advertisements. There is very slow implementation of the Tobacco Control Ordinance.

Reference: Advocacy and Awareness Campaign to introduce Amendments into Tobacco Control Ordinance in Pakistan", Network for Consumer Protection in Pakistan, 10/24/2008.

Euromonitor: Tobacco in Pakistan..
Read more...

Nigeria House Passes Anti-smoking Bill...

October 24, 2008 - Nigeria - House of Representatives yesterday, 10/23/2008 passed the anti-smoking bill prohibiting the smoking of tobacco in public places across the country. By definition, the locations identified as ‘public places’ include hospitals, government offices, nursery, primary and secondary schools among others. Anyone caught smoking cigarettes in public places will now be liable to four months imprisonment, N50, 000 ($436.53USD) fine or both.

The adoption followed the presentation of the report of the Joint Committee on Health and Justice on the issue. Chairman House Committee on Health, Dr. Alaba Ojomo, urged the House to consider the report which provides for the regulation of the production, importation, advertising, promotion, sponsorship, distribution, sale and smoking of cigarettes and other tobacco products.


The new law repeals the existing Act. At the plenary, members considered the report and unanimously resolved that sale of cigarettes to persons under the age of 18 years should be punishable and violators should be liable to two months imprisonment, N50,000 fine or both.

Efforts by some members to inject a clause prohibiting the sale and consumption of tobacco at the nation’s airports as well as some other places designated as ‘public places’ failed as majority of members kicked against the amendment. The House also struck out a section of the bill which prescribed a total ban on advertisements and sponsorship of events by tobacco manufacturing companies.

Reference: House Passes Anti-smoking Bill from Onwuka Nzeshi in Abuja, naijarules.com, 10/22/2008.

Related news briefs: BAT using illegal tactics to get African youths to start smoking.. and British American Tobacco (BAT) - 100 years in Africa...

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




Read more...

In Process - UST, Inc. posted lower third-quarter net profit..

October 24, 2008 - UST Inc posted lower third-quarter net profit as it spent more to try to defend sales of its smokeless tobacco products (e.g., Skoal and Copenhagen) from increased competition.

The company, has agreed to be acquired by Altria Group Inc.

UST's share of the U.S. smokeless tobacco market was 57.4 percent, the same as the second quarter and down 3 percentage points from a year earlier. While smokeless tobacco sales in general have been on the rise, UST's main business, the premium segment, has suffered because of soaring gasoline prices and the weak U.S. economy.

- Response to question from tobacco analyst..

Judy Hong - Goldman Sachs..And then in terms of Snus, I know previously you’ve been a little bit reluctant to comment on Snus making any meaningful inroads in the near term. You’ve got Reynolds now rolling out Camel Snus nationwide. Do you think that they’re beginning to gain some traction, maybe faster than you expected? What are your thoughts there for Snus, generally?

Murray S. Kessler, UST's Chief Executive Officer - Our Snus test, we put it in and in selected customers it’s doing fine. I haven’t seen any change in trend that would change the opinions I’ve given you in the past. So they obviously see the numbers different than me but it still remains a very tiny piece of the category and I don’t see it building significantly in original markets in any material way. So I’m not saying it can’t over time, I’ve always been a believer, but no, there are no breakthroughs going on right now.

Some previous comments on snus:UST, Inc. Executives Very Disappointed in Sales of the Entire SNUS Segment...

Reference: UST third-quarter net profits falls, Reuters, 10/24/2008; UST, Inc. Q3 2008 Earnings Call Transcript, Seeking Alpha, 10/24/2008.
Read more...

Philip Morris USA request stop in San Francisco's ban on tobacco sales by pharmacies..

October 24, 2008 - Philip Morris USA Inc. (PM) argued in a filing with U.S. District Judge Claudia Wilken on Thursday, October 23, 2008 that because the measure "handicaps" the company's advertising message ("suppress favorable messages about tobacco"), it violates the constitutional right of free speech. Judge Wilken will hold a hearing in Oakland on Nov. 6 on PM's request for a preliminary injunction that would stop the city law from being enforced.

The measure went into effect on Oct. 1 after Wilken on Sept. 26 turned down the Virginia-based company's bid for a temporary restraining order. The judge said Philip Morris filed its lawsuit very late - on Sept. 25 - and hadn't met the requirements for an immediate order. But Philip Morris continued its challenge with the request for a preliminary injunction, the next step in the case.

The ordinance bars pharmacies from selling tobacco, but makes an exception for supermarkets and so-called "big-box" stores such as Costco that contain pharmacies. It applies to about 60 pharmacies in the city, most of which are Walgreens drug stores. Walgreen Co. filed a separate challenge, based on a claim of discrimination, in San Francisco Superior Court, but on Sept. 30 a trial judge declined to grant a preliminary injunction in that case.

City lawyers have argued that the measure has nothing to do with free speech because it regulates conduct - cigarette sales - and not advertising.

Reference: Philip Morris argues against SF cigarette ban, San Francisco News, 10/24/2008.

Related news briefs: San Francisco - cigarette sales rise sharply in c-stores..; San Francisco files brief to oppose bid by PM USA to block the banning of tobacco sales in pharmacies..; 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...
Read more...

No Downturn for Tobacco in Tough Economic Times - YET..

October 24, 2008 - No Downturn for Tobacco
Cigarette makers Philip Morris International Inc. (PMI) and Reynolds American Inc. (RAI) display sales resilience as other industries struggled with a pullback in the third quarter while consumers watched banks collapse and markets teeter.

PMI's profit rose 20% in the third quarter as sales climbed, and it benefited from favorable foreign exchange rates. PMI, which was spun off in March from Altria Group Inc., reported net income of $2.1 billion, or $1.01 per share, in the quarter that ended Sept. 30. It earned $1.73 billion, or 82 cents per share, in the same period a year ago. Revenue climbed 22% to $17.37 billion. The company also affirmed its full-year profit forecast for 2008 and increased its quarterly dividend.

Reynolds American raised its full-year forecast even though profit fell 41% on hefty restructuring and trademark charges. The results still topped expectations as the tobacco company used higher prices (and cost savings) to offset consumption declines (cigarette sales volume declined 7.5% in the 3rd quarter). The net income slid to $211 million, or 72 cents per share, in the three months ended Sept. 30. It earned $358 million, or $1.21 per share, a year ago. The maker of Camel, Pall Mall and Kool brands said revenue dipped 1% to $2.27 billion, coming in just above Wall Street's $2.25 billion forecast.

With U.S. excise taxes likely to rise in 2009 and the economy weakening, loyalty toward premium brands could come under fire.

Reference: No Downturn for Tobacco, Convenience Store/Petroleum (CSP) News, 10/24/2008.
Read more...