UST Inc. will increase marketing and introduce new products to counter increased competition from Altria Group Inc. and Reynolds American Inc.

December 21, 2007 - UST Inc. (principal subsidiaries: U.S. Smokeless Tobacco Company and Ste. Michelle Wine Estates), the largest U.S. snuff-maker, said yesterday (12/19/2007) that it will increase marketing and introduce new products to counter increased competition from Altria Group Inc. and Reynolds American Inc. Americans are smoking nearly 2 percent fewer cigarettes each year, prompting Philip Morris USA to begin selling a Marlboro snus product in Atlanta (actually Dallas/Ft. Worth - TW) and Reynolds to test a Camel Snus product in seven markets, including Greensboro, High Point and the Triangle. New UST products include wintergreen-flavored Skoal Edge and new varieties of Skoal Dry, a spitless snuff in small pouches. UST said it plans to spend more than $100 million in 2008 on marketing and other steps to increased sales. ( "UST snuff-maker to crank up marketing, fight competition" Winston-Salem Journal, December 20, 2007)

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New Life for Ariva®, Stonewall® Dissolvable Smokeless Tobacco Products...

December 21, 2007 - New Life for Ariva®, Stonewall® Dissolvable Smokeless Tobacco Products... ( These tobacco lozenges have been around for a few years with lackluster sales; in fact, some retail stores refused to even carry these nicotine addicting products.) Star Scientific, Inc. held its annual shareholder’s meeting on Friday, December 14, 2007 in Washington, DC. Star executives were gratified with the results of two studies from the University of Minnesota Transdisciplinary Tobacco Use Research Center that favored their tobacco lozenge products. One study examined the potential health risks and benefits of potential harm reduction products. Tobacco-specific carcinogen uptake was greater from Exalt (SNUS product by Swedish Match) than from the MNL (medicinal nicotine lozenge), and was comparable between the MNL and Ariva. Physiological effects and subjective effects on withdrawal and craving were comparable among Exalt, Ariva, and the MNL. Ariva was preferred over the MNL, which was preferred over Exalt. It was concluded that with the exception of medicinal nicotine products, low-nitrosamine ST products have the greatest potential to result in reduced toxicant exposure compared with other combustible reduced exposure products and have promise for reducing individual risk for disease. ( "Pilot study on lower nitrosamine smokeless tobacco products compared with medicinal nicotine," M. Irene Mendoza-Baumgart et al., Nicotine & Tobacco Research 9(12): 1309-1323, 2007) In another study tobacco specific nitrosamine levels were analyzed in Ariva, Stonewall, Exalt, Rebel, Smokey Mountain (a tobacco free snuff product) and Quest and compared their TSNAs levels with those in NRT (nicotine replacement therapy) and conventional smokeless tobacco and cigarette brands. The lowest levels containing tobacco were in the two Star Scientific products Ariva and Stonewall. "Tobacco-specific nitrosamines in new tobacco products," Irene Stepanov et al., Nicotine & Tobacco Research 8(2):309-313, 2006. All of a sudden Star has 130 new distributors (an 166% increase over 2006) - at retail outlets Ariva and/or Stonewall can be found at Food Lion Grocery stores, a number Kroger Stores and drug store chains like Walgreens and Rite Aid. Star is now convinced they are the leader in the low-TSNA dissolvable smokeless tobacco category. Tobacco products that look like candy containing compressed tobacco powder along with sweeteners, mint and other flavorings, and resembles a brand of popular breath mints. (The Cancer Blog)

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Congress Sends An Extension of the SCHIP to President Bush..

December 20, 2007 - Congress Sends An Extension of the SCHIP to President Bush.. Bush vetoed the 2nd bill expanding the State Children's Health Insurance Program (SCHIP)on December 12. The extension through March 2009 was part of legislation that also gave physicians a 0.5 percent rate increase when they treat the elderly and disabled in Medicare. Physicians had been scheduled to take a 10 percent cut. The reprieve for doctors will last until June 30. The House leadership has scheduled a vote for January 23, 2008 to attempt to override that veto. It appears that the House will not be able to muster the 2/3 vote necessary to override the veto. Late last week there was talk regarding a short term extension of the current SCHIP program through March 31, 2008. However, on December 17, negotiators agreed to extend the current SCHIP program through March 31, 2009 with a small increase in funding necessary for the states to maintain their current enrollment through that date. There will be no increase in tobacco taxes to fund that modest increase. While it is always possible that the Democrats will introduce another SCHIP bill in 2008 to force the Republicans to vote on the issue, it now appears likely that the issue will be pushed into 2009. ( "Current SCHIP Program to be Extended to 2009 Veto Override Attempt of Current SCHIP Legislation Unlikely" by Chris McCalla, Ligislative Director, International Premium Cigar and Pipe Retailers Assoc., 12/18/2007) Dr. Marina L. Weiss of the March of Dimes, "It is extremely unfortunate Read more...

Weighing the Benefits - An independent Lorillard opens acquisition, cash-flow opportunities by Steve Holtz..

December 19, 2007 - Weighing the Benefits - An independent Lorillard opens acquisition, cash-flow opportunities by Steve Holtz.. Citigroup analyst Bonnie Herzog wrote: "In our opinion, the most appealing aspect of this spinoff will be Lorillard's ability to act as an independent company, without the 'confinement' of the Loews Corp. board." "Lorillard will be free to make acquisitions using its own stock as currency or conduct share buybacks as it sees fit." Added Herzog, "Post spin, Lorillard will no longer be under the 'control' of parent company Loews, and will be free to pursue its expansion plans and balance sheet restructuring (increased leverage for buybacks or acquisitions), Lorillard won't trade with a tracking stock discount, the new Lorillard stock may attract new investors previously turned off by the tracking stock nature of Carolina Group, and Lorillard will be debt free." As reported on Monday (12/17/2007), Lorillard will soon begin test marketing its own snus, under the brand Triumph - NO Newport SNUS yet. Meanwhile Newport smokers are complaining about the Lorillard price increase that recently went into effect - c-store news. (TobaccoWatch.org) Read more...

Tobacco industry adapts to smoking bans by developing dozens of new ways for the body to absorb nicotine..

December 19, 2007 - Tobacco industry adapts to smoking bans by developing dozens of new ways for the body to absorb nicotine.. Big tobacco is developing dozens of new ways for the body to absorb nicotine - from hookahs to snus to lozenges ( see also SNUS.biz) to smokeless nicotine delivery systems. And, in a clear attempt to attract younger users, they come in more flavors than you can find at a Ben & Jerry's ice cream store. That new terrain in the world of tobacco was sketched out by Dorothy Hatsukami, a tobacco researcher at the University of Minnesota, for some of the approximately 3,000 anti-tobacco experts from around the world who met in Minneapolis in late fall at the National Conference on Tobacco or Health. "Is it a gateway drug to cigarette smoking?" she said. "Does it help them quit smoking? We don't know." ( "Smoke and mirrors" by Josephine Marcotty/Scripps Howard News Service, The MetroWest Daily News, 12/18/2007) We also have to be concerned with the cigarettes with less tobacco smell being introduced in Canada. Click on image to enlarge - some of the many tobacco products now available.. Read more...

Does Reynolds Wish for Swisher?

December 18, 2007 - Does Reynolds Wish for Swisher? Citi Investment Research analyst Bonnie Herzog speculates RJR could buy cigar maker to counter PM USA/John Middleton (see related news brief directly below dated December 17, 2007). We believe there is a 75% chance that Reynolds acquires Swisher within the next 6-12 months." An acquisition of Swisher International Inc., a private tobacco company and a market leader in machine-made cigars, would offer several benefits to Reynolds American Inc. including a quick market share grab of the growing cigar industry, substantial cost savings and synergies with its Conwood and Lane subsidiaries, an opportunity to truly become a "total" tobacco company and to become a bigger player in the growing U.S. cigar category than PM USA, said Herzog. An acquisition of Swisher would give Reynolds the opportunity to become the second-largest domestic cigarette manufacturer, the second-largest smokeless manufacturer and the largest machine-made cigar manufacturer, she added. With U.S. cigarette volumes consistently declining, and Reynolds inability to take its famous cigarette brands outside the United States given the sale of these trademarks, "we believe an acquisition of Swisher provides Reynolds with a growth opportunity within the domestic tobacco sector, much like Conwood, considering cigar volumes have been growing, even despite limited promotion of the segment." Read more...

Loews to Spin Off Lorillard, Newport Cigarette Maker..

December 17, 2007 - Loews to Spin Off Lorillard, Newport Cigarette Maker.. Loews expects the tobacco spinoff to be complete by the middle of next year, and said Greensboro, North Carolina-based Lorillard will likely list on the New York Stock Exchange. "Lorillard would be a smaller, but valuable opportunity to get some brands and share in a highly profitable market" for a potential buyer, said Bruce Davidson, an analyst at Blue Oar Securities in London. Newport is the best-selling menthol cigarette in the U.S., according to Loews, and the nation's No. 2 cigarette brand behind Altria's Marlboro. Founded in New York City in 1760 by Pierre Lorillard, the unit is the oldest continuously running cigarette maker in the U.S. as well as being the country's third-largest tobacco company, Loews said. Lorillard also sells cigarettes under the brands True, Maverick and Old Gold. (Bloomberg.com, 12/17/2007) On October 25, 2006 Lorillard announced that it has entered into an agreement with Swedish Match North America to jointly develop and market a select line of smokeless tobacco products in the United States. (TobaccoWatch.org) Lorillard will soon begin test marketing its own snus, under the brand Triumph, Loews executives said Monday (12/17/2007). The Triumph test product is part of a joint venture formed in October 2006 with Swedish Match North America Inc. to develop smokeless tobacco products. ( Loews to Spin Off Lorillard Tobacco by Vinnee Tong, Assoc. Press) Swedish Match is making the product in Sweden and Lorillard is distributing it. (Philip Morris Revises Smokeless Tobacco Market Tests by JOHN REID BLACKWELL/ Richmond Times-Dispatch, 1/11/2008) Read more...

Reynolds American linked with Swisher..

December 17, 2007 - Reynolds American linked with Swisher.. There is a good chance that Reynolds American Inc (RAI) will try to buy the cigar manufacturer, Swisher International, according to Citigroup. The acquisition of Swisher, which is a private tobacco company and a market leader in machine-made cigars, would allow Reynolds to compete strongly in the cigar sector, where PM USA has recently acquired John Middleton, the maker of Black & Mild Cigars (see related news briefs: December 12, 2007 and November 2, 2007. Citigroup said that the Swisher acquisition would provide RAI with a quick market share grab along with substantial cost savings and synergies with Conwood and Lane. (Tobacco Reporter, 12/17/2007) More on Swisher International.. Read more...