Altria Group's first-quarter 2008 profit falls 11 per cent on spinoff costs..

April 25, 2008 - Altria Group's first-quarter 2008 profit falls 11 per cent on spinoff costs.. ( Altria Group profile - also Altria has an 29 per cent stake in London-based SABMiller PLC, the world's 2nd largest brewery and brewer of Miller beer.) Profit fell 11 per cent, in part because of costs related to the spinoff of Philip Morris International Inc. and relocating its corporate headquarters from New York to Richmond. Cigarette sales volume at the company's Philip Morris USA unit was down about 3.5 per cent, when adjusted for changes in trade inventories. The Marlboro brand achieved a 41.5 per cent share in the first quarter, compared with 40.8 per cent in the year-ago period. PM USA estimates that total cigarette industry volume declined approximately 4% in the first quarter. For the full-year 2008, PM USA estimates a total cigarette industry volume decline of approximately 3%. The first-quarter results also included, for the 1st time those of cigar manufacturer John Middleton Inc., which the company acquired in December. Middleton's sales were $91 million, company officials said. Middleton's first-quarter retail share through February 2008 increased 2.7 share points versus year-ago to 26.8% of the machine-made large cigar segment, driven by Black & Mild. Retail share for Black & Mild increased 3.0 share points versus year-ago to 25.9% of the machine-made large cigar segment. As part of its adjacency growth strategy to develop new revenue and income sources for the future, PM USA is test marketing Marlboro Snus in Dallas, TX in August of 2007 and expanded the test into the Indianapolis, IN area in the first quarter of 2008. PM USA believes snus offers long-term potential as an alternative product for adult smokers as well as other adult tobacco users. In addition, PM USA is test marketing Marlboro Moist Smokeless Tobacco, which is designed to provide a premium quality product at an attractive price for adult moist smokeless tobacco consumers. PM USA began testing Marlboro Moist Smokeless Tobacco in the Atlanta area in October 2007, and expanded the test market to include additional counties in the greater Atlanta, Georgia area in the first quarter of 2008. - incomplete in progress.. Read more...

UST Posts Strong First Quarter 2008 Results; Reconfirms 2008 Guidance

April 25, 2008 - UST Posts Strong First Quarter 2008 Results; Reconfirms 2008 Guidance
Thursday April 24, 7:58 am ET
- Net sales $472.7 million, +5.7% vs. year ago
- Diluted earnings per share $.83, +23.9% vs. year ago
- Adjusted diluted earnings per share $.84, +12.0% vs. year ago (see table)
- Total Moist Smokeless Tobacco net can volume +3.0% and premium +2.1% vs. year ago
- Moist Smokeless Tobacco category +7.1% vs. year ago (26 weeks ended Feb. 23, 2008)
- Ste. Michelle Wine Estates net sales +25.3% vs. year ago
(UST Inc. is a holding company for its principal subsidiaries: United States Smokeless Tobacco Company and International Wine & Spirits Ltd).

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UST, Inc. Executives Very Disappointed in Sales of the Entire SNUS Segment..

April 25, 2008 - Be the 1st to know.. UST, Inc. Executives Very Disappointed in Sales of the Entire SNUS Segment.. Comments from Murray S. Kessler, Chairman and CEO, UST, Inc. and Dan Butler, President of USSTC (United States Smokeless Tobacco Company) - UST, Inc. Q1 2008 Earnings Call Transcript, 4/24/2008. (UST Inc. is a holding company for its principal subsidiaries: USSTC and International Wine & Spirits Ltd.. USSTC is the leading producer and marketer of moist smokeless tobacco products.) Mr. Butler is very disappointed with the progress of the SNUS segment in total. The entire segment itself has gained very little traction, and we had plans to be more aggressive. Frankly, we are revisiting those because the size of this market and how slowly it's developing -- it's so tiny and taking so long to gain any traction. We've got almost seven years of experience with Revel SNUS and our competitors out there now for a couple of years -- we're struggling whether this segment is really going to take hold or not and whether an American consumer is really interested in this form of tobacco or not. So, we will probably continue some testing and make some modifications, but we are less enthusiastic and, frankly, disappointed. Regarding R.J. Reynolds Tobacco recently announced that they're going to roll out their Camel Snus marketing to a number of more metropolitan markets like New York City and San Francisco. ( TobaccoWatch.org comments on the expansion of the Camel snus test market.) I can't speculate on what Reynolds approach is. Obviously going into metro markets is a different kind of approach. From our perspective, the category still has not gained significant traction and quite frankly, we're disappointed in the consumer response to it. We've all talked about the fact that it's going to take time and education to create a consumer awareness and trial. But what we're seeing in market for all of the players is, versus some reasonable velocities in the early days when they were very heavily promoted, sequentially the volume has really not held up and has declined overtime. So, we're really trying to figure out the right steps to take going forward and what the appropriate approach and level of investment is in the segment.

Murray Kessler - We are very disappointed in the total performance of whether -- they call it Snus or we call it spit-free. We've been testing this thing now for seven years. The newer entrance, if you go back, is now, in original markets, is over two years, and it is not gaining the traction, given the level of investment that's been put there. (TobaccoWatch.org)

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Reynolds American management team..

April 24, 2008 - Reynolds American management team will discuss the company's 2008 first-quarter results during a conference call following the release of the results on April 30th.
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1st Quarter 2008 - Philip Morris International (PMI) post 29% profit increase..

April 24, 2008 - Philip Morris International (PMI) post 29% profit increase but in regions such as the European Union (EU)and Japan continued to show declines in volume.. Higher taxes and bans on smoking in public places has played a role in parts of the EU. PMI cigarette shipment volume for the quarter was 217.9 billion units, up 2.2%, driven by strong demand in EEMA (Eastern Europe, Middle East & Africa), Asia and Latin America. The cigarette shipment volume decline of 5.9% in the European Union or EU was adversely distorted by unfavorable inventory movements in the Czech Republic and Germany. While total cigarette shipments of PMI's flagship Marlboro declined 1.2% to 77.3 billion units, mainly due to a drop in EU, there was growth in EEMA, Asia and Latin America. Total cigarette shipments of L&M declined 8% to 23.8 billion units in sharp contrast to shipments of Chesterfield that grew 18.3% over the prior-year quarter. Shipments of Parliament recorded similar strong growth of 18.8%, while shipments of Virginia Slims grew 13.7%. Total shipment volume of Other Tobacco Products or OTP (in cigarette equivalent units) surged more than 33%, fueled by strong growth in Germany and Poland. The company plans to invest further to expand key markets around the world. PMI was recently spun off from parent Altria Group, Inc. - this was the 1st time it reported as an independent company.
More detail on First-Quarter 2008 results..
History - Philip Morris International..
(TobaccoWatch.org) Read more...

Japan Tobacco's (JTI) market share up in Japan in FY 2007 for 1st time since 1985..

April 24, 2008 - Japan Tobacco's (JTI) market share up in Japan in FY 2007 for 1st time since 1985.. JTI, the world’s third largest tobacco manufacturer and the only domestic producer in Japan, said on Thursday (4/24/2008) its domestic cigarette market share inched up 0.1 percentage point from the previous year to 64.9% in fiscal 2007, marking the first rise since the company’s privatization in 1985. JTI attributed the slight increase in the tobacco market share to sales promotions centering on its main brand Mild Seven series. Mild Seven has been the leading brand in Japan for 30 consecutive years, and is currently the third best-selling tobacco brand in the world. According to JTI, Japan consumed 258.4 billion cigarettes in the reporting year, down 4.3% from the previous year. The size of the domestic market has been on the decline due to increasing public awareness about health and tax hikes on tobacco products. (JT makes small, giant market share leap, Tobacco Reporter, 4/24/2008) JTI - Mild Seven news briefs: December 11, 2007, December 6, 2007, October 9, 2007, May 31, 2007 and May 12, 1999.

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Canada's Yukon passes comprehensive smoking ban..

April 23, 2008 - The Yukon Territories has become become Canada's last territory or province to enact a ban on smoking in public places. The ban also forbids smoking in a vehicle in which there are passengers under the age of 18 - the measure goes into effect May 15. The act also forbids retailers from openly displaying tobacco products or advertising in their stores.

Canada's other two territories, Nunavut and the Northwest Territories, passed smoking in public places bans in 2004 and only Nova Scotia has a similar ban on smoking in cars with children.

Reference: Canada's Yukon passes smoking ban, UPI.com, 4/23/2008.

Click on image to enlarge..

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Britain's Imperial Tobacco Group is selling a number of fine cut and pipe tobacco brands to Philip Morris International (PMI) for EUR 254 million (USD

April 23, 2008 - Britain's Imperial Tobacco Group is selling a number of fine cut and pipe tobacco brands to Philip Morris International (PMI) for EUR 254 million (USD 406 million).. The European Commission on October 18, 2007 announced its decision to approve Imperial Tobacco Group PLC’s proposed acquisition of Altadis, S.A. (Alliance Tobacco Distributors) The acquisition of Altadis was subject to the enlarged group divesting a small number of fine cut tobacco, pipe tobacco and cigar brands in certain European markets. In 2007, the acquired brands accounted for an approximate 2% share of the total fine-cut category in PMI’s EU Region and Interval, a strong French heritage brand with a high quality blend, was the leading fine-cut brand in the French market with a 14.8% share of the category. Other brands included in the agreement are the fine-cut brands Bergerac, Santoya and Wervicq (France), Van Nelle (Italy and Canary Islands) and Picadura (Spain) and the pipe tobacco brands Bergerac (France) and Kilta (Finland). The transaction is subject to approval by the European Commission and certain local regulatory agencies and is expected to be completed in the second quarter of 2008. (Tobacco cuts: fine cut - tobacco comes in granules slightly larger than sand or coffee grounds; mid-cut - comparable to small granules about 1mm cubed and long cut - comes in thin strands of tobacco around 7mm long, (Dipping Tobacco) e.g., Marlboro MST (moist smokeless tobacco) available from Philip Morris USA comes in long cut and fine cut tobacco. Fine-cut tobacco is popular for roll-your-own cigarettes accounting for two-thirds of the total cigarette market in Norway (MMWR,June 08, 1984 / 33(22);320-3). PMI is testing a roll-your-own (RYO) device called the "Tobacco Block System" in Germany. RYO tobacco taxed at significantly less rate than cigarettes.)

Some Imperial Tobacco Group news briefs: March 20, 2008, March 4, 2008; Imperial Tobacco successfully concludes acquisition of Altadis.. and November 21, 2007. (TobacoWatch.org)
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Earth Day 2008 promoting environmental citizenship - Tobacco A Major Culprit..

April 22, 2008 - Litter: 378,000 volunteers in 76 countries joined the Ocean Conservancy's International Coastal Cleanup. They cleared more than seven million items of trash from coastlines around the world. The top 10 items found on the world's anything-but-pristine beaches and coasts, and their percentage of the total trash haul, are listed below: Cigarettes/cigarette filters - 27.2%; Food wrappers/containers - 9.6%; Caps/lids - 9.1; Bags - 8.1%; Beverage bottles - 6.8%; Cups, plates, cutlery - 5.2%; Glass beverage bottles - 4.8%; cigar tips - 4.5%; Straws, stirrers - 4.5%; Beverage cans - 4.3%. The vast majority of the items collected fit within the Top 10 list, accounting for 84.1 per cent of the total. Tobacco companies are test marketing a smokeless, spitless Swedish type product called SNUS in the U.S. with very little success. It comes in pouches - like tea-bags that you place in one specific place in your mouth and suck on it for around 30 minutes. We're sure you can imagine the massive problem that results from SNUS litter.

Air Pollution: Smoking cigarettes, cigars, pipes increases air pollution. According to the U.S. Surgeon General Richard Carmona, a non-smoker who is regularly exposed to secondhand smoke is 30% more likely to develop heart disease or lung cancer than a non-smoker who is not exposed. Some related news briefs: Council unanimously approves Quakertown, PA parks smoking ban.. and L.A. bans smoking in parks.. Click on image to enlarge.. (TobaccoWatch.org)
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The primary reason to increase the tax on tobacco is to get smokers to quit and dissuade kids from starting..

April 21, 2008 - The evidence is clear that increasing the price of cigarettes is one of the most effective ways to reduce smoking, especially among children. Studies show that every 10 percent increase in the price of cigarettes reduces youth smoking by about 7 percent and overall cigarette consumption by about 4 percent. There is no guarantee that every state that has significantly increased its cigarette tax will enjoy significant increases in revenue even while reducing smoking. In Iowa in the 12 months before the one dollar cigarette tax increase, the state took in just less than $91 million in tax revenues from cigarettes. That revenue jumped to just over $219 million in the last 12 months. That's a 142 percent increase. At this same time cigarette sales fall by 36%. In North Carolina Cigarette Sales Fell BUT Revenues from Higher Cigarette Taxes Increase.. In Wisconsin the January 2008 cigarette tax increase (from $0.77 to $1.77)is not generating as much revenue as expected. As Governor Jim Doyle's spokesperson pointed out - the most important part of the tax was to stop people from smoking (and stop young people from starting), even if the revenue is less. ( State cigarette tax millions short of earlier projections by Charles Brace, The Daily Cardinal, 4/14/2008) An analysis of recent tobacco tax increases conducted by Altria, the parent of Philip Morris USA Inc., concluded that three-fourths of them had raised less money than projected. Since 2002, 43 states and the District of Columbia have enacted 76 distinct tobacco tax increases, raising the average state tax to $1.13 from 61 cents, according to the Campaign for Tobacco-Free Kids. The R. J. Reynolds Tobacco Company estimates that state taxes now generate $14.5 billion in revenue, while the federal excise tax of 39 cents a pack raises $7.3 billion. References: States Look to Tobacco Tax for Budget Holes by Kevin Sack, The New York Times, 4/21/2008; , New Report: Increasing Massachusetts' Cigarette Tax Will Reduce Smoking, Save Lives and Save Money, PR Newswire, 4/7/2008; Fired up over cigarette tax Philip Morris tries to rile smokers into action, by Jay Fitzgerald, BostonHerald.com, 4/18/2008; Cigarette-tax strategy could backfire on states, by Richard Craver, 4/11/08. Of immediate interest: R.J. Reynolds Tobacco launches web site to help retailers and other opponents fight tobacco taxes... Click on image to enlarge.. (TobaccoWatch.org) Read more...

Has Camel SNUS really gained market traction??

April 20, 2008 -In May 2008 R.J. Reynolds Tobacco (RJR) test marketing of Camel SNUS will go from eight to 17 metropolitan areas. We did a spot check on the sales of Camel SNUS in the eight cities its now available. We know that Camel SNUS has not caught on in the Raleigh, N.C. The original test sites were convenience stores (c-stores) in the Austin, TX and Portland, OR areas. Sales in these stores and the other cities added indicate sales have been slow, only if the store is near school do sales pickup, e.g., a store in Austin, TX near two schools. In one of the Sheets c-stores in North Raleigh the special cooler for Camel SNUS has even been placed under the counter. Tobacco companies are in agreement for SNUS to catch on and be a strong seller it's going to require more public awareness and education.

Amongst other things RJR has tried various coupons for free can of SNUS trying to get smokers to give it a try but its not easy learning the art of SNUSing. (I'll bet that RJR has given away more cans of Camel SNUS than they have sold.) Mainly young adults and kids that want to be young adults will take time to learn the proper technique of sucking on the moist snuff packet. As pointed out by Matthew Myers, the president of the Campaign for Tobacco-Free Kids, all the new cities picked by RJR have clean air laws. So RJR is targeting smokers when they can't smoke to get past their nicotine craving. Because smoking bans stimulate quitting, this is a harm increasing development - Dr. Simon Chapman. Dr. Lars E. Rutqvist, the Vice President for Scientific Affairs at Swedish Match has stated the drive in SNUS sales in Sweden has been in response smoking ban rather than the perceived advantage to user’s health. Click on image to enlarge.. (TobaccoWatch.org) Read more...

This week - 2008 First Quarter Financial Results Webcasts

April 20, 2008 - This week - 2008 First Quarter Financial Results Webcasts: Altria- Philip Morris USA, Philip Morris International, UST, Inc. PMI was spun off from Altra on March 28,2008. Read more...

Philip Morris International (PMI) has better prospects than Altria..

April 20, 2008 - Philip Morris International (PMI) has better prospects than Altria.. Altria spun off its overseas operations to shareholders on March 28, 2008 leaving Philip Morris International as the largest publicly traded tobacco company in the world. Only the state-owned China National Tobacco sells more cigarettes. The idea behind the split was to give Philip Morris International room to flourish. While tobacco use has waned for decades in the developed world, it is growing in China, Russia, India and other emerging nations. Beyond making inroads in China, PM's main task will be to push the Marlboro brand more overseas. ( Marlboro is the dominant brand in the global tobacco market, with an 8.5% share excluding the Chinese market. That's four times the size of its largest rival.) A beachhead in the tightly controlled Chinese tobacco market, the world's largest, gives PM an edge over competitors. It is the only tobacco company that has struck a standing deal with Chinese National Tobacco. That means PM can sell its popular Marlboro brand of cigarettes and other products in China. It is estimated that achievement of a modest 10% market share in China over the next ten years would add nearly two percentage points annually to PM's growth in sales volume. Altria has legal baggage and must cope with the declining demand for tobacco in the U.S. Read more...