18 juillet 2008
EU aims to stub out cut-price cigarettes
Smugglers of cut-price cigarettes into Ireland
have been targeted by the EU in a move designed to reduce smoking and stub out
the illicit tobacco trade.
The price of cigarette products across Europe
vary, with eastern European countries smokers paying less for a puff due to
lower taxes
But a new proposal revealed at press
conference yesterday could see EU-wide standard tax levied against cigarettes
and rolling tobacco.
If adopted by the member states, minimum
excise rates will be ratcheted up over five years, or as long as seven years
for some nations, that must be charged on cigarettes and other product, such as
fine-cut tobacco for roll-your-own smokes.
The change would mostly affect eastern
European countries that have joined the EU bloc since 2004. Raising the cost
may cut smoking by 10pc over five years while reducing the incentive for tax
evaders to illegally import into countries such as Ireland and the UK, where
cigarettes are as much as seven times more expensive than in Latvia.
More than 20pc of tobacco products in some
nations are imported, due to smuggling as well as legal cross-border shopping,
the commission said.
"The number one consideration is health
policy, more than budgetary reasons," Taxation and Customs Commissioner
Laszlo Kovacs said at a news conference.
The measure now requires the approval of the
EU’s 27 governments.
30 juin 2008
Big Tobacco
NEW YORK - Big tobacco companies should be able to raise prices and keep profits growing despite weakening sales, a Citi Investment Research analyst said Tuesday.
Adam Spielman said Philip Morris International Inc. could post 12 percent annual profit growth over the next few years, and Altria Group Inc. could grow at a 9 to 10 percent clip. That's as good as a lot of other big consumer product makers, he said, but the stocks are trading at a discount because of concerns about litigation and declining sales.
But the companies can keep increasing their profits as long as prices rise faster than sales fall, he wrote. Spielman said a pack of Marlboros costs $11 in the U.K., and prices are still going up to keep pace with wages.
"This implies U.S. prices have plenty of room to increase," he wrote. Costs are also coming down, he added.
Spielman expects the sector to outperform, and he started coverage of PMI and Altria with "Buy" ratings. He placed a "Hold" rating on shares of Reynolds American Inc., and said PMI and British American Tobacco PLC are his top picks.
He said fewer lawsuits are being filed against
tobacco companies, so their legal risk has declined.
16 avril 2008
Kentucky mandates fire-safe cigarettes
Starting this month, every cigarettes sold in Kentucky must be fire-safe. The cigarettes feature special technology to help prevent fires, but some customers feel like they're the ones getting burned. 
"It's got little rings around it in a couple of spots," said Josh Hubbard, as he pointed to a fire-safe cigarette in the parking lot of Butch's in Williamsburg, Kentucky.
Paper rings act like speed bumps, slowing the burn of the cigarette. Keep puffing to keep it lit. Stop, and it burns out.
"I do understand why they did it, as a safety precaution," said Katie West. "I think that was good, but the cigarettes don't taste near as good as they used to."
The taste is one complaint. The other problem is the very quality that makes the cigarette less likely to start a fire.
"If they set their cigarette down, it goes out immediately, so they're having to re-light it," said Victor Freeman, owner of Butch's. "I bought more Bics, so we'll sell more lighters."
Freeman said business hasn't slowed since the law took effect April 1, but customers keep asking him if he has any leftover cigarettes that aren't fire safe.
"No one likes it," said Freeman. "But there's no alternative except to go to Tennessee and pay more. So they buy them and complain."
Josh Hubbard sums up the problem: "Cigarettes taste like crap."
Tennessee cigarettes may taste better, but smokers who cross the border to buy a pack will pay a higher tax. The tax per pack in Tennessee used to be 20 cents. As of July 1, 2007, people pay 62 cents of tax per pack in Tennessee.
The higher price and short drive are worth it to some Kentucky smokers.
"Minute and a half and 50 cents, so they don't care," explained Dave Fox, a cashier at an Exxon station in the border town of Jellico, Tennessee.
He estimated cigarette sales have jumped 40 percent since Kentucky switched to fire safe cigarettes. That's the opposite of what happened when Tennessee raised the cigarette tax.
"It's completely reversed," said Fox. "It should get back exactly the way it was, because nobody likes it at all."
Customers at Butch's weigh their options.
"I'm a pretty loyal customer to Vic," said Katie West. " I'll probably still buy my cigarettes in Kentucky."
Josh Hubbard has another idea.
"Quit. Yeah, probably. Hopefully," Hubbard said. "I know a lot of people who are talking about quitting."
Kentucky is one of nine states selling only fire-safe cigarettes.
Eighteen other states have passed fire-safe cigarette laws that will soon take effect.
31 mars 2008
Tax enhancement recommendation on cigarettes supported
Bloomberg Grant Initiative (BGI) Forum has supported the recommendation of Tobacco Advisory Group (TAG) regarding enhancement of taxation on cigarettes.
The Technical Advisory Group (TAG) on Tobacco Control had recommended the government to enhance taxation on cigarettes with a view to make it beyond the reach of youth.
The recommendation was made during the first meeting of recently formed TAG on tobacco control. The TAG was of the view that increase in taxes on tobacco products has double benefits like on one hand it will enhance revenues and on the other, it will reduce prevalence of cigarettes use in the country.
The Group had also recommended other multiple strategies to control tobacco use in youth particular and others in general because of its lethal effects on health.
According to forum’s statement, it has been decided to hold meetings of BGI Forum on quarterly basis with a view to materialize the partnership between all concerned organizations.
Bloomberg Grant Initiative New York is a global initiative to fund tobacco control initiatives primarily in developing countries.
The meeting of the BGI forum was attended by Director General Implementation of the Framework Convention on Tobacco Control Dr. Shaheen Masud, WHO Representative Dr. Khalif Bile, Project Officer Bloomberg-TFI at EMRO Dr. Farrukh Qureshi and National Professional Officer Tobacco Control WHO Dr. Shahzad Alam.