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Imperial Tobacco

Court upholds NT$5 million fine on British tobacco company

The Taipei High Administrative Court on Thursday upheld a NT$5 million (US$160,800) fine imposed by Taipei City government on a U.K.-based tobacco company.

Imperial Tobacco received the fine in 2015 for violating the Tobacco Hazards Prevention Act, after the company was found to have invited consumers to try out one of its cigarette products, as part of a marketing survey.

Imperial Tobacco filed a case with the Taipei High Administrative Court challenging the fine.

The court on Thursday ruled in favor of Taipei City government, after determining that Imperial Tobacco did indeed violate the provisions of the Tobacco Hazards Prevention Act.

The case can be appealed.

(By Liu Shih-yi and Y.F. Low)

Secret report shows Big Tobacco targeted city politicians in Sudbury and Sault

Algoma municipalities are being asked to stub out all motions proposed by tobacco companies or front groups that slip demands for a freeze on excise taxes into campaigns against contraband tobacco.

Leaked map shows 10 Ontario 'strategic municipalities' whose local politicians were targeted in 2012 by Imperial Tobacco Canada. Reasons for selecting these targets included their 'proximity to illicit tobacco' and 'likelihood of buy-in.'

Leaked map shows 10 Ontario ‘strategic municipalities’ whose local politicians were targeted in 2012 by Imperial Tobacco Canada. Reasons for selecting these targets included their ‘proximity to illicit tobacco’ and ‘likelihood of buy-in.’

Greater Sudbury has the dubious distinction of being named in a secret Big Tobacco document aimed, ostensibly, at fighting contraband smokes, but at the same time quietly lobbying to freeze the excise tax on legitimate tobacco products.

Algoma Board of Health, the governing body of Algoma Public Health, is warning area politicians about new evidence linking Imperial Tobacco Canada Ltd. to lobbying campaigns against contraband tobacco.

The health board voted this week to ask Algoma municipalities to reject all motions received from tobacco companies or front groups that spike campaigns against illicit smokes with demands for a tobacco excise tax freeze or limits on regulation of tobacco products.

Imperial Tobacco Canada Ltd. is a wholly-owned subsidiary of British American Tobacco Plc., one of the world’s five biggest tobacco companies with 55,000 employees in 44 factories in 41 countries.

In a recently leaked internal report prepared for its London-based parent, Imperial Tobacco Canada reveals that it’s been quietly involved for years in lobbying campaigns by convenience-store and anti-contraband groups.

The secret report describes Project M&M, a 2012 campaign intended to “mobilize local governments to pressure for big government action” against illicit tobacco, with demands for an excise tax freeze piggybacked on the main message.

Listed as partners in Project M&M are the Canadian Convenience Store Association, the National Coalition Against Contraband Tobacco, the Ontario Chamber of Commerce, Fédération des Chambres de Commerce du Québec and the Canadian Taxpayers Federation.

The leaked 32-page document includes a map identifying 10 “strategic municipalities” to be targeted in Ontario: Sault Ste. Marie, Sudbury, Windsor, Brantford, London, Mississauga, Niagara Falls, Whitby, Cornwall and Toronto.

These municipalities were selected, the report says, because of their:

  • proximity to illicit tobacco
  • seizure activity
  • internal sales data
  • political weight
  • likelihood of buy-in

The document also identifies 10 targeted municipalities in Quebec: Montreal, Gatineau, Chateauguay, Laval, St. Georges, Sherbrooke, Quebec City, Drummondville, Trois Rivieres and Saguenay.

An article published one month ago by the National Post pointed to other close ties between convenience-store organizations and the tobacco industry.

“In fact, there is other evidence of their close links to the industry, including at least three former tobacco-company executives who are now leaders in the Ontario, Quebec and national convenience-store associations,” the Post’s Tom Blackwell reported.

The leaked Imperial Tobacco report suggests that the “2012 lobbying campaign was no grassroots movement, and that the retail and contraband organizations have for years been used as surrogates by the cigarette giant to promote its own interests,” Blackwell wrote.

Sales of illicit cigarettes are considered a major problem in Ontario, where a bag of 200 illegal “rollies” sells for as little as $10 to $15, compared to more than $80 for legally taxed smokes bought at a corner store.

A 2013 study of collected cigarette butts conducted by NIRIC Group for the Ontario Convenience Store Association found that 17.7 per cent of butts picked up in Sault Ste. Marie were contraband, compared to 30.1 per cent in Kitchener, 28.5 per cent in Barrie, 24.5 per cent in Sudbury, 20.9 percent in Thunder Bay, 18.7 per cent in Toronto, 18.1 per cent in Guelph and 11 per cent in North Bay.

Tobacco firm Imperial Brands to step up spending plans

Imperial Brands (IMB.L), the world’s fourth-biggest tobacco company, is accelerating its cost-savings drive and pouring some of the benefits into marketing key brands as it faces the prospect of a greatly enlarged competitor.

The maker of Winston, Gauloises and other cigarettes said it plans to spend 750 million pounds over the next three years to make the business more streamlined and efficient. The effort should result in additional savings of 300 million pounds each year by 2020.

Imperial also said it would spend 300 million this year on growth opportunities in some of its top markets.

But spending more will dent its profit, taking 2017 earnings growth below its medium-term target of 4 to 8 percent. It should return to growth in that range from 2018, it said.

The increased investment comes as larger rival British American Tobacco (BATS.L) has proposed a $47 billion buyout of Reynolds American (RAI.N), which would make it the biggest international tobacco company and could spark further deals in an industry that is shrinking as more people quit smoking.

Imperial got a boost last year from its $7 billion purchase of some Reynolds brands. The move sharply increased its exposure to the lucrative U.S. market.

“We’re building a stronger high-quality business,” Chief Executive Alison Cooper said.

The weak British pound should benefit earnings by around 14 percent in the 2017 financial year, the UK-based company said, since the vast majority of its profits come from overseas.

The company said it remains committed to raising its dividend by at least 10 percent.

Imperial shares were down 2.9 percent at 0949 GMT.

For the just-ended financial year, Imperial reported higher adjusted sales and profit, helped by the acquisition of brands in the United States and a weaker British currency.

The company said net revenue of its tobacco business rose 9.7 percent to 7.17 billion pounds. Adjusted operating profit rose 10.4 percent to 3.5 billion pounds.

Part of the company’s simplification strategy involves reducing the number of brands it sells. It is aiming to have around 125 brands or less, down from 184 now.

(Reporting by Martinne Geller, Editing by Mark Potter and Louise Heavens)

Leaked Big Tobacco document suggests it used convenience-store, anti-contraband groups as lobbyists

Across Ontario and Quebec, city and town councils passed a wave of similar resolutions, urging provincial governments to crack down on the scourge of contraband tobacco.

It was no coincidence: the municipalities had all been lobbied by convenience-store and anti-contraband associations.

The same, seemingly independent groups have also called for a freeze on legal tobacco taxes, opposed bans on menthol cigarettes and, today, are fighting the federal government’s plan to require plain packaging for smoking products.

But a leaked Imperial Tobacco document suggests that 2012 lobbying campaign was no grassroots movement, and that the retail and contraband organizations have for years been used as surrogates by the cigarette giant to promote its own interests.

The internal PowerPoint presentation describes deploying the convenience-store groups and the National Coalition Against Contraband Tobacco — both at least partly funded by the tobacco industry — to promote fears about contraband, push for action against it and keep taxes down on legal ones.

The document focuses at length on what it calls Project M&M: “Mobilizing municipalities to pressure for Big Government action.”

It then refers to cases where the convenience-store associations or anti-contraband group garnered media coverage and convinced dozens of local councils to pass those resolutions.

One slide in the August 2012 presentation suggests Imperial’s tactics worked, noting there had been no increases in tobacco taxes since 2008.

“Our campaigns have delivered some success.”

The document — a presentation made to parent company British American Tobacco — was leaked to a public-health researcher by a company “whistleblower,” said Melodie Tilson of the Non-Smokers’ Rights Association.

“This presentation makes it really clear,” she said. “They are orchestrating various organizations and using them basically as their puppets to ensure governments don’t enact effective tobacco-control measures.”

Groups like the convenience stores mislead the public and elected officials when they fail to make clear their close ties to Big Tobacco — whose products are one of the biggest sources of chronic disease and death in Canada, said Tilson.

She and other anti-smoking advocates agree that contraband cigarettes — whose cheap prices may be encouraging more smoking — are an important issue.

But they note the groups have not only called for enforcement action against the illicit trade, but opposed tax increases, bans on flavoured cigarettes and even the move to hide tobacco “power walls” in stores.

In fact, there is other evidence of their close links to the industry, including at least three former tobacco-company executives who are now leaders in the Ontario, Quebec and national convenience-store associations.

It’s a bit peculiar that some are hanging their hats on this particular PowerPoint presentation, in that it addresses contraband … which I think all of us should be concerned about
The CEO of the Ontario group, David Bryans, for instance, worked at what is now JTI-MacDonald until 2002, at one time as director of domestic sales. He has led either the Ontario or Canadian convenience-store trade groups since 2003.

But the current president of the Canadian Convenience Stores Association, Satinder Chera, denied his group acts at the behest of the tobacco industry.

Cigarette companies are among 60 national firms who are part of the association, representing the stores’ major suppliers from soft-drink makers to oil companies, he said.

The association lobbies on a “slew” of issues, and makes no apologies for opposing contraband, said Chera.

“It’s a bit peculiar that some are hanging their hats on this particular PowerPoint presentation, in that it addresses contraband … which I think all of us should be concerned about.”

Still — like colleagues from his and the other groups at various legislative committee hearings — he refused to disclose what proportion of the association’s funding comes from the tobacco industry.

Jeffrey Guiler, an Imperial Tobacco spokesman, said in a statement that the company works with a variety of groups on a “multitude of issues,” including contraband.

“This criminal activity harms honest small-business owners. They care about their business and we work with their umbrella groups to advocate for their best interests.”

The National Coalition did not respond directly to the suggestion it is part of Imperial’s lobbying campaigns, but noted in a statement that its 18 member organizations have convinced governments to act against “this growing (contraband) threat.”

The Imperial Tobacco presentation lists the company, the convenience-store groups and contraband coalition side by side as conducting various campaigns for years to oppose illegal cigarettes and to “freeze taxes.”

Then it asks “how to keep the pressure on” and answers by describing the 2012 Project M&M campaign involving the same players, but leaning on Quebec politicians during an election year and on municipalities in two provinces.

Through such “front groups,” the tobacco company essentially co-opted politicians and other “innocents,” charged Cynthia Callard of Physicians for a Smoke-Free Canada.

“If I was a councillor in any of those municipalities that had passed a resolution in good faith,” she said, “I would feel used.”

Tobacco industry to benefit from new vaping proposals

Tobacco companies are taking over the e-cigarette industry. Does this mean they’re changing their spots?

Why are tobacco giants welcoming the Government proposal on electronic cigarettes? Because they stand to benefit.

For the past decade the tobacco industry have been buying up e-cigarette manufacturers and suppliers and investing heavily in developing these product lines.

The three dominant tobacco players in New Zealand – Imperial, British American Tobacco, and Philip Morris – all have e-cigarette subsidiaries under their parent companies.

The Government are proposing nicotine e-ciggy sales should be R18, have constraints on advertising and be banned in smokefree areas.

All going to plan, nicotine-vapours will be part of New Zealand’s health policy to help Kiwis quit smoking. The Government are just trying to figure out how it would work.

Perhaps this is the dawn of Big Tobacco being the ‘good guys’ for once – but experts are not so sure.

The Government wants to clarify the law surrounding electronic cigarettes, Peseta Sam Lotu-liga says.

Imperial Tobacco are “certainly wanting to assist” in “shaping good, solid and sound regulations”, says its corporate affairs manager Louise Evans McDonald.

“We are very supportive of adults having the right to choose a product,” she said.

Imperial bought e-cigarette brand Blu in 2014, after member company Fontem Ventures bought Dragonite in 2013 for $75m.

Associate Health Minister Peseta Sam Lotu-liga says the proposals on e-cigarettes are not about regulating who can supply them.

However, the corporation has never applied to Medsafe to have its products available to those that want to quit smoking. It’s been waiting on the Government to take a “lead steer” on regulations, Evans McDonald said.

At this stage, Imperial was just focused on selling tobacco in New Zealand. It made a 50 percent jump in profit from sales of $553m for the year ending September 2015.


It’s “unlikely” the tobacco industry are just wanting to be ethically responsible with their investments, says Otago University pubic health co-head Richard Edwards.

They’re really getting “a big slice” of the consumer pie by investing in a market that’s grown exponentially in the past few years, he said.

“It may mean it’s a way for them to get more influence over governments, and policy and so on, by appearing to be not so bad after all.”

Take a look at the track record of the industry’s court actions, he said, such as trying to prevent graphic health warnings in Uruguay, and losing the argument to prevent plain packaging in the UK.

“They’re still trying to prevent effective policies to reduce the harm caused by smoking. So that’s why I don’t think there’s any evidence that the tobacco industry has changed its spots.”


When asked if tobacco companies stand to benefit from the Government proposal, Associate Minister of Health Peseta Sam Lotu-Iiga responded: “It is not a proposal to regulate who is involved in the provision of e-cigarettes.”

The proposal would treat e-cigarettes in a “similar fashion” to tobacco regulations, “which tobacco companies already operate within”, he said.

He had not had discussions yet with the tobacco industry on the issue.

Philip Morris, known for the Marlboro and Chesterfield cigarette brands, welcomed the consultation announced by the Government, said New Zealand general manager Jason Erickson.

He pointed out that advances in vaping technology was “transforming the tobacco industry”.

Philip Morris International teamed up with Altria to market e-cigarettes in 2013, selling these exclusively outside the US. In 2014, it bought Nicocigs to enter the UK market.


In 2013, British American Tobacco was the first international company to launch an e-cigarette (called ‘Vype’) in the UK.

Its website says it will continue to invest “substantially” in the research, development and commercialisation of a pipeline of products. They also plan to launch Vype in other markets.

It also says it was the first company to have a nicotine product licensed as a “medicine” – their nicotine inhaler.

“If we are successful in developing and bringing to market a range of products that meet the needs of adult smokers seeking less risky alternatives to cigarettes, this will help to meet the objectives of a number of leading public health professionals.

“And of course it will also make commercial business sense to us and our shareholders.”

Statistics about vapers in New Zealand are hard to come by because the nicotine products are illegal to sell.

However, in the UK and US there are already a high rate of users. It’s estimated that 2.8million adults in the UK are vapers, according to Action on Smoking and Health, correlating with a decrease in smokers. However two thirds of vapers were still smokers.

American vapers are counted as high as 10 per cent of the US adults, according to a Reuters poll last year.

British American Tobacco was contacted for comment on the Government’s proposal, but have not responded in time for this article.

Stub you: How a tobacco giant is bypassing packaging rules

IMPERIAL Tobacco has deployed a new trick to circumvent plain packaging legislation and it’s caught the Federal Government flat footed.

Packs of 20 Peter Stuyvesant cigarettes – manufactured by Imperial – are being sold with a lift out soft pack inside the olive boxes mandated by the Rudd/Gillard Government in 2011.

The move means people are able to throw away the cardboard box carrying warnings of cancer, gangrene, blindness and heart disease and instead use a shiny silver pack to carry their smokes.

Imperial Tobacco is inserting soft packs inside its packets of Peter Stuyvesant cigarettes to get around the Federal Government's plain packaging legislation.

Imperial Tobacco is inserting soft packs inside its packets of Peter Stuyvesant cigarettes to get around the Federal Government’s plain packaging legislation.

A spokeswoman for Imperial denied the company was breaking the law before adding: “we are providing a fresher, premium product to consumers.”

The Federal Department of Health said it would investigate the issue – after it was raised by Australian Regional Media with Federal Health Minister Sussan Ley.

Ms Ley and the department declined to comment further because the investigation is ongoing.

The Plain Packaging Act states that: “If the pack contains lining – the lining of the pack must be made only of foil backed with paper,” which the soft packs in question are.

And while there is also a section precluding tobacco companies from having fold out panels on their packets there is nothing that specifically addresses this latest move by Imperial.

The regulations which accompany the Act also fail to do this.

The maximum penalty for manufacturers who breach the plain packaging legislation is $36,000.

This is not the first time Imperial has used extras with Peter Stuyvesant cigarettes to entice smokers.

A report by Quit Victoria in 2011 mentioned the brand’s previous behaviour.

“In February 2006, one month prior to the adoption of picture‐based warnings on tobacco packages, Peter Stuyvesant cigarettes were being sold in ‘trendy retro‐style tins’ which, unlike soft packets of cigarettes with on‐pack printed warnings, had health warning stickers that were easily peeled off,” the report stated.

“Retailers reported that the tins were very popular with younger smokers.”

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Maori MP walks off set during TV tobacco debate

Maori Party co-leader Marama Fox called Imperial Tobacco a peddler of death and destruction.

Maori Party co-leader Marama Fox called Imperial Tobacco a peddler of death and destruction.

A fiery exchange on TV3’s The Nation this morning.

Imperial Tobacco’s Axel Gietz announced the company wouldn’t rule out a fight with the New Zealand government if plain packaging went ahead, before being attacked by Maori co-leader Marama Fox.

Fox joined Dr Gietz on the show and the MP became angry during the discussion, accusing the tobacco spokesman of “peddling death and destruction and misery on our people”.

She also compared Dr Gietz to Nazi propaganda chief Joseph Goebbels.

After 17 minutes, Fox took off her mic and walked off set.

Dr Gietz didn’t react or rise to Fox’s comments.

As Fox made her departing remarks, The Nation host Lisa Owen pleaded for civility, reminding the MP that Dr Gietz was an invited guest.

Earlier on the show. Dr Gietz said a lawsuit against the Kiwi government would be a last resort, but they would defend the right to use their brands.

Imperial Tobacco and British American Tobacco linked to child labour in Indonesia

HRW claims that tobacco companies should do more to eliminate child labour within they supply

Children reported working long hours in extreme heat and without wearing any type of protective equipment while handling tobacco Human Rights Watch

Children reported working long hours in extreme heat and without wearing any type of protective equipment while handling tobacco Human Rights Watch

Tobacco companies are not doing enough to prevent child labour in tobacco farming, according to Human Rights Watch.

Imperial Tobacco and British American Tobacco, two of the largest tobacco firms in the UK, both purchase tobacco from Indonesia. Both firms can’t guarantee that their tobacco is not made using child labour, according to a new report by the rights group.

Philip Morris International and four other multinational companies were also named in the research.

“Most companies do some monitoring and report on their results, but it is not enough. The industry should get to the farm level and inspect how exactly their tobacco is made and where it is coming from. Tobacco companies should not be profiting from child labour,” Margaret Wurth, children’s right researcher at Human Rights Watch told The Independent.

Human Rights Watch conducted research between September 2014 and 2015 in tobacco farming in four provinces in Indonesia and interviewed more than 100 children under 18.

HRW claims that tobacco companies should do more to eliminate child labour within they supply chain through meticulous investigation as well as adequate monitoring and external audit.


Indonesia is the world’s fifth-largest tobacco producer, home to more than 500,000 tobacco farms nationwide.

Hundreds of children as young as eight are endangering their health by participating in a range of tasks including planting applying pesticides or harvesting tobacco leaves by hand, HMW said.

Many suffered from nausea, vomiting and dizziness. These are all symptoms consistent with acute nicotine poisoning or ‘green tobacco sickness’, the group claims.

“After too long working in tobacco, I get a stomach ache and feel like vomiting. It’s from when I’m near the tobacco for too long,” Rio, a 13-year-old boy, working on tobacco farms in Central Java, told HRW in 2014.


He likened the feeling to motion sickness, saying: “It’s just like when you’re on a trip, and you’re in a car swerving back and forth.”

Children also reported working long hours in extreme heat and without wearing any type of protective equipment while handling tobacco.

Wurth said it is the companies’ responsibility to ensure no child under 18 is working in direct contact with tobacco in any form.

All the multinational companies mentioned in the report are committed to the International Labour Organisation (ILO) human rights conventions.

Under these conventions, the general minimum age for admission to employment or work is 15 years old (13 for light work) and the minimum age for hazardous work is 18 (16 under certain strict conditions).

Philip Morris International (PMI), which has six of the world’s top 15 international brands including Marlboro, has the best practices when it comes to transparency and monitoring procedures, HRW said.


“We are encouraged to be recognized for the transparency of our efforts to address hazardous farm working conditions for children on tobacco farms in Indonesia. Our Agricultural Labor Practices (ALP) programme is showing tangible progress to eliminate child labor on all farms where we source tobacco, yet we agree with HRW that there is much work still be to done,” Miguel Coleta, PMI sustainability officer said.

Imperial Tobacco told The Independent that the company takes its responsibilities in the purchasing and cultivating of tobacco leaf very seriously and expect its suppliers’ work practices to reflect the high standards set by the company. But it admitted child labour is a risk in agricultural supply chains.

“Given the complexity of this problem of course it not possible to provide this guarantee. We source tobacco from more than 40 countries worldwide, and as just one of the many stakeholders involved, we cannot be everywhere at once” it said.

“That does not stop us from continuing to work with all out stakeholders, including HRW, to acknowledge and address concerns. Child labour is totally unacceptable,” the company added.

British American Tobacco said the company and its Indonesian subsidiary Bentoel, take the issue of child labour extremely seriously.

“We do not employ children in any of our operations worldwide and make it clear to all of our contracted farmers and suppliers that exploitative child labour will not be tolerated. In Indonesia, however, children often participate in agriculture to help their families, and to learn farming methods and skills from their elders,” BAT said.

The International Labour Organisation (ILO) also recognises that in poor communities, often on small family farms, low risk work that doesn’t interfere with schooling and leisure time can be a normal part of growing up in a rural environment.

British American Tobacco said it is working with the Eliminating Child Labour in Tobacco growing foundation (ECLT) and other stakeholders in Indonesia to tackle exploitative child labour in leaf growing areas, and are conducting research in to identify existing efforts, and current and ongoing needs.

“The insights gained from this research will allow for a new approach to be developed to tackle child labour in the region,” the company said.

Wurth said companies have the responsibility to create alternative opportunities for children in the region but not in jobs that put their health at risk.

“Businesses are encouraged not only to adopt child labour policies but also to work with government and social partners to promote education and programs to support youth employment and job opportunities for young workers,” Wurth said.

Top tobacco companies lose plain packaging appeal

Britain’s High Court has rejected a legal challenge brought by the world’s top four tobacco companies against making plain packaging compulsory on cigarettes.

Philip Morris International, British American Tobacco, Japan Tobacco International and Imperial Brands had argued the law, due to come into force on Friday, unlawfully took away their intellectual property.

“It is wrong to view this issue purely in monetised terms alone,” the ruling said on Thursday.

“There is a significant moral angle which is embedded in the regulations which is about saving children from a lifetime of addiction, and children and adults from premature death and related suffering and disease.”

Plain packaging means a ban on all marketing on tobacco packages — including colours, logos and distinctive fonts — to try to make smoking less attractive, especially to young people.

Governments around the world are cracking down on the deadly habit that kills about 6 million people a year.

Australia became the first country to mandate cigarettes must be sold in plain packages when it passed a law in 2012.