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BAT to expand ‘glo’ smokeless tobacco sales in Japan from July

British American Tobacco (BAT) will expand sales of its “glo” tobacco-heating device to Tokyo and Osaka from July and roll it out nationwide by year-end, intensifying a battle with Philip Morris International for a share of Japan’s vaping market.

http://www.thestar.com.my/business/business-news/2017/05/30/bat-to-expand-glo-smokeless-tobacco-sales-in-japan-from-july/

Big tobacco firms are investing in alternative products as more people give up traditional cigarettes amid health concerns.

Japan has emerged as a popular testing ground, mainly for “heat not burn” tobacco devices, given e-cigarettes using nicotine-laced liquid are not permitted under the country’s regulations.

In fact, both glo and Philip Morris’ vaping device “iQOS” were launched in Japan and have limited sales outside.

Glo has been on sale in the northeastern city of Sendai since December and iQOS was rolled out across the country in April 2016. According to their manufacturers, the products have been so popular in Japan that supply has fallen short.

BAT, known for Kent and Lucky Strike cigarettes, will start selling glo in the western Japanese city of Osaka, Miyagi in the country’s northeast and Tokyo from July 3, its Japan president Roberta Palazzetti said.

“Our ambition is to be a leader in next generation-products in Japan,” Palazzetti said at a news conference on Tuesday.

Glo, like iQOS, uses tobacco packed in replaceable sticks.

Instead of burning, the battery-powered devices heat the sticks to generate vapour, which their makers say emit less harmful chemicals than conventional cigarettes.

Marlboro-maker Philip Morris estimates that HeatSticks, used in iQOS, had already cornered a 10% share of the Japanese market as of April, up from 7.6% in January.

Apart from Japan, iQOS is available in at least 19 other markets. Glo went on sale in Switzerland and Canada earlier this year.

The latest version of iQOS is priced at 10,980 yen (US$99), while glo is priced at 8,000 yen. Japan Tobacco Inc’s vaping product “Ploom TECH”, which is set to be sold in Tokyo from June 29, costs 4,000 yen.

The former state monopoly, which commands 60% of Japan’s cigarette market, has been lagging in the new product category, but says it is aiming to grab the top share of the country’s vaping market in three years.

Japan Tobacco plans to spend 10 billion yen in marketing as it expands the sale of Ploom Tech to the rest of Japan in the first half of 2018, CEO Mitsuomi Koizumi told Reuters on Monday. – Reuters
Read more at http://www.thestar.com.my/business/business-news/2017/05/30/bat-to-expand-glo-smokeless-tobacco-sales-in-japan-from-july/#0kPxiDzxQM2ex1jq.99

British American Tobacco nabs 40 per cent market share in Bulgaria with its purchase of Bulgartabac brands

British American Tobacco (BAT) has agreed to buy some of Bulgarian cigarette maker Bulgartabac’s top brands in a deal worth more than €100m (£84.8m).

http://www.cityam.com/262852/british-american-tobacco-nabs-40-per-cent-market-share

The move to buy Victory, Eva Slim and GD brands will bring BAT’s market share in the country to 40 per cent from just 12 per cent previously. The deal will include retail and distribution assets in the country and the wider Adriatic region.

BAT, which has operated in Bulgaria for 25 years, said it is proud to be making the biggest investment in the country this year.

“We are committed to the Bulgarian market and are very excited about this investment in a country which is increasingly demonstrating that it has a very bright future. This significant investment demonstrates our confidence both in Bulgaria and our future growth here,” said Richard Widmann, general manager of BAT’s central European cluster.

Subject to regulatory approval, the deal will be complete by mid-2017, BAT said.

A spokesperson for BAT added the transaction aligns financially and strategically with the business objectives for the central European region. The group will grow its business in Bulgaria and further enhance its position in the Balkans, following its acquisition of TDR in 2015.

Branded tobacco packaging rule riles BAT

The company warns a proposed ban on branded tobacco packaging poses a threat to British American Tobacco’s only cigarette plant in SA

https://www.businesslive.co.za/bd/companies/2017-03-02-branded-tobacco-packaging-rule-riles-bat/

British American Tobacco (BAT) says it may close SA’s only cigarette plant if plans to ban branded tobacco packaging are implemented.

BAT operates its eighth-largest factory in the world at Heidelberg, south of Johannesburg. The proposed new rules would threaten the financial viability of the operation, Joe Heshu, BAT’s head of external affairs in Southern Africa, said on Monday.

Plain packaging threatened the closure of the factory and “poses a threat to the viability of the legal tobacco industry in SA”, Heshu said. The move would make it harder to distinguish the cigarettes from black-market cigarettes and “the illegal market will benefit from having a cheaper product”, he said.

SA is cracking down on industries and products viewed as harmful to consumers, including through a planned tax on sugar-sweetened beverages, which Finance Minister Pravin Gordhan said in February would be implemented later in 2017.

SA had drafted a bill mandating plain cigarette packaging, which was expected to be made available for public comment soon, Elize Joubert, CEO of the Cancer Association of SA, said on Friday.

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“You don’t want to build jobs based on people who are sick,” said Joe Maila, a spokesman for the Department of Health. He declined to provide a time frame for the new rules.

Plain packaging of tobacco products, which has been championed globally by the World Health Organisation, requires standardised designs on cigarette packs.

BAT had cut 750 jobs in SA in two years as it grappled with an increase in illegal cigarettes, it said. The Heidelberg plant employs 1,100 people.

According to the Tobacco Institute of Southern Africa, the supply, distribution and sale of smuggled or counterfeit tobacco products have cost the government more than R21bn since 2010 in lost tax revenue.

Bloomberg

Forthcoming European Conference on Fighting Organised Crime and Terrorism 2017 Letter

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PMI, BAT units fined KRW 300 billion for hoarding

The Korean affiliate of Philip Morris International (PMI) and a British American Tobacco (BAT) subsidiary were fined a combined KRW 300 billion (EUR 239 million) for hoarding, the Yonhap news agency said.

http://www.tobaccojournal.com/PMI_BAT_units_fined_KRW_300_billion_for_hoarding.54071.0.html

The companies were accused of building up inventories in advance of a 2015 hike in excise duties. Sale of the hoarded cigarettes after January, 2015, allowed the companies to avoid tax on the profits, according to Yonhap. PM Korea was fined KRW 218 billion and BAT Korea KRW 89 billion, Yonhap reported. The ruling has been appealed, the news agency said.

Future of BAT’s Planned Nicotine Inhaler in Question

British American Tobacco ends the supplier deal for its long-delayed Voke inhaler

http://www.wsj.com/articles/british-american-tobacco-ends-voke-supply-deal-1483457898

British American Tobacco PLC terminated the supplier agreement for its long-delayed Voke nicotine inhaler, which the tobacco giant had promoted as setting it apart in the growing market for cigarette alternatives.

BAT in 2014 received a medicinal license for Voke from the U.K.’s Medicines and Healthcare Products Regulatory Agency, marking the first time a product from a major tobacco company had been licensed by a Western government.

Voke isn’t an electronic cigarette—it doesn’t heat liquid, use a battery or create vapor—meaning BAT expected it to be unaffected by regulations targeting such devices.

The product, meant to be sold as a cigarette-sized stick in a box containing 20 nicotine refills, was billed as a safer alternative to cigarettes—in the same way as nicotine gum or patches—and one that could be prescribed by doctors.

BAT, which licensed distribution, manufacturing and marketing rights to Voke from closely held patent developer Kind Consumer Ltd., had said it expected the product to be launched in the U.K. by the end of 2015. The London-based tobacco giant has delayed the launch several times, however.

On Tuesday, drug-delivery-device maker Consort Medical PLC said BAT was terminating its entire supply deal for Voke, effective immediately, which was a contractual right if the product hadn’t been commercially launched by the end of 2016.

The companies remain in “constructive dialogue” about the future of Voke, Consort said. A BAT spokeswoman declined to comment on whether the deal’s termination meant Voke was being permanently shelved. Kind Consumer also declined to comment.

In an interview in December, Kingsley Wheaton, BAT’s head of next-generation products, described Voke as “a very complex and challenging product to miniaturize at speed” and said the company was “still working through the many manufacturing challenges of Voke.”

Analysts hadn’t expected Voke to be a significant revenue driver for BAT, but they had seen the product as diversifying the Dunhill and Lucky Strike owner’s offerings within the market for cigarette alternatives.

Consort’s shares were down 3.3% in recent London trading, while BAT’s were down less than 0.1%. Consort said the termination didn’t materially affect its performance expectations for the fiscal year ending in April.

— Denise Roland contributed to this article.

Imperial stubs out plans for Supreme Court battle on tobacco packaging rules

Big Tobacco’s battle against the Government’s crackdown on cigarette packaging has taken a blow after a second company stubbed out plans to take its case to the Supreme Court.

http://www.telegraph.co.uk/business/2016/12/17/imperial-stubs-plans-supreme-court-battle-tobacco-packaging/

The decision by Imperial, the ­maker of Gauloises and Lambert & Butler cigarettes, leaves just two of the big four tobacco companies still considering whether to take the Government to the Supreme Court over the rules, which came into force in May.

Since then, cigarette firms have been required to manufacture products in standardised “plain” khaki packaging sporting prominent health warnings. All tobacco products sold in the UK from next May must comply with the rules.

Imperial joins Philip Morris International in reluctantly accepting the tobacco branding crackdown after a failed court challenge in May lead to an unsuccessful legal appeal last month.

A spokesman for Imperial told the Sunday Telegraph: “We maintain our firmly held view that plain packaging is not an effective tobacco control policy but we have chosen not to seek permission to escalate our legal challenge in the UK to the Supreme Court.”

British American Tobacco and Japan Tobacco International (JTI) will reveal “any day now” whether they will continue to fight the rules which came into effect in April, an industry source said.

But Imperial’s decision to walk away from the fight despite relying on the UK for around 15pc of its total earnings raises questions over the commitment of BAT which earns less than 1pc of its takings from Britain.

JTI also has a 15pc exposure to the market and has been the most outspoken against the legislation which its UK boss Daniel Sciamma has branded “commercial vandalism” which “sets a dangerous precedent for other targeted industries”.

Imperial said it plans to focus on maintaining its market share in the face of rising legislation and will invest more heavily in its specialist brands such e-cigarettes and non-tobacco vaping products.

ACCC proposes to deny authorisation for tobacco companies

The Australian Competition and Consumer Commission has issued a draft determination proposing to deny authorisation to British American Tobacco, Imperial Tobacco, and Philip Morris (the tobacco companies) to jointly stop supply to retailers or wholesalers they believe are supplying illicit tobacco.

http://www.accc.gov.au/media-release/accc-proposes-to-deny-authorisation-for-tobacco-companies

The ACCC considers that having the three dominant tobacco companies working together, sharing information, and making decisions about whether or not to supply particular retailers raises competition concerns.

“The ACCC is concerned about the potential for the sharing of information broadly, and that, for example, the proposed arrangements could be used to selectively target retailers that stock competing brands. This could result in detriment to businesses that may be wrongly or mistakenly subject to a joint decision of the applicants to cease supply, without any opportunity for independent review of that decision,” ACCC Chairman Rod Sims said.

These three tobacco companies are the major suppliers of legal tobacco products in Australia. They have proposed the arrangements to reduce the supply of illicit tobacco in Australia.

“While we agree that reducing illicit tobacco sales is in the public interest, we are not satisfied these proposed arrangements would reduce trade in illicit tobacco sufficiently to offset the likely detriments,” Mr Sims said.

The ACCC expects to release its final decision in February 2017.

Further information about the application for authorisation is available on the ACCC Authorisations Register.

BAT Representative Letter on Graphic Health Warnings

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Representative of BAT on Proposal to Change Graphic Health Warnings

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