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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.

Japan Tobacco playing catchup as nation takes to vaping in big way

http://www.japantimes.co.jp/news/2016/08/31/national/japan-tobacco-playing-catchup-nation-takes-vaping-big-way/

Competition to sate Japanese nicotine addicts is heating up.

Philip Morris International Inc. and Japan Tobacco Inc. have rolled out products that are heated — not burned — in battery-charged devices, seeking to appeal to smokers who want their nicotine fix without the usual smell and smoke. The move, part of the rapidly growing global vaping trend, has created a bright spot on Japan’s otherwise bleak tobacco market.

The approach is winning devotees because it avoids the part of smoking that involves setting tobacco on fire and inhaling the smoky fumes. In fact, demand for the cigarette alternatives — while still tiny compared with the paper-rolled type — has grown faster than manufacturers had anticipated, leaving Japan Tobacco grappling with a supply bottleneck and ceding ground to Philip Morris, the world’s largest tobacco company.

“Our goal for Japan is to switch every consumer we have to this,” said Paul Riley, who joined Philip Morris in Sydney in 1988 and became its Japan unit’s president last September. “For me, it’s like a no-brainer. The biggest thing is we know that smoking kills. If we’ve got an alternative to that, that’s a pretty good reason to switch.”

$50 BILLION MARKET

Sales of electronic nicotine delivery systems are booming. Within a decade, the industry has grown from a single manufacturer in China in 2005 to 466 brands on the market, according to the World Health Organization.

More than $50 billion may be spent annually on the devices worldwide by 2030, WHO says, noting “concern about the role of the tobacco industry in this market” and the potential for the products to serve as a “gateway to nicotine addiction.”

Most of the products haven’t been tested widely enough by independent scientists to gauge any harm-reduction benefits and to determine whether they can help smokers quit. Still, the reduced exposure to toxicants of well-regulated devices by adult smokers as a complete substitution for cigarettes is likely to be less toxic for the smoker than conventional cigarettes or other combusted tobacco products, the Geneva-based WHO said in a September 2014 report.

Companies have seized on that in Japan, where the smoking rate among adults has been falling for decades, dropping below 20 percent in 2014 — the lowest since annual surveys began in 1965. Cigarette sales declined 0.7 percent to $32.1 billion in Japan last year, while vapor-producing products increased fivefold to $4.6 million, according to Euromonitor International.

Japan Tobacco shares have dropped about 14 percent so far this year, in line with the decline of the MSCI Japan Food, Beverage and Tobacco Index.

“Tobacco companies are seeking the chance for new opportunities in the tobacco market in Japan,” said Akari Utsunomiya, a research analyst with Euromonitor in Tokyo.

So-called electronic cigarettes have shown “strong potential,” she said in an email. “The product is seen as extremely hygienic in a country that values both cleanliness, as well as being seen as ‘more healthy’ due to the lack of smoke compared to cigarettes.”

Philip Morris began selling its heat-not-burn vaporizer, called iQOS, nationwide in Japan in April after testing it in selected sites from 2014. Monthly sales in the 10 countries in which it’s sold now top 250,000, with Japan accounting for more than 95 percent.

The ¥9,980 device, which works by inserting a tobacco-containing HeatStick into a cigar-shaped heating device, has more than 6 percent of the broader cigarette market in Tokyo, according to Phillip Morris’s Riley, who expects that share to double in the next year. A pack of 20 Marlboro-brand HeatSticks sells for ¥460 — the same as a traditional pack of 20 Marlboro cigarettes.

‘GAME CHANGER’

Tetsuo Yamamoto, a 40-year-old Tokyo designer, said he took up using iQOS to help him quit his 20-year-long smoking habit. Now, he says he can’t stand the bitterness and smell of paper cigarettes. “I’m relieved as my wife doesn’t complain any more if I take a puff in front of her,” Yamamoto said.

“It’s a game changer,” said Masashi Mori, an equities analyst at Credit Suisse Group AG in Tokyo, who sees vapor-producing products eventually gaining a 10 percent foothold in Japan’s tobacco market. “There is no doubt that iQOS is taking the lead, and it looks like Japan Tobacco is still testing the water from both the production and marketing perspective.”

Japan Tobacco began selling its Ploom Tech system in March in about 900 convenience stores and retail outlets in Fukuoka Prefecture as well as via an online store. The pen-shaped, battery-powered device uses vapor from heated liquid to deliver the taste and other properties of granulated tobacco leaves in a capsule.

A week after its release, Ploom Tech shipments were suspended as demand exceeded supply. When deliveries resumed, about 100,000 online orders were received in around 15 days, Executive Deputy President Hideki Miyazaki told reporters in Tokyo in August.

SUPPLY CRUNCH

“The market response was tremendous — beyond our expectations — and we are still having to limit our product supply,” said Naohiro Minami, Japan Tobacco’s chief financial officer, on an Aug. 2 conference call with analysts and investors, according to a transcript.

The device costs ¥4,000 and is used in combination with one of three types of tobacco capsule from the company’s best-selling Mevius brand. A pack of five capsules sells for ¥460, ¥20 more than a 20-stick pack of the brand’s traditional cigarettes.

Nicotine-laced liquid — commonly used in e-cigarettes popular in the U.S. — is categorized as a pharmaceutical ingredient in Japan, where it’s strictly controlled. In contrast, vapor-producing products that use tobacco leaves, such as iQOS and Ploom Tech, are viewed as pipe tobacco, while nonnicotine e-cigarettes aren’t regulated in Japan and are available even to minors.

VAPING APE

Keiichi Ando sought to catch the emerging vaping wave in Tokyo two years ago, opening a Vaping Ape store in Shibuya, a shopping and entertainment district popular with teenagers.

While none of the more than 150 varieties he stocks contains nicotine, sales have been increasing gradually, Ando said. On a visit to the fog-cloaked shop last week, one customer said switching to vaping helped him quit using tobacco.

Japan Tobacco is already feeling the heat. On Aug. 1, it cut its domestic sales target for paper cigarettes by 1 billion units to 107 billion for the year ending this December to reflect competition from the vaped alternatives after suffering a 7.9 percent slide in the volume of stick sales in July.

With plans to invest “several tens of billions of yen” in tobacco-vaping over the next four years, Japan Tobacco aims to become the market leader, Miyazaki told reporters.

He didn’t say when Ploom Tech would be released nationwide or overseas.

“A lot of our customers are still waiting for Ploom Tech, so we will boost production as soon as possible,” said Masanao Takahashi, director of the company’s emerging products marketing division, in an interview. “They just continue to sell out at shops in Fukuoka.”

Philip Morris International is Dominating the E-Cigarette Revolution in Japan

Philip Morris International Inc. (NYSE:PM) is making big inroads in the Japanese tobacco market with its iQOS smokeless tobacco e-cigarettes, which could drive big revenues in a country with 20 million smokers.

http://etfdailynews.com/2016/08/12/philip-morris-international-is-dominating-the-e-cigarette-revolution-in-japan/

In what may be an early vindication of Philip Morris’s e-cigarette strategy, the iQOS accounted for 2.2 percent of Japan’s tobacco sales in the quarter ended June 30, a company spokesman said.

That share had climbed to 2.7 percent by the end of June after Philip Morris rolled out the 9,980 yen ($98.53) electronic smoker in late April accompanied by “HeatSticks”, which cost the same as regular cigarettes.

“The figures clearly show that iQOS is stealing a chunk of the rolled tobacco market,” said Masashi Mori, analyst at Credit Suisse Securities in Tokyo. Japan’s overall cigarette sales in June shrank 5.2 percent.

Unlike traditional cigarettes, e-cig sales are jumping around the world as former smokers flock to what is widely considered a safer alternative to tobacco. The e-cig market saw $8 billion in sales in 2014, more than five times 2010′s total.

Philip Morris is investing heavily in the new technology and wants to expand its reach to many other nations soon.

Philip Morris plans to widen sales of iQOS to 20 countries by the end of the year.

Former state tobacco monopoly Japan Tobacco, which has 60 percent of its domestic market, is struggling to counter the challenge with its own device. JT’s electronic cigarette stick, dubbed the Ploom TECH, creates a vapor from a liquid that is passed through granulated tobacco.

Philip Morris International shares rose $0.49 (+0.50%) to $99.35 in Friday afternoon trading. The largest U.S.-based international seller of tobacco products has seen its stock rise 13% year-to-date, nearly doubling the performance of the S&P 500 in the same period.

pmnysebats

Protests call for tobacco operating license reversal

‘SELLING POISON’:Allowing a Japanese tobacco plant to operate would encourage domestic smoking and turn Taiwan into an export hub for cigarettes, protesters said

http://www.taipeitimes.com/News/taiwan/archives/2016/08/05/2003652492

The Executive Yuan should revoke the operating license for a massive new Japanese-owned tobacco factory, anti-smoking advocates said yesterday, blasting the government for approving the investment and providing subsidies.

“We do not want Taiwan to become a center for selling poison,” said Taiwan Medical Alliance for the Control of Tobacco founder Wen Chi-pang (溫啟邦), a professor at China Medical University, alongside 20 protesters from the John Tung Foundation and other groups outside the Executive Yuan in Taipei.

The protesters said that the Ministry of Finance should not have issued an operating license to Japan Tobacco International’s new factory in the Tainan Technology Industrial Park.

Japan Tobacco’s NT$9.2 billion (US$290.1 million) investment is reportedly to produce enough cigarettes to cover one-third of local consumption, becoming the nation’s second foreign-owned tobacco factory, following the establishment of an Imperial Tobacco factory in Miaoli County in 2009.

The groups say that the Japan Tobacco factory will encourage domestic smoking, while turning the nation into a base for exporting cigarettes to an export base to Southeast Asia because of favorable government incentives.

“The government says it is bringing in foreign investment, but a lot of the funds are coming out of taxpayers’ pockets,” foundation tobacco control division head Lin Ching-li (林清麗) said, adding that the government should not have granted the factory use of a 7.6-hectare site, as well as utility incentives and property tax exemptions.

Japan Tobacco will be able to use the factory to skirt cigarette tariffs, Lin said.

“Japanese firms plan to turn Taiwan into a huge factory base, but the government was too stupid to foresee this ‘beggar thy neighbor’ behavior,” foundation chief executive officer Yao Shi-yuan (姚思遠) said.

Yao criticized the government for allowing Japanese investment in the tobacco industry using the Arrangement for the Mutual Cooperation on the Liberalization, Promotion and Protection of Investment (投資自由化促進及保護協議) negotiated in 2011.

He said the government could still revoke the company’s license, as long as it provided compensation.

Lin Hsin-ho (林信和), a professor of law at Chinese Culture University, said that allowing the factory to begin operations could oblige the nation to allow similar investment from other nation’s according to the WTO’s most-favored-nation status provisions.

Lin added that the government’s approval breached the spirit of the Statute for Investment by Foreign Nationals (外國人投資條例), which forbids foreign investment in industries that have an adverse effect on public health.

Japan Tobacco faces stiff challenge in trying to light up sales for discount brand

http://www.journalnow.com/business/business_news/local/japan-tobacco-faces-stiff-challenge-in-trying-to-light-up/article_b7e50712-471d-5066-bf6e-84ab3f5e47c6.html

The U.S. subsidiary of Japan Tobacco International is aiming to add more toes to its footprint through testing the parent company’s global discount cigarette brand in the Triad and Carolinas.

LD by L. Ducat comes in red, blue, green and silver packs in up to 10 styles. Its $2.81 price per pack is between 60 to 80 cents lower than the top discount brands of R.J. Reynolds Tobacco Co. (Pall Mall) and Philip Morris USA (L&M).

LD packs have been available on a limited basis since March, including at Hanes Mart Discount Tobacco at 370 E. Hanes Mill Road in Winston-Salem.

JTI describes LD as “a brand with reliable quality at an everyday price. It’s the No. 1 international value cigarette brand in the world.”

“It offers a competitive price and a high-quality product, giving a better choice to adult smokers.”

The marketing and selling of LD, which originated in Russia, represents a full-circle U.S. branding initiative by JTI.

The subsidiary was formed in 1999 as part of Japan Tobacco Group’s $8 billion purchase of the non-U.S. rights to Reynolds’ cigarette brands, including Camel and Winston.

JTI’s other U.S. brands are discounts Wave and Wings. Altogether, JTI has a 0.34 percent U.S. market share.

By comparison, Pall Mall has the No. 4 overall brand at 7.8 percent market share.

There also are a number of second- and third-tier manufacturers, whether branded or private label, that have focused on the discount market as many smokers sought — and stuck with — a lower-cost option during the economic downturn that began in fall 2008.

When asked why it is marketing and selling LD in just the Carolinas, JTI said that “with a deep tobacco history, the Carolinas are the ideal place to introduce LD by L. Ducat.”

“After evaluating LD by L. Ducat’s success in North and South Carolina, JTI USA will look into launching the brand nationwide,” possibly as early as 2017, the company said.

Competitor to Pall Mall

Sales of LD have been limited primarily because many convenience stores and tobacco shops participate in the Reynolds every-day-low-price program.

The program is a voluntary retailer contract that provides pricing discounts to retailers of up to $4 a carton, or 40 cents a pack, off Reynolds’ best-selling brands.

In order to get the discount, retailers must agree that Pall Mall will be the lowest-priced cigarette in their stores. The current participation rate is 60 percent.

Bonnie Herzog, a Wells Fargo Securities analyst, projects Reynolds could reach 75 percent participation now that it had tied access to Newport, the top-selling menthol brand, to the program.

Jacob McConnico, a spokesman for R.J. Reynolds Tobacco Co., said the manufacturer is aware of the LD entrance into the Carolinas.

“We are confident in Pall Mall’s competitive position that offers adult smokers the value proposition of long-lasting taste and premium quality tobacco at an attractive price,” McConnico said.

Pat Shehan, owner and operator of the Tarheel Tobacco retail chain, said he does not carry LD because of his participation in the Reynolds program.

“Their representatives called on me a couple of weeks ago and said they were having moderate success,” Shehan said.

“I think it will do well in non-EDLP stores, in part because they have hired former Commonwealth Brands sales representatives, so they have the retail and wholesale contacts to make it easier to gain distribution.”

Market share goals?

JTI did not provide a response when asked about its U.S. market share goals.

It entered the U.S. electronic cigarette sector in 2015 when it bought Logic Technology Development LLC. At last count, Logic was fourth in market share at 14.4 percent.

By comparison, R.J. Reynolds Vapor Co.’s Vuse is the top-selling e-cig at 35.7 percent.

Japan Tobacco’s interest in the U.S. market may be bigger than just introducing LD.

There have been analyst and media reports since November that Imperial Brands Plc may be up for sale, with British American Tobacco Ltd. the potential top suitor in a deal possibly worth $67 billion.

Imperial spent $7.1 billion in 2015 to buy four U.S. traditional cigarette brands (Kool, Maverick, Salem and Winston) and blu eCigs from Reynolds American Inc. and Lorillard Inc.

In the deal, Imperial’s ITG Brands LLC subsidiary acquired the bulk of Lorillard’s operations, including a Greensboro workforce of about 1,700 and about 2,900 overall.

ITG announced April 22 plans to eliminate 375 production jobs in Greensboro — about one-third of the production workforce — in preparation for the June 24 end of a reciprocal manufacturing agreement with Reynolds.

“We’ve long believed there would be further consolidation in the global tobacco industry with the four leading players reduced to three,” Herzog said. “A deal is very probable, and the most likely scenario is that BAT acquires Imperial.”

In a BAT acquisition scenario, Herzog said Imperial would let go of ITG Brands in a tax-free spin to shareholders and also divest brands in certain global markets to address antitrust concerns. Herzog said a potential spin transaction could command a valuation of up to $12 billion.

Internationally, Imperial is a distant fifth at 4.9 percent. China National Tobacco, which is privately held, owns 44.2 percent of the global market share, according to research firm Euromonitor. Among publicly traded companies, Imperial trails Philip Morris International (14.6 percent), BAT (10.7 percent) and Japan Tobacco (8.9 percent).

BAT likely would need to sell off ITG Brands to gain U.S. regulatory approval since it owns 42 percent of Reynolds.

Imperial’s U.S. market share jumped from 4 percent to 10 percent through the Reynolds-Lorillard deal, enabling ITG Brands to replace Lorillard as the smallest member of the Big 3 U.S. manufacturers.

However, since the close of the deal, ITG Brands’ market share has slipped to 7.7 percent, according to Herzog’s research. Imperial and ITG Brands said they are increasing Winston marketing to bolster U.S. sales.

Another, less likely, possibility is ITG Brands being bought by Liggett Vector, if it has the financial means to acquire a larger rival. Liggett has a 3 percent U.S. market share.

Advocates gets tobacco industry rep. removed as speaker at UN meeting

http://www.fctc.org/fca-news/opinion-pieces/1428-advocates-gets-tobacco-industry-rep-removed-as-speaker-at-un-meeting

Quick action by tobacco control advocates resulted in a representative from Japan Tobacco International (JTI) being dropped as a speaker at a meeting on investment policy hosted by the United Conference on Trade and Development (UNCTAD).

Mr Ulle Geir, JTI director of international trade, was to speak at UNCTAD’s biennial investment forum in Kenya on 19 July. However, as advocates pointed out in email messages to UNCTAD days before the meeting, it is highly inappropriate for the tobacco industry to speak at events focused on policy-making, for various reasons.

As explained in a letter to UNCTAD signed by two dozen FCA members, tobacco use is a barrier to development, costing millions of lives and billions of dollars a year.

Strengthening implementation of the FCTC is one of the ‘means of implementation targets’ (target 3a) included in the United Nations Sustainable Development Goals (SDGs) that were adopted in September 2015.

In 2011, the UN General Assembly recognised “the fundamental conflict of interest between the tobacco industry and public health”. This was a clear reference, by world leaders, to FCTC rules on protecting policy-making from tobacco industry interference.

‘Fundamental, irreconcilable conflict’

Article 5.3 of the FCTC, requires governments to protect “public health policies with respect to tobacco control” from the “commercial and other vested interests of the tobacco industry”. Principle 1 of Article 5.3 guidelines, unanimously adopted in 2008, states: “There is a fundamental and irreconcilable conflict between the tobacco industry’s interests and public health policy interests.”

The UN Task Force on NCDs, of which UNCTAD is a member, is currently developing a model policy for United Nations organisations on preventing tobacco industry interference. The policy is expected to contain measures based on FCTC Article 5.3 and its guidelines.

In its letter, FCA called on UNCTAD, as well as other UN agencies and bodies, to help develop that policy, and to adopt it without delay. It also sought confirmation that, until such a policy is adopted, UNCTAD will quickly put in place, structures and procedures to prevent any tobacco industry employee or representative from acting as a speaker or participant at any event organized by UNCTAD.

Japan’s JT Buys 40% Stake In Ethiopian Tobacco Monopoly For A Record $510M

http://afkinsider.com/129796/129796/

Japan Tobacco Inc. (JT), the seller of Camel and Winston cigarettes outside the U.S., announced on Sunday it had won a bid to buy 40 percent of the National Tobacco Enterprise S.C. from the Ethiopian government for a record $510 million.

JT said in a press release (in Japanese) that it has signed a share purchase agreement of $510 million with the Ethiopian Government for 40% of the total shares in the country’s tobacco monopoly after submitting a successful bid last May.

“The JT Group is delighted to be entering the Ethiopian market where we currently have no presence,” said Mutsuo Iwai, executive vice president and president of the tobacco business.

“Ethiopia will be an important expansion of our geographic footprint in emerging markets. As the largest shareholder, we expect to be able to exert significant influence over the direction of the company. The country is currently experiencing double-digit economic growth, with industry volume also expected to continue to increase.” Iwai added.

The more than half a billion dollar bid by the publicly listed Japanese company was the highest offer ever made for any Ethiopian state-owned enterprise, Addis Fortune reported.

It was more than double its closest rival British American Tobacco – maker of brands such as Rothmans and Dunhill, which offered $230 million for the same stake, Bloomberg reported in May.

Other companies that were involved in the bid included Phillip Morris International, known for Marlboro and a Chinese company—China Logistics Company Ltd. They were among the five bidders, including an unnamed individual from Niger.

The National Tobacco Enterprise S.C., a company established in 1942 as the Imperial Ethiopian Tobacco Monopoly, is one of the four public companies the Ethiopian government said it will privatize in 2016.

The country’s Ministry of Enterprises said in March it plans to sell some of governments shareholding in Bahir Dar Textile S.C., Kombolcha Textile S.C., National Tobacco Enterprise S.C. and Ethiopian Crown Cork and Can Manufacturing Industry S.C.

National Tobacco Enterprise S.C. was first privatized in 2008 when 22 percent of its shares were sold to a Yemeni company, Sheba Ethiopia Investment Plc, for $35 million.

Sheba’s bid to beef up its share by 20 percent was however disqualified after its representatives arrived late for the bid opening meeting in May, Addis Fortune reported.

With JT’s purchase Sheba’s stake in the Ethiopian company is now valued at $255 million, seven times the amount they paid in 2008.

In 2012, Ethiopia offered to sell over 40 public enterprises, including several large farms, a winery and a big hotel, over the next three years, Reuters reported.

While it managed to sell some firms, several other still remain unsold due to lack of interest from foreign investors.

With return of Big Tobacco to Myanmar, smoking rates on the rise

Since the return of Big Tobacco to Myanmar en masse in 2013, smoking rates have increased markedly. Tobacco control experts warn that the firms’ sophisticated strategies are likely to push more people into the clutches of addiction

http://sea-globe.com/myanmar-big-tobacco/

From the backseat of a traffic-stranded cab attempting to travel from Yangon’s airport to a city hotel, Myanmar’s burgeoning love affair with cigarettes quickly starts coming into focus.

Vendors peer into car windows, peddling cigarettes. Calling one over, the cab driver buys two individual filter tips and lights up, eagerly espousing the low cost of his favourite brand, Red Ruby.

In the city’s central downtown area, kiosks selling everything from a single brand to a staggering array of tobacco products are situated on nearly every street corner. And the smokers aren’t far behind. Cigarette vendor Sein Win, 46, is adamant that more people have taken up the habit in recent years, although this has not translated into an increase in customers – he blames the sheer number of salespeople trying to ride the boom. “My sales rate is lower than before because there are new vendors opening,” he said.

While many in the country have traditionally preferred chewing betelnut or smoking cheroots – local cigars that turn popular teashops into a haze of smoke as customers puff away with aplomb – Myanmar is currently seeing a rapid increase in the popularity of manufactured cigarettes as political change swings open the country’s doors to investment.

Tobacco firms were among the first global brands to descend upon Myanmar in 2013 after its quasi-civilian government began implementing reforms. Japan Tobacco International (JTI), British American Tobacco (BAT) and the state-owned China Tobacco now all have a presence there.

It’s little wonder. According to the WHO, 45% of adult males and 8% of women used some form of tobacco each day in Myanmar in 2012, although just a tiny fraction – an estimated 4% – smoked cigarettes, meaning that a large potential market was ripe for the taking. Meanwhile, in 2013, market research firm Euromonitor identified Myanmar as one of the top 20 potential markets for consumer goods companies globally, on account of increased investment along with population growth – and named tobacco as one of the seven key industries in the nation of about 55 million people.

According to Than Sein, the president of People’s Health Foundation in Myanmar, there are now 62 brands of cigarettes clamouring for a share of the country’s tobacco market, compared to the 10 or 15 brands that were available in the 1990s.

Judith Mackay, a senior advisor at Vital Strategies who has been a leading advocate for tobacco control for 30 years, said that as smoking rates have fallen in developed countries, Big Tobacco has turned its attentions to new horizons. “They really tend to go all out to get any smokers they can,” she said. “The low- and middle-income countries are particular targets.”

“Typically, these markets have high smoking rates and, in many cases, are trying to attract investment,” added Ross Mackenzie, a public health expert at Macquarie University in Sydney. “Transnational tobacco corporations take advantage of globalised production and distribution networks and economies of scale to promote their brands.”

BAT, which had a joint venture with a military-owned company until leaving Myanmar in 2003 following a concerted campaign by overseas human rights activists, has invested $50m to build its factory on the outskirts of Yangon to begin producing its London brand of cigarettes – the top-selling brand before Red Ruby took its mantle in the intervening years.

“The foreign tobacco companies bring in very sophisticated advertising, promotion and sponsorship that the [local] monopolies don’t have”

The return of BAT, and establishment of others, is “highly significant” in terms of changing cigarette consumption habits, according to Mackay, who said these transnational tobacco companies were on a different level to government-affiliated firms and monopolies. “The foreign tobacco companies bring in a new scenario of very sophisticated advertising, promotion and sponsorship, which in general the monopolies don’t have; they bring with them much more sophisticated obstruction to legislation.”

According to May Myat Cho, the Myanmar country coordinator for the Southeast Asia Tobacco Control Alliance (SEATCA), official sentinel surveys clearly show that male smoking rates dipped from a peak of 48.6% in 2003, the year BAT left Myanmar, before climbing to 46.8% when the firm returned in 2013 and increasing sharply to 60.3% last year.

Similarly, the surveys showed female smoking rates were at 13.7% in 2003, but this had increased to 18% in 2015.

Women and young people, in particular, are in the crosshairs for tobacco firms. Vendor Sein Win said most of his customers are aged between 15 and 20, but his youngest is just ten years old. “There is no age limitation for selling cigarettes here. If an underage person comes and asks to buy cigarettes, we have to sell to them. We don’t want any problems.”

He is mistaken: Myanmar banned the sale of tobacco to minors aged under 18 in 2006, when the government introduced a tobacco control law that also prohibits all forms of tobacco advertising, the sale of individual cigarettes and requires health warnings be printed on tobacco products.

However, according to experts, Big Tobacco is using myriad tactics to circumvent this legislation, which, despite government efforts, is not being implemented by authorities on the ground. “They take advantage of limited and/or poorly [enforced] tobacco control regulations in aggressive marketing campaigns that include some combination of traditional advertising and sponsorship of sports, music and cultural events, which can also lead to access to policymakers,” MacKenzie said of the firms’ strategies globally.

In a recent interview with Frontier Myanmar magazine, BAT Myanmar managing director Rehan Baig denied that his company was using advertising in the country. SEATCA’s Myat Cho disputed this, saying that as well as selling and distributing cigarettes at teashops and restaurants, “they are also distributing complimentary napkins, ashtrays and lighters at teashops, and actually with the brands [visible]”. She added that cigarette kiosks often display promotion posters and some companies, she cited JTI in particular, were known to distribute free cigarettes at major religious festivals – both practices that are outlawed.

One of the more insidious, less-well-known avenues used by Big Tobacco to influence government policy is via the International Tax and Investment Centre (ITIC), which Mackay described as a “front organisation” for the alcohol, tobacco, oil and food industries that sets up secretive meetings with government officials worldwide to pressure them into keeping taxes low. She added that there is plenty of evidence the organisation is active in Myanmar.

“They have their meetings in the House of Lords in London; they’re a very, very powerful group of retired finance ministers and customs officials, and they’re using other front organisations and challenging governments. And when they get into a country, particularly, it seems to get even worse,” she said. “What they do is, they work with the ministry of finance, so the health people often… have no knowledge of them,” she added.

Despite this, Myat Cho is optimistic that the country’s new health minister, Myint Htwe, a former director of the non-communicable diseases department at the WHO’s regional office, will draw upon his experience to tackle tobacco use in Myanmar. Last year, the government increased taxes on tobacco products from 50% to 60%, and pictorial health warnings – shown to be effective in deterring smokers in other countries – are due to be introduced in September.

“The tobacco industry already wrote letters to the Ministry of Health to delay the implementation, so we’re expecting those challenges, but we’re working closely with the ministry and providing our assistance [with] whatever they need, so I think it will be effective,” she said. “And also the taxes on tobacco changed from ex-factory price to retail price, so the revenue will be increased, but whether it will be immediately effective on the reduction of smoking – they need to increase the tax higher.”

Regardless, in-country production, which makes cigarettes much cheaper and more accessible than foreign imports, is ramping up. At the height of military rule in the 1990s, approximately 500m sticks were produced in the country annually, according to official government statistics provided by SEATCA. This jumped to 3 billion by 2005, and it is estimated that 5 billion were manufactured last year. An increasing tide of production is difficult to stem, especially while the novice government has serious political, economic and social challenges it must now manage.

“The difficulty is that tobacco tends to be a rather low priority” in comparison to other issues, said Mackay. “The other difficulty is that, up to now, countries like Myanmar have been fighting infectious diseases such as TB, malaria and maternal mortality and infant mortality. They have no or very little experience dealing with the sophisticated tobacco companies; it’s a different paradigm, dealing with a vector that is not a mosquito, that is not a bacteria.”

The upshot, she added, is that a growing number of people in Myanmar are likely to take up cigarettes or swap their traditional tobacco for manufactured filter tips. “We’re certainly not talking within a year or two, but I would suspect if you were to review this in ten years’ time, you certainly might find a shift in the cigarettes people are smoking, particularly the young, and particularly the better educated; that would be the pattern.”

University student Kaung Htet Lin, 16, started smoking about a year ago amid peer pressure. Now, he struggles to kick the habit. “I want to quit, but I can’t because if someone smokes in front of me, I want to smoke and inhale too,” he said.

And in his changing preferences – from a local brand to one owned by tobacco giant BAT – could lie an early glimpse of the future: “Mostly I smoked Red Ruby; now I’m smoking Lucky Strike.”

Smoke gets in your eyes

The long, strange history of global tobacco use

Some smoke it, some chew it, others curse it. Regardless of its toxic health effects, tobacco has been a global pastime for centuries. Its origins are in the Americas, where the World Health Organisation (WHO) claims cultivation of the plant began as early as 6,000 BCE. Within 150 years of European settlers arriving to the ‘New World’, the tobacco plant was being used around the globe.

While in past centuries snuff and cigars were among the more popular methods of enjoying tobacco, the early 1900s ushered in mass cigarette production, and the modern cigarette was born in 1913 with R.J. Reynolds’ Camel brand. Smoking subsequently grew in popularity throughout the 20th century.

In 1951, however, the first large-scale study of the relationship between smoking and lung cancer was produced, followed by mounting evidence of the associated health risks. Smoking rates in industrial countries have dropped off significantly over the past 60 years, but tobacco use in the developing world remains a major health concern. The WHO predicts that tobacco use will cause 8.4 million deaths annually by 2020, 70% of which will occur in developing countries.

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Top tobacco companies lose plain packaging appeal

http://www.newshub.co.nz/world/top-tobacco-companies-lose-plain-packaging-appeal-2016052015#axzz49CBnbBvf

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.

Reuters