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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.


Cigarette firms lose appeal on UK packs

TOBACCO giants have lost a legal challenge in London against imposing new rules for standardized packaging due to come into force today, meaning Britain will join a growing list of countries to do so.

Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International had challenged the legality of the new regulations, which mean all new cigarette packs sold in Britain will have to be olive green.

Shops will have 12 months to sell existing packets.

“The regulations were lawful when they were promulgated by parliament and they are lawful now in the light of the most up-to-date evidence,” judge Nicholas Green said in yesterday’s ruling.

Cancer Research UK’s Chief Executive Harpal Kumar said: “This is an important milestone in our efforts to reduce the devastating toll that tobacco exerts on so many families every day.

“It’s the beginning of the end for packaging that masks a deadly and addictive product,” he said.

The European Court of Justice earlier this month ruled that the Tobacco Product Directive is lawful.

Under the directive, health warnings must cover 65 percent of the front and back of every pack of cigarettes, with extra warnings on the top.

The directive also allowed Britain to go further and introduce its own regulations requiring all packaging to be olive green.

A British health ministry spokesman said: “Smoking … kills over 100,000 people every year in the UK.”

Tobacco firms vow to fight on against plain packaging following High Court defeat

Two of the world’s biggest tobacco companies have vowed to continue to fight plain packaging in the UK, after the High Court today rejected a bid by the cigarette industry to prevent the introduction of the new law.

Plain packets of cigarettes will be officially imposed tomorrow after Mr Justice Green dismissed a challenge against the measure by four industry giants: British American Tobacco (BAT), Japan Tobacco International (JTI), Imperial Tobacco, and Philip Morris International (PMI).

BAT and JTI immediately said they would seek to appeal the ruling, which means that brands and logos will be banned and packets must be a standardised green-brown, with graphic health warnings. Tobacco companies have a year to sell through their old stock.

The cigarette-makers had argued that the controversial law deprived them of their intellectual property without receiving compensation. They also said the evidence from Australia, the first country in the world to impose plain packaging in December 2012, showed it had been ineffective in discouraging people from smoking.

However, in a ruling that ran to 386 pages, Mr Justice Green decided in favour of the Government, which seeks to cut smoking rates and stop children from picking up the habit.

“The regulations were lawful when they were promulgated by Parliament and they are lawful now in the light of the most uptodate evidence,” he said. “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.”

Deborah Arnott, the head of anti-smoking charity Ash, described the ruling as a “crushing defeat for the tobacco industry”.

But a spokesman for Dunhill manufacturer BAT claimed it was “by no means the final word on the lawfulness of plain packaging”, claiming the judgement “contains a number of fundamental errors of law”.

JTI, the other company that plans to appeal, said: “This decision sets a dangerous precedent for intellectual property rights and investment. Other consumer goods industries must now worry that their branding is under threat from political opportunism, rather than examining the evidence.”

Both Imperial and PMI said they were “disappointed” with the ruling.

It is a blow to the cigarette industry, which earlier this month also failed in an attempt to block new European Union rules that bans 10-packs and forces manufacturers to put health warnings on 65pc of packaging. The EU regulations also come into force tomorrow.

Debt rating agency Moody’s said tobacco companies should be able to mitigate plain packaging, but warned that measure “could reduce cigarette volumes and brand value over time, and there is also the risk that consumers could trade down to cheaper brands.”

Shares in BAT and Imperial, which are both listed in London, fell 1.9pc and 0.6pc respectively, although the latter was trading exdividend.

UK court quashes tobacco firms’ packaging challenge

LONDON — A High Court judge Thursday quashed the tobacco industry’s challenge to U.K. rules to require drab packaging stripped of logos and other branding on cigarettes and other products.

The 386-page judgment addressed all 17 grounds on which the tobacco industry challenged the U.K.’s rules, and sided with the government.

“I have found that the Secretary of State has adduced ample evidence to support the suitability and appropriateness of the Regulations,” the ruling reads.

The U.K. law is part of the country’s effort to implement the EU’s tobacco products directive, which comes into force on Friday.

The British standardized packaging regulations also take effect that day. Health warnings will have to cover 65 percent of the front and back of cigarette packaging. Anti-smoking advocates praised the decision.

“This landmark judgment is a crushing defeat for the tobacco industry and fully justifies the government’s determination to go ahead with the introduction of standardized packaging,” said Deborah Arnott, chief executive of ASH, an anti-smoking charity.

Cigarettes and hand-rolling tobacco will be sold in plain brown packages, which have had all the attractive features and colors removed. This so-called plain packaging is not required by the EU, but member countries can go beyond the floor set by the directive.

However, new packets will not be on sale until stocks of existing cartons have been sold over the next year.

The U.K.’s biggest tobacco firm, JTI, and British American Tobacco, both said they will challenge the ruling.

“We will continue to challenge the legality of plain packaging. The fact remains that our branding has been eradicated and we maintain that this is unlawful,” Daniel Sciamma, U.K. managing director of JTI, said in a statement on the decision.

ASH supported the government’s defense and provided written evidence and gave oral testimony to the court.

According to Arnott, who was in the London court, the judgment rejected every argument the industry put forward.

It was “highly critical” of the industry’s use of commissioned expert evidence, its failure to disclose any internal assessments on how packaging design affects children and young people, and the effect of standardized packaging on sales, according to Arnott.

The case was the first challenge to plain packaging laws, coming into force in France and Ireland among other countries.

Ethiopia: Smoke Screen – Companies Secretively Scramble for Tobacco Monopoly

By Dawit Endeshaw and Solina Alemayehus

Philip Morris, British American, Japan International and Sheba will all put forward bids this week.

International tobacco firms are gearing up for some hefty competition, as the auction of 40pc of the National Tobacco Enterprise’s (NTE) shares is scheduled for May 19, 2016.

Three of the largest international players in the 500 billion pound tobacco industry – a group that controls roughly a third of the global market share – have their legal teams in Addis, to ready their bids.

Ethiopia, as a gateway to East Africa, represents a growing, youthful population, with increasing disposable income, is an attractive proposition,” explained a local industry veteran. This is not lost on the competitors.

The NTE has been having countless meetings and receiving visits from representatives of Philip Morris International Inc (PMI), British American Tobacco (BAT) and Japan Tobacco International (JTI). The Enterprise imports and packages BAT’s Rothmans and PMI’s Marlboro for the Ethiopian market.

These, as well as some locals, have been requesting information. Guna Trading Plc, one of the companies under the Endowment Fund for the Rehabilitation of Tigray (EFFORT), has also knocked on the Enterprise’s door.

British American is a multinational company that sold 158 billion cigarettes last quarter, with its revenue growing at an average annual rate of 5.4pc. Almost 30pc of this comes from Eastern Europe, the Middle East and Africa, through its affiliates in Kenya, Nigeria and South Africa.

In addition to acquiring local legal firm Kumilachew Dagnew Law Office, the company has sent its legal teams from Nairobi, West Africa and the UK. It has also acquired the services of international law firm, Addleshaw Goddard LLP, and investment consultants, Ernst & Young.

Phillip Morris owns seven of the world’s 15 top selling brands. Its quarterly sales of 209.8 billion cigarettes represented a 2.4pc decrease from the previous quarter. However, with three affiliates on the continent, in Senegal, Mali and South Africa, its African market share is showing an annual growth rate of 0.3pc.

In what some have deemed a lobbying gesture, the company recently donated half a million dollars to the Ethiopian Red Cross Society’s drought response.

The third multinational bidder, JTI, known globally for brands Winston, Camel, and Benson & Hedges, is the Japanese version of the NTE. Its total shipment volume grew by 7.1pc to 94.4 billion cigarettes in the last quarter. The company has seven affiliates in Africa, including Sudan, South Africa and Nigeria.

As interest in tobacco wanes elsewhere – in the US alone the proportion of adults who smoke has dropped from 43pc to 18pc in 50 years – Africa has become the new frontier.

“Shares in the NTE would be a way to cement their presence in the region,” the veteran commented. “And, for PMI, a way to create one.”

But the fields are not all green.

Government made a point of restricting any bidder from having majority shares. Sheba Investment Group, the only other shareholder so far, will only bid for half of the shares on offer, since it already owns 29.05pc of the Enterprise.

The government’s decision to sell only 40pc of the share is puzzling, seeing that health and environmental concerns could have been addressed by existing regulatory measures. If business is what they were after, they could have simply continued with their current holdings, the veteran opined.

Established with paid up capital of 50,000 Maria Theresa dollars during the imperial regime in 1935, the Enterprise was originally named the “Imperial Ethiopian Tobacco Monopoly”. It became a share company in 1999, following the EPRDF-led government’s expressed intention to privatise public owned enterprises.

Over the past five years, the annual turnover of the Enterprise has increased – on average by 190 million Br a year. It offers five brands – Nyala, Gissila, Elleni, Delight and Nyala Premium. Last year, the Enterprise registered 1.76 billion Br in sales, while collecting 394 million Br of profit. It now produces nine billion units of these cigarettes a year – a 50pc increase from four years ago.

BAT is known for five global brands, and had a stock price of 120.57 dollars as of May 13, 2016. PMI, with 15 international brands, is trading at 100.86 dollars per stock, While JT is going for 4,511.00 Japanese Yen on May 13, 2016.

Someone close to the process described the secrecy surrounding the bid as a smoky environment, where bidders were keen to keep a low profile. The giants, however, were too big to hide and there is some speculation about what may happen under the table.

But the bidders have major concerns.

The most obvious one is the limitation on the number of shares any single entity can own. The 40pc cap makes the potential owners of the NTE wary of the representation they will have on the board, which affects their decision-making abilities and the amount of power they will have over the Enterprise.

They are obliged to continue with the existing cigarette brands, and decisions like capital increase can only be made via consensus.

“The government did not want to be outvoted, it wanted to retain veto power,” one representative said. “But I doubt that it considered that it has also given the other members the power to veto any decision the government will try to make.”

The bidders are moving forward with the hope that there will eventually be the opportunity to transfer shares.

A source from the NTE has expressed concern that these companies may risk the fate of the 5,000 permanent and temporary staff.

The veteran disagrees.

“Since most are bidding in the hope of a future where more shares will come up for sale,” he opined. “They will most probably try to keep in the government’s good graces until then.”

Accessing growers of tobacco could prove challenging due to cultural differences, Getu Alemayehu, the public relations head at the NTE shared his concerns. The Enterprise already imports more than 50pc.

Another concern is the monopoly. The law on tobacco and the tender dictate a continuation of the monopoly for at least ten years, with no established upper limit.

“They shouldn’t worry about that,” the veteran added, “a decade is enough time to cement their market presence.”

Criticism was also directed at the NTE for being unprepared. Staff held back or did not have the necessary documentation, participants claimed, while others even gave away papers they were not supposed to.

Another concern is with the process. After the competition, the winning company is required to pay all the money up front. The parties will sign the agreements, then go to the Ministry of Trade and the Competition Authority. Both refer to the investment law, which clearly states that investment in tobacco is not for foreign investors. There is no guarantee that they will accept the merger.

The real challenge will come later, one lawyer predicted. From his observation, neither the Ministry of Trade nor the Public Enterprises legal team is fit to handle a merger of this size and complexity.

“I expect the worst during negotiations with them,” he said.

Tanzania: Tobacco Company Spends Sh103 Million On Education Projects

Tabora — The Japan Tobacco International (JTI) Leaf Tanzania has spent Sh103 million on refurbishing eight classrooms and building two teachers’ houses at Migungumalo School in Uyui District.

The JTI senior vice president for Global Leaf, Mr Paul Neumann, said at the handover ceremony at the weekend that the refurbishment of the classrooms and the construction of the teachers’ houses were part of the company’s programmes on supporting tobacco farmers and their communities to address the local needs of the communities in which the firm operates.

This is aimed at establishing long-term relationships by improving the quality of life.

Apart from education, the company also helps tobacco-growing communities with water whereby in 2015 it invested in drilling of boreholes — some as deep as 140 metres – to ensure that it provides access to clean and guaranteed supply of water throughout the year.

Tabora regional commissioner Aggrey Mwanri applauded the company for the support.

Supreme Court refuses to hear appeal by cigarette manufacturer

A Quebec law that was adopted to facilitate the recovery of the costs of medical treatment to smokers has stood up to a cigarette manufacturer’s attempts to invalidate it.

On Thursday, the Supreme Court of Canada refused to hear an appeal by JTI-MacDonald, which was the company’s last recourse to invalidate the law. As is usual in such cases, the top court did not provide grounds for its refusal.

The Tobacco-related Damages and Health Care Costs Recovery Act was sanctioned in June 2009 and its purpose is to establish special rules for the recovery of tobacco-related health care costs that are attributable to a wrong committed by one or more tobacco product manufacturers and for the recovery of damages for a tobacco-related injury.

Quebec Superior Court declared the law constitutional in 2014, and its decision was upheld by the Quebec Court of Appeal in 2015

JTI-MacDonald claims the law infringes the protection that is conferred by Section 23 of the Quebec charter of human rights and freedoms, which provides for the right to a full and equal, public and fair hearing by an independent and impartial tribunal.

The company argues the law has the effect of placing tobacco product manufacturers at a substantial disadvantage compared to government and private litigants because of the “cumulative effect” of the special rules foreseen in the law.

The manufacturers claim they are “handcuffed” and not in a situation to fully defend themselves.

The justices of the Court of Appeal didn’t agree with the manufacturers’ arguments.

However, Justice Geneviève Marcotte, speaking in her name and of those of her colleagues on the bench, called the law “particularly severe” towards cigarette manufacturers and said it “significantly reduces” the government’s burden of proof. The judge also talks in the ruling about “hefty” means in terms of civil responsibility.

Despite the finding, Marcotte declared it’s not for the Court of Appeal to question the choices made by the legislator nor the opportunity for a law.

In June 2012, with the help of the law, Quebec filed a C$60-million claim for damages and interest against JTI-MacDonald and other tobacco manufacturers.

Other provinces in Canada have adopted similar laws to recover health care costs

EU’s highest court upholds new restrictive law on cigarettes

Europe’s highest court on Wednesday upheld a tough EU law on standardizing cigarette packaging and banning advertising of e-cigarettes, paving the way for its adoption later this month.

The court rejected a legal challenge brought by Philip Morris International and British American Tobacco, with Japan Tobacco International and Imperial Brands acting as interested parties.

“The court finds that, in providing that each unit packet and the outside packaging must carry health warnings…. the EU legislature did not go beyond the limits of what is appropriate and necessary,” the court said.

We ban tobacco sponsorship of sport in the UK. Let’s stub it out in the arts, too

Medical professionals call for a smoke-free approach to arts sponsorship

Smoking is a leading preventable cause of ill health and premature death, and a major contributor to health inequality. Current estimates are that the tobacco industry will kill one billion people in the 21st century.

Tobacco advertising has now been banned, along with sponsorship of sport. However, tobacco companies continue to use sponsorship of some high-profile arts organisations to promote the spurious idea that they are responsible corporate citizens. We suspect that most members of the Royal Academy in London will be appalled to learn that Japan Tobacco International (JTI) has been a premier sponsor for its exhibitions. British American Tobacco is also a sponsor, a position it shares with, among others, the Marie Curie cancer charity and Bloomberg. The latter is of note given Michael Bloomberg’s passionate tobacco control stance while mayor of New York.

These sponsorship arrangements are morally unacceptable and must be brought to an end. As healthcare professionals who deal daily with the harm caused by the tobacco industry, we call on arts, cultural and heritage organisations to sign the smoke-free arts declaration ( to affirm that tobacco sponsorship is unacceptable. We also call on sponsors of the arts to undertake that they will no longer support organisations that accept tobacco sponsorship.

Dr Nicholas Hopkinson

Reader in respiratory medicine, Imperial College, London on behalf of 1,104 other healthcare professionals

Ditch tobacco sponsors, health experts warn cultural institutions

1,000 experts sign open letter to London’s leading cultural bodies, including British Museum and Royal Academy, over ‘morally unacceptable’ sponsorship

More than 1,000 healthcare experts, including 57 professors, have signed an open letter calling on some of London’s most respected cultural institutions to abandon their financial links with big tobacco.

The British Museum, the Royal Academy of Arts, the South Bank Centre and the London Philharmonic Orchestra, have long-standing lucrative corporate membership and sponsorship deals with two leading cigarette manufacturers, which are banned from advertising in the UK.

The links have dismayed many in the medical community. “As a doctor specialising in the care of people with emphysema, I see the harm smoking causes every day,” said Dr Nick Hopkinson, reader in respiratory medicine and honorary consultant physician at the National Heart and Lung Institute, who is leading a campaign against the tie-ups.

“Tobacco companies, which rely on getting people addicted to products, which maim and kill, must not be allowed to use arts sponsorship as a way to present [themselves] as respectable.”

Tobacco giant JTI has corporate membership deals with the British Museum, the London Philharmonic Orchestra and the Royal Academy of Arts. JTI pays almost £40,000 a year to the Royal Academy for a premier membership package that sees the company listed in all exhibition catalogues. The company is also a corporate supporter of the Southbank Centre on whose website its logo appears.

British American Tobacco is an associate member of the Royal Academy of Arts and a corporate sponsor of the London Symphony Orchestra.

The Framework convention on tobacco control – to which the UK is a signatory – states that tobacco companies’ investment in corporate social responsibility initiatives should be treated as a form of advertising.

In 2007, Philip Morris International Inc, manufacturer of Marlboro, stopped funding a number of New York art institutions.

In their letter, published in Sunday’s Observer, health experts, including John Moxham, professor of respiratory medicine at King’s College London; Richard Ashcroft, professor of bioethics, Queen Mary University of London; and John Britton, director, UK centre for tobacco and alcohol studies, University of Nottingham; call on cultural organisations to rethink their relationship with big tobacco.

They warn: “Tobacco advertising has now been banned along with sponsorship of sport. However, tobacco companies continue to use sponsorship of some high-profile arts organisations to promote the spurious idea that they are responsible corporate citizens.”

Hopkinson added: “People can’t believe that the galleries, museums, orchestras they love could do this.”

Pressure on the likes of the Royal Academy to drop their links with big tobacco companies comes after BP ended its sponsorship of the Tate after 26 years following anger from environmental groups. The British Museum, National Portrait Gallery and other institutions have also been forced to defend themselves against claims that they accommodated the demands of the oil company, a major sponsor.

In a statement to Hopkinson, Will Dallimore, director of public engagement at the Royal Academy of Arts, said that JTI’s support had “indisputably helped the academy fulfil its endeavours to contribute to the artistic life of the country”.

A spokesman for the London Philharmonic said: “The LPO is grateful to JTI for its support and for providing our organisation with many platforms for us to make classical music more accessible and widen access to the arts.”

A spokesman for the British Museum said: “JTI supports an acquisition fund at the British Museum, which allows us to acquire objects for the museum’s modern Japanese collection. JTI have supported the Museum since 2010. The British Museum is grateful to JTI for their long-term support.”

A spokesman for JTI said: “It seems illogical that in a democratic society like the UK and at a time when funding for cultural and artistic institutions is under pressure, people would want to prevent a legitimate company like JTI from making a contribution to good causes.”

A British American Tobacco spokesman: “Like many other businesses we support art and cultural institutions throughout the UK through corporate memberships. The small amount of corporate memberships we have do not result in our brands being featured anywhere but simply provide the opportunity for our staff, customers and business partners to attend events, concerts and exhibitions alongside other corporate members.”

But Hopkinson suggested that the tobacco firms were using their support for the arts to retain key staff to give themselves a commercial advantage.

“In its annual report, British American Tobacco identifies the difficulty recruiting people because of the industry’s poor reputation, as a risk to its future profits,” Hopkinson said. “Arts sponsorship is one way that the tobacco industry can enable its own employees to deceive themselves about the true nature of what they are doing.”