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February 10th, 2010:

Canada government seeks to avoid tobacco liability

OTTAWA, Reuters

10th Feb, 2010

* Tobacco wants Ottawa to share responsibility for costs

* Ottawa wants to overturn decision on possible liability

– The Canadian government asked the Supreme Court this week to overturn British Columbia court rulings that could force it to share financial responsibility for damages caused by tobacco use.

The tobacco industry successfully got the British Columbia Court of Appeals to rule in December that the federal government should be a third-party defendant, meaning it may have to share in possible any liability that may result from lawsuits against the tobacco industry.

The British Columbia provincial government, for instance, is suing the tobacco industry for billions of dollars in health care costs. Another case is a class action by smokers against British American Tobacco’s (BATS.L) Imperial Tobacco Canada Ltd. The claimants allege they were misled into believing cigarettes labeled mild or light were safer to smoke.

The tobacco industry has long argued that government should share in any responsibility for damages because they were partners in the sale of tobacco by keeping it legal and collecting tax revenue from it. And they argue that Ottawa pushed them to promote light cigarettes.

The government filed its application to the Supreme Court of Canada on Monday asking the court to hear an appeal.

Several of Canada’s provinces have sued the industry for billions in damages, but the main British Columbia case — based on legal action by U.S. states — was filed first and is being used as the lead case in the Canadian courts.

Rob Cunningham of the anti-tobacco Canadian Cancer Society, said the federal government should not be asked to pay for tobacco costs.

“The tobacco industry is the cause of the wrongs and the tobacco epidemic, and they shouldn’t be trying to shift responsibility onto someone else,” he said. (Reporting by Randall Palmer; editing by Peter Galloway)

Secondhand smoke raises TB risk: study

NEW YORK (Reuters Health)

Wed, Feb 10 2010

Smoking has long been known to boost tuberculosis risk, and a new study from Hong Kong suggests that being exposed to someone else’s tobacco smoke also increases the likelihood of contracting the disease.

Dr. Chi C. Leung of the Wanchai Chest Clinic in Wanchai and colleagues compared TB risk in older women living with at least one smoker to that of women living in smoke-free homes. The study included 15,486 non-smoking women 65 to 74 years old, all of whom lived with their husbands. All of the women had enrolled at one of the territory’s 18 Elderly Health Centers between 2000 and 2003, and about one in four lived with a smoker.

During follow-up, which lasted through the end of 2008 (or until a person died or was diagnosed with TB), 117 women developed active TB and 69 of these cases were confirmed in a laboratory.

Leung’s team found that women who had been exposed to secondhand smoke were 1.5 times more likely to develop active TB than women who didn’t live with a smoker, while their risk of culture-confirmed TB was 1.7-fold higher.

Secondhand smoke exposure accounted for about 14 percent of active TB cases and about 18 percent of culture-confirmed TB cases.

The researchers also found that the women who lived with a smoker were significantly more likely to have some type of obstructive lung disease, such as emphysema, as well as diabetes, at the study’s outset.

The findings appear in the latest issue of the Archives of Internal Medicine.

In a written commentary published with the study, Dr. Neal L. Benowitz of the University of California San Francisco notes that secondhand smoke has many known harmful effects, including increasing the risk of lung cancer and heart disease in adults and promoting asthma and lower respiratory illness in children. And smoking can promote respiratory infections, such as TB, by impairing the ability of the lungs to fight off infection, he adds.

In China, 60 percent of men smoke, but only 4 percent of women do, Benowitz notes, so secondhand smoke disproportionately affects women.

“Secondhand smoke exposure is another health problem of particular concern for women in less developed countries,” he adds. “Therefore, smoking bans should be part of the international women’s health advocacy agenda.”

SOURCE: Archives of Internal Medicine, February 8, 2010.

Taiwan study proves relation between tobacco, lung cancer

The China Post/Asia News Network

Wed, Feb 10, 2010

TAIPEI, Taiwan – A Taiwanese research had further identified the reason why tobacco causes lung cancer and other smoking-related diseases and was made the cover story of the February issue of the world is leading biomedical journal, The Journal of Clinical Investigation.

The study revealed the mechanism of how tobacco-specific carcinogen causes lung tumors. It showed that the key ingredient of tobacco carcinogen, nicotine-derived nitrosamine ketone (NNK), would induce the accumulation of a protein, DNA methyltranferase 1 (DNMT1), which inhibits the tumor suppressor genes, and lead to lung cancer.

It also showed that the accumulation of DNMT1 in lung cancer patients who smoked continuously correlates with poor recovery. If lung cancer patients quit smoking, after two to four weeks, the level of DNMT1 would decrease and this would greatly increase the life span of the patients. Lung cancer patients who quit smoking outlived those who do not quit by eight-to-ten months.

Also, in the future, doctors can extract lung cancer samples and test for the level of DNMT1. Lung cancer patients who have a low level of DNMT1 can avoid going through chemotherapy and radiotherapy.

The research article was jointly written by researchers from National Cheng Kung University, National Taiwan Normal University, National Health Research Institute, National Yang-Ming University, China Medical University Hospital and National Taiwan University.

EU mandates push up price tag for non-premium smokers

By Stephan Delbos – Staff Writer |

February 10, 2010

Philip Morris will not increase the prices for Marlboro cigarettes, but smokers must pay 2.50 Kč more for nonpremium packs.

An excise tax hike on tobacco that went into effect Jan. 1 should have led to a 2.50 Kč (13 U.S. cents) price increase per pack of cigarettes, but many smokers are unlikely to see an increase in the price of their preferred brand due to the decision of one Czech tobacco industry leader.

Philip Morris, the largest tobacco distributor on the Czech market, has decided not to pass on the tax increase to smokers of its flagship brand, Marlboro, but will pay the tax themselves. Other premium cigarette manufacturers are unlikely to raise their prices as a result.

Philip Morris will increase the price of its nonpremium cigarettes, however, according to Andrea Gontkovičová, director of corporate affairs for Philip Morris Czech Republic, but there will be a delay before existing stocks with lower excise tax stamps are sold and the more expensive cigarettes hit stores, she said.

Smokers of premium brands may have been spared the latest excise tax increase, but more are on the way. The EU has called for further excise tax increases of 90 euros per 1,000 cigarettes before 2014, which will lead to an approximate increase of 12 Kč per pack in the Czech Republic, depending on the exchange rate, said Kamil Provazník, executive at Imperial Tobacco Czech Republic.

Cigarette prices

Excise taxes on cigarettes have steadily increased the average cost per pack of budget cigarettes, but smokers of premium cigarettes are spared the latest increase

Budget cigarettes
Dec. ’03: 31.5 Kč
Dec. ’07: 49 Kč
Dec. ’09: 56 Kč
Jan. ’10: 58.5 Kč

Premium cigarettes
Dec. ’03: 53 Kč
Dec. ’07: 74 Kč
March ’09: 82 Kč
Jan. ’10: 82 Kč

Source: Wholesalers’ price list

“The trend of excise tax increases will continue, and we will set our prices based on new tax rates,” he said. “It is not good or bad, but a necessity. We simply follow the rules.”

The 2010 budget passed by Parliament included a 2.50 Kč excise tax increase on each package of cigarettes, in hopes of generating needed revenues beyond the 40 billion Kč the government collects annually on tobacco taxes. Cigarette manufacturers usually pass on the tax, meaning increased state revenues come from smokers’ pockets. Philip Morris’ decision is an anomaly, but a welcome one for Marlboro smokers.

Gontkovičová explained that excise taxes already have an “extensive” effect on the price of cigarettes, accounting for up to 80 percent of the final price for the consumer, a percentage that has risen steadily over the past half-decade.

“Over the past five years, cigarettes have been a subject of continuous dramatic tax increases, which have put the legal market under serious pressure,” she said. “It is in this context that we make the final decisions on the pricing, including our flagship Marlboro.”

Philip Morris’ decision is clearly good news for those who smoke Marlboros but will also translate to savings for those who favor other brands as well. Due to the highly competitive nature of the Czech cigarette market, of which five companies hold 95 percent dominance, smaller cigarette manufacturers – such as Imperial Tobacco, which produces and distributes Davidoff, Rizla and Gauloises, among others – are forced to follow Philip Morris’ lead on pricing.

Imperial Tobacco will not increase prices on most brands of cigarettes this year as a result of Philip Morris’ decision, explained Provazník.

“Because Imperial is No. 3 on the Czech market, we must follow the price decision of bigger competitors,” he said. “So, if Philip Morris absorbs the cost of higher excise taxes, we can’t behave differently and increase the price of our cigarettes because we are simply a smaller company.”

The 2010 tax hikes come just two years after the largest tobacco excise tax increase in history raised prices an average of 6 Kč per pack. As prices continue to increase, many smokers are switching to cheaper brands and loose tobacco, meaning that every crown counts for tobacco producers.

Provazník conceded that the Czech tobacco market is “aggressive,” but hesitated to use the phrase “price war,” saying, “We aren’t in a war; we are in a free market.”

“All new prices are registered with the Finance Ministry,” he said. “What we are seeing are simply reactions to tax increases.”

Philip Morris is the particular focus of EU tobacco taxes, which are calculated around “the price category most in demand,” according to EU tax directives. The Czech Republic’s most popular brand of cigarette is Petra, produced and distributed by Philip Morris. According to Alessandro Tschirkov, EU affairs manager for the Confederation of the European Community of Cigarette Manufacturers (CECCM), tobacco producers throughout Europe must comply with EU tax directives but are free to decide whether to increase prices.

“Member states have autonomy to a certain extent, but they have to comply with requirements set out in the directives. These refer to minimum levels of excise duty, etc,” he said.

One unintended consequence of rising European tobacco taxes has been the increase of counterfeit branding and illegal smuggling of cigarettes from East European countries not subject to EU tax laws. EU agents recovered almost 750 million contraband cigarettes in 2009, including 8,500 cartons of Ukrainian cigarettes Austrian police discovered in a truck driven by a Czech man June 26. Such activity is bound to increase as excise taxes continue to swell, according to Lászlo Kovács, EU commissioner for taxation.

“High price and tax differentials are indeed [some] of the main reasons behind the substantial amounts of smuggling, in particular of cigarettes, from certain neighboring countries into the European Union,” he said.

Bulgaria to Seize BGN 7 M Assets from Football Club President


February 10, 2010, Wednesday

The Bulgarian Commission for establishing of property acquired from criminal activity has entered a court claim for over BGN 7 M against the property of Kostadin Hadzhiivanov aka Kotse Matsa.

The claim was lodged in the Sofia City Court by the Commission on Wednesday and totaled BGN 7,05 M. Hadzhiivanov’s property that is likely to be seized includes land plots in Petrich, 3 apartments in Sofia, 4 cars and 5 trucks.

Bulgarian prosecutors launched a probe for money laundering against Hadzhiivanov, the president of Bulgaria‘s Belasitsa football club, in early 2009, after he was detained in 2008 on allegations of cigarette smuggling.

Kotse Matsa, made headlines when he was put in custody by police authorities in Germany, where he was extradited to after his arrest in Greece in September 2008.

The detention came after London authorities issued a European writ of arrest and extradition of the sport boss on accusations of cigarette smuggling.

Hadzhiivanov pleaded guilty and received a suspended sentence and a fine from a German court.