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November 16th, 2012:

international report on cigarette package warnings released today

Copied below and attached is a Canadian Cancer Society news release regarding the launch today in Seoul of the report Cigarette Package Health Warnings: International Status Report.

The new report was prepared by the Canadian Cancer Society, in collaboration with the Framework Convention Alliance and significant contributions from the Campaign for Tobacco-Free Kids and WHO Tobacco Free Initiative.

English and French versions of the report can be found on the FCA website, which is accompanied by an FCA news item:

English and French versions can also be found on the CTFK website




Canadian Cancer Society

More than 60 countries now require graphic cigarette package warnings

International report details progress on cigarette package labelling, ranks Australia first
For release: Wednesday, November 14, 2012

TORONTO – More countries worldwide are implementing picture health warnings on cigarette packages, according to a report released today by the Canadian Cancer Society. The report, which ranks 198 countries and territories on the size of their health warnings on cigarette packages, was released at the fifth session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control (FCTC) being held in Seoul, South Korea from November 12 to 17.

“The progress internationally has been outstanding,” says Rob Cunningham, Senior Policy Analyst, Canadian Cancer Society. “There is a huge trend worldwide of countries adopting graphic pictures of the health effects of smoking as part of warnings on cigarette packages,with 63 countries requiring picture warnings – up from 34 in 2010.”

In terms of reach, now more than 40% of the world’s population is covered by the 63 countries and territories that have finalized picture warning requirements. In 2001, Canada was the first country to require picture warnings.

Package warnings are recognized as a highly cost-effective means to increase awareness of the health effects of tobacco, and to reduce its use. A picture says a thousand words and can convey a message with far more impact than can text alone, and the effectiveness of warnings increases with size. International guidelines under the FCTC recommend that warnings should be as large as is achievable, should include a rotating series of graphic pictures and should be on both the front and back of packages. Examples of pictures that appear on packages include a diseased lung or mouth, a patient in a hospital bed and a child exposed to secondhand smoke.

“Picture warnings are especially valuable for low and middle income countries where there are higher rates of illiteracy, and where governments may have few resources,” says Cunningham.  “More than 60 countries and territories have demonstrated that implementing picture warnings is achievable, which shows that all countries can do so. The momentum on this key tobacco control measure has become unstoppable.”

“The international progress in implementing picture warnings is all the more significant given tobacco industry opposition,” continues Cunningham. “If larger picture warnings did not work to reduce smoking, then the tobacco industry would not be opposed.”

Other highlights from the report include:

  • Australia, ranked first in the report, now has the largest warnings in the world at 82.5% of the package front and back (75% front, 90% back) surpassing Uruguay, the previous holder of this title. Australia has also implemented plain packaging to prohibit tobacco company colours, logos, and design elements on the brand part of the package, and to standardize the shape and format of the package.
  • 47 countries and territories have warnings covering at least 50% of the package front and back, up from 32 in 2010 and 24 in 2008.
  • 18 countries have warnings covering more than 50% of the package front and back. Here are the top countries in terms of warning size as an average of the front and back:

.           1. 82.5% Australia (75% of front, 90% of back)

2. 80% Uruguay (80%, 80%)

2. 80% Sri Lanka (80%, 80%)

4. 75% Canada (75%, 75%)

4. 75% Brunei (75%, 75%)

6. 65% Mauritius (60%, 70%)

7. 65% Mexico (30%, 100%)

8. 60% Ecuador (60%, 60%)

9. 60% New Zealand (30%, 90%)

9. 60% Cook Islands (30%, 90%)

The goal of the FCTC – the international tobacco treaty – is to control the global tobacco epidemic. Countries that ratify the FCTC agree to put in place health policy controls to reduce tobacco use. For example, health warnings on tobacco products, banning tobacco advertising and ensuring indoor workplaces and public places are smoke-free are all FCTC obligations.

For package health warnings, the FCTC has an obligation for parties to require health warnings that “should be 50% or more of the principal display areas but shall be no less than 30%” and may be in the form of, or include, picture warnings. There are now 176 countries that are parties to the FCTC.

The report, first released in 2008, is updated by the Society and published every two years.

Warnings report in English

Warnings report in French

The Canadian Cancer Society is the leading non-government organization in Canada in the fight against cancer.  The Canadian Cancer Society fights cancer by doing everything we can to prevent cancer, save lives and support people living with cancer. Join the fight! Go to to find out how you can help. When you want to know more about cancer, visit our website at or call our toll-free bilingual Cancer Information Service at 1 888 939-3333.


For more information, please contact:

Rob Cunningham

Senior Policy Analyst

Canadian Cancer Society

Mobile: +1-613-762-4624

Alexa Giorgi

Bilingual Communications Specialist

Canadian Cancer Society, National office (Toronto)

Phone:  +1-416-934-5338

Download : CCS international warnings report news release-2012-11-14

No smoke without IRE

Tobacco retailers fear tough new regulations will impinge on people’s freedoms.

Forty-eight -year-old Wanchai Kusomboompol sells cigarettes at his mom-and-pop shop in Bangkok’s Sam Yan area mostly to casual workers who buy fewer than 10 cigarettes per day on average.


About 480,000 retailers fear new tobacco regulations will cause them a burden. ‘Sales will be definitely lower but there will be an increase in illegal cigarettes,’ says Mr Wanchai.

“Some people, especially those who earn less money, do not buy cigarettes in packs. Some smoke only three per day, and therefore it just makes more sense for them to buy separate ones,” he said.

All that will change next year, once new measures by the Ministry of Public Health are put in place. The measures will also prevent shops like Mr Wanchai’s from selling cigarettes near educational institutions.

Provisions will also open the door to plain packaging, removing all forms of branding _ trademarks, logos, colours and graphics _ except for the brand name written in a standardised font on the package.

Mr Wanchai is among the 480,000 registered retailers nationwide who say the ministry’s new tobacco regulations will cause them a burden.

“Sales will be definitely lower but there will be an increase in illegal cigarettes,” he said.

The Thai Tobacco Trade Association (TTTA), which has about 1,300 retailers, wholesalers and distributors across the country, has called on the ministry to abandon the plan.

“We are not against health concerns, but the law should not increase the burden on retailers as selling cigarettes is not against the law,” said TTTA executive director Varaporn Namatra.”The law should not limit people’s rights and freedoms.”

The provisions under the proposed Tobacco Consumption Control Act (TCCA) will require retailers to submit costly annual reports, restrict the age of sales persons, participate in anti-smoking campaigns and restrict the display of prices.

The TCCA will also prohibit major retailers from partnering government agencies to conduct charitable programmes, such as providing disaster relief support in response to flooding, Mrs Varaporn said.

“Moreover, the draft is too broad, ambiguous and gives the Public Health Ministry too much authority to issue further regulations without public consultation or review by parliament,” she said.

According to a new poll conducted by Ipsos Thailand on behalf of TTTA on 1,000 retailers, 78% of retailers believe the new regulations will negatively affect their businesses.

Instead of introducing new regulations, 72% believe more education and 50% believe better enforcement of current laws would be more effective in reducing smoking rates.

“At a time when retailers expect economic conditions to worsen next year, the government could be wrong to experiment with costly tobacco regulations that will hurt retailers but do very little _ if nothing at all _ to reduce smoking levels,” said Mrs Varaporn.

The government should instead focus on measures that are proven to reduce smoking levels, such as better education and existing laws of enforcement, she added.

The TTTA submitted a letter to the Public Health Ministry explaining its concerns two weeks ago.

The new provisions have undergone four public hearings and are open to the public for comments. The process should be finished next month. Then the provisions will be submitted to the health minister and the cabinet.

U.S. Study Says Graphic Images Make the Case to Quit Cigarette Smoking

Friday, November 16, 2012 7:22 PM EST

U.S. Study Says Graphic Images Make the Case to Quit Cigarette Smoking
By Erik Pineda

Graphic images carry more punch in convincing smokers to kick the habit,
a new U.S. study said, which also showed that mere text warnings were no
match to powerful representations of the numerous ill-effects of
cigarette smoking.

Researchers led by Dr James Thrasher of the University of Carolina in
Columbia confirmed on their study of 1,000 individuals that “that
pictures work better than text,” in terms of driving home the message
that smoking leads to serious health conditions and even death.

Mr Thrasher added that such findings are applicable not only in the
United States but also in other countries including Australia, which
this year is set to implement one of the strictest regulatory measures
that the global tobacco industry will face.

By December 2012, cigarette products being sold locally are legally
required to come in drab packages, with the plain look to be
complemented by imposing health warnings that occupy much of each pack’s
total makeup.

Rolling out this kind of policy is powerful enough to reduce any
country’s incidence of smoking but more traction for such campaign will
be gained if compelling images of people suffering from tobacco-related
diseases are used, Mr Thrasher said.

“Our research supports this finding while also showing what tobacco
researchers have assumed for a while – that warnings with pictures work
particularly well among smokers with low levels of literacy,” the lead
author of the new report was quoted by USNews as saying.

The report is set to be published by the American Journal of Preventive
Medicine on December 2012, USNews said.

According to Mr Thrasher, the findings that he and his co-researchers
arrived at are especially true for smokers with low health literacy.

This bracket of the respondents “rated the warning labels with pictures
as more credible than text-only messages,” the report said while “the
warnings with very graphic imagery were rated as the most effective by
smokers with both high and low health literacy.”

The strongest indication that the study has reflected is that
governments “should put prominent, graphic warnings on cigarette
packages . . . (because) smoking is highest among people with the least
education,” such as the case in the United States, Mr Thrasher stressed.

Dr Aditi Satti of the Temple University Health System in Philadelphia
and is not part of the study offered that “a picture is probably worth a
thousand words . . . (for) lower-income, less educated (patients).”

Putting strong images along with specific health warnings “get people at
least thinking about what the consequences of smoking cigarettes are. It
gets them in the contemplation state,” Mr Satti told USNews.

Even non-smokers in poorly ventilated spaces are at risk of COPD

Our correspondent
Friday, November 16, 2012
From Print Edition

214 0 3 2


Not just smokers, but anyone chronically exposed to smoke in a poorly ventilated space is at risk of developing Chronic Obstructive Pulmonary Disease (COPD), which will become the third leading cause of death worldwide by 2020 from its current ranking as the fifth leading cause.

Renowned pulmonologist and medical specialist, Dr. Naghman Bashir shared this piece of information during a lecture delivered to medical students and faculty of Shifa College of Medicine (SCM) here to mark World COPD Day on Wednesday. The lecture was organised by the federal chapter of the Pakistan Chest Society, which has scheduled similar sessions in other medical colleges of Rawalpindi and Islamabad as well.

Patients (usually smokers or ex-smokers) suffering from COPD have difficulty in breathing, with cough and sputum; in its extreme form, patients are home bound due to breathing disabilities. It is caused almost exclusively by exposure to smoke. Eighty-five per cent of COPD sufferers are, or have been, smokers; the rest are non-smoking women exposed to kitchen smoke in unventilated kitchens, or traffic policemen or auto mechanics chronically exposed to smoke.

Dr. Bashir traced the history of tobacco, which was brought to Europe from America by Christopher Columbus in 1492. The tobacco epidemic then spread to the rest of the world. He explained the health hazards of smoking, which include heart disease, lung diseases particularly COPD, cancers of lung, mouth, oesophagus, stomach, and reproductive organs, sub-fertility, poor blood circulation, and worsening mental and intellectual health.

He quoted Dr. William Vaughan who wrote about the effects of tobacco in 1617 as: “Tobacco that outlandish weede, it spends the braine; it spoils the seede, it dulls the spirite and dims the sight, it robs the woman of her right.”

Later in his presentation, Dr. Bashir discussed a few myths about tobacco and presented facts breaking these myths. The last part of his talk was exclusively devoted to strategies on how to quit smoking. With the help of sketches, he spelled out steps, which, if properly followed, can help smokers quit. While sharing successful strategies to quit smoking, he advised smokers to set a deadline, which should be within two weeks from the day of their decision to quit. He advised them to announce their decision to all including family, friends, colleagues, and even the shopkeeper from where they buy cigarettes, and to seek support from all as they will feel stressed and may express frustration and anger. During these two weeks, smokers should practice to quit. “Whenever the urge strikes, defer for a few minutes. For example, defer this to after meal, or after responding to a phone call or completing some office or home task,” Dr. Naghman Bashir advised. He also suggested removal from reach, everything that reminds a smoker of smoking. “Do not keep a packet of cigarettes with you. Removal all ashtrays, matchboxes, and lighters from your home, office, car and other place of work,” he suggested to this effect.

Whenever hit by the urge to smoke, it is advisable to get yourself busy in some activity like household chores, calling someone, going out for a walk, or going to a smoke-free area like a mosque, library or cinema. “Get yourself busy away from smoking cues like after meals, or drinking tea or coffee. Stay with your children or parents so as to avoid smoking. And when the D Day arrives, do not take a single puff from then onwards. If you feel withdrawal symptoms, consult a doctor who can prescribe you some medicines, which help in quitting and also help in managing withdrawal symptoms,” he concluded.

The session ended with interesting questions from the attendees.

Does Investing In Big Tobacco Make Sense?

by Jan Michael Acebo

Governments around the world are ramping up regulations on tobacco products. In light of this, are tobacco companies the best stocks for investors today? Do they compensate investors for the industry-specific risk that they face?

Unfortunately, the answer is no. Cigarette companies are getting dividend investors hooked on unsustainably high yields. The headwinds for these stocks and their unstable dividend policies are bad omens. Alternative high dividend-paying stocks are suggested to help income investors kick the cigarette stock habit.

This negative perspective is agnostic to the reservations of socially responsible investors, who have (slightly) more incentive to stay away. However, boycotting these shares does not represent substantial activism.

Australian Tobacco Regulations

In Australia, tobacco companies are now required to place images of cancer victims and gangrenous limbs on cigarette packs. To comply with new government standards, there must be images and health warnings covering seventy five percent of the front of cigarette packs. New packages will display disgusting images including tongue cancer, a skeletal man dying of lung cancer, or an infected foot. Additional warnings have to cover the sides of the packages and ninety percent of the back.

Health officials are hopeful that new cigarette packaging will dissuade more consumers from smoking. After most of the packaging is not covered in cautionary warnings, the remainder is required to be drab. According to the state law, the background of the packaging must be a specific greenish-brown color and any trademarks or product names have to be in Lucida Sans font. State officials will look closely for deviation from these regulations.

Government officials hope that the new packaging will curtail the recruitment of young people as smokers. Australia’s health minister Tanya Plibersek said, “Young people are the ones most affected by the packaging and by the advertising, and no parent wants their kid to start smoking.”

Australia is just the beginning. Margaret Chan, the World Health director-general said, “With so many countries lined up to ride on Australia’s coattails, what we hope to see is a domino effect for the good of public health.” Countries including the United Kingdom, Turkey, New Zealand, India, and Russia expressed interest in more severe plain packaging rules.

Tobacco Warning

Stifling Australian tobacco regulations are likely a preview of the future in other countries. There is no way to predict the future, but that the possibility of such hard impositions on packaging and advertising could manifest in any country. Since this risk could become reality, tobacco stocks should be much, much cheaper than other stocks.

Consider the following cigarette and non-cigarette companies:

Ticker Company Industry P/E P/S P/B P/FCF DivYield Payout Ratio
(VGR) Vector Group Cigarettes 68.58 1.26 9.26% 6.14
(PM) Philip Morris Cigarettes 18.19 1.99 47.99 3.71% 0.61
(RAI) Reynolds American Cigarettes 16.66 2.83 4.03 5.62% 0.89
(MO) Altria Group Cigarettes 15.33 2.76 15.7 5.31% 0.76
(LO) Lorillard Cigarettes 13.99 2.29 91.7 5.45% 0.70
(CA) CA Technologies Application Software 12.68 2.43 2.12 11.63 4.02% 0.30
(GCI) Gannett Newspapers 10.59 0.8 1.75 7.68 4.47% 0.33
(GME) GameStop Electronics Stores 9.69 0.31 1.02 5.56 4.39% 0.13
(INTC) Intel Semiconductors 9.1 1.97 2.21 20.59 4.19% 0.34

It appears that cigarette companies are using by unsustainably high dividend payout rates to keep investors hooked. These dividends will not last forever since payout ratios above 60% don’t leave enough margin for error if earnings decline or if governments initiate new restrictions on your products.

Fortunately there are alternative stocks which offer superior valuation metrics. Each of the alternative stocks on this list, CA Technologies, Gannett, GameStop, and Intel are trading at lower valuations than the listed cigarette companies. They also offer high dividend yields above 4% with sustainable payout ratios. Think of them as the dividend equivalent of nicotine patches to help you quit the tobacco habit.

Underweighting Tobacco: Not Socially Responsible Enough

Investors who abstain from cigarette stocks for moral reasons are making the right choice for their portfolios, albeit for dubious reasons. These socially responsible investors do not want to benefit from an industry that destroys health, reduces life-expectancy, and hooks customers through addiction.

Moral and ethical stances are great, but would a boycott of tobacco stocks on the secondary market really make a difference? The toxins in tobacco leaves and smokers don’t know that you own shares.Whether or not you buy these shares doesn’t dramatically impact new tobacco ventures. Buying shares through the stock market pays someone who bought the stock from someone else, who in turn bought the stock from someone else, who in turn bought the stock from someone else…who in turn bought the stock from someone else, who helped launch the company.

If you actually care about reducing or preventing tobacco-related deaths and health problems, here are three potentially effective ways to make a difference:

1) Boycott tobacco companies. The best way to not smoke is to not smoke. Show friends and family how tobacco will ruin their lives using real data and tell them what they will miss out on (family events, the next iPhone, whatever) if they die early.

2) Political action. Write your congressman or join an activist group.

3) Don’t invest in new tobacco ventures or grow tobacco yourself.

This brief discussion is not meant to shake your moral compass. In fact, it is meant to highlight which routes travel furthest in the direction to which it points.

Boycotting these shares is smart for your stock portfolio but makes a poor excuse for activism. You should avoid them for financial reasons, but don’t kid yourself: you are not saving lives by underweighting big tobacco.

Time to Stop Bogarting Cigarette Stocks

Charles Sizemore, Contributor

You know you have reached a certain level of immortality when your name becomes a verb, and I can think of no better example than the American actor Humphrey Bogart, perhaps best known for his role in that all-time classic Casablanca.

“To Bogart” a cigarette is to leave it dangling sloppily in your mouth, even when speaking, rather than engaging in proper smoking etiquette by giving it a few puffs at a time and then removing it. Over the years, the word has also come to mean to greedily hog something.

Today, I would say both meanings of the word are accurate descriptions of investors in tobacco stocks. Investors are “Bogarting” cigarette stocks by continuing to hold them at current prices.

First, a little disclosure is needed. I have been a major fan of sin stocks in general and cigarette stocks in particular for years (seeNot All Sin Stocks are Created Equal andDelightfully Sinful Dividend Stocks as recent examples.

But my enthusiasm for Big Tobacco rested on two big assumptions:

  1. They are largely despised by both individual and institutional investors due to their pariah status as politically incorrect merchants of death—making them perpetual contrarian value investments.
  2. They pay high and growing dividends that are significantly better than what can be found elsewhere among mainstream large-cap stocks.

Unfortunately, I cannot credibly say that either of these conditions still hold. Cigarette stocks have become downright trendy of late as investors have taken to chasing yield in a low-interest-rate world.

Let’s take a look at Philip Morris International (NYSE:PM), the seller of the iconic Marlboro brand among many others.

For years Philip Morris appeared to be the perfect stock. It had access to emerging market growth (roughly half its sales) while benefitting from an American listing and top-notch management. It also paid a dividend far higher than the norm among stable U.S. blue-chip stocks, and that dividend was growing every year.

There’s one little problem here: Philip Morris International is still a tobacco company. Its sales may be enjoying a multi-year boost as emerging market smokers trade up from cheaper local competitors to premium Western cigarettes, but worldwide demand for their products is shrinking, and fast.

In its most recent quarterly release, Philip Morris International saw its profits fall 6% on lower volume sales.

And perhaps worse, the regulatory noose continues to be tightened. Consider Australia’s new plain packaging law. All cigarette boxes for all brands now look identical in Australia. Cigarettes must now be sold in logo-free boxes featuring nothing more than graphic pictures of people dying of smoke-related illness. It’s hard to enjoy taking a drag on that cigarette when you’re looking at a picture of a gangrenous foot on the package.

This does not at all bode well for premium brands like Marlboro. Given that tobacco companies are all but prohibited from advertising, how can a premium brand differentiate itself from the cheaper competition when it sells its cigarettes in an identical box?

Australia has adopted the most aggressively anti-tobacco regime in the world in taking this approach, but other countries are catching up in a hurry. Russia, the world’s second-largest tobacco market after China, is starting to take tobacco’s health risks seriously. Russian prime minister Dmitry Medvedev recently said that a ban on public smoking and cigarette advertising t were “just the beginning” of his efforts to stamp out cigarette smoking in his country. Several countries in Latin America have joined this bandwagon as well.

Meanwhile, Philip Morris International’s dividend yield, now 3.9%, is not the great selling point it used to be. It’s lower than that of the 4.2% offered by blue chip semiconductor maker Intel (Nasdaq:INTC) and significantly lower than that of most telecom stocks, MLPs and REITs.

Again, unlike the rest of these industries—which are still growing—Philip Morris faces a shrinking market for its wares. And its stock valuation of 17 times is ludicrous given that Intel trades for just 9 times earnings.

Taking a look at other Big Tobacco giants, the story isn’t much better. I have a special fondness for Lorillard (NYSE:LO) because it was one of my most successful trades in history. I made 40% in all of two weeks (see “Insider Edge in Practice: Lorillard”).

But I wouldn’t be particularly enthusiastic about buying Lorillard today. Based on current earnings, it actually trades at a slight premium to the broader S&P 500. Yes, the juicy 5.3% dividend is appealing. But Lorillard is still a cigarette company selling primarily to a shrinking U.S. market, and it’s hard to justify buying it at a premium P/E ratio.

The same is true of Reynolds American (NYSE:RAI) and Altria (NYSE:MO), the granddaddy of all Big Tobacco stocks. Reynolds trades for a ridiculous 17 times earnings and Altria trades for 15. Both enjoy yields over 5%. (In the interests of full disclosure, MO is currently rated a “Hold” in the Sizemore Investment Letter; it’s been a holding of the portfolio for two years, and I’ve been reluctant to pull the trigger and sell because of the taxable gains it would generate. But I have tightened my stops in MO and am not advising that investors put new money into it.)

Investors have enjoyed a fantastic ride in Big Tobacco stocks, but like a good cigarette (or cigar if you prefer), they will eventually burn out. This long-time tobacco bull recommends discarding Philip Morris International like a soggy cigarette butt and viewing the rest of the sector with skepticism. There are better income opportunities elsewhere.

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