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February 8th, 2013:

ABPI and Luther Pendragon parted ways over tobacco lobbying

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Op-Ed: 4000 chemicals in cigarettes and tobacco’s the problem?

Sydney– The Australian government official campaign refers to thousands of chemicals, some dangerous, in cigarettes. This is a health warning, in effect warning people that toxins in consumer products are allowed on the market by the government.

Let’s start with the basics of tobacco, nicotine and addiction.

Tobacco is a plant of the family Nicotiania. It contains nicotinic acid, which can be used as a pesticide and which when oxidized forms an analogue of Vitamin B3 as oxidized nicotinic acid. That’s why it’s addictive. You can only get addicted to drugs which are similar to body chemicals. Opiates, for example, are addictive because they’re very similar to endorphins, the body’s own pain killers.

(Just for the record, I’m a qualified horticulturalist.)

So in theory, nicotine is a fully metabolizable material. Not a problem, you’d think, until you notice the Australian research which adds thousands of different chemicals, some of which are highly toxic, to the average cigarette.

The list of chemicals in cigarettes put together by the Australian National Drug Strategy includes some rather strange inclusions and some bizarre materials.

Carbon monoxide- You get carbon monoxide the minute you burn anything with carbon in it. You could say the same thing about a barbecue, but the barbecue, particularly if using firelighters, contains a lot more CO than any cigarette could. Your car produces a few kg of CO a week, and you breathe that in whether you’re a smoker or not.

Ammonia- A product of nitrogen, which is contained in all plants. You could smoke a rhododendron and get ammonia. Ammonia is a very important organic chemical, involved in a range of biological functions.

The others aren’t so hilarious and have nothing to do with the tobacco plant. They’re also 100% unnecessary in producing tobacco for consumption:

Acetone- A dangerous chemical which can affect human tissue.

Methanol- Another dangerous chemical with a really nasty side.

Pesticides- All agricultural products have some form of pesticide. They’re usually removed from products before going on the market, though.

Arsenic and cyanide-Hardly essential, dangerous as oxides, and they’re allowed on the market?

Butane- Another dangerous non-essential.

Cadmium- A heavy metal, also not required for smoking.

Nicotine and DDT-Nicotine? You don’t say? …And by the way, DDT was banned decades ago. It’s illegal, and the government is acknowledging that all these toxic compounds are permitted in a regulated substance?

Tar- If it’s ordinary tar like bitumen as the ad suggests, it contains a lot of carbon which can have obvious health issues if oxidized.

At this point the question has to be asked- What’s more dangerous, the tobacco or this gigantic chemistry lesson which the government, for no obvious reason permits to be contained in a consumer product?

All the non-tobacco-derived products are quite unnecessary, anyway. According to urban myth, the tobacco companies included them in cigarettes to make them burn better.

That’s not entirely surprising. Tailor made cigarettes contain the low quality tobacco. Dried, chopped, more or less wood shavings. Compared to pure tobacco leaf, most tailor made cigarettes are garbage.

I’ve grown, cut, and cured Havana tobacco. All you need is some sugar and water to cure it, and an oven to dry it. There’s no need whatsoever for any of the additives, at all. You can smoke it straight out of the oven like a normal cigarette. Actually, all you do by adding anything unnecessary to any consumer product is drive up costs. The sugar, incidentally, burns a lot hotter than the chemicals supposed to help it burn.

Smokers please note that these particular additives are not at all good for you. Some of them cause instant discomfort like headaches, etc.

Interesting picture so far, isn’t it? Let’s move on to other user issues.

*Why do people smoke? Because it relaxes them. That’s part of the role of B3.

*Why do people get addicted? Because they get a fast hit and grow more receptors. (The same thing happens with heroin.)

*Do people get withdrawals? Yes. Very unpleasant, annoying, withdrawals.

*Are tailor made cigarettes the same thing as uncut, pure tobacco? Of course not. They’re chemistry labs by comparison.

Now the regulatory issues-

Why are so many toxic chemicals permitted at all in a consumer product? There’s no agricultural or production-related justification at all for their presence.

If the government is aware of these hazards, labelling isn’t the same thing as regulating them. Quite the opposite, many of these chemicals are classified as hazardous under Australian laws. Permitting them to be present in commercial consumer products is in effect breaching those laws.

So- Is the Australian government regulating tobacco? According to it, it is.

Which raises the question of legal liability for allowing hazardous chemicals into consumer products. If the government is aware of the presence of hazardous materials in consumer products in the case of tobacco, it can:

  • Ø Demand that the products are changed to eliminate the chemical hazards.
  • Ø Require certification of chemical constituents.
  • Ø Regulate tobacco to require that only tobacco leaf is present in the products.

Failure to do so may incur direct legal liability in that the government has effectively permitted poisons to be sold on the consumer market. It’s reasonable to assume that the government permits sale of tobacco in the full knowledge of the presence of known toxins in the products.

So what’s it going to be, regulators? How many double standards equate to effective regulation? Which is more dangerous to consumers, that list of chemicals or the tobacco?

The Australian government is now looking at regulating the taste of tobacco to make it taste bad. The problem with that is that most flavouring can be easily diluted with certain additives, and that many types of commercial flavouring are themselves toxic if oxidized.

Talking about bad taste- Missing your own point so thoroughly about tobacco health hazards in the form of added chemicals is very distasteful. You might want to do something about that.

Just one more question- If all these chemicals have been included in cigarettes, is it the tobacco that’s dangerous, or them? Have there been any studies to directly link the effects of these chemicals to those attributed to tobacco?

If not, why not?

If so, why haven’t findings been made public?

What’s the health equation between “tobacco” and “cigarettes full of things they don’t need”?

I would suggest that the indicators will show that the chemicals do more damage than the tobacco is capable of doing.

This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of

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20 hours ago by Steve Kflagged as abuse – show comment #1
  • As wonderful as your suggestions are, it won’t happen Paul! … Money talks!
  • … Tax revenues on cigarettes that gov’ts collect, and, under the table monetary bribes or over the table campaign contributions politicians often receive from such industry interests.
  • quote | flag as abuse | block user from view
20 hours ago by Paul Wallisflagged as abuse – show comment #2
  • Show quoted comment from Steve K
  • @Steve K
  • As wonderful as your suggestions are, it won’t happen Paul! … Money talks!
  • … Tax revenues on cigarettes that gov’ts collect, and, under the table monetary bribes or over the table campaign contributions politicians often receive from such industry interests.
  • True, but they’ve never been under any pressure to come clean on all these additives, which are obviously big cash cows. Might be possible to hit a raw nerve or so in the process, particularly in an election year.
  • quote | flag as abuse | block user from view
14 hours ago by Marcus Hondroflagged as abuse – show comment #3
  • For me, it’s the tobacco and the horrid chemical additives. I don’t touch cigarettes and have sympathy for those addicted to all the crap.
  • quote | flag as abuse | block user from view
1 min ago by Mickey Maoflagged as abuse – show comment #4

Read more:

Restaurant turnover HKG 1983-2012

Hong Kong restaurant (includes bars)  statistics show no doom and gloom after the 2007 partial smoking ban was introduced,

contrary to the Liberal Party predictions

One should ask whether the restaurant receipts are also adversely affected in a major way by the ridiculous rents charged in the territory

and how much better they would be if the onus on licensees to prevent smoking indoors and outdoors in their licensed premises

was introduced

Download PDF : Restaurant1983-2008

Suriname approves bill that bans smoking in public –


PARAMARIBO: Legislators in the South American country of Suriname have approved a bill that could mean jail time for people who smoke in public.

President Desi Bouterse is expected to sign the bill in upcoming weeks.

People caught smoking outside their homes, cars or other private places could be put behind bars.

The bill approved Thursday also bans tobacco advertising and requires that tobacco packages carry graphic warnings about the dangers of smoking.

The World Health Organization found that nearly 40 percent of men in Suriname smoke cigarettes. Among them is Bouterse, a well-known heavy smoker.

Government could control taste of cigarettes, raise taxes in battle against smoking

Download PDF : NewsComAU

Tobacco’s a No-Go at Current Prices

by Charles Sizemore | February 8, 2013 10:49 am

Back in December, I recommended that readers “watch their ash”[1] when investing in tobacco stocks. In their hunt for yield in a seemingly yield-less world, investors had bid up the price of most tobacco stocks to levels that no longer made sense.

Tobacco is a no-growth business and an industry in terminal decline. As a case in point, American teenagers are more likely to use illegal drugs than light up a cigarette[2].

In the circular logic of the stock market, the lack of growth is part of what has made tobacco stocks such fantastic investments in recent years. Management doesn’t have to reinvest in the business or to fund an expensive marketing budget. There are no white elephant projects, and there is no unrealistic management spin. They understand the economics of their business, and they do the only things that make sense: They pay out gargantuan dividends and aggressively buy back their shares.

But the key here is investor expectations. Investors had low expectations for the sector and were unwilling to pay up for earnings. Ultimately, the success of any investment depends on the price you pay, and tobacco investors were able to enjoy monster returns precisely because the stocks were cheap.

Well, they’re not any more. Not by a long shot. By Wall Street Journal estimates[3], the forward P/E on the S&P 500 is 13.5. Philip Morris International (NYSE:PM[4]) is significantly more expensive than that, and Altria (NYSE:MO[5]) and Lorillard (NYSE:LO[6]) are essentially at the same valuation.

Company Ticker Forward
1-year div.
growth rate
Philip Morris
PM 15.5 3.9% 63% 10%
Altria MO 13.5 5.1% 83% 7%
Lorillard LO 13.4 5.2% 71% 19%
Intel INTC 9.9 4.2% 41% 7%
Microsoft MSFT 8.6 3.3% 45% 15%
Cisco Systems CSCO 10 2.7% 23% 75%

This should not be. Tobacco stocks should not be more expensive than the rest of the market.

Yes, all pay significantly more in dividends than the S&P 500, which pays a pitiful 2%. But look at the payout ratios. All pay out the majority of their earnings as dividends, whereas the payout ratio of the S&P 500 is less than 30%.

Meanwhile, take a look at the technology stocks at the bottom of the chart. Intel (NASDAQ:INTC[7]), Microsoft (NASDAQ:MSFT[8]) and Cisco Systems (NASDAQ:CSCO[9]) all trade for 10 times or less expected earnings, and all have modest dividend payouts with plenty of room for growth. They pay a little less in dividends than tobacco stocks … but not that much less. And their dividend growth rates are comparable (with the exception of Cisco, whose growth rate is off the charts).

Last month I joked that chipmaker Intel was my favorite “tobacco stock,”[10] arguing that Intel had quite a bit in common with the likes of an Altria and its peers:

“As the Big Tobacco has proven for decades, companies in declining industries can make excellent investments under the right conditions. If you have a dominant market position (think back to Warren Buffett’s ‘moats’), a conservative balance sheet, and have ample cash flow for share repurchases and dividends, you can do quite well by your investors even in a shrinking market. It’s worked for Big Tobacco investors, and it will work for Intel investors as well.”

The same could be said for Microsoft and Cisco. Tech is the new tobacco.

To be fair, tobacco companies have certain advantages that “tobacco companies” like Intel lack. A chemically addicted clientele, for starters, as well as an unrivaled ability to raise prices virtually at will. Whenever a progressive-minded (or cash-strapped) city decides to hike the taxes on cigarettes, the taxes flow right through to the customer. Not too many companies have that ability.

But that said, I’m betting that Big Tech is a better investment than Big Tobacco. Investors are expecting no growth from Big Tech. So, if actual results prove to be even marginally better than disastrous, investors should enjoy a decade or more of solid gains.

Microsoft and Intel in particular might or might not ever figure out the mobile market. But that’s OK. Given that a zero percent probability is currently priced into shares, mobile success can be thought of as an embedded call option that could end up paying off in a big way.

And if that option is never exercised, you’re still getting the existing businesses at “tobacco” prices.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter[11], and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he was long MSFT and INTC. Sign up for a FREE copy of his new special report: “Top 3 ETFs for Dividend-Hungry Investors.”[12]


  1. “watch their ash”:
  2. more likely to use illegal drugs than light up a cigarette:
  3. Wall Street Journal estimates:
  4. PM:
  5. MO:
  6. LO:
  7. INTC:
  8. MSFT:
  9. CSCO:
  10. Intel was my favorite “tobacco stock,”:
  11. Sizemore Investment Letter:
  12. “Top 3 ETFs for Dividend-Hungry Investors.”:

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UK Doctors Target Tobacco PR Firms

UK Doctors Target Tobacco PR Firms

EMEA, Global

Plain cigarette packaging

Arun Sudhaman08 Feb 2013

LONDON–A group of UK health professionals has called for the healthcare industry to cut ties with PR firms that represent tobacco interests.

The call comes as the country’s pharmaceutical trade body (ABPI) confirmed it had parted ways with Luther Pendragon because of the firm’s work for Philip Morris.

Writing in the Lancet, the group of more than 25 health professionals points to public affairs firms Crosby Textor and Luther Pendragon, which have worked for the tobacco industry.

“Public relations companies might take their own view of what they regard as ethical, but it would clearly be unacceptable for any health-care organisation to engage with a company that is simultaneously working to oppose public health legislation,” says the group, which features Imperial College clinical senior lecturer Dr Nick Hopkinson.

“We therefore call on all health-care organisations, and especially the UK Department of Health, to send out a clear message by severing any links they have with public relations companies that work to promote the interests of the tobacco industry. Additionally, they should adopt clear, ethical policies to ensure that they will not give contracts to such companies in the future.”

Also targeted is the Conservative Party, which has hired political consultant Lynton Crosby to provide strategic advice for its next election campaign. Crosby’s firm Crosby Textor has supported the Australian tobacco industry’s opposition to ‘plain packaging’, which became law last year.

In a statement released yesterday, the ABPI said it decided to end its relationship with Luther Pendragon in December last year, once it learned that had begun working for the tobacco giant.

The ABPI hired Luther Pendragon earlier in the year to provide public affairs advice, supporting its relationships with the political sector, the NHS and patient organisations. The ABPI has now handed this assignment to MHP Health Mandate.

Reports surfaced last year that Luther Pendragon helped Philip Morris campaign against UK plans to adopt Australia’s ‘plain packaging’ laws.

Luther Pendragon did not respond to request for comment as this story went live.

“While I respect the 25 health professionals who have made this forthright demand, as they say themselves, public relations companies can take their own view of what they regard as ethical,” said PRCA director general Francis Ingham. “But I would go further, to say that this applies to healthcare firms as well.”

“The PRCA is in favour of a free and open PR industry, and we believe that only clients themselves have the right to make a decision on who they can and can’t employ to handle their public relations. However, the PRCA thinks that this is certainly a valuable issue for debate – but one that the entire industry needs to take part in rather than a handful of health professionals.”

Sinn Féin MEP To Oversee EU Smoking Legislation – Northern Ireland News

Northern Ireland News

08 February 2013

Sinn Féin MEP To Oversee EU Smoking Legislation
Sinn Féin MEP Martina Anderson has been appointed to oversee new legislation on tackling smoking in the European Parliament.

Ms Anderson will now track and amend the Tobacco Products Directive as it passes through the legislative process.

Speaking following her appointment Martina Anderson said: “This is a major piece of legislation which will impact greatly on how we tackle smoking related illnesses throughout Europe. I look forward to taking an active role in shaping this legislation to prioritise public health over an industry which results in a shocking 700,000 deaths in Europe annually. I will do my utmost to make an ambitious proposal even more so.

“As MEPs, we have a responsibility to prioritise the health of our citizens over the profits of an industry which manufactures deadly consumer products. 2300 people die in the North of Ireland alone each year from smoking-related diseases. We must do more to eradicate this figure.”

But she added: “The various controversies surrounding the numerous delays in bringing these proposals forward and the reported potential corruption within the Commission raises very worrying questions surrounding the undue influence that tobacco industry lobbyists have on the policy process.

“The EU has signed up to a World Health Organisation’s (WHO) convention on tobacco control. This convention explicitly states that public health policy makers have an obligation ‘to ensure that they protect these policies from the commercial and other vested interests of the tobacco industry’.

“The WHO convention therefore must form the core of this legislation and have its principles incorporated by the Commission in drafting this directive. As part of my brief on behalf of the GUE/NGL group in the EU Parliament I will be tracking the drafting of the legislation and where there isn’t adherence to the principles of the WHO convention I will be raising serious questions.”