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September 22nd, 2015:

British American Tobacco boosts bet on e-cigs

British American Tobacco is set to buy a Polish e-cigarette company and team up with fellow tobacco company RJ Reynolds as it seeks a greater foothold in the vapours game.

In an announcement on Tuesday BAT said it had signed a conditional agreement to buy the whole of Poland’s CHIC Group, which it says has 800 points of sale in Poland, an “e-liquids” production facility and a clutch of Polish e-ciggie brands.

BAT’s managing director of so-called ‘next generation products’ Kingsley Wheaton said the deal:

is strategically significant and makes commercial sense. It provides BAT with scale and market reach through Europe’s largest eCigarette retailing network, as well as important manufacturing and R&D capabilities. It further demonstrates our commitment to the NGP category.

Approval from Polish anti-competition authorities is needed next.

The tie-up with RJ Reynolds of the US, meanwhile, “provides a framework for collaboration and mutual cross-licensing of the parties’ vapour product technologies up to 31 December 2022.”

The two companies are expecting to conclude and sign a final agreement on this by the end of this year.

Mr Wheaton added:

Today, we’ve announced two significant milestones to enhance our next generation product business globally, further enabling us to meet the demands of today’s consumer

‘Vaping’ is proven path to tobacco addiction

SUNDERLAND — New state regulations limiting the sale of e-cigarettes to children take effect Friday. And they come not a moment too soon.

This is because of the association of “vaping” in children with their regular use of tobacco cigarettes — a link around which there is a growing consensus.

A Sept. 15 article about the new regulations stated there is no scientific consensus on whether vaping leads kids to become regular smokers.

Among teens put off cigarettes by health risk and social stigma, e-cigarettes are an increasingly popular way to try nicotine products.

The Centers for Disease Control report a tripling of their use from 2011-2014 among middle and high school students.

Even with no smoke, these products do contain nicotine, the drug that makes tobacco products so addictive.

Pediatricians like myself and all those concerned about public health worry that e-cigarettes are opening up a new market for tobacco products among adolescents.

It is becoming the new gateway to nicotine addiction.

All the data are not yet in, but it is clear from multiple studies that young people using e-cigarettes are more likely, not less, to smoke cigarettes.

A study published July 27 online in the journal Pediatrics found that 10 percent of the California high school students surveyed were using e-cigarettes.

Of those, a third also smoked tobacco cigarettes.

This contrasted with 1 percent smoking of cigarettes among those who did not use e-cigarettes.

The Massachusetts Medical Society has advocated for this legislation. We applaud the Commonwealth’s action to ban sales of these products to those under 18.

We cannot stand by and watch a new generation become addicted to nicotine.

Ilana Schmitt, MD, is vice president of the Hampshire District of the Massachusetts Medical Society.

British American Tobacco Buys CHIC Group, Signs Deal With RJ Reynolds

LONDON (Alliance News) – British American Tobacco PLC on Tuesday said it has bought the CHIC Group, the market leading e-cigarette business in Poland, and said it has signed a vapour products technology-sharing term sheet with the US’s RJ Reynolds Tobacco Co.

The tobacco company said that the CHIC Group has 800 points of sale in Poland, a dedicated e-liquids production facility, a modern research and development centre and leading Polish e-cigarette brands including VOLISH, P1, Provog, Cottien, LiQueen and Aromativ.

It did not say how much the acquisition would cost.

“Acquiring the CHIC Group is strategically significant and makes commercial sense. It provides BAT with scale and market reach through Europe’s largest e-cigarette retailing network, as well as important manufacturing and research & development capabilities. It further demonstrates our commitment to the next generation products category,” Managing Director of NGP Kingsley Wheaton said in a statement.

BAT added that the term sheet it has signed with RJ Reynolds provides a framework for collaboration and mutual cross-licensing of the parties’ vapour product technologies up to the end of 2022.

The collaboration also includes joint R&D activities and co-operation on regulatory, scientific and manufacturing issues relating to vapour products.

RJ Reynolds is a subsidiary of tobacco company Reynolds American Inc, in which BAT holds a 42% stake, a holding it maintained following the USD27.4 billion acquisition of Lorillard Inc by Reynolds earlier this year.

“Today, we’ve announced two significant milestones to enhance our next generation product business globally, further enabling us to meet the demands of today’s consumer,” Wheaton added.

Shares in BAT were trading down 1.6% at 3,501.50 pence Tuesday morning.

Cigarette design

Illicit, smuggled tobacco is an issue that deserves a serious response. Unfortunately, the Tobacco Manufacturers’ Association’s (TMA) recent article (17 September) fails to deliver. It disregards reliable evidence on illicit tobacco in favour of misinformation.

Giles Roca claims that high taxes on tobacco products have “failed”. Certainly, the tobacco industry must be disappointed – scientific studies show that 
raising the price of tobacco is one of the most effective ways to reduce smoking rates.

The industry is quick to attack proposed tobacco taxation and frequently claims steep rises in illicit tobacco will follow. It isn’t true. And as a recent paper from the University of Bath put it: “Industry data on levels of illicit tobacco should be treated with extreme caution.” The industry’s sums don’t add up.

If low taxes lead to low levels of illicit tobacco, countries with the lowest tobacco tax regimes would have low levels of smuggled tobacco. This isn’t the case.

Eastern European countries such as Latvia have substantially higher rates of illicit tobacco than the UK, despite low tax. Enforcement of the law is the best way to cut the illicit tobacco trade. Mr Roca also declares that plain, unattractive cigarette packaging has caused a rise in smuggled tobacco in Australia. This is not true.

Sir Cyril Chantler’s review of the policy last year concluded that “there is no evidence of increased counterfeiting following the introduction of plain packaging in Australia”.

Even the former head of Imperial Tobacco Australia’s corporate affairs department has admitted that its predictions on illicit had proved “simply wrong”. By contrast, studies have shown that plain packaging works to deter children from starting smoking. This is an important health measure and we should not allow tobacco industry scaremongering to deflect us from implementing it.

R.J. Reynolds Signs Vapor Technology Deal With British American Tobacco

R.J. Reynolds Signs Vapor Technology Deal With British American Tobacco

WINSTON-SALEM, N.C. — R.J. Reynolds Tobacco Co. (RJR), an indirect subsidiary of Reynolds American Inc. (RAI), announced today that it has signed a vapor product technologies-sharing “term sheet” with British American Tobacco Holdings Ltd. (BAT).

The companies have not finalized the specifics of the deal, but it is the first step in reaching a definitive agreement.

The term sheet provides a framework for collaboration and mutual cross-licensing of vapor product technologies through 2022.

The companies’ collaboration will include a process for joint research and development activities and cooperation on regulatory, scientific and manufacturing issues related to vapor products.

Winston-Salem, N.C.-based RJR, an indirect subsidiary of RAI, is the second-largest tobacco company in the United States. RJR’s cigarette brands include Newport, Camel and Pall Mall. These brands, and its other brands, including Doral, Misty and Capri, are manufactured in a variety of styles and marketed in the United States.

Based in London, BAT is a global tobacco group with more than 200 brands sold in more than 200 markets.

Tobacco Industry Warns of Job Losses if Excise Is Increased

Jakarta. Indonesia’s powerful cigarette lobby continues to rail against a government proposal to raise the tobacco excise, claiming producers have been forced to lay off 15,000 workers this year as demand for the cancer sticks weakens.

“More layoffs will [continue to] happen and many more will be surely affected, for example others in the supply chain,” Hasan Aoni Aziz, the secretary general of the Indonesian Cigarette Producers Association (Gappri), said on Tuesday as quoted by

“We may have to cut down production. We declare [our] objection [to the proposed excise hike]. This industry can no longer bear [any] additional burden. During the first half of the year alone, production dropped significantly.

This has never happened before,” he added.

Hasan did concede, however, that the slowing economy was not the sole factor behind the downturn in the cigarette industry, noting that many companies were automating their production processes to cut labor costs. He also said that Indonesian smokers increasingly favored “milder” cigarettes that used less tobacco, hence resulting in job losses in the tobacco-farming regions.

In Indonesia, where about 60 percent of men smoke, cigarette production increased at an annual 7 percent average between 2007 and 2013. In 2014, it declined 0.5 percent and this year will see a 2 percent fall, according to the association.

Tobacco taxes have been raised an average 11 percent annually since 2010, but the government is undecided on what to do with the tax for 2016.

The customs and excise chief previously said the government did not want to impose a tax that would price cigarettes out of the reach of consumers – an attitude in keeping with the Indonesian government’s refusal to acknowledge, in deed if not in rhetoric, the health dangers of smoking.

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