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October 1st, 2015:

Smoking: the terrifying numbers behind the tobacco industry

Oct 1st, 2015
by AdminCTA.
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http://www.telegraph.co.uk/news/nhs/11902329/Smoking-the-terrifying-numbers-behind-the-tobacco-industry.html

 

100,000 people a year die in the UK from smoking. The Telegraph looks at the terrifying facts of the habit and the tobacco industry as smoking in cars with people under the age of 18 becomes illegal

A new law that bans smoking in cars in front of people under the age of 18 comes into effect from today.

Drivers caught smoking in a vehicle carrying someone under the age of 18, could now face a fine of £50.

In this video, The Telegraph looks at some of the terrifying facts of smoking and the tobacco industry, including how a 20-day smoker would normally spend around £2,900 a year on cigarettes while the NHS combats the diseases caused by smoking with £2billion a year.

Review of ITIC’s ASEAN Excise Tax Reform: A Resource Manual

Oct 1st, 2015
by Editor.
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Illicit cigarette consumption in PH up 4.1% in 2014 – Oxford Economics

Oct 1st, 2015
by Editor.
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http://www.mb.com.ph/illicit-cigarette-consumption-in-ph-up-4-1-in-2014-oxford-economics/

Hong Kong — UK-based Oxford Economics said illicit cigarette consumption in the Philippines rose 4.1 percent to 19.9 billion sticks in 2014, the highest level since its first Asia Illicit Tobacco Indicator Report in 2012, or about 19.4 percent of the total consumption.

However, experts are hoping for a marked improvement in 2015 with the full year implementation of the tax stamp system of the Bureau of Internal Revenue (BIR).

In a press briefing, Oliver Salmon, Senior Economist for Asia of Oxford Economics, said tax revenue loss from illicit consumption estimated at P22.5 billion in 2014, representing a 44.1 percent increase from 2013.

Domestic illicit, or cigarettes that are manufactured by the trademark holder, but are illegally sold and consumed in the same market, without the payment of excise taxes and VAT, accounted for 19 billion of the estimated 102.3 billion cigarettes consumed in 2014.

“In line with the amendment of the National Internal Revenue Code of 1997, it is anticipated that the affixture of tax stamps introduced on 1st December 2014 will ‘further improve tax administration’ and ‘deter misdeclaration of removals’[1]”, the report said.

For legal domestic sales (or tax paid volumes), it declined 4.6 percent to 82.3 billion cigarettes last year, following the implementation of the new sin tax law in 2013 or successive excise tax rate increases.

Despite lower legal domestic sales, excise tax revenues increased by 5.6 percent to P74.3 billion in 2014.

In 2014, excise rates were increased to P17 per pack of low-tier cigarettes and P27 per pack of high-tax tier cigarettes.

The price per pack of 20 of the cheapest brand rose 22 percent last year.

The price of the most sold brand remained unchanged until November 2014 when it increased by 24 percent.

In terms of total cigarette consumption, both legal and illicit, it dropped 3 percent to 102.3 billion sticks, the lowest level since 2012.

The market report on the Philippines is part of the Asia-16 Illicit Tobacco Indicator 2014 which includes Australia, Brunei, Cambodia, Hong Kong, Indonesia, Laos, Macao, Malaysia, Myanmar, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

Salmon said that the volume of domestic illicit consumption would decline in future years following the Philippine government’s action to address the problem with the imposition of the new tax stamp program last December, providing such actions were part of a wider campaign to address the problem of illicit trade in cigarettes.

At the same time, significant tax-led price increases have left the market exposed to the threat of cheap illicit cigarettes coming from other countries, as well as counterfeits of well-known brands, he said.

“As evidenced by this report, significant price increases over the last few years have led to the erosion of the legal market for cigarettes, with the illicit trade filling the gap,” Salmon said.

Former Budget Secretary Benjamin Diokno, an adviser to the International Tax and Investment Center (ITIC) who reviewed the report, said the rise in the incidence of domestic illicit consumption for two consecutive years builds a compelling case for the imposition and strict enforcement of the BIR’s new Internal Revenue Stamps Integrated System (IRSIS).

Diokno said IRSIS, or the tax stamp program of the BIR, if consistently enforced and monitored, should be an effective tool to bring down the incidence of domestic illicit consumption, as well protect government revenues, by plugging loopholes

Tobacco manufacturers revive lawsuit against FDA

Oct 1st, 2015
by Editor.
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http://www.journalnow.com/news/local/tobacco-manufacturers-revive-lawsuit-against-fda/article_e61a0419-c358-57a2-a415-5cda473f2b82.html

The FDA issued an interim enforcement policy May 29 on new tobacco products that appeared to be a response to the lawsuit.

The manufacturers agreed to drop the lawsuit June 2 based on the FDA’s willingness to consider regulatory comments and delay enforcing the initial guidelines.

The FDA’s new guidelines were issued Sept. 8. The manufacturers said in the revived lawsuit that the guidelines imposed similar restrictions.

In the revival of the lawsuit, ITG Brands LLC has taken the place of Lorillard. Although Reynolds spent $29.25 billion to buy Lorillard — essentially to get top-selling menthol brand Newport — the bulk of Lorillard went to Imperial Tobacco Group Plc in a $7.1 billion side deal. ITG Brands is Imperial’s U.S. subsidiary.

The FDA has wanted to broaden its power of prior restraint on the companies’ marketing communications, foremost by saying that its approval is required for changes to labeling of tobacco products and the quantities of products within a package. That includes being able to declare any tobacco product whose label is modified as a new “distinct” product — even if the product’s ingredients and characteristics are not changed.

For example, a modified label could be simply changing the background color.

According to the lawsuit, “over the past four years, FDA has suggested varying interpretations of the act that would improperly broaden the agency’s regulatory authority over tobacco product labels and product quantities.”

“Each time, when challenged, FDA devised a new rationale for the same predetermined conclusion that the changes create a new tobacco product subject to premarket review under the act — a results-oriented approach that is antithetical to proper agency decision-making and inconsistent with the plain language of the act.”

The FDA did not comment Wednesday on the revival of the lawsuit, citing a policy of not commenting on pending litigation.

“Reynolds American’s operating companies are in compliance with the act, and believe that FDA does not have the authority to impose the restrictions outlined in the guidance,” David Howard, a Reynolds spokesman, said.

“The act’s substantial equivalence provisions regulate the introduction of new tobacco products into the market. These provisions address the characteristics of the product itself, not how the product is described. Congress provided different mechanisms for changes to how the product is described in its packaging and labeling.

“FDA is trying to do an end run around these other mechanisms by using the substantial equivalence pathway to regulate packaging and labeling,” Howard said.

Tobacco companies increasingly rely on packaging to build brand loyalty and grab consumers — one of the few advertising avenues left to them after the government curbed their presence in magazines and on billboards and TV.

Some manufacturers changed their packaging labels to associate a certain color with a certain style after the FDA banned the words “light,” “mild,” “medium,” and “low tar” in advertising in June 2010. For example, the blue packaging associated with Camel Lights has become the main identifier of the style; the same with gold and Marlboro Lights.

The revival of the lawsuit comes as the FDA has stretched its regulatory muscles in recent weeks.

On Sept. 15, the FDA prohibited the sale of four brands of R.J. Reynolds Tobacco Co.’s traditional-style cigarettes: Camel Crush Bold, Pall Mall Deep Set Recessed Filter, Pall Mall Deep Set Recessed Filter Menthol and Vantage Tech 13.

On Aug. 27, the FDA sent warning letters to a Reynolds American Inc. subsidiary and ITG Brands LLC, saying that advertising traditional cigarette products as “additive free” or “natural” is in violation of federal regulations. The brands are Natural American Spirit for Santa Fe Natural Tobacco Co., Winston for ITG Brands and Nat Sherman for Sherman’s 1400 Broadway N.Y.C. Ltd.

When asked if the two decisions had anything with the revival of the lawsuit, Howard said, “not at all; completely separate issues.”

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