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January 12th, 2017:

Doctors help finance lawsuit against tobacco companies

Family doctors and medical specialists are lending financial support to the prosecution of four tobacco companies in what will be the first lawsuit of its kind in Europe, the Volkskrant writes.

The Dutch Journal of Medicine NTvG , which has a membership of over 250 doctors, has decided to earmark ‘several hundreds of thousands of euros’ to support the case which is being brought by 1,300 (ex) smokers suffering from smoking-related illnesses.

According to Willem Mali, professor of radiology at UMC Utrecht, doctors should do more than simply supporting anti-smoking policies, writing reports and informing their patients about the consequences of smoking. ‘Doctors should become activists and really go for it,’ he told the paper.

The case is not about compensation but about prosecuting tobacco companies for ‘wilfully producing addictive cigarettes and prejudicing people’s health with premeditation’, the paper writes. Anti-smoking policy In the Netherlands 20,000 people die every year from smoking-related illnesses. A quarter of the population smokes.

In the United States, Canada and the United Kingdom the number is much lower, which Mali blames on the less than stringent anti-smoking policy in this country. NTvG editor Yolanda van der Graaf feels doctors have the knowledge and authority to persuade politicians to adopt more restrictive measures.

‘All we talk about now is new, more expensive medicines against lung cancer which help make care unaffordable and only prolong life by a couple of months. But if no one smoked we wouldn’t have to have this debate at all,’ Van der Graaf told the paper. The Dutch association of tobacco producers VNK commented that it ‘remains confident that the sale of a legal product will not be labelled as a crime.’

Traditional cigarette sales remain on decline in December

R.J. Reynolds Tobacco Co.’s gain in Newport sales and increased pricing were not enough to help the company defy an overall industry sales decline during December.

Reynolds experienced a 2.4 percent drop-off during a four-week period that ended Dec. 31, slightly above the industry’s 1.9 percent decrease, according to Nielsen data released this week.

The Big Three U.S. manufacturers — Reynolds, Philip Morris USA and ITG Brands LLC — all raised their list prices in November by 8 cents a pack. The list price is what wholesalers pay manufacturers for their products. The increases typically are passed on to customers.

Newport, the top-selling menthol cigarette and No. 2 cigarette overall, had a 0.2 percent drop during the period. Sales are up 0.8 percent year over year.

Reynolds spent $29.25 billion in June 2015 to buy Greensboro rival Lorillard Inc., essentially to acquire Newport.

Since the completion of the deal, Reynolds has increased sharply the amount of marketing for Newport. By comparison, Lorillard was content with a status-quo market share of about 12 percent.

Wells Fargo Securities analyst Bonnie Herzog projects Newport increasing its market share to at least 15 percent.

Herzog said she projected overall industry sales to have declined by 2.5 percent during 2016. Her forecast for 2017 is a decline of 3.4 percent.

Sales of Top 10 super-premium cigarette Natural American Spirit were up 12.1 percent over the four-week period.

By comparison, Camel, the No. 3 traditional cigarette brand, was down 4.2 percent. Pall Mall, the No. 4 brand, fell by 9.6 percent, as more smokers have more disposable income to spend on higher-priced options.

Marlboro, the top-selling traditional cigarette brand, was off 2.4 percent. Its market share is at 46.8 percent.

Herzog said ITG Brands’ cigarette sales have stabilized in recent months, down 1.1 percent over the four-week period.

ITG’s market share was 7.5 percent, down from 10 percent in June 2015 when it acquired three Reynolds brands (Kool, Salem, Winston) and one Lorillard brand (Maverick) brand as part of parent company Imperial Brands Plc’s $7.1 billion purchase from Reynolds.

“Overall, Imperial continues to underperform the industry,” Herzog said.

Turning to sales of electronic cigarettes, Herzog said e-cig and vaporizer sales exceeded $4 billion in 2016. She is projecting growth of another $400 million in 2017.

Nielsen data tracks the e-cig mass channel and convenience store marketplace. Vaporizers, which typically are lower in price, are sold mostly in tobacco and vapor shops where Nielsen has limited tracking.

Tobacco products introduced into the marketplace after Feb. 15, 2007 — including almost every e-cig and vaporizer — have to retroactively go through additional Food and Drug Administration requirements to prove they don’t cause public harm. That includes providing more detail on liquid nicotine ingredients and manufacturing details.

Some smaller e-cig manufacturers have either gone out of business since the FDA regulations debuted Aug. 8, or are selling off inventory in anticipation of shutting down.

“Our outlook for 2017 is more cautious for the total vapor category given stifled innovation due to FDA regulations, as well as expected increased competition from iQOS given its superior heat-not-burn technology,” Herzog said.

In December, Philip Morris International has entered the FDA regulatory gauntlet to have its electronically heated cigarette, branded as Marlboro HeatStick, reviewed as a potential reduced-risk product.

“We continue to expect iQOS to be commercialized in the second half of 2017,” Herzog said. Reynolds recently completed a test market in Japan for Core, its latest heat-not-burn version.

Herzog said the top market share of R.J. Reynolds Vapor Co.’s Vuse brand dropped from 35.7 percent to 33.6 percent.

Blu eCigs, sold by ITG Brands, remained second at 17.4 percent, while the MarkTen XL product of Altria Group Inc. was third at 15.7 percent.

Leading U.S. websites stay in front despite slowing of traffic

Convenience and lower prices make the internet one of the most important distribution channels for e-cigarettes in the U.S., according to a new ECigIntelligence market report which estimates that the country has 180 vendors selling vaping products online.

Most traffic is concentrated among the top online vendors, although their web rankings declined during 2016.

Most of the leading websites receive more than half their visits from the U.S., although traffic from countries such as the UK, Canada and Turkey is increasing.

The leading source of visits is organic search, primarily from Google, followed by direct traffic – consumers who go directly to the vendor’s website. The impact of other channels such as email or social media is very low, according to ECigIntelligence data.

The study reveals that most of the leading online distributors in the U.S. have multi-brand websites, and the presence of corporate websites with single-brand is very low.

The report reveals a large variation in pricing between the leading websites. On the other hand, there is little average difference between prices among the top ten ranked online retailers and the next ten.

What This Means: Despite a downward trend in web ranking and visitor numbers for the leading online brands, the internet still provided one of the most important distribution channels for e-cig products in the U.S. in 2016, with about 15% of vapers regularly making their purchases online. The percentage is higher among hobbyists, of whom approximately 50% prefer to buy online.

The most popular vendors don’t necessarily have the cheapest products available – and though the leading websites’ statistics appears to have declined, they still account for the lion’s share of the traffic. There is no necessary correlation, however, between website visits or engagement and revenues.

– David Palacios ECigIntelligence staff

Minister Litzman, The Tobacco Companies And Cash Envelopes Episode 2

On Tuesday 12 Teves, YWN-ISRAEL reported on a Channel 2 sting investigation in which persons affiliated with the Hamodia newspaper, which is tied to Health Minister Litzman, accepted cash to arrange meetings with the minister via is closest confidants. The report also shows how members of the senior ministry staff, physicians, were willing to turn a blind eye to importing electronic cigarettes, which reports show are harmful to the tzibur’s health, all to accommodate the e-cigarette company representatives, who were distributing cash envelopes.

As explained in the first report, the undercover reporters established a fictitious company, SEC (Smoke Electric Cigarettes) and approached ‘macherim’ in Hamodia, primarily Yaakov Reinitz, who in exchange for cash, arranged meetings with senior ministry officials and with Minister Litzman himself. The first meeting was arranged during Chanukah, less than two weeks before they first met with officials in the Hamodia office in Jerusalem. The SEC representatives were seeking approval from the Health Ministry, or at least to refrain from interfering with importing their e-cigarettes to Israel.

It was also explained that Channel 2 has documented Litzman has met with heads of international tobacco companies, which he is prohibited from doing as per the FCTC (WHO Framework Convention on Tobacco Control) Agreement that was signed by many countries, including Israel. If the Health Minister does meet with such persons, the public must be advised, which did not happen here.

Channel 2 also points out that Litzman, to the surprise of all, has been a lone vote objection to legislation to get tougher against the tobacco industry, hinting that he may have been bought out by persons representing the tobacco companies’ interests.

In the final chapter of the report, Reinitz is recorded telling SEC folks “I am sitting in the minister’s office and I am told representatives of Phillip Morris were already here and they are supposed to meet with the minister.

The SEC representatives (Channel 2 reporters) entered Litzman’s office with their hidden video cameras and met with the minister along with personal aide and confidant to the minister, Moti Bobchik and of course, Reinitz.

They get right to the point, telling Litzman they wish to import electronic cigarettes in the coming weeks and seek the ministry’s assistance, adding “we already met with Prof. Itamar Grutto who said ‘at the moment it cannot be authorized’, but added you, the minister has the ultimate say in the matter”.

Litzman explains the matter is still being debated and at first, the thought was to prohibit the e-cigarettes, then instruction the SEC officials to continue to remain in contact with Prof. Grutto. He added “Whatever Itamar decides is what will be. I am not getting involved with this. At present I am dealing with junk food, not this”.

It is pointed out during this tenure, Litzman has not moved ahead any legislation seeking to curtail smoking and tobacco. The minister has also blocked legislation that seeks to limit or prohibit electronic cigarettes. Litzman advises them to remain in touch with Reinitz, who will be updated by him. The meeting lasted for seven minutes, during which they learned Litzman has given Phillip Morris permission to go ahead advertising a new product.

In a subsequent call with Reinitz, he promises SEC officials “A client of mine will not be …… and they needn’t worry”.

Once again Litzman’s office insists it has no knowledge of anyone asking for money or persons paying to see him. He insists his office is open to all and accepting money for such meetings is illegal and unacceptable. Regarding electronic cigarettes, Litzman’s office reports it is working to advance bills seeking to limit them in Israel. However, the minister’s voting record and ministry actions in recent months tell a different story, that the minister is not working against tobacco companies. In addition, Phillip Morris has invested “billions” in a new electronic smoking product and appears to have received a green light in Israel.


Indonesia may ban cigarette advertisements from TV, radio

The government may completely ban tobacco companies from advertising their products on television and radio in the future, according to a tobacco watchdog.

The National Commission on Tobacco Control (Komnas PT) said on Thursday that the latest draft of the broadcasting bill stipulated that the content of a broadcast advertisement was prohibited from promoting alcohol, cigarettes, and other addictive products. The bill is a revision of Law No. 32/2002 on broadcasting.

“The banning of [tobacco] advertisements, promotion and sponsorship in the bill is a policy by the House of Representative that is progressive and conforms to the Health Law and several Constitutional Court rulings,” Komnas PT law and advocate department member Muhamad Joni said.

Joni pointed out that the latest draft of the bill indicated the country was showing progress in tobacco control efforts as previous drafts did not contain such stipulations.

“The House has proven to be in favor of tobacco control and the public’s protection. Therefore, the bill must be secured in its deliberation process until it is passed,” Joni said. (dan)