From: James Middleton [mailto:dynamco@netvigator.com]
Sent: Monday, June 13, 2011 21:25
To: ‘pid@legco.gov.hk‘
Cc: ‘info@fstb.gov.hk‘
Subject: Tobacco ‘s Armageddon -Tobacco Tax Increases – save the children from addiction
Please distribute to All Legco Members
Dear Legco Members,
Tobacco Tax increases on a regular yearly basis and indexed above the rate of inflation level plus plain generic packaging of tobacco products are the Death Knell of Big Tobacco.
Please see the news articles below and be guided accordingly.
Excise Taxation set above 75% of retail price will have marked affects on the local market and youth smoking to the benefit of Hong Kong society and its future leaders, adding 15 years to their lifespan by not smoking.
Tobacco tax increases seriously hinder children and youth peer smoking due the lack of affordability. HK Customs Department has the local contraband situation under control and have yet to use the powers of the Organised and Serious Crimes Ordinance against the main source of the illicit tobacco here – the tobacco companies themselves which for the past two years (as shown in Customs Department figures) are shown to have supplied 60-65% of genuine product found in the illicit market place by failing to control their supply chains.
7% of the genuine product seizures by HK Customs in the past two years were marked ‘HK Duty Not Paid’’ showing these ‘legal’ products are being leaked through our Duty Free outlets as contraband whilst counterfeit products were reportedly sold to a UK tourist through one Duty Free outlet here, as reported in the UK Press.
Is Legco aware that the Tobacco companies have for some considerable time now, funded a reward scheme for public information provided ‘on counterfeit tobacco’ provided to HK Customs Department contrary to FCTC Treaty guidelines on Government involvement with the tobacco companies ?
At current June 2011 retail price of HK$ 52 (7-eleven stores) we are still HK$ 20 per packet less expensive for a 20 pack of Marlboro than in Singapore where the Govt intend to ban the sales of tobacco to all persons born after the year 2000.
http://tobaccocontrol.bmj.com/content/15/2/125.abstract
The cost to Hong Kong Society of smoking including loss of life is US 9.4 billion per year (in 1998 HK$ against Euro value terms – this will be far more now ) .
Please – Compare that to the tobacco Excise tax received per year here.
Sue Big Tobacco like the USA for the cost of healthcare treatment due to their unsafe consumer product that kills 50% of it long term users and also innocent passive smoking bystanders also.
Keep increasing the excise tax to save our children from addiction.
Kind regards,
James Middleton
Chairman
Clear the Air NGO
NEWS
Imperial Tobacco sees £110m go up in smokeafter Spanish cigarette ban
Imperial Tobacco has revealed it faces a £110m hit to its profits due to price cutting in the Spanish cigarette market.
It said that price moves in Spain in recent weeks had impacted all tobacco companies there, and it had acted to protect its market position. It said it continued to monitor the situation closely. Its Altadis business has followed key rival Philip Morris in cutting prices after consumption in Spain fell after a ban on smoking in public places, which came into effect on January 1 this year. The moves will hit operating profits for this year by around £110m, including a one-off cost of £40m relating to the impact on its logistics business.
Imperial said that, excluding Spain, the company’s financial performance would be in line with expectations. This has proved little comfort to investors, and the company’s shares have dropped 27p to £20.58.
http://www.guardian.co.uk/business/marketforceslive/2011/jun/13/imperial-hit-by-spanish-smoke-ban
Imperial Tobacco’s Spanish profits to halve – Citi
10:29 am by Sergei Balashov
Imperial lowered its own profit guidance today, saying that its operating profits in Spain will drop £110 million compared to its previous expectations for the full year
Imperial Tobacco’s (LON:IMT) profits will more than halve in Spain because of the recent sharp fall in cigarette prices in the country due to a price, according to Citi analyst Adam Spielman.
The warning follows Imperial lowering its profit guidance today, saying that its operating profits in Spain will drop £110 million compared to its previous expectations for the full year. Of this, £40 million represents a one-off non-recurring impact on IMT’s logistics business.
Otherwise, the group’s anticipated financial performance remains in line with expectations.
As a result of the price war in Spain, prices have dropped €0.20-0.40 per pack of 20 since 18 May, while net prices for manufacturers have fallen €0.15 on average. According to Spielman’s calculations, this will translate into a loss of sales of about €470 million per year in the €3.1 billion market. Imperial’s share of it will be about €150 million.
The reductions in cigarette prices by Imperial Tobacco, whose brands include West and Davidoff, followed a similar move by Philip Morris. This is seen as a result of a ban on smoking in public places imposed by the Spanish government at the start of the year.
“There is no offsetting decrease in costs so the loss will fall straight to the bottom line, more than halving Imperial’s profit from Spain,” said Spielman, reducing his earnings per share estimate for the group’s current year by 4 percent.
He has also cut Imperial Tobacco’s target price to £21.75 per share. That compares to a share price of £20.62 this morning.