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BNZ to bring in nuclear free, tobacco free investment policy

Bank of New Zealand has developed a responsible investment policy which excludes companies involved in the production of cluster munitions, anti-personnel mines, nuclear weapons and tobacco or tobacco products from its international equity holdings, it said.

http://business.scoop.co.nz/2017/03/23/bnz-to-bring-in-nuclear-free-tobacco-free-investment-policy/

“In the last 3.5 years our funds under management have grown from $1.5 billion to almost $4 billion today, so we’ve undertaken a comprehensive review of our investment business,” BNZ head of wealth and private bank Donna Nicolof said in a statement. In the past BNZ invested in commingled funds alongside other institutional investors.

“One of our key investment beliefs is that risk and return are equally important and we have made the decision to exclude companies involved in the manufacture of tobacco on the basis that there is no safe level of use and engagement with these companies is futile. The regulatory and litigation risks faced by this industry are significant,” Nicolof said.

The investment policy at BNZ, a subsidiary of National Australia Bank, spans all investments it makes on behalf of customers and includes the investments of the BNZ KiwiSaver Scheme.

The move follows investor uproar last year after media investigations found New Zealanders had unknowingly invested $152 million in arms manufacturers and big tobacco companies through their KiwiSaver funds.

Earlier today the opposition Green Party said the government needs to set a clear deadline for when all KiwiSaver providers should have divested from companies involved in the manufacture of cluster bombs, landmines, and nuclear weapons. According to a report by Radio New Zealand four default providers – Australia & New Zealand Banking Group, Kiwibank, Westpac Banking Corp and Mercer – still had passive investments in such companies through global index funds.

“It’s time for the government to get tough on investment companies that are dragging their feet on ethical investment,” said Green Party co-leader James Shaw.

Smoking rate continues to decline, survey shows

The latest Canadian Community Health Survey shows a 0.4 percentage point annual decline in the smoking rate and a nearly nine per cent drop since 2000-2001, the Canadian Press reported.

http://www.tobaccojournal.com/Smoking_rate_continues_to_decline_survey_shows.54156.0.html

Some 17.7 per cent of the population 12 years and older smoke daily or occasionally in 2015, compared with 18.1 per cent the year before, the news agency said. The rate was 26 per cent in 2000-2001. About 5.3 people smoke, of which about 3.8 million are daily smokers, Canadian Press said. Male smokers at 20.4 per cent represented a larger group than females at 15 per cent of the population in the latest survey.

FCTC cut smoking 2.5 per cent over 10 years; study

A decade of tobacco control efforts by the Framework Convention on Tobacco Control (FCTC) has reduced the global smoking rate by 2.5 per cent, according to an evaluation by the International Tobacco Control Policy Evaluation Project.

http://www.tobaccojournal.com/FCTC_cut_smoking_2_5_per_cent_over_10_years_study.54157.0.html

Although the international treaty, an adjunct of the World Health Organisation, has made substantial progress in combatting use of tobacco products, implementation of FCTC measures has fallen short of its objectives, according to the study. “While the progress of WHO Framework Convention on Tobacco Control has been remarkable, there are still far too many countries where domestication of the treaty and its implementation has fallen short,” said Dr Geoffrey Fong, a study author from the University of Waterloo, Canada. “One important cause of this is the tobacco industry’s influence, particularly in low- and middle-income countries.”

Conducted with assistance from WHO, the study analysed data from 126 countries and determined the smoking rate in those countries declined on average from 24.7 per cent in 2005 to 22 per cent in 2015. FCTC obligates 180 signatory countries to raise tax on tobacco products, create smoke-free public spaces, implement warning labels on packaging, ban advertising and support stop-smoking services.

Cigarette tax to rise 100 per cent

The tax on cigarettes is expected to be hiked 100 per cent this year as part of a selective tax agreement agreed last year by the Gulf Cooperation Council (GCC) to raise the price of goods deemed unhealthy, the Times of Oman said.

http://www.tobaccojournal.com/Cigarette_tax_to_rise_100_per_cent.54154.0.html

Cigarettes, alcohol and unspecified other unhealthy products have been targeted by the Finance Ministry for the tax increase this year, the Times said. The rationale for the stiff duties is that use of unhealthy products raises healthcare costs for governments, the newspaper said.

The 2016 selective tax agreement by GCC member states Bahrain, Kuwait, Saudia Arabia, Qatar, Oman and the United Arab Emirates calls for comparable duties on products deemed harmful to human health and the environment. For example a 100 per cent tax was approved for tobacco products and high energy drinks sold in member countries, while soft drinks face a 50 per cent tax.

FDA delays ‘other use’ rule for tobacco-derived products

The Food and Drug Administration (FDA) pushed back by one year a rule to clarify when products derived from tobacco face regulation as drugs or combination products.

http://www.tobaccojournal.com/FDA_delays_other_use_rule_for_tobacco-derived_products.54153.0.html

Initially set to take effect in February, the FDA first delayed implementation by one month and now intends for it to take effect on 19 March 2018. An additional comment period will expire on 19 May 2017. Additional information is available at: https://goo.gl/BrQooq

PMI to convert Greek cigarette plant to make iQOS sticks

Philip Morris International (PMI) will invest EUR 300 million (USD 323 million) to convert a Greek cigarette factory to into a plant capable of turning out 20 billion tobacco sticks for its iQOS heat-not-burn device, the company said.

http://www.tobaccojournal.com/PMI_to_convert_Greek_cigarette_plant_to_make_iQOS_sticks.54155.0.html

Expansion and remodeling the Aspropyrgos plant operated by affiliate company Papastratos will create 400 new jobs in addition to the 800 current ones, PMI said. Construction will begin immediately with operations expected to start in January 2018.

“This investment is further evidence of our progress towards a smoke-free future. We are encouraged by the 1.4 million smokers who have already switched to IQOS around the world, and we expect this momentum to continue,” said Frederic de Wilde, PMI regional president for the European Union.

Aspropyrgos will be the third facility dedicated to iQOS production. Production currently is centred in a specially built facility in Crespellano, Italy and a small scale Industrial Development Centre in Neuchatel, Switzerland.

Organised crime syndicates smuggling ‘low risk’ tobacco leaf and cigarettes into Australia

ORGANISED crime syndicates trafficking drugs like ice and cocaine are now smuggling tobacco leaf and cigarettes and funnelling the cash back to terrorist groups.

http://www.geelongadvertiser.com.au/news/national/organised-crime-syndicates-smuggling-low-risk-tobacco-leaf-and-cigarettes-into-australia/news-story/81507f303ce6c7005b0f764afc10fe9b?nk=4a17044c8404afede5aa34fab4c90734-1490219416

With government taxes on tobacco set to rise again in May’s federal Budget, black market tobacco leaf and cigarettes are now as profitable as narcotics.

And such is the “low risk high return” market, Federal law enforcement now have credible evidence monies from tobacco trafficking are supporting terrorist groups in the Middle East.

Lead national crime fighting agency Australian Border Force intelligence has flagged a noticeable shift in the pattern of trafficking of tobacco which is rising exponentially, in ordinary postal mail alone by 10 to 15 per cent every year.

According to figures obtained by News Corp Australia, in January last year 3.6 million sticks of cigarettes and 435kg of loose leaf tobacco was intercepted at the nation’s main foreign parcel receiving facility in Sydney through which 75 per cent of all mail nationally passes through.

But this January, the latest monthly figure available, 5 million sticks and more than 1 tonne of loose leaf was intercepted.

Last year’s record average was 150 tonnes of loose leaf and 40 million sticks seized but this year that’s expected to be significantly eclipsed.

The difference has been the emergence of serious organised crime groups as opposed to opportunists taking over the trade almost in entirety.

“It’s all about the money,” one frontline ABF officer involved in the fight said.

“Those who were sending drugs are now involved, because the profit is there. We will recognise the mail coming through as being from the same criminal syndicate … over the last 12 months with tobacco we are actually seeing the exporters using the methodologies we would normally see with drugs.”

Such is the profit margin, ABF recently seized a teddy bear with just four packets of cigarettes sewn into it, a considerable effort for just $60 profit but in multiple individual teddy parcels it could be considerable.

Most of the illicit cigarettes, some of which ends up on the shelves of legitimate corner shops, is from South Korea, Japan, China and Hong Kong while loose leaf is mostly from Indonesia and the Middle East.

Some of it is manufactured legally but with the intention to import it specifically to Australia (evidenced in their plain packaging) to avoid duties or to fuel the black market with foreign markings and brands.

While the trafficking alone is a concern so to are its national security implications.

It has been learnt Australia’s multiagency counter terrorism agents, including the ABF, Australian Federal Police and ASIO, have been warned by overseas counterparts notably both US and French authorities and Interpol that the tobacco smuggling industry was being taken over by terrorist networks.

Specifically suspects linked to Lashkar-e-Taiba and the Taliban in Pakistan, Hezbollah in Lebanon and elements linked with al-Qaeda in the Islamic Maghred (AQIM) in North Africa, Islamic State (ISIS) and even Colombian militant group FARC who traditionally have been involved almost exclusively just in cocaine production.

Australian authorities have intelligence of targets here believed to be in the tobacco smuggling trade and sympathetic and or indirectly linked to the Islamic extremist cause of both Hezbollah and ISIS.

Authorities have conceded the thresholds that have to be established for a prosecution with proof of knowledge and proof of origin are substantial and hard to make, not helped by suspected corrupt import brokers and freight handlers.

Earlier this month, the Australian Criminal Intelligence Commission (ACIC) told a parliamentary joint committee inquiry into illicit tobacco it was a “low risk high reward” trafficking industry and as such high-end criminals were using profits to fund into other criminal enterprises.

This included those with jihadist terror links, although sensitivities around element prompted a request for the evidence to be heard behind closed doors.

There was evidence just one successful import out of 20 attempts from the Middle East was all that was needed to turn a profit.

In 2015, the ABF recognised the rise in tobacco smuggling and the potential loss to government in tax revenue and created a dedicated strike team.

The level of illegal trafficking attempts is expected to rise significantly with a 12.5 per cent increase in excise and customs duties to come in this September under the Federal Government’s May budget, to make the average cost of a packet of cigarettes the most expensive in the world at up to $40 a packet.

Calls to stub out tobacco deals

http://www.thestandard.com.hk/section-news.php?id=180992

Several legislators yesterday called on the government not to extend further concessions to the tobacco trade that is trying to further delay implementation of bigger graphic health warnings on cigarettes to the detriment of public health.

The government proposed in May 2015 to enlarge the size of health warnings to cover at least 85 percent of the packet or retail containers of cigarettes, saying the existing six graphic health warnings which cover half of packets or containers have been in use since 2007.

The Food and Health Bureau has made four concessions to meet the industry’s concerns, including using any background color to show nicotine and tar content and for the English version of the health warning to remain at 50 percent of the surface area of the lid of a drum-shaped container.

Undersecretary for Food and Health Sophia Chan Siu-chee told a Legislative Council health services panel yesterday that the government will also extend the adaptation period from six months to 12 months upon gazetting of the amendment order of the smoking ordinance.

Tourism-sector lawmaker Yiu Si- wing said: “The government is conceding, giving in to the tobacco sector’s pressure.”

The Labour Party’s Fernando Cheung Chiu-hung: “Public health should come first. Especially as I have had some personal health problems, I understand the value of health.

“I understand from the grassroots that smoking is a relief for them from stress but the government should not concede anymore. It has already conceded enough.”

Peter Shiu Ka-fai, of the wholesale and retail sector, questioned whether the government would have evidence to show that bigger warnings would mean “people will stop smoking?”

Wong Ting-kwong, of the import and export sector, said he is a smoker and that bigger warnings will still affect second- and third-hand smokers as “the smoke isn’t less.”

The panel also discussed the Hong Kong Code, a voluntary code aimed at protecting breastfeeding and to impose restrictions on formula milk marketing practices that give misconceptions about the nutritional value of products for children up to 36 months old.

Chan told the legislators: “We consulted the Department of Justice and the code is not breaching the competition law as this is voluntary.”

Stamps mandated for tobacco products

The Tax Authoritiy (AT) has introduced a “control” stamp on tobacco products and plans the same for alcohol to reduce revenue loss from illicit trade, the AIM news agency reported.

http://www.tobaccojournal.com/Stamps_mandated_for_tobacco_products.54149.0.html

All imported and domestically manufactured products must bear the stamp to be sold legally, said AIM, the Agência de Informação de Moçambique. Amelia Nakhare, AT chairperson, said the new stamp would have a significant impact on government revenue and the country’s fiscal organisation, AIM said. She reportedly announced the new stamp during a visit to the British American Tobacco factory in Maputo, where cigarettes bearing the new seal were being manufactured.

Treasury consults on tax treatment of heated tobacco products

The Treasury is consulting on the tax treatment of heated tobacco products, which are being promoted as a new innovation in the tobacco market. In these products processed tobacco is heated (but not burned like conventional tobacco) to produce, or flavour vapour. Heated tobacco is not a separate category in its own right in current legislation, so a consultation on their tax treatment aims to help maintain the integrity of the duty system going forward.

The consultation scope does not include e-cigarettes, which do not contain tobacco.

The consultation closes on 12 June 2017.