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April 19th, 2012:

Government discussing timetable for selling its shares in Japan Tobacco

19 April 2012


The government is discussing a timetable for selling its shares in Japan Tobacco Inc. to help pay for earthquake rebuilding and limit expansion of the world’s biggest public debt, according to two Finance Ministry officials.

A combination of a market sale and a buyback by JT is possible, said the officials, who spoke on condition of anonymity because of ministry policy. The government wants to avoid going to market at the same time as Japan Airlines Co., the officials said.

Japan Tobacco is considering buying back shares if the government sells, spokesman Hideyuki Yamamoto said Tuesday. JT can’t comment on the timing of a share sale, Yamamoto said.

Based on Tuesday’s closing share price, the government would raise about ¥2.33 trillion were it to sell its entire 50.01 percent stake. A law passed last year allows for the sale of about one-third of the government’s holding, according to the Finance Ministry’s website.

JT is the fastest growing of the world’s five largest listed cigarette makers in terms of revenue, Bloomberg data show. Challenges for the company include an Australian law that will require cigarettes to be sold in plain packages as of Dec. 1, a move opposed by Philip Morris, Imperial Tobacco Group, British American Tobacco and Japan Tobacco.

JT’s stock is down almost 50 percent since the last share sale by the government in June 2004, when the price stood at ¥843,000. Any repurchases of stock by the company will help prevent dilution of share value if the government decides to cut its holding, Executive Deputy President Masakazu Shimizu said Feb. 8.

The Democratic Party of Japan proposed in September selling the government’s majority stake to help pay for recovery work after last year’s earthquake and tsunami.

Dubai plans 200% hike in tax on tobacco products

19 April 2012

Dubai: Beginning August, residents of Dubai might have to pay much more to take a puff. The authorities are planning to impose a 200 per cent increase in tax on sale of tobacco products in the markets of the emirate, a top official revealed on Wednesday.

The Dubai Health Authority (DHA) considers this will be a revolutionary step to deter the consumers from continuing with smoking, apparently reducing the sales of cigarettes in Dubai, one of the lowest-priced cities for cigarettes, compared to international prices. The present tax on cigarettes in the city is below 100 per cent.

Currently, the average price for a packet of 20 cigarettes in the UAE is Dhs7, while cheap brands are available for as low as Dhs2 in the Emirates. Usually, the price of a cigarette packet in Europe and other parts of the world is higher at about $7.

Speaking at the World Congress of Cardiology in Dubai, Qadhi Saeed Al Murooshid, director-general of the DHA, indicated that the authority is currently preparing for the legislation, which will come into effect in the Emirate from August onwards.

“Dubai Municipality will take necessary steps to implement the new regulation, which is aimed at curbing the consumption of tobacco products among the population,” he added.

“This is in the wake of the fact that the number of cardiovascular diseases (CVDs), which is mainly due to the tobacco use, has increased alarmingly, making it the No.1 cause of death in Dubai and the UAE,” elaborated Al Murooshid.

However, there is no immediate nationwide plan to implement 200 per cent increase in tax for tobacco products. Earlier, the Ministry of Finance had applied a 100 per cent tax on the import of cigarettes to the country, even though there was a recommendation for 200 percentage increase, which was not incorporated in the law for technical reasons.

Smoking is estimated to cause nearly 10 per cent of the CVDs, the second leading cause of the CVD, after high blood pressure, says a study issued by the World Heart Federation (WHF) on Wednesday at the World Congress of Cardiology.

Sydney C Smith, President of the WHF, said that tobacco harms the cardiovascular health of smokers and non-smokers exposed to secondhand smoke, but significant gaps in knowledge of these risks have been found in studies.

“Non-smokers who breathe secondhand smoke are 25 to 30 per cent more likely to develop CVD. There’s no risk-free level of exposure to secondhand smoke, which kills over 600,000 people worldwide each year. Of all adult deaths caused by secondhand smoke, more than 87 per cent were from CVD,” he explained.

NZ -Cabinet in favour of plain packaging

19 Apr 2012. The cabinet has agreed in principle to introduce plain packaging for all tobacco products in New Zealand, reports Herald Sun.
The packaging will display only health warnings and the contact details for Quitline, the government-funded service helping smokers stub out, Associate Health Minister Tariana Turia says.

New Zealand banned the open display of cigarette and tobacco packs in all dairies and other shops with effect from 23 July 23 this year. “Plain packaging is the next step to ensure that once they are in the hands and homes of smokers, the packs don’t promote anything other than our serious health warnings and quit messages,” says Turia.

There will be a public consultation process on the proposed change. (pi)

Australian duty-free operators prepare for arrivals tobacco abolition decision

19 April 2012

Federal Budget to be announced May 8 will reveal whether industry anti-ban lobbying was successful

Duty-free operations in Australia are waiting to find out whether industry lobbying efforts have succeeded in preventing the government form pressing ahead with a proposed ban on arrivals duty-free tobacco.

The measure is intended as a measure to help balance the budget by raising domestic tax levels in Australia but independent reports suggest it will not have any noticeable effect. The decision whether to press ahead with the ban will be unveiled when details of the 2012 Federal Budget are unveiled on May 8.

A delegation from European Travel Retail Council (ETRC) visited the country last month to lobby the Australian government in conjunction with the Australian Duty Free Association (ADFA).

Nuance Australia CEO Derek Larsen told DFNIonline: “ADFA has worked very hard to support the case against arrivals tobacco abolition in conjunction with its global counterparts including the European Travel Retail Council (ETRC), and with ourselves as the dominant duty-free player in Australia, along with JR Duty Free, we have been very active in lobbying both sides of government.”

He added: “We will fight to the end on this and we are hoping that we will get a decision that is favourable in terms of tobacco on arrivals.”

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Tobacco industry’s legal challenge stumbles as death tops agenda

19 April, 2012

THE tobacco industry’s constitutional challenge to enforced plain packaging has hit a central problem: smoking kills.

After six hours of legal argument by the tobacco multinationals in the High Court yesterday, the Chief Justice, Robert French, raised the question of whether previous cases cited by legal counsel to support the companies’ case dealt with a product comparable to cigarettes.

Justice French put it to leading counsel Bret Walker, SC, who had referred to cases dating back to the 1870s in the United States, that none related to a product on the market that carried the risk of serious or fatal disease to all who used it.

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”Doesn’t this put it into a different category?” Justice French asked.

Mr Walker said there was no case dealing with public health in the context of this constitutional challenge that he could produce.

He is appearing for two of the five tobacco companies challenging the constitutional right of the federal government to introduce plain packaging at the end of this year. This measure would require the removal of all trademarks and logos from cigarette packets which would have to be coloured a uniform brown and carry prominent health warnings and images.

The companies, British American Tobacco, Philip Morris, Imperial Tobacco, Van Nelle Tabak Nederland and JT International SA, have argued the measure breaches the constitutional requirement that the acquisition of property by the government be on just terms.

To make the case that the government’s measures involve an acquisition, the companies have to show that the government gains a measurable benefit as a consequence, that is apart from the claimed benefits to the public’s health.

The Commonwealth Solicitor-General, Stephen Gageler, SC, later yesterday opened the defence case declaring there could be no acquisition of property unless it could be shown that property had been taken.

Mr Gageler said it would be “incongruous” for the government to compensate a company for requiring a measure that had as its purpose the prevention of harm to the public.

He took up the example of Ratsak rat poison, previously raised in the hearing, as a product where the company was required to print a warning on the pack to keep it away from children.

To liken it to the aim of the plain packaging measures, Mr Gageler said it would be inconceivable for rat poison companies to be paid compensation if they were prohibited from making the product package appealing to children.

The steady increase in regulation of tobacco over the past 30 years might prompt the view that the companies were to be likened to ”frogs slowly boiling”, gradually having their property taken away, he said.

But Mr Gageler said that the increasing restrictions on the tobacco companies and the use of their trademark had not been associated with any diminution of their property

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High Court reserves decision on tobacco

19 April 2012

A TOBACCO company’s lawyer has brandished a packet of rat poison in the High Court to draw attention to the product’s lack of health warnings compared with planned requirements for cigarette packets.

After more than two days of hearings, Chief Justice Robert French today announced the court would reserve its decision on an appeal by tobacco companies against the federal government’s plain-packaging laws.

Earlier, Gavan Griffith QC, representing Japan Tobacco International, revealed he had ventured to Canberra’s Kingston shops to purchase a packet of Ratsak which he displayed to the court.

His action was a response to Commonwealth Solicitor-General Stephen Gageler, who argued that what the Commonwealth proposed was a regulation of a trade in the same manner that other products harmful to human health, such as rat poison, required warnings about safe handling.

Mr Griffith pointed to the poison warning on the Ratsak pack, saying it was very modest compared with what was required for cigarettes under the government’s plain-packaging legislation.

He offered to tender his Ratsak to the court, adding: “I do not invite your honours to open the pack.”

Four big tobacco companies are challenging the plain-packaging laws, which will require all cigarettes and tobacco products to be sold in drab olive-brown packs from December.

They are arguing the laws effectively mean the acquisition of their property, in the form of trademarks and logos, and would be unconstitutional unless just compensation was paid.

The case, which has drawn international attention, is being heard by the full bench of the High Court before a packed public gallery and an army of some 40 lawyers.

The lawyers represent British American Tobacco (BAT), Japan Tobacco International, Philp Morris and Imperial Tobacco Australia, the Commonwealth, as well as state and territory government and groups such as the Cancer Council of Australia.

Mr Griffith said the Commonwealth through the plain-packaging and health warnings was attempting to appropriate 100 per cent of the back of each packet and 70 per cent of the front.

“We say our trademarks are extinguished,” he told the court.