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April, 2013:

Regulators to request information about chemicals in tobacco products

By Megan R. Wilson 04/22/13 04:08 PM ET

The Food and Drug Administration has been given the green light to collect information from cigarette and tobacco companies about the chemicals they use.

Last year, the FDA issued guidance that asked tobacco companies to list the amount of more than 90 “harmful and potentially harmful constituents” in their products. In addition to nicotine, the HPHCs include acetaldehyde, ammonia, arsenic and formaldehyde.

The Office of Management and Budget (OMB) last week gave the FDA permission to ask companies about the substances. OMB also suggested that the Department of Health and Human Services delegate the information collection to the Centers for Disease Control and Prevention.

Congress ordered the collection of the information in the Federal Food, Drug and Cosmetic Act.


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TCI Trumpets Investment in Japan Tobacco

Oscar Veldhuijzen of TCI Fund Management kicked off today’s Active-Passive Investor Summit in Manhattan with a discussion of the London-based firm’s investment in Japan Tobacco . TCI, which manages more than $9 billion, invested in the tobacco company in summer 2011. It has since more than doubled.

“It is one of our most successful investments in recent years, a turnaround investment,” said Veldhuijzen, a partner and analyst at the roughly 50-person firm. In the beginning there were “virtually no believers.”

Japan Tobacco is one of the top three international tobacco companies in the world and includes flagship brands Benson & Hedges, Camel and Silk Cut, he said. Two-thirds of its profits are generated in Japan and Russia.

In the three years prior to TCI’s investment, Japan Tobacco had delivered poor shareholder returns, when compared to British American Tobacco and Philip Morris international, which returned 70% and 120% respectively to shareholders over that period, Veldhuijzen said. Yet Japan Tobacco had low levels of debt, a free cash flow yield and a low cost of borrowing that made share buybacks extremely accretive.

“We love the tobacco sector because it has very strong pricing power,” he said.

When TCI began its investment, the government held more than 50% of Japan Tobacco’s shares. It aligned with the government and pushed for more corporate governance and shareholder returns.

TCI “demanded” Japan Tobacco replace its chief executive, set clear profit targets and add independent board members in order to narrow the discount versus its global peers.

Veldhuijzen initially said Japan Tobacco’s share price would at least double if management increased its shareholder returns in line with global peers. He said the firm expects profits to increase by double digits in an industry that has shrunk volumes.

Separately, Veldhuijzen discussed his firm’s investment in Coal India , the largest coal miner in the world. He said he expects it to grow 20% in coming years, especially since coal is sold at a “massive” discount.

The firm “often invests in unconventional and unloved stocks…that trade at low multiples,” he said. “We have a bias for out of favor investments.”

Paraguayans Elect Tobacco Magnate as President

(ASUNCION, Paraguay) — Paraguayans elected a tobacco magnate as their new leader Sunday, returning the conservative Colorado Party to the presidency that it held for 61 years before former Roman Catholic bishop Fernando Lugo won the office in 2008.

Horacio Cartes won a five-year term with 46 percent of the vote over 37 percent for Efrain Alegre of the Radical Liberal party, the Electoral Court announced after most votes were counted. Five other candidates trailed far behind.

“I’ll need help from all the Paraguayans to govern in the next five years. Poverty, the lack of jobs for young people and international issues await us,” Cartes said Sunday night.

Poverty is widespread in Paraguay, which is an agrarian nation that is South America‘s No. 3 producer of soy, corn and sunflowers. About 1 percent of the population controls 77 percent of the arable land. The U.N. estimates more than half of Paraguayans live in poverty, while the country’s census bureau puts the number at 39 percent.

Alegre recognized his defeat despite saying earlier that he might challenge the outcome. “The Paraguayan people have spoken. There’s nothing more to say,” he said in a brief concession speech.

(MORE: Paraguay: President’s Forced Exit Wasn’t a Coup, but Still Deserves Scorn)

Cartes, 58, is part of the tiny elite that controls just about everything in Paraguay. His father represented the Cessna airplane company in Paraguay, which enabled Cartes to get schooling in the U.S. state of Oklahoma.

The president-elect owns controlling shares in banks, investment funds, agricultural estates, a soda maker and tobacco plantations. Most pre-election polls predicted his victory, despite this being his first run for public office. Cartes has been well-known in Paraguay as president of Libertad, the club that won last year’s national soccer championship.

Many Paraguayans hope this election will encourage other countries to restore full relations that were suspended after last year’s impeachment of Lugo, which neighboring nations saw as a threat to democracy in the region.

Nobel Peace Prize laureate Oscar Arias led an observer mission from the Organization of American States, and said Sunday that he had complete confidence in the Electoral Court because it had spent months observing and supporting the process. There were 515 observers from the OAS, European Union, the Union of South American Nations regional bloc known as UNASUR and the Union of Latin American Electoral Organizations.

International election observer Martin Sequeira said voting proceeded calmly with a high turnout. He said there were some unconfirmed reports of election fraud complaining that some ballots had been pre-marked.

But Arias said those were only “some small incidents, which you see even in the most consolidated democracies.”

The Colorados held the presidency during and after Alfredo Stroessner’s 35-year-dictatorship, until Lugo, a leftist, sandal-wearing former bishop, joined up with the Radical Liberals and was swept into office on promises of land reform. But Lugo lacked even a handful of supporters in congress, made political missteps within his own coalition and was stymied at every turn.

The Radical Liberals finally joined with the Colorados to vote Lugo out of office for “poor performance” last year. The impeachment process is well defined under the constitution, but Paraguay’s neighbors criticized the ouster of a popularly elected president as anti-democratic and suspended the country’s membership in UNASUR, the Mercosur trade bloc and CELAC, which brings together Caribbean, Latin American and European Union countries.

Lugo’s vice president, Federico Franco, a Radical Liberal politician who took over as caretaker president, said he expects Paraguay’s status to be swiftly normalized after the new head of state takes office Aug. 15.

Turnout was more than 68 percent among the estimated 3.5 million of Paraguay’s 6.2 million citizens who are registered to vote. They elected 45 senators, 80 deputies, 17 governors and 18 delegates to the Mercosur parliament based in Uruguay.

Millions more eligible voters live outside Paraguay, but after a poorly funded registration process, fewer than 22,000 people were registered, most in Argentina, Spain and the United States.

MORE: Impeachment of Paraguay’s President Still Doesn’t Solve Underlying Injustice

Ethics first as super investors get tough on tobacco

Ethics first as super investors get tough on tobacco


April 22, 2013

· (1)

· Read later

Dan Harrison

Dan Harrison

Health and Indigenous Affairs Correspondent

Standing firm: Australian Ethical has put the pressure on Norwegian company TOMRA to stop selling tobacco sorting machines.

An Australian superannuation and investment fund is leading an international effort to pressure a Norwegian machinery maker to leave the tobacco industry.

In what amounts to a new front in the war against tobacco, Australian Ethical will put forward a resolution on Monday at the annual general meeting of Norwegian company TOMRA, demanding it stop selling tobacco sorting machines.

Australian Ethical, which manages more than $600 million on behalf of about 18,000 investors, has long invested in TOMRA, which makes machinery used in recycling.

Last year, when TOMRA bought a company that makes tobacco sorting machines, Australian Ethical wrote to the company, asking it to get out of the area. When it refused, Australian Ethical approached other investors in the company for support.

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”We’ve got a very strong position on tobacco,” Australian Ethical managing director Phil Vernon said. ”Any exposure to tobacco we treat pretty seriously.”

The resolution calls on the company to stop selling tobacco sorting machines to the tobacco industry within six months. Australian Ethical focused its lobbying efforts on TOMRA’s top 20 shareholders, and has received two strong indications of support, and informal assurances from other investors. While some investors were not aware of TOMRA’s exposure to tobacco and were alarmed, others were not concerned, either because they do not screen out tobacco, or they were not worried by the size of the tobacco business, which provides about 3 per cent of TOMRA’s revenue.

”To be honest, we’re probably realistic about whether the resolution will succeed but we’re hopeful obviously that it will,” Mr Vernon said.

”At the very least, what we’re interested in is sending a fairly strong message to the company.”

Mr Vernon said if the resolution received majority support, it would be binding on the company. If it fails, Australian Ethical will sell its stake in TOMRA.

In February the Future Fund announced it would sell its tobacco investments – valued then at about $222 million – citing the damaging health effects and addictive properties of tobacco.

Superannuation funds including HESTA, UniSuper and First State Super have previously dumped their investments in tobacco.

Read more:

High Court Rejects Tobacco Marketing Appeal

The Wall Street Journal

Updated April 22, 2013, 3:14 p.m. ET

High Court Rejects Tobacco Marketing Appeal


The Supreme Court on Monday rejected a tobacco industry challenge to a 2009 federal law that requires graphic warning labels on cigarettes and expanded marketing restrictions on tobacco products.

The challengers argued that parts of the law, which gave the Food and Drug Administration the authority to regulate tobacco, violated their constitutional free-speech rights. The companies challenging it include R.J. Reynolds Tobacco Co. and Lorillard Tobacco Co.

The law mandated that tobacco manufacturers allow half of the space on the front and back of cigarette packages for graphic health warnings. It also barred marketing practices …

Quebec to enact total smoking ban in prisons; last province to do so

Quebec to enact total smoking ban in prisons;

last province to do so

Canadian Press | 13/04/19 4:54 PM ET
More from Canadian Press

A prison at Saint-Jerome, Quebec.

Ryan Remiorz/The Canadian Press filesA prison at Saint-Jerome, Quebec.

QUEBEC — The Quebec government is moving to prohibit smoking outright in provincial prisons within a year — the last Canadian jurisdiction to do so.

The province’s public security minister says the ban will extend to courtyards.

Stephane Bergeron said in Quebec City today he knows the move will create tensions in the prison system.

But Bergeron says it is time to move forward. He says Quebec is currently the last province to allow smoking in courtyards.


The new rules will be introduced in two prisons this June, with the full ban to be in effect by the spring of 2014.

The Liberal government tried to do the same thing in 2008, only to backtrack three days later because of the reaction.

Corrections officials have complained that a partial ban is difficult to enforce.

Bergeron acknowledges the full ban will result in “added tensions” but says the Parti Quebecois government is vowing to go forward

HK Driver Arrested for Smuggling 11 Mln HKD Goods

2013-04-19 23:43:22 Xinhua Web Editor: Wang Wei

Hong Kong Customs and Excise Department said Friday that customs officers have arrested a 55-year-old truck driver at the Shenzhen Bay Control Point for importing unmanifested cargo worth 11 million HK dollars (1.42 million U.S. dollars).

It is the largest smuggling case at land boundary control points in last two years.

Officers stopped his lorry on Thursday morning, which was declared to be carrying connectors, clothing and wires.

Officers found 331 cartons of unmanifested goods in the lorry, including 60,000 sets of electronic cigarettes and cartridges, 15, 000 tablets and 10,000 boxes of suspected virility drugs and health products.

Parents smoking near children to be held accountable in Latvia

18.04.2013 12:29

Parents smoking near children to be held accountable in Latvia. 49873.jpeg

The Latvian Parliamentary Committee on Human Rights and Public Affairs Committee approved the proposal to impose criminal liability against parents who smoke near children. The proposal was initiated from the Latvian Society of Physicians.

Doctors suggested that parents should be punished for smoking in the same manner as they are punished for child abuse. The members of the committee came to the conclusion that such amendments would help reduce the harm to children’s health caused by passive smoking. The Seim will soon consider the proposal in the second reading.

Not that long ago, Russia adopted the Federal Law “On protection of public health from exposure to environmental tobacco smoke and the consequences of tobacco use.”

The law established prohibitions on smoking tobacco in certain areas, as well as pricing, fiscal and organizational measures to reduce the demand on tobacco products and restrict tobacco trade. Additionally, the law stipulates restrictions on advertising and sponsorship of tobacco.

Copyright © 1999-2013, «PRAVDA.Ru». When reproducing our materials in whole or in part, hyperlink to PRAVDA.Ru should be made. The opinions and views of the authors do not always coincide with the point of view of PRAVDA.Ru’s editors.

How U.K. tobacco firms stay one step ahead of the regulator: study


The Globe and Mail

PublishedWednesday, Apr. 17 2013, 5:37 PM EDT

You can call tobacco-company executives a lot of nasty names. But you certainly can’t call them stupid. They are constantly coming up with ingenious ways to keep people hooked on their products.

A new British study is a case in point. It found that tobacco firms in Britain fiddled with cigarette prices as a way of sabotaging public-health efforts to reduce smoking.

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Every year, around March and April, the British government nudges up taxes on tobacco. The taxes add to government revenues. But raising the price of cigarettes is also considered one of the most effective means of reducing smoking – particularly among the young and low-income individuals.

However, the companies have not passed on the taxes to all of their products, according to the study published this week in the journal Addiction. Instead, they have been absorbing the tax increases on their lower-priced brands, so that prices of these products have remained almost unchanged since 2006. Yet, during the same period, the companies boosted prices on their premium brands, which tend to be purchased by high-income earners who are unlikely to quit because of an incremental cost increase.

“The tobacco industry is playing a clever game with cigarette prices and undermining the intended impact of public-health policies,” said the study’s lead author, Dr. Anna Gilmore, a professor of public health at the University of Bath. Smoking rates have remained fairly stable in recent years, hovering around 20 per cent of British adults. That indicates successive tax increases have done little to persuade smokers to butt out.

Gilmore said her study represents the first detailed analysis of the price structure of cigarettes sold in Britain. The U.K. consumer price index has traditionally included only the premium brands. So the widening gap between low-end and premium products has remained under the public radar, she said. Prices can vary by more than a pound ($1.56) a pack.

Charging different amounts for their products helps the companies maintain their customers while boosting profits, she said.

“On their more expensive brands, they add their own price increases on top of the tax increase. On their very cheapest brands, they absorb the tax increase and cut prices. The first ensures their profits rise and that consumers are hoodwinked into believing the price increase is due to the government’s tax increase, the second ensures fewer smokers quit than would otherwise, providing a win-win for the industry,” she wrote in a statement released with the study.

The study also found that the market share of lower-priced cigarettes tended to grow over time. That suggests some consumers shifted to the cheaper smokes as the price of high-end products rose. So rather than being enticed to quit because of the price hike in their favourite cigarettes, they simply shifted brands.

“The availability of cheap cigarettes is really important for young smokers,” she said, noting they represent the future market for tobacco firms. “I think a low price keeps customers in the market and potentially attracts new young customers.”

Gilmore believes Britain needs to create a new public agency to regulate how much money the companies make while ensuring tax increases are imposed on all products.

Could tobacco companies in Canada also shift taxes from one product to another so that some brands remain relatively cheap? Rob Cunningham, a senior policy analyst for the Canadian Cancer Society, says that would not be possible in Canada. “Britain has a different tax structure. We just have a certain amount of tax per cigarette,” he said.

“There is no doubt that tobacco companies are very sophisticated in their knowledge of the market and their desire to maximize sales and profits. And if they can have a strategy that keeps people in the market, instead of quitting altogether, you can expect tobacco companies are going to want to use that. And, based upon this study, that is exactly what is happening in Britain.

“I think the approach we have in Canada – a specific tax – is a better approach.” But, he noted, Canadian companies have introduced products at different prices so there are still some similarities with Britain.

“Up until about a dozen years ago, all brands of the major companies in Canada had the same price, except for one or two of the smaller companies. Since then, there has been a lot of price discounting, ” he said. “Discount brands are selling for $10 to $20 dollars a carton less” than premium brands.

ASA Adjudication on Gallaher Ltd – Advertising Standards Authority

ASA Adjudication on Gallaher Ltd

Gallaher Ltd

Members Hill
Brooklands Road
KT13 0QU


17 April 2013


National press Sector: Tobacco Number of complaints: 1


Big Al’s Creative Emporium

Complaint Ref: A12-210929


Summary of Council decision:

Two issues were investigated, both of which were Upheld.


Ads, for a tobacco producer, responded to the Government’s plain pack consultation on cigarette packs:

a. A national press ad featured an unmarked packet of cigarettes. Text stated “WHY MAKE IT EASIER FOR CRIMINALS TO MAKE A PACKET? In the current economic climate, the black market in tobacco is booming. Standardising packs will make them easier to fake and cost taxpayers millions more than the £3 billion lost in unpaid duty last year”.

b. A national press ad featured an unmarked packet of cigarettes and a star which contained the text “ONLY £3bn”. Text stated “The black market in tobacco is booming. Last year it cost the Treasury £3bn in unpaid duty”.


Cancer Research UK challenged whether:

1. the claim “the black market in tobacco is booming” was misleading and could be substantiated, because they believed it suggested there had been a rapid growth in the market, whereas an HMRC report from 2011 stated that “the tobacco illicit market had been reduced significantly over the last decade”; and

2. the claims “Standardising packs will make them easier to fake and cost taxpayers millions more than the £3 billion lost in unpaid duty last year” in ad (a) and “last year it cost the Treasury £3bn in unpaid duty” in ad (b) were misleading and could be substantiated, because they believed the figure of £3 billion was exaggerated.

CAP Code (Edition 12)


1. Gallaher Ltd, t/a JTI (JTI) said it was a well-established fact that the market in illicit goods was a major, global problem and had grown significantly in size and value over the last 30 years. They said the black market was estimated to be worth US$5.5 billion in 1982 and the latest figures for 2012 valued it at approximately US$600 billion. They provided a report entitled “The Impact of Plain Packaging on the Illicit Trade in Tobacco Products” by Professors Zimmerman and Chaudhry in support of their claims.

They stated that tobacco products (cigarettes and roll your own tobacco (RYO), also known as hand-rolling tobacco (HRT)) made up a significant proportion of the black market in consumer goods, as stated in a European Union (EU) report on EU customs enforcement of intellectual property rights, which set out that the top categories of products detained were cigarettes which accounted for 34% of the overall amount, followed by office stationary (9%), other tobacco products (8%), labels, tags and emblems (8%), clothing (7%) and toys (7%). They added that, while difficult to quantify in exact terms, the Zimmerman and Chaudhry report indicated it was generally agreed that 10–11% of the global cigarette market was illicit, representing over 600 billion cigarettes a year.

JTI stated that reports indicated that the black market in tobacco products in the EU was significant and growing and a report quoted in the Financial Times stated that, in 2010, one in 10 European cigarettes smoked (64.2 billion) were either untaxed or made of counterfeit tobacco, which was a rise of nearly 2% since 2006. They stated that the European Law Enforcement Agency (Europol) recognised that “Organised crime groups based in the EU are increasingly active in cigarette smuggling” and a KPMG report for Philip Morris estimated that consumption of illicit tobacco in the EU had increased from 8.3% in 2006 to 10.4% in 2011.

They stated that, in the UK, an HMRC report from 2011, which represented the most up to date data when the ad appeared in October 2012, estimated that illicit product constituted up to 15% of the market for cigarettes and up to 50% of the market for RYO. They said the UK Border Agency and European Commission Anti-Fraud Strategy communications reinforced the position that the UK was a key destination for illicit tobacco products.

Although JTI acknowledged that the illicit trade in tobacco products had reportedly been a declining trend over the past ten years, they said it was clear that the scale of the black market in the UK remained significant and had grown for certain types of tobacco product. They pointed out that HMRC noted that the black market continued to be a serious problem and that “methods of tobacco smuggling have evolved”. JTI provided examples of such counterfeiting operations which had been brought to justice. They added that on 19 June 2012, in the Public Bill Committee’s discussion of the Finance Bill, Cathy Jamieson MP referred to data from an empty pack survey conducted for tobacco companies which stated “preliminary results show an increase in the non-UK duty-paid [tobacco] products this year compared with the same period last year. There is a fear that there will be further large increases in the current year”. They considered that that statement was based on more recent data than that in the 2011 HMRC report and showed that illegal tobacco trade as a whole in the UK was again back on the increase. They therefore considered the claim was not misleading.

JTI also provided a number of quotes from news articles which reported and commented on the likely impact of plain packaging on illicit trade.

2. JTI said the HMRC figures from 2011, in a report entitled Measuring Tax Gaps, showed that the illicit tobacco trade already cost taxpayers up to £3 billion per year in lost revenues. They provided a copy of the report. They said the £3 billion figure was a well-publicised statistic derived from an official HMRC source and did not consider that the figure was in dispute. They stated that the figure was frequently cited by public authorities to illustrate the cost of the illicit tobacco trade and did not consider it was misleadingly presented in the context of the ads.

They provided examples of the £3 billion being quoted by public officials; in a letter to the Home Secretary from Jim Sheridan MP on 25 October; by the HMRC itself to emphasise the cost of the illicit tobacco trade to the tax payer; by John Whiting (a Non-Executive Director on the board of HMRC) when giving evidence to the Northern Ireland Assembly Committee for Justice; and by Cambridgeshire County Council, providing consumer information on their website.

They stated that, when used by Mr Sheridan and Mr Whiting, the figure had not been qualified on the basis that it represented the upper limit calculated by HMRC. As they noted that the £3 billion figure was derived from an official HMRC source and was frequently cited by public authorities and journalists without reference to its provenance, they did not consider that such a reference should be required in the ads. They said the figure was used in the ads in relation to the cost of the illicit tobacco trade to the “the Treasury” and considered that the reference to the Treasury was sufficient to demonstrate that the figure was an official HMRC statistic and further detail about the calculation and provenance would be available on HMRC’s website or in their tax publications. They added that the ads included a reference the JTI website, where a copy of JTI’s response to the Department of Health’s (DH) consultation on the Standardised Packaging of Tobacco Products of July 2012 was available and pointed out that that document included sections on illicit trade which referenced the source of the £3 billion figure.

They said there was no implicit or explicit reference in the ads to the £3 billion lost in unpaid tax being linked only to the illicit trade in one type of tobacco product and considered that consumers would not infer that the £3 billion figure related only to the illicit cigarette market and not HRT, as the ads referred consistently to the black market in tobacco and the standardisation of packs in connection with the £3 billion figure. They added that ad (a) did not refer to “cigarettes”. They did not consider that references to “packs” and the image of a plain cigarette packet would lead consumers to assume that the £3 billion figure related to the illicit cigarette trade only, especially as they considered that the wording of the ads, and the context in which they appeared, clarified that it was the black market in tobacco. They felt that it was universally accepted that “packs” or “packets” were used in relation to all tobacco products.

They added that the ads were created in response to the DH’s consultation on the Standardised Packaging of Tobacco Products, which concerned cigarettes and HRT. They therefore considered that it was clear that the ads referred to the cost of the black market in tobacco in relation to all tobacco products.


1. Upheld

The ASA noted the HMRC report “Tackling Tobacco Smuggling – building on our success”, dated April 2011, which looked at the impact of tobacco smuggling on the UK. We noted that the report recognised that “methods of tobacco smuggling have evolved”; that the tobacco illicit market “is now a global problem carried out by highly organised criminal gangs” and “in the UK, we are facing continued threats from … a growing problem of illicit whites”, namely “cigarettes manufactured for the sole purpose of being smuggled into and sold illegally in another market”. We also noted that the report stated “that tobacco smuggling costs the UK taxpayer an estimated £2.2 billion per annum”. We acknowledged therefore that the report suggested that the state of the tobacco illicit market was presently a major problem which had a considerable financial impact on the UK. However, we also noted that the report stated that “the tobacco illicit market had been reduced significantly over the last decade”.

We considered that the claim “the black market in tobacco is booming” would be understood to mean that problems with the tobacco illicit market had been increasing and did not consider that readers would infer from the ads that, although the tobacco illicit market was presently a major problem, it had also significantly reduced in the past ten years.

Because we considered that consumers would understand the claim “the black market in tobacco is booming” to mean that the problems with the tobacco illicit market had been increasing, when we understood that that was not the case, we concluded that the ads were likely to mislead.

On that point, the ads breached under CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).

2. Upheld

We considered the HMRC figures provided by the advertisers in support of the claims that the UK had suffered “£3billion lost in unpaid duty last year” and that the black market “cost the Treasury £3bn in unpaid duty”. We noted that the HMRC report from which the figures were drawn provided upper and lower estimates for the associated revenue losses for cigarettes and for HRT products, and acknowledged that the combined upper estimate for cigarettes (£2,200 million) and HRT (£880 million) came to £3.08 billion.

We considered that consumers would infer from the claim that £3 billion had been lost in unpaid duty and that that figure represented an official estimate from HMRC regarding the revenue the UK had lost in unpaid tax in 2011 from the illicit cigarette market. We understood, however, that the £3 billion figure related to the HMRC’s combined upper estimates for cigarettes and HRT. We noted that the lower estimate for cigarettes was £500 million and for HRT was £620 million and considered there was a notable difference between the upper and lower estimates for cigarettes in particular. We also noted that the HMRC report “Measuring tax gaps 2012″ stated “Key findings for cigarettes … The illicit market share for cigarettes was estimated to be 9 per cent in 2010-11, with associated revenue losses of £1.2 billion” and that the HMRC report “Tackling Tobacco Smuggling – building on our success (2011)” stated that “… tobacco smuggling costs the UK taxpayer an estimated £2.2 billion per annum” and that the HMRC did not use the upper limit when referring to an estimate revenue loss figure.

We also noted that the ads featured a picture of a cigarette packet and made references to “packets”, “packs” and “cigarette packs”. In light of that, we did not consider that the ad made clear that the £3 billion tax loss figure was intended to relate to a combined total for cigarettes and HRT. In the absence of further qualifying information, we considered that most consumers would be likely to understand the figure of “£3 billion” to relate to the revenue tax losses for cigarettes only.

We therefore concluded that, in the absence of qualifying text, providing additional information about the methods used to calculate the “£3 billion” figure, or any information indicating that it was an upper estimate relating to all tobacco products, the figure was likely to mislead.

On that point, the ads breached CAP Code (Edition 12) rules 3.1, 3.3 (Misleading advertising) and 3.7 (Substantiation).


The ads must not appear again in their current form