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February 6th, 2014:

Provisions Contained in the EU Tobacco Products Directive

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BBC: Tobacco ban for Aberdeen newsagent believed to be first in Scotland

from the BBC news:

An Aberdeen newsagent is believed to have become the first in Scotland to be banned from selling tobacco products.

Aberdeen City Council applied for a tobacco retail banning order against Shriraj Gindha, trading as Tony’s Newsagent, in Victoria Road, Torry.

The local authority said he had repeatedly been caught selling tobacco products to under age customers.

The council said Tony's was a repeat offender. (BBC)

The order, which was granted at Aberdeen Sheriff Court, will be in place for a year.

Aberdeen City Council trading standards team leader Graeme Paton said: “Despite numerous advisory visits, repeated warnings and fixed penalty notices, Mr Gindha continued to sell cigarettes to our 16-year-old test purchasing volunteers, never asking for proof of age or their date of birth.

“In light of repeated offending, we had little option but to seek an order from the court banning him from selling tobacco products.

“This was an extreme case and the majority of tobacco retailers in the city comply with the law.

“Those who do fail a test purchase visit rarely do so a second time.”

5 Feb 2014

SCMP: Smoking habit set to get more expensive

from Jennifer Ngo of the SCMP:

Government mulls tax hike as part of a plan to cut tobacco use – especially among kids

The government may raise tobacco taxes to prevent people – especially youngsters – from picking up the habit.

“Further raising of the tobacco tax is a very effective measure in reducing smoking,” said Professor Sophia Chan Siu-chee, undersecretary for food and health.

Ahead of the financial secretary’s budget speech later this month, Chan said the government would explore the possibility of raising tobacco taxes, strengthening tobacco control and pumping more money into educating kindergarten and primary pupils.

The government had increased tobacco taxes twice in the past five years, with tangible results, she said. The current tobacco tax is HK$1,706 per 1,000 cigarettes, a rate of about 41.5 per cent.

Lisa Lau Man-man, chairwoman of the Council on Smoking and Health, said the smoking rate among young people had dropped since 2008, but rose slightly among primary-school children according to recent government data.

Lau advocates raising taxes progressively, better education and the pouring of revenue from tobacco taxes into policing initiatives and the establishment of centres to help smokers quit.

“There needs to be a multi-pronged approach to curb smoking,” she said.

However, Robin Jolly from Hong Kong United Against Illicit Tobacco said high taxes were to blame for the city’s growing black-market cigarette trade.

Jolly said raising tobacco taxes would only aggravate the issue. But he denied that the group’s stance was influenced by the fact it was funded by a tobacco firm.

“We need to deal with [the illicit cigarette issue] before thinking about increasing taxes.”

Jolly, a former police superintendent, also blamed weak law enforcement for the booming black-market.

In a survey commissioned by the group, 80 per cent of the 1,006 people questioned said black-market cigarettes were an issue, 70 per cent said illicit cigarettes were easily accessible to young people, and 87 per cent believed the government should do more to combat the problem.

But Lau disagreed, saying that to attribute the illicit cigarette boom to tobacco-tax increases was “jumping to a conclusion”.

The Customs and Excise Department seized 89,000,000 illicit cigarettes last year – a 17 per cent increase from the year before.

“We are targeting the source, so as to greatly reduce the number of illicit cigarettes on the streets,” a spokeswoman said.

6 Feb 2014

Jolly, tobacco front smokes public again

It is an open secret that tobacco firms deliberately aid cigarette smuggling, for instance, by manufacturing excess cigarettes to flood the illicit market, primarily to keep their products at affordable pricing on the black market. That did not stop tobacco-funded campaigner, Richard Jolly, from trying to smoke the public regarding the illicit tobacco situation; in fact, he even accuses the Hong Kong police and customs of supposed inaction.

from Qi Luo of the Standard:

Cops accused in illicit tobacco poll

Seven in 10 people say it is easy for teenagers and children to get hold of illicit cigarettes, a poll shows.

Hong Kong United Against Illicit Tobacco, which is supported by Philip Morris Asia among others, also accused police of turning a blind eye to the sale of smuggled cigarettes in the territory.

The group commissioned market research firm Ipsos to survey 1,006 people last November and December.

It found 70 percent believed it was “fairly easy or very easy” for people under 18 to access illegal tobacco products.

About 64 percent agreed that black market cigarettes contributed to youth smoking due to lower prices and ease in buying without age verification.

Social worker Harris Har Man-kwong of Hong Kong Christian Service said illicit cigarettes are much cheaper, making it attractive for teenage smokers to find a way to buy them.

Undersecretary for Food and Health Sophia Chan Siu-chee said in a TVB interview the number of Primary Four to Six students who smoke is increasing.

“We’re worried,” Chan said. “Most of current smokers started when they were teenagers.”

Chan said the Department of Health’s Tobacco Control Office will work with the Po Leung Kuk to fund non-smoking education at its kindergartens.

The Hong Kong Council on Smoking and Health urged the government to raise the tobacco tax up to 100 percent in the 2014-15 fiscal year, making the price of a cigarette pack HK$84.

It believes high tobacco duty will prevent youngsters from trying smoking for the first time.

The Ipsos survey, however, showed 90 percent believe the government should curb illicit cigarettes. Hong Kong United Against Illicit Tobacco convener and former policeman Robin Jolly said police have little incentive to crack down on the sale of smuggled cigarettes. He urged the government to effectively tackle the illicit cigarette trade before introducing any tobacco tax increase as it might inadvertently drive smokers to buy illegal cigarettes.

“We have to contain the problem before we consider raising tax and just making the problems bigger,” Jolly said.

A study released by Oxford Economics last year showed that more than 35 percent of cigarettes consumed in Hong Kong in 2012 were illicit. It estimated 1.8 billion illicit cigarettes, on which duty was not paid, cost the government HK$3.3 billion in lost tax revenue.

6 Feb 2014

BI: CVS’s decision to ban tobacco means next to nothing…for now

by Steven Perlberg of the Business Insider:

This morning, CVS announced it will remove tobacco products from all its stores nationwide by October 1.

That will cost the pharmacy chain an estimated $1.5 billion a year, only a tiny portion of CVS’s $123 billion in 2012 revenue.

It’s an even tinier portion of global retail sales. Excluding duty free and China (the market there is essentially closed to outside tobacco companies), global retail sales topped $554 billion in 2012, according to Citi.

And only 16% of that — $89 billion — came from U.S. sales.

So how upset are tobacco companies about CVS and its $1.5 billion? It’s hard to say.

Smokers who can’t buy their cigarettes from CVS will likely go elsewhere for their fix.

The more serious concern for big tobacco is waning demand in America. U.S. tobacco sales are decreasing as a portion of global sales.

That’s why tobacco companies have long targeted other regions as growth opportunities.

“On a volumetric basis, the global cigarette industry (excluding China and duty free) is increasingly concentrated outside of the U.S., which market accounted for 8.2% of volumes in 2012 (vs. 9.4% in 2008),” wrote Citi economists.

CVS is the first major U.S. pharmacy to ban tobacco, and the move may spur others to do so. As Wonkblog’s Sarah Kliff noted, CVS thinks this will end up being a shrewd business decision for its bottom line. Not to mention it gets positive press (and commendation from President Obama, himself a former smoker) for paving the anti-smoking way.

But with tobacco companies shifting attention to growth areas like Asia (Indonesia, Malaysia and the Phillip pines are particularly profitable), you have to wonder whether they even care about CVS.

azcentral: Tobacco sale ban by CVS praised

by Peter Corbett and Ken Alltucker for The Republic, azcentral:

CVS Caremark Corp.’s decision to stop cigarette sales drew praise Wednesday for a move perceived as putting health before profits even as skeptics wondered whether alcohol, sugary sodas and other products would be next.

CVS, the nation’s second-largest drugstore chain, announced that cigarettes and tobacco products no longer would be sold in its 7,600 drugstores nationwide as of Oct. 1.

Officials at CVS Caremark Corp. said the company’s 7,600 U.S. drugstores will stop selling cigarettes and tobacco products as of Oct 1. (Michael Chow/The Republic)

“Put simply, the sale of tobacco products is inconsistent with our purpose,” said Larry Merlo, CVS Caremark president and CEO.

CVS is the first major pharmacy chain to halt tobacco sales nationwide, but drugstores have been under pressure to end the practice for years.

In 2010, the American Pharmacists Association recommended a ban on cigarette sales in drugstores and supermarkets with pharmacies.

San Francisco banned tobacco sales in pharmacies in 2008, a move that was challenged by Walgreens, and later expanded that to include supermarkets with pharmacies.

Boston and other municipalities in Massachusetts have similar bans.

CVS is expected to lose $2 billion annually in tobacco and ancillary sales.

Business analysts and health-care advocates say CVS will take a short-term economic hit from halting tobacco sales, but it will get a boost in public perception for staying true to its health-care mission.

Ross Muken, a health-care services analyst with the ISI Group in New York, said CVS’ move helps its credibility.

“The average citizen is skeptical of big business,” Muken said. “They don’t assume that companies will forgo profits. But in the long term, this will help (CVS) to not be in that market.”

Analyst Scott Mushkin of Wolfe Research in New York said it was unlikely that large grocery retailers with pharmacies, such as Kroger and Walmart, would halt tobacco sales any time soon, but other retailers might follow CVS’ lead.

“I think this puts pressure on Walgreens and Rite Aid,” Mushkin said. “It doesn’t make sense to give out drugs to keep people healthy and yet you’re selling them tobacco.”

CVS stands to lose about 1 percent of its $136 billion in annual revenue.

“That’s pretty small potatoes from a big company,” Mushkin said.