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ASH Daily news for 29 July 2010

HEADLINES

  • Anti-smoking review is cancelled

    Smoking will not now be banned in parks and cars, after a health minister said the coalition had decided to cancel a planned review of the legislation.

    Anne Milton, the public health minister, said there was no need for the review as existing legislation "is working".

    In March 20 senior doctors called for a sweeping extension to anti-smoking laws, urging the government to prohibit smoking in vehicles and public places visited by children like parks and playgrounds.

    The Royal College of Physicians' Tobacco Advisory Group argued that while banning smoking in enclosed public places had been highly effective, there were "still gaps that needed to be closed".

    Its report warned that 9,500 children had to be admitted to hospital every year due to passive smoking.

    Forest, the smokers' lobby group, described the proposal as "unacceptable and unenforceable".

    Speaking at a conference at the King's Fund think-tank in London on how the coalition government planned to improve public health, Mrs Milton said: "We have studied the smokefree legislation and decided not to proceed with the planned review, because we feel the legislation is working."

    Further plans on smoking will be revealed in a forthcoming public health white paper.

    Source: The Telegraph, 28 July 2010
    Link: http://bit.ly/b0p6X8

  • Tobacco display ban to be scrutinised in ministerial meeting

    Opponents of the tobacco display ban are pinning their hopes of a last-minute reprieve on a ministerial meeting next week.

    The ban is due to come into force in large stores next year and in small shops in 2013, but both the Tories and Lib Dems said before the election they wanted to revisit the issue.

    DH advisers and Anne Milton, parliamentary under secretary of state for public health, will discuss with colleagues whether the ban would be the best way to discourage teenagers from smoking.

    A decision was expected within the next fortnight, one senior lobbyist said. "There will be two outcomes either it will be scrapped or they will say that they want to think about it some more. If they choose the latter option, there are unlikely to be any more developments until the end of the summer."

    Health groups are also understood to have intensified their lobbying efforts in support of the ban.

    This week, in response to a question from Luciana Berger MP, Milton wrote: "Discussions are taking place across government to decide how best to tackle this issue in the context of our focus on public health and our priorities, given the challenges facing business competition and costs."

    Source: The Grocer, 24 July 2010
    Link: http://bit.ly/b0NvJb

  • Emerging markets light up BAT sales

    British American Tobacco said early signs of growth in emerging markets were slowing the rate of underlying sales decline at the group.

    Reporting first-half results, Paul Adams, chief executive, said the second-quarter contraction in volumes was lower than that in the first quarter, and that “for the balance of the year, volume will not be down more than 2 per cent”.

    While western markets for cigarettes have been shrinking due to greater health awareness and tighter regulation, in recent years the recession has depressed volumes in emerging markets, too.

    But Mr Adams said BAT had benefited in the first half of the year by its presence in commodities-led economies, which are seeing early signs of growth. BAT’s top five markets are Brazil, South Africa, Canada, Australia and Russia.

    BAT saw hopeful signs in Russia. Nicandro Durante, the chief operating officer who will replace Mr Adams as chief executive in 2011, said: “I may be premature, but I think the worst in Russia is behind us.”

    In Asia, customers brought in by the acquisition last year of Indonesia’s Bentoel helped to make up for shrinking volumes in Japan. But BAT’s purchase of Tekel Cigarette in Turkey failed to make up for a 30 per cent excise tax increase there.

    Higher prices for cigarettes helped to shore up revenues and profits in all regions. Group revenues in the first half rose 8 per cent to £7.3bn, helped by acquisitions, while pre-tax profit rose a similar amount to £2.3bn. Earnings per share rose 5 per cent to 76.5p.

    The results were “very solid”, said Jonathan Fell at Deutsche Bank. “Organic volume decline was moderated.”

    Volumes in BAT’s Lucky Strike, Pall Mall and Dunhill brands increased, and innovations, such as flavour capsules and resealable packages, helped the company increase market share and shift smokers from its low-price cigarettes to mid-price and premium brands.

    Mr Adams said: “Post-recession, I can see our volumes returning to a small amount of growth globally.”

    BAT’s sale of the Belgian cigarette distribution business Lyfra, completed last month, will help margins in the coming year, the company said. It raised its margin targets by one percentage point to 35 per cent by 2012.

    The company increased its interim dividend by 19 per cent to 33.2p.

    The group’s exposure to foreign exchange risk is high. Revenues and profits in the first half had a “formidable tailwind” due to foreign exchange, said Ben Stevens, finance director.

    Source: Financial Times, 28 July 2010
    Link: http://bit.ly/9CNeD8

  • Felixstowe port officers seize large cigarette haul

    Port officials in Suffolk have seized 150,000 cigarettes which smugglers were trying to pass off as insulation material.

    The eight boxes of cigarettes arrived at Felixstowe on Thursday and UK Border Agency officers were not convinced paperwork was authentic.

    Jin Ling cigarettes, shipped from Latvia, were found hidden under a layer of stones at the top of each box.

    "Smugglers would have evaded £35,000 in unpaid excise duty and VAT," Bill Form, from the UK Border Agency, said.

    "This is not the first time that this particular modus operandi has been seen at Felixstowe.

    "In January this year, officers seized 329,000 Jin Ling cigarettes smuggled in precisely the same fashion."

    Source: BBC News, 28 July 2010
    Link: http://bit.ly/bXI1Ga

  • Ireland: Revenue opens phone line seeking information on tobacco smuggling

    Tobacco Smuggling has reached record levels, with more than 127 million illegal cigarettes seized so far this year, according to the Revenue Commissioners.

    This compares to 200 million cigarettes seized last year, but 120 million of these were accounted for by a single operation at Greenore, Co Louth.

    The proportion of counterfeit cigarettes among those seized is also on the rise, from about 50 per cent last year to almost 80 per cent so far this year.

    Revenue yesterday announced the results of a two-week crackdown on cigarette smuggling carried out this month. A confidential freephone number, 1800 295295, has also been introduced for members of the public to provide information about smuggling or the sale of illegal cigarettes.

    Revenue Commissioner Liam Irwin warned people who bought cigarettes on the black market that they were putting money into the hands of criminals.

    “Anyone tempted to buy cheap cigarettes from an irregular source of supply must realise that there is a high possibility that they are buying counterfeit goods, which provide an unknown additional set of health risks, as the product is not the subject of quality control,” he added.

    “These actions are not just robbing the exchequer of much needed funds, they are also hurting local businesses.”

    Airports, freight terminals, markets, postal services and white van operators were all targeted during the blitz, which resulted in the seizure of cigarettes and tobacco worth almost €6 million.

    The action resulted in four arrests, and 73 prosecutions are pending, Revenue said in a briefing.

    Some 1.3 million of the cigarettes were seized from passengers alighting from aircraft; most of these were smuggled from the Canary Islands, Poland and China, according to Tom Talbot, head of the Customs criminal investigation branch. More than half the 343,000 cigarettes seized in the post were imported from China.

    The largest seizure in the blitz was made near Ratoath, Co Meath, where over 10 million cigarettes were found in a trailer that came through Dublin Port, having arrived from Malaysia. The brand involved, Bolton, had never been seen before in Ireland.

    Mr Irwin said there was no evidence that drug gangs or subversives had targeted tobacco smuggling, but individual criminals had switched to the trade because it was high-value and the consequences were less serious than for drug smuggling. Penalties for cigarette smuggling increased last year and Mr Irwin said he was satisfied the courts were taking the crime more seriously than before.

    Source: Irish Times, 29 July 2010
    Link: http://bit.ly/bnFaqr

  • California: State's tobacco tax revenue drops as cigarette sales fall

    Last year, cigarette sales in California dropped by 8.1%, the largest one-year decline in the past 10 years, according to the state Board of Equalization.

    The board estimated that 972 million packs of cigarettes were sold in California last year, down from 2.8 billion packs sold in 1980.

    According to the California Department of Public Health, the percentage of smokers in California also has declined by nearly 50% since 1985. 

    Higher Prices Per Pack

    The federal per-pack tax on cigarettes increased by 62 cents last year, bringing the total tax to $1.01 per pack. In California, a package of cigarettes now costs an average of $5.09.

    In addition to a higher sales tax, cigarette manufacturers also raised their product prices by an average of 4.2% between fiscal year 2008 and FY 2009 to compensate for a drop in demand.

    Good News for Public Health, Bad News for Health Programs

    California's decline in cigarette sales could have a positive effect on public health because smoking has been linked to cancer, emphysema, heart disease and other medical conditions.

    However, the drop in sales also means that the state is collecting less in tobacco tax revenue. During the most recent fiscal year, the state received $839 million in cigarette tax revenue, down from the $913 million it collected in the previous fiscal year. 

    California's tobacco tax revenue helps finance health education programs, early childhood development, breast cancer research and other state programs.

    Diane Levin -- chief deputy director of First 5 California, which uses tobacco tax revenue to fund early childhood health and education programs -- said she expected the decrease in cigarette sales and tax revenue. Levin added that her organization is developing strategies to do more with less funds.

    Source: California Healthline, 28 July 2010
    Link: http://bit.ly/bdcQOp