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ASH Daily News for 19 December 2006

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ASH Daily News
 
19 December 2006
 
 
HEADLINES
 
Heavy smokers intake more toxins even when cutting down
 
Santa passes a CO test and shows his support for an EU campaign
 
India’s biggest tobacco maker moves into new markets
 
BAT rules out bidding war and ends production in Southhampton
 
Investing in Vice
 
FULL TEXT
 
Heavy smokers intake more toxins even when cutting down
 
Researchers at the University of Minnesota have found that heavy smokers who reduce their number of daily cigarettes still take in two to three times more total toxins per cigarette than light smokers.
 
The study, published in the December issue of Cancer Epidemiology, Biomarkers & Prevention, cites compensatory smoking as the chief reason for the increased exposure despite decreased cigarette use.
 
“We found that the more that heavy smokers reduced their smoking, the more likely they were to increase their intake of toxicants per cigarette, presumably because they took more frequent puffs or inhaled deeper or longer on each cigarette to compensate for fewer cigarettes smoked,” said Dorothy Hatsukami, Ph.D., lead researcher on the study. “This indicates that they are trying to maintain a specific level of nicotine in their bodies.”
 
“Our results are consistent with other studies that show that people who decrease their smoking by 50% or more do not experience a comparable reduction in risk for lung cancer because they tend to smoke their fewer cigarettes more intensely,” Hatsukami said. “The best way to lower the risk for tobacco-caused premature death is to stop smoking altogether.”
 
Source: Medical News Today 18 December 2006
Link to article: http://tinyurl.com/u9j73
 
 
Santa passes a CO test and shows his support for an EU campaign
 
Santa Claus has passed a carbon monoxide test as part of the HELP - For a Life without Tobacco campaign in Rovaniemi, Finland.
 
Rovaniemi, located near the Arctic Circle, is Santa Claus’ hometown. His secret getaway is in the East of Lapland, a secluded area on the border between Finland and Russia, which is impossible to reach by anyone else.
 
Santa scored two when he took the Carbon Monoxide test - That's a normal background CO score for a non smoker:
 
Santa gave his full support to the campaign, which informs people about the many health risks caused by smoking and tobacco smoke, not just to smokers but also to the people around them. He was especially concerned about families in which parents smoke.
 
“Parents who smoke are harming their own health but also exposing their children to tobacco smoke. Our health is more valuable than even the most expensive Christmas present, so we should not put it at risk by smoking,” Santa said.
 
The HELP campaign is an initiative of the European Commission in all 27-member states of the European Union. The carbon monoxide tests are carried out at public events to show people the effects of smoking and passive smoking. In 2006, over 75.000 Europeans took the test at one of over 250 events where the HELP stand was present.
 
HELP is the second major EU-wide anti-smoking campaign run by the European Commission. Adolescents (15 to 18 year olds) and young adults (18 to 30 years olds) are the main target groups.
 
Source: Response source 18 December 2006
Link to article and pictures of Santa: http://tinyurl.com/y7meyn
Information on the ‘HELP’ campaign www.help-eu.com
 
 
India’s biggest tobacco maker moves into new markets
 
ITC Ltd which is India's biggest tobacco maker and second-largest hotel operator plans to tap ‘new areas’ in consumer products to cut dependence on its tobacco business.
 
In the past six years ITC has added food, matches, apparel, deodorants, greeting cards and rural retail stores to its business to reduce its reliance on tobacco, which contributes to about half of sales.
ITC plans to set up fresh-food stores in 54 locations in the country over the next three years, Deveshwar said. ITC opened its first fresh-food store, called Choupal Fresh, in August in the southern Indian city of Hyderabad.
 
British American Tobacco owns 32% of ITC.
 
Source: Bloomberg 19 December 2006
Link to article: http://tinyurl.com/t5eyj
 
 
BAT rules out bidding war and ends production in Southhampton
 
British American Tobacco (BAT) is said to have ruled itself out of launching a counter-bid against Japan Tobacco bid for Gallaher after deciding that the company was too expensive.
 
BAT, which is Gallaher’s larger rival in the UK, said does not want to enter into a costly bidding war with Japan Tobacco.
 
Yesterday BAT also made its last cigarette in Southampton, ending a run of production that has lasted nearly a century. The company has moved production overseas to “more competitive” factories in the Far East and Eastern Europe. Their decision to maximise their profitability will cost 550 Southampton workers their jobs.
 
A spokesman for the company is reported as saying: “We have made the difficult decision that the Southampton factory is no longer economically viable. We have therefore transferred production to other factories in the Far East which are closer to our destination markets - as well as more competitive factories elsewhere in Europe.”
 
Source: Share cast 19 December 2006 & South East England 18 December 2006
Link to article: http://www.sharecast.com/cgibin/sharecast/story.cgi?story_id=978605
Link to article: http://www.bnp.org.uk/reg_showarticle.php?contentID=1667
 
 
Investing in Vice
 
The Financial Times speaks to Charles Norton about his Vice share funds.
 
“Bugs Bunny would occasionally have an angel sitting on one shoulder and a devil on the other. Vice versus virtue, those two opposing poles distract us at every major decision point during out lives.
 
This year Vice is the winner. The Vice Fund, run by Charles Norton, focuses on shares in the alcohol, tobacco, gaming and defence industries. The Vice fund is up 20% while the Ave Maria Catholic Values Fund is up 14%.
 
Why is that an investment theme?
 
“The ideology is simple: people around the globe have been drinking, smoking, gambling for hundreds, if not thousands, of years. Wars have been around since the earliest, hunter-gatherer societies. Few industry groups have a history that dates back that far. And no matter what is happening in the world economy, people will continue to drink, smoke, gamble and nations will need to defend themselves. As a result, in general these companies tend to be steady performers in good times and bad – they are mostly insulated from economic slowdowns.
 
With regard to tobacco and alcohol specifically, the products are never made obsolete by a newer technology. And these businesses are global in nature.”
 
What are some of your current holdings?
 
“Our top holding right now is Altria Group. The stock is trading at a significant, 20-plus percent discount to the global consumer staples industry despite in-line earnings growth prospects. I believe there are three issues that have depressed its valuation: litigation risk; its current corporate structure; and the uncertainty surrounding the timing of the break-up of the food and tobacco businesses. The timing of Altria spinning off Kraft is now certain – it will be announced on January 31. As the restructuring approaches, I believe the stock move towards its sum-of-parts valuation, which is conservatively $100, or around 20% higher than current levels.”
 
Do you use all the products you invest in?
 
“I’m a family man. My wife and I live in the Dallas suburbs with our three-year-old and infant daughters. I don’t smoke, rarely gamble, and drink only on occasion. We are not making a political statement or advocating these activities in any way. Our job is to analyze the fundamentals of these businesses. We are very serious investors and we take a very methodical, analytical approach in investing in these sectors.”
 
Source: Financial Times 18 December 2006
Link to article: http://tinyurl.com/thymv

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