Here are a selection of the latest cigarette, tobacco and cigar news stories, from around the world. Will new picture warnings on cigarettes curb smoking? From October the first, the UK will introduce picture warnings on cigarette packets. In accordance with EU law, tobacco manufacturers have one year in which to ensure that all cigarettes in the UK carry pictorial warnings. For other tobacco products the deadline for compliance is 30 September 2010. Fourteen images - ranging from the mildly humorous to the frankly disgusting - have been created and the companies will have to use all of them regularly. But is the move really likely to change smoking habits or affect sales? The evidence to date - although hindered by the fact there are normally a number of anti-smoking campaigns running simultaneously - seems inconclusive. When a similar move was introduced in Canada, the pictures of tarred lungs were reportedly highly prized by children and were being swapped in schoolyards soon after their introduction. The tobacco companies themselves have always said their marketing doesn't encourage people to take up smoking and say they are unafraid of this type of regulation - saying there is little evidence that these pictures stop people smoking. Anti-smoking campaign group ASH say warnings are an effective way of informing consumers of the risks of smoking. They say international studies have shown that they can help deter young people from taking up smoking and also help smokers to quit. And they say pictures are even more effective. Blackburn man gets shop first tobacco sales ban in county THE actions of a Blackburn shop assistant who sold counterfeit cigarettes has cost the shop its tobacco licence. And it was the first shop in Lancashire to face such a ban. Tradings standards officers caught Abdul Mall, 40, selling the potentially dangerous tobacco at the Pound Plush store in the St John’s centre, Preston. He pleaded guilty to selling the fake goods after he was found in possession of 84 packets of counterfeit cigarettes and 35 pouches of Golden Virginia rolling tobacco. Mall, of Randal Street, Black-burn, had been selling the goods from the shop counter at less than half the retail price without the knowledge of the shop's proprietor, Muniur Bagyia. Nick McNamara, the legal process officer for Lancashire Trading Standards prosecuted the case after a complaint. He told Preston magistrates: “When interviewed Abdul Mall said he had been selling the cigarettes at £2.50 per pack and the tobacco at £4.50 per pouch. “He asserted that he had been selling about 30 packs of cigarettes per week. “All this went on despite the fact that, in December last year, a close relative of Mr Mall’s, who previously owned the business, was prosecuted for essentially the same offences committed at the same store the previous June.” He added there were safety conc-erns with the products as genuine items are manufactured to high requirements, with strict controls on what they should contain in respect of tar and other toxins. Mall was sentenced to 100 hours community service and fined £325. He will also pay costs of £475 and £15 to a victims' fund. Pound Plush is banned from selling tobacco products for six months. Electric cigar avoids smoking ban We are a law-abiding lot here, people that anyone’s great aunt would be proud to take for tea at the monthly W.I. meet so when we suggest a flouting of the smoking ban, be assured we’ve a trick up our sleeves. The Gamucci cigar is good for about six hundred battery operated puffs, far from just glowing red at the end, which Columbo would approve of, this one offers a realistic inhalation of smoke. Not of the carcinogenic kind, nor is it ideal for anyone in training for 2012 either, but perfect for cigar chompers who don’t want to stand out under inadequate smoke shelters. The “smoke” exhaled is simply water-vapour and totally law abiding, there’s no tobacco and no flame so you can sit back in the snug of your pub with a brandy in hand and be as smug as a boardroom bigwig. There is no doubt that you will attract attention and will be often asked to extinguish your Cuban impersonator whilst indoors. We consider this to be a good ice-breaker. As we were told at school, smoking is neither big nor clever, but then we never had an option like this! Europe lights up to fire-safety rules for cigarettes A decision by Finland to test the ignition ability of all cigarettes sold in the country could be extended across Europe as of 2011 in an attempt to prevent domestic fires and related deaths. Last month, the Finnish government suggested adopting the international standard ASTM E2187 to test the ignition performance of cigarettes on bedding and upholstered furniture. About 700 fires are caused by cigarettes in Finland each year, causing some 35-40 deaths. In Europe, the Commission estimates that a minimum of 1,000 fatalities are caused by such fires each year. Burning cigarettes are also responsible for many forest fires, it adds. "While any lit cigarette is a potential fire hazard, cigarettes that perform well as measured by the ASTM international standard are less likely to start fires when left unattended," ASTM said in a statement. Stephen Russell, secretary general of ANEC, a European consumer association, welcomed the Finnish initiative as a contribution to improved consumer safety. He said he supported referencing the ASTM standard as a test method "until the details of a formal European standard have finally been worked out". A Commission dated 25 March 2008 defines a fire-safe cigarette as "a cigarette that self-extinguishes when not actively puffed, before it has burnt through its full length". According to the decision, the European safety requirement is met when "no more than 25%" of a batch of cigarettes "burn through their whole length" when left unattended. However, there is currently no single European standard for testing cigarettes, a task which is left to national authorities. Florence Berteletti Kemp, coordinator of the RIP Alliance, which campaigns for safer cigarettes in Europe, said the EU should impose strict fire-safety rules on manufacturers. "In view of the fact that it is technologically and economically feasible for cigarettes to meet fire-safety standards, tobacco manufacturers should be required to produce and market only reduced-ignition propensity cigarettes in the EU". She added that tobacco manufacturers should use the same standard applied in New York, where "fire-safe" cigarettes were introduced in 2003. The standard was later taken up by Canada and 35 other US states. At European level, the European Committee for Standardisation (CEN) to develop a fire-safety standard that would apply across the entire EU. A spokesperson for Meglena Kuneva, the EU commissioner for consumer protection, told EurActiv that such committees usually take "two to three years" to develop a standard. It would be "realistic" to expect the new rules to enter into force in 2011. Drought causes tobacco crop failureKEBUMEN, Central Java: Farmers are suffering millions of rupiah in losses as 143 hectares of tobacco crop in Kebumen regency, Central Java, could not be harvested due to severe drought. "If there are any tobacco leaves to pick, their quality is poor so they'll fetch a lower price," said Karso, 45, a farmer from Clapar village, Karanggayam district, adding the prolonged dry season had shriveled the tobacco leaves. He said under normal conditions farmers sell their tobacco leaves at about Rp 3,500 (38 US cents) per kilogram. "With these conditions, the price can drop to as low as Rp 1,500 or even Rp 1,000 a kilo." Clapar village head Sukirno said Friday the drought affected farmers' crops here every year. "It's hard to find a solution. We do hope the administration will help us cope with the problem soon," he said Phoenix launches campaign against cigarette littering``Keep your butt in the car." That's the message from Keep Phoenix Beautiful, which is taking up the fight against the most littered item in the United States. The organization is distributing bumper stickers, aimed at reminding smokers to put their butts in ash trays. ``Before you toss that cigarette butt out the car window, think twice about it and use your ash tray," said Tom Waldeck with Keep Phoenix Beautiful. He added, ``One-point-seven billion pounds of cigarette litter ends up on the streets all across the country. And if you take a look at one cigarette butt, and think one-point-seven billion pounds, that's a lot of cigarette butts." Keep Phoenix Beautiful is counting the number of butts around US Airways Center and Chase Field in downtown Phoenix to focus attention on the problem. Ref shows the red card to cigarettes FORMER World Cup referee Hugh Dallas MBE last week helped NHS Lanarkshire launch its new no smoking policy by blowing the whistle on fags. Smoking is now banned on all the health board’s premises and grounds – including areas around hospitals, health centres, clinic entrances and car parks. Hugh revealed he was well placed to comment on the benefits of giving up smoking, and the merits of the new ban. “When I was younger smoking was quite a fashionable thing to do and it was a bad habit of mine for many years,” he said. “There’s no way I would have made it to the top of refereeing if I’d continued.” Hugh, who is now the Scottish Football Referee Development Officer, continued: “In 1991, with the help and advice of friends, I eventually managed to give up smoking and the effects were emphatic. “From then on every fitness test result was better than the last. There’s no doubt in my mind that this was due to kicking the habit. “Anyone who stops smoking will soon reap the benefits. I believe the smoking ban on NHS Lanarkshire grounds is a huge step forward to encourage people to give it up.” NHS Lanarkshire’s chief executive Tim Davison believes the new no smoking policy will play a key role in improving people’s health. He said: “Lanarkshire has one of the highest rates of smokers in the country and the effects of smoking are devastating for people’s health. “It is not an option for a health board to just ignore these facts and permit people to damage their own and others’ health on our own grounds. “We want to encourage people to give up smoking and to point them in the direction of NHS Lanarkshire’s Stop Smoking Service.” Dr Lesley Armitage, consultant in public health medicine, is firmly behind the new ban. She said: “Smoking is the biggest single preventable cause of ill health and early death in Lanarkshire. “It not only increases the risk of lung cancer, as many people know, but also increases the risk of other much more common diseases such as heart disease, stroke and chronic obstructive pulmonary disease (COPD), which effects the lungs. “In many cases patients suffer years of gradually deteriorating health which greatly reduces their quality of life and restricts what they can do.” Hopes that tobacco could be a cure for cancer THE TOBACCO plant – responsible for millions of cancer cases – may actually offer the means to treat one form of the disease, a study says. US scientists used the plant to “grow” key components of a cancer vaccine. The National Academy of Sciences study suggests they could be used to tackle a form of lymphoma. UK specialists said while the work is potentially exciting, more research would be needed to test how well the vaccine actually worked. The ironic new role for tobacco is the work of researchers from Stanford University in California. They are using the plants as factories for an antibody chemical specific to the cells that cause follicular B-cell lymphoma, a type of non-Hodgkin’s lymphoma. These antibodies are put into a patient newly diagnosed with the disease to prime the body’s immune system to attack any cell carrying them. If successful, this would mean the body would then recognise and destroy the lymphoma cells. But every patient’s antibodies are different, and would need to be produced quickly once the diagnosis was made. Holiday cigarettes to go up in smoke The tradition of bringing back hundreds of cheap cigarettes from holidays abroad is about to go up in a puff of smoke. Proposals are currently being examined which would see a dramatic increase in the tax on tobacco throughout the EU region. The moves are being made after research by the World Bank showed that burning a hole in people's pockets is the best way to reduce the level of smoking. Experts say that the proposed increase would cut the number of smokers by an average of 10pc over the next five years. It is thought that changes will have the biggest impact in Poland where they expect more than 20pc to give up as a result of price increases. The proposal outlined by Taxation Commissioner, Laszlo Kovacs, is for a gradual increase in EU minimum taxation levels on cigarettes and fine-cut tobacco up to 2014. It would also remove loopholes that allow some cigarettes or fine-cut tobacco to be presented as cigars, cigarillos or pipe tobacco and so benefit from a lower tax rate. The plan also aims to bring tobacco taxation levels in line across all 27 EU member states. At the moment, the difference in taxation can be as high as 600pc leading to intra-EU tobacco smuggling especially in the new member states. The level of smuggling varies across the EU and accounts for up to 9pc of the EU tobacco market. But in some major markets this is as high as 20pc. The countries most susceptible to illegal tobacco are those closest to Russia and other markets that do not impose high tax on cigarettes. Mr Kovacs said it would also make the taxation rules more transparent, and create a level playing field for manufacturers and give flexibility to member states to set minimum taxes. Anti-smoking announcement will be added to DVDs with tobacco scenes Movies can glamorize smoking, but don’t do it. Six major studios will include anti-smoking announcements on millions of DVDs of motion pictures that include scenes with tobacco use. The public service announcements will appear on films rated G, PG and PG-13. Companies fined £132m over deal to fix prices of cigarettes ASDA and Somerfield were fined yesterday for illegally fixing cigarette prices. They were among six retailers and tobacco firms that agreed to pay combined penalties of £132.3 million.
The companies, which also included First Quench, Gallaher, One Stop Stores and TM Retail, applied to the Office of Fair Trading for leniency. The OFT accused the groups of anti-competitive pricing in April, alleging they agreed to link the price of some brands to rival products.
It is still investigating six other firms - Tesco, Morrisons, Safeway, Shell, the Co-operative Group and Imperial Tobacco.
Sainsbury's - which first came forward for leniency from the OFT - will not face any fine if it continues to co-operate with the inquiry.
The six firms that have reached agreement with the OFT have received a discount from the potential maximum fine of £173.3 million.
The OFT has also separately alleged that some of those named arranged to swap information on future pricing.
OFT chief executive John Fingleton said: "The OFT is very pleased that the early co-operation of these parties has enabled the swift resolution of some of this case, which will significantly reduce the costs of pursuing the investigation for the OFT and the businesses concerned.
"This demonstrates the flexible approach the OFT is prepared to take to reduce the burden of investigations, while maintaining strong and effective competition law enforcement."
The OFT said in April that the companies involved struck deals that restricted the retailers' ability to set selling prices independently between 2000 and 2003. Nutrition: Poor Chose Cigarettes Not Food The researchers found that of low-income families, those containing a household head or spouse who smoked cigarettes were at about six per cent higher risk for being "food insecure" - not always able to put enough food on the table.
Such families purchase, on average, ten packs of cigarettes per week, spending around 33.70 U.S.-Dollars - enough to add two pounds of ground beef, two pounds of chicken breasts, 64 ounces of fresh orange juice and ten pounds of frozen vegetables to the weekly menu, at current supermarket prices.
The researchers analysed data from the 2001 Panel Study of Income Dynamics, a long-term study of U.S. men, women, and children and families. They looked at the connection between smoking and the lack of consistent and dependable access to nutritious food, while controlling for other socioeconomic factors and behavioral health choices.
The choice between smoking and having more food might seem like a no-brainer, but this is not the case, said Terry Pechacek, associate director of science for the CDC's Office on Smoking and Health. "Smoking is an addiction that gets established in adolescence, before individuals fully understand the long-term implications of their behaviour", he said. "Poor families suffer the long-term health impact." Cuban rolls cigar said to be world's longest With music, dancing and rum, Cubans celebrated the likely return of a record they consider rightfully theirs - the world's longest cigar.
At just over 148 feet 9 inches, the thick stogie stretched like a long brown snake through a room and out its front and back windows at El Morro, the old Spanish fort overlooking Havana Bay.
British diplomat Chris Stimpson made the official measurement, which he said would be sent to the Guinness World Records in London for confirmation.
"The best in the world, no?" said the cigar's smiling, ash-stained roller, Jose Castelar Cairo, better known as Cueto.
His six-day-long project, completed with several assistants, eclipsed the previous record of 135 feet, held by Patricio Pena of Puerto Rico. Breaking the record was a point of pride for Cubans, whose cigars are considered among the world's best.
"It's an honor for Cuba and I feel satisfied to do it for Cuba," Cueto said above the din of 50 or so happy Cubans sipping rum, singing and swaying to the lively music of a guitar-playing singer.
Cueto, who learned cigar rolling when he was 5 years old, is no stranger to big cigars. He held the record for world's longest three times before.
This cigar record was not without its drama. As late as Thursday, Cueto planned to roll a cigar 98 feet in length, thinking that would break the record. But then he learned that Pena had bested it last year. The veteran cigar roller worked until 5 am to beat Pena's record, an effort which he said had left him ‘exhausted.' Tobacco display ban could cost retailers £252 million It is estimated that the new equipment required to safely remove tobacco from customers view could cost the convenience industry as much as £252 million. The minimum a single store could expect to pay is £1,850 but this could rise to as much as £4,985 depending on the detailed requirements in any regulation. ACS Chief Executive James Lowman said: "What we have found is that changing tobacco displays will bring significant and damaging costs to convenience stores. As the picture becomes clearer about what the likely harm to business will be, we have still not seen the convincing evidence that a ban would have the desired effect on underage smoking. If the costs are high and the benefits not clear then the Government should not press ahead. "We have looked at international comparisons and worked with members to arrive at an analysis of costs, although we have only considered the costs of removing the equipment and replacing it. If you consider the cost of upheaval and loss of trade during any changeover the actual cost may be much more. Some of the big issues we cannot yet cost accurately include the shortage of equipment, materials and labour to change tens of thousands of shops, as well as the likely disruption to trade during any changeover." ACS has also called upon the Department of Health to produce evidence that would suggest a display ban is effective in reducing smoking rates among young people. Evidence ACS has collated from other countries, including Iceland and Canadian states, is not conclusive and in some cases even shows an increase in the smoking rates among young people. The Department of Health will shortly be releasing a consultation on the next steps in tobacco control. The consultation forms part if the wider Cancer Strategy and Ministers have already indicated that display bans will feature in their thinking. Mr Lowman continued: 'This Government has to contemplate the possibility that the display ban is a bad idea that won't have the desired effect. Rather than causing this level of disruption they could usefully target their attention on measures that will make a real difference. What we have made clear is that we believe that targeting proper interventions at bootleggers who sell tobacco on the streets and making it illegal to buy tobacco and supply it to an under 18 are both far more likely to change behaviour." USA Officials consider ban on cigarettes at pharmacies Cigarettes are getting harder to find. More retail chains are dropping them, and for the first time, officials in a few states want to ban pharmacies from selling them. This month, San Francisco Mayor Gavin Newsom proposed an unprecedented city ban on drugstores selling tobacco products, including cigars, pipes and smokeless tobacco. "This will be the beginning of a national movement," Newson predicted. He said he's "absolutely confident" that the San Francisco Board of Supervisors will approve the ban this month or early in June. It would take effect Oct. 1. Others are on the same track. Bills are pending in New Hampshire, Illinois and Tennessee to bar pharmacies with walk-in clinics from selling tobacco, and a bill in New York would apply to all pharmacies, including those in big stores such as Wal-Mart. "Pharmacies are places we go to get healthy," said Assemblyman Sam Hoyt, author of the New York proposal. "It just seems inappropriate that on the other hand, they sell something that kills." His state borders Canada, where most provinces don't let pharmacies sell tobacco. Most independent pharmacies in the United States no longer sell tobacco, but the drugstore market is dominated by big chains such as Walgreens, CVS and Rite Aid that do. Target stopped selling tobacco products in 1996. Bill Phelps, spokesman for Philip Morris USA, the nation's No. 1 cigarette maker, said the government should not impose bans. "We think retailers should be able to decide," he said. More retailers are deciding not to sell tobacco products. A wave of grocery stores, some with pharmacies and some without, have taken tobacco off their shelves. Wegmans, which has 70 stores in five states, did so in February, the same month as two smaller New York-based chains, Budwey's and DeCicco Family Markets. San Francisco-based Andronico's also quit in February, and some ShopRites followed in March. "We're seeing a real trend in which fewer and fewer stores want to be associated with the harm caused by cigarettes," said Matt Myers, president of the Campaign for Tobacco-Free Kids. As fewer stores sell cigarettes, he said, "the cultural norm becomes not smoking." That doesn't necessarily happen, said Gary Nolan, national spokesman for Citizens Freedom Alliance, a nonprofit group that defends smokers rights and the free market. Smokers won't stop but will be driven to a black market run by smugglers, he said. A passion for cigars Anto Kamarian clearly remembers when he smoked his first cigar: It was 1981 in Europe after he saw two locals, cigars in hand, relaxing and enjoying each others' company. "I saw the expression on their faces, and then I started to budget cigars into my daily budget," he said. Kamarian, who now smokes six to seven cigars a day, views cigars as a "tool of relaxation." "I always say, `Give me cigar in my coffin, and I will be happy,"' he said. Kamarian has transferred his cigar enthusiasm into his Pasadena business, Cigars by Chivas. "I've always been a believer in the service industry," he said. "When an individual walks in I remember their name. I treat everyone the same way whether they are buying a $7 cigar or a $40 or $50 cigar." With several seating areas centered around tables with ashtrays, Cigars by Chivas acts as a social gathering place for many customers, Kamarian said. "The fun part of having this business is the regulars who come in," he said. One of those regulars is Pasadena resident Don Engle. Engle said he enjoys the socialization aspect of the shop and has also forged many business relationships there as well. He's found his banker there as well as several clients for the business he works for, Garocco Pool & Landscapes. "The service (there) is unmatched in the cigar industry," Engle said. "It's a comfortable atmosphere without alcohol involved. It's a nice retreat. Study: Restaurant tobacco bans influence teen smoking A Massachusetts study suggests that restaurant smoking bans may play a big role in persuading teens not to become smokers.
Youths who lived in towns with strict bans were 40 percent less likely to become regular smokers than those in communities with no bans or weak ones, the researchers reported in the May issue of the Archives of Pediatrics & Adolescent Medicine.
The findings back up the idea that smoking bans discourage tobacco use in teens by sending the message that smoking is frowned upon in the community, as well as simply by reducing their exposure to smokers in public places, said Dr. Michael Siegel, of Boston University School of Public Health, and the study's lead author.
"When kids grow up in an environment where they don't see smoking, they are going to think it's not socially acceptable," he said. "If they perceive a lot of other people are smoking, they think it's the norm."
Siegel and his colleagues tracked 2,791 children between ages 12 and 17 who lived throughout Massachusetts. There were no statewide restrictions when the study began in 2001 but about 100 cities and towns had enacted a hodgepodge of laws restricting smoking in workplaces, bars or restaurants.
The teens were followed for four years to see how many tried smoking and how many eventually became smokers.
Overall, about 9 percent became smokers ---- defined as smoking more than 100 cigarettes.
In towns without bans or where smoking was restricted to a designated area, that rate was nearly 10 percent. But in places with tough bans prohibiting smoking in restaurants, just under 8 percent of the teens became smokers.
The study found that having a smoker as a parent or a close friend was a factor in predicting whether children experiment with cigarettes. But strong bans had a bigger influence on whether smoking grew into a habit, reducing their chances of becoming smokers by 40 percent.
"There is really no other smoking intervention program that could cut almost in half the rate of smoking," Siegel said.
Age was also a factor. Smoking bans had a greater effect on younger teens than on older teens.
The researchers said it's not clear whether strong bans would have the same effect in other states since local towns adopted their restrictions as part of an aggressive anti-smoking campaign throughout the state.
A statewide workplace smoking ban that included restaurants went into effect in mid-2004. Since then, high school smoking rates in Massachusetts have continued to decline, from about 21 percent of students in 2005 to about 18 percent in 2007.
Many restaurant owners fought the ban, saying it could drive away diners, according to Janine Harrod, director of government affairs for the Massachusetts Restaurant Association, which represents 2,000 restaurant owners.
While some restaurants were hurt initially, the effects have eased over time since the ban applies to everyone, she said.
Bill Phelps, a spokesman for Altria, parent company of cigarette-maker Philip Morris USA, said the study shows that the reasons teens take up smoking are complex.
"There is no single reason why young people engage in risky behaviors like smoking," he said. "We believe that there should be a multifaceted approach to address youth smoking."
At least 23 states, the District of Columbia and Puerto Rico require most public places and workplaces, including restaurants and bars, to be smoke free, according to the National Conference of State Legislatures.
Another nine states ban smoking in workplaces but have various exemptions for restaurants or bars.
"We already have more than enough evidence why we should pass these smoke-free laws, but certainly this study should help push them along," said Danny McGoldick of the Campaign for Tobacco Free Kids. Children to be stopped from buying cigarettes in Samoa Children may soon be prohibited from buying cigarettes from local shops in Samoa. This depends on the acceptance of the Tobacco Control Bill 2008 recently discussed in Parliament. Ever since cigarettes were introduced and sold in Samoa, children as young as five have been able to buy packets or lose cigarettes from local shops, usually for their parents. On that note, the Minister of Health, Hon. Gatoloaifaana Amataga Gidlow last week stood on sensitive grounds in Parliament. The Minister submitted the Tobacco Control Bill 2008 to Parliament for its second reading carefully outlining the reasons why Samoa should not hesitate in adopting the legislation. "What is sad is that not only smokers are affected by the use of cigarettes, it also impacts on those who do not smoke, the secondhand smokers or passive smokers," Gatoloaifaana said. "This is an issue for great concern and it needs the support of our Parliament and the country as a whole. This Bill will ensure the protection of our people from the harmful effects of cigarettes," she said. Reynolds Coughs Up Warning as Slump in Cigarettes Reynolds American Inc.'s (RAI) first-quarter net income jumped 54% on a gain from ending its joint venture with Gallaher Ltd. as they cut their 2008 earnings forecast in light of falling cigarette sales. Reynolds, the second-largest U.S. tobacco company, and Kool and Camel cigarette maker, posted a net income of $505 million, or $1.71 a share, compared with $328 million, or $1.11 a share, a year earlier. These results included a 71-cent gain from the ending of the Swiss joint venture last year. Total revenue fell 4.2% to $2.06 billion. The mean estimates of analysts surveyed by Thomson Reuters were for earnings of $1.15 and revenue of $2.15 billion. The R.J. Reynolds Tobacco division saw a 15% drop in its´earnings as sales declined 6.3% and volumes fell 12% versus an overall industry drop of 3.3%. The company's U.S. market share fell 1.4 percentage points to 28% amid drops at its support and non-support brands. They exclude Camel, Kool and Pall Mall. Earnings at Conwood, which makes smokeless-tobacco products, were flat while revenue rose 7.7% and volume increased 11%, double the industries 5.5% growth. On Tuesday, Morgan Stanley cut its investment rating on the tobacco industry on falling U.S. consumption levels, higher state taxes, the possibility of a large hike at the federal level and a "growing suspicion that indoor smoking bans are having an adverse consumption impact." Looking ahead, Reynolds American now sees flat earnings excluding the joint-venture gain, not the mid-single-digit growth previously expected. Analysts projected a 6% increase to $4.83 a share. Reynolds also announced a $350 million stock buyback. Its shares closed at $57.85 on Tuesday and fell to $56.20 in premarket trading. Zimbabwe tobacco farmers angry as inflation soars away Zimbabwean farmers took away their tobacco crop in an angry protest on the auction floors of Harare as state price controls to combat hyper-inflation threatened to erase their profits. "The price is completely useless and I would rather keep all my tobacco and sell to other buyers from Malawi or Zambia," muttered farmer Ottilia Mavhunga, as she started to take away her bales of tobacco. The tobacco trading season, which was once a key feature of Zimbabwe's business calendar, had to be called off for the second time in two weeks after farmers pulled out of the sale, saying that the prices given by auctioneers were too low. Some farmers tore up their bales and spread tobacco leaves over the floor as others ripped off the tags placed on their bales by the auctioneers that showed prices as low as one dollar per kilo. Production of tobacco, which once was Zimbabwe's top foreign exchange crop, fell from a record high of 236,130 tonnes in 2000, the year controversial land reforms were launched, to just 68,800 tonnes last year. Only around 80 bales went under the hammer on the auction floors, before the auction had to be cancelled on Wednesday. Berison Mutemeri, a farmer from Banket, northwest of Harare, said the price offered by the government was very disappointing. "How can maize fetch higher prices than tobacco? The state offered farmers 70 million Zimbabwe dollars per kilogramme, or around one US dollar under an exchange rate that is a tiny fraction of the black market rate in a country where inflation is at 165,000 percent. Agriculture Minister Sylvester Nguni told tobacco farmers at the auction that the price was fair. "It is my conviction that this level of support will adequately reward the farmer for both effort and quality and make him or her go back to the land." The government have kept the official exchange rate at 30,000 Zimbabwe dollars for one US dollar since September last year but on the thriving black market one US dollar can be exchanged for around 100 million Zimbabwe dollars. The 70 million dollar rate offered to tobacco farmers was a compromise. Buyers at the Tobacco Sales Floor in Harare said farmers should not despair over the opening prices as rates were expected to improve during the sale. Around 400 farmers waited as officials from government, buyers and farmers' representatives met to try to resolve the price dispute. Central Bank governor Gideon Gono was expected to make an announcement later on Wednesday about monetary policy that could answer farmers concerns. David Mupamhadzi, chief economist at the Zimbabwe Allied Banking Group, said the government should let market forces determine the prices. "There is a need to move away from this multiple exchange rate. Prices should be market-determined, all these problems we have in the economy are as a result of controls." F1 Drops Cigarettes Ads Formula One has dropped cigarette logos forever, after Ferrari and Philip Morris agreed to run Marlboro ‘barcodes' on their F2008s instead of the tobacco brand's normal logo. F1 has been trying to get the nicotine out of its system for several years. McLaren, Renault (previously Benetton) and Honda (previously BAR) have all found alternative places for sponsorship income and dropped the tobacco advertising. Ferrari has a deal with Philip Morris that runs through to 2011 and is worth a reputed £600 million, so it was thought that it would continue Marlboro advertising in countries where the law permitted it. However, Ferrari's dominant one-two in the Bahrain Grand Prix was scored with ‘unbranded' cars, even though the country would have allowed full logos. The team has now confirmed that this will be its policy in future. The reasons behind the switch are still unclear, but it could simply be a ‘goodwill' gesture on Philip Morris's part, allowing Ferrari a ‘cleaner' car to attract alternative sponsorship in advance of the Marlboro deal's conclusion. New York To Tax Small Cigars Big New York State is changing the status of cigarette-sized cigars to allow them to be taxed at the same rate as cigarettes. The new state budget includes the rule change, which takes effect on June 3. Taxes on cigarettes and little cigars will jump to $2.75 per pack on the same day, the New York Daily News reported. Currently, the little cigars are currently taxed at a rate of 30 cents per pack. Cigarettes are now taxed at $1.50 per pack. The state predicts the new tax will add $3.6 million to its annual budget, the report said. New York State is now the national public health leader in tobacco taxation, Michael Seilback, policy director for the American Lung Association in New York told the paper. 'Smoking ban putting clubs at risk' Worried social club bosses have set up a meeting with their MP to voice concerns at the effect the smoking ban is having on their trade. Hartlepool MP Iain Wright will speak to representatives from the town's 31 social clubs at a meeting next week, and will hear how some of the venues are fighting for their futures following the introduction of the nationwide smoking ban last summer. John Denholm, secretary of the Hartlepool Clubs' Constitutional Association, said: "We are glad Mr Wright has agreed to come to the meeting, because there are some grave concerns within the industry. "The smoking ban has had a massive impact on all of the clubs and while some are doing better than others, it's fair to say the whole industry is struggling. "We knew the ban would have an impact, but nobody predicted it would be this bad. What we want to do is pass on our concerns to the MP, and hope that he will in turn take those concerns to parliament. "What happens after that remains to be seen, but I don't think it is exaggerating to say that this time next year, we could be sitting here talking about clubs closing down. " Mick Hudson, treasurer of Seaton Carew Social Club, said: "We are £18,000 down on beer sales in the last six months - and we are one of the clubs that is just about coping. "When you look at the membership, our figures have dropped from about 450 to around 300 in the last year, so we have lost a third of the members. "People can buy cheap drink in the shops and stay at home, they don't want to be standing outside in the cold, smoking. When the members drop, there is a knock-on effect everywhere. The money over the bar drops, we have to put prices up, we don't make enough to cover the costs of putting entertainment on and so on. "If it wasn't for the private functions we host for members, I dread to think what state we'd be in. "We said before the ban that a room set aside for smokers would have been a better alternative, but that never happened and we are feeling the effects now." |