Reynolds American CEO Delen

Reynolds American Inc., the second-biggest U.S. cigarette company, has aggressively promoted its Pall Mall brand in recent quarters as a longer-lasting, more affordable cigarette as smokers weather the weak economy and high unemployment.

The company says that half the smokers who try the brand continue using it.

Pall Mall sales are growing despite industrywide declines in the number of cigarettes sold as taxes, smoking bans, health concerns and social stigma all increase.

Reynolds sold 16 percent more Pall Mall cigarettes in the first quarter even as the Winston-Salem, N.C., company's overall volume fell 5.2 percent. Reynolds American said Pall Mall gained 2 points of U.S. retail market share to hold 8.5 percent in the quarter.

In a conference call with analysts regarding the company's first-quarter earnings, CEO Daniel Delen discussed Pall Mall.

QUESTION: The brand has experienced very good growth and the equity of the brand seems pretty resilient. How do you think about the price positioning of the brand and whether you can look forward to raising the profitability of the brand going forward?

RESPONSE: Pall Mall has had a great run more recently, but I would just remind everyone that Pall Mall was growing already even prior to this downturn over the last couple of years. ... I'm very, very pleased with the brand. It is contributing significantly to profitability. And over the last year and a bit, we've been able to actually increase profitability over and above the marketplace. We continue to look for opportunities like that to make sure that the growth isn't just a volume and market share growth.

Senate Passes 53-Cent Tax Increase On Cigarettes

Vermont lawmakers who rejected a proposal to jack up the state's per-pack cigarette tax by a dollar have OK'd a smaller increase - 53 cents.
The state Senate voted in favor of the smaller amount Friday, a day after defeating the $1-a-pack increase amid worries that it would drive cigarette buyers to neighboring states and also cut the business Vermont gets from New York and Massachusetts cigarette buyers.
State officials say the 53-cent hike would raise about $5.9 million annually.
Supporters say adding taxes to cigarettes can help discourage people from smoking and at the same time raise money for the state.

Cigarette-making shops start drawing attention

Some states are looking at make-your-own-cigarettes shops and smelling something foul.
The Wall Street Journal reported that New Hampshire sued several retailers, contending they act as cigarette manufacturers and should pay applicable fees.
Michigan recently warned shops there that using the machines constitutes manufacturing; it said they must obtain a manufacturer license and meet other requirements or face criminal and civil penalties.

Michigan also said retailers could not sell cigarettes without a tax stamp or face penalties.
Wisconsin Department of Justice spokesman Bill Cosh said Friday, "The Wisconsin Department of Justice and the Department of Revenue are aware of these machines and are examining the relevant legal issues."
State Department of Revenue spokeswoman Stephanie Marquis said the shops, if they are following the law, do pay their full share of state and federal taxes.
"There is a concern," she said, "but we need more information: Are they a manufacturer or a retailer?" A manufacturer would have more scrutiny and laws to follow, Marquis said, including one that requires cigarettes have fire-retardant bands that many smokers dislike.
Nick Patel, co-owner of Save On Cigarettes, 5201 Washington Ave., acknowledged there are some questions about the matter but said, "We're currently on the legal side of it."

On the Call: Lorillard CEO Murray Kessler

CEO Murray Kessler of Lorillard Inc. - the third-largest U.S. tobacco maker, whose biggest brand, Newport, is the nation's top-selling menthol cigarette - spoke during a conference call with analysts Tuesday about a report on menthols from a Food and Drug Administration advisory panel.

The FDA panel, the Tobacco Products Scientific Advisory Committee, said in March that removing menthol cigarettes from the market would benefit public health because the minty flavoring has led more people to pick up smoking and makes quitting harder.
The panel stopped short of recommending an outright ban, saying the FDA should consider other factors, including whether a ban could increase the market for counterfeit and smuggled cigarettes.

Many analysts believe the agency won't ban menthol, which about 19 million Americans smoke, because it's a political hot potato. Menthol cigarettes are one of few growth areas in the shrinking cigarette market.

Kessler defended the cigarettes.
QUESTION: As we look longer term, when FDA would make a final assessment, how do you think they would reconcile some of the concerns that the panel raised in the report?
RESPONSE: They have an obligation to evaluate this issue, to follow the science. And, if they follow the science, we believe it strongly comes to the conclusion that there's no disproportionate harm from a menthol cigarette versus a non-menthol cigarette.

They also have to deal with the issue that was really not even dealt with at all by the TPSAC report, which is countervailing effects like black market and unemployment and taxes and smuggling and youth access. We think when you combine that with it, they'll come to the right conclusion.

Hopefully, the worst is behind us on this issue.

Philip Morris International Inc. (PMI) Reports 2011 First-Quarter Results

Reported and adjusted diluted earnings per share of $1.06, up by 17.8% versus $0.90 in 2010, or by 14.4% excluding currency
Reported net revenues, excluding excise taxes, up by 4.5% to $6.8 billion, or by 4.3% excluding currency, driven by favorable pricing
Reported operating companies income up by 10.8% to $3.1 billion, or by 8.3% excluding currency
Adjusted operating companies income, which reflects the items detailed in the attached Schedule 7, up by 11.4% to $3.1 billion, or by 8.8% excluding currency
Operating income up by 10.8% to $3.0 billion
Free cash flow, defined as net cash provided by operating activities less capital expenditures, up by 22.6% to $2.2 billion, or by 21.1% excluding currency, as detailed in the attached Schedule 11
Repurchased 22.2 million shares of its common stock for $1.36 billion
Announced an agreement to acquire the cigarette manufacturing assets and trademarks of International Tobacco & Cigarettes Company Ltd. (ITCC) in Jordan
PMI increases its forecast for 2011 full-year reported diluted earnings per share by $0.20 to a range of $4.55 to $4.65, at prevailing exchange rates, versus $3.92 in 2010
Approximately $0.10 of the increased guidance are attributable to an improved business outlook and approximately $0.10 reflect favorable currency at prevailing rates;
Excluding a total favorable currency impact of approximately $0.20 for the full-year 2011, reported diluted earnings per share are projected to increase by approximately 11% to 13.5%, or by approximately 12.5% to 15% versus adjusted diluted earnings per share of $3.87 in 2010
Philip Morris International Inc. (NYSE / Euronext Paris: PM) today announced its 2011 first-quarter results, and increased its forecast for 2011 full-year reported diluted earnings per share.

“We start the year on a strong footing, despite the tragic events in Japan and the upheavals in North Africa,” said Louis C. Camilleri, Chairman and Chief Executive Officer.

“Our organic volume performance was slightly higher than we had originally forecast given the anticipated weakness in Mexico, Japan, Spain, Ukraine and Pakistan. Our momentum is such that we are raising our EPS guidance for the year driven, in equal part, by a stronger organic earnings projection and favorable currency at prevailing rates. Our revised guidance anticipates higher spending in support of our brand portfolio and a more conservative pricing stance in response to competitive actions. We are pleased with our financial performance to date and look forward to another year of solid results.”

In the Czech Republic, the total cigarette market was down by 2.0%, reflecting the impact of price increases implemented in the second quarter of 2010 and the first quarter of 2011. PMI’s shipments were down by 9.4%. Market share was down by 3.7 points to 45.0%, mainly reflecting continued share declines for lower-margin local brands, partially offset by a higher share for Marlboro, up by 0.2 points to 6.5%, and for Red & White, up by 0.5 points to 13.1%.

David Cassells jailed for illegal cigarette imports

David Cassells, 52, was found with the tobacco haul during an investigation by the Scottish Crime and Drug Enforcement Agency (SCDEA) in Glasgow in June 2006. He later admitted evading excise duty and VAT on the Mayfair cigarettes to the value of £102,718.

Glasgow Sheriff Court heard that Cassells will also face action under the Proceeds of Crime Act.

The court heard how the SCDEA carried out surveillance on Cassells, who is from the city's Crookston area, as part of an investigation into the trade of imported cigarettes.

On 16 June 2006, officers saw him loading a van with goods from a unit in Bridgeton. They then followed him to another car parked in another part of Bridgeton.

'Serious offence'
Cassells then placed two large packages in the boot of the car and drove off before being stopped and detained by police.

The court was told that 100,000 Mayfair Kingsize cigarettes were found in the back of the van, 20,000 were found in the car and 430,000 were discovered at the lock-up unit.

Subsequent investigations revealed the cigarettes were made for the Polish domestic market and there was no paperwork to show how they had come into Scotland.

Sentencing Cassells, Sheriff Martin Jones told him: "You cannot escape the fact that you have pled guilty to an extremely serious offence and I consider that a custodial sentence is necessary."

NH court hears case on cigarette rolling machines

The New Hampshire Supreme Court is weighing the question, "What is a cigarette?"

Retailer North of the Border Tobacco drew the attention of state investigators in 2009, when it installed machines that can roll 200 cigarettes in 10 minutes. Customers buy loose tobacco and rolling tubes from the retailer's store and then pay to use the machines.

State lawyers argue customers leave with cigarettes that didn't exist when they walked into the store in Brookline, a town of about 5,000 residents. They say that makes the retailer a cigarette manufacturer that should be paying into a national fund that helps states offset the Medicaid costs of tobacco-related illnesses.

The retailer's lawyers say what goes into the rolling machines already is a cigarette so nobody's manufacturing anything.

The justices didn't indicate Wednesday when they would rule.

Putnam County Tobacco Prevention and Cessation gets new coordinator

The cause to reduce tobacco use among Hoosiers in Putnam County is alive and well, thanks to the Putnam County Tobacco Prevention and Cessation Coalition. Through the combined efforts of the Coalition and Putnam County Hospital, Chris Shuck was recently hired as the new program coordinator.

"We are very excited to have Chris be a part of the team," said Dennis Weatherford, CEO of Putnam County Hospital. "It's great to know that the program will be able to continue with effective leadership. Chris brings a lot of qualities to the table that will be important as we work toward the goal of improving the overall health of the residents in the county. "

Most recently, Shuck worked as campaign manager for former State Rep. Nancy Michael of Greencastle. On top of his political experience, Shuck has worked with the public through volunteer activities and in a professional financial capacity.

"I'm very excited about this opportunity," Shuck said. "Greencastle is essentially the first town of its size to go smoke-free in Indiana. There is still a lot of work to be done, and the potential for Putnam County to be a leader in the reduction of tobacco use is very high."

Responsibilities of the program coordinator include working with patients at Putnam County Hospital as they try to quit using tobacco products, reaching out to mental health providers to educate their clients on the dangers of tobacco use, promoting youth cessation programs, partnering with the Coalition for Prevention, Intervention and Education (P.I.E.), teaching Tobacco Awareness Program (T.A.P.) and Tobacco Education Group (T.E.G.) classes, meeting with physicians as well as encouraging businesses to create smoke-free environments for their employees and visitors.

When asked about the controversy that surrounds the subject of tobacco cessation Shuck responded, "I think the misconception is that this program exists in order to force people to quit smoking. That simply isn't true. A lot of that is centered in public policy and the discussion in the Statehouse recently about the statewide smoking ban. This program exists to give people who want to quit using tobacco the resources to accomplish that goal."

The Putnam County Tobacco Prevention and Cessation Program is supported by a grant that is administered by the Indiana Tobacco Prevention and Cessation (ITPC) organization at the state level. This year marks ITPC's 10th anniversary. Because of the program many people have access to the Indiana Tobacco Quitline, 1-800-QUITNOW. This is a free service provided to any Indiana resident. Phone calls to the Quitline are anonymous and provide counseling for those wishing to find healthy ways to quit using tobacco.

SCSU student vote backs tobacco-free plan

St. Cloud State University students approved a plan that could make their campus tobacco free by August 2012.

The issue passed with 63 percent approving and 37 percent voting against the plan.

The students voted Monday through Wednesday, and the results were announced today at a Student Government meeting. The approval of the tobacco-free campus plan essentially is a recommendation to President Earl H. Potter III, who has final say over whether to give the go-ahead to the plan.

The plan has two phases, with the first reducing to 17 the areas on campus where tobacco products can be used. That phase would begin this summer and would go until August 2012, when the campus would switch to being tobacco-free. Students also elected a new Student Government president and vice president.

They are Samantha Ivey, who was elected president, and Christopher Norton, who is the new vice president. They received 57 percent of the vote, with Dale Rystad and Ashli Gerdes receiving 35 percent. The number of votes cast amounted to about 6 percent of the student body.

Pennsylvania judge lets Corbett keep using tobacco money

A Commonwealth Court judge on Thursday denied a petition to freeze millions in tobacco-settlement money that had been paying for a health-insurance program but that Gov. Corbett is now directing to the state's general fund.
Pennsylvania is expected to get an estimated $370 million in tobacco-settlement funds, and a portion of it was to help pay for adultBasic, which provided health insurance for people who do not qualify for Medicaid but who cannot afford private insurance.

The program was projected to cost more than $160 million this fiscal year and was funded with tobacco money and donations from Blue Cross and Blue Shield companies that also administer it.

AdultBasic ran out of money at the end of February, and Corbett said the state could no longer afford it. He redirected the tobacco money, which comes via a 1998 settlement with cigarette companies, to the general fund.

"The bottom line is that the commonwealth can continue as planned," said Kevin Harley, a spokesman for Corbett.

Though the petition for a preliminary injunction was denied, a class-action lawsuit seeking to restore adultBasic remains active. "Despite today's ruling, we remain optimistic that we will be successful in restoring the adultBasic program," said David Senoff, a lead attorney for the 75 plaintiffs who sued Corbett and the legislature.

The suit argues that Corbett needs legislative approval to redirect the tobacco money. The injunction would have required the state treasurer to hold the tobacco money rather than turn it over to the governor.

Past administrations also shifted tobacco money to the general fund.

About 41,000 people lost health insurance when adultBasic was cut off, but nearly half of them might qualify for Medicaid coverage. The state Insurance Department said Wednesday that it would send letters to former adultBasic recipients to tell them they might be eligible for Medicaid.

Local Underage Tobacco Sales Decrease

Public Health Madison and Dane County (PHMDC) is reporting that the number of underage tobacco sales has dropped for the fourth year in a row. In 2010, the overall compliance rate throughout Madison and Dane County was 94 percent. PHMDC conducted 280 tobacco compliance checks and found that underage customers were able to successfully purchase tobacco products only 7.4 percent of the time.

Compliance checks are done by trained teams of minors ages 15 to 17 and PHMDC staff. Team members attempt to purchase tobacco products from licensed vendors. Store employees are required to request and check the identification of young people attempting to purchase tobacco products. When a retail clerk does not follow the law and sells tobacco to an underage youth, citations are issued in accordance with Wisconsin statutes.

The Wisconsin WINS—the Wisconsin tobacco prevention and control program—was created in 2002 to comply with federal mandates designed to reduce the number of tobacco sales to minors. When the program began in 2002, 33 percent of all tobacco sales in Wisconsin were to minors.

Studies show that 80 percent of all smokers start smoking before age 18. According to Lyle Burmeister, the Tobacco Control Youth Coordinator, retail clerks play a key role and “are the first line of enforcement in preventing youth access to tobacco products.” When minors have a harder time gaining access to tobacco, they are less likely to become lifetime smokers. Burmeister added, “We know that tobacco use is the leading cause of preventable death in the US. We must continue education and enforcement to keep Wisconsin youth from becoming replacements for the 1,200 people in the US who die every day due to the health effects of tobacco.”

Tobacco companies spend $15 billion per year to market their products nationwide. In Wisconsin alone, they spend $274 million per year. Much of this advertising targets youth, as evidenced by the multitude of new, candy-flavored tobacco products. In 2011, Wisconsin will receive $840 million from the 1998 tobacco settlement and tobacco taxes. Less than one percent of that amount will go to tobacco prevention programs.

Tobacco company plans fire up to rejuvenate Eastlakes

The proposal for a massive $626 million residential and retail development in Eastgardens is expected to get the tick of approval by the end of next year.

British American Tobacco (BAT) plans to free up 10 hectares of its 16.8-hectare site on Westfield Dve including 15 residential towers of up to 12 storeys in height, containing about 1,000 apartments and
35,000 square metres of retail floor space.

The proposal was declined by Planning NSW last month under its Part 3A planning laws.

The department informed BAT it would be more appropriate for the site’s future use to be considered through the preparation of Botany Bay City Council’s new council-wide local environmental plan or as a stand-alone rezoning request to council.

Former planning minister Tony Kelly said concern was also raised regarding the suitability of the proposed uses and the potential impacts on existing retail centres.

“When the wrong kind of proposal is lodged, the evidence has clearly been the system is robust enough to say ‘no’, and that is what has happened here,” he said.

But a Botany Council spokesman said the development was an exciting opportunity to create a perfect retail/ residential development.

“This is one of the biggest projects that the Eastern Suburbs will see because it’s a unique site,” he said. “There’s the parks and the golf courses opposite, access to the beach on the other side, public transport through the bus services either down Wentworth Ave or Bunnerong Rd, retailing adjacent, access via Southern Cross Dve to the city, you’re near the airport and you can access the M5.”

The spokesman said council would change its LEP and zoning and would work with BAT to have the amendments done by the end of next year.

Foss's Tobacco Experiment Revealed

Kevin's experiment with growing tobacco last summer didn't end well, since he was growing them potted on a rooftop deck. The plants he gave us that we planted on our backyard, on the other hand, took root like the weeds they were. Last October we gave Meatyballs Mobile owner/chef Phillip Foss the leaves our Chinese neighbors didn't scavenge to work with in the kitchen. Foss had contacted Art Culinaire magazine.

A few days later Foss updated us on his attempts to cook with tobacco. The two of us were nicotine high for hours after nibbling the slightest bit of the raw leaf, so the key here was to get rid of the nicotine. Foss doesn't have the cool lab toys that a Ted Breaux — the absinthe maker who's working to get his shelf stable, nicotine-free tobacco liqueur legalized in the States — does, so he had to do some outside-the-box thinking to blanch that flavor that had us choking and drooling like brahma bulls in the backyard.

Foss went back to a venison loin dish he made when he was at Lockwood in the Palmer House Hilton. He blanched the leaves, made a gastrique made from silan, a Middle Eastern date molasses, tossed the leaves with them and then steamed them. Then he dehydrated the leaves, which wound up removing the astringency from the leaves. Foss called this "tobacco leather."

The dish he tried to make with the venison and tobacco for Art Culinaire looked pretty, but Foss admitted in a recent blog post that he made a couple of errors to the preparation, and the taste also was still an issue. He's hoping that the magazine will still publish it, because of the tobacco element to the story.

Cheryl Cole told to 'stop smoking' for US 'X Factor' elocution lessons

Cheryl Cole has reportedly been told to kick her smoking habit as rumours intensify regarding her possible judging role on the US version of 'X Factor'.

As previously reported by AOL Music, the show's only officially confirmed judge so far -- former record label CEO LA Reid -- let slip that Cole had been signed up to appear on the talent programme.

However, as The Sun reports, it seems like she's going to have to give up her famed love of cigarettes in order to keep her place on the show.

The newspaper claims that her habit -- reported to be some 20 a day -- is causing trouble with elocution lessons as she tries to smoothen out her Geordie accent for the American TV audience.

A source said, "Cheryl's teacher has advised her to stop smoking. But she says the move to LA and 'X Factor' job is stressful enough without having to try and quit the cigs on top. Voice coaches are determined to make her sound more American but in a natural way. Basically just so she can be understood."

As previously reported by AOL Music, Cole had apparently been told to avoid phrases like "babe" and "pet" to ensure she doesn't alienate confused US 'X Factor' fans and break American TV rules in the process -- should she officially land the role, of course.