Tobacco products to face higher taxes

The Ministry of Health (MoH) has proposed that the Government increases the cost of tobacco for consumers in a bid to tackle the high number of smokers and passive smokers in Viet Nam. The proposal calls for a higher level of tax on all tobacco products and for the minimum price for cigarettes sold in duty free shops to be more tightly regulated. The MoH has set a number of targets to limit the harmful effects of tobacco from now up to 2020.

It aims to lower the rate of male smokers from 47.4 per cent to 39 per cent, and the number of young smokers (between the age of 15-24 years old) from 26 per cent to 18 per cent. They also hope to keep the ratio of women smokers under 1.4 per cent. The ministry also wants to slash the rate of people exposed to cigarettes smoke at healthcare centres from 24 to 14 per cent, and at educational institutions from 22 to 12 per cent. Currently the rate of passive smokers at work is 56 per cent, which the MoH hopes to reduce to 26 per cent.

Similarly, the ratio at restaurants will be pulled down to 50 per cent from 80 per cent and on public transportation to 16 from 34 per cent. MoH statistics rate Vietnamese males as the fifteenth highest smokers in the world. A survey in 2010 revealed that there were 15.3 million smokers in the country and about 8 million others are exposed to cigarettes smoke at work, with a staggering 47 million passive smokers at home.

The health ministry also reports 40,000 fatal cases relating to smoking in Viet Nam each year. Meanwhile the World Health Organisation (WHO) estimated the figure will increase to 70,000 by 2030 if effective measures to reduce smokers are not applied.

Marlboro maker Altria 3Q profit falls on charges

Marlboro maker Altria Group Inc.'s third-quarter net income fell 44 percent on charges for a loss on early extinguishment of debt. But it sold more cigarettes at higher prices and expanded its industry-leading share of the U.S. market. Marlboro maker Altria Group Inc.'s third-quarter net income fell 44 percent on charges for a loss on early extinguishment of debt. But it sold more cigarettes at higher prices and expanded its industry-leading share of the U.S. market.

The owner of the nation's biggest cigarette maker, Philip Morris USA, on Thursday reported net income of $657 million, or 32 cents per share, for the three-month period ended Sept. 30, down from $1.17 billion, or 57 cents a share, a year earlier. Earnings were impacted by previously announced plan to buy back $2 billion in debt, which resulted in a charge of $874 million in the third quarter. Adjusted earnings were 58 cents per share, matching Wall Street expectations.

The Richmond, Va.-based company said revenue, excluding excise taxes, rose about 3 percent to $4.46 billion as higher costs to promote its top-selling Marlboro brand were offset by higher prices and volumes. Analysts polled by FactSet expected revenue of $4.36 billion. Its shares slipped 9 cents to $32.04 in midday trading.

They are 12 percent below their 52-week peak of $36.29 in early August. Altria said cigarette volumes grew about 1 percent to 33.7 billion cigarettes compared with a year ago, compared with an estimated total industry volume decline of 3.5 percent. Volumes for its discount cigarette brands increased 14 percent, Marlboro saw gains of 1 percent and its other premium brands fell by about 8 percent. Its share of the U.S. retail market rose 1.2 percentage points to 49.9 percent.

Marlboro brand gained 1 percentage point of market share to end up with 42.7 percent of the U.S. market. In the year-ago quarter, Marlboro experienced one of the biggest U.S. market-share declines in at least four years. The company has introduced several new products with the Marlboro brand, often with lower promotional pricing.

They include special blends of both menthol and non-menthol cigarettes to try to keep the brand growing and steal smokers from its competitors. At the end of the quarter, Altria said it expanded Marlboro NXT - a cigarette that can be switched to menthol by crushing a capsule in the filter - into 27 states.

 "Marlboro's got a big reach, it appeals to a lot of adult smokers. It's proven that not just recently, but over decades," CEO Marty Barrington said in a conference call with investors. "It's a big brand, it's got a lot of room for a lot flavor segments, it's got room for a lot of adult smokers, and that's how we think about it." Altria still faces pressure in the current economy from less-expensive brands such as Pall Mall from Reynolds American Inc. and Maverick from Lorillard Inc. Marlboro sold for an average of $5.79 per pack during the third quarter, compared with an average of $4.24 per pack for the cheapest brand.

But Altria also saw volumes for its discount L&M brand grow this quarter. Like other tobacco companies, Altria is focusing on cigarette alternatives - such as cigars, snuff and chewing tobacco - for future sales growth because the decline in cigarette smoking is expected to continue. Volumes of its smokeless tobacco brands such as Copenhagen and Skoal rose nearly 6 percent compared with the year-ago period. For the quarter, the company's smokeless tobacco brands had 55.5 percent of the market, which is tiny compared with cigarettes.

 The timing of promotional shipments and other inventory changes drove volumes for its Black & Mild cigars down14 percent during the period, but its share of the U.S. retail market grew 0.8 percentage point to 30.1 percent. The company also owns wine and financial services businesses and holds a voting stake in brewer SABMiller. Altria has been forced to cut costs as tax hikes, smoking bans, health concerns and social stigma make the cigarette business tougher. After completing a $1.5 billion multi-year cost savings program last year, the company rolled out a plan to cut $400 million in "cigarette-related infrastructure costs" by the end of 2013 in advance of anticipated cigarette volume declines.

The company said that plan remains on track. Altria also reaffirmed its full-year adjusted earnings guidance in the range of between $2.19 and $2.23 per share. Analysts expect earnings of $2.21 per share. During the latest quarter, the company said it repurchased 7.7 million shares for a total cost of about $262 million as part of its previously announced $1 billion share buyback program, which was expanded by $500 million in a board vote earlier this week.

It has about $550 million remaining in the expanded program, which it expects to complete by the end of the second quarter of 2013. No. 2 cigarette maker Reynolds American said Tuesday its third-quarter profit grew nearly 7 percent as higher prices and smokeless tobacco gains helped offset a nearly 7 percent decline in the number of cigarettes it sold. And Lorillard Inc., the nation's third-biggest tobacco company, said Wednesday its third-quarter net income rose 6 percent, as higher prices helped offset a decline of about 2 percent in its cigarette volumes.

AUSTRALIA PENSION FUND REVIEWING TOBACCO STAKE

The Australian government's pension fund for public servants said Thursday it was reviewing its investment in tobacco shares following the passage of plain packaging laws in a bid to curb smoking. The Future Fund, which manages some Aus$80 billion in retirement savings for government workers, said its board had requested a review of tobacco holdings worth Aus219 million in the light of Canberra's new anti-smoking policies.

"We think it's important, particularly given the responsibility for managing such a large pool of capital for the long term, that we take a careful, methodical and considered approach to these kinds of issues," said Future Fund managing director Mark Burgess. "This work has been started and will include consideration of the cost and implications of exclusion." Tobacco products in Australia will have to be sold in drab, uniform khaki packaging with graphic health warnings from December 1 after smoking giants lost a High Court challenge to the measures in August.

The fund has come under growing pressure to dump the shares after it was revealed in the Senate last week that new stock worth almost Aus$40 million was being bought at the same time the new policies were being pushed through. Health groups and the left-wing Greens party have described the investment as inconsistent with public values. The Australian government estimates there are 15,000 deaths nationally each year from tobacco-related illnesses and that smoking costs more than Aus$30 billion a year in healthcare and lost productivity.

The Future Fund has holdings in major firms including British American Tobacco, Imperial Tobacco, Japan Tobacco Inc and Philip Morris -- all of whom were parties to the High Court challenge to Australia's plain packet plan. It has previously jettisoned holdings on ethical grounds, selling off its stock in 10 defence companies that manufactured cluster munitions and land-mines in 2011. Similar moves against tobacco firms were taken by the Norwegian government's pension fund in 2010.

Walpole Health Board divided on tobacco age issue

The Board of Health will consider raising the local age to purchase tobacco from 18 to 21 years old after hearing a local pediatrician’s impassioned plea. The board voted unanimously to open up Walpole’s tobacco regulations for change and will hold a public hearing on Jan. 8 before they make any decisions. Though they agreed to get public input first, the board is divided on the issue. Chairman Bill Morris already gave his support to Dr. Lester Hartman, the Westwood physician who approached the board earlier this month.

Hartman is asking all Boston suburbs to consider raising the age from 18 to 21 to protect children from smoking’s harmful effects. Though they’re adults legally, 18-year-olds are still children in that their brains and bodies are still developing. Morris agreed with Hartman’s case. Board members Lisa Procaccini and Claire Wolfram think 18-year-olds should still be allowed to purchase tobacco. “It’s not that I think they should be smoking. I just think, they’re adults,” Procaccini said. “They’re going to smoke if they want to smoke.

That law isn’t going to change that.” Wolfram didn’t see how upping the age in Walpole would reduce teen smoking, another reason Hartman is pushing for 21-year-olds to be able to buy cigarettes. “I don’t think we should bother with this,” Wolfram said. Board member Carol Johnson indicated she would support increasing the age, while fellow board member Richard Bringhurst said he had mixed feelings on the issue.

“I’m obviously opposed to anything that stunts growth,” said Bringhurst, also a doctor. “I think I am concerned about the economic impact on small businesses.” The Board of Health will have the final say on changing the age. In 2010, the board voted to ban the sale of cigarettes and tobacco in pharmacies. So far, only two towns have upped the allowable age. Needham first raised it to 21 and then amended it to 19. In July, Belmont raised their age to 19. Hartman is hoping for a domino effect amongst Boston suburbs that will force the state to take notice.

Aggressive Tobacco Pricing to Come

Altria Group recently lowered the price on some of its tobacco products, growing its total cigarette market share. Reynolds American and Lorillard will also drop cigarette cost in an effort to gain back market share, Dow Jones Newswire reports. Lorillard and Reynolds American both pointed to a competitor (Altria, although not specifically named) for the recent influx of cigarette promotions.

Currently, Altria has around half of the U.S. tobacco market. Analysts wonder if this competitive pricing trend will hurt earnings growth in the near future. Both Lorillard and Reynolds American only registered small bumps in third-quarter earnings, while Altria reported a 3% profit jump. Thomas Mullarkey, an analyst with Morningstar, predicted aggressive pricing will commence for the next two to four quarters, but that it will taper off in the long term.

 Reynolds American will keep pricing stable on Camel and Pall Mall, while promoting specific brands and styles, and offering certain geographical areas different price points. Meanwhile, Lorillard said it would not be closing the gap too much between premium Newport and its competition. “The cost of business has been raised, not by us, by our competitor,” said Murray Kessler, CEO/chairman of Lorillard. “We're not trying to get more aggressive by reducing prices below them.”

Chancellor to address state summit on tobacco-free campuses

University of Wisconsin-Stout Chancellor Charles W. Sorensen will deliver the keynote address at a conference Tuesday intended to help other colleges and universities in Wisconsin implement tobacco-free policies. Sorensen will describe UW-Stout’s journey to become the only public four-year campus in the UW System with a comprehensive tobacco-free policy at the Summit on Tobacco-Free Campuses sponsored by the American Lung Association at Monona Terrace in Madison. “I am honored to be asked to talk about the subject of tobacco-free campuses, which I am passionate about,” Sorensen said.

“I believe we have learned some things at UW-Stout that could help other state universities follow our path in providing a healthier campus environment for students, faculty and staff.” UW-Stout students voted 1,176-718 in an April 2009 advisory referendum to ban smoking on campus. Students voted in another advisory referendum in April 2010 to ban the use of all tobacco products on campus. Sorensen accepted the results of those referendums, and the tobacco-free policy went into effect Sept. 1, 2010. At least 825 campuses across the country are smoke-free, including about 15 in Wisconsin, mainly technical colleges.

UW-Baraboo/Sauk County is the only other UW System institution on the list. Sorensen will tell the summit that the tobacco-free policy has been embraced by students, faculty and staff during its first two years and has dramatically changed the culture of tobacco use at UW-Stout. “No one has to walk through clouds of tobacco smoke to get into or leave a building,” Sorensen said. “We have cut the use of tobacco on campus significantly and continue to make progress in fully implementing the policy.” The policy sends an important message to students, faculty and staff about the dangers of using any form of tobacco, he added.

 “There is very good evidence that a policy like this will help prevent some people from becoming smokers and may help others to quit,” he said. “This policy will save lives.” Also speaking will be Doug Mell, UW-Stout executive director of communications and external relations and chairman of the Tobacco-Free Campus Policy Implementation Committee. Mell will describe the communications and other efforts the university has used to implement the policy.

 Those efforts were bolstered recently after the university received a $1,500 grant from the American Lung Association. Other scheduled speakers include Susan Uttech, director of the state Bureau of Community Health Promotion; Sue Swan, executive director of the American Lung Association in Wisconsin; Dustin Hinton, a vice president for United Healthcare; and Kathy Staats, program director for “Spark,” the campus-tobacco effort of the state American Lung Association.

Should people be allowed to smoke in cars?

Scientists say that smoking in cars creates dangerous levels of pollution - and it should be banned. It means that any child sitting in the back of a car while someone smokes breaths in high levels of smoke - which is really bad for them. At moment, smoking in cars is not against the law in the UK. But what do you think? Should smoking in cars be banned? Is it fair that passengers have to breath in other people's smoke?