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March, 2007

EU Approves JTI Bid to Buy Gallaher
Brussels - European Union antitrust regulators cleared Japan Tobacco Inc.’s 11.1 bn euro (US$14.7 bn) purchase of British cigarette maker Gallaher Group plc, saying the deal did not pose competition problems on the European market.

The European Commission said the deal showed overlaps between the two companies “are generally limited,” with the brands of the two positioned in different market areas. “Moreover, for all products concerned, the new entity would continue to face several strong, effective competitors with significant market shares,” the commission said in a statement.

Japan Tobacco wants to buy Gallaher to give the maker of Mild Seven, Camel, and Winston brands a bigger share in the European market.

Currently, JTI has little presence in Western Europe, and only has operations in Russia.

The combined company would have annual global output of 600 bn cigarettes, JTI said. It would remain at No. 3 behind Altria Group Inc. of the United States and Britain’s British American Tobacco.

Cigarette Shortages Reported
Santiago – A chain of debts within the government supply system has caused a cigarette shortage in Cuba’s second-largest city, driving up the black-market price of smokes, Cuban news media reported.

The shortage led “a few unscrupulous people” in the eastern city of Santiago to sell “Popular” brand cigarettes for the equivalent of 95 cents a pack, nearly triple the normal price of 33 cents, according to the Communist Party youth newspaper Juventud Rebelde.

According to the newspaper, the government retail company in Santiago owes about $430,000 to the government’s regional cigarette wholesaler, which in turn owes $95,000 to the government cigarette manufacturer.

The manufacturer stopped shipping cigarettes to the wholesaler after the debt extended past 30 days.

Juventud Rebelde said that officials were working to solve the payment problems and had begun to ease the shortage by bringing in cigarettes from other areas.

It said the shortage had not affected supplies that are part of the monthly government rations, which are nearly free though insufficient for many smokers.

Despite providing the rations, Cuba’s government has tried to discourage smoking, banning it from public places in 2005. Still, smoking is widespread in Cuba.

Kreteks Go Online
Jakarta — myclovecigarettes.com is launching its all-new online store. With more than 10 years experience in the clove cigarettes business, myclovecigarettes.com aims to provide customers with a safe, economical, service-driven shopping experience on the Internet.

“We are very pleased by the launch of the new clovecigarettesmart.com Web site,” said Arnold Lee, managing director of myclovecigarettes.com. “The main purpose of this new Web site is to further expand our market worldwide. This site is more user friendly, more product-oriented, and enabled our customers to place orders online using their credit cards.”

Myclovecigarettes.com and clovecigarettesmart.com offer a complete selection of famous clove cigarette brands such as Djarum clove cigarettes brand, Sampoerna, Gudang Garam, Wismilak, and Bentoel clove cigarettes. myclovecigarettes.com and clovecigarettesmart.com also guarantee that all of their products are freshly supplied from the original manufacturer in Indonesia to the customers for their full satisfaction.

United States
Lawmakers Renew Push for Regulation
Washington, DC — Seven years after being rebuffed by the Supreme Court, a group of lawmakers from the U.S. Senate and House of Representatives introduced the Family Smoking Prevention and Tobacco Control Act, which would give the Food and Drug Administration (FDA) the same authority to regulate tobacco products as it has over other consumer products. The bill would allow the FDA to enforce stronger warning labels on tobacco products, and also to decrease the amount of addictive ingredients, such as nicotine, that tobacco companies put in their products.

“FDA regulation creates a uniform set of federal standards for the manufacture and marketing of all tobacco products,” Michael E. Szymanczyk, chairman and c.e.o. of Philip Morris USA, said in a statement.

“We certainly continue to oppose any bill that conveys an unfair advantage or disadvantage to any manufacturer, which this legislation could. If you eliminate ways to communicate with adult smokers or consumers, that certainly benefits the market leader and makes it difficult, if not impossible, for those who aren’t the market leader to compete,” said David Howard, a spokesman for R.J. Reynolds Tobacco Co., the nation’s second-largest tobacco company.

“This bill is long overdue, and this is the year, I believe, that regulation of tobacco by the Food and Drug Administration is going to become law,” said Rep. Henry A. Waxman (D-Los Angeles).

Tobacco International - March, 2007

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