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June, 2008

Essentra

Canada
Native leader warns of confrontations over tobacco
Ottawa - Mike Delisle, Grand Chief of the indigenous Mohawk Council has warned that if the Royal Canadian Mounted Police (RCMP) plan more raids on tobacco-manufacturing facilities on aboriginal reserves, confrontations will occur.

The RCMP is pursuing a policy of seizing contraband tobacco and related products, dismantling manufacturing facilities, and disrupting supply lines related to organized crime.

The RCMP says that most illegal tobacco in Canada comes from three Mohawk territories. During March, they raided the reserves, arresting almost 30 people and seizing approximately $3 mn in firearms, drugs, and cash.

In 2007, the RCMP seized 618,077 cartons of contraband cigarettes, a year-on-year increase of 30%. RCMP seizures of loose tobacco rose dramatically to 141,374 bags.


China
As Beijing looks forward to the Olympics, stronger bans are imposed
Beijing - Continuing the effort to make the 2008 Olympic games in Beijing smoke-free, a new policy has been imposed, covering spaces from parks to hotels.

Building on a regulation from 1996, the measures have been expanded to include offices, meeting rooms, fitness centers, dining halls, toilets, cultural relic sites, and aisles and lifts in buildings belonging to government or private institutions. Also, restaurants, internet cafes, parks, waiting halls in airports, railway stations, and coach stations are also required to provide separate smoking and non-smoking areas. Hotels have been told to offer smoke-free floors or rooms, but regulations do not specify the proportion.

Anyone caught smoking in these prohibited areas will be fined 10 yuan (US$1.40), while institutions which violate these rules will be fined anywhere from 1,000 yuan to 5,000 yuan.


India
Bombay court stays tobacco ban
Bombay - The High Court of Bombay has passed an interim judgment banning gutkha and pan masala products. Chief Justice Swatanter Kumar and Justice V M Kanade granted this judgment while admitting that the challenge brought by Ghodavat Industries, manufacturers of Star ghutka and pan masala, and Dhariwal Industries, manufacturers of Manikchand, was legal.

Japan
Japan’s teenage smokers face wrinkle test
Tokyo - Cigarette-vending machines have been given the ability to recognize underage customers by sight and teenage smoking is expected to drop rapidly.

The machines have been equipped with digital camera technology that allows the customer’s facial characteristics to be compared with a growing database of over 100,000 people. The characteristics that the cameras look for include wrinkles around the eyes and sagging skin.

As of July 1, vending machines require users to insert a “smart card” to prove their age, and with facial recognition, only those who are under the age of 18 should have problems obtaining a pack of cigarettes.

There are approximately 5.5 mn cigarette vending machines in Japan, the annual take of which comes to almost 7 tn yen.


Jordan
Jordan’s panic at price hike
Amman - The Jordanian government has decided that import duties on tobacco products will increase by up to 70%. As it stands, the major tobacco companies have not yet set their new prices, and as such, some retailers have taken advantage of this situation.

Custom duties have been raised to 150% from 100% on imported cigarette brands, and to 150% from 80% on cigars, while the custom levies on raw tobacco increased to 75% from 60%.

These increases are the part of a government plan to reduce pressure coming from higher international food prices, lifting duties and sales tax on milk, rice and sugar while increasing duties and taxes on what it calls “luxury items” like tobacco products and alcohol.

The Director of the Ministry of Industry and Trade’s market control department, Imad Tarawneh, has said that any shopkeepers caught overcharging smokers would be fined as much as US$750 or imprisoned for multiple offenses. Notably, the amounts of complaints regarding the increase of cigarette prices heavily outweigh those that pertain to the food price hikes, despite the government’s anti-smoking campaigns. Total tobacco consumption is at US$500 mn a year, according to the Director of the Health Promotion Directorate.

Due to rumors of price hikes, retailers have increased the size of their orders from distributors as much as five times, while economists predict an increase in black market tobacco sales.


United States
Online cigarette buyers hit with state tax bills
Columbus - Smokers who managed to evade Ohio state cigarette taxes through online purchases between July and March will be receiving a bill for unpaid excise taxes, the grand total of which is over $2.15 mn. During 2006, the state billed $568,000 in unpaid taxes on cigarettes.
US Supreme Court rejects settlement challenge
Sacramento - The Supreme Court has denied the appeal from a California smoker who alleged that the price increase for cigarettes was a result of the 1998 settlement between tobacco companies and almost all of the states in the union. Steve Sanders, the plaintiff, argued that the settlement led to price increases of $12.20 per carton between 1998 and 2002.

Tobacco International - June, 2008
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