Bulgartabac goes on sale, raises prices
SOFIA - Some reports state that Bulgartabac
Holding may be privatized soon as a package
including its two remaining factories in Sofia
and Blagoevgrad, and a smaller plant in the
village of Yasen close to Pleven.
The way through which the Bulgarian tobacco
monopoly will be privatized - through the
Bulgarian Stock Exchange or by seeking a
strategic investor - is said to become clear. At
the end of 2008, the Bulgarian Parliament
voted to cross Bulgartabac out of the list of state-owned companies that cannot
be privatized. In the summer of 2008, Bulgartabac already sold two of its
plants - in Plovdiv and in Stara Zagora - through the Stock Exchange.
In other Bulgartabac news, the prices of some of the company’s most
popular cigarette brands went up this month.
The prices of the brands Eva and Sredets will increase by BGN0.20 to 0.30,
but the Victory brand will maintain its price of BGN3.40 until the end of 2009.
The prices of all Bulgarian cigarette brands went up April 1 due to
the excise increase. The manufacturers then established the so-called
"intermediate" prices to deal with market competition.
Bulgartabac owns 60% of the cigarette market in the country. The other
cigarette makers: Plovdiv Cigarette factory and Sluntse Stara Zagora
announced they will maintain the current prices, but added that they keep
the option to raise them at any time over market changes.
Scandinavian Tobacco Group acquires Norwegian brands
COPENHAGEN - Scandinavian Tobacco
Group A/S (STG) (previously
Skandinavisk Tobakskompagni A/S) has
acquired several Norwegian tobacco
brands in the RYO and cigarette segments
from British American Tobacco (BAT).
With the acquisition, Scandinavian
Tobacco Group will gain an approximate
30% share of the large Norwegian market
for rolling tobacco which will now
include Tiedemanns Rød, Tiedemanns
Gul, and Tiedemanns Lys, as well as
Teddy, Mento, and Mentolett.
The acquisition is a consequence of
the EU Commission's approval of the sale
to BAT of STG's cigarette and certain
RYO activities in summer 2008. As a condition
of approval, the Commission required
that BAT dispose of the predominant
part of the RYO activities in Norway,
in order to prevent BAT from gaining too
strong a position on the Norwegian market.
The deal is thus effectively a repurchase
of part of the activities STG sold to
BAT in summer 2008.
Likewise as a consequence of the
Commission's requirements, BAT sold
the Petterøe’s brand in November 2008
to PMI, and with the sale of Tiedemanns
to STG, BAT has now complied with
the Commission's requirements regarding
the sell-off in Norway.
Tiedemanns' rolling tobacco is already
being produced under contract at STG's
factory in Holstebro, where production
will also be carried out henceforth. BAT
Norway will handle distribution on the
Norwegian market of the Tiedemanns
products and the other acquired brands.
BAT puts 'less toxic' tobacco to the test
HAMBURG - British American Tobacco is
recruiting 250 volunteers in Germany to
test experimental cigarettes designed to
produce less toxic smoke than conventional
products, according to a report
by The Financial Times.
The smokers' biological reactions
will be analyzed through a battery of
scientific tests. The study in Hamburg is
believed to be the first modern clinical
trial of tobacco treated to be safer when
smoked. BAT's long-term business plan
is to produce cigarettes that can be marketed
as less likely to cause disease, with
solid evidence to support the claim.
BAT has made three "prototype combustible
products" for the German trial.
They incorporate tobacco that has been
processed in several ways to generate fewer
toxicants as it burns, including treatment
with enzymes similar to those in biological
washing powders. The prototypes also
have new filters, with activated charcoal
and resins to absorb harmful chemicals.
Momentum Pharma Services, a contract
research organization that normally
works for drug companies, is carrying out
the £6m analysis. It has been registered
on an independent clinical trials database -
a first for BAT - and results will be
published in a scientific journal next year.
Although the tobacco industry has
been investigating cigarette safety for
decades, science has only now reached a
stage at which researchers can discover
how to make smoking genuinely safer,
said David O'Reilly, BAT head of public
health and scientific affairs.
"There are 100 or so toxicants in
cigarette smoke and more than 30
significant diseases associated with
smoking," he said.
JTI sales in Russia gain as taxes lift rivals' prices
MOSCOW - Japan Tobacco Inc., the world's
third-largest publicly traded cigarette
maker, said Russian sales are rising as taxes
force up the prices of budget competitors
to its Winston and LD brands.
Cigarette volumes in Russia climbed
1.5% from January to March, Executive
Vice President Masakazu Shimizu said
at a press conference in London.
"People are starting to trade up from
the value segment," as prices rise, he
said. "When people who used to belong
to higher pricing products are trading
down, we have the expansive presence
in the mid-pricing zone to catch them."
Taxes on tobacco are being increased
incrementally until 2011 in Russia, where
42% of the population smokes, according
to Japan Tobacco. Tax currently accounts
for around one-third of the retail price on
filtered cigarettes in the country. Japan
Tobacco includes Russia in its Rest of the
World unit, which accounted for 17% of
sales last fiscal year.
Lorillard has a great first quarter
GREENSBORO - Lorillard Inc. - the US’
oldest tobacco company - saw its firstquarter
profit rise 5.7%, as retails were
higher and costs lower, according to an
Associated Press report.
The makers of Newport cigarettes saw
its profit grow to $184 mn, or $1.09 per
share, in the three months ended March
31, up from $174 mn, or $1 a share, a
year ago, according to the report.
Sales fell less than 1% to $917 mn
on lower volumes, which were partially
offset by higher prices. Sales were down
from $921 mn a year ago.
"We are pleased with our results for
the quarter despite the extraordinary inventory
adjustments that occurred related
to the Federal Excise Tax increase
and the impact of the current macroeconomic
pressures," Chief Executive
Martin Orlowsky said in a statement.
For the quarter, Lorillard said it saw
a 7.6% decrease in its wholesale shipment
volumes to 7.909 bn cigarettes,
with declines of 10.6% on its Newport
brand. However, with the decrease in US
smokers overall, Newport's retail market
share increased 0.2 to 10.1% compared
with the year-ago period.
Tobacco International - June, 2009
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