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May/June, 2010


STG and Swedish Match make it official
Copenhangen - In mid-January it was announced that there was an intention to join the business of Scandinavian Tobacco Group (STG) and the cigar and pipe tobacco business of Swedish Match (SM) to form a new worldwide company with focus on cigars and pipe tobacco. The parties have now signed the transaction contract, which takes over from the letter of intent. Skandinavisk Holding (SH) will hold 51% of the shares in the new company, with the remaining 49% of the shares being held by SM. The company will be named Scandinavian Tobacco Group. Jørgen Tandrup, Chairman of SH and the current STG, will become the Chairman of the Supervisory Board and Conny Karlsson, Chairman of SM, will assume the role as Deputy Chairman of the Supervisory Board. Anders Colding Friis, CEO of the existing STG, will become CEO of the new company, which will be headquartered in Denmark. The new company will be a leading player in a number of markets in Europe within cigars and pipe tobacco and will hold about 30% of the US premium cigar market. The completion of the transaction is subject to competition authority approvals, which are expected to occur during third quarter of 2010.

“This is a major step towards our ambition to become a world leader in cigars and a leading player in smoking tobacco. The new Scandinavian Tobacco Group will be a truly global company, with an outstanding brand portfolio, increased scale and a much stronger platform from which we can drive growth and profitability,” says Anders Colding Friis, CEO of Scandinavian Tobacco Group.

Swedish Match (SM) will contribute all its cigar business (with the exception of its US mass-market cigars and the minority stake in the German company Arnold André), as well as its pipe tobacco and accessories business. The combined entity will also distribute lighters and matches in selected markets.

The company’s leading cigar brands will include brands such as Café Crème, Henri Wintermans, Colts, and Mercator, among others from STG, and brands such as La Paz, Macanudo, Partagas (US), and Punch (US) from SM. Leading pipe tobacco brands will include Erinmore, Clan, and W.Ø. Larsen from STG and Borkum Riff and Half&Half from SM.

Scandinavian Tobacco Group (STG) produces and sells cigars, pipe tobacco, and fine cut tobacco in more than 115 countries around the world and has a number of strong brands. The group has approximately 3,400 employees and is headquartered in Denmark. Swedish Match (SM) produces and sells market-leading brands in smoke-free tobacco products, cigars, lighters and matches.

Eastern Europe
Filtrona launches Russian language website
Filtrona Filter Products has launched a new Russian language website available at www.filtronafilters.ru. Eastern Europe is the second largest market in the world for cigarette consumption and with Russian being spoken across the region, the new website will enable Filtrona to offer customers in this area improved access to innovative, high-quality filter solutions for the region’s growing market segments of premium, slim and super slim, mentholated and carbon filtered cigarettes.

PT Sreekumar, Managing Director, says of the new site: “By expanding the language base of our website we can keep our Russian speaking colleagues in the tobacco industry up to date with current developments. This, combined with the possibilities for technical exchange that the website provides, means we can build even stronger relationships with our customers and provide an improved pace of action to meet their needs.”

Barakat, Imperial Tobacco ink Davidoff distribution deal
Mumbai - UK-based Imperial Tobacco Group Plc and Mumbai-based Barakat Food & Tobacco Pvt Ltd have entered into an import and distribution agreement for the Davidoff brand of cigarettes in India. Davidoff cigarettes will be available in the “Classic” and “Gold” Premium Line versions and will be distributed in a number of key cities in India.

“We are pleased that this agreement allows us to enter the Indian market with Davidoff, one of the Group’s flagship cigarette brands. We are confident that Barakat’s expertise in FMCG distribution and merchandising will be mutually beneficial,” said Colin Matthews, regional managing director for Africa, West Asia and Indian sub-continent, Imperial Tobacco.

Djarum drives clove marketing push in Spain
Madrid - Indonesia-based clove cigarette manufactures Djarum, recently began a marketing push into the Spanish markets in Barcelona, Madrid, Sevilla, Vigo, among other cities. Hundreds of Spanish sales promotion girls were spread to 312 tobacco stores in many parts of Spain to promote Djarum cigarettes. At each big city like Madrid, Barcelona and Sevilla these sales promotion girls had been spread to 40 tobacco stores and in each smaller cities sales promotion girls had been spread to 36 tobacco stores.

United States
USTC receives Exporter Of The Year award
from North Carolina Department Of Agriculture

In early February, the North Carolina Department of Agriculture and Consumer Services named U.S. Tobacco Cooperative its 2010 Exporter of the Year. N.C. Commissioner of Agriculture, Steve Troxler, presented the award to USTC Chairman of the Board, Albert Johnson, and Senior Vice President of Global Sales and Marketing, Mike Lynch.

The award was created by the department to honor agriculture businesses that export North Carolina products internationally. Commissioner Troxler said USTC had successfully increased North Carolina tobacco exports to other countries and has been instrumental in helping build a stronger relationship between North Carolina and China.

Reynolds to raise prices on Camel, all brands
Winston-Salem - Reynolds American Inc., the second-largest US tobacco company, raised prices on all of its cigarette brands in mid-May. Reynolds’ R.J. Reynolds Tobacco Co. division recently notified wholesalers it would charge an additional 8 cents a pack for top-selling Camel, Pall Mall, and several other brands. Distributors’ list prices for Carlton, Lucky Strike, and other brands will climb by 33 cents a pack.

The increases took effect May 12, two days after an 8-cent- a-pack increase by Altria Group Inc.’s Philip Morris USA, the largest US producer.

Tobacco International - May/June, 2010

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