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September, 2009

Might a new lawsuit from US manufacturers fight off FDA oversight?
Washington, DC - A group including some top US tobacco companies filed a federal lawsuit to block provisions of a new tobacco law, arguing it violated their free speech rights under the US constitution.

R.J. Reynolds Tobacco Co, a unit of Reynolds American Inc that makes Camel and Winston cigarettes, and Lorillard Inc, which sells the Newport menthol brand, were among those seeking to void parts of the law.

Altria Group Inc, which makes Marlboro cigarettes and is the largest US tobacco company, is not involved in the case after breaking with rivals to support the legislation which gave the federal government broad powers for the first time over cigarettes and other tobacco products. It calls for larger warnings on cigarette packages, restricts vending machine sales, bans most flavored products and curbs print advertisements targeting children. The FDA also has final say over new products and marketing claims such as “light” and “low tar.”

While not challenging the FDA’s authority to regulate tobacco products, tobacco companies say the law goes too far in limiting their commercial speech rights in light of existing bans on television and radio advertisements.

The companies are asking the court to overturn bans on the warning labels, using color and graphics in labels and advertising, some outdoor advertising and sponsorships of sporting and other events. While commercial speech has less constitutional protection than other speech, the government still faces a high hurdle in trying to restrict it, legal experts said.

Even one opponent of the tobacco industry said the companies could have a good case. “The tobacco companies have a very legitimate claim based on the Supreme Court’s own rulings,” Michael Siegel, professor of community health sciences at Boston University’s School of Public Health.

Other plaintiffs in the lawsuit include cigarette maker Commonwealth Brands Inc; tobacco retailer Discount Tobacco city & Lottery Inc and National Tobacco Co.

A booming market for pharma. in smoking cessation?
Bangkok - World pharmaceutical leader Pfizer is striving for a larger share in the booming smoking-cessation market in China. China, as the world’s largest market of tobacco consumers, has more than 350 mn smokers who consume about 30% of the world’s cigarettes. To tap into the anti-smoking market, Pfizer launched its smoking-cessation Champix product in late 2008.

Pfizer is not the only pharmaceutical maker to recognize the market potential in stop-smoking pills. Its rivals, Swiss drug maker Novartis AG and US-based Johnson & Johnson, also introduced their quit-smoking products. Novartis introduced Nicotineel to China in 2008, and Johnson & Johnnson introduced Nicorette to China this year. It’s estimated by Novartis that the smoking cessation market in China is valued at around 30 bn yuan.

Russian tobacco makers relaunch iconic soviet cigarette brands
Moscow - The Russian tobacco market has been showing a curious trend recently. The cheapest and premium class cigarette brands currently enjoy the biggest demand in Russia. Many tobacco companies focus their efforts on the inexpensive segment and resume the production of Soviet brands, BFM.ru business portal said.

“According to our estimates, the reduction of the Russian tobacco market during the first half year made up 3–4%,” Kingsley Wheaton, the managing director of British American Tobacco Russia (BAT Russia) said. The sales of cheap cigarettes are growing, but they are growing in the premium segment of the market too, he said.

Philip Morris has also reported a growth in the sales of its low price segment cigarettes (Bond Street). The sales gained 35% during the second quarter of the year - Optima cigarettes went 23% up. More expensive brands of the company demonstrated negative dynamics in their sales. Marlboro dropped by 19% with Parliament losing 4.3%.

BAT Russia took account of the changing demand and launched two new brands: Capri slim cigarettes (prices at $0.8 per pack) and The Golden Fleece (Zolotoye Runo), a legendary Soviet brand which the company relaunched in April (priced up to $0.48 per pack).

The cigarette brands with the Soviet past from another company, Nevo-Tabak, also managed to improve their sales. The sales of such brands as Arktika, Troika, and Leningad improved considerably during the recent six months.

Tobacco International - September, 2009

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