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October, 2007

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Saudi Arabia
Lawsuit against “international tobacco companies” postponed
Riyadh - A Saudi court has postponed the hearing of the first lawsuit by Saudi health authorities against two international tobacco companies until October 31, a spokesman for Ministry of Health said in a recent statement. Representatives of the companies the names of which have not been disclosed-were not present during the initial hearing.

The Saudi Ministry of Health is seeking 10 bn Saudi riyals (US$2.7 bn) in compensation to be used for the treatment of smoke-related illnesses as well as another 500 mn riyals to be paid annually.

Saudi Arabia is the world’s fourth biggest tobacco importer. Saudis smoke about 15 bn cigarettes worth $1.5 bn dollars every year. According to the World Health Organisation, one out of every 10 Saudis smokes. In Saudi Arabia, smoking is prohibited in the holy city of Mecca and several public places in other cities.

The United States is the leading tobacco exporter to Saudi Arabia. Tobacco products are also imported from other countries like Switzerland, Germany, the United Kingdom, and Indonesia.


Sweden
Snus-users in face new tax increases
Stockholm - A Swedish Government budget proposal, presented in late September, is expected to include a new tax increase on tobacco products including snus, which is proposed to be SEK 2.70 for 24 g (pouch) and SEK 5.63 for 50 g (loose). The numbers include VAT and the increase is expected to be effective as of January 1, 2008.

In the light of the recent tax increase in January of 2007-where the tax increased by SEK 3.69 for 24 g and SEK 7.69 for 50 g snus, including VAT-a defiant Swedish Match press release calls the new tax proposal “unexpected,” and promises to ”take all necessary actions in order to protect and improve profitability in the Swedish market.”


Switzerland
PMI opens new HQ
Lausanne - The global headquarters of world-leader Philip Morris International (PMI) officially opened in Lausanne after more than three years of construction work.

The new premises consist of six buildings spread over 75,000 square meters on the slope between the avenue de Cour and the avenue de Rhodanie, in the south part of the city. The complex is known as the "Rhodanie Campus." The construction costs totalled SFr274 mn.


Thailand
Tobacco project scrapped
Bangkok - Thailand’s cabinet formally scrapped a project by the Thailand Tobacco Monopoly (TTM) to build a new multimillion dollar manufacturing plant in Chiang Mai, according to reports from The Bangkok Post.

A barter trade agreement between the Thai and Chinese governments was also scrapped by ministers. The Chiang Mai plant was to be built by the China Yunnan Corporation under a cabinet decision made in 2003, but the project has been plagued by delays and allegations of improprieties.

The TTM is now considering building a new plant in Saraburi.


United States
Federal tax on tobacco could explode
Washington, DC - At press time, the US Congress is expected to send a bill to the President that would raise the federal excise tax on cigarettes from 39 cents to $1 to increase funding for the politically popular State Child Health Insurance Program.

President Bush has threatened to veto that bill, but many analysts believe there are enough votes in Congress to override the veto, meaning cigarette taxes could rise dramatically in the next few months.


Vietnam
Huge counterfeit bust in Mekong Delta
Hanoi - More than 71,000 packets of smuggled and counterfeit cigarettes were destroyed recently in the Mekong Delta province of Long An, the local market management department reports.

With the bust, the total of illegal cigarettes seized this year comes to 4 mn packets nationwide. Most of the illicit products are under trade name Hero and Jet, smuggled mainly from the neighboring country Cambodia.


Tobacco International - October, 2007
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