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December, 2006


Smoking out illegal traders
Budapest — The illegal tobacco trade fell by approximately 50% in the first half of 2006, thanks to the coordinated work of the Hungarian Customs and Finance Guard (VPOP), border guards and other law-enforcement agencies. In 2005, illegal trade in tobacco products represented 22% of total consumption, causing serious damage to the national economy and cigarette manufacturers, among them British American Tobacco Hungary, which said such illegal trade hurt the state as well as the industry.

Rita Bede, spokesperson for BAT Hungary, said, “According to estimates, in 2004–05 the state lost approximately Ft155 bn ($808.4 mn) in tax revenues due to tobacco smuggling. This amount is equivalent to approximately one third of the 2006 expenditure appropriations of the Ministry of Education and Culture, and exceeds the Health Ministry’s spending this year by 5%.”

Cutting back illegal tobacco trade from 22% in 2005 to 11% in July 2006 is an impressive achievement, Bede said, “which brought about a significant increase in sales in the legal market.” This was achieved through a series of efforts, the first component of which involved gradually increasing the level of excise duty on tobacco products.

Snus customers stocking up
Stockholm — Swedish consumers of snus were among those hardest hit when finance minister Anders Borg presented his budget in mid-October. Beginning in 2007, tax on the product is set to double. A small box of snus is expected to increase in price from 26 to 37 kronor.

And, according to a report in The Local, retailers are now beginning to notice an increase in demand as consumers have started squirreling away extra snus nationwide. When refrigerated, the product can stay fresh for up to a year.

Magnus Frisk, spokesman for the Coop supermarket chain, indicated that sales are already higher than usual, but he expects to see all previous snus records smashed in the week between Christmas and New Year’s.

The Dag Livs supermarket in Stockholm is taking absolutely no chances and has ordered in 10 times more product than usual.

"We think there is going to be a major increase in sales and are taking in snus by the pallet. For the first time ever we have even had to put loads of snus in the chilled cabinets," said store buyer Niclas Åberg.

Snus accounts for half of the country's total tobacco consumption. It is estimated that, out of a total population of 9 million, 1.1 million Swedes are snus users.

United States
Keep on trucking, but no smoking
Cleveland, Ohio — Ohio truckers who want to light up a cigarette in their cabs may want to think twice. The statewide smoking ban that took effect this month includes company vehicles.

The truck-driving provision was included to protect employees in vehicles used by more than one driver, but because enforcement is based on complaints, it's unlikely health inspectors will be climbing into trucks to issue citations. Exceptions include family owned and operated trucks when drivers are related to the owner. An out-of-state trucker crossing into Ohio also can light up.

The Ohio Trucking Association, which claims that 40 percent or more of truckers smoke, plans to ask the state legislature to exempt truck drivers from the smoking ban.

United States
Hawaii watches tourist trade after smoke ban passes
Honolulu — In mid-November, Hawaii enacted one of the strictest antismoking laws in the United States, outlawing smoking in bars, restaurants, and most hotel rooms, as well as forbidding it within 20 feet of those establishments’ doorways, windows, or ventilation intakes.

According to a New York Times report, the question in Hawaii is how the new law will affect the lives of sun-and-fun-seeking tourists, who pour more than $11 billion a year into the economy. In particular, some bartenders and business owners are worried about upsetting a vital segment of the Hawaiian marketplace: the Japanese, who account for nearly one in five tourist dollars spent and are known to like to smoke.

Marsha Wienert, the state’s tourism liaison, said the tourism department started a campaign earlier this year to educate Japanese tourists about the changes in state law, working with travel agents and marketing groups in Japan to get the word out.

“Japanese visitors to Hawaii spend more per person per day than any other market segments, about $255 per day per person,” Wienert told the Times. “And we are definitely conscious that they do like to smoke.”

She added that the new law had not brought any complaints yet from Japanese tour agencies or a loss of business, but said that her department was “watching it carefully to see if there’s any decrease because of that.”

Cigarette imports allowed — at a price
Hanoi — As part of the changes in its tax and tariff regulations, Vietnam’s Ministry of Finance plans to lift the ban on cigar and cigarette imports. However, the country will still pursue the policy on not encouraging imports by imposing a 150% tax on these kinds of products. In addition, only one state-owned enterprise will be authorized to import these products.

The Ministries of Finance, Industry and Trade will reconsider the tax policies if there are big changes in the markets.

Tobacco International - December, 2006
U.S. Tobacco Cooperative

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