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December, 2008

New tobacco group to be incorporated in China on basis of merger
Hong Kong - China’s newest tobacco manufacturing enterprise group, Hongyun Honghe Tobacco Group, was inaugurated in southwest China's tobacco-producing Yunnan Province on November 8th - the product of a merger between Hongyun Group and Honghe Group in the ongoing structural reform of China's tobacco industry.

In late October, the State Tobacco Monopoly Administration (STMA) approved the restructuring plan of the tobacco industry of Yunnan, under which Hongyun and Honghe will be merged to form Hongyun Honghe, and the Hongta Group - the largest existing Chinese tobacco manufacturer - will take over Zhaotong Cigarette Factory previously owned by Honghe.

According to the restructuring plan approved by the STMA, the newly incorporated Hongyun Honghe Tobacco Group will include Kunming, Qujing, and Huize Cigarette Factories in Yunnan, Ulanhot Cigarette Factory in north China's Inner Mongolia region, Shanxi Kunming Tobacco Co., Ltd. in north China's Shanxi Province in which Hongyun is holding a controlling stake, Inner Mongolia Cigarette Co., Ltd. in which Hongyun has shares, Honghe Cigarette in Yunnan, and Xinjiang Cigarette Factory in northwest China's Xinjiang region.

United Kingdom
BAT unaffected by sputtering economy
London - British American Tobacco's (BAT) revenue increased by 19% to £8.70 bn ($14.39 bn) in the first nine months of fiscal 2008, as a result of favorable exchange rate movements, improved pricing, better product mix and the acquisitions of Tekel and Skandinavisk Tobakskompagni (ST) mid-year.

The reported group profit from “operations was 18% higher at £2.71 bn, up 20% if exceptional items are excluded, with all regions contributing to this strong result. Group volumes from subsidiaries were 524 bn, up 4% percent, a combination of organic volume growth of over 1% and the benefits from the two acquisitions.

The four “Global Drive Brands” continued their strong performance and achieved overall volume growth of 17% with around a quarter of the rise coming from brand migrations.

Republic Technologies acquires Swedish Match U.K.
Paris - Republic Technologies International (RTI), a manufacturer and distributor of smoking accessories headquartered in Perpignan, France, has announced the pending acquisition of Swedish Match U.K., Ltd. - providers of smoking papers, filters, lighters, matches, and fire products.

The transaction is still subject to the U.K. Office of Fair Trading approval, however, Philippe Parcevaux, President of RTI says, “This is a great move in what we believe is the right direction.”

United States
Smoking Brand Rolling Papers Reintroduced
Moorpark - Since their introduction to the market more than 75 years ago in the year 1924, Smoking brand Spanish rolling papers have maintained status as a quality brand that has immense variety, and now the Smoking brand is being reintroduced into the American market by one of the largest growing companies, Kretek International.

Aiming for distribution in smoke shops and convenience stores across the nation, they have offered special introductory pricing and promotions to retailers. The Smoking line includes pocket rollers in addition to filters.

Tobacco International - December, 2008

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