Monthly Archives: February 2014

Hong Kong fights smoking

The most drastic tobacco-tax increase in Hong Kong’s history came in 1983, when duty went up 300 per cent. The proportion of smokers fell from 23.3 per cent of Hongkongers aged 15 or over the year before, to 19.9 per cent afterwards. When the tax was doubled in 1991, the proportion fell from 15.7 per cent to 14.9 per cent.

“The two major tax increases in the past were important factors in reaching our low smoking population today,” he said. About 10.7 per cent of adult Hongkongers smoke, some 650,000 people, one of the lowest rates in the developed world. The rate on the mainland is more than three times as high.

The success is such that the city’s Tobacco Control Centre was appointed by the WHO to train professionals from around the region in fighting smoking. But Lam sees no grounds for complacency. “We’re worried that if the scope of the tax increase is not enough, people will look at the outcome and say the effects are not big,” he said.

The charity Lok Sin Tong interviewed 100 smokers who refused to accept its smoking cessation services when offered in an outreach programme. Some 15 per cent said a rise of 24 per cent would make them quit, while 20 per cent would not quit no matter how high taxes went. Lam said the findings were in line with his experience. Audera-Lopez says a tax increase would have the biggest effect on young smokers.

“Children and adolescents are also more sensitive to price increases than adults,” she said. Some 2 per cent of Hongkongers aged 15 to 19 smoked in 2012, a household survey by the Census and Statistics Department found, down from 2.4 per cent in 2007.

But even a modest tax increase is expected to face opposition in the Legislative Council. The Democratic Alliance for the Betterment and Progress of Hong Kong has already come out against it, and the League of Social Democrats’ “Long Hair” Leung Kwok-hung cast doubt on the government’s claims of success against smoking.

“When you’re asking about something that’s taboo in society, people won’t tell you they’re doing it,” said Leung, a smoker for 40 years. He believes a tax increase will push smokers towards illicit cigarettes. The number of smuggled cigarettes seized by customs was up 41 per cent year on year in 2013, to more than 38 million.

The Coalition on Tobacco Affairs, an industry-funded lobby group, urged the government to tackle the illicit trade before raising tax, and to keep duty increases moderate to avoid a “shock effect” that drove smokers to the black market.

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Posted by on February 25, 2014 in Tobacco Articles


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Nigeria: Cigarette smokers to pay more

Fresh facts have emerged that smoker of cigarette may have to part with money  to buy a stick of puff, as tobacco companies around the world are facing difficult times due to shrinking sales revenue. Market analysts said this development is attributable to the recent weakness witnessed in Emerging Markets (EM) Foreign Exchange ( FX) rates and the resultant strength in company reporting currencies, such as the dollar and sterling.

International tobacco companies have large exposures to emerging market, which provides the bulk of tobacco company revenue and growth. This, they said, had led rating agencies to downgrade  2014 Financial Year Earnings Per Share across  tobacco coverage universe, thereby raising concerns about the future of the industry .

“Substantial recent FX weakness in key tobacco markets, such as Russia, Brazil, Canada, Australia, South Africa and Indonesia, is likely to place additional pressure on the earnings growth of Philip Morris International (PMI), British American Tobacco (BAT) and Imperial Tobacco (IMT) in 2014.

“Various factors, such as the unwinding of the US bond-buying programme, a recovery in developed market (DM) economies and concerns about weakening trends in the Chinese economy we think, are behind the weakness in EM and commodity-exposed currencies,”  analysts at an international investment research company, Renaissance Capital (RenCap), revealed.

Nigerian Tribune checks revealed that the cost of cigarettes had not increased in Lagos, as most traders interviewed said the prices had not changed while others said they still had old stocks. Market analysts said the volume of cigarettes sold around the world was declining, and for some tobacco investors, this was worrying because as the price of the available products was going up, demand for cigarettes would be decreasing and sales  would continue to shrink.

According to RenCap, “tobacco share prices have declined about 10 per cent over the past 12 months, negatively affected by reduced earnings estimates, regulatory concerns and sector rotation out of defensives. “Consequently, forward Price Earning (P/E) multiples have declined to about 13.3x, from a peak of 15.4x in May 2013, while Price-to-Book (P/B) ratios have also contracted substantially,” the analysts stated. P/B ratio is a financial ratio used to compare a company’s current market price to its book value.

There has been rising concern that normal cigarettes release toxins through combustion and even faces rising taxes, public-smoking bans and other restrictions that affect its sales. Thus the big three tobacco companies are switching to  a new product known as e-cigarettes which they perceive as less harmful than regular cigarettes.

Philip Morris International is the world’s largest publicly traded manufacturer and seller of cigarettes and other tobacco products, with sales in approximately 180 countries. PM owns many major brands, including Marlboro, Parliament, L&M and Chesterfield.

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Posted by on February 11, 2014 in Tobacco Articles


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FDA launches its first national public education campaign to prevent, reduce youth tobacco use

The U.S. Food and Drug Administration today announced the launch of a national public education campaign to prevent youth tobacco use and reduce the number of kids ages 12 to 17 who become regular smokers. “The Real Cost” campaign is the FDA’s first of several planned tobacco education campaigns using the new authority granted under the Family Smoking Prevention and Tobacco Control Act, signed into law by President Obama in 2009.

Tobacco use remains the leading preventable cause of disease, disability and death in the United States, causing more than 480,000 deaths each year. Each day, more than 3,200 youth under age 18 in the United States try their first cigarette and more than 700 kids under age 18 become daily smokers.
As part of Department of Health and Human Services Secretary Kathleen Sebelius’ call to make the next generation tobacco free, “The Real Cost” campaign targets the 10 million young people ages 12-17 who have never smoked a cigarette but are open to it and youth who are already experimenting with cigarettes and are at risk of becoming regular smokers.

“We know that early intervention is critical, with almost nine out of every ten regular adult smokers picking up their first cigarette by age 18,” said FDA Commissioner Margaret A. Hamburg, M.D. “Today marks a historic moment as we launch the FDA’s first-ever national education campaign to prevent tobacco use among our nation’s youth, and we bring to life the real costs that are of the most concern to young people.”

“The Real Cost” campaign uses a comprehensive multimedia approach, compelling facts and vivid imagery designed to change beliefs and behaviors over time. The ads were developed to educate youth about the dangers of tobacco use and to encourage them to be tobacco-free. The campaign uses several social media platforms to create space for teens to engage in peer-to-peer conversations about the issue in ways that are authentic to who they are.

Supported by the best available science, “The Real Cost” campaign will be evaluated to measure its effectiveness over time. It is the first of several campaigns that the FDA will launch over the next few years. Subsequent campaigns will target additional discrete audiences, including multicultural youth, rural youth, and lesbian, gay, bisexual, and transgender (LGBT) youth.

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Posted by on February 4, 2014 in Tobacco News


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