EU wants 8.1 per cent rise in cigarette prices by 2014

Maltese smokers will have to fork out more money to keep puffing in the next few years as the European Commission yesterday laid out new plans aimed at narrowing the difference in price levels of tobacco products in the 27 member states while cutting tobacco consumption.

According to computations made by the EU, the price of a packet of standard cigarettes in Malta will have to increase by 8.1 per cent by 2014 in order to conform to the new rules on minimum taxation of tobacco products. At the same time, Brussels said that the increase in price in Malta should contribute to a reduction of 3.5 per cent in demand. The new proposed directive will need the green light of all the 27 EU member states in order to enter into force.

Smokers in the new EU member states are likely to be the most affected as taxes on cigarettes in these countries are still considered to be very low when compared to the EU average. Malta is however an exception as retail prices are already close to the average price in the EU. Currently, 60.82 per cent of the price of a packet of cigarettes goes to the Exchequer in excise duty and VAT. Still, the EU say this is not enough.

According to the EU, its proposal, part of a four-year review of tobacco duties, would reduce smuggling.

The Commission's primary tool would be to increase the minimum tax that member states impose on cigarettes.

At present, this minimum has two elements: the tax levied as a percentage of a packet's price, which must translate into a minimum price per 1,000 cigarettes. As a percentage, tax would have to rise from 57 per cent to 63 per cent by 2014 or from €64 per 1,000 cigarettes in the most popular price category to €90 for all categories.

Duties on loose-leaf tobacco would also be hiked to bring them more closely into line with those imposed on cigarettes.

A second element in the EU's plan is to tighten definitions of tobacco products because, during the past years, manufacturers have been able to re-classify products in order to quality for lower taxes.

Although through this new directive Maltese smokers would be badly hit, the impact on fellow smokers in some of the other new member states would be dramatic. According to EU calculations, while in countries like Denmark or Finland the price increase will be of about six per cent, in countries like Poland it will rise by 46 per cent.

Statistics show that in the five-year period between 2002 and 2006, excise duties in the EU rose by 33 per cent on average and cigarette consumption dropped 10 per cent.

UK tobacco case

LONDON - Six companies will pay a maximum of 173.3 million pounds ($342.5 million) after admitting unlawful practices relating to the retail price of cigarettes in the UK, under a deal with Britain's Office of Fair Trading (OFT).

Japan Tobacco said its Gallaher unit had agreed to pay 93 million pounds for taking part in anti-competitive practices during 2000 to 2003, before the Tokyo-based cigarette group bought the British tobacco company in 2007.

The other five groups, all retailers, were Wal-Mart-owned Asda, First Quench, One Stop Stores (formerly called T&S Stores), Somerfield and TM Retail, a statement by the British regulator said on Friday.

A number of the six parties had previously applied to the OFT for leniency and the total penalties the groups agreed to pay, if all leniency and early resolution discounts are given, is 132.2 million pounds, rather that the pre-discount penalties total of 173.3 million pounds, the OFT said.

The OFT did not say when a final decision on the level of fines would be taken.

The regulator added that supermarket group Sainsbury Plc was the first to apply to the OFT for leniency and will receive complete immunity if it continues to co-operate.

Investigations will continue against Imperial Tobacco Plc, Shell and retailers Morrisons, Morrisons-owned Safeway, Tesco and the Co-operative Group, the OFT said.

Imperial Tobacco said in a statement it had not admitted to any infringement of competition law and had not acted in any way contrary to the interests of consumers. It said it would continue to co-operate with the OFT. (Editing by Mike Elliott and David Holmes)

Philip Morris test new filter Marlboro cigarettes

Philip Morris USA, the No. 1 U.S. tobacco company, said Monday it has ended test markets of Marlboro-branded cigarettes that use a high-technology filter.

The operating company of Altria Group Inc. said it pulled the plug on Marlboro Ultra Smooth and Marlboro Ultra Light cigarettes, which used an activated carbon filter to deliver nicotine with potentially less exposure to carcinogens than in conventional cigarettes.

Philip Morris said it stopped making new shipments of Marlboro Ultra Smooth to wholesalers on April 1. Those cigarettes were being tested in Atlanta, Tampa (Florida), and Salt Lake City for more than three years. Marlboro Ultra Lights in Phoenix and North Dakota, and Basic Ultra Lights in Washington state also were discontinued, the company said.

"We did see lower consumer acceptance of those products in some of the test markets," said spokesman Bill Phelps. "These are test markets and they're designed to help us learn a lot of things. In the case of Ultra Smooth, it was designed to help us understand consumer acceptance of those particular products' taste and flavor."

Phelps said the company had made no claims that the products reduced health risks.

Shares of Altria rose 18 cents to $20.96 in midday trading.

Philip Morris saw a 4.6 percent decline in cigarette sales volume last year, but said that is estimated to be down 3.6 percent when adjusted for calendar differences and other factors. The industrywide decline is estimated at 4 percent in the United States.

The company has projected that cigarette sales volume will fall between 2.5 percent to 3 percent in the U.S. over the next few years because of concerns about health, smoking bans and price increases.

In turn, Philip Morris is looking to growing its business in other tobacco categories and reduced-risk products, Phelps said.

"We remain committed to our overall objective of reducing the harm caused by cigarette smoking," Phelps said. "That work will continue both for conventional lit-end cigarettes as well as what we would describe as noncombustible tobacco products."

Last year, the company began testing of its Marlboro-branded moist smokeless tobacco product — cut tobacco placed in the mouth — in Atlanta and recently expanded to counties in the surrounding metropolitan area. It also began testing a moist powdered tobacco called Marlboro Snus in Dallas last year, and also has expanded the test to Indianapolis.

Are Electronic Cigarettes Better For Your Health?

Ontario's anti-smoking law is one of the toughest in the country. So is Toronto's own bylaw.
Both ban smoking in offices and enclosed spaces. And both force puffers to head outside for a butt - even in the dead of a -30C winter or the heat of a 40-plus humidex.
Smokers have been forced to grin and bear it all these years, while crying they've been discriminated against. And many have been looking for loopholes to get around the all encompassing bans. And now some think they've found it, thanks to an electronic cigarette.
They're made by a company called Crown Seven. The user puts a nicotine capsule inside, then puffs on one end. The other end lights up just like cigarettes even though this product does not burn.
The gizmo delivers a hit of nicotine but lets out a puff of odourless water vapour instead of a plume of smoke. It only contains nicotine and not the hundreds of other chemicals that can be in a standard smoke.
It comes with a rechargeable battery that heats up the liquid nicotine and turns it into a gas. And since it's not technically cigarettes and doesn't threaten anyone else's airway, it may not fall under the strict laws regarding indoor puffing. But how does it taste?
"It's got a bit of a bite, sort of tobacco-like bite but it doesn't really taste like tobacco," reports volunteer Leo Jablonski.
They're for sale all over the Internet at a range of strengths and prices, and advocates insist they have lots of benefits. There's no chance of fire since you don't light them, they don't stain your teeth, there's no second-hand smoke and they may make quitting easier.
But vendors also claim they don't harm your health because the tar and smoke that comes with normal coffin nails isn't present.
"I think people need to be cautious," warns Dr Roberta Ferrence, director of the Ontario Tobacco Research Unit. "It's an unknown."
"The concern is that the product will probably be promoted as something that's safer than smoking," she adds.
Dr Ferrence doesn't think they're safe at all.
In an interview with CityNews Medical Specialist Dr Karl Kabasele, she pointed out the many disadvantages of this "smokeless" cigarette:
We don't know for certain that they are less harmful than regular cigarettes. They're not regulated, and because they're available in different strengths, it's difficult to gauge the danger.
It keeps smoking visible, and therefore increases its social acceptance, at a time when the Ontario government is working to make smoking "uncool."
Kids will have easier access to the gadget, and it may act as a gateway to the real thing.
It's not a tool to help you quit smoking; it's just a way to get around the smoking ban laws. There's no evidence that it can help with smoking cessation.
Finally, inhaling nicotine is the most addictive of all delivery modes.
However, the company never claimed it could be used to help you quit smoking.
"It's intended just for smoking alternative...for smokers to get their nicotine in nonsmoking environments," agrees Ron MacDonald, President and CEO of Crown Seven.

Tobacco Information – Summary

Commercially available in cured, dried and natural forms, it is often smoked in the form of a cigarettes , cigar or in a stem pipe, water pipe, and hookah.

Tobaccois an product processed from the leaves of plants in the genus Nicotiana. Tobacco had already been used in the Americas when European settlers arrived and introduced the practice to Europe, where it became hugely popular. With the arrival of Europeans, tobacco became one of the primary products fueling the colonization of the future American South, long before the creation of the United States. The initial colonial expansion, fueled by the desire to increase tobacco production, was one cause of the first colonial conflicts with Native Americans and became a driving factor for the use of African slave labor.

Many countries set a minimum smoking age, regulating the purchase and use of cigarettes . All methods of tobacco consumption result in varying quantities of nicotine being absorbed into the user's bloodstream. Over time, tolerance and dependence develop. Absorption quantity, frequency, and speed seem to have a direct relationship with how strong a dependence and tolerance, if any, might be created.

The tobacco industry comprises those persons and companies engaged in the growth, preparation for sale, shipment, advertisement, and distribution of cigarettes -related products. It is a global industry; tobacco can grow in any warm, moist environment, which means it is farmed on all continents. Tobacco is a commodity product similar in economic terms to foodstuffs in that the price is set by the fact that crop yields vary depending on local weather conditions. The price varies by specific species grown, the total quantity on the market ready for sale, the area where it was grown, the health of the plants, and other characteristics individual to product quality. Laws around the world now often have some restrictions on smoking but, still 5.5 trillion cigarettes are smoked each year. Taxes are often imposed heavily on tobacco.

The tobacco industry is heavily dominated by giant firms. Due to historical growing areas, many of these companies are concentrated in the southern United States, particularly Raleigh-Durham, North Carolina; Winston-Salem, North Carolina; and Richmond, Virginia. Other companies are based around the world. Tobacco advertising is becoming increasingly restricted around the world.