CigarettesDigest – Your cigarette and tobacco guide

Philip Morris USA, Reynolds American and Lorillard are set to increase prices on their cigarette brands.

After Altria, the parent company of Philip Morris announced its cigarette price increase two weeks ago, its main rivals, Reynolds American and Lorillard admitted to follow the trend, approving five-cent price hike.

David Howard, senior communications manager at Reynolds American, said that the price hike would affect the company’s flagship brands, Pall Mall and Camel, and the support brands, including Winston, Kool, Salem and others. The price increase took into force last week.

He mentioned that the latest price change is a list-price rise intended to the cigarette-maker wholesale customers. Howard admitted that the company does not comment on retail prices, as they are set by the wholesalers.

Christina McGlone and Andrew Kiely, Deutsche Bank analysts said in their report that they consider the latter changes as indicator of industry rationality, and positive pricing environment in all market segments. T Read more…

Reynolds Cigarette Company, the world’s second largest cigarette company, declared these days that its 3Q profit dropped about 4%.

But the manufacturer of Camel and Pall Mall cigarette brands announced that its earnings except those products raised approximately 4% as higher prices, increase in efficiency and selling more of its smokeless brands like Grizzly and Kodiak postpone cigarette volume decreases.

The company continues to pay attention on delivering persistent growth,” even tacking into account the difficult economic and competitive tobacco market,” CEO Daniel M. Delen stated in an interview.

Reynolds based in Winston-Salem, declared that its net profit dropped to $367 million, or 63 cents per share, which is lower than $381 million, or 65 cents per share, registered a year ago.

Earnings adjusted for the charges related to several claims in lawsuits from smokers affected by their cigarette use and other costs constituted 70 cents per share. Analyst expected at least 73 cents per share.

Profit excluding excise duties decreased about 2 % to $2.2 billion from $2.24 billion, but surpassed the analysts’ estimates of $2.16 billion.

The company also increased its quarterly dividend by 5.7 %. Its shares remained unchanged at $39.37 in premarket trading.

Reynolds declared that it sold less than 6.8% of cigarettes in comparison to last year’s quarter. The total Read more…

Last week, British American Tobacco reported the company’s results for nine months to September 30th, posting 7 percent growth at constant exchange rates and on organic basis, due to high pricing, even despite volumes went down and economic conditions remained challenging. Nicandro Durante, BAT Chief Executive declared the tobacco giant eyes another year of profits growth.

According to Durante, whereas the challenging market conditions continued to affect smokers in many markets, other markets are demonstrating growth. Price increases driven by excise tax growth will continue to impact on tobacco industry volumes, yet, the company managed to achieve strong performance with Global Drive Brands and reached solid growth in profits.

BAT released an interim management statement for three quarters, saying that it managed to increase overall market share in the main 40 markets thanks to continued growth of market share of its key brands.

In the meantime, shipment volumes generated by subsidiaries went down 0.6 percent reaching 523 billion down from 526 billion last year. Organic volumes fell 0.4 percent.

The company CEO said the benefit from increased sales in Japan was offset by drop in industry volume resulted from considerable excise-driven price hikes that hit Japanese tobacco market last year.

Cigarette shipment volumes in Asia-Pacific region were flat, equaling 141 billion during the nine-month period, whereas volume in American region went down to 105 billion from the 110 billion, reported last year. Western Europe region’s volume dropped to 100 billion from 101 billion shown previous year, and volume in EEMEA region (Eastern Europe, Middle East, Africa) went up to 177 billion from 174 billion a year ago.

The volume of the company’s Global Drive Brand added 8 percent during the nine months to September 30th. Kent‘s volume grew 9 percent with market share boost in all of its major ten markets. Read more…

Lately, the major cigarette makers in international tobacco industry, including Philip Morris International, British American Tobacco and Japan Tobacco International are looking on the innovative menthol capsule technology to boost the sales of their tobacco products.

Japan Tobacco International adds new menthol Pianissimo to the brand family

JTI, the third-leading tobacco company in the world, is launching the brand new version of its popular Pianissimo brand. The latest addition, named Pianissimo ViV Menthol is equipped with “Breath Sparkling Shot”, which is a capsule filled with menthol and mounted in the filters. The new product will be selling from November.

Pianissimo Viv with menthol Capsule

The capsule, an innovative technology, developed by Reynolds American, gives adult smokers a chance to enjoy refreshing menthol taste, while smoking a full-flavored cigarette, by simply breaking the capsule, whenever they want to, said JT spokesman.

In addition, according to JTI press release, “Breath Sparkling Shot” also provides smokers with a more delicious aftertaste instead of the soul taste of harsh tobacco after smoking.

The Japan Tobacco International spokesman said that the name for their new product, ViV (shortened from “vivid”) and its packs will transmit the idea of fun and playfulness of the squeezing menthol capsules.

RJ Reynolds introduces new version of landmark Camel Crush

RJ Reynolds Tobacco, cigarette-making unit of Reynolds American revealed new version of innovative Camel Crush brand, launching a full-flavor cigarette with the revolutionary menthol capsule that is squeezed anytime an adult smoker is willing to.

Camel Crush Bold, the newest extension of Camel Crush family has the same tobacco composition as used in classic Camel Filters. This gives Read more…

Over the past several years of New Jersey’ increased state and federal taxes a great number of smokers have turned to less-taxed smoking products.

New Jersey implemented a $2.70 tax per cigarette package, and the federal government has established a $1.01 excise tax two years ago.

Less-taxed smoking products such as roll-your-own cigarettes

“The six highest tobacco taxes in the country may discourage many smokers from this hazardous habit and others from starting lighting up,” said Karen Blumenfeld, executive director of Global Advisors on Smokefree Policy.

New Jersey gathered about $742 million in cigarette taxes in 2010. That figure was a 4% decrease, $33.1 million less in comparison to 2008 data.

However the profit from other cigarette products as cigars, chewing tobacco, hookah tobacco and roll-your-own cigarettes increased by 26% in that time, producing $3.7 million more from lower tax rates.

The state has a stipulated wholesale tax on all tobacco products that is 30% of the price the retailer pays the manufacturer.

“If I had to purchase cigarettes for seven or eight dollars, I would think about quitting,” said Schubiger, 52, who bought a 10-pack of little cigars for $22. Had they been cigarettes, he would have paid nearly $75.

“Price is a significant thing; plus I like them very much,” he said.

New Jersey government proposed to tax little cigars the same as regular cigarettes.

“The additional tax will make the little cigars so attractive to present smokers looking for a cheaper alternative,” said Schubiger.

The Office of Legislative Services declared that the bill would raise tax revenue $6 million to approximately $9 million. A Read more…

Popular Bollywood actor Shahrukh Khan seen smoking in latest movie

The tobacco companies are more and more looking on cinema for promoting their products across India and neighboring countries, after tobacco advertisements were banned, according to the World Health Organization.

Lately, the cigarette makers have also been stripped of the sponsorships of social events, like music festivals and athletic meetings, what forced their shift to movie industry, the WHO declared in its report “Smokefree movies: From evidence to action”.

A study of popular movies has demonstrated that tobacco products displays boomed in Bollywood after tobacco ads were prohibited in 2004. According to the study, 76 percent of 395 top-grossing movies depicted smoking. The percentage of smoking scenes involving lead characters grew from 22 reported in 1991 up to 54 in 2002, whereas out of the 110 Hindi films shown in cinemas in 2004-2005, 89 percent contained scenes with tobacco use. The main characters were depicted smoking in 75 percent of these films.

The brand displays were equally used to promote premium cigarette brands owned by British American Tobacco and its main rival, Philip Morris International , which entered the Indian cigarette market when tobacco advertising ban took place.

Resorting to movies to promote tobacco use is a worldwide phenomenon. In the United Kingdom, where most types of tobacco ads are prohibited, Hollywood youth-rated movies contained more than 80 percent of all tobacco scenes in 2001-2006. In Australia, a 2008 survey showed that 70 percent of all films depicted smoking scenes, with 75 percent shown in top-rated movies. In Canada, a study published in 2009, showed that 75 percent of smoking scenes were contained in youth-rated films.

The smoking images contained in movies – depicting particular brand or otherwise – are usually consistent with tobacco usage adverts rather than with the images of the severe health complications related to tobacco consumption, the WHO said. S Read more…

Japan Tobacco International is the world’s third largest cigarette manufacture, lifting its position in almost three years due to speculation it can raise prices more than the tax increases advised by the health minister.

JTl to Increase Cigarette Prices by 75%

Japan Tobacco drove 6% to 370,000 yen, the highest intraday level since October 2008. Tobacco taxes in Japan have to be increased until the mean price of a package of cigarettes will constitute 700 yen ($9.15), or 75% higher than the present level, in order to reduce medical costs, Health MinisterYoko Komiyama stated in an interview.

“Tax increases will bring to Japan Tobacco’s revenue growth. If the price will be over 500 yen, it will affect the sales of tobacco, but tobacco companies can still increase revenue when their price growth reflects the higher costs, stated Mikihiko Yamato, a research partner at Japan Invest KK.

The ministry will try to increase tobacco taxes by 100 yen annually for three years.

“At that level, we can hope some people will have the desire to stop smoking, while maintaining the level of tax revenue. I think that it is also the best way to prevent smoking among teenagers,” said Komiyama.

Approximately 10% of Japanese under 20 had lighted up at least once, with 1.2% of them smoking every day, according to a statistics sponsored by the health ministry in 2007.

Attempt to increase taxes have been impeded by government possession of a controlling stake in Japan Tobacco and worries that tax revenue may drop for a country facing the world’s largest public debt.

The tax panel conducted by the Finance Minister Jun Azumi, advises dropping the government’s stake in Japan Tobacco to a third from about half. The manufactu Read more…

The so expected ban on smoking in public places is approaching with the health ministry publishing its plans to introduce severe laws by 2014.

The law proposed by the government officials plans to prohibit smoking in all public places, including airports, train stations and transports till the Sochi Olympics. The price of a pack of cigarettes is planned to be increased in order to discourage people from this habit.

Smoking also will be banned in bars, cafes and nightclubs in 2015, and it will also include a ban on hookah.

A minimum retail price will be implemented, thus lifting costs up greatly.

Tobacco manufacturers will also be prohibited from sponsoring any events and advertising their smokes.

“Any companies and citizens can make their suggestions during the public debate,” the ministry declared.

Similar bans have been already introduced in many European countries as Finland, France, UK and Norway. The association of restaurants and hotels is ready for the ban, representative of the anti-tobacco coalition Nadejda Khalturina said Rossiyskaya Gazeta.

Examples from all around the world demonstrate that not only their gains did not fall, but sometimes even increased, as people wanted to take children with them, and would sit longer in a room with clean air than in one full of tobacco smoke.

According to a world survey that was realized among Russian adults, 60.2% of men and 21.7% of women in the country light up regularly.

Approximately 43.9 million Russian smoking adults constitute about 40% of the economically active population. According to data an average Russian lights up 17 cigarettes per day, and 400,000 Russians die every year because of serious diseases caused by tobacco usage.

“The solution to the problem of smoking is concealed not in bans, but in helping those people who want to quit this dangerous habit. Those Read more…

Cigarette manufacturer Lorillard Inc.’s second-quarter net profit increased more than 10% as it sold Newport and Maverick cigarette brands at higher prices.

The third largest tobacco company cautioned that its third-quarter cigarette volumes will be affected because wholesalers stocked more than usual last year, and that could damage its earnings.

Lorillard gives significant attention to promotion of its brands, most of all on it currently launched non-menthol version of Newport.

Newport non-menthol cigarettes pack

The manufacturer didn’t give any guidance for this particular quarter.

Its shares dropped $5, or 4.4 %, ending trading at $107.29.

Investment analyst Vivien Azer declared that the company’s shares were under considerable pressure due to concerns about increase slowing down in the second half of the year, but the sell-out is “overdone.”

Lorillard spokesman stated that company’s net profit increased to $291 million, or $2.05 per share, for the period till June 30, up from $263 million, or $1.73 per share, a year earlier. The per-share figure was lifted due to lower number of outstanding shares.

The volume of cigarettes Lorillard sold increased about 10% to approximately 10.8 billion cigarettes on profits of 9.6 % from its Newport brand and nearly 21 % for its lower-priced Maverick brand, while it expected a 1.3 % decrease for the whole industry.

According to the company’s representative their non-menthol Newport cigarettes, launched in November, presented the bulk of the increase in Newport shipments during the quarter, but it also underlined that the price of promoting it affected its profit.

Competitors Reynolds American Inc. and Altria Group Inc. both declared selling fewer tobacco products in the same quarter.

Increased unemployment and growing cigarette prices and taxes have led many smokers to switch to lower-priced brands during the recession trying to save money. Lorillard’s Read more…