Entries from February 2009 ↓

German Tobacco welcomes investors
Feb 12, 2009—German Tobacco Group (GTC) of Frankfurt, Germany, is seeking strategic investors and partners for completion of its first two acquisitions of German cigarette manufactures and the international launch of its S.A.L.E. brand.

Introduced to Austrian and German markets in 2007, S.A.L.E. focuses on the dynamically growing international value brand’ segment in Europe.

With a market volume of 95 billion cigarettes, 20 million adult smokers, a shift from premium to value brands and a predictable tobacco taxation policy, Germany is still an attractive operating environment for tobacco companies, according to GTG.

What’s more, Germany still allows billboard advertising and recently loosened smoking restrictions in bars and restaurants.

For more information……… visit

http://tobaccoreporter.com/home.php?id=498&art=1926

or contact……….

Thomas Deng Mahmoud Schumann
German Tobacco Group AG
An der Welle 4
D-60322 Frankfurt
Ph +49-69-257389-83, Fax -84

Aufsichtsratsvorsitzender/Chairman:Thomas Deng Mahmoud Schumann
Vorstand: Herbert Neumeister (CEO), Gunnar Anger (CFO)
Registergericht/Commercial Register: Amtsgericht Frankfurt HRB76711

We’ve talked about it for some time now (years actually) but there is a good chance FDA regulation of Tobacco products will become reality this year.

PM USA has been for it all along, while their competitors see another agenda.

Assuming it does become reality – what is the most likely scenario – and how will FDA regulation unfold and change the business.

How long will this take? Will FDA regulators be reasonable and impartial?

Will there be tar ceilings, or perhaps a nicotine ceiling – avoiding the ”tar wars?”

Will FDA implementation be along the lines of pharmaceuticals, improving tracability in manufacturing and trackability in the market?

Will it lead to ingredient disclosure and possibly to harm reduction?

Will consumers benefit?

Ahead of a massive tobacco tax increase on April 1, PM and Lorillard weighed in and increased cigarette prices – 9 to 18 cents a pack.

Customers are going to have a difficult enough time funding their smoking pleasures from April 1 without manufacturers raising prices as well in this economy.

While Schip was being debated - Big Tobacco argued that higher taxes (read prices) would adversely impact lower income consumers. What is their position now?

Article Points Out Folly of Using Cigarette Taxes to Fund Children’s Health Insurance

“While the idea of smokers quitting their habit may seem like a good thing to some … what’s problematic is that if people quit smoking tobacco taxes are never going to fund the CHIP expansion. … That’s why the CHIP bill is such a fraud. Anybody with common sense knew that taxing tobacco use into extinction is not a sustainable way to fund government-provided health care. The taxes are too high, and the tax base is too small. … the point wasn’t ever to have tobacco users fund the bill inevitably. The point was just to get the foot of government health care expansion in the door. Once they had the CHIP expansion in place they knew full well that it would never go away, even if tax revenues from tobacco users did. So while we Americans were sold on the idea of getting government-provided health care at the expense of a not-so-sympathetic demographic like smokers the reality is that we’re all going to end up paying for CHIP as soon as the smokers finally give up their freedom to smoke in the face of blatant economic prohibition. It was a bait-and-switch from the get-go.”

I found this to be very interesting. Is the article on target? What are your thoughts? What do you think will occur? Do you think the industry still has resiliency? What do you think smokers will do? Will they find other channels like so many predict? Will they choose other options for tobacco satisfaction?

So whats all the hype about? Folks are saying that the New Age of Tobacco is upon us and that it will take many different forms. What are your thoughts? Do you think Snus will catch on? Do you know of folks that have switched? Those who tried to switch? Seems to already be a crowded arena?

Star Tobacco has been out there for some time and now Reynolds has joined the dissolvables tobacco offering. What do you think about the relative harm of these products? If you were a smoker and knew that there were less harmful products would you switch? Why? What would stop you? Take a few minutes and read the attached article that recently appeared in the Wall Street Journal. What do you think of the article? Is Kevin on target? What obstacles does the Future of Tobacco have to overcome to be a success? Lots of questions to be asked! Let’s explore the future together as folks post their thoughts on this topic?

JANUARY 27, 2009

Tobacco Road Takes a Turn to the Smokeless

By KEVIN HELLIKER

About 18 months ago, Russell Stevens gave up cigarettes and took up a new habit — placing between his lip and gum a tiny pouch of smokeless tobacco called Camel Snus. The 26-year-old Kentuckian says it satisfies his craving for nicotine while exposing him to far fewer risks than did smoking.

Like Mr. Stevens, more Americans are continuing to give up smoking, helping to push cigarette consumption down about 3% each year. To help kick the habit, many smokers turn to safer sources of nicotine — the addictive but non-carcinogenic ingredient in cigarettes — such as nicotine gum, patches or lozenges.

But one method that has been gaining ground as a safer alternative to cigarettes — smokeless tobacco — remains controversial. A decades-old federal law requires smokeless tobacco to carry a label warning that it is not a safe alternative to cigarettes. The perils include possibly increased risk for certain cancers and cardiovascular disease. And U.S. public-health officials note that no clinical trials have been conducted showing that smokeless tobacco is an effective quitting aid. Adding to the controversy:  Some of the biggest cigarette makers are jumping into the non-combustible market.

R.J.Reynolds Tobacco

Tobacco makers are launching smokeless products that have fewer risks than cigarettes.

There is no evidence that smokers will switch to smokeless tobacco products and give up smoking,” Michael Thun, vice president of epidemiology for the American Cancer Society, said in a recent article in the journal CA.

Still, popular brands of smokeless tobacco generally contain far fewer carcinogens than do cigarettes, although some studies indicate the habit isn’t risk-free. One recent study showed that some newer brands, with names like Ariva, Camel Snus and Marlboro Snus, have sharply lower levels of a dangerous carcinogen than do older varieties of smokeless tobacco, such as Copenhagen and Skoal. Britain’s Royal College of Physicians, which sets health standards in the United Kingdom, has said smokeless tobacco is between one-tenth and one-one thousandth as hazardous as smoking, depending on the specific product. As with all nicotine-replacement products, smokeless tobacco can lead to addiction.

Morgan Stanley estimates that U.S. consumers spent $4.77 billion on smokeless tobacco in 2007 versus $78 billion on cigarettes. Smokeless-tobacco sales have been increasing about 5% or more a year.

Some switchers say the benefits of smokeless tobacco can be immediate and dramatic. After 30 years of smoking more than a pack a day, Deborah Barr required several respiratory medications just to breathe. An analysis of her lung capacity shocked her physician. “He said, ‘I’ve never seen anybody this bad,’ ” recalls Mrs. Barr, 53, of Richmond, Va. So she switched to Ariva, a tobacco pellet that dissolves in the mouth. “Within three days I could breathe without medication,” says Mrs. Barr, who smoked her last cigarette four years ago and still uses Ariva.

No Spitting

For many people, smokeless tobacco conjures up an image of a wad of chewing tobacco bulging from the cheeks of users who spit brown juice. Instead, recent products consist of dissolvable pellets or tiny pouches of tobacco that reside invisibly in the mouth and induce no spitting. The model for these new brands comes from Sweden, where use of spit-free smokeless tobacco, called snus, is more common among men than smoking.

Studies of Swedish snus users have found no elevated incidence of mouth cancer compared with the general population. Other studies, however, have linked snus consumption to cardiovascular disease, albeit at rates far below the risks of smoking, and some research has found a minor link with pancreatic cancer. Many of the studies were performed by the Swedish government, which discourages the use of snus and cigarettes.

Big U.S. cigarette makers have been staking out the smokeless tobacco field. Altria Group Inc., the nation’s largest cigarette maker, this month completed its $10.3 billion purchase of UST Inc., the biggest smokeless-tobacco maker and owner of the Copenhagen and Skoal brands. Reynolds American Inc., which owns Conwood Co., a discount smokeless purveyor, this month announced that the Camel Snus brand has performed well enough in test markets to warrant national distribution. Marlboro Snus is available in a few test markets.

“There are probably in excess of 400,000 adults switching to smokeless each year,” says Seth Moskowitz, a spokesman for Reynolds American. But the company doesn’t know whether switchers succeeded in permanently giving up their previous form of tobacco.

Tommy Payne, Reynolds American’s executive vice president of public affairs, says that he himself is a Camel Snus user. When asked, he says the product helped him successfully quit smoking, a habit he says he had practiced for “too long.”

Cutting Nitrosamines

A federally funded study by the University of Minnesota’s Masonic Cancer Center found that Camel Snus, made by Reynolds American unit R.J. Reynolds, and Marlboro Snus, made by Altria’s Philip Morris unit, bear substantially lower levels of nitrosamines, the class of carcinogen that most concerns public-health officials, than do traditional brands. The study, published in the December issue of Nicotine & Tobacco Research, a leading journal of researchers battling tobacco-caused disease, was similar to one done in 2006 measuring the carcinogen in Ariva and Stonewall, two smokeless-tobacco products made by tiny Star Scientific Inc.

“The reduction in carcinogenic…content in the new smokeless tobacco is encouraging,” concluded the authors, none of whom had financial ties to industry.

The December study also found that Marlboro Snus contained a very low level of nicotine. By contrast, Camel Snus offers a jolt of nicotine that “has the potential to satisfy those smokers who are looking for a substitute to smoking, and to keep them addicted to this product,” the authors said.

An Altria spokesman says the nicotine level of Marlboro Snus has been increased. “Our interest is offering Marlboro Snus to adult smokers who are interested in a smokeless alternative to cigarettes,” the spokesman says.

Purveyors of smokeless tobacco aren’t marketing it as a smoking-cessation aid, because doing so could force it off the shelves as an unapproved medical treatment. Makers of the products are beginning to push back against such limitations, although they haven’t yet altered their marketing pitches.

Star Scientific this month announced that a study it conducted of smokers in withdrawal found that its Stonewall smokeless tobacco and a nicotine lozenge, used separately, proved to be “much more effective” than placebos at satisfying cravings. And Reynolds American is calling for public-health officials to talk openly about the lower risks of non-combustible tobacco products. “I believe that governments, public-health associations, tobacco manufacturers and others should provide consumers with accurate information, based on sound science, on the different levels of risks posed by different types of tobacco products,” Susan Ivey, chairman of Reynolds American, said in a speech last year at the University of Arkansas.

Some smokers on their own have long viewed smokeless tobacco as a way out of their habit. During medical school in the early 1970s, Michael Moore was trying without luck to kick cigarettes when a fellow nicotine addict recommended that he switch to smokeless tobacco. The Minneapolis resident stopped smoking and used smokeless tobacco for decades, quitting two years ago at the urging of his loved ones. “I never saw anything in the scientific literature that convinced me it was very dangerous,” says Dr. Moore. As a psychiatrist, however, he concedes that rationalization is a symptom of addiction. Dr. Moore says he has no connection to anti-tobacco causes, although his father, a scientist, years ago contributed to research linking cigarettes to disease.