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Rank Sales Drop Eases on Casino, Bingo-Hall Visits (Update1) 

Rank Group Plc, owner of the U.K.'s second-largest bingo-hall chain and Grosvenor Casinos, said a sales decline eased after managers took steps to counter a decline in customer numbers caused by a ban on indoor smoking.

Revenue fell 8 percent at outlets open at least a year in 2008's first 17 weeks, the Maidenhead, England-based company said today in a statement. That was less than the 10 percent slide in the first eight weeks. Cost-savings have strengthened the company's ``profit performance,'' it said.

Rank opened sheltered outdoor gaming areas and installed electronic gear that permits remote play at its bingo halls to counter a fall in sales after England barred indoor smoking in public places in July. The company is vulnerable to prohibitions on tobacco use because about half of bingo players smoke, twice the rate of the general populace, according to executives.

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Agency Wounded in Battle Over Anti-Tobacco Funds  

Ohio has dismantled a foundation that paid for a statewide anti-smoking campaign, prompting the advertising agency that handled the account to lay off 27 employees May 5.

Northlich, Cincinnati, has handled the creative and media efforts for the Ohio Tobacco Prevention Foundation since 2002, winning a review against other shops in late 2007.

"It's a tragedy that such a successful program may not continue," Northlich CEO Kathy Selker said in a statement. "I can't begin to express the depth of the personal and professional commitments our people made. ... When you know that 40% fewer teens smoke today than when we began this program, you know we've made a true difference." . . .

In what The Columbus Dispatch called a "huge miscalculation," the foundation even tried to keep lawmakers' hands off the money by transferring the cash to the coffers of the Campaign for Tobacco-Free Kids, a nonprofit based in Washington.

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Tribune Co.'s smoking policy sparks debate 

Yesterday, two colleagues were discussing the Tribune’s recent change of heart over charging smokers more for their health insurance.

That policy was instituted as of the first of the year, but under the leadership of new Tribune owner Sam Zell it’s been retracted.

Bad idea, argued my male colleague, who sits just a few cubicles over. Smoking is the single biggest preventable cause of illness and death. Anything you can do to stop it is good, including giving people financial incentives to quit.

Let the company penalize workers for their personal habits and you’ve started down a slippery slope, argued my female colleague . . .

This informal late-afternoon discussion reflects an important debate going on across the country. Are we all in the same boat together when it comes to health insurance – do we share risk and responsibility for each other when we become ill – or should we stand on our own? In turn, this mirrors a larger social debate about what it means to be part of a community and how that meshes with individual freedom.

Which of my colleagues' positions makes sense to you and where do you stand?

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• Blue Cross Marks 10-Year Anniversary of Victory Over Tobacco Industry 

Ten years ago this week, Blue Cross and Blue Shield of Minnesota (Blue Cross) became the first private insurance company to score a legal victory against the tobacco industry. On May 8, 1998, Blue Cross and the State of Minnesota agreed to settlement terms with the tobacco industry, ending a four-month trial that had national and even international implications. The benefits of this settlement are clear today, as Minnesota enjoys a lower smoking rate than the national average.

The historic lawsuit and trial received worldwide attention for exposing the tobacco industry's long history of deceptive marketing, advertising and research, ultimately forcing the industry to change its business practices. In addition to Blue Cross' monetary award of $469 million and the State's award of $6.1 billion, the settlement required tobacco companies to stop a number of practices in Minnesota. The restrictions, which were quickly adopted by 46 other states . . . Others have said our decision to sue the industry was the greatest act of corporate courage they had ever seen. Courageous or not, it was the right thing to do," said Dr. Mark Banks, CEO, Blue Cross. "The lawsuit paved the way for significant public health achievements and will continue to have a profound impact on the health of our members and all Minnesotans for years to come."

Ten years later, the victory over the tobacco industry is still giving back to Minnesotans. Blue Cross continues to commit its settlement money to create lasting change that improves health for all Minnesotans. In 2006, Blue Cross launched Prevention Minnesota, a long-term initiative to reduce heart disease and cancers by tackling their root causes -- tobacco use, secondhand smoke, physical inactivity and unhealthy eating. . . .

Blue Cross will mark the tobacco settlement anniversary by hosting a day-long Prevention Minnesota conference at the Minneapolis Marriott Southwest in Minnetonka on May 8. For more information on Blue Cross' Prevention Minnesota initiative, visit http://www.bluecrossmn.com/preventionminnesota.

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Schweitzer-Mauduit Announces First Quarter 2008 Results 

Schweitzer-Mauduit International, Inc. (NYSE: SWM) today reported a first quarter 2008 net loss of $1.2 million compared with net income of $4.2 million during the first quarter of 2007. The diluted loss per share was $0.08 compared with diluted earnings per share of $0.27 in the prior-year quarter. Restructuring expenses decreased earnings per share during the first quarters of 2008 and 2007 by $0.09 and $0.11, respectively. Excluding restructuring expenses, earnings per share of $0.01 for the first quarter of 2008 declined relative to diluted earnings per share of $0.38 for the first quarter of 2007.

Wayne H. Deitrich, Chairman of the Board and Chief Executive Officer, commented that, "The first quarter 2008 financial results for Schweitzer-Mauduit were disappointing. Although we expected the first quarter of 2008 to be the lowest earnings quarter of the year, results were more severely impacted than expected by significant inflationary cost increases, especially energy, combined with a longer than planned start-up of a rebuilt paper machine in France and unfavorable currency impacts. We realized increased earnings from higher sales volumes of reconstituted tobacco leaf products and cigarette paper used in lower ignition propensity, or LIP, cigarettes, but this was not enough to offset negative changes in our business. During the first quarter, we completed the 35 million euro acquisition of the 28 percent minority share in our reconstituted tobacco leaf business in France.

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New federal contraband tobacco enforcement strategy a good start, but more action is needed 

The Canadian Convenience Stores Association (CCSA) reacted positively to the announcement by Public Safety Minister Stockwell Day and the RCMP that the government has adopted a new enforcement strategy to tackle the out-of-control problem of contraband tobacco. However they reminded all levels of government that quick action is needed to reign in a criminal trade that's growing exponentially. "For a lot of our members, particularly small family-run convenience stores contraband tobacco is the number one issue facing them. Many get 50%-60% of their sales from the legal sale of tobacco", said Dave Bryans, President of the CCSA. "But beyond the business impact, the speed at which contraband tobacco is being spread by criminals through communities and showing up in places like schools is alarming and should be a reminder to every politician how serious this threat is to families and communities."

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• Northlich to lay off 27 

Northlich, the downtown Cincinnati-based public relations, media and branding agency, said Monday it will lay off 27 people after it lost a key account, the state's Stand youth anti- tobacco campaign and OhioQuits cessation campaigns.

Ohio legislators last week moved to abolish the Ohio Tobacco Prevention Foundation, which funded the campaign.

The layoffs are split between Northlich's Columbus and Cincinnati offices. Northlich will employ 120, or 18.3 percent fewer people after the reconfiguration. . . . "It's a tragedy that such a successful program may not continue," Northlich CEO Kathy Selker said. The agency had a $13 million contract for this year for the campaign, which included billboards, television and Web advertising, public relations and grass-roots organizing.

The Stand strategy was to debunk myths among teens that "everyone" smokes

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• Award Winning Smoking Alternatives to Be Featured at 'Cigar Night' at Twin Cities' Nightspot 

Ruyan America, Inc., Minneapolis, announced today that it will be previewing its award-winning and ground-breaking smoking substitutes on Thursday, May 22, 2008, at Neisen's Sports Bar and Grill, 4851 West 123rd Street, Savage, Minn., from 6:00 pm to 9:00 pm. The preview will feature the Ruyan Vegas E-cigar, recently awarded the honor as Most Marketable New Product at the 2008 Tobacco Plus Expo held in Las Vegas on April 24th and 25th, 2008. Ruyan will also have its E-cigarette available that night; the Ruyan E-cigarette was given the 2008 Most Innovative Product award at the same Las Vegas Expo. Products will be available for sampling and for sale.

The Ruyan Vegas looks and feels like a premium cigar, five and one-half inches in length with a circumference of approximately 50 ring size. The Ruyan Vegas uses a microchip, airflow sensor, ultrasonic atomizer and nicotine-infused cartridges to produce a vapor that provides its user with the experience of smoking, without producing dangerous second hand smoke and without endangering the health of associates or bystanders. The Ruyan Vegas has approximately 1800 mouthfuls of vapor, nearly the equivalent vapor to the mouthfuls of smoke produced in a carton of conventional cigarettes, and is meant to be disposed after it ceases to produce vapor. Smokers who use it to replace all of their smoking activity report it lasts as long as a carton of cigarettes

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• “Free Trial” Smoking Cessation Patch Promoter Halts Deceptive Practices; Trials Weren’t Free, Patches Didn’t Work As Claimed, FTC Alleges 

An operation that offered "free trials" of its herbal products, including smoking cessation patches, has agreed to halt its allegedly deceptive practices, pending trial. The Federal Trade Commission sued, alleging that the trials weren't free, the patches didn't work as claimed, and the operation was illegally debiting consumers' bank accounts without their authorization. The defendants have now agreed to abide by a federal court order that bars them from making deceptive claims, restricts their ability to dissipate assets, requires them to preserve records and other evidence, and account for the money they made from their venture.

According to the FTC, NextClick Media operates several Web sites that offer "free" 10- day trials for their products, including herbal stop-smoking patches called "Nicocure," "Stop Smoking 180," and "Zero Nicotine."

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• Electronic cigarettes get around indoor ban 

At least two companies are selling battery-powered cigarettes, cigars and pipes that attempt to replicate smoking without burning tobacco. The gizmos use nicotine cartridges and water vapor in what is essentially a nicotine inhaler complete with a light on the end. The invention gets around smoking bans like Colorado's, where smoking is prohibited in nearly all indoor public places.

The devices are not advertised as smoking cessation products like a nicotine patch or gum but rather as a way to satisfy the nicotine craving where smoking isn't allowed. One of the companies, Minneapolisbased Ruyan America Inc., says the products "allow users to effectively simulate the physiological and psychological attributes of smoking without creating any harmful secondhand smoke."

By not claiming to help people stop smoking, the companies have avoided regulation by the Food and Drug Administration.

Ruyan America Inc. produces the E-cigarette while another company, Crown7, produces a similar product called the Crown7. Ruyan claims to be the inventor of the electric smoking devices and is taking on competitors in a global patent dispute, said Chief Executive Officer Alex Chong.

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Smoking ban continues to hit Rank 

Gaming firm Rank says it is continuing to feel the impact of the UK-wide smoking ban at its Mecca bingo halls.

Like-for-like revenue fell 14% in England and Wales during the 17 weeks to 27 April, compared with the same period a year ago.

Attendance fell by 13%, with spending per customer down by 1%.

But Rank, which also runs Grosvenor Casinos and the Blue Square online betting business, said it had been "encouraged" by its performance.

"We have achieved a degree of success in adjusting to the smoking ban and the new gaming regulations and have taken timely action to protect profits," the firm said

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• Smoke-free laws have no impact on employee turnover 

Supporting the argument that smoke-free laws do not damage the hospitality industry, restaurants that ban cigarette smoking haven’t suffered from increased employee turnover, according to a new report published in the current online issue of Contemporary Economic Policy. The report , “Smoke-Free Laws and Employee Turnover,” was the first of its kind to examine the impact of smoke-free laws on the restaurant labor market.

“We already know from multitudes of other studies that going smoke-free doesn’t hurt business,” said Ellen Hahn, professor at the University of Kentucky College of Nursing. “But this is the first one to look at how smoke-free laws may impact employee retention and training.”

The study examined payroll records of a franchisee of a national full-service restaurant chain that operates 23 restaurants in the state of Arizona

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• Retailers fume over tobacco legislation; Province forces stores to conceal cigarettes 

With convenience stores earning up to 60 per cent of their revenue from tobacco sales, it's no surprise that Cochrane and other store owners are furious about a provincial law that comes into effect May 31 that will make it harder for them to sell tobacco.

The new law requires Ontario's approximately 20,000 cigarette-selling retailers to hide the tobacco they sell and distribute it from a covered place.

For people like Cochrane, that means spending $2,500 on a specially designed wall of small cabinets that can be individually opened and shut as cigarettes are sold.

It's a cost that he said may cause him to raise the price of cigarettes. He fears it may chase away customers. . . .

Working with the Kingston Korean Business Association and the Ontario Korean Business Association, he has arranged to have an advertising company install and build his cabinet.

In exchange for the free case, the company will place ads on it, including a flat-screen TV.

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Brief Exposure to Second-Hand Smoke Bad for Health According to New Study 

Nymox Pharmaceutical Corporation (NASDAQ: NYMX) offers TobacAlert™ Urine, an easy-to-use test for second-hand smoke exposure that requires no special equipment or training and can be used for at home or at the workplace. A new study has shown that even a brief exposure to second-hand smoke may hurt human blood vessels. Researchers at the University of California, San Francisco found that healthy nonsmokers exposed to 30 minutes of second-hand smoke showed signs of blood vessel injury and impaired repair responses that persisted up to 24 hours after exposure, in a report published in the most recent issue of the Journal of the American College of Cardiology (J Am Coll Cardiol. May 6, 2008; 51:1760-71).

“Second-hand smoke is insidious and exposure to second-hand smoke has serious short term and long term health consequences for children and adults alike,” said Brian Doyle, Nymox's Senior Manager for Worldwide Sales and Marketing. “Parents who smoke may not realize the extent to which their habit is harming their children, even if their child’s exposure to second-hand smoke at home or in the car is relatively brief. Our TobacAlert™ Urine product gives concerned individuals a way of assessing the level of tobacco product use or exposure within a matter of minutes.”

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Smoking: Companies to cough up 

"Healthy lifestyles" is to be the health department's key strategic message this year, and as part of its campaign the government is pressing forward with its bill to amend the tobacco products control law.

Parliament's portfolio committee on health will hold two days of hearings this week on Wednesday and Thursday on the new proposals. The bill will strengthen sections of the original act that prohibit advertising, promotion and sponsorship, and the regulation of smoking in public places.

"The bill increases the penalties so that they become a real deterrent," health minister Manto Tshabalala-Msimang said at a media briefing in parliament on Monday. "The fine for the owner of a public place or employer who fails to ensure that there is no smoking in a smoke-free area has been increased from R10 000 to R50 000."

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