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THE Government has proposed that excise duty on cigarettes be increased by three sen per stick to 18 sen. With this, the duty for a 20-stick pack is now higher by 60 sen.
The excise increase of three sen per stick also brings the total excise hike to 380% over the last five years.
British American Tobacco (M) Bhd (BAT) managing director Jack Bowles said: "We are disappointed that there is such a high excise increase.
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However, a different view came from British American Tobacco (Malaysia) Bhd (BAT), which said Budget 2009s high excise of three sen per stick brings the total excise increase to 380 percent over the last five years.
In this situation, based on similar high increases in previous years, illegal operators stand to gain at the expense of the governments public health agenda and legal manufacturers, the company said.
"We are disappointed that there is such a high excise increase. Our position has always been that we are not opposed to any increase in taxation but we were hoping that the Government will seriously consider the impact that high tax will have on the illicit tobacco trade problem that we are currently facing," said BAT managing director Jack Bowles.
Cigarette makers can raise a hue and cry about sin taxes but they know that a rise in taxes is inevitable this or next year but the bigger issue at hand is how to curb the growing illicit trade of cigarettes in the country.
What these cigarette makers want is stronger enforcement to stop the sales of cigarettes where no duty is paid as this is hurting their market share.
"Whichever way the industry goes, nothing much changes without a full scale enforcement,'' Philip Morris director for Malaysia IIwoo Chong said in an interview.
British American Tobacco Malaysia managing director Jack Bowles shares the same sentiments. . . .
Cigarette companies are appealing for gradual annual increases to fight the rise in illicit trade.
They have experienced sharp declines in their sales and that also means lower tax revenue for the Government.
Some of the world's biggest tobacco firms researched the lethal radioactive substance polonium - present in cigarettes - over a 40-year period but never published the results, according to a new scientific article.
Experts have examined more than 1,500 internal documents from tobacco companies.
Polonium 210 is known to cause lung cancers in animals and studies suggest it is responsible for 1 per cent of all lung cancers - equivalent to 11,700 deaths globally - each year in the US.
It is also the substance that poisoned the Russian dissident Alexander Litvinenko in London in 2006.
Yet tobacco companies, while attempting but failing to remove the substance from their products, have kept quiet about their research, experts say.
One of the documents - all of which were made public through legal actions - said publication would be "waking a sleeping giant". The authors of the article, published in the September edition of American Journal of Public Health, also say tobacco companies feared possible litigation.
The World Health Organisation is trying to determine which constituents of tobacco smoke are most important in diseases including lung cancer, but as yet have not concluded polonium 210 is a priority constituent.Unidentified spokeswoman for British American Tobacco.
[Publication of the tobacco industry's polonium 210 research] has the potential to wake a sleeping giant.Unidentified 1978 tobacco industry internal document.
The Supreme Court has declared as constitutional a section of the tax code that levies higher taxes on cigarette brands that entered the market after 1996.
The Court declared as invalid certain sections of issuances of the Bureau of Internal Revenue (BIR) in that these gave the bureau the power to reclassify or update the classification of new cigarette brands every two years or earlier.
"As modified, this Court declares that: (1) Section 145 of the NIRC [National Internal Revenue Code], as amended by Republic Act 9334, is constitutional; and that (2) Section 4(B)(e)(c), 2nd paragraph of Revenue Regulations No. 1-97, as amended by Section 2 of Revenue Regulations 9-2003, and Sections II(1)(b), II(4)(b), II(7), III (Large Tax Payers Assistance Division II) II(b) of Revenue Memorandum Order No. 6-2003, insofar as pertinent to cigarettes packed by machine, are invalid insofar as they grant the [BIR] the power to reclassify or update the classification of new brands every two years or earlier," said a Court decision authored by Associate Justice Consuelo Ynares-Santiago.
The case began at the Makati City Regional Trial Court Branch 61, which upheld the validity of the questioned section of the tax code and the BIR issuances. The petitioner, British American Tobacco (BAT), brought the case to the Supreme Court.
The Supreme Court on Wednesday declared as constitutional a provision of the National Internal Revenue Code (NIRC) which levies higher taxes on cigarette brands that entered the market after 1996.
The high court en banc unanimously affirmed the constitutionality of Section 145 of the NIRC that levies new cigarette brands at their current net retail price and existing brands at their net retail price as of Oct. 1, 1996.
It also nullified two regulations imposed by the Bureau of Internal Revenue to implement the NIRC provision which empowered the bureau to reclassify or update cigarette brands every two years or so.
The case arose from a suit brought in 2003 by the British American Tobacco (BAT)
An anti-litter group is being bankrolled by a $300,000 donation from British American Tobacco.
Not-for-profit environmental organisation Keep New Zealand Beautiful has signed a three-year deal with the cigarette company and has received smaller payments since 2005.
A company official also sits on Keep New Zealand Beautiful's board as an industry representative, though the board chairman insists there are no strings attached.
In its latest social report, the multinational company says the money will help minimise the impact of pollution by cigarette butts, in line with its environmentally-focused business activities.
But anti-smoking groups have labelled the deal an attempt to legitimise the actions of a corporate monster whose products help kill 5000 New Zealanders each year.
The Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) yesterday urged the federal government to investigate on-going 'Experience Freshness' secret parties being organised by the British American Tobacco Nigeria to promote its Pall Mall cigarette brand.
It said the parties were being used to induce under-age persons into smoking.
ERA/FoEN, in a statement issued in Lagos, alleged that BAT has staged the "smoking" parties secretly in Sokoto, Kano, Ilorin, Ibadan while the most recent was held at Gateway Hotel, Kuto, Abeokuta on Wednesday, August alleging that the tobacco company has concluded plans to stage the next party in Akure, Ondo state.
"It is outrageous that BAT is still conducting itself this way just weeks after a BBC documentary revealed how the corporation had been marketing cigarettes to children across Africa and how it had used parties and concerts to lure people to smoking," the group's Programme Manager, Akinbode Oluwafemi, said.
British American Tobacco (Malaysia) Bhd (BAT) emerged as the overall winner of the KPMG/The Edge Shareholder Value Awards 2007 winner for the sixth consecutive year.
BAT, which is in the consumer market has good business model and with a low capital expenditure base it generates high profits on an annual basis, said KPMG's executive director financial risk management, Anita Menon.
"The company also rewards the shareholders with good dividend payout. So, the key is how efficiently you manage your capital," she said after the award presentation ceremony here, today.
Shares in British American Tobacco (BAT) fell by as much as five per cent today after it announced it was seeking a secondary listing on the South African stock exchange.
BAT lost 49p to £18.27 before recovering after luxury goods company Richemont and investment group Remgro, which are controlled by South Africa's billionaire Rupert family, said they would spin off a combined 27 per cent stake in BAT to shareholders.
The shake-up, which is being driven by impending tax law changes in Luxembourg, would place BAT in the top three companies on the South African exchange
Sin stocks, ranging from gambling to liquor, are usually a safe bet in hard times. While shares in some of those companies have fallen along with stock exchanges this year, lots are still seeing strong revenues and sales.
"It's inelastic demand as far as many of these stocks are concerned," said Hargreaves Lansdown analyst Keith Bowman . . .
And while people can't smoke at the bar because of spreading smoking bans, tobacco companies are doing just fine.
Philip Morris International said its earnings rose 23 percent in the second quarter and it raised its earnings forecast for this year, saying it had not been affected by inflationary pressures like other consumer products companies.
"Cigarettes in general can withstand such an environment better than many consumer products," Chief Financial Officer Hermann Waldemer said at the time.
British American Tobacco PLC posted a 15 percent rise in its first-half profits with help from higher prices and increased sales of premium brands. Sales of BAT's most expensive brands, such as Dunhill and Lucky Strike, grew 7 percent.
True, Richemont's "grand luxury" brands should be more resilient than many less-exclusive peers. Cartier and stablemates such as Van Cleef & Arpels and Piaget are accessible only to the world's wealthiest, consumers who are expected to keep spending, credit crunch or no. A strong presence in China, predicted to be the world's second-largest luxury market by 2015, should also help.
But Mr. Rupert has gone to some trouble to set up a fund that can invest in anything other than premium trinkets. It looks like one of the titans of luxury goods is hedging his bets.
British American Tobacco (LSE: BATS.L) is seeking approval from the Johannesburg Stock Exchange to obtain a secondary listing there to help Richemont and Remgro restructure their stakes in the company.
Swiss luxury goods maker Richemont has a 19.4% interest in BAT, while South African investment holding group Remgro, which wants to separate its tobacco interests from other operations, owns a 10.7% stake.
British American Tobacco (BAT) is set to become South Africa’s biggest listed company, challenging stalwarts like mining giant Anglo American for top spot on the JSE.
At current market prices, BAT, which will have its secondary listing on the JSE, is valued at about R560-billion. Its primary listing will be in London.
The new listing is a result of a massive, complex restructuring of the Rupert family-controlled Swiss luxury goods group Richemont and its local investment group Remgro.
The restructuring will also bring about a massive payout to shareholders — R60-billion in the case of Remgro and just less than R120-billion for those with shares in Richemont .
For the first time in the history of the Rupert family empire, neither Remgro nor Richemont will be invested in tobacco. . . .
While Remgro has got rid of tobacco, Visser is optimistic about the future of BAT.
The tobacco business remains sound and BAT is a good company with a footprint in developed and developing economies, he said. . . .
But not everyone is happy.
Yussuf Saloojee of the National Council Against Smoking said BAT’s listing is “regrettable, not only because of the product it sells but also because of its conduct”.
He said the company sells its products to young people and has broken an advertising ban on a number of occasions.
He encouraged people not to invest in the company as it is not socially responsible.
Cie. Financiere Richemont SA and another company controlled by South Africa's billionaire Rupert family will spin off a 27 percent stake in British American Tobacco Plc to avoid taxes.
BAT fell 2 percent in London trading, cutting the holding's value to 9.96 billion pounds ($19.1 billion). Richemont, which will split into two companies as part of the transaction, rose 3.3 percent in Zurich. Remgro Ltd., which the Ruperts also control, added 4.3 percent in Johannesburg. The spinoff will take place Nov. 3.
Richemont and Remgro are reorganizing the Luxembourg investment company that holds their BAT stakes because the Grand Duchy plans to end holding-company tax breaks from 2010. . . . .
The spinoff may draw investors to Richemont who avoid tobacco investments on ethical grounds, Alessandro Migliorini, an analyst at Helvea AG, wrote in a note to investors. He has a ``neutral'' rating on the stock.