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The world's third largest tobacco company is offering entertainment perks to parliamentary researchers as legislation that will ban the display of cigarettes is before peers and MPs.
Japan Tobacco, the firm behind brands such as Benson & Hedges, Silk Cut, Camel and Winston, offered a "fun evening" watching the Strictly Come Dancing tour at the 02 Arena at the Millennium Dome in London.
The company invited at least two MPs' aides, including the researcher for Norman Lamb, the Liberal Democrat health spokesman.
The aides turned down the chance to see Holby City star Tom Chambers, this year's winner, the entertainer Julian Clary, presenter Gethin Jones and former rugby player Kenny Logan.
With tickets still on sale for £47.25, the offer is not the most lavish hospitality offered by the cigarette industry, but its timing will raise eyebrows when parliament is due to debate a health bill that will clamp down on the sale of cigarettes. . . .
The offer to the researchers was made by Nick Harris, the corporate affairs manager of Gallagher, the British subsidiary of Japan Tobacco.
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An avid art collector, also owns other camel paintings by Chinese contemporary artist Zhou Tiehai, including Joe Camel as Mona Lisa which hangs in his private dining room.
But it is the sly subversion of the iconic Marlboro image in his office that best hints at the scale of Pierre de Labouchere’s ambitions for Japan Tobacco, the world’s third-biggest publicly listed cigarette maker.
“Our goal is to overtake PMI as the industry’s number one,” says Mr de Labouchere with a laugh. “So yes, I guess you can say there’s a subliminal message there [in the painting].”
As the head of a division that has been the main driver of profit growth for JT over the past four years, the 54-year old Frenchman has reasons to be ebullient.
JT, which also owns food and pharmaceuticals businesses, still has some way to go before it topples PMI . . .
But the challenge for Mr de Labouchere will be whether he can internationalise any of Gallaher’s brands – most of which are relatively local in nature - in the same way he has with Winston.
No less important is how trading in Russia - now its largest market by volume and second-largest by profit - will be affected by the fallout from the market turmoil.
In the longer term, JTI still faces gaps in its portfolio, notably in Asia and Africa, and particularly in Latin America - a situation Mr de Labouchere says he would like to remedy.
“At the moment our priority is to combine Gallaher into JTI’s existing operations,”
Tobacco companies are targeting financially vulnerable consumers with the launch of cheap cigarettes. The move by Imperial Tobacco and Gallaher comes in the wake of a government consultation that could restrict the promotional activity of tobacco giants.
Imperial Tobacco, which makes brands such as Lambert & Butler, will launch a new brand called JPS Silver next month at a price of £4.21 for a pack of 20.
Meanwhile, Gallaher, which makes Benson & Hedges and Silk Cut, will reduce prices on its budget brand Sterling by 7% to £4.20 a pack.
Lobby group, Action on Smoking and Health research manager, Amanda Sandford, has slammed the move by the tobacco companies. "Whenever the price of cigarettes falls, there is an impact on consumption – that hits poor people the hardest. This is bad news," she says.
Tobacco brands are putting packaging design at the heart of their marketing strategies as the government continues to clamp down on the promotion of their products.
Gallaher-owned Benson & Hedges is rolling out five limited-edition packs of its Gold range of cigarettes.
Imperial Tobacco has refreshed the identity of its Golden Virginia and Windsor Blue brands . . .
The Department of Health (DoH) is proposing plain packaging and a bigger minimum pack size to deter children from taking up the habit. Brand names would be required to be printed in a standard font, colour and size. The DoH is also recommending that cigarette displays and vending machines be banned.
John Noble, director of the British Brands Group, claimed the proposals would restrict brand-building. 'Making all products look the same will reduce consumer choice and weaken competition,' he said.
Supermarkets must pay a multimillion pound fine for ripping off smokers in collusion with Gallaher, the tobacco company, it was announced yesterday.
Asda and Somerfield have admitted fixing the price of cigarettes and overcharging customers under a secret deal with the manufacturer of brands including Benson & Hedges and Silk Cut. The Office of Fair Trading said that a total of £173.3 million in fines and costs had been agreed in one of the biggest settlements of its kind.
Other firms that admitted colluding in the pricing scam include the owner of Threshers, the off-licence chain, and One Stop convenience stores, which must contribute towards the settlement. But the lion’s share of the fine — £93 million — will be paid by Gallaher, owned by Japan Tobacco.
Six retailers and tobacco firms have agreed to pay a maximum of £173.3m in combined fines after admitting unlawful tobacco pricing practices.
The news comes after the Office of Fair Trading (OFT) in April accused a number of retailers and tobacco companies of anti-competitive retail pricing.
Asda, Somerfield, First Quench, TM Retail, One Stop Stores and tobacco firm Gallaher have agreed to the fines.
The OFT is continuing its investigation into a further six firms.
They are Imperial Tobacco, Tesco, Shell, the Co-operative Group, Morrisons and Somerfield. . . .
The OFT alleged that the retailers and tobacco groups arranged to swap information on future pricing.
A separate allegation is that there was an understanding that the price of some brands would be linked to rival brands.
Japan Tobacco Inc., the world's third- largest publicly traded cigarette maker, said full-year profit rose 13 percent after the takeover of Gallaher Group Plc helped increase overseas sales.
Net income was 239 billion yen ($2.3 billion) in the 12 months through March from 211 billion yen a year earlier, Japan Tobacco said in a statement to Tokyo's stock exchange today.
The maker of Camel and Mild Seven cigarettes purchased U.K.-based Gallaher last year to increase tobacco sales in Europe and Russia as smoker numbers fall in its home market. The contribution of overseas cigarette sales to total revenue doubled to 41 percent over the past year. . . .
Tobacco sales in Japan fell 1.6 percent to 3.36 trillion yen as an increase in health consciousness reduces the smoking rate. The percentage of Japanese men that smoke has fallen by half over the past 40 years to about 40 percent.
A THREE-YEAR legal battle fought by Gallaher, the British maker of Silk Cut and Benson & Hedges cigarettes, has exposed its own connections with tobacco smuggling, sanctions busting and product dumping in the developing world.
Gallaher won its case in the High Court this month against a distributor when Mr Justice Christopher Clarke ruled that the tobacco company had lawfully terminated its contract with Cyprus-based Tlais Enterprises Limited (TEL) because of concerns over smuggling.
More than 20,000 internal documents were disclosed in the course of litigation. And an investigation by The Sunday Times reveals that many of these "cigarette papers" raise serious questions about Gallaher's own complicity in facilitating worldwide smuggling, sanctions busting in Iraq and the dumping of sub-standard cigarettes in Africa and Afghanistan.
A former Gallaher director at the centre of these allegations has blown the whistle despite attempts by the company to gag and discredit him. His witness statements contradict claims by Gallaher to the court that it "deplores smuggling".
Norman Jack alleges Gallaher's board operated a policy of "wilful blindness" . . .
Correspondence seen by this newspaper shows that Gallaher’s new owner, Japan Tobacco (JT), which bought the company last year for £7.5 billion, was concerned about the Iraq matter and further allegations. It wanted to settle the case before the ruling was made public. No deal was possible and Mr Justice Clarke’s 300-page judgment makes uncomfortable reading for all parties.
Jack was the director Gallaher appointed to implement a new and undeclared “trading policy”. It was laid out in a memo written by then chief executive Peter Wilson to his senior managers in May 1999.
It said: “As a consequence of the disruption to our business in Russia we should be seeking alternative sources of business in the short term in order to provide some compensation and to maintain throughput in our factories.”
From then on, Gallaher’s factory in Northern Ireland pumped out billions of Sovereign and Dorchester cigarettes with English health warnings for Jack to sell outside the European Union at low margins and without attempting to build any brand identity.
The OFT has issued a statement of objections alleging that certain tobacco manufacturers and retailers have engaged in unlawful practices in relation to retail prices for tobacco products in the UK.
The statement of objections sets out the OFT's proposed findings against tobacco manufacturers Imperial Tobacco and Gallaher, and eleven retailers - Asda, the Co-operative Group, First Quench, Morrisons, Safeway, Sainsbury, Shell, Somerfield, T&S Stores, Tesco and TM Retail.
The OFT alleges that these tobacco manufacturers and retailers variously engaged in one or more unlawful practices in relation to retail prices for some or all of a number of tobacco products in breach of the Competition Act 1998
The Office of Fair Trading (OFT) has alleged tobacco firms and supermarkets have been engaged in unlawful practices linked to retail prices for tobacco.
The OFT names 11 retailers, including Asda, Sainsbury and Tesco, and tobacco firms Imperial Tobacco and Gallaher.
One allegation is that retailers and tobacco groups arranged to swap information on future pricing.
Tesco Plc, Imperial Tobacco Group Plc and eleven other companies were accused of fixing cigarette prices between 2000 and 2003 by the U.K.'s antitrust regulator, opening the first formal probe of tobacco sales.
The Office of Fair Trading said today it's investigating whether 11 retailers and two manufacturers linked the price of tobacco brands made by competing companies. The regulator in London is also examining whether Imperial, Japan Tobacco Inc.'s Gallaher unit and five retailers shared information on prices.
The probe is the second in the last six months involving U.K. retailers. In December, supermarkets including Wal-Mart Stores Inc.'s Asda and J Sainsbury Plc agreed to pay fines of as much as 116 million pounds ($228.5 million) for fixing milk prices in 2002 and 2003 after an Office of Fair Trading probe. . . .
Royal Dutch Shell Plc, Somerfield Ltd., Co-operative Group Ltd., William Morrison Supermarkets Plc, Safeway Plc, First Quench Retailing Ltd., T&S Stores Plc and TM Retail Ltd. were also named
The competition watchdog is today expected to unveil wide-ranging allegations of cigarette price-fixing involving tobacco companies and retailers, days after it was forced to make a humiliating apology over incorrect accusations in another antitrust probe.
People familiar with the tobacco investigation say the Office of Fair Trading will name leading supermarkets, 48 hours after it agreed to pay Wm Morrison �100,000 damages and costs over mistakes in a statement about alleged milk price-fixing.
The cigarette announcement - the latest sign of the OFT's tightening clampdown on antitrust activity - relates to alleged deals between the tobacco companies and a broad spectrum of retailers, people familiar with the investigation say.
Companies involved in price-fixing can face fines of up to 10 per cent of annual turnover
R.J. Reynolds Tobacco Co. will receive $387.6 million from Gallaher Ltd. as part of settling the demise of their international joint venture last year, according to a regulatory filing today.
Reynolds formed Reynolds-Gallaher International in 2002 to give the manufacturer access to cigarette sales in most countries in the European Union. The agreement was scheduled to run through 2012.
But the partnership ended last May, about a month after Japan Tobacco Inc., the world's third-largest publicly traded cigarette manufacturer, completed its purchase of Gallaher, based in London, for $14.7 billion. The joint venture between Reynolds and Gallaher ceased to exist Dec. 31, and the settlement was reached Wednesday.
Reynolds received the settlement money, which equals 265 million euros, because Gallaher's licensed trademarks in the joint venture were determined to be of greater value.
Today Japan Tobacco International signed up to an anti-smuggling Agreement with 26 of the 27 EU Member States. [1] The UK is the only Member State left out of the Agreement, which leaves it completely isolated from the rest of Europe. This means that the UK will not benefit from measures hammered out between the European Commission and JTI, which ensure that the company is required to control the illicit trade in its products and will pay heavily if its cigarettes continue to be smuggled.
The agreement between JTI and the European Commission is equivalent to the agreement struck between Philip Morris International and the EC in 2004. [2] This means that two of the top three tobacco companies in the world by market share have now signed up to Agreements with the EU. The UK refused to sign the PMI agreement, arguing that as PMI only had a small market share in the UK, the Agreement was not relevant. This argument will not wash with Japan Tobacco, which recently acquired UK-based Gallaher, the UK's second-largest tobacco company by market share with an almost 40% market share and therefore has a significant stake in, and control over the UK tobacco trade. [3] Gallaher will fully join up to the Agreement in two years, but the general compliance obligations apply immediately.
A CENTURY-OLD cigar factory responsible for the production of Hamlet cigars is to close with the loss of nearly 200 jobs, it was confirmed yesterday.
Tobacco giant Gallaher blamed the smoking ban for the closure of its JR Freeman factory in Grangetown, Cardiff, which will close in 2009 with the loss of 184 jobs.
Workers' union Unite said last night the news was " a real blow" and said it would be meeting with the company on Monday to urge them to reconsider.
Gallaher says it has been experiencing declining sales in the UK for years and that this has been accelerated by the smoking ban.