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Indonesian Industry Minister Fahmi Idris said Thursday that he will propose closing the cigarette industry for new foreign direct investment in order to protect existing producers.
"The ban will be directed toward new (foreign) investors," Idris told reporters.
Idris added that his ministry will also propose six other industries, such as sugar refinery and pulp-making, to be closed for foreign investors.
Such a proposal will be subject to approval by the president.
There are now around 8,000 local cigarette producers, Idris said, and they are mostly small companies.
Phillip Morris International and British American Tobacco Plc (BAT.LN) are the biggest foreign investors in the industry and have majority stakes in two large local producers.
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Welcome to Democracy Now!, Dr. Nitzkin. Would you say this bill was written by Philip Morris?
DR. JOEL NITZKIN: I would say so. The bill was negotiated between Philip Morris and Tobacco-Free Kids, and it appears from the actual text of the bill that the Philip Morris people did their homework very well and knew exactly what they wanted, while those appointed from Tobacco-Free Kids to negotiate on behalf of the public health community really had no understanding of tobacco-related science, of how and why kids initiate tobacco use, or the steps that could be taken to stop them. So it resulted in a bill that gives the appearance of effective regulation, but not the substance. And with the exception of the graphic warnings, which were added in the Senate, not in the original House bill, every provision having to do with restriction of marketing of tobacco products falls into one of two categories: either it’s already in place as a result of the Master Settlement Agreement, or it has already been thrown out by the US Supreme Court.
JUAN GONZALEZ: And why this alliance between the Campaign for Tobacco-Free Kids and Altria?
DR. JOEL NITZKIN: Well, it appears that a political decision was made that the only way they could get tobacco regulation through the Congress is if they could get Philip Morris, our nation's largest and most dominant cigarette company, to endorse the bill. And they felt that without that endorsement, they could not get a bill through Congress. . . .
DR. JOEL NITZKIN: There were strong objections from the African American community about the menthol exclusion. To satisfy those requests, Representative Waxman wrote in a provision saying that the Science Advisory Committee to the FDA would have to consider the menthol issue and issue a ruling on it.
The problem is, the guidelines that the committee is mandated to go by, written into the law, says they can only ban things on the basis that they increase the risk of cancer or some other serious disease, or they increase the addictiveness of the tobacco product. There is nothing in the law that would allow them to ban any ingredient that’s there for the purpose of attracting people to cigarettes who otherwise would not smoke. . . .
To make things even worse, if I could continue for a moment, if somebody with a smokeless product wants to prove that their product is of lesser risk than cigarettes, they have to undergo basically impossible-to-do scientific studies. But if a cigarette company wants to market its cigarette as lower exposure, all they have to do is change the chemical composition by that small amount, and then they can advertise it as lower exposure without any scientific proof that it’s safer or less risky.
Philip Morris International Inc. [NYSE / Euronext Paris: PM] (PMI) announced today that the company has entered into an agreement with Swedish Match AB to purchase its South African affiliate, Swedish Match South Africa (Proprietary) Limited (SMSA) for ZAR 1.75 billion (approximately $222 million).
SMSA is the market leader in the South African pipe tobacco and snuff categories, which represent an estimated 31% of total tobacco consumption. In 2008, SMSA reported net revenues of ZAR 687 million. Its principal brands include Boxer, Best Blend and Taxi.
“This financially attractive acquisition represents an excellent strategic fit for our business in South Africa,” said Jean-Claude Kunz, President of PMI’s Eastern Europe, Middle East & Africa Region. “We firmly believe that merging the two businesses will provide us with the talent, infrastructure and expertise to further build and grow our portfolio of strong brands in this important market.”
Philip Morris International Inc.’s (NYSE / Euronext Paris: PM) Managing Director Turkey, Turhan Talu, will today provide investors with a review of Turkey’s cigarette market dynamics at the J.P. Morgan Global Tobacco Field Trip in Izmir, Turkey.
A copy of the remarks and selected slides will be made available at www.pmintl.com.
Swedish Match AB [publ] announced today that it has reached an agreement to sell its South African operations, Swedish Match South Africa (Proprietary) Limited (“SMSA”) to Philip Morris International [NYSE/Euronext Paris: PMI] (“PMI”) for a purchase price amounting to 1.75 billion ZAR.
* Sells S. African ops to Philip Morris for 1.75 bln rand
* Says deal to be complete in the second half of 2009
* Says capital gain on sale about 500-600 mln SEK
A U.N.-backed meeting on tobacco smuggling has barred cigarette companies from attending for fear they will try to influence delegates, participants said Thursday.
More than 130 countries agreed late Wednesday to expel the tobacco industry from the rest of the weeklong meeting of parties to the 2005 Framework Convention on Tobacco Control, which the U.S. has signed but yet to ratify.
Governments are considering a range of measures to crack down on contraband cigarettes, including a ban on Internet sale of tobacco products and a crackdown on smuggling through duty free zones.
"We (the governments) decided not to permit the tobacco industry to enter the meeting because they could interfere in the negotiations," said Justino Regalado Pineda, the head of Mexico's National Office for Tobacco Control.
"We have to protect people from their commercial interest to poison the population." . . .
"This action sends a clear message from customs, health and law enforcement officials that it's not business as usual for the tobacco companies," the group's international policy director Kathy Mulvey said.
Philip Morris International Inc. said Thursday it has agreed to buy Swedish Match AB's South African operations for 1.75 billion South African rand, or roughly $222 million.
Swedish Match South Africa Ltd. reported sales of 687 million South African rand last year. Its brands include Boxer, Best Blend and Taxi.
Philip Morris estimated that Swedish Match South Africa's pipe tobacco and snuff products represent about 31 percent of total tobacco consumption in South Africa.
In a statement, Jean-Claude Kunz, president of Philip Morris' Eastern Europe, Middle East and Africa region, said the deal "represents an excellent strategic fit for our business in South Africa," which he called an "important market."
garettes -- at $1.05 per pack -- making the country a bonanza for smugglers, whether by glider or more mundane pathways on the ground. Cars and trucks filled with Ukrainian-made Marlboros and Viceroys get waved through border checkpoints by customs guards who seem more than eager to accommodate, for a price. Loads also move by bus and train, bound for other European countries where high taxes make packs cost as much as $5 (Germany) or $10 (United Kingdom).
The backbone of this underground commerce -- the acquisition of the cigarettes themselves -- is by far the easiest part of the entire operation. The world's four leading multinational tobacco companies, Philip Morris International, Japan Tobacco International (JTI), Imperial Tobacco, and British American Tobacco (BAT), have produced billions of excess cigarettes in Ukraine, fueling a teeming black market that reaches across the European Union. Today, Ukraine is rivaled only by Russia as the top source of non-counterfeit brand cigarettes smuggled to Europe, EU officials say.
The booming trade in tobacco smuggling has major consequences, say industry experts. The growing traffic pushes huge supplies of cheap, untaxed, and unregulated cigarettes into the rest of Europe, undercutting otherwise successful attempts to curtail smoking. Worse, officials say, the trade is boosting organized crime gangs, who find the soft penalties and big profits hard to resist. . . .
Attracted by high smoking rates and the potential for rapid returns on investments, multinational tobacco companies rushed to acquire the state-run cigarette factories after the Soviet regime collapsed in 1991. Today, the big four tobacco companies -- Philip Morris, BAT, JTI, and Imperial -- control 99 percent of the Ukrainian cigarette market.
But the bill Obama signed is actually the second half of a legislative push, or maybe a putsch, that Philip Morris and its parent, Altria (MO), have been shepherding through Congress for more than a decade. In 2004, President Bush signed the first half of the legislation, which had to do with tobacco production rather than consumption. That bill, the Fair and Equitable Tobacco Reform Act of 2004, eliminated the quota system for tobacco farmers that had been in place since the 1930s. Similar to its other crop insurance programs, the government had created a system to guarantee a minimum price for tobacco farmers by limiting the amount that could be grown each year.
In what is a familiar refrain, the buyout was sold to Congress and anti-smoking groups as something that was necessary to help impoverished small tobacco farmers get out of the business. . . .
In 2004 it was Ken Cook, president of the Environmental Working Group, who tried to pull back the curtain. He said at the time, "The House buyout plan is an incredible rip-off of the taxpayer, mostly to benefit a handful of large tobacco interests and tobacco companies." . . .
The South, after a few years of production declines adjusting to the new market dynamics, is again growing plenty of tobacco. And tobacco acreage, after declining following the buyout, has jumped up by more than 20 percent, including in some states where tobacco hasn't been farmed in 100 years, like Ohio and Illinois.
According to one story on the buyout, some farmers have stopped growing commodity crops like corn and wheat to switch to the wildly more profitable tobacco crop. . . .
So, five years later, the first prong of the tobacco legislation effort spearheaded by Philip Morris USA and supported by the Campaign for Tobacco-Free Kids has consolidated, boosted, and industrialized American tobacco farming and removed the price supports that made American tobacco exports unattractive on the open market. The only problem is that now that Philip Morris International is using so much American tobacco, its profits had fallen last quarter due to the stronger American dollar. But before some congressman jumps to Big Tobacco's rescue, as they seem to love to do these days, I should note that the dollar is already weakening once again.
For more than 100 years, the emerald green 4-H clover has been a symbol of wholesome living. The National 4-H Council trumpets health as one of its "four H's" and says its 6.5 million members pledge allegiance to a healthy lifestyle.
Over the past decade, however, the National 4-H Council has accepted more than $25 million from Philip Morris USA - maker of Marlboro, the best-selling U.S. cigarette brand and a long-time favorite of teen smokers.
Philip Morris International Inc.'s (NYSE / Euronext Paris: PM) Managing Director Turkey, Turhan Talu, will today provide investors with a review of Turkey's cigarette market dynamics at the J.P. Morgan Global Tobacco Field Trip in Izmir, Turkey.
Philip Morris International Inc.'s (NYSE / Paris Euronext: PM) Chief Financial Officer, Hermann Waldemer, will address investors today at the J.P. Morgan Global Tobacco Conference at the Mandarin Oriental Hotel in London.
The presentation and Q&A session are being webcast live, in a listen-only mode, beginning at approximately 9:25 a.m. London Time (4:25 a.m. ET) at www.pmintl.com. An archived copy of the webcast, together with selected slides, will be available on the same site.
Highlights of the presentation include an update on Philip Morris International's (PMI) major market performances and key brand strategies.
* UST CEO to leave Altria at the end of June
* Altria says integration cost savings on track
* Altria shares fall 0.7 percent
CHICAGO, June 26 (Reuters) - Smokeless tobacco maker UST's top executive will leave Altria Group Inc (MO.N) at the end of June after working on integrating the business into Altria for the past five months.