Australia passes plain-packaging cigarette law | CigarettesReporter.com - Your cigarettes guide

Australia is to become the first country to enforce the plain packaging of cigarettes but tobacco companies have vowed to fight the new legislation in court.

Marlboro cigarette packs with graphic warning labels on them

From December next year, all cigarettes will be sold in olive green packs, which research has shown is least appealing to smokers.

Under the new laws, approved by the upper house of parliament, no trademark brand logos will be permitted on any packaging of tobacco products, although companies will be able to print their name and the cigarette brand in small, prescribed font on the packets.

The boxes will continue to carry stark health warning messages and pictures, which will cover 75% of the front of the pack and 90% of the back.

“If this legislation stops one young Australian from picking up a shiny, coloured packet and prevents them becoming addicted to cigarettes then in my view it will have been worthwhile,” said John Faulkner, a Labor senator, during the parliamentary debate.

The debate in Australia has been keenly watched around the world, including in Britain, Canada and New Zealand where similar plans to curtail branding are being considered.

Cigarette giant British American Tobacco, which owns 46% of the Australian market, plans to challenge the legislation in the high court on constitutional grounds.

“The government can’t take away valuable property from a legal company without compensation,” said Scott McIntyre, spokesman for British American Tobacco Australia.

McIntyre said the company’s brands, including Winfield and Benson & Hedges, were worth billions of dollars.

“We’re a legal company with legal products selling to adults who know the risks of smoking. We’re taking this to the high court because we believe the removal of our valuable intellectual property is unconstitutional,” he said.

Cigarette makers Philip Morris Australia said the legislation meant it had little option but to pursue its compensation claim “through international arbitration against Australia and to also consider domestic legal action under Australian law”.

The health minister, Nicola Roxon, said the government would not be bullied by the tobacco industry’s threat of a legal challenge.

“We’re ready for that if they take legal action. We hope that they don’t. We believe that this is a measure that’s in the interests of the community and it would be better off for tobacco companies to look at ways they could invest in something that’s not so harmful for the community,” Roxon told reporters in Melbourne.

Cigarette companies also say the plain-packaging legislation will increase the sale of illegal tobacco. “Once the packs all look the same they will be very easy to copy,” said McIntyre.

Fifteen thousand Australians die from smoking-related illnesses each year with the social cost of smoking to the Australian economy estimated to be more than A$30bn (£19bn) a year.

Anti-smoking groups have welcomed the legislation. “We believe that it will reduce smoking in younger people and the fact that tobacco companies have been using packs very effectively as one of the last forms of advertising is one reason why they’re so upset about it,” said Professor Ian Olver, chief executive officer of the Australian Cancer Council.

Fifteen per cent of adults in Australia smoke compared with 23% a decade ago. In Britain about 22% of the adult population smokes, according to Cancer Research UK.

Australia already has some of the toughest smoking regulations in the world. Cigarettes must be sold behind closed doors in retail outlets and advertising and sponsorship deals are banned. It is illegal to smoke in any public places including bars, restaurants or entertainment venues. Some local councils have banned smoking in parks and outdoor areas.

Anti-Smoking Sponsors in Tobacco War

After a string of setbacks, anti-smoking advocates scored a victory, albeit a small one, when a Las Pinas regional trial court denied a petition of the Philippine Tobacco Institute to stop the Department of Health and the Food and Drug Administration from enforcing any form of regulation or supervision on tobacco products.

“This is indeed victory for the country! It’s high time public welfare is prioritized over the profit of an industry that ultimately kills its consumers,” Metro Manila Development Authority General Manager Cora Jimenez told the Manila Standard Monday.

The MMDA’s smoke-free campaign in public places along Metro Manila’s major and secondary roads was stopped by a Mandaluyong City RTC after granting the petition of two security guards nabbed by MMDA enforcers for smoking in a public place last September.

“Imagine how detrimental it will be for Filipinos if the petition of the tobacco industry was granted. The industry wants a government committee where it sits as a member to regulate tobacco products–this is not only ironic, but worse, puts the whole nation’s health at risk.” UN Global Cancer Ambassador Emer Rojas said, who also founded a tobacco control advocacy group of cancer victims.

The case filed by PTI argued the authority and jurisdiction of FDA to regulate tobacco products.

The petition said that based on Republic Act 9211 or the Tobacco Regulation Act of 2003, the Inter-Agency Committee on Tobacco has exclusive authority to implement RA 9211, which includes regulation.

The FDA and DoH responded petitioned the court that cigarette falls under their authority because of its impact on health.

“Finally, a victory for health! We eagerly await the actions of DoH and FDA on some violations of the tobacco industry including sale of cigarettes whose packs are without picture warnings,” lawyer Ipat Luna of Health Justice Philippines said.

The Mirror reveals top ten smoking football players

10. Socrates

The legendary Brazilian captain and World Cup winner got through two packets of cigarettes a day during his playing career and continued to smoke after he retired. He’s now a medical doctor.

Zinedine Zidane in action during football match game

9. Gazza and Teddy Sheringham

In the run up to Euro ’96 both Gazza and Teddy Sheringham were spotted with tabs on the go. We suspect the reason why they weren’t collared by the FA, or indeed the press, for this misdemeanour was because it occurred on the same night as the infamous ‘dentist’s chair’ incident.

8. Robert Prosinečki

Ex-Crotaian international Robert Prosinečki was famous in his homeland for being a heavy smoker. He was as well known for his ability to chug away on more than 40 ciggies a day as he was for his midfield prowess. When he was joined Portsmouth in 2001 word is that he cut down… to 20 a day. He lasted one season.

7. David Ginola

The French love a smoke – if it was an Olympic sport they’d take gold in Beijing – which is probably why ex-Spurs head-turner and shampoo hawker David Ginola enjoyed the odd Gitanes during his playing career. Who says smoking isn’t sexy?

6. Zinedine Zidane

Another Frenchie caught with a salmon between his lips was Zinedine Zidane who was snapped puffing away ahead of France’s 2006 World Cup semi-final against Portugal. The thing is Zizou fronted an anti-smoking campaign in 2002. D’oh!

5. Maradona

Maradona, one of the most prolific footballers in history, began to smoke after he retired from the game. He spent 10 days in intensive care in 2004 with breathing problems, which may or may not have been down to smoking. But probably was. Maradona recognised in 2005 that Wayne Rooney was a closely cut copy of himself, which may not have been a bad observation.

4. Johann Cruyff

Johann Cruyff was smoking 20 cigarettes a day, prior to heart surgery in 1991, at a time when he was coaching Barcelona. He was also often seen lighting up in the RFK locker room as he talked to reporters. Nowadays, the legendary Dutchman fronts a campaign by the Health Department of the Catalan autonomous government against smoking. And to think, it only took him a double heart bypass to see the error of his ways.

3. Stanley Matthews

Stanley Matthews was not a smoker himself, but in 1954 he nonetheless backed an advertisement for Craven A cheap cigarettes, who put his “smooth ball control” down to the “smoothness of Craven A”.

2. Fabien Barthez

Fabien Barthez was a high-profile smoker during his time in the Prem. After a game for Man United against Southampton in 2003, defeated manager Gordon Strachan was furious when he returned to his non-smoking office and found cigarettes stubbed out in an ashtray. It seemed that the injured Barthez had been in the room after being stretchered off in the second half. The Scottish manager later said that he “must have been taken off for smoker’s cough”.

1. David James

England’s number one confessed to a 15 year 20-a-day smoking habit earlier this year in his newspaper column. “I spent most of my career puffing away on fags: after training, before matches and even on the team coach,” he wrote. We’re surprised his afro never caught fire.

U.S. Smoking Rates Drop to 20 %

The United States Centers for Disease Control and Prevention (CDC) said America has seen a decline in the number of current smokers to below 20 %. 43.3 million, or just under one-fifth of the population smoked in 2007 while in 2006 the figure stood at 20.8 %.

As a part of the Healthy People 2010 project America had set a goal of bringing adult smoking down to 12 % and although that goal still remains a distant dream there has been a slight decline in the smoking rates.

Dr. Matthew McKenna, the director of the Office on Smoking and Health at the U. S. Centers for Disease Control and Prevention said, “If we want to see far more people quit smoking, we need expanded access to stop-smoking programs, continued progress in eliminating secondhand smoke exposure and ongoing investment in programs that work.” There was a decline though in the number of people trying to give up smoking. In 1993 47 % people tried to give up smoking while in 2007 it dropped to 40 %.
The report also said that those most likely to quit smoking were between the ages of 18-24 as compared to the older smokers.

Whites came in second at 21 %, blacks at 20 %, Hispanics at 13 % and Asian Americans were the lowest at 10 %. McKenna said, “If, starting in 2009, all states were to fully implement tobacco-control programs at CDC-recommended levels of investment, an estimated 5 million fewer people in this country would smoke within five years, and hundreds of thousands of premature tobacco-related deaths would be prevented each year.”

Smoking-related diseases claim nearly 438,000 Americans’ lives each year and it is costs $193 billion a year which includes $97 billion in lost productivity and $96 billion in direct health care expenditures. Dr. McKenna said, “Even though we’ve come a long way, there’s a long way to go.”

Mint cigarettes fire up collectors

A tobacconist in Reading is about to sell some cigarettes which are at least 100 years past their sell-by date. Paul Gilmour, who owns Shave and Coster in Harris Arcade, was given a pack of five Paymaster cigarettes which he said dated back to somewhere between 1897 and 1913. He said: “An elderly couple came into the shop and asked me to find a good home for these cigarettes. “The woman said they had belonged to her mother and she had had them in a drawer for years.


Paymaster cigarettes dated back to somewhere between 1897 and 1913.

“I wasn’t familiar with the brand but I told her that some specialist museums took things like this so she gave them to me.”

Mr Gilmour looked up the Paymaster brand and discovered they were made by Cohen Weenen and Co of London. He said he believed the company started up in 1897 and had closed down by the beginning of the First World War.

He added: “What is absolutely amazing is that the packet is intact with all five cigarettes inside.

“These were the days when practically everybody smoked, so it is extraordinary that no-one smoked them in all that time.

“You wouldn’t want to smoke them now of course.”

Mr Gilmour made further inquiries and found the Cigarette Packet Collectors’ Club of Great Britain. He said: “I contacted them and discovered that the cigarette pack was extremely rare.

“They have offered me £120 and I expect they will auction it among their members.”

He has not been able to get in contact with the original owner and will be donating the money when he gets it to the Berkshire Multiple Sclerosis Therapy Centre in West Reading.

He said: “I believe I have discharged my duty in finding a good home for them.”

Barry Russell, secretary of the Cigarette Packet Collectors’ Club of Great Britain, said the puffs could be even older than Mr Gilmour believes.

He told the Reading Post Cohen Weenen was in fact founded in 1864 and converted into a limited company in 1927. It produced popular cigarette cards from 1891 until 1923.

He said of the Reading find: “It’s a very uncommon pack and doesn’t turn up very often, although I have one.”

High Taxes Less Smokers in Canada

High taxes on tobacco products have reduced the number of Pall Mall cigarette smokers in Canada. According to a study by economists at the Concordia University in Montreal, between 1998 to 2008, for every 10 percent hike in cigarette tax, the number of Canadians who lit up went down by 2.3 percent.

However, one group appears to be least affected by higher taxes on cigarettes. These are people in the age group 25 to 44. According to Sunday Azagba, the author of the study, these middle-aged smokers are not responsive to tax increases on tobacco products.

The younger age group of 12 to 24 are more sensitive to price increases caused by tax hike on cigarettes because majority of them are dependent on their allowance to finance their habit. However, majority of the middle-aged group are employed and at the peak of their earning capacity.

The study also found that the propensity to smoke was higher among Canadians who had only high school education compared with those who have post-secondary education.

Tax increases on cigarettes caused a carton of cigarette to have a price tag of $33.35 in 2008 in Ontario from $12.65 in 1998. The amount factored out inflation based on constant 2000 dollars. The increase was lesser in the Canadian provinces of British Columbia and Newfoundland and Labrador, where cigarettes sold at an average of mid-$40 in 2008 from $30 in 1998 per carton.

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Higher Cigarette Prices Climb Imperial Tobacco

Investors, on the other hand, will be celebrating. The shares rose 26p to £21.43 yesterday, on the hope that this could finally put an end to an ongoing price war in Spain. British American Camel Tobacco also ticked up 33p to £27.87. Analysts applauded Imperial’s stance although Citigroup urged caution: “While we expect the rest of the industry to follow Imperial’s lead on prices, we can’t be certain.

It may be that the rest of the industry wants to wait for a while to see if the government will change the tax system.”

The analysts retained a buy rating on the stock with a target price of £23. In the wider markets, there was a sense that the mood was shifting as brokers turned bullish on European stocks.

Nomura increased its recommendation from neutral to overweight, while Deutsche Bank upgraded its tactical view on European equities to positive.

They expect the global economy to pick up in the fourth quarter, as the impact of the higher oil price and Japan’s tsunami diminish. “Risks around oil have moderated,” they said, “And consensus growth expectations have been revised down sufficiently.”

The blue-chip index pushed past the significant 6,000 mark for the first time since May, although volumes were weak because of the US holiday for Independence Day.

The FTSE 100 closed up 27.78 at 6,017.54, while the mid-cap index ended the day 61.99 higher at 12,102.27.
Low volumes and little activity set traders dreaming of M&A. Yesterday’s rumour suggested either Procter & Gamble or Unilever would buy Reckitt Benckiser for around £50-a-share.

Competition issues over any acquisition would mean the eventual buyer would have to break up Reckitt, and the suggestion was that Colgate Palmolive could mop up any remaining parts. Reckitt shares ticked up 35p to £34.88, while Unilever was 25p higher at £20.37.

There was also talk that Dragon Oil, a £2.7bn oil producer with operations in the Caspian Sea, could be bought out by its biggest shareholder, the Emirates National Oil Company, for 700p-a-share. Rumour had it that China’s state-owned oil company CNOOC might also be interested in the company, driving the shares up 42½ to 550½p.

In the UK, property stocks rose with the market. British Land put on 14 to 629½p on the back of a bullish note from Deutsche Bank. The analysts said they expect the group’s share price to “appreciate considerably” over the next 12 months as the value of its properties increase.

They said the company is well placed to buy distressed property loans from the banks. They added that British Land has a better portfolio than Land Securities – up 14 at 880½p – with less central London offices and more out-of-town retail properties. Deutsche rates British Land a buy with a price target of 820p.

Broker comment also lifted temporary power provider Aggreko 36p to £19.80. Citigroup raised its target price from £17.33 to £23. The analysts said the company’s International Power Projects (IPP) should continue to grow on the back of three drivers – electricity consumption in non-OECD countries, potential in untapped countries, and extensions of existing contracts.

The top blue-chip riser was engineering group John Wood, which continued last week’s rally. It ended the day up 22.73 at 694p. The company was lifted by a mid-week trading update and an upgrade by Goldman Sachs from neutral to buy.

Rival Weir Group ticked up 44p to £21.85 in sympathy.

In corporate news, Essar Energy rose 6.1 to 422.1p after confirming that a meeting to rubberstamp its acquisition of an oil refinery in Cheshire would take place later this month.

On the downside, banks wobbled as fears of a Greek default re-emerged. Ratings agency Standard & Poor’s warned that French proposals for the Greek debt rollover could push the country into default.

British banks would suffer little direct impact from a Greek default, but rather a second order effect as a result of their close ties with French and German banks, which have substantial investments in Greece.
Lloyds dropped 0.94 to 49.88p. Barclays lost 2.85 to 262.7p, and HSBC fell 2.1 to 627p.

Royal Bank of Scotland fell 0.58 to 39.11p, edging further away from the 50.2p level that would mean the Government would break-even on its near £15bn investment in the bank.

Cairn Energy was the top faller, losing 13.8 to 404.7p, after negative comments from JP Morgan.
The analysts cut their target price on the stock from 500p to 480p after Cairn dropped the price of the stake in Cairn India that it is selling to Vedanta.

Premier Foods was the biggest riser on the mid-cap index, although it gained only 1.63 to close the day at 18.71p.
Martin Deboo at Investec said: “Given the drubbing it had on Thursday and Friday last week, a dead-cat bounce is to be expected.” He put out a note on Premier with a hold rating and 20p target price.

Reports also emerged yesterday that the chief executive of Birds Eye Iglo, Martin Glenn, had turned down an offer to head up Premier Foods.

Another riser was engineering group Charter International, which added to Friday’s gains, ticking up 12 to 828½p.
The company has turned down a 780p-a-share offer from Melrose. UBS raised its target price on the stock from 550p to 850p.

M&A speculation also helped lift the London Stock Exchange 26p to £10.59. Weekend reports said senior executives at US exchange Nasdaq were meeting in New York to plot a £3.4bn merger with the LSE.

In smaller tech stocks, enterprise software company Kofax ticked up 19 to 464p after Espirito Santo Investment Bank reiterated its buy rating on the stock and boosted its target price to 612p from 551p, ahead of the company’s pre-close update.

New Hampshire’s Irresponsibility on the Smoking Behavior

In a new fiscal adventure, Republicans in Concord this week voted to reduce tobacco taxes by a dime per pack of cigarettes. The thinking: Out-of-state smokers will flock to New Hampshire to load up on Bond cheap smokes and, while they’re here, buy who knows what other products to bring about a retail boomlet.
The politicians, apparently taking the fictional part of Reaganomics for real, say that the tax cut will cause state revenues to grow. Time will tell. For what it’s worth, in a fiscal no te to House Bill 156, where the tax cut originated, the Department of Revenue Administration predicts that state tobacco tax revenue in 2012 could fall by more than $7.5 million if the levy is cut from the current $1.78 per pack to $1.68.
But assume the Republicans are right in their expectations of more revenues. Does that make the tax cut the responsible thing they say it is?
It does not, for a larger reason. The tax cut strategy is to draw smokers from neighboring states that, unlike New Hampshire, are making an effort to discourage tobacco consumption among their people on the grounds that smoking is a public health menace; the New Hampshire strategy would reduce the flow of cigarette tax dollars to those states, which run tobacco-education programs. Here are the facts:
Vermont, which levies a tax of $2.24 per pack, is spending $4.5 million of its own money this year on anti-smoking programs for its citizens.
Massachusetts, which levies a tax of $2.51 per pack, is spending $4.5 million of its own money on anti-smoking programs for its citizens.
Maine, which levies a tax of $2 per pack, is spending $9.9 million of its own money on anti-smoking programs for its citizens.
New Hampshire, which may soon have a tax of $1.68 per pack, spends zero dollars of its own money on anti-smoking programs, though annually 1,700 of its adults die from smoking-related illnesses and many more Granite Staters are exposed to tobacco smoke.
The only money spent in this state to discourage smoking comes from the hated feds: $1 million this year from the Centers for Disease Control to draft anti-smoking policies and messages, plus about $800,000 from the federal stimulus to help fund such things as a telephone-based service for people who want to quit smoking, in addition to $56,815 from last year’s heath reform bill to discourage pregnant women from smoking.
There you have it. New Hampshire, which ranks dead last among all states in trying to reduce smoking among its own citizens, sees a fiscal bounty in robbing other states of the resources that they would use to minimize the danger of the habit among their citizens.

How Big Tobacco’s Trying to Regain Lost Ground in the U.S.

With the Big Apple in the grip of a new anti-smoking law enacted late last month, some Red & White cigarette makers are seeing an opportunity to shore up their top lines — a smokeless opportunity.

Quick to capitalize on the situation, Reynolds American has launched print-ad campaigns in some national newspapers to promote Camel Snus, for those who love tobacco but hate smoke.

In an environment that’s becoming increasingly hostile toward smoking, Reynolds America knows that clever marketing is key to an intelligent, sustainable, and successful business strategy. Other tobacco giants are following suit quickly.

Tobacco in the no-smoke zone
Cigarette makers have long been testing out alternative tobacco products. Today, they’re plunging even deeper into it — perhaps out of necessity, but also because that’s where the most innovation is taking place.

This segment is stacked with competition. British American Tobacco sells similar products, and it says that Swedish and Norwegian adults alone consume more than 240 million cans of smokeless tobacco every year.

Thanks to a large takeover several years back, Altria’s U.S. Smokeless Tobacco Company is the world’s leading manufacturer of moist smokeless tobacco. When reporting their first-quarter results, U.S. Smokeless Tobacco and Philip Morris USA said they believed volumes within the smokeless category to have grown by an estimated 7% in the first quarter of 2011.

A company seemingly on the cutting edge of the industry, Star Scientific, markets dissolvable smokeless-tobacco products, the first of their kind on the commercial market.

This is a very competitive industry that may get even more competitive in the near future.

Thank you for not smoking
The market for snus and snuff is already big, with the United States and Scandinavia being the largest regional markets. Swedish Match has estimated that more than 1.5 billion cans are sold annually, with around 30 million to 40 million in the U.S. market. Slap on an average price tag of roughly $5 per can (my own estimates), and you can see how big a business this really is.

In terms of overall share in the U.S. market for snus and snuff, Altria claimed an estimated 56% by volume in 2010, while Reynolds stood at 30.3%.

The market for smokeless tobacco in the United States is forecasted to grow at a compounded annual growth rate of 7% between 2010 and 2012. Considered together with the government’s increased emphasis on stricter smoking bans, this segment should continue to grow.
While cigarette volumes have declined in the U.S., moist snuff volumes grew at an average rate of around 6% annually in the past five years. Even better, moist snuff products generally render higher profit margins than cigarettes do. Combined with tougher regulations in their core businesses, this reality explains why more and more tobacco companies are interested on focusing on such smokeless products.
The key lies in how well the companies market these products and generate profits from their sales.
New York’s citywide smoking ban makes smoking illegal in the city’s 1,700 public parks and beaches, along with several plazas. And at the national level, the FDA is continuing to study measures to curb tobacco use. In the past few months, the agency has contemplated limiting or banning menthol and other mint-flavored cigarettes. Such a move would hit companies heavily reliant on menthols, including Lorillard.
Amid stricter regulation and even outright bans on smoking, it makes a lot of sense for the tobacco companies to diversify their product base. Keep an eye on Reynolds by adding it to your watchlist, so you can watch future developments in the industry.

Tobacco Agreement Funds Being Abused

Tobacco companies have been giving Pennsylvania $350 million dollars a year for the past 10 years and will continue to do so for 15 more. But Auditor General Jack Wagner says $1.3 billion has floated away in recent years as lawmakers raided an unprotected pot of money. ”The general assembly during a recession was looking for money in every way, every direction they could find it,” said Wagner.
Wagner says tobacco money should be funding Adultbasic health insurance, and he points to Cigaronne smoking cessation programs that got $50 million eight years ago.
“Have any of you in the media seen an ad in the newspaper radio or TV related to smoking prevention and cessation?,” asked Wagner. “I would challenge you…I haven’t in recent memory…it’s because there’s no more funds devoted to the program.”
Wagner says trailer bills with convoluted language let Governor Rendell and lawmakers raid the fund. And he criticizes Governor Corbett for moving the money to the general fund.
“That is a major change in how those dollars are utilized moving forward,” Wagner said.
But House Republican Spokesman Steve Miskin says the money will still fund health programs -it’ll just be streamlined.
“These are programs that everyone feels is appropriate for state to fund,” he said. “Just putting it all in the general fund…how many budgets should there be?”
Corbett will also use tobacco money to create a liberty loan fund for investment in health-related industries. Wagner has his doubts.
“To take the majority of those dollars away from health purposes and put them in a so-called loan fund is not in the best interest of Pennsylvania,” Wagner said.

Smoking More Dangerous for Diabetics

Cigarette smoking causes many health problems that can even be more serious for people with diabetes enhancing their risks to heart disease and amputation. An article that has appeared in the latest edition of Diabetes Digest, a publication of Diabetic Association of Pakistan warned diabetics to particularly detest from smoking Davidoff as it shrinks the way blood flows through the body and aggravate complications of diabetes.
Heart disease and amputation of leg are the commonest risks for the people with diabetes, warned the expert Dr. Abdus Samad Shera.
To further substantiate the fact, he maintained that smoking damages the blood vessels that makes it harder for the human body to heal ultimately causing infection in legs and feet.
Similarly smoking severely hampers oxygen flow inside the human body and can cause heart attack or stroke.
A diabetic who also smokes is more likely to get nerve damage and kidney disease. Moreover, smokers also contract colds and respiratory infections more easily.
These, he mentioned are besides the fact that smokers in general are more vulnerable to cancers, breathing problems and impotence. Children are more likely to start smoking if their parents smoke, warned the senior health expert.
The good news, he writes, is the fact that no matter how long a person may have smoked his health would start to improve right after he or she quit or cut down a lot on the amount they smoke.
Kicking the habit is hard to do – but worth it and that there are many ways to quit it.

Reynolds launches campaign to push smokeless product

R.J. Reynolds Tobacco Co. is attempting to make lemonade out of the outdoor smoking ban that begins Monday in New York City.

The company is launching a major advertising campaign for Camel Snus next week in hopes of getting smokers to try the smokeless product “and reclaim the world’s greatest city.”

Reynolds is the first large U.S. tobacco company to encourage smokers to quit smoking by urging them to switch to a smokeless product, said Bill Godshall, the executive director of SmokeFree Pennsylvania. The ads do not make any claims of reduced health risks with a potential switch.

The New York City law is considered one of the largest outdoor smoking bans in the country. There also are bans affecting Los Angeles city parks and Chicago parks with playgrounds. The goal in each instance is reducing second-hand smoke.

New York City violators could be subjected to a fine of up to $100 for each instance by the city’s parks department, but police will not enforce the ban.

Two ads will run in the New York Daily News, New York Post, Newsday and some New York weeklies, as well as nationally in USA Today and Wall Street Journal. The New York Times does not take tobacco ads, Reynolds spokesman David Howard said.

One ad features the image of a flame holder with the tagline “NYC Smokers: Enjoy freedom without the flame.” The other ad is in the shape of the Empire State Building with the tagline “NYC Smokers: Rise above the ban.” Both ads feature health warnings.

“We thought this was a good opportunity to communicate with adult smokers in New York City, and across the country, to inform them of a smoke-free, spit-free tobacco option they might want to consider switching to,” Howard said.

The campaign also includes point-of-sale advertising, interaction with age-verified and certified adult tobacco consumers, messages on packs and an age-restricted website.

“Camel is transforming to meet demand from adult tobacco consumers, as well as societal changes,” Howard said. “We wanted to raise awareness of another tobacco product that doesn’t produce second-hand smoke.”

Since Reynolds agreed to participate in the landmark 1998 Master Settlement Agreement that restricted its advertising options, the company has tried to walk a fine line in marketing to young adults.

As expected, the Camel Snus campaign drew criticism from anti-tobacco advocates.

“These ads continue Reynolds’ irresponsible marketing of snus as a way for smokers to get their nicotine fix in the growing number of smoke-free places,” said Vince Willmore, a spokesman for the Campaign for Tobacco-Free Kids.

“The goal is to discourage smokers from taking the one step that would truly protect their health, which is to quit entirely. Once again, Reynolds is putting its bottom line ahead of public health.

“It’s also deeply offensive Reynolds is using iconic New York City images to market a harmful and addictive products, especially in a city that is a global leader in fighting tobacco use,” Willmore said.

Reynolds has not run cigarette ads in newspapers and consumer magazine in 3½ years.

But it has been aggressive with its Camel Snus advertising, including in magazines such as Entertainment Weekly, People, Sports Illustrated, Time and US Weekly, as well as free and alternative publications.

The New York City campaign also is Reynolds’ latest attempt to connect its brands with specific geographic regions and landmarks.

For example, Reynolds conducted a 10-week “Break free adventure” marketing campaign from November through January that had participants guess which trendy destinations the Camel mascot was visiting before coming home to Winston-Salem. Destinations included Austin, Texas; Brooklyn, N.Y.; New Orleans; Las Vegas; San Francisco; Seattle; and Sturgis, S.D.

Anti-smoking groups and health and government officials protested the campaign for using well-known images of the destinations behind the Camel logo. Reynolds distributed packs bearing the images nationally in December and January.

“The Camel advertising is simultaneously both pragmatic — it is concerned with practical consequence — and yet an auger for the slow but steady change in tobacco-use habits,” said Stephen Pope, an industry analyst and the managing partner of Spotlight Ideas in England.

John Sweeney, the director of the sports-communication program at UNC Chapel Hill, said that the campaign may succeed in attracting new users among smokers.

“It will only get long-term success if it captures a loyal, enthusiastic following,” Sweeney said. “It will only do that if it provides a truly satisfying experience to the current smoker.”

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Roll your own, avoid tax; you make the smokes at local business

The big wood-paneled box at Discount Smokes is a tobacco-rolling machine. Into it go loose pipe tobacco and rolling tubes. With a rattling and

The RYO Filling Station machine processes pipe tobacco and rolling tubes into "smokes." Customers have to load the machine and start it.

grinding of gears, out of it come “smokes” – 190 guaranteed to fill a 200-count box and designed to match the flavor of popular cigarette brands.
The machine also is a number-cruncher. As it whirs and grates inside an East Wisconsin Street building that once housed an H&R Block office, it keeps out the state and federal excise taxes that go along with purchases of manufactured cigarettes.
For a carton purchased in Wisconsin right now, that’s an additional $35.21 past the base price: $2.52 per pack for the state and $1.01 per pack for the federal government. Instead of charging $60 or more for a brand-name carton, as convenience stores must, Discount Smokes offers a deal that results in a price of $29.99 a box.
The tax arithmetic at Discount Smokes, owned by Kirk Burnstad, Randy Heinzel and Lon Chester, all of Portage, depends greatly on careful attention to order of operations – but not parentheses, exponents, multiplication, division, addition and subtraction. The key is who does what.
“They manufacture the product. We don’t do it,” Burnstad said of customers.
“We sell them tubes. We sell them tobacco,” Heinzel said.
In mid-April, a first-time customer walked into Discount Smokes, and the owners walked him through the process, starting with picking the brand he wanted to match. Discount Smokes keeps two columned, plastic-covered pages posted on a wall. One column lists popular brands – Salem Full Flavor, Virginia Slim Light and Newport, for example – and other columns list the inputs. For Pall Mall Menthol Ultra Light, that’s 2 oz. Blue, 6 oz. Platinum and a menthol tube.
The owners next directed the customer to the tobacco bins and told him to weigh 8 ounces onto a small postal scale. A cassette of rolling tubes went into the machine, the tobacco went into a hopper, and the customer followed directions on a small screen. Every step of the way, the owners demonstrated and directed.
What they pointedly were not doing was any of the work themselves. If they did, the owners said, they’d be manufacturers. Instead, they sell materials and rent the use of the machine to customers in a package deal. Their caution extends to language. For legal reasons, they said, they identify the machine’s output as “smokes,” not “cigarettes.” The containers the “smokes” go into likewise are “boxes,” not “cartons.”
The machine started and immediately began filling tubes and otherwise processing raw materials. “Smokes” soon spit out of a dispenser, and the customer was packing a box. He said the box would last him a week. At that rate, it would save him about $120 a month in taxes.
How much does the machine cost, the customer asked.
“It’s pricey,” Chester said.
How many years before you get your investment back?
“Don’t know yet,” Chester said.
“Well, I’ll be letting my friends know,” the customer said as he walked out.
Rolling your own
Smokers have long “rolled their own” and avoided excise taxes. The machine at Discount Smokes takes the concept to a new level. It’s called an RYO Filling Station and is produced by a company of the same name in Girard, Ohio. RYO claims to have more than 1,000 of the machines in 35 states. At least 43 are within 250 miles of Portage, according to the company website, and the Discount Smokes partners said they know people in Reedsburg and Richland Center who planned to set up RYO stations. Tomah already has one.
“We’re the eighth machine in Wisconsin,” Burnstad said.
The machines use pipe tobacco, not roll-your-own tobacco. The step saves serious money: When the federal government raised tobacco taxes in 2009, it raised the roll-your-own tobacco tax from $1.09 per pound to $24.78 per pound but made the tax on pipe tobacco $2.8311 per pound.
RYO’s website advertises a typical return on investment of 300 percent in the first year of use and a margin of 20 percent to 30 percent per “carton,” as RYO describes the containers. The clear incentive for customers to use RYO machines is the promise of avoiding the federal and state excise taxes. Wisconsin’s tax is among the highest in the nation; neighboring Illinois, Minnesota and Iowa have taxes of $0.98, $1.56 and $1.36 per pack, respectively.
Government’s role
Governments have noticed the spread of commercial roll-your-own machines.
The Tobacco Tax Parity Act of 2010, introduced in the U.S. House of Representatives early last year, would have raised taxes on pipe tobacco to the same level as roll-your-own. It never got out of committee.
In October, the federal Alcohol and Tobacco Tax and Trade Bureau ruled that the rolling machines were being used for manufacturing and should be subject to taxes paid by name-brand tobacco manufacturers.
“The permit requirement is triggered by the manufacture of a cigarette by the commercial cigarette-making machine, which forms the tobacco into the roll and applies the cigarette paper or tube,” the bureau said in its ruling. “The permit requirement is triggered regardless of whether the person operating the machine, by inputting loose tobacco and cigarette tubes, is an employee of the retail establishment or the ultimate consumer of the cigarettes manufactured.”
Late last year, a federal judge in Ohio issued an injunction that prevented the bureau from carrying out its new policy, pending further court action.
On April 13, the New Hampshire Supreme Court heard arguments over a Brookline tobacco retailer’s roll-your-own machine. According to an Associated Press report, lawyers for the state argued that customers left the store with cigarettes that hadn’t existed before they walked in, making the store a manufacturer that should pay into the national fund meant to offset costs of tobacco-related illnesses.
Lawyers for the company, North of the Border, said only customers might be manufacturing cigarettes, not the store, since the customers are paying a fee to use the store’s machine, not buying cigarettes.
Stephanie Marquis, spokeswoman for Wisconsin’s Department of Revenue, said whether excise taxes apply to RYO machines hasn’t been determined but that the department and the state Department of Justice continually review laws to see if updates are needed.
“Those machines are fairly new,” she said. “It’s just an issue that’s beginning to crop up with states.”
Groups gather data
Ryan Sheahan, coordinator for the Tobacco Free Columbia-Dane County Coalition, said he wasn’t sure that the machines would increase the number of smokers but instead might only shift spending from name brands to stores that offer the machines.
The coalition promotes smoking cessation among youths and adults and the elimination of exposure to secondhand smoke, among other things. It conducts periodic compliance checks with tobacco sellers to test whether vendors will sell to youths, for example.
Sheahan said he was aware RYO machines have been moving into Wisconsin and other states. For now, he said, he’ll gather data and consider increasing education efforts toward lawmakers.
“It’s definitely an emerging market that we have to keep track of,” he said.
Before Discount Smokes’ first two weeks had passed, the owners said, they had had 130 runs.
One Discount Smokes customer, Stephanie Loufik of Rio, was described jokingly by Burnstad as “our favorite German customer.”
Loufik said she’d spend about $60 at Kwik Trip for the particular brands of Marlboros she wants, about twice what she pays for a box at Discount Smokes. She noted the particulars of the store’s process.
“You have the push the button as the customer,” she said.
Regardless, the owners said the process was fairly easy to master.
“I had an 82-year-old lady in here the other day,” Heinzel said. “No problem. She loved it.”
The finished products aren’t exactly Marlboros or Pall Malls. The owners said that’s advantageous in some ways. The smokes don’t have formaldehyde or plastics, they said.
“It’s all natural,” Burnstad said.
Heinzel said he switched to the RYO smokes and within a few weeks lost a bad hack. Chester said he doesn’t smoke.
“I’m not against it,” he said. “I just choose not to do it.”
Chester said the three plan to soon open Discount Smokes branches in Baraboo, Wisconsin Dells, Lake Delton and Columbus.