Utah gives hookah the hook

Starting in mid-September, Utah bars and clubs cannot allow patrons to smoke most hookah products indoors.
The Utah Department of Health announced Monday that it has amended the Utah Indoor Clean Air Act to ban hookah products that contain tobacco. The rule goes into effect Sept. 12.
“The purpose of the clarification is to protect people from exposure to second hand smoke. Even minimal amounts of exposure is considered harmful,” said Steve Hadden, a health program specialist in the department’s Tobacco Prevention and Control Program.
The rule does not grandfather clubs that currently offer hookah.
Nathan Porter, owner of the Murray-based Huka Bar & Grill and Huka Lounge, sought such an exception from the health department, since his businesses opened in 2005. On Monday, he said he plans to sue the state and the health department, saying the rule is discriminatory against hookah smokers.
He said the rule would put him out of business. While hookah-related sales account for 15 percent to 20 percent of his business — the clubs also sell food and alcohol — he said hookah is what his bar is about.
“You take hookah away from the Huka Bar, now what are we? We’ve spent tens of thousands of dollars marketing this business,” he said.
He maintains that hookah pipes don’t emit secondhand smoke, citing a 2009 study in the International Journal of Environmental Research and Public Health. It says research on the effects of hookah secondhand smoke is sparse, and that the secondhand smoke is largely made up of smoke that has been filtered within the pipe and by the smoker’s respiratory tract.
“When we’re talking about the Huka Bar and people go there to smoke hookah; who are they trying to protect? They don’t like our type of business,” Porter said.
But the Centers for Disease Control and Prevention maintains the secondhand smoke “poses a serious risk for nonsmokers, “particularly because it contains smoke not only from the tobacco but also from the heat source (e.g., charcoal) used in the hookah.”
Health officials also fear hookah pipes appeal to young adults, attracted by flavors like apple-cinnamon and chocolate. And the American Lung Association and the World Health Organization have raised concerns about the health effects of water pipe smoking on the smoker, saying it carries similar risks of addiction, cancers and heart disease as cigarette smoking.
Hadden said the health department does not know how many businesses will be affected by the rule change. While there doesn’t appear to be many clubs billed as hookah lounges, some bars offer hookah pipes to patrons.
He said club employees deserve to be protected from exposure to secondhand smoke.
The changes made to the Utah Indoor Clean Air Act come more than a year after the health department received questions from local health departments, businesses and individuals seeking clarification on whether the act covered hookah smoke or just cigarette and cigar smoke. Since January 2009, the state has banned smoking in bars and clubs.
By Heather May
The Salt Lake Tribune
hmay@sltrib.com

State Preemption of Local Tobacco Control Policies Restricting Smoking, Advertising, and Youth Access

Preemptive state tobacco control legislation prohibits localities from enacting tobacco control laws that are more stringent than state law. State preemption provisions can preclude any type of local tobacco control policy. The three broad types of state preemption tracked by CDC include preemption of local policies that restrict:
1) smoking in workplaces and public places,
2) tobacco advertising, and
3) youth access to tobacco products. A Healthy People 2020 objective (TU-16) calls for eliminating state laws that preempt any type of local tobacco control law.
A previous study reported that the number of states that preempt local smoking restrictions in one or more of three settings (government worksites, private-sector worksites, and restaurants) has decreased substantially in recent years. To measure progress toward achieving Healthy People 2020 objectives, this study expands on the previous analysis to track changes in state laws that preempt local advertising and youth access restrictions and to examine policy changes from December 31, 2000, to December 31, 2010. This new analysis found that, in contrast with the substantial progress achieved during the past decade in reducing the number of states that preempt local smoking restrictions, no progress has been made in reducing the number of states that preempt local advertising restrictions and youth access restrictions. Increased progress in removing state preemption provisions will be needed to achieve the relevant Healthy People 2020 objective.
Data on state preemption provisions were obtained from CDC’s State Tobacco Activities Tracking and Evaluation (STATE) System database for the 50 states and the District of Columbia.* The STATE System contains tobacco-related epidemiologic and economic data and information on state tobacco-related legislation. In determining whether state laws preempt local smoking restrictions, the STATE System considers statutes and examines relevant case law, because rulings by state courts sometimes have been decisive in determining whether local policies were preempted. Because litigation has been less common with regard to state preemption of local advertising and youth access restrictions, the STATE System analyzes state statutes but not case law in these areas. Data are collected quarterly from an online legal research database of state laws and are analyzed, coded, and included in the STATE System.
The number of states that preempt local smoking restrictions decreased from 18 at the end of 2000 to 12 at the end of 2010. During this period,

Number of states with laws in effect that preempt local tobacco control laws restricting smoking, advertising, and youth access, by year --- United States, 2000--2010

Delaware, Illinois, Iowa, Louisiana, Mississippi, Nevada, New Jersey, Oregon, and South Carolina completely rescinded preemptive provisions or had such provisions overturned by state courts.† In addition, North Carolina rescinded preemption for certain settings, but left it in place for others. Conversely, state courts interpreted ambiguous provisions in New Hampshire and Washington laws as preempting local smoking restrictions. The number of states preempting local advertising restrictions remained constant over the decade at 18. The number of states that preempt local youth access restrictions increased from 21 to 22 during this period, with Pennsylvania enacting a new preemptive provision in 2002.
The number of states with preemptive provisions in any of the three policy categories decreased by one, from 28 states at the end of 2000 to 27 states at the end of 2010. The number of states that preempted local action in all three categories decreased from 11 states at the end of 2000 to seven states at the end of 2010. Those seven states were Michigan, North Carolina, Oklahoma, South Dakota, Tennessee, Utah, and Washington.

TABLE. States with provisions preempting local restrictions on smoking in workplaces and public places, tobacco advertising, and youth access to tobacco products – United States, December 31, 2000 and December 31, 2010
State Any preemption Smoking restrictions Advertising restrictions Youth access restrictions
2000 2010 2000 2010 2000 2010 2000 2010
Alabama
Alaska
Arizona
Arkansas
California X X X X
Colorado
Connecticut X X X X
Delaware X X X X X X X
District of Columbia
Florida X X X X
Georgia
Hawaii
Idaho
Illinois X X
Indiana X X X X X X
Iowa X X X X X
Kansas
Kentucky X X X X X X
Louisiana X X X X X X X
Maine
Maryland
Massachusetts
Michigan X X X X X X X X
Minnesota
Mississippi X X X X X X X
Missouri
Montana X X X X X X
Nebraska
Nevada X X X X X X X
New Hampshire X X
New Jersey X X
New Mexico X X X X X X
New York
North Carolina X X X X X X X X
North Dakota
Ohio
Oklahoma X X X X X X X X
Oregon X X X X
Pennsylvania X X X X X
Rhode Island
South Carolina X X X X X X X
South Dakota X X X X X X X X
Tennessee X X X X X X X X
Texas
Utah X X X X X X X X
Vermont
Virginia X X X X
Washington X X X X X X X
West Virginia X X X X
Wisconsin X X X X X X
Wyoming X X X X

Reported by

Michelle Griffin, MPH, Univ of Washington. Stephen D. Babb, MPH, Michael Tynan, Allison E. MacNeil, MPH, Office on Smoking and Health, National Center for Chronic Disease Prevention and Health Promotion, CDC. Corresponding contributor: Stephen D. Babb, sbabb@cdc.gov, 770-488-1172.

Altria Fires Up Dividend Hike, Riding Smokeless To $30 Stock Price

On Friday, Altria increased its dividend by 7.9% to $0.41 per common share, making it 45 times in the last 42 years that the company has hiked the dividend. With a set of new product launches in addition to its strong product mix and pricing power, the Altria Group is well positioned to grow in the smokeless tobacco segment.
Altria, previously named Philip Morris Companies Inc., is the parent company of Philip Morris U.S.A, John Middleton, Inc., United States Smokeless Tobacco, Inc., Philip Morris Capital Corporation and Chateau Ste. Michelle Wine Estates. It owns several leading cigarette and smokeless tobacco brands that include Marlboro, Copenhagen, Skoal and Black and Mild.
Altria competes with Reynolds American and Lorillard, two of its biggest competitors in the U.S.
We have a near $29.60 price estimate for Altria Group, Inc., which is about 15% ahead of the current market price.
Smokeless tobacco: The only growing tobacco segment
Smokeless tobacco is the only segment that has been growing for the company in the past several quarters. Altria’s smokeless segment’s revenues grew by 14% in 2010 and is expected to grow by 9% this year. The cigarettes segment, which currently contributes over 70% of tobacco sales in the U.S., is continuously seeing volume declines due to growing health consciousness among consumers, a ban on public smoking as well as high excise taxation on tobacco products and other legislative controls.
Smokeless products, however have come up as an alternative to cigarettes. Not only can they be consumed in places where smoking is banned but are perceived by users as less harmful than traditional cigarettes. In addition they are taxed less than cigarettes (less than 10% compared to more than 40% for cigarettes) for being perceived as products that help people quit smoking.
Major smokeless tobacco products include snuff and snus. Snus is a Swedish snuff similar to American snuff. The U.S. is a major market for smokeless tobacco products and is expected to grow at 7% between 2011-12.
Altria well positioned for growth
Altria acquired the world’s largest smokeless tobacco manufacturer, US Smokeless Tobacco Company as part of its 2009 UST acquisition. This helped significantly strengthen Altria’s market share with leading brands like Copenhagen, Skoal and Red Seal. These brands occupy a market share exceeding 40% in terms of sales volume and 55% in terms of revenues.
The smokeless tobacco division contributes approximately 15% to Altria’s stock value. In 2010, Altria’s smokeless tobacco segment grew in terms of market share and generated a 30% growth in operating income, led by its leading premium offerings of Copenhagen and Skoal. After building the Copenhagen brand over the past few quarters and gradually growing its market share, the firm has now launched more than 15 new smokeless products in 2011, which include Skoal X-tra and Skoal Snus.
Forbes.com

Tobacco crop up a bit, down from a decade ago

tobacco farmer
Third-generation Kentucky tobacco farmer Gene Witt says this year's crop, his 46th, may be his last.

SHELBYVILLE, Ky. — It’s harvest time in much of the nation’s tobacco patches, and this year’s harvest is expected to be among the smallest in at least a decade.
Farmers are expected to produce 726 million pounds, the U.S. Department of Agriculture said. That’s up 1 percent from 2010, but down nearly 28 percent from a decade ago, when more than 991 million pounds made its way into cigarettes and other products.
Tax increases, smoking bans, health concerns and social stigma have driven a decline in cigarette sales, but the drop is less stark outside the United States. Growing markets such as Asia offset worldwide declines and contribute greatly to U.S. exports.
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Gene Witt’s 46th tobacco crop might be his last in a part of the country where the “golden leaf” was once an economic mainstay. The crop that helped build much of the South and was once celebrated at festivals now seems more a vestige of the past.
The third-generation Kentucky tobacco farmer was upbeat about the prospects for his long, green tobacco leaves hanging in a barn to cure for the fall market. A timely rain the night before promised to sprout more growth in the crop still to be harvested.
But Witt, 62, said he’s increasingly worn down by the unpredictability of tobacco farming – from the weather to the tobacco companies that sign up farmers under production contracts to supply them with leaf. The companies can pick and choose what part of a crop they want to buy at market.
“It used to be fun, and you made some money,” Witt said. “You’re not making as much money now, and it’s not as fun.”
U.S. tobacco production has fallen sharply since the 2004 tobacco buyout, which ushered in a free-market system to replace a Depression-era price support program. The venerable program was reeling from steep declines in tobacco demand because of anti-smoking efforts. Some tobacco companies also have set their sights on crops overseas, where tobacco often can be grown less expensively.
In Kentucky, the nation’s top producer of burley tobacco – an ingredient in many cigarettes – farmers are expected to bring 126 million pounds to market, down about 11 percent from last year and down nearly 43 percent from 10 years ago.
North Carolina is the country’s top producer of flue-cured tobacco, growing more than 3 million pounds in 2010. Overall production of flue-cured tobacco is expected to be up 3 percent this year.
The increase is due to a new purchaser, U.S. Growers Direct, said David Reed from Virginia Tech’s Southern Piedmont Agricultural Research and Extension Center. The N.C.-based company, which contracts with farmers and exports products overseas, would not say which tobacco companies it was working with for its purchases. Reed and others said the tobacco is headed for the Asian cigarette market, and exports have played a big role for U.S. tobacco farmers.
However, the coming selling season could be crucial in determining how many farmers sign up with tobacco companies to grow another crop next year, said University of Kentucky agricultural economist Will Snell.
Farmers weigh options
Decrease in demand has caused some tobacco farmers not to put much or any money into rehabbing old tobacco barns used to hang and dry their crop – another example of the dwindling industry. And with grain prices high, some farmers might opt to get out of costly tobacco growing and convert that land into corn or soybean production. Others might turn tobacco plots into pastures for beef cattle.
“Growers just can’t sustain,” Reed said about the costs and uncertainty of being a tobacco farmer. “You just can’t keep doing that.”
Farmers contract with tobacco companies, which then come to local receiving stations to grade and purchase leaf. But how much they buy depends on the quality.
In the United States, large tobacco manufacturers include Richmond, Va.-based Altria Group, parent company of cigs4us.biz/marlboro-cigarette maker Philip Morris USA; Reynolds American, the Winston-Salem producer of cigs4us.biz/camel-cigarette and cigs4us.biz/pall-mall-cigarette; and Newport maker Lorillard Inc., based in Greensboro.
Witt has a production contract with Philip Morris International. Last year, Witt averaged $1.62 a pound for his tobacco, enabling him to eke out a profit. The year before, he averaged $1.79 to $1.82 a pound.
Many farmers last year had at least a part of their crop rejected by their contract buyers, and some growers had big chunks of their crops turned away by the tobacco companies. That leaf ends up at auction, selling for much less than it cost to produce.
“Used to be, when you took your tobacco to market, you were happy to go get your check,” Witt said. “Last year, your stomach rolled over because when you took it down there, you didn’t know if they were going to take it or not.”
BY BRUCE SCHREINER AND MICHAEL FELBERBAUM

Michigan Bar Owners Bounce Lawmakers to Protest Smoking Ban

Some days, politicians could use a drink. But lawmakers in Michigan may soon find it harder to get one.
Hundreds of bar owners in the Great Lakes State plan to deprive lawmakers of their hospitality by banning them from their establishments in protest of the state’s smoking ban.
A new group, Protect Private Property Rights in Michigan, claims it has more than 500 bar owners statewide pledging to blacklist almost every lawmaker. The idea is to persuade the Legislature to at least revisit the ban, which went into effect last year.
“We’re going to have to remind Lansing that our bars are in fact private property, so therefore they are now persona non grata as of Sept. 1,” said Stephen Mace, director of the group and a bar worker himself.
How effective the ban is could depend on how much Michigan’s lawmakers cherish their local watering holes. Mace said the primary goal is to get a discussion started again in the capital — he said many of the Republican candidates who swept into office last November were opposed to the ban but haven’t done much to address it since their swearing-in.
“The bar owners and workers felt they were being ignored by the new Legislature,” Mace said.
Mace said businesses and the government have lost millions of dollars as a result of the smoking ban, which applied to most businesses across the state when it went into effect on May 1, 2010. Mace claimed that “in excess of 100” small bars closed down in the first year as a result of the ban.
According to the Michigan Licensed Beverage Association, overall sales at bars and restaurants were down about 20 percent between May and July of last year after holding steady in the months before the ban. Sales of alcohol, food and lotto tickets all fell — the drop-off in revenue was more pronounced among smaller establishments.
However, the Michigan Licensed Beverage Association was not thrilled with Mace’s latest idea. While the group opposes the smoking ban, spokesman Peter Broderick said there are better ways to voice the industry’s frustration than by banning lawmakers.
“It could only hurt you to alienate your legislators,” Broderick said. “We’d rather have people invite our legislators in for a burger and a beer and talk about it.”
A handful of proposals are floating around the state capital to modify the ban, including one that would allow for special smoking rooms.
A spokeswoman with the American Cancer Society, which fought hard for the ban, said it would oppose any move to revise the bill.
“Any attempt to open it up is an attempt to undo it altogether,” spokeswoman Judy Stewart said.
Supporters of the smoking ban pushed it as a way to cut down on secondhand smoke and improve the health of Michigan residents. Stewart claimed about 1,500 people in Michigan die every year due to secondhand smoke exposure and that the ban will reduce the chronic diseases associated with that.
Mace said his group is not pro-tobacco, but the reality is the ban is hurting business, and bar owners should have the right to make their own decisions about allowing smokers.
He said his group’s ban on lawmakers will have exemptions, just like the law does for casinos. He said rank-and-file lawmakers will be banned, but the head honchos — the governor, lieutenant governor and top members of the House and Senate — will still be allowed.
“In the way that the smoking ban exempted the casinos … the big guys get looked after,” Mace said.
By Judson Berger
Foxnews

Debating Influence of Movies on Kids' Smoking

The World Health Organization recommends slapping adult ratings on movies with scenes that depict smoking, an approach that some anti-tobacco advocates believe could deter kids from lighting up.
Although WHO guidance is largely symbolic, and most nations have ignored it, supporters of controlling kids’ access to these images now say restrictive ratings could influence what movie makers are marketing to kids, according to their policy paper in this week’s issue of the journal PLoS Medicine.
In it, Christopher Millett, a public health expert at Imperial College London, and his co-authors from the UC San Francisco Center for Tobacco Control Research and Education, director Dr. Stanton Glantz, and consultant Jonathan Polansky, said that some governments provide “generous subsidies to the U.S. film industry” for movies that indirectly promote tobacco use in youngsters. They would like to turn that around with a policy that relies on economic disincentives, such as making sure that films that include tobacco use are ineligible for public subsidies.
However, others who are just as committed to reducing youngsters’ risk of tobacco-associated cancer, heart disease and lung disease, don’t think there is enough evidence to demonstrate that controlling who gets into a movie theater can reduce the likelihood kids will become smokers.
Simon Chapman, a public health professor at the University of Sydney in Australia, and Matthew C. Farrelly, a public health policy researcher with RTI International in Research Triangle Park, N.C., offered a four-part argument against the ratings.
First, they said, no one has definitively demonstrated that watching others smoke onscreen leads to more smoking among those in the audience. Furthermore, they said, most of the studies purporting to show that link are muddied by many other factors in kids’ lives.
“Movies showing smoking might have a lot more in them that might appeal to youth at risk of smoking than just smoking,” they wrote.
As a result, they discounted the strength of published estimates suggesting that 390,000 American youngsters smoke because of what they see onscreen, or that imposing adult ratings on films that include actors smoking would likely prevent 200,000 youngsters from becoming smokers. The figures fail to take into account that kids are drawn to smoking by far more than just what they see at the movies, they said.

Adult Film Ratings Don’t Shield Kids From Other Images of Smoking

A third element of their opposition to tougher ratings is that singling out the movie industry ignores the many other media that contain images of smoking, including the Internet.
On a more practical level, the two called adult ratings a “highly inefficient way” of shielding youngsters from depictions of smoking. Kids can easily do an end run around restrictions by watching movies at friends’ houses or downloading them either legally, or illegally, from the Web.
Finally, as a matter of principle, they objected to censorship of movies, books, art or theater as a means of tackling public health issues. Chapman and Farrelly suggested that censorship might turn off citizens and politicians who would otherwise support stricter tobacco control measures, such as blocking “commercial product placement by the tobacco industry.”
They suggested that movies and other media can promote not just the interests of government or policymakers but also act as a mirror and “reflect on what is in society.”
By JANE E. ALLEN, ABC News Medical Unit

France unveils new austerity budget

CIGARETTE and alcohol price rises and a new tax on France’s richest residents are among the measures unveiled by the goverment in an €11bn deficit reduction package.
Prime minister François Fillon says the new measures will target well-off individuals and big businesses – but they have angered opposition leaders and unions, who say ordinary workers will be hit as well.
The headline announcement was a new “exceptional contribution” for households earning more than €500,000 a year. The 3% tax is forecast to bring in €200m a year and will be scrapped as soon as the budget deficit is back under control.
The deficit currently stands at 7% of its GDP – a figure President Sarkozy wants to cut to 3% by 2013. Economic growth in France was flat in the second quarter of 2011.
Fillon said: “Our country cannot live beyond its means forever.
“Well-off household and the very rich will be asked to contribute more than people from modest backgrounds – large businesses more than small and medium firms.”
Most of the major personal tax breaks have been kept – and employees’ overtime hours will continue to be exonerated from income tax and benefit from reduced social charges.
However, some areas of consumer spending have been targeted. The price of cigarettes will rise by 6% within the coming days – a measure expected to bring in an extra €100m a year in revenue – and a further 6% in the 2012 budget.
This budget will also include a duty increase on spirits and beer and a new tax on fizzy drinks with added sugar, forecast to raise €120m a year.
Tax on health insurance (complémentaires santé) is set to rise by up to 7%, bringing in an estimated €1.1bn a year.
Theme park ticket prices will also go up, with the rate of VAT charged increasing from 5.5% to 19.6%.
For companies, the tax breaks available when incurring a loss will be limited – raising an estimated €1.5bn and harmonising the French corporation tax system with that of Germany.
Unions will meet on September 1 to discuss their response to the budget. The CFDT trade union said: “The efforts required of workers are quite significant [compared to] that demanded of companies and very high-earners.”
Socialist Party spokesman Benoît Hamon said: “France has officially plunged into austerity” and green party presidential candidate Eva Joly said the measures were “short-term”, politically motivated and lacked vision.
Front National leader Marine Le Pen said: “The middle classes are constantly being asked to make sacrifices. The price rise on certain products is particularly unpopular.”
The government has also announced that a planned reform of dependency arrangements in France – including better help for families looking after elderly people – has been pushed back to 2012.
The changes, which were promised by President Sarkozy in 2007, have been delayed because Fillon said it would have been “irresponsible to deal with it in the current economic context”.

Big tobacco to take Australia packaging fight to higher court

bat
CANBERRA – Cigarette giant British American Tobacco (BAT) (BATS.L) plans to appeal an Australian court ruling that handed the tobacco industry a setback in its campaign against the world’s first ban on branded cigarette packaging.
The Australian government is legislating to enforce plain packaging for cigarettes in a bid to reduce smoking, angering the industry which has described the reform as a misguided attack on their brands and intellectual property rights.
After the plan was first announced, BAT asked the Federal Court to force the government to release its secret legal advice on the plan, suspecting Canberra’s own lawyers had warned it long ago that such a move would infringe on property rights.
The industry hopes such advice would strengthen its case for a legal challenge against the validity of the proposed law, which is expected to be approved by parliament this year.
“We are definitely looking to appeal and will try to get to the High Court as soon as possible,” Scott McIntyre, a spokesman for BAT’s Australian arm, told Reuters.
“We are thinking that if they are not prepared to release it, maybe it’s because it demonstrates that the plain packaging laws are flawed.”
Another tribunal last week rejected a similar request for government legal documents by U.S.-based Philip Morris (PM.N).
Health Minister Nicola Roxon said on Wednesday the government was determined to implement the plain-packaging reform, which is due to take effect next year and give Australia the world’s most restrictive anti-smoking laws.
“I don’t really think it’s helping them but ultimately they’ve been clear that they will fight this tooth and nail and we’ve been just as clear that we won’t let them bully us into stopping this,” Roxon said.
The lower house of parliament, where the government has a one-seat majority with the backing of Green and independent MPs, began considering the laws on Wednesday.
The conservative opposition wants some changes to allow some very modest form of branding on cigarette packets, but it too is broadly in favour of the reform.
New Zealand, Canada, the European Union and Britain are considering similar laws and governments in those countries are closely watching to see if Australia succeeds.
Analysts say plain packaging could also spread to emerging markets such as Brazil, Russia and Indonesia.
Australia’s total tobacco market revenue grew to about $10 billion (6 billion pounds) in 2009, though smoking generally has been in decline.
Smoking is the largest preventable cause of disease and death in the country.
By Rob Taylor
Reuters

World-first plain packaging for tobacco products becomes law in Australia

PLAIN CIGARETTES PACKAGING australia
Legislation requiring tobacco products to be in plain packaging was passed by the House of Representatives last night. This is the first such measure in the world to become law.
We asked a roundtable of experts to respond to the news.
Colin McLeod, Associate Professor & Executive Director, The Australian Centre for Retail Studies at Monash University, looks at the possible impact of the legislation on the retail industry.
The whole issue of tobacco is a challenging one for the retail industry.
The passage of the plain packaging bill yesterday adds to the complexity and if the bill succeeds in achieving the objectives stated by Heath Minister Nicola Roxon, retail sales of tobacco will fall.
In many retail sectors tobacco sales still represent between a fifth and a third of sales revenue. While it’s legitimate to argue that retailers should have weaned themselves off their reliance on a product category that is under substantial threat from regulation and community attitudes, this has been difficult.
Part of the problem for retailers is that while volumes have fallen as the proportion of the population who smokes reduces, the drop has been largely offset by upward changes in the price of tobacco products.
While some of this has been due to price increases by retailers and wholesalers, it’s worth noting that about 65% of the cost of a packet of cigarettes is federal excise duty plus GST. Although in fairness to our Federal Government, this is at the lower end of comparable OECD countries.
The net effect is that tobacco products have maintained their financial significance to the retailer as a share of turnover.
The other major issue for retailers is that they are members of the communities that they serve, and they have to find a balance between understanding and responding to community attitudes and running a viable business.
Tobacco represents a unique case, as other product categories can develop alternative strategies – for example McDonald’s can introduce healthy meals or Mars can reduce the fat content of their products in response to community concerns about childhood obesity.
But there is no middle ground on tobacco, as can be seen from the response of public health experts to yesterday’s announcement – we can’t find a healthier way to smoke.
Mike Daube, Professor of Health Policy at Curtin University and Director of the Public Health Advocacy Institute, considers why Australia’s tobacco plain packaging legislation is important for public health.
First, it will help to reduce smoking in adults by encouraging them to quit, and in children by removing the tobacco industry’s last advertising vehicle.
It shows that a determined minister (Nicola Roxon) acting on expert advice and compelling evidence, supported by unanimous health and medical support, can face down massive (and massively misleading) advertising and public relations campaigns, as well as lobbying and legal campaigns by the world’s most lethal industry and its shadowy allies.
Despite some sadly misinformed speeches from a few oppposition politicians, all-party support for the plain packaging bill shows that Australian politicians can work together to reduce our largest preventable cause of death and disease.
But perhaps crucially, this is a precedent that, once set, will be followed over time by many other countries. The history of tobacco control shows that the domino theory justifies every tobacco executive’s worst nightmare.
Legislation (and other important measures, such as major mass media programs) are always fiercely opposed by tobacco interests; but when one country or state shows the art of the possible, the others follow.
The argument that “nobody else has done it” will no longer apply. Other countries and other governments will be encouraged by the Australian Government’s world-leading initiative, and will note that the tobacco industry’s credibility has fallen even further, aided by so many leaks and revelations about its deceptive tactics.
Public health campaigners will press for action, confident that they have all the ammunition they need, from research evidence to advocacy approaches.
The Australian tobacco industry is entirely controlled from London (British American Tobacco and Imperial Tobacco) and New York (Philip Morris). The global industry has poured tens of millions into opposing plain packaging here, partly because they know it will work, but above all because they are desperate to prevent measures like this from being introduced in other countries.
There is much yet to be done, but the tobacco wars are being won in Australia. Plain packaging serves as a beacon to the rest of the world, especially developing countries, where the new battlegrounds are forming and hundreds of millions of lives are at stake.
Professor Rob Moodie, the inaugural Chair of Global Health at The University of Melbourne discusses the possible impact of the law in global public health.
It’s well known that tobacco companies use packaging as a way of advertising and promoting their products, so this is a very significant legislation that strikes at the very heart of Big Tobacco.
And it’s clear from the reaction of tobacco companies that they’ve taken it seriously. Their willingness to invest in massive advertising campaigns and to vilify the health minister is evidence that this law will have an impact.
The passing of the Bill is particularly important as a prelude to the September High-level Meeting on Non-communicable Diseases in New York because it will help strengthen the global resolve to act against tobacco and its harms.
We should all remember that in the Reputation Institute’s 2009 Global Reputation Pulse Report, the tobacco industry comes last. It has repeatedly shown that it has very deep pockets and that it’s willing to threaten, sue and bully to get its own way.
The law is a very important leap forward because it starts to protect the public from what is a really dangerous product.
I’ve never had any doubts that tobacco should remain a legal product – it can now remain to be a legal product without being able to promote itself.
This move will give other countries encouragement to initiate public health measures that will help minimize tobacco’s harms for their populations.
Deborah Gleeson, Research Fellow in the School of Public Health and Human Biosciences at La Trobe University, examines what this means for the negotiations for the Trans Pacific Partnership Agreement.
Australia’s leadership in tobacco control must extend to trade agreements
Australia is taking a leadership role in global tobacco control. This leadership must also extend to trade agreements that threaten the success of tobacco control by enabling Big Tobacco to take legal action against governments.
The burden of premature death from tobacco use is disproportionately borne by low and middle income countries, many of which have yet to introduce effective tobacco control policies.
In many countries where smoking rates are high and economies are closely enmeshed with the tobacco industry, tobacco companies hold far more power than they do in Australia.
It is vitally important that the tobacco industry is not granted additional powers to take legal action to oppose tobacco control measures recommended by the World Health Organization.
The Trans Pacific Partnership Agreement currently being negotiated between Australia, the United States, New Zealand, Chile, Singapore, Brunei, Peru, Vietnam and Malaysia is one such trade agreement. Three more rounds of negotiations are planned for later this year and member countries are now tabling draft text and making their positions clear.
The United States Government is seeking investor state dispute settlement provisions in this agreement that would grant powers to foreign companies to sue governments directly in international courts over public health legislation. Philip Morris International has indicated that it would sue the Australian Government if such provisions were included in the agreement.
Australia’s position against these provisions is strong. The Government’s Trade Policy Statement released in April 2011 states it “will not accept provisions that limit its capacity to put health warnings or plain packaging requirements on tobacco products” (p. 14).
This is welcome news for public health advocates.
But Australia’s stance on the inclusion of these provisions for other members of the Trans Pacific Partnership is less clear. The provisions would make countries like Vietnam and Malaysia even more vulnerable to the bullying tactics of Big Tobacco.
Australia has indicated that it will not seek these clauses in its trade agreements with developing countries. To fully implement the policy, trade negotiators must actively reject efforts to include them in the regional agreement, and work with developing country members to strengthen their positions.
The next round of negotiations, in September, presents an ideal opportunity.
Australia must take its leadership role seriously and ensure that the investor state dispute settlement is kept out of the Trans Pacific Partnership Agreement. This will deal a big blow to the global bullying capacity of Big Tobacco.
Luke Nottage, Associate Professor in the Sydney Law School at The University of Sydney, discusses the possible impact of the legislation on bilateral investment treaty law and practice.
The plain packaging legislation passed the Australian Parliament stuck to the original proposal for implementation.
So Philip Morris Asia (PMA) is likely to commence investor-state arbitration (ISA) proceedings after expiry of the 3-month “cooling off” period under Art 10 of the 1993 Australia – Hong Kong bilateral investment treaty (calculated from notification of the dispute on 27 June).
The Gillard Government has closed off one avenue for settling this dispute by enacting legislation but delaying its implementation, to give more time for PMA and other companies to prepare for the new regime.
Even if the possibility of delaying implementation comes up in arbitral proceedings, perhaps due to arbitrators attempting to facilitate early settlement (‘Arb-med’), the Government will now find it politically difficult to backtrack in this respect.
Early and cost-effective settlement during arbitral proceedings will also become harder if the Government decides that it’s worth risking billions of dollars to compensate PMA in exchange for savings in many more billions spent annually on tobacco-related illnesses.
More cynically, the Gillard Government may be thinking that it will get votes in the short-term by coming down hard on tobacco companies with this legislation, without having to take much responsibility for a compensation payment if and when the tribunal reaches a final decision because that may take several years.
The recent escalation of the Gillard Government’s dispute with PMA is unfortunate for another reason. It will entrench the view in the April “Trade Policy Statement” that ISA should not be included in any future investment treaties.
This stance goes far beyond the Productivity Commission’s recommendation on ISA in its Inquiry Report last year, yet the Commission’s economic theory and evidence was already questionable.
Australia seems now to have thrown out the ISA baby with the bathwater. This has serious implications for economic integration initiatives particularly in the Asia-Pacific region, including ongoing FTA negotiations with Japan.
It’s a broader dimension often overlooked when people hear about PMA’s ISA claim related to the new legislation.
A longer version of Luke Nottage’s contribution can be found at on the “Japanese Law and the Asia-Pacific” blog.
Theconversation.edu.au

Russia launches massive campaign to isolate smokers

An open public debate on the bill of the Health Ministry “On protection of human health from the consequences of tobacco consumption” started in Russia. The project was developed in connection with the accession of the Russian Federation to the WHO Framework Convention on Tobacco Control. It will also fulfill the government’s Action Plan on implementation of the concept of public policy on combating tobacco consumption in 2010-2015.
Deputy Minister of Health and Social Development Yuri Voronin at a press conference on Friday said that the document should become a statutory framework to ensure the health of citizens from the consequences of tobacco use by implementing a set of restrictive measures to reduce tobacco consumption and leveling the effects of tobacco on human health.
Nearly a year ago the State Duma developed a version of the law “On Restriction of Tobacco,” K2K reported then. According to the deputy chairman of the Duma’s Health Committee Nikolai Gerasimenko, the bill mandated the sale of cigarettes and related products only in special licensed kiosks.
In addition, owners of bars and restaurants should provide smokers with isolated rooms equipped with their own ventilation system. In practice, this meant that it takes time to implement these requirements. Under the law, the businesses still have time to resolve these issues. In this case the ban on smoking in schools, indoor sports facilities, elevators, and public transportation was to come into force six months after the adoption of the law, noted Bigness.ru.
The situation has long demanded government attention. Today there are 43.9 million people in Russia, according to the global survey of adults about tobacco use (GATS). The vast majority of people in Russia support the ban on smoking in public places. 82.5% of Russians favor a complete ban on tobacco advertising.
GATS Research showed that nearly 35% of Russians are exposed to secondhand smoke at work. 90.5% of people who visit bars and 78.6% of people who visit restaurants are forced to inhale tobacco smoke. This violation of rights of non-smoking individuals must be completely eliminated, according to the developers of the law. Tobacco advertising will also disappear completely, and manufacturers of tobacco products will be banned from sponsorship. It is planned that smoking will be prohibited in all films and television shows made after the adoption of the document.
Voronin said that “we have placed the bill on the ministry’s website and opened a forum for public discussion of all provisions, where anyone can express their point of view, provide additions, comments and suggestions.” It contains things “that we talked about and debated in the parliament and government, these are internationally recognized obligations that we joined and now consistently deliver on our promises.”
According to Voronin, all proposals made during the public discussion of the bill will be carefully studied. Proposals from the concerned ministries and agencies will also be taken into account in the finalization of the bill, RIA Novosti reported.
The chief specialist of the Health Ministry Leo Bokeria has called the bill limiting tobacco consumption a remarkable document, which should have been accepted long ago. He thinks that the law will have hard time because of the opposition in the Duma. Chairman of the Board of the International Confederation of Consumer Societies Dmitry Yanin added that “foreign tobacco companies that have over 90% of the market share in Russia will oppose the law. They only agreed that kindergartens should not have smoking areas.” It is clear that tobacco companies are also reluctant to ban tobacco advertising and want to continue sponsorship of public events. Thus, the expressed view of the citizens about the new bill may acquire additional weight in the eyes of the government, because the decision is long overdue.
By Valentin Vasspard
Pravda.ru