Cigarette labeling suit

When St. Louis attorney Stephen Tillery argument made earlier this month that Philip Morris had admitted the facts set out in his latest petition, without giving a formal answer, lawyers, tobacco giant argued that both parties agree to do so.

Tillery, who represents the plaintiffs in the decade-old class action suit over cigarette labeling that he is seeking to reignite, told Madison County Circuit Judge Dennis Ruth that he did not recall such an agreement and assumed it was just part of Philip Morris’ legal strategy

Stressing the need to keep track of just how the decision will likely be appealed, oral motion Ruth gave Philip Morris “for leave to file a formal response. He also appealed to the lawyers to look at my e-mail and let him know if there is a record of the agreement. Two days later, Philip Morris filed a proposed answer to the petition Tillery in seeking relief from dismissal $ 10.1 billion sentence came in 2003 over claims that Philip Morris mislead their customers through the use of “light” and “low-tar” cigarette labeling.

In an attempt to show the judge that Tillery Philip Morris agreed to file a petition against it with all the factual and legal arguments, instead of dealing with the problems alone, the company has included an e-mail string between the two legal teams. In the February 2 letter Tillery, Larry Hepler, one of the lawyers representing the tobacco company, wrote, “As you know, the Court of Appeal declined to reach the base we have come to our motion to dismiss the petition, except for timing and said that Judge Ruth should consider these grounds into custody.”

Hepler, lawyer Edwardsville, continued: “With all the time that has passed, we believe that the best way to proceed would be for us to get our motion to dismiss and to file against your petition, which includes all of our legal and factual arguments against her to avoid, as you say, dealing in parts. ” “I think it makes the most sense, let me know what you think,” Hepler said. Tillery wrote back: “Just because I’m clear, you offer O, and then re-file your motion to dismiss, or simply provide your factual and legal response to the petition, so we do everything in one ear?”

Hepler Tillery answered the question with the proposed schedule, which said, Philip Morris will give a brief with all the factual and legal response to the petition, Tillery will respond to its brief within 30 days, and Philip Morris will give a reply within 21 days. After that, Hepler wrote one hearing will be held for Ruth to hear arguments on the application. In a letter sent Hepler, Tillery wrote that, as the only remaining basis for moving Philip Morris “, whether to dismiss the plaintiffs have sufficient grounds for exemption under Section 2-1401 of the Civil Procedure Code,” it seems that we could have done in a single hearing. “

Tillery added: “In other words, you must submit a factual and legal response to the petition, and then we move from one court hearing … If this is what you propose to do, I think we can work something out.’ After several email exchanges between the two, Tillery said: “We can make a deal,” and then offered a specific date for the parties to file their responses to questions. Hepler said the other proposed schedule, which will give both sides more time to file their replies and answers. Tillery wrote in response: “It will work.”

Although this issue in the absence of a formal response to the petition Tillery was just one of several issues discussed during the lengthy hearing on August 21, it has become quite controversial. Chicago attorney George Lombardi, who argued on behalf of the tobacco companies at the hearing, said Tillery not raise the issue before the hearing, he said the move was “gamesmanship.” Tillery Ruth said that in 2007, the state high court’s decision in People v. Vincent argues that if the defendant does not respond to the petition, it is an acknowledgment of the facts. The proposed response filed on August 23, Philip Morris argues Vincent Court based its decision not only on the failure of the state to file an answer, but the fact that it does not offer any response to the prisoner section 2-1401 petition.

“But nothing in this or any other case suggests that the parties agreed to the procedure here … somehow not enough, in the absence of point-by-point response to preserve the defendant’s right to challenge the fact that the plaintiff’s claims were factual assertions,” Philip Morris argued. Tobacco Company then offered a point-by-point response to all of the claims alleged in the petition of the plaintiff. He noted that he did not offer any new arguments, and thus providing the company’s request to file a response shall be without prejudice to the customers Tillery.

Ruth noted on August 21 hearing that just because he gave an oral motion Philip Morris “for leave to file a response does not mean that he would have approved it. It is unclear when he will rule on the matter or motion seeking relief from the judgment of dismissal.

Price history

In 2000, Tillery filed a lawsuit against Philip Morris on behalf of Sharon prices, arguing that tobacco companies deceptively promoted the health benefits of light and low-tar cigarettes. It did not make claims for personal injury, and to search for the difference between what smokers pay for cigarettes and what they would pay if Philip Morris did not disappoint them. After a bench trial in Madison County, now a retired Madison County Judge Nicholas Bryon in 2003 he was awarded the plaintiffs damages in the amount of $ 10.1 billion, which includes $ 1.8 billion in attorney’s fees.

After the Illinois Supreme Court ordered Byron to dismiss the case in 2005, Tillery request reconsideration. The judge denied his request, stimulating Tillery on appeal from the U.S. Supreme Court, which denied it. After the Illinois Supreme Court, Byron dismissed the case in 2006. Two years later, Tillery seeks relief from dismissal in Madison County Circuit Court. Philip Morris moved down petition under the statute of limitations, and for that asserts a basis for relief.

Ruth, who inherited the business from Byron, when he retired, ruled in favor of the tobacco companies, saying the statute of limitations for filing a request has expired. Tillery appealed and, as Ruth, the Fifth District Court of Appeal found that the statute of limitations applies and does not address the tobacco companies claim that the plaintiffs could not claim as a basis for relief.

The appeals panel remanded the case back to Ruth on facts. Philip Morris appealed to the Illinois Supreme Court, which refused to violate a court of appeal last September. Although she wrote the majority opinion for the court in 2005, Garman disagreement with the decision of the court to refuse the application for a tobacco company for leave to appeal. She said that her colleagues had the petition Philip Morris “, because it inevitably comes to us in the normal course of the trial.”

Philip Morris: Additional revenues up to 9.6% at 7 months, plus dividends

Philip Morris International (PM) is trading near 52-week high. If you look at the two years following table you can see it usually experiences some kind of a setback after trade to new highs.

The graph shows that Philip Morris repeated this pattern several times over the past two years, and it appears that the potential to do it again. It also has a fairly strong support in the 80-83 range. The following strategy can be used to take advantage of this situation. Please note that you need to have a reserve, as the first part of the strategy entails selling covered calls. If you do not own stock, you can implement the second part of this strategy.

Before we get to the point of this strategy, let’s look at some of the benefits associated with the sale of puts and covered calls.

The advantages of selling covered calls

  • Income generation
  • Two. Downside protection and reduce the volatility of the portfolio
  • Three. Pre-yield
  • Conversion of ordinary shares in payment of dividend shares
  • Investors looking for more detailed information about the benefits of selling covered calls can read our work on the “Benefits Covered write strategy.”

The advantages of selling naked put

The investor usually sells the option, if his / her perspective on the main bullish security.

  • In essence, you pay for putting “limit order” for the shares or stocks, you would not mind owning.
  • It allows you to earn income in a neutral or growing market.
  • Acquisition of shares in a short put strategy is widely used, many retailers, and is considered one of the most conservative option strategies. This strategy is very similar to the covered call strategy.
  • The safest option is to make sure the set is the “money provided.” It simply means that you have enough money in the account to purchase a particular stock if it trades below the strike price. Your final price will be a little bit lower when you add the premium you were paid in advance in the equation.

Every day you arrive at the decay time as long as the stock price does not drop significantly. If it falls below the strike you sold a put on, you get to buy the shares you want at the price you want.

The proposed strategy for Philip Morris

Part I

Jan 2013, 95 calls are currently trading in the range 2.33-2.41. The sale of these calls at $ 2.33 or higher. In this example we will assume that the calls are sold for $ 2.33. For each contract traded, $ 233 will be credited to your account. We sell covered calls and calls are not naked, so you have to have this stock in order to be able to put this part of the strategy in the game. If the stock is trading above the exercise price, the shares may be revoked. If this happens, you will leave with a gain of 7.05% (4.80 and 2.33 from the warehouse of the premium you received when you sold the call). If the shares are not withdrawn, your winnings will be 2.45%.

Part II

Sell the Jan 2013, 80, puts on a $ 2.08 or higher. For each put sold, $ 208 will be credited to your account. If the stock is trading below the strike price Put sold, shares may be assigned to your account. Your final price will be $ 77.92. If the shares are not tied to your account, you’ll leave with a gain of about 2.6%.


This strategy gives you the ability to collect two awards in addition to the dividend – one of the selling covered calls, and others from the Bond brand of cigaretes.

Possible results

Shares withdrawn, but the stock is not traded below the price of puts were sold. In this case, your gain of 9.65% was (7.05% plus 2.6%).

Shares not withdrawn, and the stocks are not traded below the price of the put was sold on. Your winnings in this case are 5.05% (2.6% plus 2.45%).

Your shares withdrawn, and the stock trades below the put strike price were sold. In this case, you will receive shares at 77.92, and you leave with a gain of 7.05%.

Your shares are not withdrawn, but the stock is trading below the strike price Put sold. In this case, you get a much lower price of 77.92, and leave with a small increase in the 2.45% of premiums received for the sale of the call.

Risk Factors

Shares may trade above the price you sold the calls. If this happens, your shares may be withdrawn. One simple way to avoid this would be a challenge if the stock is trading above the strike price, and you still want to hold on to stocks.

Another risk factor is that if the stock is trading below the price you sold puts on, the shares may be assigned to your account. It should not be a big problem, as one only sells sets when the bullish on long-term prospects for stocks. If you have a change of heart and I feel that the shares could trade much lower price, you can roll sets. You buy the puts you sold back and sell new ways in which a bit of money. Shares are usually appointed for the last trading option.


This strategy should be used only by those who are bullish on the stock, as it is likely that the shares may be assigned to your account. In addition, there is a chance that you may lose the shares if the stock is trading above the price you sold the calls. Investors are looking for other ideas may find this article to be interesting.

Disclosure: I have no positions in any stocks mentioned, and does not intend to initiate any positions within the next 72 hours. EPS and price schedules Vs industry, as well as most of the historical data used in this paper were obtained from Options table are derived from

Warning: It is important that you do your due diligence, and then determine if the above strategy is suitable for your level of risk. Latin principle of “caveat emptor” (let the buyer beware) applies.

Philip Morris and village from Haverstraw

Earlier this year, the village of Haverstraw, working with POW’R on Tobacco Control, took the unprecedented step of banning the retail sale of cigarettes to products in their stores, making cigarettes and cigars out of sight of customers. The basis for the decision, which is set to come into force later this year, is that it would reduce the impact of tobacco products to youth.

But now a new wrinkle was added to the situation. New York Association of Convenience Stores (NYACS) and seven tobacco companies in court trying to cancel the upcoming ban and the village is preparing for a potentially costly legal fight. NYACS, Lorillard Tobacco Co, Philip Morris USA Inc, RJ Reynolds Tobacco Co, Santa Fe Natural Tobacco Company, the American company Snuff LLC, the U.S. Smokeless Tobacco Brands Inc, and John Middleton Company filed a civil suit on Tuesday in U.S. District Court for the Southern District of New York.

In an interview with Rockland County Times, NYACS Representative James Calvin described the law of Haverstraw as “an example of extreme and excessive regulation of tobacco retailers.” He said: “Shops have a fundamental legal right to place the products they sell.” He thinks the law can be the first of its kind in the United States, which is also the fact that POW’R on Tobacco Control argued when it was first announced.

“We believe that it is unconstitutional. We are seeking a court declaration that it is unconstitutional and ordering the village from the constant use of it,” said Calvin. The village is not contacted his group to the law passed, Calvin said. “We learned about it after the law was passed.”

Jay Hood, the village of Haverstraw’s lawyer, said: “According to a lawsuit the village, within a reasonable regulation of the display just shows that they are more interested in selling product than the health of our children. This law was designed to keep the kids from gathering to life, and possibly deadly habit. I did not get complaints like this, but the village is going to handle it in a balanced way that will protect children, but at the same time is not worth the money of taxpayers to protect the village. There are outside of the firm when dealing with us in order to cope with this possible at no cost to the village.”

Michael Kohut, Haverstraw village Mayor, said: “This is a big corporate America will be after the baby, mostly. I would hope Michael Bloomberg would take this instead of the law oversized soda, as tobacco companies are likely to get it will be negated after us, because we are the little guy. We knew it was possible that they will sue, but I do not know what they are. “

He continued: “Ideally, the forces opposed to smoking come to our aid because we are not going to bankrupt a village in the protection of that right. It makes no sense. But if someone from the outside will take the reason we struggle with this, considering that the Council agrees with me. ” The village was proposed during the transition to a resolution POW’R on Tobacco Control, and they are a potential source of financing lawful activities of the village. Describing the next step the village, Kohut said, “We have documents, I’m going to give it to Jay Hood (village attorney). He is in contact with other lawyers in the anti-smoking efforts.”

Calvin said he did not have an estimate of how long it may take the case to play. The prohibition of retail display Haverstraw is due this October. Village Board took action in April, stating that the form of packs of cigarettes on the wall of the store makes the minors to start smoking. By law, retailers could continue to sell tobacco, just not display it, instead giving customers an age check, upon request, printed Control “menu” to order from.

“Retailers have a fundamental right to communicate with their customers about the products they offer to show these products within its own territory,” Calvin said in a statement to the media. “The United States and the new constitution of New York have long been protected by this form of commercial speech.” Defendants in the suit are the Haverstraw village and village institutions and officials who were assigned the responsibility for ensuring that the display of tobacco products, ban as soon as it enters into force in October 2012.

Philip Morris gets in the UK

Philip Morris International, the biggest Cigarette Company in the world  has attacked the UK Department, in the end with the public over whether to introduce plain packaging for tobacco products.

A report commissioned by the manufacturer of  Marlboro brand of cigarettes said the cornerstone of the Research Ministry of Health about a simple package, failed to provide evidence that this will lead to a reduction in smoking, and were based on studies . The comments in the report of the American consulting firm Compass Lexicon, represent an unusually sharp criticism from a large tobacco company and goes to Alison Cooper, executive director of the FTSE 100 Imperial Tobacco, was criticized for the fact that the Ministry of Health “anti-business” in the last month.

They point to widespread tobacco industry fears that Britain may soon follow the example of Australia, where all tobacco products should be sold in packs of gray similar to the standard label and carrying a large health warnings this year. The report of the Ministry of Health of the Public Consortium for Health Research, a network of researchers, funded by the Ministry of Health, is the largest government report today in the efficacy of simple packages to reduce smoking.

Professor Gerard Hastings, one of the authors of the report, said: “A little more than three decades of research have been identified and it shows that plain packaging could help smokers in three ways: by increasing the value and effectiveness of health warnings by updating and thus smoking less attractive Remove confusion about the damage can cause packaging design. ” Separately, Philip Morris also released a study by researchers at Transcrime, Centre of Criminology research, based in Milan, which warned of plain packaging would be a fake cigarette lighter and can lead to increased smuggling of tobacco products in the UK.

“We do not think plain packaging would reduce smoking and simply lead to an increase in black market cigarettes,” said Philip Morris. So far, only Australia has a law on plain packaging. The government is struggling with a series of legal battles with tobacco authorities, who accuse him of illegal confiscation of their brands. This policy is also considered within the EU. British American Tobacco describes the data Ministry of Health for the introduction of plain packaging as “limited.” “We are very concerned about the way that the database and consultation impact assessment process falls short of standards that tend to require policies to be considered, let alone implemented,” said BAT.

Tobacco Control Cell registers case against Philip Morris

In a landmark development, the Tobacco Control Cell has commenced legal proceedings against cigarette manufacturer Philip Morris Pakistan Limited for violation of binding stipulations concerning tobacco advertising.

Good precedent

Talking to Profit, Deputy Project Director of the Tobacco Control Cell Dr Ziauddin Islam said, “For the first time ever a police case has been registered and sent to the magistrate against any tobacco company on violation of tobacco control laws in Pakistan.” This case has been registered in Faisalabad and Dr Ziauddin said it would set a good precedent for future cases.

However in this case, under section 11B, the first time offender would be liable to pay a fine of Rs5,000 with up to three months in prison, while subsequent offenders will be subjected to a Rs100,000 fine along with the three-month sentence. Unfortunately, multi-national companies have time and again indulged in practices that are in blatant disregard of existing laws and Philip Morris Pakistan Limited (formerly known as Lakson Tobacco Company) has taken it a step further by openly advertising their cigarette brand Marlboro, in numerous magazines with full page glossy adverts, promoting the brand in gross violation of SRO 882(I)/2007, issued under Section 7 of the Prohibition of Smoking and Protection of Non-smokers Health Ordinance 2002, which states that with effect from May 31, 2007, tobacco advertisements will not be more than one square inch (with 20 per cent of this covered by a health warning).

Civil society action

It is learnt that the advertisement campaign in question cost Philip Morris approximately Rs50 million, in gross violation of law prohibiting just such an act. Yet authorities did not take appropriate legal measures till the transgression was reported by civil society activists. It is common knowledge that cigarette companies have been barred from indulging in advertising campaigns, something that even the common man is aware of. But despite the action, campaigners are dissatisfied with the Rs100,000 fine as “not nearly enough” to discourage such discourse. “This is a ridiculous penalty.

It is unlikely to deter the company or set a viable precedent. The punishment must be stricter,” said an anti-smoking activist while talking to Profit. Interestingly, the worth of the brand being promoted by the company itself is in millions of rupees. The Director General of Health Services Academy and in charge of Tobacco Control Cell, Dr Asad Hafeez, earlier said he issued notices to Philip Morris Pakistan for illegally advertising cigarette print media so that anti-tobacco ordinance could be implemented. The Prohibition of Smoking in Enclosed Places and Protection of Non-Smokers Health Ordinance, 2002, governs multiple areas of tobacco control, including restrictions on public smoking, sales to minors, and tobacco advertising, promotion and sponsorship.

According to the Presidential Ordinance, “Notwithstanding anything contained in any other law for the time being in force, no person/company shall advertise tobacco and tobacco products in any media, in any place and any public service vehicle.” This makes the recent promotional advertisements by Philip Morris, a clear violation of these rules and regulations.

Poor justification

The Tobacco Control Cell in an issued statement, said, “It is the practice of the M/s Philip Morris International (PMI), Pakistan, to first violate the tobacco control laws, and then give poor justification on these violations. This company has already been served a legal notice on violation of Section 7 of ‘Prohibition of Smoking and Protection of Non-Smoker’s Health Ordinance, 2002 by offering free incentives on tobacco products. On this violation, Tobacco Control Cell issued a legal notice to the company on 22nd June, 2011. To clarify the guidelines, the matter was again discussed in the Tobacco Advertisement Guidelines Committee. In this meeting, representative from M/s PMI, Pakistan (M/s Lakson Tobacco Company) assured to follow the guidelines. This means no more excuses shall be accepted.” When questioned over the effectiveness of the Tobacco Control Cell, Ziauddin said, “We are merely concerned with the legislation aspect, while the implementation and enforcement of legislations rest with law enforcement authorities.” Letters have been issued by Provincial Police officers of all provinces to ensure the implementation of tobacco control law in their respective jurisdiction.

Unconditional apology

In response to the blatant violation of law, Philip Morris Pakistan deemed it fit to tender an unconditional apology to the Tobacco Control Cell, citing that they were unaware that the law also prohibited the company from publishing adverts in magazines. However, it is clearly mentioned in the Presidential Ordinance 2002, that no cigarette manufacturing company will advertise in any media, in any place or public service vehicle. The law also stipulates that “tobacco advertising is prohibited in publications intended for young people.” Clearly the magazines where adverts were published had a significant youth target market as well. In their official statement, Tobacco Control Cell said, “Full page advertisements of Marlboro cigarette appeared in the following Newspapers: Sunday magazine of Express Tribune on 13th November, 2011, Sunday magazine Daily Times on 13th November 2011, Newsweek Pakistan on 11-18th November, 2011, Herald November 2011, Sunday magazine, Daily Times 20th November 2011, and Sunday Magazine Jang, 21st November 2011 and Sunday Magazine of Jang 28th Nov, 2011.” What is most unfortunate is that yet again, Philip Morris despite an unscrupulous violation of law will be allowed to run free, setting a precedent for other companies to follow suit.

Newspaper responsibility

While talking to a civil rights activist, he said “It is the responsibility of newspapers to ensure that such advertisements that are in blatant violation of the sovereign law of Pakistan are discouraged by print media.” He added that he was shocked to see leading stakeholders of the industry not reacting strongly, or refusing to print advertisements by Philip Morris.

Department of Health in UK targeted by Gallaher and Philip Morris

The tobacco industry is targeting the Department of Health to extract information about meetings between government officials and researchers who are investigating the public-health implications of new smoking policies.
One leading tobacco company has asked for – and been given access to – the minutes of a confidential meeting between health department officials, cancer experts and foreign government officials – to the surprise of those who attended the private discussions.
The Freedom of Information requests are part of a global campaign by tobacco companies to fight any further legal restrictions on cigarette sales and promotion, particularly the introduction of plain cigarette packets devoid of company logos and branding.
Yesterday, The Independent revealed that the world’s biggest tobacco company, Philip Morris International, has demanded access to confidential interviews with British children about their smoking attitudes and behaviour, collected as part of a research project at Stirling University funded by the charity Cancer Research UK. It used the Scottish Freedom of Information (FOI) Act to request the information.
Jean King, Cancer Research UK’s director of tobacco control, said: “We would question the tobacco industry’s motivation for trying to access this information. Are they concerned about the health of young people and seeking to clarify the impact of tobacco marketing on the rates of youth smoking?”
Earlier this year, Philip Morris also submitted FOI requests to the Department of Health in order to access government documents related to “tobacco regulation”, according to Anne Edwards, director of external communications at Philip Morris International, the makers of Marlboro cigarettes.
The Department of Health has been subject to a series of FOI requests from tobacco companies, including one from Gallaher, which is part of Japan Tobacco International, the world’s third-largest cigarette company and which makes top-selling brands such as Silk Cut, Camel and Benson & Hedges.
Although tobacco companies can use FOI legislation to access government documents, the tobacco industry itself is not subject to the legislation. Critics of the industry point to the difficulty of extracting information from tobacco companies, which frequently refuse to open their own files unless forced to do so by a court order.
“Unlike official information held by government agencies, information held by private companies such as ours is often of a commercial nature and therefore cannot be released for competitive reasons,” Ms Edwards said.
In its FOI request, Gallaher wanted all information that the health department kept that could be viewed as evidence in favour of introducing plain-packaging legislation. It also wanted all correspondence between the department and outside organisations, such as the campaign group Action on Smoking and Health (ASH), the UK Centre for Tobacco Control Studies – a consortium of nine UK universities – and the scientific research charities Cancer Research UK and the British Heart Foundation.
The Department of Health tried to block giving out the minutes of a June 2009 meeting between its officials, cancer experts and overseas government representatives to discuss the possibility of introducing plain, logo-free cigarette packets that would contain only a warning and the brand name written in a plain typeface.
However, the Information Commissioner ruled that the minutes should be released to Gallaher, despite the fact that the meeting was held under the “Chatham House rule”, which states that the identify or affiliation of the speakers should not be revealed.
Deborah Arnott, the chief executive of ASH, who attended the meeting, said: “We are concerned that this is a one-way street and that the tobacco industry is not in return being either transparent or honest. The industry wants access to government documents and academic research for one purpose only: to help it fight regulation – regulation which is essential to reduce the numbers smoking and dying from their addiction.”
Japan Tobacco International, which owns Gallaher, said it was not possible in the time allowed to list all other FOI requests it has made to government departments, but, in the case of its health department request, the company wanted to understand what materials were being relied upon as evidence for tobacco-control legislation.
The company accepted that Freedom of Information did not apply to its own documents. “Of course, we are not a public authority for the purposes of the FOI Act, although we are subject to various regulatory reporting requirements,” said Jeremy Blackburn, head of communications at Japan Tobacco International UK.
Imperial Tobacco, the makers of the UK’s best-selling brand Lambert & Butler, said that its vending business Sinclair Collis, a wholly-owned subsidiary, has also made an FOI request to the Department of Health because of concerns over a ban on the sale of cigarettes from vending machines.
“Sinclair Collis made the FOI request because of concerns it had about the lack of evidence for a ban and the lack of clarity surrounding the Government’s decision-making process,” said Simon Evans, a spokesman for Imperial Tobacco.
Lobby group has a change of personnel
The tobacco firms are overhauling the organisation set up to lobby for their interests, after failing to overturn the anti-smoking policies of the Labour government. Five of the seven people employed by the Tobacco Manufacturers’ Association, including its head, Christopher Ogden, are leaving. Mr Ogden, who has worked for the TMA since 1997 and has been chief executive since 2007, steps down next month.
The TMA was set up by the three firms that dominate the smokers’ market: British-American Tobacco, Gallaher and Imperial Tobacco. It has had a frustrating year lobbying unsuccessfully for the easing of restrictions on advertising and marketing imposed since 2003 or the ban on smoking in public places introduced in 2007. A ban on cigarette vending machines, passed by MPs in October 2009, will also go ahead.
A spokesman for the TMA said that it is going through “organisational restructuring to take account of the changing nature of the regulatory climate in the UK”.
He added: “The aim of the new TMA will be to co-ordinate and represent its member companies’ interests and efforts, whilst reducing costs, removing areas of duplication and concentrating on core activities. Some positions in the TMA are being made redundant in the course of the restructure, but new roles have been created and the head count at the TMA will remain the same.”
A brief history of tobacco branding
* In the 20th century, the imagery of big tobacco permeated the public consciousness. Lucky Strike white packets, first sold in 1942, were designed by Raymond Loewy, the man behind the Coca-Cola logo, and are still remembered as milestone in modern design.
* Advertisers focused their efforts on the glamour of the cigarette, with celebrity endorsements and slogans that said, out loud, that successful people smoke.
* Men were urged to join the likes of Bing Crosby and Bob Hope in enjoying a Chesterfield, or John Wayne, who preferred Camels – or so a famous poster claimed in 1950. In 1954, another cowboy, the Marlboro Man, popularised the filter cigarette as a trophy of masculinity.
* The tobacco giants soon turned their attentions to women. In 1968 the Philip Morris group released “a cigarette for women only”, the Kiss, whose “you’ve come a long way, baby” publicity campaign made the cigarette a trophy of female emancipation.
* The culture of some sports became dependent upon tobacco-industry sponsorship. Embassy backed the big snooker and darts competitions and dished out free cigarettes to the players.
* In Formula 1, the entire look of cars and team uniforms was dictated by whichever tobacco brand was backing them. Before the 1960s, teams competed in their national colours. Team Lotus were the first, carrying the Gold Leaf logo at the 1968 Monaco Grand Prix. The rest of the sport soon followed. McLaren cars were red and white for Marlboro for 20 years; Jordan cars turned yellow when Benson & Hedges began sponsoring them in 1996. Ferrari carried the Marlboro logo until 2007.
* In the UK, health warnings first appeared on cigarette packets in 1971, on the advice of the Royal College of Physicians. A ban on TV advertising for cigarettes followed in 1986 and a 2002 law banned almost all forms of promotion, including sporting events.
* The cigarette packet itself has become a battleground between marketers and regulators. All packets have carried health warnings since 2003, with much of the pack devoted to the warning.

Philip Morris: tobacco firm using FOI laws to access secret academic data

Philip Morris International has tried to force the University of Stirling to hand over secret data into teenage smoking and cigarette marlboro cigarettespackaging gathered over more than a decade.
The manufacturers behind the Marlboro-cigarette, have used Freedom of Information laws to gain access about 6000 confidential interviews undertaken with teenagers as young as 13, which discuss their views on smoking and tobacco.
The interviews, undertaken by the University’s Institute for Social Marketing unit since 1999, formed the basis for two major studies that analysed the negative effects of cigarette packaging and marketing on British youths.
The studies, published in the Journal of Adolescents, the European Journal of Public Health and the Tobacco Control journal, examined why teenagers started smoking and what they thought of marketing by tobacco companies.
Critics accused the company of misusing public information laws to gain access to information for commercial gain.
Academics said that handing over the information would be a major breach of confidence and could jeopardise future research.
But the company defended its request as entirely legal and legitimate to gain access to information “of interest”.
“We have not been broken any laws. Frankly we have requested some information, legitimately, on an issue that is of interest to us,” one executive told The Daily Telegraph on Wednesday night.
According to the university, Philip Morris’ made requests to gain access to the information in 2009, which was initially refused because it was mady anonymously through its lawyers.
But after another request was lodged that same year, the two organisations have fought a battle over the information, which culminated in mediation by the Scottish Information Commissioner this year.
In June the commissioner’s office said the university’s reason for refusing to hand over the information, because the request was considered “vexatious”, was not a correct reason and ordered it to issue another response.
The university has since refused the request because it believes it will cost too much money to process.
Under FOI laws, organisations can refuse to hand over information if it believes it will cost a certain amount, general no more than several hundred pounds.
Prof Gerard Hastings, 57, who co-authored the studies with Prof Linda Bauld, said he was “very angry about it indeed on a number of levels”.
He said it was “deeply concerning they are even trying to get this data” because if the company gained access to the data it would have “enormous implications for academic freedom”.
“First of all it is an abuse of the FOI legislation,” said Prof Hastings who is director of the university’s Centre for Tobacco Control Research.
“I don’t think for a moment that Parliament had this in mind when it created their laws.
“But also these young people shared their inner most secrets about this. They shared their confidences and we explicitly told them that we would treat this data as confidential and that it would be restricted to the research.”
He added: “I am not over-egging this. We are talking about behaviours that they have not told their parents about – they are not supposed to be doing this.
“But also, particular when buying cigarettes, they are (breaking) the law.”
The centre was established in 1999 by Cancer Research UK and aims to discover why children start smoking.
One of the researchers has also received anonymous phone calls trying to discredit her work, though there is no suggestion they are linked to PMI in any way at all.
A University spokesman said all requests made under the FOI Act were treated fairly.
“If we receive a Freedom of Information request we treat it fairly and honestly and respond within the normal time scale,” he said.
In a statement Peter Nixon, Philip Morris’ vice-president of communications confirmed the company had sought information to “understand more about a research project conducted by the University of Stirling regarding plain packaging for cigarettes”.
He said it was an appropriate request to a public institution and that the Scottish Information Commissioner had concluded was not “designed to cause disruption or annoyance to the University”.
“We are not seeking any private or confidential information on any individuals involved with the research,” he said.
“As provided by the freedom of Information Act, confidential and private information concerning individuals should not be disclosed.”
It is not known whether the company will appeal the university’s latest decision.
By By Andrew Hough

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.

Marlboro Is Still The Man At Altria

Altria Group recently announced its Q2 earnings that were marked with solid operating margins and retail share performance of the

marlboro brand

company’s premium tobacco brands especially Its strong pricing power and product mix continue to be the key sources of value creation. 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 $27 price estimate for Altria Group, Inc., which is just slightly ahead of the market price.
Although Altria’s earnings declined 60% due to one-time charges, the tobacco business performed well and delivered strong operating margins led by higher pricing and retail market share growth.

Marlboro, Copenhagen Support Growth

Higher pricing helped Altria boost its operating margins, partially offset by lower shipment volumes. The cigarettes division that contributes almost three-fourths of Altria’s stock value continued to lead the solid operating company income growth of 6% year-over-year (yoy), 3% on an adjusted basis.. The performance was led by the company’s flagship brand Marlboro, which saw sequential growth in its retail market share benefited by the recent new product launches and strengthening menthol business.
The smokeless tobacco division followed suit with strong OCI growth of 12% (yoy) led by its leading premium offerings of Copenhagen and Skoal both of which saw continued growth in their retail market shares. Better pricing helped expand OCI margins by 3.8 percentage points (pp). Copenhagen saw volume growth over the quarter with recent product introductions and strength of its core natural business.
Cigars Income Declines, Premium Wines Sell Well
In the cigars segment, Middleton continued to invest in new products, promotion and brand building to defend Black and Mild’s market position amid significant competition from imported, low-priced machine-made large cigars. While Black and Mild’s retail market share grew 1%, increased promotional investments led to a 16% decline in OCI.
In the wine segment, Ste. Michelle delivered strong financial results as it continued to improve its mix with more higher margin premium products. As a result, net revenues grew at 8-9% while OCI increased double digits in the second quarter and first half of 2011.
By Trefis

Philip Morris Cigarette Sales Volume

PMI’s product portfolio boast of eight of the world’s top 15 brands, including Marlboro, the number one cigarette brand worldwide. Until a spin-off in 2008, Philip Morris International was an operating company of the Altria Group. Philip Morris International competes with British American Tobacco, Japan Tobacco and Imperial Tobacco Group plc in its various geographical segments.
Pricing Focuses on Profitability
With a favorable geographical footprint and a strong product portfolio, Philip Morris International expects an average 3-5% organic growth in its annual revenues, net of excise taxes. Amid declining volume of cigarette sales in several key markets worldwide and rising excise taxation, PMI will continue to focus on its profitability. Accordingly, the profit margins will primarily be driven by higher pricing. PMI also recently concluded the 2008-10 cost savings program and expects to save $1.5 billion in costs annually going forward. This may significantly improve its bottom line.
Emerging Markets Driving Cigarette Sales Volume
PMI’s cigarette sales volume will be mainly driven by growing Asian and Latin American markets of Indonesia, Philippines, Argentina and Brazil. Indonesia and South Korea are expected to offer PMI organic sales growth. Sales in the Philippines will continue to rise after the 2010 merger with Fortune Tobacco Corporation.
Post-merger PMI-FTC together control up to 90% of the expanding Philippine tobacco market with a greater presence on the low and mid-priced segments. Also looking forward, market share retention in the important Japanese market in the aftermath of the March 2011 earthquake and tsunami will be important.
Philip Morris International and British American Tobacco witnessed significant market share growth post March at the cost of Japan Tobacco which saw temporary supply disruptions.
However, sales volumes are expected to be offset by declining sales volume in Europe due to decreasing market volume, notably in Greece, Poland and Spain. Sales will also continue to be hit by the disruptive 2010 excise tax increase in Mexico as well as trends consumers trading down to lower priced cigarettes in Pakistan and possibly Russia.
By Trefis Team