ASH Daily News for 19 June 2008

Imperial to unveil Altadis restructuring

Imperial Tobacco will unveil the long-awaited details of its planned restructuring of Altadis, the Franco-Spanish maker of Gitanes and Gauloise cigarettes it acquired last year for €12.6bn (£10bn).

Analysts said as many as 2,400 jobs in France and Spain, or about 20 per cent of Altadis’ workforce in the two countries, could be axed as part of Imperial’s drive to hit its cost saving targets.

Bristol-based Imperial, the world’s fourth-largest tobacco company, said it expected to generate savings of €300m a year by 2010 from the Altadis takeover, with the figure rising to €400m by 2012.

Details of the cost-saving programme, seen by some in the industry as too ambitious, will be scrutinised closely by investors and analysts alike.

Having paid a high price for Altadis, analysts say Imperial is under pressure to show it can cover its cost of capital.

The high price paid for its Franco-Spanish rival was one reason the company had to announce a rights issue at the high end of some analyst expectations last month.

Analysts at Natexis Securities, the French brokerage, believe Imperial will also announce the closure of two cigarette factories, along with the closure of a rolling tobacco unit in Metz, in north-eastern France, when it reveals its restructuring plans in Paris on Thursday.

Like its competitors, Imperial has seen cigarette sales in the UK and Europe, its core markets, fall amid increasing health concerns, smoking bans, higher taxes and advertising restrictions.

Yet the company has managed to expand spectacularly over the past decade thanks to relentless acquisitions and cost-cutting.

However, analysts warned that the restructuring of Altadis was likely to be a drawn-out process. French and Spanish unions have already voiced strong oppositions to any factory closure and job cuts.

Source: The Financial Times, 18 June 2008
Link: http://tinyurl.com/5fguuc

Howitt fined again for flouting the smoking ban

Hamish Howitt has been fined once again for flouting the smoking ban.

Howitt was fined £250 each for four offences plus £1,000 in costs. It is his 21st conviction for flouting the ban.

Howitt's wife Joanna was given a 12 month conditional discharge and also ordered to pay £1,000 costs for allowing smoking at Del Boys Sports Bar in Blackpool.

Howitt said he would suspend smoking for a few days while he removed his wife from the licence.

He said, "This is a vindictive prosecution, I alone am responsible, not my wife."

"I've suspended smoking for a day or two while I get her taken off the licence, I'll find a trusted friend with a clean record to do it."

Source: The Morning Advertiser, 19 June 2008
Link: http://tinyurl.com/626rzh

Australia: Smoking ban in the pipeline

The Northern Territory Government says smoking in bars, pubs and clubs will be banned, but will not say when.

Chief Minister Paul Henderson said, "The process is going slowly. As the Chief Minister, what I'm saying it is not if, but when. But we will do it in a consultative way with the Australian Hotels Association, because we don't want to see people losing their jobs as a result."

"It's certainly something being discussed with AHA at the moment .It is going to happen at some point."

Source: ABC News, 19 June 2008
Link: http://tinyurl.com/5noe73
 

Canada: Health groups applaud bill to protect youth from novelty tobacco products

The NDP Member of Parliament for Winnipeg North introduced a private members bill to amend the federal Tobacco Act and curb the marketing of cigarillos. 

Canada's leading health agencies today welcomed the introduction of legislation to crack down on the marketing of novelty tobacco products designed to attract young smokers.

Aaron Levo, the Chair of the Canadian Coalition for Action on Tobacco said, "We are very grateful to Ms. Judy Wasylycia Leis for proposing legislation to strengthen Canada's tobacco laws and to protect young Canadians from new and dangerous novelty tobacco products. We hope that all parliamentarians will work together to support speedy passage of this law." .

In recent years, candy-flavoured cigarillos and other novelty tobacco products have become a significant threat to Canadian youth. Health Canada data released at the end of May shows that sales of cigarillos have grown by over 300% per year between 2001 and 2006, from fewer than 50,000 units to over 80 million.

The groups point to weaknesses in current tobacco laws as a cause of this growing problem. Canadian law distinguishes between tobacco products which are wrapped in paper made from tobacco leaves (cigarillos) and those which are wrapped in paper made from trees (cigarettes). Unlike cigarettes, which cannot be sold in packages with fewer than 20 units, cigarillos can be sold individually and without health warning messages and are not included in many other tobacco control measures.

Robert Walsh, executive director of the Canadian Council for Tobacco Control said, "Loopholes in the current law have allowed tobacco companies to mask a deadly and addictive product in candy flavouring, to package it in bright colours, to price it like a candy bar and to induce one-third of Canadian teenagers to give it a try. The legislation introduced today would put a stop to this irresponsible and deadly commercial activity."

The groups are calling on parliamentarians to continue their tradition of pan-partisan support for private member's legislation to reduce smoking. Neil Collishaw, research director for Physicians for a Smoke-Free Canada said, "When it comes to tobacco laws, private member's bills have made enormous contributions to public health."

"More than a quarter of a million Canadian teenagers have smoked one of these dangerous products in the past month. Each of these children deserves the protection that this law would provide," said Aaron Levo.

Source: Yahoo Finance, 16 June 2008  
Link: http://tinyurl.com/5dgrd2

Uganda: Tobacco firms should be socially responsible

An opinion piece in New Vision (Kampala) by Denis Oguzu.

I wish to draw attention to the damage tobacco growing has caused to the environment in West Nile, the North, Bunyoro and south-western Uganda.

Several acres of woodland have been felled for flue-cured tobacco production in Maracha, Arua, Koboko, Yumbe, Hoima, and Masindi districts. Forests that would otherwise have filtered carbon emissions and protected arable land from erosion are removed, and temperatures in the tobacco-growing districts are rising.

Firms like British American Tobacco, Leaf Tobacco and Commodity, as well as Continental, in their fallacy, give eucalyptus seedlings to farmers supposedly to replace chopped forests without considering the long maturity period these tree require and the impact it has on the water table.

The tobacco firms do not plough back their profits yet they hype their cosmetic social responsibility programmes. Apart from the trivial contribution through the mandatory 2000 Crop Ordinance that Arua enacted, tobacco companies have not done much for the community. Since tobacco growing is laborious and an all-year round activity, many food crops are foregone by tobacco farmers, which has caused food insecurity.

Besides, during peak seasons, students stay home harvesting tobacco, leading to poor academic performance and child labour. Tobacco companies have not trained farmers to invest their little earnings and this leaves them in a cyclical poverty trap.

The negative impact of tobacco growing includes the accumulation of chemical compounds in soils and declining fertility. Tobacco production negatively affects people's health. The effects include nicotine poisoning, pesticide exposure, respiratory effects, musculoskeletal and other injuries.

The Government should assist tobacco growers in West Nile to produce alternative crops that thrive well there without fertilisers or pesticides. The tax revenues from tobacco exports and products should not shroud the negative effects on tobacco on the population.
 

Source: New Vision, 18 June 2008
Link: http://tinyurl.com/5skc38