ASH Daily news for 11 December 2015



  • Tobacco firms challenge packaging law – Day1
  • Kenyan taxman invites anti-corruption watchdog to investigate staff over BAT bribery scandal
  • Northern Ireland: Under-staffing will prevent smoking ban in cars being enforced
  • BAT slips after fresh twist in bid talk
  • Boys’ fitness affected by smoking mothers – new research shows
  • Standardised packaging to cost Big Tobacco $5bn a year, says Goldman Sachs
  • US: North Dakota only state spending enough on tobacco prevention
  • Canada: Partner believed winning Alberta tobacco-litigation team would have political advantage, email suggests
  • The data on plain packaging that tobacco companies don’t want you to see

    Tobacco firms challenge packaging law – Day1

    Some of the world’s largest tobacco firms have gone to the High Court to challenge the lawfulness of the government’s new packaging rules.

    Mr Justice Green, sitting in London, is being asked to rule on the legality of the new “standardised packaging” regulations in a judicial review action by Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International.

    At the start of an estimated six-day case, David Henderson QC, for Japan Tobacco International (JTI) said the companies were “entitled to know” whether the regulations “are lawful or not.”

    He told a packed court: “The claimants manufacture products which are lawful, which contribute approximately £10bn per year in excise duty alone for the UK exchequer, which are used by some 19% of the adult population, and which the Secretary of State … has never sought to ban.”

    Anderson, referring to written legal submissions before the court on behalf of the Secretary of State, said he was “quite wrong when he says that we are trying to protect our ability to market unencumbered by legitimate legislation.”

    The QC submitted that “on the contrary” the industry was “regulated in a way almost unprecedented in any other field.”

    As well as hearing arguments from lawyers for each of the companies and the Health Secretary, the judge will hear submissions from Action on Smoking and Health.

    The firms are putting forward a number of grounds of challenge, including a claim that the regulations violate a number of UK and EU laws, and that they are “disproportionate.”

    In written submissions to the judge, Philip Morris International (PMI) argues that the regulations are “disproportionate and so must be quashed.”

    PMI QC Marie Demetriou said the defendant (the Health Secretary) has “failed to demonstrate” that the regulations are suitable or appropriate to meet the objective of “improving public health by reducing smoking” because “it has failed to establish that the regulations will cause a material decrease in smoking rather than an increase”.

    PMI further submits that the Health Secretary has failed to demonstrate that the regulations “are necessary in that the same public health objective cannot be achieved through a less restrictive means, namely taxation.”

    James Eadie QC, representing the Health Secretary, said in written submissions that the companies manufacture and sell tobacco products “which are the only legal consumer products in the world that cause half of their long-term users to die prematurely.”

    He said: “At the heart of the claimants’ case is the assertion that the regulations will not be effective in achieving their public health objectives.

    “In short, according to the claimants, standardised packaging will not reduce the appeal of smoking and will not achieve a reduction in tobacco consumption.

    “To the contrary, standardised packaging is likely to increase tobacco consumption, and have other adverse consequences such as an increase in illicit trade in tobacco.”

    Eadie added: “The Secretary of State’s case is that none of the grounds of challenge are made out and the regulations are lawful.

    “The claimants’ attack on the proportionality of the regulations is without substance.”

    The QC said that “independent and systematic reviews of the evidence” concluded that branded packaging plays an important role in encouraging young people to smoke, and that “standardised packaging is highly likely to reduce both uptake and prevalence of smoking, and thus will have a positive impact on public health.”

    He argued that if the tobacco industry “is prevented from using packaging to promote its products to consumers or potential consumers, the appeal of cigarettes is likely to diminish, with inevitable reducing effects on smoking itself.”

    See also:
    – Big Tobacco takes UK government to court over plain packaging, Reuters

    Source: Business Quarter – 11 December 2015

    Kenyan taxman invites anti-corruption watchdog to investigate staff over BAT bribery scandal

    The BBC in its investigative show Panorama reported that BAT executives paid bribes to Kenya Revenue Authority (KRA) officials to spy on Mastermind Tobacco — the manufacturer of Supermatch cigarettes — and hand over tax files.

    The expose shows that the KRA officials were also paid to make numerous tax demands from Mastermind, a strategy whose aim was to intimidate and damage the reputation of the homegrown Kenyan firm.

    The Kenya Revenue Authority (KRA) Commissioner General John Njiraini has invited the Ethics and Anti-Corruption Commission to investigate those allegations.

    “We have taken action to seek relevant details in support including the nature of information allegedly divulged, recordings if any of the bribery incidents, individuals involved on both sides (KRA/BAT), amounts paid/received and the evidence to support bribe taking,” Njiraini said in a statement.

    See also:
    – BAT bribed KRA officials to spy on rival Mastermind, The East African

    Source: in2EastAfrica – 10 December 2015

    Northern Ireland: Under-staffing will prevent smoking ban in cars being enforced

    The Police Federation for Northern Ireland (PFNI) has argued that policing a planned ban on smoking in cars with children present will be difficult in the current climate, as its officers are already over-stretched, and it should be left to to focus on solving widespread under-staffing problems rather than having to enforce matters relating to public health.

    The PFNI said that it does appreciate the health issues behind the legislation. Its reservations are based only on the practicality of carrying out the proposed ban.

    Source: Police Professional – 10 December 2015

    BAT slips after fresh twist in bid talk

    Traders speculating about a BAT offer for Imperial Tobacco latched on to news that UBS had ceased coverage of the tobacco sector “due to a reallocation of research resources”.

    UBS is joint house broker to BAT, its lead analyst Nik Oliver having been poached from Merrill Lynch in June.

    Advisers to BAT were rumoured in November to have secured funding to support a potential takeover offer for Imperial, a deal that analysts caution would face huge financial and regulatory challenges. Neither company has responded to the speculation.

    Source: Financial Times – 10 December 2015

    Boys’ fitness affected by smoking mothers – new research shows

    Mothers who smoke during pregnancy risk making their sons unfit in later life, according to new research from the University of Oulu, Finland.

    In the first study of its kind researchers discovered that the sons of women who smoked had worse aerobic fitness by the age of 19 than those whose mums didn’t smoke.

    The research, published in the International Journal of Obstetrics and Gynaecology, analysed the fitness of 508 men with an average age of 19, as they began their military service.

    Of those 59 had mothers who smoked more than one cigarette a day throughout their pregnancy.

    Source: Western Daily Press – 10 December 2015

    Standardised packaging to cost Big Tobacco $5bn a year, says Goldman Sachs

    Goldman Sachs has warned Big Tobacco that it faces a $5bn annual profit hit from the impact of standardised packaging in the next few years.

    Imperial’s profits have a considerable exposure to the UK market and Goldman estimates a 15% downside risk to the company’s UK profit post plain packaging adoption, with “more downside than upside risk” in the UK as the company has a leading position in cigarettes.

    BAT is forecast by the bank’s analysts to be the most exposed of the Big Tobacco groups to the next wave of potential plain packaging adoption beyond the UK and Ireland.

    Goldman estimates the company’s exposure to key markets such as France, Canada and others currently considering plain packaging to be circa 21%, resulting in an estimated 5% downside to group profits in a scenario of these markets adopting the regulation.

    Source: Share Cast – 10 December 2015

    US: North Dakota only state spending enough on tobacco prevention

    A new report argues that almost every state in the country is not spending enough money on tobacco prevention and cessation programs, except for North Dakota.

    The report, released by the Campaign for Tobacco-Free Kids, focuses in part on the billions of dollars states have received since they settled lawsuits against major tobacco companies in 1998. With $10 million set aside for fiscal year 2016, North Dakota is the only state to spend at levels recommended by the Centers for Disease Control and Prevention and was one of five states to spend at least 50 percent of what the CDC recommends.

    Source: Dickinson Press – 10 December 2015

    Canada: Partner believed winning Alberta tobacco-litigation team would have political advantage, email suggests

    Six months before Alberta launched its “independent” process to select outside legal counsel for a multibillion-dollar lawsuit against the tobacco industry, a partner in the legal consortium eventually chosen believed it was in the “forefront” for the potentially lucrative legal claim.

    CBC News has obtained an internal email that suggests Jamie Cuming, a partner in the winning International Tobacco Recovery Lawyers (ITRL) consortium, believed it had an inside track to then justice minister Alison Redford through its pending association with the law firm of her former husband, Robert Hawkes.

    In the email, dated April 16, 2010, the lawyer Cuming details the outcome of a meeting he said he had that morning with JSS Barristers partners Sabri Shawa and Hawkes, whose firm was then being recruited to join the ITRL consortium.

    “Rob is the ex-husband (on a very friendly basis) with Alison Redford, QC (our justice minister),” Cuming wrote in the email to ITRL lobbyist Tim Wade and two of the consortium’s Ontario partners.

    See also:
    – Premier Notley resists calls for RCMP investigation of tobacco-litigation contract, CBC

    Source: CBC – 10 December 2015

    The data on plain packaging that tobacco companies don’t want you to see

    Australia introduced plain-packaging rules in 2012, and the data clearly show that this can have an impact, speeding the decline of smoking that is already taking place in many developed countries.

    Not all tobacco-control measures work in the same way. Simon Chapman, professor of public health at the University of Sydney, explains how some are quick-acting, like raising taxes or taking cigarettes off shelves. Others are on-going, slow-burn measures like plain-packaging rules. These take longer to have an effect, which can nonetheless be long lasting.

    [includes graph]

    Source: Yahoo! Finance – 10 December 2015