Top 10 international tobacco news stories of 2017

 In 2017, the international tobacco industry experienced another extraordinary year: product recalls, corporate acquisitions, and tobacco smuggling……

  In 2017, we witnessed many events in the international tobacco industry: global, regional, happy and unhappy……   Today, we have sorted out ten important international tobacco news items for you, analyzed their context, and commented on their gains and losses.   Altria Group recalls some smokeless tobacco products   On January 31, the American Smokeless Tobacco Company, a subsidiary of Altria Group, notified the U.S. Food and Drug Administration that it would voluntarily recall some smokeless tobacco products already on the market. The recalled smokeless tobacco products were produced at a factory in Illinois, USA. The main reason for the recall was that eight consumers found metal debris in some cigarette cans with cigarettes in their mouths. Although there were no reports of consumer injuries, Altria Group decided to recall the products. American Smokeless Tobacco immediately instructed wholesalers and retailers to quarantine the inventory products within the recall scope and sent sales representatives to recycle them. Altria Group immediately released the news to the outside world, reminding consumers not to use if they purchase products within the scope of recall, and has opened a toll-free number to facilitate consumers to call the company to return money.   comment   Tobacco products are actually recalled? Doesn't seem to be common. Among the vast amount of Internet information, among the tobacco product recalls that can be retrieved, except this time, Philip Morris voluntarily recalled US$100 million worth of cigarettes with defective filters on May 26, 1995. The recall cost Philip Morris $200 million. Although the two recalls were 22 years apart, and the company's name changed to Altria, the company's responsible attitude towards consumers is impressive. No wonder the American investment community calculated this result: if you bought $1 worth of Philip Morris stock in 1968, you would net earn $6637 (including dividends) in 2015. Even if you only bought it in 2008, it had grown by nearly 300% by 2015. It seems that this kind of high growth has its origins.   Empire Brands sues Philip Morris International for illegally selling iQOS   In May 2017, Imperial Brands (formerly Imperial Tobacco) provided evidence to the New Zealand Ministry of Health and the Otago Daily News, claiming that its competitor Philip Morris International illegally sold the heating non-burn device iQOS to New Zealand consumers on its website. The evidence provided by Empire included photos of consumers ordering the product and filled out online orders, and the company said Philip Morris did not mark the product with appropriate legally required health warnings. Philip Morris International publicly responded that Empire brands were just taking advantage of the situation because they did not have similar products themselves and were at a competitive disadvantage in the market.   comment   Looking around the world, Empire brands have fallen out of the cross-border tobacco competition. Not only is the gap wider with British American Tobacco, Philip Morris International and Japan Tobacco in terms of sales of traditional cigarettes, but it is also the only one among all multinational tobacco giants that does not have its own heated, non-combustible products in terms of new tobacco products. Although Empire brand executives have shown a dismissive attitude towards products that are heated but not burned, this rare disclosure of their peers reveals helplessness and helplessness in the face of fierce market competition.   British American Tobacco successfully acquires Renault America   On July 25, British American Tobacco completed a US$54.5 billion (approximately RMB 360 billion) acquisition of the remaining 57.8% stake in Renault America. Previously, British American Tobacco already owned a 42% stake in Renault America. It is reported that Renault USA has a 34.6% share of the U.S. tobacco market. This acquisition will make the United States surpass Brazil, Eastern Europe, South Africa and Southeast Asia to become British American Tobacco's largest market. In addition, the acquisition of Renault America will also strengthen British American Tobacco's market position in fields such as e-cigarettes and steam cigarettes.   comment   The emergence of British American Tobacco was the product of a compromise after the fierce collision between the tobacco industries of the United States and the United States. Who would have thought that this company, which had both Britain and America in its name, could not actually sell cigarettes in the UK or in the United States. According to the 2016 company report, British American Tobacco's acquisition of Renault America will not make British American Tobacco the champion in cigarette sales (there is still a gap of 1.26 million cases from the industry's leader, Philip Morris International), but it will allow it to outperform Philip Morris International in terms of sales (exceeding Philip Morris International by US$8.35 billion), and it will also greatly overtake Japan Tobacco, which is pursuing it (the sales gap between the two in 2016 was only US$1 billion). From Japan Tobacco's US$14.7 billion acquisition of Gallagher in 2007 and Imperial Tobacco's 15 billion euro acquisition of Atadis, to Renault America's US$27.4 billion acquisition of Lorillard in 2014, British American Tobacco's move once again proved that mergers are still the main way for multinational giants to become bigger and stronger.   #p#Pagination Title #e# India investigates Bloomberg Charity's funding of anti-tobacco lobbying   On August 29, Reuters reported that India has been investigating how the Bloomberg charity founded by American billionaire Michael Bloomberg funded local non-profit organizations to conduct anti-smoking lobbying. Michael Bloomberg has pledged US$1 billion to help India and other developing countries control tobacco. Since 2014, the Modi government has gradually strengthened its supervision of non-profit organizations, saying these organizations have harmed India's national interests. A statement drafted by the intelligence agency of the Indian Ministry of the Interior stated that it was under the lobbying of the Bloomberg Foundation that India finally adopted the radical plan proposed by the health department to account for 85% of the cigarette case warning area, and abandoned the proposed plan proposed by the relevant congressional committee. The proposed plan of 50% of the cigarette case warning area has had a bad impact on the livelihoods of 35 million people in India. In April 2017, the Ministry of the Interior sent a letter to the health department asking them to report on the acceptance of foreign donations during the anti-tobacco lobbying.   comment   The infiltration and erosion of the sovereignty of developing countries by non-governmental organizations in developed countries is an act that all developing countries have to be vigilant against. Tobacco control is ultimately part of national social governance. It is related to economy and politics. Why do I lie to others about my family's affairs? Why do you have to come all the way to point fingers and make irresponsible remarks? This is probably the reason why India is dissatisfied with Bloomberg Fund.   Australia's tobacco control indirectly assists organized crime   In late October, a research report by the Australia federal government revealed that despite an increase in national tobacco consumption and a 12.5% increase in tobacco excise tax, the country's tobacco tax revenue still fell by US$237 million compared with official estimates. Legal tobacco retailers, tobacco companies and industry experts claim this is evidence of a thriving illegal tobacco black market in Australia. It is estimated that the black market in tobacco costs the Australia government US$1.5 billion to US$4 billion in tax revenue every year. ldquo; All the federal government's increased consumption tax (due to tax increases) has gone into the pockets of organized criminals! rdquo; Rohan Pike, founder of the Tobacco Commando of the Australia Border Force and an illegal trade expert, joked.   comment   Implementing plain packaging and significantly increasing tobacco taxes. In recent years, Australia has been in a rush to control tobacco. Regardless of it, it has gone its own way, and once led the trend. And how effective these tobacco control measures are, multinational tobacco giants and Australia government have their own arguments. As the saying goes, every benefit will produce a disadvantage. The information from the military quoted by the Australia Financial Review at least proves that smoking control with an iron fist regardless of reality and cost has not only won crazy calls from anti-smoking extremists, but also won loud cheers from criminals!   North Korea smuggled cigarettes to help nuclear weapons test   On October 5, 2017, David Luna, head of the OECD Anti-Illicit Trade Task Force, published an article stating that North Korea is using illegal cigarette trade to support its nuclear weapons program. Currently, the United Nations prohibits the export of luxury goods to North Korea, and each member state can compile its own relevant list. Sources have revealed that North Korea is re-exporting cigarettes produced for British American Tobacco in Singapore. At least 15000 boxes of NK555 cigarettes, valued at approximately US$6.3 million, have been smuggled back to ports in Vietnam and the Philippines from North Korea's Nampo Port. These cigarettes may be sold back to South Asian markets or shipped to wealthier Middle Eastern countries. In August 2016, Bangladesh expelled a North Korean diplomat who was caught on-site while smuggling more than 1 million cigarettes through containers.   comment   From North Africa to the Middle East, from the Middle East to Western Europe, tobacco smuggling not only impacts the order of the international tobacco market and erodes the government's legitimate tax revenue, but also profoundly affects the international security situation by nurturing terrorists. However, who would have thought that cigarette smuggling would be intertwined with the proliferation of nuclear weapons in East Asia. Thinking of the fact that a leader of a certain country on the Korean Peninsula once smoked leisurely next to a missile launch vehicle that was being refueled not long ago, no one dared to dissuade him from smoking due to explosive fuel. Who can say that this little cigarette will not cause smoke on the Korean Peninsula?   Japan Tobacco confirms group coaching change in 2018   On November 21, Japan Tobacco's board of directors appointed Masamichi Terabatake to replace Koizumi Mitsumoto as group president. Terabatake, 51, previously served as vice president at Japan Tobacco International, where he was mainly responsible for Japan Tobacco's international business. According to the plan, he will formally perform the duties of group president from January 1, 2018, and his appointment will be confirmed at the shareholders 'meeting in March 2018. As domestic cigarette demand in Japan continues to decline, Japan Tobacco's coaching change aims to inject vitality into its management, use Terabatake's experience to strengthen its international business, and open up the market for heated non-combustible tobacco products. Terabatake said at a group meeting that there is room for growth in overseas markets and promised to strengthen international business through mergers and acquisitions and other measures.   comment   On one hand, Japan Tobacco Group changed its coach, and on the other hand, the stock price of Imperial Brand rose sharply. Considering the new coach of Japan Tobacco's rich experience in international mergers and acquisitions, discussions in the industry about multinational tobacco giants 'four-to-three changes have once again become rampant. As British American Tobacco in front of it ate Renault America, Japan Tobacco has fallen behind in size. Keeping the imperial brand in its pocket has become one of the few strategic choices for it to catch up with and even surpass the two top powers. At this time, Philip Morris International, which has been doing subtraction and focusing on endogenous growth in recent years, seems to have little interest in imperial brands; Renault America, which is still digesting, seems to have no appetite. Now it's Japan Tobacco who has the intention, and it depends on whether the Empire brand has the intention.   #p#Pagination Title #e#EU adopts new EU-wide tobacco tracking system   On December 15, Vytenis Andriukaitis, head of the European Commission's Health and Food Safety Committee, issued a statement deciding to adopt a new EU-wide tobacco product tracking and tracing system. The system will assign a unique identifier to each tobacco product, requiring at least five certification elements on each packaging. This is one of the measures to implement the 2014 EU Tobacco Directive. The European Commission member said that on May 20, 2019, the tracking system and related security measures for cigarettes and hand-made cigarettes will be fully implemented; on May 20, 2024, other tobacco products (cigars, cigarillos and smokeless tobacco products) Tracking and related security measures will be in place. However, due to mistrust of the tobacco industry, the rationalization suggestions put forward by the tobacco industry were not considered at all during the system design process. Even the British Health Department was skeptical about this approach.   comment   Itis Andrioke, a doctor who was once rejected by Lithuania, has become increasingly courageous in tobacco control since he was appointed as a member of the European Union Health and Food Safety Committee in 2014. On November 24, he publicly issued a document questioning the transparency of the tobacco industry and criticizing its silence on anti-smuggling. Japan Tobacco International cited examples to refute this one by one, and ridiculed him that he was more concerned about whether he could make headlines by demonizing a legal industry rather than implementing better supervision. The European Smoking Tobacco Association (ESTA), which represents small and medium-sized tobacco companies, criticized him for being unprofessional and refusing to listen to contrary opinions. ldquo; Studying evidence, considering facts, and listening to the opinions of stakeholders is the responsibility of every good decision-maker. Although angry, Japan Tobacco International's final words were quite pertinent!   Whether to ban smoking at the Tokyo Olympics in Japan remains inconclusive   In order to welcome the 2020 Tokyo Olympics, in 2017, all walks of life in Japan debated whether smoking should be implemented in Tokyo. According to the New York Times, as of November 27, Japan has not yet concluded whether to ban smoking at the Tokyo Olympics. The mayor of Tokyo supports strict implementation of the agreement signed with the International Olympic Committee to ban smoking indoors and in enclosed public places. However, 70% of the Liberal Democratic Party members have resisted the anti-smoking policy, and many Liberal Democratic Party members come from rural districts, where tobacco farmers and mom-and-pop shops have an important influence on the election situation. The Ministry of Health, Labor and Welfare came up with a compromise that 150-square-meter restaurants would not be subject to smoking bans, but all parties did not buy it. The Japan Tobacco League, which represents 60000 tobacco sellers, called indoor smoking bans extremist ideas and bullying smokers. The Japan Catering Association said that smoking bans will reduce the number of diners and may even close small restaurants.   comment   Japan's long-standing debate over the Olympic ban and the competition between all parties once again show that smoking bans cannot be achieved by bullying. Shops have to support their families, and smokers have to relieve their addiction and reduce pressure. Without consensus, standing on the moral high ground and waving the anti-smoking banner, you can be complacent, but you cannot solve the fundamental problem. Japanese smokers believe that just as obedience is their national character, smoking is also their cultural gene that is difficult to give up. Can the tough tobacco control policy cut off the smoking culture passed down by Japanese smokers like flowing water? Public opinion is strong, and I am afraid that the voices of all walks of life in Japanese society cannot but listen.   Multinational tobacco giant bets on heating products without burning   In 2017, multinational tobacco giants began to increase production of heating and non-burning devices and heating rods that do not require ignition. Philip Morris International, which produces IQOS heating non-burning units, has invested huge sums of money to build a new plant in eastern Germany in 2017. The company also manufactures the device and its associated heating rods in Italy, Switzerland and Greece. It is expected that by the end of 2018, the company's production of Marlboro heating rods will double the current level, reaching 100 billion units. Nihon Keizai Shimbun said that in January 2017, Marlboro heating rods 'share of the Japanese tobacco market was 7.6%. In May, Philip Morris International launched iQOS in South Korea; in July, Japan Tobacco began selling its heated non-combustible product Ploom Tech through terminals. In mid-August, British American Tobacco opened a flagship store of the Glo brand in Seoul, and in October it launched this heated non-combustible product into the Russian market.   comment   In recent years, new tobacco products have come in fierce fashion. Tobacco giants have rushed to launch electronic tobacco products around the world. Traditional tobacco products are facing unprecedented pressure to be replaced. Among the various new tobacco products, the non-heating and non-combustible products pose the greatest threat to traditional cigarettes. This can be seen from the share of Marlboro heating rods in the Japanese tobacco market in January 2017. Some people say that among all kinds of innovations, the ones that are most easily accepted are often those that find a delicate balance between familiarity and novelty. Among all kinds of new tobacco products, the three multinational tobacco giants are all betting on heating and not burning products. It seems no accident.# p#pagination title #e#