Tobacco news and articles!

Japan Tobacco Inc. (2914.TO) Wednesday said it swung into a net profit in its fiscal fourth quarter, but it expects a tough year ahead as it hikes prices to absorb a looming government-mandated tobacco tax hike. 

The world's third-largest tobacco company by sales volume after Philip Morris International Inc. and British American Tobacco PLC, said it generated a Y31.5 billion group net profit in the January-March quarter, considerably better than a year-earlier loss of Y8.0 billion. The company attributed the improvement in its bottom line to increased tobacco sales in overseas markets that offset a sales drop at home. 

It also booked a special profit of Y16.7 billion, reflecting smaller penalties that its U.K. tobacco units Gallaher Group Ltd. and Gallaher Ltd. will pay the U.K. Office of Fair Trading. The special profit mirrors the discrepancy between the provision already set aside for the penalties, and the actual payments. 

In the just-ended fiscal year, the company, commonly known as JT, posted revenue of Y1.483 trillion for the quarter, down 0.2% from Y1.486 trillion in the previous year. Group operating profit rose 29% to Y43.9 billion from Y34.1 billion. 

Separately, JT said it will raise prices for tobacco products sold in Japan effective Oct. 1, with the magnitude of the hikes differing by the type of tobacco. JT plans to raise the price of its popular Mild Seven and 32 other brands by Y110, or 37%, per pack of 20 cigarettes, bringing the price of tobacco to Y410 per pack. A pack of its Seven Stars brand and 13 other brands will cost Y440 compared with the current Y300. 

"The planned tobacco tax hike is unprecedented so we are projecting a steep decline in demand," said Hiroshi Kimura, JT president and chief executive. "We will keep making efforts to cut back costs, but the impact of the tax hike is not something that such efforts alone can cancel out." 

Expecting the initial rush of consumers stocking up on cigarettes to give way to a steep fallback, JT expects domestic sales of tobacco in terms of volume to tumble by 16%, or 24.3 billion cigarettes, for this fiscal year ending March 2011. 

That would siphon off Y74 billion from JT's profit from its domestic tobacco business on an earnings before interest, tax, depreciation and amortization basis for this fiscal year. Even after taking into account improved profit margins as a result of the price hike and other factors, JT estimates its EBITDA to be pulled down by about Y32 billion on a net basis. 

The Japanese government will hike tobacco taxes by Y3.5 per cigarette effective Oct. 1, or Y70 on a pack of cigarettes -- the first tax hike since July 2006 and marking a much steeper pace of increase when compared with previous hikes. Tobacco taxes already make up 63% of tobacco prices with a cost of Y300 per pack. 

While the Japanese government has increased its tobacco tax three times since 1998, limiting the magnitude of the tax hike to about Y1 per cigarette each time, tobacco has continued to generate about Y2 trillion in tax revenue annually. 

But Japan's new administration, led by Prime Minister Yukio Hatoyama, called for greater consideration of the health impact of cigarettes, leading to the steeper pace of tax increases. 

For the current fiscal year, the company expects a net profit of Y133 billion, down 3.9%. Revenue is pegged at Y5.980 trillion, down 2.5%. 

In addition to the debilitating effect of the tobacco tax hike, the company said it will book Y13.8 billion special loss for the July-September quarter to reflect a payment made by Canadian unit JTI-Macdonald Corp. to settle a longstanding dispute over alleged cigarette smuggling. 

JT has been in a legal dispute with the authorities in Canada, which in 2004 claimed JTI-Macdonald had profited from contraband trade in cigarettes, and that it didn't pay tax on those profits between 1990 and 1998. 

JT obtained the unit via the 1999 purchase of the international operations of RJR Nabisco. 

Japan Tobacco compiles its earnings based on Japanese accounting standards.

Sparkling fountains, shady trees, lush grass and scampering squirrels announce the arrival of spring at Southern Methodist University. 

Brochures and college recruiters proclaim the campus’ beauty, but a quick trip behind Fondren Library reveals a different image. The ground is littered with discarded cigarette butts.

Creighton Holley, a junior corporate communications and public affairs major, explained that this area is a favorite haunt of late-night students on smoke breaks. 

“Most of the smokers are at the library—and mostly at night,” Holley said.
Holley showed frustration at the smokers’ inability to properly dispose of their spent cigarettes, “It’s such a beautiful campus, the least smokers could do is pick up after themselves.”

SMU’s community standards specify that smokers must stay a minimum of 25 feet away from buildings and throw away all cigarette ends. Yet, students continue to casually flick butts on the ground, despite this policy. 

Some smokers on campus disregard trashcans and ashtrays even when they are within reach, as evidenced by the butts scattered around the bases of trashcans on campus. One student complained about this behavior.

“I do see a lot of cigarette butts in the actual ashtrays, but when I see them on the floor it makes me think someone is really lazy,” Vanessa Tapia, a junior public policy major said.
Tapia’s opinion of litters’ lethargy is shared by experts.

Apparently, “90 percent of littered cigarette butts are dropped within 10 feet of an ashtray,” according to Amy, Allie and Dave Steinmetz of the No Butts About it Litter Campaign on their awareness website.

“It kind of surprises me... our campus is gorgeous, it’s like seeing a zit on a beautiful face; it just looks bad,” Tapia said. 

The large groups of prospective students visiting campus each week may not find SMU’s blemishes very appealing. Littered cigarette butts not only detract from the beauty of 

SMU’s campus; they are also harmful to the environment.

Smokers may think their discarded cigarette ends will decompose like paper or cotton. 

However, many websites like CigaretteLitter.org and WhyQuit.com tell another story.

These sites inform visitors that, like all litter, cigarette butts harm the environment. Almost every cigarette filter contains acetate, a material similar to plastic that can take upwards of 20 years to biodegrade. WhyQuit.com explains that while decomposing, cigarette butts release toxins like nicotine and tar into the environment. These toxins harm ecosystems and can kill wildlife and even leak into water supplies.

If aesthetic and environmental health concerns will not compel smokers to walk those extra few steps to the trashcans, perhaps money and numbers can offer a more persuasive argument. 

The Steinmetz’ stated that each year in America 176,000,000 pounds of butts wind up on the ground and this can cost the average university around $30,000 to clean up their campus. According to Campus Planning and Plant Operations, SMU spent more than twice the average to remove cigarette butts from our campus with cleanup totaling just over $66,000 in 2008.

Kathe Lee, a transfer student from Richland College said. “It bothers me tremendously to see cigarette butts on the side of the road or dumped in a pile beside a vending or trash collecting area. It should be illegal.” 

Littering in Texas is illegal. Since cigarette butts are considered litter, violators can be and are punished.

The Don’t Mess With Texas’ website reveals that people who litter face fines of up to $500 for initial offenses and up to $2,000 and 6 months of jail time for multiple infractions. Regardless of the law, butts are still littered. 

Many advocates of proper cigarette disposal like the Steinmetz’, WhyQuit.com and CigaretteLitter.org suggest that smokers litter by habit, rather than with malicious intent. These groups argue that if educated of cigarette butts’ harmful effects smokers would quit littering. 

Keep America Beautiful has developed the Cigarette Litter Prevention Plan, which relies heavily on education. Keep America Beautiful reported an average success rate of 46 percent reduction of cigarette litter in participating communities. 

Interviewed SMU students like Holley agreed that higher awareness is the best route to prevention. Even smokers who admitted to littering, but wished to remain anonymous, listed better enforcement and education as keys to reducing litter.