Category: big tobacco manufacturers

Of course, we’re being far too tough on Big Tobacco, as so many contemptuous refer to it, after the failure of its high court challenge to the plain packaging legislation. If we just open our minds to the fact that British American Tobacco and others are saying, we can see how amazing they are public spirited.

They are worried not for themselves but about ”serious unintended consequences” unintended consequences they fear plain package will bring. According to their spokesman, Scott McIntyre, his only advantage would be” organized criminal groups that sell illegal tobacco on our streets.”  Illegal black market will continue to grow, when all packets look the same, and it’s easier to copy,” he said.

In case you have not heard, the country is faced with the rampant problem of illegal tobacco, a” crime of smuggling now three times as many counterfeit and contraband cigarettes” in Australia last year, compared with a year earlier. In general, the illegal tobacco market is equal to 13.4% of the legal services market. As the industry know? He commissioned the report Deloitte, Financial Services. The industry was concerned about the illicit tobacco scary market within a few years. Why? Not for myself, of course, but for what it costs the taxpayer in lost tobacco excise taxes.

You often see me criticize the industry trying to get taxpayer subsidies, but the tobacco people are all different. Last year, they ran ads desperately tried to dissuade the government from continuing with the simple concept of packaging and thus oblige industry to cost taxpayers millions in legal fees in response to a high court challenge Big Tobacco – not to mention the billions the government stood to lose in compensation should the court agrees that the government has assigned the intellectual property in the industry.

Fortunately, the court did not agree. He was also awarded costs on the industry, which I’m sure will come as a great relief to the patriotic people of tobacco. But the industry’s concern for the taxpayer does not end there. He railed against the 25 per cent increase in tobacco excise taxes in 2010 due to falling revenue will cause the jump in cigarette prices have more than the legal market in the hands of discounted criminal black market.

You can think of your innocence, plain packaging will reduce the number of young people taking up smoking, but that’s where you’d be wrong. As the industry is due to the full page ad last year, just a” package can manage the cost of tobacco down. And the decline in prices will make tobacco more accessible to young people.” British American boss developed elsewhere, it was a worry because it would undermine the health of the government’s initiative to curb tobacco use. See what caring people we are dealing with?

I think that plain packaging may undercut the” premium brands of cigarettes.” That would be good, but it would be easy eliminated by increasing the tobacco excise tax. Tobacco companies are not just critics. According to the Australian Association of retail, retail” now facing the costs of simple packaging operations, which will see a significant increase in the time required to complete the transaction, as well as all products are virtually identical.”

”Increases operating time, estimated business to half a billion dollars, equivalent to 15,000 jobs,” we were told. No back-of-envelope was offered in support of this remarkable claim, and in this case I would be inclined to regard it with skepticism. But what about the alleged thriving black market – how concerned should we are about this? Not really. We really only got the word in the industry about how great he is and detailed criticism, Quit Victoria calls into question the reliability of the report prepared by Deloitte.

The calculations are based on a survey of Deloitte with a very small sample, which does not seem to be completely random. He asks smokers about their purchases vintage tobacco, contraband cigarettes and counterfeit cigarettes and adds them to the answers together, even if you expect virtually all fake smokes also need to be contraband. As people know, cigarettes they purchased are illegal? The trouble is that these days a lot of cheap, foreign-made, funny cigarettes are imported legally.

Quit Victoria used an official survey by the Australian Institute of Health and Welfare in 2010, which had a very much bigger sample, to estimate the total use of illicit tobacco products is more like 2 per cent to 3 per cent of the overall market.This means loss of income of the taxpayer close to $ 165 million a year, over $ 1 billion. I’m sure that taxpayers everywhere to thank the industry for its concern on our behalf, but I do not think we should lose too much sleep over it.

Tobacco companies have a big problem. Their products kill about 1,200 of its customers every day or about 440,000 people a year across the United States.With the exhaustion like that when they go to find a replacement for all those, the disappearance of smokers? Where do they go to work the legions of new users of tobacco? Parents beware: they go for our children.

Despite new laws and legal settlements, which restrict how tobacco companies can market their products, the industry spends more money than ever to encourage their children, and my thinking that tobaccos use is normal and acceptable part of growing up.Marketing of cigarettes and smokeless tobacco products now exceeds $ 10 billion a year – or about $ 1 million per hour – in accordance with the Federal Trade Commission. This is a 52-percent increase in spending, as in all branches of the legal settlement, imposed strict controls on tobacco promotion in 1998.

The report recently released by the U.S. health care, tobacco use among youth and adolescents concluded that scientific evidence is “consistent and consistently point to the deliberate marketing of tobacco products to young people as the cause of tobacco use by young people.”It makes sense for Big Tobacco to send their sales pitch in children. According to the chief doctor, hardly anyone came, on the subject of tobacco marketing after adolescence. Among adults who smoke daily, 88 percent started smoking before the age of 18 and 99 percent started before 26 years.

The sad result of the power industry marketing to children is a flattening of more than ten years of progress in reducing youth tobacco use began at the national level. Now, every day approximately 3,800 children in the United States smoke their first cigarette, according to the report of the chief physician. Nearly 25 percent of the national high school smoke, compared with about 20 percent of the adult population. At the same time, about 1 in 10 male high school students use smokeless tobacco, and 1 in 5 smokes a cigar, the report said.

Fortunately, the Marin County rates of smoking among young people is much lower and only about 5 percent of 12 – to 17-year-olds reported smoking cigarettes. You may wonder how the industry can spend so much money on marketing now. In the end, tobacco advertising is banned on television, radio and billboards, and it is much less common today in magazines and newspapers.

Long gone are the kid-friendly cartoons, like Camel and lasting icons, like a man, Marlboro brand of cigarettes. So where does all the money spent? Short answer: It’s Time posted where it can reach their children in the smart way to encourage them to become new customers. Campaign for Tobacco-Free Kids, the advocacy group based in Washington, DC, cites four main strategies:

• Increased advertising and discounting of tobacco products in shops, places where two-thirds of teenagers have been known to visit at least once a week, candy, soft drinks and snacks after school. Many of these stores are plastered with famous images of tobacco and branding, inside and out. Tobacco companies often give discounts retailers are making their products more affordable for cash-strapped young consumers.

• Increased sales of smokeless tobacco, as well as the promotion of new smoke-free candies. Traditional chewing tobacco is being actively marketed in flavors such as cherry and apple trees, and new smokeless, that look like breath strips, mint chocolate or even a toothpick will become available. Some of these new products, while very addictive, dissolve, like candy and it is easy to hide in the school or at home.

• The spread of cheap, sweet scented miniature cigars. With colorful packaging and flavors such as chocolate, strawberries, peaches and grapes, industry circumvent the federal ban on candy flavored cigarettes, selling these products as “little cigars.” These issues are attractive to young customers.

• Increasing cigarette brands most popular among children. Knowing that more than 80 percent of adolescent smokers prefer the three popular brands in the industry recently rolled out a new cigarette product lines aimed at women and other target groups, using these familiar brands.

Even many of the new youth smokeless products have this baby attractive names and logos. Unfortunately, the tobacco industry proves once again that he decided to enslave the next generation of its toxic products. There is hope, however. Young people who do it in their teens and in their mid-20s without becoming addicted to cigarettes and other tobacco products will be lost forever, like Big Tobacco clients. If parents, teachers, health workers and other adults can work together to ensure that our young people who are vulnerable through age without tobacco is part of their lives, we can hasten the day when no one in Marin County kills more from tobacco-related causes.

The three largest U.S. companies, tobacco, said Monday they have paid a total of $ 6.5 billion this year in the states of the United States, unchanged since 2011, the 1998 national agreement, which obliges companies to help cover the health bills of patients smoking .

Altria (in MO.N) Philip Morris paid $ 3.5 billion, but the Marlboro brand of cigarettes contests the $ 206 million of this amount and put the money on deposit. The national settlement, which involved the majority of states, is intended to equalize between the two companies which have signed it, and those who did not. Thus, payments to the signing of the companies reduced the amount of market share they lost to firms that did not participate in the settlement.

However, the participating tobacco companies for years have argued reductions were not large enough, and large companies have the amount they are challenged in the transaction. Reynolds American Inc (RAI.N), which makes Camel, had paid $ 1.9 billion and put $ 469 million it is dispute in the transaction.

Lorillard (LO.N), known for its Newport brand, said it paid $ 1.1 billion to $ 98 million of that amount to put into storage. States, counties and the city sold about $ 40 billion of bonds secured more than $ 200 billion of payments that cigarette manufacturers agreed to with the passage of time.

The National Association of Attorneys General last week estimated that the cigarette manufacturers would pay claims of $ 6.1 billion, compared with $ 6.03 billion last year. This figure does not include the disputed amount, and refers to the payment of all tobacco companies.

Last year, the top cigarette manufacturers, Philip Morris, Reynolds American and Lorillard, paid $ versus $ pure 5649000000 5727000000 in 2012. Nevertheless, the prospects for U.S. municipal bonds are only slightly better than tobacco, because sales of cigarettes decreased less steeply than expected, and the tobacco companies should pay a little more of in the national agreement.

“We’re not out of the woods yet,” said Richard Larkin, Iselin, New Jersey director of credit analysis to HJ Sims, noting that the risk that cigarette sales could fall more in the next year. In addition, tobacco companies can win the right to preserve some of the billions of dollars they say they do not have states. The National Association of Attorneys General, whose members negotiated the 1998 settlement of a cigarette, said that the number of cigarettes sold fell only 2.9 percent compared with the expected decline of 3.5 percent.

In 2010, cigarette sales fell much steeper: 6.37 percent, according to Standard & Poor’s Ratings Services. In 2009 sales fell 9.3 percent, he said. California, Ohio, Virginia brand of cigarettes can get In contrast to the general sector respect of tobacco, however, the debt is sold in three states should benefit from the latest data.

This is because, Ohio, California and Virginia all have been identified in the reserves last year to pay off the bonds and higher payments this year may help to minimize the extent to which these three states will have to tap reserves, according to analysts.

Ohio sold $ 5.2 billion of tobacco bonds in the past year to bring about $ 8 million from the reserves, he said. This year, Ohio could avoid pushing reserve. Virginia has sold more than $ 1 billion in tobacco bonds, and this year, Larkin said that the conclusion is likely to be less than $ 1 million.

California has sold two bond issues of tobacco. Over $ 4.4 billion question, he had to leave about $ 7.7 million of stock last year. This year in California, probably still have to use reserve funds to make payments on these bonds – but only about $ 1.8 million, according to Larkin.

California has also sold another $ 3.1 billion of tobacco bonds, but this debt with the support of public spending so that its withdrawal from reserves of $ 5 million last year, was not so alarming, said Larkin. But Blake Anderson, managing director of the San Francisco group of high-Mesirow Financial, in warning that any market benefits are not sure what you need for tobacco bonds of these three states.

“Somehow, the market comes to realize that this is another factor entirely.” This is because the market of tobacco bonds and illiquid debt is so complex that significant research is needed to select the winners and losers, analysts said.

So far this year, tobacco bonds have largely been met as well as other high-yield municipal bonds, will benefit some growth in investor risk disappointment with the low yields offer a safe investment, analysts say. But these spotted, because prices vary depending on the size of the block, and the bid / ask spreads are usually wide. This makes the identification of trends.

The specific transaction, however, show high yields, which can be obtained with such a duty – and some of the recent tight spreads on AAA-scale data compiled by Municipal Market, part of Thomson Reuters.

For example, $ 1 million block of Golden State Tobacco Securitization California debt traded at a yield of 7.13 percent on April 16, according to EMMA, the database is created municipal securities rulemaking board. The issue, which matures in 2033, has a 5 percent coupon. December 15, 2011 block of 10 million dollars has changed to 8.06 per cent yield.

A similar pattern was observed with a certain debt of Virginia. $ 1 million blocks of tobacco bonds with a maturity of Virginia in 2047 and to 5 percent coupon traded on April 13 at 7.78 percent yield on EMMA. In contrast, more than $ 23 million block trading at 8.635 per cent return on December 7, 2011.

Dear Mr. Berko: I have $ 23,000 that I want to invest and grow revenue. I asked my broker about tobacco stocks because they show very good yields. He told me that the tobacco industry is in a ditch in the next five years, and fewer people smoke today, and hundreds of billions of dollars in settlements they did with the state governments will soon hurt them very badly.
I know the tobacco companies have been fined hundreds of billions of dollars, but it does not seem to affect their share price, dividends or profits. How is this possible? Do you think that this is a good action, and if you do that you bought? – H.E., Akron, Ohio
Dear H.E, it would seem a huge tobacco settlements (more than $ 200 billion paid to the state attorneys general) is not worth the big tobacco (Altria, British American Tobacco, Lorillard and Philip Morris) more than a few pence and six pence. Big Tobacco has hired ten years ago, sleek and most intelligent, creative, and “snake” of lawyers to ensure continued profitability and stability in the tobacco industry. Whether we like it or not, cigarettes are essential to the health of the economy, vital to the budgets of public administration and for millions of Americans who depend on tobacco sales and profits, to earn a living.
Therefore, when the jury decided the tobacco industry was guilty of sin, Big Tobacco paid billions of dollars – but only by increasing the price of a pack of cigarettes. And in the agreement paved the tobacco lawyers for more than ten years ago, Big Tobacco got almost everything it wanted. States agreed that they would never sue Big Tobacco and tied their payments to the State tobacco products. Thus, if a reduction in tobacco sales, the states receive less money, in effect putting the state in the tobacco business.
Remember 25 years ago, when a pack of cigarettes costs about 50 cents to 75 cents? Today in many states, the package costs about $ 7 to $ 9, which includes $ 1.01 in tax on the federal government, plus $ 3 to $ 5.35 in tax for the state, as Connecticut, Hawaii, New York, Rhode Island and Washington.
Multibillion-dollar agreement with the states was food for anti-smoking lobby, he received millions of dollars on education programs, cancer research and related support groups. And if big tobacco sales fall, the state will see less revenue from taxes on tobacco products. Our state can not help becoming addicted to tobacco and survival of all those programs, employing more than 110,000 Americans.
Americans do not realize the importance of taxes on tobacco products are for their welfare. The tiny state of Montana raised more than $ 85 million from taxes on cigarettes in 2010. New York has collected more than $ 1.5 billion, while the federal government was richer by more than 18 billion dollars. Yes, a billion! In 2010, states, counties, cities and the federal government collected more than $ 200 billion in cigarette sales taxes. What is it! And smokers are paying 100 percent of the cost of their sins. Anti-smoking lobby was a big failure, but its senior management are paid big money.
Over the past five years, the big tobacco has increased revenues, profits and dividends, very nice, and the share prices of companies also did well. So I think that (MO-$ 30,46), Altria Group in the $ 1.64 dividend brings the 5.7 per cent (LO-$ 130,34) Lorillard in the $ 6.20 dividend brings the 4.9 per cent and Phillip Morris International ( PM-$ 84,62) $ 3,08 brings dividends represent 3.9 per cent above the average level of investment income, earnings and dividend growth. Each of these companies produces strong cash flow, which allows them to maintain significant benefits, despite the challenges. And, despite the negative factors that surround this industry (which I believe are taken into account in their actions), these companies have good cost management and effective pricing.
Go ahead and buy these three. I think they will do, but in the next few years, as it did in the past few years.