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Plain packaging of tobacco products in India

The world is watching Australia progress towards tobacco plain packaging. A number of developed countries have announced that they will follow suit. But, as tobacco companies are losing traction in developed countries, it is likely they will be more and more new markets with their poison.

If the world is watching Australia move to plain packaging, imagine how people can sit and listen, if India, the second largest producer and consumer of tobacco products in the world, has developed a similar policy.

So, when the Australia-India Institute tobacco control task force held a high-level launch of its policy document on plain packaging at the Press Club in New Delhi, we all waited intently for a response from the government and department of health and family welfare.

We were more than encouraged by the response.

Support from the India representative of the World Health Organization and a number of politicians expected. But we were very happy support Shakuntala Gamlin’s in committing to move toward such a policy in India.

Steps in the right direction

Just like in Australia, Indian Tobacco Control law largely prohibits the advertising and promotion of tobacco products. But it is currently excludes packaging and point of sale displays such industry increasingly relies on the package for a promotion.

We’re sure the support of the Indian Department of Health and Family Welfare was not missed by the big tobacco companies. After all, this is a policy that would affect a fifth of the world’s population and a quarter of the world’s tobacco users.

Given the many interests and a powerful tobacco lobby, we know that the introduction of such a policy in India will be difficult. It will take several years and require significant, ongoing advocacy and research.

At the launch of the policy document, the Joint Health Minister also said that it is closely monitoring the progress of Australia, and we can only assume that the Ministry of Health and Family Welfare has been encouraged by the High Court last week. We believe that India can learn from this and other Australian experience in moving to a simple package.

A Helping Hand

Australia provides technical assistance to India in the field of research and advocacy through Australia, India Institute working group, which was convened with the idea of sharing experiences and using his considerable knowledge and experience on a normal package.

This task force was called enthusiasm from the international community in the fight against tobacco, and, encouragingly, from members of the target group in India. Indeed, the severity of Indian partners has prompted us to go beyond our original mandate and conduct research on the acceptability of plain packaging and the production of promotional packaging.

We have also developed useful tools for further dissemination of our work.

Local knowledge

We released the preliminary results of the market research on the target group through the Public Health Foundation of India on the issue of admissibility of plain packaging and the relation to packaging, brands and packaging color to run.

He showed that the children’s interest in tobacco packaging significantly affects colors and branding. This shows the importance of case studies in India, before taking such initiative. We found, for example, that the Indians see the dark gray as the least attractive color, whereas in Australia, chose the color olive green.

The study also found that the context in India is complex, with multiple forms of non-smoked tobacco and smoking, as well as different forms of the latter. All these forms of tobacco should be included in any legislation, as tobacco companies will find loopholes and replace one product to another.

In India, 5500 children try tobacco for the first time every day. Attractive packaging is designed to make sure that it will not be the last time. This policy initiative, if implemented, along with other proven interventions for tobacco control, will save thousands of lives and prevent thousands of young people from becoming addicted to a substance that kills more people worldwide than any other.

We believe that our target group can help Indian organizations such as the International Union against Tuberculosis and Lung Disease and the Public Health Foundation of India to work towards plain packaging. But we need cooperation between health organizations and tobacco control, government agencies and the community, if we want to see a simple package to become a reality on the sub-continent.

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Lifeline for tobacco farmers

The down and out of tobacco farmers of Krishna district are likely to sell their licenses and switch to other crops in the coming season after the recent decision of the Board of Tobacco to allow the transfer of the license barn farmers in other regions of the country, Karnataka on.

Hardly a year goes by when Krishna farmers must struggle to sell their shares mainly because traders tend to offer low prices referring to the poor quality of the crop. As a result, farmers may sell their shares and they do not give up tobacco farming. And it is due to the presence of pits.

Indeed, Krishna farmers require Tobacco Board compensation for the dismantling of their barns, they can move on to other cultures. After hectic lobbying, tobacco Council gave the green light to transfer the license to shed other regions in a recent meeting of the governing body.

Council’s decision to permit the movement of tobacco barns revived hopes of farmers from the areas and Kesara Kanchikacherla in Krishna district, Tullur in Guntur district and Bhadrachalam in Khammam who also would like to quit tobacco products in accordance with their mounting losses.

It is learnt that cash rich farmers of West Godavari district as well as those from Karnataka are rushing to Krishna district to grab the licenses from local cultivators.

According to initial inputs, nearly 1,800 barns in Kesara, Kanchikacherla, Tullur and Bhadrachalam would be cleared for transfer to other regions.

While the farmers in these areas are desperate to get rid of their tobacco licenses, those in Northern light soils (NLS) region Devarapalli, Koyyalagudem, Gopalapuram, Jangareddigudem in West Godavari seek to increase production, as there is a great demand for their shares in the international market .

In the absence of science policy, farmers in the region will be recognized NLS producing huge reserves without permission they nonetheless unload after paying a fine to the board. After careful study of the whole question, tobacco Chairman G Kamalavardhan Rao urged the council to shift unwanted barns in areas where there is demand for them.

Farmers from NLS belts are now trying to get the barns in Krishna, a move that would allow them to be performed by a stock in the future. Sources said that the farmers of West Godavari offer up to Rs 05.06 crore for the transmission license.

Apart from the cost to have the license transferred to the farmer will also have to pay for the construction of the shed, which can add another Rs 1.5 crore to its expenses. “With a license to put an end to year’s headache pay fines, NLS farmers are willing to pay huge sums for its transmission.

This will help us in a big way to clear our debts and go to other cultures, “said Purnachandra Rao, tobacco farmer Kanchikacherla.

Overall, there are about 42,000 authorized barns in the state and another 21,000 barns in Karnataka. Interestingly, the farmers from Karnakata, is believed to have built about 20,000 barns without permission and refused to remove them, despite warnings from the field. On the other hand, the board officials also failed to act tough against such unauthorized pits due to pressure from the public. Meanwhile, farmers of Krishna district are in no hurry to sell their barns in the hope of getting more awards waiting for some time. They hope to get around Rs.8-10 lakh for the barn, if farmers of Karnataka are also line up for the licenses.

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New type of tobacco

Camel orbs are the size and color of Tic-TACs and packaged as breath mints. But each ball packs about the same amount of nicotine as a cigarette. Snus is another product that comes in a bright tin box with Camel logo on the lid. Tiny sacs contain soluble tobacco in mint or vanilla flavors.

Snus also has the same nicotine hit, like cigarettes. Big Tobacco is also a marketing nicotine strips that dissolve on the tongue. Some cigars are now in flavors such as grape and cherry.

The R.J. Reynolds Tobacco Co, for its part, insists on the fact that these products are instead for the adult consumer to which we would reply: Yes, true. What part of the adult tobacco craves white grape flavored blunts?

We recognize that nicotine delivery systems such as patches, chewing gum and even nicotine mints serve less harmful alternative to cigarettes and may help some smokers quit. Those products, many of which were previously available only by prescription, can be targeted to adult users.

But nicotine sold in the form of chocolates can only have one main objective: Getting kids hooked on one of the drugs in the world. And while regulators have taken reasonable measures to keep cigarettes out of the hands of children, they seem to be behind the curve, which prohibit the use of “new tobacco” and other nicotine products minors.

Jane Alleva, director of the local drug and alcohol abuse education coalition All Council On, attended seminars where she learned more about the risks associated with these products. She said the U.S. Centers for Disease Control and Prevention determined fashion as “high risk” teenagers.

She told the assembly of local health directors last week that children can die from ingesting lethal amount of nicotine. For decades, from the 1970s, health officials have seen a steady decline in teenage smoking. But efforts hit a wall in 2009, when the decline leveled down.

In 2011, nearly 30% of high school males and 18% of women use some form of tobacco. This included both cigarettes and forms a “new tobacco.”

Among middle school students, 10% of boys and 8% of girls were using tobacco products. And now, 18 – 25 year olds have the highest rate of tobacco use in any age group in the country.

To some extent, this result is less public money spent on anti-smoking campaigns throughout the country. During the economic downturn, such programs have been among the first to be cut. And in some states, including South Carolina, have traditionally had little anti-smoking efforts in the first place.

But another factor is certainly the marketing of alternative tobacco products to young people. Let them hooked in high school, and they are customers for life – even if that life is reduced to the use of tobacco.

Health officials fought teen smoking for decades with great success, but these new products represent a growing threat and the new strategy on the part of Big Tobacco. Tobacco companies sell the same product in new packaging.

This is a threat that must be addressed not only to the health authorities, such as Alleva, but also by both government regulation and law enforcement. It’s quite simple: Don’t let the market tobacco addictive substance for our children and hit the sale of any tobacco products to minors.

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Philip Morris: Additional revenues up to 9.6% at 7 months, plus dividends

Philip Morris International (PM) is trading near 52-week high. If you look at the two years following table you can see it usually experiences some kind of a setback after trade to new highs.

The graph shows that Philip Morris repeated this pattern several times over the past two years, and it appears that the potential to do it again. It also has a fairly strong support in the 80-83 range. The following strategy can be used to take advantage of this situation. Please note that you need to have a reserve, as the first part of the strategy entails selling covered calls. If you do not own stock, you can implement the second part of this strategy.

Before we get to the point of this strategy, let’s look at some of the benefits associated with the sale of puts and covered calls.

The advantages of selling covered calls

  • Income generation
  • Two. Downside protection and reduce the volatility of the portfolio
  • Three. Pre-yield
  • Conversion of ordinary shares in payment of dividend shares
  • Investors looking for more detailed information about the benefits of selling covered calls can read our work on the “Benefits Covered write strategy.”

The advantages of selling naked put

The investor usually sells the option, if his / her perspective on the main bullish security.

  • In essence, you pay for putting “limit order” for the shares or stocks, you would not mind owning.
  • It allows you to earn income in a neutral or growing market.
  • Acquisition of shares in a short put strategy is widely used, many retailers, and is considered one of the most conservative option strategies. This strategy is very similar to the covered call strategy.
  • The safest option is to make sure the set is the “money provided.” It simply means that you have enough money in the account to purchase a particular stock if it trades below the strike price. Your final price will be a little bit lower when you add the premium you were paid in advance in the equation.

Every day you arrive at the decay time as long as the stock price does not drop significantly. If it falls below the strike you sold a put on, you get to buy the shares you want at the price you want.

The proposed strategy for Philip Morris

Part I

Jan 2013, 95 calls are currently trading in the range 2.33-2.41. The sale of these calls at $ 2.33 or higher. In this example we will assume that the calls are sold for $ 2.33. For each contract traded, $ 233 will be credited to your account. We sell covered calls and calls are not naked, so you have to have this stock in order to be able to put this part of the strategy in the game. If the stock is trading above the exercise price, the shares may be revoked. If this happens, you will leave with a gain of 7.05% (4.80 and 2.33 from the warehouse of the premium you received when you sold the call). If the shares are not withdrawn, your winnings will be 2.45%.

Part II

Sell the Jan 2013, 80, puts on a $ 2.08 or higher. For each put sold, $ 208 will be credited to your account. If the stock is trading below the strike price Put sold, shares may be assigned to your account. Your final price will be $ 77.92. If the shares are not tied to your account, you’ll leave with a gain of about 2.6%.

Benefits

This strategy gives you the ability to collect two awards in addition to the dividend – one of the selling covered calls, and others from the Bond brand of cigaretes.

Possible results

Shares withdrawn, but the stock is not traded below the price of puts were sold. In this case, your gain of 9.65% was (7.05% plus 2.6%).

Shares not withdrawn, and the stocks are not traded below the price of the put was sold on. Your winnings in this case are 5.05% (2.6% plus 2.45%).

Your shares withdrawn, and the stock trades below the put strike price were sold. In this case, you will receive shares at 77.92, and you leave with a gain of 7.05%.

Your shares are not withdrawn, but the stock is trading below the strike price Put sold. In this case, you get a much lower price of 77.92, and leave with a small increase in the 2.45% of premiums received for the sale of the call.

Risk Factors

Shares may trade above the price you sold the calls. If this happens, your shares may be withdrawn. One simple way to avoid this would be a challenge if the stock is trading above the strike price, and you still want to hold on to stocks.

Another risk factor is that if the stock is trading below the price you sold puts on, the shares may be assigned to your account. It should not be a big problem, as one only sells sets when the bullish on long-term prospects for stocks. If you have a change of heart and I feel that the shares could trade much lower price, you can roll sets. You buy the puts you sold back and sell new ways in which a bit of money. Shares are usually appointed for the last trading option.

Conclusion

This strategy should be used only by those who are bullish on the stock, as it is likely that the shares may be assigned to your account. In addition, there is a chance that you may lose the shares if the stock is trading above the price you sold the calls. Investors are looking for other ideas may find this article to be interesting.

Disclosure: I have no positions in any stocks mentioned, and does not intend to initiate any positions within the next 72 hours. EPS and price schedules Vs industry, as well as most of the historical data used in this paper were obtained from zacks.com. Options table are derived from money.msn.com.

Warning: It is important that you do your due diligence, and then determine if the above strategy is suitable for your level of risk. Latin principle of “caveat emptor” (let the buyer beware) applies.

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Philip Morris and village from Haverstraw

Earlier this year, the village of Haverstraw, working with POW’R on Tobacco Control, took the unprecedented step of banning the retail sale of cigarettes to products in their stores, making cigarettes and cigars out of sight of customers. The basis for the decision, which is set to come into force later this year, is that it would reduce the impact of tobacco products to youth.

But now a new wrinkle was added to the situation. New York Association of Convenience Stores (NYACS) and seven tobacco companies in court trying to cancel the upcoming ban and the village is preparing for a potentially costly legal fight. NYACS, Lorillard Tobacco Co, Philip Morris USA Inc, RJ Reynolds Tobacco Co, Santa Fe Natural Tobacco Company, the American company Snuff LLC, the U.S. Smokeless Tobacco Brands Inc, and John Middleton Company filed a civil suit on Tuesday in U.S. District Court for the Southern District of New York.

In an interview with Rockland County Times, NYACS Representative James Calvin described the law of Haverstraw as “an example of extreme and excessive regulation of tobacco retailers.” He said: “Shops have a fundamental legal right to place the products they sell.” He thinks the law can be the first of its kind in the United States, which is also the fact that POW’R on Tobacco Control argued when it was first announced.

“We believe that it is unconstitutional. We are seeking a court declaration that it is unconstitutional and ordering the village from the constant use of it,” said Calvin. The village is not contacted his group to the law passed, Calvin said. “We learned about it after the law was passed.”

Jay Hood, the village of Haverstraw’s lawyer, said: “According to a lawsuit the village, within a reasonable regulation of the display just shows that they are more interested in selling product than the health of our children. This law was designed to keep the kids from gathering to life, and possibly deadly habit. I did not get complaints like this, but the village is going to handle it in a balanced way that will protect children, but at the same time is not worth the money of taxpayers to protect the village. There are outside of the firm when dealing with us in order to cope with this possible at no cost to the village.”

Michael Kohut, Haverstraw village Mayor, said: “This is a big corporate America will be after the baby, mostly. I would hope Michael Bloomberg would take this instead of the law oversized soda, as tobacco companies are likely to get it will be negated after us, because we are the little guy. We knew it was possible that they will sue, but I do not know what they are. “

He continued: “Ideally, the forces opposed to smoking come to our aid because we are not going to bankrupt a village in the protection of that right. It makes no sense. But if someone from the outside will take the reason we struggle with this, considering that the Council agrees with me. ” The village was proposed during the transition to a resolution POW’R on Tobacco Control, and they are a potential source of financing lawful activities of the village. Describing the next step the village, Kohut said, “We have documents, I’m going to give it to Jay Hood (village attorney). He is in contact with other lawyers in the anti-smoking efforts.”

Calvin said he did not have an estimate of how long it may take the case to play. The prohibition of retail display Haverstraw is due this October. Village Board took action in April, stating that the form of packs of cigarettes on the wall of the store makes the minors to start smoking. By law, retailers could continue to sell tobacco, just not display it, instead giving customers an age check, upon request, printed Control “menu” to order from.

“Retailers have a fundamental right to communicate with their customers about the products they offer to show these products within its own territory,” Calvin said in a statement to the media. “The United States and the new constitution of New York have long been protected by this form of commercial speech.” Defendants in the suit are the Haverstraw village and village institutions and officials who were assigned the responsibility for ensuring that the display of tobacco products, ban as soon as it enters into force in October 2012.

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Harvesting of tobacco donations to political parties

The leading cigarette manufacturer in India, ITC Ltd, made a financial contribution of Rs. 6.78 lakh in the last two years, all major political parties in the country, causing public health officials here to the question of possible intervention of tobacco companies’ efforts of the central government to bring in tough anti-smoking laws in the country. “

The figures disclosed ITC Ltd – and the recently released activists as part of its campaign against tobacco – note that the company paid the Indian National Congress (3 crore), the Bharatiya Janata Party (Rs 2.50 lakh), Samajwadi Party (rupiy. 0 42 million rupees), Rashtriya Janata Dal (0.33 lakh rupees), Dravida Munnetra Kazhagam (0,22 lakh rupees), Shiv Sena (Rs 0.17 lakh) and the Nationalist Congress Party (Rs 0.14 lakh) in the last two years (2010-2011).

“What does it mean when the largest cigarette manufacturer in India donates money to all the major political parties in the country? This means that he is trying to boost trade and dilute any policy; political parties can lead to keep its sales and profits. We are against the conflict of interest and in this case, the main victim is the public health, “said Amit Yadav, an attorney of the Public Health Foundation of India, non-governmental organizations working in the field of tobacco control.

“In addition, the Framework Convention of the World Health Organization’s Tobacco Control (FCTC) – a global health treaty, which India ratified in February 2004 – requires that signatories in developing and implementing their public health policies on tobacco control must act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national legislation. This is in accordance with Article 5.3 of the FCTC, “said Bhavna Mukhopadhyay, executive director of the NGO Public Health Association of India.

Responding to the accusations, ITC Corporate Communications Vice President Nazeeb Arif says: “The WHO FCTC Article 5.3 says nothing about the donations from the” tobacco “companies. May also be noted that the Convention is not the law of the country,” he adds: «ITC, as well as other responsible corporate, made donations to political parties in a transparent manner»

Mr. Yadav admits that “there is nothing illegal about what the company does,” but says that “the government takes money from the ITC also runs counter to his talk about trying to bring a tougher policy on tobacco control.”

Pointing to rampant abuse of tobacco and its impact on the growth of health activist and Tata Memorial Hospital Mumbai, a leading cancer surgeon Dr Pankaj Chaturvedi said: “This is for the government to stand up here and refuse cash aid organizations [an Indian or foreign] that deal with the goods is detrimental to human health . You can not have good will and financial assistance in the form of the tobacco industry and policy in relation to them. Practice is not illegal it is just unethical. Here we focus only on one organization. Government should take the part of public health and works for the ordinary rights. “

“The central government is now actively exploring the issue of government firms investing in tobacco companies,” said a senior officer of health, which, however, declined to comment on political parties receive money from the tobacco manufacturers. As of March 31, 2011, five out of ten shareholders ITC were state-owned insurance companies, including Life Insurance Corporation of India.

Mr. Arif, however, insists that the criticism is misplaced ITC. “In India, cigarettes account for only 15 percent of tobacco – the rest consists of chewing tobacco, beds, etc. – but also contribute to more than 75 percent of the taxes from the sector. There is also evidence of links between international companies and organized smuggling of cigarettes, especially in developing countries. This growth in the industry of illegal cigarettes robs national treasuries potential taxes in addition to the provision of inferior quality. India currently ranks 6th in global illegal trade in cigarettes [domestic illicit and contraband] and has one of the highest growth rate which increased by 58 percent over the period 2004 – 2009 while the global market showed a decline of 4.2 percent over the same period. As the industry an estimated loss of revenue in this regard, it is estimated, Rs. basic 3000 per annum. Creating strong Indian brands of cigarettes could reduce the huge influx of smuggled cigarettes in a foreign country, “he says.

He notes that if tobacco control is the goal, the duty-free sale of cigarettes should be banned because they allow unscrupulous diversion of such cigarettes in the domestic market, once again plunder the treasury of Indian tax, as well as Indian farmers livelihood.

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Australia says the Big Tobacco WTO help applicants

• Plan for Australia on the gray box call

The tobacco industry provides legal advice in Ukraine and Honduras in their problems in Australia, a new package of tobacco rules of the World Trade Organization, the Australian Health Minister Jane Halton said on Tuesday. “We know that the tobacco companies, because they recognized it, provide legal advice to members of the WTO in order to induce them to take action against Australia,” she said.

Halton spoke at the event on the sidelines of the annual ministerial meeting of the World Health Organization in Geneva, WHO Director-General Margaret Chan called for intensified “fight tooth and nail against one of the worst enemies of public health – tobacco industry.” Australia plans to introduce tough new rules for the tobacco packaging from 1 October, which will force manufacturers to abandon various colorful ads and sell their cigarettes uniformly gray bags with no decoration. Other tobacco products such as cigars should follow this example, on December 1.

“We believe that dealing with one of the last forms of tobacco advertising in this country – a package,” said Halton. “We are very confident that we can resist these attacks, our government will not be intimidated.” Smoking rates in Australia fell to 15.1 percent in 2010 to some 30.5 per cent in 1998. “Our goal over the next few years will reach 10 percent and, hopefully, lower,” she said.

Honduras and Ukraine to the WTO to challenge the motion, saying it was unfair to restrict trade, although no country has a significant share of the Australian market.  “We are far from both countries, and we are very, very little trade with them,” said Halton. And the plaintiffs have “requested consultations” with Australia, the first step in WTO litigation. The first round of talks was held last month, she said.

“We believe that some people in the meeting were British American Tobacco lawyers,” she told Reuters, adding that she was not aware of any date of the second round. The representative of the British American Tobacco has confirmed Reuters, the company provides assistance to address the WTO, but can not confirm that BAT lawyers were directly involved in the negotiations.

If the case is not settled by negotiation, Honduras and Ukraine can ask the WTO to establish a group of arbitrators to judge the dispute. If Australia were to lose, it may be forced to cancel some of its rules on tobacco products. Two trade dress, attracted a large number of countries as a third party observer disputes, and some diplomats see them as tests in the fight against tobacco companies to stop the global flow control, dramatically tightened the rules for the sale of cigarettes over the past decade.

British American Tobacco, Imperial Tobacco and Philip Morris began to High Court challenges to Australian laws, saying they violate its trademark rights. Halton told Reuters, that it is expected that the Supreme Court decision could come in October. She also said that health should be taken into account in trade in the future. “When we negotiate new trade agreements, we must be very clear that the right to health of our society is of paramount importance. We will make sure we live up to our obligations under the Framework Convention on Tobacco Control,” she said, referring to the WHO treaty ratified by 174 countries.

Philip Morris “Chief Financial Officer Hermann Waldemer said he expects other countries to challenge the rules in the WTO, Australia, according to transcripts provided by the analyst calls a Thomson Reuters events st. Philip Morris spokesman told Reuters earlier this month that the firm was established to support the government, the problem of Australia’s simple packaging, but it does not support Ukraine in its complaint to the WTO.

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Tobacco getting started in Bluegrass

Tobacco is set around the state.

About 30 percent of the expected crop was planted, but we missed the important part: the rain.
“We need a good rain,” said Andy Bailey, a specialist in the expansion of the University of Kentucky, which focuses on dark tobacco, but also working with Burley, which is common in Central Kentucky.

U.S. Department of Agriculture expects that the national area of ​​tobacco to fall 2 percent on an annualized basis, up to 317,950 acres in 2012. In Kentucky, it is expected that by 4 percent, to 80,700 acres.

Bailey, who works at Princeton in Western Kentucky, said Central Kentucky, where Burley is dominant, is in “great shape, lots of water wise” than in the western part of the state, where the dark tobacco used in snuff and other products is increased.

“The state of the crop still looks good,” Bailey said, warning that irrigation may be required in June, and not typical of early July.

Bob Pierce, the expansion of the UK tobacco specialist in Lexington, said he was concerned about the transplanted tobacco.

“We had a difficult situation with greenhouses. When it was so warm in the early stages, many of our greenhouses simply became too hot, and we had many problems with the uneven growth of plants,” said Pierce.

He said farmers typically receive about 85 percent to 95 percent from the convenience of these plants, but they are probably running 75 percent to 85 percent this year.

“Usually, it’s not such a big deal, because if you come a little short, someone got a few” Pierce said. “But this year, it seems, everything is a little short.

“We have to see how it plays out.”

Kentucky tobacco harvest peaked in 1919 with 648,000 hectares of crops, according to the National Agricultural Statistics Service.

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States could see more tobacco payments this year

States are estimated to receive about 1% more in annual payments from tobacco companies this year than in 2011, offering more money will be available to return billions of dollars of municipal bonds, tobacco payments.

It is expected that the state will receive about $ 6.1 billion from tobacco companies this year, according to figures released by the National Association of Attorneys General. Last year they collected about $ 6.03 billion. Payments are made according to the 1998 settlement, the States agreed health-related claims against tobacco manufacturers.

Tobacco companies should make their annual payments on April 15, but will make their April 16 this year because April 15 falls on a Sunday. The amount actually collected may be somewhat different if some companies are unable to make payments in the past year, the default is 20 million dollars. Payments are based on U.S. consumption of cigarettes in the previous calendar year.

Cigarette consumption has declined faster than expected over the past few years, forcing Virginia, Ohio and California, to use the reserves last year to pay the investors who own tobacco bonds. It was not clear whether the slight tick in payments will be sufficient to capture the state of their reserves again.

Cigarette consumption fell by 3.5% in 2011 after declining by 3.8% in 2010 and 8.6% in 2009, according to industry research group Department of Science Associates. The companies that signed the 1998 agreement may hold some payments if they lose market share to other producers who have not yet signed. Companies are not required to hold a so-called “non-participating manufacturer adjustment,” but last year the three original signatories – Reynolds American Inc (RAI), Lorillard Inc (LO) and Altria Group Inc (MO) – continued, the money from the state.

Although the fee for that year was founded in 2011, cigarette consumption, not participating manufacturer adjustment of the three original signatories based on 2009 sales. Adjusting this year is about $ 780 million less than the approximately $ 825 million in the previous year, according to the Attorney General. Even if the consumption of cigarettes continues to decline, the less this year, the adjustment helps states with a small tick in the tobacco payments. Approximately $ 6.1 billion in tobacco payments is estimated this year includes setting.

The market share of signatories continues to grow. Their combined share amounted to 84.71% in 2011, the most since 2007, when the figure was 84.77%, in accordance with the Attorney General. The market share for companies that have not signed an agreement in 1998 was 5.65%, the lowest since at least 2003, according to the Attorney General.

Vikram Rai, a credit strategist at Citi, said that a small tick in the actual payments this year will be a plus for Bond brand of cigaretes, despite the short-date bonds could rally more. Furthermore, if the original signatories to continue to recover market share from companies that have not signed an agreement to adjustments in the future should be lower. Cautious investors have traditionally avoided because of the risk of tobacco bonds, while others were brought to their high yields. Tobacco bonds are generally more volatile than other municipal bonds, as well as offer juicy returns, although they also have the potential to outperform.

Later take into account the relationship of tobacco consumption is declining in more recent years, to turn to a more risk-averse investors. For example, Ohio, listed in a study in 2007 bond prospectus, which is estimated at 1.8% per annum reduction in cigarette consumption.

Forty-six states signed the 1998 agreement, and there is about $ 30 billion of tobacco bonds in circulation.

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The state puts a flame to roll your own tobacco stores

Young roll your own retailers of tobacco by Bob Peckinpaugh to the last, desperate gasp.He has already closed its sister city in the store for a turn of events has caused regulators Kansas.
Peckinpaugh in the double-$ 32,500 car rental customers to convert the bags and boxes of loose tobacco in cigarettes filtered paper to sit back in a strip shopping center. There is no appeal of a sophisticated device providing 200 cigarettes in 8 minutes, Smokes Cigarette sales in the University fell to $ 6.52 on Wednesday and $ 1.42 at midday Thursday.
“Without a car we have no business,” said Peckinpaugh, who moved to Lawrence in the autumn of last year and discovered a set of self-rolling of the field. “If we do not resume within a few days, we will close this store.” Both of his establishments licensed Kansas Department of Revenue, but the Kansas State Fire gave up about 20 ‘roll of his own businesses throughout the state.
Cease and desist letter was released in February, with reference to fire a law providing for cigarettes rolled in commercial establishments to use a paper type, as shown on the basis of laboratory tests to withstand a fast burn rate. Peckinpaugh, however, said that the special paper was not available to roll your own retailers
“I understand why they’re angry,” said Seth, Valery, General Counsel to the Kansas Fire Department. “We make compliance with fire safety laws. It is a matter of national security. They simply flooded the market.”
The agents entered the state stores to wrap electrical plugs on the mechanical features of cars rolling tape. Shop owners have been warned that any resumption of use of the equipment can be hit with steep fines. To date, three companies have ignored the order. The penalties are under consideration. Apparently, none of this kind of shop exist in Topeka.
Large manufacturers of cigarettes under the laws of the state, paying $ 250 fee every three years to confirm the laboratory tests showed each brand and style of the cigarettes sold to those companies in Kansas have been made with paper treatment to dramatically reduce their ability to start fires.
Kansas regulators are only a safety standard for sophisticated, expensive mills.
Handheld units available in some stores, and is able to produce 200 cigarettes per hour and is still allowed, Peckinpaugh said. There is no state law prohibiting people from rolling their own cigarettes. The group roll their own government, business – RYO Kansas Coalition – organized to consider the legal issues in response to the actions related to the Kansas Fire Protection, Department of State revenues and Kansas Attorney General Derek Schmidt.
Tom Erickson, owner of Trader Jacks tobacco in Shawnee, said officials entered his shop, recorded with his car and pointed out a $ 10,000 fine will be waiting for him if he pulled off a plastic fork and went back to work.
“I understand if you do not like smoke,” Erickson said, “but for them to close me, without a court order just not right.” “It is unfortunate that our Attorney General, who was elected by the people to uphold the Constitution and the rule of law has allowed such an overly aggressive actions to take place,” he said.
April 2 at the National Fire Protection Association, Quincy, Massachusetts, reported 610 civilian deaths in the United States during 2010 were associated with smoking material fires. There were 90,800 fires, smoking materials in the course of the year by $ 663 million in property damage.
Lorraine Carli, vice president of the association of fire, said that the decline in smoking fire deaths at record low levels may be associated with a reduction in the number of smokers and raising industry standards for mattresses and upholstered furniture. The third factor was the beginning of 2003 the demand of cigarettes sold in the United States, were to be made with fireproof paper, she said.
“The adoption of fire-safe cigarette legislation is proving to be a giant step forward in reducing the leading cause of death, house fire,” said Carly.
Peckinpaugh said the national and state mandates on paper should not be used in stores, like him, because they are technically the sale of tobacco and paper – not fully formed cigarette subject to the requirement. “We sell the tobacco and paper, and rent a car,” Peckinpaugh said. He said the merger of paper and tobacco was carried out without the help of customers by store employees. Tobacco is poured into the funnel.. A couple of buttons pressed. Ready-made cigarettes appear.
This is the same as someone in the laundry detergent who buys and leases the car clean clothes, he said. Peckinpaugh protest flyer taped his idle mills expressed opposition to “illegal” raid. The pilot reference quote he attributed to the Attorney General that “all that is really great and inspiring is created by man that is able to operate freely.”
Peckinpaugh find irony in the row. “I invested my life savings at the store,” he said, “and was forced to terminate my lease and dismiss their employees. Kansas kills jobs when they have to create them.”