tocacco plant Native American Tobaccoo flower, leaves, and buds

tocacco Tobacco is an annual or bi-annual growing 1-3 meters tall with large sticky leaves that contain nicotine. Native to the Americas, tobacco has a long history of use as a shamanic inebriant and stimulant. It is extremely popular and well-known for its addictive potential.

tocacco nicotina Nicotiana tabacum

tocacco Nicotiana rustica leaves. Nicotiana rustica leaves have a nicotine content as high as 9%, whereas Nicotiana tabacum (common tobacco) leaves contain about 1 to 3%

tocacco cigar A cigar is a tightly rolled bundle of dried and fermented tobacco which is ignited so that its smoke may be drawn into the mouth. Cigar tobacco is grown in significant quantities in Brazil, Cameroon, Cuba, Dominican Republic, Honduras, Indonesia, Mexico, Nicaragua, Sumatra, Philippines, and the Eastern United States.

tocacco Tobacco is an agricultural product processed from the fresh leaves of plants in the genus Nicotiana. It can be consumed, used as an organic pesticide, and in the form of nicotine tartrate it is used in some medicines. In consumption it may be in the form of cigarettes smoking, snuffing, chewing, dipping tobacco, or snus.

tocacco
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Tobacco industry going up in smoke as new regulations bite

IF you are in business right now you probably wish the Government was helping you a little more. But stop and imagine for a second what it must be like to be in a perfectly legal business where the Government is doing pretty much everything it can to close you down, while still pocketing €2bn a year from what you do.

Welcome to the tobacco industry, an industry struggling as new rules make business harder and, which kills an estimated 7,000 people in Ireland every year.

John Dromgoole has been observing the business closely during his 20 years in the country’s leading tobacconist. The manager of Kapp and Peterson opposite Trinity College Dublin has watched the tobacco industry shrink as tastes change and the Government does its best to make life hard for smokers.

The cigarette companies used to send in reps almost every day, he says. Now they’d be surprised to see one a week.

Kapp and Peterson still employs 25 people in the Dublin suburb of Sallynoggin to make pipes so good that Stalin refused to smoke anything else and which are still sent out to customers all over the world, including comedian Billy Connolly.

Ban

Today, after surviving the smoking ban and some of the highest taxes in the European Union, Kapp and Peterson has finally stopped stocking cigarettes as part of a deal with the authorities to allow the landmark shop to continue to openly sell pipes and cigars despite a ban in July on displaying cigarettes, rolling tobacco and other products.

Mr Dromgoole says the recession isn’t hurting business but government regulations are. “Tobacconists are like pharmacists,” he jokes. “They both offer a form of medication and do well in a recession.”

Kapp and Peterson has also benefited from the ban on displaying tobacco because tobacco goes stale if not bought regularly. Small shops are finding that smokers don’t buy unusual brands if they are hidden away.

“We’re sending mail order all over the country; between eight and 10 parcels a day which is a bit sad when you think about it. People in remote places are not going to their local shop anymore; they’re missing a bit of chat.”

Newsagent

In Donegal, one newsagent has had enough. Maurice Timony joined forces earlier this month with tobacco giant Philip Morris to take a High Court action against the Government to overturn the ban on displaying tobacco products, on the grounds that it severely restricts his ability to provide trade and services.

“The country is swamped by legislation that is making life very difficult for compliant retailers like me,” Mr Timony said before launching the case.

“The ban on display of cigarettes is just one example of a piece of over-regulation that has not been well thought through and has negatively affected my business.”

He is being backed by the National Federation of Retail Newsagents which claims that 600 newsagents, most in the north of the country, will go out of business this year, in part because tobacco sales are falling, as more and more smokers buy smuggled cigarettes to avoid the third highest taxes in the world.

Disaster

“Because these jobs are being lost a handful at a time, many people don’t realise the scale of the disaster, but this is a virulent cancer eating away at communities all over the country,” Convenience Store and Newsagent Association chief executive Vincent Jennings said recently.

The National Federation of Retail Newsagents’ Stefan Wojciechowski claims the level of illegal tobacco in Ireland has doubled over the past two years and nearly one in three packets smoked here avoids excise tax revenue.

These figures, which are widely quoted by the tobacco industry, are disputed by the Government and other organisations who say the figure was 20pc last year and may reach 25pc this year. Still, the Revenue Commissioners admit the State lost €387m in revenue last year and could lose more than half a billion euros this year.

Whatever the exact figures, nobody denies that every smuggled cigarette boosts crime, reduces the Government’s tax take and hurts newsagents’ profits.

In August, the Irish unit of Japan Tobacco International (JTI) which sells brands such as Silk Cut and Benson & Hedges, stopped supplying cigarettes to a shop in the midlands because it believed it had been selling a counterfeit version of one of its best-known brands made in the Far East.

“The illicit sale of tobacco is a huge problem for the Irish economy and retailers in general,” JTI general manager Martin Southgate said at the time.

Penalties

Penalties for smuggling and selling illegal cigarettes are proving inadequate, which is not surprising when one considers that the Revenue’s defaulters’ list for the first quarter of the year reveals that the average fine was just €423.

In July, Imperial Tobacco, which sells brands such as Superkings, complained in a trading statement to the stock market that Irish government hikes in taxes caused a 10pc decline in the duty paid cigarette market “with cross-border flows, particularly from Northern Ireland, rising to an estimated 25pc of consumption”.

Profits across the world remained in line with expectations, it added.

It is always difficult to judge profitability in an industry such as the tobacco industry which transfers large amounts of money from holding company to holding company but what is clear is that the manufacturing element of the tobacco industry employs relatively few people in Ireland after a series of closures in the middle of the decade.

Tobacco companies have been pulling out for sometime, with companies such as PJ Carroll closing its Dundalk factory in 2005 and ending a link with the town that went back almost 200 years. Gallaher closed its cigarette manufacturing operation the same year, ending a 40-year associated with Tallaght while John Player moved its blending facilities overseas.

Demise

In short, the demise of the tobacco industry won’t hit employment in the manufacturing sector but it does seem likely that it will have a negative effect on employment in the already battered small retail sector which will, in turn, harm the prospects for anything else sold in newsagents such as newspapers, magazines, gob stoppers and ice creams.



By Thomas Molloy
Independent, October 22 2009

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