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 Profits Threatened As Plain Packaging Resurfaces

LONDON -The possibility of cigarettes being sold in plain packaging-threatening the profitability of the world’s tobacco companies-resurfaced Monday, as the U.K. government pledged to halve the number of smokers in the country over the next 10 years.

Included in the U.K. government’s proposals to crack down on smoking in the U.K. Monday was a pledge to look once again at banning all logos and branding from tobacco products-a move which could set a dangerous precedent and pose a real future threat to profitability in the global tobacco industry.

The idea was first mooted in 2008 as part of a Department of Health, or DoH, move to protect young people from smoking, but was not implemented. Instead the government is currently legislating to ban the display of cigarette products from shops.

In a policy document Monday the DoH said it would once again look into the issue.

“The government believes that the evidence base regarding ‘plain packaging’ needs to be carefully examined,” it said. “Therefore, the government will encourage research to further our understanding of the links between packaging and consumption, especially by young people.”

The proposals are seen as a serious risk to the future profitability of companies such as Imperial Tobacco Group PLC (ITY) and Japan Tobacco (2914.TO) in the U.K. Imperial is the most exposed with 25% of group profits generated in the U.K.

But the real danger is that, if the U.K. scheme is implemented and proves a success, it could be copied elsewhere-in the same way that bans on smoking in public spaces have spread around the world in recent years.

Stripping cigarette packets of all branding and logos has never been tried in any market. Under the proposals, packaging would be decorated only with the brand name in standard type and a pictorial health warning-an image of a diseased lung for example. All other trademarks, logos, color schemes and graphics would be prohibited.

Such a move could drive down pricing, boost the market for illegally-imported cigarettes, and most importantly, put an end to “premiumization” whereby marketing activities by companies induce consumers to “trade up” to buy more expensive products.

With little scope to grow sales in a tightly regulated industry, tobacco firms rely on pricing and encouraging customers to move to premium brands in order to grow profit.

Cigarette companies are well used to restrictions on their marketing and advertising. The inability to advertise in countries such as the U.K. has led to tobacco packaging becoming a key promotional vehicle for the industry.

While most types of regulation attack volumes - which can be countered through price rises-plain packaging would effect mix, as without any branding, premium cigarettes would have little appeal.

Premium cigarette brands can sell for about GBP6 in the U.K., while a value pack can sell for almost GBP2 less. With about 80% of both these amounts being paid in tax, the difference in the amount a cigarette company receives from each sale is considerable.

If such a proposal were adopted worldwide it could effectively commoditize tobacco.

The report said that a number of studies published recently had suggested tobacco packaging stimulated tobacco use, rather than simply promoting a particular brand.

The department said packaging was still the “silent salesman” for tobacco brands.

The report said there was evidence that ‘plain packaging’ could increase the effectiveness of health warnings for young people and reduce misunderstandings about the relative risks of different brands.

While cigarette descriptions such as “light” and “mild” have already been outlawed in the U.K., the government suggested that certain pack colors like white, silver and light blues, falsely imply that the brands are less harmful.

The world’s second largest global tobacco group British American Tobacco PLC (BTI) said the government faced a huge fight should it try to introduce the measures.

“Packaging is fundamental to consumer choice in a competitive market,” it said in a statement. “Brands are valuable corporate assets and the government risks breaching various legal obligations relating to intellectual property rights, international trade and European law.”

The DoH said Monday it would give weight to the legal implications of restrictions on packaging for intellectual property rights and freedom of trade.

Indeed the idea was considered in Canada in 1994 but dismissed on grounds that it infringed upon intellectual property rights.

British American Tobacco said plain packaging would also increase illicit trade for tobacco products.

“Plain packs would require no complicated logos, colors or designs to be copied-making it far easier and cheaper for criminals to flood the market with mass produced fake products for sale on street corners,” It said. “And the perverse outcome of this is that cigarettes will become more accessible to young people and the sections of society that these regulations seek to protect.”

The proposals form part of the DoH’s program to cut the proportion of the U.K. population who smoke to 10% from 21% by 2020.

Other proposals include a ban on vending machine sales, which it said was “a significant source of tobacco for young people.”

The document also pledged to make tobacco less affordable by continuing “real increases” in duty on tobacco and “additional investment” in crack downs on illicit trade.

In recent years, the U.K. government has banned most forms of tobacco advertising and sponsorship in print, on billboards and on the internet, introduced hard hitting pictorial warnings and raised the minimum age at which people could be sold tobacco was raised to 18 years from 16.

These moves have cut the prevalence of smoking in the U.K., particularly among young people, it said. Just 6% of 11-15 year olds now smoke, down from 11% in 1998. By 2020, the government plans to cut that rate below 1%.

According to media reports, the U.K.’s health secretary Andy Burnham favors the plain packaging idea. Whether he’s in any position to see the policy implemented is another matter.

A general election is expected to be held in May and Burnham, together with the ruling Labour Party, is widely expected to be ousted from power.

The Conservative Party-who are set to win the election if opinion polls are believed-have traditionally been much more friendly to the tobacco industry.
By Michael Carolan, Dow Jones Newswires

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