Research and Markets: Analyzing the Tobacco Industry in Russia

The Russian tobacco industry has been maintaining a good rate of growth in recent years, but the coming five years are likely to see the market undergo a slowdown, particularly because of the stringent regulations put in place by the Russian government to curb smoking. Cigarettes continued to be the leading market segment in the industry, followed by loose tobacco.

With the market being concentrated between three major players, scope of entry for new players is limited. The report is an in-depth profile of the tobacco industry in Russia as well as the global tobacco industry, along with a complete analysis of the major players in the industry. For the global tobacco industry this report analyzes the industry through an industry definition, industry overview wherein it looks at the market statistics, an industry value analysis, industry segmentation, regional share of the industry, industry distribution, along with an analysis of the competition in the industry and company market share. Future of the global tobacco industry is also analyzed.

For the Russian tobacco industry, this report analyzes the tobacco market through an industry overview, industry value analysis, industry segmentation, regional share analysis, industry distribution, market competition, major players in the market and their market share, as well as an analysis of the future of the tobacco market in Russia. With tobacco being one of the most commonly used addictive substances in the world, the industry will continue to grow in the coming years, though the growth is going to be faced with many challenges as countries put in place stringent laws to combat the health effects of consuming tobacco. Major players in the Russian tobacco industry are analyzed through a company overview, business segment analysis, financial analysis, and a SWOT analysis.

The tobacco industry by the numbers

The dwindling cigarette market may seem to be a good-news story, but it means tough times for the tobacco industry, a major player in the South African economy. “Is this a growth industry? No. It is a mature industry and it is in decline,” said Brian Finch, the managing director of British American Tobacco South Africa. Tobacco companies are switching to survival mode amid stifling regulation and a growing illicit market. Still, research shows that more than 7.7-million South African adults consume 11.4 cigarettes a day.

Buy marlboro cigarettes from this shop.

The local industry, which has estimated annual revenue of more than R22-billion, loses a further R8-billion in revenue to the illicit cigarette trade. British American Tobacco owned the lion’s share of this market in 2011 with 86% of the legal local cigarette trade. It is also the world’s second-largest tobacco company and has a presence in more countries than any other. It is listed on both the London Stock Exchange and the JSE, the company’s only secondary listing. Depending on currency fluctuations it is, at times, the top listed company on the local share trading platform and has a market cap of R830-billion.

 With 150000 retail outlets and 14000 employees, the tobacco company plays a big part in the economy. Thirty-one percent of its tobacco is sourced from South African farms, mostly in Mpumalanga. Its factory in Heidelberg then produces more than 26-billion cigarettes each year and exports to most of Africa and parts of the Middle East. The excise rate on the legal product is 52%, contributing an annual R10.8-billion to the government, making it in some ways the biggest shareholder, said Finch. Strategic challenge But a big industry player such as British American Tobacco stands to gain or lose the most. At present, 29% of cigarettes are illicit or do not comply with regulation in some way.

That is seven billion illicit cigarettes of a total of 29-billion sold. “It’s our biggest strategic challenge and we are working with the authorities to address it,” Finch said. In 2011, 1.2-billion cigarettes were seized and the onslaught was largely because of product from Dubai and Zimbabwe. Quality standards need to be subscribed to and there are costs associated with that. Illicit cigarette market “We have no problem with it,” said Leslie Rance, the tobacco company’s corporate and regulatory affairs manager. “We just want to compete with everybody on the same terms.” Once the illicit cigarette market reaches 40% or 50%, Finch believes it will be game over.

“I don’t think there will be any recourse — it will just be too difficult to stop.” It is becoming an impossible battle in the light of tighter regulations and heavy taxes. Regulations are tightening over public-place smoking, point-of-sale communication and display, graphic health warnings and plain packaging. By November 16, all cigarettes in South Africa will have to comply with a reduced ignition propensity requirement according to which lit cigarettes that are not drawn on for a certain amount of time must extinguish themselves. “It is not for the benefit of the consumer. It is an irritation, in fact, but it is in the name of regulation,” Finch said. Until now South Africa’s cigarette sales have not dropped dramatically despite one in three adults quitting smoking in recent years. The prevalence of smoking has dropped from 32% to 22% since 1994.

Big tobacco targeting teens, says Plibersek

THE federal government says big tobacco is deliberately targeting vulnerable teenagers by selling cheap cigarettes. British American Tobacco Australia (BATA) has released a budget brand called Just Smokes, which retails at about $11.50 for a pack of 25. That's much lower than the average price of $16 and only slightly higher than illegal counterfeit products. BATA argues it has been forced to go downmarket because the government's decision to increase the tobacco excise by 25 per cent in 2010 has resulted in a massive growth in illegal tobacco and contraband.

But Health Minister Tanya Plibersek isn't buying the argument. ''By dropping their prices, British American Tobacco appears to be directly targeting vulnerable teenagers,'' she said yesterday. ''We know that young people are the most price-sensitive smokers of all.'' BATA spokesman Scott McIntyre says the government is to blame for the price war by increasing the excise.

''Our customers have been down-trading to cheaper products or illegal cigarettes so we've been forced to compete. ''If the government keeps giving us ad-hoc excise increases like they have in the past then all they'll do is make the problem worse.'' Mr McIntyre later admitted on ABC radio that cheaper cigarettes would probably result in more people lighting up.

Cuban cigars: icons abroad, unsmoked at home

The elderly cigar maker sits at a rustic table next to a tobacco field and a barn filled with hanging rows of aging tobacco and meticulously selects the brown leaves, rolling the most tender ones carefully for the center of the world’s most celebrated tobacco product: the Cuban cigar. But here in the province that’s the heart of the tobacco-growing region, as in Havana, it’s largely tourists who light up. Very few of the Cubans themselves smoke cigars. Read more articles here.

The economics of smoking, given the locals’ low, government-set salaries, put cigars out of reach for most people, making the iconic Cuban cigar something that’s produced for foreigners — for export and for tourism. Cuban revolutionary leader Fidel Castro, who for years was always puffing on a Cuban Cohiba cigar, gave them up in the mid-1980s. A ferocious anti-smoking campaign by the government in the last 10 years also has had an impact. But it’s really about the cost.

 “The only people I’ve ever seen puffing on cigars have been in cigar factories, and even in Pinar del Rio, someone might smoke for the theatrical side of things,” said Bill Messina, an agricultural economist at the University of Florida who’s an expert on Cuba and has been there a dozen times since the 1990s. “It’s a luxury good.” John Kavulich, a senior policy adviser with the U.S.-Cuba Trade and Economic Council, said it came down to: “Do you have money for lunch or for a cigar today?”

 With salaries that average $17 to $20 a month, even a cigar that costs the equivalent of a dollar in Cuba’s currency is out of reach. There are low-quality cigars available for less, but they aren’t popular. Archibald Ritter, a Cuba expert at Ottawa’s Carleton University, said that until about 10 years ago cigars were included in every Cuban’s monthly ration card — five a month at reduced prices. “People would get the ration and then resell it,” Ritter said. “Everybody became buyers and sellers. It was sort of an ironic and counterintuitive approach — turning people into mini-capitalists.”

Cigarette consumption up by 4.19% in the year 2011-12

Domestic consumption of cigarettes in 2011-12 increased by 4.19 per cent to 1,16,166 million sticks over the previous year, Minister of State for Commerce and Industry Jyotiraditya Scindia has said. According to the available data, domestic consumption (total number of units sold) of cigarettes in 2010-11 was 1,11,487 million sticks as compared to 1,11,860 million sticks in 2009-10, Scindia said in a written reply to the Lok Sabha.

 "However, the domestic consumption of cigarettes during 2011-12 was 1,16,166 million sticks showing an increase of 4.19 per cent as compared to the previous year," he said. Manufactures of cigarettes and cigars using tobacco are subject to compulsory industrial licensing, he said, adding "however, no industrial licence has been granted for manufacture of cigarettes since 1999, on ground of health". In an another reply, the minister said that in 2010-11, traces of pesticides like carbendazim were detected by some laboratories in some of the consignments of Indian basmati rice to the UK, France, Germany, Belgium and Italy. Source for more articles.

"On account of this, some exporters had to recall their consignments from European markets," he said. Scindia said that All India Rice Exporters Association had served legal notice to the European Laboratory challenging the validation of the testing method. "However, lawyers advised that as per European law, there might not be much relief expected by pursuing the legal course," he said adding the matter has been raised in bilateral meetings by India with the EU. India in 2010-11 exported 2.2 million tonnes of basmati rice, of which over 80 per cent was shipped to Gulf countries, including Saudi Arabia, Iran, Kuwait, Yemen and Europe.

Launches Innokin LEA E-Cigarette in Leather Carry Case

Mp-comp.co.uk launches Innokin lea e cigarette in leather carry case. The Innokin lea is a new design released in May 2011. Extensive R&D has made this a superior unit to it's predecessors. It is very easy to fill & leak-proof (something earlier tank (cartridge) based e-cigs have not been able to claim.). Its vapor production is good, producing a satisfyingly significant improvement in 'throat-hit' over cigarette sized e-cigarettes. Read more about cigarettes and e-cigarettes at our blog.

Battery life is also good, one LEA battery lasts 5 months before needing replacement. This makes a favorable impact on 'running-costs', as all e cigs require periodic replacement of atomizers & batteries. Battery indicators mean users are far less likely to unexpectedly end up with a dead battery.

Tobacco ad doctor appears mired in finance problems

She's the family physician in the doctor's smock turning up in California's living rooms on TV spots, declaring the tobacco tax measure on the June ballot a menace. But now Dr. La Donna Porter is coming under fire from tobacco-control groups and other doctors who are convinced the tobacco doctor -- a registered Republican who once campaigned on behalf of a toxic chemical -- is in it for the money and is being paid by tobacco companies. Public records show that she's struggling to save her home from foreclosure and lift herself financially from two personal bankruptcies. But in an exclusive interview with this newspaper, Porter's husband defiantly defended her, denying that his wife has been paid for her work against Proposition 29.

"We don't know anybody in the tobacco industry," said John Porter from the couple's home in Wilton, 35 miles from Sacramento. "They haven't offered any money. And I've been with her every step of the way." Porter said he was "disgusted" with what he calls a "character assassination" against his wife. "She's a woman who has a great heart for the people she serves," he said. The criticism "has been hurtful. My wife is the most humble, most loyal person. ... It's sickening." La Donna Porter filed for Chapter 7 bankruptcy in 1998 and again in 2008, the latter action coming when her personal debts grew to $2.4 million while she was unemployed for nine months. to be auctioned May 23, according to a foreclosure auction site, but John Porter disputed that. He said he could not comment because of pending litigation.

"We're not exempt from personal problems," he said. "We're fighting through it. We're doing fine. The house is not being foreclosed -- there's been misinformation about that." La Donna Porter, 46, in a statement provided to this paper, said she stood by her views in the ad and insisted she has not been paid by tobacco interests. "As for the personal questions you raised, I do not see how they are relevant to my opposition to Prop. 29 or my involvement as an unpaid volunteer with No on 29," she said. In the TV and radio ads, Porter argues Proposition 29, which would boost California's tobacco tax by $1 a pack, would create "a huge new research bureaucracy with no accountability run by political appointees who can spend our tax dollars out of state."

Porter's appearance in the ads sparked a protest at the 196-bed San Joaquin General Hospital near Stockton, where she has worked for two years. The protest was organized by Carol McGruder, the co-leader of the African American Tobacco Control Leadership Council, who has demanded that Porter divulge how much she has been paid by Philip Morris and R.J. Reynolds. The tobacco giants have thrown $20 million into the campaign with a month to go before the June 5 election. The No on 29 campaign on Friday released a letter insisting that Porter is a volunteer for the campaign and has never been paid. Tobacco companies have a history of cultivating relationships with leaders in African-American communities, such as Porter, to ensure a foothold in a profitable segment of the market, said Valerie Yerger, a medical researcher at UC San Francisco who has published papers on the subject. "Dr. Porter is doing a lot of harm because she's taking advantage of the fact that she's a doctor to promote the interests of the industry that's providing a product that's the primary killer in (the black) community," Yerger said. Porter's ties to the tobacco industry go back to 2006, when she appeared in an ad opposing Proposition 86, the initiative that would have raised tobacco taxes by $2.60 a pack.

Her appearance came late in the campaign after the No on 86 campaign -- bankrolled with $60 million by Philip Morris and R.J. Reynolds -- had failed to land a doctor to make its pitch. According to news reports at the time, actor Americo Simonini, a Beverly Hills cardiologist, had been approached and was offered at least $10,000 if the initiative's proponents could use his name and identify him as a physician. He declined. That year, tobacco companies paid $160,000 to the consulting firm of Alice Huffman, president of the California NAACP, which went on to oppose the tobacco tax. Porter lent her voice to industry groups at least once before 2006. In 2002, she took the side of the chemical industry against health advocates. She became a key voice in opposing an EPA-proposed regulation of perchlorate, a water pollutant that environmentalists say has harmful effects on infants and children. At the time, Porter (then La Donna White), acting as president of an African-American doctors group, argued that the proposal would divert funds from "real health issues" affecting blacks and "scare the public."

She later repeated her argument in a column and in a news release produced by a lobbyist for perchlorate users, the Council on Water Quality. Porter has been a practicing family physician since 1998 after graduating from UC Davis Medical School two years earlier. According to the Medical Board of California, she has had no malpractice lawsuits or other actions taken against her as a physician. But her personal finances were troublesome from the time she began her practice 14 years ago, when she filed for her first bankruptcy. By 2008, her income, $167,000 in 1997 and $193,000 the previous year, had plummeted to $60,000. She'd received unemployment checks for nine months, according to the bankruptcy documents, and was unable to make payments on her house and office space she'd bought in Elk Grove. Porter's Wilton home, south of Elk Grove in the Ranch Equestrian Estates, is a sprawling, 4,850-square-foot, five-bedroom, three-and-a-half-bath house. She bought it in 2006 for $1.18 million but its value has plummeted by more than half.

Acupuncture, hypnosis may help smokers; IVF risks studied

Your Monday morning health roundup:
 Help for smokers:

Acupuncture and hypnosis might help some people quit smoking, say researchers who reviewed 14 previous studies. But it's not clear how many people kick the habit with these methods or how the techniques stack up against conventional approaches such as behavioral counseling and nicotine replacement, Reuters reports. IVF and birth defects:

The increase in birth defects seen among babies born after in vitro fertilization and other assisted reproduction methods can be largely explained by factors that contributed to their parents' infertility -- not by the procedures themselves, a large study concludes. One possible exception: A procedure called intracytoplasmic sperm injection (ICSI) may raise risks because it is "mechanically more invasive" and may allow fertilization with sperm that would otherwise fail, a researcher tells CNN. Obesity and car safety: Obesity raises all sorts of health risks.

Here's one you might not think of: Very obese drivers are less likely than other drivers to wear seatbelts -- possibly because they find standard belts difficult to fasten, researchers say. Previous research has shown very obese people have an increased risk of dying in car crashes. Today's talker: A Phoenix woman faked breast cancer in a scheme to raise money for breast implants, according to police reports. The woman told co-workers and family members she had cancer and needed a double mastectomy. She raised $8,000 before her story unraveled -- after she paid cash to a plastic surgeon and turned down an offer of free treatment for her cancer.

War On Smoking Offers Some Lessons To The Fight Against Obesity

Since first lady Michelle Obama made childhood obesity her signature project almost two years ago, the issue has had the kind of highly visible national leadership that it previously lacked. But that isn’t enough, say public health leaders frustrated with the slow progress in stemming America’s obesity epidemic. Something more ambitious is needed, they argue — something more like the anti-tobacco movement.

The similarities between the two public health challenges are compelling. Tobacco use is the nation’s No. 1 cause of preventable deaths in the U.S., killing 467,000 people in 2005, according to a landmark study by Harvard University researchers. Being obese or overweight caused an estimated 216,000 deaths from heart disease, diabetes and other conditions, researchers estimated, while another’1,000 deaths resulted from being physically inactive – another key contributor to expanding waistlines. In terms of health care costs, obesity is now the larger concern, accounting for $147 billion to $190 billion in yearly expenditures, compared to $96 billion for tobacco.

After decades of lawsuits, damning reports about industry practices, and stop-smoking campaigns, smoking rates have plummeted, from a high of 42 percent of adults in’65 — a year after the first Surgeon General’s report on smoking and health — to just over’ percent today. Meanwhile, obesity has been soaring since the’80s and only last year reached a plateau, which experts say may be only temporary. Currently, 45 million American adults are smokers, while 78 million adults and almost 13 million youngsters are counted as obese. Some public health advocates see other parallels. “When I look at what’s going on with obesity, it reminds me of what was going on with tobacco in the 50s, 60s, and 70s, when there was a lot of emphasis on personal responsibility, voluntary self-regulation, and trying to make safe cigarettes,” said Stanton Glantz, director of the Center for Tobacco Control Research and Education at the University of California, San Francisco.

That approach didn’t work, and efforts to reduce smoking didn’t really have much success until advocates shifted their emphasis from changing individual behavior to community-based activism and holding cigarette manufacturers accountable for harmful products, Glantz said. A similar shift is needed today in the fight against America’s expanding waistlines, many experts believe. Instead of approaching obesity as a personal issue, it needs to be redefined as a community challenge that calls for collective action and wide-ranging policy changes such as more informative food labels, limits on marketing to children, and taxes on unhealthy products, they argue.

But there are many hurdles. The scope of the obesity problem is much larger than tobacco ever was: it touches on the food we eat, the beverages we drink, the amount of television we watch, how much we exercise, the way our cities are designed, and more. While the variety of policy changes proposed are therefore broader, the political will to enact them has not materialized, in part because “people don’t yet perceive a significant personal threat,” said Dr. William Dietz, director of the division of nutrition, physical activity and obesity at the U.S. Centers for Disease Control and Prevention.

Penns Grove officials propose banning smoking in Barber Avenue Park

Borough officials have introduced a new ordinance to prohibit smoking at the Barber Avenue Park in a continued effort to cleanup the park’s image. The ordinance will prohibit any smoking or use of tobacco-related products within 50 feet of the park. According to Mayor John Washington, this is the latest move by the borough to combat issues with drug use and trafficking at the park. “We don’t want any smoking in the park whatsoever,” said Washington.

“This will help us control drug trafficking and drug use at the park ... The situation there has been getting out of hand.” Borough officials said problems like drugs, vandalism and litter have been ongoing concerns at the park. The park was closed temporarily on March 29 to send a message to borough residents that the park is a privilege and residents need to treat it with respect. The park was re-opened eight days later on April 5. Officials said the borough plans to install “No Smoking” signs and security cameras at the park have been re-activated.

 Police presence will also be increased in the area of the park, said the mayor. If the park continues to present a hazard to the community, officials said it will be closed down permanently and will only be open to the community for activities hosted by the recreation department. The new “No Smoking” ordinance will be presented for public comment and voted on for final adoption during council’s next meeting on May 15.

Arlington Bingo Halls Fear a Smoking Ban would hurt Charities

Read more at http://www.freetobacco.info/ blog

Arlington city council is considering an all-out ban on smoking, in every public building. The city already bans smoking in restaurants and most public building, but there are some exceptions. One of those exceptions: bingo halls. Bingo halls generate money for charity. They're worried if Arlington bans smoking, smokers will take their bingo cash to nearby cities where they can smoke. "It's one of the friendliest bingo places in Arlington. We just love to have the people in," said Lauren Stubbs of the Grand Prairie Moose Lodge.

 The lodge holds bingo every Sunday. It raises about $1,000 each week for charity. This sunday, there was a haze hanging over the games, and we're not just talking about the smoke. "It's just a habit. Gambling and cigarettes go together kind of thing," said Stubbs. The moose lodge is worried bingo may go bust. Bingo chairman Tim Warner says 85% of their players smoke. If they can't smoke at the lodge, he's worried they'll take their bingo business elsewhere. "I can possibly see it would kill bingo," said Warner. "As a smoker, I will personally still come to support what we do, but most smokers will probably go somewhere else," said Stubbs.

 "Anybody who ever says 'my business was hurt because smoking was banned,' you gotta ask them what else were you offering besides a place to smoke, if that really happened?" said David Fusco, Executive Director of Arlington Citizens for Clean Air (ACCA). ACCA is the group behind the smoke-free push. "No one should ever have to breath smoke anywhere, anytime, any place. It's unhealthy. It kills people and it kills and awful lot of people," said Fusco. In March, Fusco fired off a letter to Mayor Robert Cluck, asking that the city prohibit smoking in all public places and workplaces. Soon, a city council committee will consider it.

If passed, it would essentially clear the air at the Moose Lodge. The lodge just hopes a ban doesn't also clear the seats. "I'm hoping that the folks who love us for who we are will still continue to come back," said Stubbs. If Arlington outlaws smoking in workplaces, according to ACCA, it would join 30 other cities in Texas with comprehensive smoking bans. In north Texas, that list includes Benbrook, Dallas, Flower Mound, Granbury, Mckinney, Plano, and Southlake.

Smoking ban is least of problems for bars

Cigarettes and tobacco news: http://www.tobacco-news.net/

I couldn't help but think about the article on no smoking in bars. It said that restaurants have not seen a loss of business but bars have because of the ban. Well, lack of smoking is not the problem. What do you think about the drunk driving laws the state has enacted in the last two years? If you smell the cork of a wine bottle or sip a beer you better not get caught driving or you will do at least 30 days in jail and get to pay the state huge sums of money.

Your insurance company will have a field day with your insurance premium — if you can get your license back. I feel sorry for the bars. Once again our in-your-face government is driving another faction of our lives out of business.

When voters ponder 'cigarette tax,' will they think 'stem cell'?

The proposal is pretty simple: Levy a $1-a-pack tax on cigarettes in California and spend most of the proceeds on medical research. Voters might base their decisions on the matter on questions as simple as whether they oppose any new taxes, or whether they're glad to see a revenue producer that, by raising the price of cigarettes(read more: http://www.cigarettesflavours.com/), is sure to lower smoking rates. But it's also possible that Californians will ponder some deeper questions -- chief among those is whether they want to spend the money to fund research on cancer and cardiovascular and pulmonary diseases.

The plan for the cigarette tax, Proposition 29, is sure to strike many voters with its similarities to 2004's Proposition 71, which uses $3 billion in bonds to fund embryonic stem cell research. Like the 2004 initiative, Proposition 29 would create a new agency independent of state government to dole out research grants. Of course, the two also are different in many ways. Stem cell research was getting short shrift from the federal government when Proposition 71 was passed, and the George W. Bush administration had tied researchers' hands.

That gave California a chance to shine nationally; it also gave the state a chance to thumb its nose at a president that many felt was imposing his religious views on science. Cancer research, in contrast, is well funded by the federal government. Proposition 71 takes its funding from the state's general fund, leaving less money for other programs; Proposition 29 creates a revenue stream to pay for research in the form of a new tax on cigarette smokers. It's too early to assess the results of Proposition 71. The stem cell agency has spent about half its money, most of that for laboratories and basic research, and more recently has forged relationships with foreign stem cell research efforts.

Many people, of course, expected quick cures from the initiative, but that was never realistic. And when Californians voted for Proposition 71, the state's economy was still generally robust, the housing bubble a few years from bursting. Yet many voters will take their general feelings about the stem cell initiative into the voting booth when it comes time to decide on Proposition 29. What are your thoughts? Was Proposition 71 a good idea? If you voted for it in 2004, would you vote for it again now?