Recent Performance Review Of 6 High Yield Tobacco Equities

Cigarette and tobacco equities are often hyped as recession-resistant businesses. The addictive nature of the vice makes many smokers reluctant to cut tobacco from their budgets, or even substitute their preferred brand, though the cost of cigarettes has continued escalate at a rate that outpaces almost any other consumer good. In fact, it is frequently the case that cigarette sales, as well as other tobacco products, often increase when consumers are forced to cut food budgets, work longer hours and deal with stressful situations.

Additionally, beyond the known realities of the negative health consequences associated with tobacco, nicotine is believed to calm the nerves during aggravating situations, curb one's hunger and act as a stimulant. As an investment option, the health issues and litigation consequences that have plagued the industry have also kept many individuals, institutions and funds from investing in tobacco equities, either as an official or unofficial policy.

This could contribute to market undervaluation of tobacco related equities, as there will often be less demand for tobacco equities than there might be for many other consumer goods makers. Below are the present yields and recent equity performance rates for six publicly traded tobacco companies: British American Tobacco (BTI), Lorillard (LO), Altria Group (MO), Philip Morris International (PM), Reynolds American (RAI) and Vector Group (VGR). I have provided their 1-week, 1-month, 3-month and 2012-to-date equity performance rates.

Future Fund's tobacco investment soars 50%

THE Future Fund's stake in the tobacco industry has swelled by $78 million, an increase of more than 50 per cent, sparking criticism of the fund for investing in companies that are suing the government. The taxpayer-owned fund, which also holds shares in nuclear arms companies, yesterday revealed its tobacco shares were worth $225 million in February, up from $147 million at the end of 2010. Senate estimates also heard that a controversial report written by the fund's new chairman, David Gonski, last year named himself as a possible next chairman before the government had even considered him.

The $77 billion fund was set up by the Howard government to help pay federal public servants' pensions, but is now under fire for its ''unethical'' investments. While the government refuses to intervene in the fund's investment policies, the Greens say its stake in tobacco companies makes a mockery of the plain packaging laws for cigarettes - which tobacco giants are challenging in the High Court. Victorian Greens senator Richard Di Natale accused the government of profiteering from ''the death and misery of people dying with lung cancer''.

 "This undermines all of the good work we've done in tobacco control with measures such as plain packaging. It's particularly galling when you consider they are the same companies taking legal action against the government,'' Dr Di Natale said. The managing director of the fund, Mark Burgess, was unable to say if the increase in tobacco investments had occurred because of stock price rises, or if the fund had been buying more shares. ''Price, currency movements can have a significant impact, as can too an increase in holdings,'' he said.

Over the period in question, share prices of British American Tobacco, Philip Morris, and Imperial Tobacco rose by between 25 per cent and 40 per cent - less than the rise in the portfolio. The Aussie dollar's strength may also have boosted the value of the investments. The fund also owns $180 million of shares in arms companies, and last year was forced to sell its holdings in companies that make cluster bombs before a new treaty came into force.

NY man sentenced in W.Va. on cigarette charges

A New York man convicted of contraband cigarette charges in West Virginia will spend more than a year in prison. Mohammad D. Mohammad of Brooklyn, N.Y., also must pay a $5,000 fine. Mohammad pleaded guilty last November to one count of transporting and possessing more than 10,000 cigarettes without paying state taxes.

Officers found the cigarettes when they stopped him in Lewis County on March 29, 2011. U.S. Attorney William Ihlenfeld II says Mohammad was sentenced to one year and nine months Tuesday in U.S. District Court in Elkins. Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

A smoke-free country? New Zealand, intent on snuffing out habit

New Zealand's government on Thursday squeezed smokers more than ever by announcing a 40 percent hike in tobacco taxes over the next four years. Prices here are already among the highest in the world, and by 2016 they will top 20 New Zealand dollars ($15) a pack on average. Officials hope higher taxes and new restrictions will bring the nation of 4.4 million closer to a recent pledge to snuff out the habit entirely by 2025. Other countries have lauded the idea of trying to wean their populace off tobacco, but few, if any, have been willing to put a date on it. Health officials here are so serious they recently considered hiking the cost of a pack of cigarettes to 100 New Zealand dollars ($75).

Although that idea was dismissed, another measure, which will force retailers to hide cigarettes below the counter rather than putting them on display, will come into effect in July. Smoking rates among New Zealand adults have fallen from about 30 percent in 1986 to about 20 percent today. Cigarette sales have fallen more sharply, suggesting that even people who haven't quit cut back as prices rose. People who are still smoking aren't happy about where prices are going. Chris Hobman said the cost is "horrendous" and could drive some low-income people to commit crimes to support their habit. He said the government needs to provide more support and alternatives to smokers if it's serious about making them quit.

 Wellington resident Hayley Mauriohooho, who has smoked for about 20 years, said that although it would be good if more people quit, higher taxes won't stop her. "It's quite ridiculous for the government to be concentrating on that," she said. "They have bigger things to worry about." New Zealand's Cancer Society reacted to Thursday's announcement by sending out a press release titled "Thumbs Up!" Michael Colhoun, a spokesman for the anti-smoking lobby group ASH, said the fact that a higher percentage of low-income people smoke will mean the tax increases will force many to cut back or quit entirely because they simply won't be able to afford their habit.

 The New Zealand branch of cigarette company British American Tobacco says the tax increases will force consumers to turn to the black market. "Consumer demand is far better served by legitimate companies than by the illegal operators that will surely grow as the government makes it increasingly difficult for people to buy their product of choice," wrote Susan Jones, head of corporate and regulatory affairs, in an email. So far, New Zealand officials have seen few cases of illegal tobacco sales. The South Pacific nation's smoking statistics are similar to those in other developed countries. According to a 2011 study by the World Health Organization, about 20 percent of adult New Zealanders smoke. That compares to about 16 percent of adults in the U.S., 17 percent in Australia, 23 percent in China and 27 percent in France. New Zealand already charges more than 70 percent tax on cigarettes, compared to 41 percent on average for China, 45 percent on average for the U.S., 64 percent for Australia and 80 percent for France.

State tobacco prevention funding lacking

States have spent only about 3 percent of the billions they've received in tobacco taxes and legal settlements over the last decade to fund tobacco prevention programs, making it harder to reduce the death and disease caused by tobacco use, according to a report released Thursday by the federal Centers for Disease Control and Prevention. Between 1998 and 2010, states have collected nearly $244 billion in cigarette taxes and settlement money, compared with only $8.1 billion earmarked for state tobacco control efforts.

The numbers are far less than the minimum of $29.2 billion the CDC said should have been spent over that same period. While states on average have never spent as much the CDC would like, the total has declined dramatically in recent years as states grapple with budget deficits that have forced layoffs, furloughs and cuts for basic services. Many also have raised tobacco taxes in order to increase revenue and supplement funds provided by the tobacco industry. About 46 million Americans smoke, while more than 3 percent of American adults use smokeless tobacco, according to the CDC. And tobacco-related diseases are responsible for about 443,000 deaths a year in the U.S. If states were to use a greater portion of the tax and settlement money for tobacco control and prevention programs, they could achieve larger, more rapid reductions in tobacco use and health-care costs, as well as lower tobacco-related death and disease, the report said.

 "We understand that there are severe financial pressures and that they have difficult choices to make," CDC Director Dr. Thomas Frieden said in a telephone interview with The Associated Press. "Not investing in tobacco control is not only penny wise and pound foolish, but it's also costing lives." According to the report, states that have spent larger amounts on tobacco control programs have seen cigarette sales fall about twice as much as in the U.S. overall. Smoking prevalence also has declined faster as anti-tobacco spending increased in states like Arizona, California, Massachusetts, Minnesota, Maine, New York, Oregon and Washington, the report said. However, other factors like smoking bans also could have contributed to those reductions.

 Frieden said that while states are lacking in prevention funding, tobacco companies continue to spend billions on marketing. The industry spent $10.5 billion to market their products in 2008, the most recent year tracked by the Federal Trade Commission. In that same year, state anti-tobacco funding was about $779 million, according to the report. "The tobacco companies are out there doing everything they can do, and they have gobs of money to do it," said Stanton Glantz, a tobacco researcher who directs the Center for Tobacco Control Research and Education at the University of California, San Francisco. "You don't need to meet them dollar for dollar, you just need to be out there with enough to counter them. ...

It's easier to sell the truth than a lie." In addition to raising tobacco taxes from an average of 39 cents per pack in 1998 to $1.44 per pack in 2010, states continue to receive millions of dollars every year from the tobacco industry in the form of a long-standing legal settlement. Tobacco companies agreed in 1998 to settle lawsuits several states brought over smoking-related health care costs by paying them about $206 billion over more than two decades, but the settlement did not require the money be used for anti-tobacco and stop smoking programs. States first received full payments under the settlement in 1999.

The largest U.S. tobacco company, Altria Group Inc. -- based in Richmond, Va., and maker of Skoal smokeless tobacco and top-selling Marlboro cigarettes -- pays a majority of that. "Today, there's more tobacco-generated revenue available to the states, as well as the federal government, than ever before to fund proven efforts that can prevent underage tobacco use," said Altria spokesman Ken Garcia. "Obviously there's a large spend opportunity to put toward these programs that will help further reduce underage tobacco use and promote cessation."

CANSA condemns tobacco's marketing tactics

Tobacco smoking, including second-hand smoke, is known to cause lung cancer, heart disease and other illnesses. It kills almost 6 million people a year, an average of one person every six seconds with the biggest rise in low- and middle-income countries. Over 44 000 people die each year from tobacco related diseases in South Africa. "We aim to educate policy makers and the public about the tobacco industry's harmful and dark marketing tactics of promoting tobacco products in clandestine ways, enticing women and young people to become smokers," says CANSAs CEO, Sue Janse van Rensburg.

  Big concern

 "We are aware that the past tobacco was made freely available and promoted at exclusive parties and we have evidence of specific brands promoting cigarettes in a supermarket as well as at a restaurant as recent as November 2011. Beautiful women are used to promote and even distribute free cigarettes in that environment; giving the impression that smoking is cool." A big concern is that of hookah (hubbly-bubbly) smoking, which seems to be a popular pastime at parties with teenagers and students. While they may think it is safer than cigarettes, in fact it is deadly. Smoking one hookah pipe can give you as much nicotine as smoking 10 cigarettes even after the smoke has passed through the water; it still contains high levels of toxins including carbon monoxide and cancer causing chemicals. Read more information about tobacco marketing on www.freetobacco.info

 Janse Van Rensburg adds, "It's up to all of us to fight the covert tactics of the tobacco industry and their agents and make the right choice in not supporting it in any way. Get to know the law around the Tobacco Control Act as you have the right to a smoke-free environment and we urge you to report any non-compliance to the Environmental Health Offices of the local municipalities." The Tobacco Control Act restricts tobacco advertising, including viral marketing, which is a favoured approach to target young people. CANSA highlights the need for these laws to be leveraged to stop tobacco companies from marketing their harmful products to the public.

Tobacco black market predicted

Government tax hikes on tobacco will hasten the evolution of a black market, Tauranga tobacco discounter Mike Lawrence warns. Mr Lawrence, who has just changed the name of his Cameron Rd shop to Puff 'n Stuff, was responding to the Budget announcement that the excise tax on tobacco would increase by 10 per cent a year for the next four years, starting January 1. It comes on top of the existing annual inflation indexed tax increases on tobacco, meaning the tax on tobacco was expected to jump by a further 48 per cent by 2016. It will push the price of his most popular packet of 20 cigarettes from $13.20 to more than $20, something which Mr Lawrence predicted would hasten the evolution of a black market in tobacco(www.tobacco-news.net).

 He has already heard about an organised group selling packets of tobacco for $20 and he has personally been offered Asian-branded cigarettes from out of the back of a car for $70 to $85 a carton. He was told they were legally brought into the country by family members but Mr Lawrence told them they were still illegal because they did not carry Government health warning labels. "There is a black market out there and it's growing." The mounting Government pressure on people to quit smoking has seen Mr Lawrence's business branch out into a cafe and gift lines. On July 22, every tobacco product will have to be hidden from public view.

 He was bitter at how pre-budget hints had needlessly spooked Tauranga smokers into buying up cartons of cigarettes, so much so that he had nearly run out by the time the Budget was announced yesterday. "It has been absolutely diabolical for the last few days." The rundown of his stocks was not helped by major suppliers holding out in anticipation of a price rise from midnight. Mr Lawrence said that five minutes after the Budget was read out, he received a call from a supplier asking what he wanted. In the lead-up to the Budget, he had been forced to restrict sales to one carton per customer, but not before one woman almost maxed out her credit card buying cigarettes.

"A lot of people were spending a lot of money they did not have." Labour's Sue Moroney welcomed the tax hike, saying that all the evidence showed it would lead to an immediate fall in the numbers of smokers. ASH communications manager Michael Colhoun said the Government had shown a fantastic commitment to reduce smoking.

Accused ex-guard argues he only brought tobacco to inmates

The trial of a former guard at the Regina Provincial Correctional Centre, accused of drug-running, is in the final stages. During final arguments delivered Thursday, the lawyer for Brent Taylor urged jurors not to believe everything they heard from witnesses for the prosecution. Lawyer James Korpan described one woman, who testified about how she prepared packages of loose tobacco — and drugs — for delivery to the jail, as unreliable.

 "Her evidence seems to just change with the wind," Korpan said, pointing out that the woman was a drug user and that many people were coming and going from her house. Korpan added that his client has only admitted to bringing tobacco, and only tobacco, to inmates on three occasions. He also noted that Taylor never hid or disguised himself when he went to the woman's house to pick up tobacco. He described Taylor's actions as open and transparent, and inconsistent with someone involved in drug-running. The packages looked like regular pouches of loose tobacco and there was no reason for Taylor to think they were anything else.

 He reminded the jurors of Taylor's adamant denial, in a police interview, of bringing drugs into the jail. He said Taylor, in that interview, was understandably concerned about his job because of the jail's policy banning tobacco. The crown's case was largely based on testimony from the two women who allegedly prepared the tobacco packages, and a lengthy investigation by police, who spent months tracking Taylor's movements. The next step in the trial is for jurors to receive instructions from the judge and begin their deliberations.

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Tobacco giants reap monster profits

The biggest of the three, Philip Morris (Australia) increased its profits last calendar year to $376.7 million, up more than $65 million on the previous year. Its revenue was more than $908 million. It spent just $51.4 million on raw materials. Imperial Tobacco Australia made $34.2 million, up more than $5 million in the year to the end of September. Both results outpaced the performance of the Australian share market, which fell 15.2 per cent for the year. British American Tobacco Australia does not separately disclose its profit figures, but said profit was up in Australia "as a result of cost-saving initiatives, favourable exchange movements and higher pricing, partially offset by additional costs associated with the campaign against plain packaging".

All three companies are party to the plain-packaging case, which is seeking to block the Government's plans to force cigarette makers to uniformly encase their products in drab olive green packaging. The case started in the High Court last week. The industry is arguing, among other things, that plain packaging will lead to more people smoking, a loss of government excise, and more profits for organised crime. "There are so many serious consequences involved with plain packaging ... the tobacco black market will be flooded with counterfeit cigarettes as they'll be easier to copy and smuggle into the country," BAT spokesman Scott McIntyre says in a press release. The companies are arguing the case on constitutional grounds, saying the Government is infringing their intellectual property rights - basically taking over their brands.

 The Government argues it is not acquiring the brands, just restricting their use "in a manner appropriate and adapted to reducing harm to ... the public". Cancer Council Australia chief Ian Olver says the industry's estimates of the potential size of the illicit tobacco trade and the government projections were poles apart. "They're claiming absolutely ridiculous levels of illicit trade based on a report that they provided all the information for," he said.

People of Cambridgeshire pledge to stamp out illegal tobacco

A CRACKDOWN on illegal tobacco launched just last month has already generated over 7,000 pledges from members of the public across the East of England to help rid their communities of the problem. Campaigners, including key figures from local district councils, NHS and Trading Standards, have been out on the streets talking to the people of Cambridgeshire about the campaign since its launch. The Cambridgeshire campaign team were hard to miss in bright yellow jackets located at the Grafton Centre entrance in Cambridge and at Wisbech market.

 Dr Liz Robin, Director of Public Health of NHS Cambridgeshire said: “The campaign has received a fantastic response from the people of Cambridge and Wisbech so far and this is just the start. With the number of local organisations now involved and more and more people, businesses and retailers pledging their support every day, we hope the drive to keep illegal tobacco out of Cambridgeshire will continue to grow.” Andrew Fayers, of Trading Standards said: “The people of Cambridgeshire have been really engaged with the campaign not only showing support but wanting to know about the consequences of illegal tobacco in their community.”

 The campaign was launched in response to research which showed 36 % of people have been offered illegal tobacco in Cambridgeshire and 8 % admit to buying it. “It is really important for people to realise that buying illegal tobacco doesn’t only impact on them individually - it makes it easier for children to smoke, brings crime into our communities and undermines our legitimate businesses,” explained Christine Harvey, Regional Tobacco Policy Manager, for the East of England.

 People can find out more about the campaign and pledge their support by logging onto the campaign website at www.no-illegal-tobacco.co.uk. Cambridgeshire Action on Tobacco is a partnership of Trading Standards (Cambridgeshire County Council), South Cambridgeshire District Council, Fenland District Council, East Cambridgeshire District Council, Cambridge City District Council, Huntingdonshire District Council and NHS Cambridgeshire. All parties are fully supportive of the Illegal Tobacco Campaign.
Free tobacco blog at: www.freetobacco.info

Imperial Tobacco Group Buys 275,000 Own Shares To Hold

Imperial Tobacco Group PLC (IMT.LN), said Friday it purchased 275,000 ordinary shares at an average price of 2516.07 pence per ordinary share, adding that the purchased shares will all be held as treasury shares.

 MAIN FACTS:
 -Following the above purchase, Imperial Tobacco holds 71,197,000 ordinary shares as treasury shares. -The total number of ordinary shares in issue--excluding shares held as treasury shares is 996,745,881. -Shares closed Friday at GBP25.43, valuing the company at GBP24.90 billion.

International Tobacco Contraband

The contraband of tobacco products internationally has attracted little interest on a media level, although it constitutes an important and increasing form of revenue for a variety of illicit actors, be they organized crime figures, terrorists or extremist sects. In contrast to narcotics trade or human trafficking, tobacco smuggling constitutes no obvious social threat; nevertheless, these activities are conducted by the same people who run the bulk of other dangerous illicit trades, while fueling governmental corruption in developing nations.

Evidence from many countries suggests that organized crime syndicates amass capital needed to organize a systemic flow of narcotics by investing in tobacco smuggling. The increase in tobacco taxation in most countries makes that trade rather easy to be conducted and yields substantial profits with far lower risks of imprisonment than other more well-known illegal activities. Globally tobacco smuggling is worth 50 up to 80 billion euros. In the E.U. market, the commercial price differences for tobacco products can reach up to 400 percent from lowest to highest price, thus the profits involved are a great lure for all sorts of smugglers.

According to reports by EUROPOL, smuggling of cigarettes and tobacco products is prominent in the regional triangle between Netherlands, Belgium and the United Kingdom. Small groups of people bring tobacco from these two continental countries into the United Kingdom, which has high taxes and the potential for large profit.

Tobacco crop replaced with asparagus for one farmer

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Twelve years ago, Larry Oberdeck was working winters in a tobacco warehouse, a crop industry that was steadily declining. As a full, but small time farmer, Oberdeck was raising corn, soybeans and tobacco. His tobacco acreage had been reduced from 14 to two acres and he needed to find extra ground to work. “Another fella and I started to decide what we could raise because the tobacco industry was going nowhere,” Oberdeck says. “We were sitting around talking one day about what people would want to buy and how we could use our land.” They hit upon asparagus. Oberdeck knew nothing about asparagus and decided to do some research to find out if this was something he could possibly do.

“We didn’t have the Internet back then,” he says. “It was around, but we didn’t have it. My sister-in-law worked at a library, and she got me all this information on how to raise asparagus.” After looking through all the information, Oberdeck says he found each asparagus plant would produce 50 pounds of asparagus a year under the right conditions. “You add up how many plants per acre and it dawned on me that if I could sell all I had it would be better than tobacco an acre,” Oberdeck says. The next step was to plant. He says he wasn’t sure what he was going to get since it takes two to three years to establish asparagus, but he was excited for what was to come. He planted his first quarter acre in 1997.

The first thing he wanted to find out was if he could raise it and if he could actually get a crop from it. He found out asparagus needed to be planted a foot deep in the ground, but then only covered with 2 to 3 inches of soil. Oberdeck wasn’t sure how he was going to do all that digging and covering in an efficient way. “I ended up going to Farm and Fleet and found a sod buster,” he says. “I was able to make a trench by hooking it up to the tractor. I got to thinking, ‘How in the world am I going to cover up all this asparagus.’ It dawned on me that I had a cultivator and if I went just fast enough it would throw the right amount of dirt into the furrow. The only thing I had to do by hand was throw the crowns in.”

He hoed the crop the first year so it would start out good, but figured he didn’t need to do much afterwards. “I learned an awful lot from the first quarter acre,” Oberdeck says. “I thought asparagus would grow anywhere, seeing it grows wild in ditches, but found out there is more to it than that. If you don’t keep the weeds off the field, and don’t take care of it like any other field, you aren’t going to get a crop.” The next year Oberdeck planted another acre and a half, and by the year 2000 he had three and a half acres. He was just starting to sell the first batch at $1.50 per pound. He began to realize picking all of the asparagus was going to be kind of a problem because the first flush seemed to come all at once. “In the early days, I had a friend who had a vegetable stand and asked her if she would sell it for me,” Oberdeck says.

“I would take up about 30 pounds per day. It was really encouraging for me because people started calling me for orders, and I had so much asparagus.” Currently, Oberdeck says he is picking the asparagus by hand because it’s been faster for him, but he also has a contraption that his brother made. “Years ago my brother made me something I could ride on,” he says. “It’s an old Snapper mower he extended by putting a platform on it. It’s really nice because one man can drive or two people can sit on it and put the asparagus in the middle. But this year, it’s just been faster for me to pick it by hand.” Oberdeck says one of his main goals all along was to have enough asparagus to sell every day. He wanted to make sure if people were calling he wouldn’t have to say he didn’t have any available since people just quit asking for it. He harvests his fields daily. It wasn’t until about four years ago that Oberdeck started his own asparagus stand. He likes to keep his asparagus priced so people can afford it. “I learned you have to sell the best,” Oberdeck says. “You have to put out the best. If there are any flaws or it’s not the best you might as well not even try to sell it. You want people to know you have great quality.

So that’s what I strive for.” He says he can sell 40 bunches easily on his stand during the weekend. Oberdeck is now raising about four acres of asparagus and harvesting close to 1,500 to 2,000 pounds per year. “This year it started so early,” he says. “It started growing at the end of March so I don’t know how long it will grow this year. The season usually lasts six to eight weeks.” Oberdeck says he always quits picking by Flag Day to let the asparagus go dormant and keep its nutrients for the following year to make more crowns. During his asparagus experience, Oberdeck says he hasn’t had any frustrations. “It was really exciting from the start,” he says.

“It was something new to see if I could do it, to see if it would grow and to see if I could sell it. It’s so much different than any other crop and nobody else really does it.” At the time Oberdeck began his field he thought it should last close to 20 years and by the time he was ready to retire it would be his full time hobby. “I’m not a big farmer, I don’t have a lot of land, but I like to try new things,” he says. “Who knows, maybe in a year or two I’ll check into raising rhubarb. It’s like asparagus, people who like it, like it and those who don’t, don’t.”

West TN counties to form anti-drug coalitions serving teens

Officials in three West Tennessee counties are working to create coalitions to fight drug use among teens. The state Department of Alcohol and Drug Abuse Services awarded grants to Dyer, Lauderdale and Tipton counties that will allow them to form the panels. Professional Care Services Director of Drug Abuse Treatment Services Lisa Kent told the Dyersburg State Gazette that similar coalitions have been in East Tennessee for years, but they are new to West Tennessee. “It is an exciting thing we are working on,” Kent said. “(We are joining with) Lauderdale and Tipton counties to work together to saturate all three counties.”

 Members of the Prevention Alliance of Dyersburg and Dyer County met recently at City Gate Church as they work to form a group there that will target the use of tobacco, alcohol and prescription drug use. “The goal of this coalition is to make a difference,” said P.A.D.D. Interim Coordinator Nora Ammons. “City Gate Church stepped up as the fiscal agent of the grant. We were encouraged and felt strongly that if this (coalition) is going to make a dent in this problem that it is going to take faith-based organizations and a large cross-section of the community.”

 Mission developed The group has already developed it mission and vision and are reaching out to find organizations and individuals who want to get involved. P.A.D.D.’s vision is to “serve as the cornerstone of building a healthy and safe environment that encourages and promotes the abstinence of tobacco, alcohol, and drugs so our youth grow up to be productive members of society and future advocates of prevention.” “Our law enforcement and county and city government are absolutely essential for this coalition,” said Ammons.

 Dyer County Sheriff Jeff Box said members are currently reaching out to community leaders, parents, businesses, faith-based and civic organizations. “Our law enforcement agencies are working close together in any way we can in this community,” said Box. “But it is going to take the community.”

Police spot violation of tobacco norms, raid shop

The UT Police along with officials of the National Tobacco Control Programme on Thursday confiscated over 260 packets of tobacco molasses of brand Afzal , 20 hookahs and water pipes and about 16 packets of hookah charcoal from a shop in Patel market, Sector 15, in violation of Section 5 of the COTPA (Control of Tobacco Products Act) wherein advertisements of cigarette brands were also displayed. The raid was conducted on the basis of specific inputs.

Dr Deepak Bakshi, nodal officer, National Tobacco Control Programme, Chandigarh, along with Sunil Chowdary, drug inspector, and a team of police officers — SI Ramesh Kumar, SI Ashok Kumar, Head Constable Major Singh and Constable Birender Singh — raided a booth and found a huge cache of tobacco molasses to be used in hookahs along with water pipes, hookahs, charcoal for hookahs. The police team also found about 110 packets of cigarettes of brands like Pine and Black, Superslim, Marlboro, Rothmans packets and cigarettes without the mandatory pictorial warnings.

Two other shops were also found displaying advertisements for cigarette brands and the same were removed by the police officers. Both the shops were booked for violations. Later, the team took a round of Sector 24 market wherein they found three violations of Section 5 of COTPA, ie advertisements of cigarettes and tobacco products. The advertisement boards were removed. At another shop, the team found some cigarette packets without the mandatory pictorial warnings. About 60 such packets were confiscated.

Recent Performance Review For 6 Cigarette Manufacturers

Tobacco and cigarette equities are frequently touted as recession-resistant industries. Due to the addictive nature of the vice, smokers are often reluctant to cut tobacco from their budgets, even though the cost of cigarettes, especially after taxes, has continued escalate. Moreover, cigarettes and other tobacco product sales often increase when consumers are forced to cut food budgets, work longer hours and deal with stressful situations.

Despite the known realities of the negative health consequences associated with tobacco, nicotine is also known to calm the nerves during aggravating situations, curb one's hunger and act as a stimulant. Further, the metaphorical dark cloud surrounding tobacco will keep many individuals and even some institutions and funds from investing in tobacco equities. This disinterest by some investors might contribute to market undervaluation of tobacco related equities, as there could often be fewer buyers of cigarette manufacturers than there might be for many other consumer goods makers.

 Below are the present yields and recent equity performance rates for six publicly traded tobacco companies: British American Tobacco (BTI), Lorillard (LO), Altria Group (MO), Philip Morris International (PM), Reynolds American (RAI) and Vector Group (VGR). I have provided their 1-week, 1-month, 2012-to-date and 6-month equity performance rates.

Groups protest Family Dollar tobacco sales

A group of anti-tobacco activists is protesting Matthews, N.C.-based Family Dollar's recent decision to start selling cigarettes, saying the stores will push more cigarettes on low-income consumers, who already smoke more than average. Family Dollar responded that its decision was driven by customer demand. "We're not in the business of judging our customers for their purchases," said Family Dollar spokesman Joshua Braverman.

"It's just another category where we add the convenience for them." But in a letter to Family Dollar CEO Howard Levine, the Campaign for Tobacco-Free Kids and the Break Free Alliance said the increased availability of tobacco at Family Dollar's 7,100 stores will add to customers' health problems. "Selling tobacco to your customers will make it easier for them to become addicted or sustain an existing addiction," said the letter, co-signed by the groups' directors. "The fact that your customer base is comprised of low-income families makes your decision even more troubling."

 The groups said about 26.9?percent of low-income adults smoke, compared to 19.3?percent of the total adult population. Braverman told McClatchy Newspapers that Family Dollar customers smoke at a higher rate than the general population, which was one factor driving the decision to start selling tobacco. "Our customer over-indexes as tobacco users," Braverman said. "We know they're going to other retailers to purchase their tobacco products."

 In March, Family Dollar reported a record $136.4?million in profits for the second quarter, up from $123.2?million a year ago. Total sales at Family Dollar were $2.46?billion, up 8.6?percent. Family Dollar also has been bulking up its selection of food and drinks. The rationale is similar with tobacco: Executives hope to spur more frequent trips, and allow customers to cross off more of their shopping list at Family Dollar. Levine told analysts at a retail conference this week that while tobacco is a low-profit business, having cigarettes in the store will draw customers who would have shopped elsewhere before.

 "The whole strategy behind adding tobacco was not a basket-builder," he said, using a retail term to describe how much customers buy. "It was very simple. It was to get a trip in the Family Dollar that we had not had before. ... That's what we hope to accomplish, is to get him or her into our store." Family Dollar also has been competing more directly with mega-retailers such as Wal-Mart and traditional grocers as customers look to save money, and both those store categories sell tobacco.

Training on tobacco law planned

The Clinton County Health Department will hold Certified Tobacco Sales Training on Monday, May 7, to help retailers reduce the potential for tobacco sales to minors. In Clinton County, the overall sale of tobacco to minors increased by 5 percent between 2008 and 2011. About 8 percent of the 105 retailers who sell tobacco products in the county were fined for selling to minors, a Health Department press release said.

 Across the state, those figures have actually dropped from 8.3 percent to 5.9 percent over that same time period. "We conduct unannounced compliance checks throughout Clinton County," said Susan Thew, a senior public-health sanitarian who oversees the compliance-check program for the county. "Despite our educational efforts with vendors, sales to youth continue to rise."

 SURPRISE CHECKS

 The state's Adolescent Tobacco Use Prevention Act allows local health departments to conduct unannounced checks and identifies penalties for businesses that sell to minors. "We conduct one adult compliance check and one youth compliance check in retail stores annually," Thew said. "The adult check is used as an educational tool to help vendors understand their responsibilities."

 During an adult compliance check, Health Department staff verifies that tobacco vendors are registered with New York to sell cigarettes products and are compliant with signage and tobacco location requirements.

ZNFU bemoans unfair tobacco pricing

THE Zambia National Farmers Union (ZNFU) has expressed concern over the price exploitation of local tobacco on the regional market by merchants which is adversely affecting the industry. ZNFU commodity chairman Graham Rae said the continued exploitation of local tobacco farmers has a negative impact on the industry. In an interview recently, Mr Rae urged the newly-appointed board at the Tobacco Association of Zambia (TAZ) to investigate why local tobacco is fetching low on the regional market.

He said local tobacco, which is priced at US$4.60 is being treated as inferior when the same commodity from Zimbabwe is fetching US$5.90. “The question is why our tobacco is inferior…I say no, it’s straight exploitation. When you look at the average price of tobacco on the floors now, they are 30 to 50 percent higher than they were last year,” he said. Mr Rae said Zambian tobacco is losing its identity by exporting to Zimbabwe, which later adds value to the product.

“There is a real issue here and as a country we need to find out why our tobacco is being discounted to regional prices in Zimbabwe. If the issue is on value addition, let them tell us so that we can upgrade Tombwe Processing to upgrade the facility to meet international standards,” he said. He wondered why Zambian tobacco should be exported to Zimbabwe to simply enhance their tobacco which has low nicotine and flavour.

“Three years ago, Zambia participated in the international tobacco competition in America and Zambian tobacco came second in the world,” he said. Recently, the Zambia Co-operatives Federation called on Government to quickly address the chaotic tobacco marketing before the opening of the next auction floors. The TAZ is expected to officially open the sales floor price for tobacco on May 11, 2012.

Tobacco stocks: A hard habit to break

Somebody forgot to tell investors that cigarettes are a declining business. The S&P 500 tobacco index has beaten the market, jumping 13 per cent so far this year after surging 36 per cent in 2011. While the U.S. tobacco industry must wrestle with falling cigarette sales, rising taxes and potential litigation headaches, dividend hunters can't kick the industry's lush payouts. “The products tobacco companies make are abhorrent … but they are amazing businesses,” says Darren McKiernan, a portfolio manager with Invesco Canada Ltd.

“The beautiful thing about it is that these companies generate so much cash … They pay out 50 to 75 per cent of their earnings in the form of dividends and they buy back stock.” Philip Morris International Inc. and its former parent Altria Group Inc., (MO-N32.420.210.65%) both of which sell the iconic Marlboro brand, are among the best-positioned bets in a sector where dividends now yield 3 to 6 per cent. Both firms recently reported higher first-quarter profit, while Lorillard Inc. (LO-N133.56-1.73-1.28%) and Reynolds America Inc. (RAI-N40.77-0.06-0.15%) saw earnings fall on weaker cigarette volume. Sales of cigarettes have been falling in markets like the United States and other developed countries because of smoking bans and concerns about tobacco-related cancer.

But the industry has been offsetting revenue declines by cutting costs, boosting prices and diversifying into smokeless tobacco products like snuff, which is inhaled through the nose, and snus, which users insert between their teeth and gums. Lorillard, which last year fought off a proposed U.S. government ban on its top-selling menthol cigarettes, expanded its offerings last week by buying Blu Ecigs, a maker of electronic cigarettes that heat nicotine-laced liquid and convert it into a mist. “At some point, the party ends, but as far as I can tell, it is a long, long way off,” said Mr. McKiernan, who owns Philip Morris, Altria and British American Tobacco in his global dividend fund. While the U.S. tobacco industry continues to battle lawsuits, “the litigation environment is more benign now” because it has won some big cases, and litigation is less prevalent in other countries, he said.

“The dirty little secret is that the biggest beneficiaries of tobacco companies are the local governments because of the taxes.” China, home to a third of the world's smokers, is a closed market where tobacco sales are dominated by state-owned China National Tobacco Corp, but cigarette sales are rising in other Asia markets where consumers with more disposable income seek out prestigious brands such as Marlboro. Unlike its three domestically focused U.S. peers, Philip Morris International is “generating growth and has momentum” in international markets, said Wells Fargo Securities analyst Bonnie Herzog. She rates its stock as her “top pick” with a one-year target of $96 (U.S.) a share.

 “I expect Philip Morris' profit in Asia to double to over $10-billion by the year 2020,” she said. “One of the big drivers is Indonesia where I expect profits to quadruple.” Altria is Ms. Herzog's top U.S. pick because she expects its Philip Morris USA unit will become more aggressive in offering alternative tobacco products this year to keep its No. 1 market position. Cigarette sales have been declining for four decades, but the U.S. tobacco category is “closer to flat” when smokeless products “be it moist snuff, snus, dissolvables or electronic cigarettes” are included, Ms. Herzog said. She compares the sector to the beverage category where carbonated soft drinks are fading, but “you have non-carbonated drinks, whether it is water, juice or tea, and energy brands like Monster or Red Bull.”

 S&P Capital IQ analyst Esther Kwon has a “strong buy” on Philip Morris because of its rising sales in emerging markets, and a “buy” on Lorillard and Altria. Lorillard, through its Newport brand, dominates the market for menthol cigarettes, but has launched a non-menthol version that is gaining market share, she said. “We are less positive on Reynolds American, which we have downgraded to a hold” because its brands are vulnerable to consumers trading down to roll-your-own cigarettes, she said.

Lights out on tax on cigarettes?

Now that the election is in the history books, Danville City Council’s next task is to finish work on the 2012-13 budget — one that’s likely to include a new local tax on cigarettes. Danville’s proposed budget doesn’t try to justify this new tax on health grounds. In that argument, the cost of smoking is raised to the point where smokers are forced to quit. That’s not happening here. Neither is there any acknowledgment of tobacco’s role in Danville’s rich history.

The city is, of course, best known for being a transfer station for tobacco from nearby farms to the companies that turn that tobacco into cigarettes. You won’t find any references to that irony in this proposed budget. Instead, Danville’s proposed cigarette tax is simply about adding another 30 cents to the price of pack of cigarettes, with the hopes of generating another $100,000 in the upcoming budget year and as much as three times that amount once the cigarette tax is levied for an entire year.

 Danville is one of nine Virginia cities (out of 39) that do not charge the cigarette tax. That would seem to put the matter in the realm of "We should do it because just about everyone else is doing it." But the real question that should be asked right now is "What are the unintended consequences of adding to the cost of cigarettes purchased in Danville?" Danville is not an island surrounded by dozens of miles of empty space. If the cigarette tax is enacted in the next few weeks, store owners won’t start collecting it until Jan 1.

That’s plenty of time for some of them to figure out where to locate new stores that will sell cigarettes for less in Pittsylvania County or Caswell County, N.C. Of course, it costs a lot of money to make the kind of capital investment simply to create a price advantage for cigarettes sold just over the border. But the border isn’t all that far from most of Danville, and the members of City Council would be wise to consider the competitive disadvantage that they could be creating for the city’s merchants.

 For a city like Danville, which has developed into a retail hub for the surrounding communities, that competitive disadvantage might have the unintended consequence of spreading the hub’s retail sales to areas beyond the reach of the Municipal Building’s tax collectors. That concern is worth considering now, before it’s too late. Danville certainly needs new revenue, but the better choice this year is to find more savings in the lines of municipal government spending. Tax increases may be a forgone conclusion, but their bite is numbed when people know their political leaders were willing to take a tough look at spending before they raised an entirely new tax.

Bedford man convicted in regional cigarette theft conspiracy

A Bedford man accused in a regional cigarette theft conspiracy was convicted in a jury trial here Tuesday. Keith Lamont Hill, 55, is not a typical thief. Tuesday’s trial was not a typical jury trial. Hill’s case drew attention as his capture relied heavily on the warrantless tracking of his movements by a GPS device attached to his car in the 2010 investigation. A Supreme Court ruling in January in a similar case ruled the placement of such a device falls under the Constitution’s protections against unreasonable search and seizure.

 Hill will not get the benefit of that ruling, at least not now. He also drew attention because he unhesitatingly insisted on serving as his own lawyer — now with a 0-4 record. Charged in cigarette theft cases in Botetourt, Franklin and Campbell counties and the cities of Salem and Lynchburg, he now stands convicted in all but Lynchburg. Before the January Supreme Court ruling, judges in all but Campbell County and Lynchburg ruled the placement of the GPS tracker did not require a warrant.

Existing case law said the placement was not a search or seizure as long as the device was placed while the vehicle was parked on a public street. Since January, the remaining two judges have ruled investigators acted in good faith and while a warrant may be required now, it wasn’t under the law two years ago. He appealed those decisions in the earlier cases and plans to do as much with this one, he said Tuesday.

 Hill came under suspicion in late 2010 when investigators, starting in Botetourt County, began noticing a pattern of cigarette-theft crimes at grocery and convenience stores. In all cases, the perpetrator would cut a hole in the wall of the store and take nothing but cigarettes. On Sept. 27, 2010, less than two weeks after investigators put the GPS tracker on his car, the Campbell County Sheriff’s Office got a familiar call. In her testimony before Tuesday’s jury, Nancy Franklin described her surprise when she came to work that morning to open the Food Lion supermarket just south ofLynchburgon U.S. 29.

 “There was a big hole in the side of the building,” Franklin, the store manager, testified. “I could actually see inside the building.” Nothing was missing, save 180 cartons of cigarettes, she said. Meanwhile, Lt. John Mandeville of the Botetourt County Sheriff’s Office was on his way to Rustburg to meet with others working the regional investigation. With him, he carried a report of every location Hill’s car stopped for the last 11 days. Mandeville information confirmed the car had been sitting in the vicinity of the Campbell County supermarket for a little more than an hour around 2:30 that morning, he testified.