NEW HAVEN, Conn. (AP) — The maker of Skoal and Copenhagen smokeless tobacco has agreed to pay $5 million to the family of a man who died of mouth cancer in what is believed to be the first wrongful-death settlement won from a chewing tobacco company.
A legal expert said the case could open the door for more lawsuits against makers of chewing tobacco, an industry that drew fewer legal battles during the 1990s than cigarette manufacturers.
U.S. Smokeless Tobacco Co. will pay the award to the family of Bobby Hill of Canton, N.C., who began chewing tobacco at 13. He died in 2003 at 42.
Attorney Antonio Ponvert III, who represented Hill's relatives, told The Associated Press about the agreement Tuesday. Regulatory documents confirmed the deal.
Steven Callahan, a spokesman for Altria, which acquired U.S. Smokeless Tobacco last year, said the company admitted no liability and does not make any health claims about its products.
Ponvert and Mark Gottlieb, director of the Tobacco Products Liability Project at Northeastern University in Boston, both said the Hill family settlement is the first case of its kind.
Gottlieb predicted more lawsuits targeting smokeless tobacco would follow, calling the settlement "a wake-up call" to plaintiffs' attorneys "that there are a lot of victims of smokeless tobacco use out there, and it's possible these cases can be successful."
Smokeless tobacco companies managed to fend off most previous lawsuits. In the past, lawyers focused more on cigarette makers because of stronger evidence to back up their claims, even though smokeless tobacco is harmful as well, Gottlieb said.
"So this is an unusual instance and runs counter to what had been the sort of the playbook for tobacco litigation," Gottlieb said. The settlement shows that "perhaps there is a new strategy afoot in terms of dealing with some of these types of cases."
But, Gottlieb added, Altria may have simply concluded it was cheaper to settle than risk a larger award at trial.
Callahan said the case involved unique circumstances because it was a settlement offer made before Altria acquired the company.
"And we have no intention of settling cases like this in the future," he said.
Ponvert said his case was bolstered by previously undisclosed letters from the 1980s that the company sent to minors thanking them for their business and offering free samples. The company even sent a can opener to one child to help open the chewing tobacco, he said.
"It was just this unbelievable trail of incredibly damning documents," Ponvert said.
The family's case also was stronger because Hill was a longtime user of chewing tobacco who did not drink or smoke cigarettes, factors tobacco companies point to as causing the cancer, Ponvert said.
Hill's wife, Kelly, filed the lawsuit in 2005 after her husband died of cancer of the tongue, Ponvert said.
Through her attorney, she declined to comment.
Hill had multiple surgeries to remove his tongue. Mouth cancer victims typically lose parts of their mouth, either through surgery or because the tissue wastes away.
"It's a really sad and a really gruesome way to die," Ponvert said.
For many years, smokeless tobacco has carried warning labels. Rules that took effect in June require larger labels listing the risks of chewing tobacco, including cancer, gum disease and tooth loss, and stating that smokeless tobacco is not a safe alternative to cigarettes.
The Altria spokesman said the company supported legislation enacted last year that allowed the FDA to regulate tobacco and required the larger warning labels.
U.S. Smokeless Tobacco was headquartered in Greenwich before being acquired by Altria, which is also the parent of Phillip Morris USA, the nation's largest cigarette maker.
Best info and news about tobacco world!
Tuesday, December 28, 2010
Wednesday, December 22, 2010
Consumers choose price over branding in tobacco
Andrew Lansley may want to rethink his support of putting cigarettes in plain packs after The Grocer's annual Top Products survey revealed that price - far more than bright shiny packaging - determines purchasing decisions.
The overall tobacco category grew by 3.8% in value for the year to 2 October, helped by increases in both duty and VAT, but within that there was staggering growth for some of the lower-priced brands, while the most recognisable such as Marlboro, Benson & Hedges and Regal all suffered significant losses.
Imperial Tobacco's budget John Player Special Blue variant experienced by far the strongest growth of any grocery product sold this year up a massive 173.1% to £209.4m.
Rival JTI also enjoyed massive success for its low price brand, Sterling, with King Size up 67.1% and Superkings up 37.9%.
In stark contrast, premium cigarette brands all lost sales Marlboro Gold was down 2.4%, Benson & Hedges Gold was down 4.3% and Regal was down 11.3%. Overall, 632 million fewer cigarettes were sold but this was more than made up for by a 19.5% increase in the sale of roll-your-own tobacco, which smashed through the £1bn barrier with total sales of £1.14bn.
The figures suggest that price is the key factor for smokers in the current economic climate and will cast further doubt over the need for government to introduce plain packaging.
"Making all tobacco products available in the same, easy-to-copy generic plain packaging would potentially lead to a significant increase in counterfeit product," said Imperial Tobacco head of marketing Steve Brock. "Governments need to ask themselves whether they want tobacco products to be sold by a responsible, legitimate business or by organised crime gangs who have no regard for any regulation."
Elsewhere in Top Products, pet food has also had an excellent year, with volume and value sales up 13.3% and 4.4% respectively on the back of consumers trading up to more premium products for their pets.
Now worth £1.6bn, the category owes much to new first-placed Whiskas pouch's strong performance. The Mars product's 12.6% value increase added £19m to sales, boosting them to £169.8m.
Another category that posted strong growth was sports and energy drinks, with sales up £112m to £827.6m, driven by impressive Lucozade performances. Just one brand in this category, Powerade, failed to record value growth.
Cheese also had a good year. Despite constant promotions, particularly on Cheddar, value sales rose £12.7m. Of the big brands, Cathedral City saw its sales rise 8% to £208.7m and Dairylea's were up 5.2% to £106m. Reduced fat brand Low Low, which launched in mainland UK last April, got off to a great start, with sales up by 847.2% to £10.3m.
Other standout brands included Danone Activia, which was up by £22.2m to £237.6m and knocked Müller Corner into second place in yoghurts and desserts. Meanwhile, Kingsmill stood out in a struggling bread category as the only bread brand in value growth, with sales up 7.3% to £358.4m.
The overall tobacco category grew by 3.8% in value for the year to 2 October, helped by increases in both duty and VAT, but within that there was staggering growth for some of the lower-priced brands, while the most recognisable such as Marlboro, Benson & Hedges and Regal all suffered significant losses.
Imperial Tobacco's budget John Player Special Blue variant experienced by far the strongest growth of any grocery product sold this year up a massive 173.1% to £209.4m.
Rival JTI also enjoyed massive success for its low price brand, Sterling, with King Size up 67.1% and Superkings up 37.9%.
In stark contrast, premium cigarette brands all lost sales Marlboro Gold was down 2.4%, Benson & Hedges Gold was down 4.3% and Regal was down 11.3%. Overall, 632 million fewer cigarettes were sold but this was more than made up for by a 19.5% increase in the sale of roll-your-own tobacco, which smashed through the £1bn barrier with total sales of £1.14bn.
The figures suggest that price is the key factor for smokers in the current economic climate and will cast further doubt over the need for government to introduce plain packaging.
"Making all tobacco products available in the same, easy-to-copy generic plain packaging would potentially lead to a significant increase in counterfeit product," said Imperial Tobacco head of marketing Steve Brock. "Governments need to ask themselves whether they want tobacco products to be sold by a responsible, legitimate business or by organised crime gangs who have no regard for any regulation."
Elsewhere in Top Products, pet food has also had an excellent year, with volume and value sales up 13.3% and 4.4% respectively on the back of consumers trading up to more premium products for their pets.
Now worth £1.6bn, the category owes much to new first-placed Whiskas pouch's strong performance. The Mars product's 12.6% value increase added £19m to sales, boosting them to £169.8m.
Another category that posted strong growth was sports and energy drinks, with sales up £112m to £827.6m, driven by impressive Lucozade performances. Just one brand in this category, Powerade, failed to record value growth.
Cheese also had a good year. Despite constant promotions, particularly on Cheddar, value sales rose £12.7m. Of the big brands, Cathedral City saw its sales rise 8% to £208.7m and Dairylea's were up 5.2% to £106m. Reduced fat brand Low Low, which launched in mainland UK last April, got off to a great start, with sales up by 847.2% to £10.3m.
Other standout brands included Danone Activia, which was up by £22.2m to £237.6m and knocked Müller Corner into second place in yoghurts and desserts. Meanwhile, Kingsmill stood out in a struggling bread category as the only bread brand in value growth, with sales up 7.3% to £358.4m.
Friday, December 17, 2010
Cigarette-Smuggling Gangs Sap Lithuania Budget, Spark Crackdown
A man in a black wetsuit straps nine boxes to his body in the Russian exclave of Kaliningrad, wades into the Nemunas River and swims 200 yards to Lithuania and the European Union.
He drops his cargo as officers close in and 4,500 packs of cigarettes sink to the bottom of the river, according to photographs from the state Border Guard Service. The authorities aren’t always so successful, with the government estimating 110 million packs are smuggled into the country each year, costing it 500 million litai ($193 million) in lost taxes.
Lithuania declared war on smuggling to boost revenue in the 2011 budget under review tomorrow after the deficit swelled to 9.2 percent of economic output during the global recession. The so-called grey economy has grown to 30 percent of gross domestic product as people look for bargains and gangs flood the country with untaxed tobacco, alcohol and fuel from Russia and Belarus.
“Everyone must realize that by smoking illegal cigarettes you not only harm your health as it says on the pack but you also harm your parents and your children,” Prime Minister Andrius Kubilius said Nov. 9 in an interview with Ziniu Radijas. “You take away money from the school your children attend or you take away money from the pension your parents get.”
Baltic neighbors Lithuania, Latvia and Estonia experienced the world’s deepest recessions last year. All three border on Russia, while Latvia and Lithuania also share frontiers with Belarus, making them a gateway into the EU.
Prison Sentences
Lithuania plans to collect an additional 1.2 billion litai next year, or about 1 percent of GDP, by curbing illicit activity, according to the draft budget. The government has pledged to cut the deficit to the EU limit of 3 percent of GDP by 2012.
The government on Nov. 17 approved tougher penalties for smugglers, replacing fines with prison sentences of as much as eight years. Lithuania also plans to increase spending on customs enforcement by 15 percent next year, including 8 million litai to install X-ray scanners at border crossings.
The crackdown is fueling tensions. One smuggler was killed and two officers injured in a June shootout. Last month, a border patrolman found a rag doll hanged from a wooden cross stuck in his driveway less than two weeks after his sauna was set on fire, according to the Border Guard Service.
Targeting smuggling may be the easiest avenue left to rein in the deficit after the government implemented austerity measures equal to 14 percent of GDP in the past two years, said Vilija Tauraite, a Vilnius-based economist at SEB AB, the second-biggest bank in the Baltic countries.
“Fighting smuggling is a rather realistic and effective measure, given how widespread the illegal imports are,” Tauraite said. “The illegally imported fuel, tobacco products and alcohol are no secret to anyone living in Lithuania.”
Excise Taxes
The growth in smuggling led to faltering excise-tax income, the second-biggest source of state budget revenue after the value-added tax. Consumption of taxed cigarettes fell 53 percent from a year earlier in the first nine months of the year, according to the Finance Ministry, which missed its revenue target for the excise category by 8.3 percent in the period.
“Alcohol and tobacco consumption are falling,” said Violeta Klyviene, chief Baltic economist at Copenhagen-based Danske Bank A/S. “This doesn’t mean people resolved to healthier lifestyles, but rather shows booming smuggling.”
Tomas, from Klaipeda, Lithuania’s third-largest city, says he buys illegal cigarettes at half price, saving about 180 litai a month, “a very substantial sum” compared with his monthly income of 1,200 litai from self-employment.
“Nobody in my family buys cigarettes from a shop,” said Tomas, 26, who asked to be identified by his first name because buying smuggled goods is a crime. “I don’t remember the last time I filled up my tank at a gas station. You simply pre-order and get Russian products delivered in a day or two.”
‘No Easy Solution’
Forty-nine percent of the cigarettes smoked in Lithuania this year carried foreign-language, mostly Russian, warning labels, according to the Lithuanian Free Market Institute, a Vilnius-based researcher whose motto is “If you don’t create a free market, a black market will emerge.”
In every country the smokers smoke almost the same cigarette brand, starting from well known Winston cigarettes or Pall Mall cigarettes.
The grey economies of the three Baltic states are the biggest in the EU behind Romania and Bulgaria, according to Friedrich Schneider, a professor at Austria’s Johannes Kepler University of Linz, who studies illegal economies.
The shadow economy accounts for about 30 percent of GDP in Lithuania and Estonia and 27 percent in Latvia, Schneider estimates. The EU average is 20 percent.
The growing reliance on smuggled goods makes people more tolerant of the grey economy, raising concern the crackdown won’t work, said Jekaterina Rojaka, a Vilnius-based economist at DnB Nord Bank, the Baltic unit of DnB NOR ASA. About 64 percent of Lithuanians approve of buying smuggled goods, according to a survey of 1,009 people conducted July 28-Aug. 6 by local pollster Spinter Tyrimai.
“There’s no easy solution,” Rojaka said. “To succeed with the plan, the state will have to stitch up the borders and fight.”
He drops his cargo as officers close in and 4,500 packs of cigarettes sink to the bottom of the river, according to photographs from the state Border Guard Service. The authorities aren’t always so successful, with the government estimating 110 million packs are smuggled into the country each year, costing it 500 million litai ($193 million) in lost taxes.
Lithuania declared war on smuggling to boost revenue in the 2011 budget under review tomorrow after the deficit swelled to 9.2 percent of economic output during the global recession. The so-called grey economy has grown to 30 percent of gross domestic product as people look for bargains and gangs flood the country with untaxed tobacco, alcohol and fuel from Russia and Belarus.
“Everyone must realize that by smoking illegal cigarettes you not only harm your health as it says on the pack but you also harm your parents and your children,” Prime Minister Andrius Kubilius said Nov. 9 in an interview with Ziniu Radijas. “You take away money from the school your children attend or you take away money from the pension your parents get.”
Baltic neighbors Lithuania, Latvia and Estonia experienced the world’s deepest recessions last year. All three border on Russia, while Latvia and Lithuania also share frontiers with Belarus, making them a gateway into the EU.
Prison Sentences
Lithuania plans to collect an additional 1.2 billion litai next year, or about 1 percent of GDP, by curbing illicit activity, according to the draft budget. The government has pledged to cut the deficit to the EU limit of 3 percent of GDP by 2012.
The government on Nov. 17 approved tougher penalties for smugglers, replacing fines with prison sentences of as much as eight years. Lithuania also plans to increase spending on customs enforcement by 15 percent next year, including 8 million litai to install X-ray scanners at border crossings.
The crackdown is fueling tensions. One smuggler was killed and two officers injured in a June shootout. Last month, a border patrolman found a rag doll hanged from a wooden cross stuck in his driveway less than two weeks after his sauna was set on fire, according to the Border Guard Service.
Targeting smuggling may be the easiest avenue left to rein in the deficit after the government implemented austerity measures equal to 14 percent of GDP in the past two years, said Vilija Tauraite, a Vilnius-based economist at SEB AB, the second-biggest bank in the Baltic countries.
“Fighting smuggling is a rather realistic and effective measure, given how widespread the illegal imports are,” Tauraite said. “The illegally imported fuel, tobacco products and alcohol are no secret to anyone living in Lithuania.”
Excise Taxes
The growth in smuggling led to faltering excise-tax income, the second-biggest source of state budget revenue after the value-added tax. Consumption of taxed cigarettes fell 53 percent from a year earlier in the first nine months of the year, according to the Finance Ministry, which missed its revenue target for the excise category by 8.3 percent in the period.
“Alcohol and tobacco consumption are falling,” said Violeta Klyviene, chief Baltic economist at Copenhagen-based Danske Bank A/S. “This doesn’t mean people resolved to healthier lifestyles, but rather shows booming smuggling.”
Tomas, from Klaipeda, Lithuania’s third-largest city, says he buys illegal cigarettes at half price, saving about 180 litai a month, “a very substantial sum” compared with his monthly income of 1,200 litai from self-employment.
“Nobody in my family buys cigarettes from a shop,” said Tomas, 26, who asked to be identified by his first name because buying smuggled goods is a crime. “I don’t remember the last time I filled up my tank at a gas station. You simply pre-order and get Russian products delivered in a day or two.”
‘No Easy Solution’
Forty-nine percent of the cigarettes smoked in Lithuania this year carried foreign-language, mostly Russian, warning labels, according to the Lithuanian Free Market Institute, a Vilnius-based researcher whose motto is “If you don’t create a free market, a black market will emerge.”
In every country the smokers smoke almost the same cigarette brand, starting from well known Winston cigarettes or Pall Mall cigarettes.
The grey economies of the three Baltic states are the biggest in the EU behind Romania and Bulgaria, according to Friedrich Schneider, a professor at Austria’s Johannes Kepler University of Linz, who studies illegal economies.
The shadow economy accounts for about 30 percent of GDP in Lithuania and Estonia and 27 percent in Latvia, Schneider estimates. The EU average is 20 percent.
The growing reliance on smuggled goods makes people more tolerant of the grey economy, raising concern the crackdown won’t work, said Jekaterina Rojaka, a Vilnius-based economist at DnB Nord Bank, the Baltic unit of DnB NOR ASA. About 64 percent of Lithuanians approve of buying smuggled goods, according to a survey of 1,009 people conducted July 28-Aug. 6 by local pollster Spinter Tyrimai.
“There’s no easy solution,” Rojaka said. “To succeed with the plan, the state will have to stitch up the borders and fight.”
Cigarette, bidi cos win a year’s reprieve on warnings
Giving in to the demand of the tobacco industry, the government on Tuesday decided to retain the existing pictorial warnings on cigarette and bidi packages for one more year. The decision taken at a meeting of the Cabinet comes a week after tobacco majors like ITC and Godfrey Phillips India (GPI) stopped production due to uncertainty.
The Cabinet has decided to retain the current pictorial warnings for one more year, after which it will be reviewed in December 2011, sources said. The existing pictorial warnings —a scorpion on bidipacks and a cancer-affected lung on cigarette packs — were to be replaced by a canceraffected mouth, from December 1 after a notification by the ministry of health and family welfare in May this year. Such warnings are to be rotated every year.
Reacting to the government’s decision, Tobacco Institute of India director Udayan Lall said: “We will abide by the decision the government has taken.”
Godfrey Phillips India (GPI) vicepresident marketing Neeta Kapur said the company will start production of cigarettes at its two units in India “within a couple of days” . An ITC spokesperson said, “We have heard this from the media and can comment only after seeing the notification.”
Tobacco companies, which were under an impression that the timeline for ‘mouth cancer’ warning would get pushed back, had made representations to the health ministry requesting for increasing the number of years for implementing particular pictograms from existing one year to two to three years at least. They reasoned out that existing cigarette stock lying with the retailers could not be withdrawn and re-manufactured and this may account to huge losses to them. There are many tobacco manufacturer which are worried for the tobacco industry for example, there is R.J. Reynolds , the producer of Camel cigarettes or Philip Morris , producer of Marlboro cigarettes.
The manufacturers requested that they be first allowed to sell the previous stock and that if the new warning must come into effect then its duration should be increased to two or three years so that companies do not need to print new packets every year.
The Cabinet has decided to retain the current pictorial warnings for one more year, after which it will be reviewed in December 2011, sources said. The existing pictorial warnings —a scorpion on bidipacks and a cancer-affected lung on cigarette packs — were to be replaced by a canceraffected mouth, from December 1 after a notification by the ministry of health and family welfare in May this year. Such warnings are to be rotated every year.
Reacting to the government’s decision, Tobacco Institute of India director Udayan Lall said: “We will abide by the decision the government has taken.”
Godfrey Phillips India (GPI) vicepresident marketing Neeta Kapur said the company will start production of cigarettes at its two units in India “within a couple of days” . An ITC spokesperson said, “We have heard this from the media and can comment only after seeing the notification.”
Tobacco companies, which were under an impression that the timeline for ‘mouth cancer’ warning would get pushed back, had made representations to the health ministry requesting for increasing the number of years for implementing particular pictograms from existing one year to two to three years at least. They reasoned out that existing cigarette stock lying with the retailers could not be withdrawn and re-manufactured and this may account to huge losses to them. There are many tobacco manufacturer which are worried for the tobacco industry for example, there is R.J. Reynolds , the producer of Camel cigarettes or Philip Morris , producer of Marlboro cigarettes.
The manufacturers requested that they be first allowed to sell the previous stock and that if the new warning must come into effect then its duration should be increased to two or three years so that companies do not need to print new packets every year.
Thursday, December 2, 2010
Sauk County tops tobacco watchdog’s list
A state program that surveyed 65 Wisconsin communities says Sauk County retailers were most likely to sell tobacco products to minors.
"I have been doing these investigations for five or six years and have never seen numbers this high," said Jeff Melby, assistant coordinator of the South Central Wisconsin Tobacco Free Coalition.
Melby performs compliance checks for Wisconsin Wins, a state Department of Health Services program that seeks to reduce youth access to tobacco and tobacco-related products. Underage volunteers working with the group walk into businesses and try to purchase tobacco products.
Wisconsin Wins reports that 10 of 32 Sauk County businesses surveyed - about 31 percent - illegally sold tobacco to the volunteers. That was the highest rate out of the 65 communities surveyed statewide during the same time period.
Melby released year-to-date figures Thursday showing that 27 of the 72 businesses he has surveyed throughout all of 2010 sold to minors.
"That's not good," Melby said.
He said some clerks are not aware of less common tobacco products, such as snus - a pouch that users slide under their lip - or dissolvable strips.
"I think they are not watching those sales as carefully," Melby said. "We actually had a situation where a volunteer was trying to purchase snus and one clerk in Sauk County was not even sure that qualified as a tobacco product."
A high rate of turnover at gas stations and convenience stores in the tourism-based Wisconsin Dells could play a role in Sauk County's high numbers of illegal sales, Melby said, adding that employees who are new on the job may not know state requirements when it comes to checking identification.
Melby said greater education and enforcement should help increase compliance with the law.
He also said he would like to see more law enforcement agencies join in the compliance checks and issue citations.
In Reedsburg this summer, Police Chief Tim Becker announced that five sellers who failed compliance checks would receive citations.
The Wisconsin Wins surveys are not scientific, but are intended as educational tools, said Beth Kaplan, spokeswoman for the state Department of Health Services.
She said the state also conducts scientific surveys as part of a federal program called Synar. States must have non-compliance rates of less than 20 percent to qualify for certain federal funding. Just over 7 percent of Wisconsin businesses surveyed in the Synar program in 2009 failed their compliance tests.
"I have been doing these investigations for five or six years and have never seen numbers this high," said Jeff Melby, assistant coordinator of the South Central Wisconsin Tobacco Free Coalition.
Melby performs compliance checks for Wisconsin Wins, a state Department of Health Services program that seeks to reduce youth access to tobacco and tobacco-related products. Underage volunteers working with the group walk into businesses and try to purchase tobacco products.
Wisconsin Wins reports that 10 of 32 Sauk County businesses surveyed - about 31 percent - illegally sold tobacco to the volunteers. That was the highest rate out of the 65 communities surveyed statewide during the same time period.
Melby released year-to-date figures Thursday showing that 27 of the 72 businesses he has surveyed throughout all of 2010 sold to minors.
"That's not good," Melby said.
He said some clerks are not aware of less common tobacco products, such as snus - a pouch that users slide under their lip - or dissolvable strips.
"I think they are not watching those sales as carefully," Melby said. "We actually had a situation where a volunteer was trying to purchase snus and one clerk in Sauk County was not even sure that qualified as a tobacco product."
A high rate of turnover at gas stations and convenience stores in the tourism-based Wisconsin Dells could play a role in Sauk County's high numbers of illegal sales, Melby said, adding that employees who are new on the job may not know state requirements when it comes to checking identification.
Melby said greater education and enforcement should help increase compliance with the law.
He also said he would like to see more law enforcement agencies join in the compliance checks and issue citations.
In Reedsburg this summer, Police Chief Tim Becker announced that five sellers who failed compliance checks would receive citations.
The Wisconsin Wins surveys are not scientific, but are intended as educational tools, said Beth Kaplan, spokeswoman for the state Department of Health Services.
She said the state also conducts scientific surveys as part of a federal program called Synar. States must have non-compliance rates of less than 20 percent to qualify for certain federal funding. Just over 7 percent of Wisconsin businesses surveyed in the Synar program in 2009 failed their compliance tests.
Subscribe to:
Posts (Atom)
