Menthol Ban = Black Market

SILVER SPRINGS, Md. -- The majority of speakers at a public hearing on menthol cigarettes had a consistent message: Banning menthol would likely lead to a black market.

The hearing was part of a regularly scheduled Tobacco Products Scientific Advisory Committee (TPSAC) meeting, and of the seven people who spoke, four cautioned about the potential black market.

In a surprising testimony, Gilbert Ross, executive director and medical director of the New York-based American Council on Science and Health, said his organization initially was puzzled as to why menthol wasn't included in the FDA's initial flavored-cigarette ban and commissioned a review of literature "to find out what was the real deal with menthol in cigarettes."

"We were quite surprised to find out that it's not quite so easy to say, 'Let's ban menthol,' " Ross said. The council's research found no physiological toxicities associated with menthol in cigarettes, beyond what is already contained in cigarettes.

"It seems quite clear to me that people who smoke menthol cigarettes are really quite devoted to smoking menthol cigarettes, and that if you ban menthol, the chances of creating a black market are substantial," he said, adding that a black market would allow for more under-aged smoking and tax evasion.

Bruce Levinson, a senior staffer of Washington-based Center for Regulatory Effectiveness, cautioned further about harm that could be caused by a black market, citing a Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) filing on the federal register about how contraband is likely to not have standards of production, be sold to people who are underage and have ties to organized crime and terrorist groups. He asked that TPSAC view an upcoming contraband paper from the center, as well as invite the ATF to brief the committee on potential impacts of a menthol ban on the contraband market and the public.

Chicago-based Compass Lexecon was retained by Greensboro, N.C.-based Lorillard Inc. to conduct economic analyses on the subject. Fredrick Flyer, senior vice president at Compass, acknowledged that his company therefore only had access to Lorillard's Newport brand data, but said that his company found low elasticity in preference for the brand.

"What that implies in terms of the black market is that there is sufficient demand out there for menthol cigarettes that shows strong preferences for menthol, and hence, would likely source from the black market should a black market emerge," he said.

Lyle Beckwith, senior vice president of government relations at NACS, said that thus far tobacco products have gone to the black market because of price. "I firmly believe that if there were to be a ban on menthol, that would be the spark that the black market in tobacco needs to push it into a more burgeoning problem for our country." He added, "My membership loses sales when people go to the black market."

Not all participants were focused on potential black market effects, however. Gary Giovino of the School of Public Health and Health Professions, State University of New York at Buffalo, said, "Mentholated cigarettes are at least as dangerous as their non-mentholated varieties, and there is concern about menthol sweetening the poison."

He shared results on The National Youth Smoking Cessation Survey of smokers, which found that 12-17-year-olds were more likely to smoke menthol than 18-25-year-olds. He speculated that banning menthol likely would help contribute to the continuing reduction in smoking by adolescents. "I think the most harm-reducing product is one that's not smoked, so I would hope that prevalence of smoking in young people continues to decline at least as rapidly if not more rapidly than it has been," he said.

Jonathan P. Winickoff spoke on behalf of the American Academy of Pediatrics. "The role of menthol in facilitating smoking initiation is greatly concerning," he said, adding that the nation's youth smoke menthol cigarettes at higher rates than older smokers. "While a child's first cigarette is usually an unpleasant experience, menthol can make it less so, partially by anesthetizing the throat against the harshness of tobacco smoke."

Winickoff also pointed out that 82.6% of African American smokers smoke menthol. Despite the finding, the academy's research found that 20.6% of menthol smokers supported banning menthol, and 47% of African Americans supported such a ban.

Mike Little, former chair of National Black Chamber of Commerce, addressed the fact that many of the statistics shared during the meeting pointed to data that African Americans tend to prefer smoking menthol. But he added, "I think that there certainly seems to be some business implications associated with the banning of menthol."

A former cigarette smoker himself, Little said, "I would be glad to come back if the agency would like to have support in banning all cigarettes. But if cigarettes are going to be a legal item, I don't think that race should ever be used to differentiate and give advantage to some cigarette makers as opposed to others."

The TPSAC's report on menthol is due March 23, 2011.

Tobacco - Spain - New Market Report Published

In 2009, consumers traded down to cheaper variants or switched to alternative tobacco products. Cigarettes suffered the most as a consequence of the strong migration towards RYO tobacco, which for the second consecutive year achieved double-digit volume and value growth rates. This impressive performance from RYO tobacco was the main driver of market value growth in 2009. Spaniards, despite their brand-oriented nature, proved to be frugal and flexible as a result of economic constraints,...

This report Tobacco in Spain report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data 2005-2009, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be the new legislative, distribution or pricing issues. Forecasts to 2014 illustrate how the market is set to change.

Product coverage: Cigarettes, Cigarettes Including RYO Cigarettes, Cigars, Smokeless Tobacco, Smoking Tobacco.

Data coverage: market sizes (historic and forecasts), company shares, brand shares and distribution data.

Why buy this report?
* Get a detailed picture of the Tobacco industry;
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WHO FCTC - 4TH SESSION ON TOBACCO CONTROL - URUGUAY 15 NOV 2010 TO 20 NOV 2010

The fourth session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control (WHO FCTC) will be held at the conference centre of the Conrad Hotel in Punta del Este, Uruguay. It will open at 10:00 on Monday, 15 November 2010, and is expected to close no later than 13:00 on Saturday, 20 November 2010.

Guide for participants in the Conference of the Parties

Fourth Session- Main Documents

Some critical issues:

WHO may have a solution to the contraband problem..

Without a solution to control the flow of illicit (illegal, contraband, smuggling, black market) tobacco products a country can not have a successful tobacco control program.

Flavoured tobacco products around the world.. We are agreement that tobacco flavourings are an increasingly important part of tobacco industry marketing, particularly to young people. Flavourings enhance attractiveness, encourage youth initiation, and discourage cessation.

Part 1: avoidance of nicotine addiction - remove the flavoring from all tobacco products..;
Part 2: avoidance of nicotine addiction - remove the flavoring from all tobacco products...

This issue, which is covered by the Article 9/10 guidelines of the WHO’s Framework Convention on Tobacco Control (FCTC), will be addressed at the upcoming Fourth Conference of the Parties. View images of some flavoured tobacco products and advertising from around the world.

WHO wants to force tobacco growing countries to reduce production as part of its anti-smoking campaign. Tobacco producing countries are opposed to the World Health Organisation's attempts to push through a ban of ingredients used in producing blended tobacco. At present there is no alternative crop that will provide the same income as that from growing tobacco.

Take Zimbabwe, among the top five tobacco producers in the world. Tobacco is the best paying crop in Zimbabwe with a total of 123,4 million kgs sold at the just ended tobacco selling season. About 350 000 people are directly earning a living from tobacco, while an estimated 500 000 more benefit from downstream industries.

About 80% of the world's traded tobacco production was said to be represented at this year's International Tobacco Growers Association (ITGA) Annual General Meeting last week, where farmers discussed the devastating impact the new guidelines for the FCTC could bring if adopted in Uruguay next week.

According to ITGA, which represents 30 million tobacco farmers these measures will have disastrous social and economic consequences without making any difference to peoples' health. Article 9 of the FCTC aims to regulate the contents of tobacco products, that is the testing and measuring of tobacco contents and emissions.

The Zimbabwe Tobacco Association and the Zimbabwe Commercial Farmers Union have both united to fight this ban, which could affect 30 million tobacco farmers globally, according to the International Tobacco Growers Association.

Resolution elusive in debate over NY cigarette tax

UFFALO, N.Y. — New York's latest attempt to tax lucrative Native American smokeshop sales to non-Indian customers has generated mountains of legal briefs, hours of argument and a seemingly constant flurry of court decisions.
What it hasn't generated is any of the roughly half-million dollars per day in projected state revenue.
Collections were to start Sept. 1, but legal challenges by five of New York's Indian nations have indefinitely delayed them.


"To a large extent, this is not a tax issue, it's a constitutional law issue as to whether or not the state has the right to tax," said Stuart Lazar, a University at Buffalo law professor who specializes in tax issues.
The five Indian nations are pursuing multiple challenges, rather than a single, united one, because each is an independent nation with its own government, priorities and business models to protect, authorities said. The strategy has not only lengthened the legal debate but also has put the state's lawyers in the position of defending the same tax law against multiple, simultaneous attacks, each coming from a different perspective.
The state already has appealed a federal judge's decision in Utica granting the Oneida Nation's request to block the tax collections. State lawyers also have appealed two orders by a federal judge in Buffalo meant to give the Seneca, Cayuga, Unkechaug and St. Regis Mohawk nations time to appeal after he denied their requests to prevent collections.
"The nations want to maintain their sovereignty, and this is part of that whole process," said Don Grinde, an American studies professor at the University at Buffalo.
Each nation has a different set of factual circumstances that have to be considered, said Unkechaug Chief Harry Wallace, whose 400-member Long Island nation sold more than 5 million cartons of tax-free cigarettes in 2009, virtually all to non-tribal members, according to state records.
The Cayuga Nation, meanwhile, operates two stores, both tribally owned, while the Seneca Nation's cigarette economy comprises about 170 stores, most of them independently owned and operated. There are about 30 licensed cigarette retailers on the St. Regis Mohawk's territory, and the Oneida Nation operates a dozen SavOn gas station-convenience stores.
The Native American cigarette business has flourished as New York has increased its cigarette tax to $4.35 per pack - the highest in the country. Native smokeshops charge about half of the $10 that non-Native convenience stores charge for name-brand cigarettes and even less for brands manufactured on reservations. Taxing non-Indian smokeshop customers will produce $200 million a year in new revenues for the state, officials estimate, at a time of multibillion-dollar budget deficits.
State lawyers say U.S. Supreme Court precedent is on their side, having upheld states' rights to tax non-Native customers as long as the tax doesn't impose more than minimal burdens on tribes.
The New York Association of Convenience Stores, which has fought for years against its tribal competitors' price advantage, has intervened in the lawsuits, supporting the state's arguments.
Ultimately, the issue could return to the U.S. Supreme Court, either through the tribes' federal cases - which argue the state's plans will impinge on their sovereign right to self government - or a separate state case brought by a North Country wholesaler and a Seneca businessman.
Some of the biggest players in the tax-free cigarette business, the Seneca and Unkechaug nations, say the state tax would disrupt internal taxing structures, which bring in millions of dollars for member health and education programs. Others point to the jobs tribal members would lose when smokeshops inevitably close.
"Unemployment will likely rise to greater than 80 percent," Unkechaug Chief Wallace said in a sworn affidavit.
The Cayuga Nation would "struggle to exist as a financially viable entity," its court papers say.
Past taxation attempts have led to violent protests, including one in 1997 involving tire fires that forced authorities to shut down a portion of the New York State Thruway that runs through the Seneca Nation's western New York territory.
"You're talking about a huge issue and significant costs," Lazar said. "You've got the $200 million a year on one side and all of the job losses on the other side."
But "it's not just a monetary issue," he said. "There's a lot of emotions, especially with tribal members, about encroachment on their sovereignty."
The Cayuga, Oneida and Unkechaug nations have requested court-supervised mediation to settle the dispute, citing a provision in the new tax law that provides for court-endorsed tax agreements between the nations and state. The state attorney general's office so far has opposed the idea.
"It's our view that this dispute is ill-suited to mediation," Andrew Bing, a state lawyer, told Arcara when the issue was raised by the Unkechaug nation. "Mediation has no reasonable chance to be productive."

Cigarettes Without Smoke, or Regulation

FALL RIVER, Mass. — During 34 years of smoking, Carolyn Smeaton has tried countless ways to reduce her three-pack-a-day habit, including a nicotine patch, nicotine gum and a prescription drug. But stop-smoking aids always failed her.

Then, having watched a TV infomercial at her home here, Ms. Smeaton tried an electronic cigarette, which claimed to be a less dangerous way to feed her addiction. The battery-powered device she bought online delivered an odorless dose of nicotine and flavoring without cigarette tar or additives, and produced a vapor mist nearly identical in appearance to tobacco smoke.

“I feel like this could save my life,” said Ms. Smeaton, 47, who has cut her tobacco smoking to a pack and a half daily, supplemented by her e-cigarette.

That electronic cigarettes are unapproved by the government and virtually unstudied has not deterred thousands of smokers from flocking to mall kiosks and the Internet to buy them. And because they produce no smoke, they can be used in workplaces, restaurants and airports. One distributor is aptly named Smoking Everywhere.

The reaction of medical authorities and antismoking groups has ranged from calls for testing to skepticism to outright hostility. Opponents say the safety claims are more rumor than anything else, since the components of e-cigarettes have never been tested for safety.

In fact, the Food and Drug Administration has already refused entry to dozens of shipments of e-cigarettes coming into the country, mostly from China, the chief maker of them, where manufacture began about five years ago. The F.D.A. took similar action in 1989, refusing shipments of an earlier, less appealing version, Favor Smoke-Free Cigarettes.

“These appear to be unapproved drug device products,” said Karen Riley, a spokeswoman for the agency, “and as unapproved products they can’t enter the United States.”

But enough of the e-cigarettes have made their way into the country that they continue to proliferate online and in the malls.

For $100 to $150 or so, a user can buy a starter kit including a battery-powered cigarette and replaceable cartridges that typically contain nicotine (though cartridges can be bought without it), flavoring and propylene glycol, a liquid whose vaporizing produces the smokelike mist. When a user inhales, a sensor heats the cartridge. The flavorings include tobacco, menthol and cherry, and the levels of nicotine vary by cartridge.

Propylene glycol is used in antifreeze, and also to create artificial smoke or fog in theatrical productions. The F.D.A. has classified it as an additive that is “generally recognized as safe” for use in food. But when asked whether inhaling it was safe, Dr. Richard D. Hurt, director of the Nicotine Dependence Center at the Mayo Clinic, said, “I don’t think so, but I’m not sure anyone knows for sure.”

Of the e-cigarettes themselves, Dr. Hurt added: “We basically don’t know anything about them. They’ve never been tested for safety or efficacy to help people stop smoking.”

Public health officials also worry that the devices’ fruit flavors, novelty and ease of access may entice children.

“It looks like a cigarette and is marketed as a cigarette,” said Jonathan P. Winickoff, an associate professor at the Massachusetts General Hospital for Children and chairman of the American Academy of Pediatrics Tobacco Consortium. “There’s nothing that prevents youth from getting addicted to nicotine.”

Sales and use of electronic cigarettes are already illegal on safety grounds in Australia and Hong Kong, and some other countries regulate them as medicinal devices or forbid their advertising. So far the United States has focused only on stopping them at the border, although Senator Frank R. Lautenberg, Democrat of New Jersey, has asked the drug agency to take them off the market until they can be tested.

Distributors of electronic cigarettes fear that a bill making its way through Congress that would give the F.D.A. the authority to regulate tobacco could be used to put them out of business as well. The bill has passed the House and could be taken up by the Senate this week.

The only American study of electronic cigarettes, now under way at Virginia Commonwealth University and financed by the National Cancer Institute, deals not with the kind of safety questions raised by propylene glycol but rather with the amount of nicotine processed by the bodies of the products’ users.

Another study, conducted this year at the University of Auckland in New Zealand and financed by Ruyan, an electronic cigarette company, shows that users typically receive 10 percent to 18 percent of the nicotine delivered by a tobacco cigarette.

Smoking Everywhere, a Florida-based distributor of electronic cigarettes, sued the F.D.A on April 28, claiming that the agency did not have jurisdiction to refuse the imported devices.

“The F.D.A. has the power to regulate Nicorette gum and the like because it is marketed as a smoking cessation product,” said Kip Schwartz, a lawyer for Smoking Everywhere. But the company says its products are a cigarette alternative for adult enjoyment and make no claims to help smokers quit, Mr. Schwartz added.

Matt Salmon, a spokesman for the Electronic Cigarette Association, which represents six distributors, said e-cigarettes delivered nothing more than a mixture of nicotine and water vapor and emitted “no carcinogens.” The association declined to give sales figures, but said that “hundreds of thousands” of people used the products and that the average age of those users was the mid-40s.

“It’s a really good alternative for people who smoke tobacco,” Mr. Salmon said.

Edwin Schwab, who quit smoking regular cigarettes last year after trying e-cigarettes, likes them so much he has started selling them at a mall kiosk in Providence, R.I.

Mr. Schwab took his e-smoke along when he went out one night, he said, “and when everyone was smoking outside in the cold, I just stood in the warm bar, smoking.”

Electronic cigarettes

In their ever-diabolical efforts to sell their dangerous wares, cigarette manufacturers and marketers have created a new smoke screen... electronic cigarettes, which are touted as a safe alternative to smoking. These are small, battery-powered, refillable devices that resemble traditional cigarettes but don’t actually burn tobacco. While the product is said to contain "only" pure nicotine (which is unsafe), a recent FDA analysis indicates nicotine is not the only danger they present.

SOMETHING’S BURNING

"E-cigarettes" are positioned in a way similar to nicotine patches and chewing gums, as being helpful to smokers trying to kick the habit, according to Steven Marcus, MD, of the University of Medicine & Dentistry of New Jersey. The new "fake cigarettes" supposedly contain just liquid nicotine -- but a recent FDA report found nitrosamines in half the samples from the two leading brands tested. Dr. Marcus made it a point to say that "you should not get nitrosamines unless you burn something" and that "these things are not supposed to burn." Nitrosamines are the key carcinogens in tobacco. So the question is, if there is nothing burning in e-cigarettes, then where do the nitrosamines come from?

Also curious was the fact that manufacturers chose to produce the e-cigarettes in a variety of flavors, from chocolate to cherry in addition to the traditional tobacco flavor. (Note: The FDA just banned flavoring in actual cigarettes.) Though of course older folks may like these, too, they seem especially appealing to kids -- and e-cigarettes are primarily sold online, where age restrictions aren’t enforceable. Dr. Marcus told me he is concerned about the potential for misuse of the product, which can result in an overdose of nicotine, and be dangerous to the heart. The bottom line, he says, is "this is nicotine, this is dangerous, and the goal should be to stop smoking."

Charter airline gives out free Blu Cigs electronic cigarettes

You can do a lot of things on an airplane. E-mail a friend, watch TV, even lie in a bed if you're flying overseas in first class. But you can't smoke.

One company hopes to change that. Blu Cigs, maker of electronic cigarettes that offer the taste but not the tobacco found in a regular cigarette, is partnering with a charter jet company to provide free samples to passengers. It hopes some commercial airlines will consider following suit.

"Definitely it's the first step," Jason Healy, president of Blu Cigs, says of the partnership with Global Exec Aviation of Long Beach. "It's largely to gather feedback ... and just highlight the fact it's an option."

Smoking was prohibited on all commercial domestic flights and international flights to and from the U.S. in June 2000, according to the Transportation Department. It wasn't banned on charter flights, but charter companies must provide a seat in a non-smoking part of the plane to anyone who asks.

The department has not taken a position on whether the smoking ban applies to e-cigarettes, spokesman Bill Mosley says.