Information about Cigarettes and Tobacco.

This June edition of Other Tobacco Product Manufacturing Industry report is the comprehensive market research guide for the industry. It publishes the latest information on the industry’s key financial data, competitive landscape, cost and pricing, and trends during the current economic environment.

The downstream analysis section of this industry reveals a large dependency on personal consumption. Understanding the recessionary effects on consumer consumption for products within this industry is essential. This industry has a high concentration of players, with the market consisting of fewer companies with relative similarity in size. This aspect exposes the industry to further possibility of merger and acquisition opportunities, as well as anti-trust scrutiny. The competitive landscape section provides a closer examination of this situation.
(There is more where this came from … )

A scientist at the Hebrew University of Jerusalem’s Robert H. Smith Faculty of Agriculture, Food and Environment has succeeded in producing a replica of human collagen from tobacco plants – an achievement with tremendous commercial implications for use in a variety of human medical procedures.

Natural human type I collagen is the most abundant protein in the human body and is the main protein found in all connective tissue. Commercially produced collagen (pro-collagen) is used in surgical implants and many wound healing devices in regenerative medicine. The current market for collagen-based medical devices in orthopedics and wound healing exceeds US $30 billion annually worldwide.

Currently, commercial collagen is produced from farm animals such as cows and pigs as well as from human cadavers. These materials are prone to harbor human pathogens such as viruses or prions (mad-cow disease). Human cadaver is scarce, and for certain indications possesses serious ethical issues.

Producing human recombinant type I pro-collagen requires the coordinated expression of five different genes. Prof. Oded Shoseyov of the Robert H. Smith Institute of Plant Sciences and Genetics in Agriculture has established the only laboratory in the world that has reported successful co-expression all the five essential genes in transgenic tobacco plants for the production of processed pro-collagen. For this work, Shoseyov was one of the recipients of a Kaye Innovation Award during the Hebrew University Board of Governors meeting in June.

Shoseyov’s invention on has been patented, and the scientific findings behind it were published recently in the journal Biomacromolecules. A company, CollPlant Ltd., has been established based on patents and technology that were developed in Shoseyov’s laboratory. It has raised US$15 million to establish the first commercial molecular farming company in Israel and is already manufacturing collagen-based products that have attracted collaborative commercial interest from companies in the US, Japan Europe and Israel.

Yissum, the technology transfer company of the Hebrew University, is one of the shareholders of CollPlant.. CollPlant is a public company traded in “TASE”, and the potential revenue for the Hebrew University from this invention is estimated to reach into the multi-million dollar range.

The Kaye Awards have been given annually since 1994. Isaac Kaye of England, a prominent industrialist in the pharmaceutical industry, established the awards to encourage faculty, staff, and students of the Hebrew University to develop innovative methods and inventions with good commercial potential which will benefit the university and society.

Northern Chile provides a gateway for smuggling

Black market cigarettes confiscated by the Iquique customs are up 77 percent through April 30 this year. In the first four months of this year, 1.9 million illegally imported cigarette packets were seized, 867,000 more than those confiscated last year.

The 1.9 million cigarette packets were valued at almost US$4 million.

Each packet of cigarettes — mostly of Chinese origin — smuggled into Arica and Iquique (northern Chile) is valued at US$0.75 but is traded in Santiago at US$1.89 per packet and sold at commercial establishments for US$3.39 a packet.

Despite strict customs controls the illegal trade of cigarettes continues by using the north and central zones as gateways into Chile.

After the recent cigarette tax increase in Chile, these black market cigarettes are in even greater demand, since their prices are comparatively low (as they do not pay custom duties or tax).

District attorney Eduardo Rios, who specializes in economic crimes, said the high profitability of illegal cigarette trading compared to the low penalties for the crime was problematic.

The penalty for illegal importing is no more than three years imprisonment, with a minimum sentence of 61 days, regardless of the quantity of the merchandise, Rios said.

Iquique customs director Raul Barria said that in order to bring the merchandise into the country, smugglers generally declare cigarette packets as something else, such as toys, on the customs declaration forms.

“To circumvent controls, cigarettes are hidden among legitimate cargo to transport it to cities in the north and south,” Barria said.

Police and Chile’s Investigative Police (PDI) have discovered clandestine cigarette stores in Alto Hospicio and Pozo Almonte (near Iquique) and loaded vans traveling between villages such as Mamiña and Poroma (also in Chile’s north).

Eugenio Cortés, the general manager of the local ZOFRI foreign trade zone, blames Chile’s long borders, which are highly permeable, for smuggling.

The border between Peru and Chile is equally problematic, with recent crackdowns on taxi drivers and tour-bus drivers accepting bribes for smuggling people between Peru and Chile.

In the past year PDI staff stationed at the border post have detected nine cases of illegal immigrant smuggling, mainly between Tacna in southern Peru, and Arica, in Chile’s north.

According to PDI prefect Douglas Rodriguez, these methods are used by Peruvians trying to return to Peru from Chile without being detected at the border. “Obviously they can also do it to circumvent legal requirements for serious crimes,” Rodriguez said.

Drivers who have been caught in human trafficking admit to receiving bribes between US$57 and $US94. None of the drivers have been criminally charged since there is currently no law in Chile prohibiting people from profiting by assisting in illegal immigration.

Jordan Patton started smoking cigarettes in high school.

“I started in tenth grade. It was peer pressure that got me to start smoking,” said Patton, a 2006 graduate of Carrick High School who lives in Beltzhoover.

When she became pregnant with her son Jamir, now 8 months, Patton knew she simply had to quit.

“Everyone knows that smoking is no good, and smoking when you are pregnant — everyone knows how dangerous that is,” said Patton, a cook in a nursing home.

Now 21 and more than a year off cigarettes, Patton is one of four people featured in “Breathing Room,” an edgy web-based documentary produced for the Pennsylvania Department of Health. The film chronicles four young black men and women as they attempt to quit.

“Quitting smoking is a struggle, and people need to know they are not alone in having stress. This film should be used everywhere — schools, youth programs and at the Girl Scouts,” she said.

In Pennsylvania, 20 percent of adults smoke. Among black adults, the figure is 26 percent, according to state numbers collected for the Centers for Disease Control and Prevention’s Behavior Risk Factor Surveillance Survey.

“We have seen some increase in smoking rates in this age group among African-Americans, and there has been an inability to reach them,” said Ron Kirby, a public health administrator for the Department of Health’s division of tobacco prevention and control, who was involved with making the film.

Furthermore, about 80 percent of blacks smoke menthol cigarettes, which health officials say are more addictive, Kirby said.

Patton is the only person featured in the film who is from Pittsburgh. The others are from Philadelphia.

“They were so honest and open, which is why we think the film will work well,” Kirby said. Depending on the film’s success, the department may try to commission additional films that would target other groups.

Patton was selected for the film based on her answers to a Department of Health survey. It shows her in several day-to-day situations, including a visit to Magee-Womens Hospital of UPMC and even arguing with her parents at the dinner table.

If Patton was not always thrilled about being tailed by camera crews, she believes her participation in the film will help others.

“Breathing Room” took 18 months to produce and was made by BrownPartners, a Philadelphia marketing firm that specializes in multicultural marketing.

The firm had two one-year, $100,000 contracts with the Health Department, and the film was made within that budget. Kirby said no Health Department employee has a relative working at BrownPartners. The film was paid for entirely out of the $432 million in tobacco settlement money the state receives each year for 25 years, Kirby said.

In planning and making the film, health officials learned that teenagers and twentysomethings respond best to peer-to-peer messaging and social networking.

Patton agrees.

“There’s nothing new about kids ignoring adults,” she said. Now she would like to persuade her parents to quit smoking.

Cindy Thomas, executive director of Tobacco Free Allegheny, a group that runs smoking cessation programs, was impressed with “Breathing Room.”

“It is edgy and will be engaging for the target audience. The four young people in the film are very interesting people. It’s sort of like reality TV. It’s real people, not actors,” she said.

Sharmeen Kahn takes a deep puff from a hookah at the Sultan Café in Richardson. She said it’s a relaxing way to spend the afternoon and besides she said, it’s safer than cigarettes.

“I think it is, I mean you don’t have that smell, that tar going inside your lungs which is not completely, I’m not saying that it’s nothing, that it’s not hurting you at all, but it’s probably less than it would,” Kahn said.

According to a Canadian study that belief may represent a public health threat. Researchers collected information from more than 1,200 people between the ages of 18 and 24 and found that 23% had used a hookah within the past year. Doctors now believe more people are using hookah’s because they think they are safer than cigarettes but experts warn that hookah smoke contains nicotine, carbon monoxide and carcinogens and may contain more tar and heavy metals than cigarette smoke.

Baylor-Dallas pulmonologist Dr. Mark Millard says that some water soluble toxins may be filtered out but the perception that hookah’s are safe is dangerous.

“So cancer causing agents aren’t necessarily reduced, nicotine is also present, which is the hook that gets you on to tobacco products,” Dr. Millard said. “It’s not safe, it feels okay because of the moisture from the water but it’s the stuff in the air that’s the problem.”

Ibaad Qazi likes to smoke while studying and also believes that using a hookah is safer than other forms of smoking.

“If you’re not inhaling it’s not as bad as tobacco smoking cigarette or cigar smoking would be,” Qazi said.

Christie Geter works at the Deep End smoke shop in Dallas where she sells lots of hookahs.

She’s also an occasional hookah user who believes it’s healthier than a cigarette.

“As for as health concerns go, I have bronchitis a lot so smoking a hookah to intake my tobacco would actually be a lot more beneficial for me than smoking a cigarette,” Geter said.

For those who still think hookah’s are somehow safer than cigarettes Dr. Millard said it’s all smoke and mirrors.

“If you think inhaling on a hookah is safer than inhaling on a cigarette, well then I just hope you don’t have to see a lung doctor in a few years.”

Legal threats over plain cigarette packaging have no basis in law.

My late father, a Presbyterian minister, joked that on occasions he would write sermons with the following note to himself: ”Shout here, the argument is weak.” The tobacco industry is shouting very loudly about the Australian government’s proposals for plain packaging of cigarettes.

The industry claims the proposed legislation would be illegal and it would be entitled to massive financial compensation if such laws were passed. In line with my father’s approach, it needs to shout much, much louder because its legal arguments are anaemically weak.The plain packaging proposals would restrict cigarette companies to identifying their brands with simple words in plain font only. No artwork would be associated with or part of the branding of the cigarettes. The intent is that smokers could continue to obtain the brand of their choice, but the visual appeal of the packets to non-smokers, especially children, would be reduced.

These are not recent suggestions. All aspects of the proposals, including their legal implications, have been the subject of global research and consideration for well over a decade. The government’s decision to adopt the proposals is the culmination of a detailed and thorough national and international process.

There are two main legal arguments put by the tobacco industry about the legality of the proposals. Neither withstands any meaningful scrutiny.

The first is that the proposals would involve an acquisition of property by the government, and that under our constitution the government can do that only on ”just terms”. The industry claims that mandating plain packaging would be an acquisition of its property rights in its trademarks, and such acquisition requires monetary compensation.

It is true that trademarks are property. What is not true is the suggestion that the proposals would involve the government acquiring those trademarks. The government wants to restrict the use of them by their owners but has no interest in acquiring them for itself. Highly respected constitutional law experts professors Greg Craven and George Williams have unequivocally rejected the industry’s argument. The industry will be hard-pressed to identify a constitutional law expert who disagrees with them.

The second argument is that tobacco companies have a right under international law to use their trademarks. They do not. No such words appear in the World Trade Organisation agreement dealing with intellectual property. A seminal decision of the organisation addressing the nature of a trademark owner’s rights stated categorically that trademark owners do not have the right to use their trademarks.

They are entitled to prevent others from using their trademarks, but that is all. In addition, the agreement has a provision stating that: ”Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health.” The trademark provisions of the agreement need to be interpreted in light of these fundamental and undeniable legal principles.

Finally, there exists an international treaty specifically dealing with tobacco issues. The World Health Organisation Framework Convention on Tobacco Control requires its 168 parties to implement a comprehensive prohibition on the promotion of tobacco.

In 2008, the parties to the convention unanimously adopted guidelines recommending that parties consider plain packaging in order to achieve that objective. Australia is simply intending to be the first cab off the rank in adopting that option.

If our government declined to take action every time an industry alleged its rights were being affected and the industry was therefore entitled to compensation, it would probably never take any action.

Instead of measuring the volume of the complaint, we should examine the legitimacy of the arguments and any conflict of interests of those who make the arguments. The tobacco industry’s legal arguments are simply not credible. They are a smokescreen designed to scare the government into backing down.

As to conflicts of interest, I should declare mine. On two occasions, the Cancer Council Victoria has supplied me with some very nice sandwiches and some orange juice, although I suspect the orange juice may have been reconstituted rather than fresh.

Those who are shouting on behalf of the tobacco industry may have been more richly rewarded by that industry, but it is a matter for them to declare their interests. Or not. In any event, the tobacco industry will struggle to find independent legal experts prepared to back its legal claims.

No doubt the shouting will continue for a while yet. There may even be litigation, although the industry may prefer not to be required by court processes to reveal how its promotion strategies influence the decisions of children. Ultimately, our government must maintain its resolve in the face of the industry’s bluff and unreasoning noise.

Even a seasoned lawmaker can learn something about the legislative process. Or let’s hope so, anyway.

State Sen. Vivian Figures, D-Mobile, has long been an advocate for a strong, statewide, anti-smoking policy for Alabama. For a dozen straight years, Figures sponsored different kinds of anti-smoking bills.

There have been bills that banned smoking practically everywhere. There have been bills Figures herself had to withdraw because her colleagues weakened them so much. Then, this year, Figures put up a much weaker bill, but one that would at least ban smoking in all restaurants in the state.

About the only thing this year’s bill had in common with all those previous bills was that it, too, failed to pass. After getting through the Senate, the bill to ban smoking in restaurants died on the last day of the session after the House failed to vote on it.

Figures said she is taking the right approach, and that the “way to go, is to whittle at it a little at a time.” But Figures in this year’s session was whittling with a pretty dull knife.

So here’s the lesson for Figures, and others who rightly support a smoking ban in public places: Put up the strongest, most comprehensive bill possible, then focus on getting support and lobby to get it passed. Sure, there might have to be compromises along the way, but clearly starting from a weak position doesn’t work, either.

We hope Figures — or somebody else — does that next session.

A model bill also introduced during the session never got out of a House committee, but if there had been a unified effort on the anti-smoking policy this year, maybe it would have. That bill, sponsored by Rep. Mary Sue McClurkin, R-Pelham, would ban smoking just about everywhere — restaurants, bars, workplaces, public places, even in many open places. That’s the kind of policy Alabama (and all states, for that matter) needs to protect nonsmokers from the unhealthy air created by smokers.

Smoking sections in buildings, restaurants, bars and other places don’t work. Cigarette smoke doesn’t obey the boundaries of smoking areas. Patrons and visitors to these locations must inhale the secondhand smoke, and are subject to all sorts of health problems, including heart disease and cancer.

Even worse, the people who work in bars, restaurants and other places where smoking is permitted have no choice but to inhale poisonous smoke during their workday. Jobs are hard to get, especially in this economy, so quitting isn’t an easy option.

Only about a quarter of Alabama’s adults smoke, so it’s not like there’s a huge constituency to protect. No, Alabama lawmakers respond to what they usually respond to: special interests telling them what to do.

This is an election year, so voters have a chance to change the Legislature. And next year, the no-smoking advocates need to be vocal throughout the session and highlight those who are standing in the way of a strong, credible, statewide smoking policy.

Nestor Gambino doesn’t smoke. He’s always hated the taste of tobacco.

“I think maybe my whole life I’ve smoked two cigarettes,” he said.

But the Sunnyside convenience store owner is worried about the state’s latest expected tax increase on tobacco. Cigarette sales make up at least 20 percent of business at the Buena Vista Market, which he owns with his two brothers.

Customers complain and say they’re quitting for sure this time, said Gambino, adding some will succeed, some only try.

To help plug a $2.8 billion budget hole, state legislators earlier this month passed a wide range of tax increases on mass-produced beer, soda, bottled water and a variety of tobacco products. If Gov. Chris Gregoire signs the bills, as expected, the taxes will take effect in 10 days.

The taxes on cigarettes alone will jump $1 to $3.03 per pack. That will take the average cost of a pack of smokes to $7.30, said Mike Gowrylow, a state Department of Revenue spokesman.

The increase will give Washington the second-highest cigarette taxes in the nation behind Rhode Island and more than twice the national average of $1.40 per pack, according to the Campaign for Tobacco Free Kids.

The hikes come on the heels of a 62-cent increase in cigarette taxes imposed by the federal government last year. The federal tax is now $1.01 per pack. Washington bumped up its taxes by 60 cents per pack in both 2001 and 2005.

Gambino’s right. Some smokers will quit simply because their habit is getting too expensive.

Tobacco Free Kids says on its Web site that every 10 percent increase in the price of cigarettes leads to a 4 percent decrease in smoking. Washington’s jump will spur 19,200 smokers to quit, the group says.

Financial forecasters at the Revenue Department predict even more quitters. They figure every 10 percent increase in the price of cigarettes leads to a 10 percent drop in consumption, Gowrylow said.

True, some of those who try to quit might go back, said Donn Moyer, a spokesman for the state Department of Health. But it takes an average of eight tries to successfully stop, he said.

“If that’s one of the eight … so be it,” he said. “That’s a good thing.”

Smokers, however, feel picked on and accuse the state of preying on their addiction to balance the books.

“Every time you turn around, someone, somewhere is kicking you in the teeth,” said Doug Pacheos, a 55-year-old smoker and owner of a downtown Sunnyside bar. (He also opposed the beer tax increase.)

Pacheos takes a cynical view of the state’s motives.

“Cigarette smoking is bad except for the revenue part of it,” he said.

The idea that the state’s new tax could drive smokers to tribal smoke shops is misguided, said Brenda Fisher, national sales manager for Lil’ Brown Smoke Shack on the Yakama reservation. Though shops like Lil’ Brown don’t charge the state tax, they still are required to collect federal tobacco taxes. So the difference isn’t that great, Fisher said.

“People shop where they shop,” she said. “A lot of it is convenience, and it’s a hike to get out here to the reservation.”

It’s possible recent increases in both federal and state tobacco taxes will lead people to quit, which isn’t good for anybody in the industry, Fisher said.

“There’s been such an attack on the tobacco industry in general, the small segment of the population that still smokes seems to be shouldering the burden,” she said.

The state tax increase comes at the same time as a 17 percent, or $2.65 million, reduction in the state’s tobacco prevention and control program funding.

In the past two years, the program has lost $14 million to budget cuts — a 54 percent decrease. Those cuts caused the state to terminate its mass media advertising campaign. It also prompted cutbacks in the services provided under the state Health Department’s Tobacco Quit Line. For example, callers get four weeks of nicotine replacement material, such as gum or patches, instead of eight.

While smoking cessation advocates laud the tax increases, they liken it to fighting a battle on only one front.

“We believe strongly that when you increase tobacco taxes, the resources need to be there to help people quit,” said Erin Dziedzic, a spokeswoman for the Action Network, a lobbying arm of the American Cancer Society.

Gordon Kelly, environmental health director of the Yakima Health District, said he typically sees a temporary decrease in smoking after a tax increase, but many smokers come back. He also suspects more people will just drive across state lines to stock up on quantities of cigarettes.

That’s illegal with any sized load, punishable by a fine of up to $10 a pack or $250, whichever is greater.

Still, Yakima County is headed in the “appropriate” direction when it comes to smoking, Kelly said.

In the county, 14.1 percent reported smoking cigarettes at the end of 2008, the most recent figures on the state Health Department’s website. That’s down from 18.8 percent in 2004 and lower than the state average of 15.3 percent.

Tony Bertsch, 50, has tried to quit before. Three days is the longest he has made it. He grew up on a farm in a shop where everybody around him smoked.

The Sunnyside resident owns a glass tinting business in Grandview.

Bertsch called the extra taxes unfair. So was Initiative 901, the 2005 voter-approved measure that banned smoking in public places, he said.

“You start feeling like a secondhand citizen,” he said.

Bob Guy, 55, said he has quit, though it took him five tries. His last cigarette was in November.

Still, the Outlook resident called the higher taxes unfair after picking up a pack of Marlboro Lights from Buena Vista Market for his daughter.

“Every time a new tax is needed, the government just nails the smokers,” he said.

Philadelphia City Council was looking at new potential taxes today to help close the city’s budget gap, and the focus seems to be moving from soda to dip.Tobacco lovers — brace yourselves. A new tax on cigars, chewing tobacco and related products — except cigarettes — could be coming from City Hall.

Philadelphia City Council will weigh that option as a potential new revenue source.

Pennsylvania is the only state in the nation that doesn’t already tax smokeless tobacco. Chewing tobacco and pipe tobacco would be taxed at 36¢ per ounce, which is about the size of one can. Individual cigars would be taxed at more than 3.5¢ per ounce.

The sponsor, Democratic councilman Daryl Clark, says it would be levied on retailers as part of the business tax and raise up to $6 million every a year…

The council and Philadelphia Mayor Michael Nutter are trying to close a $150 million budget gap. Some believe Mayor Nutter’s twin proposals for a $300 annual trash collection fee and a 2¢ per ounce tax on sugary beverages are on life supports at best. The council is taking hard look at rearranging the business tax, upping the gross receipt rate and lowering the net income rate. All that talk has the Chamber of Commerce crowd crying foul.

The absolute deadline for passing a new, balanced budget for Philadelphia is the end of June. This tight budget season is generating a wider variety of ideas than ever, and the friction over taxes is nothing new at all.

Junk food is bad for us. No surprise there then. But a shocking new study has revealed that fattening snacks could in fact be as addictive as heroine and cigarettes.

According to the research, food high in fat or sugar trigger exactly the same ‘pleasure centres’ in the brain as drugs and tobacco, making them difficult to give up.

The discovery emerged after experts studied rats fed on cheesecake, bacon and sausages. Almost immediately, the animals started showing signs of addiction.

‘In the study, the animals completely lost control over their eating behaviour and continued to over-eat even when they anticipated receiving electric shocks, highlighting just how motivated they were to continue eating the palatable food,’ says Professor Paul Kennedy from the Scripps research Institute in Jupiter, Florida.

Rats on a normal diet quickly learned to avoid the unhealthy food.

‘It presents the most thorough and compelling evidence that drug addiction and obesity are based on the same underlying neurobiological mechanisms,’ Professor Kennedy continues

The study concluded that parts of the brain that handle the feel-good chemical dopamine become unbalanced after eating junk food. The same changes occur after taking cocaine or heroine.

The good news is that people can adapt their food tastes if they want to. The key is to make subtle changes, such as giving up sugar in tea or replacing full-fat milk with semi-skimmed on cereal. Make simple alterations and new eating habits will eventually replace the old ones.