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Archive for September, 2010

Malaysia beats industry with warning labels

Monday, September 27th, 2010

cigarettes badDespite strong tobacco industry resistance, tobacco control advocates in Malaysia helped implement pictorial warning labels that exceed policy guidelines, a new report found.

The Southeast Asia Tobacco Control Alliance (SEATCA) recently released the report, Implementing Pictorial Health Warnings in Malaysia: Challenges and Lessons Learned, which highlights Malaysia’s experience with implementing pictorial warning labels on tobacco packs despite huge tobacco industry resistance.

Tobacco control advocates managed to mandate and implement pictorial warning labels that exceeded the minimum guidelines in Article 11 of the international treaty – the Framework Convention on Tobacco Control (FCTC). The FCTC states that pictorial warnings should cover at least 50 per cent of the package of a tobacco product, and must cover at least 30 per cent.

SEATCA’s report outlines the challenges and key lessons learned so tobacco control advocates working in other countries can learn from this experience.

Key challenges highlighted in the report are:

•    Resistance from the tobacco industry.
•    Limited human resources working on tobacco control issues.
•    Lack of local evidence to build support for implementation
Key lessons learned and recommendations for effective tobacco control advocacy are:
•    Advocate for a pictorial health warning law that includes clear specifications for the size, shape, and colour of the package, picture and text-based messages to avoid the tobacco industry taking advantage of loopholes in the law.
•    Set a realistic implementation deadline that is no longer than one year after passage of the law.
•    Be prepared to address industry arguments, which can include claims that pictorial health warnings violate international trade agreements and intellectual property rights.
•    Limit tobacco industry consultations and negotiations to avoid compromises that would weaken the effectiveness of warning labels.
•    Partner with researchers to produce local evidence that helps generate political will for implementation among policymakers and support from the media.
•    Provide staff of government and non-government organizations training to build capacity to promote tobacco control policies with policymakers and the media, and to counter tobacco industry claims.
•    Save time and money by taking advantage of resources and information available from other countries, such as picture images.
•    Develop and communicate implementation guidelines that specify responsibilities for tobacco manufacturers, importers, suppliers and retailers in advance of the deadline.

The Week Ahead: Imperial Tobacco to stem the flow of bad news

Monday, September 20th, 2010

Imperial Tobacco is due to post a full-year trading statement on Wednesday and, ahead of the update, investors must be hoping that this week’s update helps turn the tide for the cigarette maker’s shares.

The stock has been repeatedly hit by negative news in recent months, including leaf-cost pressures, heavy promotional activity in the US, worries about the impact of European austerity measures on tobacco taxation and the July disclosure of disappointing cigarette volumes for the nine months to June.

In a review published at the beginning of this month, Evolution Securities said the market was discounting “close to zero future free cash-flow growth … which looks excessively pessimistic”. Just last week, Morgan Stanley, while repeating its positive view on the shares, labelled Imperial the “cheapest” in the global tobacco sector.

With this in mind, Evolution said the simple absence of bad news should help drive the focus back to the value in Imperial’s shares. “We believe it just needs to show robust earnings,” Evolution argued, adding that, in constant currency terms, it was as confident as it could be that “there should be no new negative surprises”.

Beyond the update, the company also has an opportunity to reassure at its investor day later this month. Though it doesn’t expect any significant news flow to emerge at the outing, Evolution said that “a good showing from management” could also help instil greater investor confidence in the stock.

Today – results/updates: IS Solutions.

Tomorrow

Panmure Gordon is anticipating news of a drop in net asset values when the resort developer Dolphin Capital Investors posts half yearly figures. The company’s first half was, as Panmure puts it, an “an interesting period”, with economic stress in Greece – which hosts a number of the company’s major projects – and volatility in the currency markets.

Given this backdrop, the broker, which predicts 173p in net asset value for the half year, against 190p at the first quarter stage, reckons that Dolphin’s valuers will have reduced their valuation assumptions on the company’s Greek assets.

That said, Panmure remains positive on Dolphin’s shares, which, at around 33p, trade at a significant discount to the broker’s forecasts. “We believe the current share price to be completely anomalous, particularly given that the first phases of the four advanced projects were last valued at 77p,” Panmure said, repeating its “buy” view ahead of this week’s figures.

The insurance broker Jardine Lloyd Thompson is due to host an investor seminar at its offices in London. Numis expects to the tone of the presentation to “reflect management’s confidence” in the company’s growth prospects, adding that detail on how Jardine Lloyd continues to win market share against the backdrop of difficult trading conditions “should provide useful insight”.

Results/updates: Wilmington, JD Sports Fashion and Dolphin Capital Investors. Others: Jardine Lloyd investor seminar in London.

Wednesday

The Bank of England will publish the minutes of the last meeting of its rate-setting Monetary Policy Committee. To recap, the MPC decided to keep interest rates at the record low level of 0.5 per cent and sided against adding to its quantitative easing programme, which is aimed at increasing the money supply. Howard Archer, chief UK economist at forecasters IHS Global Insight, expects the minutes to confirm that Andrew Sentance was once again the lone policymaker in favour of a small rise in interest rates.

“We strongly suspect that the other eight MPC members concluded that the serious headwinds facing what is still … [a] muted recovery from [a] very deep recession … warranted unchanged interest rates,” Mr Archer said, adding that he expected the base rate to remain at current levels for the remainder of the year. Global Insight expects the first interest-rate rise to be forthcoming in the fourth quarter of next year and even then sees rates at just 1 per cent at the end of 2011.

Results/updates: RSM Tenon and Imperial Tobacco. Other – Minutes of the last Bank of England Monetary Policy Committee meeting.

Thursday

Mitchells & Butlers, the pubs group which bought the Ha Ha Bar & Grill chain for £19.5m on Friday, is due to issue what Numis reckons will be a “strong” pre-close trading statement later this week. “The disposal of the company’s high street bar estate has increased its orientation to food sales, which have strengthened across much of the sector in recent weeks,” the broker said in a preview published before the Ha Ha deal was announced.

“Without tenanted pubs, the company is valued at a slight discount to its peer group, against which it [offers] above-average growth prospects and the potential to further enhance growth through acquisitions,” Numis added, expecting like-for-like sales growth to have strengthened to 1.8 per cent from 1.6 per cent at the 42-week stage.

Results/updates: Group NBT, United Utilities and Mitchells & Butlers.

Friday – results/updates: Euromoney Institutional Investor.

Tomorrow

Public sector finances

US housing statistics

Wednesday

Minutes of the last Bank of England Monetary Policy Committee meeting to be released

Thursday

BBA loans for house purchases

US initial jobless claims

US existing home sales

Friday

US durable goods orders

US new homes sales