Tuesday, February 26, 2008

British American Tobacco wins Turkish privatisation auction

British American Tobacco PLC (AMEX:BTI) said it has won the auction for the cigarette business assets of Tekel, the Turkish state-owned tobacco company, with a successful bid of 1.72 bln usd.

The transaction is subject to approval by Turkey's competition board and ratification by the Turkish Privatisation High Council. The deal's completion is expected later this year, BAT said.

The deal, if successful, will lift BAT's share of the Turkish market to 36 pct. Tekel's brands account for around 32 bln cigarettes, or around 29 pct of the market, and the company has estimated EBITDA earnings of 151 mln usd in 2007, BAT said.

Annual savings of around 30 mln by the third full year are estimated for the enlarged business, driven largely by improvements in the supply chain and savings in administrative costs, BAT said.

BAT predicts that the transcation will be earnings enhancing by 2009.

Paul Adams, BAT CEO, said: 'This investment, coupled with the country's rapid economic growth, will transform our position in the world's eighth largest cigarette market.'
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Thursday, February 21, 2008

Tobacco Origins and History

1492- Columbus Discovers Tobacco. In his journal, Columbus mentions tobacco for the first time. Rodrigo de Jerez and Luis de Torres first observe the native smoking ritual and try it themselves. Jerez becomes the first smoker of western decent.

1556-Tobacco use spreads to the old world through Spain and Portugal. The plant that grew from these seeds is christened Nicotina tabacura by Linnaeus, thereby immortalizing Jean Nicot's name. Later the addictive alkaloid is called nicotine.

1548 - The Portuguese begin to grow tobacco for export in Brazil.

1770 - The first tobacco shop is established in Lancaster.

1826 - England is importing only 26 lbs of cigars per year. By 1830, England is importing 250,000 lbs per year.
1847 - Philip Morris is open for business in England. They sell hand rolled Turkish cigarettes.

1854 - Philip Morris begins making its own cigarettes in London, on Bond Street

1881 - James E. Bonsack invents the automated cigarette-making machine. It can produce 200 cigarettes per minute, a production rate which would have previously taken 50 workers, thereby markedly reducing the cost of production. Within one year the largest cigarette manufacturer sells more than a billion cigarettes annually.

1832 - The cigarette is invented by an Egyptian artilleryman during the siege of Acre. The Egyptian's cannon crew had improved their rate of fire by rolling the gunpowder in paper tubes. For this, he and his crew were rewarded with a pound of tobacco. Their only pipe was broken, so they took to rolling the pipe tobacco in the paper tubes.

1864 - First American cigarette factory opens and produces almost 20 million cigarettes annually.

1875 - Allen & Ginter cigarette brands, Richmond Straight Cut No. 1 and Pet, begin using picture cards to stiffen the pack and protect the cigarettes. The cards, with photos of actresses, baseball players, Indian Chiefs, and boxers are enormously successful and represent the first modern promotion scheme for a manufactured product.

1901 - 3.5 billion cigarettes and 6 billion cigars are sold. Four in five American men smoke at least one cigar a day.

1902 - Tiny Philip Morris sets up a corporation in New York to sell its British brands, including Philip Morris, Blues, Cambridge, Derby, and a cigarette named after Marlborough Street, where its London factory is located. Marlboro is one of the earliest woman's cigarettes, featuring a red tip to hide lipstick marks. It does not catch on with the public.

1910 - Most popular brands: Pall Mall, Sweet Caporals, Piedmont, Helmar and Fatima.

1913 - RJ Reynolds introduces Camel, considered by historians as the first 'modern' cigarette.

1917 - During World War I cigarettes become the smoke of choice as pipes and cigars prove unmanageable at the front. Between 1910 and 1919 cigarette production increases by 633% from under 10 billion/year to nearly 70 billion/year and cigarette smoking begins to become fixed among American men. The American Red Cross and the Young Men's Christian Association, previously opposed to the propagation of cigarettes, actively supply them to the troops overseas.

1921 - RJ Reynolds spends $8 million in advertising, mostly on Camel. Inaugurates the highly successful "I'd Walk a Mile for a Camel" slogan.

1924 - Philip Morris re-introduces Marlboro with the slogan "Mild as May," targeting "decent, respectable" women. "Has smoking any more to do with a woman's morals than has the color of her hair?" the advertisement reads. "Marlboros now ride in so many limousines, attend so many bridge parties, and repose in so many handbags."

1927 - A sensation is created when George Washington Hill blatantly aims cigarettes advertising campaign at women, urging them to "reach for a Lucky instead of a sweet." Smoking initiation rates among adolescent females triple between 1925-1935, and Lucky Strike captures 38% of the American market.

1936 - Brown and Williamson introduce Viceroy, the first national brand to feature a filter of cellulose acetate. Advertising increases the use of physicians to counter the claims that cigarettes are a major health problem.

1940 - Adult Americans smoke 2,558 cigarettes per capita a year, nearly twice the consumption of 1930

1945 - Smoking is now socially acceptable for women. Another generation of Americans is now habituated to tobacco as a result of free cigarettes distributed by the Red Cross and other organizations to our fighting men and women.

1952 - Kent introduces the 'Micronite' filter, which Lorillard claims "offers the greatest health protection in cigarette history." It turns out to be made of asbestos. Kent discontinues use of the Micronite filter four years later.

1954 - RJ Reynolds:- introduces:- Winston:- cigarettes, but promotes the taste benefit, not health. Winston dominates the US market for the next 15 years.

1954 - Marlboro advertising taken over by the Chicago ad agency Leo Burnett. "Delivers the Goods on Flavor" ran the new slogan in newspaper ads. Design of the campaign, which features 'Marlboro Men,' is credited to John Landry of Philip Morris. Prior to initiating this campaign, Marlboro had <1% of the US market.

1963 – Marlboro dispenses with tattooed sailors and athletes as the Marlboro Man and settles on the exclusive use of cowboys. For several years, Philip Morris research had shown that sales increased whenever they cowboys appeared in their campaigns.

1964 - Marlboro Country ad campaign is launched. "Come to where the flavor is. Come to Marlboro Country." Marlboro sales begin growing at 10% a year.

1968 - Philip Morris introduces Virginia Slims with the slogan, "You've come a long way, baby." Five yeas later, Billy Jean King, wearing cigarettes colors, defeats Bobby Riggs in the televised 'Battle of the Sexes.' Virginia Slims continues to promote tennis matches to this day.

1972 - Marlboro becomes the best-selling cigarette in the world. It remains so today by a wide margin.
1999 - About 10 million Americans smoke cigars.

2002 - CDC estimates smoking health and productivity costs reach $150 billion a year, according to a new study published in this week's WMMR. CDC estimated the total cost of smoking at $3,391 a year for every smoker, and even itemized the per-pack health/productivity costs at $7.18/pack. Further, it estimated the smoking-related medical costs at $3.45 per pack, and job productivity lost because of premature death from smoking at $3.73 per pack.

Current campaign
Fire-safe cigarette legislation has been passed or introduced in many states. To maintain regulatory uniformity, all states and countries are using the “model” FSC regulatory bill based on the New York FSC law. With identical fire safety regulations for cigarettes in all states and countries, cigarette manufacturers can voluntarily produce FSC worldwide. Until then, legislative campaigns mandating FSC will continue.

Thursday, February 14, 2008

Victorians shun cigarettes

However, Quit Victoria executive director Fiona Sharkie said research indicated the increase in the price of cigarettes had also contributed to the decrease ...

New smoking restrictions and graphic advertising has helped cut the number of Victorians now smoking regularly.
New figures show fewer than one in five Victorians are now regular smokers.
The Cancer Council Victoria says 17.3 per cent of Victorians now smoke regularly, compared to 21.3 per cent in 1998.
Council spokeswoman Professor Melanie Wakefield said considerable tobacco control activity and reform had contributed to the reduction.
Last year, the Victorian government introduced a ban on smoking within bars and clubs.
"Over the past decade, Victoria has experienced a rise in smoke free environments, exposure to regular quit smoking mass media campaigns and the introduction of graphic health warnings on cigarette packets," Prof Wakefield said.
However, Quit Victoria executive director Fiona Sharkie said research indicated the increase in the price of cigarettes had also contributed to the decrease in smoking rates.
The figures also show a sharp drop in the number of young adults who smoke regularly.
In 2006, 26.2 per cent of people aged 18-29 were regular smokers. In 2007, the figure was just 18.6 per cent.
Ms Sharkie said Quit had found there were fewer young people experimenting with cigarettes during high school, which may have contributed to the drop, Ms Sharkie said.
However, Prof Wakefield was reluctant to draw any conclusion from the large reduction.
"I'm not going to get too excited about that ... we want to see data from future years to be confident ... but nonetheless the data is moving in the right direction."
Quit also launched a new advertising campaign on Thursday highlighting the difficulty in diagnosing lung cancer before it's too late.
Associate Professor David Ball from the Peter MacCallum Cancer Centre said there were no nerves to detect pain in the lungs.
"I've seen cancers the size of grapefruit in the lung, and the person is not aware of it being there," Prof Ball said.
Prof Ball said the number of lung cancer deaths exceeded that of breast and prostate cancer combined.
"Those people who continue to smoke I'd advise, 'It's never too late'," he said.
"If you quit smoking it not only reduces your chance of getting cancer, but those people who do develop the disease are much more successfully treated than those who continue to smoke."
Victorian Minister for Health Daniel Andrews said the state government was committed to releasing a Victorian Tobacco Strategy.
The government is setting a 20 per cent smoking reduction target in adults by 2013.

Monday, February 11, 2008

Tobacco Origins and History

Tobacco and cigarettes has a long history dating. The tobacco plant is believed to be widely spread in America since the 1st Century.

The written history of cigarettes dates back to the early 16th century when Spaniards conquerors witnessed the Aztec Indians smoking an ancient cigarette, it was a cane or reed tube stuffed with tobacco.

It was the Spaniards who introduced the cigar in the old world. Early in the 16th century, beggars of Seville picked up discarded cigar butts, shredded the contexts rolled them back in paper and termed those as cigarillos.
Cigarettes spread through Europe in the wake of the Napoleonic wars and became common towards the middle of the century.

A cigarette factory was established in 1853 but it was after the Crimean war where British got the first taste of cigarettes, which was the outset of cigarette’s immense upcoming popularity. The French were the people who gave cigarettes their present name, which meant ‘little cigar’.

In 1882, the cigarette was a specialty item made by hand, sold for a penny apiece, and very much the stepchild of other tobacco products. However, that was about to change.

An automated cigarette rolling machine, developed by 18-year-old James Bonsack, was put into use in 1883 and revolutionized cigarette production. The retail price was cut in half, and volume, which in premachine days had never exceeded 500 million, leaped to 10 billion by 1910. American Tobacco was able to take advantage of this new technology and, like Standard Oil, was such a success that it, too, and was broken up by the feds in 1911.

In the 1840s the cigarette industry was born, although cigarettes were still rolled by hand, mainly by women. In 1881 the cigarette-rolling machine was invented, increasing production exponentially. Offering a cigarette and a light became a ritual of sociability. The two World Wars helped spread the habit widely.

During the 1920s women took up smoking as a sign of modernity. The development of mass media and advertising in the late 19th and 20th Century played a decisive role in securing the popularity of cigarettes . Today 93 percent of the world's tobacco is consumed as cigarettes .