Tobacco Maker Names Chairman

British American Tobacco PLC on Wednesday tapped former Bank of Ireland PLC Governor Richard Burrows as its new chairman.

Mr. Burrows will take over from Jan du Plessis, who will become chairman of Rio Tinto PLC, on Nov. 1.

Mr. Burrows resigned from the Bank of Ireland in May, following a troubled fiscal year in which the bank's net profit dropped to €69 million ($97.5 million) from €1.7 billion a year earlier and had to seek €3.5 billion in financial assistance from the Irish government. Mr. Burrows apologized to investors at the time for the loss of shareholder value and the cancellation of the company's dividend.

BAT, meanwhile, demonstrated the resilience of the tobacco industry last month when it posted a 16% rise in first-half net profit to £1.45 billion ($2.4 billion).

Sales of cigarettes are continuing to hold up pretty well in the recession because smokers are reluctant to give up tobacco. Also, any dropoff in volume can be offset with price increases. The company's shares have risen 3.4% in the past year.

Analysts weren't concerned by Mr. Burrows's Bank of Ireland record, concentrating instead on his highly successful career in the fast-moving consumer-goods industry.

He was chief executive of Irish Distillers from 1978 until its takeover by Pernod Ricard SA in 1988. He continued to work within the French drinks company and eventually served as co-chief executive of Pernod Ricard from 2000 to 2005.

The BAT chair is a nonexecutive position, but a higher-profile role than at other similarly sized companies. During his five years in the job, Mr. du Plessis took responsibility for commenting on any political issues -- such as antismoking legislation -- leaving Chief Executive Paul Adams to concentrate on operational matters.

Mr. Burrows will be paid an annual salary of £525,000 and will work a two-day week for BAT. The salary is below the £686,000 Mr. du Plessis received to reflect the short working week, the company said.

Tobacco Festival should make big comeback next

The South Carolina Tobacco Festival is returning for its 53rd year in Lake City, although the schedule is leaner this year as a result of the economy. The decision to offer a scaled-down series of events for the 2009 festival, which will run from Sept. 18-20, was a conscious and unanimous one by the Greater Lake City Chamber of Commerce’s board.

In spite of the bleak economic scenery surrounding us, Lake City is fortunate to still have a festival, and an abbreviated schedule is a small sacrifice to make as our local businesses fight to stay alive.

One minor rumor was that the Tobacco Festival wasn’t happening at all this year. While it might not be totally identical to the Tobacco Festival we’re familiar with, several events are still planned, starting with the Street Dance the night of Sept. 18, a Friday. The event will feature the Band of Oz and will run from 8 p.m. to midnight.

The biggest changes to the festival’s schedule are the lack of a parade down Main Street as well as entertainment at the town square stage on Saturday, Sept. 19.

But that doesn’t mean you should just stay home that day; get up early and go support a good cause when the Florence Florence County Disabilities Foundation will hold “Lake City’s Largest Yard Sale” at its thrift shop at 219 N. Church St.

Also on Saturday, the festival beauty pageant will take place at the Blanding Street Auditorium, at 125 S. Blanding St.

Finally, on Sunday, the Lake City Country Club will hold a golf tournament.

The chamber of commerce already is making plans for next year’s festival.

“The hope is that we’ll be able to do it even bigger and better than in the past, and we’re even working on that now,” chamber Director Rita Smith said.

When the economy improves, we hope businesses will be able to resume their sponsorships of the festival. A large number of local businesses have been quite generous to the festival, as shown by the lists of contributors in previous years, so we have a good feeling that things will be looking up.

Smith said most people she’s spoken with have been understanding of the decision to scale back the festival this year. Many vendors have called to show interest in selling their goods at this year’s festival have asked Smith to keep them in mind for next year, she said.

With interest already mounting in the 2010 festival, an economic rebound would bring back a Tobacco Festival like those so many of us have regularly attended with our families.

And, as Smith said, it could be even bigger and better than before.

Festivals are good for the morale in towns and cities. They give residents a chance to have fun and take pride in their community.

The people of Lake City and the surrounding areas still have an opportunity to do that as the Tobacco Festival stays alive, and it’s something to be thankful for.

It’s my choice and I choose to smoke

“Quitters never win and I’m no quitter.” “It’s my choice and I choose to continue using nicotine!” The fact is, we lost “choice” the day nicotine took control. But that doesn’t stop the tobacco industry from spending billions on store marketing to build a mighty facade that screams, “smoking is an adult free-choice activity.” Every time we step up to the counter to purchase tobacco the signs and displays hammer our brains with the message that using it is all about flavor, pleasure and aroma. Apparently few tobacco executives “choose” to buy into the lies.

A former Winston Man, David Goerlitz, asked R.J. Reynolds executives, "Don't any of you smoke?" One executive answered, "Are you kidding? We reserve that right for the poor, the young, the black, and the stupid." Once hooked, our only real alternative is the up to 72 hours needed to purge nicotine from our system. Choice? What users have chosen is to avoid withdrawal.

As Joel puts it, it isn’t that we like using nicotine but that we don’t like what happens when we don’t use it. Then there are those of us who claim to smoke knowing full well that it’s killing us. We say we don’t care what happens, that we don't want to get old, that we have to die of something, so why not smoking. Most of us using these “self-destruction” rationalizations do so to hide the fears born of a history of failed attempts, and of a false belief that we’re somehow different than others, and that we’ll never be able to stop using. Try to find anyone who isn't shocked when cancer, emphysema, heart attack or stroke does occur. As Joel writes, "no one ever called me enthusiastically proclaiming, 'It worked, it's killing me!' On the contrary, they were normally upset, scared and depressed."

Choice? Once out from under our dependency’s control then free choice is restored. But just one puff, dip or chew and our freedom and autonomy will again be lost, as our brain is soon begging for more.

Ohio dealt decisive blow in tobacco funds dispute

The Strickland administration will mount an appeal to a Tuesday court ruling that would prevent the state from using $230 million in smoking prevention funding to help pay for home-care services under Ohio’s latest budget.

Franklin County Common Pleas Court Judge David Fais’ decision bars the state from touching $230 million from the dissolved Ohio Tobacco Prevention Foundation. The battle over the money began in April 2008, when Gov. Ted Strickland outlined plans to use tobacco foundation money to partly finance a $1.57 billion jobs stimulus plan in the state.

With the money frozen while the legal fight played out, the state shifted the intended use of the cash to optional Medicaid services, a children’s Medicaid expansion and cancer screenings, said Strickland spokeswoman Amanda Wurst.

In the ruling, Fais wrote that two pieces of legislation backing a liquidation of the foundation and transfer of the money are unenforceable because they “clearly violate” tenets of the state Constitution. Assets in the foundation’s endowment fund are now in the state Treasury’s custody, but they’re to be used solely for tobacco prevention programs mounted by public or private agencies.

Wurst said Strickland was disappointed by the ruling and the time it took to reach a decision. The governor has asked state Attorney General Richard Cordray to speed an appeal of Fais’ ruling “to ensure these vital services continue for Ohioans.”

“Today’s ruling will delay or jeopardize the ability of these health-care services to continue to serve the people of Ohio,” Wurst said.

Fais reiterated a position he held when issuing an injunction on use of the money last February: The state had a reasonable alternative to raiding the tobacco fund for the jobs stimulus plan by issuing bonds instead.

Tough Summer for Tobacco Crop

It's a sight you'll find up and down the Connecticut River Valley, field after field abandoned or already harrowed.

"It's like a ghost town," said Allan Zuchowski. "It's like a spaceship came and took all the farmers away."

It's not the farmers that are gone, but instead their tobacco crops, a result of a very cold and wet summer.

Zuchowski, a farmer in Hadley, has lost seven acres worth.

"It pays the bills. It replaces the equipment. It keeps up the buildings," he said.

Wally Czajkowski, another farmer in town, has lost 30 acres.

"It's just a big hole in the middle of our season," he said.

It's leaving a big hole in Czajkowski's wallet. His tobacco crop makes up a third of his income.

Both farmers say it's a combination of factors that have led to the devastating loss. Four diseases attacked the crops early in the season, and the cold and wet weather made it too difficult for the plants to fight them off.

One virus many tobacco farmers are dealing with leaves spots all over each leaf. When cured, the spots become holes, and the leaf becomes useless.

"Tobacco is a job that requires many hands and many hours and those hands are idle now," said Zuchowski.

"There's going to be a lot of unemployed farm workers this fall," said Czajkowski.

Both Zuchowski and Czajkowski are now paying close attention to their other crops. They must now rely on those to make up for the loss of income.

But both say they're not giving up on tobacco.

"We'll just try again next year," said Czajkowski.

Farm Labor Supply Surprising Tobacco Growers

About the time the economy went in the dumper in 2001 folks started saying that the recession would improve the farm labor supply. But a fellow at an agricultural outlook seminar in Gainesville, Fla., said the supply of field laborers was just fine.

"We have a great system," he said. "It's called Greyhound. It crosses the border, picks up workers and when the job's done, it takes them back home."

No self-respecting American who could get a check in the mailbox would go sweat in a field, the speaker said. At the time, he was accurate.

Either times have changed and some of those folks who could get a check prefer to earn an honest's days wages - as my parents and grandparents taught - or, well, I don't think there is an or. You see, those checks still are available to just about everyone who asks for one and Congress keeps extending unemployment eligibility.

But farmers are reporting Americans coming to see about working in their fields. Laborer jobs. Earlier today Ray Tucker couldn't help grinning when he said an American was among the fellows harvesting the tobacco on his Kentucky farm. And Jay sounded a little proud when he said the American was keeping up with the Mexicans who came here through the H2A program.

Reynolds American 2Q Profit Up 3.6%; View Raised

Reynolds American Inc.'s (RAI) second-quarter profit unexpectedly rose 3.6% as the tobacco company reported higher margins, which helped offset a decline in volume at its R.J. Reynolds Tobacco division.

Based on the company's first-half results, and more clarity in shipping patterns and the effects of a federal excise tax increase, the company raised its full-year per-share earnings view to a range of $4.40 to $4.60 a share from $4.15 to $4.45.

Last month, the Food and Drug Administration was given power to regulate tobacco products, giving the government authority to monitor smoking products. Reynolds and Lorillard Inc. (LO) claimed the legislation would give larger rival Altria Group Inc. (MO) advantages, but Fitch Ratings expects well-established brands will maintain their market shares and benefit from potentially greater advertising restrictions.

Fitch, though, warned launching new reduced-risk products could be difficult under the new restrictions. Reynolds, for instance, has been developing new smokeless products to boost sales, but its efforts could be snuffed out by the FDA.

The second-largest U.S. tobacco company behind Altria reported earnings of $377 million, or $1.29 a share, up from $364 million, or $1.23 a share, a year earlier. Revenue declined 3.8% to $2.25 billion.

Analysts polled by Thomson Reuters expected per-share earnings of $1.16 on revenue of $2.27 billion.

Gross margin rose to 46.6% from 44.2%.

The R.J. Reynolds Tobacco division's volume dropped 6%, but earnings rose 3.4%, as higher pricing and lower expenses were more than offset by lower cigarette volume and higher pension costs. Market share for growth brands grew 2.6 percentage points to 12.7%, while Camel's market share was flat at 7.5%.

Total R.J. Reynolds U.S. market share was up 0.4%, to 28.7%.

At the Conwood unit, which makes smokeless-tobacco brands Kodiak and Grizzly, earnings decreased 4.1% but volume rose 6.7% while market share for moist snuff shipments improved 2 percentage point to 29.4%.

On Wednesday, rival Altria reported its second-quarter profit grew a larger-than-expected 8.6% on its purchase of smokeless tobacco company UST as cigarette volumes continued to fall.

In premarket trading, Reynolds American's shares recently were up 0.8% to $41.50. The stock is up by about a third from its 52-week low in March.

Shanghai World Expo Says "No" to Tobacco Sponsor

rganizers of the Shanghai World Expo in 2010 have canceled a sponsorship deal for the China pavilion by Chinese cigarette maker Shanghai Tobacco in response to outcry by China’s growing anti-smoking lobby. Organizers of the Shanghai fair turned down a $29.3 million deal previously signed in May, the Shanghai Daily reported. That’s a huge amount considering how the U.S. is still struggling to raise $61 million from U.S. companies [though no tobacco companies]to build its USA National Pavilion. U.S. backers so far include 3M, Pepsi, GE, Yum Brands [KFC], Walmart, Intel and NYSE Euronext.

What’s surprising is that organizers of the Shanghai Expo ever consented to the tobacco deal in the first place. The world’s fair is themed “Better City, Better Life” with a strong focus on green technologies aimed at building a cleaner environment. But then again, the state-owned tobacco industry is hugely profitable and powerful. You can bet it will be lobbying hard against a proposed anti-smoking law to be discussed by the Shanghai Peoples Congress next month. Like the smoke-free Beijing Olympics, the Shanghai Expo has billed the Expo, which is open from May to October next year, as smoke-free. Smoking inside offices, restaurants and most public spaces is still legal in China.

China is one of the biggest growth markets for international tobacco companies such as Philip Morris International, maker of Marlboro cigarettes. For more on what it’s doing in China have a look at the cover story Nanette Byrnes and I wrote for BusinessWeek earlier this year. China has about about 350 million smokers, accounting for one third of the world’s puffers.

Councilwoman Head pushing for tobacco change

Councilwoman Stacy Head is set to introduce an ordinance this week that would create new restrictions on tobacco sales in the city.

It's a fight to steer New Orleans kids away from tobacco use.

"This is an initiative that has been brought together by a large coalition of people, some faith based organizations, some organizations dedicated to trying to reduce the use of tobacco products," Head said.

The measure would ban new businesses from selling tobacco products within a certain distance from city schools, playgrounds, libraries and churches.

Existing businesses would be excluded from the ban.

Up for debate is just how far the boundary lines would extend.

Head said it could be anywhere from 300 to 1,000 feet.

Those details will be worked out during a Housing and Human Needs Committee meeting Monday.

"We don't allow liquor sales often very close to churches and close to schools and close to parks,” Head said. “We should have the same rules for tobacco. It's gonna help, again, set an environment around a school that's going to be more wholesome."

Pastor Patrick Keen with Bethlehem Lutheran Church in Central City said the measure would be an important cog in the city’s rebuilding effort.

"It's a land use ordinance that we're addressing,” he said. “How do we use the land in New Orleans as we develop post-Katrina?”

Keen believes the proposal would help offset what he describes as an ongoing tobacco advertising blitz.

"Our children are being targeted by the tobacco industry,” he said. “There's about $251 million that's used by marketing specialists in the tobacco industry in Louisiana alone."

But some retailers feel a restriction would be unnecessary, pointing out there are already laws on the books addressing underage tobacco sales.

"If they're worried about minors, especially like from schools, they don't have to be worried about it because the state has a law and we do have strict laws regarding our store over here,” said Deya Ottallah, who manages a convenience store not far from Cohen High School. “There is no selling tobacco for minors."

Head said children do get around the laws, however. And she disagrees with the notion that her proposal could signify too much government.

"I'm a firm believer in the market taking care of many, many, many things, but I think government has an obligation to control the market when it's something as harmful as tobacco and kids," Head said.

The proposal is expected to be ready for a full council vote on Thursday

Adult smoking drops in Arkansas

New survey information shows there are nearly 10,000 fewer smokers in Arkansas since the beginning of the Arkansas Department of Health's (ADH) Tobacco Prevention and Cessation Program in 2002. When the program started in 2002, 25.1 percent adults smoked in the state; more current data show that those numbers have decreased to approximately 20.7 percent.

Dr. Paul Halverson, director of the ADH and state health officer said, "We are encouraged by these results." Overcoming tobacco addiction is one of the hardest things anyone can do -- especially for adults that have been smoking for a long time. We applaud these Arkansans who have beaten addiction and celebrate with them as they lead healthier lives. However, we still have more work to do as we have many Arkansans that would benefit from a tobacco-free lifestyle."

"This news is also good for Arkansas's economic health," Gov. Mike Beebe said. "When fewer people smoke, we have healthier employees, healthier families and less demand for health-care services. It all adds up to a healthier workforce, which will help us in our efforts to attract new business and industry to Arkansas."

The ADH Tobacco Prevention and Cessation Program (TPCP) funded through the Tobacco Master Settlement Agreement, works to reduce tobacco use in Arkansas. Through community and school prevention programs, a media and public relations campaign known as Stamp Out Smoking, and cessation services for tobacco users looking to quit, TPCP continues to see the positive effects of its efforts.

"It's rewarding to see our hard work pay off with the release of these new numbers," said Dr. Carolyn Dresler, ADH Director of the Tobacco Prevention and Cessation Program. "It takes all of our partners working together to achieve these kinds of results and through youth prevention efforts, quitting services like the Arkansas Tobacco Quitline and policy changes like the tobacco tax, we feel confident tobacco use in Arkansas will continue to decline."

Arkansas has made significant strides over the past year to provide more services for tobacco users who want to quit and Arkansans have overwhelmingly responded. Since 2008 the toll-free Arkansas Tobacco Quitline has received more than 22,000 calls. The Quitline, found at 1-800-QUIT-NOW, now offers free motivational coaching with a QuitCoach by phone or online and free medications while supplies last.

Alberta Faye Powell quit smoking on Oct. 20, 2008, with the help of Quitline. She said that she was successful because of the combination of the nicotine patches, coaching and "having the attitude that you are ready to quit." She said the coaches provided assistance in a professional manner and assured her that it was OK to be honest if she failed and to start again.

While helping tobacco users quit smoking provides maximum benefits for the state and the individual, it is equally as important to ensure that youth never start. Arkansas has been successful in continuing decline in youth smoking despite national statistics remaining stagnant. In Arkansas, youth smoking has decreased from 34.7 percent in 2001 to 20.7 percent in 2007.

A decline in tobacco use in the state benefits all Arkansans. It means lower health care costs, due to smoking-related illness, less exposure to second hand smoke and longer life expectancy resulting in more time with loved ones. Smoking is a major cause of heart disease, stroke, emphysema and chronic bronchitis. Since the Tobacco Prevention and Cessation Program began in 2002 the number of hospital admissions in Arkansas for heart attack, stroke, chronic bronchitis and emphysema has declined progressively each year resulting in substantial savings in healthcare costs.