Tobacco Asia

Volume 18, Number 2

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62 tobaccoasia CLOSING PAGES 卷尾新闻 US US Navy Bans Tobacco Sales The US Navy may be banning the sale of cigarettes and other tobacco products at Navy and Marine Corps exchange stores starting as soon as October 1 this year. This possible move is part of Navy Secretary Ray Mabus' initiative to improve the culture of fitness in the services. Secretary Mabus has already stopped price subsidiaries for tobacco products on bases and is looking into the impact a ban on tobacco product sales would have. Other considerations such as whether the ban should be implemented only in the US or extend it overseas, and whether or not the ban would be in effect on bases in combat zones, will, of course, also need to be addressed. BRAZIL/CHINA Alliance One/China Tobacco in Brazil Alliance One International, Inc. recently an- nounced the formation of a new joint venture company – China Brasil Tobacos Exportadora SA (CBT) – between its Brazilian subsidiary Alliance One Brasil Exportadora de Tabacos and China Tobacco's Brazilian subsidiary China Tabaco Internacional do Brasil. The new joint venture was established and registered on March 26 in Brazil. The newly created entity is 51% owned by China Tabaco Internacional do Brasil and 49% by Alliance One Brasil. For the last two crops CBT has acted as an independent subsidiary of Alliance One Brasil; it presently contracts some 9,500 integrated growers. The administrative, buying and processing center of the joint venture will make use of Alliance One´s facilities located in Venancio Aires. "We are honored that China Tobacco selected Alliance One for its first international joint venture in the tobacco leaf supply segment," commented Alliance One c.e.o. and president Pieter Sikkel. "China Tobacco is a highly valued partner, and we are pleased with our combined ef- forts to grow CBT over the last two crops and see a very bright future. China's cigarette market is the largest in the world, and our joint venture has been established to provide high quality, sustain- ably grown Brazilian tobacco to its cigarette manufacturing groups. Our partnership aligns Alliance One's strategy of profitable growth with meeting customers' unique individual require- ments through our sustainable model." The Davidoff Art Initiative hosted the inaugural Davidoff Art Weekend in collaboration with Altos de Chavón School of Design and Casa de Campo in the Dominican Republic on February 28 through March 2, 2014. US Top 5 States with Highest Excise Tax Latest data from the Tax Foundation shows that New York, Rhode Island, Connecticut, Hawaii and Washington are some of the toughest states regulating against smoking due to their having the highest excise taxes. The state excise tax per pack is US$4.35 for New York, $3.50 for Rhode Island, $3.40 for Connecticut, $3.20 for Hawaii, and $3.03 for Washington. High excise taxes on tobacco products have long been employed by authorities as a measure to control cigarette smoking, in addition to mea- sures which include anti-smoking campaigns such as those executed by the Centers for Disease Control and Prevention (CDC) and other anti-smoking organizations; regulations from the FDA requiring the tobacco industry to disclose the quantities of at least 20 harmful chemicals found in cigarettes; or even regulations from local authorities, such as the ban on smoking in restaurants, bars, and common public areas such as beaches and plazas. According to the Tax Foundation's data, the national average excise tax is US$1.457 per pack. The excise taxes in these five states is more than double, or in some cases, triple the national average. On top of that, these are merely state excise taxes and do not include the federal excise tax of US$1.0066 per pack. Nor do they include local taxes on cigarettes, which vary from city to city. In sum, an additional US$1.01 can be expected in federal and local taxes, plus the wholesale costs that tobacco producers charge retailers, which in turn gets marked up and passed along to the consumer. In total, a pack of cigarettes in one of these five states can range from around US$5.00-15.00 dollars per pack. Whether or not high excise taxes will help curb smoking is still an ongoing debate. Many smokers and industry experts say that high excise taxes would have little effect on smoking cessation but will in fact encourage illicit cigarette trade. However, studies from the New York Department of Health and the annual release of tobacco usage data from the surgeon general suggest that higher taxes actually do curb tobacco consumption.

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