Tobacco Asia

10 tobaccoasia FRONT PAGE NEWS 卷首新闻 US IPCPR and CRA File Joint Cigar Regulation Comment Two of the largest cigar trade associa- tions, International Premium Cigar & Pipe Retailers Association (IPCPR) and Cigar Rights of America (CRA), filed a joint comment on the US Food and Drug Administration's (FDA) advance notice of proposed rule-making (AN- PRM) on premium cigar regulation. In their joint comment, IPCPR and CRA provided recently published data, collected and analyzed by federal agencies and scientists at FDA as evidentiary-based justification for why premium cigars should be regulated differently from how FDA has thus far chosen to regulate it via the deeming rule imposed in 2016. Some key points in the data included: o Premium cigars are luxury items that are smoked infrequently by adults; o The average premium cigar consumer smokes as little as 1.1 days per month; o Youth engagement with premium cigar products is so minimal that it was determined to be statistically insignificant; o Premium cigars are not used by consumers as an alternative or supple- mental source of nicotine. CRA's executive director, Glynn Loope, said, "The studies and comments filed by the premium cigar industry last night provide substantive answers to the FDA solicitation for comment, with analysis and recommendations for relief from rules that [many legislators] have stated are burdensome." BANGLADESH JTI to Acquire Akij Group Japan Tobacco Inc. (JTI) announced it has signed an agreement to acquire the tobacco business of Akij Group, Bangladesh's second largest tobacco company, further increasing its presence in Asia. The purchase price for the trans- action is estimated at US$1.5 billion at today's exchange rates. "With this investment, we continue to accelerate our expansion in emerging markets that matter, a key component of the JT Group's growth strategy," said Mutsuo Iwai, JTI's executive v.p. and president of the tobacco business. "Akij's substantial market share places us straight at the number two position in Bangladesh, which will expand our quality top-line growth. This transaction will also support our sustainable profit growth objectives in the mid- to long-term." Akij holds about a 20% share of the cigarette market in Bangladesh, the eighth largest cigarette market in the world, with volumes exceeding 86 billion units and growing by about 2% year-on- year. This transaction will add around 17 billion units to JT Group's overall volume. Akij currently occupies the number two position in both the value and base segments, together covering up to 90% of Bangladesh's cigarette market, with brands such as Navy and Sheikh, respectively. "Bangladesh is one of the fastest growing economies in the world with a pro-business mindset, which is why we are keen to expand our presence in the country," said Eddy Pirard, JTI's president and c.e.o. "The tobacco business of Akij is profitable, has state-of-the-art manufacturing facilities, and a strong distribution network and workforce. With our strong track record of integration, we can accelerate opera- tional efficiencies and introduce some of our global flagship brands alongside Akij's well-established portfolio." The transaction is expected to be completed in the third quarter of the fiscal year 2018 following regulatory clearance. RUSSIA JTI Completes Acquisition of Donskoy Tabak On July 31, Japan Tobacco Inc. (JTI) completed the acquisition of the Donskoy Tabak (DT) companies. The acquisition enables JTI to complement its existing product portfolio with DT's value brands and expand its distribution network through DT's strong salesforce. This acquisition will reinforce JTI's leading position in Russia, a country which has been a key market in earnings growth for many years. CANADA Retailers Launch Fight Against Plain Packaging The Premium Cigar Retailers of Canada has launched "The Better Cigar Plan", a new portal that allows Canadian citizens and businesses to easily contact their member of parliament in support of an exemption for premium cigars from the bill's plain packaging requirement. The site, bettercigarplan.ca, went live on August 11. Leading the project are Jerry Filice and Ryan Baker, founding partners of Village Cigar Co, who said the Cana- dian's government plan for plain packaging "will in turn have a ripple effect that will all but wipe out the premium cigar industry across Canada." Supporters are encouraged to write to their MPs pointing out plain and standardized packaging on premium tobacco is a useless endeavor based on statistics so low they are deemed to be insignificant. Some well-known cigar industry figures are already supporting the campaign; Alan Rubin of Alec Bradley, Jose Blanco of E.P. Carrillo, Rocky Patel of Rocky Patel Premium Cigars, and Nicholas Melillo of Foundation Cigar Co., who have all created video messages encouraging Canadians to speak up in favor of the premium cigar exemption. KOREA Health Ministry Pushing for Bigger Graphic Warnings The Ministry of Health and Welfare said this September or October it plans to announce a measure pushing to enlarge the size of graphic warning images on cigarette packs. This is expected to send a stronger message to smokers as the size of the warning images will increase from the current 50% of the package's exterior to 70%. Currently, the size of the warning photos must cover more than 30% of both sides of cigarette packages with warning text making up an additional 20%. Korea began requiring tobacco companies to put pictorial warnings on

• Cover