Tobacco Asia

Volume 18, Number 2

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14 tobaccoasia FRONT PAGES 卷首新闻 themselves and undermining their credibility. This, he says, is largely due to the fact that the tobacco industry stopped monitoring tobacco control science, thus doing away with any restraint that might have been shown if faced with having to answer public questioning by "Big Tobacco". What triggered Dr. Siegel's stance seems to be a series of faulty research, including a study on the effects of third-hand smoke concluding that third-hand smoke is as harmful as active smoking, based on test results showing that mice treated with third-hand smoke in controlled experiments experienced impaired wound healing and other forms of cell damage. The researchers did not, however, conduct any human clinical studies to support their conclusion. UK Imperial Takes on E-Cig Giants A lawsuit filed by Imperial Tobacco is set to shake-up the e-cigarette industry. Should they win the lawsuit, Imperial may very well become one of the top players in the global tobacco industry. Considered to be Europe's second largest tobacco company, Imperial Tobacco is suing leading American e-cigarette brands Blu, NJOY and Logic, which have a combined 80% of the US$2 billion American market, as well as six other American manufacturers in a patent infringement lawsuit. The lawsuit is believed to be a result of Imperial Tobacco's acquisition of Chinese firm, Dragonite, founded and formerly owned by Hon Lik, a Chinese pharmacist credited as being the inventor of the modern e-cigarette. The lawsuit only applies to companies manufacturing their own e-cigarette devices, not to distributors and especially not to distributors using Dragonite as their main supplier. No specific patent infringements have been disclosed by Imperial Tobacco as yet. The fact that many e-cigarette makers have patents on their cigarettes, with the first smokeless, non-tobacco device patented by an American in the 1960s, raises doubts as to how Imperial Tobacco could win this lawsuit. Any alleged infringements would most probably have to do with body or cartridge design, airflow design or charging technology rather than the atomizer or the battery. EU JTI a Top Employer in Europe Japan Tobacco International (JTI) has been recognized as the third top employer in Europe by the Top Employers Institute, which certified 25 JTI offices across Europe for their excel- lence in people management. According to Jörg Schappei, human resources senior vice president at JTI, the number of Top Employer certified JTI offices have more than doubled since the previous year. Worldwide Smoker-Friendly Hotel Site With many hotels banning smoking or at least keeping their smoking rooms on the down-low, is the answer to many a frustrated smoker trying to find a place to stay during their travels where they can light up. Part of a booking-engine system managed by, offers 100,000 smoking rooms available in hotels around the world, making finding a smoking room less complicated and time-consuming. Despite many international hotel chains being less than smoker-friendly, such as Marriott International whose 2,300 hotels (approximately 400,000 rooms) in the US and Canada have completely banned smoking (although their hotels in other parts of the world are exempt from this rule), there are still some, especially in the mid-market level, who still offer some of their room inventory as smoking rooms. Some higher-end hotels are even trying to find ways to accommodate their smoking guests, particularly those who prefer cigars over cigarettes, as such guests tend to have other expensive hobbies and tastes. US Reynolds-Lorillard Takeover Speculation Lights Up Industry Speculation of the possible takeover of Lorillard Inc. by Reynolds American Inc. has sparked interest in the industry. Lorillard, the maker of Newport cigarettes, is worth an estimated US$19 billion and is the third-largest tobacco company in the US. Reynolds, maker of Camel, is the second largest. There has been talk that British American Tobacco Plc. (BAT), which owns 42% of Reynolds, could help finance the deal or Reynolds could also sell to Japan Tobacco Inc. to focus on Newport, the number one US menthol cigarette. Lorillard's Newport cigarettes accounted for 85% of last year's revenue, which was about US$5 billion after excise taxes. Its other brands include Maverick and Kent, as well as two types of e-cigarettes. Analysts have predicted that Lorillard's sales will climb 16% over the next three years, more growth than some of its competitors, including about 3% for both Reynolds and BAT. Should the takeover move forward, Reynolds and Lorillard are seen to be a good combina- tion that would make a partnership even more compelling for BAT. It would also allow the companies to market and sell e-cigarettes globally. A standstill agreement barring BAT from increasing its 42% stake in Reynolds ends in July, making the companies working together more closely a high possibility. Japan Tobacco, which owns the Camel and Winston brands outside of the US, may also seek to gain US distribu- tion and a platform for e-cigarette development by buying the US domestic rights for Camel and Winston brands from Reynolds, allowing Reynolds to acquire Lorillard and its Newport. While in favor of the takeover, some analysts believe it would be more appropriate after there is more clarity on the FDA's regulations for menthol, which is expected to happen later this year or early 2015. Sceptics, however, find it difficult to believe a takeover is really under way, mainly because of antitrust hurdles to overcome in the US. A takeover would reduce the number of major sellers from three to two. Reyn- olds might even be forced to divest its brands to satisfy antitrust authorities.

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