Tobacco Asia

tobaccoasia 13 FRONT PAGE NEWS 卷首新闻 Some 27 big companies owned by US, European, and Nicaraguan capital and 60 smaller local ones operate in Esteli, growing, curing, fermenting and producing cigars. Many of the farms here are owned by families that emigrated from Cuba, bringing with them Cuban know-how. People are flocking to the area to find employment. Around 35,000 are estimat- ed to work for the tobacco industry in northern Nicaragua. The population influx has driven a boom in construc- tion, shops, and tourism, turning Esteli into one of Nicaragua's most important economic hubs. US N.Y. Tobacco Taxes Cost Billions A recent study by analysts for the Tax Foundation and the Mackinac Center for Public Policy has shown that New York's anti-smoking tax policies is costing the state and city billions in lost tax revenue. The study found that more than 50% of the cigarettes consumed in New York are smuggled in - the nation's highest rate. In 2015, the most recent reporting year, the state lost US$1.63 billion because of untaxed sales. Currently, a pack of Marlboro costs US$13.00 in Manhattan, of which US$4.35 is a state tax levy and US$1.50 is a city tax. In 2015 the city lost an estimated US$740 million and the state about US$895 million on top of that. "Given the relationship between higher cigarette tax rates and higher smuggling, policymakers should consider these issues when determining whether a cigarette tax increase is appropriate," said Scott Drenkard, director of state projects for the Tax Foundation. The foundation said the campaign by many states to generate more revenue, and at the same time deter smoking, has backfired into a morass of smuggling and black market activity. Also, a study by the Mackinac Center discovered that besides the tax losses, the smuggling activity has uncovered evidence of violence against residents and police officers; financing of a terrorist organization; cigarette truck hijackings; counterfeiting of tax stamps; property damage; and the counterfeiting of name-brand cigarettes that are replaced with inferior products. Tobacco Still a Favorite for Investors Tobacco stocks remain favorites of investors looking for a combination of defensive positioning and stout divi- dends. Some of the largest tobacco stocks, such as Altria Group Inc. and Phillip Morris International have hefty market values, and are important parts of some well-known consumer staples exchange traded funds (ETFs). At press time, Wall Street was expecting Altria's earnings per share (EPS) of US$0.67 on sales of US$4.8 billion; Phillip Morris' estimated EPS was US$1.12 on sales of US$6.67 billion; and Reynolds American had analysts expecting its EPS of US$0.60 on revenue of US$3.16 billion.

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