15 décembre 2009
Display ban of tobacco products
Display bans are regulations that prohibit the visual display of tobacco products within
the point of sale. They are the most restrictive of all point-of-sale regulations, which
include limitations on height and visibility of displays, prohibition of self-service displays,
and restrictions on logos, banners, and window posters.
Whether display bans have an impact on tobacco consumption is an empirical question.
Also, the likely magnitude of that impact can only be estimated using empirical
techniques.
This is why this paper considers the case of Iceland, the only country in
Europe to have introduced display bans before 2009.
Iceland introduced display bans in August 2001.1 The Tobacco Control Act explicitly
mandated that products had to be placed in a manner that they were not visible to the
customer. Ireland and Thailand are the only two other countries to have introduced
nationwide display bans Ireland in 2009 and Thailand in 2005.
Most Canadian
provinces and two Australian states have also implemented point of sale display bans. 3
In Iceland, as in most western countries, smoking prevalence has been declining since at
least the mid 1980s. The percentage of individuals aged 15 to 79 years who smoked
declined from 33% in 1987 to 19% in 2007. Likewise, the percentage of individuals aged
15 to 24 years who smoked fell from 27% in 1989 to 18% in 2007.
Several factors may explain this negative trend. While the display ban may have been
responsible for part of the observed decline, it cannot explain the evolution of the
smoking rate prior to August 2001. In addition, the display ban was preceded by several
other tobacco control measures, such as an advertising ban on all media and the
introduction of mandatory health warnings in 1984, a ban on smoking in public areas in
1999 and brand sharing prohibition in 2000. Those interventions may also be responsible
for the observed reduction in the smoking prevalence after August 2001. Finally,
cigarette prices in Iceland have been continuously increasing since the mid 1980s, bothin absolute and relative terms. The increase in tobacco prices, driven primarily by tax increases, is likely to have a negative impact on smoking prevalence. A simple correlation analysis shows that the smoking rate variations are closely and inversely related to changes in cigarette prices.
26 mai 2008
Imperial Tobacco can scent victory overseas
I CAN’T help but wonder what Winston Churchill would have made of the smoking cigarettesban in the UK.
After all, he was once noted as saying that he treated smoking cigars and drinking alcohol as an absolute sacred right to be taken before, after and if need be, during all meals and in the intervals between them.
But in the 21st century killing yourself slowly with fags has gone out of fashion. The business is just about alive and kicking in the UK and yesterday Imperial Tobacco announced one of the biggest rights issues in the City.
Asking for just under £5bn to repay some of the debt owed for a recent purchase, the owner of Embassy and French heavyweight Gauloises is offering shareholders a 43% discount on Monday’s close.
As smoking in the UK wanes, continental Europeans appear to insist on the obligatory Gitanes, scooter and espresso as part of their lives. Likewise in the emerging economies there seems little support for the anti-smoking lobby. The future then may be rather bright, if not short lived.
Meanwhile the FTSE 100 fell back as one analyst predicted a ten to twenty percent fall in the short term in mining stock. The miners have been fuelling the rally since March and now look expensive. On cue, the sector fell with BHP Billiton leading the way with a fall of 4.4%.
Some other news from the trading rooms suggested that shareholders in Royal Bank of Scotland were selling their holdings to raise cash for the impending rights issue.
A sweet move really as there are lingering worries about the ability of the bank to shore up its balance sheet and concerns over the real value of the sale of its insurance subsidiary.
Happily not everyone has suffered in the last year. For Icap the time has been something of a purple patch with profits up nearly a third.
“Who is Icap?” I hear you mutter.
Well, the company is the world’s largest interdealer broker and transacts over $1 trillion every day.
This would probably pass most private investors by as the firm only deals with counterparties such as banks and others operating in the wholesale market. The company believes the worst is over and still anticipates growth.
23 avril 2008
Suit on Light Cigarettes Is Thrown Out
In a legal victory for the tobacco industry, a federal appeals court on Thursday threw out an $800 billion class-action lawsuit on behalf of smokers who said they were misled that light cigarettes were safer than regular ones.
Plaintiffs’ lawyers had wanted to represent potentially millions of people across the country who had smoked light cigarettes, but the court found that it was impossible to tell why smokers chose light cigarettes, so the group could not be treated as a class.
Instead, smokers will have to sue individually.
“Individualized proof is needed to overcome the possibility that a member of the purported class purchased lights for some other reason than the belief that lights were a healthier alternative,” the ruling said.
The unanimous ruling by a three-judge panel of the United States Court of Appeals for the Second Circuit means that individuals can still pursue lawsuits against cigarettes makers, but they cannot be grouped together as a class.
Stocks of big tobacco companies were little changed by news of the ruling, which was not entirely unexpected. Shares of the Altria Group, which owns Philip Morris USA, maker of Marlboro cigarettes, were up 2 cents, to $22.06, in mid-afternoon trading Thursday in New York. Stock in Reynolds American, whose R. J. Reynolds Tobacco unit markets the Camel brand, were up 14 cents, to $59.85.
The court decision was a setback for lawyers who thought that the ruling approving the class, issued by Federal District Judge Jack B. Weinstein in Brooklyn in September 2006, could have opened a new avenue for litigation against the tobacco industry, exposing cigarette companies to potentially large damages.
Judge Weinstein’s ruling in the case was the first time a so-called “lights” case received class-action certification in federal court. A number of such lawsuits have been filed in state and federal courts around the country, so far with little success for plaintiffs.
Nearly a dozen such cases across the county are currently held up, awaiting a United States Supreme Court decision in a Maine case involving light cigarettes. The issue in those cases involves federal “pre-emption,” the question of whether the fact that the Federal Trade Commission allowed marketing of cigarettes as “light” bars legal action against tobacco companies on that count.
Unlike most tobacco lawsuits, the Brooklyn case did not contend that smokers were injured but instead that they had been subjected to a fraud since 1971, when Philip Morris began selling Marlboro Lights, the first light cigarette.
Even though the appeals court ruling was generally expected, analysts still viewed the decision as a victory for the tobacco industry. Theodore M. Grossman, the lawyer who argued the case in July before the appeals court on behalf of tobacco companies, said the ruling should have implications in other similar class-action cases across the country involving light cigarettes.
“One of the central points of the opinion was that the reasons that people bought light cigarettes were highly individual and that this kind of case can’t be resolved in a class context,” Mr. Grossman, a partner at Jones Day, said.
The lead plaintiffs lawyer could not be reached for comment by mid-afternoon Thursday. But one lawyer who represented plaintiffs in the case, Gerson Smoger of Oakland, Calif., said he could not yet answer the question of whether the group would appeal.
The Supreme Court rarely reviews cases involving class certification, however, and Mr. Grossman said, “I don’t see anything in this opinion that would provide a basis for certification to the Supreme Court.”
In a note to investors, a Goldman Sachs tobacco industry analyst, Judy Hong, said that the ruling “should continue to increase investors’ confidence about the legal environment and allow the cigarette companies to have more balance-sheet flexibility.”
Besides Philip Morris and R. J. Reynolds, the tobacco companies that market light cigarettes include the Lowe Corporation’s Lorillard Tobacco unit, whose brands include Newport.