British American Tobacco’s (BATS.LN) New Zealand subsidiary is being investigated by the local tax department, the company confirmed Thursday.

The subsidiary’s financial statement filed with the New Zealand Companies Office said New Zealand’s Inland Revenue Department was currently “reviewing a financing transaction” and that the directors had made a NZ$39.6 million provision for this.

The investigation follows Inland Revenue’s actions against Australian-owned banks BNZ, ANZ New Zealand, Westpac and ASB for using cross-border structured finance transactions to reduce tax pay. The five banks settled with the IRD late last year, paying a total NZ$2.2 billion.

BAT said in light of these recent court decisions “which are widely regarded as indicating a conservative shift in tax jurisprudence in New Zealand” the directors decided to make the tax provision.

Although, BAT confirmed the statement it refused to make any further comments about the case. An Inland Revenue spokesman said the department was unable to comment on personal tax cases.

BAT NZ’s 2009 profit was NZ$53.2 million down from a profit of NZ$106.1 million in 2008.

Media commentators are questioning the motives and backing of a new lobby group for the country’s small retailers - suggesting it is backed by big tobacco companies and their PR companies.

But the group says it is entirely funded from its members and rejects any suggestion it is backed by tobacco cash.

The Association of Community Retailers (ACR) announced itself last week - saying it aimed to promote the interests of small retailers. It followed that up with criticism of the Government’s sudden hike in tobacco prices last week.

Media blogger Keith Ng questioned why ACR shared the same postal address as Omeka Public Relations, whose managing director is Glenn Inwood.

Another of Inwood’s companies, Spin It Wide, distributes press releases from Imperial Tobacco, as well as Japan’s Institute of Cetacean Research, among others.

Another media blogger, Rory MacKinnon, questioned how ACR’s list of 170 member retailers, who subscribe $50 each for an annual income of around $8500, could afford two part time coordinators.

But founding member Richard Green, who runs a tobacconist business in Palmerston North, told NZPA ACR grew out of the former Stay Displays coalition of retailers, a coalition that formed to fight a proposed ban on displaying tobacco products for sale.

ACR wanted to expand from that single issue, and would speak for retailers on a wider range of subjects affecting retailers, such as security, sale of alcohol and confectionary.

ACR was set up with the help of Inwood, who he had worked on the Stay Displays campaign.

Green said the sole funding so far came from its members. It had employed two part time coordinators but it had yet to figure out how they would be funded, as it was still early days.

“I would love to get funding from the tobacco industry,” he said.

And Inwood firmly maintained ACR received no funding from tobacco companies or himself but purely from members’ subscriptions.

“It’s running off the smell of an oily rag.”

He had known Green for a few years through the Stay Displays campaign and the two had discussed how ACR could operate. His company Omeka shared office space with ACR’s two workers.

The organisation was on a membership drive and if they attracted half of the country’s 7000 independent retailers, there would be enough funding to run the organisation, he said.

None of the Auckland shops listed as “members” on ACR’s website said they were in fact paying members. All but one said they had never even heard of the association.

The exception, Martin Ave Superette, said it had signed up to Stay Display’s campaign by email years ago, and had received a letter from ACR recently - but it ended up in the bin before it was read.

The owner said she had never paid anything to the campaign or the association.

The Centers for Disease Control and Prevention (CDC) is calling on all states to implement coordinated, high-impact strategies to end the stall in the decline of U.S. smoking rates — a move CDC says will prevent millions of smoking-related heart attacks, cancers, strokes, and deaths.

A new CDC report, Tobacco Control State Highlights 2010, contends that if all states supported and used a combination of proven strategies — hard-hitting education and media campaigns, smoke-free air laws, and higher cigarette prices — the nation’s adult smoking rate would begin to decline and smoking-related diseases, deaths, and health care costs would be substantially reduced. The smoking rate has stalled at around 20 percent.

“Although the nation has not experienced substantial reductions in the national smoking rate over the past five years, this report shows that states know how to end the smoking epidemic,” said CDC Director Thomas R. Frieden, M.D., M.P.H. “Smoke-free laws, hard-hitting ads, and higher cigarette prices are among our strongest weapons in this fight against tobacco use. We must redouble efforts to bring down smoking rates, prevent suffering and premature death, and cut health care costs by reducing smoking.”

The report uses consistent data across all 50 states and the District of Columbia to provide a state-by-state assessment of tobacco use prevention and control efforts and showcases evidence-based strategies that are successful in reducing smoking rates. Programs are evaluated on several key measures, including smoking prevalence, public funding for cessation support, enforcement of restrictions on cigarette advertising and promotions, and tobacco pricing.

National survey data show that a trend of significant reductions in smoking rates among adults and youth has stalled since 2004. According to the report, the smoking rate for American adults varies across states, with Utah (9.3 percent) and California (14 percent) reporting the lowest rates. West Virginia (26.5 percent) and Indiana (26 percent) are among states reporting the highest adult smoking rates in the country in 2008.

Utah (6.5 percent) and Hawaii (6.8 percent) have the lowest youth smoking rates, while Kentucky (15.9 percent) and Wyoming (14.9 percent) have the highest.

Studies show that smoke-free laws, which ban smoking in indoor places, public spaces, and work sites, are the only effective way to protect nonsmokers from the dangers of secondhand smoke. The evidence also shows that these laws motivate smokers to quit.

According to the new CDC report, 24 states and the District of Columbia have comprehensive smoke-free laws. Recently, Kansas, Wisconsin, and Michigan passed smoke-free laws that will go into effect later this year. Seven states — Indiana, Kentucky, Mississippi, South Carolina, Texas, West Virginia, and Wyoming — do not have statewide smoke-free laws.

The CDC report also examines data from 42 states and the District of Columbia on counter-marketing media campaigns (campaigns that use commercial marketing tactics to reduce tobacco use). Hard-hitting media ads are proven to influence attitudes and behaviors about smoking when they are seen often, by many people, over an extended period.

The report assessed each state anti-smoking campaign’s gross rating points (GRPs), which measure the total intensity of the campaigns — the percent of households exposed, multiplied by the frequency of exposure to the ads. Among the states that presented data, counter-marketing campaigns achieved a median of 138 GRPs per quarter — only about a tenth of the CDC-recommended level of 1,200 GRPs.

Cigarette manufacturers are spending around $12.5 billion a year to market tobacco products, according to the latest tobacco marketing reports of the Federal Trade Commission. This amounts to $20 for every $1 spent on tobacco control.

The Institute of Medicine reports that increasing cigarette prices through higher excise taxes reduces smoking rates, particularly among youth, who are less likely to start smoking when prices are high. Studies show that a 10-percent increase in cigarette prices results in a four percent decline in smoking rates.

In 2009, Congress raised the federal cigarette tax by 62 cents, to $1.01 per pack. That same year, 14 states and the District of Columbia also increased cigarette taxes, according to the report. At the end of 2009, cigarette excise tax rates varied widely from state to state, ranging from $3.46 a pack in Rhode Island to seven cents in South Carolina — a 50-fold difference.

The State Highlights report comes on the heels of a publication by the Campaign for Tobacco-Free Kids, which showed that if all states and the District of Columbia raised their cigarette tax rates by $1 per pack, they would raise $9.1 billion in new annual state revenues, prompt more than 1.2 million adult smokers to quit, and prevent more than 2.3 million young people from starting to smoke.

State revenues from tobacco include excise taxes on tobacco products and payments from the 1998 settlement agreement between the attorneys general of 46 states and the four largest U.S. tobacco companies. And the report finds states are spending less than three percent of these revenues on tobacco control programs, and that they cut these programs by another $100 million last year.

On average, it would take less than 20 percent of their total tobacco revenue for every state to fund a tobacco prevention program at CDC-recommended amounts.

According to the CDC report, states that have invested in comprehensive tobacco control programs have significantly reduced smoking rates, which in turn leads to decreased smoking-related diseases, deaths, and health care costs.

California, which has the longest-running tobacco control program in the country, has seen lung cancer rates decline four times faster than those in the nation as a whole. Further, the state saved $86 billion in tobacco-related health care costs between 1989 and 2004. Still, the report points out that no state funds its tobacco control program at levels recommended by CDC.

“Much more work needs to be done to address the smoking epidemic in this country,” said Ursula Bauer, Ph.D., M.P.H., director of CDC’s National Center for Chronic Disease Prevention and Health Promotion. “There is excellent research that clearly identifies what needs to be done to eliminate cigarette smoking. The nation must now accelerate its efforts to translate that knowledge to action, or continue to lose hundreds of thousands of its citizens each year to smoking-related diseases.”

The campaign to get people to stop smoking has spawned a whole smoking-cessation industry. But some experts believe that the best way to kick the habit is to — in the advertising catchphrase used by Nike - “just do it.”

Anti-smoking protesters have taken aim at pop star Kelly Clarkson for lighting up a fuming feud in Indonesia by appearing in billboard ads for cigarette company Diarum.

The tobacco firm’s bosses are sponsoring the Since U Been Gone hitmaker’s 29 April concert in Jakarta - and they’ve splashed their L.A. Lights brand logo all over posters advertising the show.

The marketing ploy comes two years after Alicia Keys objected to a similar tobacco-fuelled sponsorship deal in Indonesia.

The No One singer insisted the cigarette logo was removed from all ads promoting her Jakarta concert, and U.S.-based anti-smoking groups want Clarkson to do the same.

Matt Myers, the president of the Campaign for Tobacco-Free Kids, tells the Associated Press, “If Kelly Clarkson goes ahead with the concert, she is by choice being a spokesman for the tobacco industry and helping them to market to children.

“She has the power now to turn this situation around and to send a clear message to

Indonesian young people and, frankly, to the young people of the world.”

60 Minutes recently ran a story about snus, smokeless tobacco that is not messy and that may be a substitute for cigarettes. An anti-tobacco activist talked at length about how it might worsen tobacco’s hazards by addicting more people to nicotine, leading to more smoking.

This is a standard problem whenever the damage from undertaking a risky activity is reduced: Offer a life raft and more people will jump off a sinking ship. Many will be saved, but some will drown off the life raft. Mandatory seat belts do this—lives are saved, but people also drive faster and more accidents occur. Sex education does this—there are fewer pregnancies per sexual encounter, but more sexual encounters are undertaken. Unemployment insurance does this—it is a life raft for the working, but it attracts people into the workforce who are more likely than others to be unemployed. I’ll bet that snus, like the other examples, will reduce the total damages of the risky behavior, but more people will engage in the behavior because they expect its costs to be lower.

EIGHT people were prosecuted by Limerick courts last year in connection with smuggling tobacco, according to the Revenue Commissioners, an increase of 100 per cent on 2008.

Half of those convicted were from overseas, giving credence to claims by retailers that cigarette sales in Ireland were being undermined by people smuggling in cheap tobacco from abroad.

Those published on the Revenue’s list of defaulters includADVERTISEMENT
e company director Anthony
Kelly from O’Malley Park, who was fined €500; Michael Hanley from Downey Avenue, Garryowen, who was also fined €500; Theresa McCarthy, of Fairview Crescent, Garryowen, fined €800; and William Donaghy, a bricklayer from Kishkirk, Ballysimon, who received 240 hours’ community service.

Also published on the list are Rehan Khan, a student from Mount Kennett Apartments, who was fined €300; Muhammad Ismail Haroon, a waiter from Clarina Park in Ballinacurra Weston, who was fined €150; Paulius Karalius, a factory worker from Arra View, Newcastle West, fined €500; and Egidijus Kirklys, of Hawthorn Drive, Newcastle West, also fined €500.

A woman from Limerick city is due before Limerick Circuit Court later this year in relation to the alleged seizure by customs officials of almost over 36,000 cigarettes at different locations and on different dates last year.

Tobacco sales can account for up to 30 per cent of turnover in a typical newsagents and hard-pressed retailers have credited customs officers for increased detections for tobacco smuggling.

Retailers Against Smuggling, which was formed arising from increased concerns about the black market, welcomed the doubling of convictions and also the slight rise in fines from an average of €435 in 2008 to €482 last year.

In February 2010, the Government increased the maximum fine tenfold to €126,970 as the problem worsens.

It is estimated that the loss in tax revenue arising from tobacco smuggling is now easily in excess of €500 million.

Retailers say they lost €700 million in sales last year over the rise in black market tobacco.

“I can see it myself in and around my shop here, the amount of illegal cigarettes being sold on a daily basis is reaching epidemic proportions,” said Retailers Against Smuggling spokesman Benny Gilsenan.

“I’m not surprised by these latest figures but I am very worried.

“A lot of credit must go the customs officials who have been working overtime in attempt to clamp down on the growth of the black economy but there is no way they can catch everything that comes through the ports.”

“We have all noticed it here in Ireland, retailers aren’t selling cigarettes in the same quantities were even this time last year while conversely the official percentage of people smoking still stands at 30 per cent. This shows that people are still smoking but they aren’t buying them from the legitimate, legal shopkeeper,” Mr Gilsenan added.

The second largest cigarette maker in the world is making some waves in the art market. British American Tobacco (BTI) sold several paintings last night at a Sotheby’s (BID) auction in the Netherlands, picking up $18.5 million last night. This contributed to a record night for the auction firm’s Netherlands office.

Previously known as the Peter Stuyvesant Collection, the BATartventure Collection includes more than 1,400 pieces and doubled the upper end of its presale estimate, yet another sign that strength is returning to the art market this year – after a year and a half of agony.

In Amsterdam, 161 lots went under the gavel, and only four failed to find a home. The highest price of the evening was paid for Martin Kippenberger’s “Dinosaurierei. It was estimated at between 200,000 euros and 300,000 euros. The final price was 1.1 million euros.

In February, another major collection was tapped by Sotheby’s for auction fodder. The Zero collection owned by Gerhard and Anna Lenz was good for 47 pieces at a London auction last month. Forty-six lots sold, bringing in 23.2 million pounds.
For BAT, the auction brought in small cash, but the event is a good sign for Sotheby’s. Following the financial crisis, the art market was dealt one severe blow after another. Now, it looks like we’ve turned the corner.

The Food and Drug Administration on Monday named at least two scientists with ties to pharmaceutical companies that market stop-smoking medicine to a scientific panel that will help it regulate the tobacco industry.

Jack Henningfield, a vice president of research and health policy with Pinney Associates, a consulting firm whose clients include GlaxoSmithKline PLC, will be part of a committee of 12 people that will provide advice, information and recommendations to the FDA on a wide range of tobacco issues. Mr. Henningfield will be one of nine voting members. The three nonvoting members, which will come from the tobacco industry, haven’t been named.

At least one other member of the panel has had ties to the pharmaceutical industry. Neal L. Benowitz, a professor of medicine at the University of California, San Francisco, has served as a consultant to GlaxoSmithKline and Pfizer Inc. He also will be a voting member of the panel.

The selections raise questions about whether the members would have a conflict of interest on topics such as whether to approve a low-carcinogen smokeless tobacco product as a safer alternative to cigarettes. Such products compete for smokers’ dollars against smoking-cessation aids such as the Nicorette gum marketed in the U.S. by GlaxoSmithKline.

The FDA says on its Web site that it seeks “qualified experts with minimal conflicts of interest.” Kathleen Quinn, a spokeswoman for the agency, said panel choices were made based on the federal statute, which said the nonindustry members of the panel could not have received any salary or payments from any tobacco manufacturer, distributor or retailer in the previous 18 months.

She said board members will be screened for conflicts of interest before each meeting of the tobacco board, “and their participation may be limited based on that screening.”

Mr. Henningfield, 57 years old, said in an interview that he receives most of his income from Pinney Associates and also shares a patent for a potential nicotine-gum delivery system that hasn’t been commercialized. He is an adjunct professor of behavioral biology at the Johns Hopkins School of Medicine.

Mr. Henningfield said he disclosed his income sources and “real and potential conflicts of interest” as part of the FDA’s review of potential members of the panel.

“If there are any issues that come up that are of concern,” he said, “then my expectation is that I would be recused from either participation or voting.”

Mr. Benowitz said he doesn’t “see a direct conflict of interest” because the board deals with tobacco products, not drugs that are aimed at helping people quit smoking. “Now, if this group gains jurisdiction over drugs as well, I think that would be something different,” he said. Mr. Benowitz said he still consults Pfizer, but not GlaxoSmithKline.

Nicotine-replacement therapies such as Nicorette are regulated by a different part of the FDA.

David Sylvia, a spokesman for Altria Group Inc., which owns leading U.S. cigarette maker Philip Morris USA, declined to comment Monday on the composition of the advisory board. “We think it’s important that [the panel] takes a scientific approach to the issues,” he said. “We look forward to the opportunity to share information as they get up and running.”

Maura Payne, a spokeswoman for Reynolds American Inc., the second-largest cigarette maker in the U.S., said it looks forward to working with the new panel “to help set a scientifically based regulatory structure for the tobacco industry.”

The tobacco panel was created to advise the FDA on how to regulate tobacco products as part of sweeping legislation signed into law last year that gave the agency broad power to regulate tobacco products.

The nine members with voting powers are comprised of health professionals, one member of a state government and a member of the general public.

The committee will have its first meeting at the end of March and will discuss the controversial topic of menthol cigarettes.

The Campaign For Tobacco-Free Kids, a Washington-based anti-smoking organization, praised the FDA’s choice of committee members.

Electronic cigarettes may be more harmful and life threatening for those who choose to smoke them compared to an actual pack of cigarettes, said the wellness and health promotion coordinator at the Health Center.
“Many students don’t know how much nicotine are in these e-cigs, and students don’t know how harmful that can be,” Jennifer Gacutan-Galang said.
What many students also don’t know about the e-cig is that it is not FDA approved, she said.
Of the students Gacutan-Galang sees using tobacco products or who are trying to quit using tobacco products, half know about the e-cig product and a quarter have it or have tried it, she said.
An e-cig is composed of an atomizer, a battery and a mouthpiece. The e-cigarette is powered by a battery and emits vapor rather than chemical smoke, according to e-cigarette national Web site.
There are nicotine cartridges that are put into the atomizer, which is then inhaled, according to the e-cigarette Web site.
“What the e-cig companies don’t tell you is the amount of nicotine in each e-cig,” Gacutan-Galang said. “Even though the e-cig does not have the 4,000 plus chemicals, they contain nicotine, which is the chemical that makes cigarettes addictive.”
Gacutan-Galang said a student brought in an e-cig starter kit he had purchased from Valley Fair Mall and nowhere on the box or the pamphlet of the $120 product was the amount of nicotine printed.
Some students who come to sessions with Gacutan-Galang and want to quit smoking noticed a change in the number of cigarettes they smoked she said.
“They went from a pack to half-a-pack a day, but the problem with that is since it is not known how much nicotine is in each e-cig, they could potentially be smoking two packs worth of nicotine,” she said.
“They taste better than normal cigarettes, and you don’t smell like you have just had one,” said sophomore chemistry major Jade Lopez.
The reason these e-cigs have been referred to as the “cigarette you can smoke anywhere” is because there is no secondhand smoke from it, Gacutan-Galang said.”You’re not burning them, so there is no secondhand smoke and this is what people get offended by,” she said. “But they are still harming themselves.”
“It would be a little weird and throw me off seeing someone smoke in a building,” said freshman nursing major Karina Nettie.
Linda Steadman, a sophomore radio, television and film major, said she favors the benefits of the e-cig.
“It is pretty cool, since you can smoke inside buildings and not have to go outside,” she said.
Since the e-cig can range in price from $70 to $150, this is money students may not be willing to spend.
“The fact that they are so expensive does not make it appealing to me,” said Monica Gallyot, a senior social science major who has been smoking for 15 years.
Students who have tried the e-cig have told Gacutan-Galang they didn’t like it because after they would smoke the e-cig and would still crave an actual cigarette, she said.
“No college student can afford that price, but five dollars for a pack is easier to get, and even then can be a struggle sometimes,” said Steadman, a smoker for one year.
Lopez said the e-cigs are expensive at the moment, but if more brands started coming out with them, the price might lower.

3 per cent increase in 15-19 age group, StatsCan reports
More teenagers in Quebec are turning to smoking - a troubling new development that raises questions about whether the provincial government has gone far enough to curb tobacco use among youth, experts say.
The latest survey on smoking by Statistics Canada shows that in Quebec, one in five teens age 15 to 19 lit up last year - an increase of three per cent from 2008.
By comparison, the national smoking rate for that age group declined to 14 per cent from 15 per cent.
What’s more, 11 per cent of Quebec children up to the age of 11 said that they were exposed to second-hand smoke at home, compared with five per cent for the whole country.
“Something is attracting teenagers to smoking,” said Marc Drolet, a spokesperson for the Quebec division of the Canadian Cancer Society.
“There was a downward trend for the past 10 years, and now for some reason, the trend has probably reversed. Unfortunately, we are now the Canadian champions in that (smoking age) category.”
Drolet conceded that the government has taken some strong anti-smoking measures to date, like banning it in bars and restaurants. But he urged Quebec to do more to curb subtle marketing campaigns by tobacco companies aimed at youth.
Karine Rivard, press attaché to Health Minister Yves Bolduc, defended the government’s anti-smoking initiatives and said that more were planned for this year.
She noted that Quebec has banned the sale of single cigarillos with grape and other flavours that had been popular with some teens.
“The government intends to continue to intensify the fight against tobacco,” Rivard said. She declined to describe some of the proposed anti-smoking measures.
The survey did contain some good news, however. The prevalence of tobacco use in an older age group of Quebecers - 20 to 24 - dropped to 25 per cent last year from 31 per cent for the corresponding period in 2008.
Smoking is considered the main cause of avoidable cancer globally, killing more than 5 million people each year.
Tobacco use has been linked to 85 per cent of cases of lung cancer and is responsible for 30 per cent of all cancers, according to the Canadian Cancer Society. In Quebec, 7,400 Quebecers received a diagnosis of lung cancer last year and 6,500 died from that illness.
The Canadian Tobacco Use Monitoring Survey is carried out semi-annually and is based on a survey of more than 9,000 respondents. The latest survey was for the months of February to June 2009.