European News Bulletin - EU9942 8 November 1999 (fwd)

[Robert Weissman <rob@essential.org>]

Globalink's EUROPEAN BULLETIN EU9942 – 8 November 1999

Headlines

Europe:

FRANCE: Seita refuses Gallaher merger offer
FINLAND: Doctors statement reaffirms dangers of smoking 

HUNGARY: Smoking banned in public buildings 

POLAND: Finance Ministry announces big rises in tobacco excise tax 

SWEDEN: Swedish Match dumping complaint backfires

International

CHINA: Rise in counterfeit cigarettes 

ZIMBABWE: Air Zimbabwe Bans Smoking On All Flights


Full Text

FRANCE: Seita refuses Gallaher merger offer

Gallaher has been rebuffed in an audacious attempt to forge a £4.5 billion
merger with Seita, the French manufacturer of Gauloises and Gitanes
cigarettes. In a statement, the company said the contact was aimed at
making a recommended bid at about Eu75 a share - valuing Seita at just
under £2 billion.

However Gallaher, which is capitalised at £2.5 billion, stressed that the
approach was tentative and "did not represent a firm offer for Seita
shares". The suggestion was abruptly squashed by Seita, which has already
agreed to a tie-up with Spain’s Tabacalera to create an entity with
worldwide sales of Eu2.7 billion.

A source close to Seita described Gallaher’s move as "an act of
desperation", saying: "Zero discussions are underway". Seita believes the
British company fears being left behind in the industry’s rapid
consolidation. Seita sources add that Gallaher’s brands are relatively
weak - Silk Cut is popular only in the UK, while Benson & Hedges is owned
by others outside Europe.

Gallaher owns Hamlet cigars, but Seita’s preferred merger partner,
Tabacalera, is a larger cigar producer which has ties with the Cuban
government. Analysts said Gallaher was unlikely to make a hostile bid but
they suggested that Seita’s board may face pressure from shareholders to
enter discussions.

Jonathan Fell, of Merrill Lynch, said: "It’s got to be a possibility, at
the kind of level Gallaher is talking about." Seita’s shares jumped 10pc
to Eu56 yesterday, still well below the indicative offer price of Eu75.
Gallaher is keen to expand overseas - Mr Fell said: "The company is still
pretty dependent on the UK for profits and it needs more international
exposure. A deal is the only way to achieve that on the scale people
want."


Source: Electronic Telegraph, Thursday, 11/4/99




FINLAND: Doctors statement reaffirms dangers of smoking

Over 100 Finnish doctors have signed a statement drafted by cancer

organisations affirming that tobacco causes cancer. The statement’s goal
is to

remind people that the scientific evidence on the cause and effect
relation

between tobacco and cancer is indisputable, regardless of court rulings or

of what the tobacco companies claim. The doctors who signed the statement

hope that it will affect the precedent to be given by the Finnish

Supreme Court on a case involving British American Tobacco Nordic.

Source: Helsingin Sanomat (XFB), via The Gale Group, 28/10/99



HUNGARY: Smoking banned in public buildings

Hungary, the world's third heaviest smoking country, has banned smoking in
most public buildings and set up smoking sections in restaurants and bars
under a new law that went into effect on 1 November.

Under the measure, Hungarians under 18 are prohibited from buying
cigarettes and tobacco sales are banned altogether from schools and health
and social care institutions.

However, some public health officials said it would be very hard to
implement the law. "Forty-four percent of adult men and 27 percent of
adult women are regular smokers, and an alarming 22 percent of elementary
school pupils have already tasted tobacco," said Laszlo Domoszlai of the
National Tobacco-free Association.

Smokers will have to pay a fine of up to Ft 30,000 (117 euros, $124) if
they break the law, while employers and restaurant owners will pay more
than triple if they fail to provide separate areas for smokers and
non-smokers. Smoking on trains will only be allowed in designated
compartments but only when the train covers a distance of more than 62
miles (100 kilometers).

Tobacco factories have launched a campaign against cigarette sales to
underage buyers who make up between one to two percent of their consumers,
Peter David of the Hungarian Tobacco Federation said. Philip Morris,
Reemtsma, British American Tobacco and V. Tabac will send out stickers to
25,000 sales outlets to warn people not to send their children to buy
tobacco, he said.

"The income of the tobacco industry from sales to people under 18 has so
far come up to some Ft 400 million (1.55 million euros) a year. But the
industry targets adults and would rather lose the income from sales to
underage people," said David.



Source: Central Europe Online, Monday, 11/1/99




POLAND: Finance Ministry announces big rises in tobacco excise tax

The Polish Finance Ministry has announced plans to increase excise taxes
in 2000 by 25%, with further increases in 2001 and 2002 of 34% and 33%
respectively.

BAT Polska's chief executive officer, Jacek Siwek said that plans covering
import tariffs would also have a bearing on the market’s future
profitability.

Source: Warsaw Business Journal 04/10 Oct 1999, via The Gale Group



SWEDEN: Swedish Match dumping complaint backfires

Swedish tobacco company Swedish Match has managed to win and lose the same

case before the EU Commission. In 1994, a company in the Swedish Match

group complained to the Commission about companies in the Philippines

exporting lighters at dumped prices. The Commission decided in favour of

Swedish Match and imposed a 43 percent anti-dumping duty. Ironically,

Swedish Match has its own subsidiary in the Philippines, which is now

liable to pay the anti-dumping duty as well.

Dagens Industri (DI), 28 Oct 1999 via The Gale Group.



INTERNATIONAL

CHINA: Rise in counterfeit cigarettes

>From the beginning of 1999, the number of counterfeit cigarettes seized

in China has amounted to 100mn, which represents three times the number

registered in 1997. The Central Government is attempting to stop it

although some Communist Party officials and local governments are involved

in the trade. The number of copied brands has increased to over 100 from
30

in 1998. There are 35 different kind of Marlboro cigarettes in the

market, this brand being the most favourite one to counterfeit. With a

smoking population of 320mn people, China’s cigarette production decreased

by 0.5% to 1.67 trillion cigarettes in 1998, compared to 1997, and it

generated 14% (RMB 77.7bn) of the total central government revenue. In the

first half of 1999, sales from state-owned plants decreased by 8.6%

due to fake products and declining interest in domestic cigarettes.

South China Morning Post (XKT) 21 Oct 1999, via the Gale Group



ZIMBABWE: Air Zimbabwe Bans Smoking On All Flights

Air Zimbabwe has banned smoking on all its flights with effect from
November 1. The airline said in a statement that it had come to the
decision as it was concerned about the health of some of its passengers.
Another reason for its smoking ban was that "Air Zimbabwe was one of only
two airlines in Africa that still allowed smoking on some of its flights."


The new ban, which follows the airline’s 1993 tobacco ban on all domestic
flights, is in line with international trends. The Ethiopian airline is
another carrier in Africa which still allows its passengers to smoke on
flights.

XINHUA News Agency, 28/10/99

Amanda Sandford Research Manager ASH 102 Clifton Street LONDON EC2A 4HW
tel: 0171 739 5902 fax: 0171 613 0531