[Intl-tobacco] European News Bulletin - EU0026 - 3 July 2000 (fwd)

[Robert Weissman]

Globalink's EUROPEAN BULLETIN     EU0026 =96 3 July 2000

Headlines

EUROPE: EU Ministers agree on stricter tobacco regulations
EUROPE: EU court rejects challenge to tobacco advertising law

BULGARIA: Marlboro man races east from tobacco control
FRANCE/CUBA: Co-President of Altadis SA sees more opportunities in Cuba
GERMANY: Swedish Match To Appeal German Ban On Tobacco Product
GERMANY: Reemtsma expansion plans
ITALY: Manslaughter inquiry over passive smoking death
NORWAY: Report clears way for smoker claims
ROMANIA: Philip Morris goes local



Full Text


EUROPE: EU Ministers agree on stricter tobacco regulations

European Union health ministers have approved the tobacco product
directive which will reduce the maximum tar content of cigarettes to 10
milligrams per cigarette from 12 milligrams and set a 1-milligram ceiling
on nicotine content.

The ministers agreed to enlarge health warnings to cover 25 percent on
both sides of the pack, higher than the current 4 percent, although lower
than a measure voted on by the European Parliament earlier this month
which called for 35 percent on the front of a pack and 45 percent on the
back.

 =93Tobacco must be regulated through a responsible manufacturing and
marketing policy,=94 said David Byrne, European Commissioner for Consumer
and Health Affairs, adding that =93the appalling and entirely preventable
death toll from smoking=94 claims one European life a minute.

Germany, the only country to oppose the directive, has said it will
consider a legal challenge, arguing that parts of the directive could not
be justified under the single market legal base proposed.  Luxembourg,
Austria and Spain abstained.

The proposal needs to be agreed by the commission before returning to the
parliament for final approval.


Source: Bloomberg News, 29 June 2000



EUROPE: EU court rejects challenge to tobacco advertising law

The European Court has ruled that a challenge by clothing, media and
advertising companies to the EU's ban on tobacco advertising is
inadmissible and should not be heard. A separate challenge by Germany to
this directive is unaffected by the ruling.

The challenge was mounted by a group of companies variously affected by
the advertising ban passed in 1998, including Salamander AG, a
German-incorporated company making shoes and boots, which holds the
license for Camel boots.

Other parties were Una Film "City Revue" GmbH, an Austrian company which
distributes advertising films in cinemas; a partner of Austrian Tabak,
which holds exclusive rights over tobacco advertising in Austria; Alma
Media group, which sells advertising space in public places in Greece and
has 90% of that market; and Zino Davidoff SA and Davidoff & Cie SA, which
hold the right attached to the Davidoff trade mark and grant licenses to
cosmetic products and leather goods.

The action was supported by Markenverbrand of Germany, Manifattura Lane
Gaetano Marzotto & Figli SpA of Italy and Lancaster BV of the Netherlands.

The companies all sought the annulment of the directive but the European
Court of First Instance ruled that their applications were not admissible
because they were individuals, not member states, and that the directive
did not directly affect their legal situation even if it might be of
concern to them.

Source: NewsEdge, Wednesday, 28 June 2000



BULGARIA: Marlboro man races east from tobacco control

The Marlboro man's ride into Bulgaria is among the latest signs that major
cigarette makers are racing into Eastern Europe before the European
Union's expansion and international anti-smoking campaigns lead to
stricter tobacco laws.

 Smokers in Eastern Europe face fewer restrictions in restaurants, offices
and schools than in the West. According to a World Bank report, Bulgarian
schools do not restrict smoking and Romanian children can legally buy
cigarettes. Tobacco laws are especially lax in Ukraine, where smoking is
allowed even on public transportation.

 In this environment Philip Morris recently launched sales of Marlboro
cigarettes, the world's most popular brand. Cartons appeared on store
shelves overnight in cities across Bulgaria. Strong demand was reported
immediately "irrespective of prices," according to a Sofia newspaper.

 Marlboros have been sold on the Bulgarian black market for years, but the
legal packets are advertised as fresher and more flavourful.  Philip
Morris says it has cornered a dominant share of the tobacco market in
several parts of Eastern Europe. For example the company says it controls
33 percent of the market in Poland, 53 percent in Slovakia and 79 percent
in Czech Republic. Another big player in the region is BAT, which
aggressively advertises its Lucky Strike brand as "real American" =20
cigarettes.

Tobacco companies say they're working with Eastern European governments to
protect the public. Philip Morris, for example, says it helped Estonia
create the Baltic country's first tobacco-industry marketing code.
Nevertheless Eastern Europe's demand for cigarettes is one reason why a
WHO report two weeks ago predicted a global increase in smokers to 1.6
billion by 2020 from 1.2 billion today. A World Bank report says by 2020
seven out of every 10 people who die from smoking-related illness will be
in low- to middle-income nations.

 The WHO-funded Collaborating Centre on Tobacco at the Karolisnka
Institute in Stockholm is focusing on training Eastern European health
officials to combat smoking with education and regulation.  Among other
measures, the World Bank is pushing for higher cigarette taxes. It says a
10 percent increase in taxes in 1995 would have spurred 40 million people
to quit and save 10 million lives.

 The call for tobacco control is getting louder, particularly in Europe.
In October, the subject will be debated for two days at a WHO-sponsored
public hearing in Geneva, Switzerland. It's being billed as history's
largest gathering of representatives from the tobacco industry,
anti-smoking groups, health agencies and governments.

 Yet the industry's push into Eastern Europe is not expected to soften.
Industry documents obtained by WHO include this statement from a BAT
executive speaking about the region's potential for sales growth:
"Obviously there is enormous potential in these countries. I would say
that the demand for Western cigarettes is insatiable. It's a fantastic
opportunity for everybody... in any number of countries."

Source: UPI, 26 June 2000





FRANCE/CUBA: Co-President of Altadis SA sees more opportunities in Cuba

Jean Dominique Comolli, co-president of cigar industry giant, Altadis SA,
recently headed a French business delegation to Cuba on a mission to
increase trade between the two countries, according to Granma, Cuba's
state newspaper.

The French delegation, representing 25 companies, visited Cuba's tobacco
farms in Pinar del Rio province, southwest Cuba, where Cuban farmers grow
most of the tobacco wrapper leaf used in the manufacture of hand-made
Cuban cigars.

Last December, Altadis SA purchased a 50 percent stake in Habanos SA,
Cuba's global marketer and distributor of its cigars, for $500 million.

The purchase was completed this month and under the arrangement Habanos SA
has two presidents, Oscar Basulto, a former vice minister of Cuban
agriculture and Jamie Garcia Andrade, a Spaniard who worked 10 years in
Cuba for Tabacalera SA as the Spanish tobacco giant's point man in Havana.

Comolli told Granma that in terms of bilateral trade, France occupies
second place among Cuba's trading partners with $280 million in exports,
ahead of both Canada and Germany.

Source: Bloomberg News, Thursday, 29 June 2000




GERMANY: Swedish Match To Appeal German Ban On Tobacco Product

Tobacco products group Swedish Match AB has said that it will appeal the
ruling of a court in Cologne to ban the sale of snus - a moist snuff
tobacco product - in Germany.

Swedish Match will also seek to question the legality of a European Union
ban on certain smokeless tobacco products through the European Court of
Justice.

"It is our firm opinion that the E.U. ban on certain smokeless tobacco
products - to the extent it covers snus - violates fundamental E.U.
principles, foremost the principles of non-discrimination and
proportionality," said Swedish Match President and Chief Executive Lennart
Sunden.

"A significant body of scientific evidence now clearly shows that the
health risks associated with using snus are significantly less than those
associated with cigarette smoking," said Sunden.

Since snus is widely used in Sweden, the Swedish government has obtained a
permanent derogation from the E.U. ban on certain smokeless tobaccos.

Source: The Wall Street Journal Interactive Edition, 28 June 2000



GERMANY: Reemtsma expansion plans

The German cigarette producer Reemtsma, which registered worldwide sales
of 137.2bn (up from 129.4bn) cigarettes, a turnover (excluding tobacco
tax) of DM 4.841bn (+8.4%) and a net profit of DM 435.5mn (after DM
369.3mn) in 1999, wants to expand further.  Reemtsma is targeting in
particular eastern and central Europe as well as Asia.  In 1999, Reemtsma
sold 104.9bn (97.8bn) cigarettes abroad.  In Germany, the group ranked
second with a market share of 22.9% (22.8%).  Reemtsma is also the number
two in central Europe and Taiwan and the market leader in Ukraine and
Kirgizia. In Cambodia, Reemtsma acquired the majority of Paradise Tobacco,
which represents a market share of 6% in that country.  After a 10%
turnover rise in the first five months of 2000, Reemtsma targets a 'high
single-digit' growth rate for the full year. Profits should develop in
line with the turnover. In 1999 pre-tax profits increased by 44% to DM
735.6mn.

Source: Handelsblatt via the Gale Group, 09 Jun 2000



ITALY: Manslaughter inquiry over passive smoking death

A Milan prosecutor has begun investigating whether an asthma sufferer died
from passive smoking, with a view to charging her employers and colleagues
with manslaughter.

The victim, identified by Italian newspapers as Stefania C, 25, collapsed
at her desk in a Milan bank 10 months ago and died of an acute asthma
attack.

Employers have in the past been ordered to pay compensation for the
effects on health of passive smoking, but this would be the first time in
Italian legal history that anyone had been charged with culpable homicide
in such a case.

The woman, who suffered from chronic bronchial asthma, had been hired
under a scheme that gives tax incentives to employers who take on staff
with physical handicaps. But her family say she was forced to work in a
small, windowless room, surrounded by habitual smokers.  Her repeated
written requests to be transferred to a healthier environment were
allegedly ignored by her employers.

The prosecutor, Luca Poniz, is investigating whether those who continued
to smoke around her and those who ignored her pleas for help should be
charged with manslaughter.  The intervention of trade union officials
achieved no improvement in Mrs C's working conditions.

She returned from work every day with her clothes reeking of smoke and
feeling humiliated by the insensitivity of her colleagues, her husband
told the prosecutor.  Her anxiety at having to work in an airless,
smoke-filled room often caused her to break down in tears, he said.

According to Francesco Bacchini, a researcher on labour rights at the
University of Modena, the entire bank hierarchy could be liable to
prosecution.

"There is still no law against passive smoking in Italy, but using an
extensive interpretation of other laws on safety in the workplace, there
is no doubt that this case has serious penal implications," he said.

Four years ago the constitutional court established that smoking should
only be allowed in the workplace in specially designated rooms or
adequately ventilated smoking areas.

Mr Poniz will decide if he should go ahead with charges against the bank
staff after questioning all those involved in Mrs C's case. His decision
is expected by the end of the month.

Source: The Guardian, Saturday, 24 June 2000



NORWAY: Report clears way for smoker claims

 A 700-page official report on Norway's tobacco industry will make it
easier for individuals and local authorities to claim damages against the
industry. However, the authors say it won't be an easy legal process.

The document - put together by a team of legal and medical experts - marks
a crucial turning point in the fight against tobacco. Emphasis will now be
on responsibility and compensation whereas in the past, priority was given
to the prevention of tobacco related illnesses.

Health minister Tore T=F8nne, who received the report last week, says sick
smokers cost the nation NOK 2 billion ($230.7 million) each year and that
7,500 people die of tobacco related illnesses. He says it is strange that
a product designed to be addictive, and which can be fatal, is sold with
few restrictions, but he did not envisage a ban on the sale of tobacco.


Source: Aftenposten, Wednesday, 28 June 2000




ROMANIA: Philip Morris goes local

Philip Morris Romania last week officially launched a new cigarette
created especially for Romanian market. "This is the first time that an
international tobacco company has decided to launch a local brand of
cigarettes," said Peter Imre, Corporate Affairs Director with Philip
Morris Romania.

Research showed that 46.1 percent of the Romanian tobacco market is
covered by local brands, 31.6 percent by low price cigarettes, 13,9
percent by medium price cigarettes and only 8.4 percent by high price
cigarettes.  The Callatis brand is designed to attract smokers on low
income who cannot afford to buy high price cigarettes.

The new brand will be supported by "the biggest campaign ever made for a
local cigarette brand. The budget for the campaign is valued at a couple
of hundred thousand of dollars," said Imre without mentioning the exact
amount of money that will be invested in promoting the brand.  He was also
reluctant to mention the value of the investment that Phillip Morris has
made on the Romanian market and in its factory.

Source:  The Business Review - Bucharest; June26 - July2, 2000 / Volume 3,
no. 25


Amanda Sandford Research Manager ASH 102 Clifton Street LONDON EC2A 4HW
tel: 020 7739 5902 fax: 020 7613 0531