Shocking Facts about Tobacco

Dividend paying companies have gaining popularity in the markets in 2012. With interest rates as low as they are investors are looking at dividend paying stocks for investment income, where returns currently far exceed those of bonds. The Cigarette Industry has been home to some of the safest dividend investments in the market. Even during the recession, when many companies slashed dividend payments, cigarette manufacturers did not. Five Star Equities examines the outlook for companies in the Cigarettes Industry and provides equity research on Altria Group, Inc. (NYSE: MO) and Philip Morris International Inc. (NYSE: PM).

Tobacco companies have been experts in dealing with adverse conditions. Negative publicity in the U.S. has sent demand for tobacco down in recent years; however, companies have been able to maintain stable revenues by merely raising the price of cigarettes. With stable profits cigarette companies have been able to keep their high yielding dividends intact.

A proposed law in Australia may prevent a new challenge for the tobacco industry. The Australian government wants impose the first ever ban of logos on cigarette packs. The proposed law would see cigarettes sold in dark olive-brown packages, with graphic images of diseases caused by smoking replacing corporate logos. Countries such as New Zealand, Canada, Belgium, Iceland, and France have all expressed interest in adopting a packaging law like Australia.

In April 20, 2012, Altria‘s annualized dividend yield was 5.1%. Altria expects to continue to return a large amount of cash to shareholders in the form of dividends by maintaining a dividend payout ratio target of approximately 80% of its adjusted diluted EPS.

Phillip Morris currently offers investors a dividend yield of 3.4 percent. The company recently reported first quarter results: Net revenues, excluding excise taxes, were up by 9.7% to $7.4 billion, or by 10.9% excluding currency and acquisitions. The company reported earnings per share of $1.25, up by 17.9%, or by 19.8% excluding currency, versus $1.06 in 2011.

Merchandising brand Tonino Lamborghini, which has earlier offered the cigar lighters and cutter to help you in flaunting your love for the auto brand has now introduced a new cigarette line. In conglomeration with South Korea’s biggest tobacco producer, KT&G Corporation, Tonino Lamborghini has launched the new cigarette line, the Raging Bull smokes. The Lamborghini’s iconic raging bull logo will adorn the Cigarettes in South Korea, and soon the smokers will be able to light up a Lamborghini cigarette.

The cigarettes – which will be sold alongside smoking paraphernalia such as lighters and cigarette cases – will reportedly cost 2700 South Korean Won per packet ($2.40) – about $0.17 more than the average pack of cigarettes in South Korea (about 2500 Won).

KT&G told the Korea Herald the new cigarette line has been under development for the past three years, and will eventually be sold overseas. The company says the product has been: “designed as a premium product with a global brand value”.

Targeting both the domestic and the international markets, the Lamborghini cigarettes has been under development from the last three years. KT&G, Korea Tobacco & Ginseng has acquired the exclusive global sales rights for the new cigarette brand, and has the future plans to market the cigarette line as one of its global strategic product. However, the Italian car maker Lamborghini is not involved in the venture, but associated the merchandise and fashion arm, Tonino Lamborghini.

Specially designed as a superior product with global brand value, the new cigarette line priced at $2.37, has been made of top-notch materials will be released on April 18, 2012.

Besides the new cigarette line, Tonino Lamborghini also offers a sleek silver cigarette case to carry the cigarettes in style. Priced at $125, the cigarette case boasts an exquisite craftsmanship infused with the elegant design, and also comes beautifully presented in a signature gift box.

There’s no word yet on whether Australia will see the Lambo-branded smokes sold here.

Madonna expressed herself in an interview on Wednesday’s “Today” show that she was not happy to see her 15-year-old daughter, Lourdes, smoking.

Photos of Lourdes smoking emerged late last month when a paparazzi took a picture of her having her nicotine break in New York where the legal age for smoking is 18.

“I wasn’t very happy,” Madonna told “Rock Center’s” Harry Smith about her eldest daughter’s cigarette smoking, “but honestly, I don’t think I’m as tough as I should be.

“I think I need to be maybe tougher. It’s hard. “Every day is a negotiation, but cigarette smoking I’m not fond of on anyone, most of all my daughter,” she said in the exclusive interview.

When Smith mentioned about Madonna’s smoking in her latest music video, “Girl Gone Wild,” she confirmed that she doesn’t smoke.

“I don’t smoke.” “That’s just an accessory, Harry. There’s a difference. Lourdes smoked that cigarette before I did that video!”

The Material Girl who has three other young children namely Mercy James, David Banda Mwale Ciccone Ritchie and Rocco Ritchie also said that her children only see one side of her, shes simply Mom.

“To my children there’s mostly the one who says, ‘Have you done your homework?’ and ‘Why are you wearing that?’ and ‘Why did you say that?’ and ‘What are you eating that for?’” she said.

Lindsay Lohan’s redemption tour continued with a random act of kindness at the White House Correspondents’ Dinner, starting with a possibly illegal smoke break and ending with a bizarre run-in with a bathroom attendant that left Lohan’s wallet $100 lighter.

Tobacco firm Philip Morris International  on Monday said its Chief Financial Officer Hermann Waldemer has elected to take early retirement effective July 31. Waldemer will be succeeded by Jacek Olczak, with effect from August 1.

Olczak is currently President, European Union Region. He will be succeeded by Drago Azinovic, currently President, Philip Morris Japan.

Commenting on Waldemer’s retirement, Louis Camilleri, Chairman and CEO, said, “His crowning achievement is undoubtedly his invaluable contribution as CFO to our company’s tremendous performance since our spin off from Altria Group, Inc., in March 2008.”

Olczak has been in his present role since April 2009. Since joining the tobacco company in 1993, Jacek has held several increasingly senior positions in Finance, Sales and Operations, including General Manager Romania, Managing Director Poland and the Baltic States.

Azinovic joined the company in 2009 as Vice President Marketing and Sales for the Asia Region. In July 2011, he was appointed to his current position as President of the company’s affiliate in Japan.

PM closed on Friday at $89.13, down $0.83 or 0.92 percent, on 3.71 million shares.

There are fewer basic sizes in the world of cigars. The size of a cigar is defined by diameter (ring gauge) and length (in inches). Ring gauge is the diameter measured in 64ths of an inch, so a cigar with a ring gauge of 48 is 48/64ths (or 3/4ths) of an inch.

The basic sizes are:

Cigarillo Cigars (3″ X 20 ring gauge)
Panatela Cigars (6″ X 36)
Corona Cigars (5 1/2″ X 42)
Lonsdale Cigars (6 3/4 X 42)
Robusto Cigars (5″ X 50)
Toro Cigars (6 x 50)
Double Corona Cigars (7 1/2″ X 50)
Churchill Cigars(7″X 48)

Cigars and Their Regions

Cigars sold in the United States are manufactured in many countries throughout the world including Jamaica, Nicaragua, Honduras, Mexico, Brazil, Belgium, Holland, Denmark, Germany, Switzerland, the Dominican Republic, the Canary Islands, the Philippines and the United States. Each of these countries produce cigars which vary from each other in flavor, strength, aroma, and price. Seed from the same tobacco plant put into the ground in various countries will yield very different results because of differing climate conditions, soil, water, even perhaps the air itself. As a matter of fact, cigars produced in a particular country may contain tobaccos grown in a completely different country.

- Dominican Republic Cigars made in the Dominican Republic are presently the most popular choice among US consumers. Their flavor is subtle, sweet, nut-like and usually milder than most other countries.

- Honduran cigars are more robust in flavor with a more full-bodied strength. To the uninitiated, they may be overpowering.

- Jamaica cigars are gentle, mild and more mild than even Dominicans. A good cigar for early afternoon or even early morning.

- Nicaraguan cigars are just coming back into their own after the burning of the tobacco plantations during the Sandanista years. They tend to be slightly less robust than Hondurans and possess a sweet nutty flavor.

- Mexican cigars are thought to be on a tier below super premium cigars because of a general lack of refinement. However, there are several excellent Mexican brands.

- Cigars made in Europe are unlike those described above in that they are machine-made using short filler tobaccos and are generally not humidified. They are also smaller in size. The taste of these cigars is quite different because they use tobacco not only from the Americas (Brazil) but also from Africa and Indonesia. These tobaccos blend to produce a spicy flavor in a mild cigar.

Paul Garmirian’s The Gourmet Guide to Cigars Describes Cigars in this Fashion:

“A cigar consists of three components: the filler, the binder, and the wrapper. The filler, which is the inner core of the cigar is what constitutes the body and shape of the cigar and constitutes its greatest mass. The binder is the leaf that binds the filler. It is somewhat coarser than the wrapper. The wrapper which is the outer covering of the cigar must be strong, yet elastic and silky. The elasticity of the wrapper gives the ability to the leaf when moisturized to stretch without breaking.”

Rick Hacker in The Ultimate Cigar Book points out that there are three different ways a cigar may be made:

Handmade Cigars – The entire cigar is bunched, rolled and trimmed by individual hand labor. It can be one person working alone on a single cigar, or the work can be divided between a buncher and a roller working on the same cigar. The main criterion is that the entire cigar is completely made by hand from start to finish.

Machine Bunched/Handrolled Cigars- The filler is bunched by machine and then the filler/binder combination is turned over to a cigar roller, who puts the wrapper on by hand. This technique is often simply referred to as machine bunched.

Machine-made Cigars - The filler, binder and wrapper are completely assembled by machine.”

The best way to decide what you will like is to become familiar with various sizes and types of cigars. Then you’ll be able to determine what cigar is best for your own special smoking scenarios.

A federal court judge has struck down a provision of a local tobacco control ordinance that bans outdoor advertising of tobacco products within the city.

Cigarette smoking advertising

In a 22-page ruling released today, US District Court Judge Douglas P. Woodlock ruled the ban is unconstitutional.

He said the city has no legitimate interest in prohibiting “non-misleading advertising” to adults to prevent them from making decisions of which the city disapproves.

The judge added that the city failed to show the outdoor advertising regulations are not more extensive than necessary to advance its substantial interest in preventing under-age tobacco use.

He went on to say that the city also did not make any effort in crafting the ordinance to determine what types of advertisements are most harmful to minors.

He said a ban on all signs of any size seems “ill suited” to target the problems of highly visible billboards, as opposed to smaller signs.

“The broad sweep of the ordinance suggests that the (city) did not consider how to tailor the restrictions so as not unduly to burden the plaintiffs’ free speech rights and the rights of adults to truthful information about tobacco products,” Judge Woodlock wrote.

“Neither the city’s goal to prevent tobacco-related health problems among adults, nor its correlative goal regarding minors, provides a basis for the ordinance,” he added.

The suit was brought against the city by the National Association of Tobacco Outlets Inc.; RJ Reynolds Tobacco Company; Philip Morris USA Inc.; and Lorillard Tobacco Company.

Tobacco companies hailed the court decision as a victory for free speech.

“Tobacco companies have a constitutional right to communicate with adult consumers through retail advertising and this court appropriately recognized that,” said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Philip Morris. “Many courts, including the US Supreme Court, have determined that the First Amendment allows us to communicate with adult consumers and we will continue to vigorously defend this right when it is challenged.”

City officials, meanwhile, say they are reviewing all options.

Last April, Worcester became the ninth municipality in the state to ban the sale of cigarettes and other tobacco products by local health-care providers, including chain pharmacies and other drugstores.
The ban was one of four amendments to the city’s tobacco control ordinance.

The other amendments also banned the sale of tobacco products at local institutions of higher education and the citywide sale of so-called blunt wraps — a cigarette-like rolling paper that is usually made from tobacco leaves.

In addition, cigarettes and tobacco products can not be advertised in areas where they can be viewed from public streets, parks, schools and institutions of higher education. That effectively banned the outdoor advertisement of tobacco products throughout the city.

Advocates of the amendments called the council’s action “historic,” adding that they will serve as an important first step to reduce the smoking rate among Worcester’s population.

In drafting the ordinance, city public health officials pointed out that an estimated 31,265 smokers live in Worcester. They said 23.7 percent of adults living in Worcester older than 18 smoke — a level that is 47 percent higher than the statewide level of 16.1 percent.

Also, cigarette smoking among middle-aged residents (ages 45 to 64) is at the 23.7 percent level, which is 42 percent higher than the statewide level of 16.7 percent.

Meanwhile, the death rate among Worcester residents from tobacco on a per-capita basis is about 250 people annually, or roughly five deaths per week, according to public health officials.

Soon after the City Council adopted the ordinance, tobacco companies filed suit against the city, challenging the validity of the advertising ban. The city agreed not to enforce that provision of the tobacco control ordinance while the lawsuit was pending.

In drafting the ordinance, the council made a number of findings, most related to the harms caused by tobacco and the relationship between tobacco advertising and increased tobacco use.

But the tobacco companies raised concerns that the ordinance’s advertising regulation will impede their ability to market their products within the city.

“The plaintiffs do not claim that the city of Worcester lacks a substantial government interest in preventing youth tobacco use,” the judge wrote. “However, they argue that the city’s substantial interest is limited to protecting minors.

“They contend the city has no legitimate interest in prohibiting non-misleading advertising to adults to prevent them from making decisions of which the city disapproves,” he added.

Judge Woodlock said the US Supreme Court in 2002 considered a similar First Amendment challenge to a statute prohibiting the promotion of compound drugs.

But the Supreme Court dismissed the notion that government has an interest in preventing the dissemination of truthful commercial information in order to prevent the public from making bad decisions with that information.

“The (Supreme) Court thus rejected the principal interest advanced by the city of Worcester in support of its advertising restriction,” the judge wrote.

Judge Woodlock also made reference to a decision made by the Supreme Court last year that effectively prohibits the city from seeking to remove “a popular but disfavored type of product,” such as tobacco, from the marketplace by prohibiting truthful, non-misleading advertisements directs to adults.

Under that court decision, the judge said, “Worcester may not prohibit tobacco advertisements in order to prevent adults from making the choice to legally purchase tobacco products.”

In December, the legal challenge into the city’s ban on the sale of blunt wraps was dropped. Meanwhile, Honey Farms has filed a challenge to the provision of the tobacco control ordinance that bans the sale of tobacco products on property owned by educational institutions.

MANILA, Philippines – Failure. This was the grade that the multi-awarded movie in the 2011 Metro Manila Film Festival got from anti-tobacco advocates, according to a study by the Department of Health (DOH).

Manila Kingpin: The Asiong Salonga Story smoking cover

“Manila Kingpin: The Untold Story of Asiong Salonga” got the most awards in the filmfest, but the DOH was unimpressed.

44 out of 91 scenes in the 112-minute black-and-white movie, which starred Laguna Governor E.R. Ejercito, showed actors who were smoking.

“Ironically, this adjudged quality and best film is filled with tobacco and smoking scenes from the first 4 minutes of the movie up to the last few minutes towards the end. Smoking is also very obvious in the movie’s trailer, music video, print advertisement and poster,” said Anthony Roda, acting division chief of the DOH’s National Center for Health Promotion.

He warned that smoking scenes in movies is an “indirect tobacco advertising and promotion vehicle,” which violates existing laws.

Craving for cigarettes

Roda called on filmmakers to “exclude scenes that show actors smoking cigarettes” because they “entice people to crave for cigarettes.”

“We don’t want to send the wrong message to our children. We want to inculcate positive, health-conscious values and awareness….Let this be the time to educate the film makers,” he pointed out.

“Manila Kingpin: The Untold Story of Asiong Salonga” won a total of 11 awards including Best Picture, Best Director, Best Screenplay and Best Supporting Actor and the special award – Gatpuno Antonio Villegas Cultural Award.

The horror movies “Shake Rattle and Roll 13” and “Segunda Mano,” on the other hand, had one smoking scene each.

Roda said that the films “My House Husband,” “Ang Panday 2,” “Enteng ng Ina Mo” and “Yesterday, Today, Tomorrow,” did not have smoking scenes.

Roda has urged tobacco control advocates to “exert efforts in educating filmmakers on the harmful effects of tobacco use and the evidences that smoking scenes have on smoking initiation and craving to smoke.”

“This strategy may encourage them not to show smoking scenes or depict the true picture of diseases and deaths brought about by smoking in their movies,” he said.