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Imperial Brands, formerly known as Imperial Tobacco, has agreed to sell its premium cigar business for more than £1bn to two private buyers, as it presses ahead with asset disposals to focus on mass-market products and cut debts.
The maker of Winston and Davidoff cigarettes on Monday said that Allied Cigar Corporation, an investment consortium, had agreed to buy the international business of Premium Cigar in a £912m deal. Another consortium, Gemstone Investment Holding, has agreed to buy the US division for £162m.
It plans to use the proceeds of the sale to reduce its debt, it said, which at the end of last year stood at £12bn. The premium cigar business last year made Imperial £80m in pre-tax profits, with the company in total making £3.4bn before tax.
Source: Financial Times, 27 April 2020
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US: Henry Geller, who helped rid TV of cigarette ads, dies at 96
Writing in the New York Times, Sam Roberts highlights Henry Geller’s central role in banning TV advertisements for cigarettes.
“John F. Banzhaf III was watching football on television with his family in the Bronx on Thanksgiving 1966 when he realized that the most strategic plays were being made off the field — in the cigarette commercials whose jingles, gags, slogans and images of virile cowboys and urbane women glamorized smoking.
“Mr. Banzhaf, a 25-year-old recent graduate of Columbia Law School, complained in a letter to the Federal Communications Commission (FCC) that while television news coverage included both sides of the tobacco debate, the cigarette commercials did not. Under the so-called fairness doctrine, which required that both sides of an issue of public concern be presented, weren’t opponents of smoking entitled to free airtime?
“When his letter came in, it struck a responsive chord, and I thought why not use it?” Henry Geller, the FCC counsel at the time, recalled in an unpublished memoir. Mr Geller, who died on April 7 in Washington at 96, did just that. He suggested that one antismoking public service message be broadcast free for every paid cigarette advertisement.
“That proposed formula so unnerved station owners afraid of jeopardizing their licenses, and tobacco companies concerned about competing with powerful antismoking commercials, that Congress was finally able to ban the advertising altogether.
“The industry desperately wanted to stop these counter ads and did so by eliminating its own ads,” Mr. Geller said. “From April 1, 1970, forward, all cigarette advertising was eliminated from radio and television.”
Source: New York Times, 24 April 2020
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India: Cigarette sales may see steepest dip in 20 years due to lockdown and price rise
Cigarette sales may fall by 10% — the steepest decline in the last two decades — in this calendar year owing to a rise in tobacco prices and the nationwide lockdown, according to market research firm Euromonitor International.
In 2017, ITC Limited – India’s leading tobacco manufacturer – increased cigarette prices by 6-7% across brands, while in 2019, the company increased prices of Bristol, Capstan and Flake Excel brands by 7-14%. ITC has halted cigarette production in response to the central government’s prohibition on the sale of tobacco products during the lockdown.
However, cigarette prices in the black market have surged by 20-40% over the maximum retail price across the country. The prices of some of ITC’s best-selling brands have risen by 10-20% following an increase in the National Calamity Contingent Duty (NCCD) – a tax on tobacco products – in February this year. This is one of the steepest price hikes ITC has implemented in the past 2-3 years.
During the nine months ending December 31, 2019, ITC posted a 6.31% rise in its income from cigarettes, while profit from cigarette sales rose by 7.59%.
Source: Business Standard, 27 April 2020
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