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** 17 June 2020
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** UK
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** Conservative councils warn coronavirus second wave could bankrupt local authorities (#1)
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** Half of smokers accessing Lancashire stop smoking service successfully quit (#2)
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** North West: Convicted cigarette smuggler ordered to pay back more than £174,000 (#3)
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** Manchester: Counterfeit cigarettes found in a shop in Levenshulme (#4)
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** International
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** Tobacco industry discounting linked to higher cigarette consumption in Europe (#5)
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** Imperial selling cigar brand for £1.1bn (#6)

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** UK
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**
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** A group of Conservative-run Councils has told ministers that a second wave of coronavirus would leave them with a multibillion-pound budget shortfall, triggering a wave of insolvencies and forcing a fresh round of emergency cuts to local services.

The County Councils Network (CCN), which acts for 39 of the biggest English authorities, said that even without a resurgence of COVID-19, they face “large scale reductions in services this year” unless ministers agree to a long-term bailout plan. It called for a government-backed “income guarantee” to underpin council finances over the next five years, as well as short-term emergency funding to keep authorities afloat as they struggle with declining council tax income and rising social care costs.

Although the government injected £3.2bn of pandemic emergency funds into local authorities in two tranches in March and April, councils said that money has run out and that many are currently running on “fresh air”. Housing and local government minister Simon Clarke told MPs earlier this week he was “working closely with cabinet colleagues on a comprehensive plan to ensure councils’ financial sustainability over the financial year ahead”. Asked by Labour MP Kate Osamor whether councils should prepare for the second wave of austerity cuts to enable them to balance their budgets, Clarke replied: “The answer to that question is unequivocally no, they should not.”

However, several councils have started to plan emergency cuts to stave off bankruptcy. Wiltshire county council last week said that a £50m shortfall caused by extra pandemic costs had put it at “significant risk and threat” of collapse, while Luton borough council has warned of £22m cuts.

A CCN commissioned report by consultants Grant Thornton modelled three scenarios that leave the 39 member councils with a collective shortfall of between £2.5bn and £4.5bn by April 2022, depending on whether a COVID-19 second wave leads to a second lockdown.
The report highlights that many councils would have little scope to find further cuts because a decade of real-terms funding reductions “has left most councils with significantly fewer options to drive out further efficiency or to make cuts to front line services.”

Cllr Carl Les, CCN finance spokesperson and leader of North Yorkshire county council, said: “This research shows the challenges facing county authorities and the severity of the potential impact on councils’ sustainability.”

Source: The Guardian, 17 June 2020
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** According to NHS digital data, nearly half of people in Lancashire on a programme to quit smoking managed to stop. About 6,648 people accessing the stop smoking service in the County set a date to quit between April and December last year.

At follow-up meetings held a month later, 47% of the people had stopped smoking. However, the rate dropped to 31% when only counting those who confirmed this with a test to measure carbon monoxide levels in their bloodstream, which indicates tobacco use. In Lancashire, a higher proportion of men said they successfully quit, with 50% quitting compared to 45% of women. A similar pattern was seen nationally, where the figures stood at 53% and 50% respectively.

A spokesperson from Action and Smoking and Health (ASH), said: “All smokers deserve support to quit, and for many, it can make the difference between success and failure. However, good services need funding, and national government has repeatedly cut the public health budget. We are now in the midst of a respiratory pandemic with the biggest impacts being felt by the most disadvantaged. While local authorities are doing their best, if we are to ensure that all smokers get the help they need, those cuts to the public health budget must be reversed.”

Rachael Hodges, Senior Policy Officer at the British Lung Foundation, said: “While face-to-face support has come to a halt due to COVID-19, many stop smoking services are continuing to provide behavioural support and stop smoking treatment remotely. We would urge anyone looking to quit to search online for NHS smoke-free to find support near them.”

A Department of Health and Social Care (DHSC) spokeswoman said, smoking rates were at a record low level of 14.4 % across the country. “However, we are not complacent, and our ambition is for England to become a smoke-free society by 2030. Prevention remains at the heart of our NHS Long Term Plan, and this year we have made £3 billion of funding available to support local authorities, including stop smoking services.”

Source: Burnley Express, 17 June 2020

See also: Today is the day ([link removed])
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** Over the last two days, a complex proceeds of crime application has been heard at Liverpool Crown Court, involving 41-year-old Paul Smith.

Smith was part of a four men gang who evaded duty and VAT to the sum of £4,308,832 as they smuggled more than 17 million non-UK duty paid cigarettes and 1.4 tonnes of hand-rolling tobacco into the UK from South East Asia. During the 2014-15 racket, they rented a flat in Liverpool which was used as their base before it was raided by HM Revenue and Customs officers.

In 2018, Paul Smith got five years imprisonment. However, it was only yesterday, 16 June 2020, that Mr Smith was ordered to pay back £174,688. He has three months to pay that bill, and if he does not, he may receive an additional sentence of 21 months in jail.

Source: Liverpool Echo, 16 June 2020
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** A shop in Levenshulme could have its licence revoked after more than 6,000 counterfeit cigarettes were found on the premises.

A sniffer dog found tobacco in non-standardised packaging concealed out of sight underneath the counter, and 199 cigarettes packs which were seized by authorities. Trading Standards received a complaint alleging that the sale of illicit tobacco was ongoing in the premises, which prompted the visit.

A report to Manchester council’s licensing subcommittee says: “Samples of the tobacco were sent to the relevant trademark representatives and the Richmond tobacco was confirmed as being counterfeit. The other brand did not carry any health warnings.”

Under its current licence, the shop can sell alcohol from 8 am until midnight Monday to Sunday. However, officers want the licence reviewed as they say the discovery of the cigarettes and tobacco ‘shows complete disdain’ for licensing regulations and the safety of those who visit.

The owners of the shop will go before a licensing hearing with Manchester councillors on Monday 22 June via telephone conference.

Source: Manchester Evening News, 15 June 2020
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** International
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** Tobacco industry discounting is linked to higher cigarette consumption the following year, an analysis of the impact of pricing differentials in 23 European countries, has found.

The researchers looked at the associations between price and cigarette consumption per head from 2004 to 2014. They drew on annual international cigarette consumption and market research data on the top 10 brands in each country, sampling an average of 93 cigarette products every year. After converting all prices to Euros and accounting for inflation, they calculated the lowest and average prices for packs of 20 cigarettes to represent the potential for smokers to trade down to cheaper products to avoid price rises. They also factored in background unemployment, time lags between price changes and smoking rates and gross domestic product (GDP).

Findings show in 2004, the average pack price was €2.16, rising to €3.60 in 2014. The difference between the cheapest and average pack price roughly halved between 2004 and 2014, falling from nearly 25% to almost 13%. During this period, the number of cigarettes smoked per head also fell each year by 29.5, with unemployment linked to an even larger annual fall of 41.5 cigarettes for each percentage rise in joblessness.
Wider gaps in pricing in any given year were linked to higher rates of cigarette consumption, rising to 67 more cigarettes per person the following year, suggesting that opportunities for smokers to switch to much cheaper cigarettes are undermining the effects of taxes on reducing overall consumption.

The researchers said: “These findings suggest that differential cigarette pricing strategies may be undermining efforts to control tobacco use. Tobacco taxation is widely considered to be the most effective strategy for tobacco control. Recent evidence has highlighted the techniques which are used by the tobacco industry to prevent the effectiveness of such efforts, indicating that innovations in policy design may be required to make the best use of tax rises.
”This may include the introduction of a floor, or minimum prices, which would be more difficult for the tobacco industry to combat and would explicitly recognise the concern that smokers move to budget cigarettes.”

Source: Medical Xpress, 16 June 2020

See also: BMJ Journals – Association between cigarettes prices and consumption in Europe 2004 – 2014. ([link removed])


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** As part of its plan to become a “leaner and more agile organisation”, multinational tobacco company Imperial Brands PLC is to sell its worldwide cigar business, Premium Cigars for £1.1bn, with the proceeds to be used to reduce its debt. The disposal is also intended to reinforce the company’s focus on simplifying its business and realising value for shareholders.

The sale is to an investment consortium of individual investors. It will take place across two transactions: one for the US business – Premium Cigar USA – and another for the Premium Cigar rest of the world (RoW) business.

Investor Gemstone Investment Holding Ltd will acquire Premium Cigar USA for a total consideration of £162m. This transaction is subject to the fulfilment of certain conditions, including customary antitrust and other regulatory clearances. The second investor, Allied Cigar Corporation, S.L., will acquire Premium Cigar RoW for a total consideration of £912m, also subject to conditions.

Following the sale, Imperial says it plans to invest in new vaping products, widely seen as the new growth frontier as smoking rates decrease.

Transactions expected to close in the third quarter of 2020.

Source: Financial Worldwide Magazine, June 2020

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ASH Daily News is a digest of published news on smoking-related topics. ASH is not responsible for the content of external websites. ASH does not necessarily endorse the material contained in this bulletin.

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