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Chancellor Sajid Javid has promised increased spending on priority areas of schools, police and health. Setting a 4th September date for the 12-month spending round - earlier than previously planned - he said there would be no "blank cheque" for departments.
Mr Javid said he would stick to the current borrowing rules, limiting the scope for extensive spending increases. Ministerial sources said bringing the review forward was intended to provide certainty ahead of Brexit. Labour called the move a "one-off pre-election panic-driven stunt budget".
Paul Johnson, director of the Institute for Fiscal Studies (IFS), said that the chancellor would have to decide whether to spend money in areas that "sound most popular", or in areas that have seen lower funding in recent year. "The bits of public services that have really suffered much worse than those areas are the justice system, prisons and courts and so on, local government, social care and further education," he added.
Source: BBC, 28 August 2019
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Philip Morris in talks with Altria to create $200bn tobacco group
Philip Morris International (PMI) is in talks to merge with Altria in a deal that would reunite the global and domestic US makers of Marlboro and create the world’s largest tobacco group with a market value of nearly $200bn.
PMI said on Tuesday 27th August it was considering an all-share combination that would put it back together with Altria, 11 years after they were separated to shield PMI from a slowing US cigarette market as well as the threat of regulation and litigation. A successful deal would create a vast business which last year reported combined sales of nearly $50bn and net income of $15.3bn.
The rumours received a negative reception from investors, as shares for both companies fell wiping a combined total of £13bn off the combined market value of PMI and Altria. PMI investors are worried about US regulatory and litigation issues, which were the main reason the two companies split more than a decade ago, according to analysts and people familiar with investor feedback to the companies.
Source: Financial Times, 27 August 2019
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Tobacco companies are reportedly investing increasingly in oral nicotine products. British American Tobacco (BAT)'s Lyft and Epok products, Japan Tobacco International's Nordic Spirit and Imperial Brands' Skruf products all aim to reinvent stereotypical conceptions of oral tobacco, packaged in sleek white cases and targeted at “a generation on-the-go.”
The renewed interest in an established product reflects declines in volumes of cigarette sales of around a third since 2004 in Western Europe, and are expected to drop further through 2022, according to Euromonitor. That has set off a race to become a leader in next-generation alternatives. While vaping and heat-not-burn devices have become a popular and widespread means to wean people off cigarettes, modern oral tobacco remains a fringe phenomenon, accounting for just 2% of BAT’s cigarette-alternative sales.
Even though the modern oral category is far smaller than vaping and heated tobacco, it’s lucrative. BAT said the gross margin per 1,000 oral nicotine pouches is about 2 to 3 times higher than per 1,000 cigarettes because it faces lower tax levies.
“The tobacco industry would love this to be a much bigger category,” said Nico von Stackelberg, an analyst at Liberum. “The industry is less likely to face massive litigation and it can be priced at a point where it’s very profitable.” The way cigarette companies see it, oral nicotine offers several attractive opportunities. It’s discreet, odorless and can be consumed practically anywhere, be it in the office, a movie theater or on a long-haul flight. It’s predominantly a male phenomenon, meaning that there’s a huge untapped market of female consumers.
Source: Bloomberg 23 August 2019
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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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