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E-Cigarette Gaining Momentum?The electronic cigarettes popular in Asia and the Netherlands are now breaking into the UK market.To celebrate its introduction of e-cigarettes to the U.S. market, Ruyan America, Inc., introduced the Ruyan Vegas E-cigar at the 2008 Tobacco Plus Expo in April. The Ruyan Vegas uses the same technology as the Company’s E-cigarette, a microchip, airflow sensor, ultrasonic atomizer and nicotine cartridges to produce a vapor that provides its user with the experience of smoking, without producing second-hand smoke and without endangering the health of associates or bystanders, reports the company. When a smoker inhales through an E-cigarette, a sensor detects the airflow and activates an atomizer that injects tiny droplets of the liquid into the flowing air. The resulting vapor mist—which resembles cigarette smoke—is inhaled by the user. The device also incorporates an orange LED light at its tip that simulates the glow of a real lit cigarette. Already growing popular in China and the Netherlands, as well as France, Germany, and Belgium, e-cigarettes are now breaking into the U.S. markets through Ruyan America, a U.S.-based joint venture of China’s Ruyan Holdings. Unlike the E-cigarette, the Ruyan Vegas is designed to be used and then disposed of; with each of the E-cigars having approximately 1,800 mouthfuls of vapor, nearly the equivalent vapor to the mouthfuls of smoke produced in a carton of conventional cigarettes, reports the company. “The new Ruyan Vegas is an exciting addition to our family of products,” said Alexander Chong, CEO of Ruyan America, in a statement about the debut. “Users will find it convenient and easy to use. Additionally, retailers and distributors will find that the product’s price point, consumer appeal, and aesthetics will significantly enhance their product offerings in the cigarette alternative category.” •
Smoker Friendly Debuts LoungesA new smoking area is equipped with free wireless Internet access.Boulder, Colorado-based Smoker Friendly International recently added a smoking lounge complete with free wireless Internet access, couches and large flat-screen televisions to a Denver-area store and plans to retrofit other select stores. In introducing the lounge, Smoker Friendly is taking advantage of the fact that under Colorado’s smoking ban, retailers of tobacco products and bars classified as “cigar-tobacco bars” are exempt from the ban. In a December interview with TOB, Smoker Friendly’s Dan Gallagher described the exemption as a “real opportunity” for the chain. “We’re installing lounges in as many stores as we can,” he said. “In some it’s just a few chairs, but when we have the space it’s a separate room with televisions, a coffee bar and Internet access. The strategy seems to be working. Smoker Friendly’s sales increased to $127 million in 2007 from $110 million in 2006, according to a report in the Denver Business Journal, despite a decline in Colorado’s smoking rate from 22.3 percent in 2001 to 17.9 percent in 2006. •
ShopRites Stub Out CigsSix stores in New Jersey will no longer carry tobacco products.The owners of six Shop Rite supermarkets in New Jersey recently announced a decision to quit carrying tobacco products. The stores join a growing tobacco-free retail movement led in part by New York’s Wegmans Food Markets, which ceased offering tobacco earlier this year. But while Wegmans’ cited health concerns as the rationale behind the change, the Shop Rite operators say that high state taxes that are siphoning off profits prompted their decision. “It’s not a good business to be in [in] New Jersey, which imposes the highest state excise tax on cigarettes in the nation,” grocer Jason Ravitz told the Cherry Hill, N.J. Courier-Post. “There’s almost no profit in it anymore.” New Jersey ranks 10th in the nation in the cost of a pack of cigarettes, with tax on a pack running around $2.58 cents, plus the federal tax of 39 cents per pack imposed on all cigarettes. “Some of our customers will be upset, but sales have been declining,” noted Ravitz, whose family runs stores in Cherry Hill, Mount Laurel, and Marlton, N.J. “Smokers are buying anyplace but here.” In dropping tobacco products, the Shop Rite stores were preceded by another small New York grocer, Budwey’s Supermarket, which decided to discontinue cigarettes earlier this year. In addition to health concerns, Budwey’s owner Frank Budwey also noted that the cigarette business isn’t as profitable as it once was, due to factors such as the proximity of his store to American Indian reservations where customers can buy cartons for as much as $15 less. He also said that selling cigarettes to minors can cost stores a large fine as well as the loss of their state lottery ticket license—risks not worth taking for such a narrow profit margin. •
Pipe Brands to RelaunchMitchell Thomas is re-introducing the Aldo Velani and Graco names.Fresh off a trip to Italy and France, Jeff Abel, president of Mitchell Thomas Trading Co., has announced the re-introduction of two pipe brands that his company now owns: Aldo Velani of Italy and Graco of France. Previously distributed by Lane Ltd., Aldo Velani is once again being manufactured in Italy by a master pipe maker with more than 50 years experience. The new Aldo Velani line will include various popularly priced standard series pipes, as well as free-hand limited editions. Retail pricing is expected to start at $40 for the standard series and $100 for the freehand. Graco was a smaller pipe company that began production in 1863 in Saint Claude, France, the birthplace of briar pipe making. While not very well known in the U.S., the Graco brand featured many unique shapes in classic finishes and was considered top quality by pipe smokers throughout Europe. The company ceased production and went out of business due to operating problems, but is now back and being made exclusively for Mitchell Thomas by two well-known pipe makers. One is located in Saint Claude and has been producing pipes since 1875, and the second is a smaller workshop that has been making hand-made pipes since 1991. All Aldo Velani and Graco pipes will be packaged in cloth bags and gift boxed. For more information on Aldo Velani, Graco and the complete line of smoking accessories available from Mitchell Thomas Trading Co., call 1-877-869-4557 or visit www.mitchellthomas-trading.com. • |
Study Under ScrutinyTobacco company financing of lung cancer research prompts criticism.A study released in 2006 reporting that 80 percent of lung cancer deaths could be prevented through widespread use of CT scans is reportedly under scrutiny now that officials have found that it was financed by Liggett Group, maker of Liggett Select, Eve, Grand Prix, Quest, and Pyramid cigarette brands. The study, which was authored by Dr. Claudia Henschke of Weill Cornell Medical College, was published in The New England Journal of Medicine, and financed in part by a charity called the Foundation for Lung Cancer: Early Detection, Prevention & Treatment. The New York Times review of tax records filed by that organization showed that it had been underwritten almost entirely by $3.6 million in grants from the Vector Group, Liggett’s parent company. Whether that casts any doubt on the study results is a matter of debate. Speaking to The New York Times, a Vector spokesman confirmed that the company donated $3.6 million to the foundation over three years, but said that Vector “had no control or influence over the research.” Vector was public with the sponorship, issuing a press release on Dec. 4, 2000, stating its intention to give $2.4 million to Weill Cornell to finance Dr. Henschke’s research. Articles in Business Week and USA Today mentioned the gift. Editors, however, argue that the sponsorship raises questions. “I would never publish a paper dealing with lung cancer from a person who had taken money from a tobacco company,” said Dr. Catherine D. DeAngelis, editor of The Journal of the American Medical Association. Dr. Henschke was the foundation president, and her longtime collaborator, Dr. David Yankelevitz, was its secretary-treasurer. Dr. Antonio Gotto, dean of Weill Cornell, and Arthur J. Mahon, vice chairman of the college board of overseers, were directors. Drs. Henschke and Yankelevitz responded to criticism by pointing out that the gift was announced publicly and fully disclosed in the study, as well as to other funding organizations, and that that it comprised only a small part of the total funding. Dr. Henschke has argued that CT scans of smokers and former smokers would detect lung cancer when tumors are small enough to be cured, preventing as many as 80 percent of the 160,000 deaths a year from lung cancer, by far the biggest cause of cancer deaths in the U.S. The 2006 study in question, which screened 31,567 people from seven countries, reported that CT scans uncovered 484 lung cancers, 412 at a very early stage. Three years later, most of those patients were still alive, and Henschke projected that 80 percent would live for more than 10 years, all of whom might well have died without the screens. Laurie Fenton Ambrose, president and chief executive of the Lung Cancer Alliance, a nonprofit patient advocacy group, said she still trusted Dr. Henschke and still believed in widespread CT scanning to prevent lung cancer deaths. • New York Hikes Cig TaxThe state cigarette tax will jump from $1.25 to $2.75 per pack.New York legislators and Governor David Paterson approved the largest-ever increase in a state cigarette tax—from $1.25 to $2.75 per pack—making New York’s the highest state cigarette tax in the nation. The increase was passed despite opposition voiced from area business owners and NATO, who pointed out that a tax hike of that magnitude will drive many smokers to evade the state tax altogether by purchasing cigarettes online and through the black market. “If the State of New York was collecting all of the cigarette taxes it’s supposed to by law, there wouldn’t be any need for a conversation about a new excise tax,” noted Paul Nanula, Wilson Farms president and CEO. The New York Association of Convenience Stores (NYACS) also protested the hike, warning that it was tantamount to a “death warrant” for the state’s c-store industry—particularly small mom-and-pop stores. New York’s tax increase brings the average state cigarette tax to $1.13 per pack. New York is now one of 10 states with cigarette taxes of $2 or more, and one of 44 states that have increased taxes since 2002. Iowa and Kansas City to Ban Public SmokingNew legislation will ban smoking in workplaces.The Iowa Legislature and voters in Kansas City, Missouri, voted to enact measures that will ban smoking in most workplaces, including restaurants and bars. Iowa Governor Chet Culver has said that he will sign the proposed smoking ban legislation into law, which will then take effect July 1—making Iowa the 24th state to pass a smoke-free law. Meanwhile, a majority of Kansas City voters approved a ballot initiative requiring that workplaces be smoke-free, despite vigorous campaigning against the measure by area business owners. Similar measures were recently defeated in South Carolina and Wisconsin. Other states with smoking bans in effect include: Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, Utah, Vermont and Washington. A growing number of countries have also passed nationwide smoke-free laws, including Bermuda, Bhutan, France, Iceland, Ireland, Italy, Lithuania, New Zealand, Norway, Panama, Sweden, Thailand, Turkey, the United Kingdom and Uruguay. Washington, D.C., and Puerto Rico also have similar laws in place.• HotlineGrand Snu DebutLiggett Group recently debuted Grand Prix snus in select retail stores in seven test markets: Portland, Ore.; Kansas City, Mo; Indianapolis; Dallas/Fort Worth, Texas; Raleigh, N.C.; Orlando, Fla.; and Columbus, Ohio. Offered in Original and Spearmint, the snus will be marketed under the company’s subsidiary, Vector Group Ltd. Supersmooth RolloutDjarum rolled out a Supersmooth series of Djarum cigarettes in Special and Black styles in March. Manufactured by P. T. Djarum and imported from Indonesia by Kretek International Inc., Supersmooth is a blend of aged tobaccos with a hint of clove for a lighter aroma and richer tobacco taste than regular Djarum clove cigarettes. More Supersmooth styles are planned for later this year and 2009. Supersmooth is packed in flip-top boxes, five to a cube, with 80 cubes per shipping case. Kentucky Goes “Fire Safe”Legislation enacted in the 2007 session of the Kentucky General Assembly, requires that all cigarettes sold in Kentucky after April 1, 2008, must be in compliance with Fire Safety Standards for Cigarettes, also known as the “fire safe” cigarette law. All cigarette manufacturers who wish to sell products in Kentucky are now required to comply with testing, labeling, and certification requirements to prove that their cigarettes meet certain reduced ignition standards and are labeled as such. Certification is required for each brand family, requires payment of a $1,000 fee per brand, and must be renewed every three years, stated a report from the office of Michael Plumley, Assistant Attorney General of Kentucky. Certification will be done through the Kentucky Fire Marshal. “Lights” Appeal WinThe 2nd U.S. Circuit Court of Appeals reversed a lower court’s ruling brought against cigarette makers—including R.J. Reynolds—decertifying the nationwide class. “Because individual issues outweigh issues susceptible to common proof, the class is not maintainable... “ stated the court’s opinion. “We are certainly pleased with the court’s ruling and agree with its reasoning,” said Martin L. Holton III, general counsel for RJR. “Numerous courts across the country have held that claims such as these simply cannot be tried as class actions.” •
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