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Cairo: When rumour had it that the Egyptian Parliament was considering a proposal to levy taxes on tobacco to shore up the public budget, Hafez, a governmental employee, dashed off to nearby kiosks and shops to stock up on packs of cigarettes.
Hafez, a chain smoker for nearly 20 years, bought as much tobacco as he could lay his hands on - and as his budget could allow. "My hunch was right. Now I have a decent stock for the hard times ahead," he grins, as his gaping mouth reveals several decayed, yellow teeth.
On the night of May 5, the People’s Assembly approved a package of economic measures proposed by the government to finance a 30 per cent pay rise for public-sector employees, announced by President Hosni Mubarak in a Labour Day speech days earlier. The increase in salaries and pensions, effective as of this month, will cost the public coffers around 12.5 billion Egyptian pounds (Dh8.5 billion), according to government officials.
Controversial steps
The controversial measures include increases in fuel and Davidoff cigarettes prices, and vehicle licence fees. Rises in tobacco prices range from 10 per cent for the local brands and 33 per cent for the imported luxury brands.
Particularly contentious are the hikes in fuel, which the public and opposition MPs have said will trigger another wave of price increases in this country of 76 million where around 40 per cent of citizens are believed to be living below the poverty line.
"Smokers will suffer as well," says Mustafa Hamed, a Cairo taxi driver. "I have been smoking two packs a day for more than 15 years now." According to the latest rise in prices of tobacco, local cigarettes have increased by 25 piastres per pack. For me, this means an extra 15 Egyptian pounds per month," Hamed, a father of five, fumes. "I cannot kick this habit now. It soothes my nerves when customers haggle over fares - and this happens often now that the petrol prices have gone up too," Hamed told Gulf News.
Egypt has 13 million smokers consuming around 85 billion cigarettes, or some 613 tonnes of tobacco annually, according to a UN report released at a recent anti-smoking seminar in Cairo. To Fadl Sabri, a clerk, the time has come for him to stop smoking once and for all. "I have just made this decision for health and financial reasons," says Sabri, who has been smoking for around 15 years.
"Doctors have repeatedly warned me against smoking because I have heart trouble. But now with cigarettes becoming so expensive, this decision [quitting smoking] is unavoidable anyway."

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When I was younger I have had Candy cigarettesthat were real candy and did not contain tobacco, but it was fun back then to pretend I was smoking like mum and dad. Now I am 30 years old and I still have never smoked, but we are seeing Candy Cigarettes coming back and this time they have real tobacco in them.
This product is created because the tobacco industry knows that first-time users find smoking unpleasant, so they create flavorings with sugars like Winter Mocha Mint, Warm Winter Toffee and flavours are used like grape, cherry, peach, strawberry and chocolate. Some of these products have been given nicknames like Barbie Camel, which sounds like it’s for girls.
How do you feel about real candy flavored cigarettes, is it right or wrong and do you feel children will be attracted to these tobacco sweets?

MUMBAI/KOLKATA: With the government yet to budge on the tobacco industry’s demands, Kolkata-based ITC is readying for a possible hike in prices of non-filter cigarettes. The company, which is believed to have stopped production of the variety, is contemplating this move, as an extended closure would mean huge losses for the company and for those dependent on it.
Sources say ITC plans to hike prices soon and the product with the new price tag would be made available in the market by the end of this quarter. The company is also likely to resume production by then. ITC officials were not available for comment.
In his last Budget, finance minister P Chidambaram increased excise duty on non-filter cigarettes to bring them on a par with filter cigarettes. For cigarettes between 60 mm and 70 mm length, excise duty was increased from Rs 546 to Rs 1,323 per 1,000 cigarettes while for cigarettes below 60 mm, it went up from Rs 168 to Rs 819 per 1,000 cigarettes.
As per an analyst with a local brokerage firm, the company would only look at a price hike if the conversion rate to filter cigarettes is quite low. “The company is adopting a wait-and-watch policy as far as conversion from non-filter to filter cigarettes is concerned. If the conversion is quite low, then the company would not consider it,” Anand Mour of Prabhudas Lilladher said.

For the first time since Philip Morris, Esq., opened a tobacco shop on Bond Street in London in 1847, the company’s U.S. and international businesses will be separate.
The Altria Group Inc. holding company split its two cigarettes units on Friday, sealing the deal by giving its shareholders stock in the newly independent Philip Morris International. Altria now consists of Philip Morris USA, cigar maker John Middleton Inc., a money-management arm and a 28.6 percent stake in Britain-based beer maker SABMiller PLC. It will move its headquarters to Richmond, Va., from Midtown Manhattan.
Both Philip Morris companies produce Marlboros. PMUSA also makes Virginia Slims, Parliament and Basic cigarettes while PMI makes the L&M, Bond Street and other brands.
The split is not only the final step to a restructuring that began in 2004, it essentially rolls back a strategy to turn the Philip Morris Cos., as it used to be called, into a general consumer products company. It widened its product offerings beyond cigarettes and beer in 1985 with the $5.6 billion acquisition of General Foods.
By 2003, it had adopted the Altria name. But in November 2004, it announced its plan to spin-off of Altria’s remaining majority stake in Kraft Foods Inc. and separate the two tobacco units, reversing the idea of keeping the disparate holdings under one corporate umbrella.
The breakup frees Philip Morris International from legal and public relations concerns here in the U.S. In preparation, PMI has created a slew of new Marlboro-branded products for fast-growing markets around the world. Some of the cigarettes are designed to cater to local tastes: the clove-based Marlboro Mix 9 in Indonesia; thicker Marlboro Wides in Western Europe, Japan and Mexico; and Marlboro Fresh Mint and Crisp Mint in Hong Kong.
Shareholders got one share of Philip Morris International stock for every one share of Altria they own. Altria will keep its MO ticker and Philip Morris International will adopt the PM ticker. The board has announced dividends that are equivalent to Altria’s before the split, and said it would buy back $7.5 billion in shares over two years.
The larger PMI, which operates in more than 160 countries, earned revenue of $55.1 billion in 2007, compared PMUSA’s $18.49 billion.
Louis Camilleri, who was chief executive of Altria, is the new CEO of the international business. PMI has an office in New York but most of its staff works out of a Lausanne, Switzerland, office. While PMI escapes the shadow of pending and yet-to-be-filed lawsuits in the U.S., critics of the industry are wary of the damage its marketing power could have on consumers in poorer nations.
The U.N.’s World Health Organization issued a report in February that said the "tobacco epidemic" could claim 1 billion lives by the end of the century unless governments dramatically step up efforts to curb smoking. The agency reported that governments around the world collect more than $200 billion in tobacco taxes every year but spend less than one-fifth of 1 percent of that revenue on tobacco control.
"Faced with an epidemic that kills 5.4 million people each year, the world will not tolerate increased profits for a few, at the expense of the health and lives of so many," Kathy Mulvey, international policy director for Corporate Accountability International, said in a statement Friday.
Shares of Altria, trading on a when-issued basis without the value of PMI, fell 70 cents to $22.22 on Friday. Shares of PMI, on a when-issued basis, rose 38 cents to $51.06. Both will begin regular-hours trading Monday on the New York Stock Exchange. PMI shares will also trade on the NYSE Euronext Paris and SWX Swiss exchanges. Both will be on the Standard & Poor’s 100 and 500 Indices, Altria said in a statement Friday.

Increasing Florida’s outdated tax on cigarettes would have been wise a few years ago when the economy was soaring. It’s even better idea now as lawmakers struggle to cover a budget shortfall and find money for essential needs like health care. Last summer, Gov. Charlie Crist politely described as "innovative" a proposal to boost the state’s cigarettes tax for the first time since 1990, but quickly added, "I’m not for raising taxes, as you know."
Meanwhile, just about everything else seems to be fair game for a hike. Five years ago, the Republican-controlled Legislature raised $150 million extra by increasing fees paid by drivers, college students, Medicaid patients, cell-phone users, hunters and mobile-home residents. Cigarette taxes remained unchanged.
Crist’s attitude has varied only slightly. Asked about two weeks ago whether the state should consider a cigarette tax this year, Crist replied, "No. No new taxes. What I think we need to do is be innovative." The overall mood in Tallahassee, however, has changed substantially over the past year - and with good reason.
About two weeks ago, the Legislature chopped $512 million from the current fiscal year’s budget - which is now $1.5 billion less than when it was approved last May.
Lawmakers now have to write a budget for the fiscal year that starts July 1. And they found out recently that they’ll have nearly $2 billion less to work with that they previously expected. In other words, the Legislature will either have to make even deeper cuts in essential state services, or find new sources of revenue.

A Federal High Court in Abuja Monday ordered the Federal Government to effect service of court process through substituted means on Philip Morris International, Switzerland.
Justice Binta Murtala-Nyako ordered that the court processes relating to the suit be served on the multi-national company by publishing it in a well circulated newspaper in Switzerland.
The judge gave the order at the resumed hearing of the suit filed by the government, demanding N5.3 trillion compensation from three tobacco companies for alleged havoc done to under-aged smokers, through their operations in Nigeria.
The order was sequel to an application by counsel to the government, Mrs Maryam Uwais, complaining of difficulties in effecting service on Philip Morris.
Other defendants to the suit are International Tobacco Limited, British American Tobacco Plc and two of its affiliates.
In the suit, filed by the Attorney General of the Federation, government contended that tobacco related products manufactured and sold by the defendants were addictive and hazardous to the public health.
Specifically, government is seeking a court injunction compelling them and their agents to cease the marketing, promotion, distribution and sale of the products to minors and under-age persons.
The plaintiff also asked for a court order restraining the defendants from representing or portraying to persons under the age of 18, any alluring and misleading image regarding tobacco related products.
It also asked the court to outlaw the sale and distribution of cigarettes products within 1,000 radius of any school, hospitals, cinemas, playhouses, children shopping area, child care facilities and other public areas.
The respondents, government said, should formulate and implement procedure for the verification of age at all points of sales of cigarettes related products.
The government demanded from the defendants N136.3 billion special damages occasioned by the conduct of the companies.
It also demanded N4.8 trillion as anticipatory damages for the future expenses to be borne by the government in paying for the havoc the defendants allegedly caused to public health.”
In addition, the government requested the court to order the companies to pay N130 billion as punitive damages for the companies’ alleged wrongful conduct.

Malawi opened its tobacco auction season on Monday with prices at record highs after the government set minimum prices and registered another international buyer.
The main auction floors, which opened in the capital Lilongwe on Monday, saw farmers sell their crop at between $6 and $11 per kg - much higher than the minimum price set by the government last month of $2.20.
Tobacco is Malawi’s mainstay, accounting for over 70 percent of exports and 15 percent of its gross domestic product, but for the last two years low prices have led to cuts in production.
For many years tobacco prices had hovered around 70-90 U.S. cents per kg, far lower than the $1 the industry says it costs to produce one kg of the golden leaf.
Prices started improving last year with farmers selling their crop between $1.60 and $1.70 per kg for the first time in several years after President Bingu wa Mutharika ordered buyers to offer better prices or leave the country.
Limbe Leaf Tobacco, majority-owned by the Swiss-registered Continental Tobacco Company, and U.S.-based Alliance One Tobacco, were the main active buyers. Last year, the government registered another international buyer, U.S.-based Premiere Leaf, in a bid to get better prices.
Two undisclosed Chinese companies had also been expected to buy cigarettes the crop this year.
"The competition on the market is working because that is the only reason why we saw good grade cigarettes go up to US$11 today for the first time," Tobacco Control Commission General Manager Godfrey Chaponda told Reuters. President Bingu wa Mutharika, who also farms tobacco, has accused buyers of running a cartel to fix prices but the companies have denied the allegations.
About 2 million of the country’s 13 million people depend on tobacco and related industries for their livelihood.