Tobacco.org

• Smugglers Prosper in Spain’s ‘Perfect Storm’ for Tobacco  

Spanish smokers, squeezed by higher taxes and a deepening recession, are increasingly relying on smugglers to feed their habit.

Illegal imports now account for 7 percent to 8 percent of Spanish cigarette sales, compared with almost nothing a year ago, according to the country’s tobacconists association. In southern provinces such as Cadiz, Seville and Malaga, the proportion is 20 percent.

“Smuggling and fake tobacco, which had been eradicated since 1993, came back strongly last year,” said Jaime Gil- Robles, corporate affairs director at Altadis, the Spanish unit of Imperial Tobacco Group Plc. (IMT)

Smuggling, encouraged by a December 2010 increase in tobacco taxes and a ban on smoking in public places, has eroded both government coffers and company revenues. Spain, which has the European Union’s highest jobless rate, collected 14 percent less tobacco taxes in 2011 than a forecast of 9.05 billion euros ($12 billion), excluding value-added tax, according to Altadis.

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Tobacco Industry Vet Freudenthal Joins Imperial Tobacco Group 

Kevin Freudenthal has been named president and CEO for Commonwealth - Altadis Inc. and region director for the Americas at Imperial Tobacco Group (ITG). He succeeds Graham Bolt, who retired from the company at the end of December.

Freudenthal will take overall responsibility for Commonwealth - Altadis from Eric Workman, senior vice president of marketing, at the end of the month.

Freudenthal has 26 years of industry experience and has made a career out of leadership and innovation in marketing tobacco products, the company said, working with large teams, crafting business strategy and improving profitability.

Before joining ITG, he was vice president for category management for Altria Group, and before that, spent two decades in executive positions at U.S. Smokeless Tobacco Co., where he began his career as a territory representative.

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• Imperial Tobacco Group Announces Commonwealth-Altadis Inc. 

Altadis U.S.A. Inc. and Commonwealth Brands Inc., both owned by Imperial Tobacco Group PLC, have come together to create a new sales and distribution company called Commonwealth-Altadis Inc. (CAI), offering consumers and customers a high quality range of brands and products.

“Commonwealth-Altadis Inc. brings the outstanding sales and marketing teams of Altadis and Commonwealth together to provide greater sales coverage, a larger portfolio of products and a more comprehensive service to our customers,” said Graham Bolt, regional director Americas, in a press release.

“The combination strengthens our competitive position and enables us to apply our total tobacco focus to our sales expansion strategy. Total tobacco means expertise across tobacco categories at a range of price points, providing unrivalled choice for consumers and customers. Our enhanced total tobacco portfolio includes great cigarette, cigar and fine cut tobacco brands and we’re very excited about driving the growth of our brands and products through a larger, integrated sales team,” he said.

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Imperial's Altadis raises Spain tobacco prices 

Altadis, a unit of British group Imperial Tobacco (IMT.L), said on Tuesday it has raised the prices of its leading brands in Spain by 10 euro cents ($0.14).

Imperial Tobacco, the world's fourth-biggest cigarette maker, said on Tuesday half-year earnings beat forecasts though the Spanish market remained difficult due to a wider-ranging smoking ban in place since January and a weak economy. [ID:nLDE74512S]

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Commonwealth Brands, Inc. and Altadis USA to Integrate Operations  

Commonwealth Brands, Inc. has announced that it will be integrating its sales and marketing operations with its Florida-based sister company, Altadis USA. This will allow the companies to provide their customers with greater sales coverage and more comprehensive services. The combined portfolio will incorporate cigarettes, fine cut tobacco, mass market cigars, pipe, papers and tubes. The premium cigar division of Altadis USA will remain as a separate entity.

In order to better service the combined business, Altadis USA's current offices in Fort Lauderdale will become the corporate center for the newly integrated company. As a result, the proposed Commonwealth Brands Corporate Office relocation to Nashville, TN will not take place.

The integration, between the two Company's sales and marketing functions, is expected to be completed within six months and the transition of all other departments to Fort Lauderdale within 12 months.

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• 'One + One = Three' 

Altadis USA announced yesterday that it is integrating sales and marketing units with those of Commonwealth Brands to form one unified team. "It combines two of Imperial Tobacco's assets into what we hope will be a better, combined company. One plus one, hopefully, equals three." Eric Workman, senior vice president of marketing for Altadis, told CSP Daily News.

As reported yesterday in a Morgan Keegan/CSP Daily News Flash, the goal of the integration, which kicked off this week, is to provide greater sales coverage and more comprehensive service to customers--with both cigarettes and cigars.

On the cigar side, Workman said, the company's sales force of about 200 people was smaller compared with competitor sales forces. The integration brings that number to 800, now making it one of the larger forces.

For cigarettes, the company is hoping to capitalize on the cigar side's "long-established relationships from brands with solid market shares," Workman said. "So we hope to be able to use those relationships and help the cigarette side along."

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• Cigarette smuggling soars in Spain after tax hike: company  

The sale of smuggled cigarettes in Spain has soared since the government raised the tax rate on tobacco, a spokesman for Franco-Spanish tobacco producer Altadis said Monday.

The company estimates smuggled cigarettes accounted for around six percent of Spain's total cigarette consumption during the first three months of the year, compared to just one percent in all of 2010, the spokesman said.

The problem is especially high in the southwestern region of Andalusia as a significant amount of smuggled cigarettes enter Spain from the nearby British territory of Gibraltar, he added.

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Cigar Industry Sends Aid to Haiti 

Many premium cigar companies have joined the world effort in providing aid to Haiti after last week's earthquake devastated the country. Altadis U.S.A. Inc., La Aurora S.A., Tabacalera A. Fuente y Cia., Manufactura de Tabacos S.A. and General Cigar Co., all of which make cigars on the island of Hispaniola, which is shared by Haiti and the Dominican Republic, are sending relief in the form of money, medicine and food.

Altadis U.S.A., through its Montecristo Relief Organization, donated $25,000 to Food For the Poor, a group that was already active in Haiti before the earthquake hit on January 12. In addition, the Montecristo Relief Organization will match dollar for dollar up to $125,000 in contributions made by Altadis U.S.A. employees, customers, consumers and vendors donated by February 15.

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Altadis and Tatuaje End Lawsuit 

The fleur-de-lis fight has ended. Altadis U.S.A. Inc. and Tatuaje Cigars jointly announced yesterday that they have reached a mutual agreement ending the trademark battle over Tatuaje's use of the fleur-de-lis on its cigar brands.

"It's over," said Pete Johnson, owner of the Tatuaje, La Riqueza, Ambos Mundos and other cigar brands. Johnson said this morning that he would be making "minor changes, nothing that is really noticeable" to his cigars. Tatuaje, a boutique brand rolled in Miami and Nicaragua by Jos� "Pepin" Garcia, was named the hottest cigar brand in America by Cigar Insider this summer.

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TI 08/09 - Key Markets of Imperial's Empire 

More than a year since its acquisition of Altadis, we take a look at how the deal has enhanced the company's presence in several key markets.

In January 2008, tobacco giant, Altadis, became part of even-larger tobacco giant Imperial. This was one of several big events for Imperial in their 2008 financial year. Overall cigarette volumes jumped up nearly 50% to 292 bn cigarettes (helped, not only by the Altadis acquisition, but by the Commonwealth Brands acquisition in 2007). Fine cut tobacco volumes went up 25,000 tons and cigar volumes increased dramatically, as well.

Integrating Altadis has been labeled a "key focus" by the company, and is a process that is continuing into 2009. The company has successfully completed all consultations, enabling the further implementation of the European integration projects it announced in June 2008. The company has completed the integration of its sales and marketing teams in Spain and France and remains on track to achieve its synergy targets.

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Cigar maker closing factory 

The Tampa area will lose part of its cigar heritage in August when Hav-A-Tampa shuts its factory near Seffner and lays off about 495 employees, closing a factory that has been operating since 1902.

Company officials announced the closing Tuesday.

Many employees there make Hav-A-Tampa's iconic Jewels, inexpensive machine-made cigars known for their birchwood tips. Some workers have labored there for two decades or longer, including one who's been there for 50 years, said Richard McKenzie, a senior vice president of human resources for Altadis USA, which owns Hav-A-Tampa.

Altadis tried to keep the plant open by closing it for a week or two at a time and furloughing workers. Eventually, though, the company couldn't cope with a steep drop in consumer demand brought on by the recession and a large new tax on tobacco products, McKenzie said.

Work that had been done in Seffner will now be performed in an Altadis plant in Puerto Rico, where it has extra manufacturing capacity, McKenzie said.

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Imperial Tobacco Corporate Responsibility Review 2008 - Case studies - Products, customers and consumers - Tobacco research in France 

Founded in 1927, the Altadis Tobacco Institute of Bergerac aims to improve the quality and characteristics of raw tobacco, from seed production through post-harvest treatment to the final product.

The institute has undertaken extensive research programmes in the areas of plant genetics and breeding, pest and disease resistance. It provides a pest diagnosis service to tobacco growers and promotes integrated pest management and good agricultural practices. The institute has contributed greatly to the science of the tobacco plant and holds an extensive collection of Nicotiana species.

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Imperial Tobacco Corporate Responsibility Review 2008 - Report - Business Overview - Overview by the Corporate Development Director 

Conducting our business responsibly is fundamental to our future success and the sustainability of our business - including managing social, environmental and economic risks and opportunities, and responding to external developments and stakeholder issues. In addition, our responsible approach enhances our credibility with stakeholders and supports our international development.

The Board of Imperial Tobacco Group PLC remains committed to high standards of corporate governance and business conduct and this will continue to be emphasised in the enlarged Group, following the acquisition of Altadis in January 2008. . . .

In preparation for the integration of Imperial Tobacco and Altadis, I have sponsored specific projects aimed at further strengthening our approach to corporate governance and the Board has agreed to the appointment of a specific Risk Co-ordination Committee under the chairmanship of the Company Secretary.

In the last few months of the financial year, we have completed a project to help improve the clarity of our corporate documents and how they are interconnected. These documents include our Business Principles, Code of Conduct and Group policies, which set out the corporate standards we strive to achieve regardless of the requirements of local regulations. An example of this is our International Marketing Standard (IMS), which sets out our principles and rules for the marketing and promotion of our products. The next phase is the roll-out of guidance and training on this revised document framework to further educate our employees regarding the behaviour that is expected of them in their work for Imperial Tobacco, and particularly in respect of their business decisions.

Imperial Tobacco and Altadis have taken similar approaches to corporate responsibility

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2nd UPDATE: Imperial Tobacco Fiscal Year Profit +30%, On Altadis Progress 

Imperial Tobacco PLC (ITY) Tuesday posted a 30% rise in profit, boosted by both its Altadis acquisition and strong sales of its economy cigarette brands in Europe as consumers traded down - a trend it expects to continue in the year ahead.

Imperial, the world's fourth-largest tobacco company by sales, said it was making "very good" progress in integrating its Altadis acquisition and reassured investors that it has no pressing need to refinance its large debt.

Pretax profit before exceptional items in the year to Sept. 30 grew to GBP1.61 billion from GBP1.24 billion the previous year, in line with analysts' expectations.

Chief Executive Gareth Davis said on a conference call with reporters that the company had grown volumes and share in both its mature and emerging markets, with consumers trading down to its low cost brands like JPS in mature markets and trading up to its premium brands, such as Davidoff, in emerging markets.

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Tobacco industry downturn causes cigar factory closure 

The increased battle against tobacco — smoking restrictions, rising taxes and government regulations — has resulted in part to the closing of The Cigar Factory in Selma.

An official at the factory said Tuesday the last production day is Nov. 14. People will receive paychecks through Dec. 5, said Vlencon Brown, the plant manger.

Altadis U.S.A. owns the plant, which has manufactured blunt-shaped cigars.

Richard C. McKenzie, senior vice president of human resources for Altadis, said a decrease in consumer demand for the blunt-shaped cigar is another reason for the factory’s closure.

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