Count Virginia as one more state that is taking action against roll-your-own (RYO) tobacco retail operations. According to the Virginia Legislative website, the state’s senators yesterday unanimously approved Senate Bill 74, a measure that declares any person who operates or maintains a roll-your-own cigarette machine at a retail establishment to be a manufacturer of cigarettes. The issue stems from the disparity of taxes collected on RYO vs. a pack of cigarettes bought in a convenience store or other retail location.

According to a report by WDBJ7.com, higher state and local taxes, fire-safe paper and the master tobacco settlement have all pushed the cost of retail cigarettes higher. For comparison, the price of 200 cigarettes produced on a RYO machine is about half the cost of a carton of cigarettes produced by a traditional manufacturer.

“We think everyone who operates a cigarette manufacturing facility in Virginia should play by the same rules, be subject to the same regulations and pay the same taxes on the manufactured cigarette products that the industry pays,” David Sutton, senior manager of media affairs for Altria, told the news outlet. The Altria Group, which calls Richmond home, is the parent company of Philip Morris USA.

Roll-your-own is also under fire in New York State, drawing the attention of Gov. Andrew Cuomo in his recent budget proposal. As part of the new budget, released on Jan. 17, Cuomo proposed taxing loose tobacco at the same rate as cigarettes, which in New York State is $4.35 per pack. In the case of loose tobacco, the levy would be $4.35 per ounce, as CSNews Online previously reported.

Two stores, on Staten Island and in Chinatown, have agreed to stop selling roll-your-own cigarettes after New York City accused them of being fronts for evading cigarette taxes. The owners of the stores, both called Island Smokes, agreed to close them by February as part of a consent decree filed in Federal District Court in Manhattan, according to the city’s Law Department. They also agreed that no one associated with the businesses would operate a similar enterprise in New York City; stores had already been planned for the East Village and Bay Ridge, Brooklyn.

The stores, which sell loose tobacco and rolling papers and have machines to help customers make their cigarettes, had appeared to operate in a legal gray area. The owners had argued that because they sold loose tobacco, they should not be subject to full state and city cigarette taxes, which can nearly double the price of a pack of cigarettes.

But the city’s lawyers contended that the businesses were set up to defy tax laws, which have pushed the price of cigarettes in the city to more than $10 a pack. They noted that store employees would help customers assemble the tobacco into cigarettes, including filters, using the machines on the premises. The cigarettes, packaged in a small tin, cost $6, or $4.50 for a refill.

“The success of the lawsuit should serve as a reminder to others thinking of ‘gimmicks’ to skirt New York City’s tough cigarette laws that the city will enforce those laws vigorously,” Michael A. Cardozo, the city’s corporation counsel, said in a statement. Mr. Cardozo noted that the city had ordered other stores to comply with tax laws or face litigation.

Jonathan B. Behrins, a lawyer for the shop owners, said that though he thought Island Smokes’ case was winnable, “a business decision” was made to close, rather than bear the cost of litigation.

“They researched the law through and through, and there’s a gaping exception for pipe and loose tobacco,” Mr. Behrins said. “These gentlemen saw the opportunity to make a niche out of it.” He said the stores appealed to people who wanted additive-free, “more organic” cigarettes, and just because customers used the machines in the stores, the city “put us in the same category with the Philip Morrises of the world, and that’s not fair.”

Similar stores under other ownership have proliferated, including at least three on Staten Island, he said. He compared the litigation against his clients to the Bloomberg administration’s grading of restaurants for compliance with health rules, which has led to some grumbling that the administration is overzealous.

The Bloomberg administration has portrayed cigarette taxes as not just a revenue source but as a tool to improve public health by discouraging people from smoking.

The state is pulling the plug on machines that roll cigarettes while you wait. The Department of Revenue has informed the machine owners they need manufacturing and distribution permits and other approvals for selling cigarettes. But owners, including Kurt Kruchten, said they are selling loose tobacco, not cigarettes. Kruchten operates Smokes-4-Less in Slinger.

The roll-your-own stores sell loose tobacco and the consumer loads it into the machine, which rolls a carton of cigarettes in 10 to 15 minutes. The cartons cost around $32, about half of the cost of a carton of premium brand cigarettes.
The Journal Sentinel said revenue agents have been doing on-site visits, unplugging machines and posting notices. The department estimates there are 50 to 100 roll-your-own machines in the state.

Columbus, Georgia – The International Premium Cigar & Pipe Retailers Association came out swinging today by challenging news reports regarding the labeling switch of some roll-your-own tobacco brands to pipe tobacco by their manufacturers and claims that pipe tobaccos, which have been flavored for more than five centuries, are designed to appeal to minors.

“The anti-smoking forces once again are getting their underwear in a twist by reaching for straws in their attempts to besmirch our mom-and-pop members,” said Gary Pesh, president of the IPCPR. Pesh also is owner of a chain of retail tobacco stores in Virginia. “We the retailers didn’t make the marketing switch and we never market to or sell any kind of tobacco products to children.”

The Associated Press and other news sources have reported that some small producers have relabeled their RYO products as pipe tobacco to avoid having consumers pay newly increased tobacco taxes at the much higher RYO level.

Among other increases on tobacco products, the new RYO taxes jumped 2,000 percent per pound. RYO tobacco sales have plummeted while pipe tobacco sales are on the rise. Pesh believes it is due, in small part, to the label switch but mostly because many consumers who roll their own cigarettes are simply using pipe tobacco, which, because of lower taxes, is less expensive than RYO tobacco.

“The IPCPR is comprised of some 2,000 tobacconists, largely small, neighborhood businesses that maintain very high standards of ethics and professionalism. We didn’t support these tax increases but, now that they are here, we abide by the letter of the law,” Pesh said.

Pesh is particularly concerned with the well-funded anti-tobacco organizations claiming in the reports that his organization’s membership sells any kind of tobacco products to children, including flavored pipe tobacco.

“Pipe tobacco is marketed strictly to adults – as are all of the tobacco products we sell. It’s against the law to sell tobacco to minors. Period. As for pipe tobacco, it has been infused with a wide range of flavors to enhance and provide variety in its taste and aroma for the adult pipe smoker since the 1500s,” he said.

The new tax increases on tobacco products went into effect earlier this year to fund SCHIP, the government’s expanded children’s health insurance program.

“These tobacco taxes are never going to be enough to pay for SCHIP. If more people smoked, they might be enough, but we all know that smoking overall is on the decline, largely due to these very same increased taxes. In a way, the government is throwing out the baby with the bath water by over taxing tobacco,” said Pesh.

As for the news reports, Pesh emphasized that pipe tobacco and RYO tobacco are different products for different uses; that pipe tobacco has been flavored for five hundred years and has never been marketed to children; and that the IPCPR fully supports children’s healthcare but believes it should be funded by sources other than tobacco.

“Taxes aimed at modifying behavior have a way of backfiring. And the last thing we need is for government to further intrude on our businesses and personal lives,” he said.

Transworldnews

The number of tobacco smokers currently in Thailand has reached 14.3 million, the latest Global Adult Tobacco Survey revealed yesterday.

Meanwhile, the Public Health Ministry is considering a proposal to the Finance Ministry to increase the tax level on hand-rolled cigarette products after finding over 7.4 million people smoke this style of cigarette. The remainder smoke manufactured cigarettes.

The Global Adult Tobacco Survey is a national household survey launched in February 2007.

Sixteen countries, home to more than half the world’s smokers and bearing the highest tobacco use, were involved in the study: Bangladesh, Brazil, China, Egypt, India, Indonesia, Mexico, Pakistan, Philippines, Poland, Russian Federation, Thailand, Turkey, Ukraine, Uruguay and Vietnam.

Thailand was the first country to complete and release its survey – conducted this year as a household poll of persons 15 and older by the Ministry of Public Health, Mahidol University and the National Statistical Office.

Lakkhana Termsirikulchai, who led a survey team, said it found that of the 14.3 million people who smoked tobacco, 7.9 million chose manufactured cigarettes and the other half – 7.4 million – were hand-rolled cigarette smokers.

Only six out of every 10 smokers said they planned or are thinking about quitting, while five in 10 smokers had tried to quit in the last 12 months.

The survey found that 3.3 million workers are exposed to tobacco smoke at the workplace and 20.5 million adults to tobacco smoke in their homes.

The survey found that 74.4 per cent of adults noticed anti-cigarette smoking information on television. Only one in 10 adults were aware of cigarette marketing in stores where cigarettes are sold; seven in 10 smokers considered quitting because of warning labels; and 98.6 per cent of adults believed smoking causes serious illness.

Action Smoking and Health Foundation’s secretary-general, Dr Prakit Watheesathokkij has expressed concern over the consumption of hand-rolled cigarettes as most people mistakenly believe smoking them is less dangerous than manufactured cigarettes.

He said hand-rolled cigarettes also cause serious illness for smokers such as oral cancer and cancer of the oesophagus. In India, he added, about 100,000 died from smoking hand-rolled cigarettes each year.

He said most cigarette manufacturers are now producing more smokeless cigarettes after noting an increasing trend in smokeless tobacco use among teenagers worldwide.

To reduce the number of hand-rolled cigarette smokers, Prakit has asked the government to increase the tax level on hand-rolled cigarette products and collect tax excise to 70 per cent of product price from the current rate.

Deputy Minister of Public Health Manit Nopamornbodee said he will consult with the Finance Ministry about increasing the tax level on hand-rolled cigarette products and ya nat – traditional medicine that contains hand-rolled cigarette products.

“I will bring this issue to consultation with the Finance Ministry before implementing the regulation,” Deputy Minister Manit Nopamornbodee said.

“We have to study its impact carefully on whether an increased tax level would reduce the amount of hand- rolled tobacco smokers or not,” he added.

He also instructed the Department of Development of Thai Traditional and Alternative Medicine of Public Health and the Department of Medical Science to conduct research into medicinal plants that help smokers to quit.

Meanwhile, Thai Network Against Tabinfo Asia 2009, led by Dr Hatai Chitanont, has submitted an open letter to Deputy Finance Minister,Prasit Pattaraprasit asking him to withdraw from the tobacco industry event he is due to open on Wednesday at Impact Arena Moung Thontani Exhibition Centre.

“Pradit must think carefully whether to participate, talking about a product that kills millions every year,” he said. “Prime Minister Abhisit Vejjajiva has told Cabinet he will not allow government officials to be involved in the event.”

He added that any government support for an event organised by the tobacco industry would be a violation by the Thai government of the UN’s Framework Convention on Tobacco Control.

By Pongphon Sarnsamak
The Nation
November 10, 2009

Roll-ups are making a comeback, as recession-hit smokers switch from expensive cigarettes to cheaper hand-rolled tobacco.

Customs officials cleared 159,605kg of rolling tobacco for distribution in the first nine months of this year, a 38% increase on 2008. They attributed the surge to a rise in the use of roll-your-own tobacco by smokers striving to cut costs.

A survey published last week found that Irish people are smoking more than ever, with one third of the population still lighting up, the highest rate in 11 years.

Despite hikes in tobacco tax, the ban on smoking in the workplace and a law against shops displaying cigarettes for sale, the number of smokers has risen since 2007, when 29% of the population smoked, the EU’s Help campaign found.

A 25g pack of rolling tobacco costs €8.74 but, according to Vincent Jennings, chief executive of the Convenience Stores and Newsagents Association, a thrifty smoker could roll as many as 150 cigarettes from it. Twenty cigarettes cost €8.45, though a preliminary ruling from the European Court of Justice last week found that Ireland’s policy of setting a minimum price for tobacco products distorts competition.

“I always smoked Marlboro Lights and it’s only in the last year that I switched to rollies because I couldn’t keep paying out €8.45 a pop,” said John Murphy, 33, who works in sales and advertising. “I used to spend €100 a week on cigarettes and now I spend €16.

“Ireland’s culture of overcharging is a disgrace and if they continue to rip us off I’m going to buy it on the streets.”

Customs seized 3,144kg of roll-your-own tobacco in the first nine months, double the amount in all of 2007. Illicit tobacco products now account for 30% of consumption, the highest figure in the EU.

Convenience stores say they are losing about €80m a year and are not benefiting from higher rolling-tobacco sales as much as they should be, Jennings says. “One member found that when a local gang got in on the act, his tobacco sales went down to 25% of what they had been,” he said.

Imperial Tobacco, maker of Golden Virginia, is enjoying a 15% increase in sales of the brand leader and has introduced discount brands such as Gold Leaf. Deirdre Healy of John Player & Sons, Imperial’s Irish business, said: “Unlike cigarettes, which are a standard size, roll-your-own gives greater flexibility to control spending by rolling a cigarette as small or as large as you like.

“Rolling tobacco has always been lower in Ireland than in the UK, accounting for about 2% of the market. But because of the times, we have increased our orders month-on-month.”

A recent analysis of smoking in the UK discovered a cultural shift in the use of tobacco, with more than one in four adult smokers using pouch tobacco.

One in five white-collar professionals who smoke now use roll-ups, as do one in five female smokers compared with one in 50 in 1990, suggesting that the roll-up, favoured by actors such as Jeremy Irons and Kate Winslet, is now hip.

“Rolling tobacco has become fashionable in certain quarters,” Jennings said. “I think, though, that for most smokers, it’s an inconvenience and they only go for it because of the value for money.”

Sunday Times
October 25, 2009

More than one in four adult smokers now use pouch tobacco and roll-up cigarettes, with a particularly sharp rise in the proportion of women users, research shows.

Analysis of smoking habits in England suggests a cultural shift in the use of tobacco, with one in five white-collar professionals who smoke now using roll-ups rather than conventional cigarettes.

While roll-ups may once have been the habit of the working man and the spit and sawdust pub, their use among women has risen sharply in recent years.

In 1990 just one in 50 female smokers used hand-rolled tobacco, compared with one in five in 2007.

The trend, revealed in Statistics on Smoking in England 2009, was described as partly a cultural shift — with roll-up smoking less stigmatised and more “hip” among the middle-classes — and partly economic, with rolling tobacco significantly cheaper as it has not been subject to severe tax rises placed on other forms of smoking.

Some famous smokers of roll-ups include the actresses Kate Winslet, Emma Thompson and Helena Bonham-Carter.

The report, compiled by the NHS Information Centre and published yesterday, also shows that the number of people aged 35 and over admitted to hospital for smoking-related diseases has risen by a fifth since 1997, from 1.2 million to 1.4 million.

In 2007-08, there were approximately 1.4 million hospital admissions of over-35s with a primary diagnosis of a disease that can be caused by smoking, compared with 1.2 million a decade earlier. The number has been rising steadily over the past ten years.

Of the admissions in 2007-08, 440,900 were directly related to smoking habits, such as respiratory problems, cancer or circulatory disease. These represented one in 20 of all hospital admissions for over-35s.

The report, which brings together information about smoking from a range of official sources, also showed that nearly one in five deaths among people over 35 was estimated to be caused by smoking in 2008.

While much of the data related to 2007 calendar year — straddling the introduction of the smoking ban in public places — some trends were already identified in the wake of the legislation. These included a rise in the number of people who do not allow smoking in their home.

A total of 21 per cent of adults reported smoking in 2007, a slight drop on 2006, while men remain more likely to smoke than women. Current smokers averaged just over 13 cigarettes a day.

Of pupils aged 11 to 15, 11 per cent of girls and 10 per cent of boys claimed to have smoked during the previous week.

Costs to the NHS of treating illness and disease associated with smoking were estimated at £5.2 billion in 2005 — about 5.5 per cent of the total healthcare costs.

A spokesperson for the NHS Information Centre, who compiled the report, said that it was still too early to identify noticeable shifts in smoking habits as a result of the smoking ban.

But she added that roll-up smoking had shown as definite and steady rise, suggestive of slowly changing attitudes rather than a sudden resposne to legislation.

“The trends we are seeing are all quite long term and gradual changes,” she said.

The findings support sales data from Imperial Tobacco, Britain’s biggest cigarette company and the owner of Golden Virginia and Drum.

It told The Times earlier this year that the volume of hand-rolling tobacco sold by the group in the UK rose by 7 per cent to 3,750 tonnes last year, with further significant increase expected in 2009.

While it is difficult to compare the price of ordinary cigarettes with rolling tobacco — because roll-up smokers choose how much tobacco they use in each cigarette — a 20-pack of premium cigarettes costs about £5.80. A 12.5gm pouch of rolling tobacco costs £2.99, while a 25gm pouch costs £5.87.

While about one third of roll-your-own smokers are believed to use filters, some health experts argue that there is little difference in the health risks posed by filtered cigarettes and roll-ups.

Amanda Sandford, research manager of Action on Smoking and Health (ASH), said that the shift was symptomatic of social changes and recent taxation policies, including the Government’s reluctance to tax rolling tobacco for fear of increasing smuggling.

“At one time hand-rolling was associated with working class men with cloth caps and whippets, but that time has changed. Price certainly has played a part, because the tax on it has not kept pace with that of cigarettes.”

In 2007, the Treasury launched a big clampdown on tobacco smuggling. In the past, smugglers had bought rolling tobacco from the Benelux countries, where tax is lower.

Many smokers had then bought their discount pouches from market stalls and pubs.

However, according to a report published by HM Revenue & Customs, the amount of hand-rolling tobacco legally on sale in the UK has risen from 3,454 tonnes in 2006 to 4,154 tonnes in 2008, as smokers have since been forced to buy nonsmuggled tobacco.

© Copyright: September 30, 2009 Timesonline