Tobacco manufacturers say why they raised cigarette prices

Head of Corporate Communications British American Tobacco Ukraine Andrew Krill commented about the fact that the major cigarette manufacturers are not waiting for the decision of the President, increased from November 1, the maximum retail prices for some brands of cigarettes.
"From November 1, the company actually declared the new maximum retail prices of some (but not all) of our brand," - he said.
Krill explained that taking such a decision, the company has tried, as far as possible, take into account the purchasing power and pricing factors such as excise tax, the cost of production, exchange rate fluctuations, inflation, etc.
"I want to emphasize that the proposed date of entry into force of the new excise tax rates set by Parliament in clear violation of Ukrainian legislation (excise rates will take effect from the date of official publication of the law that completely contradicts the requirements of Ukrainian legislation on the taxation system and is a glaring precedent)," - said he.
This decision continues to Krill, Parliament has put manufacturers in the extremely difficult conditions, when the existing order of declaration of prices would not give the possibility to display the new excise rates in current prices.
"In these circumstances, our decision to increase from November 1, the price of some brands was a balance between the commercial nature of the activities of our company, like any other business, and our desire to satisfy consumer expectations," said a representative of one of the largest tobacco producers in Ukraine.
As reported, according to the State Tax Administration, the largest cigarette manufacturers are not waiting for the decision of the President, raised from November 1, the maximum retail prices for some brands of cigarettes.

International experience shows the positive results of raising the excise tax on tobacco

Statistics of the number of people smoking in various countries shows that the decrease in the number of smokers can be successfully combated. One of the controversial topics among Russian experts is to increase the excise rates on tobacco and tobacco products.

Russia's experts argue that the increase in excise tax rates only temporarily make cigarettes less accessible and, simultaneously, will fill the budget. In their view, increase the price of tobacco products quickly leads to filling the market for smuggled goods. As a result, the flow of funds in the budget from the excise tax, only declining, the tobacco industry is going through difficult times, curtailing production and decreasing the amount of tax deductions. But most important: the smoker still get cigarettes for him at an affordable price.

Scientists do not agree with the experts and give us examples of New York. From 1 July 2002 excise tax on cigarettes was increased from 80 cents to 1.5 dollars. A year later, New York could boast that revenues in the budget grew by 10 times! The volume of sales fell by almost half.

At present, Russia has one of the lowest excise tax rates in the world: about 1 euro cents. For comparison, excise rates on tobacco in the UK is about 5 euros per pack. In the European Union set a minimum rate of excise tax (1,28 euro for a pack of cigarettes), which took all the new EU members.

China of May drawing use on struggle of warning labels

The Chinese officials of public health services support the laws demanding placing of photos and other graphic representations on cigarettes on purpose to warn people about danger of smoking.

"The effective prevention is very important", Jan Gonghuan, the deputy director of the Center under the control and preventive maintenance of diseases and the director National to struggle against tobacco has told.

Now packs of cigarettes to bear only small reading of the text of the prevention, "Smoking is harmful to your health".

Despite the fact that, there is an assistance on fractions in the Chinese government, offered new marks should be are ratified by the congress of national representatives to become the law. For this purpose officials from public health services have begun online of a disk of the petition on popular web site Sohu.com.

The drawing campaign is a part of wider national efforts "On a way to free from a tobacco smoke of China", intended for reduction of the general consumption of tobacco in the country. According to positions by the World organisation corrected that he has agreed in 2005 China should forbid sale of cigarettes by the minor, AMP to warning inscriptions on tobacco, to lift taxes and the prices for tobacco products, to limit degree of susceptibility of people from passive smoking and a place more rigid rules on advertising of tobacco products within three years. Not all these obligations, including rigid labels of the prevention, have not been executed yet.

Some previous efforts of China on suppression of the use of tobacco have included an interdiction for tobacco, publicity boards, on smoking of taxi drivers, and on smoking in public places in Beijing a threshold of Olympic games of 2008.

Now one third of smokers in the world - 350 million persons - live in China. The state tobacco company has made $53,6 billion in 2007 from this market, with sale of two billions cigarettes in a year. As consequence, millions people die because of connected with tobacco causes in China every year.

Nevertheless, cigarettes remain cultural significant in China, few people realise the dangers. It is traditional to give a cigarette as gifts, especially on holidays, and smoking are considered as icebreaking activity.

Philip Morris paid almost $ 3 billions for cigars

Corporation Altria, which owns a cigarette company Philip Morris, paid $ 2.9 billion for cigar manufacturer John Middleton, The Associated Press. Approximately $ 700 million of that amount are tax benefits. The transaction is expected to be completed by the end of this year.

John Middleton manufacturers of large cigars, made by machine. The volume of the market in 2007 amounted to $ 5.3 million. As expected by the end of this year growth John Middleton, will amount to $ 360 million and operating earnings of $ 182 million. Altria expects that the acquisition will compensate for the receding demand for cigarettes in the United States of America. Previously with the same purpose, the company started production of chewing tobacco under the brand Marlboro.

At the same time, the corporation Altria preparing to get rid of the international department of Philip Morris. It is assumed that the division of the company held on 30 January. It will allow Philip Morris to a more active work in developing country markets without any restrictions imposed by U.S. legislation.

Cigars manufactured in Cuba

Cigars manufactured in Cuba are believed by many to be the best. Many of Cuba's top cigar producers have left for other cigar making countries and brought their Cuban seeds with them. The Cuban status is thought to arise from the unique features of the soil of Vuelta Abajo district in the Pinar del Río Province at the west of the island, where the microclimate allows high-quality tobacco to be grown.Cuban cigars are rolled from tobacco leaves found throughout the country of Cuba. The filler, binder, and wrapper may come from different portions of the island. All cigar production in Cuba is controlled by the Cuban government, and each brand may be rolled in some different factories in Cuba. Cuban cigar rollers or "torcedores" are claimed to be the most skilled in the world. Torcedores are highly respected in Cuban society and culture and travel worldwide displaying their art of hand rolling cigars.

The Best of the Best - the History of Cuban cigars

Some historians claim that the Chinese invented the pipe and that Asians were smoking long before the Christian era, but they smoked grass and not tobacco - which had never been grown anywhere but in the Americas and Cuba before Columbus .

It is commonly believed that the native land of tobacco, a plant belonging to the genus Nicotiana (especially Nicotiana Tabacum and Nicotiana Rustica, cultivated for their leaves to make cigarettes, cigars, cigars, snuff etc), was anywhere in the American continent. It is unknown how and when it was first discovered. Maybe a native, cooking food on a leaf over a fire noticed that it gave off a particularly appealing aroma, and took his or her first sniff. Then threw the food away and settled down to a serious smoke.

What is certain is that tobacco smoking was practiced among the early Mayas, probably in the district of Tabasco, Mexico , as part of their religious ceremonies.

Between 3000 and 2000 years BC, tobacco smoking widen in the Mexico region and the Antilles.
While the Antonine Wall (named after the benevolent Roman emperor, Antoninus Pius, 86-161 AD) was being built between Britain 's Forth and Clyde rivers (the remains of it can still be seen there today), the cultivated inhabitants of southern Mexico were smoking basic cigarettes. They had no paper and wrapped their tobacco in palm leaves or corn husks, stuffed it into reed or bamboo. The early Mexicans also rolled tobacco leaves into crude cigars.

Gradually over the coming centuries, tobacco was further spread when the smoker-friendly tribes dispersed northwards by way of the Mississippi Valley and, by sea, as far as Brazil .

In South America , the Aztecs smoked and took snuff. Elsewhere in the American continent, tobacco was chewed, eaten, drunk as an infusion, or rubbed into the body. Certainly the use of tobacco was widespread long before the Europeans arrived to claim their ` New World '. Montezuma II (1446-1520), the last Aztec Emperor of Mexico , is said to have smoked a ceremonial pipe after dinner.

And then came that fateful day - October 12, 1492 – when the Genoese explorer, Christopher Columbus (1451-1506), landed on an island called Guanahani by its inhabitants and which he re-named San Salvador . The natives told Columbus of another much larger island nearby and he immediately set sail, arriving off the Cuban coast on 28 October 1492 .

Not knowing what to expect, he sent two of his fellow-explorers, Rodriguo de Jerez and Luis de Torres, to scout Cuba 's interior. In his log, Columbus reported that the two Spanish conquistadors met a large number of men and women, walking round "with a little lighted brand made from a kind of plant whose aroma it was their custom to inhale."

That same day, Rodriguo de Jerez took his first hesitant puff of the New World 's early version of the cigar, its ring size estimated to be as big as a man's arm, and became the first European smoker in history.

Cuba 's natives knew tobacco as Cohiba, and for them it was a miraculous medicine, an essential element in religious, political and social ceremonies; and an important factor in their agriculture. The plant was usually grown in small conucos in the middle of cassava sown fields.

When Columbus and his crew returned home with some tobacco leaves, Rodrigo, who'd taken to smoking a Cuban cigar every day, made the mistake of lighting up the unusual plant in public. He was promptly thrown into prison for three years by the Spanish Inquisition - the world's first victim of the anti-smokers.

In 1497, Romano Pane, the monk who accompanied Columbus on his second voyage (at the command of the Borgia, Pope Alexander VI), wrote the first account of smoking, ‘De insularium ribitus’, in Europe.

In 1512, Portugal was the first European country to cultivate tobacco outside of the Americas. By 1558, snuff was on sale in the markets of Lisbon.

About seven years later, Sir John Hawkins (1532-1595), the first English slave trader who made three expeditions from Africa to the Caribbean in the 1560s noted in his second voyage (I564-1565) the existence of smoking among the natives of Florida.

Despite what is commonly believed, Sir Walter Raleigh (1552-1618) did not introduce tobacco to England although he did popularise it in the court of Elizabeth I. When tobacco arrived in London for the first time, Raleigh was still a teenager and had not yet been to sea.

Whoever was responsible for its introduction (and Hawkins is the most likely culprit), the first few specimens of tobacco arrived in England in 1565 and were smoked by the sea captains in the streets of London, to the great amazement of the crowds of people who collected to witness the strange sight.

Such was tobacco's popularity, especially in 16 th century Spain and England, that shipments rapidly increased – to the extent that the tobacco trade soon became the most profitable business of that period. Due to the fact that tobacco was not yet properly regulated, the booming demand for this lucrative product was boosted by widespread smuggling.

The main centres of this illicit trade in 17 th century Cuba were Trinidad, Bayamo and Matanzas, from which Cuban leaf were shipped to Spain, England and other European countries. King Felipe III of Spain became concerned that all the money flowing among the tobacco smugglers was out of control of the Spanish Crown. At one point, Cuba's tobacco farmers ran a parallel business with the official one they had set up with the Spanish Crown.

The Cuban leaf which was sent to Spain was known as the 'King's Business' and processed in Seville to produce a kind of snuff known as 'Seville Powder' or 'Tobacco from Spain'. Meanwhile, the smoking habit rapidly expanded to the rest of Europe but it was not until 1731 that John Cockburn became the first Englishman to smoke a cigar, while marooned on the shores of Honduras.

At that time, there were several ancestors of the cigar's poorer cousin, the cigarette, some of them now difficult to recognise, but most shared the common feature of being smaller and cheaper than cigars and hand-wrapped in paper.

Step forward a couple of centuries and the use of tobacco – as snuff in, smoked in pipes and as early cigarettes and cigars had taken over a large part of the world. In the late 18th century, trade in snuff decreased but this was compensated for by the rise in cigar consumption.

However, cigars produced in Spain were considered low-grade and there was a growing demand for Cuban cigars, tobacco monopoly's officers tended to accept any mix of Cuban tobacco leaves as “first class” while the best ones were reserved for the smugglers. And those leaves of dubious quality had a tendency to ferment during the lengthy journey from Cuba to Spain, producing cigars with an unpleasant taste. It didn't help that the Spanish cigar factories often included tobacco trimmings, cuttings and scraps in their finished product.

By contrast, cigars made in 18th century Cuba comprised carefully selected fresh filler in good condition. In 1796, the Cuban cigar producers had formed little family businesses on the outskirts of Havana. The first private Havana industrial unit was set up by the Spaniard, Francisco Cabanas, in a small factory in the Havana street known as Jesu del Monte. Shortly afterwards, he was joined by several cigar workshops and the fabrication of Cuban cigars increased. Those early cigar factories were known as chinchales or chinchilatos – Spanish for the abundance of bedbugs which plagued the lodgings of the Cuban factory workers.

By the early 19th century, due to the fact that Spain was waging wars in both its own territory and in Hispanic America, the days of the Spanish tobacco monopoly, also known as the King's business', were numbered Cuban chinchales had become prosperous workshops and were now visited by a growing number of agents and tobacco traders from North America and Europe.

After a short period when pipe smoking was old-fashioned, the smoking habit was revived with the growing European demand for cigars. Sevillas, as the Spanish home-grown cigars were called, were superseded by those from the then Spanish colony, Cuba, boosted by King Ferdinand VII of Spain's decree in 1821, which encouraged the production of Cuban `sticks'.

In 1830, the Spanish 'King's Business' came to an end and the Cuban cigar business became the only possessions of the Cuban families who ran the chinchales in Havana. That same year, the first Havana brands were born, the oldest referred to as “Hijas de Cabanas & Carvajal'. And the first Cuban segars (as they were then known) arrived in London at the shop of Robert Lewis in St James's Street. Great (as it was then) Britain’s first cigar divan, Simpson's-in-the-Strand opened in London, two years later, in 1832.

By the late 1840s, the Cuban cigar brands of Don Amigos, Estrella, Pedro Acosta, H. Upmann, Larranaga, Hernandez, and Partagas were established, among others.

Over the next few decades, Europe's trains introduced smoking carriages, hotels set aside smoking lounges for their guests and smoking jackets and velvet tasseled smoking hats became de rigeur for gentlemen smokers. The after-dinner cigar, enjoyed with a glass of port or brandy by gentlemen who left the female diners to their own devices, became an established tradition.

European women had in fact developed an early taste for smoking. The French writer, George Sand, while living with Chopin in the mid-1800s, loved to shock her guests by lighting up a cigar after breakfast.

unhappily, the ten years' war in Cuba at the end of the 19th century destroyed most of the country's tobacco plantations, creating a serious shortage of tobacco leaf. This was rapidly seized upon as an opportunity by foreign companies among whom, the English Company, which had been established in the 1880s, decided to buy five large factories and its brands. These were grouped in a public limited company called Henry Clay & Bock, which set up the Havana Cigar and Tobacco Company. Collectively, this newly created business produced 35 brands of cigars and 18 of cigarettes.

As a result of the military occupation of Cuba by the US army (1898-1902), North American businesses also decided to seize the opportunity. By the end of the century, a group of businesses known as the American Trust was created, which purchased 12 Cuban cigar tobacco factories, producing 149 cigar brands and 36 cigarette brands.

Some of the original Spanish factories managed to survive, including La Esception, Partagas, Romeo y Julieta, H. Upmann, and Por Larranagas. Several of these were to continue trading into the 21st century, as world famous Havana marques.

In 1901, Great Britain’s anti-smoking monarch, Queen Victoria, was succeeded by her son, Edward VII, a great cigar smoker who was ticked off by his late mother when she caught him lighting up in Buckingham Palace. And King Edward is fondly remembered today for making the smoking of fine cigars fashionable again when he uttered these immortal words when humidors were presented to his male guests after dinner at Buckingham Palace, “Gentlemen, you may smoke.” Ironically, Queen Victoria had tried smoking in the 1870s in the gardens of Balmoral to ward off the midges, during a picnic with Princess Beatrice and another lady companion.


Across the Atlanticin 1925, the first machine for producing cigars was initiated in Cuba, resulting in extensive protests and strikes. Over the next decade, thousands of Cuban tobacco-related jobs were lost. Until the foreign companies, who had engineered the change from manual to machine-made cigars to boost their profits, were compelled to take their machines back to America in 1937.

A few years later, changes in the international markets were forced by the outbreak of the Second World War, which reopened the possibility of increasing exports of Havanas with the aid of machine-made cigars. Due to resistance from Cuban tobacco workers, the reintroduction of machine-made cigars was held back until the 1950s, when machines in Havana made around 10 to 15 per cent of the total cigars produced in Cuba.

On May 17, 1959, 137 days after Cuba's revolution, Cuba's first Agrarian Reform Law was introduced. In August 1960, Cuba nationalised its tobacco industry, much of which had been owned by North American companies.

Which in turn led to the US embargo on Cuban goods in 1962, resulting in many famous Cuban tobacco workers leaving their homeland to set up new farms and factories elsewhere,. especially in the Dominican Republic. But, despite the growing competition from rivals cigar-producing countries, Cuban cigars remain the pinnacle by which all other cigars are judged.

By the mid-1990s after the gradual introduction of anti-smoking measures such as the mushrooming of ‘no smoking’ signs in cinemas, theatres, shops and other public meeting places – mainly to avoid paying the increased insurance premiums levied in opposition to smokers, cigarettes and pipes were in decline.

This didn’t stop the sales of excellent cigars (i.e. hand-rolled and made from pure unadulterated tobacco – mainly from Cuba and the Dominican Republic) getting a vast boost first in the USA and then Europe by the launch of a new American magazine, Cigar Aficionado, responding to the world’s growing mountain of disposable income looking for new luxuries to spend itself on.

On 29 March 2004, Ireland became the first country in the world to ban smoking in public, but this does not show to have affected Ireland's sales of premium cigars, especially Havanas, which have increased significantly in the last few years.

By mid-2007, the growing number of bans on smoking in public will have been extended to many parts of the world, including North American beaches, but Bhutan so far waits the only country in the world to ban the actual sales of tobacco as well as smoking in public. It seems the smokers' pound or smokers' dollar , still rules.

Since its discovery, the global require for Havana cigars has gradually enlarged. By 2006, one third of the 400 million hand-rolled cigars sold in the world are Havanas. Excluding the United States, where half of the world's cigars are smoked, Cuba has 75 per cent of the global premium cigar market.

In February 2007, Habanos S.A., a cooperative venture between the Cuban state and Spanish-French tobacco group Altadis, said its vending of premium hand-rolled cigars rose 8 percent to $US370 million ($NZ527.96 million) in 2006 despite the growing bans on smoking.

And there are no signs on the production or sales of fine Havana cigars dwindling. Long may it continue.