TI DIGEST UNITED KINGDOM Imperial Brands to Shed its Premium Cigar Business BRISTOL—Imperial Brands will sell its worldwide premium cigar business as part of its divestment program, the company announced at the end of April. “The program supports Imperial’s ongoing simplification agenda and will release capital to pay down debt and, where appropriate, invest in its growth agenda,” a statement said. Premium cigars have performed well for Imperial over a number of years with good revenue and profit growth, the statement noted. “However, it is a unique luxury business with a different consumer base and route to market relative to Imperial’s other businesses. The sale of the business provides an opportunity to realize shareholder value.” Potential buyers were not identified in the announcement. Imperial said its divestment program was launched in May of 2018 and is expected to generate proceeds of up to £2 billion no later than May 2020. Imperial has so far realized £280 million from the sale of a portfolio of other tobacco products in the USA and of 9.99 per cent of Logista, which distributes products and services in Southern Europe Significant progress has been made with a number of other divestment opportunities, with the priority of maximizing shareholder returns. Recognizing that tobacco valuations have come under some pressure in the last 12 months, assets will be sold only if they will realize appropriate value.
AUSTRALIA Tax Office Searches for Illicit Tobacco Plantings SIDNEY —The Australian Tax Office (ATO) has called on members of the public to help identify illicit crops, according to media reports. Crops are approaching maturity, and the ATO is stepping up enforcement efforts. ‘‘The tobacco-growing season typically runs from November to May and it is often grown in rural areas in central Victoria,’’ assistant commissioner Peter Vujanic said New techniques will be introduced to combats illegal tobacco plantings, he added.
CANADA Judgment Stayed on Quebec Action vs. Tobacco Companies QUEBEC —Legal
proceedings against three major tobacco companies were
suspended as an Ontario court has upheld an order that postponed action by Quebec smokers. The Quebec class action suit had won a judgment for the three companies— JTI-Macdonald Corp.; Rothmans, Benson & Hedges and Imperial Tobacco Canada—several years ago but the $15 billion+ judgment was stayed recently after the companies filed for creditor protection.
CUBA How many cigars are made in Cuba? HAVANA—Cuba
is producing 260 million “hand-rolled” cigars per year, said officials of Tabacuba in a report from La Prenza, Cuba’s state news agency. Justo Luis Fuentes and Miguel Vladimir Rodriguez, president and first vice-president of Tabacuba, were quoted as saying the country exported 93.9 million handmade cigars.
10 TOBACCO INTERNATIONAL APRIL/MAY 2019
The rest are produced for national consumption, meaning 166.1 million cigars for an island of just under 11.5 million people and presumably some of the 4.8 million tourists the country welcomed in 2018. In 2016 the Cuban government’s Office of National Statistics said the country exported 91.4 million handmade cigars. It has not yet released figures for 2017 or 2018. It’s unclear whether the terms premium, handmade and hand-rolled are being used interchangeably. Cuba produces a range of handmade cigars, from the traditional premium offerings such as Cohiba, Montecristo and Partagás. Most Cubans would be hard pressed to afford these brands. They would more likely consume cigars available only locally and generally referred to as peso sticks. Habanos S.A., is the company responsible for sales and marketing of Cuban cigars worldwide, a number which would seem to include cigars produced both in Cuba and in other countries. Prensa Latina also said that the country makes 150 million machine-made cigars and exports 91 percent of them, about 136.5 million. The report also announced that The Brazilian company Souza Cruz, a subsidiary of British American Tobacco, has made an investment of $116 million in a new joint venture for machine-made cigars and cigarettes.
MALAYSIA How Much Contraband is too Much for Market to Bear? KUALA LUMPUR —It is not acceptable that illegal cigarettes account for 60 percent of the Malaysian market, contends Erik Stoel, managing director for BAT Malaysia. “These players do not and will not
