China Tobacco Make Greater Profits than Sinopec Group

Industrial Bank made the financial performance of China Tobacco public for the first time on Monday evening, and the assessment indicates that China Tobacco may be larger by annual profit than Sinopec Group, China.com.cn reports.

China's Industrial Bank Company Ltd aims to raise at least 25 billion yuan ($3.97 billion) selling shares to institutional investors including the People's Insurance Co (Group) of China Ltd (PICC) and the China National Tobacco Corporation. Industrial Bank Company released the figures for China Tobacco in a statement late on Monday because China Tobacco is buying a 5.2 billion yuan stake in the Shanghai-listed lender.

The announcement from Industrial Bank shows that the total assets of China Tobacco were 969.9 billion yuan in 2010. The state-owned tobacco company had a net income of 117.7 billion yuan ($18.7 billion) in 2010 on sales of 770.4 billion yuan, which means that it made 320 million yuan per day.

The net profits from China Tobacco in 2010 were even greater than that of the Agricultural Bank of China (95 billion yuan), which was fifth on net profit rankings of all listed companies. The top four were the Industrial and Commercial Bank of China (166 billion yuan), Sinopec Group (150 billion yuan), China Construction Bank (135 billion yuan) and Bank of China (109.7 billion yuan).

Furthermore, the initial assessment indicates that China Tobacco may be larger by annual profit than Sinopec Group. The net assets rate of China Tobacco is 12.14%, which is higher than the 9% from Sinopec Group. China Tobacco, the nation's cigarette monopoly with a registered capital of 57 billion yuan, is one of the largest state-owned enterprises and is by sales the largest single manufacturer of tobacco products in the world.

COD considers tobacco-free campus policy

Smokers who go to school or teach on College of DuPage campuses will have to get their tobacco fix before heading to class if a smoke-free proposal is approved by the college’s board this spring.

Under a proposal to make school tobacco free, smokers could still use tobacco products in their vehicles on campus grounds, but nowhere else at the school’s facilities, said college spokesman Joe Moore.

A proposed policy is expected to be considered by the school’s board of trustees at its March 15 meeting, Moore said, though the board is not likely to vote on it that night.

“It’s to ensure that the campus is healthy and safe for everyone,” Moore said, adding that administrators are sensitive to the addictive nature of tobacco, and would ramp up efforts to market smoking cessation opportunities.

The law would supplement Illinois laws that ban smoking in public places. Now, smokers at the campus have to be 25 feet away from buildings before lighting a cigarette.

Moore said the new policy would affect “a large number” of people on the campus, but said he did not know exactly how many smokers work or attend the school.

First-year student Jake Schweitzer said he thought the proposed ban would do little to enhance public health.

“Unless someone is like standing next to you inhaling the smoke it’s not going to make any difference,” Schweitzer said after he extinguished a cigarette outside the Student Resource Building this week.

Moore said a survey of students showed the majority would support such a policy, though.

If the proposal is approved, COD would not be the first junior college campus to tighten campus smoking rules. Last fall, McHenry County College in Crystal Lake implemented a tobacco-free policy “to promote a safe, clean and healthy learning environment,” according to its website. Those who violate the policy are issued a $50 citation.

At the College of Lake County in Grayslake, a tobacco policy task force has been meeting this year to determine if a tobacco ban is appropriate for its campus, said college spokeswoman Diane Rarick.

Nationally, at least 258 universities and colleges, including junior colleges, are smoke-free, according to the American Lung Association.

Still, College of DuPage would probably not count as one of these schools if its proposal passes since smoking would be allowed in vehicles on campus, said Lung Association spokesman Mike Townsend.

If the board approves the policy, the tobacco ban would begin in August. COD spokesman Moore said college administrators are still contemplating how the ban would be enforced and how violators would be punished.

“We’re trying to simply ensure that campus is a healthy place to be for all of students, visitors and employees,” Moore said.

The COD board of trustees next meeting is scheduled for 7 p.m. March 15 at the Student Services Center, 425 Fawell Boulevard in Glen Ellyn.

Four Naugatuck Clerks Cited for Selling Cigarettes to Minors

Four Naugatuck convenience stores face fines after being caught selling cigarettes to minors during unannounced compliance checks.

In a press release, the Naugatuck Police Department said the four violating locations were the Mobil station at 469 Rubber Ave., Cumberland Farms at 69 Rubber Ave., Family Market at 129 Rubber Ave. and Sid Mart at 73 Bridge St.

The police department worked in cooperation with a state agency, the Department of Mental Health and Addiction Services. The agencies dispatched underage youth informants employed by the Tobacco Prevention and Enforcement Program to purchase the tobacco products.

The youths entered each business and made attempts to purchase the products as a way to test whether the clerks would card them or attempt to verify whether they were underrage.

Police conducted checks on 16 businesses. The four that failed the compliance check were cited for a sale of tobacco to minors under 18. The offending clerks were fined $200.

BAT in $2 billion share buyback as earnings rise

British American Tobacco , the world's second-biggest cigarette maker, increased its share buyback to 1.25 billion pounds ($2.0 billion) after it raised prices and saw strong growth in emerging markets to help boost full-year earnings.

The London-based maker of Dunhill, Kent, Lucky Strike and Pall Mall cigarettes bought back 750 million pounds of shares in 2011 and has raised its 2012 programme, confident it has growth ahead and firepower for acquisitions.
BAT, which made 705 billion cigarette last year, has seen smoking decline in Western Europe and North America and offset that with higher prices and by making gains from growth in developing markets such as Brazil, Mexico, Romania and Russia.

"The economic climate around the world is far from settled but we remain confident that our strategy should continue to generate growth for our shareholders in the years ahead," chairman Richard Burrows said on Thursday.

BAT, the most globally spread of the big tobacco groups, has not been immune from tough economies, excise tax rises and higher unemployment which have pushed smokers to give up or switch to cheaper -- and sometimes illicit -- cigarettes.

Higher prices meant that while underlying global volumes fell 0.4 percent last year, revenue rose 3 percent to 14.4 billion pounds. Marlboro-maker Philip Morris, the world's largest cigarette group, saw its underlying 2011 volumes rise 0.5 percent.

BAT Chief Executive Nicandro Durante said he expected industry volumes ex-China to be down 1-2 percent this year after a decline of 2 percent in 2011, while BAT would continue to outperform as it gained share in a number of markets.

"We face a very difficult economy with disposable income not up and unemployment high," he added.

Durante said the group was flexible enough to conduct bolt-on acquisitions but he said it was difficult to see big deals happening with the world's four largest listed cigarette groups controlling 80 percent of the global market outside China.

BAT said it gained from its good spread of businesses with 60 percent of profit and 75 percent of volume coming from emerging markets. In mature Western Europe, where it cut costs as well as raising prices, profit rose 10 percent.

The higher buyback and slightly better than expected 2011 earnings prompted analysts to upgrade forecasts, with Rae Maile at JP Morgan increasing his 2012 earnings estimate 0.5 percent to 213.85 pence per share and put 2013 up 1.5 percent. "The company continues to offer shareholders a compelling mix of earnings growth, dividend growth and modest valuation," he said.

BAT shares, up 9 percent over the past month, were down 1.4 percent at 3,088 pence by 1300 GMT in a 0.2 percent higher London blue-chip stock market.

The group posted a rise of 11 percent in 2011 adjusted diluted earnings per share to 194.6 pence, compared with a Thomson Reuters poll forecast for 193.9 pence and a BAT-compiled consensus of 194.3 pence.

Was Science Sidelined in Cigarette Debate?

It was instructive to be reading Golden Holocaust, Robert N. Proctor's new history of the tobacco industry, during the recent debates over Mitt Romney's leadership of Bain Capital.

Bain made some of its money by closing unprofitable companies that it had bought, often firing hundreds of people along the way. During his 15 years at Bain, Romney became a multimillionaire.

To many observers, the Bain story was a yawn. Those who have studied the history of capitalism, dating back to the days of John D. Rockefeller and Andrew Carnegie, have shown that it is generally a dirty business, in which more ruthless practitioners generally get ahead and deftly use science and statistics to support their causes.

But perhaps due to the current economic downturn and high unemployment rate, others asked whether someone who had made his fortune as Romney did was an appropriate person to lead our country. It was, of course, only a momentary pause, but one that may have actually forced people to rethink something that they have long taken for granted.

This type of dramatically new perspective, "making the familiar seem strange and the strange familiar," is what Proctor is trying to achieve in Golden Holocaust. Is the tobacco industry so inherently duplicitous that it does not deserve to exist, even if it is a great capitalist success? Proctor challenges his readers to conceptualize a much happier and healthier world in which the manufacture and sale of cigarettes is prohibited.

Proctor is hardly the first accomplished author to mine this topic. Books by Richard Kluger, Stanton Glantz and Allan Brandt have savaged the cigarette industry, relying in part on internal tobacco company documents that were released as a result of a series of lawsuits.

Proctor builds not only on this earlier work but on the continued release of documents in an easily searchable online database, now containing 70 million pages. As the author notes, being able to search for specific terms -- like candy cigarettes, cyanide and the famous 1964 surgeon general's Report -- made it easy for him to document the industry's perfidies. Through such searches Proctor learned, for example, that cigarette filters don't filter and that light and low tar cigarettes are especially deadly. He also learned that, remarkably, the tobacco industry was given the power to veto membership on the surgeon general's committee, leading to a report that did not condemn smoking nearly as forcefully as it might have.

Indeed, Golden Holocaust is like a 700-page how-to manual of how to sell a dangerous product that no one needs and make lots of money as a result. Here is the full story of the December 1953 meeting of tobacco company CEOs that engineered several public strategies for obfuscating the growing proof -- privately well-known to these executives -- that smoking was both addictive and almost surely linked to lung cancer. The main plan, engineered by the public relations firm Hill and Knowlton, was to repetitively insist that no definitive proof of harm existed and that "more research was needed." It was a masterful example of what we now call "plausible deniability." Proctor calls it an "oncologic Ponzi scheme."

How to Profit off Addicts

If you want to get rich, don't invest in things people want. Invest in things people need.
Of course, besides food, shelter, and safety, needs change. Those changing needs are often the most profitable, and the more people need, the more suppliers can profit.
History shows us that one of the most profitable needs of all is the need for an addictive drug. Before being shot by Colombian security forces, Pablo Escobar was one of the wealthiest men in the world, with a personal fortune near $25 billion. Thanks to an unstoppable demand for cocaine, Escobar rose from poverty by smuggling tons of cocaine into the United States back when the white powder was the drug of choice of American yuppies and junkies alike. Such is the wealth to be had in feeding addictions.
Tobacco companies have known for a long time how profitably supplying addicts can be, and the firms have become the dividend darlings that yield-hungry investors dream of. Reynolds American (NYSE: RAI [FREE Stock Trend Analysis]), producer of Camel, Pall Mall, and Winston cigarettes through its R. J. Reynolds subsidiary, has been offering dividends of around 5 percent (usually much higher) since the middle of 2004, while its stockprice has climbed steadily despite lower cigarette smoking rates from 2005 to 2010. Meanwhile, stock in Reynolds increased nearly 4 percent--and that's including the market crash of 2008.

Social media more addictive than cigarettes, alcohol

Cannot resist your urge to tweet or check emails? Don't get surprised, as a new study has found that checking email and social media is more addictive than cigarettes and alcohol.

US researchers who carried out an experiment to test the will power of 205 people, aged 18 to 85, in the German city of Wurtzburg found that most of them were more likely to give in to urge to tweet or check email than other cravings like drinking or smoking.
"Desires for media may be comparatively harder to resist because of their high availability and also because it feels like it does not 'cost much' to engage in these activities, even though one wants to resist," said lead researcher Wilhelm Hofmann at Chicago University's Booth Business School.

In the experiment using BlackBerry devices, participants were asked seven times a day over the course of a week to identify desires they were experiencing and the strength of said desires.

The team sifted through thousands of responses and came up with some telling results. Thankfully, the study showed we're all not slaves to vice and distraction, as the need for sleep and leisure topped the list.

However, next on the list of "self-control failure rates" was checking in with social media, email and work -- ahead of the urge to have a Camel Light, while sipping on that glass of 12-year single malt scotch.

"With cigarettes and alcohol there are more costs -- long-term as well as monetary -- and the opportunity may not always be the right one," the Discovery News quoted Hofmann as telling the Guardian.

"So, even though giving in to media desires is certainly less consequential, the frequent use may still 'steal' a lot of people's time," Hofmann added.

The results of the study are to be published soon in the journal Psychological Science