Philip Morris Int'l 3Q profit falls 6 percent

Cigarette maker Philip Morris International Inc.'s third-quarter net income fell more than 6 percent, despite higher prices, as the company sold fewer cigarettes. The seller of Marlboro and other cigarette brands overseas said Thursday that changes in currency exchange rates hurt its profit in the July-September quarter. The company narrowed its earnings guidance for the year. Philip Morris International said it earned $2.23 billion, or $1.32 per share, in the third quarter, down from $2.38 billion, or $1.35 per share, a year ago.

On an adjusted basis, the company said it earned $1.38 per share, missing Wall Street estimates by a penny. Its shares fell $3.85, or 4.2 percent, to close at $88 Thursday. When the U.S. dollar is rising against the world's other currencies, companies that sell goods internationally take a hit when converting revenue in foreign currencies back into the dollar. That effect is particularly strong for Philip Morris International, because it does all its business overseas. Excluding excise taxes, revenue fell about 5 percent to $7.9 billion, despite higher prices.

Analysts expected $8.21 billion, according to FactSet. Philip Morris International said the number of cigarettes it shipped fell more than 1 percent to 236.5 billion cigarettes compared with a year ago when the company saw volumes jump more than 4 percent. The company is the world's second-biggest cigarette seller, trailing state-controlled China National Tobacco Corp. Smokers face tax hikes, bans, health concerns and social stigma worldwide, but the effect on cigarette demand generally is less stark outside the United States.

Philip Morris International has compensated for volume declines by raising prices and cutting costs. Shipments grew 3 percent in the company's region that encompasses Eastern Europe, the Middle East and Africa, but fell about 8 percent in the European Union as the region is under pressure because of the continent's government debt crisis, which has caused smokers to switch to cheaper roll-your-own tobacco and counterfeit cigarettes. "Economic conditions continue to be very difficult. Unemployment continues to rise," Jacek Olczak, the company's chief financial officer, said in a conference call with investors. Still, Olczak expressed "confidence in the underlying strength of the business." Shipments also fell nearly 5 percent in Latin America and Canada.

And in Asia, one of its largest growth areas, shipments grew less than 1 percent during the quarter on a tough comparison with the year-ago period, when shipments shot up in Japan following the March 2011 earthquake and tsunami. The events offered the company a sales opportunity because supply disruptions led Japan Tobacco Inc., the world's No. 3 tobacco maker, to stop shipping cigarettes within Japan. Philip Morris International also bought Philippines company Fortune Tobacco Co. in February 2010, bolstering its Asian business.

Philip Morris International said total Marlboro shipments fell 2.3 percent in the quarter to 77.1 billion cigarettes. The company said its market share increased or remained stable in many key areas. During the quarter, the company spent $1.5 billion to buy back 16.7 million shares of stock, completing a three-year, $12 billion buyback program that began in May 2010. A new, previously announced three-year share repurchase program of $18 billion began in August. Looking forward, Philip Morris narrowed its full-year earnings forecast to between $5.12 and $5.18 per share. Previously the company forecast $5.10 to $5.20 per share. Altria Group Inc. in Richmond, Va., the owner of Philip Morris USA, spun off Philip Morris International as a separate company in 2008. Altria is the largest U.S. cigarette seller.

Tougher tobacco laws being drafted

A tobacco watchdog is preparing a new tobacco control law that will lift the legal age for buying cigarettes from 18 to 20, while sellers must be over 18. Dr Lakkana Termsirichaikul, of Mahidol University’s faculty of public health, on Monday revealed details of the proposed legislation at a press conference dubbed “Stop Using Children to Sell Cigarettes”. She said the Tobacco Control Research and Knowledge Management Centre (TRC) was busy drafting the new law on tobacco consumption control to replace the current one which was brought in 20 years ago.

 A study showed the number of smokers aged between 15-18 in the past 10 years had risen from 6.44% to 9.2% with the youngest smokers reported at the age of 6. The new law would be aimed at protecting juveniles. About 300,00 of them became new daily smokers each year, Dr Lakkana added. Besides raising the minimum age for buying and selling cigarettes, the significant changes to the law include:

- Those allowing minors to sell tobacco products will face a maximum one-year prison sentence and a fine of 20,000 baht.
 - Banning the sale of cigarettes on the internet and closing websites associated with it.
 - Banning the sale of packets containing less than 20 cigarettes and selling cigarettes individually.
 - Prohibit sales promotions by tobacco companies and displaying any form of advertising and prices of cigarettes at a point-of-sale.
 - State-run academic institutes must not receive financial support offered by tobacco firms, nor disseminate or promote their corporate social responsibility (CSR) activities.

Chico City Council to consider 20-foot smoking rule for businesses

A smoking ban within a specified distance of private entryways will be up for discussion at Tuesday's City Council meeting. Smoking is already prohibited in front of entryways to public buildings but not privately-owned businesses. The ordinance before the council would prohibit smoking within 20 feet of doors, windows and other openings to businesses. Two ordinance options are being considered, with one adding an exception for people passing by. It's not clear what kind of enforcement will be used or the penalty for violations.

The proposal was brought forward by the American Lung Association earlier this year, and in August the council voted 5-2 to send the issue to city staff for suggestions, with Bob Evans and Mark Sorensen voting no. In researching how other cities have addressed the matter, City Attorney Lori Barker reports most ordinances prohibit smoking within 20 to 25 feet of doors, windows or other openings. Other ordinances she found prohibit smoking completely on specifically designated sidewalks or on all city public property.

In August, a handful of community members said the rules would be difficult to enforce, and that people still smoke now in places where it is banned, including City Plaza. On Friday afternoon, Nicole Romain, membership coordinator and office manager of the Downtown Business Association had not yet heard a reaction to the ordinance from board members. But she said when the association voiced its opposition in August the biggest concern from a survey of business owners was about enforcement. "As far as I know that's still the concern.

I haven't heard anything different," she said. "It's about creating another law and who is going to enforce that law. I don't know we have the police support to be enforcing it." Members of Students with Kids Leading Everyone Against Nicotine said they counted 857 cigarettes butts within 20 feet of 61 businesses, gathered signatures of support from 500 people and received endorsements for a ban from 70 businesses. The city had also been asked by the American Lung Association to ban smoking in Bidwell Park, an issue that has been referred to the Bidwell Parks and Playground Commission. The rest of Tuesday's council agenda includes a quarterly financial update, several consent items and other routine reports.

We must stub out smoking for teens in poor regions

MORE work needs to be done in socially deprived areas to reduce the number of youngsters taking up smoking, campaigners have said. Figures have shown that those who live in deprived areas are more likely to take up smoking and, despite work to bring these numbers down, more is required to try to tackle this trend. Speaking at the annual ASH Wales conference held in Cardiff, Professor Ann McNeill, deputy director of the UK centre for tobacco control studies, said it was also important to look at the influence parents from socially deprived backgrounds may have on their children.

 She said: “The number of people smoking increases between 11-15 - that’s the age when children tend to take up smoking. Smoking has decreased in the last decade so we can all congratulate ourselves but although youth smoking is going down, we cannot be complacent. “There are many factors that influence smoking in young people and the most worrying thing is socioeconomic trends. For may years we did not see much differentiation in young people smoking but what we are seeing at the moment is a trend towards a more deprived youth becoming the main smokers. “We know that smoking can be associated with truancy in schools and drinking and drug use.”

 A report into smoking trends across Wales by the Public Health Wales Observatory and the Welsh Government found that smoking prevalence was highest in the most deprived areas including the South Wales Valleys, South Cardiff and Barry. Professor McNeill said: “Parents smoking are obviously still playing a big role in the prevalence of smoking in young people. “As smoking becomes more concentrated in adults in deprived areas, it is likely that will have a knock-on effect on young children. There was a small change in smoking in the home when the smoke-free legislation came in, but this actually went down. It is clear that the legislation did not have a knock-on effect and drive smoking into the home.

But most of this decline was seen in the high socioeconomic groups so in the future we need to focus more on the more deprived groups.” Professor McNeill said that there were also gender differences in the uptake of smoking, and that it was important to understand these differences to try to reduce the numbers. In his last report before retiring this summer, former Chief Medical Officer for Wales Dr Tony Jewell found that 11% of 15-year-old boys smoked at least once a week while the figure for girls of the same age was 16%. This was higher than the figures for England, Scotland and Ireland. She said: “At the age of 11, boys and girls are similar in their habits, but at the age of 13 and 15, the number of girls smoking is higher than boys.

 “We need to keep an eye on gender differences and we need to keep working to get these rates down. One of the key things we need to be doing is to de-normalise smoking in the wider society.” Professor McNeill also said that the issue of illegal tobacco was of major concern. An estimated one in 10 cigarettes and half of all hand-rolled tobacco is smuggled, according to figures which put the cost of the practice throughout the UK at £2bn. She said: “Illicit tobacco is a really big issue. I think what is evident is that young people are visiting places to get illicit tobacco from wherever it is available and it’s very attractive to them because it is so cheap.

 It’s a big problem and something to watch out for.” Chair of the children’s committee, Julie Morgan AM, said she believed Wales could lead the way in tackling the problem of smoking in teenagers. “Up to 14,000 young people aged between 11 and 15 start smoking each year in Wales and that is a very sobering figure,” she said. We’ve done a lot of work in this area, but there is still a long way to go. With devolution we have more opportunity to be championing and leading the way and there are huge opportunities in Wales to drive the agenda forward.”

Tobacco rule about control and discrimination

The Avalanche Journal’s “Our View” on UMC’s anti-nicotine policy in the Oct. 3 edition is completely one-sided and does not “make sense” as you state. I do not smoke, and I do not appreciate secondhand smoke, but I am not going to infringe on someone else’s rights in order to make my rights the priority. Tobacco users have been singled out and criticized for years, yet tobacco companies continue to produce their products in abundance, while taxes on said products continue to skyrocket.

You state the “policy is a logical one,, and “Doesn’t it seem appropriate businesses in health-related industries would take the lead in promoting good health practices among their employees?” So my question is, “What’s next?” Will they stop hiring people who consume alcohol, abuse prescription drugs, and people who are overweight? Surely those do not promote good health practices.

This has nothing to do with promoting good health practices. It’s all about control and discrimination, whether it’s lawful or not. We should all be concerned when entities (private or government) start denying employment based on someone’s personal weakness.

Colorado marijuana-legalization amendment's lead shrinks

A ballot measure to legalize limited possession of marijuana in Colorado continues to lead in the latest Denver Post poll on the question, but it has dropped below 50 percent support. The poll of 614 likely voters found that 48 percent of respondents support the measure, while 43 percent oppose it. A poll last month found a wider lead for Amendment 64, with 51 percent in support and 40 percent opposed.

Both polls have a 4-percentage-point margin of error. The most noticeable swing in the new poll, taken Tuesday and Wednesday for The Denver Post by SurveyUSA, came among women. The previous poll showed the measure succeeding with women 49 percent to 39 percent. The new poll, however, shows women opposed 48 percent to 40 percent. Men continue to support the measure, as do young voters and those ages 50 to 64. But a slender lead among voters ages 35 to 49 has turned into a 4-point deficit, while voters 65 and older disapprove of the measure by a wider margin. The poll comes as the campaigns for and against the measure have been heating up, with both sides announcing a series of endorsements.

Opponents have touted endorsements against the measure from Gov. John Hickenlooper, the Colorado Education Association, the Colorado chapter of the American Academy of Pediatrics and several law-enforcement organizations. On Monday, representatives from the Denver Metro Chamber of Commerce and the Downtown Denver Partnership, along with Denver Mayor Michael Hancock, will speak out against the amendment. No on 64 spokeswoman Laura Chapin disputed the language of the poll question — which uses the word "decriminalize" — and said the campaign is skeptical of the results.

Neither campaign was shown the results of the latest poll before they were published. "We have every confidence if people understand what Amendment 64 does ... they will vote against amending the Colorado Constitution this way," she said. Proponents of the measure, meanwhile, have announced the support of more than 300 doctors in Colorado, the Colorado branch of the NAACP, singer Melissa Etheridge and former Colorado Congressman Tom Tancredo. In a statement, pro-64 campaign spokeswoman Betty Aldworth said the measure will make Colorado safer.

"Momentum is greater than ever among the volunteers who are working around the state to educate voters, and we look forward to more and more support in these final weeks of the campaign," Aldworth said. Amendment 64 would legalize use and possession of up to an ounce of marijuana for people over 21 years old. People would also be allowed to grow up to six marijuana plants in their home. The measure legalizes marijuana sales at specially regulated retail stores but also allows communities to ban those stores. Public consumption of marijuana would not be allowed.

Landlords wary of marijuana law

With Question 3 on the statewide ballot expected to pass Nov. 6, landlord groups say they want the right to turn away renters who are medical marijuana patients and those who may be authorized to cultivate marijuana. They don’t want their apartments to become grow operations. Federal law still forbids the use, sale or making of marijuana and may trump state law. The ballot question asks to eliminate state penalties for marijuana use by qualifying patients, starting Jan. 1. At present, 17 states and the District of Columbia allow medical marijuana.

Under the proposal, the state Department of Public Health would allow nonprofit medical marijuana treatment centers to grow, process and provide marijuana to patients or their caregivers. In 2013, there could be no more than 35 treatment centers, with at least one but not more than five in each county. The landlords fear the “treatment center” could be in one of their units if the tenant attained the requisite state license to grow marijuana. The grow operations, according to the proposal, would be in a “closed, locked facility” and provide a 60-day supply of marijuana for the patient’s use. In a worst-case scenario, the feds could step in and seize their properties for drug activity, the landlord advocates say.

Medical marijuana exposes the landlord to civil asset forfeiture under a federal law that allows police departments or the Department of Justice to take a private property that has been used in any way for drug activity, said Skip Schloming, executive director of the Small Property Owners Association in Cambridge. “This puts the landlord in the vise of the conflicting legislation,” said Ron Bernard, editor of the Southern Worcester County Landlord Association’s newsletter and chairman of its membership committee. Mr. Bernard, who owns rental units in Southbridge and Warren, points out that a landlord can’t discriminate against an existing or potential tenant because of a handicap or medical issue. Mr. Bernard said his association, which has about 90 paid-up members, has concerns about the ballot question and hopes it will be defeated.

In case it passes, Mr. Schloming said, his organization is petitioning legislators to amend the proposal to remedy the landlords’ concerns. The landlords, Mr. Schloming said, want the cultivation of marijuana to be forbidden in homes and apartments and only be allowed in business settings. Mr. Schloming said that because the ballot question allows growing to be done under lock and key, his organization anticipates landlords will have problems gaining access to their apartments in which a state-sanctioned grower is doing business. He also noted that growing marijuana requires a lot of water, lighting and ventilation, and is widely known to put additional wear and tear on an apartment.

Mr. Schloming said the organization wants landlords to have the ability to turn down medical marijuana tenants or evict them, because such tenants are not likely to disclose this information to landlords. Michael G. Gatlin, vice chairman of the Property Law Section of the Massachusetts Bar Association, said these are all legitimate concerns. “At least at this point in time, it’s hard to say what a landlord should do,” the Framingham lawyer said. Mr. Gatlin said then Deputy U.S. Attorney General David Ogden sent a letter to U.S. attorneys in October 2009 saying that given the burgeoning nature of medical marijuana use, the agency would not prosecute people who are using marijuana in states where it’s been made legal, nor were they going to prosecute caregivers.

But naturally, the government intends to prosecute trafficking, which in theory could be done by a caregiver, the lawyer said. “It’s an inconsistent kind of position,” said Mr. Gatlin, adding it would clearly be illegal for a federally financed or federally maintained housing project to allow people to grow marijuana on site. “Beyond that, you’re kind of hoping that the feds are going to look the other way, but there’s no guarantee that they are,” he said. Another concern, he said, is that medical marijuana would violate any type of mortgage a landlord would hold on the property. Every mortgage has language that says the property can’t be used for illegal purposes.

“I think what’s going to happen is, some unfortunate person is going to lose their property by way of a default under the mortgage for that reason, or the feds are going to seize it and test it in court,” Mr. Gatlin said. “The bad news is you’re going to have to litigate the issue, or there has to be some clarification to the statute that will result from this referendum that makes clear what the parties’ rights are, at least under state law. The Legislature has to clean this thing.” Morgan Fox, spokesman for the Washington, D.C.-based Medical Marijuana Project, said government interference with medical marijuana is “happening all over the country.” The government, he said, leans on landlords to evict these tenants. It is to the chagrin of both providers and patients that some patients are no longer able to get safe, reliable access to their medicine.

“The only thing the federal government is doing when it tries to use this ‘asset forfeiture’ is it’s just pushing the marijuana market underground where it can’t really be licensed or controlled,” he said. Landlords usually get a written warning and a certain amount of time to either challenge the proceedings or evict their tenants, he said. The government claims “they aren’t interfering with state medical marijuana laws, when in fact they are,” Mr. Fox said. They do it under a variety of guises, such as saying they’re too close to schools, even though medical marijuana providers have shown no danger to children or to their communities in terms of increased violence or availability, Mr. Fox said. Christina Sterling, a spokesman for the U.S. attorney’s office in Boston, said her agency wouldn’t comment on hypothetical scenarios.

But federal law, she said, unambiguously makes it unlawful to grow, distribute or possess marijuana, other than as part of a federally authorized research program. Marijuana is a controlled substance and has been placed in Schedule 1 of the Controlled Substances Act, meaning it has no currently accepted medical use in the country and has not been determined to be safe and effective by federal health authorities, she said. “While this office does not intend to focus its limited resources on seriously ill individuals who use marijuana as part of a medically recommended treatment program in compliance with state law,” she said, “individuals and organizations who are in the business of cultivating, selling or distributing marijuana and those who knowingly facilitate such activities will be in violation of federal law and subject to federal enforcement.” If the Massachusetts ballot question passes, she added, her office will wait and see how the state will regulate marijuana.