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Sat, Oct 25th - 7:52PM

French Gauloises cigarettes
Gauloises cigarettes were, many years ago, something of an icon of France and the romance of Paris. Jean-Paul Sartre liked to smoke them, as well as Albert Camus, Serge Gainsbourg, and even, once, George Orwell. However the days of Gauloises, those tough cigarettes are numbered.

Imperial Tobacco Group, which via its Seita subordinate company owns Gauloises, declared a restructuring currently that, will shut factories in Britain and France, with an anticipated loss of some 900 jobs.

The French factory, next to Nantes, manufactures Gauloises cigarettes, and Gitanes. Manufacturing of the classic Gauloise moved to Spain practically 10 years ago, which, based on Reuters, tends to make present day shift symbolic. Bloomberg remarks that Seita, which joined with a Spanish corporation in 1999 in order to create a company that was ultimately bought by Imperial, kept a production and supply monopoly approved by the finance chief of Louis XIV.

The Gauloise brand goes back to the 1900s, kind of a bad thing that would ultimately result in a filtered cigarette and, in the end, the lighter style. Not that one have to romanticize cigarette consumption, however Reuters records the well-known aspect of the cigarette: °»Philosopher Jean-Paul Sartre visited Left Bank cafes in postwar Paris with a pen in one hand and a GauloiseŁŁ Incorporated into French combat rations in the course of the World War Two, the light blue pack of Gauloises with the army headgear logo continued to be the most favored cigarette brand in France right up until the 1970s, when lighter, nicer American brands like Marlboro appeared.°…

Imperial, which has anything to deal with the Canadian company of the similar name, explained these days that the British and French factories could be closed over the upcoming two years, as part of a cost cutting program the cigarette company claims will save about ߣŹß»300-million per year starting in the autumn of 2018. °»The suggested closures reveal decreasing industry volumes in Europe, affected by challenging economic situations, growing regulation and excise,°… Imperial explained in declaring the shutdowns. °»Manufacturing process has been impacted at the Nottingham and Nantes s ites, which currently use less than half their production potential.°…

The Nantes factory engages over 300 workers, with potential for 21 billion cigarettes yearly, even though just 9 billion are likely to be closed this year. Manufacturing will be relocated somewhere else in Europe.

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Sat, Oct 25th - 7:44PM

American tobacco manufacturers
The number 2 U.S. tobacco manufacturer Reynolds American Inc Parent company of R.J. Reynolds Tobacco Company (RJRT) has been making headlines recently on two separate fronts. The first concerns the ownership status of the company itself, since its top shareholder, with a 42% stake, is British American Tobacco Ltd. Some analysts claim that BAT is considering to attempt to increase its stake in Reynolds and acquire majority control. Such a move will be possible after 30 July 2014, when a 10-year stock-buying moratorium which was included in the initial deal between the two tobacco companies is due to expire. BAT is known for having a lot of minority stakes in many companies around the world and for its willingness to consider its options for further investments. BAT°«s CEO Nicandro Durante mentioned during the company°«s annual shareholders°« meeting, where its first quarter results for 2014 were also announced that °»we°«d never go to Reynolds with a hostile takeover.°… According to some analysts, if BAT were to make the move and acquire the majority stake in Reynolds, then Reynolds would operate as a U.S. subsidiary of BAT with the impact on local jobs being minimal.

The second front on which Reynolds is making headlines is its rumored interest in buying rival Lorillard Inc. of Greensboro, which is currently the number 3 U.S. tobacco manufacturer. Indeed these rumors have been circulated for some time and in fact they had culminated back in 2008. However then deal was not concluded back then and it is uncertain whether it will do so now, as the matter is quite complicated. Some mention the fact that such a move by Reynolds, i.e. pursuing an offer for Lorillard will require the prior granting of BAT°«s permission, although BAT is rumoured to be willing to finance such a move by Reynolds.

Moreover, the combination of the number 2 and the number 3 U.S tobacco manufacturers will have to be allowed by the competent antitrust authority FTC. The Federal Trade Commission would only allow the deal to go through if Reynolds first sells off some of its existing menthol brands such as Kool and Salem, because if it takes over Lorillard it would then acquire Newport, which currently holds a 37% market share in the menthol cigarettes. Combined with Reynolds°« menthol styles of Camel and Pall Mall and its other menthol brands, the new venture would have an unacceptably high, for healthy competition reasons, menthol market share of 67%. Therefore the sell off of some brands to a manufacturer who could become a competitive number in the U.S. market appears the only feasible way for the deal to go through and get the green light from the authorities.
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Sat, Oct 25th - 7:37PM

Selling 555 cigarettes
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