SWITZERLAND. JT International (JTI) has announced the appointment of Ming Lee Foo as new marketing and sales vice president for Worldwide Duty Free and Near East, based in Geneva. Foo takes over from Henri Meimoum, who is appointed vice president for Europe, Middle East and North/West Africa Duty Free.
Ming Lee Foo was previously marketing director for Europe, Middle East and North/West Africa Duty Free. He brings ten years of tobacco industry experience to his new duty free role, having worked previously in domestic markets in Malaysia, Thailand, Vietnam, Russia and Romania, before joining the duty free organisation in May 2001.
The company was also in Cannes to present new Winston Filters and the revitalised Salem Menthol packs to the trade for the first time. Already well-established as one of the world’s top five cigarette brands, the new Winston Filters represents a complete upgrade of the original cigarette, first introduced in 1954.
The introduction is supported by fresh dark-red packaging, chosen to reflect the contemporary style of the new cigarette, supported by an advertising campaign and promotional activities. This new platform uses the tag line “Winston. True Quality” to convey Winston’s key attributes of quality, simplicity and refinement. The logo font has also been changed to blue from black and the look combines with Winston Lights and other lines to form a clear product family.
The new-generation Salem has been launched as part of a major drive to increase market share of JTI’s flagship menthol brand (The Moodie Report, 17 July 2003) with the emphasis on the innovative spirit of Salem. Both Winston and Salem are important brands within JTI’s duty free portfolio. Salem was being shown to European markets for the first time at TFWA World Exhibition this week.
Speaking to The Moodie Report Foo said: “The Salem re-launch is mostly completed in Asia and now the focus is on Europe for the next year. The rejuvenation for Winston started mainly in West and Eastern Europe, extending to Asia next year, followed by the Middle East and Latin America.”
Foo confirmed that sales of the Camel brand are continuing to grow since its redesign more than one year ago and Winston is following a similar trend. “Full flavour Winston sales have picked up dramatically, in [European] airports first, followed by border shops. You will see new showcasing units for Winston in major airports towards the end of 2003.
“But managing tax changes is one of the most difficult tasks we face,” said Foo. “Overnight we had a major situation in France. Although we made representations to the government, they have other priorities. The UK-France [duty paid cigarette] price differential will go from 40% to 10%. But the French government may yet not press ahead with the last phase of the tax increase.”
Come January 2004, the last of three rolling tax hikes in France could raise the price of a pack by more than +50% to about €5.50, although protests are still going on, including the country’s first “day without tobacco” protest on 20 October.
Then in the ten countries due to join the EU next year JTI foresees more turmoil in the tax regime in future years. The Baltic countries for example have historically low tobacco taxes and, in common with all accession countries, they will have to raise taxes in a phased programme ending in 2009, and 2010 for some countries, to the level of €64 per 1,000 cigarettes. This will create a shock on the domestic market. But meanwhile the tax saving will become higher for those non-EU long haul travellers in duty free shops and the current price difference will still exist for most of the decade.
“We will see how [the new EU-member countries} cope with those increases,” said Foo. “Generally governments are very careful about taxation, as a means to avoid the illegal trade and counterfeit, which are a side effect of higher taxes. The illegal trade is to nobody’s advantage.”
By comparison Asia is different to Europe and taxation is managed by individual governments. JTI says Asian tobacco taxes – and duty free price differentials – have been rising to a high level and countries such as Hong Kong and Malaysia have been leading the way over the past five years.
Meanwhile, in common with other suppliers the South African government’s draft law to ban duty free tobacco sales is being appealed by JTI, and the appeal period may be extended.
Said Foo: “We feel it is the wrong target for governments. There is no real need to ban it and the arguments go back to the original FCTC (Framework Convention on Tobacco Control) negotiations, where South Africa saw itself as a leading tobacco-control nation.”
Meanwhile, similar talks are going on in Australia and South Korea involving national duty free associations and health and trade ministries, as the governments there decide how to ratify the FCTC agreement into national law – which they can do over a several-year period.
“There is still a retailer battle on this issue,” said Foo. “But the difficult times are behind us and we need to look positively to the next few years. Tobacco will continue to be an important draw for the whole duty free and travel retail market.”
