said Tuesday that it could cost $20 million to comply. Reynolds spokesman David Howard said Reynolds remains the entity obligated to comply with the court order even though it is now the U.S. subsidiary of British American Tobacco PLC. “R.J. Reynolds Tobacco Co., along with the other parties, including the U.S. Department of Justice, filed joint consent motions in the U.S. District Court concerning the implementation of the court-ordered corrective statements,” Reynolds said in a statement. Each statement will begin: “A federal court has ordered Altria, R.J. Reynolds Tobacco, Lorillard and Philip Morris USA to make this statement ...” The manufacturers will take turns being the first listed in the statement. The agreement settles an 18-year-old lawsuit about the marketing of the manufacturers and their various affiliates and acquisitions going back to the 1950s. In 2006, U.S.
The company’s operating profit margin , the highest among listed Asian peers, narrowed to 64 percent in 2016 from 67 percent a year earlier in a cigarette market estimated at about $1.1 billion. The gap between the price of cigarettes and beedis, cheap tobacco wrapped in a coarse leaf, has widened after the government raised excise duties and slapped a 15 percent value-added tax last year. The lowest-priced offering sold by Ceylon Tobacco -- the only licensed manufacturer of cigarettes -- is about four times more expensive than leaf-rolled products, which are produced by a segment of the industry that’s relatively less regulated and has seen smaller increases in levies. “In 2017, we foresee the beedi industry capturing at least half the tobacco market, posing a serious threat to the legal cigarette industry,” said Ridley. “As the affordability of legally manufactured cigarettes continues to diminish, more consumers are expected to downgrade to this cheaper alternative.” Beedis accounted for about 44 percent of the total tobacco market last year, up from 20 percent in 2007, Ridley said. The share of smuggled cigarettes is expected to rise to about 8 percent this year from 2 percent in 2016, according to the company. The numbers for the market share shift being claimed for beedis are exaggerated, said Health Minister Rajitha Senaratne. The government is in discussions with farmers cultivating tobacco to wean them away from the crop, he said. Sri Lanka hasn’t seen any evidence of an increase in the market share of beedis as imports of tendu leaf haven’t climbed, said Palitha Abeykoon, chairman of the National Authority on Tobacco and Alcohol. Tighter regulations on the beedi segment are being considered, he said. The authority estimates market share using surveys that are based on prevalence of use and not stick count.
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