Apple Says Steve Jobs Will Take a New Medical Leave Monday, Jan 17 2011 

Apple Says Steve Jobs Will Take a New Medical Leave

Published: January 17, 2011

Steven P. Jobs, the co-founder and chief executive of Apple, is taking a medical leave of absence, a year and a half after his return from a liver transplant, raising questions about both his long-term prognosis and the future of the world’s most valuable technology company.

Justin Sullivan/Getty Images

The Apple C.E.O. Steve Jobs at Apple’s headquarters in Cupertino, Calif., last October.

Mr. Jobs, who recovered from pancreatic cancer after surgery in 2004, is going on leave at a critical time for Apple.

While the company has outflanked most of its rivals in the technology industry, creating a string of products like the iPhone and the iPad that have been blockbuster hits with consumers, it is also facing ever more intense competition from giants like Google, Microsoft and Samsung. Some of those rivals have narrowed Apple’s lead or even surpassed the company by some measures.

Mr. Jobs’s leave is certain to cause anxiety with investors and even consumers. Perhaps more than any other chief executive, he is seen as inseparable from his company’s success.

“He may be the most vital C.E.O. of our era,” said Michael Useem, a professor at the Wharton School at the University of Pennsylvania and director of its Center for Leadership and Change Management.

Mr. Jobs is known for his hands-on management style and his obsessive attention to the most minute details of Apple’s products. He is also credited with anticipating the needs of consumers time and again, leading Apple to create one breakthrough product after another.

Mr. Jobs, who is 55, announced his leave on Monday in an e-mail to employees that said he was stepping aside “so I can focus on my health” but would continue to be involved in major strategic decisions at the company.

“I love Apple so much and hope to be back as soon as I can,” Mr. Jobs wrote in the message, which was made public by Apple.

Timothy D. Cook, 50, the company’s chief operating officer, will run day-to-day operations, Mr. Jobs said. Mr. Cook performed the same duties during Mr. Jobs’s medical leave in 2009.

“I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011,” Mr. Jobs wrote.

Unlike his prior leave, when Apple said Mr. Jobs would be gone for six months, this time Mr. Jobs did not say how long he expected to be out. Analysts said the announcement raised questions as to whether Mr. Jobs would come back to lead Apple.

“It raises the bigger question about whether he’ll ever return,” said Toni Sacconaghi, an analyst with Sanford C. Bernstein & Company.

Medical experts said that recipients of liver transplants often suffer from a variety of medical problems that are not life-threatening.

A person with knowledge of the situation said that Mr. Jobs suffers from immune system issues common with people who have received liver transplants and that, as a result, his health suffers from frequent “ups and downs.”

In recent weeks, Mr. Jobs began a down cycle and slowed his activities at Apple, said the person, who refused to be identified because he was not authorized to discuss Mr. Jobs’s condition. Mr. Jobs has been coming to the office about two days a week and has appeared increasingly emaciated, the person said. He has frequently had lunch in his office, rather than in the company cafeteria, the person said.

During his prior leave of absence, Apple kept details of Mr. Jobs’s health private, prompting criticism among some shareholders who contended that the company had an obligation to be more forthcoming with information.

In his message to the staff on Monday, Mr. Jobs said, “My family and I would deeply appreciate respect for our privacy.”

An Apple spokeswoman, Katie Cotton, said Apple would have no further comment beyond Mr. Jobs’s statement.

Apple’s stock immediately dipped on foreign exchanges Monday, falling 7.6 percent in Frankfurt. Financial markets in the United States were closed on Monday in observance of Martin Luther King’s Birthday.

“It is natural that investors will expect the worse,” said Charles Wolf, an analyst with Needham & Company, noting that Apple has a history of “minimal disclosure” and “obfuscating” details about Mr. Jobs’s health.

Mr. Wolf said that regardless of whether Mr. Jobs returns to Apple, the company would probably continue doing well for the foreseeable future, though its long-term prospects are more uncertain.

“Right now Apple has a management team that is one of the greatest in American business,” Mr. Wolf said. “Whatever trajectory the company is on will continue for two to five years, regardless of whether Steve comes back.”

Still Apple faces increasing competition, especially in the smartphone market, where handsets powered by Google’s Android software recently began outselling the iPhone in the United States. Some analysts said the rise of Android led to Apple’s recent decision to begin offering the iPhone on Verizon Wireless starting next month, ending more than three years of exclusivity on AT&T.

Apple also faces sharper competition in tablet computers. The company’s iPad, introduced last spring, became an instant hit with consumers. But less than a year later, companies like Samsung, Research in Motion and others have introduced or announced a string of credible competitors.

Analysts said that during Mr. Jobs’s 2009 leave, Mr. Cook successfully steered the company as it developed critical products like the iPhone 4 and the iPad.

“Last time, Tim elevated his status with shareholders and employees,” Mr. Sacconaghi said. “The company did very well in Steve’s absence and various constituencies were pleased with that.”

In January 2009, Mr. Jobs went on a medical leave. During the leave Mr. Jobs secretly flew to Tennessee for a liver transplant.

In June 2009, Apple said Mr. Jobs was back at work, and he reappeared in public for the first time in September of that year. While he was energetic and exhibited his unique brand of salesmanship as he unveiled new products during 90-minute event, he continued to look gaunt. Since then, Mr. Jobs has headlined a string of product introductions, including the iPhone 4 and the iPad and a new line of MacBook Air laptops, where he was equally energetic and focused, but still looked frail.

At one such event in July 2010, a reporter asked Mr. Jobs about his health, and he replied, “I’m feeling great.”

In recent months, he has looked increasingly frail, according to people who have seen him.

Dr. Lewis W. Teperman, the director of transplant surgery and vice chairman of surgery at the Langone Medical Center of New York University, said a variety of problems could affect someone with a liver transplant. Dr. Teperman has not been involved in Mr. Jobs’s care and said he had no knowledge of the case.

“It’s very common for transplant patients to have issues that are not life-threatening,” Dr. Teperman said. “We give them very strong, high-powered medications, immunosuppressants, to prevent rejection. It’s a delicate balance, more art than science.”

Side effects from the drugs can make patients ill, and sometimes the regimen has to be changed, a process that can take days and weeks. The side-effects include high blood sugar and diabetes, kidney damage, diarrhea, high blood pressure, high blood fats and cholesterol, rashes and low counts of white blood cells. The drugs leave patients prone to infection.

Rejection of the transplanted liver is also a possibility, but Dr. Teperman said it was extremely rare for a liver transplant to be totally rejected.

The original reason for Mr. Jobs’s transplant was never publicly disclosed. At the time, doctors not involved in his case said the most likely reason was that his pancreatic cancer had spread to his liver. If that was the case, it is possible that cancer has recurred; the anti-rejection drugs can increase the odds of cancer recurrence. A recurrence may be treatable. But so little information has been disclosed that it is impossible to tell, Dr. Teperman said.

“There are lots of bumps in the road with transplantations, and people usually get through them,” he said.


Hotel Chains Offer Hypoallergenic Rooms, for a Price Monday, Jan 10 2011 

Hotel Chains Offer Hypoallergenic Rooms, for a Price

Published: January 10, 2011

Even die-hard road warriors need a comfortable place to recharge after a long day. But for business travelers with allergies, asthma and other sensitivities, hotel rooms can be rife with dust mites, mold, animal dander and other allergens that set off sneezing, itchy eyes, headaches and sleepless nights.

The Fairmont Hotel Vancouver provides hypoallergenic rooms for guests with allergies.

Individual hotels have long accommodated guests by cleaning rooms with special products and processes and washing linens in hot water with no or fragrance-free detergent. They have also offered mattress and pillow protectors, rooms with no carpets and windows that open.

But now, two hotel chains, Hyatt Hotels and Resorts and Fairmont Hotels and Resorts, are taking the service even further by designating permanent allergy-friendly rooms, with things like medical-grade air purifiers and chemical- and fragrance-free bath products.

Jim Strong, co-owner of Strong Travel Services in Dallas, said a colleague who once worked at the St. Regis in New York recounted how over 100 years ago, the hotel replaced draperies with wooden shutters in some rooms for guests with dust allergies. “This type of customer service has been done for years and years and years” all over the world, he said. But in recent years, there has been, he said, “a noticeable increase in requests.”

Thirty-eight percent of hotels offer some kind of allergy-friendly service in guest rooms, a 14 percent increase in the last two years, according to the 2010 Lodging Survey prepared for the American Hotel and Lodging Association by STR, a hotel research company.

The trend toward improving indoor air quality is part of the larger green movement that began with nonsmoking rooms, said Ray Burger, founder of Pineapple Hospitality, which administers a “green” hotel certification program and operates, an online booking site for smoke-free rooms. The Web site plans to add icons soon that will indicate which hotels offer hypoallergenic rooms, and what chemicals are used in cleaning products, paints, sealants and bath products.

Hyatt recently announced plans to create hypoallergenic rooms in all of its full-service hotels in North America. The rooms, which will soon total about 2,000 in 125 properties, cost $20 to $30 extra a night and are intended to eliminate up to 98 percent of allergens and irritants through a six-step process that cleans all surfaces, carpets and fabrics. A medical-grade purifier continuously circulates air, Hyatt said.

We sought “a full-scale solution for guests,” said Tom Smith, vice president of rooms for Hyatt. “This was a market really underserved.”

The number of allergy suffers is believed to have gone up substantially since the late ’70s, said Dr. Darryl Zeldin, senior investigator and acting clinical director of the National Institute of Environmental Health Sciences. Currently, roughly half of Americans are sensitive to at least one common allergen. Different testing methods may account for some of the increase, but better hygiene resulting in less exposure to bacteria is also thought to play a role, Dr. Zeldin said.

Brian Brault, chief executive of Pure Solutions, the company that installs and maintains Hyatt’s hypoallergenic rooms, said more than 200 hotels nationwide, including properties at several major brands, had Pure Solutions rooms, but Hyatt was the first to offer them across its brands. The technology is also being used in some hotel conference centers, he said.

The Fairmont Vancouver Airport hotel has had an entire hypoallergenic floor since 1999, and other Fairmont properties have long provided services to guests with allergies. But the chain is in the final stages of a pilot program for permanent hypoallergenic rooms that it plans to introduce gradually this year.

“We’re looking at the bigger picture,” said Paul Kingsbury, director of housekeeping for the Fairmont Hotel Vancouver. The approach will include featherless duvets and pillows and chemical- and perfume-free bath products, as well as in-room mini bars from which all nuts have been removed and room service meals that cater to various food allergies. All Fairmont chefs have been trained to prepare a vast array of special dietary and allergy-specific meals.

Fairmont’s hypoallergenic rooms will cost about $25 extra a night.

Mr. Kingsbury recalled a patron who had a terrible reaction because she saw, through a small rip in a duvet, some fibers that she mistook for down. The duvet contained no feathers, but “sometimes even the perception of an allergen can be harmful,” he said. “Knowing things are set up properly is a big comfort for the guests.”

Bjorn Hanson, divisional dean of the Tisch Center for Hospitality, Tourism and Sports Management at New York University, said that because more people were being diagnosed with allergies, it made business sense for hotels to provide a greater number of allergy-friendly rooms. But the rooms also have great general appeal.

“There are many people who request special rooms, not because they have allergies but because they believe those rooms will have a higher degree of sanitation and cleanliness,” Mr. Hanson said. “It’s a way for hotels to invest a little bit more for a room but get a premium for both occupancy and rate.”

Mike Piazza, a partner at the law firm Greenberg Traurig in Irvine, Calif., said he did not realize he had allergies until one night on a business trip: “I woke up and I couldn’t breathe.” It turned out he was allergic to down. “I called the front desk to get a foam pillow,” he said. “Then I was fine.”

Lisa Abbott, a marketing consultant for nonprofit groups in Oakland, Calif., who suffers from multiple chemical sensitivities, has learned the benefits firsthand of good air quality in a hotel room.

At home, she rarely takes the morning rush hour train, to avoid “breathing in a soup of fumes and fragrances” from deodorant, after shave, hair products and freshly laundered clothing. Traveling, she said, has “always been dicey.” But she stayed in one of Hyatt’s new rooms on a recent trip to Chicago. “The air is purer,” she said. “I slept great. I felt energized both days of conferences. It has just completely opened up my travel options.”

Facebook investment ‘values firm at $50bn’ Monday, Jan 3 2011 

3 January 2011 Last updated at 19:39 GMT

Facebook investment ‘values firm at $50bn’

Mark Zuckerberg
Facebook’s billionaire founder Mark Zuckerberg has denied there are plans for a flotation

Facebook has reportedly raised funds from Goldman Sachs and a Russian investor in a deal valuing the social networking site at $50bn (£32.3bn).

The New York Times said that Goldman was investing $450m in Facebook, and Digital Sky Technologies another $50m.

The paper, citing unnamed sources, said the terms of the deal implied a value for Facebook of just over $50bn.

Goldman’s involvement could also raise speculation that Facebook might float on the stock market.

The Financial Times also reported that Goldman was investing $375m in Facebook, with Digital Sky putting in $75m.

Cashing inA Facebook spokeswoman told the BBC that the company was not commenting on the New York Times story. Goldman also declined to comment.

If valued at $50bn, Facebook is worth more than eBay and Time Warner.

The fresh investment is expected to be used to fund development of new products and possibly make acquisitions, the New York Times said.

It may also enable Facebook employees and early investors to cash in some of their stakes.

The paper said the Securities and Exchange Commission (SEC) was looking at the growth in the private market for trading in companies like Facebook, Twitter, and LinkedIn.

Regulators are concerned that, with this private market booming, companies are able to circumvent public disclosure requirements.

Further scrutiny by the SEC could help push Facebook towards a public listing, although the company’s founder, Mark Zuckerberg, has denied there are plans for a flotation.

Snow sends a shiver through shops Sunday, Dec 12 2010

Snow sends a shiver through shops

By Andrea Felsted and Andrew Bolger

Published: December 10 2010 19:27 | Last updated: December 10 2010 19:27

Retailers face a nail-biting fortnight in the run-up to Christmas, amid continuing bad weather and impending austerity measures.

“The next two weeks are make or break,” said one senior executive.

Scotland has been in the grip of severe weather conditions, and some store groups fear that a return of snow and ice in other parts of the country could blight the crucial festive trading period.

“Where there has been snow it has affected footfall – there is no question about it,” said the executive.

Another said: “If it drags on . . . a lot of retailers will be seriously nervous.”

Richard Hyman, strategic retail adviser at Deloitte, the professional services group, added: “It’s a bit of a lottery. It all depends on the weather. If this weather carries on, more or less, I think it’s going to be really serious.”

John Lewis, the department store group, said sales rose 1.3 per cent compared with the year before in the week to December 4. In the preceding week, sales were up almost 9 per cent, and some retailers suggested this impact could be reflected elsewhere in the sector.

Waitrose’s sales rose 5 per cent in the week to December 4. They were up 10.6 per cent in the preceding week.

“There is nervousness around the economy and if you are a non-food retailer I think the snow is a real challenge because people have not come out,” said a third executive. “It’s a question of how much of [those sales] will come back.”

The Federation of Small Businesses in Scotland said retailers that relied on passing trade had been particularly badly hit, as had those in outlying areas that struggled to receive deliveries.

Andy Willox, the FSB’s Scottish policy convener, said: “Scotland’s business community, especially in the central belt, has taken a real hit over the past two weeks, and there’s the possibility of more trouble to come.”

Some high street spending has moved online during the bad weather. John Lewis said online sales rose almost 50 per cent year-on-year in the week to December 4.

But Neil Saunders, consulting director of Verdict, estimated that, for every £1 spent on the high street, only about 70p was spent on the internet. “It is a lot of impulse spending that is lost out on. It definitely depletes retail sales,” Mr Saunders said.

Tesco, Britain’s biggest supermarket group by market share, was upbeat on Christmas sales in spite of the weather and uncertainty about the economy. It predicted that lost sales would come back, and that consumer confidence was returning.

John Lewis said it had seen a surge in demand for heaters, wellington boots, children’s coats, gloves and scarves as well as duvets, mattress toppers, hot water bottle covers and electric blankets.

Jason Gordon, of the consultancy Booz & Co, believes the immediate period is crucial. “Retailers have been biting their nails for some time. I think the next seven days will be absolutely pivotal. Once somebody loses their nerve and goes [for significant discounting], there will be a whole stream of people who will have to follow in immediate succession,” he said.

However, PwC, the professional services group, found that retailers appeared to be holding their nerve on discounting.

Some 55 per cent of the 100 high street retailers it surveyed were holding sales or advertising promotions, compared with 60 per cent last year – in spite of an average discount of 39 per cent compared with 37 per cent last year.

Supermarkets are seeking to kick-start spending by stepping up promotions on groceries, according to PwC, with an average of nine of the 20 typical Christmas-related products it tracked appearing on promotion last weekend, compared with eight the weekend before.

Retailers see rise in smartphone shopping Sunday, Dec 5 2010 

Retailers see rise in smartphone shopping

By Jonathan Birchall in New York

Published: November 29 2010 19:50 | Last updated: November 29 2010 19:50

US shoppers equipped with smartphones have significantly increased the volume of both searches and sales made from mobile devices so far this holiday season, underlining the technology’s growing retail power.

Fiona Dias, head of strategy at GSI Commerce, which provides e-commerce services to retailers, said that a survey of a range of retailers showed that sales from mobile devices accounted for almost 3 per cent of their online sales on the Friday and Saturday after the US Thanksgiving holiday last Thursday, compared with “practically zero” last year.

“You are talking about a nine or 10 times increase in penetration … although there’s still a way to go,” she said.

Laura Conrad, president of Pricegrabber, a comparison shopping site owned by Experian, said it had seen a “significant spike” in recent days in the number of people using their mobile phones both for purchases and for research.

“There is more research than buying because people are not completely comfortable making purchases [via this medium] and a lot of retailers still do not have good applications for the mobile phone yet,” she said.

The Find, a search engine that also allows shoppers to compare prices, said roughly a quarter of the searches over the post-Thanksgiving weekend came from mobile devices, up from about 15 per cent a year ago. It said the total number of mobile searches was more than four and a half times greater than the volume seen a year ago.

Ebay, the e-commerce marketplace, also reported that mobile transactions using its PayPal and Bill Me Later payments services more than tripled during the post-Thanksgiving Friday sales, compared with the same day last year. Ebay saw an increase of 27 per cent in total payment transactions over last year’s Black Friday.

Ms Dias said that Rue La La, a luxury flash sales site owned by GSI commerce, had benefited from an unusual surge in mobile usage on the day of the Thanksgiving holiday itself, as its primarily young, female customers used their phones to pursue limited-time sales offers. Mobile devices accounted for 19 per cent of its revenues, up from just 2 per cent of sales a year ago and double the levels seen earlier in the month.

“If you are sitting on your grandma’s couch … then you are really just forced to buy through Rue La La’s mobile site,” she said.

About 28 per cent of US mobile phone subscribers have a smartphone, according to data from The Nielsen Company.

Meanwhile, US retailers on Monday launched a new wave of price cutting offers to mark “cyber-Monday”, the day that sees a surge in online buying from the office as people return to work after the holiday.

Music publisher Chrysalis being sold Sunday, Nov 28 2010 

26 November 2010 Last updated at 10:45 GMT 

Music publisher Chrysalis being sold

David Bowie David Bowie is one of Chrysalis’ clients

UK music publisher Chrysalis Group is being sold for £107.4m.

Chrysalis is being bought by German rival Bertelsmann Media Group (BMG) and private equity firm Kohlberg Kravis Roberts (KKR).

London-based Chrysalis controls the publishing rights to songs by artists including David Bowie and Michael Jackson.

Chrysalis, founded in 1969, used to own a record company of the same name before it was sold to EMI in 1991.

Chris Wright, Chrysalis’ founder, said the deal marked “the end of one era and the start of another” for the firm.

BMG and KKR are buying Chrysalis through a joint venture.

They are paying 160 pence per Chrysalis share, 45.5% higher than the 110p closing price on 29 October, the last trading day before Chrysalis announced that it was in takeover talks.

Chrysalis shares were down 2% to 158.50 pence in Friday trading.

BMG chief executive Martwig Masuch said the deal represented “an important step forward” in his company’s building of a “major, global music rights business”.

Mr Wright added that he was proud of Chrysalis’ “track record”.

‘Harry Potter’ Has $330 Million Debut Weekend Monday, Nov 22 2010 

‘Harry Potter’ Has $330 Million Debut Weekend

LOS ANGELES — The seventh Harry Potter movie opened to a jaw-dropping $330 million in global ticket sales over the weekend, underscoring the magical powers of the Warner Brothers marketing and distribution departments.

Jaap Buitendijk/Warner Brothers Pictures

The first “Deathly Hallows” film made $125 million in North America.

That brawny total easily made “Harry Potter and the Deathly Hallows: Part 1” No. 1 in North America, where the boy wizard generated an estimated $125.1 million. It was the second-biggest domestic opening for the Harry Potter franchise; adjusting for higher ticket prices, “Harry Potter and the Goblet of Fire” sold $127.4 million over its first three days in November 2005.

The strong results for the film, the penultimate in the franchise, reflect the continued popularity of J. K. Rowling’s Harry Potter books, and “Deathly Hallows” also earned strong reviews.

But equally important was a yearlong, full-court press by Warner’s global marketing chief, Sue Kroll, to position “Deathly Hallows” as a must-see event for children and adults alike. The advertising campaign played up the sophisticated, darker elements of the plot. Harry and pals are now grown up, for instance, and the good-versus-evil battle is intensifying as the story line reaches its climax.

The marketing materials also injected some edge into the franchise by taking risks like identifying the film only by the letters “HP7” and splattering posters and billboards with what looked like blood; one poster depicted the Hogwarts castle in flames.

It paid off: about 25 percent of the North American audience for “Deathly Hallows” was in the 18-to-34-year-old demographic, according to Dan Fellman, Warner’s president of domestic distribution. In comparison, about 10 percent of the audience for the first film in the series came from that age bracket. Mr. Fellman noted that “Deathly Hallows” beat “Alice in Wonderland” to become the top opening movie in Imax history.

Imax showings on 239 screens accounted for $12.4 million of the domestic box office and contributed $16.6 million (on 340 screens) of the international gross. At its opening, “Alice” took in $12.1 million domestically from Imax and $15.3 million internationally.

“No other franchise has been able to age and expand the audience this way,” Mr. Fellman said.

Early last week, the first 36 minutes of “Deathly Hallows,” about a quarter of the movie, leaked onto the Internet, prompting a fresh round of hand-wringing about piracy and leading to some worries that the movie’s opening weekend would suffer as a result. Mr. Fellman said that the studio was investigating but that the pirated footage did not appear to hurt the release. (If anything, the news media coverage of the leak helped.)

The Harry Potter series will conclude with the 3-D release of the second half of “Deathly Hallows” on July 15. The franchise, overseen by Alan F. Horn, Warner’s chief operating officer, has generated some $6 billion at the global box office and billions more in DVD, television and merchandise sales.

The success of “Deathly Hallows” underscores just how big a hole Warner, owned by Time Warner, will have to fill once the series ends, box office analysts said.

The weekend was also big for “Tron: Legacy,” the forthcoming Walt Disney Studios release; that picture’s final trailer played before “Deathly Hallows” in a push by Disney to attract the broadest audience possible for the science-fiction adventure, which arrives in theaters on Dec. 17 after three years of marketing.

That pre-Christmas weekend promises to bring one of the more brutal box office battles of the year. Typically, rival studios would steer clear of a release as enormous as “Tron: Legacy.” But “Yogi Bear” (Warner), the James L. Brooks comedy “How Do You Know” (Sony Pictures Entertainment) and “The Fighter” (Paramount Pictures) will all enter the marketplace or expand to wide release on Dec. 17, setting up an intense showdown going into the crucial Christmas holiday.

DreamWorks Animation’s “Megamind” was second at the box office last weekend, selling about $16.2 million in North America in its third week in theaters for a new domestic total of $109.5 million, according to, which compiles ticketing statistics. “Unstoppable,” a thriller about a runaway train, from 20th Century Fox, was third, with $13.1 million in its second week for a new total of about $42 million.

The Warner comedy “Due Date,” in its third week, was fourth with $9.2 million for a new total of $72.7 million.

Cigarette Giants in Global Fight on Tighter Rules AND Graphic images to help US smokers quit Monday, Nov 15 2010 

Cigarette Giants in Global Fight on Tighter Rules

Sigit Pamungkas/Reuters

Workers making cigarettes in East Java in Indonesia. The country has not signed on to the global anti-smoking treaty.

Published: November 13, 2010

As sales to developing nations become ever more important to giant tobacco companies, they are stepping up efforts around the world to fight tough restrictions on the marketing of cigarettes.

Indonesian boys smoke ahead of a soccer match in Jakarta. Indonesia is not a signatory to any global treaty on smoking.

Companies like Philip Morris International and British American Tobacco are contesting limits on ads in Britain, bigger health warnings in South America and higher cigarette taxes in the Philippines and Mexico. They are also spending billions on lobbying and marketing campaigns in Africa and Asia, and in one case provided undisclosed financing for TV commercials in Australia.

The industry has ramped up its efforts in advance of a gathering in Uruguay this week of public health officials from 171 nations, who plan to shape guidelines to enforce a global anti-smoking treaty.

This year, Philip Morris International sued the government of Uruguay, saying its tobacco regulations were excessive. World Health Organization officials say the suit represents an effort by the industry to intimidate the country, as well as other nations attending the conference, that are considering strict marketing requirements for tobacco.

Uruguay’s groundbreaking law mandates that health warnings cover 80 percent of cigarette packages. It also limits each brand, like Marlboro, to one package design, so that alternate designs don’t mislead smokers into believing the products inside are less harmful.

The lawsuit against Uruguay, filed at a World Bank affiliate in Washington, seeks unspecified damages for lost profits.

“They’re using litigation to threaten low- and middle-income countries,” says Dr. Douglas Bettcher, head of the W.H.O.’s Tobacco Free Initiative. Uruguay’s gross domestic product is half the size of the company’s $66 billion in annual sales.

Peter Nixon, a vice president and spokesman for Philip Morris International, said the company was complying with every nation’s marketing laws while selling a lawful product for adult consumers.

He said the company’s lawsuits were intended to combat what it felt were “excessive” regulations, and to protect its trademark and commercial property rights.

Cigarette companies are aggressively recruiting new customers in developing nations, Dr. Bettcher said, to replace those who are quitting or dying in the United States and Europe, where smoking rates have fallen precipitously. Worldwide cigarette sales are rising 2 percent a year.

But the number of countries adopting tougher rules, as well as the global treaty, underscore the breadth of the battleground between tobacco and public health interests in legal and political arenas from Latin America to Africa to Asia.

The cigarette companies work together to fight some strict policies and go their separate ways on others. For instance, Philip Morris USA, a division of Altria Group, helped negotiate and supported the anti-smoking legislation passed by Congress last year and did not join a lawsuit filed by R. J. Reynolds, Lorillard and other tobacco companies against the Food and Drug Administration. So far, it is not protesting the agency’s new rules, proposed last week, requiring graphic images with health warnings on cigarette packs.

But Philip Morris International, the separate company spun out of Altria in 2008 to expand the company’s presence in foreign markets, has been especially aggressive in fighting new restrictions overseas.

It has not only sued Uruguay, but also Brazil, arguing that images the government wants to put on cigarette packages do not accurately depict the health effects of smoking and “vilify” tobacco companies. The pictures depict more grotesque health effects than the smaller labels recommended in the United States, including one showing a fetus with the warning that smoking can cause spontaneous abortion.

In Ireland and Norway, Philip Morris subsidiaries are suing over prohibitions on store displays.

In Australia, where the government announced a plan that would require cigarettes to be in plain brown or white packaging to make them less attractive to buyers, a Philip Morris official directed an opposition media campaign during the federal elections last summer, according to documents obtained by an Australian television program, and later obtained by The New York Times.

The $5 million campaign, purporting to come from small store owners, was also partly financed by British American and Imperial Tobacco. The Philip Morris official approved strategies, budgets, ad buys and media interviews, according to the documents.

Mr. Nixon, the spokesman, said Philip Morris made no secret of its financing of that effort. “We have helped them, not controlled them,” he said.

Mr. Nixon said Philip Morris agreed that smoking was harmful and supported “reasonable” regulations where none exist.

“The packages definitely need health warnings, but they’ve got to be a reasonable size,” he said. “We thought 50 percent was reasonable. Once you take it up to 80 percent, there’s no space for trademarks to be shown. We thought that was going too far.”

These days in courts around the world, the tobacco giants find themselves on the defensive far more than playing offense. The W.H.O. and its treaty encourage governments and individuals to take legal action against cigarette corporations, which have encountered growing numbers of lawsuits from smokers and health care systems in Brazil, Canada, Israel, Italy, Nigeria, Poland and Turkey.

But in other parts of the world, notably Indonesia, the fifth-largest cigarette market, which has little regulation, tobacco companies market their products in ways that are prohibited elsewhere. In Indonesia, cigarette ads run on TV and before movies; billboards dot the highways; companies appeal to children through concerts and sports events; cartoon characters adorn packages; and stores sell to children.

Officials in Indonesia say they depend on tobacco jobs, as well as revenue from excise taxes on cigarettes. Indonesia gets some $2.5 billion a year from Philip Morris International alone.

“In the U.S., they took down billboards, agreed not to sponsor music events, no longer use the Marlboro cowboy,” said Matthew L. Myers, president of the Washington-based Campaign for Tobacco-Free Kids. “They now do all of those things overseas.”

The world’s second-biggest private cigarette maker, British American Tobacco, with $4.4 billion profits on $23 billion sales in the year ending June 30, is spending millions of dollars lobbying against anti-smoking health measures, like smoke-free air policies in the European Union.

A video on the company’s Web site says some of the proven methods of reducing smoking — like taxes and display bans — encourage a black market in cigarettes and that, in turn, would finance drug, sex and weapons traffickers and terrorists.

The six-minute video, in which actors play gangsters, one with an Eastern European accent, concludes, “Only the criminals benefit.”

The conference beginning on Monday in Punta del Este, Uruguay, will try to add specific terms to a public health treaty known as the Framework Convention on Tobacco Control, which since 2003 has been ratified by 171 nations. It would eventually oblige its parties to impose tighter controls on tobacco ingredients, packaging and marketing, expand cessation programs and smoke-free spaces and raise taxes — proven tactics against smoking.

President George W. Bush signed the treaty in 2004 but did not send it to the Senate, where a two-thirds vote is needed for ratification. President Obama hopes to submit it to the Senate next year, a White House spokesman said on Thursday.

One recommendation drawing fire from tobacco farmers would either restrict or prohibit the use of popular additives, like licorice and chocolate, to blended tobacco products that account for more than half of worldwide sales.

The International Tobacco Growers’ Association says that could threaten the makers of burley tobacco, an air-cured leaf that has long been sweetened with additives, costing millions of farmers their jobs and devastating economies worldwide.

“We all know the real objective here is to eliminate tobacco consumption,” says Roger Quarles, a Kentucky grower and president of the association.

Aubrey Belford contributed reporting.

This article has been revised to reflect the following correction:

Correction: November 14, 2010

An earlier version of this article made an incorrect reference to Uruguay’s gross domestic profit rather than its gross domestic product.


Graphic images to help US smokers quit

By Stephanie Kirchgaessner in Washington

Published: November 10 2010 19:16 | Last updated: November 10 2010 19:16

Cigarette smokers in the US will be subjected to graphic reminders of the ill effects of the habit – including images on cigarette packs of a corpse in the morgue and a cancer patient in hospital – as part of a strategy by the Obama administration to get people to quit.

A proposal unveiled on Wednesday would require tobacco companies to include one of nine new graphic images and warning statements on cigarette packs. The administration said the move represented the most significant change to hit cigarette advertising in 25 years.

“When the rule takes effect, the health consequences of smoking will be obvious every time someone picks up a pack of cigarettes,” said Margaret Hamburg, the top commissioner at the Food and Drug Administration.

Dr Hamburg said the proposal was a “concrete example” of how the FDA’s new oversight of the tobacco industry, mandated by a law passed in 2009, would benefit public health.

Research has shown graphic images are “very effective” in anti-smoking campaigns, according to Lois Biener, a senior research fellow at the University of Massachusetts’ Center for Survey Research.

Ms Biener said a similar Canadian programme showed that, even when individuals sought to cover up the warnings by keeping their cigarettes in cases, for example, they were still more motivated to quit than people not exposed to graphic images. Research showed that the most effective images were also the most graphic and disturbing.

The FDA appears to have kept that in mind in designing some of the proposed labels. Other images in contention include two sets of lungs – one healthy and pink and another ravaged by smoking – as well as a stark image of man lying in an open coffin next to the words “Smoking can kill you”. Under US law, cigarette makers have to include written warning labels on cigarette packs, but not graphic images.

Philip Morris, the cigarette maker, said it supported several initiatives cited by the Health and Human Services Department regarding tobacco and planned to “actively participate” in the FDA’s packaging proposal.

The public has been invited to post comments about 36 proposed images, nine of which will be chosen by the FDA in June and implemented in September 2012.

UK remains a target for world’s retailers Monday, Nov 15 2010 

UK remains a target for world’s retailers

By Andrea Felsted, Retail Correspondent

Published: November 15 2010 01:59 | Last updated: November 15 2010 01:59

The UK is set to remain a target market for overseas retailers, as store groups ramp up their expansion plans in Europe, the Middle East and Africa amid increasing confidence, according to a property consultancy.

CB Richard Ellis (an investment management company, also known as CBRE) said confidence had returned to retailers in the EMEA region, with more groups intending to extend their store networks next year.

It found that 77 per cent of the retailers surveyed were planning to open more than five stores in the EMEA region by the end of next year. This is a significant increase from 12 months ago, when half of the retailers intended to open less than five stores this year.

More than half of the retailers surveyed intended to open between one and 20 stores, with the average at about 30 stores.

“Intentions are much greater for 2011 than they were for 2010,” said Peter Gold, head of cross-border retail, EMEA, at CBRE.

The supermarket sector is set to be the most active, followed by coffee and restaurant chains, as well as the value and denim fashion sector.

CBRE found that 28 per cent of mid-range fashion retailers are aiming to open 30 or more stores in 2011, higher than the 16 per cent reported a year earlier.

Germany is the most popular country for expansion given its populous cities. Retailers are also eyeing Poland, France and Spain, where property is more affordable.

The UK is the fifth most popular market, with 29 per cent of the retailers surveyed targeting the country.

A number of overseas retailers, including Coach, the US handbag and accessories retailer, Victoria’s Secret, the lingerie chain, and young fashion groups Forever 21, and Vero Moda are expanding in the UK.

Mr Gold said overseas retailers used the UK as a “stepping stone to broader international [expansion]”. A presence in the UK also provided retailers with “international credibility”. “Everyone has a plan for the UK,” he added.

However, retailers are also eyeing emerging EMEA markets, which accounted for more than half of the top 20 target cities.

CBRE found that retailers preferred to consolidate and expand into new cities in countries where they already have a presence, instead of entering new markets.

Return of the hourglass look Sunday, Oct 24 2010 

Return of the hourglass look

By Dana Thomas

Published: October 22 2010 23:06 | Last updated: October 22 2010 23:06

A fashion show presenting gowns
Designs by, from left, Louis Vuitton, Oscar de la Renta, Jason Wu and Prada

First lady Michelle Obama, the “most powerful woman in the world,” according to Forbes magazine, is back on the campaign trail, stumping for Democrats in next month’s midterm elections, trying to weave a little anti-Tea Party magic while demonstrating stylistic consistency.

In fashion terms, she’s firmly in the 1950s, hourglass, curve-celebrating camp – and she’s not the only one. This autumn, everyone including Michael Kors, Miuccia Prada, Marc Jacobs at Louis Vuitton, and Jason Wu, have revived Christian Dior’s postwar New Look for a new decade. It is, says Ikram Goldman of Ikram, the influential Chicago boutique, “a fashion moment”. The question is why or, more specifically, why now?

Ken Downing, fashion director at department store Neiman Marcus, says: “In a challenged economy, designers want to make clothes that create desire, that make women want to shop. Women want something that they do not have in their closet – something opposed to the straight up-and-down figures we’ve seen for years. Clothes that celebrate the woman’s shape do that.”

Of course, it’s not really a new look and it wasn’t even in the 1950s. When Christian Dior introduced his wasp-waist styles at his debut show in Paris in February 1947, he was simply refashioning the corseted gowns that his mother wore before world war one – a silhouette that had dominated women’s dressing for centuries. With its masses of fabric, clusters of beaded embroidery and sexy line, what Harper’s Bazaar editor Carmel Snow dubbed “the New Look” has long been hailed by fashion historians as a giddy response to the austere war years.

While the New Look eventually gave way to freer silhouettes such as the trapeze and the mini-skirt, the idea that a woman should show off her curves instead of hiding them became a permanent element in fashion design, and a trademark of designers such as Dolce & Gabbana, Roland Mouret and Azzedine Alaïa.

But now many young designers are also discovering the beauty of the 1950s and mining it for ideas. American designer Jason Wu, whose autumn/winter collection is heavily wasp-waisted, says: “I was influenced by Irving Penn’s incredible portraits and personal style as well as the majesty and craftsmanship of classic couture.” Similarly, Erdem Moralioglu, designer for the London-based fashion company Erdem, also embraced the silhouette. He says he loved the innocence of “girls in skirts and their boyfriends’ sweaters with the waist cinched in”.

Part of the reason for the prevalence of the hourglass shape is surgical: the extreme body reconstruction many women have been undergoing, with breast and bottom augmentation, alongside hours of Pilates and yoga, has created a figure as contrived and Barbie-like as bullet bras and waist cinchers (or “waspies”) did 60 years ago. “Just look at Victoria Beckham,” says Ed Burstell, managing director of Liberty, London. “She is the hourglass girl.”

And, lest we forget, there’s the influence of Mad Men, the television series about a Madison Avenue advertising firm in the early 1960s. “We are all captivated by the glamour and style of the programme,” says Marigay McKee, fashion and beauty director at Harrods. “Grown-up, ladylike elegance is cool, and it exudes sophistication, confidence and presence.” Burstell says: “The Mad Men girls are all over the red carpet wearing the look, particularly Christina Hendricks.”

But ultimately, like most decisions in fashion today, the return of the New Look comes down to a cold-hearted business strategy. Burstell says: “There always has to be a new reason to buy and shop: the length goes up, the length goes down, the shoulders are padded, then they’re soft, street athleticism turns into curvy fabulous fashion.” The new New Look, by being the direct opposite of what Holli Rogers, buying director for, describes as “the fierce aesthetic of previous seasons”, does just that.

How long will this moment last? Judging by the spring/summer catwalk shows during the past few weeks in New York, Paris and London, just about that: a moment. Come spring, retailers will replace the 1950s hourglass dresses with tailored 1970s Yves Saint Laurent-style trouser suits, which will make everything in your closet look hopelessly out of date again. “Designers want to sell,” Downing shrugs. “That’s what we are in the business to do.”

Dana Thomas is the author of ‘Deluxe: How Luxury Lost Its Lustre’ (Penguin)

Copyright The Financial Times Limited 2010.

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