04/05/2016 World Business Report

Big tobacco vs. the European Court of Justice

the size of cigarette packs, warning labels and a ban of menthol.

And there's no business like showbusiness to win votes.

Rico's been taking a look at election spending

Welcome to World Business Report. I'm Sally Bundock.

Also in the programme we'll hear how the budget is being received

in Australia with an election just a few months away.

Today is an important day for Big Tobacco as firms like

Philip Morris, BAT and Imperial Tobacco find out the results

of their challenge to the European Union's Tobacco Products Directive.

The new rules, voted on last year, included a ban

on flavoured cigarettes, a ban on so called "lipstick-style" packs

aimed at women and the requirement for 65 percent of each packet sold

The EU says it's necessary to reach the goal of reducing the number

of smokers in Europe by 2.4 million which is estimated to be costing

With me is Martin Deboo, Consumer goods analyst at

What do you think, what is the likely outcome? History tells us

tobacco firms did not get what they want. Moves to prohibit tobacco have

generally been successful and legal challenges generally fail. The

proposal that these be adopted is that, like personal view, it will

stay. How big blow for the company 's? I of the view that it is not big

blow to the big tobacco but it will be to the small tobacco industry.

They will face more stringent compliance to get their products on

sale. It will be difficult for small manufacturers. You will see

rationalisation of E cigarettes and big share going to large tobacco.

What impact would this have on the number of smokers in Europe? The EU

say their aim is to reduce them by millions. I am not convinced. In my

experience, the deterrence to smoking is the price of the pack

which is the function of attacks or levy on them. The evidence and

graphic images, smoking in public places is very equivocal, including

plain packages. The early signs are mixed as to whether any of these

things have much of an effect on consumption. How are the big

companies faring? There are measures taken to prevent people from smoking

but they seem to be doing very well? That is the paradox. If you

read consumer papers, you would think they are doing badly but they

are doing well. From the stock market perspective, they are doing

great. The European market has recovered. These companies are able

to increase profits. Stronger dividend players in the stock

market, good investment. When we get news from the European Court of

Justice we will update you. Cigarettes is a big talking point

in Australia as well. Monday's budget contained big rises

in tobacco taxes in a country that already has some of the highest

cigarette prices in the world. But that was not all -

there are plans to spend more on infrastructure, income-tax relief

and cut corporate taxes, meaning the deficit may widen to $28 billion

during the next fiscal year. The day after the budget,

Australians in the centre of Sydney, digestive venues, trying to work out

whether they are going to be better or worse, you would not expect there

to be too much bad news and if there is, it is expected to be hidden. Tax

cuts for middle income earners and small businesses. Big infrastructure

plans. Crack down on tax avoidance by big international companies. The

bottomline that the Australian economy is not doing great. It is

not on life support but it is pretty sickly. The Reserve Bank of

Australia cut interest rates yesterday, to try and stimulate

things. The problem for the government is that it has been

extremely difficult to cut the deficit and cut spending largely

because of global markets and particular commodity markets that I

all, coal - prices have slumped and it has made it extremely difficult

for the government to balance the books. -- eye iron ore. It might not

be able to do anything unless global markets change. It was steady hand

the Treasurer, Scott are sent. The only shop, massive rise in the price

of cigarettes. Already cigarettes here are monks of the most expensive

in the world and they will double in price over the next three -4 years,

around 40 US dollars packet. Pretty good time to quit.

The Philippine economy is expected to outperform many of its neighbours

Part of that is due to rising employment, higher wages and

And the money being spent on next week's general election is

so huge it will also prove to be a big factor.

Rico Hizon was just in Manila to find out who is cashing in.

I would like to be brutally honest with you guys. He does

impersonations, the likes of Tony Bennett, Elvis Presley, and Frank

Sinatra. But in an election year, presidential candidates become great

material and great draw for audiences. It used to be that way.

We laughed at the comedians and listened to the politicians but now

it is different. You can laugh at them with all your heart in my show

because they are the target. It is not the only show in town. Rallies

draw great crowds partly because of supporters but also because of side

attractions. Consumers and media sectors gain the most, some say,

giving away freebies, food, and this is why elections are good for the

local economy. In the middle of Raleigh, a lot of people buying

food, drinks, record companies producing music, fly years.

Filipinos always love good show and here, show business is good

business. This actress should do. She has been asked to endorse

candidates this year but chose not to. Politicians are certain

celebrities because they know these celebrities have big reach. They

have big number of fan base, big number of followers. Mostly the

masses. Popular young celebrities are being paid $1 million for such

an endorsement. In country were an actor can become president and

someone who can trade sit in the Senate, it is no surprise that show

business and real business often come blurred. That is where he has

been. Looking at the markets. Traders in Tokyo relieved the market

is now close. Another day of decline. The price of oil slipping

as well. I will see you send. A new crackdown on misleading

broadband adverts has been unveiled. The Advertising Standards Authority

says it will tighten the rules on broadband price deals after

research showing consumers don't Here's our tech correspondent

Rory Cellan-Jones