:00:00. > :00:19.Big tobacco vs. the European Court of Justice
:00:20. > :00:27.the size of cigarette packs, warning labels and a ban of menthol.
:00:28. > :00:30.And there's no business like showbusiness to win votes.
:00:31. > :00:33.Rico's been taking a look at election spending
:00:34. > :00:46.Welcome to World Business Report. I'm Sally Bundock.
:00:47. > :00:49.Also in the programme we'll hear how the budget is being received
:00:50. > :00:55.in Australia with an election just a few months away.
:00:56. > :00:58.Today is an important day for Big Tobacco as firms like
:00:59. > :01:00.Philip Morris, BAT and Imperial Tobacco find out the results
:01:01. > :01:04.of their challenge to the European Union's Tobacco Products Directive.
:01:05. > :01:06.The new rules, voted on last year, included a ban
:01:07. > :01:09.on flavoured cigarettes, a ban on so called "lipstick-style" packs
:01:10. > :01:13.aimed at women and the requirement for 65 percent of each packet sold
:01:14. > :01:19.The EU says it's necessary to reach the goal of reducing the number
:01:20. > :01:24.of smokers in Europe by 2.4 million which is estimated to be costing
:01:25. > :01:32.With me is Martin Deboo, Consumer goods analyst at
:01:33. > :01:50.What do you think, what is the likely outcome? History tells us
:01:51. > :02:02.tobacco firms did not get what they want. Moves to prohibit tobacco have
:02:03. > :02:10.generally been successful and legal challenges generally fail. The
:02:11. > :02:19.proposal that these be adopted is that, like personal view, it will
:02:20. > :02:27.stay. How big blow for the company 's? I of the view that it is not big
:02:28. > :02:33.blow to the big tobacco but it will be to the small tobacco industry.
:02:34. > :02:39.They will face more stringent compliance to get their products on
:02:40. > :02:44.sale. It will be difficult for small manufacturers. You will see
:02:45. > :02:54.rationalisation of E cigarettes and big share going to large tobacco.
:02:55. > :03:01.What impact would this have on the number of smokers in Europe? The EU
:03:02. > :03:08.say their aim is to reduce them by millions. I am not convinced. In my
:03:09. > :03:15.experience, the deterrence to smoking is the price of the pack
:03:16. > :03:22.which is the function of attacks or levy on them. The evidence and
:03:23. > :03:29.graphic images, smoking in public places is very equivocal, including
:03:30. > :03:34.plain packages. The early signs are mixed as to whether any of these
:03:35. > :03:40.things have much of an effect on consumption. How are the big
:03:41. > :03:44.companies faring? There are measures taken to prevent people from smoking
:03:45. > :03:52.but they seem to be doing very well? That is the paradox. If you
:03:53. > :03:57.read consumer papers, you would think they are doing badly but they
:03:58. > :04:03.are doing well. From the stock market perspective, they are doing
:04:04. > :04:12.great. The European market has recovered. These companies are able
:04:13. > :04:18.to increase profits. Stronger dividend players in the stock
:04:19. > :04:19.market, good investment. When we get news from the European Court of
:04:20. > :04:22.Justice we will update you. Cigarettes is a big talking point
:04:23. > :04:25.in Australia as well. Monday's budget contained big rises
:04:26. > :04:27.in tobacco taxes in a country that already has some of the highest
:04:28. > :04:30.cigarette prices in the world. But that was not all -
:04:31. > :04:34.there are plans to spend more on infrastructure, income-tax relief
:04:35. > :04:39.and cut corporate taxes, meaning the deficit may widen to $28 billion
:04:40. > :04:56.during the next fiscal year. The day after the budget,
:04:57. > :05:01.Australians in the centre of Sydney, digestive venues, trying to work out
:05:02. > :05:10.whether they are going to be better or worse, you would not expect there
:05:11. > :05:14.to be too much bad news and if there is, it is expected to be hidden. Tax
:05:15. > :05:20.cuts for middle income earners and small businesses. Big infrastructure
:05:21. > :05:25.plans. Crack down on tax avoidance by big international companies. The
:05:26. > :05:31.bottomline that the Australian economy is not doing great. It is
:05:32. > :05:36.not on life support but it is pretty sickly. The Reserve Bank of
:05:37. > :05:41.Australia cut interest rates yesterday, to try and stimulate
:05:42. > :05:43.things. The problem for the government is that it has been
:05:44. > :05:49.extremely difficult to cut the deficit and cut spending largely
:05:50. > :05:54.because of global markets and particular commodity markets that I
:05:55. > :05:58.all, coal - prices have slumped and it has made it extremely difficult
:05:59. > :06:12.for the government to balance the books. -- eye iron ore. It might not
:06:13. > :06:17.be able to do anything unless global markets change. It was steady hand
:06:18. > :06:24.the Treasurer, Scott are sent. The only shop, massive rise in the price
:06:25. > :06:28.of cigarettes. Already cigarettes here are monks of the most expensive
:06:29. > :06:36.in the world and they will double in price over the next three -4 years,
:06:37. > :06:41.around 40 US dollars packet. Pretty good time to quit.
:06:42. > :06:43.The Philippine economy is expected to outperform many of its neighbours
:06:44. > :06:49.Part of that is due to rising employment, higher wages and
:06:50. > :06:55.And the money being spent on next week's general election is
:06:56. > :06:59.so huge it will also prove to be a big factor.
:07:00. > :07:15.Rico Hizon was just in Manila to find out who is cashing in.
:07:16. > :07:24.I would like to be brutally honest with you guys. He does
:07:25. > :07:30.impersonations, the likes of Tony Bennett, Elvis Presley, and Frank
:07:31. > :07:35.Sinatra. But in an election year, presidential candidates become great
:07:36. > :07:44.material and great draw for audiences. It used to be that way.
:07:45. > :07:48.We laughed at the comedians and listened to the politicians but now
:07:49. > :07:56.it is different. You can laugh at them with all your heart in my show
:07:57. > :08:02.because they are the target. It is not the only show in town. Rallies
:08:03. > :08:10.draw great crowds partly because of supporters but also because of side
:08:11. > :08:19.attractions. Consumers and media sectors gain the most, some say,
:08:20. > :08:25.giving away freebies, food, and this is why elections are good for the
:08:26. > :08:34.local economy. In the middle of Raleigh, a lot of people buying
:08:35. > :08:39.food, drinks, record companies producing music, fly years.
:08:40. > :08:45.Filipinos always love good show and here, show business is good
:08:46. > :08:48.business. This actress should do. She has been asked to endorse
:08:49. > :08:54.candidates this year but chose not to. Politicians are certain
:08:55. > :09:00.celebrities because they know these celebrities have big reach. They
:09:01. > :09:06.have big number of fan base, big number of followers. Mostly the
:09:07. > :09:16.masses. Popular young celebrities are being paid $1 million for such
:09:17. > :09:23.an endorsement. In country were an actor can become president and
:09:24. > :09:31.someone who can trade sit in the Senate, it is no surprise that show
:09:32. > :09:42.business and real business often come blurred. That is where he has
:09:43. > :09:47.been. Looking at the markets. Traders in Tokyo relieved the market
:09:48. > :09:54.is now close. Another day of decline. The price of oil slipping
:09:55. > :10:03.as well. I will see you send. A new crackdown on misleading
:10:04. > :10:06.broadband adverts has been unveiled. The Advertising Standards Authority
:10:07. > :10:08.says it will tighten the rules on broadband price deals after
:10:09. > :10:15.research showing consumers don't Here's our tech correspondent
:10:16. > :10:21.Rory Cellan-Jones