JTI USA Corporate Affairs & Communications Small Manufacturer Perspective Federation of Tax Administrators August 19, 2014
Introduction to JTI FTA Importation & Anti-Illicit Trade 2
Our goal is clear: To be the most successful and respected tobacco company in the world. We do this by always improving to satisfy the needs of our consumers, being open with the people and communities we work with, and setting the highest possible standards. Copyright JTI 2013 FTA Importation & Anti-Illicit Trade 3
The JT Group Our parent company Date of establishment: April 1, 1985 President and CEO: Mitsuomi Koizumi Operates in Japan s domestic tobacco market, as well as in beverages, seasonings, processed foods and pharmaceutical businesses Is a global Fortune 500 company 48,759 employees globally, including JTI 33.3% owned by the Japanese government, making it the largest shareholder Copyright JTI 2013 FTA Importation & Anti-Illicit Trade 4
JTI today Global Snapshot JTI is the JT Group s international tobacco business We employ people in 73 countries around the world We are a leading international tobacco product company created in 1999 The Company s core revenue is USD 11,817 million 2 27,000 1 employees 95 offices 25 factories 6 research & development centers 5 tobacco processing facilities 1 As of March 2013 2 Jan-Dec 2012 Copyright JTI 2013 FTA Importation & Anti-Illicit Trade 5
Our Global Flagship Brands Sold in 120 countries with a portfolio strongly represented across most price segments Engine brands (outside of the United States) Stronghold brands (outside of the United States) * * Mevius will be rolled out over the course of 2013 Prestige brands (outside of the United States) Copyright JTI 2012 FTA Importation & Anti-Illicit Trade 6
JTI in the United States US Leaf & Cigarette Business JT International U.S.A., Inc. 122 employees HQ in Teaneck, NJ Founded in 1986 JT International Leaf Services LLC 200+ full-time & seasonal employees $150 million in Burley & Virginia leaf Purchases from contract growers in KY, NC, OH, PA, TN & VA Copyright JTI 2012 FTA Importation & Anti-Illicit Trade 7
JT International U.S.A., Inc. US Tobacco Business Introducing Nakhla Hookah Tobacco 1993: Wave launched 2001: JTI USA HQ relocated to New Jersey 2009: JTI celebrates 10 years of growth & success since the RJR-Int. acquisition President Obama signs the Family Smoking Prevention & Tobacco Control Act 2013: JTI begins its engagement with FTA 1986: JTI USA established in California as a subsidiarity Japan Tobacco 1999: Joined MSA JT acquires RJ Reynolds non-us tobacco business Export A launched in the US market 2007: JTI acquires Gallaher Tobacco 2010: WINGS launched Copyright JTI 2012 FTA Importation & Anti-Illicit Trade 8
Being A Small Manufacturer in the United States FTA Importation & Anti-Illicit Trade 9
Tobacco Compliance Mosaic of Compliance and Reporting Checkpoints FDA Submissions Compliance Licensing & Permitting Federal State Local Taxes Federal State Local MSA Registrations Certifications LIP/FSC ATF Registration State Local Copyright JTI 2013 FTA Importation & Anti-Illicit Trade 10
Impact Time, Money and Resources Staffing Compliance Costs Managing Complexity Finite Resources Copyright JTI 2013 FTA Importation & Anti-Illicit Trade 11
Common Concerns FTA Importation & Anti-Illicit Trade 12
Impact Responsible Stakeholders & Government Have Similar Interests Illegal Tobacco Trade Government Industry Lost revenue Enforcement costs Organized crime Supply chain security Lost profits to illegal operators Customer concerns Burden Government Industry Managing inflow of data from taxpayers Adapting to new statutory requirements Budgetary constraints vs expectations Getting it right Allocating compliance resources Integrating compliance into business Copyright JTI 2013 FTA Importation & Anti-Illicit Trade 13
Solutions FTA Importation & Anti-Illicit Trade 14
Making It Work How Can We Work Together Cooperation between government and stakeholders is key to understanding the issues we each face living within the operating environment with which we all must cope E-Solutions must be open and operable Consolidation of reporting requirements lowers the burden for all stakeholders now and in times of future statutory change Copyright JTI 2013 FTA Importation & Anti-Illicit Trade 15
Enterprising Open Challenging