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Physicians WEIGHT LOSS Centers® ©1990 Copyright Physicians WEIGHT LOSS Centers of America, Inc., Akron, Ohio 44313 DAVID BIBER ASK ABOUT THE NEW LEASE PROGRAMS THAT HAVE BEEN CREATED by DAVID BIBER "The Cadillac Man" (313) 642-9087 ❑ Luxury Car Locater ❑ Roadside Service ❑ Pick Up and Drop Off edans FINEST PERSONAL SERVICE Ask My Customers (313) 644.1930 PERSONAL ATTENTION FREE Municipal Bonds Listing TO CORPORATE Receive Weekly Report GIFT SOLUTIONS • Unique Gifts For All Ages co LL THAT • PERSONALIZED TOUCH I. JULES R. SCI-TUBOT CORPORATE DIVISION 3001 W. Big Beaver Road, Suite 123 • Troy MI 48084 3 1 3 - 6 4 9 - 1 1 1 1 52 FRIDAY, JULY 27, 1990 . Customized Imprinting Always 20% OFF! g Napkins, Guest Towels, Place Cards Cake Boxes and Matches. it o- , Foe 3 GO • Bev and Sue 661-0177 0 e Invitations For All Occasions • fifty-year-old monoplies are not easily broken. Yet for a brief period earlier this year the Israeli consumer had a choice of which locally-made cigarette to buy. The preference was as short-lived as Forum lights, the American-blend cigarette Haifa-born entrepreneur Ami Hister put on the market. After much fanfare and a small fortune in a public rela- tions blitz, Forum was a marketing failure, the com- pany, Potomac TDbacco Israel Ltd. was a financial disaster, and the entire episode is now being investigated by the State Comptroller (Om- budsman) for possible govern- ment mismanagement. When Hister applied to Israel's Ministry of Industry and Trade in the summer of 1987 to establish a factory in northern Israel he claimed that the raw tobacco was go- ing to be imported from Potomac Tobacco (U.S.) Ltd., which was 90 percent owned by Reemstma, West Gar- many's largest cigarette maker. His overall strategy was to take a high quality raw material and use relatively cheap Israeli labor to manufacture the finished product. On that basis the Ministry of Industry and Trade gave Potomac Israel a $1.2 million grant to establish production facilities in Safed. The U.S. company invested an addi- tional $2 million and a fur- ther $1.2 million came from a consortium of Israeli banks. Hister claimed that Forum would capture between 5-7 percent of Israel's cigarette market (valued at $340 million, $100 million of which is imported) in its first year. In business for only 60 days, his new brand seized no more than a paltry 1.8 percent marketshare. Like many manufacturers which enter a market with a new product, initial start-up expenses were woefully underestimated. Hister thought he would simply hook-up with Dubek's wholesalers and distributors. When he realized that Dubek's business was more important to these concerns than an upstart, he had to establish his own distribution channel of 30 suppliers and offered commissions of only 4.5 percent. The firm's pockets weren't deep enough to finance such an aggressive undertaking as instead the company's debts climbed to $4.5 million. In mid February when income, customs and purchase tax weren't paid, the authorities impounded the firm's delivery vehicles from its Petah Tikva's warehouse. Hister left Israel shortly after. His secretary claimed he had gone abroad to search for new investment sources; he hasn't been heard from since. His debt to the pur- chase tax department alone is enough to prevent his immi- nent return to Israel. Representatives of his West German partners told a press conference in Tel Aviv that Hister's lack of business acumen caused the venture's downfall. While a few foreign companies and Dubek were reportedly to be initially in- terested in Reemstma's 68 percent share in the company, no deals have yet been reached. A new Israeli cigarette was a marketing and financial disaster. In early March after the com- pany had gone into tempo- rary receivership and the de- tails of its financial position were released to potential buyers, it was reported that Hister might have misled the Ministry of Industry and Trade by stating he would be importing equipment from the U.S. when in fact much of it came from the West German-based Reemstma Ld. A five-year agreement was signed with Reemstma, West Germany, to buy tobacco at a price which was significantly higher than what could be ob- tained elsewhere. Originally, Hister told Ministry of In- dustry and Trade officials he would acquire the raw materials from Potomac Ibbacco (U.S.) Ltd. The State Comptroller is trying to determine if in fact any cigarettes at all were manufactured in the plant but merely brought in from West Germany and packaged in Safed. It is also demanding to know why the Ministry of In- dustry and Trade recom- mended to the Israel Invest- ment Authority to offer a $1.2 million cash grant to Hister if in fact the company had lit-