2023 - Tobacco Reporter

Minnesota Settles Juul Lawsuit

Minnesota has settled its legal case against Juul Labs and Altria Group for deceptively marketing e-cigarettes. The terms of the deal will be kept confidential until formal papers are publicly filed with the court.

“After three weeks of trial highlighting and bringing into the public record the actions that Juul and Altria took that contributed to the youth vaping epidemic, we reached a settlement in the best interest of Minnesotans,” said Attorney General Keith Ellison in a statement.

“We followed in the footsteps of former Attorney General Skip Humphrey, who led the historic 1998 tobacco trial in Minnesota. Once again, Minnesota has demonstrated leadership in taking these cases head on, including going to trial to hold tobacco companies accountable, protect our community’s health and protect our kids. One of my goals in bringing this case was to send a message: We will not tolerate youth marketing of nicotine products in Minnesota,” said Ellison.

Minnesota’s deal comes less than a week after Juul Labs agreed to pay $462 million to settle similar claims brought by New York, California, Colorado, Illinois, Massachusetts, New Mexico and the District of Columbia.

Of the more than a dozen states and hundreds of local governments that have sued Juul, Minnesota was the first to go to trial. Filed in 2019, the state’s lawsuit alleges that Juul developed sleek devices and flavors that were appealing to youth and that Juul’s marketing deceptively attracted and addicted young people. In 2020, Minnesota amended its complaint to include Altria as a defendant: In 2018, Altria spent $12.8 billion to acquire a 35 percent share in Juul.

In a statement, Juul Labs stressed the importance of resolving legal challenges from the company’s past. “We are pleased to have reached a settlement with the state and will work to finalize this agreement over the coming weeks,” the company wrote.

Juul Labs has now settled with 48 states and territories, providing over $1 billion to participating states to further combat underage vaping and develop cessation programs. In addition, the company has resolved private litigation that covers more than 5,000 cases brought by approximately 10,000 plaintiffs.

“As we reach total resolution of the company’s past, we are focused on our path forward to maximize the value and impact of our product technology and scientific foundation,” wrote Juul. “Our technology already has transitioned over 2 million adult smokers from combustible cigarettes. And our priorities remain to secure authorization of our PMTAs [premarket tobacco product applications] based on the science and lead the category with innovation to accelerate our mission and advance tobacco harm reduction for over 31 million adult smokers in the U.S. and over 1 billion adult smokers worldwide.”

April 18, 2023

EU Commission Chided Over Tobacco Contacts

The European Commission’s failure to be fully transparent about its meetings with tobacco industry representatives constitutes maladministration, according to the European Ombudsman, reports Reuters. Such transparency is required by the World Health Organization Framework Convention on Tobacco Control.

In a letter to the commission, ombudswoman Emily O’Reilly detailed preliminary conclusions from her office’s inquiry into EU executive contacts with the tobacco industry in 2020 and 2021. The investigation follows an earlier study concluded in 2016, when the ombudsman urged the commission to adopt the transparency policy of the EU health and food safety directorate-general. Apart from improvements at the tax and customs unit, this had not happened, the letter noted.

The ombudsman found a deficiency in record-keeping and a failure to keep and make available minutes on all commission meetings with tobacco interest representatives.

The ombudsman also questioned whether commission officials were limiting their interactions with the tobacco industry only to those that were “strictly necessary.”

EU institution contacts with lobbyists have come under scrutiny after a cash-for-influence scandal hit the European Parliament, two of whose members have been charged with corruption and money laundering in Belgium.

The ombudsman’s recommendations are not legally binding.

April 18, 2023

Glo Hyper Under Scrutiny

Italian regulators are investigating BAT and Amazon for potentially misleading advertising for the Glo Hyper X2 tobacco-heating product, reports Reuters.

According to the Italian Competition Authority, the companies have made it insufficiently clear to consumers that Glo Hyper X2 is a nicotine-based product and that it is intended for an adult audience. The agency also said it had seen the product being marketed as “nicotine-free.”

“The omission and/or deceptiveness of this essential information” in advertising could influence consumers’ decisions and expose them, “minors in particular,” to the risk of unknowingly damaging their health, the Competition Authority said.

A spokesperson for BAT said the company was committed to responsible marketing in addition to the requirements set by local applicable laws.

“We are available to cooperate with the Italian Competition Authority to ensure a swift conclusion of these proceedings,” the spokesperson added.

April 18, 2023

22nd Century Adds Private Label Brand

22nd Century Group has started producing a new private label premium cigarette brand, Pinnacle, under a new manufacturing agreement. Pinnacle is for sale at a leading U.S. gas station convenience store chain comprising almost 1,700 stores in 27 states.

“We are excited to launch a new store-brand product with one of the largest convenience store chains in the country and one of the highest volume cigarette points of sale per outlet square foot,” said John Miller, president of tobacco products at 22nd Century Group, in a statement.

“We believe that working with premier retailers on conventional products like Pinnacle offers value to current adult smokers as we aggressively expand our flagship product, FDA [Food and Drug Administration]-authorized VLN reduced-nicotine cigarettes designed specifically to help adult smokers to smoke less,” said Miller.

22nd Century Group provided the trademarked brand name and predicate tobacco blend for the new Pinnacle product, which is produced at its manufacturing operations in North Carolina. Pinnacle is approved in 22 states to date where the retail partner has stores and is available in approximately half of eligible stores to date as availability continues to expand.

“Pinnacle represents a key opportunity to further scale our revenue and margins, advancing 22nd Century toward its goal of cash positive operations,” said 22nd Century Group CEO James A. Mish.

“The rollout of this new brand into such a large number of stores across more than two dozen states also demonstrates how we expect to benefit from expanded utilization of our new national scale distribution relationships for our VLN products, supporting placement into a broader range of well-known retail points of sale for both our conventional cigarette products and our new VLN 95 percent reduced-nicotine content products designed specifically for adult smokers who want to smoke less,” Mish said.

April 18, 2023

KT&G Assists Tobacco Growers

KT&G volunteers helped tobacco growers in Nong’am-myeon plant about 20,000 seedlings on April 14. Since 2017, KT&G workers have been assisting tobacco farmers, who face difficulties recruiting labor in South Korea.

“KT&G engages in employee volunteer activities every year to support the activities of leaf tobacco farms, which have a problem of labor shortages,” said Kim Jeong-ho, director of KT&G’s raw materials department, in a statement. “We will continue to make the best efforts for mutual growth with farmers.”

Since 2013, KT&G has also provided KRW3.34 billion ($2.53 million) in financial support to tobacco growers. The money has paid for scholarships and medical checkups, among other things.

April 18, 2023

JT Boosts Investment in Heating Products

Japan Tobacco will invest ¥300 billion ($2.25 billion) in its tobacco-heating products (THPs), with ¥200 billion designated for marketing the sticks internationally, reports Nikkei Asia

“Last year, we couldn’t make the investment because there were not enough [heated-tobacco] devices due to the semiconductor shortage,” Japan Tobacco President Masamichi Terabatake was quoted as saying. “For 2023, we are back on track for procurements, and we are able to secure more than twice Japan’s supply volume compared to last year.”

JT plans to roll out its Ploom X THP in more than 10 countries this year, reaching at least 20 new countries by the end of 2024. Currently available only in Japan and the U.K., the product is set to debut in Italy this month.

To gain name recognition, JT will invest in pop-up shops and digital sales. It will develop flavors that match the tastes of each market.

In the U.S., JT formed a joint venture with Altria Group. The partners will seek permission from the Food and Drug Administration to market Ploom by early 2025.

While JT’s THP segment is currently in the red due to the forward investments, the company anticipates turning a profit in 2028 on overseas growth.

JT will also invest in research and development, looking to develop the second generation and third generation of Ploom X devices.

Global sales volume for cigarettes shrank 1.5 percent last year, JT said. By contrast, the global market for THPs last year grew 17 percent to $33.4 billion, according to Euromonitor International.

April 17, 2023

California Shelves Endgame Bill

California lawmakers have quietly shelved a proposal to ban people born after Jan. 1, 2007, from buying tobacco products, reports Jefferson Public Radio.

In February, assembly member Damon Connolly introduced a bill that would make it illegal for anyone in California who is presently 16 years old or younger to ever buy a tobacco product in that state. Vendors caught selling would risk fines of up to $6,000 and a loss of their tobacco license. The minimum age to buy tobacco products in California is presently 21, as it has been in every U.S. state since the law was changed in 2019. The proposed legislation is similar to laws passed in New Zealand and considered elsewhere, including Hong Kong and Malaysia.

Connolly’s bill struggled to attract backing, however. By mid-April, only 10 organizations, including the California chapter of the American Academy of Pediatrics, had sent letters of support to the Assembly Health Committee, where it was first set to be considered, according to an analysis prepared by the committee.

The committee reportedly suggested that phasing out tobacco sales in California was less urgent because adult and youth smoking rates are only slightly higher than half the national average. “The legislature may want to consider whether it would be more effective to focus on enforcing the flavored tobacco ban rather than engaging on a new front and attempting to prevent a product that is legal in 49 other states, as well as on sovereign tribal lands, from entering the state,” the committee wrote.

At the Assembly Health Committee hearing on April 11, Connolly accepted amendments from the committee that changed the focus of his bill. It will now authorize the California Department of Public Health and the state attorney general’s office to enforce the recently enacted flavored tobacco ban, in addition to local agencies.

April 17, 2023

Dutch Institute Urges Darker Cigarettes

Changing the color of cigarettes from white to a darker hue would make them less attractive to (potential) smokers, reports Dutch News, citing the National Institute for Public Health and the Environment (RIVM).

Darker colors suggest a stronger taste and more damage to health, RIVM researchers noted. White, by contrast, is associated with a safer product. Selling cigarettes in darker colors would help the government achieve its aims of zero children smoking and only 5 percent of over 18s smoking by 2040, as stated in the national prevention agreement, the RIVM said.

Changing the color of cigarettes would require a change in Dutch law, however, which states that cigarettes should be white. Another option to discourage smoking would be printing health warnings both on the packaging and the cigarettes, according to the RIVM.

The RIVM opposes a ban on filters, which contain plastics and harmful chemicals, because it may create the impression that filterless cigarettes are less unhealthy. The RIVM is compiling a list of ingredients in tobacco and vaping capsules that may be banned by law, including vitamins.

The results of the RIVM research will be used in policy to discourage smoking, Junior Health Minister Maarten van Ooijen said, although some recommendations, such as lowering nicotine content, would have to be decided on a European level.

April 17, 2023

Pakistan To Miss Tax Target Due To Illicit Sales

Pakistan is unlikely to achieve its tax collection targets due to the rapid growth of illicit cigarette sales, reports Geo News, citing Philip Morris Pakistan Chief Financial Officer Muhammad Zeeshan.

In February, the government increased the Federal Excise Duty on cigarettes in an attempt to boost revenues in line with the conditions for financial support from the International Monetary Fund.

Following the tax hike, the duty on locally produced cigarettes retailing for more than PKR9,000 ($32.02) per 1,000 sticks is PKR16,500 while the duty on locally produced cigarettes retailing for less than PKR9,000 per 1,000 sticks is PKR5,050. The government aims to fetch an additional PKR11 billion ($39.13 million) in revenue with the measure.

The excise duty increase has doubled the price difference between legal and illegal cigarettes. As a result, illicit cigarette sales have skyrocketed. In the first quarter of 2023, the sale of legal cigarettes has declined by 50 percent. Pakistan now has the second-largest illicit cigarette market in Southeast Asia after Malaysia.

Due to the declining legal sales, analysts expect the government to collect only PKR170 billion from the tobacco industry—well short of its collection target of PRK260 billion.

April 17, 2023

Stingfree Launched in Sweden

Sting Free modern oral nicotine pouches have been launched in Sweden.

The Stingfree technology reduces the burning sensation and irritation on the gums, which is typical of regular snus and oral nicotine products, according to a press release. Several e-commerce distributors and stores are now selling the first product in an upcoming series of tobacco-free nicotine pouches with different flavors and strengths.

Several studies have shown that many snus users suffer damage to and changes to the gums, especially where the pouches are in direct contact with the gums. The U.S./EU patented Stingfree technology aims to counteract this and the associated burning/irritating sensation by having an impermeable barrier on the gum side of the pouch. A high percentage of snus users dislike when nicotine pouches and snus stings/burns and irritates the gums. This has been established by Sting Free AB in a comprehensive survey in 2022, with responses from over 1,000 Swedish snus users (of which almost 40 percent were women). Of the respondents, 67 percent of the women considered that the burning/stinging sensation, regardless of when it stings, is unpleasant as did 53 percent of the men. Almost 50 percent of the respondents had had oral health problems pointed out by their dentists linked to their use of snus/nicotine pouches.

A recent survey of U.S. females investigated why the use of smokeless tobacco products like nicotine pouches and snus is so much lower among women compared to men. A main factor concluded from the responses was the burning sensation and oral irritation caused by these products, with comments such as “irritation,” “burn,” “hurts my gums,” etc. Other factors were “negative stereotypes about smokeless users,” “deadly misconceptions” that smokeless products are more dangerous than e-cigarettes and smoking and the unfamiliar mode of delivery.

Sting Free AB’s vision is that the Stingfree technology will become a new industry standard for nicotine pouches and traditional smokeless tobacco products like snus and that customers in the future will be asked the question, “Regular or sting-free?” when they buy such products. The company also hopes that the technology will contribute to more smokers opting out of smoking in favor of significantly less dangerous nicotine pouches.

April 14, 2023

Year: 2023