Year: 2023

  • Activists Slam Report

    Activists Slam Report

    Photo: Tom

    The World Health Organization’s recently published report on the global tobacco “pandemic” discounts the impact of harm reduction and vaping, according to Michael Landl, director of the World Vapers’ Alliance

    “While filled with biased anti-vaping scaremongering and unfounded claims, the report’s overall direction is perplexing. Instead of prioritizing the crucial goal of reducing smoking rates, the WHO is directing its focus on vaping, which happens to be the most potent smoking cessation tool available.”

    In the report’s foreword, Director-General Tedros Adhanom Ghebreyesus asserts that vaping would undermine anti-smoking efforts, claiming that e-cigarettes are harmful to both the people using them and those around them.

    “Regrettably, the WHO appears to ignore reality and scientific evidence,” said Landl in a statement. “Countries that adopt an open and consumer-friendly approach to harm reduction products achieve significantly better results than those following WHO’s misguided path. Comparative data from Sweden and the United Kingdom demonstrate their remarkable success in reducing smoking rates, surpassing countries with a negative harm reduction approach by a wide margin.”

    The WHO report also claims a gateway effect from vaping to smoking and alleges that vaping flavors target children. It further highlights that 121 countries have adopted vaping regulations, with 34 completely banning vape sales.

    “The outdated and debunked theories propagated by the WHO report pose risks to public health,” said Landl. “The notion of a gateway effect from vaping to smoking lacks evidence. Furthermore, flavors are essential for adults as they play a crucial role in helping millions of smokers transition to vaping. Additionally, celebrating countries which ban a way less harmful alternative for smokers is absurd.”

    According to a review of 15 studies, “a true gateway effect in youths has not yet been demonstrated,” according to Landl. Factors such as anxiety, parental smoking habits, peer attitudes and household income must be considered, he noted. Another study found that vaping is not a gateway to smoking but rather that negative circumstances in teenagers’ lives lead to risky behaviors. According to the Yale School of Public Health, vaping flavored e-cigarettes is linked to a 230 percent increase in adult smoking cessation, and a flavor ban, as suggested by the WHO, could drive five out of 10 vapers back to smoking or the black market.

    “The lack of empathy for smokers and vapers, coupled with the outright denial of scientific findings, will have severe consequences for many lives,” said Landl. “The WHO seems to have lost sight of its ultimate goal – reducing smoking rates. While we all agree that teenagers should not smoke or vape, the report notes that only 45 percent of countries ban e-cigarette sales to minors, and 10 percent of countries impose no age restrictions on cigarette purchases. Why not address these real-life challenges? The WHO systematically disregards an abundance of scientific evidence supporting the benefits of vaping, not to mention the experiences of millions of vapers. Vaping is 95 percent less harmful than smoking and a more effective method to quit smoking compared to traditional products like gum and patches. Restricting or banning access to vaping will only lead to unnecessary loss of lives.”

  • Filtrona Opens New Filters Center

    Filtrona Opens New Filters Center

    Photo: Filtrona

    Filtrona has opened a new Centre of Excellence (COE) in Budapest, Hungary. Combining multiple advanced filter manufacturing machines, the COE will increase the company’s production capacity and speed-to-market of sustainable filter solutions. The COE enables tobacco companies to develop and manufacture a portfolio of sustainable tobacco products by leveraging Filtrona’s expertise in innovative filter designs, processing methods and knowledge of materials.

    The COE combines Filtrona’s extensive experience in manufacturing non-woven filters with advanced, high-speed production technology and the latest testing methods to produce sustainable filters for various tobacco product applications. These include cigarettes, heated tobacco products, cigarillos, cigars, and RYO and MYO cigarettes.

    Globally, consumers and regulators are pushing for more environmentally sustainable solutions for consumer goods, according to Filtrona. Likewise, the tobacco industry is seeking plastic-free alternatives by focusing on the use of wood pulp based non-woven materials, such as papers. The EU Single-Use Plastic Directive provides a roadmap for the phasing-out of single-use plastics, which includes cellulose acetate tow. Using the EU Directive as a blueprint, tobacco companies in territories outside the EU are expected to follow a similar path in reducing single-use plastics over time.

    “As the world’s leading producer of sustainable filter solutions, Filtrona is advancing our sustainability journey by launching our Centre of Excellence to expand our portfolio of sustainable products at a faster pace,” said Filtrona’s Global Director of Innovation and ESG Hugo Azinheira. “With the EU SUPD driving a wider adoption of plastic-free tobacco products, our new production line has the capability to meet the evolving needs of customers, consumers, and regulators rapidly.”

     

  • Altria Reports Quarterly Results

    Altria Reports Quarterly Results

    Photo: Altria Group

    Altria Group reported net revenues of $6.51 billion for the second quarter of 2023, down 0.5 percent from the comparable 2022 period. Revenues net of excise taxes increased 1.2 percent to $5.43 billion.

    In the first half of 2023, Altria Group reported revenues of $12.23 billion, 1.7 percent less than in the first six months of the prior year. Revenues net of excise taxes increased 0.1 percent to $10.2 billion during the first half of 2023.

    “We had a solid first half of the year and we continue on our exciting journey towards Moving Beyond Smoking,” said Altria CEO Billy Gifford in a statement. “We completed our acquisition of NJOY and delivered strong business results, growing adjusted diluted EPS by 5 percent in the first half. And we returned $3.8 billion to shareholders while investing in pursuit of our Vision.”

    “We look forward to executing our commercial plan for NJOY in the second half of the year, and we reaffirm our guidance to deliver 2023 full-year adjusted diluted EPS in a range of $4.89 to $5.03. This range represents an adjusted diluted EPS growth rate of 1 percent to 4 percent from a $4.84 base in 2022.”

  • Learning From the Past

    Learning From the Past

    Photo: Lukas

    This year’s GFN looked at past successes and continuing challenges for tobacco harm reduction.

    By Stefanie Rossel

    “Tobacco harm reduction—the next decade” was the theme of this year’s Global Forum on Nicotine (GFN), which took place in Warsaw June 21–24, 2023. For the first time, the presentations stretched over four full days. Some 220 delegates from 40 countries attended the event, which also marked the 10th anniversary of the conference—a good time for a look back not only on the progress of and the opportunities but also on the challenges facing tobacco harm reduction (THR).

    The picture of THR currently is highly fragmented, as became clear during a workshop on global regulation. Regulatory treatment of safer nicotine products varies widely among countries. There’s Australia, where vape products are available on prescription only and just 5 percent of doctors can prescribe nicotine. By contrast, the Philippines, after a 10-year debate, last year introduced a law that treats vapes differently than tobacco products, offering nicotine users easier access to less hazardous products.

    In the European Union, there is a double layer of regulation, which relates to the harmonization of the 27 member states and the national adoption of the Tobacco Products Directive (TPD2). Trends influencing legislation include polarizing views of member states, so countries are advocating for more regulatory freedom within the EU. Mexico has banned the sale and production, but not the use, of reduced-risk products (RRPs). Kenya’s RRP taxes are so high that they constitute a de facto ban.

    For many countries, tobacco control is a relatively low priority, and smokers have been left behind in the discussion.

    GFN participants cited Australia as an example of how not to regulate vaping. Nicotine can be legally bought from pharmacies only with a prescription. This has led to a flourishing unregulated market. Ninety-two percent of Australian vapers source their e-cigarettes from the black market. To curb illicit trade, Australia plans to ban the import of all nonprescription vaping products, including those that don’t contain nicotine. Colors, flavors, volumes and nicotine content of prescription e‑cigarettes will be restricted, and packaging must be pharmaceutical-like.

    Consumers trying to get a prescription in Australia face many barriers, many of which are due to the country’s geography. Doctors have an inadequate understanding of smoking and nicotine addiction, and they must be registered as an authorized nicotine prescriber. Once they have the prescription, consumers must convince a pharmacist, who usually has limited stock, to get nicotine. While several Australian states have legalized possession of drugs, vape products are becoming an illicit product. In a survey, 81 percent of Australian vapers said that they would return to smoking if they had no access to vaping.

    Tobacco Control: A Substitute Religion

    The stigmatization of THR bears a strong resemblance to religion, according to participants in the panel discussion on science, regulation and morality. Bans are about social engineering, and the regulatory wording reveals an ideology of people who want to control others. As an example, panelists cited the imagery used to scare people off vaping (“vaping causes brain worms”).

    There is still a lot of disinformation, misinformation and misleading science, and knowledge of THR in the wider harm reduction community remains limited. And although certain debates, such as the cause of e-cigarette or vaping product use-associated lung injury (EVALI), have been settled by science, they remain a topic of discussion, a phenomenon that panelists found very frustrating.

    A panel evaluating the past 10 years of science reminded the audience that first attempts at safer products date back 30 years to 40 years, when the first heated-tobacco products (HTPs), Eclipse and Accord, hit the market. The introduction of modern HTPs in 2014 changed the landscape. Snus in Sweden has an even longer history. If this type of oral nicotine was accepted in the rest of Europe, 3 million smoking-related deaths could be avoided, the panelists pointed out.

    Thanks to advances in technology, the new generation of e-cigarettes provides safer nicotine delivery than its predecessors. As years go by, data on vaping accumulates. Recently, the Oxford Foundation confirmed there was strong evidence that e-cigarettes help people quit.

    Tobacco control advocates apply double standards to nicotine, however: In their minds, the benign nicotine in medical smoking cessation products becomes a lethal, toxic substance as soon as it leaves the pharmacy. This leads to some grotesque situations. In Austria, for example, nicotine-replacement therapies are flavored and can be sold to children from the age of 12.

    While in the 1980s and 1990s, tobacco control was about the “endgame” against cigarettes, the war has now turned against nicotine, according to GFN panelists. Countries such as Finland, for example, discuss nicotine ceilings in nicotine pouches. To convince tobacco control that their science is reliable, panelists agreed that the industry must change its communication strategies and talk about science outside of the usual places. Real-data science, which is already available, will make a big difference in the next decade, one speaker predicted. It could help drive the policy debate and improve the reputation of the tobacco industry. Industry science should be based on geographies and sales of RRPs, according to the speaker.

    Getting the Message Out

    Scientific publishing is important as it creates transparency and builds trust. According to a panel on the politics of such publishing, more than 2 million peer-reviewed articles were published in 2021. Good journals have at least two referee reports; three tend to improve the quality of the article. Rejection rates are high. Most journals have little expertise with the tobacco and nicotine industries. Scientific publishing is a massive, $28 billion-a-year industry built on the backs of volunteers. Despite the barriers to publication, the two largest tobacco companies have published more than 350 manuscripts on RRPs.

    Next to the established publications are open access journals. Their selection criteria are purely financial, as each accepted manuscript attracts a fee. While they are looking to publish as much sound science as possible, the downside is that the hurdle to becoming a publisher has dropped, and industry scientists should beware of untrustworthy, predatory journals.

    One of the critical issues regarding tobacco industry transformation is the question of whether it is reaching low-income and middle-income countries (LMICs), where around 80 percent of smokers live. Currently, RRPs barely feature in the 137 LMICs, partly due to regulatory restrictions. Twenty-six LMICs, including major markets such as Brazil, India and Argentina, ban RRPs. Many consumers are unaware of reduced-risk options, with some even believing they are more harmful than smoking. If available, RRPs are expensive and difficult to access in LMICs.

    While lumped together into a single category, LMICs in fact comprise a collection of very different countries with greatly varying consumer preferences. The World Health Organization, a declared opponent of THR, tends to enjoy considerable credibility in these regions. Other hurdles to RRPs in LMICs include the tendency of regulators to view the terms “tobacco” and “nicotine” as interchangeable and the low awareness in the medical community about the role of nicotine.  

    BAT’s introduction of modern oral nicotine in Kenya and Pakistan is an example of a promising first step and shows that products need to be designed from the point of view of the consumer.

    The Pros of Nicotine

    Tobacco control has turned its war on cigarettes into a war on nicotine, but the supposedly evil substance has a vast pharmacological potential, according to one presenter. The positive effect of nicotine in the treatment of Parkinson’s disease or schizophrenia is already known. A more recent studies revealed nicotine to be an efficient therapy for mild cognitive impairment as well.

    Other conditions, such as late life depression, also benefit from nicotine stimulation. Nicotine can help modulate aggressive behavior in autistic patients, and scientists are currently examining its efficiency in combating the loss of hearing. In the next six months, researchers will also start investigating whether nicotine could help treat the cognitive syndrome (“brain fog”) that sometimes accompanies Long Covid.

    Unfortunately, the progress of THR over the past decade, with more than 100 million people using RRPs today, has also had a less welcome effect in the form of electronic waste. The growing popularity of disposable vapes in particular has led to an increasing number of batteries and other components ending up in landfills and causing fires.

    To solve the problem, manufacturers should consider standardizing the materials in their products, looking at biodegradable components for tanks and making the batteries removable, according to GFN panelists. Retailers should offer to take back used products for recycling, and consumers, too, must take their responsibility. One panelist said he wanted to set up a study to find out what motivates people to bring back their devices and to what extent such behavior could be spurred by financial incentives.

    Stigmatize, Exclude, Silence

    So who has a stake in the THR game? Certainly, the industry should have one, one panelist argued, as it has the will and the money, which unlocks science in toxicology, behavioral research or postmarket surveillance surveys. The industry also knows how to make consumers switch quickly, and it has the scale of manufacturing and distribution to deliver these products to the biggest possible audience in a short time.

    Vulnerable communities, which represent a large percentage of smokers, appear to have no such stake, however—an equity issue that needs to be addressed. While article 5.3 of the Framework Convention on Tobacco Control, which aims to protect tobacco control policies against tobacco industry influence—does target smokers, this group remains conspicuously absent from discussions about the tobacco control process.

    Medicinal licensing of vape products was not considered a solution by panelists since many smokers don’t view their habit as a medical problem. Besides, such an approach stifles innovation, as the authorization of medicinal products takes a long time, and the resulting products are not necessarily the ones consumers want.

    Children, too, should be seen as stakeholders in the debate, according to one panelist. If they lose their parents to smoking-related death, they are traumatized, and this will influence their later relationships. That means THR is a child welfare issue, the speaker claimed, quoting a 2013 study that found that if all tobacco control policies were implemented, there would still be 523 million smokers in the world.

    A plenary discussion focused on “the tobacco control playbook” revealed the methods that tobacco control activists have been using since RRP started gaining traction years ago. Measures include attempts to delegitimize, stigmatize, silence and exclude THR proponents and people with ties to the tobacco industry, however tenuous, from smoking cessation conferences.

    Academic journals have silenced authors with research funding, however indirect, from tobacco companies. The University of Bath, which on its TobaccoTactics website keeps a running tab of people linked to the industry, has planted stories with journalists, including those it funded.

    There have been attempts at making journal editors reject papers published by grantees of the Foundation for a Smoke-Free World (FSFW), which receives funding from Philip Morris International. While in many areas of health, governments consult with consumer groups, vapers are viewed with suspicion and suspected of being on Big Tobacco’s payroll. Academics have suggested links between vapers and tobacco companies where there aren’t any.

    Those in tobacco control who think differently but don’t speak up against these methods become accomplices, according to one panelist. Tobacco control, he observed, needs people to blame. In the future, every opportunity should be taken to raise objections—for instance, to university ethics committees who fail to protect people, to journal editors and editorial boards that publish inaccurate articles and to academic institutions that receive funding for activist tobacco control work. Finding enemies is now so embedded in the tobacco control psyche that these activists have no interest in finding common ground. Nevertheless, optimism prevailed in the panel. The question, they argued, is not if but when THR will succeed.

    Achievements and Obstacles

    For THR to make progress in the future, a look at the past may be useful. In 2012, massive protest by vapers helped avert a ban on vaping in the EU. In 2014–2015, Public Health England acknowledged the relative safety of e-cigarettes, opening many eyes to the promise of vaping as a smoking cessation tool. One year later, Kenya became the first country to regulate vape products. Around this time, the split between pro-vaping and anti-vaping advocates occurred.

    In 2016, the U.S. Food and Drug Administration started regulating all nicotine products as tobacco products. This had a domino effect around the world.

    Founded in 2017, the FSFW faced strong opposition. In 2018, consumers joined a legal challenge to the EU snus ban. One year later, the Indian government banned vaping while in the U.S., misinformation about EVALI created a panic.

    New Zealand embraced vaping in 2021, and in 2022, the EU endorsed vapes as part of its Beating Cancer Plan. Around the same time, the Philippines introduced reasonable vaping regulations. In all three cases, consumer advocates played a vital role.

    This year, Quebec introduced a vape flavor ban, Australia announced a crackdown on vaping, and the U.K. launched its “swap to stop” scheme to encourage smokers to switch to e-cigarettes.

    The developments in the past decade, panelists concluded, were driven by instinct and moral concern on the policy side, which leads to prohibition. Indifference to different products is a risk. Youth use is heavily emphasized by health activists, and silence has become subordinate to the political agenda. Consumer advocacy, however, has been working in favor of THR. On a global scale, vaping is rising.

    GFN 2023 closed with an outlook on THR in the next decade. Participants in the final plenary discussion were confident that THR will happen one day—simply because things always change, RRPs are there, and there’s no going back. Education of the general public is vital to drive the debate. Children’s uptake needs to be solved, and THR proponents should remember that the debate is about more than vaping.

    More attention must be paid to THR in LMICs, particularly those that have dictatorships in which criticism means rebellion and informing consumers is impossible.

    To free themselves from their guilt from the past and be taken seriously in their claim to create a smoke-free world, tobacco companies should eventually divest their cigarette units.

  • Stick Warnings Take Effect in Canada

    Stick Warnings Take Effect in Canada

    Image: Health Canada

    A new rule requiring warning labels on individual cigarettes in Canada takes effect today, reports The Canadian Press.

    The move, announced earlier this year, makes Canada the first country to take that step to deter smoking.

    Under the new law, cigarette manufacturers will be required to print messages in English and French on the paper around the filter, warning smokers about the risk of damage to organs, impotence and leukemia, among other diseases.

    Manufacturers have until the end of July 2024 to ensure the warnings are on all king-size cigarettes sold, followed by regular-size cigarettes and little cigars with tipping paper and tubes by the end of April 2025.

    Rob Cunningham, a senior policy analyst at the Canadian Cancer Society, believes the labels will dissuade teens leaning toward taking up the habit and encourage nicotine-dependent adults to quit.

    Dozens of studies in Canada and elsewhere show the effectiveness of printing warnings on each cigarette, he noted.

    Tobacco advertising, promotion and sponsorship are banned in Canada, with warnings on cigarette packs dating back to 1972.

    In 2001, Canada became the first country to require tobacco companies to print pictorial warnings on the outside of cigarette packages and include inserts with health-promoting messages.

    Federal rules ban packaging that includes brand colors or trademarks.

    The tobacco industry has warned against unintended consequences. The National Coalition Against Contraband Tobacco, which is funded by Canada’s leading cigarette manufacturers, warned in June that cheaper, colorful black-market packs free of health warnings attract young smokers and funnel more money to organized crime.

    While acknowledging that big tax hikes or sales bans would indeed benefit the black market, Cunningham believes that gradual price boosts and more strident messaging can bring down smoking rates.

    “The only real reason that they can oppose something is because it’s going to have a reduction in sales— and that is exactly the point,” he said of the manufacturers.

  • UKVIA Announces Annual Forum

    UKVIA Announces Annual Forum

    Photo: UKVIA

    The U.K. Vaping Industry Association (UKVIA) annual Forum and Industry Recognition Awards Dinner will take place at the QEII Centre in London on Nov. 10, 2023.

    Under the theme, “Accelerating Action to Secure a World Without Smoking,” the event will feature sessions focusing on harm reduction, illicit trade and sustainability, among other topics.

    Secretary General of the China Electronic Chamber of Commerce Ao Weinuo will be giving a keynote presentation on China’s commitment to change. Also included on the conference agenda is a dialogue on the upcoming general election, which will explore how the U.K. industry should prepare for a possible change in government and will ask how to retain the existing “parliamentary momentum” around vaping.

    “We have, and I’m confident will continue to, make significant strides in putting forward the harm reduction benefits of vaping on the political front, but it’s no secret the landscape could soon shift and we need to be prepared,” said UKVIA Director-General John Dunne in a statement.

    Following the forum, the UKVIA will host its  annual Industry Recognition Awards dinner.

    According to Dunne, the awards are an opportunity to recognize the “outstanding contributions and achievements” of individuals and organizations both inside and outside the industry.

    Last year, 500 delegates and guests attended the UKVIA Forum and Awards. This year’s event is expected to attract an equally high number of visitors.

  • More People Protected by Policies: Report

    More People Protected by Policies: Report

    Photo: Maksym Yemelyanov

    Seven out of 10 people worldwide are now protected by at least one “best practice” tobacco control policy—five times more than in 2007, according to a new World Health Organization report supported by Bloomberg Philanthropies.

    Global smoking rates have fallen over the past 15 years, a development that the WHO attributes in part to its MPOWER tobacco control measures. Without this decline there would be an estimated 300 million more smokers in the world today, according to the global health body.

    Almost 40 percent of countries have completely banned smoking from public indoor places. The report rates country progress in tobacco control and shows that two more countries, Mauritius and the Netherlands, have achieved best-practice level in all MPOWER measures, a feat that only Brazil and Türkiye had accomplished until now.

    “These data show that slowly but surely, more and more people are being protected from the harms of tobacco by WHO’s evidence-based best-practice policies,” said WHO Director-General Tedros Adhanom Ghebreyesus in a statement. “I congratulate Mauritius on becoming the first country in Africa, and the Netherlands on becoming the first in the European Union to implement the full package of WHO tobacco control policies at the highest level. WHO stands ready to support all countries to follow their example and protect their people from this deadly scourge.”

    “While smoking rates have been going down, tobacco is still the leading cause of preventable death in the world – largely due to relentless marketing campaigns by the tobacco industry,” said Michael R. Bloomberg, WHO global ambassador for noncommunicable diseases and injuries and founder of Bloomberg Philanthropies. “As this report shows, our work is making a big difference, but much more remains to be done. By helping more countries implement smart policies, backed by public opinion and science, we’ll be able to improve public health and save millions of more lives.”

  • Cambodia to Implement Tobacco VAT

    Cambodia to Implement Tobacco VAT

    Photo: mehaniq41

    Companies importing and distributing cigarettes in Cambodia will have to apply value-added tax to these products effective Aug. 1, reports  The Phnom Penh Post.

    The procedure mirrors the application of VAT on other taxed commodities, with a flat rate of 10 percent on all cigarette supplies in Cambodia.

    VAT paid at the point of importation or domestic purchase may be claimed as an income tax credit, deductible with output tax, according to the Ministry of Economy and Finance.

    Furthermore, enterprises importing cigarettes for export purposes will be permitted to pay a one-off value-added fee at the point of importation.

    The Cambodia Movement for Health (CMH) lauded the Ministry of Economy’s guidance as a clear indicator of the government’s commitment to combat the health risks associated with cigarettes and tobacco products.

    Nonetheless, CMH Executive Director Mom Kong urged the government to extend the VAT to include non-cigarette tobacco products, as well.  

    Citing research by the World Health Organization, Kong stated that imposing an additional tax of KHR500 ($0.125) per pack of cigarettes could increase market prices by 15 percent. This, in turn, could potentially reduce the number of smokers by 30,000 in the next year, and prevent 10,000 premature deaths over the next decade or so.

  • Kazakhstan to Ban Vapes

    Kazakhstan to Ban Vapes

    Photo: natatravel

    Lawmakers in Kazakhstan voted on July 29 to ban the sale, import, export and production of e-cigarettes and liquids, reports Atlas News.

    “The harm of vapes is undeniable,” said Deputy Nurgul Tau. “That is why the Ministry of Health has been sharply raising the issue of introducing a ban on the circulation of vapes since 2021. In my request, I proposed a complete ban on the sale of vapes.”

    The legislation has been in the works since May 10 following a ban of the use of e-cigarettes in public spaces. The ban was triggered by concern about increased vaping among minors.

  • Korean Court Overturns PM Tax Refund

    Korean Court Overturns PM Tax Refund

    Photo: mnimage

    The Supreme Court of Korea has overturned a ruling that awarded Philip Morris Korea a tax refund, reports Business Korea. The case has now been sent back to the Suwon High Court.

    The dispute stems from 2014, when fiscal authorities announced new cigarette taxes that caused the price of pack of cigarettes to increase from KRW2,500 ($1.95) to KRW4,500 in January 2015.

    The National Tax Service (NTS) argued that Philip Morris Korea had sold cigarettes stored in purpose-build warehouses to wholesalers at an inflated price after January 2015, but had manipulated the sale to appear earlier in order to evade the additional special consumption tax that followed the price increase.

    When the NTS demanded tax payments of KRW99.7 billion, Philip Morris Korea challenged the decision, first the Tax Tribunal and then in court.

    The lower court accepted the company’s claim that the cigarettes in question were shipped to wholesalers in 2014, before the special consumption tax was applied.

    However, the Supreme Court viewed Philip Morris Korea’s temporary warehouses as a stopgap measure intended to accumulate as much inventory as possible before the price increase, in order to profit from the price differential later on.

    “Even if the computer system shows that the cigarettes were sold in advance before the tax increase, the special consumption tax should be levied based on Jan. 1, 2015, when the cigarettes actually moved from the temporary warehouses to the wholesalers,” the court said in its ruling.