February, 2024 - Tobacco Reporter

KT&G Posts Record Revenue

KT&G posted revenue of KRW1.45 trillion ($1,09 billion) and operating profit of KRW198.6 billion in the fourth-quarter of 2023. For the full-year, the company reported record revenue of KRW5.872 trillion and operating profit of KRW 1.168 trillion.

KT&G’s record annual revenue was driven mainly by the performance of its overseas combustibles business. The overseas combustibles business reported record annual revenue of KRW1.14 trillion. The combined annual revenue of KT&G’s three core business areas, which also include next-generation products (NGP) and health functional foods, reached KRW3.31 trillion, a 1.1 percent increase year on year.

KT&G’s NGP business sold 8.24 billion sticks overseas and 5.71 billion sticks in South Korea, reflecting growth rates of 43 percent and 14.4 percent, respectively.

KT&G achieved an all-time high total overseas sales volume of 61.4 billion sticks, surpassing 60 billion sticks for the first time.

KT&G projects its annual revenue and operating profit to exceed growth rates of 10 percent and 6 percent, respectively, in 2024. It expects its consolidated year-on-year revenue growth to exceed 15 percent. Additionally, the operating profit from the core business areas is expected to grow 31.5 percent, year on year.

“Last year was a year dedicated to the successful implementation of a business transformation strategy that focuses on the core business areas, KT&G wrote on its website. “This year, we will continue to strengthen the competitiveness of the core business areas, expand a sustainable business portfolio, and faithfully carry out the shareholder return policy.”

February 7, 2024

Zimbabwe Farmers Demand Premiums

Following a 30 percent increase in tobacco export earnings to $1.3 billion in 2023, Zimbabwean tobacco farmers are pushing for increased premiums, according to The Herald.

In 2023, Zimbabwe exported tobacco products worth $1.3 billion, up from $998.1 million in 2022, according to the Zimbabwe National Statistics Agency (ZimStats). In volume, the increase was 20 percent for the same period.

“The huge gap between what ends in the farmer’s pocket and what exporters take home is a big anomaly that needs to be addressed,” said George Seremwe, chairman of the Zimbabwe Tobacco Growers Association (ZTGA). “Participation of farmers in the value addition chain needs to be enhanced by making sure they take ownership of the crop all the way to the market.”

Seremwe stated that there should be a premium price paid back to farmers after the value addition process as happened in the past. He also argued for a model that rewards farmers in terms of export earnings.

“We used to have export retention schemes from the Reserve Bank of Zimbabwe. This needs to be revived so that the farmer gets more value from the crop,” the ZTGA chair said.

“The grower is the weakest link in this matrix and needs protection from (the) government,” said Zimbabwe Progressive Tobacco Farmers Association (ZPTFA) president Mutasa Mutandwa.

“The Tobacco Industry and Marketing Board needs to thoroughly monitor contractors as per the compliance administration framework in order to find out what inputs have been given to farmers versus the crop they are buying,” said Mutandwa.

“Our crop is fetching high prices on the international market, as it is used as a blender, but the farmer is not benefiting. There is need for massive investment in tobacco processing plants to increase exports of high-priced manufactured products,” explained the ZPTFA president.

The Tobacco Value Chain Transformation Plan aims to increase value addition from 2 percent to 30 percent by 2025 to reach a $5 billion tobacco industry.

“The price at the floors can only be enhanced by improving the quality of the leaf as buyers prefer clean and clear styles,” said Shadreck Makombe, president of the Zimbabwe Commercial Farmers Union. “There is need to have more investment in processing to enhance value addition.”

February 6, 2024

Botswana Awarded for Tobacco Control

Botswana received an integrity award from the World Health Organization for reaching a milestone in its tobacco control efforts, reports Xinhua News.

The award was given at the 10^th session of the Conference of the Parties (COP10) to the WHO Framework Convention on Tobacco Control (FCTC), which is being held in Panama Feb. 5 to Feb. 10.

“The award was in specific recognition of Botswana’s efforts to safeguard public health by ensuring that there was no undue influence or pressure from the tobacco industry, in any of its public health policy formulation or implementation processes, in line with the WHO Framework Convention on Tobacco Control (FCTC),” said Christopher Nyanga, Botswana’s health ministry spokesperson.

Botswana’s Tobacco Control Act strictly prohibits any form of contributions or corporate social responsibility initiatives from the tobacco industry.

February 6, 2024

Thailand: Dual Tax Rates Decrease Revenue

Thailand’s dual cigarette tax rate has led to a decrease in government cigarette tax revenue, according to the Bangkok Post. The decrease is about THB23 billion ($646.8 million), according to Poomjit Pongpanngam, governor of the Tobacco Authority of Thailand.

The new tax structure has caused sales to drop dramatically. According to Pongpanngam, the finance ministry is likely to restructure the cigarette tax rate to a single tax system; however, illicit cigarettes will still pose a problem because they will still be less expensive.

Farmers contracted by the tobacco authority have seen a decrease in income due to the low sales of cigarettes. The authority has been buying 50 percent less tobacco from the farmers over the last three years. The tobacco authority recently stated that it plans to use THB1.3 billion for a production subsidy for tobacco farmers.

February 6, 2024

Plain Packaging Continues to Spread

Legal requirements to sell tobacco products in generic, unbranded packaging continue to spread, according to a report released on Feb. 6 by the Canadian Cancer Society (CCS).

The CCS report, titled Cigarette Package Health Warnings: International Status Report, details global progress on plain packaging, ranks 211 countries and territories on the size of their health warnings on cigarette packages and lists the countries and territories that now require graphic picture warnings.

The report also features the new Canadian requirement for a warning on every individual cigarette. This world precedent setting measure will start to appear on cigarettes in Canada by April 2024. Australia is in progress to become the second country to adopt the measure.

“There is a strong global trend for countries to implement plain packaging,” says Rob Cunningham, senior policy analyst at the CCS, in a statement. “Australia was the first country to implement plain packaging in 2012, followed by France and the U.K. in 2016, and now more and more countries are implementing the measure. These developments are very encouraging as plain packaging is a key measure to protect youth and to reduce tobacco use.”

There are now 25 countries and territories that have adopted plain packaging, up from nine countries in 2018 and 21 countries in 2021.

The report reveals there are now 138 countries and territories that require picture health warnings on cigarette packages, an increase from 117 in 2018 and 134 in 2021. This represents 66.5 percent of the world’s population. Canada became the first country in the world to require picture health warnings in 2001.

“There is continuing progress for countries to use graphic pictures on cigarette packages to show the lethal health effects of smoking,” says Cunningham. “It is extremely positive for global public health that more than 130 countries and territories have required picture health warnings and have increased warning size and that so many are moving toward plain packaging. The international trend will reduce global tobacco industry sales and will save lives lost to cancer and other tobacco-related diseases.”

The release of the CCS report coincides with the 10th Conference of the Parties to the World Health Organization Framework Convention on Tobacco Control (FCTC), which takes place in Panama this week. The FCTC mandates that all parties require health warnings that cover at least 30 percent of the principal display areas and at least 50 percent of the display areas.

February 6, 2024

COP10 Warns Against New Products

Delegates from around the world gathered in Panama City on Feb 5. to open the 10th Conference of the Parties (COP10) to the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC).

Adriana Blanco Marquizo, head of the FCTC Secretariat, welcomed attendees and warned of the increasing availability of novel and emerging nicotine and tobacco products.

These are “becoming a very troubling problem with an alarming increase in the use of these products by young people,” Blanco Marquizo said in her opening address.

“Part of this increase is due to disingenuous tobacco industry messages portraying these products as a replacement for real tobacco control measures as the industry again tries to claim a seat at the table—as part of the solution to an epidemic that the industry created and continues to sustain.”

She also asked everyone to be alert to what she described as “the relentless interference of the tobacco industry in every corner of the world.”

At COP10, delegates will consider a wide range of work to direct the FCTC in its work.

Discussions at COP10 will include:

implementation of FCTC Articles 9 and 10 (regulation of contents and disclosure of tobacco products): reports by the Bureau, by the Expert Group and by the WHO;
tobacco advertising, promotion and sponsorship: depiction of tobacco in entertainment media: report by the Working Group;
novel and emerging tobacco products;
forward-looking tobacco control measures (in relation to FCTC Article 2.1);
implementation of FCTC Article 19, which relates to liability;
improving the reporting system of the FCTC;
Implementation Review Mechanism;
contribution of the FCTC to the promotion and fulfillment of human rights; and
the FCTC Investment Fund.

COP10 runs from today until Saturday, Feb. 10.

It is followed by the third Meeting of the Parties to the Protocol to Eliminate Illicit Trade in Tobacco Products, Feb. 12–15, 2024.

February 6, 2024

FEELM Turbo Promises ‘Explosion’ of Flavor

FEELM, a leading vape solution provider, has launched the world’s first “burst power ceramic coil” vape solution. The FEELM Turbo solution leverages “cutting-edge” ceramic coil technology to deliver an explosion of flavor for consumers, according to an emailed press release.

“Like none others, it can deliver intense flavors, powerful vapor in the shortest time, and enduringly long product life. Compared to other high-powered vapes, products equipped with FEELM Turbo have smaller sizes yet deliver even higher bursts of vapor,” FEELM states. “This technology is also perfectly adapted to the two major vape categories, the disposables, and the pod-system, suitable for customers to create differentiated products to seize the market.”

Despite its small size, the Turbo can deliver a 200 percent improvement in taste intensity. It efficiently atomizes large molecules while enhancing e-liquid aroma recovery, resulting in a richer and more satisfying hit, according to the release. “With a burst time of just 0.5 seconds, it outperforms mainstream products on the market by strides. Tests show that just one burst power ceramic coil performs more than on par with dual MESH coils,” FEELM states.

At this year’s TPE exhibition, FEELM showcased an ultra-thin burst power disposable product the 2024 TPE trade show held in Las Vegas at the end of January. With a body thickness of only 14mm, the product “impressed consumers with its elegant thinness, excellent feel, and powerful first puff. It truly lives up to its name: ‘thin yet powerful!’”

The FEELM Turbo solution delivers significantly more vapor at a lower power setting. Compared to dual Mesh products on the market, FEELM Turbo sees an 80 percent increase in performance, offering a richer flavor experience. The Turbo also boasts constant power engine technology, which ensures consistent flavor and vapor volume throughout the product’s lifespan.

“Users can enjoy the same satisfying taste with every puff, unlike mainstream products where flavor often fades to bland. Compared to the competitors, FEELM Turbo products demonstrate a 35 percent improvement in flavor consistency and a remarkable 95 percent consistency in the vapor volume,” the release states.

February 6, 2024

BAT Makes Board and Committee Changes

Sue Farr and Dimitri Panayotopoulos will step down from BAT’s board at the end of the company’s annual general meeting on April 24, 2024, having served as nonexecutive directors for nine years.

As a result of these departures, BAT is changing the role of senior independent director and the composition of the audit and remuneration committees.

After the conclusion of the company’s annual general meeting, Holly Keller Koeppel will be appointed as senior independent director, succeeding Farr. Koeppel has been a nonexecutive director of the company since July 2017, and she is currently chair of the audit committee and a member of the nominations committee. Darrell Thomas will be appointed as chair of the audit committee, succeeding Koeppel, who will remain a member of the audit committee. Kandy Anand will be appointed as chair of the remuneration committee, succeeding Panayotopoulos.

Luc Jobin said, “I would like to thank both Sue and Dimitri for their extensive contribution to the board over their tenures. I would also like to thank Holly for chairing the Audit Committee since 2019. I look forward to welcoming Holly, Darrell and Kandy to their new roles.”

The above proposals are subject to reelection of each of the directors at the 2024 annual general meeting.

February 6, 2024

VTA Stands up for Lower-Risk Alternatives

The Vapor Technology Association (VTA) today announced the launch of a cable news ad buy in the U.S. targeting Senator Chuck Schumer and his proposed ban on Zyn nicotine pouches. The ad runs this week on FOX News and FOX Business during key programming slots, including “FOX and Friends,” “Kudlow,” and “The Five.”

The ad connects a proposed ban on e-cigarettes with a ban on all less harmful, tobacco-free nicotine products, such as Zyn nicotine pouches. The ad also calls out officials at the Food and Drug Administration’s Center for Tobacco Products (CTP) for repeatedly blocking access for millions of Americans to e-cigarettes as harm reduction tools.

“Sen. Schumer and the FDA are simply wrong: wrong on e-cigarettes, wrong on Zyn, and wrong on the science,” said Tony Abboud, executive director of VTA, in a statement. “Rather than give adult smokers broader access to a greater number of lower-risk alternatives, the FDA and CTP have instead imposed a de facto ban on e-cigarettes—and Zyn is next.”

The ad states that Schumer’s proposed Zyn ban mimics his attempts to eliminate e-cigarette use nationwide, amounting to an assault on Americans’ personal freedom to choose lower-risk, tobacco-free nicotine products that overwhelming scientific and medical data demonstrates are effective at helping adults quit smoking.

“Why is the FDA denying access to a wide range of less harmful alternatives to combustible cigarettes that could otherwise be used by millions of adult smokers trying to quit?” asked Abboud.

“Cigarettes kill. Rather than even acknowledging the settled science in support of e-cigarettes and other less harmful, tobacco-free nicotine products in recent years, the CTP has instead authorized nearly 900 new cigarettes for Americans’ use—but Sen. Schumer thinks it’s Zyn you need to be worried about.

“The anti-nicotine FDA and congressional establishment has simply lost its bearings on the strategy of harm reduction, which it applies to every public health crisis, yet refuses to apply to the annual crisis of nearly half a million Americans dying from smoking every single year.”

“VTA is running this ad buy because Americans deserve to know that less harmful nicotine products exist that can help adult smokers trying to quit. VTA supports Americans’ freedom to choose,” said Abboud.

February 6, 2024

Diversification in Africa: FCTC No Help

While participants in the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) are keen for tobacco growers to abandon the golden leaf, farmers around the world say they receive little support in switching to alternative livelihoods.

Interviewed by the International Tobacco Growers’ Association, Ryan Swales, president of the Zimbabwe Tobacco Association (ZTA), said he has not witnessed any attempts from the global health body to assist with diversification.

“I do not see any help from the WHO FCTC helping the diversification of tobacco farmers in Zimbabwe,” he was quoted as saying. “We are on our own, and a big proportion of large-scale growers have diversified on their own, with no help from anyone else, be it the tobacco companies or the WHO FCTC. If you ask many growers if they know who the WHO FCTC are, you will be met with a blank stare!”

This sentiment was echoed by ZTA CEO Rodney Ambrose, who noted that for Zimbabwe’s tens of thousands of small-scale farmers, there simply are no viable diversification options. “Our ministry engaged in a study on behalf of WHO FCTC some years back, which clearly concluded that there are no economically viable crops other than tobacco for our small-scale farmers. Tobacco is their livelihood.

“However, we are always willing to further explore diversification options that the WHO FCTC may propose.”

In Malawi, tobacco growers have received support from the Foundation for a Smoke-Free World as the country seeks to broaden its economic base.

February 6, 2024

Month: February 2024