Month: March 2024

Netherlands Probes Tobacconist Support

Photo: jordi2r
The Netherlands’ food and consumer product safety organization, NVWA, will investigate cigarette manufacturers’ support of tobacconists, which critics insist amounts to illegal advertising, reports Dutch News.
Dutch law prohibits the advertising, promotion, sponsoring and marketing of tobacco products.
The investigation was prompted by a news report that said Philip Morris International is giving money to people who are opening new tobacco shops ahead of a ban on the sale of cigarettes in supermarkets scheduled to take effect in July.
In the runup to the ban, the number of specialist cigarette shops, often in the direct vicinity of supermarkets, has risen for the first time in more than 10 years.
“A lot of adult smokers will be looking for new outlets,” a PMI spokesperson told Distrifood. “We are very willing to work with those entrepreneurs who share our vision of the future,” he said.
Almost a quarter of the Dutch population smokes.
March 15, 2024
Finland Aims for Pouch Regulation Like Tobacco

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The government of Finland wants to bring nicotine pouches under tobacco laws so that it can more effectively discourage consumption, reports YLE.
Among other measures, it wants to curb pouch nicotine levels to 20 milligrams per gram of product. In addition, the government wants to prohibit the online sales of nicotine pouches and limit the range of flavors, in an effort to reduce the products’ appeal to young people.
Under the proposals, retailers selling pouches would need to obtain a license, while importers would face restrictions.
The stated aim of the proposed legal reform is to prevent health risks and the use of oral nicotine among young people.
The widespread availability of strong nicotine pouches in Finland has reportedly reduced the smuggling of oral tobacco products from neighboring Sweden.
March 15, 2024
Protesters Demand End to Mexico’s Vape Ban

Image: Sansert
Vapers protested in front of Mexico’s Congress of the Union, calling for the country’s vaping ban to be replaced with risk-based regulation. The protest was organized by the World Vapers’ Alliance and All Vape Mexico.
The protesters also demanded a halt to the constitutional reform proposed by President Andres Mauel Lopez Obrador that would elevate the ban to the Constitution. In addition, they called for approval of a risk-based regulation allowing adult smokers access to vapor products to quit smoking combustible cigarettes.
Mexico’s vaping ban has been in place since May 2020.
“The ban was introduced in order to prevent underage vaping; however, minors now have full access to potentially dangerous products on the black market,” said Alberto Gomez Hernandez, policy manager of the World Vapers’ Alliance. “At the same time, smokers who want to quit smoking have difficulty finding safe vaping products. The ban has clearly been a failure and must be reversed as soon as possible. Legislation cannot be based on whim or ideology; it must be based on scientific evidence and the experience of other countries that have had good results.”
Vapes can easily be obtained on the informal market from underground vape shops and on the black market, which is controlled by organized crime groups.
“It is very unfortunate that the federal government thought that the ban would prevent many young people from having access to vaping and does not give people who want to quit smoking the opportunity to use this option,” said Deputy Sergio Barrera. “We need to have clear rules. We need to know who can produce it, who can distribute it and who can consume it, and that is why we are pushing for regulation.”
“The president sees a problem where there is actually a solution to smoking,” said Antonio Toscano, All Vape Mexico spokesperson. “His prohibitionist stance unprotects adult users, who are forced to buy black market products, where there are no quality controls, let alone controls on sales to minors. Prohibition is a danger to public health; good regulation could benefit public health enormously and save millions of lives.”
March 14, 2024
Altria to Sell Part of its Anheuser-Busch Stake

Photo: Rafael Henrique
Altria Group plans to sell a portion of its investment in Anheuser-Busch InBev (ABI) through a global secondary offering. In addition, ABI has agreed to repurchase $200 million of ordinary shares directly from Altria, concurrently with, and conditional on, completion of the offering.
Altria currently holds approximately 197 million shares of ABI, representing approximately 10 percent ownership. Altria, as the selling shareholder, is offering 35 million of ABI’s ordinary shares. In connection with the offering, Altria expects to grant the underwriters an option to purchase up to 5.25 million additional ABI shares owned by Altria, exercisable within 30 days following the pricing of the offering. In addition, Altria has agreed to a 180-day lockup with the lead underwriter for our remaining ABI shares.
“As good stewards of shareholder capital, we consistently review options to unlock the value of our ABI investment, and we believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” said Altria CEO Billy Gifford in a statement.
“Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet. Our continued investment reflects ongoing confidence in ABI’s long-term strategies, premium global brands and experienced management team.”
Following its investment sale notice, Altria announced a $2.4 billion increase to its existing $1 billion share repurchase program. The expanded program is expected to be completed by Dec. 31, 2024.
Altria expects cash savings from the elimination of future dividend payments on the repurchased shares.
“These opportunistic capital allocation decisions reflect our ongoing confidence in Altria’s future and the significant value offered in our shares today,” said Gifford. “We have a longstanding history of returning cash to our shareholders, and today’s announcement reflects our continued desire to create long-term shareholder value.”
March 14, 2024
Top KT&G Shareholder Opposes CEO Nominee

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KT&G’s biggest shareholder is opposing the nomination of Bang Kyung-man as the cigarette manufacturer’s new CEO, reports Yonhap News. The Industrial Bank of Korea (IBK), which owns about 8 percent of KT&G, cited falling profitability and dubious business practices during the nominee’s tenure as a board member.
On Feb. 22, KT&G’s CEO candidate recommendation committee selected Kyung-man Bang, senior executive vice president of KT&G, as the final CEO candidate, citing his performance on criteria such as management expertise, global acumen, strategic thinking skills, stakeholder communications and universal morality and ethical awareness.
KT&G shareholders are due to vote on the nomination during the company’s annual general meeting on March 28. The appointment would mark KT&G’s first leadership change in nine years.
IBK opposes Bang’s nomination because “KT&G’s operating profit has fallen more than 20 percent” since he was appointed as vice president of the cigarette maker, an IBK official was quoted as saying.
“Given a decision to secure friendly shares using its own stocks, the independence and fairness of the current board of directors are bound to be seriously questioned,” the official said.
In a regulatory filing dated March 12, IBK also made a shareholder proposal to improve KT&G’s governance by strengthening the expertise and independence of the board of directors.
KT&G has faced pressure recently to be more transparent in its CEO selection process. In a video published ahead of the South Korean tobacco firm’s annual general meeting, KT&G shareholder Flashlight Capital Partners highlighted what it considered the problems during previous CEO nominations.
In January, the incumbent CEO, Baek Bok-in, said he would not seek reappointment.
March 14, 2024
Kazakhstan Mulls Cigar Tax

Photo: Maksym Kapliuk
Kazakhstan’s Ministry of National Economy wants to introduce excise taxes on high-end cigars and other luxury items, reports The Times of Central Asia.
The goals of the new taxes are “to equalize the socioeconomic situation of different segments of the population, to increase the nation’s revenue and to regulate consumption of certain goods,” according to the ministry.
In its proposals, the ministry acknowledged that potential reductions in consumption of the impacted luxury goods, along with the cost of administrating the new taxes, might offset any additional income generated.
The new amendments are also forecast to harmonize excise on general tobacco. Current legislation already provides for a gradual increase in excise taxes on cigarettes, which are due to reach $30.6 1,000 cigarettes this year.
The ministry’s document is publicly available for discussion until March 27, with the new tax code expected to be adopted in October of this year.
March 14, 2024
Call for Climate-Proof Agriculture in Zimbabwe

Photo: Taco Tuinstra
Smallholder farmers, who are the backbone of Zimbabwe’s tobacco farming industry, should have access to affordable irrigation facilities, according to the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement Anxious Masuka.
This years tobacco growing season was impacted by an El Nino-induced drought, which caused leaf volumes to be 10 percent below those of last year’s record 296 million kg.
“We must take innovative ways to climate-proof agriculture,” Masuka was quoted as saying at the opening of the marketing season by The Star. “Seventy-five percent of our tobacco is grown by the smallholder sector who invariably depend on the rains to plant their tobacco.”
The start of the tobacco marketing season is an important event in Zimbabwe’s farming calendar, as tobacco is the country’s largest agricultural export.
Tobacco exports earned Zimbabwe nearly $1 billion in 2023, according to the Tobacco Industry Marketing Board.
This year the first bale of the golden leaf was auctioned for $4.92 per kg compared to $4.35 last year.
March 14, 2024
Zimbabwe Tobacco Season Opens

Image: Taco Tuinstra
Zimbabwe’s auction floors opened today, with high expectations for better prices this season compared to last year, according to The Herald. Deliveries of the contract crop start tomorrow.
Tobacco growers in the country faced poor rains this season, but those with a good crop expect better prices due to demand. The Tobacco Industry and Marketing Board (TIMB) stated that Zimbabwe exported 233,896,182 kg valued at $1.22 billion as of Dec. 15, 2023. The average price for shipments was $5.23 per kilogram.
The auction floors only sell about 5 percent of the crop but are considered the major price setter compared to the contract floors.
Farmers will receive 75 percent of their earnings in foreign currency with the remaining 25 percent in local currency.
Only two auction floors have been licensed this year by the TIMB to buy leaf, the Tobacco Sales Floor and Premier Tobacco Auction Floors (PTAF).
“We have finished all preparations,” Owen Murumbi, PTAF chairman, said yesterday. “The banks are now lined up, EcoCash and Mukuru are all there to bring more convenience to the farmers.
“We have started receiving bales. We should surpass last year’s figures although the volumes are low. We don’t expect them to go down. Farmers need to come, and we are offering excellent services. We are starting with Mukuru and EcoCash on day one. This should improve payment systems for farmers.
“Tobacco sales floors should implement strict age verification processes to ensure that only adults can access the premises. All selling points shall ensure there are no children under 18 in and around selling premises, tobacco processing factories and any other tobacco storage and handling facilities.
“Sales floors should prominently display awareness campaigns that highlight the issue of child labor in tobacco production, posters and educational materials that provide information about the harmful and unethical practices associated with child labor.”
The TIMB has created a transporter compliance framework that will work toward developing a system that monitors movement of tobacco from the primary source to the market. The framework is expected to minimize losses, enhance farmer viability and improve livelihoods and aims to curb side marketing, tobacco bale theft, bale swapping and forgery on stop order launching.
“We appeal to the authorities to ensure that tobacco sold at the auction floors get similar prices with the one which is sold at the contract floors,” said Barbra Marava of Banket. “Farmers incur similar costs, and there is no reason to offer them different prices like before.”
March 13, 2024
Pyxus Achieves Supplier Engagement Leadership

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Pyxus International has been recognized by environmental nonprofit CDP as a Supplier Engagement Leader. Pyxus ranked among the top tier of companies featured on CDP’s Supplier Engagement Leaderboard for its effectiveness in working with its suppliers, particularly contracted growers, to address climate change.
Pyxus’ 2023 Supplier Engagement Rating ranked the company above the industry, North America and global averages and reflects its improved environmental performance, as evidenced by its 11 percent year-over-year reduction of value-chain-related emissions (scope 3), according to a company press release.
“Our sustainability journey cannot be traveled alone. Collaborating with our contracted farmers and other upstream suppliers to reduce our company’s scope 3 emissions is pivotal to achieving our carbon neutrality targets and delivering stakeholder value,” said Pyxus President and CEO Pieter Sikkel in a statement. “We are honored to receive Supplier Engagement Leadership status, CDP’s highest level of recognition, confirming that we are truly working together to grow a better world.”
A company’s Supplier Engagement Rating is derived from information submitted during CDP’s annual climate change disclosure process and assesses a business’ governance, targets, scope 3 emissions and supplier engagement performance. In February, Pyxus achieved Leadership status in CDP’s climate change category.
March 13, 2024
California Firm Sues Zyn Makers

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A law group in California has filed a lawsuit against Philip Morris in the state’s Southern District. The Schmidt National Law Group claims that the maker of Zyn is targeting children and young adults with its flavored nicotine pouches.
“Now comes along Zyn the chewing gum, and the common denominator of all these nicotine delivery systems is as far as targeting towards kids, and I’m talking about kids, middle school, high school, younger and younger,” said Martin Schmidt, managing attorney at The Schmidt National Law Group.
Although a person must be at least 21 years old to purchase the product legally, Schmidt says it is very accessible to people younger than 21. The class action lawsuit seeks “damages” from Philip Morris and Schmidt said he would like stricter limits on access to the product, according to media reports.
The case could take years to work its way through the litigation process, according to Schmidt.
March 13, 2024