Month: March 2024

  • Smoker Friendly Acquires Low Bob’s Locations

    Smoker Friendly Acquires Low Bob’s Locations

    Credit: Smoker Friendly

    The Smoker Friendly chain of retail stores announced it is acquiring 54 Low Bob’s Discount Tobacco locations in Indiana.

    The Cigarette Store, LLC, parent company of Smoker Friendly, announced its acquisition of Richmond Master Distributors, Inc., the owner of Low Bob’s Discount Tobacco. The stores will be rebranded as Smoker Friendly locations.

    There are 344 Smoker Friendly locations across 13 states, as well as independently owned stores within the Smoker Friendly network. The company has its own private-label brands and operates the Rocky Mountain Cigar Festival, according to Charlie Minato of Halfwheel.

    “We are very pleased to welcome the Low Bob’s team to the Smoker Friendly family,” said Terry Gallagher Jr., CEO of Smoker Friendly, in a press release. Pat and Scott Carrico and the Richmond Master team have been longtime friends and leaders in the tobacco outlet channel. We are fortunate to make this acquisition and strengthen our Smoker Friendly footprint in Indiana, bringing our store count to 80 in the state.”

  • STG Results ‘in Line with Expectations’

    STG Results ‘in Line with Expectations’

    Photo: STG

    Scandinavian Tobacco Group (STG) delivered net sales of DKK8.7 billion ($1.27 billion) in 2023, down slightly from the previous year.

    For the fourth quarter of 2023, net sales were DKK2.3 billion. Organic growth of 5 percent for net sales was driven by the group’s “growth enablers,” which in the fourth quarter accounted for close to 10 percent of group net sales, as well as an improved performance in the machine-rolled cigar business in Europe.

    The growth enablers comprise three opportunities that currently represent a small proportion of the group’s overall business but that have significant potential to contribute to greater net sales and earnings, according to STG. They are continued retail expansion in the U.S., international growth in handmade cigars and development of next-generation products, such as nicotine pouches and hemp products in key markets.  

    For the full year 2024, net sales are expected to be in the range of DKK8.8 billion to DKK9.1 billion.

    “Despite a challenging consumer environment STG delivered solid results for 2023 due to the commitment and performance of our employees across the globe,” said STG CEO Niels Frederiksen in a statement.

    “We continued to execute well on our strategy with two acquisitions, and I am particularly happy to see the progress in our growth enablers, where we saw healthy growth in international handmade cigars, retail expansion and next generation products. As we move into 2024, we are increasing our investments in the growth enablers and we expect 2024 to be a year of growth for STG.” 

    At the annual general meeting on April 4, 2024, the board of directors will propose an increase in the ordinary dividend of 2 percent to DKK8.40 per share, complementing the up to DKK850 million share buy-back program, which was started in Nov. 2023.

    The group’s annual report is here.

  • Belarus Bans 47 Vapes

    Belarus Bans 47 Vapes

    Image: natatravel

    Belarus’ State Committee for Standardization has banned 47 types of electronic cigarettes from sale, reports Novosti.

    In January and February, authorities in the Gomel region identified traders that were selling electronic smoking systems that failed to comply with legislative requirements. Some vapes exceeded the permissible nicotine level of 20 mg per ml, while others lacked health warnings, declaration on usage limitations and expiration dates,

    Many of the vapes were sold without documents proving compliance and safety of the product.

    The dangerous products were withdrawn from sale, and authorities have taken administrative measures against their sellers.

  • Zimbabwean Growers Urged to Grade Properly

    Zimbabwean Growers Urged to Grade Properly

    Image: Taco Tuinstra

    Zimbabwean tobacco growers’ representatives are urging their constituents to grade their leaf carefully to boost earnings during the selling season, reports The Herald.

    Key factors to consider during grading are plant position, color, quality, length and style, according to Zimbabwe’s tobacco research board, Kutsaga.

    “Prices in the tobacco market are determined during the opening day of the auction floors and depend on the grades of the crop,” said Victor Mariranyika, president of the Tobacco Farmers’ Union Trust. “The grading process starts even before the crop is planted, with factors such as land selection, preparation, fumigation, fertilization, seedling selection, topping and suckering, reaping, curing and storage all influencing the outcome.”

    While the tobacco plants are growing, the emerging leaves are categorized as prime, second and third, producing different colors during curing. Buyers pay more for certain colors and sizes.

    “The current practice of using color as the primary matrix for selling tobacco has proven to be unprofitable for farmers. The prices tend to be lower than the production costs, indicating the need for a different approach,” said Mariranyika.

    Tobacco Farmer Talk (TFT) WhatsApp group administrator Phineas Mukomberenwa announced an upcoming Kutsaga tour that will allow farmers to tour tobacco curing facilities and see grading, baling, tobacco presentation and the fundamentals of tobacco classification.

    “By integrating grading and classification in the tour, TFT aims to equip growers who are still harvesting and struggling with curing with the knowledge while also assisting those ready for the market. The objective is to ensure that tobacco is graded accurately and presented in a manner that secures the best possible prices at the tobacco auction floors,” said Mukomberenwa.

  • PMI to Support Female Empowerment

    PMI to Support Female Empowerment

    Image: Sanele Gobinduku/peopleimages.com

    Philip Morris International announced the launch of an extended partnership via its U.S. business to support female empowerment with a $5 million investment in the Women’s Business Development Council (WBDC), a 501(c)(3) charitable organization dedicated to providing tools and resources to help women entrepreneurs thrive in business throughout Connecticut.

    Beginning January 2025, in coordination with the WBDC, PMI’s U.S. business will contribute $1 million per year over a five-year period toward the Women’s Economic Empowerment Initiative to help remove barriers that prevent women from full participation in Connecticut’s entrepreneurial ecosystem.

    “Philip Morris International is committed to making positive impact throughout Connecticut communities and beyond. Our partnership with WBDC and investment through the Women’s Economic Empowerment Initiative enables us to better support Governor Ned Lamont’s vision of positioning our state as a catalyst for women and their families,” said Stacey Kennedy, president of the Americas region and CEO of PMI’s U.S. business, in a statement.

    Since 1997, the WBDC has educated and trained more than 18,900 clients in all of Connecticut’s 169 towns—helping women to launch, sustain and scale more than 14,170 businesses, create and maintain more than 31,400 jobs and access more than $57 million in capital.

    “This investment from PMI will enable us to continue the critical work we do to support economic independence through entrepreneurship for women in Connecticut,” said WBDC CEO Fran Pastore. “We are pleased that PMI has trusted us to use these funds to continue to help women access capital, education, and resources to support themselves and fuel employment within our state. Over the past few years, we have seen a 275 percent increase in the number of women who come to us seeking to launch or scale their business. Without the support of corporations in our community like PMI, this growth, and the growth we anticipate in the future, would not be possible.”

  • Heated, Oral Tobacco Output Jumps in Russia

    Heated, Oral Tobacco Output Jumps in Russia

    Photo: Delovoy Petersburg

    Cigarette manufacturers in Russia produced 182 billion cigarettes in 2023, reports CRPT, which operates the Honest Mark product labeling system. Accounting for 87.7 percent of domestic tobacco production, cigarette manufacturing was largely stable (up 1 percent) from the previous year.

    Production of heated tobacco products, by contrast, jumped 26 percent to 1 billion packs, claiming 10 percent of the Russian tobacco market in 2023. Output of oral tobacco products more than doubled to over 5.8 million. Production of cigarillos increased to 61.5 million packs in 2023 from 32 million in 2022.

    The only categories of tobacco products whose production decreased in 2022-2023 were cigars and smoking tobacco, according to CRPT. The production of cigars fell by 38 percent to 4.2 million packs, and smoking tobacco decreased by 8 percent to 1.3 million packs.

    Domestic tobacco companies manufactured 96.6 percent of the nicotine products on the Russian market in 2023.

    Following Russia’s 2022 invasion of Ukraine, leading international nicotine companies, such as British American Tobacco and Imperial Brands have sold their operations to domestic investors.

    The multinationals that remain are finding it increasingly difficulty to extract themselves from the market due to onerous government restrictions on such transactions (see, “A New Reality,” Tobacco Reporter, March 2024).

  • New Tobacco Control Measures in Russia

    New Tobacco Control Measures in Russia

    Photo: Kalyakan

    Russia has strengthened state control over the production and circulation of tobacco and nicotine-containing products, effective March 1, reports Mail.ru.

    The Federal Service for Control of Alcohol and Tobacco Markets, Rosalkogoltabakcontrol, will now monitor production and circulation of tobacco, suppressing illegal production and trafficking of products and monitoring compliance with licensing and mandatory requirements during production supply, purchase and transportation.

    Control activities include on-site inspections, test purchases and inspection visits.

    Effective March 1, manufacturers are required to have a license to produce tobacco. An electronic register of these licenses came into effect on Sept. 1, 2023.

  • UKVIA Seeks Clarity on Advertising Notice

    UKVIA Seeks Clarity on Advertising Notice

    Photo: New Africa

    The U.K. Vaping Industry Association (UKVIA) is seeking clarification following the recent Committee of Advertising Practice (CAP) enforcement notice on the prohibition of vaping ads on social media.

    The UKVIA is particularly concerned that “factual (nonpromotional) information” should only be made available to those who have “actively and specifically sought it out,” which would limit such content to social media accounts set to “private.”

    The industry group is especially worried that this means factual posts, such as repeating evidence-based statistics such as vaping is 95 percent less harmful than smoking, for its annual VApril Vape Awareness Month will now be deemed unlawful.

    “Around 40 percent of U.K. smokers wrongly believe that vaping is at least as harmful as, or even more harmful than, cigarettes, which suggests we need more evidence-based vaping facts on social media, not less,” the UKVIA wrote in a statement.

    One of the main aims of VApril is to use both paid and organic posts on LinkedIn, X and Facebook to give facts to smokers to help them make informed decisions over how they consume nicotine.

    The CAP says that after March 28, it will enforce restrictions under the Tobacco and Related Products Regulations 2016, which prohibit “ads that have the direct or indirect effect of promoting nicotine-containing electronic cigarette products” from being shown in most social media.

    The Enforcement Notice says: “Electronic cigarette ads are prohibited in any online media where content is shared to users who have not specifically sought it out.

    “This means paid-for display ads in all online space are prohibited, but it also means that regular, non-paid-for posts and content in social media, which might get shared by an algorithm to users, are prohibited too.”

    The Advertising Standards Authority will hold a webinar on March 21 where the rules on social media vape ads will be explained.

  • U.S. Trade Commission to Probe ALD and Stiiizy

    U.S. Trade Commission to Probe ALD and Stiiizy

    Photo: New Africa

    The U.S. International Trade Commission (ITC) will investigate oil vaporizing devices, components and products manufactured and sold by ALD Group and Stiiizy in response to patent violation complaints filed by Pax Labs.

    Pax Lab has asked the ITC to issue a limited exclusion order and a cease and desist order.

    In a note on its website, the ITC stressed that is has not yet made any decision on the merits of Pax Lab’s complaint. The ITC’s chief administrative law judge will now assign the case to one of the ITC’s administrative law judges, who will schedule and hold an evidentiary hearing. That judge will make an initial determination as to whether there is a violation of section 337 of the Tariff Act; that initial determination is subject to review by the Commission.

    The ITC said it will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the ITC will set a target date for completing the investigation. ITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

  • PMI Sued Over Zyn

    PMI Sued Over Zyn

    Photo: PMI

    In the first major legal challenge to oral nicotine pouches, a consumer has sued Philip Morris International over its popular Zyn brand, saying the product is addictive and harmful to young people, reports BNN Bloomberg.

    The plaintiff, Bailey Wolters, alleges addiction and dental issues as a result of his Zyn use. The lawsuit says that the pouches deliver more nicotine than cigarettes, and that PMI benefits from “Zynfluencers” who promote the brand on social media.

    The suit, which is seeking class-action status, also names as a defendant Swedish Match, which made the pouches before PMI bought it for $16 billion in 2022.

    According to the plaintiff, the companies failed to warn consumers about the risk of addiction and other harmful effects like cognitive issues, cardiovascular injuries, gastrointestinal problems and gum disease.

    PMI insists its pouches are intended only for existing users of nicotine products.

    The case was brought by Schlesinger Law Offices, whose initial lawsuit against Juul Labs investors including Altria Group expanded into thousands of legal actions and led to Altria’s eventual settlement of $235 million.