Author: Staff Writer

FITA Rejects BAT’s Tax-Evasion Accusations

Photo: Ognjen Stevanovic | Dreamstime.com
The Fair-Trade Independent Tobacco Association (FITA) has rejected accusations of tax evasion against its member companies.
Earlier this week, British American Tobacco South Africa (BATSA) suggested that many of its competitors were selling below the legal minimum collectable tax (MCT) level. According to an IPSOS report commissioned by BATSA, three-quarters of retail outlets in Gauteng, Western Cape and Free State are now openly selling illegal cigarettes.
Many of the brands that sold below MCT level belonged to FITA members, according to the report.
The FITA questioned IPSOS credentials. “This is not BATSA’s first dance with this particular research institution following the much-discredited report released in 2018,” the association wrote.
“Independent researchers and academics have repeatedly voiced their concerns about Big Tobacco and how it should not be trusted in respect of its research and studies on the illicit tobacco trade. They have repeatedly been found to have overstated the size and prevalence of this scourge in order to suit their selfish needs, often to the detriment of their commercial competitors and/or the fiscus.
“These so-called independent reports are now also being used as ammunition by Big Tobacco for anti-competitive purposes to smear the names and brands of independent local cigarette manufacturers.”
FITA insisted its members comply with South Africa’s tobacco laws. The association says it supports an inquiry where warranted, and that authorities should investigate BATSA.
April 13, 2021
‘Tobacco Tax Evasion a ‘National Emergency’

Photo: Tobacco Reporter archive
South Africa’s recent tobacco tax increase has sparked a criminal price war in the country as manufacturers flood the market with untaxed cigarettes, according to British American Tobacco South Africa (BATSA).
A new independent report by IPSOS shows that the announcement of the 8 percent hike in tobacco taxes appears to have been the trigger for an all-out illegal price war in key provinces.
Three-quarters (74 percent) of retail outlets in Gauteng, Western Cape and Free State are now openly selling illegal cigarettes. This is an increase of more than 7 percent on the last survey conducted before the excise increase in February.
The report showed that three-quarters (74 percent) of retail outlets in the three provinces nationwide sold cigarettes below the legal minimum collectible tax (MCT) level. Mystery shoppers were able to purchase illegal cigarettes in every retail sector more easily than during a similar study in February.
Gold Leaf Tobacco Corp. brands found being sold under the MCT rose by 13 percentage points in a month, and 85 percent of their brands purchased were illegal. One hundred percent and 91 percent of brands owned by Afroberg and Carnilinx, respectively, were being sold below MCT in retail outlets where they were the cheapest products available.
BATSA General Manager Johnny Moloto said that the findings of this latest report illustrate a “national emergency.”
The facilitation of this scale of robbery of billions of rand from the people of South Africa as we continue to struggle with pandemic hardships is totally unacceptable.
Johnny Moloto, general manager, BATSA
“We thought that the levels of criminality and tax evasion that cost every single South African huge sums of money could not get any worse. We were wrong,” Moloto said. “This study shows that, now, three out of every four retail outlets in Gauteng, Western Cape and Free State are openly selling illegal products that are not remitting taxes.
“The facilitation of this scale of robbery of billions and billions of rand from the people of South Africa as we continue to struggle with pandemic hardships is totally unacceptable. The robbery is not just getting worse. This study shows that it’s getting worse on a day-by-day basis.
“This is a national emergency, and it’s clear we need an immediate Commission of Inquiry into the tobacco market in South Africa.”
April 12, 2021
Russia Pushes for Self-Extinguishing Cigarettes

Photo: JTI
Tobacco companies selling in member states of the Eurasian Economic Union should be required to manufacture cigarettes that self-extinguish when not smoked, according to a proposal by the Russian Ministry of Healthcare.
“A draft resolution of the board of the Eurasian Economic Commission, setting forth requirements to consumer packaging and information placed on tobacco product packs and the requirement to inflaming capability of cigarettes released for circulation on the market of Union member-states, was sent by the Russian Ministry of Healthcare to interested federal executive authorities,” Tass reported.
Negligence during smoking is the cause of many fires, including with fatalities and material damage, the Ministry of Emergencies noted.
“Bringing cigarettes with lowered inflaming capability in circulation may significantly influence prevention of a portion of fire outbreaks, lowering fatalities and injuries of people during fires due to negligent smoking, and saving property of citizens,” it said.
April 12, 2021
Juul Leaves Canadian Industry Association

Photo: Juul Labs
Juul Labs is leaving Canada’s Vaping Industry Trade Association (VITA), citing nonalignment on critical policy issues.
“While we have appreciated the opportunity to collaborate with VITA, we will not be renewing our membership as we are not aligned on too many critical policy issues,” Juul Labs wrote in a statement. “For example, we support Tobacco 21 legislation—raising the minimum purchase age of tobacco and vaping products to 21—enhanced access controls at retail and limiting flavor options.”
Juul Labs Canada said it will continue to focus on combating underage usage of vaping products while preserving the historic opportunity to switch adult smokers off of combustible cigarettes.
Tobacco Reporter’s sister publication Vapor Voice profiles VITA in its current issue.
April 12, 2021
New CFO of Imperial Brands to Start Earlier

Photo: Casimirokt | Dreamstime.com
Lukas Paravicini will join Imperial Brands’ board of directors on May 1 and become chief financial officer on May 19, the day after the company publishes its half-year results.
Oliver Tant will step down from the board on May 19 and will be available to work with Paravicini through the end of June to ensure a smooth and orderly handover.
The dates have been brought forward from those announced on Feb. 17, when Imperial Brands first revealed Paravicini’s appointment.
Before joining ED&F Man Holdings, Paravicini held senior positions at Fonterra, the world’s largest dairy exporter. He was chief financial officer from 2013–2017 and chief operating officer of global consumer and foodservice business from 2017–2018. Prior to that, he spent 22 years with Nestle in various senior finance and general management roles, working in South America and latterly in Switzerland for Nestle Professional, the food service arm of Nestle, first as chief financial officer and then as vice president and general manager of Europe.
As chief financial officer of Imperial Brands, Paravicini will receive an annual salary of £730,000 ($1 million) and a pension allowance.
April 12, 2021
Saudi Arabia Bans Underage Sales

Saudi Arabia has banned the sale of tobacco to people under 18 years old and smoking in areas where children are present, reports The National.
Importing and selling toys or candy made to look like cigarettes, or that bear images that encourage children to smoke, has also been banned by law.
Saudi Arabia aims to reduce tobacco consumption to 5 percent by 2030.
In 2019, it banned smoking in public places, such as airports, restaurants, educational institutes and public transport.
The kingdom has also introduced a tax on tobacco products to curb smoking and raised the price of shisha by 100 percent.
Meanwhile, the Saudi Ministry of Health has launched anti-smoking clinics to facilitate access to therapeutic services and provide consultations to those who wish to quit smoking.
April 12, 2021
U.S. Customs Seize Unapproved Juul Pods
U.S. Customs and Border Protections (CPB) officers in Indianapolis seized six shipments containing more than 10,000 unapproved Juul Pods. All the shipments originated from an individual in Ontario, Canada, and were headed to various locations in New York and New Jersey.
The shipments arrived separately and were all seized on April 8. The packages were mismanifested as electrical apparatus, a common practice used by smugglers. A total of 10,464 pods were seized. The pods had an MSRP over $156,000.
“Our officers are dedicated to identifying and intercepting these types of shipments that could potentially harm communities,” said Kerry Carter, acting port director for Indianapolis in a statement. “Our officers and specialists enforce hundreds of laws for many partner agencies and are committed to ensuring the health and safety of American citizens.”
Last year, the Food and Drug Administration announced an increased enforcement priority of electronic nicotine-delivery systems and issued detailed guidance to the industry of these new enforcement priorities that regulate the unauthorized importation of tobacco products.
April 12, 2021
Global Tobacco Market to Reach $1.1 Trillion

Photo: Igor Akimov | Dreamstime.com
Amid the Covid-19 crisis, the global market for tobacco estimated at $845.1 billion in the year 2020 is projected to reach a revised value of $1.1 trillion by 2027, according to a new report published by Research and Markets. This translates into a compound annual growth rate (CAGR) of 3.2 percent.
Cigarettes are projected to record a 3.1 percent CAGR and reach $734.4 billion by 2027. After an early analysis of the business implications of the pandemic and its induced economic crisis, growth in the smokeless segment is readjusted to a revised 3.1 percent CAGR for the next seven years.
The U.S. tobacco market is estimated at $228.8 billion in the year 2020. China, the world’s second-largest economy, is forecast to reach a projected market size of $203.5 billion by the year 2027, trailing a CAGR of 5 percent over the analysis period.
Among the other noteworthy markets are Japan and Canada, forecast to grow at 2 percent and 2.5 percent, respectively, over the 2020–2027 period. Germany is forecast to grow at approximately 2.4 percent CAGR.

In the cigars and cigarillos segment, Canada, Japan, China, Europe and the U.S. will drive the 3.1 percent CAGR estimated for this segment. These markets accounting for a combined value of $57.2 billion in the year 2020 will reach a projected size of $70.8 billion by the close of the analysis period. China will remain among the fastest growing markets in this cluster.
Led by countries such as Australia, India and South Korea, the market in Asia-Pacific is forecast to reach $135.1 billion by the year 2027 while Latin America will expand at a 3.5 percent CAGR through the analysis period.
April 9, 2021
Stop-Smoking Chemicals in NZ Plants

Illustration: Iamnee – Dreamstime.com
A recent study in Addiction shows that a chemical found in many New Zealand plants, including the kowhai, is just as effective as varenicline in helping people quit smoking.
The chemical is called cytisine and has been used in some Central and Eastern European countries for decades to help with smoking cessation. It is relatively unknown elsewhere. Not only is the chemical cheaper than other smoking cessation medications, but it also has very few known side effects.
“This is a quitting tool that comes from a plant instead of a lab,” University of Auckland Researcher Associate Professor Natalie Walker said.
“Identifying the potential of the cytisine component of the kowhai is part of the revitalization of matauranga Maori [Maori knowledge].”
This is a quitting tool that comes from a plant instead of a lab.
Natalie Walker, associate professor, University of Auckland
The study was done in collaboration with Brunel University London and Lakes District Health Board. It involved hundreds of Maori participants from across the Bay of Plenty, many of them women.
Participants were an average age of 43 and had been smoking for around 25 years. Twelve percent of those who took cytisine pills still were not smoking after six months while 8 percent of those who took varenicline were not smoking after six months.
Those taking cytisine experienced fewer side effects such as nausea, headaches and difficulty sleeping. “Varenicline is New Zealand’s best smoking cessation medication available but also expensive for the government,” Walker said. “Cytisine is cheap, it works and it suits Maori and their whanau.”
In earlier research, scientists showed that cytisine was more effective than nicotine-replacement therapy, such as nicotine patches, gum or lozenges.
April 9, 2021
Malaysians Quitting Cigarettes with Vaping

Infographic: Green Zebras
Eighty-eight percent of Malaysian vapers successfully quit smoking cigarettes due to their vape products, reports the New Straits Times, citing a survey commissioned by the Malaysian Vape Industry Advocacy (MVIA).
Conducted by the Green Zebras market research firm, the survey also reported that 79 percent who are dual users (users of both vapor products and cigarettes) have reduced the number of cigarettes they smoke since they began vaping.
MVIA President Rizani Zakaria noted that the survey’s results clearly show that vaping can be an effective tool to help smokers quit cigarette smoking and is a much less harmful alternative.
“There is a real need for the Malaysian government to recognize the benefits of vaping, especially the potential that it has to help smokers to quit cigarette smoking by switching to a less harmful product,” he said.
There is a real need for the Malaysian government to recognize the benefits of vaping.
Rizani Zakaria, president, MVIA
“As it stands, the vape products are still unregulated, and we believe it is time for the government to look into introducing regulations on the products and adopt policies that would encourage smokers to switch to vaping that is less harmful.”
April 9, 2021