Author: Staff Writer

Existential Threats
Photo:Trần Tiến Lộc Đỗ from Pixabay
Participants in Keller and Heckman’s recent vapor law symposium agonize about U.S. shipping restrictions and marketing applications.
By Timothy S. Donahue
It is getting more difficult to be in the business of selling and manufacturing vapor products in the United States. Regulations on the industry are forcing many companies to rethink operations or go out of business. During the E-Vapor and Tobacco Law Virtual Symposium, sponsored by the Keller and Heckman law firm, industry experts discussed the current challenges facing the vaping industry. The seminar centered on two regulatory requirements that could regulate e-cigarettes out of existence: premarket tobacco product applications (PMTAs) and the Prevent All Cigarette Trafficking (PACT) Act.
As part of the Consolidated Appropriations Act 2021 in the most recent Covid-19 relief bill signed into law on Dec. 27, 2020, Congress amended the PACT Act to apply to e-cigarettes and all vaping products. Jeffrey Cohen, associate chief counsel at the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), explained that the PACT Act rules would ban the U.S. Postal Service (USPS) from mailing electronic nicotine-delivery system (ENDS) products.
Cohen said during the conference that he could not think of a situation, including business-to-business (B2B), where it would be legal to mail ENDS products through the USPS. “Basically, anything that’s covered by PACT, with certain rare exceptions, is nonmailable. You pretty much are not going to be able to mail nicotine-delivery devices anymore,” explained Cohen. “The biggest thing the PACT Act did was … it really wiped out the internet cigarette trade by nonmailability. That’s the biggest hammer in the PACT Act arsenal.”

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Many participants shared Cohen’s concern about B2B shipments. However, just a few days after the conference ended, those fears were alleviated. On Feb. 19, the USPS published in the Federal Register its rules for mailing ENDS products. This means the rule will take effect on March 27, 2021. The USPS rule states that the agency will mail vapor products under narrowly defined circumstances, including B2B. Exceptions include:
Intrastate shipments within Alaska or Hawaii;
Shipments between verified and authorized tobacco industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes;
Lightweight shipments mailed between adult individuals, limited to 10 per 30-day period;
Limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes; and
Limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
Azim Chowdhury
Azim Chowdhury, a partner at Keller and Heckman who moderated the seminar, said that the PACT Act has historically exempted B2B deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products mailed only for business purposes between legally operating businesses that have all applicable state and federal government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation or research.
“Companies seeking to use USPS for business-to-business deliveries must first submit an application to the USPS Pricing and Classification Service Center and comply with several other shipping, labeling and delivery requirements,” said Chowdhury.
The USPS rules also state that the listed exceptions cannot feasibly be applied to inbound or outbound international mail, mail to or from the Freely Associated States or mail presented at overseas Army Post Office, Fleet Post Office or Diplomatic Post Office locations and destined to addresses in the United States. Because of this inability, all ENDS products “in such mail are non-mailable, without exception.”
In addition to the non-mailing provisions, the PACT Act requires anyone who sells cigarettes or smokeless tobacco to register with the ATF and the tobacco tax administrators of the states into which a shipment is made or in which an advertisement or offer is disseminated, according to Chowdhury. Retailers who ship cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco, verify the age and identity of the customer at purchase, use a delivery method (other than USPS) that checks ID and obtains an adult customer signature at delivery, and maintain records of delivery sales for a period of four years after the date of sale, among other things.
Excluded from the statutory definition are products approved by the U.S. Food and Drug Administration for sale as “tobacco cessation products or for other therapeutic purposes and marketed and sold solely for such purposes.” The USPS also proposes to treat ENDS as a standalone category, “albeit one generally subject to the same restrictions and exceptions as cigarettes, consistent with the statute.”
The PACT Act also mandates that the ATF produce a list of noncompliant sellers who have violated the conditions of the PACT Act. If a company gets on the noncompliant list, Cohen says that even the common carriers cannot ship the company’s products. He explained that anyone can nominate entities who they believe are noncompliant of the PACT Act.
“We send a letter out to them indicating that we’re considering putting them on the list. The company has an opportunity to reply and explain to us why they are in compliance,” said Cohen. “Then we make a decision … distribute this [list] to the post office, to credit card companies, to common carriers, and they cannot ship goods sold by people that are on the list.”
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Still struggling
PMTAs were due to the U.S. FDA on Sept. 9, 2020. However, many companies submitted incomplete applications and are still working on completing the scientific studies that the applications require. Some companies are submitting PMTAs to get approval for new vaping products to be allowed to be marketed. For a product that was on the market prior to Aug. 8, 2016, to remain on the market, the manufacturer must have submitted a PMTA by the deadline.
Chowdhury says that the FDA has already started issuing warning letters to companies that did not submit PMTAs, asking them to remove the illegal products from the market. In a recent letter to the industry, the FDA has stated that it is prioritizing enforcement against any ENDS product that continues to be sold and for which the agency did not receive a product application. To date, the FDA has sent warning letters to 30 firms who manufacture and operate websites selling ENDS products, specifically e-liquids, which lack premarket authorization.
Testing requirements for PMTAs featured prominently as a discussion topic during the seminar. One requirement that can cause the regulatory agency to issue an immediate refuse-to-accept letter is the failure to include an environmental assessment (EA) study. “Despite the lack of direct correlation between environmental impacts and public health assessments, omission of an EA will jeopardize the temporary marketing order for deemed products,” one speaker noted.
For vapor products, EA studies must include items such as release of aerosol into the air, potential release of biomarkers into aquatic environments after wastewater treatment and biosolids as fertilizer. It should also include the impact of disposing of a product. This includes leftover e-liquid impacts on landfills from empty bottles and cartridges as well as the hardware impacts, such as from batteries and packaging.
Many participants asked questions about the rules for synthetic nicotine. Chowdhury explained that legislation pending in Congress includes language instructing the FDA to issue a final rule on the regulation of synthetic nicotine.
“FDA could take the position that because nicotine itself is a drug, it has this effect on the structure, function of the body that once you take away the fact that it’s derived from tobacco … could FDA come after that industry, come after those products as unapproved drugs or unapproved drug delivery devices? That’s a question that we’re waiting to see how FDA reacts as more nicotine products come to market,” he said.
Nicotine salts were also addressed. If a company has an e-liquid that contains freebase nicotine but switches to a nicotine salt, that is a change in the formulation of the product and therefore creates a new product. “Now that we are in a post-PMTA world, where applications were submitted back in September, if you were to come to market or try to change the labeling of a product now, arguably because review of the label, how it’s perceived, how it impacts the consumer, it’s part of the review process,” explained Chowdhury. “It’s not clear that a labeling change is something you want to do at this point without at least notifying the FDA and providing FDA with the updated labeling in your application.”
Due to lab space restrictions and Covid-19-related delays, numerous smaller manufacturers are still trying to complete the required testing for incomplete PMTAs. Many manufacturers are concerned about the FDA approving the products produced by major tobacco companies sold in C-stores before approving products from smaller companies whose products are typically sold in vape shops. One speaker noted that the industry is currently “freaking out” about the uncertainty and toughness of the PMTA process, fearing that the market could be handed to large companies.
These fears are not unfounded. In a Feb. 16 update, the FDA confirmed that, due to the sheer number of applications, the agency has set aside the products with the greatest market share and will push those products through the PMTA process more quickly. The agency stated this was because, “based on their market share,” these companies would provide the biggest impact to overall public health. Since vapor products are tracked nationally only through Nielsen and C-store data, products from Juul Labs, R.J. Reynolds Vapor Co., Njoy and Logic have moved to the front of the PMTA line. Manufacturers selling hardware in untracked vape shop channels have no way of proving market share to the FDA.
“I don’t think it will be only big tobacco getting PMTAs, but I think there’s a serious risk where you end up with the only flavors being approved are tobacco,” one presenter noted. “It has been a tough year, not just because of Covid, but the uncertainty over PMTAs. People are preparing to change their entire business plans because of the PACT Act. Until the FDA acts on PMTAs, real unity in this industry—not just unity among people selling your exact products—is near impossible. Once there are PMTAs [approved], there’s going to be unity through those with PMTAs to clear the market of those without them.”
Timothy S. Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.
March 1, 2021
Gold Nuggets

Photo: Stokkete | Dreamstime.com
Gaining insights from the FDA’s final PMTA rule
By Willie McKinney and Cheryl K. Olson
On Jan. 19, the U.S. Food and Drug Administration finalized a “foundational rule” about the “minimum requirements for the content, format and review of premarket tobacco product applications (PMTAs).” Within days, before many of us had a chance to download the 516-page document, let alone read it, the rule disappeared. The link says, “page not found.”
Don’t worry. This is part of a normal review by the incoming Biden administration of recent rules from the old regime. Given that little FDA staff turnover is expected, their thinking, and the rule, will probably stay the same. The document will be back, nicely formatted.
What to do while we wait for the final-final rule to appear on the FDA’s site? Well, the bulk of the document addresses “about 1,000 comments” (!) the FDA received on the proposed rule issued in 2019, including many questions from industry folks confused about PMTAs.
Understanding the subtleties and subtext of the FDA’s responses to comments can dramatically increase your chances of getting a marketing granted order. Ignoring them can lead to a significant waste of time and money.
Let’s wade into the FDA’s responses and see what gold nuggets of insight we can pan. What fuzzy areas affecting your strategy are now clear? What costly studies or paperwork might be trimmed or skipped?

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A PMTA is not a box-ticking exercise
We can begin with how the FDA thinks and what that means for PMTA strategy. Remember, interacting with tobacco product makers and sellers is still relatively new for the FDA’s staff and consultants. As they read comments, held conversations and began reviewing the recent flood of PMTAs, they realized that companies couldn’t figure out what the FDA was asking for. We know this because the PMTA rule lays out, much more clearly than in previous documents, what the FDA needs from companies. There are details on required content and format. The rule contains dozens of “musts”—must list, must include, must state and so on.
The FDA also says what can happen if you don’t meet minimal requirements: Do this, and we won’t accept or file. Or: This will slow the review process. Think of it as a series of red lights (“FDA will refuse to accept a PMTA … where it lacks constituent testing information required by § 1114.7(i)(1)(v)”) and yellow lights (“FDA may refuse to accept or file an incomplete application for review”). All of this is welcome clarity.
That doesn’t mean, as we’ve heard it described, that having a PMTA accepted and filed is a check-the-box exercise. Parts of a PMTA are like that, but the substantive review of data definitely is not.
Many of the comments to the FDA hint at frustration. “Why can’t they just tell me what studies to do so I can market my product?” The short answer is that a PMTA is partly a checklist of required information, but it’s also a narrative. You’re telling a story about why your product is appropriate for the protection of public health (APPH), illustrated by data. An effective PMTA is driven by story—explaining why your product on balance is likely to benefit public health—and merely organized by the PMTA format.
If you try to follow the rule document like a cookbook recipe—add a cup of pharmacokinetics (PK) studies and a tablespoon of label comprehension, and it’s baked—you will likely fail. That’s because the rule is descriptive but not prescriptive; it doesn’t tell you how to deliver. Why? First, because each product is different, with its own particular characteristics and target customers and therefore a distinctive set of potential public health benefits and risks that need to be demonstrated or mitigated. Second, a how-to list would tie the FDA’s hands as they make and rethink decisions about what is APPH. In Response 105, the agency notes that “Due to the nature of the Federal rulemaking process … FDA may not be able to update such standards in a timely manner.”

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Expect APPH to evolve
APPH is about relative health risks; it’s about “net benefit to the health of the population as a whole.” A definition like that, based on comparing ever-evolving tobacco products, will create a moving target. See FDA’s Response 123: “Because market conditions will change over time, what might be APPH at one point in time may no longer be APPH in the future.”
A static approach for granting marketing orders means the FDA couldn’t keep riskier products off the market, “thus undermining its core statutory mandate to reduce the harm caused by tobacco product use.” Basically, if you can show that your novel tobacco product is less risky than today’s cigarettes, that’s great. But as more tobacco users move to reduced-risk products, both the comparators and the risk equation will change. And if your tobacco product has, say, slightly more of a potentially harmful chemical than others in its category, adding your product to (or keeping it among) consumers’ options is not reducing harm.
Save with bridging, bundling and master files
Another reason the FDA “declines to require that an applicant conduct a list of new studies as part of every application” (Response 59) is that shortcuts are allowed. Applicants can also “provide scientific data to inform FDA’s review” through bridging. Rather than generating all new data on your product, you can sometimes leverage the research literature to show your product is APPH. Just a little new data connects you to more.
Suppose you show from chemistry that your product releases nicotine in the same way and has the same nicotine concentration as another product already tested in published literature. That may let you bridge to their PK and abuse liability studies, saving you hundreds of thousands or even millions of dollars. In Response 62, the FDA “declines to define” bridging but instead gives useful examples of how to do it.
Another cost-saving and time-saving shortcut is bundling or combining applications. Let’s say that you have four flavors or two nicotine strengths. The FDA sees them as separate products. But the FDA allows you to submit one PMTA for all of them. A bundled PMTA includes “a single, combined cover letter and table of contents across all products” (Response 19).
You still need to provide unique information about each product, but you can collect and present it more efficiently. For example, you might conduct and present one bundled perception and intention survey that asks noncustomers about perceptions of the labeling of each of your four flavors in turn. But be aware that the FDA will break up your bundle for review, so list in tables which parts of the PMTA apply to which products.
Bundling isn’t always best. Are your harm reduction story and target audiences the same across products? A high nicotine vape may appeal to a heavily addicted smoker, but it has different health implications than a lower nicotine sister product. Combining the two into one PMTA might muddy your case for APPH status.
A third PMTA shortcut to know about is called a tobacco product master file (TPMF). A master file contains information you can reference again and again for multiple applications. In Response 17, the FDA defines a TPMF as “contain[ing] trade secret and/or confidential commercial information about a tobacco product or component that the owner [e.g., manufacturer, ingredient supplier] does not want to share with other persons” but is willing to share with the FDA. That’s useful if your new tobacco product uses an e-liquid made by a manufacturer who doesn’t want to share their formulation but who will give you a letter of authorization to cite their master file in your PMTA.
There are other TPMF options. “When companies want to rely on the same pool of data, FDA encourages the use of shared resources, such as tobacco product master files, where appropriate” (Response 18). This might be the fruits of a thorough literature review on a particular topic. Rather than cite and submit 150 articles over and over, you can reference the master file.
More information is not always better
PMTA applicants now need to provide “only high-level marketing plan information” (Response 30) rather than detailed consumer research. The FDA’s main concern is youth exposure. It emphasizes descriptions of intended audiences and how they’ll be targeted. Note, however, that if you have already done consumer research, “the results of such research will be required” to go to the FDA.
As Comment 14 notes, “the tobacco industry has a history of marketing its products to … vulnerable populations,” which may include low-income communities, racial/ethnic minority group members, rural residents and youth, among others. Your PMTA story should include how your product might improve (or not worsen) the well-being of some of these vulnerable populations. Harm and benefit to subgroups that are more likely to start, less likely to stop and/or more likely to get sick from using tobacco products “are an important part” of the FDA’s APPH calculations. Groups of interest “will vary depending on type of tobacco product and may change over time.”
However, the FDA does not clearly state that conducting research with some of these subgroups is unethical or unsafe. This includes people under the age of 21 and women “who are pregnant or trying to become pregnant.” (The document mentions the need for special attention to vulnerable populations, including children and incarcerated persons, when discussing FDA plans to issue future regulations concerning use of Institutional Review Boards for tobacco product clinical studies.)
In Response 79, the FDA allows for “studies using individuals under the minimum age of sale” with extra protections and parental consent but “does not require it [or] anticipate that it will be necessary.” Don’t go there. Instead, over-sample young adults in your studies as a proxy for youth. Report, for example, whether intentions to use your product were different for people under age 25 compared to the rest.

Cheryl K. Olson is a California-based public health researcher and consultant who specializes in behavioral health issues. She spent 15 years on the faculty of Harvard Medical School.

Willie McKinney is the founder of McKinney Regulatory Science Advisors. He’s held senior regulatory roles at major tobacco product companies and served for three years as the industry representative on the FDA’s Tobacco Products Scientific Advisory Committee.

March 1, 2021
Blueprint for Exit

Photo: Tobacco Reporter archive
Following the exit of two leading cigarette manufacturers, Colombian tobacco farmers had to find alternative livelihoods overnight. Their experience offers lessons for growers elsewhere.
By Stefanie Rossel
From smallholder tobacco farming to organized large-scale tobacco cultivation to alternative crops in a short time—Colombia’s leaf tobacco sector has experienced a remarkable development in the past 16 years. Its most recent change toward farmer livelihoods independent of tobacco might become a blueprint for other leaf origins facing declining demand for tobacco.
The takeover of Colombia’s domestic tobacco industry by multinationals was a turning point for the country’s leaf sector. Philip Morris International (PMI) acquired Coltabaco in 2005, and British American Tobacco (BAT) bought Protabaco in 2011.
“The technological package that had been implemented by the national companies before was very different from the one brought by the multinationals, and this meant radical adaptations for growers,” explains Heliodoro Campos Castillo, founder and general secretary of the National Tobacco Fund in Colombia (Fedetabaco).
“To give some examples, tobacco farming in Colombia, like almost everywhere in the world, has always been a family business, with everyone from granddads to youngsters participating actively. With multinationals’ child labor policies, this was ended and translated into a reduction in areas cultivated. Other measures that brought about a hard adaptation for growers were the security procedures that did not exist before. Growers accepted them as part of the evolution needed in the sector to improve agricultural practices and did their best to adapt to them. However, these were abrupt changes with very little time for implementation, and the sector suffered with them.”
Years before the multinationals entered the market, Fedetabaco initiated an investment package of $64 million in Colombia’s tobacco sector, which was co-financed by municipalities, the tobacco industry and institutions and stretched over almost 25 years.
“Fedetabaco understood the challenges ahead and went beyond the improvements in production to better growers’ livelihoods through different sustainable programs, such as rainfall water collection and reservoirs, housing projects, improvement of curing methods through modernization and, most importantly, promoting sustainability through diversification to grant growers food security and endow them with resources to cover their basic consumption needs,” says Campos Castillo.
“The improvement of the production system as a whole was an important factor to contribute to this self-sufficient strategy. We are working with the International Tobacco Growers’ Association (ITGA) to make sure the example of Colombia will help growers in other parts of the world.”

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Local crop alternatives
Tobacco cultivation in Colombia dates to the 18th century, but the plant plays a minor role in the country’s agriculture. According to the World Health Organization, only 0.03 percent of Colombia’s agricultural land was devoted to tobacco cultivation in 2014. The area used for tobacco cultivation has decreased drastically in the past decade, from 9,589 ha in 2011 to 3,550 ha in 2019, notes Fedetabaco. In line with global trends, annual cigarette consumption in the country declined from 18.4 billion units a year in 2010 to 12.2 billion pieces in 2019, according to USDA estimates. With a market share of 51.4 percent in 2019, PMI contract-purchased about half of the domestic leaf tobacco crop, which corresponded to a planted area of 1,850 ha per year, from 2,300 farmers. BAT, which held the remaining 48.6 percent of the market in 2019, bought tobacco grown on 1,300 ha.
However, PMI closed its manufacturing operations in Colombia in 2019, citing a rise in contraband and a global trend away from tobacco products. One year later, BAT followed suit.

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The two companies’ sudden withdrawal left farmers with little time to find viable alternative crops. It directly affected around 2,000 families and 9,000 people whose main source of income was tobacco, says Campos Castillo.
“Fedetabaco immediately took action to try to mitigate this negative impact in these people’s livelihoods,” he says. “Working closely with the ministry of agriculture and all the sector’s national organizations and institutions, we were able to build up a strategic reconversion program based on a thorough analysis of the situation.
“As the priority line of action, we took into account the experience and expertise of the farmers and the important contribution their knowledge could bring to the program as well as the ecological and agricultural characteristics to make sure we will act on the right location with the right crop with minimum waste.
“This program includes maize, yuca and other crops well known by farmers. The investment will cover 3,500 hectares, and its estimated cost is around $10 million. So far, as a shock plan, we have been able to advance, in coordination with the ministry of agriculture, $900,000 to provide seeds and $400,000 to plant maize, but we reached out to ITGA because this will only cover a very small part of the problem.”

Colombia continues to cultivate limited amounts of cigar tobacco for domestic consumption and exports.
Cannabis pilot
To help their farmers find alternative crops after their exit, PMI and BAT commissioned studies from two national nongovernmental organizations (NGOs). While Proterritorio finished its study last year, the Fundes research will be concluded this May. “We hope [the results] will add value to solve the problem,” says Campos Castillo. “Nevertheless, growers feel confident in the program developed by Fedetabaco with the ministry of agriculture, mainly because it has identified viable crops well known by them, such as yuca, Tahiti lemon and maize. We tend to think that there is a similar line of strategy between what we are proposing from Fedetabaco and the ministry of agriculture and the NGOs hired by the companies, but we will have to wait and see when the figures are out.”
Of the 18 departments that historically grew tobacco, only two will continue. One of them, in Colombia’s north, produces a dark cigar tobacco exclusively for export. The other, in Santander, cultivates Criollo, a tobacco used primarily for domestic cigars.
Cannabis, too, could become an alternative for tobacco growers. Colombia legalized the growth, sale and smoking of medicinal cannabis in 2015. After Coltobaco’s closure, Fedetabaco immediately started exploring the potential of cannabis for medicinal, nonpsychoactive purposes. “We are carefully handling this pilot project and expect to have the result of the analysis in terms of cost of production, productivity and quality by the end of 2021.” It is an exciting project because cannabis is cultivated in small areas of around 1,000 square meters to 2,000 square meters—a scale that is familiar to smallholder tobacco farmers. What’s more, the soil and weather conditions in the target regions appear to be suitable for cannabis cultivation.
Campos Castillo insists that his organization has not stopped working with the government trying to find solutions for tobacco farmers since the departure of PMI and BAT. “The government of Colombia cannot commit to granting the total amount of the funding. Tobacco is a small agriculture share in Colombia, and investment is needed in other rural commodities. Fedetabaco is experienced and has been developing programs for more than 30 years in rural areas in Colombia, so a holistic approach would be to gather all the resources available from companies, [the] government, institutions and our global platform, ITGA, all working together with a single purpose to safeguard the livelihood of these 2,000 families. We remain hopeful that this will happen in the near future.”
The author would like to thank Mercedes Vazquez for her assistance with this article.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

March 1, 2021
Keen to Connect

Photos: QBM
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Quartz Business Media, organizer of the renowned World Tobacco exhibitions, prepares to satisfy the pent-up demand for in-person trade events in 2021.
TR Staff Report
Since its first tobacco event in 1973, Quartz Business Media (QBM) has organized industry exhibitions and conferences in Munich, Jakarta, Bali, Macau, Kunming, Hong Kong, Prague, Moscow, Vienna, Amsterdam, Geneva, Nice and The Hague, among other top locations. Today, the company is best known for its popular WT Middle East, WT Europe and WT Asia events held in the tobacco-friendly cities of Dubai, Sofia and Surabaya.
Always evolving with industry developments and consumer preferences, QBM now also offers events for the shisha and vapor segments—World Shisha and the World Vape Show, both in Dubai. And in 2020, it added the legendary TABEXPO international trade fair to its portfolio, making QBM the truly undisputed leader in industry events.
Unfortunately, 2020 was also the year that Covid-19 paralyzed the world economy. A pandemic, of course, is hardly an ideal backdrop for big gatherings with handshakes, product samplings and lively after-hours socializing. Also considering the practical hurdles erected by lockdowns and travel restrictions, QBM decided to postpone all its 2020 tobacco events to 2021 and 2022.
While vaccination programs will continue to make headway in 2021, QBM isn’t taking any chances. To protect visitors and exhibitors from infection, it has established the “Quartz Secure Standards”—a rigorous set of guidelines that includes temperature checks, frequent cleaning and mandatory facemasks along with track-and-trace systems and medical support at its venues.*
Using modern communication tools to ensure an appropriate social distance, Tobacco Reporter spoke with QBM International Sales Director Colin Case about QBM’s rich history, its plans for the newly added events and what the industry can expect as the pandemic recedes.

While communication technology has come a long way, it is still no substitute for the in-person gathering.
Tobacco Reporter: QBM may be the leading tobacco events organizer, but it’s not the only one. What sets your company apart from the competition?
Case: QBM prides itself on really understanding each distinct community it serves—and listening. The business has a great team [that] knows their industries intimately and cares deeply about those industries. QBM doesn’t facilitate exhibitions for an industry; our events are drivers of the industries they serve.
Since the first tobacco event in 1973, the team behind QBM and WT has largely remained in place and has worked to help support the tobacco industry through the many twists and turns it has faced. The business is very proud of its accolade as the longest exhibition organizer in the tobacco industry, and as our portfolio of products grows, we look forward to adapting and innovating alongside the industry we serve.
What are the characteristics of a successful exhibition?
Case: Happy exhibitors and happy visitors. The focus must always be on the quality of attendee rather than just the volume.
What has been the most successful tobacco event you have organized to date? What made it so successful?
Case: WT Dubai 2019 was a great success. After implementing a new marketing campaign, the event was able to reach more of the industry across the world. With visitors from 90 different countries, it was a truly global event, and we look forward to surpassing this in 2021 at WT Dubai.
What are the pitfalls in organizing an exhibition? How do you avoid such pitfalls?
Case: One of the key decisions for an exhibition organizer is to ensure that their partner companies, such as freight forwarders and stand builders, have the depth of experience and company reach to ensure that pitfalls are avoided. This is particularly important in our industry as clearing tobacco products through customs can be challenging and requires skill and personal contacts.
Selecting the proper time and location are crucial, especially for a business as international as tobacco. What must be considered when selecting a date and a host city?
Case: The locations that are now associated with World Tobacco, although now well established, were carefully considered at the time to ensure that the host governments were not hostile to the tobacco industry and that the local market had a sufficiently broad tobacco industry to attract good quality visitors. Our current city locations of Dubai, Surabaya and Sofia remain popular and productive venues, and so for the foreseeable future, we will continue with our program.
Please comment on your decision to add TABEXPO to your portfolio. What made it a suitable addition? What changes will you make to the TABEXPO formula in terms of setup and frequency?
Case: A fantastic addition to the World Tobacco portfolio, by having TABEXPO as part of our family of shows, it allows us to have more global visibility and helps to knit the global tobacco industry together. To be hosted in London in December 2021, TABEXPO gives the QBM tobacco portfolio a foothold in Western and Eastern Europe, Asia and the Middle East.
How has the rise in anti-tobacco sentiment affected the business of tobacco exhibitions? For example, has it become more difficult to secure suitable locations and are you encountering restrictions on what products may be displayed? How do you deal with the potential for anti-tobacco protests?
Case: The welfare and safety of our exhibitors and visitors is paramount. All events follow similar event planning protocols, which think about the social macro-environment where each event is held. Thankfully, over the 40 years of running tobacco events, we have experienced little protest and will work hard to ensure that continues.

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How has the rise of vaping changed tobacco exhibitions?
Case: Vape is an exciting and fast-growing industry. Alongside our World Tobacco portfolio, we also organize World Vape Show London and World Vape Dubai. By having a foothold in both industries, the teams are better placed to understand each industry, plan appropriately and deliver distinct and unique events, which will benefit both communities.
Please comment on the impact of Covid-19 on your business.
Case: Like all businesses, no matter what industry, we have been massively impacted by the ongoing situation. [While] we have been unable to host live events, feedback from the market has been overwhelming in their desire to meet again face-to-face when possible. With the global rollout of the vaccines underway, we remain optimistic that we can start hosting events for the tobacco community again in 2021.
How has the tobacco industry responded to the postponements? Did most 2020 exhibitors sign up for 2021 and 2022 or did you lose exhibitors permanently?
Case: The industry has been thankfully very supportive and understanding. We are very fortunate that our events are valued by the industry, and with that, the vast majority is committed to exhibiting with us.
Have you held any virtual events in lieu of physical gatherings? What lessons did you draw from those experiences?
Case: As a business, we have hosted over 40 different virtual event propositions since last March. [While] a great medium, virtual events are temporary fixes and not long-term solutions to the process of doing meaningful business. The tobacco industry has been clear: They prefer to meet physically and enjoy each other’s company. No amount of technology can replace that.
What measures do you have in place at your upcoming events to prevent coronavirus infections?
Case: We have developed a dedicated Covid-safe exhibition program for all QBM events. All of our venues have also introduced their own Covid protocols.
Do you expect demand for in-person events to be larger or smaller after the pandemic recedes? Why?
Case: As said before, people buy people. People crave interaction. Technology can help facilitate that to a limited degree but can never replace it.
Do you anticipate the pandemic to have lasting effects on the way in which events are conducted? In what way?
Case: Not necessarily. I think hygiene and safety measures will become more prevalent at all shows worldwide, but we also believe that the exhibition business, not just for tobacco, has a strong future as people will still need to meet customers and potential customers face-to-face.
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March 1, 2021
Keeping Pace

Illustration: Essentra
Filter manufacturers prepare to meet new environmental requirements and consumer preferences.
By George Gay
A major challenge for the cigarette filters industry this year, and, by extension, for the cigarette manufacturing industry, will involve the phasing-in of titanium dioxide-free (TiO2-free) acetate tow. In an email exchange in January, Georgi Zisov, sales director at the Bulgaria-based cigarette filters and print house company Yuri Gagarin, said that, initially, the requirement that cigarettes were manufactured with TiO2-free filters would apply only to those destined for sale in the countries of the EU where the requirement was due to come into force in October. But, he added, it would prove inefficient for tow producers, filter manufacturers and end users to deal simultaneously with both traditional and TiO2-free tow, so, starting this year, there was likely to be a push for the adoption of filters made with TiO2-free tow across all markets, something that would probably be achieved within a few years, allowing those involved once again to enjoy economies of scale. Yuri Gagarin, Zisov said, had already started trials with TiO2-free tow for a number of customers both within and without the EU.
TiO2, which is used as a bleaching agent to make tow appear whiter, is considered to be harmful to health, something that, to my mind, raises a number of questions, not the least of which has to be why, therefore, is it used in some food products and toothpaste? OK, perhaps the form used in these products is different to that used for bleaching, though, having said that, TiO2 was banned from foodstuffs in France last year.
Nevertheless, I think it is worth asking if it is believed that the health concerns raised by the addition of TiO2 to filters—where it is presumably heated but not burned during the consumption of a cigarette—is separate from or merely part of the “deadly” risk posed by inhaling the smoke from the combustion of the tobacco rod and paper? If it is considered to be part of the overall risk, it would seem to me, admittedly somebody untrained in chemistry, that the argument for removing it from the health equation does not stack up, at least at the level of the individual smoker. In this case, it would seem likely that the removal of TiO2 could be said with any degree of certainty only to change the health risk because, due to the complex chemistry involved, it would surely not be known whether that risk had been lowered or raised. There would, of course, be a better argument for removing TiO2 if it presented a known separate and additional risk, though it is difficult to understand how such a separate, additional risk could be demonstrated at this time, if ever.
And there is a side issue here. The undesirability of raising the risk is obvious, but lowering it could suggest to consumers that cigarettes were now less risky than they were previously, leading to a surge in consumption.

Georgi Zisov (right) and Onik Arabyan (left) of Yuri Gagagrin
No quick fix
None of this is to suggest that removing TiO2 is not a good idea. It probably is, but I feel that it is necessary to try to understand our motives, even if we have to admit that they are based on a gut feeling. I buy unbleached coffee filters on the basis of a vague idea that not bleaching the paper used in their manufacture might extend by a millisecond the date at which the earth’s ecosystems finally collapse under the weight of human indifference.
But perhaps that’s not fair. Asked what the main factors were that drive the global market for cigarette and roll-your-own (RYO) filters manufactured by specialist suppliers, Seng Keong Low (SK), global marketing manager at Essentra, told me that these comprised consumer preferences legislation and customer demand.
“For example, single-use plastics legislation, particularly in the EU, has brought sustainability to the forefront of consumers’ minds,” he said in an email exchange. “Due to the pending restrictions on plastic filters and the evolving consumer preferences for a more eco-friendly option, paper-based and other nonwoven alternative materials will be the future of the industry. As such, Essentra has invested our innovations efforts in finding a more sustainable option and recently launched three new plastic-free filters in our ECO range” (see sidebar).

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But things are not as simple as they might sometimes seem to be. “There has also always been an incongruous relationship between the tobacco industry and environmental, social and corporate governance initiatives,” said SK. “Despite this, we at Essentra believe in being the pioneers to drive the industry to go green by launching nonplastic alternatives to address the issue right from the source.
“However, we are also very cognizant of the fact that while providing a nonplastic alternative is a step in the right direction, it will ultimately come down to the consumers’ willingness to make the right choices as well. Based on positive indications from our own consumer research, we expect a slow start, but as more momentum and positive sentiment builds up, a snowball effect will rapidly accelerate the shift toward a green alternative.
“In the end, there is no quick-fix solution, and the initiative to educate and convince consumers will require the cooperation of and collaboration between regulators, cigarette manufacturers and tobacco products manufacturers, and we at Essentra are proud to be the ones to take the first step in this journey.”
One problem here is that consumers are not necessarily the good guys. Whereas industry players have a role to play in improving the environmental credentials of cigarette filters and in consumer education, it is only consumers who can stop discarding filter butts in an anti-social manner. The gains made by switching to more environmentally friendly filter materials are undermined if butts containing the toxic materials filtered from tobacco smoke are thrown away thoughtlessly, allowing those materials to leach out.
Legislation is one of the other issues driving change, and it must be said that there are few factors as powerful as new laws in ensuring change takes place within a reasonable time. Zisov told me that the recycling costs associated with cigarette butts containing plastic materials comprised one of the main factors that drove filter and cigarette manufacturers to look for more environmentally friendly filter materials. Currently, the amount that had to be paid to companies that recycled such butts was increasing each year, and, recently, those costs had doubled in Bulgaria.
That was one of the reasons why there was currently a lot of interest in cigarette filters formed from crimped paper, Zisov said. The filtration properties of crimped paper were not as good as those of acetate tow, but they were being improved.

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New opportunities
While the challenges posed by complying with new cigarette and filter regulations are considerable, these regulations also present opportunities. Zisov said that while the annual, global demand for the filters supplied by specialist manufacturers was currently falling, Yuri Gagarin’s volumes during the past four years had been stable and were expected to remain stable in the foreseeable future. In part, the reason for this optimism was that the company had dramatically increased its product portfolio during the recent past so while demand for its monoacetate offerings had fallen, this fall had been more than offset by increased demand for complex filters, such as hollow and dual charcoal products.
Another reason is that as cigarettes become more expensive year on year, interest in RYO cigarettes grows and with it demand for RYO filters. And while it was true that, since price was the main driver of the RYO market, demand for special RYO filters was still relatively low, interest in different specification filters was increasing tremendously in some markets, said Zisov. The suppliers of these filters to the retail market were looking for varying segment diameters, lengths and hardness along with, for instance, flavor and charcoal applications.
Of course, the existence of such diversity within what is still a relatively small volume plays into the hands of specialist filter manufacturers. Meeting such a demand takes a lot of resources and requires a skilled workforce, so the suppliers to the retail market are drawn to using specialist suppliers and thus avoiding the fixed costs of manufacturing. There is a downside to this, however, because it implies considerable investments in new technology and knowhow for the specialist filter manufacturer, and, given that such investment is being made at a time when volumes are merely stable, profits are likely to be squeezed.
While not ignoring the fact that the traditional cigarette industry has been under pressure for many years and will continue to decline, Essentra, too, sees opportunities. It predicts, for instance, an increase in demand for slimmer cigarettes and, therefore, slimmer filters in Africa with the uptake there of smoking among increasing numbers of women. In other markets such as China and South Korea, Essentra has identified an increasing demand for innovative new flavors, a demand that called out for “exotic flavored filters to cater to those evolving taste profiles.”
At the same time, demand for super slims and shaped filters was growing in China, and tobacco manufacturers were using more specialized filters to provide differentiation within their premium ranges and unique smoking experiences for their consumers.
Meanwhile, as smoking regulations become stricter around the world, opportunities were arising in respect of heated-tobacco products. “Tobacco-heated products are also becoming increasingly popular,” said SK, “with the current pandemic situation accelerating the switch from traditional smoking as consumers become increasingly health conscious. With such a potential growth opportunity available in this segment of the market, we have also invested our innovations efforts into filters that can cater to tobacco-heated products.”
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

March 1, 2021
Former EU Health Boss Loses Appeal in Scandal

Photo: janeb13 from Pixabay
Former EU health commissioner John Dalli lost his final appeal before the bloc’s high court in a nearly decade-old bribery scandal, reports the Courthouse News Service.
On Feb. 25, the European Court of Justice upheld a lower court ruling that dismissed the Maltese politician’s claim for €1 million ($1.2 million) in damages stemming from his resignation following accusations of fraud in 2012.
In 2012, the EU anti-fraud office found that Silvio Zammit, an associate of Dalli, attempted to facilitate a €60 million bribe from a Swedish smokeless tobacco company in exchange for lifting an EU-wide ban on the product (the ban doesn’t apply in Sweden on cultural grounds). The snus company rejected the offer as improper and reported it to the European Commission.
Denying knowledge of the bribe, Dalli claimed that he was illegally forced from his post. In 2015, a lower EU court found that Dalli resigned voluntarily, a decision that was upheld in a 2016 appeal. A second lawsuit, in which Dalli demanded financial compensation for what he alleged was his wrongful termination, was rebuffed by the lower court in 2017.
The Court of Justice upheld that ruling Thursday.
February 26, 2021
Menthols Linked to Extra Smokers, Early Deaths

Photo: Photo: Miriam Doerr | Dreamstime.com
Menthol cigarettes contributed to 378,000 premature deaths in the United States between 1980 to 2018, according to a new University of Michigan study.
The research shows that about 10 million smokers were attributable to menthol cigarettes, which researchers estimate accounted for about 3 million life years lost.
“Our results indicate that mentholated tobacco products have had a significant impact on public health and could continue to pose a substantial health risk,” said David Mendez, senior author of the study and an associate professor in the department of health management and policy at the University of Michigan School of Public Health.
“We hope these data will help the Food and Drug Administration evaluate the potential regulatory actions for mentholated tobacco products.”
The study, published in Tobacco Control, indicates that the most important drivers of the relative impact of menthol cigarettes were the effects that menthol has in smoking initiation and cessation, said first author Thuy Le of the Department of Health Management and Policy at the University of Michigan’s School of Public Health.
“Previous studies have shown that menthol experimentation is positively associated with progression to established smoking,” Le said. “In addition, menthol smokers are less likely to quit smoking than nonmenthol smokers. These observations were incorporated in the model and are the key factors in determining the outcomes of our study.”
For their study, the researchers calibrated a well-established model developed by Mendez and colleague Ken Warner, dean emeritus of the University of Michigan School of Public Health. Le and Mendez used the model in conjunction with National Health Interview Survey data and other public data sources to reproduce the overall U.S. adult smoking prevalence between 1980 and 2018 and associated mortality.
They then used the model again with adjusted parameters to reflect a scenario in which menthol cigarettes were assumed not to be present in the market over the same period. Finally, they compared both scenarios to quantify the public health harm attributable to menthol over the 1980 to 2018 period.
Mendez said they hope the FDA will look at this and other data as it evaluates potential regulatory actions for mentholated tobacco products.
Menthol cigarettes were created in 1925 and became widely spread in the 1950s and 1960s. In 2009, the Family Smoking Prevention and Tobacco Control Act gave the FDA authority to regulate the manufacture, distribution and marketing of tobacco products. The FDA banned flavors such as candy, spice and fruit, but menthol was not banned.
In 2011, the Tobacco Products Scientific Advisory Committee submitted a report to the FDA concluding that the removal of menthol cigarettes from the market would benefit public health. To date, the FDA has not taken any regulatory action on mentholated cigarettes.
February 26, 2021
Vuse Alto Vapor Brand Expands in the U.S.

Photo: R.J. Reynolds Vapor Co.
The Vuse vapor brand announced today a national expansion in the United States of Vuse Alto Golden Tobacco 5.0 percent and Alto Menthol 5.0 percent four-pod packs and the national release of Vuse Alto Golden Tobacco 2.4 percent and Alto Menthol 2.4 percent four-pod packs.
The four-pod packs provide adult vapor consumers with three Vuse Alto configuration options as they can now choose from single-pod, two-pod or four-pod packs. The national availability of four-pod packs gives Vuse the most expansive portfolio of choice for adult vapor consumers with three flavors, in three nicotine strengths across three configuration formats as well as the many options for device customization with a range of device colors, wraps and engraving options.
“Done responsibly, our ambition is to make Vuse the No. 1 vapor brand in the U.S. market,” said Christy Canary-Garner, vice president of Vuse commercial development at R.J. Reynolds Vapor Co, in a statement. “This portfolio expansion provides us with the opportunity to better compete and enhances our price competitiveness to drive conversion among existing adult vapor consumers and boost loyalty.
“The four-pod pack configuration is the most popular among competitive pod-mod vapor products, and four-pod packs enable Vuse Alto to compete against competitors on a per-pod price point. The new four-pod packs are available to all retail outlets.
“Coupled with our release of single pods in November of 2020, this national rollout of four-pod packs now gives adult Vuse consumers more options than any other brand.”
The national expansion of the four-pod packs will begin this week.
February 26, 2021
Vector Group Reports Financial Results

Photo: Steve Buissinne from Pixabay
Vector Group reported revenues of $554.6 million in the fourth quarter of 2020 compared to revenues of $439.6 million in the fourth quarter of 2019. The company recorded operating income of $87.3 million in the fourth quarter of 2020 compared to operating income of $45.6 million in the fourth quarter of 2019. Net income attributed to Vector Group for the fourth quarter of 2020 was $32.3 million compared to net income of $10.7 million in the fourth quarter of 2019.
For the year ended Dec. 31, 2020, revenues were $2 billion compared to revenues of $1.9 billion for the year ended Dec. 31, 2019. The company recorded operating income of $245.1 million for 2020 compared to operating income of $231.1 million for 2019. Net income attributed to Vector Group for 2020 was $92.9 million compared to net income of $101 million for 2019.
For the fourth quarter of 2020, the tobacco segment had revenues of $286.1 million compared to $260.3 million for the fourth quarter of 2019. For the full year of 2020, the tobacco segment had revenues of $1.21 billion compared to $1.12 billion for 2019.
Operating income from the tobacco segment was $79.7 million and $319.5 million for the three months and the full year 2020, respectively, compared to $60 million and $261.6 million for the three months and year ended Dec. 31, 2019, respectively.
“Vector Group’s strong fourth quarter results reflect our ongoing commitment to creating long-term stockholder value,” said Howard M. Lorber, president and CEO of Vector Group, in a statement. “We are pleased that both our tobacco and real estate segments reported significant increases in operating income this quarter, including record operating income at Liggett, which is well into the income growth phase of its Eagle 20’s brand strategy.”
February 26, 2021
Anti-Competition Fines Rejected in Ukraine

Photo: Taco Tuinstra
A Ukrainian court has upheld British American Tobacco’s (BAT) appeal of a UAH450 million ($16.1 million) fine imposed by the Antimonopoly Committee of Ukraine (AMCU), reports Ukraine Open for Business.
BAT welcomed the decision, saying it sent a strong positive signal to investors from around the world.
In October 2019, the AMCU imposed a UAH6.5 billion fine on four international tobacco companies and Tedis Ukraine for alleged anti-competitive behavior. With 45,000 retail points and 2,300 employees, Tedis Ukraine is one of the largest distribution companies in Ukraine.
The agency said the tobacco companies and Tedis had conspired to keep new businesses from entering the market. However, critics said the AMCU helped bring about the situation by permitting Tedis Ukraine to acquire several key distribution companies.
In August 2020, the American Chamber of Commerce (ACC) in Ukraine expressed concern about the fairness of the trial, saying the defendants had not been given full access to the evidence on which the AMCU based its allegations.
On Feb. 2, the Supreme Court of Ukraine threw out the fine against Tedis Ukraine.
February 26, 2021