Author: Staff Writer

Imperial Appoints Chief Financial Officer

Photo: Jakub Jirsák | Dreamstime.com
Imperial Brands has appointed Lukas Paravicini as chief financial officer effective Aug. 5, 2021, or at an earlier date to be announced. Paravicini is currently chief financial officer of agricultural commodities and brokerage group ED&F Man Holdings. He will succeed Oliver Tant, who announced his retirement last year.
Paravicini will step down from the board upon Paravicini’s appointment and leave the business following an orderly handover.
“I am delighted to welcome Lukas to the business,” said Imperial Brands CEO Stefan Bomhard in a statement. “He is a disciplined, results-oriented leader with a proven track record in international consumer goods companies. As well as his impeccable finance credentials, Lukas has considerable operational experience as well as expertise in driving transformational change including in global shared services in large international organizations. These qualities will be invaluable to Imperial as we implement our new strategy. I would like to thank Oliver for his support since I joined Imperial and for his contribution to the business during his seven-year tenure.”
“I am delighted to be joining Imperial at such an exciting time,” said Paravicini. “I look forward to supporting the new strategic direction and working with the board and my new colleagues to strengthen performance and enhance shareholder value.”
Before joining ED&F Man Holdings, Paravicini held senior positions at Fonterra, a New Zealand and Australia listed cooperative and the world’s largest dairy exporter with sales in 130 countries. He was chief financial officer from 2013 to 2017 and chief operating officer of global consumer and foodservice business from 2017 to 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.
February 17, 2021
Taat Launching Online

Photo: Taat Lifestyle and Wellness
Taat will be available for purchase online by most smokers aged 21-plus in the United States through the company’s e-commerce portal, which is scheduled to launch at 9 a.m. Eastern Standard Time on Feb. 17, 2021, the company announced in a press release.
Through the company’s online shop, cartons of Taat Original, Smooth and Menthol can be purchased by smokers aged 21-plus and shipped to addresses in eligible jurisdictions. As of December 2020, Taat is available in chain and independent tobacco retailers across Ohio. By accelerating the availability of Taat in new U.S. markets, the company anticipates it could seed interest among smokers aged 21-plus as a method of prioritizing new regions in which to distribute Taat at retail. Online sales of Taat are intended to complement retail placements made and managed through Crossmark as part of the company’s scope of initiatives to gain market penetration in the United States.
The company has undertaken extensive development work on the Taat online store, which began in the fourth quarter of 2020. Key considerations in planning the online store included layout optimization for desktop, tablet and mobile web browsers as well as the implementation of mechanisms to confirm that visitors are at least 21 years of age.
Marissa Dean profiled Taat in the January edition of Tobacco Reporter.
February 16, 2021
U.S. Mail Ban Claims its First Victim

Photo: Ian Allenden – Dreamstime.com
The Prevent All Cigarette Trafficking (PACT) Act, which prohibits the shipping of vapor products through the U.S. Postal Service (USPS), has claimed its first victim.
In a letter to its business partners, Securience announced it would be closing its doors at the end of March. Securience is the parent company of vapor brands such as DuraSmoke, Forge, AmericaneLiquidStore and VapeMoar.
In its letter, Securience cites its inability to mail product to consumers; however, the PACT Act also prevents business-to-business shipments by the USPS, according to a representative from the Bureau of Alcohol, Tobacco and Firearms who spoke during the recent Tobacco and Vapor Law Symposium presented by the Keller and Heckman law firm.
“Because of the complexity of these new shipping rules, FedEx, UPS and DHL have all informed us that they will stop shipping vaping products completely—including our shipments to you, our wholesale vape shop customers and distributors,” wrote Securience owner Don Muehlbauer. “While we have looked at some alternatives, given the geographic locations of our customers, the significant increase in compliance costs, and our capabilities as a small business, we have been unable to find a feasible alternative and have been left in a situation that makes continuing business impossible.”
Securience opened its doors in 2008 and has since been a staple in the vaping industry. Muehlbauer stated that he anticipates the PACT Act will not only impact his company, but many small e-liquid manufacturers. “Those manufacturers who are able to afford the increased compliance costs will have increased shipping costs that may impact [retail] shops,” he wrote. “The last day we will be able to accept orders for shipping is March 25 or until supplies run out.”
February 15, 2021
FDA Warns Sellers of Unauthorized Liquids

Photo: Eugene Onischenko
The U.S. Food and Drug Administration on Feb. 12 sent warning letters to 11 firms for selling unauthorized e-liquids.
The firms receiving warning letters are Jojo’s Smokeless World (Mod Shield), Sugar Vapor Co., DC Vapor, Take Off Corp., The Vapor Spot, Premium Vapor Technologies, Vaping Xtreme, Vapes Gone Wild Juice, Vapeoholic, Vaporescence (Vape King USA) and Elemental Vapor Bar.
The firms did not submit a premarket tobacco product application by the Sept. 9, 2020, deadline.
Collectively, these companies have listed a combined total of more than 150,000 products with the FDA.
Following an initial set of such warning letters announced earlier this year, the FDA has continued to issue additional warning letters for these types of products. The FDA sent 10 warning letters in mid-January.
“Per a court order, applications for premarket review for certain deemed new tobacco products on the market as of Aug. 8, 2016—including e-liquids—were required to be submitted to FDA by Sept. 9, 2020,” the agency wrote in a statement.
“For companies that submitted applications by that deadline, FDA generally intends to continue to defer enforcement for up to one year pending FDA review unless there is a negative action taken by FDA on the application. In line with the agency’s stated enforcement priorities, after Sept. 9, 2020, FDA is prioritizing enforcement against any ENDS product that continues to be sold and for which the agency has not received a timely product application.”
February 15, 2021
Court Overturns $10.6 Million Verdict Against Reynolds

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A Florida appeals court on Feb. 10 overturned a $10.6 million verdict against R.J. Reynolds Tobacco Co. in a lawsuit involving a woman’s death from lung cancer, reports WUSF News.
A three-judge panel of the 4th District Court of Appeal ordered a new trial in the Broward County lawsuit for which a jury awarded $6 million in compensatory damages and $4.6 million in punitive damages to the estate of Janice Hamilton.
R.J. Reynolds argued in its appeal that a circuit judge improperly allowed a hearsay statement that centered on a conversation between Hamilton and her son when he was a teen. That hearsay statement was used to prove a “fraudulent concealment” claim against the cigarette maker.
The seven-page ruling said, “In order for plaintiff (Hamilton’s son as representative of the estate) to prevail on his conspiracy to commit fraud by concealment claim, he was required to prove that Mrs. Hamilton detrimentally relied on an act or statement made in furtherance of RJR’s agreement to conceal or omit material information concerning the health effects or addictive nature of cigarettes. Hamilton’s statement that filtered cigarettes were safe based on what she heard from advertising, in turn, was undoubtedly the strongest evidence of reliance in this case.”
February 12, 2021
ITC Reports Quarterly Results

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ITC reported a net profit of INR36.29 billion ($504.14 million) for the three months ending Dec. 31, 2020, down 3.7 percent from comparable 2019 quarter. Gross revenue stood at INR124.92 billion, up 5 percent and driven mainly by the Indian company’s agribusiness and other fast-moving consumer goods segment.
Cigarette volumes and revenue witnessed strong sequential recovery during the reporting period, led mainly by urban markets on the back of progressive easing of Covid-19-related restrictions and enhanced mobility.
ITC launched several new brands of cigarette variants, including Gold Flake Neo, Classic Connect, American Club Clove Mint, Gold Flake Indie Mint and Capstan Fresh Flavour, catering to evolving consumer preferences.
“The operating environment remained challenging even as economic activity picked up pace progressively during the quarter with the easing of restrictions and increased mobility,” ITC wrote in a press statement. “High frequency lead economic indicators pointed to green shoots of recovery in aggregate demand and supply, leading to upward revisions in GDP growth estimates for FY 2020 to [20]21.”
A 13 percent tax hike that came into effect in February 2020 continues to weigh on legal industry volumes, according to ITC. “Wide availability of smuggled cigarettes continues despite deterrent actions and heightened levels of seizures by concerned authorities,” the company wrote.
In its Union Budget 2021, India’s central government kept the cess and taxes on tobacco unchanged.
With a share of nearly 80 percent, ITC is the undisputed market leader in India’s factory-made cigarette segment.
February 12, 2021
China Shuts Down Counterfeit Juul Factory

Chinese authorities have shut down an illicit enterprise involved in the manufacture and international distribution of counterfeit Juul products in China, Juul Labs announced in a press release. The operation resulted in the seizure of more than 110,000 counterfeit products, closure of the production facility and arrest of criminal actors behind the illicit enterprise.
Through its global enforcement operations, Juul Labs was able to identify individuals who were offering suspected counterfeit Juul products at wholesale from China. After in-depth surveillance and monitoring, the company was able to locate a clandestine factory manufacturing counterfeit Juul products for international distribution. Juul Labs then shared this information with Chinese law enforcement and supported its efforts to investigate and raid the illicit factory.
In addition to seizures of counterfeit Juul products, packaging and labeling, officials were able to retain a significant amount of documentation on businesses and individuals with purchase history, which will be used in follow-up investigations and enforcement actions. As a result of the raid, both the factory owner and manager have been arrested and will be subject to criminal prosecution.
The raided factory had thousands of counterfeit packaging for Juul products at 5 percent nicotine by weight in various flavors, with production runs ongoing for counterfeit Juul pods in menthol flavor. Juul Labs suspects the that the products were intended for the U.S. market. In addition, the factory appeared to have been manufacturing disposable vapor products under various brand names.
February 11, 2021
Japan Tobacco to Close Two Domestic Factories

Photo: Taco Tuinstra
Japan Tobacco (JT) will close two factories in Japan and shed 3,000 jobs as the company restructures its domestic tobacco operations to meet falling demand, reports The Japan Times, citing JT President and CEO Masamichi Terabatake.
The facilities slated for closure are a tobacco plant and a filter-making facility in Fukuoka Prefecture. Both will cease operations at the end of March 2022.
The company will shed about 20 percent of its 13,500 workers. It will offer buyout packages to 1,000 full-time and 150 postretirement workers while asking about 1,600 part-timers to quit. All of them are expected to leave the company at the end of March 2022.
The measures are part of a comprehensive restructuring plan announced on Feb. 9.
The company will consolidate its domestic and overseas tobacco businesses while unifying its headquarters functions into Geneva in January 2022. The Japanese headquarters will be left with domestic marketing and product development functions.
Japan Tobacco’s new domestic headquarters
In Japan, JT will reorganize its operations into 47 branch offices from the current combination of 15 branch offices and 145 outposts covering smaller areas.
JT said its sales fell 3.8 percent to ¥2.09 trillion ($19.95 billion) in 2020 from the previous year. The coronavirus pandemic dragged down tobacco sales at airport duty-free shops while restaurant demand for processed food products sagged, the company said in its 2020 financial report.
Net profit dropped 10.9 percent to ¥310.2 billion, although the company booked ¥41.3 billion in proceeds from the sale of its old headquarters building.
In October, JT relocated its Japanese headquarters to a new location in Tokyo.
February 11, 2021
Smokefree to Contribute Most of PMI Revenue

Photo: PMI
Philip Morris International (PMI) wants smokefree products to account for more than half of its revenues by 2025, up from its earlier target range of 38 percent to 42 percent. The new goal was announced during PMI’s 2021 investor day on Feb. 10., a virtual event broadcast from the company’s operation’s center in Lausanne, Switzerland, during which senior management presented PMI’s business strategies and growth outlook.
The company shared its 2021 to 2023 targets, including net revenue and adjusted diluted earnings per share (EPS) compound annual organic growth of more than 5 percent and 9 percent, respectively, and 2023 heated-tobacco unit shipment volume of 140 billion units to 160 billion units.
PMI plans to launch IQOS ILUMA, the next generation of its IQOS heat-not-burn product featuring internal heating based on Smartcore induction technology, in the second half of 2021.
In addition, the company intends to launch IQOS VEEV, its MESH technology vapor product, in more than 20 markets this year. PMI expects to commercialize IQOS in a total of 100 markets by the end of 2025, up from 64 markets at the end of 2020.
Also at the investor day, PMI announced its target of at least $1 billion in net revenues from “beyond nicotine” products in 2025.
With the right regulatory frameworks, dialogue and support from civil society, the company said cigarette sales can end within 10 years to 15 years in many countries.
Andre Calantzopoulos
“In just five years, we have thoroughly transformed our company, building IQOS into a top-5 global nicotine brand—with nearly $7 billion in net revenues and over 17 million users across 64 markets—while maintaining our leadership position in the international cigarette category,” said PMI CEO Andre Calantzopoulos in a statement.
“We are now embarking on our next growth phase, further shifting to a better, more sustainable business by driving the development of the smokefree category and leveraging our leading commercial model, which places the consumer at the core, to switch more adult smokers to our smokefree products.”
“This next growth phase is underpinned by our unmatched portfolio of innovative products. We are very excited to announce the planned launch of IQOS ILUMA—the next generation of our IQOS heat-not-burn product featuring a new internal heating induction technology—during the second half of this year.”
“As outlined today, we are well positioned to deliver excellent top-[line] and bottom-line growth as well as strong shareholder returns. We now aim to be a majority smokefree product company by 2025, an important milestone toward our ambition to deliver a smokefree future, to the benefit of adults who would otherwise continue to smoke, society, the company and our shareholders.”
Philip Morris reaffirmed its full-year 2021 guidance for EPS in the range of $5.90 to $6. For the three-year period between 2021 and 2023, Philip Morris is guiding for net revenue and adjusted EPS compound annual growth of 5 percent to 9 percent. Cigarette volume is expected to decline in that period. Philip Morris stock has fallen 3.5 percent over the last year while the benchmark S&P 500 index SPX, -0.03 percent, is up 16.7 percent for the period.
A transcript and slides of the Investor Day are available at www.pmi.com/2021InvestorDay. An archive of the webcast will be available until 5 pm Eastern Time on March 11, 2021.
February 11, 2021
Sales and Profits up at Turning Point Brands

Photo: Steve Buissinne from Pixabay
Net sales of Turning Point Brands (TPB) increased 31.2 percent to $105.3 million for the fourth quarter of 2020. Gross profit increased 321.8 percent to $51.8 million, partly due to certain restructuring expenses incurred in the prior year period. Net income increased $25 million to $12.7 million compared to the previous year’s fourth quarter. Adjusted EBITDA increased 80.9 percent to $25.8 million.
Net sales increased 11.9 percent to $405.1 million for the full year ending Dec. 31, 2020. Gross profit increased 38.7 percent to $189.6 million, partly due to certain restructuring expenses in the prior year period. Net income increased $19.3 million to $33 million, which includes premarket tobacco product application (PMTA)-related expenses from the fourth quarter of 2019 through the third quarter of 2020. Adjusted EBITDA increased 34 percent to $90.2 million.
Turning Point Brands has renamed its core business segments from Smoking Products to Zig-Zag Products and Smokeless Products to Stoker’s Products. Historical financial results are not impacted by the segment name change.
“Despite challenges related to Covid-19, our company remained focused on executing our plan throughout 2020 and finished the year strong with tremendous top-line growth in the fourth quarter,” said Larry Wexler, president and CEO, in a statement.
“The year was especially transformational for our Zig-Zag brand as targeted initiatives led to 22 percent growth for the full year as we repositioned it to be our fastest growing segment. Our Stoker’s segment delivered a second consecutive year of double-digit growth driven by incremental share gains in both product lines. Going forward, we expect Zig-Zag and Stoker’s to continue to be the backbone of our organic sales growth.
“NewGen managed to deliver a solid performance despite market disruption around the PMTA application process while creating long-term upside potential through its filed applications. We also had an active year of capital deployment with the acquisition of assets from Durfort as well as investments in the cannabinoid sector in Dosist and Wild Hempettes.
“Most recently, we successfully priced $250 million of senior secured notes, the latest step in the evolution of our capital structure, which gives us increased flexibility to scale the business through additional acquisitions and investments. Capitalizing on our strong momentum and increased liquidity, we expect another strong year in 2021.”
February 11, 2021