Author: Staff Writer

  • Juul Closes South Carolina Plant

    Juul Closes South Carolina Plant

    Juul starter kit
    Photo: Juul

    Juul Labs has shuttered its assembly plant in Lexington County, South Carolina, USA, amid a deteriorating business environment and pushback from local politicians.
     
    “There has been rapid change in the landscape of the vapor category, and these operations are no longer viable,” the company said in a statement to The Post and Courier on Wednesday. “Earlier this summer, we unfortunately had to begin reductions to our manufacturing team.”
     
    In May 2019, Juul announced the new assembly and packaging plant in Lexington County, boosting South Carolina’s economy by about $125 million and creating 500 jobs.
     
    Juul has since suffered a backlash over its marketing practices and heightened restrictions on the vapor business, including flavor bans in many jurisdictions. It has laid off a substantial share of its workforce, discontinued certain products and exited several international markets.

  • ‘PMI Distorting Data to Hide Smuggling’

    ‘PMI Distorting Data to Hide Smuggling’

    Photo: Taco Tuinstra

    Philip Morris International (PMI) has manipulated widely-used data on flows of contraband cigarettes to conceal its involvement in cigarette smuggling, reports the Organized Crime and Corruption Reporting Project, citing a complaint by MSIntelligence (MSI), a former business partner specializing in brand protection.

    MSI uses a variety of methods to quantify illegal cigarette consumption in more than 100 countries. That survey data has formed the backbone of widely-cited reports on worldwide cigarette contraband, some used by regulators.

    According to MSI, PMI smuggled its cigarettes into Libya despite U.S. sanctions and omitted survey results from a recent KPMG report suggesting that massive quantities of the Swiss company’s cigarettes were being smuggled into France in 2019.

    A Philip Morris spokesperson called the allegations unfounded, suggesting they are related to an ongoing commercial dispute between its Swiss affiliate and MSI.

    In the early 2000s, the European Commission filed a massive lawsuit against PMI over facilitating the widespread smuggling of its cigarettes into the EU, following a similar lawsuit in the U.S.

    PMI settled the European lawsuit for $1.25 billion.

  • FDA Accepts Bantam Vape PMTA

    FDA Accepts Bantam Vape PMTA

    Photo: Bantam Vape

    The U.S. Food and Drug Administration (FDA) has accepted the premarket tobacco product application (PMTA) submitted on Sept. 2, 2020, by Bantam Vape, a supplier of e-liquids based in North Carolina, USA.

    The filing letter signifies completion of FDA’s preliminary review of Bantam’s PMTA and the progression of its application into the formal substantive review phase. During this phase, FDA will conduct an in-depth evaluation of the scientific studies and other materials submitted in conjunction with Bantam’s application.

    “Bantam is pleased its PMTA has been formally filed and will be entering the scientific review phase of this process,” said Bantam spokesperson Anthony Dillon in a statement.

    “Bantam looks forward to engaging with FDA as it reviews the submission and scientific research provided in support of the filing. Bantam’s goal has always been to provide consumers with high-quality, science-based e-liquid products that can be enjoyed for years to come. News of the filing brings Bantam one step closer to reaching that goal.”

  • ‘Tobacco Industry Exploiting Pandemic’

    ‘Tobacco Industry Exploiting Pandemic’

    Photo: <a href="https://www.dreamstime.com/business-concept-illustration-two-businessmen-shaking-hands-seen-keyhole-busines"Rudall30 – Dreamstime.com

    The tobacco industry is exploiting the Covid-19 pandemic to hook new users and push new products, according to the Global Tobacco Industry Interference Index (GTIII) 2020.
     
    By providing resources to countries in need of them, the industry is disingenuously framing itself as part of the solution, the GTIII’s authors write. Philip Morris International alone donated more than $32 million across 62 markets in the first few months of the pandemic. The authors say this is a classic tactic of the tobacco industry to get close to governments and enable it to interfere with, derail and undermine health policies aimed at tobacco use.
     
    The report also found that the tobacco industry stepped up corporate social responsibility activities during the Covid-19 pandemic, intensified lobbying and lobbied for the acceptance and promotion of alternative tobacco products.
     
    In addition, many countries continued to give incentives, such as tax caps, to the tobacco industry and failed to address conflict-of-interest situations. Lack of transparency remained a problem, and many countries persisted in viewing the tobacco industry as economically crucial, according to the report.
     
    The authors of the GTIII recommends that governments limit their interactions with the tobacco industry to only when strictly necessary, reject nonbinding agreements with the tobacco industry and denormalize social responsibility activities of the tobacco industry, among other measures.
     
    The GTIII is a global survey on how governments are protecting their public health policies from commercial and vested interests as required under the World Health Organization Framework Convention on Tobacco Control.
     
    The report was initiated as a regional index by the Southeast Asia Tobacco Control Alliance in 2014. The GTIII 2020 was produced by the Global Center for Good Governance in Tobacco Control, with support from Bloomberg Philanthropies, the Thai Health Promotion Foundation and the Bill and Melinda Gates Foundation.

  • Charlie’s Holdings Reports Results

    Charlie’s Holdings Reports Results

    Photo: Timothy Donahue

    Charlie’s Holdings, a supplier of nicotine vapor and CBD products, reported revenues of $3.89 million for the three months ended Sept. 30, 2020, down 30 percent from those in the comparable 2019 quarter. The decline was due to a $1.18 million decrease in its nicotine-based product sales and a $515,000 decrease in sales of its CBD wellness products.

    Gross profit for the three months was $2.23 million compared to $3.07 million for last year’s quarter. The resulting gross margin was 57 percent for the 2020 quarter compared to 55 percent for the 2019 quarter.

    Cost of goods sold, as a percent of revenue, decreased 200 basis points due to a favorable mix of higher margin sales but was slightly offset by the effects of distributors and retailers participating in volume incentive rebate programs as well as lower fixed cost absorption.

    “While we have experienced adversity, with the vapor industry having its share of ups and downs during the past few years, from unfavorable news in late 2019 and the ensuing regulatory uncertainty, to the advent of a global pandemic during 2020, we as an industry have collectively overcome many challenges,” said Brandon Stump, CEO of Charlie’s in a statement.

    Stump noted that the U.S. Food and Drug Administration had recently accepted Charlie’s Holdings’ premarket tobacco product application, which would now enter the substantive review phase of the process. “This news is worthy of celebration as it highlights our progress towards achieving full regulatory compliance and providing our customers with a trusted product portfolio,” he said.

  • Imperial Reflects on ‘Difficult’ Year

    Imperial Reflects on ‘Difficult’ Year

    Photo: William Iven from Pixabay

    Imperial Brands reported revenue of £35.56 billion ($47.16 billion) in its fiscal year 2020, up from £31.59 billion in 2019. Its operating profit was £2.73 billion, compared with £2.2 billion the previous year. On an adjusted basis, the company’s revenue was £7.99 billion in 2020, down 0.1 percent from 2019. Adjusted operating profit was £3.53 billion, against £3.74 billion the previous year.

    While benefiting from strong tobacco volumes, Imperial Brands said it suffered from a sub-optimal product and market mix in 2020. However, a more disciplined approach in next-generation products reduced second-half losses after a disappointing first six months, the company added.

    “Although this has been a difficult year, the resilience of our tobacco business and the measures we have taken to improve our NGP [next-generation product] operations reinforce my confidence in the future potential of the business,” said Imperial Brands CEO Stefan Bomhard in a statement. “With a more disciplined focus and better execution we can realize significant value for our stakeholders over time.

    “My first months have been focused on engaging with employees, consumers and customers and leading the strategic review of the business,” added Bomhard, who joined the company earlier this year. What I have seen to date confirms my view of the group’s solid foundations. I believe there is scope to enhance returns from our tobacco business and opportunities to strengthen our NGP delivery over time. I firmly believe we can make a meaningful contribution to harm reduction within a more disciplined, returns focused framework and we have already taken steps to stem the NGP losses.”

    Imperial Brands completed the sale of its premium cigars business on Oct. 29. It will use the proceeds to reduce debt. In recent months, the company has strengthened its executive team with external leadership appointments providing fresh skills and perspectives. A comprehensive strategic review is underway with a capital markets update scheduled for Jan. 27, 2021.

  • Tobacco Companies Included in Sustainability Indices

    Tobacco Companies Included in Sustainability Indices

    Photo: Gerd Altmann from Pixabay

    British American Tobacco (BAT) and Japan Tobacco (JT) have been recognized for their sustainability efforts.

    BAT has been named in the Dow Jones Sustainability Indices (DJSI) for the 19th consecutive year. It is the only tobacco company to be included in the prestigious DJSI World Index.

    In a statement, BAT said it is the highest scoring tobacco company in 2020, with industry leading scores in 13 of the 23 categories assessed, while achieving a top score of 100 percent in seven categories.

    “At BAT, sustainability is at the heart of our transformation, and we are proud to have been included in the DJSI for a 19th consecutive year, said Kingsley Wheaton, chief marketing officer at BAT, in a statement.

    “We believe our inclusion in the DJSI World Index, combined with the recognition we have received from other respected ESG ratings agencies including MSCI and Sustainalytics, is testament to our commitment to accelerate the transformation of our company.”

    “We congratulate BAT plc for being included in the DJSI World and Europe,” said Manjit Jus, global head of ESG research and data, S&P Global.

    “A DJSI distinction is a reflection of being a sustainability leader in your industry. With a record number of companies participating in the 2020 Corporate Sustainability Assessment and more stringent rules for inclusion this year, this sets your company apart and rewards your continued commitment to people and planet.”

    JT has been selected as a member of the Dow Jones Sustainability Asia Pacific Index (DJSI Asia Pacific) for the seventh consecutive year.

    From among approximately 600 major companies in the Asia-Pacific region, 158 companies (including 82 Japanese companies) are included in the DJSI Asia Pacific this year.

    The JT Group’s sustainability strategy is formulated based on the company’s “4S” model, its management principles, and encompasses its materiality analyses. The foundations of JT’s sustainability strategy, are our respect for human rights, improved social and environmental impact and good governance and business standards.

    “We are delighted to remain as a member of DJSI Asia Pacific for the seventh consecutive year,” said Kazuhito Yamashita, member of the board and senior vice president, chief sustainability officer, compliance and general affairs at JT, in a statement. “This clearly reflects our continued holistic approach to address social and environmental issues, particularly the development of sustainable growth of societies and climate change which both have a major impact on society and our business.”

    Created by S&P Dow Jones Indices, the DJSI represents the gold standard for tracking corporate sustainability. In 2020, around 3,500 companies had their sustainability practices assessed against ESG (environmental, social, governance) criteria. Only the top 10 percent are recognized as leaders in corporate sustainability and achieve DJSI World Index inclusion.

  • Star Agritech Eyes Agroduhan

    Star Agritech Eyes Agroduhan

    Photo: SAI

    Star Agritech International (SAI) has expressed interest in the potential privatization of Agroduhan Slatina in Croatia.

    In a letter to the country’s Restructuring and Sales Center, SAI proposes to expand the volume and varieties of tobacco grown in Croatia, reactivate the reconstituted tobacco plant in Agroduhan and base the headquarters of its European operations in Croatia by moving its current operations from Belgium to Agroduhan.

    As part of its financial consideration, SAI said it would assume responsibility for the private sector bank loans that Agroduhan has contracted with Post bank of Croatia.

    “Using our rich experience in the tobacco industry, with the aim of growing the business using new technologies, we believe this investment would yield positive benefits,” SAI wrote in its letter.

    “With this proposal, we intend to achieve leaf production of at least 3 million kilos minimum per annum in Croatia. This program will increase the number of employees required at the Agroduhan factory as well as at the farm level.”

    In addition to creating employment, the proposal would increase economic activity and generate substantial export revenues from the sale of larger quantities of tobacco and recon, according to SAI.

    SAI CEO Iqbal Lambat

    SAI was established by the Lambat family in 2008 with the mission of providing full tobacco raw materials supply to privately owned tobacco product manufacturers as well as government tobacco monopolies. The company now operates in more than 40 countries. The firm also owns and operates two recon factories—a slurry type recon factory in Indonesia and a nano fiber recon factory in Brazil.

    In addition, SAI has started investment programs for a CRES factory in Cambodia and a second one in Indonesia.

  • Strong Quarter Paves Way for KT&G Ambitions

    Strong Quarter Paves Way for KT&G Ambitions

    Photo: KT&G

    KT&G posted KRW1.46 trillion ($1.31 billion) in consolidated sales for the third quarter of this year, up 10.7 percent from last year, reports The Korea Times. During the same period, operating profit grew 13.6 percent to KRW434.6 billion.

    The South Korean cigarette manufacturer’s performance was boosted by overseas sales, which grew 28.2 percent year-on-year to KRW262.9 billion. KT&G said it sold 12.7 billion cigarettes abroad from July to September, up 30.9 percent from a year earlier. The increase was largely due to growth in the Middle East and the expansion of the sales networks of its U.S. and Russian subsidiaries.

    Baek Bok-in

    Following the latest results, KT&G appears to be well on its way of realizing CEO Baek Bok-in’s goal of becoming the No. 4 player in the global cigarette market by 2025. In 2018, KT&G was No. 5 in terms of sales volume, according Euromonitor International.

    The company exported products to approximately 50 countries in the third quarter of 2017, but this grew to 90 in the third quarter of this year. Revenue from exports grew by KRW28.2 billion, outpacing the KRW22.2 billion growth in domestic sales during the same period.

    The company said it will increase the number of export markets to 100 by the end of this year and double the number by 2025.

    KT&G attributes its success to increased investments for product improvements.

    Tobacco heating products, too, have contributed to the company’s performance. Earlier this year, KT&G signed an agreement with Philip Morris International so that the latter would distribute KT&G’s tobacco heating products in overseas markets. Following the agreement, KT&G’s Lil tobacco heating devices and their exclusive cigarette products began exports to Russia in August, Ukraine in September and Japan in October.

    In October, Morgan Stanley Capital International assigned KT&G a top grade in an environment, social and governance evaluation. KT&G ranked first among 11 tobacco companies for product safety and quality due to its responsible marketing and outstanding quality management. It also earned a high score for supply chain labor standards.

    Tobacco Reporter featured KT&G’s global ambitions in its July 2020 print edition.

  • Turning Point Declares Stock Dividend

    Turning Point Declares Stock Dividend

    Photo: Alexsander-777 from Pixabay

    Turning Point Brands (TPB) has declared a regular quarterly dividend of $0.05 per common share. The dividend is payable on Jan. 8, 2021, to shareholders of record on the close of business on Dec. 18, 2020, the company announced in a statement.

    TPB manufactures, markets and distributes branded consumer products with active ingredients through its Zig-Zag and Stoker’s core brands and its emerging brands within the NewGen segment.

    The company’s products are available in more than 210,000 retail outlets in North America and on various websites.