Author: Staff Writer

  • Ireland: Call to Strengthen Menthol Ban

    Ireland: Call to Strengthen Menthol Ban

    Photo: Miriam Doerr | Dreamstime.com

    The government of Ireland wants to strengthen the four-month-old EU ban on menthol cigarettes to stop tobacco companies side-stepping it. The Health Service Executive (HSE) is investigating tobacco companies over the issue.
     
    Introduced on May 20, the EU measure aims to prevent “characterizing flavors” in cigarettes to make them less attractive to children and help smokers quit.
     
    Japan Tobacco International (JTI) has admitted it still adds some menthol to products, including a new Silk Cut Choice Green that was among a suite of new brands it introduced into the Irish market after the ban. However, JTI insists it is in full compliance with the ban because, it claims, the additive doesn’t make its new brand taste or smell of menthol.
     
    JTI’s new brands scooped up 5 percent of Ireland’s €1.8 billion ($2.12 billion) cigarette market in their first month, according to industry data.
     
    After complaints from anti-smoking groups and rival tobacco companies that retired their menthol blends, the HSE said in June it would cooperate with European authorities on the issue.

    Across Europe, tobacco companies have been introducing alternatives to their discontinued menthol brands. Governments have criticized tobacco companies for trying to get around the ban.
     
    Health Minister Stephen Donnelly noted the directive is being reviewed at EU level and said he would strongly support any revisions to the directive that would ensure that the provision in relation to the menthol ban is “robust.”
     
    The market for menthol cigarettes was worth €250 million prior to the ban.  

  • RAI Concludes PMTA filings for 2020

    RAI Concludes PMTA filings for 2020

    PHoto: RAI

    Reynolds American Inc. (RAI), has filed its final premarket tobacco product application (PMTA) submissions with the U.S. Food and Drug Administration (FDA) to allow its Vuse and Velo brands to remain on the market in the United States.

    Submitted Sept. 4, the filing concludes an 11-month process for RAI. The company has filed six applications for its Vuse Solo, Vuse Ciro and Vuse Vibe vapor products, as well as for its Velo nicotine lozenge and modern oral pouch products. Across the six applications, more than 530,000 pages of scientific data and more than 8,600 scientific documents have been submitted as part of the filings.

    RAI parent company BAT says it is committed to reducing the health impact of its business with a multicategory approach that offers consumers a wide range of enjoyable and lower-risk alternatives to cigarettes. With noncombustible nicotine products now available in more than 40 countries, the group’s ambition is to exceed 50 million noncombustible consumers by 2030.

    Kingsley Wheaton

    “The U.S. is the world’s largest vaping market and so the completion of our PMTA filings is a really important step for us as we transform our organization, drive a step change in our ‘new categories’ business, and increase our non-combustible consumer base and revenues,” said Kingsley Wheaton, chief marketing officer of BAT.

    “Our transformation is progressing very well and in the first six months of 2020 we attracted an additional 2.7 million new noncombustible consumers compared to the same time last year. Globally, we now have nearly 12 million regular noncombustible consumers and the U.S. will play a large part of our ambition to grow this number to at least 50 million by 2030.

    “We remain fully committed to building a better tomorrow and reducing the health impact of our business by offering consumers a range of enjoyable and lower risk products including vapor, tobacco heating and modern oral nicotine products.”

    The FDA’s PMTA deadline is Sept. 9.

  • Vapers Protest ‘Prohibitionist Policies’

    Vapers Protest ‘Prohibitionist Policies’

    Photo: UVA

    Vapor advocates from across the United States descended on Washington D.C. on Saturday to show support for small vapor businesses and to demonstrate to President Donald Trump that their votes have the power to change the upcoming election.

    The activists demanded President Trump push for the Food & Drug Administration (FDA) to reform the Pre-Market Tobacco Application (PMTA) process or extend the cutoff before the looming deadline of Sept. 9.

    Organized by United Vapers Alliance, advocates peacefully protested to show the world that “We Vape, We Vote” is a movement that has the influence to disrupt the upcoming election with millions of potential votes up for grabs. The vaping advocates vowed to continue to push elected officials to reject prohibitionist policies that threaten access to life-saving vapor products.

    “If President Trump does not deliver on real reform at FDA, he is not only risking the destruction of an American industry, but he will be also be creating a situation where millions of adult ex-smokers could return to deadly combustible cigarettes,” said Dimitris Agrafiotis, executive director of the Tennessee Smoke-Free Association.

    “HHS Secretary Alex Azar has pledged PMTA reform, but he failed to deliver. Now, it is up to President Trump to stop the FDA from destroying 99 percent of the industry and leaving 160,000 Americans unemployed in the middle of the COVID-19 pandemic.”

  • Activist Want Say on Flavor Ban

    Activist Want Say on Flavor Ban

    Opponents of California’s recently enacted ban on the sale of flavored tobacco and vapor products are working to get a referendum on the measure, reports The Los Angeles Times.

    If the referendum qualifies with the collection of 623,212 signatures, the sales ban would be placed on hold until voters are given a chance to vote on the issue, possibly in 2022.

    The referendum is being pursued by a new political group called the California Coalition for Fairness

    “We agree that youth should never have access to any tobacco products, but this can be achieved without imposing a total prohibition on products that millions of adults choose to use,” the group wrote in a statement. “This law goes too far and is unfair, particularly since lawmakers have exempted hookah, expensive cigars and flavored pipe tobacco from the prohibition.”

    State Senator Jerry Hill, the author of the bill, denounced the plan to seek a referendum.

    “California fought Big Tobacco and won,” Hill was quoted as saying. “This shameless industry is a sore loser and it is relentless. It wants to keep killing people with its candy-, fruit-, mint- and menthol-flavored poison. The adults who are hooked on nicotine aren’t enough for Big Tobacco; it wants our kids too.”

    The bill was signed into law by California Governor Gavin Newsom on Aug. 28. The legislation prohibits the sale of tobacco and vapor flavors, including menthol, in the state beginning Jan 1, 2021. The legislation does not make it illegal for someone to purchase, possess or use flavored tobacco or vapor products.

  • Philip Morris Opens IQOS Stores in Manila

    Philip Morris Opens IQOS Stores in Manila

    Photo: Alpar Benedek | Dreamstime.com

    Philip Morris Fortune Tobacco Co. (PMFTC) is opening its first four IQOS stores in Manila, reports The Manilla Standard.

    While the heat-not-burn product has been available in the Philippines through several retail outlets since April, the opening of the stores marks a significant step towards achieving the company’s vision of a smoke-free future, according to PMFTC President Denis Gorkun.

    “PMFTC’s vision is to help adult smokers who would otherwise continue to smoke to move away from cigarettes as quickly as possible and switch to a better alternative,” Gorkun said.

    PMFTC parent company Philip Morris International has invested more than $7 billion in research, development and production capabilities to create smoke-free products such as IQOS, which are now available in several countries.

    In July, the U.S. Food and Drugs Administration (FDA) authorized the marketing of IQOS and heat sticks in the U.S. with a reduced exposure claim adding that such issuance is appropriate for the promotion of public health.

    Gorkun said the FDA decision shows that IQOS is a fundamentally different tobacco product compared to cigarettes and a better choice for adults who would otherwise continue smoking.

    About 60 percent of Filipino adult smokers are willing to try smoke-free alternatives provided they are made commercially available and meet quality production standards, according to a study commissioned by PMFTC.

    PMFTC said IQOS is aimed at adult smokers. The company is implementing age verification and access restriction to ensure that only legal age consumers 21 years old and above will have access to the stores, the e-commerce website and the IQOS products.

  • Taat Secures Production Capacity

    Taat Secures Production Capacity

    Taat Lifestyle & Wellness has secured commercial-scale production capacity for its tobacco-free and nicotine-free Beyond Tobacco cigarettes with a manufacturer in North America, the company announced in a press release.

    The manufacturer, whose name cannot be disclosed under the terms of the agreement, does production on a contract basis for global and regional brands of both tobacco and hemp cigarettes.

    According to Taat, the agreement provides terms for production of Beyond Tobacco cigarettes at pricing that is lower than tobacco industry averages for full-service cigarette production for an initial duration of one year, with renewal of such pricing terms conditional upon the company meeting a first-year production quota.

    The manufacturer has also agreed to warehouse Beyond Tobacco cigarettes after they are produced, while also providing outbound logistics services by coordinating the shipment of Beyond Tobacco pallets to the company’s distributors. To protect its trade secrets, Taat will continue to process the Beyond Tobacco base cigarette material in-house.

    “While our agreement with the manufacturer precludes me from going into too much detail, I can certainly say that I am very pleased to have them on board to manufacture Beyond Tobacco cigarettes for us,” said Taat CEO Setti Coscarella.

    Tim Corkum

    “Aside from being able to produce at a much lower cost compared to our initial estimations, working with an established player in the cigarette production space enables us to benefit from their industry-leading standards in machinery, quality control and efficiency.”

    In related news, Taat recently appointed Tim Corkum as its chief revenue officer to lead commercialization efforts for Beyond Tobacco cigarettes. Corkum, who spent more than 20 years working for Philip Morris International in the Caribbean and in Canada, is a recognized industry leader in the commercialization of cigarette products as well as reduced risk products.

     

  • Rains Dampen Malawi’s 2020 Tobacco Earnings

    Rains Dampen Malawi’s 2020 Tobacco Earnings

    Photo: Taco Tuinstra

    Malawi’s 2020 tobacco selling season closed on Aug. 28 with the country realizing $173.5 million, Tobacco Commission statistics announced. According to the statistics, Malawi sold a total of 112.89 million kg of tobacco this year as opposed to 165.67 million kg sold in 2019. However, leaf prices were higher this year at an average of $1.54 per kg as compared to $1.43 per kg last year.

    Tobacco Commission CEO Kaisi Sadala described this year’s growing season as a “mixed bag.” “Although prices were better this year, we traded reduced volumes of tobacco this year. Initially we had anticipated producing around 154 million kg of tobacco this season, but we ended up producing just around 112 million [kg].”

    Sadala cited the general decline in production to weather impact, especially excessive rains received immediately after the second round of crop estimates.

    The Malawi leaf tobacco industry has been struggling with fluctuating volumes in recent years.

    Tobacco Reporter covered the country’s leaf sector in-depth in 2017.

  • Vapor Firms Request Delay of PMTA Deadline

    Vapor Firms Request Delay of PMTA Deadline

    Keller and Heckman has asked the U.S. Food and Drug Administration to postpone its Sept. 9 deadline for filing premarket tobacco applications (PMTAs) by six months because of the Covid-19 pandemic.

    On behalf of a group of small vapor product manufacturers, retailers and trade associations, the law firm filed a citizen petition asking the FDA to postpone the PMTA due date until March 8, 2021.

    Many of Keller and Heckman’s clients have experienced delays in preparing their applications because of the coronavirus. Without an extension, small vapor companies will either have to file incomplete PMTAs or forego submission altogether, according to Keller and Heckman. This would force them to layoff thousands of employees, close their doors permanently, and remove from the market less risky vapor products that addicted adult smokers rely on to move away from cigarettes, the law firm said.

    The current PMTA deadline was set by a federal district court in Maryland as part of a lawsuit filed by anti-vaping groups challenging an earlier August 2022 deadline established by FDA through guidance issued in 2017.

    The petition specifically asks FDA to request from the district court an extension on the court-imposed deadline that would apply only to small manufacturers that demonstrate to the agency that they have been working in good faith to complete PMTAs by the Sept. 9, 2020 cutoff and have otherwise taken steps to ensure that their products will not contribute to underage use.

     

     

  • Cigarettes Selling Better Than Expected

    Cigarettes Selling Better Than Expected

    Photo: Joan Parker from Pixabay

    Cigarette sales continue to perform better than expected despite a slight decline in recent weeks.
     
    The U.S. sales volume for traditional cigarettes was down 2.1 percent for the four-week period that ended Aug. 22, according to the latest Nielsen survey of convenience stores. By comparison, the sales volume was down 0.8 percent in a four-week period in May.
     
    The recent decline in cigarette sales is likely linked to a June list price hike by the leading tobacco manufacturers. Philip Morris USA raised its list price by $0.11 a pack for several brands. R.J. Reynolds Tobacco Co. and ITG Brands raised their prices by a similar amount.
     
    Despite the recent acceleration in the contraction of cigarette volumes, the rate of decline is considerably lower than it was last year.
     

    David Sweanor

    “The Nielsen data continues to show the decline in cigarette sales moderating to a pace that is only about a quarter of the rate of contraction in the second quarter of last year—before the much-enhanced attacks on vaping,” David Sweanor, an adjunct law professor at the University of Ottawa, was quoted as saying by The Winston-Salem Journal.
     
    “This is fascinating as there is very strong evidence that current tobacco control policies are leading directly to higher rates of smoking than would have otherwise been the case.”
     
    Meanwhile, sales of electronic cigarettes declined 17.4 percent for the four-week period. The category has struggled since the Food and Drug Administration (FDA) tightened regulations on Feb. 6.
     
    The FDA regulations have depressed the demand for closed pod cartridges.
     
    Traditional cigarettes had $60.27 billion in sales at convenience stores over the past 52 weeks, representing 80 percent of all U.S. tobacco sales, according to the Nielsen report.
     
    Moist snuff and chewing tobacco were at $7.59 billion and 10 percent while electronic cigarettes were at $3.72 billion and 5 percent and cigars at $3.63 billion and 5 percent.
     
    When the first round of stay-at-home orders were issued by numerous governors in mid-March to slow the spread of the Covid-19 virus, the sales volume of traditional cigarettes rose 1.1 percent for the week that ended March 22.

  • Morgan Stanley: BAT Underappreciated

    Morgan Stanley: BAT Underappreciated

    Photo: BAT

    The growth potential of British American Tobacco (BAT) is underappreciated, reports Sharecast, citing Morgan Stanley. The investment bank believes BAT is better able to offset the challenges in the combustible cigarette market than many investors are willing to give it credit for.

    The key to its thesis is BAT’s shift from a combustibles business to a nicotine play.

    “We see a significant opportunity in BAT’s new model, just as the shares and investor interest hit multi-year lows,” Morgan Stanley wrote in a statement.

    BAT’s user base has grown from about 143 million in 2017 to approximately 146 million by 2019 and might reach roughly 155 million by 2030, according to Morgan Stanley.

    Management’s ambition, announced in April, is to have 50 million non-combustible users by 2030, up from 11 million at the end of 2019, which would more than compensate for the falling number of smokers.

    The broker also highlighted the 50:50 split in BAT’s volumes between emerging and developed markets, strong management and anticipated stable earnings growth of 4 percent to 8 percent over 2020-2-2025.

    Its analysts also argued that the dividend payout was “largely secure” as the company refinanced debt.

    Furthermore, the company’s improved position in U.S. next-generation-products allows it to capture users migrating to other products if Washington bans menthols, according to Morgan Stanley.