Author: Staff Writer

BAT Uganda ‘Resilient’ in Difficult Environment

Photo: Taco Tuinstra
British American Tobacco Uganda (BATU) reported first-half 2020 results with gross revenue down by 12 percent to UGX76 billion ($20.6 million) and pre-tax profits at UGX9.9 billion.
“I am pleased to report that BAT Uganda’s business continues to show resilience despite the difficult operating environment in the country,” said BATU Managing Director Mathu Kiunjuri.
“With rising unemployment and a significant increase in the cost of various basic consumer goods, the [Covid-19] pandemic has left many consumers more cash stretched than ever. Additionally, the closure of retail outlets led to constrained consumer access to our products. Despite these challenges, our business continues to be resilient due to prudent cost management measures undertaken to mitigate the decline in revenue.”
July 31, 2020
BAT: Higher Profits on Lower Volumes

Photo: BAT
British American Tobacco (BAT) reported its 2020 second-quarter results on July 31, with profits up 3.3 percent to £5.37 billion ($6.92 billion) and revenues up 1.1 percent to £12.27 billion.
BAT reported cigarette volume down 6.3 percent for the quarter, which it attributed to international travel restrictions, although a greater proportion of higher priced cigarette sales contributed to the higher revenue figure.
BAT highlighted its “new categories” revenue growth of 14.7 percent, which includes 9.1 percent growth for heat-not-burn tobacco products, 41 percent growth in vapor products and 67 percent growth in “modern oral” products.
BAT’s Kentucky BioProcessing division continues to work on a Covid-19 vaccine with its clinical trial awaiting approval from the U.S. Food and Drug Administration
July 31, 2020
Bhutan Targets Tobacco Smuggling

Photo: Taco Tuinstra
The Bhutan government met on July 30 to discuss ways to combat tobacco product smuggling on the nation’s borders.
Prime Minister Lotay Tshering noted that tobacco product smuggling has been one of the major illegal activities in the country as more than 30 individuals are arrested each day for this crime.
Bhutan bans the sale of tobacco products but not their import. The government is proposing to introduce a scheme to allow people to purchase their tobacco products at the nation’s duty-free outlets but with the nation’s 100 percent excise tax included in the purchase price.
Currently, an individual who enters Bhutan is permitted to carry 800 sticks of cigarettes or 1,200 sticks of bidis or 150 pieces of cigars or 750 grams of other tobacco or tobacco products in a month after paying the excise tax.
July 31, 2020
Combustibles Outperform E-Cigarettes

Photo: Tobacco Reporter archive
Traditional cigarette sales in the U.S. have continued to do better than those of e-cigarettes during the coronavirus pandemic. Overall sales volume for combustible cigarettes was down 0.2 percent for the four-week period ending July 11 while e-cigarette sales were down 13.2 percent, according to Nielsen data.
David Sweanor
The drop in e-cigarette sales follows more regulation on the products from the U.S. Food and Drug Administration. “It is deeply ironic that the credit for the recovery of the cigarette business from a near-death experience a little over a year ago can be credited to the Centers for Disease Control and Prevention, Michael Bloomberg and the others who pushed an abstinence-only agenda on nicotine,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette studies.
“By undermining the low-risk alternatives to cigarettes, they protected the cigarette business.” When the stay-at-home orders were first issued, combustible cigarette sales increased 1.1 percent for the week ending March 22.
July 31, 2020
Cerulean Shares Insights into Automation

Photo: Cerulean
Cerulean has released a white paper on automating processes in vape laboratories.

“Appropriate automation significantly reduces the variability inherent in some processes and can increase laboratory efficiency as well as presenting the potential for increasing efficiencies by reducing the number of staff present at any point in an analytical cycle, so helping with social distancing in this current climate,” according to Cerulean.

The white paper recommends adopting operator-independent techniques to help smoke and vapor laboratories.
July 31, 2020
Japan Tobacco Lowers Forecast

Photo: Tobacco Reporter archive
Japan Tobacco’s (JT) reported revenue of ¥1.03 trillion ($9.84 billion) in the first six months of 2020, 2.7 percent less than in the first half of 2019. Growth in the international tobacco business was unable to offset declines in other business, according to the company. JT estimates the Covid-19 pandemic to have had an unfavorable impact on its business of around ¥35 billion.
JT’s adjusted operating profit was ¥287.6 billion over the six months (down 0.1 percent over the 2019 period) while its operating profit declined by 19.1 percent to ¥252 billion. Profit declined by 23.8 percent over the reporting period.
The company enjoyed significant favorable pricing gains in the international business, but robust currency-neutral performance was offset by stronger currency headwinds than initially assumed.
Operating profit and profit were impacted by a non-recurring one-time 2019 gain in JT’s pharmaceutical business, along with higher financing cost.
Volume trends in Japan returned to levels prior to the Covid-19-related state of emergency declaration after significant declines in April and May.
Anticipating lower tobacco volumes due to the Covid-19 impact and stronger currency headwinds, JT adjusted its fiscal 2020 forecast downward. The company now anticipates revenue of ¥2.01 trillion and adjusted operating profit of ¥457 billion for the full year.
“Although the tobacco industry was not immune to the impact of the pandemic, our performance was resilient during the first half of 2020,” said Masamichi Terabatake, president and CEO of the JT Group. “JT Group maintained solid business momentum and delivered robust growth in adjusted operating profit at constant currency driven by pricing gains in the international tobacco business.
“We have revised our forecasts based on reasonable assumption to date considering the current momentum, business environment and widening impact of currency volatility among other aspects. We believe that our solid business momentum will continue, despite of the Covid-19 challenges on our top-line.”

July 31, 2020
Japan Tobacco to Move Tokyo Headquarters

Photo: Taco Tuinstra
Japan Tobacco’s new headquarters
Japan Tobacco (JT) will relocate its headquarters to a new location in Tokyo on Oct. 5.
The new address is: Kamiyacho Trust Tower, 24-6, Toranomon 4-chome, Minato-ku, Tokyo.
JT will lease the 26th to 30th floors of the building and occupy 19,253.06 square meters of office space.
The company has approximately 62,000 employees in more than 130 countries.
July 31, 2020
Kazakhstan Strengthens Tobacco Controls

Photo: Tobacco Reporter archive
A comprehensive set of tobacco control measures has been adopted after the president of Kazakhstan, Kassym-Jomart Tokayev, approved the legislation on July 8, 2020.

Under the new legislation, the definition of tobacco products has been expanded to include all nicotine products, such as e-cigarettes and heated-tobacco products. The law also bans the import, production, sale and distribution of smokeless tobacco products.

The list of smoke-free places has been expanded, now including bus stops, outdoor playgrounds, underground walkways, transit areas and cars with children inside. Using new products in these places is also banned, and waterpipes are not allowed to be used in public; they are only allowed in homes.

Fines have been increased.
Manufacturers must now disclose information on the content of all nicotine-containing products, and the size of pictorial health warnings has increased. Tobacco products cannot be displayed at point-of-sale, and the purchase age has been raised to 21 years.
July 31, 2020
Juul Labs Submits PMTA for Juul system

Photo: Juul
Juul Labs has submitted a Premarket Tobacco Product Application (PMTA) to the U.S. Food and Drug Administration (FDA) for the company’s Juul system, an electronic nicotine delivery system (ENDS) product. The company’s submission includes comprehensive scientific evidence for the Juul device and Juul pods in Virginia Tobacco and Menthol flavors at nicotine concentrations of 5.0 percent and 3.0 percent, as well as information on its data-driven measures to address underage use of its products.
With its PMTA submission, Juul Labs has provided a scientific foundation for the FDA to evaluate whether these products are “appropriate for the protection of the public health” with respect to the risks and benefits to the population as a whole. The application includes detailed scientific data from over 110 studies totaling more than 125,000 pages evaluating the product’s impact on both current users of tobacco products and nonusers, including those who are underage.
As part of the PMTA process, Juul Labs has built a comprehensive research program focused on examining the public health impact of the Juul system. This includes research addressing the harm reduction potential of the product, including its ability to convert adult smokers from combustible cigarettes. This research is supplemented with information on the controlled design and repeatable manufacturing processes associated with the Juul system, as well as data-driven measures to limit unintended consequences to the overall population, including initiation among nonusers.
“In order to earn a license to operate in society, we need to be a science and evidence-based company, engage in open and transparent dialogue with our stakeholders, and take methodical and responsible actions to advance the potential for harm reduction for adult smokers while combating underage use. Our PMTA submission is a key part of that approach,” said Juul Labs CEO K.C. Crosthwaite.
“Juul Labs has committed all necessary resources to deliver the best possible PMTA based on rigorous scientific research and data-driven measures to address underage use,” said Joe Murillo, chief regulatory officer at Juul Labs. “We respect the PMTA process and believe it is the right forum to determine the role ENDS products can play in transitioning and completely switching adult smokers from combustible cigarettes to potentially less harmful alternative products while combating underage use.”
Late last year, the company, under Crosthwaite’s leadership, committed to resetting the vapor category and seeking to work cooperatively with regulators, legislators, attorneys general, public health officials, and other stakeholders to combat underage use and transition adult smokers from combustible cigarettes. As part of that process, the company reduced its product portfolio, halted television, print, and digital product advertising, built up its science and evidence-based capabilities, and supported the U.S. Administration’s final flavor policy for ENDS products, while taking a methodical approach to its global presence.
Juul Labs has built up its science and evidence-based capabilities and will use its research and data to explore additional pathways in other countries. The company will continue to share its research with regulators and the public health community globally through peer-reviewed journals, conferences, and one-on-one meetings.
July 31, 2020
Japanese Cigarettes Unaffected by Boycott

Photo: okaybuild from Pixabay
Sales of Japanese cigarettes have remained resilient in South Korea despite a consumer boycott against Japanese products, reports The Korea Bizwire.
The Korea Customs Service reported that South Korea imported 4,220.6 tons of cigarettes from the Philippines between July last year and June of this year, which was merely 2.79 percent lower than the volume of imports during the same period in the previous year.
Among the top four cigarette companies dominating the South Korean market, Japan Tobacco International (JTI) is the only company with a production plant in the Philippines. All cigarette imports from the Philippines, therefore, are de facto produced by JTI.
Sales of Japanese cars and beer, by contrast, have declined significantly in Korea because of the boycott, which was sparked by a deepening dispute over the countries’ wartime legacy.
Experts say tobacco consumers tend to be more brand loyal than users of other products. What’s more JTI’s share in South Korea has been comparatively small, lowering the chance of being affected by the boycott movement.
July 31, 2020