Author: Staff Writer

Avail Agrees to Buy Giant Vapes

Photo: Avail Vapor
James Xu
Avail Vapor, a premium U.S. e-liquid retailer, has agreed to acquire Giant Vapes, a major global e-commerce vapor company.
According to Avail, the acquisition would create a global, omnichannel organization with a clear mission to bring value to customers wherever they choose to shop.
“By combining the strengths of Avail’s broad brick-and-mortar footprint and Giant Vapes’ extensive e-commerce platform, the combined company will deliver unique value to its customers both in the U.S. and abroad,” the company wrote in a statement.
Following the acquisition, Avail Chairman and CEO James Xu will lead the combined companies alongside Justin Murphy, vice president of retail and marketing, who will be overseeing the day-to-day operations of both Avail and Giant Vapes.
June 11, 2020
Australia’s Plain Packaging Justified, Says WTO

Photo: Taco Tuinstra
The World Trade Organization (WTO) ruled on Tuesday that Australia’s plain packaging laws are justified, rejecting complaints by Honduras and the Dominican Republic that they are unfair restrictions on trade.
In December 2012, Australia became the first country to require tobacco companies to strip their products of all branding. Cigarettes have since been sold in drab, brown packs with large graphic health warnings but no logos or other distinguishing features. Brand names are printed in generic fonts.
Following the introduction of the measure, Cuba, the Dominican Republic, Honduras and Indonesia—all major tobacco-producing countries—challenged Australia’s measure at the WTO.
The complainants argued that Australia’s Tobacco Plain Packaging Act constituted an unjustified barrier to trade, but the WTO panel found Australia’s measures were not more restrictive than was necessary to achieve the public health goal of reducing smoking.
Honduras and the Dominican Republic appealed against the panel’s findings.
The World Health Organization’s (WTO) appellate body said on Tuesday that it had found no errors in the earlier panel’s conclusions and that it rejected the complainants’ request for Australia to change its packaging rules.
Anti-tobacco activists welcomed the WTO verdict. “This ruling is yet another victory for Australia and global health and a resounding defeat for the tobacco industry, which has fiercely fought plain packaging laws,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids. “This ruling puts to rest any remaining questions about plain packaging under international trade law.”
Myers also suggested that the plaintiffs received technical and financial support from British American Tobacco (BAT) and Philip Morris International to bring their complaints.
The tobacco industry has long argued that plain packaging is an ineffective and disproportionate measure.
“Naturally, we are disappointed with the ultimate findings of the report,” said a spokesperson for BAT, which was not part of the case. “However, it is important to note that decisions from the WTO panel or appellate body do not set a global precedent when it comes to this measure and will only be binding to the parties involved in this dispute.”
BAT also noted that the report is not an endorsement on the effectiveness of plain packaging. “The appellate body actually dismissed the panel’s finding that plain packaging reduced the consumption of tobacco products,” the company wrote in a statement.
Plain packaging is now required in at least 15 countries, and many other governments are in the process of formally considering the policy.
Tuesday’s ruling was the last by the WTO’s appellate body, which serves as a supreme court in international trade disputes but has ceased to function after the United States blocked new appointments. The result is that the Geneva-based WTO can no longer effectively intervene to settle disputes.
June 10, 2020
KT&G Donates Diagnostics Kits to Russia and Turkey

Photo: KT&G
KT&G has provided diagnostic kits worth KRW100 million ($84,136) to Russia and Turkey, where the new coronavirus infection has been spreading rapidly. In early May, the government provided 6,300 diagnostic kits to the Indonesian government.
“We decided to further support Russia and Turkey in order to help overcome the global disaster,” said Kyung-Dong Kim, KT&G’s head of social contribution. “We will fulfill our social responsibilities as a company.”
Headquartered in South Korea, KT&G has substantial operations in both countries.
KT&G has also supported coronavirus relief efforts in its home market. Among other initiatives, the company donated KRW500 million in emergency aid to the National Association for Disaster Relief and delivered KRW1,600 million worth of medical items.
June 10, 2020
Irish Health Authorities Probe Menthol Successor Products

Photo: Photo:Beverly Buckley from Pixabay
Ireland’s Health Service Executive is investigating whether cigarette makers are breaching a recently enacted EU ban on menthol cigarettes, reports The Irish Times.
The move comes after Minister for Health Simon Harris accused tobacco companies of “undermining” the ban by exploiting loopholes in the new rules.
Cigarette manufacturers throughout the EU have been introducing substitute products targeting former menthol smokers, but critics contend some of the new products fall foul of the ban. Japan Tobacco International’s (JTI) Silk Cut Choice Green variant, for example, still contains low level of menthol, but the company insists this is legal as long as the cigarettes have no other smell or taste than tobacco.
JTI says it shared in advance the ingredients for its new menthol-added product with the relevant authorities in Ireland and the EU. “So there is full transparency throughout this process,” the company said.
Philip Morris International launched Marlboro Bright, which it sells as a “menthol blend without mentholation.”
Meanwhile, Irish retailers, who commit a criminal offence if they sell menthol-flavored cigarettes, have started contacting manufacturers asking for confirmation that the substitute products they introduced after the menthol ban are legal.
The Irish market for menthol cigarettes was valued at €250 million ($284.27 million) prior to the EU ban.
June 10, 2020
BAT Shares Down on Lower Growth Projections

Photo: BAT
Shares in British American Tobacco (BAT) fell almost 4 percent after it lowered revenue and profit growth estimates for this year by a couple of percentage points each.
In adjusting its guidance, BAT pointed to a worsening outlook for an industry that had previously reported little impact from the coronavirus pandemic on sales and operations.
The company also pushed back its target for reaching £5 billion ($6.3 billion) in sales from next-generation products like e-cigarettes to 2025 from 2023–2024.
At the start of the pandemic, BAT insisted the coronavirus disruption was having little impact on consumer demand. During a recent conference call, however, CEO Jack Bowles said that earlier numbers had covered periods when many of its markets were still in the early stages of lockdowns.
BAT now expects adjusted revenue growth of 1–3 percent this year instead of 3–5 percent while earnings per share are anticipated to be up by a mid-single digit rather than a high-single digit percentage.
Nonetheless, the company will continue its dividend policy of paying out 65 percent of profit.
“All things considered, British American Tobacco has been doing relatively well against a very difficult backdrop,” said Russ Mould, investment director at AJ Bell.
June 10, 2020
FDA to Review Altria Nicotine Pouches

Photo: Tobacco Reporter archive
The U.S. Food and Drug Administration (FDA) has accepted and filed for substantive review premarket tobacco product applications for 35 On! products manufactured by Helix Innovations, an Altria joint venture.
To support these applications, Altria submitted more than 66,000 pages of documentation, including six primary studies.
“We believe the scientific evidence in these applications demonstrates that the marketing of On! is appropriate for the protection of public health,” said Paige Magness, senior vice president of regulatory affairs for Altria Client Services. “On! nicotine pouches are a key part of our vision to responsibly lead the transition of adult smokers to a noncombustible future.”
On! nicotine pouches are tobacco-leaf-free and are available in seven flavors and five nicotine levels. In the fast-growing nicotine pouch category, On! currently offers the broadest portfolio of choices for adult tobacco consumers seeking alternatives to traditional tobacco products, according to Altria.
On! was distributed in more than 28,000 stores at the end of the first quarter, including the top five U.S. convenience store chains by volume. According to IRI, total oral tobacco derived nicotine category sales in 2019 grew approximately 275 percent compared to 2018.
June 10, 2020
Court to Hear Arguments Over Disputed Florida Settlement Payments

Photo: Michal Kalasek | Dreamstime.com
A U.S. appeals court will hear arguments today in a dispute about $100 million in payments related to a landmark legal settlement between the state of Florida and tobacco companies, reports Florida Politics.
R.J. Reynolds Tobacco Co. wants the 4th District Court of Appeal to overturn a ruling that said the company is responsible for making payments to the state related to the Salem, Winston, Kool and Maverick cigarette brands.
R.J. Reynolds was part of the 1997 settlement in which cigarette makers agreed to pay hundreds of millions of dollars a year to the state because of smoking-related health costs and, in exchange, received liability protections.
In 2015, Reynolds’ parent company sold the four brands to ITG Brands to gain regulatory approval for its acquisition of Lorillard Tobacco Co. As a result of the sale, R.J. Reynolds contends it is no longer responsible for making payments linked to the four brands.
A Palm Beach County circuit judge, however, ruled in 2017 that R.J. Reynolds remained responsible for the payments. Reynolds appealed that ruling, and its arguments will be heard today.
ITG Brands, which was not part of the 1997 legal settlement agreement, contends the appeals court should uphold the circuit judge’s ruling that R.J. Reynolds is responsible for the disputed payments.
June 9, 2020
Trading Update: BAT’s Business ‘Resilient and Growing’

Photo: British American Tobacco
British American Tobacco’s (BAT) business is performing well in a challenging and volatile trading environment, the company announced in a trading update today.
BAT said it continues to see good pricing and strong volume and value share growth across its combustibles business, together with good share growth across all three of its new categories—vapor, tobacco heating and modern oral.
Results in developed markets—which account for approximately 75 percent of the group’s revenue—are strong, with continued good pricing, little evidence of accelerated downtrading to date and a particularly strong performance from its business in the U.S., which has been highly resilient throughout the Covid-19 crisis.
The impact of Covid-19 in emerging markets, including Bangladesh, Vietnam and Malaysia, has been more pronounced, according to BAT. In addition, closures and other lockdown measures in certain countries, in particular South Africa, Mexico and Argentina, have persisted longer than anticipated.
“We have made a good start to the year, with strong volume and value share growth in combustibles underpinning the sustainability of the business,” said BAT CEO Jack Bowles.
“Our focus on becoming a faster, simpler, more agile business through Project Quantum has positioned us well for continued delivery in the current environment and these efforts have ensured we are a highly resilient company.”
Bowles also referenced the work of its Kentucky Bioprocessing subsidiary, which is developing a potential vaccine for Covid-19. The vaccine candidate has demonstrated its ability to generate an immune response in pre-clinical testing and is poised to move to clinical trials.
June 9, 2020
Tobacco Firms Defend Donations

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Philip Morris International (PMI) and Imperial Brands have hit back at allegations they are using the Covid-19 health crisis to improve their public image and gain access to politicians, reports Euronews.
Earlier this year PMI subsidiary Papastratos donated 50 respirators to help Greek hospitals cope with the pandemic. The Romanian Red Cross received a financial donation—reported to be $1 million—from PMI. PMI and Imperial Tobacco both donated money in Ukraine.
Critics denounced the gestures, suggesting they were part of a PR effort to lobby governments to loosen tobacco controls. They also said that the donations contravene the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC).
PMI and Imperial Tobacco denied wrongdoing.
“Imperial Tobacco Ukraine, as a prominent employer in Kyiv, was asked to donate one ventilator to the hospital by the regional authority and other local groups,” the company told Euronews.
“The business was happy to do so and did not seek any publicity. It is clear that no regulations have been breached and to be criticized for agreeing to support the Kyiv community in these challenging and unprecedented times is a disgrace,” Imperial Tobacco Ukraine wrote.
Nataliya Bondarenko, external affairs director at Philip Morris Ukraine, noted that the FCTC does not prohibit interactions between commercial operators and government organizations. Instead, she said, it asks parties to protect public health policies from the tobacco industry’s commercial and other vested interests.
“This provision implies that regulators should act with impartiality and transparency,” said Bondarenko. “Our donation was done in full compliance with the law, demonstrating our integrity and transparency.”
June 9, 2020
Foundation to Probe Menthol Bans and Social Justice

Photo: Viachaslau Bondarau | Dreamstime.com
The Foundation for a Smoke-Free World has begun a series of surveys analyzing the behaviors of adult smokers in several countries before and after the EU menthol cigarette ban that came into force on May 20, 2020.
While there is solid science to suggest that a ban of menthol combustible cigarettes would ultimately improve public health, the foundation says it is crucial that legislation does not put already vulnerable communities in even greater danger.
The organization hopes that the findings from its survey will help inform other jurisdictions considering similar measures.
Last November, Massachusetts became the first U.S. state to ban the sale of menthol cigarettes. And in February of this year, the House of Representatives approved a bill to eliminate the sale of these cigarettes at the federal level.
Yet many researchers point out that the use of menthol cigarettes is disproportionately high among U.S. ethnic minority groups, especially African Americans. Democratic Congresswoman Yvette Clarke noted that nationwide menthol bans would have little effect on white smokers, while “black smokers could face even more sweeping harassment from law enforcement if the hint of menthol smoke can justify a stop.”
June 9, 2020