Author: Staff Writer

  • Growers Protest Rejections and Prices

    Growers Protest Rejections and Prices

    Photo: Taco Tuinstra

    Sales at the Kanengo Auction Floors in Lilongwe came to a standstill on Aug. 23 as farmers protested high rejection rates and low offers made by tobacco buyers, according to The Nyasa Times.

    The tobacco market was temporarily suspended over what farmers complained to be “continued low prices on offer.”

    Some buyers have reportedly been offering as little as $0.50 per kg, which is below the government’s set minimum prices for the crop.

    Minister of Agriculture Lobin Low urged the buyers to comply with the country’s laws in dealing with the farmers by offering improved prices for the leaf. “This is sad that currently farmers are getting as low as $0.50 on their tobacco,” he was quoted as saying. “What we are asking is to simply adjust the prices upward.”

    His call was echoed by AHL Sales CEO Graham Kunimba, who said the rejection rate has hit an alarming 70 percent.

    But the buyers seemed not ready to budge as they insisted that the leaf on offer is of low quality; hence, even the offered $0.50 is just there as a “favor” to the farmers.

    Disappointed by their earnings from tobacco, a group of Malawi growers had earlier threatened to stop growing the golden leaf.

  • Video: Vaping’s Harm Reduction Potential

    Video: Vaping’s Harm Reduction Potential

    Considerable evidence suggests that e-cigarettes are an effective smoking cessation tool for adults in the United States, where hundreds of thousands of people die of smoking-related illness each year.

    Kenneth Warner, dean emeritus and the Avedis Donabedian Distinguished University Professor Emeritus at the University of Michigan’s School of Public Health, says, however, that the potential of vaping to increase smoking cessation has been largely overshadowed by media coverage and policies that focus on the potential risk vaping represents for teens.

    Warner and 14 other past presidents of the Society for Research on Nicotine and Tobacco co-authored an article that argues that the media, legislators and the general public have developed a negative view of e-cigarettes because of the heavy emphasis public health organizations have placed on protecting kids from vaping while ignoring the potentially substantial benefits of e-cigarettes in helping adults quit smoking. The article is published online in the American Journal of Public Health.

    In an interview with Michigan News of the University of Michigan, Warner discusses why the group, all of whom have presided over the top tobacco research society in the world, decided to take on this issue.

    What prompted this group to write this article?

    In my 45 years in the field of tobacco control research, I’ve never seen an issue that is as divisive as this one, and maybe none that is as important to public health. We have a large group within public health who are very much opposed to vaping because they see it as imposing huge risks on kids. On the other end of the spectrum, we see a number of researchers and members of the vaping community who believe that vaping is a great tool for helping people to quit smoking and that it is far less hazardous than smoking. These polar opposite views have created much of the contention within the tobacco control community.  

    Our goal in this paper is to try to inject some sense of balance, to get public health organizations, the media and legislators to recognize that their appropriate but singular desire to keep e-cigarettes out of the hands of kids may actually be harming public health. Policies oriented exclusively toward protecting kids may be responsible for more adults smoking than would be if we had policies that also emphasized helping adults to quit with vaping, and frankly, if we had honest characterizations of the risks of vaping.

    Exaggerations of the risk have led a majority of Americans, including a majority of smokers, to the erroneous belief that vaping is as dangerous as, or more dangerous than, smoking. The National Academies of Science, Engineering and Medicine has determined that vaping is likely substantially less dangerous.

    What do you want people to take away from the AJPH article?

    We call for a rebalancing of society’s consideration of vaping and specifically for more attention being paid to its potential to increase smoking cessation. We should continue working to decrease young people’s use of e-cigarettes—of all nicotine products, for that matter—but we must increase our focus on adult smokers.

    In the article, my colleagues and I express concern that we have forgotten about the adults who are going to die as a consequence of smoking. We lose 480,000 Americans every year as a result of smoking. Understandably and justifiably, all Americans were enormously concerned by the toll of Covid-19 this past year. Consider that we have a Covid-level disaster created by smoking every year, year after year after year.

    How would you characterize the risks associated with e-cigarettes? What are the potential benefits of vaping for adult smokers?

    Vaping is clearly not risk-free, but it is also substantially less dangerous than cigarette smoking. Inhaling combusted tobacco smoke, which includes over 7,000 chemicals, is what causes the disease and death associated with tobacco use.

    Multiple types of evidence, identified in our article, demonstrate that vaping can increase smoking cessation. The highly respected Cochrane Review has concluded that it is likely that vaping is more effective than FDA-approved nicotine-replacement products like gum and patches. The CDC has also found that more smokers use e-cigarettes than other aids in attempts to quit smoking—and with a higher self-reported success rate.

    Still, the public is largely unaware of the potential vaping has to aid in smoking cessation. As I mentioned previously, a majority of adults, including a majority of smokers, believe that vaping is as dangerous as, or more dangerous than, cigarette smoking. This misunderstanding has actually worsened over time. That reflects, in part, the media’s coverage of vaping.

    A recent study cited in our article found that 70 percent of U.S. news coverage on vaping mentioned vaping’s risks to kids while only 37 percent noted the potential benefits for adult smokers. As such, it’s likely that fewer smokers are trying e-cigarettes as a method of quitting smoking than would be the case if they were accurately informed about its potential to help them quit and its smaller health risk compared to smoking. That means fewer people are quitting smoking.

    Put simply, research shows that the potential benefits of vaping for adult smokers are substantial. Those benefits are not being fully realized in today’s environment of misinformation and a singular focus on the welfare of kids, to the detriment of the health of adults who smoke. 

    What is known about the risks of youth e-cigarette use?

    Vaping does have risks for kids, including the potential of addicting some to nicotine. But in our article, we point to evidence that the percentage of kids being addicted to nicotine by vaping is much smaller than popularly believed.

    We also note that while prospective studies have found that vaping by kids who had never smoked increases their risk of trying cigarettes 6–24 months later, much of this may be explained by what is called “common liability,” meaning that kids who try e-cigarettes are more prone to risk-taking than are kids who don’t vape, so the former may be more likely to try cigarettes anyway, even if e-cigarettes had never existed.

    Further—and very importantly—even if there is an increased risk, doing the math indicates that this factor would increase overall smoking initiation by kids by only a very small amount. However, even that seems unlikely since we’ve seen smoking rates fall among young people (both adolescents and young adults) at unprecedented rates precisely during the period of vaping’s ascendancy. That certainly is not consistent with the idea that vaping increases smoking.

    Why has e-cigarette use in adults not been a focus in policy or the media?

    First, the concern for young people’s welfare is a compelling one, and the rapid increase in youth vaping in 2018 and 2019 understandably created a great deal of anxiety. The focus on youth drowned out attention to the welfare of adults who smoke. Youth vaping decreased significantly in 2020. We will have to monitor future years’ trends closely.

    Second, I think a lot of people may believe that the problem of smoking is pretty much resolved. I’m referring mainly to the higher education, upper socioeconomic status population. They don’t smoke, their friends and colleagues don’t smoke, there’s no smoking in their workplaces, and there’s no smoking in the restaurants and bars that they frequent. They don’t see smoking and thus may believe the problem has largely been solved.

    And yet one out of seven adult Americans is a smoker today. When we take a look at who’s smoking, it’s the underprivileged members of our society, those who don’t have a voice in politics. African Americans as a group, although they don’t smoke more, have higher rates of smoking-produced disease and death than do [white individuals]. There are groups like low socioeconomic populations, people with mental health problems and the LGBTQ community that all have higher than average smoking rates.

    My fear, frankly, is that many nonsmokers are ignoring smokers because they may not care that much about them. There is a very large life expectancy differential between the rich and the poor in the United States, and perhaps the single most important behavior-related variable is differences in smoking. The data show that low-income, low-education populations smoke at much higher rates than the high-income population, and they die at much younger ages. If we could reduce smoking among these often marginalized populations, we might be able to reduce the gap in life expectancy. This is fundamentally a matter of social justice.

    What are some policy changes that might help achieve a more balanced approach to e-cigarettes?

    Currently, we have very unbalanced policies that are directed exclusively at trying to reduce youth vaping. Two of the most prominent are eliminating or seriously restricting flavors in e-cigarettes and trying to equalize the taxation of e-cigarettes and cigarettes. Both of these policies can have adverse consequences for adult smokers. Adult smokers like flavors just like kids do, and in fact, they tend to like the same flavors.

    Banning flavors would eliminate adult smokers’ access to the flavored e-cigarettes that they prefer in attempts to quit smoking. So that’s a real concern. We propose restricting the sale of e-cigarettes to adult-only establishments, such as vape shops. This is a compromise—flavors are a significant attraction to vaping for kids, and our recommended policy would not eliminate flavors; at the same time, the policy would restrict access for adults, thereby creating an inconvenience for them. But this policy would strongly limit youth access to flavored e-cigarettes while allowing adults to get the flavored e-cigarettes they want to aid in their attempts to quit smoking.

    We also suggest a substantial increase in excise taxes on cigarettes and other combusted tobacco products, and a much more modest tax on e-cigarettes. This is the opposite of what is happening now, with states imposing “equalizing” taxes on e-cigarettes without raising taxes on cigarettes. Significantly raising the tax on cigarettes will discourage both adults and kids from smoking. A big differential in price between very expensive cigarettes and less expensive e-cigarettes creates an incentive for adults who don’t quit smoking to switch to e-cigarettes. For kids, a modest tax on e-cigarettes will discourage them from vaping because they’re the most price-sensitive group when it comes to nicotine and tobacco products.

  • Smok Parent Considers Initial Public Offering

    Smok Parent Considers Initial Public Offering

    Photo: Tobacco Reporter archive

    Shenzhen IVPS Technology Co. is considering an initial public offering in Hong Kong as soon as next year, reports Bloomberg, citing sources with knowledge of the matter.

    The vaping device company could raise between $500 million and $1 billion, the people said.

    Founded in 2010, IVPS makes vaping kits under its Smok brand. The devices are used by more than 80 million consumers globally and are sold online as well as via distributors in countries such as France, Kuwait and the U.K.

    The Chinese e-cigarette industry has been under mounting pressure in its domestic market. In March, China’s Ministry of Industry and Information Technology proposed a draft regulation that would apply the same rules for the conventional tobacco industry to the e-cigarette sector. The aim is to regulate production and marketing of new types of tobacco products and prevent false advertising and quality issues, the ministry said.

    In 2019, Beijing banned online sales of e-cigarettes.

    Shares of several Chinese e-cigarette companies plunged following the draft’s release in March. Hong Kong-listed device maker Smoore International Holdings’ shares are down about 40 percent this year.

    While rising regulatory scrutiny of the vaping industry could impact investor appetite for listings in the sector, IVPS could be less affected because it makes the device rather than the e-cigarette liquid.

  • ‘Focus on Youth Vaping Could Hinder Cessation’

    ‘Focus on Youth Vaping Could Hinder Cessation’

    Photo: andrian cz

    A new paper co-authored by U.S. tobacco control experts endorses the harm reduction benefits of vaping for adult smokers trying to quit combustible cigarettes. The paper suggests that the public image of vaping products must be improved, and electronic nicotine-delivery systems (ENDS) should be promoted as a safer alternative to combustible cigarettes.

    “Opponents focus on e-cigarettes’ risks for young people while supporters emphasize the potential for e-cigarettes to assist smokers in quitting smoking. Most U.S. health organizations, media coverage and policymakers have focused primarily on risks to youths,” the report states. “Because of their messaging, much of the public—including most smokers—now consider e-cigarette use as dangerous as or more dangerous than smoking. By contrast, the National Academies of Science, Engineering and Medicine concluded that e-cigarette use is likely far less hazardous than smoking. Policies intended to reduce adolescent vaping may also reduce adult smokers’ use of e-cigarettes in quit attempts.”

    Published Aug. 19 in The American Journal of Public Health, the study was led by Kenneth Warner, a professor emeritus of health management and policy at the University of Michigan and a distinguished tobacco control expert. Fifteen former presidents of the Society for Research on Nicotine and Tobacco co-authored the paper.

    The authors present four categories of evidence supporting vaping as a quit aid for combustible tobacco use: the results of randomized trials, which show e-cigarettes outperform other cessation methods like nicotine patches; population studies, the findings of which “are consistent with a near doubling of quit attempt success”; cigarette sales, which decrease rapidly as vaping sales increase; and the unintended consequences of policies restricting vaping, such as bans that unintentionally shot up cigarette smoking.

    “The major elements of the public health community that are concerned with tobacco have been singularly focused on the risk to kids,” Warner told Filter. “They seem to truly have no interest whatsoever in adult smokers. The other piece is that you’re seeing lots of allegedly scientific papers that are raising health concerns that are unwarranted.” One such paper, which claimed that vaping increased the likelihood of having a heart attack, was later retracted.

    The paper also presents “a sensible mix of policies” to boost ENDS use, including taxing traditional cigarettes higher than e-cigarettes to encourage adult smokers to switch, allowing flavored vaping products available only at vape shops, restricting advertising to limit youth initiation and reducing the nicotine levels in cigarettes while ensuring the availability of “consumer acceptable” reduced-risk nicotine products.

    “Because evidence indicates that e-cigarette use can increase the odds of quitting smoking, many scientists, including this essay’s authors, encourage the health community, media and policymakers to more carefully weigh vaping’s potential to reduce adult smoking-attributable mortality,” the paper states.

  • BAT Runner-Up for Best ESG Report

    BAT Runner-Up for Best ESG Report

    BAT has been recognized by the Corporate Register Reporting Awards as runner-up for Best ESG Report for its 2019 report.

    The company also placed fourth for Innovation in Reporting, fifth for Relevance and Materiality, sixth for Openness and Honesty, and ninth for Creativity in Communications.

    These awards receive entries from all types of businesses around the world, and the winners are voted for by Corporate Register’s 65,000-plus registered users from across the sustainability profession worldwide.

    Best ESG Report is a new category for the 2021 awards, recognizing the shift in recent years from corporate responsibility or sustainability reports to those focused on environmental, social and governance (ESG).

    We’re delighted to be recognized in these awards and are committed to continuing to provide information regarding our ESG efforts in clear, transparent and engaging ways.

    “As part of our commitment to building ‘A Better Tomorrow,’ ESG is front and center of everything that we do as a business,” said Jennie Galbraith, BAT’s group head of ESG, in a statement. “We have a long history of best practice and transparent reporting on ESG issues—our next report for 2021 will mark the 20th anniversary of our first ever report.

    “Over that time, we’ve understood the importance of evolving our approach to meet the needs of our stakeholders and remain at the forefront of leading practice. So, we’re delighted to be recognized in these awards and are committed to continuing to provide information regarding our ESG efforts in clear, transparent and engaging ways.”

    “BAT is one of the large corporations who set the pace on transparent reporting around 20 years ago, with a comprehensive approach that included stakeholder engagement, materiality and third-party assurance,” said Paul Scott, director of Corporate Register.

    “Since then, much has changed in the reporting field, but I’m pleased to see that BAT has stayed the course and is still pushing the boundaries of transparent reporting. The votes of our stakeholders in the CR Reporting Awards are the proof of this.”

  • RLX Growth Slows Amid Regulatory Uncertainty

    RLX Growth Slows Amid Regulatory Uncertainty

    Photo: RLX Technology

    RLX Technology revenue slowed in the second quarter of 2020 amid uncertainty about the regulatory environment in China.

    Net revenues were RMB2.54 billion ($393.6 million), representing an increase of 6 percent from RMB2.4 billion in the first quarter of 2021. The improvement was due primarily to an increase in net revenues from sales to offline distributors, which was mainly attributable to the expansion of the company’s distribution and retail network.

    The company believes that the slowdown in quarterly sequential revenue growth was due primarily to external factors, including negative publicity on the vapor industry in the latter half of the second quarter, coupled with the fact that the draft new rules for vapor products announced by China on March 22, 2021, have not been formally confirmed and no new implementation details had been revealed, which had an adverse impact on sales.

    The company is also target of a lawsuit by investors who claim RLX Technology overstated its financials and misrepresented potential regulatory risks when it filed the paperwork for its initial public offering in the U.S.

    Gross margin was 45.1 percent compared to 46 percent in the first quarter of 2021.

    “In the second quarter of 2021, our business continued to develop as we increased our efforts to further improve underage protection and product safety,” said Ying (Kate) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement. “With our strategic focus on technology investment and brand building, we strive to make RELX a trusted brand for adult smokers with state-of-the-art products, industry-leading technologies and scientific advances. Going forward, we will further enhance investments in scientific research, strengthen our distribution and retail network, and improve our supply chain and production capabilities to create more value for our users and shareholders alike.”

    RLX hosted an earnings conference call on Aug. 20, 2021. A live and archived webcast of the conference call is available on the company’s investor relations website. A replay of the conference call will be accessible until Aug. 27, 2021.

  • Essentra Appoints Asia Commercial Director

    Essentra Appoints Asia Commercial Director

    Felix Koh

    Essentra Filters has appointed Felix Koh as commercial director of Asia-Pacific, based out of Essentra’s Singapore office. Koh brings with him more than 25 years of senior commercial leadership experience to the team.

    Prior to joining Essentra Filters, Koh held several business and sales leadership positions at Kimberly Clark, Iggesund Paperboard, International Paper and most recently with Asia Paper & Pulp, having been based in Hong Kong, Shanghai and Jakarta.

    “Felix will be a key member of the Asia leadership team and will strengthen our value-add through innovation solution selling and driving sustainable sales growth,” said Hywel Thomas, global commercial director of Essentra Filters.

    “I am most pleased to be onboard Essentra Filters and extremely excited to continue establishing our market leadership position through new-generation product that meets the growing trend of heat-not-burn segment of the market as well as eco-products that could be a game changer for the industry,” said Koh.

  • VPR Brands Reports ‘Turnaround’ in Quarter

    VPR Brands Reports ‘Turnaround’ in Quarter

    Photo: snowing12

    VPR Brands, a supplier of vaporizers, reported revenues of $1.7 million for the second quarter of 2021, up from $1.2 million in the comparable 2020 quarter.

    The increase was a result of the Covid-19 pandemic, which hampered sales significantly in 2020 and increased direct online sales in 2021.

    Operating expenses for the three months ended June 30, 2021, were $457,895, compared to $372,652 for the three months ended June 30, 2020. The increase in expenses is primarily due to increased sales activity in 2021.

    Revenue for the six months ended June 30, 2021, was $2.96 million, compared with $1.8 million in the second quarter of 2020.

    Operating expenses for the six months ended June 30, 2021, were $995,798, compared to $849,476 for the six months ended June 30, 2020. The increase in expenses is primarily due to increased sales activity in 2021.

    Net income for the six months ended June 30, 2021, was $163,135 compared to a net loss of $471,944 for the six months ended June 30, 2020.

    Net income for the three months ended June 30, 2021, was $264,786 compared to a net loss of $50,354 for the three months ended June 30, 2020.

    “The company has finally put the pandemic and other extenuating circumstances behind us and is back on track,” said Kevin Frija, CEO of VPR Brands, in a statement. “The numbers, which show a tremendous turnaround from last year, speak for themselves as our team is focused on maintaining not only steady growth but most importantly profitability.”

  • Scandinavian Raises Full-Year Guidance

    Scandinavian Raises Full-Year Guidance

    Photo: STG

    Scandinavian Tobacco Group (STG) reported net sales of DKK2.16 billion ($338.61 million) in the second quarter of 2021, with 7.5 percent organic growth from the comparable 2020 quarter. EBITDA before special items was DKK606 million (from DKK489 million in the second quarter of 2020) with 20.8 percent organic growth. The EBITDA margin was 28.1 percent (23.3 percent).

    The company attributed its performance to a continued high demand in handmade cigars in the U.S., a favorable market mix and synergies from the integration of Agio Cigars. The second quarter of last year was negatively impacted by the early phases of the Covid-19 pandemic, making comparisons relatively easy.

    “We deliver a strong quarterly performance with growth in both net sales and EBITDA driven by strong sales of handmade cigars in the U.S. and a favorable mix,” said STG CEO Niels Frederiksen in a statement. “We expect continued high demand for handmade cigars for the rest of the year, and we are raising our financial expectations for 2021 to reflect that. Additionally, we continue to implement our ‘Rolling toward 2025’ strategy and show good progress on the transformation of the company.”  

    According to STG, the current high consumption of handmade cigars in the U.S. combined with a strong market mix have driven the extraordinarily strong net sales growth during the first half of 2021. The company expects growth to taper off during the second half of the year as year-on-year comparisons are more difficult, especially in the third quarter and as the market mix is expected to normalize somewhat. However, the full year is now expected to be stronger than previously anticipated, although the risks remain higher than normal due to Covid-19.

  • Altria Revenues up in Quarter and First Half

    Altria Revenues up in Quarter and First Half

    Photo: JHVEPhoto

    Altria Group reported net revenues of $6.94 billion in the second quarter of 2021, up 8.9 percent over those reported in the comparable 2020 quarter. Revenues net of excise taxes were $5.61 billion (up 10.9 percent). For the first six months of 2021, Altria’s net revenues were up 1.9 percent, to $12.97 billion, from the 2020 first half. Revenues net of excise taxes were $10.49 billion the first half, 3.8 percent more than those reported in the first six months of 2020.

    “Altria delivered outstanding results in the second quarter thanks to the continued strength of our tobacco businesses and the hard work of our highly talented employees,” said Altria CEO Billy Gifford in a statement. “Our teams have continued their commitment to ‘Moving Beyond Smoking’ by deepening their understanding of adult tobacco consumer preferences, expanding the awareness and availability of our smoke-free product portfolio and amplifying our voice on harm reduction within the scientific and public health communities.”

    “With our strong financial performance in the first half, we have raised the lower end of our full-year 2021 adjusted diluted EPS guidance range and now expect full-year adjusted diluted EPS to be in the range of $4.56 to $4.62, representing a growth rate of 4.5 percent to 6 percent from a $4.36 base in 2020. This updated guidance reflects continued confidence in our tobacco businesses, investments in smoke-free products and the expected impact of the recently announced agreement to sell our Ste. Michelle Wine Estates business.”