Author: Staff Writer

Plain Packaging Impacted Smoking

Photo: Taco Tuinstra
Plain packaging has had a measurable impact on smoking rates in Australia, according to Melanie Wakefield, who heads the Center for Behavioral Research at the Cancer Council of Victoria and was also on the advisory group to government on plain packaging implementation.
Data from the National Drug Strategy Household Survey estimated about 11.6 percent of Australian adults smoke daily, down from 12.8 percent in 2016 and more than half the 25 percent who smoked in 1991.
Plain packaging was not the only reform introduced to help bring down the rate, however. Taxes on tobacco were upped by 25 percent in 2010 and then increased by 12.5 percent each year from 2013 to 2020.
Nonetheless, speaking with The Sydney Morning Herald, Wakefield estimates that plain packaging accounted for about a quarter of the total decline in smoking prevalence in three years after plain packaging, leaving Australia with about 100,000 fewer smokers as a result.
Importantly, she says, it has also had an impact on youth smoking rates.
“In the last national survey, only 5 percent of secondary school students had smoked in the last week, and that was down by a third from before plain packaging.”
In December 2012, Australia became the first country to require tobacco companies to sell their products in drab olive-brown boxes stripped of branding but featuring large pictures of smoking-related diseases.
Tobacco companies challenged the move in various courts, saying it not only breached trademark laws and intellectual property rights but would also boost black market sales. Libertarians characterized plain packaging as a “nanny state” measure.
Now, 20 countries, including the U.K., Turkey, France, Sweden, Belgium, the Netherlands and Ukraine, have brought in their own versions of plain packaging legislation.
July 13, 2021
Graphic Warnings Postponed to July 2022

Images: FDA
The U.S. Food and Drug Administration has delayed the effective date by which cigarette manufacturers will be required to print graphic health warnings on their products by three months to July 13, 2022, reports The Winston-Salem Journal.
It is at least the fourth delay for the graphic warning labels when counting previously set launch dates of June 18, 2021, Oct. 16, 2021, Jan. 14, 2022, and April 14, 2022.
The FDA released its final rule requiring new graphic warnings for cigarettes in March 2020. The rule calls for labels that feature some of the lesser known health risks of smoking, such as diabetes. The graphic warnings must cover the top 50 percent of the front and rear panels of packages as well as at least 20 percent of the top of advertisements.
In April and May 2020, cigarette manufacturers and retailers sued the FDA, arguing that the graphic warning requirements amount to governmental anti-smoking advocacy because the government has never forced makers of a legal product to use their own advertising to spread an emotionally charged message urging adults not to use their products.
In a more recent challenge, tobacco companies argued that the deadline was too onerous due to the impact of the Covid-19 pandemic. They also pointed to the risk that they would lose their investments in new packaging if the graphic health warning requirement were to be thrown out in court.
“These expenditures of resources for the purpose of meeting the rule’s requirements constitute irreparable harm because plaintiffs cannot recover money damages should the rule and/or the graphic warning requirement in the Tobacco Control Act be invalidated,” the companies said in a legal filing.
In March 2021, a district court judge in Texas granted a motion by the plaintiffs to postpone the effective date of the final rule to April 14, 2022. In May 2021, the court pushed back the final rule by an additional 90 days.
This is the Food and Drug Administration’s second attempt to enact graphic health warnings under the 2009 Family Smoking Prevention and Tobacco Control Act. The first rule was struck down by the federal court in the District of Columbia as a violation of the First Amendment.
July 11, 2021
Critics Astonished by PMI Pharma Deal

Photo: Ljupco Smokovski
Public health groups have reacted with astonishment to PMI’s takeover of Vectura Group, according to The Evening Standard.
“It’s ironic that a tobacco company wants to invest in the lung health industry when their products are the biggest preventable cause of cancer, including lung cancer,” said Cancer Research U.K. Chief Executive Michelle Mitchell.
“If PMI really wanted to help, they could stop aggressively promoting and selling their products altogether.”
Sources told The Evening Standard that the Vectura board had a “fiduciary duty” to recommend the offer to shareholders based purely on its value.
“PMI claims it holds more than a quarter of the global market for cigarettes, so its drive to become a ‘wellness company’ is a long way from fruition,” said Deborah Arnott, chief executive of Action on Smoking and Health.
“I can’t imagine the scientists working for Vectura, a respectable company making products that treat lung cancer, are going to be at all happy waking up to find they’re going to be working for Big Tobacco.”
Vectura declined to comment on what its employees might think about working for a tobacco company.
PMI says it is working on using the technology it has developed for its smoke-free products to help drug companies develop inhalable medicines.
PMI aims to generate $1 billion of net revenues from “beyond nicotine” products by 2025. Last year, total net revenues were $76 billion.
July 11, 2021
Philip Morris Makes Offer for Vectura Group
Photo: Art_Photo
Philip Morris International has made a £852 million ($1.2 billion) offer for Vectura Group, a provider of inhaled drug delivery solutions.
“PMI’s ‘Beyond Nicotine’ strategy, announced in February, articulates a clear ambition to leverage our expertise in inhalation and aerosolization into adjacent areas—including respiratory drug delivery and self-care wellness—with a goal to reach at least $1 billion in net revenues by 2025,” said PMI CEO Jacek Olczak in a statement.
“The acquisition of Vectura, following the recently announced agreement to acquire Fertin Pharma, will position us to accelerate this journey by expanding our capabilities in innovative inhaled and oral product formulations in order to deliver long-term growth and returns.”
“The market for inhaled therapeutics is large and growing rapidly, with significant potential for expansion into new application areas. PMI has the commitment to science and the financial resources to empower Vectura’s skilled team to execute on an ambitious long-term vision. Together, PMI and Vectura can lead this global category, bringing benefits to patients, to consumers, to public health and to society at large.”
Vectura is a provider of innovative inhaled drug delivery solutions that enable partners to bring their medicines to patients. The company has 13 key inhaled and 11 noninhaled products marketed by major global pharmaceutical partners as well as a diverse portfolio of partnerships for drugs in clinical development. In 2020, Vectura generated net revenues of £191 million. The transaction value represents a multiple of around 14 times Vectura’s 2020 EBITDA.

PMI has the commitment to science and the financial resources to empower Vectura’s skilled team to execute on an ambitious long-term vision.
Jacek Olczak, CEO, PMI
In a press note, PMI listed the benefits it expects to derive from the Vectura acquisition:
Access to differentiated proprietary technology and pharmaceutical development expertise to deliver a broad range of complex inhaled therapies.
The addition of highly complementary human capital, technology, high-quality infrastructure and deep know-how of inhalable formulation and device design development and analysis, drug/device combination and pharmaceutical management processes and systems. The combination will fully leverage PMI’s existing capabilities in life sciences, product innovation and clinical expertise.
An experienced management team—supported by more than 200 scientists in formulation, devices, inhalation, regulatory teams and clinical manufacturing—that will help PMI accelerate the development of its healthcare and wellness operations.
Together with the announced agreement to acquire Fertin Pharma, the acquisition will give PMI a comprehensive portfolio of development capabilities—covering innovative inhaled and oral product formulations—to fulfill its “Beyond Nicotine” ambitions in line with its key sustainability priorities.
PMI believes that, together, the companies can create a fully owned pipeline of products across a broad range of sectors in the prescription drug and over-the-counter categories that will complement Vectura’s CDMO business and service to its existing client base. PMI further believes that its “Beyond Nicotine” aerosolization technologies and development pipeline will provide additional predictability, stability and security for Vectura’s future.
In February of this year, PMI announced its goal to generate more than 50 percent of total net revenue from smoke-free products by 2025. PMI also announced its aim to generate at least $1 billion in net revenues by 2025 from “Beyond Nicotine” products.
“We are thrilled by today’s announcement and the prospect that Vectura will be joining the PMI family as an autonomous business unit, forming the backbone of our ‘Beyond Nicotine’ inhaled therapeutic business,” said Jorge Insuasty, chief life sciences officer. “The proposed acquisition will significantly accelerate our development efforts. With the addition of Vectura’s expertise in the inhaled therapeutics space, PMI and Vectura will have the opportunity to undertake together the development and eventual commercialization of innovative inhalable drug/device combinations.”
PMI will fund the transaction with existing cash and expects it to close in the second half of 2021, subject to a shareholder vote and approval by the appropriate regulatory authorities. PMI expects the impact of the acquisition on its full-year 2021 adjusted diluted EPS to be immaterial.
July 9, 2021
Groups Urge Ban on ‘Menthol Replacements’

Photo: Валерий Моисеев
Public Health England and other health groups have asked the U.K. government to prohibit the sale of “menthol replacement” cigarettes such as NewSuperking Green and Sterling New Dual, reports Express.
Despite a nationwide ban in the U.K. on the sale of menthol cigarettes, Japan Tobacco International has sold more than £1 billion ($1.33 billion) worth of cigarettes laced with menthol in the past year since the ban went into effect, according to critics.
JTI insists its brands comply with the law. “We no longer sell cigarettes with characterizing flavors (including flavored capsule cigarettes),” the company stated. “Cigarettes with a characterizing menthol flavor have been banned from May 20, 2020. We are confident all our products are fully compliant with U.K. law. Some JTI cigarettes and rolling tobacco sold in the U.K. do still contain very low levels of menthol. This is not prohibited under the law, provided the use of such flavorings does not produce a clearly noticeable smell or taste other than one of tobacco—which they do not.
“The launch by competitors of similar products in EU markets shows they, too, are confident that products with low levels of menthol are permitted by law. All the ingredient information for our new products was shared with the authorities at both U.K. and EU level via the EU Common Entry Gate (EU-CEG) prior to their being placed on the market, so there is full transparency throughout this process. We look forward to providing further information if requested by the authorities.”
Tobacco companies across Europe have been introducing alternatives to their discontinued menthol brands since the EU banned such tobacco products in May 2020. Last year, cigarette manufacturers came under scrutiny in Ireland for supposedly sidestepping the measure.
July 9, 2021
Altria to Sell Ste. Michelle Wine Estates

Photo: InsideCreativeHouse
Altria Group has agreed to sell its Ste. Michelle Wine Estates business to Sycamore Partners Management for approximately $1.2 billion and the assumption of certain Ste. Michelle liabilities. Altria’s net cash proceeds will be subject to customary net working capital and other adjustments at closing.
Altria expects the transaction to close during the second half of 2021, subject to Sycamore Partners obtaining the necessary financing and the satisfaction of customary closing conditions, including antitrust regulatory clearance.
“We believe the transaction is an important step in Altria’s value creation for shareholders and allows our management team greater focus on the pursuit of our vision to responsibly transition adult smokers to a noncombustible future,” said Altria CEO Billy Gifford in a statement. “Ste. Michelle and its talented employees have built an outstanding portfolio of premium wine brands, and we wish them future success.”
“The Ste. Michelle leadership team and I look forward to working with the team at Sycamore Partners and believe we are well positioned to drive the next phase of our growth,” said David Dearie, Ste. Michelle’s president and CEO.
July 9, 2021
Andy Cars Joins Sting Free Board

Photo: Sting Free
Serial entrepreneur Andy Cars has invested in Sting Free and joined the company’s board of directors.
Since 2014, Cars has been running Lean Ventures International, focusing on structuring and streamlining innovation work in large companies. As part of that work, Cars helped develop the world’s first management system for innovation (ISO 56002), which was published in July 2019. Customers include H&M, Essity, Tieto, SMHI, BillerudKorsnas and Philip Morris.
Cars has also coached more than 200 startup teams to take their ideas to market. As a jury member of the European Innovation Council, Cars evaluates and funds scalable startups within the EU.
Cars holds a magna cum laude Master of Business Administration degree from the European University Business School in Lisbon.
“Sweden has the lowest number of smokers per capita in Europe and is the only country in the EU that allows the sale of snus,” said Cars in a press note. “I think that other countries will soon start to follow Sweden’s example. With tobacco-free nicotine pouches being permitted, not only in the EU but in most countries, such a development is already taking place.”
“Andy brings to the board a whole range of unique qualifications and valuable experiences that I am convinced will help Sting Free AB to continued success,” said Bengt Wiberg, CEO of Sting Free. “We are looking forward to soon launch the world’s first patented sting-free snus and nicotine pouches via licensees.”
The board of Sting Free now comprises Bengt Wiberg, Daniel Wiberg, Andy Cars and Lars Erik Stromberg. Advisers include Ken Storey, Curt Enzell, Tony Axell and Conny Andersson, who joined Sting Free in April.
Sting Free has developed a solution that eliminates the stinging sensation associated with snus use, thus reducing a barrier to tobacco users looking for less harmful methods of nicotine consumption.
Tobacco Reporter profiled Sting Free in July 2017 (see “Patching the Pouch”).
July 8, 2021
JTI to Offer Flexible Work Arrangements
JTI is giving its employees the flexibility to work up to 50 percent of their time per month away from the office, benefit from flexible core hours and work up to 10 days abroad, among other “New Ways of Working” (NWOW) measures, which redefine where and how work is done.
Following the success of remote working during the pandemic, JTI says it has built its new working model around four core elements: greater FLEXibility in ways to work, LEAD with more autonomy, LIVE a more balanced work-life blend and BELONG at JTI—regardless of if one is based in an office, factory or operates in the field.
“Like most people working today, and even before the pandemic hit, achieving more of a work-life balance has been a key priority for our employees,” said Howard Parks, senior vice president of people and culture at JTI, in a statement.
“Flexible working and the ability to work abroad for up to 10 days per year are the latest examples of measures to help every employee feel empowered to strike that balance. Performance and outcomes are what matter here, not hours spent in the office.”
JTI’s NWOW guidance follows the launch in January of the company’s pioneering equal family leave policy, which offers a minimum of 20 weeks fully paid leave to all new parents globally.
We recognize the responsibility we have to do all we can to support our employees and that being happy and content in how they balance their work and personal lives will serve everybody for the better.
Christiane Bisanzio, vice president of diversity and inclusion, JTI
“We recognize the responsibility we have to do all we can to support our employees and that being happy and content in how they balance their work and personal lives will serve everybody for the better,” said Christiane Bisanzio, vice president of diversity and inclusion at JTI. “We understand the importance of flexibility and the need to be agile, which is why our new policy is intended to be evolutionary, and with every new learning, we will improve and refine our approach. As far as JTI is concerned, work is an activity, not a place or time.”
The new policy was rolled out on July 1, 2021, and an additional measure of a four-day work week will be piloted in the first quarter of 2022 across selected locations. Further steps are being taken, including close collaboration with markets, to ensure flexibility is offered to factory and sales teams, including piloting remote working in mature locations from 2022.
July 8, 2021
Taiwan: E-cigarette Use Tripled in Few Years

Photo: Richie Chan
E-cigarette use in Taiwan has tripled since 2018, reports The Taipei Times, citing a study by the Ministry of Health and Welfare’s Health Promotion Administration (HPA).
In 2018, e-cigarette use was at 0.6 percent; in 2020, that rate grew to 1.7 percent, according to the study, which looked at responses from 25,000 people 18 years and older.
The highest e-cigarette use rates were found in men ages 26 to 30, at 6.3 percent, and women ages 21 to 25, at 4.6 percent.
“To put this growth into perspective, use of traditional cigarettes grew only marginally over this period, from 13 percent in 2018 to 13.1 percent in 2020,” said Lu Meng-ying, HPA Tobacco Control Division official. “The situation needs urgent attention, especially as new e-cigarette users are almost all young people.”
Most respondents said they use e-cigarettes out of curiosity while 17.3 percent use them to quit smoking combustible cigarettes and 9.7 percent use them because friends use them.
Use of flavored tobacco products is increasing as well, from 8.2 percent in 2018 to 15.6 percent in 2020. Majority of the increase was seen in women.
“There are more than 1,200 additives used in flavored tobacco products, and the vast majority of them are chemically derived,” Lu said. “The goal of manufacturers is to prevent new smokers, especially young women, from being turned off by foul smells.” He added that the effects of long-term use of flavored products are not well understood.
July 8, 2021
USTC Files for Chapter 11 to Fulfill Contracts

Photo: USTC
U.S. Tobacco Cooperative (USTC) has filed for Chapter 11 protection in federal court to meet short-term contractual obligations to its member growers during the 2021 crop season.
“This filing provides us the best way possible to meet our short-term obligations and plan for the future,” said Oscar J. House, CEO and president of USTC, in a statement.
“In no way does this action reflect on the health of the organization and its ability to continue operations well into the future. In fact, this action is in response to the uncertainty presented by the ongoing class action litigation brought against us in 2005. Rest assured that our obligations to our member growers, employees, suppliers and customers have always been and will continue to be our highest priority and concern.”

This filing provides us the best way possible to meet our short-term obligations and plan for the future. In no way does this action reflect on the health of the organization and its ability to continue operations well into the future.
Oscar J. House, CEO and president, USTC
As a result of this proactive filing, USTC intends to satisfy obligations to its more than 550 member growers and more than 200 employees. The company says suppliers and customers will continue to receive the exceptional service and products the organization is known for across the globe. “This filing will allow USTC to reorganize and restructure to honor commitments to stakeholders and ensure the organization’s sustainable future,” the company stated.
July 7, 2021