Author: Staff Writer

One-Stop Shop

Photos: ATD
ATD’s unique pedigree allows gives it a leg up in tackling the mechanical challenges of cigar manufacturing.
By Stefanie Rossel
The development of cigar making equipment comes with its unique challenges, tempting machinery manufacturers to focus on specific parts of the cigar manufacturing process, such as over-rolling. Dutch original equipment manufacturer ATD Machinery stands out in the marketplace as it is a one-stop shop, providing an extensive portfolio of secondary machinery from bobbinizing machinery to pack-finishing. Among other things, it offers a complete line for manufacturing shoulder boxes and a flavor injector.
The company, which originated as the technical department of Royal Agio Cigars, one of Europe’s largest privately owned cigar companies, became independent in 2013. ATD started out developing machines for Agio’s overseas business in the 1970s. Today it has 50 employees. In addition to cigar-manufacturing equipment, the company offers production and packaging machinery for other sectors. Tobacco Reporter spoke with ATD Machinery’s new CEO, Koen te Lintelo, about what’s new.

Koen te Lintelo
Tobacco Reporter: How has your business developed since it was spun off from Royal Agio Cigars?
Koen te Lintelo: Indeed, ATD moved to a brand new, state-of-the-art building, and its independence was formalized. But I think our unique history of developing technological know-how and machinery with direct feedback from the factory made us into what we are and has allowed us to become the market leader. But in reality, ATD was already independent in how it operated. Helping our customers solve cigar manufacturing challenges, producing more efficiently, with class leading reliability and quality, have always been ATD’s mission.
In how far has your customer base changed and become more independent of your parent company, Agio Cigars? Are you still growing mostly organically?
Our growth is entirely organic and comes from both existing customers and new ones. The fact that Agio is no longer part of the Wintermans family does not really change that. I believe the fact that we have a complete portfolio of machinery from boxing and packaging machines all the way to newly developed bobinizers, bunch makers, finishing machines and the world’s fastest cigar over-roller, makes us an attractive partner. We try to look at our clients’ challenges from all angles, whether it is from a desire to improve efficiency or the quality of output, data collection or technical solutions to new regulation. And that’s only possible with excellent engineering capabilities and actual manufacturing experience. As I said before, it is in our history, in our DNA. And honestly, we are proud of our heritage.
Back when you became autonomous, the percentage of your business generated by cigar machinery stood at 85 percent to 90 percent. What is its share between your business from the cigar industry and that from other sectors today?
ATD’s prime focus is on the cigar industry. We have made a strong commitment to keep on innovating and investing in the cigar business. And, as a result, the balance for cigar machinery is still 85 [percent] to 90 percent. Nevertheless, as the total business grew, the volume in turnover increased for both pillars. But we are no longer a machine manufacturer only. Today we also provide technical know-how on-site as a service. It is all about how we can help in the best possible way.

How has the global cigar market developed since ATD’s independence?
Cost of ownership, return of investment and environmental footprint are stronger key decision criteria. A driver for ATD to innovate on cost efficiencies and environmental impact.
New products and packaging concepts have been launched. Improvement and speed-up kits have been developed to upgrade existing production capacity, and we extended our capability to refurbish several types of bunch makers.
Is cigar making equipment still a viable business, given the increasing restrictions on tobacco products worldwide?
Most definitely. If anything, new regulation makes it even more important for cigar manufacturers to be agile and produce efficiently and qualitatively at the same time. We have to be one step ahead to tackle any issues that might arise as a consequence of new regulation.
What are the most promising markets for your company at the moment?
ATD is a global player, and every market has its own challenges and opportunities. In Europe, the focus is on cost, quality control and changes in production due to regulation. In the Americas, the single-leaf cigar is very promising, and in Asia the total quantities of machine-made cigars increases. With ATD’s setup, we are able to support all these markets.
You took over as CEO last September. What are your plans for ATD Machinery?
I believe helping our customers solve cigar manufacturing challenges, producing more efficiently, with class-leading reliability and quality, are at the core of ATD. Both the team and ATD’s portfolio are great, and we will keep on raising the bar in the years to come.

What have been the most remarkable developments at your company in recent months?
Last month, we launched our new website, including a new client portal. For clients, this portal makes it really easy to have 24/7 access to all necessary manuals and to select wear [parts] and spare parts.
As part of our focus on quality and production control, we developed several improvement kits for the installed base, like filter boxes and vacuum controllers, to reduce the heat and dust development and to reduce electricity consumption. Especially for the cigarillo market, several drivers of the existing wrapping machines can be replaced by new drive technologies to create higher production speeds.
Last half year alone, we introduced three new machines: the SW60 to produce single-leaf cigars at a speed of 60 per minute, the ABM60, a highly flexible tax-stamp applying machine with minimum footprint, and the pouch folding unit.
What are the most significant trends in the cigar market today?
What is really interesting about the cigar making industry is that every client is different and has a different approach toward the craft of creating a cigar. For the top-10 clients, production quality in higher quantities becomes more important compared to flexibility. Depending on the cigar format, we are able to speed up the process, like cigar over-rolling, and increase the process data control by replacing several drives by the latest servo techniques.
The Covid-19 pandemic has reportedly led to increased cigar smoking around the globe. Have you noticed an impact on your business?
ATD noticed an increase for especially single-leaf cigars and cigarillos. This resulted in an increasing demand for machinery. Logically, track-and-trace is prioritized for the coming years.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

July 1, 2021
Enduring Resilience

Photo: Taco Tuinstra
Emerging from the pandemic, the leaf tobacco industry has once again proven its mettle.
By Stefanie Rossel
One and a half years into the Covid-19 pandemic, the world has yet to return to normal. Leaf merchants around the globe have felt the impact on their business, too, as they had to cope with new challenges in their operations. Yet tobacco has once again proven its famed resilience in times of crisis, and leaf traders have found solutions to handle the unprecedented circumstances. Tobacco Reporter asked several of them to describe their experiences and provide a snapshot of the current global leaf market.
“Global leaf markets have come out of the gate sizzling hot in 2021,” says Jay Barker, founder of U.S.-based JEB International Tobacco. “The dynamics of the Brazil crop have been heavily affected by the Covid lockdowns, and prices have subsequently skyrocketed. Zimbabwe seems to be quite firm also, and contracted volume in the U.S. was up substantially from 2020 levels. These are the times when being in the tobacco business is the most fun; there is never a dull day.”
“At this stage in the tobacco calendar, we are noticing an increased demand which exceeds supply in certain key export markets,” notes Alex Mackay, CEO of Premium Tobacco Group, which is headquartered in Dubai. “This in both the flue-cured Virginia (FCV) and air-cured burley varieties. The overall increase in demand will have a positive impact on all unsold inventories of which are at lowest levels seen for many years.”
Mackay has noticed a further reduction in the production of air-cured burleys this year. “We believe that certain manufacturers may face supply challenges as core sourcing origins deliver less volume than demand requires,” he says. “However, smaller niche markets could see increased interest as a result. Outside highly specialized and high-value cigar products that are still enjoying reasonably good demand, dark-fired production for the medium[-value] to super-value segments predominately for the Middle East, North African regions have dropped steadily for the past few years. We are expecting supply to stay restrictive and demand set to increase as crop production in African and Indian origins continue to decline.”

Hardy Kohl Jr.
Brazil plays a special role this year. The price of Brazilian flue-cured has surged recently, according to Mackay, and higher-than-expected demand continues to be seen across all quality segments. “We believe certain manufacturers are keen to capitalize on the current crop quality, and the potential threat of a shorter crop next year may necessitate longer range buying patterns to strengthen durations,” he says.“In Brazil, we have a signal for a reduction in production for 2022, among other reasons, due to the excellent gain of farmers with other products,” confirms Hardy Kohl Jr., general manager of Kohltrade in Brazil. “It has also been a challenge for players to deal with Brazilian exchange rate volatility, which, together with the reduction in margins, has increased the risk of operations.”
Miguel Goerck, sales director of ATC-Associated Tobacco Co. Brazil, also observes strong demand for tobacco, especially out of Brazil. “There will be no stocks available after the current season,” he says.
“Brazil has always been, along with Zimbabwe and USA, a source of quality tobacco. On the past two seasons, the demand has increased because of a few factors. The Brazilian Real suffered a steep devaluation; Zimbabwean tobacco is expensive and committed to a few customers; Chinese tobacco stocks are lower, and there are not as many lots available at very low prices as before. Many customers are looking for price and cheap tobacco only. With commodities’ prices and tobacco growing costs increasing, it will be interesting to observe what will be the market reaction already on the next crop.”

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Kohl anticipates the market to head toward a shortage of certain tobacco grades for the next few years. This is also a trend in the U.S., says Rick Smith, founder of Independent Leaf Tobacco Co. in Wilson, North Carolina, who observes a tendency toward tighter supplies of flavor styles and domestic underproduction of these types, especially dark types. “Other flavor markets are also beginning to show the same tendencies,” he says. “Prices are inching up, cutting into the dealer’s ability to make a profit. Filler styles are available.”
Oscar House, president and CEO of U.S. Tobacco Cooperative (USTC), has singled out a new business opportunity for U.S. farmers. “Given that USTC only deals with flue-cured tobacco, the most significant thing that has occurred is China returning to the market to not only buy the 2018 and 2020 crops but also with indications for the 2021 crop,” he says. “This gives our farmers an opportunity to increase their growing contracts by up to 80 percent with the cooperative, which will greatly help their farming operations with the cuts of the past two years. With China back in the U.S. buying tobacco, it will be a boost for the flue-cured crop going forward.”

With China back in the U.S. buying tobacco, it will be a boost for the flue-cured crop going forward.
Oscar House, president and CEO, USTC
Quality Remains Key
While the South American and African tobacco crops are in mid-season, with both FCV and burley in high demand, marketing of the African crops has recently begun with demand again appearing to be in line with projected crop size, notes Jim Schneeberger, director of global leaf sales at CNT in Germany. “But quality will be the determining factor if indeed demand is to align with supply,” he says. “Weather continues to play an important role in the quality of tobacco crops and in turn farmers’ viability. Demand for competing agricultural crops is increasing, and there are some indications that tobacco growers may convert to food crops.”
“Tobacco demand is firm in most countries, and unsold stocks are in line with pre-pandemic average volumes,” says Rainer Busch, managing director and owner of Germany-headquartered NewCo Global Tobacco Trade & Service. “What is surprising is that, although the seasonal workforce is large and infection could be easy, the harvest volumes have not decreased dramatically. The same applies to the intensive workload in the factories, but no significant effects were found.”
Aylin Bahcevan, marketing supervisor of Istanbul-based Star Agritech International, hints at a development that began impacting the leaf market long before Covid-19 entered the scene. “Traditional tobacco product consumers are gradually inclining toward smoking alternatives due to the rising awareness about health concerns,” she explains. “Thus, the introduction of innovative tobacco products with unique taste options has become essential.
As a result, manufacturers have shifted their focus on premium tobacco products produced with flue-cured tobacco and fine whole leaf. The launch of low-nicotine and alternative smoke products are expected to rise and fuel the market growth of the next-generation tobacco products segment.
Prominent players in the industry, including us, are investing in research and development more than ever to meet the changing needs of the industry and lead the way of innovation. Such efforts bear the potential to help attract a larger customer base for tobacco products.”

Aylin Bahcevan
Traditional tobacco product consumers are gradually inclining toward smoking alternatives due to the rising awareness about health concerns.
Aylin Bahcevan, marketing supervisor, Tar Agritech
The Challenge of Logistics
Last year’s season saw disruptions in key markets due to the Covid-19 pandemic. Travel restrictions not only caused shortages of agricultural inputs and seasonal farm workers, but also prevented many buyers and sellers from visiting the sales floors. In TR’s survey, leaf merchants unanimously named logistics as an issue of concern.
“By far, the most pressing issue for me is logistics,” says Smith. “With the pandemic raging, it is hard to get a shipment from point A to point B in a timely manner. What used to take 45 days now takes 90 if you are lucky. This seems to be true for all sources.”
“We face higher shipping and transportation costs and delivery delays due to the overbooking of certain routes,” echoes Busch.
For House, the biggest concern for his company is the supply chain. “This has been exacerbated by the Covid-19 pandemic, and it will take some time before shipping lines have a good handle on where goods are coming from and going to in order to smooth out the disturbances in the system,” he says. “Trucking has also been affected in the U.S., and it will also take time before there are the right amount of trucks for the right amount of drivers for the right amount of customers.”
“The impact of Covid-19 is still adversely affecting the leaf supply sector; we have seen some delayed decisions within the trade last year as customers postponed placing orders, tried to better utilize or manage existing inventories and gauge potential cigarette sales given restrictions and lockdown requirements,” says Mackay. “To further compound matters, the dramatic increase in freight rates from Asia and the general lack of availability of containers and shipping routes caused dramatic cost increases and caused longer than usual transit times. As we continue to deal with the potentially longer-term impact of this pandemic, we sense the industry will inherently be more cautious in tobacco production and financing. The cost of business could be more restrictive and might limit worldwide production plans and see diminished inventory levels that could lead to an undersupply in some segments.”
Nevertheless, leaf merchants remain optimistic. “The tobacco industry has proven to be very resilient in the face of Covid-19, and the only significant decline in combustible products is from the inactivity in global duty-free shops at airports and the like,” explains Schneeberger.
“The Covid-19 virus and the challenges that came along with it have made it our priority to facilitate a transformation for ourselves and our industry—a transformation that calls for a better understanding and improvement,” Bahcevan points out. Kohl expects a stabilization of the pandemic that should generate a recovery in investments. “It is a transition moment as we believe we are seeing this imbalance in basic market rules, such as the balance between supply and demand.”
For Dora Gleoudis, managing director of Nicos Gleoudis Kavex, which specializes in Greek oriental tobacco varieties, business life has returned almost to normal. “We are travelling a lot,” she says. “It’s good to see some recovery.”

Global leaf markets have come out of the gate sizzling hot in 2021.
Jay Barker, founder, JEB International Tobacco
Supply Chain Challenges
Meanwhile, strong demand for leaf tobacco is pushing farmer prices “to the roof,” according to Goerck. “The recent strengthening of the Brazilian Real is also pressuring the free-on-board prices up, which can make some customers source tobacco from other regions,” he says.
Ever stricter regulations only add to the pressure. In the EU, pending legislation will require companies to examine their supply chains for risks to human rights and the environment—and fix any shortcomings. The U.S., too, is enforcing social governance policies with regards to tobacco trade and delivery.
“Since the introduction of the U.N. Guiding Principles on Business and Human Rights in 2011 and the U.N. SDGs in 2015, there has been a rapid shift in focus to ensuring companies implement supply chain due diligence,” says Mackay. “The focus is on: ‘Was there minimal social and environmental impact during production?’ Companies are expected to follow and implement transparent programs using the procedure of: Identify. Prioritize. Respond. Measure. Report. The new STP program [Sustainable Tobacco Program—an industry-wide initiative that helps to drive standards in agricultural practices, environmental management and social and human rights areas] focuses on several themes, social and environmental issues being of particular significance.”
A prime example are chemical residues. “As with all agricultural products and increased consumer awareness, the elimination and use of highly hazardous pesticides in the supply chain is critical,” says Mackay. “To achieve this, the implementation of proactive programs focusing on safe application of reduced-risk products, coupled with robust traceability systems, is key for suppliers. For some regions and suppliers, this will be challenging, which could redefine the tobacco industry going forward. The regulatory landscape is rapidly evolving, and the ability of suppliers to effectively address and fulfill new requirements will determine their long-term success in an increasingly competitive industry.”
Compliant crop production, along with sustainable and responsible supply, will become more essential, according to Mackay. “The requirements and obligations by all future suppliers could have a dramatic effect on the way tobacco is produced, crop sizes and the countries and companies that can implement these potential requirements. The elements needed to ensure all tobacco is grown, processed and delivered in an environmentally, socially responsible, compliant and transparent manner that is likely to redefine the tobacco industry soon.”
Schneeberger believes the regulatory environment will remain a major factor within the tobacco industry. “The focus on the ESG [environmental, social and governance] footprint of manufacturers and suppliers alike will further regulate the way tobacco is produced, and countries that are unable to satisfy international sustainability standards will most likely lose their markets for tobacco, especially as relates to exports,” he says. “The apparent impact of climate change and resultant drought conditions in certain nonirrigated tobacco crops will continue to increase production of certain ‘nondesirable’ styles of high nicotine FCV and burley for which there is little demand.”

Spotlight: Macht Tabak
Leaf tobacco trade has a long tradition at Macht Tabak MIJ (MTM). The family-owned business, which is part of Macht Global Holdings, has roots in the tobacco industry dating back to 1951. Headquartered in Hong Kong, the leaf-dealing company has presence in Dubai, Izmir, Moscow and Luxembourg.
MTM provides a wide variety of leaf tobaccos from a selection of origins tailored with custom value-added services to become an essential solutions partner to its clients’ supply chain. While primarily supplying directly from the origins, MTM holds select tobacco stocks in Belgium and Dubai to fulfill the prompter requirements of its clients in the respective regions.
Furthermore, the company offers in-house cut rag blend selections for traditional American and Virginia blends as well as a tailor-made service to provide its customers with their very own rich taste signature blend.
In collaboration with its partners, MTM additionally serves in the supply of DIET and CRES products.
Hand in hand with activities of its affiliates, MTM supports its very own impact investment platform that focuses on sustainable solutions for a greener energy and resource-efficient future.

Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

July 1, 2021
Washington, D.C., Flavor Ban Moves Forward

Photo: lenscap50
The Washington, D.C., council voted to ban the sale of flavored tobacco products, including menthol cigarettes, reports The Washington Post. The vote passed with an eight-to-five majority after a long debate around concerns that the ban could create more opportunities for police to harass Black smokers and that the ban would be “unfairly targeting a smoking choice preferred by Black residents.”
The bill will now head to Mayor Muriel E. Bowser, who is expected to sign it into law.
With this legislation, D.C. joins Massachusetts and other cities across the country in banning menthol cigarettes and other flavored tobacco products.
The bill bans the sale of flavored products but does not criminalize smoking menthol cigarettes. The council approved a change to the bill stating that city police do not have the authority to act on their own to enforce the ban. The Department of Consumer and Regulatory Affairs could still call police for assistance, though.
There is one exception: Hookah bars that already have an exemption from the city’s indoor smoking ban can continue offering flavored hookah for use on their premises.

D.C.’s projection that it will lose just $3 million in taxes by banning flavored tobacco products is a heroically wishful one.
Guy Bentley, director of consumer freedom research, Reason Foundation
Critics said the legislation’s safeguards against racial injustice are insufficient. “The police remain responsible for arresting those selling untaxed cigarettes,” wrote Guy Bentley, director of consumer freedom research at Reason Foundation. “If the bill passes, all flavored tobacco products illicitly sold in the district will be untaxed. Those selling or purchasing these products are vulnerable to police interactions.”
Bentley also pointed to likely loss of tax revenues. “D.C.’s projection that it will lose only $3 million in taxes by banning flavored tobacco products is wishful thinking,” he wrote.
According to Bentley, Massachusetts lost more than $140 million in tax revenues from menthol cigarette sales in the 11 months following its June 2020 ban on tobacco flavors. “Eighty-eight percent of Massachusetts’ lost tobacco sales were made up for by increased tobacco sales in nearby Rhode Island and New Hampshire,” he wrote.
June 30, 2021
Pyxus Releases Full-Year Financial Results

Photo: snowing12
Pyxus International announced results for its quarter and fiscal year ended March 31, 2021.
Combined sales and other operating revenues were $1.33 billion, down 12.8 percent from the prior fiscal year. Combined gross profit as a percent of sales was 12.1 percent, which decreased 2.6 percent from the prior fiscal year.
Combined selling, general and administrative expenses were $197.9 million, which decreased $1.1 million, or 0.6 percent, from the prior fiscal year.
Combined net loss attributable to Pyxus International was $117.7 million, which decreased $147 million, or 55.5 percent, from the prior fiscal year.
Combined adjusted EBITDA was $93.5 million. Total long-term debt was substantially reduced when compared to the prior fiscal year. Year-end uncommitted inventory was the lowest it has been since fiscal 2016.
“In what was an unprecedented and challenging year, our company adapted to constant change as we navigated the Covid-19 pandemic,” said Pieter Sikkel, Pyxus’ president and CEO, in a statement. “During fiscal 2021, we implemented a series of restructurings and process changes that allowed our business to continue to operate through the Covid-19 pandemic while also positioning us for success in fiscal 2022 and beyond. Through these actions, we substantially reduced our debt and costs throughout our supply chain. We also made the strategic decision to exit our cash flow negative Canadian cannabis businesses, which further supports our SG&A cost containment efforts.”

Based on expected first-quarter results, we are optimistic about fiscal 2022.
Pieter Sikkel, president and CEO, Pyxus International
“Although our production facilities continued to operate through the pandemic, certain facilities experienced lower production levels than planned due to smaller crop sizes in Africa and the implementation of social distancing requirements and safety practices to reduce the spread of Covid-19 and protect our employees. In addition, the Covid-19 pandemic-related shipping delays of leaf tobacco for certain customer orders resulted in a shift of between $170 million and $180 million of expected revenue and $30 million and $34 million of expected EBITDA from fiscal 2021 into fiscal 2022. However, the impact of Covid-19 on our business yielded innovative changes that will enable us to be more flexible in the future and accelerate certain activities in the crop cycle. Covid-19 has also pushed the tobacco industry to continue to look for ways to reduce supply chain complexity in a responsible manner.
“For the full year, we are expecting fiscal 2022 sales to be between $1.65 billion and $1.8 billion, SG&A expense to be between $140 million and $145 million (excluding nonrecurring items and potential changes in foreign currency exchange rates) and adjusted EBITDA to be between $150 million and $170 million. Based on expected first-quarter results, we are optimistic about fiscal 2022. Lastly, we are also excited about sharing more information about our enhanced global environmental, social and governance strategy, which supports our ability to deliver on our expected results for fiscal 2022.”
June 30, 2021
Pyxus Chief Financial Officer to Retire

Photo: bortnikau
Joel L. Thomas will be retiring from his position as executive vice president and chief financial officer at Pyxus International upon the appointment of his successor. Thereafter, Thomas will continue to serve as a strategic advisor to facilitate the transition of his responsibilities until he retires from that position on or before June 30, 2022. The company has initiated an executive search for Thomas’ successor.
“On behalf of Pyxus and the board of directors, I would like to thank Joel for his dedication and contributions to the company,” said Pieter Sikkel, president and CEO of Pyxus International, in a statement.
“Throughout his time with the company, Joel has provided financial leadership and implemented innovative financing structures to meet our evolving global requirements. His leadership and dedication were critical over the past year as we navigated the impact of the Covid-19 pandemic and implemented significant restructuring efforts that have positioned our business for long-term success. Joel’s passion for the business, our shareholders, our employees and our customers is evident to anyone who interacts with him, and I wish him all the best in the next chapter of his journey.”
Thomas has spent the past 16 years of his career with Pyxus International, including serving the last seven years as CFO.
“It has been a privilege to work and serve alongside our talented global team,” said Thomas. “I’m proud of the steps we have taken to create a solid foundation for the company that will enable it to achieve long-term success.”
June 30, 2021
TAAT Revenue Triples Over Previous Quarter

Photo: Taat Global Alternatives
Taat Global Alternatives reported revenue of CAD691,484 ($558,692) for the three months that ended on April 30. The figure was up more than 300 percent over the previous quarter, reflecting a faster-than-anticipated rollout and strong uptake of the company’s products at both the distributor and end customer levels.
The company said it made several key accomplishments during the period, which was the first full quarter in which Taat was sold at retail. Highlights of the quarter included the launch of e-commerce to complement retail sales, the upgrade of its common shares to the OTCQX Best Market and the landing of its first major sporting event sponsorship.
The company was also featured in Forbes during the quarter.
Taat is now sold by more than 300 Ohio retailers, with new store placements in both Illinois and Georgia. The company also has international distribution relationships in the United Kingdom and Ireland.
“I am pleased to say that the rollout of Taat is ahead of schedule as reflected in our second-quarter financial and operating performance,” said Setti Coscarella, Taat CEO, in a statement. “We generated outstanding quarter-over-quarter revenue growth, and we expect that the trend will remain highly positive in the quarters to come as customer awareness and demand steadily increase.”
June 30, 2021
Malawi Child Labor Case to Proceed

Photo: AA+W
British American Tobacco and Imperial Brands failed to persuade the U.K. high court to throw out a case alleging they are responsible for the exploitation of farm families and child labor in Malawi, The Guardian reported on June 25.
The case was brought following a Guardian investigation in June 2018.
Lawyers at Leigh Day allege the working conditions on Malawi tobacco farms breach the definition of forced labor, unlawful compulsory labor and exploitation under Malawian law. They also say they breach the U.K. Modern Slavery Act, Article 14 of the European Convention on Human Rights, and the International Labor Organization definition of forced labor. They say the companies have unjustly enriched themselves at the expense of Malawi farming families.
British American Tobacco and Imperial Brands deny the allegations. They argued that the Malawian families could not prove that the tobacco they grew had ended up in the companies’ cigarettes.
In the high court, Justice Martin Spencer said the companies’ application to strike out the case had been “misconceived.” The judge said lawyers for the farmers were not required to offer proof at the beginning of a legal action, only when it came to full trial.
A spokesperson for Imperial said they could not comment further because the litigation was ongoing, “other than to reiterate that we will continue to defend the claim.”
BAT said it had “a longstanding commitment to respect the human rights of our employees, the people we work with and the communities in which we operate. We will continue to vigorously defend the claims, and we are unable to provide further comment while this case continues.”
June 29, 2021
Next Generation Labs Receives Patent

Photo: tashatuvango
Next Generation Labs has received a European Patent (No. 3209653) for its proprietary technology related to the preparation of R-S isomer nicotine.
“This patent grant by the European Patent Office is a significant milestone for Next Generation Labs, as it solidifies our tobacco-free synthetic nicotine intellectual property portfolio across a number of European countries, allowing the company to better enforce its rights against violators and counterfeiters of its industry-leading TFN branded synthetic nicotine,” Next Generation Labs wrote in a statement.
“Alongside our announcement of patent grants in China, Australia and Canada and the enforcement efforts of our strategic partner NextEra in South Korea, we are now even better positioned to take direct action against companies violating our patented nicotine production process in an additional 38 countries.”
Next Generation Labs says it was the first company to successfully scale the bulk manufacture of nontobacco synthetic nicotine for use in novel nontobacco products, such as vape liquids and pens, in heat-not-burn devices and in many modern oral nicotine products as well as in innovative pharmaceutical nicotine cessation products.
“Our company believes that consumers have a right to access nontobacco-derived nicotine as a matter of choice,” Next Generation Labs wrote.
“There are many adult consumers who wish to enjoy nicotine but want to do so without the lingering and potentially detrimental effects of long-term tobacco use. The introduction of TFN branded synthetic nicotine has created a liberating opportunity for consumers, who as a result of Next Generation Labs’ nicotine technology, are now able to achieve a complete break from tobacco as they enjoy many of the leading brands available on the market today that use TFN.”
June 29, 2021
Juul Settles North Carolina Vaping Lawsuit

Photo: steheap
North Carolina has settled its lawsuit with Juul Labs for $40 million, reports The New York Times. The lawsuit is the first decision in of a series of lawsuits brought by states that claimed the company’s marketing practices fueled widespread addiction among young people to its e-cigarettes. The money will fund programs to help people quit e-cigarettes, prevent e-cigarette addiction and research e-cigarettes.
“This settlement is consistent with our ongoing effort to reset our company and its relationship with our stakeholders as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers,” said Juul spokesman Joshua Raffel in a statement.
The settlement was announced on June 28 by North Carolina Attorney General Josh Stein, who said that Juul agreed to avoid marketing that appeals to those under the age of 21. The company will curtail its use of “most social media advertising, influencer advertising, outdoor advertising near schools and sponsoring sporting events and concerts,” Stein said.
North Carolina sued Juul Labs in May 2019, becoming the first state in the U.S. to file suit against the e-cigarette manufacturer. In the agreement, the company denies any wrongdoing or liability. Juul Labs will ensure its products are sold behind counters, the attorney general said. Juul Labs will also use third-party age verification systems for online sales. The order also commits Juul to sending teenage “mystery shoppers” to 1,000 stores each year to check whether they are selling to minors.
The settlement also bars the company from using models under age 35 in advertisements and states that no advertisements should be posted near schools. “For years Juul targeted young people, including teens, with highly addictive e-cigarettes,” said Stein in a statement. “It lit the spark and fanned the flames of a vaping epidemic among our children—one that you can see in any high school in North Carolina.”
Thirteen states, including California, Massachusetts and New York, as well as the District of Columbia have filed similar lawsuits. The central claim in each case is that Juul knew, or should have known, that it was hooking teenagers on pods that contained high levels of nicotine.
“This win will go a long way in keeping Juul products out of kids’ hands, keeping its chemical vapor out of their lungs and keeping its nicotine from poisoning and addicting their brains. I’m incredibly proud of my team for their hard work on behalf of North Carolina families,” Stein said. “We’re not done—we still have to turn the tide on a teen vaping epidemic that was borne of Juul’s greed. As your attorney general, I’ll keep fighting to prevent another generation of young people from becoming addicted to nicotine.”
June 28, 2021
Japan: Cigarette Sales Drop Below 100 Billion

Photo: Colleen WIlliams
Cigarette sales in Japan fell below 100 billion in 2020 for the first time in decades as more smokers embraced tobacco-heating products, reports Japan Today, citing industry data.
In the year that ended in March, cigarette sales plunged by a record 16.3 percent from the year before to 98.8 billion sticks, the lowest since fiscal 1990 when comparable data became available, according to the Tobacco Institute of Japan.
The figure represents more than a 70 percent drop from fiscal 1996 when sales peaked at 348.3 billion cigarettes.
In 2019, 27.1 percent of men and 7.6 percent of women regularly smoked, down from 29 percent and 8.1 percent, respectively, from the year before, the survey showed.
Smokers in Japan purchased 41.3 billion heated-tobacco products in 2020, equivalent to some 40 percent of rolled cigarette sales.
Industry officials attributed the growing popularity of tobacco-heating products in part to the Covid-19 pandemic. While coronavirus lockdowns created more opportunities to smoke at home, many teleworkers opted for tobacco-heating products to avoid releasing smoke inside their homes or on balconies.
In April, Japan banned smoking in government buildings, eateries, hotel lobbies and workplaces.
In May, Philip Morris International CEO Jacek Olczak said the company expects to stop selling combustible cigarettes in Japan within the next 10 years to 15 years.
Japan Tobacco, which saw falls in revenues and profits in 2020 due to slumping sales of combustible products, hopes to restore its performance by launching a new heated-cigarette product this summer.
June 28, 2021