Author: Marissa Dean

  • Federal Judge OKs Altria, Juul Class Action

    Federal Judge OKs Altria, Juul Class Action

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    A federal judge approved the final part of a class action settlement with the e-cigarette company Juul Labs and its parent company Altria, bringing the settlement total to just over $300 million.

    In 2018, the plaintiffs charged Juul Labs with misleading the public about the addictiveness of Juul and the risk of the e-cigarettes and its nicotine cartridges.

    The plaintiffs also said Juul had targeted teenagers with candy-flavored Juul pods and “multimillion-dollar ad campaigns and social media blitzes using alluring imagery.”

    The case survived a number of hurdles: The judge denied multiple motions to dismiss the suit and agreed to certify four different classes of plaintiffs (a nationwide class, a nationwide youth class, a California class and a California youth class).

    In January, the judge gave preliminary approval to a $255 million settlement between Juul Labs and the plaintiffs, according to Courthouse news. Friday’s ruling grants approval to Altria’s payment of $45,531,250. The sides have yet to reach an agreement on attorneys fees.

    “Court finds that this monetary recovery is fair, reasonable, and adequate given the risks of proceeding to trial and the maximum recovery potentially available to Settlement Class Members if the Class Representatives had prevailed at trial,” wrote U.S. District Judge William Orrick in his order.

    Last year, Juul agreed to pay six states $462 million to settle claims that it had marketed its vaping products to teenagers. The year before that, it agreed to pay $438.5 million to 33 different states and Puerto Rico.

    Altria Group exchanged its entire investment in Juul Labs in 2023 for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.

  • Hong Kong: Increase in Quit-Smoking Requests

    Hong Kong: Increase in Quit-Smoking Requests

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    Hong Kong has seen an increase in calls to its smoking cessation hotline following the tobacco tax increase to 70 percent. Legislative Council member Rebecca Chan Hoi-yan has asked the government to enhance assistance to people who wish to quit smoking, according to The Standard.   

    Cigarettes in Hong Kong now cost at least HKD94 ($12.01).

    Following the announcement of the tax hike, the weekly average number of people calling the quit-smoking hotline increased by four times.

    Chan has expressed concern that the government may not follow up on the cases and determine how many people are successful in quitting smoking or how many people eventually resume smoking. According to Chan, there is a need for continuous efforts to understand the reasons behind successful quitting and the challenges of those who resume smoking.

    She also called for comprehensive tobacco control policies by “focusing on target groups, such as teenagers, and implementing measures to track families in order to prevent teenagers from smoking.”

    “The government should focus on better education and promotional efforts instead of solely relying on increasing tobacco duty,” said Peter Shiu Ka-fai of the wholesale and retail sector. He argued that it is important to inform smokers of the harmful effects of cigarettes and respect their choices.

  • Protesters Demand End to Mexico’s Vape Ban

    Protesters Demand End to Mexico’s Vape Ban

    Image: Sansert

    Vapers protested in front of Mexico’s Congress of the Union, calling for the country’s vaping ban to be replaced with risk-based regulation. The protest was organized by the World Vapers’ Alliance and All Vape Mexico.

    The protesters also demanded a halt to the constitutional reform proposed by President Andres Mauel Lopez Obrador that would elevate the ban to the Constitution. In addition, they called for approval of a risk-based regulation allowing adult smokers access to vapor products to quit smoking combustible cigarettes.

    Mexico’s vaping ban has been in place since May 2020.

    “The ban was introduced in order to prevent underage vaping; however, minors now have full access to potentially dangerous products on the black market,” said Alberto Gomez Hernandez, policy manager of the World Vapers’ Alliance. “At the same time, smokers who want to quit smoking have difficulty finding safe vaping products. The ban has clearly been a failure and must be reversed as soon as possible. Legislation cannot be based on whim or ideology; it must be based on scientific evidence and the experience of other countries that have had good results.”

    Vapes can easily be obtained on the informal market from underground vape shops and on the black market, which is controlled by organized crime groups.

    “It is very unfortunate that the federal government thought that the ban would prevent many young people from having access to vaping and does not give people who want to quit smoking the opportunity to use this option,” said Deputy Sergio Barrera. “We need to have clear rules. We need to know who can produce it, who can distribute it and who can consume it, and that is why we are pushing for regulation.”

    “The president sees a problem where there is actually a solution to smoking,” said Antonio Toscano, All Vape Mexico spokesperson. “His prohibitionist stance unprotects adult users, who are forced to buy black market products, where there are no quality controls, let alone controls on sales to minors. Prohibition is a danger to public health; good regulation could benefit public health enormously and save millions of lives.”

  • Zimbabwe Tobacco Season Opens

    Zimbabwe Tobacco Season Opens

    Image: Taco Tuinstra

    Zimbabwe’s auction floors opened today, with high expectations for better prices this season compared to last year, according to The Herald. Deliveries of the contract crop start tomorrow.

    Tobacco growers in the country faced poor rains this season, but those with a good crop expect better prices due to demand. The Tobacco Industry and Marketing Board (TIMB) stated that Zimbabwe exported 233,896,182 kg valued at $1.22 billion as of Dec. 15, 2023. The average price for shipments was $5.23 per kilogram.

    The auction floors only sell about 5 percent of the crop but are considered the major price setter compared to the contract floors.

    Farmers will receive 75 percent of their earnings in foreign currency with the remaining 25 percent in local currency.

    Only two auction floors have been licensed this year by the TIMB to buy leaf, the Tobacco Sales Floor and Premier Tobacco Auction Floors (PTAF).

    “We have finished all preparations,” Owen Murumbi, PTAF chairman, said yesterday. “The banks are now lined up, EcoCash and Mukuru are all there to bring more convenience to the farmers.

    “We have started receiving bales. We should surpass last year’s figures although the volumes are low. We don’t expect them to go down. Farmers need to come, and we are offering excellent services. We are starting with Mukuru and EcoCash on day one. This should improve payment systems for farmers.

    “Tobacco sales floors should implement strict age verification processes to ensure that only adults can access the premises. All selling points shall ensure there are no children under 18 in and around selling premises, tobacco processing factories and any other tobacco storage and handling facilities.

    “Sales floors should prominently display awareness campaigns that highlight the issue of child labor in tobacco production, posters and educational materials that provide information about the harmful and unethical practices associated with child labor.”

    The TIMB has created a transporter compliance framework that will work toward developing a system that monitors movement of tobacco from the primary source to the market. The framework is expected to minimize losses, enhance farmer viability and improve livelihoods and aims to curb side marketing, tobacco bale theft, bale swapping and forgery on stop order launching.

    “We appeal to the authorities to ensure that tobacco sold at the auction floors get similar prices with the one which is sold at the contract floors,” said Barbra Marava of Banket. “Farmers incur similar costs, and there is no reason to offer them different prices like before.”

  • Pyxus Achieves Supplier Engagement Leadership

    Pyxus Achieves Supplier Engagement Leadership

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    Pyxus International has been recognized by environmental nonprofit CDP as a Supplier Engagement Leader. Pyxus ranked among the top tier of companies featured on CDP’s Supplier Engagement Leaderboard for its effectiveness in working with its suppliers, particularly contracted growers, to address climate change.  

    Pyxus’ 2023 Supplier Engagement Rating ranked the company above the industry, North America and global averages and reflects its improved environmental performance, as evidenced by its 11 percent year-over-year reduction of value-chain-related emissions (scope 3), according to a company press release.

    “Our sustainability journey cannot be traveled alone. Collaborating with our contracted farmers and other upstream suppliers to reduce our company’s scope 3 emissions is pivotal to achieving our carbon neutrality targets and delivering stakeholder value,” said Pyxus President and CEO Pieter Sikkel in a statement. “We are honored to receive Supplier Engagement Leadership status, CDP’s highest level of recognition, confirming that we are truly working together to grow a better world.”

    A company’s Supplier Engagement Rating is derived from information submitted during CDP’s annual climate change disclosure process and assesses a business’ governance, targets, scope 3 emissions and supplier engagement performance. In February, Pyxus achieved Leadership status in CDP’s climate change category.

  • BAT India to Sell Shares of ITC

    BAT India to Sell Shares of ITC

    Image: Tobacco Reporter archive

    BAT’s wholly owned subsidiary Tobacco Manufacturers (India) intends to sell up to 436,851,457 ordinary shares in ITC to institutional investors. The trade shares represent up to approximately 3.5 percent of ITC’s issued ordinary share capital.

    Following completion of the proposed block trade, BAT’s shareholding in ITC will be approximately 25.5 percent.

    BAT intends to use the net proceeds of the trade to buy back BAT shares over a period ending December 2025, starting with £700 million ($892.9 million) in 2024. BAT will continue to allocate operating cashflow to fund investment in its transformation and to further deleverage.

    Going forward, the key elements of capital allocation at BAT will include continued investment in its transformation; progressive dividends; continued deleverage to a new range of 2 times to 2.5 times adjusted net debt/adjusted EBITDA; and sustainable share buybacks, according to the company.

    “I am confident that ITC, under the stewardship of its current management, will continue to create further value for its shareholders,” said BAT CEO Tadeu Marroco in a statement. “We look forward to remaining important shareholders in ITC as it continues its journey of growth. With this transaction, BAT can accelerate the start of a sustainable buyback while enabling us to continue to deleverage toward a new target range of 2 [times] to 2.5 times adjusted net debt/adjusted EBITDA.”

  • Turning Point Appoints Andrew Flynn CFO

    Turning Point Appoints Andrew Flynn CFO

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    Turning Point Brands (TPB) has appointed Andrew Flynn as the company’s new chief financial officer (CFO), effective on or before April 1, 2024. Flynn is replacing Louie Reformina, who will step down to pursue other opportunities.

    Prior to joining Turning Point Brands, Flynn served as the CFO of Connected Cannabis Co., where he was responsible for bringing sustained profitable growth, expanding geographically and recapitalizing the company. In this role, Flynn operationalized and reshaped the finance, IT, legal and compliance organizations to meet business objectives. Before joining Connected, he served as senior vice president of Juul Labs. Earlier in his career, he served as vice president of finance at James Hardie Building Products and vice president of finance at Arrow Electronics. Flynn holds a Bachelor of Science degree from Indiana University and a Master of Business Administration degree from the University of Colorado Denver.

    “Turning Point Brands is one of the most innovative and well-capitalized companies in the industry. TPB’s iconic Zig-Zag and Stoker’s brands and market-leading distribution platform set it apart in this rapidly evolving space. As CFO, I look forward to working with the board and management team to maximize long-term shareholder value,” said Flynn.

    “Andrew has led key initiatives across all areas of finance and broader strategic planning throughout his career. His diverse operating background and industry expertise ideally positions him to help us maximize the value of our brands, continue to modernize our organization, and grow our free cash flow,” said Graham Purdy, Turning Point Brands’ president and CEO.

  • Analysts: UK Vape Tax Good for Tobacco Stock

    Analysts: UK Vape Tax Good for Tobacco Stock

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    Citi analysts have identified the U.K. government’s new excise tax on vaping products as an encouraging development for BAT and Imperial Brands, reports Proactive.

    Chancellor Jeremy Hunt confirmed in his Spring Budget speech that vaping products would be subject to a new tax from October 2026. According to media reports, this move is designed to maintain a financial incentive for choosing vaping over smoking, complemented by a concurrent increase in tobacco duty.

    The taxation framework will be based on nicotine content, with a three-tiered system imposing charges ranging from £1 ($1.28) per 10 mL to £3 per 10 mL in addition to the current 20 percent VAT.

    This structured approach aims to regulate the vaping market further and aligns with the government’s health strategy by providing a less harmful alternative to traditional smoking.

    Citi’s short research note said: “Although [Wednesday’s] confirmation of the planned levy on vaping comes as little surprise, we believe that alongside the proposed ban on disposable vapes from April 25, the regulatory risk/reward is skewing to the upside for both BAT and Imperial.”

  • Senators Urge End to Flavored Vape Sales

    Senators Urge End to Flavored Vape Sales

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    The chairmen of five key Senate committees warned the chief executives of major convenience stores and wholesalers to stop selling illicit flavored vaping products, which they called “widespread violations of federal law,” according to The New York Times.

    The senators voiced their concerns in letters to the companies, amplifying the frustration among some lawmakers in Congress over the continued availability of disposable e-cigarettes. They say the vivid colors and candy flavors only attract kids. The unchecked sales, they wrote, “pose a tremendous public health threat.”

    “FDA [U.S. Food and Drug Administration] and the industry must do more to address the youth vaping epidemic and remove unauthorized vaping products from their shelves immediately,” Senator Dick Durbin said.

    The letters were addressed to retailers including 7-Eleven, Circle K, BP America, Pilot, Kwik Trip and others. The FDA had earlier issued warnings about sales of unauthorized brands like Elf Bar, E.B. Design and Funky Republic.

    “Today, millions of children use unauthorized e-cigarettes, risking nicotine addiction, respiratory illness, exacerbation of depression and anxiety, and many other harms,” read the letter to Joseph DePinto, the chief executive of 7-Eleven.

    The other senators who signed the letter were Ron Wyden, Bernie Sanders, Sherrod Brown and Richard Blumenthal.

  • French Continuing to Finance Tobacco: Report

    French Continuing to Finance Tobacco: Report

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    Several French banks continue to finance the tobacco industry despite promises to stop doing so, according to a report commissioned by anti-smoking group Alliance Contre le Tabac (ACT), reports RFI. In November 2023 alone, the country’s banks invested $733 million in the tobacco business. Of these investment funds, 40 percent came from the BPCE Group and more than 20 percent came from Credit Agricole.

    “If the tobacco industry has succeeded in maintaining its deadly trade, it is, in part, thanks to the resources provided by banking institutions and investment funds,” said Marion Catellin, director of the ACT.

    The banks pledged to stop funding tobacco companies six years ago, according to Catellin.

    Australian nongovernmental organization Tobacco-Free Portfolio introduced the Tobacco-Free Finance Pledge in 2017, which called on international financial players to stop financing tobacco companies. Societe Generale, Credit Agricole and the BPCE group signed this pledge.

    The ACT-commissioned report showed that these banks, between 2018 and 2023, approved loans amounting to $5.3 billion to BAT, Philip Morris International and Imperial Brands.

    “These bank credits are unacceptable,” said Catellin. “As World Health Organization Director-General Tedros Adhanom Ghebreyesus recently stated, every investment in the tobacco industry is an investment in death and disease. By financing the tobacco industry, French banks are complicit in an industry that kills one out of every two consumers.”

    “Aware of the environmental and social impacts associated with the tobacco sector, Societe Generale has committed to a strategy to exit the sector,” said the bank, which accounts for 83 percent of French financial support for the tobacco industry. Societe Generale signed a charter in September 2023 expressing plans to exit the sector.