Author: Marissa Dean

Scandinavian Tobacco Reports 2022 Results

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For the full year of 2022, Scandinavian Tobacco Group delivered a 3.5 percent negative organic EBITDA growth in line with the guidance range of minus-4 percent to 0 percent, free cash flow before acquisitions at DKK1.3 billion ($184.5 million) and an increase in adjusted earnings per share (EPS) of 8 percent. The EBITDA margin before special items was 25.9 percent. For the full year of 2023, net sales and EBITDA margin before special items are expected in the range of DKK9 billion to DKK9.3 billion and 24 percent to 25 percent, respectively.
For the fourth quarter of 2022, organic EBITDA increased by 13 percent with an EBITDA margin before special items at 25.8 percent, and the free cash flow before acquisitions was DKK530 million. These results were driven by a resilient demand for most product categories, including handmade cigars in the U.S., price increases across most product categories and continued cost efficiencies.
Net sales for the fourth quarter were DKK2.19 billion with 1.7 percent organic growth. EBITDA before special items was DKK563 million with 13.3 percent organic growth. The EBITDA margin was 25.8 percent. Adjusted earnings per share were DKK4.4. Return on invested capital was 14.3 percent.
For the full year of 2022, net sales decreased by 0.8 percent organically to DKK8.76 billion, and EBITDA before special items decreased by 3.5 percent organically to DKK2.27 billion with free cash flow before acquisitions at DKK1.26 billion.
“In the current environment, I’m pleased we can deliver a solid performance for the fourth quarter and the full year, which is in line with our financial expectations,” said CEO Niels Frederiksen. “In a challenging year, we have made good progress on our strategy ‘Rolling Toward 2025.’ Our vision is to become the undisputed and sustainable global leader in cigars, and the recent acquisition of the Alec Bradley cigar business brings us one step closer to achieving this. Our ambition of becoming a larger company, to grow our EBITDA margin over time and to generate outstanding cash flow are all important pillars for creating continuous shareholder value. I am confident we will make further progress in 2023 on our long-term strategy.”
At the annual general meeting on April 13, 2023, the board of directors will propose an increase in the ordinary dividend of 10 percent to DKK8.25 per share.
For the financial year 2023, guidance metric for the group will be changed. In the financial statements going forward, the group will report on and publish expectations for reported net sales and EBITDA margin before special items instead of organic EBITDA growth. The new guidance metrics will better reflect the group’s operational performance and will increase transparency from divisional performance to group level.
A conference call will be held on March 9, 2023, at 10:00 CEST. Dial-in information and an accompanying presentation will be available at investor.st-group.com/investor around 09:00 CEST.
March 9, 2023
Malaysia Urged to Reassess ‘Endgame’ Bill

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The Malaysian Society for Harm Reduction (MSHR) has called on the Malaysian government to reassess the generational endgame (GEG) measure regarding vaping, reports the New Straits Times.
Sharifa Ezat Wan Puteh, MSHR chairman, stated that many smokers are using vaping to quit smoking cigarettes and that the GEG could be counterproductive as it positions vaping as equally harmful as smoking.
“While vaping has health risks, we cannot ignore scientific evidence that vaping is at least 95 percent less harmful than smoking,” said Puteh. “Several reputable public health organizations have made that estimate and endorsed by multiple developed countries. In addition, vape is also recognized as an effective tool to reduce smoking hazards and rates.”
The MSHR has suggested that vaping be regulated and training be provided to vendors on proper ways to switch to nicotine-replacement therapies and vapor products. It also suggests forming an independent committee driven by science and evidence to conduct in-depth research on vapor products.
“If we look at the decline in the smoking rates in countries with higher vaping rates, it speeds up as the vaping rate increase[s],” said Puteh.
“Legislative process for the new bill will take a lengthy time,” she said. “In addition, a bill should only be tabled with detailed discussion and studies on the proposed GEG measure that the previous minister proposed.
“Given this, we believe the government should take immediate steps to regulate vape products using existing laws to speed up regulations on the products to protect consumers from prohibited ingredients by introducing standards on the product as well as prohibiting access by minors.”
March 7, 2023
UL Solutions Obtains Consent Decree

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UL Solutions obtained a consent decree against two companies selling vaporizer devices with unauthorized UL Marks, reports PR Newswire. Arizer, a manufacturer of vaping devices, and Greenlane Holdings, a distributor of vaping devices, both stipulated to a consent decree, permanent injunction and judgment of $2.2 million as part of a settlement of UL Solutions’ claims against them for trademark counterfeiting and false advertising in the Northern District of Illinois.
These consent decrees are part of a years-long effort by UL Solutions to deter vaping devices with counterfeit UL Marks from entering the marketplace. In 2019, UL Solutions brought its first suit against several manufacturers and distributors of these devices, including Kandy Pens and AFG Distribution. This case also ended with a consent decree, permanent injunction and judgment.
UL 8139, Standard for Electrical Systems of Electronic Cigarettes and Vaping Devices, was published in 2018. The UL 8139 safety standard is used to evaluate these products’ electrical, heating, battery and charging systems.
While compliance with UL 8139 is voluntary, over 35 manufacturers now have their vaporizer devices certified to this standard. Manufacturers that achieve UL certification have made the choice to put their products through the certification testing process, demonstrating their commitment to preventing serious injuries from lithium-ion battery fires and explosions.
With the increasing adoption of UL 8139 across the industry, some manufacturers applied counterfeits of the UL Mark to their products or packaging.
“Our investment in deterring counterfeiting delivers tangible value to our customers,” said Tammi Burke, director of customer marketing at UL Solutions. “Our customers invest heavily in designing and manufacturing their products to meet the requirements for UL certification. Only those companies that have earned our certification have the right to benefit from using the UL Mark. Counterfeiters of the UL Mark unfairly compete in the marketplace and claim an achievement they have not legitimately earned.”
“UL Marks appear on billions of products globally to demonstrate that these products meet scientific safety, performance or sustainability standards,” said Jackie McLaughlin, executive vice president and chief legal officer at UL Solutions. “To help safeguard the integrity of the UL Mark, we are committed to protecting our brand and taking on counterfeiters where necessary to protect the public and help fulfill our mission of working for a safer world. We applaud this decision by the Northern District of Illinois as it will help ensure the UL Mark remains a symbol of trust to the public.”
March 7, 2023
Study: Menthol Ban Increased Smoking Among Black Women

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Massachusetts’ menthol cigarette ban led to a net increase in smoking among Black adults, according to a research letter published in JAMA Internal Medicine, reports the Reason Foundation.
Samuel Asare, principal scientist in tobacco control research at the American Cancer Society, suggested that banning menthol cigarettes is counterproductive to public health goals and called for better health equity.
“As the [U.S. Food and Drug Administration] plans to eliminate menthol as a characterizing flavor in cigarettes, interventions should address possible increases in cigarette smoking among Black females,” the research letter states.
The research showed that the menthol ban led to an 8.1 percent relative decrease in smoking among adults aged 25 and older, with the prevalence of current cigarette use dropping from 13 percent in 2019 to 12 percent in 2021. Part of this decrease was due to a 56.8 percent relative decrease in smoking among Black men. However, with a 58.6 percent relative increase in smoking among Black women and an equal prevalence of smoking among both genders in 2019, the menthol cigarette ban led to a net increase in smoking among Black adults in Massachusetts.
March 7, 2023
Factory Searched for Untaxed Products

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Ukrainian detectives from the Economic Security Bureau of Ukraine and the Territorial Department of the Security Intelligence Service are searching a tobacco factory in the Lviv region upon suspicion of untaxed tobacco products.
Company officials are suspected of manufacturing and storing tobacco products without excise tax stamps; accounting and tax records do not show the economic transactions, and income received was not declared.
March 7, 2023
Ministers Oppose Vaping Ban

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Health Minister Orazio Schillaci has been labeled a “communist” for his proposal to extend Italy’s public smoking ban, reports Reuters.
Schillaci’s plan, which also covers vaping, would cover the outside areas of bars and public transport stops, along with parks if pregnant women and children are present.
Junior Culture Minister Vittorio Sgarbi called Schillaci’s view “intimidating” and said such bans would instead encourage people to smoke.
“This is something typical of an authoritarian and dictatorial communist regime,” Sgarbi told AdnKronos news agency.
Italy’s minister of infrastructure and transport, Matteo Salvini, too, was outraged by the proposed law, saying that it was thanks to electronic cigarettes that he quit smoking, according to The Blitz.
“Electronic cigarettes are helping a lot of people to abandon regular cigarettes,” Salvini wrote on Twitter.
Some 24 percent of adult Italians were smokers last year—roughly 12.4 million people and the highest percentage recorded since 2009, according to Italy’s ISS health institute.
The government passed a ban on smoking indoors in 2003, which came into force two years later.
Health association Fondazione Umberto Veronesi estimates that at least 43,000 people die in Italy every year from smoking-related diseases.
March 7, 2023
BAT Releases Combined Annual and ESG Report

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BAT has issued its first Combined Annual and ESG Report, which embeds detailed information on sustainability and environmental, social and governance (ESG) into its statutory annual report.
New and updated targets have also been announced in the report, including: achieving a 30 percent renewable energy target by 2025, two years early, resulting in a revised target of 50 percent renewable energy by 2030; increasing the initial target of 15 percent reduction in waste from BAT’s operations by 2025 to 25 percent; expanding the scope of BAT’s 100 percent reusable, recyclable or compostable packaging commitment, beyond just plastic, by 2025; and setting a new target of zero conversion of natural ecosystems in its tobacco supply chain by 2025.
“BAT is proud to further enhance its sustainability reporting with its first Combined Annual and ESG Report,” said Mike Nightingale, BAT’s chief sustainability officer. “Sustainability and ESG matters are increasingly recognized as having a significant impact both on society and on how well a company performs. A combined report shows our strong commitment to transparent reporting and integrating sustainability and ESG matters into how we manage our business.
“We are making good progress in advancing our sustainability strategy and building ‘A Better Tomorrow.’ We are reducing the health impact of our business and further increasing our ambitions as we drive our business transformation. In 2022, for example, we increased the number of consumers using our noncombustible products to 22.5 million while at the same time reducing Scope 1 and 2 GHG emissions by 15 percent versus 2021. We know we have more to do and look forward to delivering on our ambitious targets.”
This report also includes results of BAT’s first Double Materiality Assessment, an approach to assessing impacts that helps the company to further shape the most important sustainability priorities and actions. Such an approach looks not only at how its business impacts sustainability issues but also how sustainability-related matters impact its business.
March 2, 2023
MEPs Ignorant about New Nicotine Products

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Members of the European Parliament (MEPs) are less aware of key issues surrounding new nicotine products than in previous years despite being asked to vote on important new legislation concerning the topic in the coming months, according to a new survey, reports BusinessWire.
The third annual survey, conducted by business intelligence researcher Tamarind Intelligence, publisher of ECigIntelligence and TobaccoIntelligence, shows that the more MEPs know about new nicotine products (e-cigarettes, nicotine pouches and heated tobacco), the more likely they are to consider that these products are less harmful than cigarettes.
The report shows that: MEPs rarely believe that new nicotine products are as harmful as smoking—only 19 percent of responses, the lowest number since the annual survey was launched in 2020—and a majority believe they are less harmful than smoking; MEPs with no knowledge of new nicotine products are becoming far more likely to acknowledge that they don’t know the risks; MEPs with some knowledge of new nicotine products strongly tend to believe (76 percent of responses) that they are less harmful than smoking; and while very few MEPs consider that new nicotine products should be more restricted than traditional tobacco, and a majority believe online sales should be allowed for adults (with age verification), more MEPs are unsure how they should be regulated than in previous years.
“Our third annual MEP survey results are particularly relevant given the recent launch of the European Commission’s public consultation on evaluating the legislative framework for tobacco control at the end of February 2023 and the adoption by the European Parliament of the BECA committee’s recommendations over a year ago,” said Tim Phillips, managing director of Tamarind Intelligence. “As some of the questions in the commission’s consultation are similar to the ones we asked in our MEP survey, it will be fascinating to see if MEPs’ views on the topic of new nicotine products will be in line with responses to the public consultation.”
The survey was carried out online and anonymously, and all data from it remains confidential other than as used in consolidated analysis. The survey was sent to all MEPs (from all member states and political parties), and responses were obtained from 43 MEPs representing 6 percent of the European Parliament.
March 2, 2023
Scandinavian Completes Share Buyback

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Scandinavian Tobacco Group has completed its share buyback program, which was initiated on March 9, 2022, and which was increased on May 19, 2022, to an aggregated value of up to DKK1 billion ($143.08 million). As of Feb. 28, 2023, Scandinavian Tobacco Group has purchased a total of 6,114,093 shares with an aggregated transaction value of DKK775 million.
The purpose of the program has been to adjust the company’s capital structure and meet obligations relating to the group’s share-based incentive program. At the annual general meeting on April 13, 2023, the board of directors intends to propose a reduction of the company’s share capital as result of the share buyback.
In related news, Scandinavian Tobacco Group completed the acquisition of substantially all assets of Alec Bradley Cigar Distributors and associated companies.
March 1, 2023
The Gamechanger

Photo courtesy of Hindustan Adhesives
Hindustan Adhesives says its new tear tape is 100 percent sustainable without compromising strength, flexibility and runnability.
TR Staff Report
Hindustan Adhesives, part of the fast-growing Bagla Group of companies from India, is a leading global supplier of packaging materials, such as tear tapes, carton sealing tapes and POF shrink film.
Founded and led by Managing Director Madhusudan Bagla, the company has been active for more than 30 years and has supplied its products to more than 30 countries, with a focus on innovative and environmentally friendly packaging.
Hindustan Adhesives specializes in the production of tear tapes ranging in width from 1.6 mm to 12 mm and ranging in length between 5 km and 120 km. Available in several colors and designs, these products include self-adhesive tear tapes, up to six-color printed tear tapes, carton tear tapes, heat-activated tear tapes, holographic tear tapes, sustainable tear tapes and specially engineered paper tear tapes.
Recently, Hindustan Adhesives launched a new range of sustainable tear tapes dubbed The Gamechanger.
The product was developed in response to bans on single-use plastic in India and other countries. Keen to promote sustainable manufacturing and consumption, India’s federal government in August 2021 amended the country’s Plastic Waste Management Rules from 2016, prohibiting a number of single-use plastic items with high littering potential.
The legislation took effect July 1, 2022. To comply with the new requirements and at the same time keep their customers satisfied, Indian cigarette manufacturers required a tear tape that would not only be 100 percent sustainable but would also be cost effective and have the same strength and clarity as existing tear tapes.
Madhusudan Bagla
“As single-use plastic bans come into effect globally, packaging makers are looking for new ways to eliminate plastics and incorporate more sustainable elements into their designs,” said Bagla. “At Bagla Group, we have also been identifying new ways to help our customers design sustainable packaging solutions while maintaining the performance of traditionally plastic-based tear tapes.”
Replacing a 30-year-old widely used product is a tall order, however, and required changing the mindset of customers who had become accustomed to the strength, flexibility and smooth runnability of the established tear tapes. Compared with their plastic counterparts, many existing sustainable tear tapes had limitations in those areas.
Bagla was determined to overcome those limitations. After numerous trials, changes in recipes and processes, his company developed a product that was not only sustainable but also had qualities similar to those of the MOPP 26-micron tear tapes. Thus, The Gamechanger was introduced in India.
“They thought we couldn’t do it, but we surprised our customers and competitors alike,” said Bagla, who went on to express his appreciation for the tobacco companies’ support, guidance and feedback “without which this product would not be possible.”
The base film is derived from renewable resources and is compostable according to DIN EN 13432:2000-12, DIN EN 14995:2007-03 and ASTM D6400:2012-01 as well as D6868 and ISO 17088: 2008, among other certifications. It is also formulated to comply with EU legislation for most food contact applications.
Hindustan Adhesives started developing The Gamechanger in 2021 and commenced trials on customer machines in January 2022. During the development process, the company overcame several challenges. One was the lead time of the base material. The disruption to international transportation due to Covid-19 and other factors caused shortages. Through clever planning and strategizing, Hindustan Adhesives managed to prevent disruptions to its customers.
Another challenge was the process. The sustainable tape has different requirements than standard MOPP tape in terms of adhesives, which requires some equipment and operator adjustments. This is where Hindustan Adhesives’ experienced R&D and quality control teams came in. The marketing team, in turn, was instrumental in distributing the product for sampling, testing and visual inspection.
“Our team went to each and every customer’s factory and ensured smooth running by giving various tips and tricks,” said Bagla. “I am immensely proud of our team and thank them for all their efforts, right from purchasing raw materials to making the product and selling it.”
After identifying all opportunities for improvement and optimizing the product, Hindustan Adhesives released its product in India. The Gamechanger quickly captured 100 percent of India’s sustainable tear tapes market, with Hindustan Adhesives selling the product to all cigarette manufacturers in the country, according to Bagla. Since the single-use plastic ban took effect, the company’s overall tear tape sales have increased by 60 percent.
But Hindustan Adhesives’ commitment to sustainability does not end after the product has been manufactured; it also includes getting certifications from national and international bodies. Over the past 15 months, the company has earned certifications from the Central Pollution Control Board of India and the Central Institute of Petrochemicals Engineering and Technology in India.
Following its success in India, Hindustan Adhesives is already looking at opportunities abroad. “We have captured the domestic market through our efforts in innovation and development,” said Bagla. “We would now like to introduce this product globally so as to do our bit for the global environment.”
As part of its efforts to promote its sustainable tear tape internationally, Hindustan Adhesives will be participating in TabExpo Bologna, May 10–11. Encouraged by the product’s success in India, Bagla is confident that international customers, too, will soon understand why the company’s new tear tape is called The Gamechanger.
March 1, 2023