Author: Marissa Dean

  • Youth Protection Guidelines Updated

    Youth Protection Guidelines Updated

    The U.K. Vaping Industry Association has updated its guide to retailers on preventing underage sales.

    UKVIA Director General John Dunne said tackling the sale of vaping products to minors was “one of the most fundamental challenges facing the industry.”

    The UKVIA is making its “Preventing Underage Sales Guide” freely available via its website.

    The 20-page guide has been developed in partnership with the association’s Primary Authority Partners, Buckinghamshire and Surrey and Trading Standards.

    Dunne said: “The entire UKVIA membership is united behind the message that we must do all in our power to stop underage sales.

    “This is one battle that we simply have to win, but we need the support of government, regulators and enforcement authorities in order to do so.

    “Our underage sales guide will give retailers all the information they need so that they don’t inadvertently sell to someone under 18.

    “Policymakers, politicians and consumers must have confidence that the vaping industry is a responsible sector, and this will be undermined if businesses do not implement and uphold robust age verification processes.

    “The guide gives clear advice on how to implement a ‘Challenge 25’ policy and why it is important that anyone who appears to be younger than 25 should be asked to provide ID.”

  • Scandinavian to Acquire Alec Bradley Cigars

    Scandinavian to Acquire Alec Bradley Cigars

    Scandinavian Tobacco Group has agreed on the terms and conditions for the acquisition of substantially all assets of Alec Bradley Cigar Distributors Inc. and associated companies, according to a company press release.

    The transaction is valued at $72.5 million (DKK500 million) on a debt and cash-free basis (the enterprise value) and is expected to be closed shortly. The acquisition will be fully financed by cash at hand and debt.

    The Alec Bradley brand is a material addition to the company’s portfolio of premium cigars.

    Based in Fort Lauderdale, Florida, Alec Bradley reported annual net sales in 2021 of $25 million and an EBITDA margin before special items of 24 percent. Both net sales and EBITDA margin improved during 2022.

    CEO of Scandinavian Tobacco Group Niels Frederiksen said, “The acquisition of the Alec Bradley cigar business is another important step toward our ambition of becoming the undisputed and sustainable global leader in cigars.

    Through this bolt-on acquisition, we will expand our portfolio of highly regarded premium cigars in the U.S. and international markets, delivering material value to our shareholders. We will also leverage the Alec Bradley brand portfolio to deliver increased excitement to the handmade cigar category through product innovation and brand activations, benefitting both the cigar enthusiasts and our trade partners.” 

    The transaction is expected to be margin accretive, EPS accretive and ROIC accretive when fully integrated. The company leverage ratio (net interest-bearing debt/EBITDA) will, when the transaction proceeds to completion, increase by less than 0.2x.

    At the end of the third quarter of 2022, the company’s leverage ratio was 1.9x. Further details of the expected financial impact of the acquisition will be communicated in connection with the announcement of Scandinavian Tobacco Group’s full-year 2022 results on March 8, 2023.

  • Health Advocates Urge FDA to Ban Flavors

    Health Advocates Urge FDA to Ban Flavors

    Image: chocolatefather | Adobe Stock

    Health advocates are urging the U.S. Food and Drug Administration to ban menthol cigarettes and flavored cigars, reports WGBO. The FDA issued draft measures to ban menthol in April 2022. Final regulations are expected later this year.

    “Menthol is an analgesic; it numbs the throat, so it lets the poison go down easier,” said Carol McGruder, co-chair of the African American Tobacco Control Leadership Council. “It dilates the alveoli in the lungs, the little sacs in your lungs, and so it allows the toxins to stay longer and deeper in the lungs.”

    Lincoln Mondy made a documentary called Black Lives/Black Lungs about the marketing of menthol cigarettes to Black communities, something many have pointed out as a trend in tobacco marketing.

    “We say predatory because it was indeed predatory; they went in neighborhoods like Detroit and New York and majority Black neighborhoods and gave out free cigarettes. They just handed out free cigarettes; they drove up in Newport vans and Kool vans and handed out free cigarettes,” Mondy said.

    As a result of this “predatory” marketing, 85 percent of Black smokers smoke menthol cigarettes. Some states like California passed laws banning flavors. However, McGruder says that the industry is still finding ways around such bans.

    “They’ve already introduced new products that have some chemicals in there that mimic menthol, but they’re not menthol, and they’re actually on the market right now in California, and so now we have to deal with that, and so, the industry will never stop. They are going to continue to recruit their new smokers to replace the folks who are dying,” McGruder said.

  • Wild Brands Launches STEP Cigs

    Wild Brands Launches STEP Cigs

    Image: Global Tobacco

    Wild Brands has launched STEP cigarettes, a novel nontobacco cigarette incorporating a layered tobacco-style flavor system, according to a company press release.

    STEP products will be available in full flavor and green (menthol) variants with the goal to replace unaffordable traditional cigarettes in the U.S. market.

    STEP stands for Satisfaction Taste Experience and Price.

    “Based on a proprietary formulation of active herbals and botanicals, STEP cigarettes [are] the first perfectly blended cigarette substitute to come to market that truly feels and tastes like a traditional full flavor or menthol product,” said Zain Meghani, president of Wild Brands. “We believe STEP will have enormous appeal with wholesalers, retailers and, more importantly, with adult price-conscious consumers.”

    Meghani adds, “STEP was created to be a Satisfying Tasteful Experience at a fair Price and is aimed at adult consumers seeking a substitute to overpriced regular cigarettes. Despite having no tobacco, nicotine or hemp in the blend, our early consumer feedback with the STEP full flavor and green (menthol) packs indicates we have found the right feel, taste and satisfaction that adult smokers would expect from a traditional cigarette.”

    Mike Walters, vice president of sales at Global Tobacco, the exclusive distributor of STEP, said, “This is an exciting new product for the market as it is free of all federal cigarette excise taxes, many state cigarette excise taxes as well as the tobacco Master Settlement Agreement payments and [U.S. Food and Drug Administration] tobacco user fee payments.”

  • Vector Group Reports Fourth-Quarter and Full-Year Results

    Vector Group Reports Fourth-Quarter and Full-Year Results

    Image: Tobacco Reporter archive

    Vector Group reported record annual tobacco segment revenues in 2022, fueled by continued strong volume.

    In the fourth quarter, consolidated revenues were $363.8 million, up 16 percent, or $50.1 million, compared to the prior year period. Tobacco segment revenues were $363.8 million, up 18.6 percent, or $57.2 million, compared to the prior year period. Tobacco segment wholesale and retail market share increased to 5.5 percent and 5.8 percent from 4.4 percent and 4.4 percent, respectively, in the prior year period. Reported operating income was $89.3 million, up $20.7 million compared to the prior year period. Tobacco segment operating income was $93 million, up 11 percent, or $9.2 million, compared to the prior year period, primarily attributable to the transition of the Montego brand strategy from volume-based to income-based.

    For the full year, record consolidated revenues were $1.44 billion, up 18 percent, or $220.3 million, compared to the prior year. Tobacco segment revenues were $1.43 billion, up 18.5 percent, or $222.6 million, compared to the prior year. Tobacco segment wholesale and retail market share increased to 5.4 percent and 5.5 percent from 4.1 percent and 4.2 percent, respectively, in the prior year. Reported operating income was $339 million, up $18.6 million compared to the prior year. Tobacco segment operating income was $347 million, down 3.7 percent, or $13.3 million, compared to the prior year, primarily attributable to the investment in Montego’s significant volume and market share growth.

    “Vector Group delivered record revenues in 2022 by capitalizing on opportunities to substantially increase our market share, thus driving value for stockholders,” said Howard M. Lorber, president and CEO of Vector Group. “The 11 percent increase in our tobacco segment’s operating income in the fourth quarter reflects the recent and ongoing transition of our Montego brand strategy from volume-based to income-based. In 2023, we will continue to focus on optimizing long-term profit by effectively managing our volume, pricing and market share.”

  • Alex Norcia Leaves Filter

    Alex Norcia Leaves Filter

    Image: Charnchai saeheng | Adobe Stock

    Tobacco harm reduction (THR) reporter Alex Norcia is leaving Filter magazine “and [departing] from journalism,” he wrote.

    Norcia has written for Filter for the past two years, and he wrote for Vice before that.

    “I will remain involved in THR,” Norcia wrote. He broke the story about the U.S. Food and Drug Administration’s “Fatal Flaw” standard as well as dug into synthetic nicotine before the topic caught fire.

    “Reflecting on the events I’ve reported for the better part of four years leaves me with a sense of just how fast the news moves. But it can get, unfortunately, repetitive,” he wrote about his experiences. He cited cyclical news like flavor bans that have spread across states and the impacts of such laws. He noted his favorite moments as well, detailing a well-rounded career in THR reporting.

    “Now, like everybody else, I’ll be waiting to see if the FDA bans menthol combustibles or lowers the nicotine levels in cigarettes or ever authorizes a flavored nicotine vaping product (even menthol),” he wrote. “Or whether, on the world stage, more countries will follow pathways like the United Kingdom, Sweden or Japan—or, conversely, prohibition-oriented responses like India, Taiwan and Mexico.

    “I don’t know the answers to these questions. Like other observers in this rapidly evolving field, I’ve never been able to predict the future. But I’ll still be doing what I can to address the present.”

  • Pyxus Announces Third-Quarter Results

    Pyxus Announces Third-Quarter Results

    Image: Tobacco Reporter archive

    Pyxus International announced results for its fiscal quarter ended Dec. 31, 2022.

    Sales and other operating revenues increased $226.7 million, or 52.9 percent, to $655.6 million for the three months ended Dec. 31, 2022.

    Operating income increased $11.4 million to $41.6 million for the three months ended Dec. 31, 2022.

    Net loss attributable to Pyxus International improved by $27.8 million to $2.3 million for the three months ended Dec. 31, 2022.

    “We are excited to share our third-quarter results,” said Pieter Sikkel, president and CEO of Pyxus. “Our improved operating profit illustrates the company’s strong global performance in spite of a dynamic and complicated crop year that was exacerbated by La Nina and inflationary pressures. Our results evidence the progress the company made year-over-year in several ways and would not have been possible without the dedication and contributions of our employees.

    “We successfully utilized our global footprint to navigate the current tobacco supply shortage and meet our buying targets overall for fiscal 2023. Combined with continuing normalization of shipping schedules in North and South America and increased volume from Asia, the company delivered an increase of more than 50 percent in sales and other operating revenues year-over-year. This increase and higher utilization of the company’s securitization programs resulted in cash flow from operations in the third quarter increasing by more than $100 million year-over-year. Some of these funds were strategically utilized to fully repay the outstanding indebtedness under the company’s ABL Credit Facility and provides the company with increased financial flexibility as we approach the next buying cycle.

    “We anticipate the third quarter to be our largest sales quarter of the fiscal year due to more normalized shipping schedules. Based on our expectations for continued improvement year-over-year, we have revised our expected fiscal 2023 sales to be between $1.85 billion and $2 billion and our adjusted EBITDA expectations to be between $140 million and $155 million.”

  • South Korea: Cigarette Sales Up

    South Korea: Cigarette Sales Up

    Image: Tobacco Reporter archive

    Cigarette sales in South Korea increased by 1.1 percent in 2022 compared to the prior year, according to the finance ministry, according to The Korea Herald.

    In 2022, smokers purchased 3.63 billion packs of cigarettes compared to 3.59 billion in 2021.

    Sales decreased 16.8 percent from 2014, the year before the government raised cigarette prices by 80 percent to help reduce smoking.

    Heat-not-burn product demand increased by 21.3 percent while conventional cigarette demand dropped by 1.8 percent.

  • BAT Rothmans Releases New Glo Device

    BAT Rothmans Releases New Glo Device

    Image: somartin | Adobe Stock

    BAT Rothmans has released the glo Hyper X2 heat-not-burn device to the South Korean market, reports The Korea Times.

    “Glo Hyper X2 is a next-generation e-cigarette device that will lead the BAT Group’s smoke-free product business,” said Kim Eun-ji, BAT Rothmans’ country manager for South Korea. “We have not only increased the users’ convenience of the platform but also improved its design and portability.”

  • JT Reports Strong Results for 2022

    JT Reports Strong Results for 2022

    Image: Tobacco Reporter archive

    Japan Tobacco reported revenue of ¥2.66 trillion ($19.97 billion) in 2022, up 14.3 percent over the previous fiscal year.

    Operating profit increased by 31 percent to ¥653.6 billion. Profit increased by 30.8 percent to ¥442.7 billion.

    For full-year 2023, revenue is forecast to decrease by 1.1 percent to ¥2,629 billion. Operating profit is forecast to decrease by 6.4 percent to ¥612 billion. Profit attributable to owners of the parent company is forecast to decrease by 0.6 percent to ¥440 billion.

    Masamichi Terabatake

    “The JT Group reported another strong performance in 2022, driven by solid pricing and sustained market share gains in the tobacco business, overcoming the global challenges,” said Masamichi Terabatake, president and CEO of the JT Group, in a statement. “We continued to make progress in the reduced-risk products category, with Ploom X increasing share in the HTS (heated-tobacco sticks) segment in Japan and the launch of Ploom X in London.”