Author: Marissa Dean

Smugglers Create Diplomatic Dispute

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Tobacco smugglers fleeing customs agents have caused a minor diplomatic incident between Gibraltar and Spain, reports Reuters.
Gibraltar accused Spain of a “gross violation of British sovereignty” after two customs officials entered the territory during an anti-smuggling operation. Spanish media reported that the Spanish customs agents’ boat lost power while chasing the tobacco smugglers.
Gibraltar’s chief minister, Fabian Picardo, said the facts of the incident need to be investigated before diplomatic action is taken; rocks were reportedly thrown at the customs agents, and a video of the incident shows potential shots fired, but it is unclear who fired them.
Spain’s foreign ministry condemned the attack on the customs agents, who suffered “serious injuries” and said it “categorically rejects the terms” of the statement issued by Gibraltar “as well as the claims of alleged British sovereignty over the territory and waters of Gibraltar contained within it.”
Britain and Gibraltar are in the process of negotiating a treaty to settle Gibraltar’s post-Brexit status and decide how to police the border with Spain.
February 7, 2023
Vaping Studied Among French-Speaking Youth

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One in eight youth aged 14 to 25 in French-speaking Switzerland is a frequent e-cigarette user, reports Le News.
A study by Unisante, which surveyed 1,362 young people, 59 percent said they had consumed e-cigarettes at least once and 12 percent said they used them frequently (more than 10 days over the past month). Of those that responded, 59 percent said they consume the products when out at night while 40 percent said they consume them at home. The survey showed that 63 percent of respondents preferred e-cigarettes because of the flavors while 40 percent cited lack of tobacco smell and 30 percent cited ease of use.
Disposables are the most popular choice for youth, and 49.4 percent of respondents said their parents knew they used the products. Half of respondents said they’d seen advertising for the products, and two-thirds were aware of the health risks and risk of addiction.
In Switzerland, 19 percent of those aged 15 to 24 smoked combustible cigarettes daily in 2017.
February 6, 2023
Elf Bar Exceeds Legal U.K. E-Liquid Volumes

Elf Bar 600 products have been pulled from shelves in multiple U.K. stores after it was discovered that the products contained e-liquid volumes at levels at least 50 percent higher than what is legal, reports The Daily Mail (the article states the liquids were over nicotine limits, but there is no evidence of that. The UK limits nicotine strength to no more than 20mg/ml).
The company stated that it “inadvertently” broke the law and “wholeheartedly apologized.”
Experts described the situation as “deeply disturbing” and warned of risk to youth, among which the products are very popular.
Elf Bar, which launched in 2021, sells 2.5 million Elf Bar 600s in the U.K. every week, accounting for two in three of all disposable vapes sold.
The legal limit on e-liquid in vapes is 2 mL, but tests commissioned by the Mail on three flavors of Elf Bar 600s found volume levels between 3 mL and 3.2 mL.
Mark Oates, director of consumer advocacy group We Vape, said, “The Mail’s findings on Elf Bars are deeply worrying, and it is clear there have been failings on multiple levels.
“Not only are the levels of e-liquid too high, but checks to make sure these guidelines are adhered to either haven’t occurred or are insufficient. Anyone supplying vapes in the U.K. market should be following the legislation.
“It is incredibly frustrating when major players in this sector appear to behave in a way that damages the reputation of something as beneficial as vaping, and we expect the matter to be fully investigated by the Medicines and Healthcare products Regulatory Agency (MHRA).”
February 6, 2023
Over Half of Americans Support Tobacco Ban

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A new paper showed that over half of Americans would support a ban on the sale of all tobacco products, reports Vaping360.
The paper was published in the U.S. Centers for Disease Control and Prevention (CDC) journal Preventing Chronic Disease.
According to the results of a survey, detailed in the paper, 57.3 percent of respondents strongly or somewhat supported prohibiting the sale of all tobacco products while 62.3 percent of respondents supported a menthol cigarette ban.
The survey did not provide a definition of “tobacco products,” so it is unclear how many respondents believed e-cigarettes and nicotine pouches were included in the category.
Survey data was compiled from a spring 2021 web panel of 6,455 people ages 18 and older, weighted to match Census Bureau proportions for demographic variables like sex, age, income, race, education and region. Four scientists from the CDC Office on Smoking and Health and one scientist from the Oak Ridge Institute for Science and Education compiled and analyzed the data.
February 6, 2023
Arthur J. Schick Jr. Joins Universal Board

Image: Tobacco Reporter archive
Arthur J. Schick Jr. will join Universal Corp.’s board of directors on April 1, 2023, at which time the board will expand to nine directors, eight of whom are independent, according to the company.
“We are thrilled to welcome Art Schick to our board of directors,” said George C. Freeman III, chairman, president and CEO of Universal Corp. “Art is an experienced, well-respected global consumer products executive with in-depth knowledge of the food and beverage industry, and he has deep-rooted expertise and knowledge of the ingredients industry from the top down. He brings tremendous value to Universal, with over four decades of experience in ingredients, strategic supplier development, procurement, operations, international supply chain management and product research and development.”
Schick is a 35-year veteran of PepsiCo, where he served his last 17 years as the vice president of proprietary flavors within the beverage concentrate division. In that role, Schick led PepsiCo’s organization that manufactured all proprietary flavors for the company’s global beverage brands and led the global sourcing strategies and supply chain management for the organization. Schick also spent over a decade as a contributing board member for the Flavor Extract Manufacturers Association (FEMA), the premier national association of the U.S. flavor industry, serving as FEMA’s president in 2013. Schick currently serves as president of Alpha Sierra Global, a company providing strategic and operational consulting to companies focused on consumer products, flavor compounding and ingredients.
“When presented with the opportunity to serve on Universal’s board of directors, I was impressed with the company’s long and successful history in international tobacco operations, and I was excited about the tremendous upside potential for the company as it expands its plant-based ingredients platform,” said Schick. “Universal already has a strong foundation and sustainable strategy to position itself as a leader in the ingredients space. I look forward to working with my fellow directors and the company’s management team as Universal charts its course for a bright future.”
February 2, 2023
Survey Details Advocacy for Safer Nicotine

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Knowledge-Action-Change (KAC) has released a global survey investigating the role and activities of consumer organizations advocating for access to safer nicotine products (SNPs) and tobacco harm reduction.
Carried out by KAC’s Global State of Tobacco Harm Reduction project, the research was published in Public Health Challenges.
It reveals that there are 54 active consumer advocacy groups working around the world to raise awareness about, and promote the availability of and access to, SNPs, which include nicotine vaping products (e-cigarettes), Swedish-style snus, nicotine pouches and heated-tobacco products.
The authors of the survey found that the vast majority of organizations (42) were operated entirely by volunteers, most of whom had successfully quit smoking with the help of SNPs.
Only seven of the groups had any contracted or paid staff (13 people globally), and for the last full year, the total funding for all organizations surveyed amounted to $309,810. This is in stark contrast to the millions of dollars spent on campaigns by actors, such as Bloomberg Philanthropies, seeking to limit access to SNPs, such as nicotine vaping products. The paper also notes that none of the consumer advocacy organizations reported receiving funding from tobacco or pharmaceutical companies.

This paper starkly demonstrates the major imbalance in resources available to consumer organizations advocating for access to safer nicotine products and those opposed to tobacco harm reduction, unfairly skewing the debate.
Gerry Stimson, director, KAC
Many of these organizations are members of four regional umbrella organizations covering Latin America (ARDT Iberoamerica), Africa (CASA), Europe (ETHRA) and Asia-Pacific (CAPHRA).
“This survey offered a unique opportunity to map these advocacy organizations for the first time and provide valuable insight into how they are operating all over the world,” said Tomasz Jerzynski, lead author and data scientist for the Global State of Tobacco Harm Reduction project. “The sustainability of these organizations is one of the main concerns that has come out of the data. All of these groups face challenges due to their small numbers of core workers and their dependence on volunteers.”
“This paper starkly demonstrates the major imbalance in resources available to consumer organizations advocating for access to safer nicotine products and those opposed to tobacco harm reduction, unfairly skewing the debate,” said Gerry Stimson, report author, director of KAC and emeritus professor at Imperial College London. “It also highlights why consumer groups must be recognized as legitimate stakeholders in the policy sphere.”
February 1, 2023
PMI, BAT Recognized for Gender Equality

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Philip Morris International and BAT were included in the 2023 Bloomberg Gender-Equality Index (GEI).
PMI made the index for the third year running, achieving an overall score of 80.6 percent.
“Achieving gender balance at all levels of the company is one of our top priorities, and I am delighted that our efforts are recognized again in this year’s index,” said Silke Muenster, chief diversity officer at PMI. “While we are making significant progress, we know we need to keep our foot on the acceleration pedal. An inclusive workplace that leverages the full talents of both women and men is crucial to our smoke-free vision, making our organization more innovative, resourceful and engaged.”
In 2022, PMI achieved its target of ensuring at least 40 percent female representation in managerial roles and announced a new target to achieve 35 percent of women in senior roles by the end of 2025, among other targets.
BAT, which participated in the index for the first time, received a score of 75 percent. BAT was recognized for creating an inclusive culture for women via its recruiting initiatives, adoption of family-friendly policies, sponsoring programs dedicated to educating women, and support of community programs. Inclusion in the index follows BAT being named as a Global Top Employer for a sixth successive year.
“Recognition in this year’s Bloomberg Gender-Equality Index demonstrates our commitment to addressing gender diversity and highlights our concerted global efforts to provide transparent reporting,” said Hae In Kim, BAT’s director of talent, culture and inclusion. “With more than 50,000 employees worldwide, our diversity and inclusion strategy is truly global, and I continue to be incredibly proud of the collective efforts made by all our employees.”
The GEI measures gender equality performance globally across five pillars as set by Bloomberg: leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, anti-sexual harassment policies, and external brand. The 2023 Bloomberg GEI comprises 485 companies from 45 countries and regions.
February 1, 2023
Trade Group: Cigar Flavor Ban Harmful

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Banning flavored cigars would do more harm than good, according to David Ozgo, president of the Cigar Association of America, reports The Center Square.
“The economic impact is one thing, but just as important is the fact that what you’re doing is taking away an adult’s right to choose,” Ozgo said. “When President [Barack] Obama passed legislation in 2009 regulating tobacco, he stressed the idea was not to take away an adult’s right to use tobacco if that’s what they choose.”
In 2021, flavored cigars made up 47 percent of the market, so banning them would have a huge economic impact, according to Ozgo. He projects losses of about $4 billion in retail sales, 16,000 jobs, $840 million in wages and an estimated $750 million in federal, state and local tax revenue.
“The proposed rules would help prevent children from becoming the next generation of smokers and help adult smokers quit,” Health and Human Services Secretary Xavier Becerra said in a statement on the U.S. Food and Drug Administration’s website. “Additionally, the proposed rules represent an important step to advance health equity by significantly reducing tobacco-related health disparities.”
Ozgo countered that it’s already illegal for a person under 21 to purchase tobacco. Government data shows less than 1 percent of youth use flavored cigars, he noted.
“This is a solution in search of a problem,” Ozgo said. “When you look at indicators of nicotine addiction, they’re not the same as, say, cigarettes. Really, people smoke cigars for different reasons. With cigars, it’s just something you do to relax and enjoy. We always say cigars are more of a hobby than a habit; you don’t even smoke one every day.”
February 1, 2023
KT&G Refuses Ginseng Spinoff

Photo: KT&G
KT&G has refused to spin off its ginseng business as requested by activist investor Flashlight Capital Partners, reports The Korea Herald.
“The spinoff will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” KT&G Senior Executive Vice President Bang Kyung-man said.
Bang expressed concern that KT&G would potentially lose “synergy” in the event of the ginseng unit’s separation.
Flashlight Capital Partners has been putting pressure on KT&G to increase dividends and spin off its ginseng unit into a separate listing, among other things.
KT&G plans on initiating a share buyback program and aims to increase its overseas sales to over half by 2027. To raise the needed capital, KT&G can sell property assets and borrow from banks, according to Bang.
February 1, 2023
A Blunt Tool

Photo: MichaelJBerlin
Unless properly structured, Europe’s tobacco and vapor tax plans may not achieve their public health objectives.
By Stefanie Rossel
The European Commission’s (EC) December 2022 proposal for an update to the 2011 EU tobacco excise directive came with a first: In addition to a significant hike in cigarette excise rates, the draft also calls for a bloc-wide vaping levy.
According to the proposal, the current minimum EU excise tax rate of €1.80 ($1.92) should increase to €3.60 per pack of 20 cigarettes. This would double excise duties in member states with low cigarette taxes (in eastern European countries, a pack of cigarettes can currently sell for under €3) and affect excise duties in countries such as Luxembourg and Austria, where cigarette prices are low relative to income. The EU hopes to generate an additional €9.3 billion in revenue from the tax harmonization, which would be a welcome windfall for pandemic-struck and inflation-struck member states. If enacted, the proposal would also increase taxes on hand-rolled tobacco.
E-cigarettes with less than 15 mg of nicotine per milliliter of liquid would attract a 20 percent excise duty, and stronger products would be subject to a duty of at least 40 percent. In the EU, nicotine content of e-liquids is limited to 20 mg per milliliter. According to the draft proposal, heated-tobacco products (HTPs) would attract a 55 percent excise duty, or a tax of €91 per 1,000 items sold.
The proposed legislation would harmonize the fragmented EU vapor market, where each member state taxes vapor and HTP products at its own rates. It is part of a push aimed at accelerating the reduction of smoking rates throughout the EU. As part of the common market’s Beating Cancer Plan, introduced by the EC in February 2021, health officials seek to lower the current EU smoking prevalence of 26 percent to 20 percent by 2025 and achieve a “tobacco-free generation”—that is, a smoking rate of below 5 percent—by 2040.
The draft was released only weeks after the EC imposed a ban on flavored HTPs to cut the growth in demand among younger consumers. Responses were mixed. While some argued that union-wide taxes are necessary because less harmful products still present risk, tobacco harm reduction advocates warned for unintended consequences.
Too High, Too Complex
David Sweanor
“Simply increasing cigarette taxes is a blunt instrument when trying to reduce the health toll from cigarette smoking,” says David Sweanor, adjunct professor of law at the University of Ottawa in Canada. “It is far more powerful than other standard anti-smoking measures but has limitations and constraints that are often overlooked. Price sensitivity is real, but many people who smoke cigarettes will seek to deal with increased costs through access to contraband, the cross-border trade, simply changing the way they smoke without achieving health improvements, or further diminishing their overall well-being by redirecting expenditures from healthier purchases to the purchase of cigarettes.”
Taxing low-risk alternatives reduces the incentive to switch from cigarettes and can make illicit cigarettes more competitive, according to Sweanor. In his view, it is akin to making alcoholics who give up drinking by taking up jogging pay a tax on running shoes. “It misses the point of how taxes can be justified due to the relative health impact of certain behaviors,” he says.
Dustin Dahlmann
Dustin Dahlmann, president of the Independent European Vape Alliance, believes that EU policy should be guided by scientific evidence. “Science around the world agrees that vaping is significantly less harmful than smoking,” he says. “E-cigarette taxes that are too high [to] prevent socially disadvantaged groups in particular from switching to e-cigarettes. In the first instance, there should not be excise duties for electronic cigarettes, as they are a means for smokers to switch to less harmful alternatives. If further harmonization of excise duties is considered, legislators should take into account the significant differences in risk profile between tobacco cigarettes and electronic cigarettes and apply the excise duties methodology accordingly, i.e., proportionality to the harm reduction benefits brought about by tobacco replacement products.”
In practice, this would mean a maximum excise duty of €1 per 10 mL or €0.10 per 1 mL of e-liquid, and it should be applied only to e-liquids with nicotine, according to Dahlmann. “The EU draft imposes a combination of an ad valorem and a specific volume base excise that would be an administrative burden for small and medium enterprises and fiscal authorities due to the additional complexity. Giving two options will lead to uncertainty, defeating the purpose of a harmonization of excise rates.”
Illicit Trade Could Increase
The question about how the EU’s revised tobacco tax directive would impact the illicit cigarette market is justified. The experience of France provides a cautionary tale. Following a tax increase of almost three times the EC’s minimum level, the illicit market in that country more than doubled, from 13.7 percent in 2017 to 29.4 percent in 2021, leading to an estimated loss of €6.2 billion in tax revenues in 2021, according to a KPMG report. In general, the study found, illicit consumption in the EU increased by 3.9 percent, or 1.3 billion cigarettes, in 2021, which corresponds to a loss of €10.4 billion in taxes.
How the suggested excise duty increase would impact markets with relatively low income and high smoking levels, such as Greece (42 percent smoking prevalence) and Bulgaria (38 percent), is anybody’s guess. “I have worked globally on illicit trade issues for decades,” says Sweanor. “There is much we can do to limit the trade, but the economics makes [illicit cigarette trade] so lucrative that it is hard to imagine bringing it under control so long as there remains a significant market for cigarettes. Markets meet needs, including illicitly. Cigarettes are extraordinarily inexpensive to make, and taxes and the huge profit margins of Big Tobacco create a business opportunity many people can be expected to see as a money spinner. The real answer is to facilitate disruptive technology that makes cigarettes as undesirable to consumers as unsanitary food or leaded petrol.”
To achieve the latter, the EC would have to acknowledge the harm reduction and smoking cessation potential of novel tobacco products. In February 2022, the EU Parliament became the world’s first elected chamber to endorse THR when it adopted a resolution on cancer prevention and treatment that notes that e-cigarettes “could allow some smokers to progressively quit smoking.” Dahlmann praised the move as a “landmark declaration” that would help reassure smokers of the benefits of switching to vaping. “All other EU institutions—and in particular the European Commission—should take this on board and ensure that policy follows science, not the other way around,” he said at the time.
Sweanor is less upbeat. “The taxation of low-risk products reflects an understanding of differential risks. But it fails to come to terms with the full magnitude of the harm from cigarette smoking and the enormous potential to dramatically reduce it. When we are looking at hundreds of thousands of annual deaths, surely it is a public health emergency—and policies should reflect that. Language such as “could allow some smokers…” and policies that limit the relative acceptability of low-risk alternatives indicate that the extent of the public health opportunity is not fully grasped.”
Differentiated Approach Required
Whether the EU is prepared to part ways with anti-novel nicotine product sentiment of the World Health Organization Framework Convention on Tobacco Control (FCTC), which the common market has ratified, remains to be seen.
“The EU is obligated to support tobacco harm reduction as a signatory to the WHO’s FCTC as stipulated in the introduction, article 1 (d) of the treaty,” says Dahlmann. “The FCTC requires the EU to not only allow reduced-risk products but to actively promote them. However, this definition is not actively supported by the WHO. The rule here is much more ‘quit or die.’”
“The WHO’s FCTC process has followed in the footsteps of narcotics protocols in being hijacked by ideologues who seek an abstinence-only approach on drugs where total abstinence is simply not a viable nor a humane goal,” Sweanor adds. “As with those narcotics protocols, caring governments that follow the Enlightenment principles of science, reason and humanism will either creatively skirt such guidelines or simply ignore them. This is something we are now seeing unfolding globally with cannabis policies.”
The goal of the new tax directive to create a smoke-free European society, he says, is noble and achievable—and far more quickly than envisioned in that 2040 goal. “But it requires bold rather than tentative steps. Policymakers should act in ways consistent with cigarette smoking being a public health crisis of enormous importance,” says Sweanor. “The best way to tackle this is by use of cross-elasticities, of empowering and facilitating people who smoke cigarettes to make healthier choices. This is accomplished by measures such as the widest possible cost differential between lethal cigarettes and low-risk alternatives. Given the horrendous death and disease tool from cigarettes, this should be a huge priority.”
“E-cigarettes need to remain accessible and affordable to smokers from all socioeconomic backgrounds who wish to quit smoking,” says Dahlmann. “E-cigarettes offer smokers an alternative that is 95 percent less harmful than smoking. Switching from tobacco to vapor has positive individual, social and economic implications and should be encouraged, not penalized by the tax system. If taxes make vaping more expensive than smoking, many smokers will lose an incentive to switch to the much less harmful alternative. We therefore would see no chance of achieving the EU’s ambitious goals.”
Before it is enshrined in law, the proposal will have to be agreed on by all EU member states. BAT already noted that this is merely the beginning of a long legislative process. “I assume there will be amendments, but we do not yet know their likely nature,” says Sweanor. “The proposal could be changed to help facilitate a rapid public health breakthrough as people abandon lethal cigarettes in huge numbers. Or it could be amended to make that a pipe dream.”
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.

February 1, 2023