Author: Marissa Dean

Court Dismisses Suit to Outlaw Tobacco

Photo: Alexey Novikov | Adobe Stock
A Kenyan court dismissed a petition by Ibrahim Mahmoud challenging the legality of the production, manufacturing and use of tobacco products, reports Business Daily.
The suit requested that the government ban the production, supply, management, dissemination, consumption and use of tobacco products and cigarettes as well as requesting that cancer be declared a tobacco-related ailment and a national disaster requiring special administrative action.
The suit was dismissed by Justice Hedwig Ong’udi on grounds that the petitioner did not prove that the Tobacco Control Act and the Tobacco Control Regulations 2014 are contrary to the constitutional provisions that were allegedly violated.
“It is not, therefore, enough for the petitioner to solely rely on his dissatisfaction in the use and legalization of tobacco products in Kenya. He should avail [sic] evidence to show how the statute and regulations are contrary to the provisions of the constitution complained of,” Ong’udi said.
November 29, 2022
Philip Morris International to Delist Swedish Match

Photo: Tobacco Reporter archive
Philip Morris International plans to take Swedish Match off of the stock market now that it owns a large enough share of the company to initiate a compulsory redemption of remaining shares, according to Reuters.
“We are delighted to have obtained over 90 percent ownership of Swedish Match, allowing us to initiate a minority redemption process to acquire the remaining shares outstanding and request the delisting of the company from the stock market,” said PMI CEO Jacek Olczak in a statement.
“This transaction marks a major milestone in accelerating our shared objective of a smoke-free future. We look forward to welcoming Swedish Match’s employees and leading oral nicotine portfolio into the PMI family to create a global smoke-free champion, notably bringing IQOS and Zyn together in both the U.S. and international markets.
“We are very excited about the growth, value creation and progress in tobacco harm reduction that we believe can be achieved together over the coming years. Despite the increased cost of financing over recent months, we expect the combination to be low single-digit accretive to PMI’s adjusted diluted EPS in 2023, before potential revenue synergies and excluding transaction-related and one-off costs and the amortization of acquired intangibles.”
In May, PMI submitted a $16 billion takeover bid for Swedish Match. The bid initially received pushback from Elliott Management, Framtiden and other stakeholders as they felt that it undervalued the company. PMI later raised its bid from SKK106 ($10.21) per share to SKK116 per share. Elliott Management, Framtiden and the other shareholders agreed to tender their shares after the bid was raised, and PMI secured over 83 percent approval by the end of the initial offer period.
November 28, 2022
Ireland Approves E-Cigarette Rules
Photo: Josemaria Toscano | Adobe Stock
Ireland Minister for Health Stephen Donnelly and Minister for Public Health Frank Feighan received government approval to introduce additional restrictions on the sale and advertising of nicotine inhaling products such as e-cigarettes, according to Gov.ie.
Under the new proposals, the sale of e-cigarettes and related vaping products will be prohibited from self-service vending machines, from temporary or mobile premises and at places or events for children. In addition, advertisements for e-cigarettes will be prohibited on public transport, in cinemas and near schools.
“These measures are designed to protect our children and young people from starting to vape,” said Donnelly. “We recognize that nicotine is a highly addictive drug, and we are acting today to make these products less accessible to our young people and to remove the advertising for these products from our children’s everyday lives.”
The proposals will be incorporated into the Public Health (Tobacco and Nicotine Inhaling Products) Bill, which is currently being drafted. The bill is expected to be finalized and published by year end. The legislation will be designed to regulate any product that can be used for the consumption of nicotine-containing vapor or any component of that product.
The bill already contains measures to ban the sale of nicotine inhaling products to those under the age of 18 and to introduce a licensing system for the retail sale of tobacco products and nicotine inhaling products. Other measures contained in the bill include:
prohibiting the sale of tobacco products and nicotine inhaling products by persons under 18 years of age;
prohibiting the sale of tobacco products from self-service vending machines, from temporary or mobile units and at events or locations for children;
introducing minimum suspension periods for retailers convicted of offenses; and
introducing fixed penalty notices for offenses.
Feighan welcomed the government’s approval of the measures.
“Tobacco smoking continues to kill approximately 4,500 people in our country each year,” he said. “We recognize that nicotine inhaling products are used by some adult smokers to assist them to quit tobacco smoking. However, we are clear that these products are of no benefit to our children and young people or to nonsmokers, and that is why we are taking this action today.”
November 28, 2022
Hong Kong Confiscates Black Market Cigarettes

Photo: YiuCheung | Adobe Stock
Hong Kong customs officers arrested three men and confiscated HKD180 million ($23 million) in black market cigarettes, reports the South China Morning Post. This marks the second-largest smuggling bust of its kind this year.
Three container trucks at two shipping yards near Tsing Yi Road, Tsing Yi, and Container Port Road South in Kwai Chung carrying three 40-foot cargo containers with 31 million suspected illegal cigarettes were seized. Three more containers in the same yards were seized, holding 33 million sticks of tobacco.
If the illegal cigarettes were legally imported, the products would have generated HKD120 million in tax revenue.
Customs has seized 640 million suspected black market cigarettes this year, an almost 50 percent increase from last year’s 427 million, according to the South China Morning Post.
Many of the brands seized were popular overseas but uncommon locally. “Following the relaxation of anti-pandemic measures and the increase in the flow of people, the market demand for illicit cigarettes has increased,” Senior Investigator Lam Wai-kit said.
An investigation is ongoing to trace the source and flow of the illegal products, according to Lam.
November 22, 2022
Baltimore Sues Tobacco Companies Over Litter

Photo: Tobacco Reporter archive
The city of Baltimore is suing several major tobacco companies, requesting as much as $5 million annually for the cleanup of cigarette butt litter, according to WBALTV11.
Since 2014, more than 12 million cigarette butts have been cleaned up from the waters surrounding Baltimore, city officials said.
“There are all kinds of cleanup problems, from catching them [cigarette butts] to getting rid of the chemicals they leave in their wake,” said James Shea, Baltimore City solicitor.
The lawsuit alleges that the tobacco companies have refused to place warnings on their boxes explaining how to properly dispose of filters and that they have chosen not to make filters biodegradable.
“They didn’t change it—according to documents we’ve seen—to biodegradable filters because smokers preferred the draw that comes with the filter,” Shea said.
The ultimate goal is to see the companies become more environmentally friendly, according to Shea. “We’d like to have the practice stop, but, in the meantime, we want damages in the nature of cleanup costs and their fines associated with various litter ordinances that are being violated.”
The companies have 30 days to respond in court.
November 22, 2022
Choosing Wisely

Photo: manovankohr
Are choices key to successful switching?
By Cheryl K. Olson and Willie McKinney
Like many people who smoke, Doug Halterman wanted to quit. “I tried other ways, even prescription drugs, and nothing worked.” When he decided to try vaping, “At first, it was a research and development stage. I had to figure out what ones best acted like a cigarette,” he recalled. “I started with menthol tobacco. I then liked the fruit flavors because it helped stay clear of cigarettes. After vaping fruity flavors, cigs tasted absolutely disgusting.”
Halterman’s story of switching is one of several dozen generously shared via emails from members of the Consumer Advocates for Smoke-free Alternatives Association (CASAA). This exploration of what drives change was triggered by anecdotes and research suggesting that encountering and trialing a range of alternative nicotine products, or rotating among an engaging mix of options, can be key to ditching smoking. The typical successful quitting journey seems less like a thruway and more like a meandering river. The U.S. Food and Drug Administration’s Center for Tobacco Products’ approach to researching switching, described in its Final Rule guidance, assumes simple choices and straight lines.
The Wrong Framework?
Premarket tobacco product application (PMTA) behavior studies are supposed to describe likely changes (and related health risks) created by the marketing of a single novel tobacco product of a particular flavor and nicotine strength. This is not unlike studies the FDA’s Center for Drug Evaluation and Research (CDER) reviews, comparing effects of a new drug to a placebo on particular symptoms or endpoints.
In a September 2021 PMTA Technical Review Summary available online, the FDA laid out a new standard that flavored electronic nicotine-delivery system (ENDS) products must meet. Balancing concerns about youth uptake demands “acceptably strong evidence that the flavored products have an added benefit relative to that of tobacco-flavored ENDS in facilitating smokers completely switching away from or significantly reducing their smoking.” What kind of evidence? “Most likely product specific evidence from a randomized controlled trial (RCT) or longitudinal cohort study.”
Again, it’s like testing whether a medicine to treat gout or acne is superior to the current standard therapy, except it casts tobacco flavoring (the taste of cigarettes) as the standard and mango or vanilla as the unproven alternative.
Does an approach that may work for “safe and effective” prescribed drug authorizations make as much sense for a balance-of-risks consumer product standard? Does the CDER mindset serve well the end goal of moving people off combustibles? This pharma-influenced standard may be the wrong tool to address tobacco product effects.
Comments from people’s real-world switching experiences (see sidebar) suggest that a test-in-isolation model fails to capture a lot of key information that could accelerate the move away from smoking and its unacceptably high risks of disease and death.
Unlike pharmaceuticals and devices approved by other FDA centers, nicotine consumer products are not prescribed as a course of treatment. Tobacco users looking to switch aren’t making comparisons among two (or three) options. They meander through shops and gas stations, picking up nicotine products at will and whim. Many use multiple products to suit situations or prevent boredom. They learn through trial and error: How does this product work? What does it do for me? How does it fit into my life? And they choose again.
Another problem: As Neil McKeganey of the Center for Substance Use Research pointed out recently, it’s not clear by how much the FDA values youth vaping prevention over adult smoking cessation. How obviously better would a flavored product need to be at helping smokers switch, compared to a tobacco flavor, to offset concerns about youth appeal? The recent longitudinal study of Juul, where over half of participants switched completely from cigarettes at one year, found that what flavor smokers chose did not significantly affect success.
Missing Variables
Most studies aren’t designed to address the power of choices. Even large surveys that support the importance of flavors in switching tend to collapse flavors into categories (like “sweet” for fruit and candy) and ask about main flavor used, obscuring the paths taken by individual quitters. But there are tantalizing hints. For example, a six-week switching study of tobacco-free pouches found a link between trying more flavors and fewer daily cigarettes smoked. A 2018 study of MarkTen found that smokers who switched completely used more flavors.
Based on her experience researching oral and vapor product behaviors (including MarkTen), “Most smokers don’t successfully switch and sustain their switching through one product category,” said Jessica Zdinak, chief research officer at Applied Research and Analysis Consulting. She notes that academic studies of smoker transitions often leave out important variables, such as previous quitting experiences or stressful changes in life circumstances.
Adding Real-World Evidence
FDA Commissioner Robert Califf has been quoted repeatedly as supporting greater reliance on real-world evidence to support drug regulation decisions. During his first stint as FDA head, Califf said at the 2016 Food and Drug Law Institute conference that “In the past, so-called ‘regulatory trials’ tended to focus on high-quality studies with detailed study procedures, restrictive inclusion and exclusion criteria and have been conducted in special study sites.” By contrast, he noted that “pragmatic clinical trials,” studies that look at treatments and outcomes in actual medical practice settings, “may be the most important source of knowledge in the future.”
Another difference from pharmaceutical products: Many alternative nicotine products have been on the market for several years. Why not consider real-life evidence, as in natural choice situations over time, for tobacco product switching behavior? Don’t throw away tried-and-tested tools but see how they fit in a new context.
Zdinak would like to see long-term randomized trials that incorporate this approach, showing the effect of having or lacking a range of options. To demonstrate the effects of flavors on switching, “What does the world look like if I’m a smoker of 30 years who enters a vape shop, and I have tobacco-flavored vapes as my sole option? Or what happens if I see citrus, mango, cinnamon, coffee and caramel?” She is currently in the design and review phase for one such realistic study.
To quote prominent researchers Dorothy Hatsukami and Dana Carroll, “Most in the tobacco control community would agree that an immediate main goal is to rapidly eliminate tobacco-related death and disease.” If regulators agree, let’s look at what obstacles are preventing smokers from switching more rapidly. That includes tailoring methods and assumptions borrowed from pharma research to suit appropriate for the protection of public health (APPH) standards and goals.
The Power of Choices: Stories from CASAA
Founded in 2009, the Consumer Advocates for Smoke-free Alternatives Association (CASAA) is a 501(c)(4) consumer nonprofit organization that aims to “ensure the availability of a variety of effective, affordable reduced-harm alternatives to smoking.”
In response to an emailed request from CEO Alex Clark, a number of former smokers took time to share their experiences of switching to vaping or other smoke-free products. One question posed by Clark was whether the variety of products was helpful in staying engaged with smoke-free options and reducing the temptation to return to smoking.
Clark himself recently switched from vaping to using pouched snus. Along with a concern that overconsumption of stimulants, such as coffee and rapid-delivery nicotine products, were triggering heart palpitations, he said, “The hands-free nature of snus fits more with my needs. And I can still get all of the different flavors when I order from Sweden.”
Here are excerpts from CASAA member comments, edited for length and clarity. No doubt, people who smoke have a range of goals and preferences that evolve in sometimes surprising ways through product exploration.
Nancy S.: “I started vaping because I was unable to stop smoking tobacco cigarettes because I am so addicted to nicotine. And I don’t want to die from lung cancer like my father did. The products I tried were exactly what I was looking for. I wanted something that tasted like a real cigarette. No funny flavors.”
Roger M.: “I love the variety of products—both hardware and e-juices. My favs are black licorice, almond and bubble gum. They say only the kids like these flavors, but I have loved them since I started vaping 12 years ago. I am now 61.”
Sara C.: I liked trying new flavors in the beginning then found my favorite [strawberries and cream] that I’ve stuck with for years.”
Marc C.: I’ve tried the patch, the gum, hypnosis, as seen on TV products, medications and counseling. Nothing worked or works for me except vaping. I want my vape to taste like an authentic tobacco vape. But I’m okay with some flavor of tobacco, like coffee, vanilla, apple or maple. Almost like a pipe tobacco assortment.”
Sean O.: “The first product I tried wasn’t all that good. Eventually, I found that using what’s called a ‘box mod,’ which takes two high-powered batteries … gave the great sensation in your throat of inhaling the same way a cigarette did. The large clouds of vapor that you can produce using these mods and tanks is incredible. [And] the variety of flavors is exactly what has kept me away from cigarettes.”
Joni L.: “The device was key for me. I chose a Vaporesso Swag because of the size. It felt close enough to a pack of cigarettes for me, and a lot of my habit was actually reaching for my smokes. My first e-juice was a house-made vanilla custard tobacco; I was afraid to go too far away from tobacco flavors because I actually believe I liked the flavor of a cigarette. After three or four days, I went back to the vape shop and bought some mixed berry-flavored juice. That was it. It didn’t take long for my cigarette cravings to go away.”
Kelly P.: “I did try a different device but went back to Juul. I liked the mint and found it better than the menthol cigarettes I had smoked. Also, Juul wasn’t one of those devices that you would blow out a cloud of smoke.”
Glenn N.: “I believe that the first ‘e-cigarette’ I bought was the first Blu. I vaped that for a couple months, but it was missing something, and I thought I would go back to cigarettes. So I started looking online. With that ProVari, I knew that I would never smoke again. I found what I needed. I started with 36 mg liquid and went down to 12 mg in about a year.”
Steve T.: “I will be 68 this year and feel I made a great decision with vaping. Access to flavors is a critical component necessary to transition away from cigarettes. I have reduced the nicotine levels from 18 mg to 3 [mg], and my Kona e-juice was replaced with dessert and blueberry flavors.”
Jessie C.: “NRT [nicotine-replacement therapy] options like snus and nicotine gum/lozenges never worked for me as more than a way to avoid smoking at an event or during a long work shift. I’m very much a tech-oriented person, so the idea of having many options was stimulating for me. At the time, CE4 atomizer [tanks] and little pens were the most accessible items on the market [and did not meet expectations]. When the Kangertech Subox Mini hit the market, I was satisfied and stuck with that.”
Cindi K.: I started vaping in 2014 not because I was looking to quit smoking but because I was avoiding convenience stores; I had just entered AA [Alcoholics Anonymous] and that is where I’d bought alcohol. Two doors down was a vapor store. I bought an eGo Tank and some tobacco-flavored e-liquid in 24 mg. I made friends in AA that were also vaping and noticed their liquids smelled much better than what I was using. I continued to be what I labeled a dual user for a few more months and decided to use flavored e-liquid and willpower to quit smoking. I also learned how to make my own flavors. I had about 12 I used in rotation and loved.”
Tanya L.: “The first product I tried was in 2013: a vanilla-flavored vape liquid, Kanger T3S tank and coils, which I still use. I like vanilla. I just had to find the best vanilla.”
Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.

Willie McKinney is the founder of McKinney Regulatory Science Advisors. He’s held senior regulatory roles at major tobacco product companies and served for three years as the industry representative on the FDA’s Tobacco Products Scientific Advisory Committee.

November 1, 2022
Differential Progress
Photo: Nopphon
Will the valuable insights revealed in the Tobacco Transformation Index accelerate tobacco harm reduction?
By George Gay
The second biennial report on the Tobacco Transformation Index (TTI), which details the findings of two further years of research into the efforts made by the world’s 15 largest tobacco companies to reduce the harm caused by the consumption of their products, was launched at the recently staged GTNF. The 140-page 2022 report evaluates tobacco companies’ actions across six business functions, designated “categories” and 35 underlying indicators that are said to cover “measures indicative of harm reduction ….”
Of the 15 tobacco companies examined, three are state controlled, nine are publicly traded (including Egypt’s Eastern Co., in which the government owns a majority stake), and three are privately held. Together, they are said to account for about 90 percent of global tobacco product volume sales. The geographical sweep of the index takes in 36 countries spread across the globe and accounting for about 85 percent of the global population of adult smokers.
Erik Bloomquist
The report contains a huge amount of information, clearly presented and backed with a statistical methodology that aims for transparency and, despite its robust nature, is open to review. The global nicotine and tobacco investment analyst and consultant Erik Bloomquist, who is chairman of the TTI’s technical committee, said during the GTNF investor panel, which he chaired, that everybody should be visiting the TTI website because it contained a “fantastic” amount of “incredibly valuable” information.
Meanwhile, a press note issued on Sept. 28 by the TTI, which is a Foundation for a Smoke-Free World* initiative and whose research partner is Euromonitor International, said research had demonstrated “differential progress toward harm reduction across the 15 largest tobacco companies,” and highlighted:
That high-risk products made up about 95 percent of retail sales volume across the 15 largest tobacco companies during 2021, with reduced-risk products (RRPs) making up 5 percent;
That tobacco harm reduction (THR) momentum was developing across a subset of the 15 companies, albeit to varying degrees; and
That with companies having been analyzed across the six categories and 35 indicators on their actions to reduce the harm caused by tobacco use, Swedish Match was found to have been making the most relative progress.
The press note went on to list the following takeaways from the 2022 index findings:
“Only Swedish Match sells a greater volume of RRPs than substantially more harmful combustibles, due in most part to the popularity of its snus in Sweden and nontobacco nicotine pouches in the U.S. …
“Four index companies directed the majority of capital and R&D investments toward RRPs. In addition, five index companies, including three state-owned entities, made incremental investments or early indications of movement toward future production of RRPs during the review period.
“However, tobacco companies are … failing to invest in harm reduction in low-[income] and middle-income countries, with the vast majority of sales for their RRPs concentrated in markets with the highest disposable income. Notably, RRPs are banned in a number of countries around the world.”
For those who like lists, the 2022 index’s overall scores set the companies’ relative rankings as follows, with their 2020 relative rankings in parenthesis: Swedish Match 1 (1), Philip Morris International 2 (2), Altria Group 3 (4), BAT 4 (3), Imperial Brands 5 (5), Japan Tobacco Group 6 (6), KT&G Corp. 7 (7), Swisher 8 (8), ITC 9 (9), China National Tobacco Corp. 10 (10), Vietnam National Tobacco Corp. 11 (12), Tobacco Authority of Thailand 12 (11), Eastern Co. 13 (13), Gudang Garam 14 (14) and Djarum 15 (15).
As can be seen, there was little shifting of positions, but the devil is in the details, and there was more relative movement in each of the six categories that were researched: strategy and management, product offer, product sales, marketing policy and compliance, capital allocation and expenditure, and lobbying and advocacy. And this differentiation is seen as important, though, in fairness, it has to be set against any number of factors, some of which, such as portfolios, companies have control over, and in respect of some of which, such as regulations, they are largely at the mercy of outside forces, especially those companies operating mainly in countries that ban RRPs. And there are some factors that might be seen as sitting in between. Increases in sales of higher risk products, for instance, are seen as negatives.
Sense of Proportion
The report clearly has some important information, which is likely to become even more valuable in the future if, as seems likely, more of the 15 companies engage with the TTI. Six companies, mainly the multinationals, provided feedback in respect of the 2022 report.
Nevertheless, I have reservations about what is going on here. Glancing through the minutiae of the huge report and the 84-page methodology that defines the way the report’s data is arrived at, I couldn’t help wondering whether we weren’t in danger of losing our sense of proportion, even losing track of our objectives. To a large extent, tobacco transformation is pushing at an open door because consumers undoubtedly want the choices that new-generation products offer, and the business case is compelling.
David Janazzo
But what truly concerned me as somebody living in a country whose economy is being systematically tanked by the last remaining devotees of trickle-down economics was that the TTI seemed to be embracing trickle-down THR. For instance, the TTI was described in the Sept. 28 press note as having been created “to accelerate the reduction of harm caused by tobacco use by ranking the world’s 15 largest tobacco companies on their relative progress or the lack thereof.” From ranking tobacco companies in this way to accelerating THR sounds to me like a bit of a stretch. Certainly, it seems to beat something of an indirect path toward THR.
In fairness, though, I should say that the TTI program officer, David Janazzo, in his insights introduction to the 2022 report, added that part of the purpose of the index was “to inform the public about the activities of the tobacco industry that influence achieving a smoke-free world.” Such an undertaking, if it could be achieved, would certainly have a more direct influence. But I don’t see that happening. The report talks of “stakeholders,” but that term is not defined, and whereas, as far as I have been told, it potentially includes everybody, such a claim to inclusivity falls a little flat if you try to imagine smokers around the world engaging with a 140-page report and an 84-page methodology. Unsurprisingly, currently, stakeholders are largely confined to tobacco/nicotine companies, researchers and investors.
Relative Rankings
The TTI throws up a number of oddities, not the least of which has to do with the understandable decision to compare the 15 largest tobacco companies. Gudang Garam against BAT seems to be a total mismatch, and, given that the index is aimed at informing, in large part, potential investors, the presence of companies that are not publicly traded, though understandable from a nudge theory standpoint, nevertheless looks strange. PMI was said in the press note to be ranked second in the 2022 index and Djarum last, and while I understand that this is how the index’s methodology sees the tobacco world, I have to ask, is this a fair reflection of tobacco harm? If you constructed an index that ranked companies on the number of people worldwide who currently were harmed by consuming those companies’ products, I would guess that Djarum would move up the rankings.
It was disappointing, in my view, that the 2022 report did not cover the environmental credentials of the RRPs on offer, either relative to each other or relative to the higher risk combustible cigarettes they are supposed to replace, though I understand such matters might be covered in the third iteration of the report, which is due out in 2024. RRPs are supposed to comprise a disruptive technology and, if disruptive means anything, it surely means speedy. Is it wise to wait so long for such information to trickle down? We have on the one hand a problem with the diseases caused to individual smokers, which are tragic on an individual basis but contained, and, on the other hand, an existential environmental crisis enveloping everybody, and we seemingly choose to try to fix the first problem and not the second.
Timing is important, and one of the main weaknesses of the TTI seems to be its two-year time frame. The 2022 report took in research through the end of 2021 while the next report is due out in 2024, so this suggests that, unless interim updated TTI reports are issued, the publication schedule is going to provide a three-year drag on the incorporation of anything of significance that occurred in early 2022.
To my way of thinking, the commitment to THR is driven and will be driven by regulations and taxes, and one benefit of the index is that it might influence governments in these areas. And this is important. Taxes are currently set in some jurisdictions so that some RRPs attract revenues much greater than those of combustible cigarettes, and investors are clearly going to put pressure on companies to transform their portfolios while the profits generated by the sale of RRPs are higher than those from the sale of combustible cigarettes. Of course, you would have to be terribly naive to imagine that those same investors would keep up the pressure if the profit advantage were wiped out. There is nothing wrong with this if you believe that the market should be the ultimate arbiter of what is good, though one has to accept, too, that things might head in the other direction.
Finally, I would be concerned that the cynics will have a field day because while the TTI is listed as an initiative of the foundation, in my view, it is not spelled out prominently enough where the foundation’s money comes from: PMI. Despite the fact that the foundation is independent, those cynics will see that the number two company on the list is PMI, which is possibly about to acquire the number one company and move into the number one spot. All above board, I’m sure, but these things have to be seen from the point of view of those with different agendas.
My argument is not that the application of trickle-down THR would be socially destructive in the way that trickle-down economics has been but that it would be slow and there would be more efficacious ways of approaching THR. Why spend the foundation’s money carrying out research that is going to benefit mostly analysts, banks and pension funds that have the resources to carry out such research on their own behalf? Surely, the money should be spent on projects that will more directly help smokers. Even helicopter THR might be preferable to trickle-down THR.
*The Foundation for a Smoke-Free World is an independent nonprofit organization created in 2017 with the mission to end smoking within this generation.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
November 1, 2022
Moving Forward

Habanos and its partners remain committed to boosting the global reputation of all Cuban cigar brands.
By Timothy S. Donahue
Cuban cigars have always had a certain mystique about them, primarily as a result of their exclusivity. Earlier this year, they moved even further out of reach for many consumers when Cuba’s state company responsible for the production and distribution of cigars, Habanos, raised prices worldwide to the levels of its premier brands in Hong Kong. In some countries, prices jumped by as much as 300 percent. The announcement triggered massive hoarding by consumers eager to stock their inventories before the price increases took effect. This in turn led to product shortages in many markets, which then prompted several retailers to raise prices even further.
The price hike was a joint decision between Habanos shareholders, including its new Chinese partner, Allied Cigar Corp. (ACC), a Hong Hong-based investment group that in 2020 purchased 50 percent of the Cuban cigar company for €1.23 billion ($1.2 billion).
The result was a perfect storm that spawned considerable amounts of misinformation. The price increases, along with the difficulties in finding cigars in some markets and the secretive nature of the relationship between Habanos and its Hong Kong partners, had rumors swirling. In an interview with Tobacco Reporter during the 55th anniversary celebration of Habanos’ Cohiba brand in September, Leopoldo Cintra Gonzalez, commercial vice president of Habanos, and Jose Maria Lopez Inchaurbe, vice president of development, insisted that there was “no such basis” for any of those rumors.
“Rumors? We are not keen to speculate about any of this,” said Gonzalez. “The new Chinese shareholders—it’s true that they are not coming from the tobacco business, but we have a very good relationship, a very good friendship. They are now starting to be part of Habanos’ future. They are very excited about our future together for sure. There are still many aspects of this business that they are learning, trying to become familiar with. But this is normal. Nothing dramatic to see.”
Inchaurbe said he had spoken with the shareholders of ACC and that it must be understood that while the cigar business may be new to ACC, marketing a luxury good is not. It’s a learning process, and ACC is excited about the Habanos product and bringing the Cuban cigar brands to new heights, he noted. “They know our brand, our product, but they joined us knowing cigars only from [the] aficionado or consumer point of view,” explained Inchaurbe. “And we are in the process of also understanding their targets and goals and explaining our business goals, which can be a learning process.”
All decisions concerning Habanos are made jointly by both companies, added Inchaurbe. He said the new global pricing structure was a common decision between the two shareholders—and one that had been considered by Habanos for some time. After all, he says, there is no cigar in the world equal to the Cuban Cohiba in terms of quality. When a product has all the attributes of a Cohiba cigar—high quality, good presentation, attractive packaging—it must be considered a very high-end luxury good indeed.
“You have a price in Hong Kong or in London that is double the price [of that same cigar] in some other countries. At the end, for the luxury cigar industry, this is a disturbance,” explains Inchaurbe. “What we are trying to do with the global Habanos pricing is, like the many various luxury items in the ‘luxury’ industry, to have a single, global price for all the consumers wherever they are. Our benchmark for Cohiba was Hong Kong, as we clearly stated, because Hong Kong [is a benchmark] for extremely high-quality luxury products.”
Seeds of Success
In fiscal 2021, Habanos earned more than $568 million while experiencing 15 percent growth compared to the previous year. Despite the global pandemic and growing inflation, at the end of 2021, Habanos was operating 20 Cohiba Atmosphere outlets, 160 La Casa del Habano shops, 1,217 Habanos Specialist stores, 2,465 Habanos Points and 486 Habanos Lounge/Habanos Terrace outlets.
When asked whether Cuba had the capacity to produce more cigars to satisfy growing demand, Inchaurbe said that the company was not going to produce “ever more cigars” just to satisfy the demand. The most important factor in producing Habanos cigars is quality, he insisted, and the company will not increase production at the expense of quality.
“The problem is a very nice problem to have,” he said. “There is a lot of demand. This is our problem, but good news.” According to Inchaurbe, demand for high-value brands, such as Cohiba, Trinidad and Montecristo, is higher than what the company can produce at the level of quality required by Tabacuba, the government arm of the Cuban cigar industry in charge of production.
Inchaurbe insists this is not due to problems in production but because cigars are a natural product where you put all the focus on quality. “In my opinion, it’s difficult to say whether the problems of shortages in some retail shops all over the world will continue because demand is too much,” he said. “But of course, together with Tabacuba, with an investment program, we are trying always, especially Tabacuba, to be able to produce more cigars with the same quality. And that is the only way we will have the ability in the future to satisfy the growing demand.”
Habanos’ goal remains to grow every year without compromising the quality of its cigars, according to Gonzalez. Over the past 10 years to 15 years, the company has averaged nearly double-digit growth. However, today, Habanos isn’t necessarily looking to build its brick-and-mortar footprint as in previous years but rather to build on the value of its current assets alongside the global reputation of the Habanos brand. Looking at the first three quarters of 2022, Gonzalez expects the company to experience growth in line with that of 2021.
“Generally speaking, the premium cigar industry is growing for all the manufacturers, all the traders, because there is a big demand,” he said. “There is a great interest in our product. And, as usual, Habanos is the leader in this demand. Our demand continues to be very strong, especially in some emerging areas like Asia-Pacific. Of course, we are also going through difficult periods like this global inflation. This could also impact our business.”
The duty-free business in particular was heavily impacted. “The duty-free channel is not yet 100 percent recovered compared to pre-pandemic levels, and duty-free is a very significant channel,” said Gonzalez. “We are lower than the pre-pandemic figures in the duty-free channel while in the domestic channel, we are growing quite well.”
Innovation is going to be a central focus for Habanos in its quest to boost production and its global presence. Gonzalez said that the company will continue launching new products, innovating its operations and trying to satisfy its clients. The company is also considering possible technological improvements in its supply chain operations to better distribute its cigars.
“We want to prevent transfers [of product] from one market to another,” he said. “That’s why in those specific brands, Cohiba and Trinidad, we decided to harmonize with Hong Kong. Habanos is innovation. It is in our DNA, it’s in our products, in our brands. It’s true; we will continue innovating, launching new products, trying to give to our clients more activities, special activities about the lifestyle and so on because this is the demand from our clients. And regarding the prices, I will say that we will continue monitoring them.”
In the end, both men agree that the true value behind Habanos and its cigars are the factory workers who produce the cigars, the retailers who sell them and the consumers who are dedicated to Habanos’ 27 brands. “We have more than 4,000 specialized point stores in the world that represent, I would say, more than 50 percent of our sales,” said Inchaurbe. “They are in charge of this ship. For us, these new retail concepts that are driving our growth, we are going to continue bringing more points into the family and strengthening the points that we already have in the market. Habanos is poised for great success.”
Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.

November 1, 2022
Moving Backward

If enacted, Spain’s proposed regulations on vaping products will hamper tobacco harm reduction.
By Stefanie Rossel
In mid-May, a shockwave hit Spain’s vaping industry: The government presented a bill that would end the independent domestic vaping sector. The proposal calls for limiting vapor product sales to state-owned tobacconist shops within five years. Specialized vape shops can stay in business only if they transition into licensed tobacconists—a step that would oblige them to sell combustible products as well. The bill would also ban online sales of vape products.
At a recent conference, Angeles Muntadas-Prim Lafita, chair of the Spanish Association Supporting Vapers (ANESVAP) explained that the proposed legislation means the government wants to monopolize the nicotine market. “A country that is a member state of the European common market wants to monopolize a free and independent market. That’s like going back to a time when Spain wasn’t even a democracy—or even to the Spanish Inquisition,” she said.
Muntadas-Prim Lafita considered it unlikely that vape shop owners would sell combustibles. Established tobacconist shops, on the other hand, might or might not sell vaping products under the planned rules. “This would be harmful for consumers who would be forced to go to a tobacconist to get their vape products—or as many as they could find because it would be up to the tobacconist to decide what he is going to sell,” she said. “In addition, smokers who use vaping to quit more hazardous products might be tempted to purchase combustibles again. It’s like forcing an Alcoholics Anonymous meeting to be held in a liquor store.”
If the bill, which is now in the stage of public consultation, passes, it would also mean the loss of 1,200 direct and 3,000 indirect jobs in times of emerging economic crisis, according to Muntadas-Prim Lafita. Vape shops would have only six months to notify the commission for the tobacco market that they wanted to transition to become tobacconists. “The result of this legislation would be black markets, disobedience and lots of people going back to smoking,” she predicted. “Tobacco control in Spain is one of the fiercest and most stalled in the European Union.”
A Worrying Precedent
Criticism also came from the Independent European Vape Alliance (IEVA), the trade representative of independent producers and retailers of vaping products in the EU.
In a statement, the organization pointed out that the proposed legislation went against the main principles of EU competition law. “Considering the consequences of the proposed measures, the [draft bill] will set a worrying precedent in which legally established business can be unilaterally closed in an EU member state and handed over to a state-owned network of tobacco shops,” the IEVA wrote.
The planned legislation also violates the freedom of movement of goods in the EU and would generate severe adverse economic impacts in Spain and the EU, according to the group. It would drastically cut the European distribution value chain and negatively impact the exports to Spain from other EU member states, as the sales of vaping products in tobacco shops are expected to be extremely limited compared to the ones in specialized shops. Tobacco shops, after all, aim to maximize sales of combustible cigarettes and will be disinclined to devote time to explaining electronic devices to smokers looking to switch to less harmful alternatives.
An online sales ban for vape products would also drastically reduce the movement of goods in the EU as retailers in other countries would no longer be allowed to sell their products in Spain. Lastly, the IEVA said, the proposed law fails to distinguish between combustible tobacco products and noncombustible products as established in the EU’s 2014 Tobacco Products Directive (TPD).
The association called on the Spanish government, medical authorities and other stakeholders that will provide comments on the draft bill to critically reconsider the measure and insisted authorities review the proposed legislation for competition issues.
A Small Market
Compared with markets such as the U.K., vaping in Spain is relatively rare. After pharmaceutical companies lobbied the government for tougher legislation on vape products, the number of vape shops dropped by 90 percent in 2014. Today, there are around 535,000 vapers, which represents an adult vaping prevalence of 1.33 percent, according to the Global State of Tobacco Harm Reduction. This compares to a smoking rate of 27.9 percent, or 11.1 million people.
Vaping devices, like heated-tobacco products, are legal in Spain and can be sold to those aged 18 or older. E-liquids are currently untaxed. Statista estimates that the Spanish revenue service will collect the equivalent of $183.4 million in e-cigarette taxes in 2022. The market is expected to grow annually by 2.89 percent.
The bill is part of a wider effort by the Spanish government to bring its regulatory framework for tobacco products in line with World Health Organization and TPD standards.
The manufacture, advertising and sale of vape products in Spain is regulated under the Royal Decree 579/2017, implemented five years ago, which basically translates the TPD into Spanish national law. The rules ban smoking and vaping in all indoor state-owned public places, on public transport and in some outdoor places, such as parks. Advertising of vape products on TV is allowed, though there are regulations about the type of program and the times of day in which advertisements may be broadcast. Cross-border sales of e-cigarettes are prohibited.
A Tough Stance
In December 2021, the government published the draft of its “Comprehensive Plan for Smoking Prevention and Control 2021–25,” which aims to extend anti-smoking legislation from 2006 to include vaping products. During the consultation period, several Spanish medical societies took a hard stance on vaping, saying e-cigarettes are an ineffective tool for smoking cessation and asking the government to regulate them like combustible tobacco products.
Among other things, the plan aims to make more places—including private vehicles—smoke-free and vape-free, ban all e-liquid flavors except tobacco and introduce plain packaging for combustible cigarettes, vape devices and e-liquids.
Following a June 2021 report by the National Committee for the Prevention of Smoking, the plan also called for the taxation of vapor products. The report proposed a general e-liquid tax at the EU average rate of €0.15 ($0.15) per milliliter and an additional tax of €0.006 per milligram of nicotine. This would amount to an average tax rate of 35.6 percent, enabling the Spanish government to collect €35 million in taxes per year, according to the National Committee. With all measures combined, the government aims to reduce the percentage of the population that smokes to 10 percent by 2040.
Uncertain Outcome
According to the World Vapers Alliance analysis, the draft plan is biased against vaping, selectively citing studies, many of which have already been refuted. However, it didn’t consider studies acknowledging the harm reduction potential of vape products, such as the findings of Public Health England that vaping is 95 percent less harmful than smoking and may serve as an important smoking cessation tool.
“What this means is that the government wants to make it harder to vape than to smoke,” the organization stated. “Overall, the government draft shows the lack of knowledge politicians have on harm reduction tools, such as vaping, and the need for vapers to press them and tell their stories. Public health laws need to be based on evidence and not on stigma.”
The ANESVAP has started collecting signatures for a petition urging Spain to keep vapor taxes low and e-cigarettes accessible for customers. It also calls on regulators to keep online sales legal, allow an appropriate range of flavors and differentiate between vapor products and combustible cigarettes in smoke-free places.
The busy schedule of the Spanish government leading up to next year’s general election presently plays into the hands of the country’s vape community. Already more than a year behind schedule, the plan is now less likely to be brought before the Spanish Parliament soon, according to ECigIntelligence, which expects the bill to be discussed next year at the earliest.
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.

November 1, 2022
Show of Support

Speakers at the InterTabac/InterSupply trade shows expect steady growth for next-generation products.
By Timothy S. Donahue
China is the capital of e-cigarette production. It only makes sense to look at the vaping environment in the country to gauge the future of the industry. Jason Tian, director of development of 2FIRSTS, a vaping industry vertical media firm, and diplomatic assistant for the E-Cigarette Professional Committee of the China Electronics Chamber of Commerce (ECCC), said during an InterTabac/InterSupply trade show, held in Dortmund, Germany, in September, that e-cigarette production in China is growing rapidly.
A joint report from the ECCC and 2FIRSTS anticipates the global e-cigarette market to grow by 35 percent in 2022. The total market is expected to exceed $108 billion. In 2021, China’s total e-cigarette exports were $19.8 billion and were expected to reach $26.7 billion in 2022. Disposable e-cigarettes accounted for 65 percent of that growth; open systems accounted for 17 percent and pod products accounted for 8 percent in 2022. The main export destinations were the U.S., the EU, Russia, the Middle East and the U.K. Together, these markets accounted for 93 percent of China’s e-cigarette exports.
It seems that no matter where you go in the vaping industry, everybody wants to discuss the growth of disposables—and indeed, they dominate the InterTabac/InterSupply show floors. And while disposables are the fastest-growing segment of the industry, the one-time use vapes are devastating for the environment, according to several speakers during the event. A member of the European Confederation of Tobacco Retailers (CEDT) quipped, for example, “These [disposables] are really not up to date because it’s not sustainable for a society to have throwaway products.”
Tian said that new regulations in China are motivating companies to invest more heavily in R&D, including areas of sustainability, flavors and delivery. This is going to help boost the global vaping market, he predicted. “There’s going to be more investment,” said Tian. “And we predict that in the next one or two years, there’s going to be a new technological change in e-cigarettes. That’s a very optimistic look,” Tian explained. “And on the market side, though, with the strict regulation of China’s domestic market, more and more Chinese companies are going to be accelerating in their global development. They probably will put more investment in and … may do more partnerships around the globe.”
Speaking to visitors of the world’s largest tobacco/nicotine industry tradeshow, Tian told business owners, investors and other industry players that companies importing products from China or considering investing in a company that imports products from China need to be sure their China-based suppliers have a license issued by China’s State Tobacco Monopoly Administration.
“This is actually a guarantee for you and your consumers that the products that you are importing are safe, are quality guaranteed and are legal. Second, make sure your Chinese suppliers have sufficient production quotas. Every company with a license—they have a quota that limits how much they can produce yearly,” said Tian. “Once they’ve reached the quota, it seems to be a very simple path—simple paperwork, simple filing—but you have to make sure your demands [can be] met by the quota.”
Companies working with Chinese suppliers need to be sure to have registered trademarks for their products, and those products must also meet any regulatory requirements of the country in which the products will be sold. If a country doesn’t have any e-cigarette regulations, China’s regulations would apply to that country.
“We want to encourage everybody, the industry as a whole … to be compliant with the laws in the country that they are working with,” said Tian. “We want to healthily grow this e-cigarette environment, the e-cigarette industry,” he said. “To register [your] trademark is to protect your own back … protect yourself, protect your own brand.”
While synthetic products are illegal in China, the country does allow for the export of nontobacco nicotine products. At least one company has been granted a production license for such products. Tian said that China issues separate licenses for imported and exported products. “There’s a difference in the quotas. But once you have a domestic use license, you’re for sure going to have an export license. But they’re not the same. The quotas are different,” he said. “But if you’re only export, only export[s] are still needing [a] license.”
The EU is expected to introduce equivalent legislation for tobacco products, including nontobacco nicotine products, in the next few years, according to Pablo Cano Trilla, director of legal analysts for Tobacco Intelligence at ECigIntelligence. He also expects the heat-not-burn market to grow more rapidly than in previous years.
“[In the EU, heated tobacco] is a big boy in the category already: over $5 billion in market size in 2021,” said Trilla. “And we expect that by 2025, it will be over $13 billion. This means that, nowadays, it’s about two times the size of the vaping sector. In 2025, we would expect it to be four times bigger than vaping. So, it’s growing very fast in the EU.”
Trilla anticipates a future where only tobacco product flavors are allowed in the EU. While he doesn’t expect the trade block to implement U.S.-style regulations, with premarket authorization requirements, the growing concern about youth vaping could bring flavor bans. Trilla also anticipates plain packaging, progressive limitations on advertising and increases in environmental laws concerning e-cigarettes. He also said online sales are unlikely to continue.
“I guess you all know that with the [U.S. Food and Drug Administration], basically you need to get authorization from the authorities before your product is allowed in the market. Why don’t we think this will happen [in the EU]? Our guess [is] because of basically a practical reason. Any country in the world, any authority in the world, everyone knows what has happened to the vaping industry in the U.S.,” he said. “How complicated it has been for the United States government to manage the thousands and thousands of applications of PMTAs [premarket tobacco product applications]; how many legal challenges they are having now. Premarket approval [requirements] are unlikely in the EU.”
Reaction Time
Following the disruption caused by the Covid-19 pandemic, the nicotine industry trade show scene in Europe is getting back to normal. Several exhibitors and attendees in Dortmund said it was beneficial for the industry to be able to showcase its innovations again. Oliver Pohland, CEO of the German E-Cigarette Retailers’ Association, said the growth of InterTabac/InterSupply 2022, with over 600 exhibitors (including an estimated 160 first-timers) and the more than 12,000 visitors, highlights how interest remains high in e-cigarettes as a risk-reduced alternative to combustible cigarettes.
“A large number of exhibitors from our industry across Germany and beyond, including many who were attending InterTabac for the first time, took the opportunity to present new innovations and products for adult smokers,” he said. “Important contacts were made, and face-to-face conversations [were] conducted again after a long absence.”
Dennis Dahlmann, CEO of InnoCigs, and Dustin Dahlmann, chief financial officer at InnoCigs, said the draw of InterTabac is its high-quality visitors. “It is of great importance for us to generate new customer relationships and above all to maintain and deepen our existing contacts,” they said. “We had the impression that the quality of the show had improved again compared to three years ago.”
Rico Winkel, marketing manager at Dinner Lady, said that it was important to again be able to “present oneself and win potential new customers” face-to-face after InterTabac had been canceled for two years due to Covid. “This year, we’ve also been focusing on communicating new products,” Winkel said. “Also, the wide span of products we’ve [been] able to experience during these three days is giving us inspiration for evolving our own product range.”
Jan Muecke, CEO of the German Association of the Tobacco Industry and Next-Generation Products (BVTE), said his organization was able to “marvel at the innovative strength” of the next-generation products industry during InterTabac. “Society and the economy are in a state of upheaval, and this year’s show has illustrated that the entire tobacco industry is united as we go through it,” said Muecke. “With new ideas, solutions and innovations, the nicotine and tobacco industry is getting ready for a sustainable future.” —T.S.D.
Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.

November 1, 2022