Author: Taco Tuinstra

  • U.S. Urged to Bolster Post-Employment Rules

    U.S. Urged to Bolster Post-Employment Rules

    Image: bluraz

    Public policy experts are calling for stronger federal post-employment regulations as U.S. regulators, including those overseeing the tobacco business, are increasingly losing talent to the private sector.   

    A recent article in The Examination details how, over the past 15 years, nearly two dozen lawyers have left the U.S. Food and Drug Administration and its Center for Tobacco Products to advise, litigate for or work with the tobacco and vaping industry.

    “It seems like every time we get sued in the tobacco industry, a former FDA lawyer is leading the lawsuit,” Commissioner Robert Califf told an FDA oversight organization last year.

    After gaining  FDA experience, lawyers can significantly increase their salaries by moving to a major law firm or corporation. While a lawyer’s salary in the FDA’s chief counsel’s office, for example, starts at around $83,000, a first-year lawyer at a firm made on average $200,000 a year in 2023, according to the National Association for Law Placement.

    Daniel Aaron, a former FDA attorney, says lawyers who’ve left the agency to work on behalf of the tobacco industry not only increase their renumeration but can also have a powerful impact on what lands on store shelves.

    “It’s a huge advantage to getting your product to market.” said Aaron, now a University of Utah law professor. “Ex-FDA lawyers know what the agency is worried about, and how a client can maximize its options. They know not just what the law is, but they know how the FDA will enforce the law.”

    Federal post-employment rules also bar former employees from communicating with or lobbying a federal employee for two years on behalf of a client or employer under certain circumstances. That said, employees are allowed to work “behind the scenes” advising clients, according to the FDA’s post-employment guidelines. 

    Genevieve Kanter, a professor at the University of Southern California who co-published a study in 2023 on the revolving door in health care regulation, believes the rules should be strengthened if society is truly interested in preserving independent government.

    Kanter’s study focused specifically on conflicts of interest of employees at the highest level of the U.S. Department of Health and Human Services; It found that 38 percent percent of the political appointees from the FDA went into private industry, the fourth highest out of roughly two dozen offices and divisions.

    Eric Lindblom, director of the Center for Tobacco Products’ Office of Policy from 2011 to 2016, proposed blocking former staff from working for the tobacco industry for at least one or two years, in all cases, after leaving the policy office. “I thought it was really important that we had that independence,” said Lindblom, now a senior scholar at Georgetown University’s O’Neill Institute.

    The proposal went nowhere.

    The Examination is a publication supported by Bloomberg Philanthropies.

  • Japan Tobacco Reports Third-Quarter Results

    Japan Tobacco Reports Third-Quarter Results

    Masamichi Terabatake (Photo: JT Group)

    Japan Tobacco reported revenue of ¥2.21 trillion and adjusted operating profit of ¥681.7 billion at constant currency exchange rates for the third quarter of fiscal 2024, up 6.8 percent and 2.6 percent, respectively, from the comparable 2023 quarter. On a reported basis, core revenue increased 11 percent to ¥2.39 trillion and adjusted operating profit increased 1.2 percent to ¥672.5 billion. Operating profit increased 0.8 percent to ¥636.6 billion, and profit rose 0.1 percent to ¥442.4 billion.

    “The JT Group posted another set of strong results for the third quarter, mainly driven by solid pricing in the tobacco business,” said JT Group President and CEO Masamichi Terabatake in a statement.

    “Our solid market share momentum, combined with better-than-expected overall demand in a number of markets and the significant Ploom volume growth of 40 percent, resulted in total volume increasing by 2.2 percent year-on-year.

    “The geo-expansion of Ploom, our investment priority, has now reached 23 markets, and in Japan, the largest Ploom market, we continued to gain share in the HTS segment, reaching 11.8 percent quarter-to-date. Overall, RRP-related revenue increased by approximately 22 percent year-on-year.

    “Following the successful acquisition of Vector Group, I am very pleased to welcome the employees of VGR to the JT Group. I am confident that our expanded presence in the highly profitable U.S. market will improve the JT Group’s returns in combustibles and strengthen our mid[term] to long-term financial position through sustainable hard currency profit and cash flows.”

  • Altria Posts $6.26 Billion in Revenues

    Altria Posts $6.26 Billion in Revenues

    Photo: Maurice Norbert

    Altria Group reported net revenues of $6.26 billion for the third quarter of 2024, down 0.4 percent from the comparable 2023 quarter. Revenue net of excise taxes increased 1.3 percent to $5.34 billion.

    “Altria delivered outstanding results in the third quarter,” said Altria CEO Billy Gifford in a statement. “The smokeable products segment delivered solid operating companies income growth behind the resilience of Marlboro, and in the oral tobacco products segment, our MST brands continued to drive profitability while On! maintained momentum in the marketplace. We also continued to reward shareholders through a growing dividend and share repurchases while making investments in pursuit of our vision.”

    “We also announce today a new Optimize and Accelerate initiative designed to modernize our processes, which we believe will accelerate progress toward our vision, and we reaffirm our guidance to deliver 2024 full-year adjusted diluted EPS in a range of $5.07 to $5.15. This range represents an adjusted diluted EPS growth rate of 2.5 percent to 4 percent from a base of $4.95 in 2023.”

  • U.K. Announces Cigarette and Vape Tax Hikes

    U.K. Announces Cigarette and Vape Tax Hikes

    Image: John Gomez

    The U.K. government will increase tobacco duties by 2 percent above inflation for the remainder of the current parliamentary session and increase duty by a further 10 percent on roll-your-own tobacco this year, Finance Minister Rachel Reeves announced during the presentation of her budget plans on Oct. 30. From October 2026, the U.K. will also introduce a flat-rate duty on all vaping liquid alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking, reports Reuters.

    Smokers’ rights activists warned that the plans would backfire.

    “Increasing the tax on tobacco above inflation will drive even more smokers to the black market, fueling illicit trade and hurting legitimate retailers,” said Simon Clark, director of FOREST, in a statement.

    “It discriminates against consumers from poorer backgrounds for whom smoking may be one of the few pleasures available to them.

    “Instead of punishing the low-paid, the government should focus on improving the environmental conditions that drive many people to smoke in the first place.”

    The U.K. Vaping Industry Association (UKVIA) described the planned duty on e-liquid as a penalty for smokers seeking to transition to less harmful nicotine products.

    “Whilst a flat-rate tax versus one graded on different nicotine strengths is favored so as not to deter smokers who rely on higher concentrations of nicotine when they start transitioning over to vapes, the additional cost of £2.64 (including VAT) per 10 ml of e-liquid is a kick in the teeth for former adult smokers who have switched to vaping to quit their habits. It will also be the highest rate in Europe,” said UKVIA Director General John Dunne in a statement.

    “Some 3 million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS [National Health Service] millions of pounds in treating patients with smoking-related conditions. This announcement today deters adult smokers from considering vapes as a method to give up their habits and hits the lowest-paid who go for more price-sensitive e-liquid options, which currently start at 99 pence and will rise to £3.83, representing a shocking rise of 267 percent.

    “For a government that places a great focus on the NHS, it is a nonsensical move to put a severe punitive tax level on vaping when the category has done so much to reduce the number of adult smokers requiring medical attention by being a driving force in the decline of smoking rates to record-low levels in recent years.”

  • Tobacco Firms Object to New Tobacco Rules

    Tobacco Firms Object to New Tobacco Rules

    Image: Bilal Ulker

    Tobacco companies have objected to reforms to Bangladesh’s tobacco law proposed by the Ministry of Health and Family Welfare, reports BDNews24.

    In a letter addressed to the law and finance ministries, BAT and Japan Tobacco outlined their reservations and stressed the possibility of loss of government revenue due to the proposed revisions.

    However, according to the National Board of Revenue, tobacco revenues rose by 17.97 percent in fiscal 2005–2006 and 37.52 percent in fiscal 2006–2007 after the Smoking and Using of Tobacco Products (Control) Act passed in 2005.

    Following a 2013 amendment, tobacco revenues rose by 25.51 percent in the following fiscal years.

    A.B.M. Zubair, executive director of the anti-smoking group PROGGA, urged officials to ignore the tobacco companies’ objections. “The health ministry’s initiative to strengthen the existing tobacco control law aims at protecting the nonsmokers from secondhand smoke and shielding the youth from tobacco’s harmful effects,” he was quoted as saying.

    “Therefore, the draft amendment must be passed immediately, undeterred by the ill tactics of the tobacco companies.”

  • Philip Morris to Close German Factories

    Philip Morris to Close German Factories

    Image: Evgenia Parajanian

    Philip Morris International is closing two tobacco factories in Germany due to weak demand across Europe, reports Bloomberg.

    The multinational said on Oct. 29 that demand for cigarettes had fallen significantly in recent years and that the trend is likely to continue. Demand for rolling tobacco, made at the company’s Dresden plant, is also in decline.

    PMI employs 372 workers at its factories in Berlin and Dresden, which will close in the first half of next year. Philip Morris said it would begin consultations with employees and work councils, and seek “socially acceptable solutions” for its workforce.

    According to Jan Otten, PMI’s managing director of operations in Germany, the company is constantly reviewing its business processes to ensure operational efficiency. “We are aware that difficult but necessary decisions have to be made in order to adapt to current market developments,” he was quoted as saying in a press note.

    PMI has been working to transition its customers to alternative products such as vapes, heated tobacco and oral nicotine pouches. It has set a target of reaching two-thirds of sales from cigarette alternatives by 2030.

    The announcement comes as Germany’s manufacturing sector is experiencing a prolonged period of weakness, bogged down by high energy costs, weak demand at home and abroad and increased foreign competition.

    The downturn has fueled concern about Germany’s attractiveness as an industrial location.

  • California County Bans Filtered Cigarettes

    California County Bans Filtered Cigarettes

    Photo: lienkie

    The Board of Supervisors of Santa Cruz County, California, on Oct. 29 decided to ban the sale of filtered cigarettes and cigars, making it the world’s first jurisdiction to do so, according to Action on Smoking and Health (ASH).

    The sales ban will apply to all unincorporated areas of the county and requires that two of the four incorporated cities in the county pass similar ordinances before coming into effect.

    Cigarette filters are the world’s leading source of trash and the leading source of plastic pollution. Globally, approximately 4.5 trillion used filters are discarded into the environment every year. Filters are nonbiodegradable and cannot be feasibly collected or recycled.

    “There are no downstream solutions to the plague of cigarette filters,” said Laurent Huber, executive director of ASH. “The only practical choice is to eliminate them from the market.”

    “In addition to adding microplastics to the environment, hazardous chemicals from tobacco smoke that are trapped in the filters leach into water and soil,” said Georg E. Matt, co-director of the Center for Tobacco and the Environment at San Diego State University. “Cigarette filters have no health benefits to smokers; they just make it easier to get people addicted and keep them addicted.”

    Around the world, several jurisdictions are also considering filter bans. Environmental ministries in Belgium and the Netherlands have recommended banning filters, and over the past several years, bills have been introduced in several U.S. states. Current negotiations at the United Nations on a treaty to end plastic pollution include text banning filters worldwide.

    The tobacco industry added filters to cigarettes in the 1950s in response to growing health concerns about smoking, but critics contend that they don’t reduce the health risks. More than 98 percent of cigarettes are filtered.

  • FDA to Review 2ONE Marketing Application

    FDA to Review 2ONE Marketing Application

    The U.S. Food and Drug Administration has accepted for review 2ONE Labs’ premarket tobacco product application (PMTA) for 2ONE brand nicotine pouches.

    According to 2ONE Labs CEO Vincent Schuman, this means that the company’s application will now enter the next critical phase of the FDA review process. “Our company will continue to fully fund this application through to its successful completion, and our wholesale, retail and sponsorship partners should view this ‘acceptance’ as a sign of our ability to navigate this complex PMTA process and our unwavering commitment to support the long-term availability of the 2ONE brand in the U.S. market,” Schuman said in a German-language statement.

    “We have developed 2ONE nicotine pouches for adult consumers—21 and older—who find it difficult to switch from combustible or traditional oral tobacco products. The availability of the 2ONE brand in the market over the past five years and the interest and growth our brand has achieved through strong retail partnerships, such as with Circle K, have shown that it is possible even for innovative companies to identify and introduce unique brands that truly offer adults the perfect transition product.”

    Earlier this month, 2ONE Labs filed a trademark infringement lawsuit and a preliminary injunction against Imperial Brands subsidiaries’ Zone nicotine pouch trademark. The suit alleges that Imperial’s Zone products willfully infringe the 2ONE nicotine pouch brand.

  • OECD Urges Tax Reform in Latin America

    OECD Urges Tax Reform in Latin America

    Photo: Samuel

    Countries in Latin America and the Caribbean (LAC) could reduce tobacco consumption and its societal cost by reforming the design and administration of tobacco taxes, according to a new OECD report.

    The authors of the study argue that the social and economic costs of tobacco use across LAC countries outweigh the revenue from tobacco taxes. Smoking-attributable medical costs can reach up to an average of 1.5 percent of GDP per year.

    “Taxes play a vital role in limiting the social and economic costs of smoking,” said OECD Secretary-General Mathias Cormann in a statement. “Governments should be sure to maintain, and where necessary strengthen, the stringency of tobacco taxation.”

    The most common policy gaps, according to the report, are lack of mechanisms to ensure a minimum amount of tobacco excise tax is paid and that taxes are not applied consistently across different tobacco products, including new tobacco and nicotine products. Tax rates on cigarettes remain below the World Health Organization’s recommendation of at least 75 percent of the retail price.

    The OECD report recommends that LAC countries increase tobacco excise tax rates, seek to account for the strategic responses of the tobacco industry when designing tobacco tax policy, strengthen tobacco tax administration, introduce accompanying measures to tackle illicit tobacco trade, ensure that tobacco excise and income tax policies are coherent and strengthen domestic and regional tobacco tax cooperation.

  • Maldives Intercepts Illegal Cigarette Shipment

    Maldives Intercepts Illegal Cigarette Shipment

    Photo: Sergey

    The Maldives Customs Service intercepted more than 8,000 cartons of cigarettes illegally shipped into the country on a fuel tanker operated by Hawks, one of the nation’s leading fuel importers and distributors, reports The Edition.

    Under a court order, authorities subsequently searched the Hawks Boatyard on suspicion that more cigarette cartons may be stored there. “So far in this operation, approximately 1,695 million cigarette sticks of Manchester brand have been found during the search of Hawks Boatyard, in the accommodation block and workshop,” the customs service wrote in a statement.

    The agency said that the cigarettes were brought in on MT Hawks Javaahiru and taken to Thilafushi on a local boat owned by the company, which was unloaded after regular business hours.

    A senior Hawks official told Mihaaru News that company management was not involved in the smuggling operation. “We are also hearing that this was done by some employees in connection with some foreigners,” he was quoted as saying. “Our management only learned of this when police also came with a court order to search the premises,” the official said.

    The official said Hawks was cooperating with authorities and would conduct an internal investigation.