Author: Taco Tuinstra

  • TPB Quarter In Line With Expectations

    TPB Quarter In Line With Expectations

    Photo: MIND AND I

    Turning Point Brands (TPB) reported net sales of $101.72 million in the three months that ended Sept. 30, down from $107.8 million in the comparable quarter of 2022. Net income was $10.83 million, compared with $11.54 million in the prior-year quarter.

    “Our third quarter results were consistent with our expectations,” said TPB President and CEO Graham Purdy in a statement.

    “The Zig-Zag segment was stable sequentially from the second quarter and notwithstanding some transitory headwinds posted its third-highest revenue quarter. Stoker’s had another solid quarter of performance led by double-digit growth year-over-year in Stoker’s MST. We further de-levered the balance sheet with an opportunistic purchase of $15 million in aggregate principal amount of our convertible notes during the third quarter.

    “With a new $75 million ABL revolving credit facility, our strong cash balance and our free cash flow generation, we now have more than ample liquidity to address the remaining balance of convertible notes maturing next year.”

  • Online Shopping Spikes After Flavor Restrictions

    Online Shopping Spikes After Flavor Restrictions

    Photo: Ngampol
    Eric Leas

    Online shopping for cigarettes and vaping products increased significantly in the weeks following the implementation of a 2022 California law prohibiting the sale of flavored tobacco products.

    Reporting in Tobacco Control, researchers at the Herbert Wertheim School of Public Health and Human Longevity Science at University of California San Diego assessed the impact of California’s statewide flavor restriction on online shopping behavior among consumers. Comparing observed rates of shopping queries with expected rates, researchers discovered that shopping queries were 194 percent higher than expected for cigarettes and 162 percent higher than expected for vape products.

    “Retailer licensing programs have proven to be effective in enforcing tobacco control laws. However, the exclusion of e-commerce retailers from these programs can undermine their impact,” said principal investigator Eric Leas in a statement.

    Despite the flavor restriction, analysis of the first 60 websites returned in the search queries presented at least two online retailers offered access to flavored vaping products or menthol cigarettes to consumers in California—with one query returning as many as 36 websites (60 percent of the search results).

    The study authors recommend strengthening regulations to include e-commerce retailers within the scope of retailer licensing programs.

  • Vapers Cheer EU Recognition of E-cigs as Possible Quit Aid

    Vapers Cheer EU Recognition of E-cigs as Possible Quit Aid

    Photo: Maren Winter

    The EU’s Subcommittee on Public Health (SANT) has endorsed the potential role of vaping in supporting smoking cessation, according to the World Vapers’ Alliance (WVA).

    Parliament’s report on non-communicable diseases acknowledges that vaping is a way for smokers to gradually quit.

    “Parliament’s recognition that vaping can help smokers quit is a step in the right direction,” said WVA Director Michael Landl. “With the well-documented success of vaping as a smoking cessation aid, it’s crucial for the EU to fully embrace this tool within its strategy to reduce smoking-related illnesses. Vaping not only offers a way out for smokers but is instrumental in achieving public health goals.”

    Despite this recognition, the WVA views the report’s proposal to extend smoking bans to vaping as problematic.

    “Treating vaping the same as smoking in public spaces sends the wrong message to smokers who want to quit,” said Landl. “There is no evidence of harm from secondhand vaping. The Subcommittee must reconsider the broader impact, including the risk of former smokers relapsing. A more thoughtful regulatory approach based on common sense is imperative to ensure that vaping remains a viable option for those committed to quitting cigarettes.”

    The WVA believes that for the EU to significantly lower smoking rates and effectively tackle NCDs, supportive measures for harm reduction strategies like vaping must be integrated into public health policies.

  • No Added Harm from Vape Substitution: Study

    No Added Harm from Vape Substitution: Study

    Photo: fedorovacz

    A new systematic review conducted by the Center of Excellence for the acceleration of Harm Reduction on the available scientific research showed no difference in respiratory parameters in human clinical tests on the respiratory effects of electronic nicotine delivery systems (ENDS) use in participants who smoke tobacco cigarettes. 

    In their study “Respiratory health effects of e-cigarette substitution for tobacco cigarettes: a systematic review,” the researchers analyzed 16 studies from 20 publications. They found that the large majority of the studies showed no difference in respiratory parameters. According to the authors, this indicates that electronic nicotine delivery systems substitution for smoking likely does not result in additional harm to respiratory health.

    One of the problems the researchers found during their evaluation is that many studies were not of sufficient duration for observing any harmful or beneficial effects because these may take time to manifest. In fact, the researchers observed a general low quality of the studies included in the review, with 10 of 16 studies rated at high risk of bias. 

    In light of the findings of no change in respiratory function plus the presence of reporting spin bias, the researchers call for long term studies that include diverse participants and to assess smoking behavior and history. Furthermore, they note that exclusive ENDS use and dual use with cigarettes should be identified as separate categories for analysis and findings. They also stressed that additional studies are necessary to assess the potential benefits or risks of e-cigarette substitution for tobacco cigarette smoking.

  • King’s Speech: Activists Decry Generational Ban

    King’s Speech: Activists Decry Generational Ban

    Image: Michael

    Smokers’ rights group Forest condemned the U.K. government’s official announcement of legislation that will deny future generations of adults the right to purchase tobacco.

    During the opening of the new session of Britain’s parliament today, King Charles presented the government’s plans for new legislation, which includes a generational tobacco bill, as reported by the BBC and other news outlets.

    The proposed legislation would make it illegal for anyone born on or after Jan. 1, 2009, to ever legally buy cigarettes, effectively raising the legal age of purchase by one year, every year.

    The government is also looking to bring in rules regulating the flavors and descriptions of vapes that critics say are targeted at children.

    “This is the worst form of nanny state regulation because it treats consenting adults like children,” said Forest Director Simon Clark.

    “If you’re old enough to vote, drive a car, join the army, and purchase alcohol, you’re old enough to buy cigarettes and other tobacco products.

    Clark warned that the legislation would boost the black market.

    “The biggest benefactor from prohibition won’t be public health but criminal gangs and other illicit traders,” he said.

    “Given everything else that is going on in the world, at home and abroad, it’s staggering that a Conservative government would waste valuable parliamentary time banning the sale of tobacco to adults who are perfectly capable of making informed decisions for themselves.”

  • 22nd Century Expands Nicotine-Reduction IP

    22nd Century Expands Nicotine-Reduction IP

    Photo: Tobacco Reporter archive

    22nd Century Group has signed a reduced nicotine content technology license with North Carolina State University. The latest license provides additional modes of efficiently producing reduced nicotine content tobacco plants, extending 22nd Century’s IP portfolio. The license will provide 22nd Century Group exclusive rights to the technology until 2042.

    “Our reduced nicotine content technologies support the first and only FDA MRTP [modified-risk tobacco product] authorized combustible smoking harm reduction products that meet adult smokers where they are today, providing a new solution to help them smoke less and achieve their health goals,” said 22nd Century Group interim CEO John Miller in a statement.

    “This latest license further enhances and expands on our capabilities to produce reduced nicotine content tobacco plants as we work to bring these innovative products to market for the betterment of public health, including by enhancing our capability to produce reduced nicotine content tobacco plants suitable for international markets that are opposed to genetically modified plants.”

    This latest license further enhances and expands on our capabilities to produce reduced nicotine content tobacco plants.

    Under terms of the exclusive license, 22nd Century will have full use of the patent rights and plant materials to develop and commercialize reduced nicotine content tobacco using this latest non-GMO technology, which further enables worldwide marketability of the company’s VLN reduced nicotine content products.

    “22nd Century is pioneering a new pathway in the global fight to end the health and economic harms of smoking, offering both GMO and non-GMO solutions suitable worldwide,” said Miller. “Extensive clinical research, much of it funded by national government health agencies, has consistently documented the benefit of reduced nicotine content tobacco products in helping adult smokers to break the bonds of nicotine addiction and smoke less over time. Reduced nicotine content solutions, such as our VLN products, provide a new solution to adult smokers who want to quit, but have not found success with traditional cessation products.”

  • WSJ: Tobacco Firms Losing Pricing Power

    WSJ: Tobacco Firms Losing Pricing Power

    Photo: darren415

    A combination of inflation and shifting smoking habits is making it more difficult for tobacco companies to offset declining cigarette volumes with higher prices, according to an article in The Wall Street Journal.

    According to the paper, one of the attractions of investing in tobacco stocks has been cigarette manufacturers seemingly unlimited ability continuously grow their profits through price hikes even as overall cigarette sales are in long-term decline.

    The recent higher-than-expected U.S. volume declines are increasingly testing that strategy, however. Over the three months through September, U.S. cigarette sales fell 8 percent year-on—almost double the long-term average.

    Altria Group suspects many smokers have been migrating to illegal disposable vapes, the market for which has grown by one fifth recently. In October, the cigarette manufacturer announced “sweeping litigation” against 34 manufacturers, distributors and online retailers of illicit disposable e-vapor products that are unlawfully marketed and sold in California and other U.S. states.

    Stronger against illicit vapes by the Food and Drug Administration could potentially stabilize cigarette volumes.

    In addition to competition from illicit vapes, premium brands such as Marlboro face additional pressures as inflation makes consumers more price sensitive. Smaller brands offering discounts have been gaining market share, with a 15 percent increase in sales of the cheapest cigarettes over the past year.

    At a national average of $8.77-a-pack including taxes, Marlboro is now 43 percent more expensive than cheaper rivals, according to Altria data, compared with 31 percent five years ago. 

    One of the beneficiaries of downtrading has been Vector group, whose Montego brand is now the biggest discount cigarette in America.

    Despite the pressures, The Wall Street Journal believes it is unlikely that Altria will take dramatic actions. Thirty years ago, the company cut the cost of Marlboros by 20 percent to close a gap that had opened between it and cheaper brands.

    Traumatized investors sold their shares in the company en masse in an event that became known as “Marlboro Friday.”

  • BAT Designer Urges Responsible Creations

    BAT Designer Urges Responsible Creations

    Photo: KFF

    Product designs should not center only on providing attractive appearance but also encompass meaning, value and responsibility, according to Ken Kim, head of design at the BAT Group.

    “The role of designers is changing, from simply designing products to assuming social and environmental responsibilities,” Kim said at the Design Korea conference, which took place Nov. 1-5, 2023, in Seoul. “This [new role] is not a choice for individual designers to make, but a common goal the industry and society must undertake together in order to move forward.”

    Kim is the first Korean to head BAT’s product design division. His portfolio includes tobacco heating products such as Vuse Epod 2, Glo Pro Slim and Glo Hyper X2. 

    During the conference, which was reported in The Korea Herald, Kim reviewed measures on how designs could address social issues such as carbon neutrality amid heightened regulations, emphasizing that designs could function as an important key to the tobacco industry’s sustainable future.

    He stressed the importance of designing products in ways that do not appeal to underage consumers. “We need a balanced design strategy that does not stimulate the curiosity of minors, through conducting analysis of design preferences by age groups,” he was quoted as saying. 

  • Documentary Celebrates ‘Swedish Miracle’

    Documentary Celebrates ‘Swedish Miracle’

    We Are Innovation (WAI), an activist group, will pre-screen the documentary How Sweden Quit Smoking to a select audience on Nov. 15, 2023, at RSA House in London.

    Directed by award-winning Polish filmmaker Tomasz Agencki, the documentary explores how Sweden managed to reduce smoking to levels unrivaled in the European Union and elsewhere.

    According to its makers, How Sweden Quit Smoking highlights the determination, innovation and creativity that drove the Swedes toward a milestone unparalleled in contemporary times. The documentary features the perspectives of scholars, doctors, innovators and activists while demonstrating the interplay of science, politics, history and personal responsibility at the center of this journey.

    “We are incredibly thrilled to bring this important documentary to the broad audience,” said WAI CEO Federico Fernandez in a statement. “How Sweden Quit Smoking will inspire stakeholders, decision-makers, activists and the general public to pursue innovation and creativity toward a better future for all. This event is a must-attend for anyone looking to stay ahead of the curve in leveraging effective innovation methodologies to help transform the world’s most pressing problems.”

    “The goal of this documentary is to generate a positive impact on society,” said Agencki. “Through the journey of Sweden toward becoming a smoke-free nation, I hope to inspire people worldwide to embrace innovation, personal responsibility and to work toward a better society.”

    Registration is available through Eventbrite.

  • Imperial’s Performance ‘in Line With Guidance’

    Imperial’s Performance ‘in Line With Guidance’

    Photo: Igor Golovnyev

    Imperial Brands is on track to deliver in line with its previous full-year guidance, the company announced in a trading update. On a constant currency basis and including Russia in the comparable prior-year period, the company expects tobacco and NGP net revenue growth in the low single digits and group adjusted operating profit growth to accelerate to the lower end of its mid-single-digit range. (Imperial Brands transferred its Russian business to local investors in April 2022.)

    At current rates, the company anticipates foreign exchange rates to provide a boost of approximately 2 percent to its full-year net revenue and adjusted operating profit.

    “Focused investment in our priority combustible markets is expected to deliver a further modest gain in the aggregate share for our top 5 markets at the full year,” the company wrote in its update. “This will complete three consecutive years of improved market share performance following several years of decline.

    Imperial expects market share growth in the U.S., Spain and Australia to offset declines in Germany and the U.K. “This positive aggregate share performance has been achieved while delivering strong pricing across all five markets and reflects the strengthened equity of our brands and our improved resilience as a result of our recent targeted investments,” Imperial wrote.

    “As anticipated, at constant currency, our tobacco net revenue growth improved in the second half of the year as continued strong pricing helped to offset the relatively higher volume declines against historic averages.

    “Tobacco net revenue growth has remained strong in Europe and the AAACE region, more than offsetting declines in the U.S. Our U.S. cigarette business has outperformed with continued growth in cigarette net revenue, although, as expected, this has been more than offset by a decline in mass market cigar net revenue against a strong comparator period.”

    Imperial Brands’ full-year NGP revenue growth accelerated in the second half of the year, driven by strong growth in Europe.

    In its trading update, Imperial also announced a further £1.1 billion ($1.36 billion) share buyback for fiscal 2024, a 10 percent increase on the £1.0 billion buyback in fiscal year 2023.

    Imperial will announce its full-year results on Nov. 14.