Author: Taco Tuinstra

  • U.K. Mulls Single-Use Vape Ban

    U.K. Mulls Single-Use Vape Ban

    The United Kingdom will likely announce a public consultation next week on a plan to ban single-use vapes, reports The Guardian.  While the government has accepted the benefits of e-cigarettes in helping smokers quit, it is increasingly concerned about the environmental impact and youth appeal of disposable products.

    Research conducted by Material Focus suggested vapers in the U.K. throw out 5 million single-use e-cigarettes every week, a fourfold increase on 2022. This amounts to eight vapes a second being discarded, with the lithium in the products enough to create 5,000 electric car batteries a year, according to the organization.

    Smokers’ rights group Forest said that if the U.K. government’s aim is to reduce smoking rates, banning disposable vapes would be “a significant own goal.”

    “Vaping has been a huge success story, with millions of smokers choosing to switch to a product that is far less risky to their health. Part of that success is due to disposable vapes which are convenient and easy to use,” said Forest Director Simon Clark.

    “The answer to the problem of children vaping is not to ban a product many adults use to help them quit smoking, but to crack down on retailers who are breaking the law and selling e-cigarettes to anyone under 18.”

    The answer to the problem of children vaping is not to ban a product many adults use to help them quit smoking, but to crack down on retailers who are breaking the law and selling e-cigarettes to anyone under 18.”

    While stressing that the plans to ban single-use vapes were only at the consultation stage and no decisions had been made yet, the U.K. Vaping Industry Association (UKVIA) said it too opposed the idea.  

    “We welcome the idea of a consultation on disposables as it’s key that the industry gets the opportunity to highlight the benefits, and therefore continued need, for single-use vapes as a smoking cessation method,” said UKVIA Director General John Dunne in a statement.

    A ban, however, is not the answer, he cautioned. “Some 220 people die from smoking every day, 365 days a year,” said Dunne. “Disposables have proved to be highly effective in helping smokers quit their habits due to their ease of use, accessibility and low entry price points. They are one of the main reasons as to why the number of adult smokers in Great Britain has hit record lows for the last two years according to the Office for National Statistics.”

    We welcome the idea of a consultation on disposables as it’s key that the industry gets the opportunity to highlight the benefits, and therefore continued need, for single-use vapes as a smoking cessation method.

    Dunne suggested that the issues of youth vaping and environmental damage are due in part to lax enforcement of rules designed to prevent such problems. He pointed to recent research by Arcus Compliance showing that fines handed out to retailers for underage and illicit product sales amounted to just over £2,000 ($2,494)  in 11 major provincial U.K. cities between 2021-2023.

    Dunne also warned of unintended consequences of banning disposable vapes. According to him, the black market already represents over 50 percent of the single use market in the U.K. “This would only accelerate with a ban, he cautioned.

    Dunne further highlighted industry efforts to tackle electronic waste, citing research by Waste Experts showing that disposable cigarettes are highly recyclable. “However, the biggest challenge is getting consumers to recycle their vapes and providing the waste disposal facilities in public places and at points of use that will enable higher recycling rates,” he said.

    In a note to investors, TD Cowen said a ban on disposable vapes could  benefit global tobacco companies with vapor exposure. While multinationals such as British American Tobacco and Philip Morris International have exposure to the disposable vape market in the U.K., category economics are more favorable for pod-based systems, according to the investment bank.

  • Poland: PMI Invests in HnB Stick Production

    Poland: PMI Invests in HnB Stick Production

    Photo: Hamik

    Philip Morris International will invest PLN1 billion ($229.81 million) in the production of heated tobacco sticks at its factory in Krakow, Poland, reports PAP.

    “Today, Philip Morris International has decided on a new investment. We want the production of a new generation of heated tobacco sticks to take place in our factory in Krakow,” Michal Mierzejewski, president of PMI for northeast Europe, told journalists on Sept. 12.

    “We estimate that this investment… will create many jobs,” he added.

    According to Mierzejewski, the tobacco sticks produced at the Krakow plant will be distributed both in Poland and on the international market.

    Since 1996, PMI has invested nearly PLN25.5 billion in Poland, Mierzejewski added.

  • Vaporesso Licensed to Sell in UAE

    Vaporesso Licensed to Sell in UAE

    The United Arab Emirates Ministry of Industry and Advanced Technology (MoIAT) has licensed Vaporesso to sell in the country, the company announced in a press release.

    After nearly a year of strategic planning and application, Vaporesso received MoIAT certification for over 10 models of its products, including the Luxe XR, XROS 3 Mini, XROS 2, XROS 3, XROS Mini, XROS Nano, Zero S, Luxe X, Luxe QS, OSMALL 2, and GEN PT 60.

    “As the first open-system vaping device brand licensed by the MoIAT, we will continue our commitment to providing market-leading vaping products with unmatched quality and functionality,” said Jimmy Hu, vice president of Vaporesso.

    The first batch of MoIAT-certified products with compliant packaging has now arrived in the UAE and gone through taxation. This allows distributors, retailers and consumers to legally sell, stock and buy Vaporesso products with assured quality. Meanwhile, all future Vaporesso products will undergo MoIAT registration, ensuring quality and innovation for partners and consumers.

    The UAE government has enforced strict regulations to govern all nicotine-containing components used in e-cigarettes, refill packages, e-liquids and tobacco products sold in the country. The regulations demand that manufacturers and companies of vaping devices must meet Emirates Authority for Standardization and Metrology standards, which set out strict quality and safety requirements for e-cigarettes and related products before placing them on the market.

  • VPZ Expands U.K. Footprint

    VPZ Expands U.K. Footprint

    VPZ, the largest vaping retailer in the U.K., will be increasing its footprint to over 160 stores by opening 15 new stores across the U.K. by the end of 2023.

    The growth comes amid VPZ’s launch of its new vape recycling service in partnership with WasteCare across all its stores in response to the rising environmental concerns over disposable vapes.

    “We are delighted to be continuing our brand expansion and mission of supporting adult smokers to quit whilst bringing our own innovative recycling services to tackle the negative environmental impact of disposable vaping,” said Doug Mutter, director at VPZ.

    VPZ is also calling on the U.K. government to introduce tighter controls and licensing for selling vaping products both in physical and online retail environments.

    To date, Edinburgh-based VPZ has already helped over 700,000 smokers in the U.K. quit since it was established in 2012, according to the retailer.

    In March, VPZ said it planned to have opened 20 additional stores by the end of the year as its expansion plans continue.

  • DFA Signs Anti-Illicit Trade Declaration

    DFA Signs Anti-Illicit Trade Declaration

    Duty Free Americas has signed the Duty Free World Council (DFWC) and Tax Free World Association (TFWA) anti-illicit trade declaration.

    With over 200 stores in airports and border crossings throughout the Americas, the addition of Duty Free Americas to the declaration marks a major extension of the duty-free and tax-free industry’s public commitment to combat illicit trade, counterfeiting and intellectual property theft.

    The DFWC and the TFWA launched the anti-illicit trade declaration in July 2023. By signing the declaration, signatories commit to a zero-tolerance approach to illicit trade within their own organization.

    “The DFWC/TFWA anti-illicit trade declaration continues to grow in strength, and I am very pleased to welcome Duty Free Americas as the most recent signatory to this important initiative,” said DFWC President Sarah Branquinho.

    “Our industry boasts one of the most transparent, trusted and secure supply chains in the world, and this campaign sends a clear message to our millions of customers around the world that they can shop in duty[-free] and tax-free stores around, confident that the products they are purchasing are authentic and genuine.

    “Signatories to this declaration are making a firm public commitment to never permit any form of illicit trade, counterfeiting or intellectual property theft and to hold their commercial partners to that same standard. We welcome the support of any travel retail operator or supplier [who] wishes to be a part of the declaration, and we continue to encourage members of our industry to join us.”

  • 22nd Century Increases VLN Availability

    22nd Century Increases VLN Availability

    22nd Century Group’s VLN reduced-nicotine content cigarettes are now available at more than 1,200 drug store locations across Texas, Florida, Illinois, North Carolina and Georgia. With this most recent addition, VLN is available in more than 4,000 stores across 16 states compared with approximately 1,100 stores on July 1.

    “We are excited to launch the first drug store chain selling our FDA [Food and Drug Administration]-authorized VLN tobacco harm reduction products, adding 1,200 stores across five key state markets to our growing roster of convenience store points of sale,” said John Miller, interim CEO of 22nd Century Group, in a statement. “VLN offers a new, clinically researched solution helping adult smokers reduce their smoking rate and the associated harms of smoking over time.”

    “VLN users continue to report an overwhelmingly positive experience in our market research, and most say it has helped them reduce consumption of their regular cigarette brand,” said Miller. “Research with VLN users indicates that while most nonprescription methods of quitting or reducing smoking are strongly disliked, more than 75 percent of VLN users say they like their experience with the product. As a result of using VLN, 80 percent of adult consumers report a reduction in usage of their regular brand, and many want to share their positive experience with other adult smokers.”

    VLN is the first and only FDA-authorized combustible cigarette labeled as a tobacco harm reduction product.

  • Tradition and Technology: Indonesia

    Tradition and Technology: Indonesia

    Photo: Ink Drop

    In the tobacco industry, Indonesia is best known for its rich variety of leaf tobaccos, its characteristic clove cigarettes and its relative tolerance for smoking; the Southeast Asian nation is one of the few countries that has neither signed nor become a party to the Framework Convention on Tobacco Control.

    While those characteristics still hold true, they are increasingly only part of the story, as Indonesia now also manufactures some cutting-edge new nicotine products. Attracted by the country’s rapidly growing economy, young workforce and business-friendly policies, investors have been setting up shop here to supply not only the large domestic market but also other countries in the region.

    For example, in January 2023, Philip Morris International inaugurated a factory for the production of IQOS HEETS consumables in Karawang, West Java. Leading atomization companies such as Smoore, have built production facilities, as well. And in September 2023, KT&G announced the construction of a second factory in Indonesia, which in addition to traditional cigarettes is slated to produce heat-not-burn products.

    The combination of heritage and forward-thinking makes Indonesia a market to watch.

    Indonesia Keeps Tax Rates

    The government will also evaluate the price differences between cigarette categories, which have contributed to downtrading.

    Sampoerna Profit Dips

    The company’s results were impacted by above-inflation tax hikes and weakening consumer purchasing power in Indonesia.

  • USAID and Pyxus Partner in Malawi

    USAID and Pyxus Partner in Malawi

    Photo: PAM

    The U.S. Agency for International Development (USAID) will award Pyxus Agriculture Malawi (PAM) $14.6 million over the next five years, Pyxus announced on its website. The money will support the company in maximizing its operational effectiveness and minimizing its exposure to financial risk as it continues to drive sustainable agriculture developments in Malawi.

    The USAID award compliments PAM’s investment to date and offsets certain company expenditures going forward as both entities work to increase the availability of high-quality, climate-smart groundnut seed varieties, boost groundnut production and processing, support improved farmer livelihood and counteract the nation’s high rate of deforestation.

    “Our company has a 30-year history of operating in Malawi and has one of the largest networks of smallholder farmers—most operating on two hectares of land or less—in the country. We have worked diligently to help our contracted farmers successfully grow and market high-quality, sustainable crops, thus improving the livelihood of the farmer, their families, their communities and the country as a whole,” said Pyxus President and CEO Pieter Sikkel, during the partnership signing ceremony at PAM’s state-of-the-art groundnut processing facility in Lilongwe, Malawi.

    “Pyxus is honored to receive this $14.6 million award from USAID, which helps our company to further build capacity, expand impact throughout the legume and forestry value chains, and unlock value for Malawi and its farmers,” added Sikkel.

    Pyxus is honored to receive this $14.6 million award from USAID, which helps our company to further build capacity, expand impact throughout the legume and forestry value chains, and unlock value for Malawi and its farmers.

    The agreement aligns with Pyxus’ global environmental, social and governance goals and identifies five focus areas to achieve success: improve Malawi’s legume seed production system through the acceleration of PAM’s current research, breeding and distribution of new high-yielding, climate-resilient, market-demanded and more nutritious legume seed varieties; increase farmer access to high-quality crop inputs and hands-on training of good agricultural practices while simultaneously working to diversify PAM’s contracted farmer base—these efforts enable farmers to increase yields, sales and incomes, driving the development of the country’s commercial agriculture sector; help address smallholder farmer financing roadblocks, which currently put a significant limitation on crop production and overall market success, through fair and affordable crop input financing—minimizing financial roadblocks can help farmers increase yields and improve their overall livelihood; enhance the quality and value of Malawi groundnuts through increased processing capacity of PAM’s groundnut facility, driving job growth, the country’s export opportunities and value addition, resulting in a more impactful private sector contribution to Malawi’s economic growth; and combat deforestation and forest and soil degradation by further developing PAM’s sustainable forestry operation and the introduction of new, innovative energy solutions and soil health amendments to the farmer.

    PAM Managing Director Ronald Ngwira (right) with employees at the company’s groundnut facility in Lilongwe (Photo: Taco Tuinstra)

    “The partnership we’ve launched today, with USAID and Pyxus, will invest in Malawians to accelerate opportunities for more sustainable, inclusive and resilient economic growth,” said USAID Deputy Administrator Isobel Coleman during the signing ceremony.

    Coleman added that the partnership contributes to soil health improvements, utilization of clean energy generated from recycled agricultural waste and increasing availability of nutritious food for the Malawian people. 

    The PAM operation was founded in 2019 under Pyxus’ Value-Added Agricultural Products division. Since its inception, PAM has opened one of the largest groundnut processing facilities in Africa, gained government approval to commercialize five new legume seed varieties, cultivated and maintained more than 7,000 hectares of forestry, and unlocked additional income potential for over 20,000 smallholder farmers.

    Tobacco Reporter visited Pyxus Groundnut factory in the first half of 2023 and reported on the operation in its June print edition (see “A Gamble on Goobers“).

  • Zimbabwe: Seedbeds 16 Percent Larger

    Zimbabwe: Seedbeds 16 Percent Larger

    Photo: Juan

    The size of the seedbed sown for Zimbabwe’s 2023-2024 tobacco crop is 15.5 percent larger than in the previous season, reports New Zimbabwe, citing the Tobacco Industry and Marketing Board (TIMB).

    “Preparations for the 2023-2024 tobacco season are progressing well. Currently, a total of 98,217 hectares of seedbed area has been sown; this is in comparison to 84,985 hectares sown during the same period last year. The first of September marked the earliest date for planting irrigated tobacco,” the TIMB stated.

    “Currently, growers are discing and preparing ridges for the transplanting of hardened seedlings.”

    The TIMB has added shisha tobacco to the list of tobaccos to be grown. For the 2023/2024 season, 4,390 grams of shisha tobacco seed covering 549 hectares has been disbursed to growers. (Also see “Great Expectations,” Tobacco Reporter, May 2022.)

    After a call encouraging registered growers to renew their grower numbers for the next season and a call for first-time growers to apply at the TIMB regional offices, 51,695 growers have registered for the 2023/2024 season.

    “We have new contractors coming on board for the 2023/2024 season. Six contractors have been licensed to increase the number of tobacco financiers for this season,” said the TIMB.

    Zimbabwe’s tobacco growers produced a record 291.1 million kg of tobacco worth $882.2 million this season. The country’s aim, formulated in the government’s Tobacco Value Chain Transformation Plan, is to reach 300 million kg of tobacco a season by 2025. 

    The regulator also announced measures to improve trade practices.

    “TIMB has put in place some key strategies to tackle the issues of mis-invoicing and transfer pricing that have been negatively impacting the tobacco industry. Among the strategies is the Compliance Administrative Framework that was implemented in 2021 and the setting up of a new Compliance Administration Department,” the regulator said.

    “Before contracting commences, all interested companies submit their commitment documents, which show their capacity to contract for the season, which includes proof of funding, unit cost of inputs to be given to farmers and the interest component to be charged.

    “Such commitment documents are then vetted by our Compliance and Licensing Committee that will inspect all such, and if any is found in violation of the board’s compliance standards, such will be rejected, and no approval for contracting farmers will be given,” said the TIMB.

  • KT&G to Build Second Factory in Indonesia

    KT&G to Build Second Factory in Indonesia

    Photo: xreflex

    KT&G Corp. plans to expand its production facilities in Indonesia, reports the Yonhap News Agency.

    The South Korean tobacco company currently operates a factory in Surabaya and plans to build a second one in the Southeast Asian country. The new plant will produce KT&G products for export to neighboring and other countries.

    Indonesia’s government is supporting the investment, according to KT&G.

    The expansion fits into KT&G’s ambition to earn half of its sales from overseas businesses in 2027. It aims to achieve sales of KRW10 trillion ($7.53 billion) in 2027, compared with KRW5.9 trillion in 2022.

    In addition to producing conventional cigarettes, KT&G said it will reinforce its heat-not-burn (HNB) and health functional food product businesses. 

    The company has exported its HNB products to more than 30 countries since 2020 through the distribution deal with Philip Morris International.

    Currently, KT&G earns 90 percent of its overall sales from the cigarette business division and the 10 percent from the HNB division.

    The company has four tobacco manufacturing plants, one each in South Korea, Russia, Turkey and Indonesia, whose combined capacity amounts to 13.6 billion cigarettes a year.