Vector Group reported consolidated revenues of $699.8 million in the first six months of 2023, up 0.1 percent compared to the prior year period. Tobacco segment revenues increased 2.4 percent to $699.8 million. The company’s tobacco segment wholesale and retail market share increased to 5.5 percent and 5.8 percent from 5.3 percent and 5.3 percent, respectively, in the prior year period. Operating income was down 12 percent to $145.9 million. Vector’s tobacco segment operating income was $153.7 million, down 7.4 percent compared to the prior year period.
“Vector Group performed well in the first half of 2023 as we continued to benefit from the gradual transition of our Montego brand strategy,” said Vector Group President and CEO Howard M. Lorber, in a statement. “In the second half of 2023, we remain focused on optimizing long-term profit by effectively managing our volume, pricing and market share to generate long-term value for our stockholders.”
Kaival Brands Innovations Group has promoted its current president and chief operating officer, Eric Mosser, to the position of CEO.
Mosser, who will retain the position of president, brings over a decade of senior leadership experience, including since 2020 at Kaival Brands.
From 2022 to 2014, Mosser worked as director of information technology at Timbercon, a fiber-optic design company and ITAR manufacturing facility in Oregon, USA. In 2014, Mosser created Lasermycig, a specialized custom laser-engraving service for electronic cigarettes and vaporizers and served as its CEO until 2020.
In 2015, Mosser and Bidi Vapor owner Nirajkumar Patel founded Chillcorp, a full-service corporation managing operations of Just Chill Products, Relax Lab., RLX Lab, and KC Innovations Lab.
Kaival Brands Innovations Group has also appointed Thomas J. Metzler as its new chief financial officer, treasurer and secretary, replacing Mark Thoenes, who has served as Interim CFO since 2021.
Metzler brings over 20 years of finance and operational experience in the vaping and consumer products sector, previously serving as managing director of a division of Turning Point Brands.
At Turning Point Brands, Metzler led a team to transform the process of financial management efficiencies, which improved cost controls, managed inventory turn, developed strategic product promotions to accelerate product distribution, and built strategic alliances with suppliers. Metzler also developed and monitored key performance indicators (KPI).
Metzler has extensive knowledge of vaping technologies and a record of building strong partnerships with industry stakeholders. He has also been actively engaged in national trade and industry standards organizations.
At Kaival, Metzler’s will initially focus on maximizing inventory turn and driving revenue, developing and monitoring KPIs and controlling costs. Metzler also has experience in mergers and acquisitions and post-acquisition integration, which he will bring to bear on the vaporizer and inhalation patent portfolio acquired by the Kaival in May 2023.
“We are very excited to have Tom join our senior management team and believe his hiring represents a key building block for the future of Kaival Brands,” said Mosser in a statement. “Tom brings to us a wealth of experience and knowledge across all of the key elements of the CFO’s office including treasury, finance and accounting.”
Tobacco Reporter’s Publisher, Elise Rasmussen, is Installed as Master of the Worshipful Company of Tobacco Pipe Makers & Tobacco Blenders.
By David Roach
“The best way to find yourself is to lose yourself in the service of others.”
As the industry gathered last month in the grand setting of Vintners’ Hall in the city of London, home to the Worshipful Company of Vintners since the 1440s, I was reminded of this wise maxim from Mahatma Gandhi.
Elise Rasmussen has built her career in the industry, whether through this publication, Tobacco Reporter, the GTNF or Women in Tobacco. Not only can she boast an impressive CV as a woman who has made it in a man’s world, but over the past 10 years, she has devoted herself to the service of others as well. Through both fellowship and philanthropy, she has played an active part in the Worshipful Company of Tobacco Pipe Makers & Tobacco Blenders, one of London’s renowned Livery Companies.
Elise’s installation, as only the second female master in the Livery’s 400-year history, affirmed that devotion when she swore an oath while being gowned at a meeting of the Court, the governing body of the Livery Company.
In addition to playing an integral role in the governance of the city of London, the Livery Company supports people in need through its charitable works, a centuries-old tradition of the Livery movement. Its members donate to the company’s Benevolent Fund, which supports a broad range of U.K.-registered charities, with a particular focus on the advancement of education, the arts, culture and heritage, the relief of those who are disadvantaged and His Majesty’s Armed Forces.
Elise has taken on the awesome responsibility of leading this four-centuries-old institution, and it is to be admired. As Elise, and her predecessor, reminded the 150 Liverymen, Freemen and invited guests during the speeches that followed her installation lunch in the main Livery Hall, the next year will be a real test of stamina.
Over 100 engagements await her, promoting the work of the Livery, supporting the two affiliations it has, chairing Court meetings and performing numerous ceremonial duties.
Muhammad Ali once said that “service to others is the rent you pay for your room here on earth.” In Elise’s case, she will have earned a very large one by the time she hangs up her chain next June.
The Philippines’ Department of Trade and Industry (DTI) is urging tobacco companies to manufacture their heated tobacco products in the country, citing surging domestic demand and export opportunities, according to the Philippine News Agency.
During the International Tobacco Agriculture Summit in Taguig City on Aug. 2, DTI Undersecretary Ceferino Rodolfo said while local demand for cigarettes is expected to decline from 49.61 billion sticks in 2022 to 39.06 billion sticks in 2027, sales of HTPs are poised to increase significantly during that period.
He cited a Euromonitor predicting HTP retail sales of HTPs to surge by 511 percent to 4.06 billion sticks in 2027.
Rodolfo said HTP producers would benefit the Philippines’ free trade agreements with regional markets. “HTPs, if manufactured in the Philippines, can be imported in ASEAN (except Vietnam), Australia, New Zealand, Japan, Korea, and Hong Kong at zero percent tariff duty,” he was quoted as saying.
In 2022, the top destinations for Philippine tobacco products included South Korea at $102.2 million, Thailand ($98.29 million) and Myanmar at $49.4 million.
According to Rodolfo, Philip Morris Fortune Tobacco aims to build a PHP9-billion factory in Tanauan, Batangas, for the production of IQOS devices.
Universal Corp. reported sales and other operating revenue of $517.7 million in the three months that ended June 30, 2023, up 20 percent over that posted during the same period last year. Operating income declined 17 percent to $11 million.
Tobacco operations sales and other operating revenues jumped 28 percent to $443.9 million, while Tobacco operations operating income increased 9 percent to $8.9 million.
“Our tobacco operations performed well and are off to a good start for our fiscal year 2024,” said Universal Corp. Chairman, President and CEO George C. Freeman III in a statement.
“Segment operating income was higher for our tobacco operations segment in the quarter ended June 30, 2023, compared to the quarter ended June 30, 2022, even though we did not have the benefit of large shipments of carryover tobacco from certain origins that we had in first quarter of fiscal year 2023.
“Demand for leaf tobacco from our customers remains strong, and our level of uncommitted tobacco inventory was 16 percent of tobacco inventory at June 30, 2023. We are forecasting increased leaf tobacco production in fiscal year 2024, compared to fiscal year 2023, and believe that even with that increased production, leaf tobacco will remain in an undersupply position.”
Freeman also expressed satisfaction with the progress Universal has made integrating its plant-based ingredients platform. He attributed soften-than-expected demand in this segment to high customer inventory levels, but anticipated this situation to be temporary.
“We believe that we are well-positioned to capitalize on demand from our customers, and that with the investments we are making, we are a stronger partner for current and future customers due to the expanded range of capabilities and products that we can offer them,” said Freeman.
Juul Labs is seeking to raise about $1 billion, reports Bloomberg News
The e-cigarette manufacturer, which had about $800 million in revenue in 2022, is reportedly working with Jefferies Financial Group for the fundraising.
In July, the company said it was exploring options including financing alternatives, to protect its business and help refinance an existing loan, as it dealt with lawsuits related to the marketing of its e-cigarettes.
In November 2022, Juul secured a cash infusion to keep the company in business while it appeals the U.S. Food and Drug Administration’s marketing denial order related to its vapor products.
A pioneer in the vaping business, Juul Labs has gone from dominating the U.S. e-cigarette market to fighting for its survival in a relatively short time.
Following its initial success, the company quickly came under regulatory scrutiny over its marketing practices. Critics blame Juul Labs for contributing to an “epidemic” of underage vaping.
Two Reynolds American Inc. manufacturing U.S. facilities have achieved Alliance for Water Stewardship (AWS) Certification. The American Snuff Co. facility in Clarksville, Tennessee, and R.J. Reynolds Tobacco Co.’s Whitaker Park site in Winston-Salem, North Carolina, both recently earned the designation. Reynolds Operations Center (ROC) in Tobaccoville, North Carolina, received AWS certification in 2022.
The AWS Standard is a globally applicable framework for improving water sustainability performance. It enables factories, facilities, and other water-using sites to better understand their water use and impact and to work collaboratively and transparently for sustainable watershed management. Receiving this certification showcases that the Clarksville and Whitaker Park sites have implemented AWS’ best practices in five important areas: good water governance, sustainable water balance, good water quality status, protection of important water-related areas, and safe water, sanitation, and hygiene for all.
“Attaining AWS Certification at two more Reynolds sites underscores our commitment to protecting natural resources that we rely on to run our business,” said Bernd Meyer, executive vice president of operations at Reynolds, in a statement. “I’m proud of our teams’ commitment to running efficient operations and being good water stewards in the communities where we work and live.”
Reynolds’ efforts to use water efficiently across its facilities will progress even further with the addition of the recently announced WaterHub planned for the ROC in Tobaccoville, North Carolina. The advanced water reclamation plant, a product of a NextEra Energy Resource subsidiary, is projected to reclaim more than 60 million gallons of water annually.
BMJ affiliate Evergreen Hill Enterprise has offered $620 million to acquire Mativ Holding’s engineered papers (EP) business, which supplies papers to the tobacco industry.
“While a solid business, EP’s concentration in the tobacco industry is not aligned with Mativ’s long-term ambition and presents a more attractive value proposition under new strategic ownership,” said Mativ CEO Julie Schertell in a statement. “Our talented and dedicated employees will continue to deliver outstanding products and service to EP’s long-standing customer base, and we are confident in a smooth transition.”
Mativ intends to use the proceeds of the proposed transaction to pay down debt.
Subject to customary closing conditions, including regulatory approvals and satisfaction of the consultation process with the applicable works councils in France, the proposed transaction is expected to close in the fourth quarter of 2023
Based in Singapore Evergreen Hill Enterprise is part of a successful, Indonesian-based privately held group of diversified companies serving the tobacco, banking and consumer electronics industries, among other sectors.
The buyer is expected to fund the proposed transaction with existing cash balance and is not dependent on capital markets for financing
Mativ Holding was created out of the 2022 merger between Schweitzer-Mauduit International and Neenah, two leading global manufacturers of specialty materials.
BMJ said its business would continue to operate as usual. “There will not be an integrated structure between BMJ and SWM so that both companies will maintain the autonomy of action and confidentiality of projects,” the company wrote in a statement.
“Having said that, BMJ is delighted to be affiliated with SWM, a prominent supplier of engineered papers. This affiliation will open opportunities for BMJ to collaborate with SWM in some strategic areas, including, but not limited to offering complimentary geographic reach and product lines, ultimately providing comprehensive and unparalleled value to the customers and stakeholders.”
The share of Malaysia’s illicit cigarette market declined slightly this year, reports the New Straits Times.
According to a recent survey, Illegal products accounted for 55.3 percent of the domestic cigarette market in May, down 1.3 percent from a year ago.
The Confederation of Malaysian Tobacco Manufacturers (CMTM) attributes the drop to new anti-illicit measures, including the strict control on the shipment of tobacco products and increased enforcement efforts.
In Kelantan, the illicit incidence had declined to 50.2 percent compared to 70.6 percent in 2020 as a result of heightened enforcement actions in the state.
Despite the progress, the prevalence of illicit cigarettes remains extremely high by international standards. While legal cigarettes retail for between MYR9 ($1.98) and MYR12, the same products can be purchased for between MYR4 and MYR8 on the black market.
The government misses out on an estimated MYR5 billion in annual revenues due to tax-avoiding cigarettes.
The survey report also highlighted the notable increasing presence of cigarette packs with fake tax stamps in the market. Based on the study, the incidence of cigarette packs with fake tax stamps has increased to 8.5 percent from 4.9 percent in 2018.
Concerned about the persistence of illicit trade, the CMTM urged the Parliamentary Special Select Committee to carefully consider the impact of the Control of Smoking Products for Public Health Bill 2023 that is currently under consideration in Malaysia.
Among other measures, the proposed legislation would prevent those born in or after 2007 from buying tobacco or vapes. Policies should be based on substantiated science-based evidence and be designed to prevent any unintentional proliferation of illicit cigarettes, the CMTM said
The World Health Organization’s recently published report on the global tobacco “pandemic” discounts the impact of harm reduction and vaping, according to Michael Landl, director of the World Vapers’ Alliance
“While filled with biased anti-vaping scaremongering and unfounded claims, the report’s overall direction is perplexing. Instead of prioritizing the crucial goal of reducing smoking rates, the WHO is directing its focus on vaping, which happens to be the most potent smoking cessation tool available.”
In the report’s foreword, Director-General Tedros Adhanom Ghebreyesus asserts that vaping would undermine anti-smoking efforts, claiming that e-cigarettes are harmful to both the people using them and those around them.
“Regrettably, the WHO appears to ignore reality and scientific evidence,” said Landl in a statement. “Countries that adopt an open and consumer-friendly approach to harm reduction products achieve significantly better results than those following WHO’s misguided path. Comparative data from Sweden and the United Kingdom demonstrate their remarkable success in reducing smoking rates, surpassing countries with a negative harm reduction approach by a wide margin.”
The WHO report also claims a gateway effect from vaping to smoking and alleges that vaping flavors target children. It further highlights that 121 countries have adopted vaping regulations, with 34 completely banning vape sales.
“The outdated and debunked theories propagated by the WHO report pose risks to public health,” said Landl. “The notion of a gateway effect from vaping to smoking lacks evidence. Furthermore, flavors are essential for adults as they play a crucial role in helping millions of smokers transition to vaping. Additionally, celebrating countries which ban a way less harmful alternative for smokers is absurd.”
According to a review of 15 studies, “a true gateway effect in youths has not yet been demonstrated,” according to Landl. Factors such as anxiety, parental smoking habits, peer attitudes and household income must be considered, he noted. Another study found that vaping is not a gateway to smoking but rather that negative circumstances in teenagers’ lives lead to risky behaviors. According to the Yale School of Public Health, vaping flavored e-cigarettes is linked to a 230 percent increase in adult smoking cessation, and a flavor ban, as suggested by the WHO, could drive five out of 10 vapers back to smoking or the black market.
“The lack of empathy for smokers and vapers, coupled with the outright denial of scientific findings, will have severe consequences for many lives,” said Landl. “The WHO seems to have lost sight of its ultimate goal – reducing smoking rates. While we all agree that teenagers should not smoke or vape, the report notes that only 45 percent of countries ban e-cigarette sales to minors, and 10 percent of countries impose no age restrictions on cigarette purchases. Why not address these real-life challenges? The WHO systematically disregards an abundance of scientific evidence supporting the benefits of vaping, not to mention the experiences of millions of vapers. Vaping is 95 percent less harmful than smoking and a more effective method to quit smoking compared to traditional products like gum and patches. Restricting or banning access to vaping will only lead to unnecessary loss of lives.”
