Author: Taco Tuinstra

PMI Takes Charge on Healthcare Business

Photo: PMI
Philip Morris International’s foray into pharmaceuticals is proving more challenging than expected, according to The Wall Street Journal.
The tobacco multinational took a $680 million charge in the latest quarter on its wellness and healthcare business, two years after agreeing to buy inhaled-medicine maker Vectura Group for £1 billion ($1.31 billion).
After an unsuccessful clinical trial, Vectura won’t be submitting its inhalable aspiring product to the U.S. Food and Drug Administration this year.
PMI is postponing its 2025 goal to exceed $1 billion in net revenues from health and wellness products. The company still sees growth potential in products such as smoking-cessation treatments and medicinal cannabis.
The setbacks have been compounded by the recent departures of several top Vectura executives.
According to a report in The Times, Vectura CEO Michael Austwick is stepping down having been in the role only since he joined from Novartis in June last year.
Thomas Gibbs, Vectura’s chief executive in the United States, also left in 2023 after just over a year at the company to join Lundbeck, a drugs company based in Denmark, and there is uncertainty over the future of Lizzie Knowles as Vectura Group’s chief financial officer.
Austwick’s predecessor, Will Downie, and Chief Financial Officer Paul Fry stepped down shortly after PMI’s takeover of Vectura.
The tobacco group’s acquisition of Vectura caused a backlash among public health professionals, with pharmaceutical conferences banning Vectura representatives from their events.
July 27, 2023
New Categories Boost BAT Half-Year Revenues

Photo: BAT
British American Tobacco reported revenue of £13.44 billion ($17.35 billion) in the first six months of 2023, up 4.4 percent over the figure recorded in the comparable 2022 period. Growth was driven by the company’s “New Categories” segment. Revenue from noncombustible products now accounts for 16.6 percent of group revenue, up 180 base points (bps) versus fiscal year 2022.
BAT’s Vuse and Velo brands enjoyed strong revenue growth, and New Categories’ financial delivery significantly improved, contributing a £201 million increase to group profit as losses reduced.
Reported profit from operations was up 61.4 percent (with reported operating margin up 1,560 bps to 44.2 percent). Adjusted profit was up 3.6 percent at constant exchange rates. Adjusted operating margin was up 40 bps to 44.3 percent.
“Having been in my new role for 10 weeks, I’m pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organization,” said BAT Tadeu Marroco, who assumed the top job in May. “It is a challenging external environment. High inflation and slower global growth are impacting consumers and business. Yet our revenue, profit from operations and earnings are all up.
“We are making great progress in New Categories. Revenues are up by 29 percent, and we are now close to break[ing] even, with consumers of noncombustible products up by 1.5 million versus FY 2022. While it’s encouraging to see continued good performance in vapor and modern oral, we recognize more work is required in heated tobacco.
“I remain confident that New Categories will deliver a positive contribution in 2024. However, we do not expect contribution growth to be linear, as levels of investment will align with the phasing of our big innovation platforms.
“While more focus is required in the U.S., our sequential performance improvement in the critical premium U.S. combustibles business since January 2023 is encouraging.
July 26, 2023
Taiwan Mulls Cigarette Tax Hike

Photo: Taco Tuinstra
The government of Taiwan is considering raising cigarette taxes next year, reports the Taipei Times, citing the Health Promotion Administration (HPA)
Regulations require an expert committee to deliberate the tobacco tax every other year. During its most recent gathering, last year, the committee decided to leave tobacco taxes unaltered due the Covid-19 pandemic.
HPA Director-General Wu Chao-chun told the Central News Agency that “controlling consumption through cost” is a successful tactic for smoking prevention, and vowed to continue promoting other methods, such as labeling and banning smoking in more areas.
Smoking declined significantly after Taiwan raised the tobacco tax in 2009 and 2017, according to Lee Yue-chune, a professor of public health at National Yang Ming Chiao Tung University.
Last year, a pack of cigarettes cost TWD116 (US$3.71) on average, with taxes accounting for 53 percent, below the WHO recommended minimum of 75 percent, she said.
Taiwan spends an estimated TWD80 billion annually on treating smoking-related diseases, Lee said, recommending that the government set a target for the tobacco tax as a percentage of cigarette cost.
July 26, 2023
Zimbabwe Seed Sales Hint at Larger 2024 Crop

Photo: Taco Tuinstra
Zimbabwe has sold 673 kg of tobacco seed with the capacity to cover 112,104 hectares as of July 20, 2023, reports The Herald, citing Tobacco Industry Marketing Board (TIMB) statistics. 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.
“This season, we are expecting an increase in hectarage, thanks to the coming on board of new growers and players in the industry as well as the decision by those who have already been in the industry to increase production,” TIMB public relations officer Chelesani Tsarwe said.
“We are currently exploring economically viable alternatives to tobacco through robust diversification programs,” Tsarwe said. “We are glad that we can now ride on the fact that TIMB recently became a certified member of global Good Agricultural Practices (GAP), and we have registered trainers and farm assurers who will work with farmers to ensure compliance with global standards for export crops.”
Tsarwe also noted that there is a focus on implementing the sustainable tobacco program and becoming environmental, social and governance compliant.
“Sustainable agricultural practices will reduce the negative effects of tobacco production, and our tobacco products will be better ranked on the global market,” said Tsarwe.
Tobacco accounts for a large margin of the country’s exports.
Zimbabwe’s tobacco growers produced a record 291.1 million kg of tobacco worth $882.2 million this season.
July 26, 2023
Red Algae Protein Doub Boosts Tobacco Growth

Photo: YanaKho
Researchers out of Cornell University have successfully transferred key regions of red algae into a tobacco plant using bacteria as an intermediary, resulting in doubled photosynthesis and plant growth compared to tobacco grown with the unaltered protein, according to a story in the Cornell Chronicle.
The study centers on Rubisco, the most abundant protein across ecosystems. The protein performs the first step of photosynthesis by fixing carbon, but it is slow and struggles to differentiate between carbon dioxide and oxygen, often limiting plant growth and crop yield.
The researchers found a species of red algae, Griffithsia monilis (Gm), that contains Rubisco that is 30 percent more efficient at fixing carbon than Rubisco in other organisms. Laura Gunn and her co-authors of the study used the 3D structure of GmRubisco to successfully graft a small number of regions from Rhodobacter sphaeroides (RsRubisco) into a bacterial Rubisco.
“RsRubisco is not very efficient, but it is very closely related to GmRubisco—they’re like cousins—which means that unlike land-plant Rubisco, it accepts the grafted sequences,” said Gunn. “RsRubisco also doesn’t need any special chaperones for it to fold and assemble in land plants.”
Using the altered Rubisco increased the carboxylation rate by 60 percent, increased carboxylation efficiency by 22 percent and improved RsRubisco’s ability to distinguish between carbon dioxide and oxygen by 7 percent. When transplanted into tobacco, it doubled photosynthesis and plant growth compared to tobacco with unaltered RsRubisco.
“We’re not at the point where we’re outperforming wild-type tobacco, but we’re on the right trajectory,” said Gunn. “We only need fairly modest improvements to Rubisco performance because even a very small increase over a whole growing season can lead to massive changes in plant growth and yield, and the potential applications span many sectors: higher agricultural production; more efficient and affordable biofuel production; carbon sequestration approaches; and artificial energy possibilities.”
The research was supported by the Australian Research Council Centre of Excellence for Translational Photosynthesis, Formas Future Research Leaders and the European Regional Development Fund.
July 26, 2023
Industry Mourns Tommy Bunn

Photo: New Africa
Jessie Thomas “Tommy” Bunn, a distinguished leader in U.S. national and state level agricultural policy and marketing and the husband of North Carolina Secretary of State Elaine F. Marshall, passed away unexpectedly July 24 after suffering a traumatic brain event, the North Carolina Department of the Secretary of State reported.
A native of Zebulon, North Carolina, Bunn formerly served as president of the U.S. Tobacco Cooperative following a 21-year career as executive vice-president of the Leaf Tobacco Exporters Association and Tobacco Association of the United States.
In addition, he served as deputy director and acting director of the Agricultural Marketing Service Tobacco Division for the U.S. Department of Agriculture in Washington, D.C. and served under Commissioner Jim Graham with the N.C. Department of Agriculture and Consumer Services.
At the time of his death, he was serving as a consultant to the tobacco industry.
Bunn was named by the North Carolina State Grange as Man of the Year in 1988 and was honored as a Distinguished Alumni with the College of Agriculture and Life Sciences at N.C. State University in 2012, where he graduated with a degree in Agriculture Business/Crop Science in 1966.
July 26, 2023
Juul Seeks FDA Authorization for Juul2
Juul Labs has submitted a premarket tobacco product application (PMTA) for its next-generation vapor platform to the U.S. Food and Drug Administration. The company says its submission includes comprehensive science and evidence for a new device and new tobacco-flavored pods at 18 mg/mL nicotine concentration, as well as information on novel, data-driven technologies to restrict underage access.
“Our company DNA is product innovation,” said Chief Product Officer Kirk Phelps in a statement. “With our next-generation platform, we have designed a technological solution for two public-health problems: improving adult-smoker switching from combustible cigarettes and restricting underage access to vapor products. This is only the beginning of new tech being developed and refined for the U.S. market and abroad to eliminate combustible cigarettes and combat underage use.”
Launched initially in the U.K. in 2021 as the JUUL2 System, the new vapor platform delivers an improved vapor experience for adult smokers, utilizes unique Pod ID authentication to address illicit products and incorporates age-verification technology capabilities.

Our next-generation vapor platform PMTA is built on new technology that advances public-health objectives and compelling science that demonstrates a clear public-health benefit, as required to secure a marketing authorization.
Joe Murillo, chief regulatory officer, Juul Labs
According to Juul, features of the next-generation platform include:
A more consistent vapor experience that better competes with combustible cigarettes
A Bluetooth-enabled device with a larger, long-lasting battery and a “smart light system” that communicates battery life and e-liquid level to the user
Newly designed, tamper-resistant pods that enable improved aerosol delivery
An innovative heating element that improves product performance and temperature-control precision
A unique Pod ID chip that, among other tech capabilities, prevents the use of illicit counterfeit and compatible pods with the next-generation device
A mobile and web-based app that enables age-verification technology, including device-locking, and real-time product information and usage insights for age-verified consumers with industry-leading data-privacy protections
Initial behavioral research of the new platform in the U.K. has demonstrated compelling adoption and switching among adult smokers. Over 32 percent of JUUL2 System users had switched completely from combustible cigarettes six months after purchasing the product. While the currently marketed Juul System has switched over 2 million adult smokers in the U.S., the company looks forward to bringing this new technology to over 28 million adult smokers in the country who continue to smoke combustible cigarettes.
“Our next-generation vapor platform PMTA is built on new technology that advances public-health objectives and compelling science that demonstrates a clear public-health benefit, as required to secure a marketing authorization,” said Juul Chief Regulatory Officer Joe Murillo. “We look forward to engaging with FDA throughout the review process while we pursue this important harm-reduction opportunity.”
Juul said it continues to pursue its administrative appeal of the FDA’s stayed decision for the Juul System and believes that it too will receive marketing authorization once a decision is made on science and evidence.
July 20, 2023
Smoore Issues Profit Warning

Photo: Smoore International Holdings
Smoore International Holdings issued a profit warning for the six months ended June 30, 2023.
The company’s board of directors expects the group’s comprehensive income for the period to be between RMB717.3 million ($100.1 million) and RMB792.8 million, representing a decrease of between 42.7 percent and 48.2 percent from the income reported for the comparable period in 2022.
The adjusted net profit will be approximately RMB741.4 million to RMB816.9 million, representing a decrease of approximately 43.1 percent to 48.4 percent from the prior-year period.
Smoore attributed the decline to a decrease in revenue of 9.4 percent. Revenue from the Mainland China market for the period dropped approximately 96.3 percent, and its proportion to total revenue decreased from approximately 30 percent in the 2022 period to approximately 1.2 percent in the most recent six months.
Although the revenue from Mainland China in the second quarter of 2023 has significantly increased compared with the first quarter of 2023, it is still far below the same period last year.
During the period, the group’s revenue from overseas markets was approximately RMB5.06 billion, representing a steady growth of approximately 28 percent year-on-year. Among them, the revenue from the U.S. market was approximately RMB2.22 billion, representing a year-on-year increase of approximately 26.9 percent.
With the strengthening of supervision and enforcement of noncompliant products, compliant products are expected to gain more room for sustainable growth in the U.S. market.
Revenue from Europe and other markets was approximately RMB2.85 billion, representing a year-on-year increase of approximately 28.8 percent. The group launched disposable products with a better experience under the compliance framework in this market, which were well received by clients and users, and the revenue from this market continued to grow.
The increase in revenue from overseas were insufficient to offset the declines in Mainland China.
July 20, 2023
Illegal Cigarette Factories Dismantled

Photo: Mykhailo Polenok
Tax authorities dismantled two illicit cigarette operations in the Subic Bay Freeport on July 14, reports the Philippine News Agency.
OneSubic Premier Manufacturing Corp. (OPMC) and Hongcim International Corp. were found to be illegally manufacturing various cigarette brands. While OPMC is licensed to manufacture cigarettes, its brands and equipment were not registered with the appropriate agencies, according to the Bureau of Internal Revenue’s Tax Compliance Verification Drive (TCVD) team.
OPMC and Hongcim produce and package foreign-branded cigarettes, including RGD, Baisha and Bruston.
During their raids, authorities found printing machines, paper materials, inks, cigarette filters and grated tobacco leaves, among other paraphernalia. OPMC reportedly could produce 500 cigarette packs per day.
The Philippines lose an estimated PHP100 billion ($1.84 billion) in tax revenues due to fraud each year, according to fiscal authorities.
July 14, 2023
Health Minister Wants Larger Share Taxes

Photo: MemoryMan
MemoryMan
The government of Nepal should direct all the money its collects from tobacco products to the Ministry of Health and Population, Health Minister Mohan Bahadur Basnet told lawmakers on July 13, according to a report in My Republica.
The Nepalese state earns an estimated NPR6 billion ($45.66 million) in tobacco taxes annually. The health ministry, however, receives only NPR4 billion, Basnet lamented.
The additional tax revenues could be used to add more doctors and health workers, he suggested.
July 14, 2023