Author: Taco Tuinstra

Call for Action Against Noncompliant Vapes

Photo: zef art
The Chartered Trading Standards Institute (CTSI) has called for stronger actions against noncompliant vape products in the U.K., reports Convenience Store.
Stating that the rise in noncompliant products is “getting out of hand,” the CTSI has asked for “clearer direction from government” and greater resources to fight the noncompliant trade.
The CTSI has also suggested that manufacturers publish batch numbers of noncompliant products and introduce restrictions to stop youth vaping, including prohibiting cartoon characters or light-up vapes, restrictions on packaging colors and the promotion of vapes on social media platforms such as TikTok. The group also suggested looking at where the products are positioned in stores and increasing the sanctions available for those producers, suppliers retailers who don’t comply with the law.
Vaping industry representatives applauded the CTSI’s position. “We share the CTSI’s concern over the growth in illicit and underage vape product sales and fully support their call for more resources,” the U.K. Vaping Industry Association said in a statement.
“We also agree wholeheartedly that restrictions need to be explored to address youth vaping without impacting on adult smokers who wish to switch to vaping in order to quit their habits.
“That’s why we are leading the way in forming a Youth Access Prevention Taskforce to develop detailed proposals to deal with the situation, and these include on-the-spot fines of up to £10,000 ($12,176.32) per instance for retailers who are found to be selling to minors and for selling illicit products; a national registration scheme for all retailers, meaning only those outlets that meet qualifying criteria can legally sell vapes; and a national test purchasing scheme that will ensure constant monitoring of retailers’ selling vapes to ensure that they are not turning a blind eye to purchases involving minors.
“Critical to the success of our proposals will be a ramping up of enforcement, and this requires major funding in resources on the ground.
“By Trading Standards’ own admission, resources are sadly lacking, and the government needs to step in and look at this situation as a matter of urgency. Our proposals are designed to support this funding need as monies will be raised from the fines and registration scheme.
“We will be presenting our proposals to government and parliamentarians at the end of March.”
March 13, 2023
‘Tax Hike Will Kill Jobs and Boost Smuggling’

Photo: Tobacco Reporter archive
New York’s cigarette smuggling problem will get even worse if the state implements an additional levy of $1, as Governor Kathy Hochul envisions, according to a Wall Street Journal article.
The WSJ reports that more cigarettes are smoked in New York than are legally bought, suggesting considerable levels of tax evasion and avoidance. New York imposes a statewide pack tax of $4.35 per pack. New York City imposes an additional $1.50 per-pack excise tax.
Union workers have expressed discontent with the planned ban and tax hike. “Our union brothers and sisters in the tobacco industry are at risk of losing their jobs, benefits and pensions due to Governor Hochul’s proposed ban on menthol/flavored tobacco and tax hike,” Mike Smith, president of Local 810 International Brotherhood of Teamsters, said. According to Smith, 500 out of 4,000 drivers, warehouse workers and salespeople represented by Local 810 would lose their jobs if the ban is approved.
“While we understand the intent of the legislation is not to eliminate Teamster jobs or destabilize Teamster pension funds, the unfortunate reality is that those will be certain results,” Thomas Gesualdi, president of the Teamsters’ Joint Council No. 16 representing 25 locals and 120,000 members, said in a letter to Hochul early in February.
“I understand the impetus of the policy is to get people to stop smoking, which is a good thing,” Assembly Majority Leader Crystal Peoples-Stokes said. “But I think it shouldn’t be this selective. It goes way too deep … and would be a mistake, so I will be working to have it excluded.”
March 13, 2023
Kaival Brands Signs Sales Broker Agreement

Photo: Bidi Vapor
Kaival Brands Innovations Group, the U.S. distributor of all Bidi Vapor products, has entered into a sales broker agreement with a prominent U.S. broker to expand access to Bidi Vapor products from its current foundation of convenience store distribution into new retail channels, including discount, grocery and mass merchandisers.
Eric Mosser
“As we look to push distribution into more channels beyond the convenience stores, we are excited to announce a new agreement that gives us potential access to over 40,000 new locations,” said Eric Mosser, president and chief operating officer of Kaival Brands, in a statement. “We believe this agreement, along with our recent announcement of other new distribution agreements, further validates our reputation as a good actor providing adult consumers with the highest quality vape experience possible, and we look forward to working with all of our commercial channel partners to expand our revenue opportunities.”
“We are excited to further increase the reach of Bidi Vapor and its premium vaping device, the Bidi Stick, into potentially more distribution opportunities throughout multiple retail channels,” stated Russell Quick, president of QuikfillRx, the company’s third-party sales and marketing vendor. “With our feet firmly in the convenience store space, it is time not only to grow our existing footprint but to extend into more channels, like dollar and grocery stores, that meet our robust identification verification and youth access prevention requirements.”
March 13, 2023
Juul Settles Chicago Youth Marketing Suit

Photo: steheap
Juul Labs and the city of Chicago have reached a $23.8 million settlement over claims that the e-cigarette maker deceptively marketed its products and for selling vaping products to underage users, reports Reuters, citing the Chicago mayor’s office.
The vaping company is currently facing thousands of lawsuits filed across the United States over claims on its marketing practices and for contributing to rising tobacco use among youth.
In the settlement, Chicago said Juul has denied and continues to deny any wrongdoing and liability in connection with the design, manufacture, production, advertisement, marketing, distribution, sale, use and performance of its products.
According to the settlement, the company has agreed to pay the city $2.8 million within 30 days of the execution of the agreement.
Chicago would receive an additional $21 million payment later this year under the current schedule and may potentially receive up to $750,000 in additional, court-awarded payments, the Chicago mayor’s office said.
March 13, 2023
Bulgaria to Support Growers Diversification

Photo: Tobacco Reporter archives
Bulgaria will provide BGN70.5 million ($38.4 million) to help its tobacco growers diversity into alternative livelihoods, reports SeeNews, citing the State Fund Agriculture.
The financing will be awarded to producers who have grown tobacco during for least one year in the reference period 2007-2009, the fund said in a press release published on March 10.
Tobacco producers who continue to practice agriculture are entitled to receive subsidies under the program. Owners of animal farms or beekeepers are also eligible.
Bulgaria has provided aid to a number of farmers since 2015. The amount of the grants are based on the volume of the purchased tobacco and its plant variety.
Earlier last week, Bulgaria’s government said it approved the disbursement of some BGN213 million in aid for farmers to help offset the rising costs of inputs.
March 13, 2023
Oman Adopts Plain Packaging

Photo: Chris
The government of Oman will require tobacco companies to sell their products in generic packaging, reports Muscat Daily
The Sultanate has become the second country in the region, after Saudi Arabia, to adopt the measure.
The World Health Organization office for the Eastern Mediterranean welcomed Oman’s action, describing it as “significant and pioneering.”
According to the health body, the step is consistent with the obligations of the states that are party to the WHO Framework Convention on Tobacco Control.
The move is also in line with the sultanate’s plans to achieve a 30 percent reduction in tobacco consumption by 2025.
Under the new rules, health warnings must cover at least 65 percent of tobacco packaging, while the brand name must be printed in a standardized font and color.
March 13, 2023
RLX Takes Hit in 2022

Photo: RLX Technology
RLX Technology’s 2022 financial performance was heavily impacted by new industry regulations and e-cigarette taxes, along with Covid-related disruptions, in China.
The company reported net revenues of RMB340 million ($49.3 million) in the fourth quarter of 2022, down from RMB1.9 billion in the same period of 2021. Its GAAP net loss was RMB225.1 million, compared with GAAP net income of RMB494.4 million in the comparable 2021 quarter.
For the full fiscal year, net revenues declined to RMB5.33 billion in 2022 from RMB8.52 billion in 2021. U.S. GAAP net income was RMB1.41 billion, down from RMB2.03 billion in the prior year.
“2022 was a year full of unprecedented challenges,” said RLX Technology co-founder, chairperson and CEO Ying Wang in a statement. “A combination of Covid-related disruptions and the introduction of a substantial package of industry regulations and policy updates throughout the year impacted the e-vapor sector and our operations.
“We retained our core strategy in this volatile operating environment while proactively adapting our business to the new regulations. In the fourth quarter, we continued to invest in R&D and product innovation and development, offering superior products to adult smokers. We believe our core competencies will enable us to attract continued support from users.
“Looking ahead, given the benefits of the clearer regulatory framework and China’s reopening, we remain confident in the long-term growth of our industry. We are well-positioned to adapt to these shifting market forces and capture new opportunities while further deepening our commitment to honoring our social responsibilities.”
RLX Technology was particularly affected by the vast wave of coronavirus infections as China suddenly relaxed its zero-Covid policy toward the end of 2022. In addition, its gross margin in the fourth quarter suffered as a result of the imposition on Nov. 1, 2022, of a 36 percent excise tax on e-cigarettes in China.
“Despite the headwinds, we strove to improve operational efficiency to mitigate the adverse impact on our business,” said RLX Technology Chief Financial Officer Chao Lu. “As a result, we maintained a healthy level of profitability during 2022. We believe our company’s resilience will enable us to overcome near-term obstacles, and we remain dedicated to creating long-term sustainable value for our stakeholders.”
March 13, 2023
Star Agritech Expands

Photo: schankz
Star Agritech is expanding its global operations.
Headquartered in Istanbul, the company has begun constructing a reconstituted tobacco factory in Bizerte, Tunisia. The new facility will be the company’s fourth such operation worldwide.
Comprising two plants with an annual capacity of 1.2 million kg each, the factory is the first of its kind in the region. The facility will serve the domestic market and may expand its business to serve customers in Morocco and Algeria, depending on the success of the operation.
Star Agritech expects the new factory to be operational by the middle of 2023. Prior to announcing the new recon facility, Star Agritech established offices in Tunisia, Egypt and South Africa. The Tunisian office will assume responsibility for Star’s business in north Africa, the Sahel and west Africa.
In November 2022, Star Agritech established Star Agritech Commodities Trading in Yaounde, Cameroon, to strengthen its cigar leaf growing and sourcing operations in Bartouri and Bertoua. The Cameroonian facility will also implement sourcing at the farm gate for Cameroonian cacao and coffee.
In December, Star Agritech set up shop in New Delhi to further develop its sourcing of Indian tobacco. In the same month it incorporated Star Agritech Zimbabwe to enter the domestic market for flue-cured Virginia tobaccos. Star Zimbabwe will participate in the 2023 marketing season, which kicked off March 8.
Meanwhile, Star Agritech has set up a company in Norfolk, Virginia, USA to supply the North American market with tobacco and tobacco derivatives.
The company believes its nano fiber reconstituted tobacco, which can help cigarette manufacturers reduce their products’ tar and nicotine levels, has considerable potential in the United States, given the Food and Drug Administration’s intention to mandate reduced levels of nicotine in tobacco products.
March 9, 2023
Poor Scots Spend Nearly Third of Income on Tobacco: Study

Photo: Stephen Davies
Poorer households in Scotland spend almost a third of their income on tobacco, reports Daily Record, citing a study by Action on Smoking and Health.
Analysis by the health group shows that the country’s lowest income group will spend a whopping 29.4 percent of their income on tobacco products in 2023—about nine times more than the 3.35 percent estimated to be spent by households in the highest income group.
The research also estimates that households in the lowest income group containing at least two smokers will spend more than £6,000 ($7,129), or 73.5 percent of income, on tobacco in 2023.
“Tobacco is a major cause of inequalities, and the projected figures for 2023 we are releasing today spotlight the increasing need for NHS Quit Your Way services in Scotland to be better resourced and promoted to support people to leave tobacco behind, especially in communities facing the greatest challenges,” ASH Scotland CEO Sheila Duffy was quoted as saying.
In response to its findings, ASH Scotland called for increased smoking cessation support in communities experiencing deprivation.
March 9, 2023
22nd Century Reports Quarterly Results

Photo: wichayada
22nd Century Group reported net revenues of $19.2 million in the fourth quarter of 2022, up 141 percent from the comparable 2021 quarter. Revenue from tobacco-related products increased 25.7 percent to $10 million, primarily driven by volume increases in contract manufacturing and initial sales of the company’s VLN brands as part of an early rollout in Illinois and Colorado.
“The fourth quarter and 2022 were transformative for 22nd Century as we launched an aggressive commercial rollout of our FDA-authorized VLN reduced nicotine content cigarettes and accelerated revenue and margin growth opportunities with our hemp/cannabis business unit,” said 22nd Century Group CEO James A. Mish in a statement.
“Following our exceptional pilot results indicating our ability to initially capture a 1 percent share of market, several of the largest convenience store chains in the U.S. are seeking to carry our VLN products on a regional or multi-state basis.”
Looking forward, 22nd Century says it is poised to benefit from growing regulatory appetite to reduce nicotine content and ban mentholated tobacco products. The company’s VLN cigarette is currently the only Food and Drug Administration-authorized combustible cigarette able to meet the reduced nicotine content product standard under the FDA’s Comprehensive Plan requiring that all cigarettes be made “minimally or non-addictive.”
Meanwhile, the FDA’s proposed menthol cigarette ban, which is currently in final rules status, would leave VLN Menthol King as the only combustible menthol cigarette on the market. The company expects its low-nicotine leaf tobacco business to benefit from New Zealand law that will permit only reduced nicotine content cigarettes to be sold starting in early 2025.
22nd Century planted the largest ever VLN tobacco crop in 2022, including the second-generation VLN 2.0 reduced nicotine tobacco plants, which have demonstrated approximately 30 percent higher yields, enhanced quality leaf, improved disease resistance, reduction in nutrient requirements and increased stability across various environments and geographies.
March 9, 2023