Author: Taco Tuinstra

  • Tobacco Sales Boost Luxembourg Budget

    Tobacco Sales Boost Luxembourg Budget

    Image: alexlmx

    Luxembourg’s budget will be boosted by millions of additional euros in tax revenue due to higher than anticipated tobacco sales this year, reports The Luxembourg Times.

    The government expects cigarette sales to be around 6 percent higher than originally forecast in the 2024 budget, meaning that the state could reap a total of €700 million ($763 million) alone in additional excise duties. Including all taxes, the sale of tobacco products this year is expected to generate a total of €1.4 billion for the public purse.

    The direct benefit to the government’s finances from tobacco sales is expected to increase to €1.6 billion next year and €1.9 billion in 2028.

    Luxembourg will increase excise duties on tobacco products by a further 5.5 percent from next year, Finance Minister Gilles Roth said in his budget speech last week.

    While the tax increase raises the cost of the cheapest packet of cigarettes from €5.20 to €5.50, Luxembourg remains one of the cheapest places to buy cigarettes in Western Europe.

    A pack of 25 cigarettes currently costs €8 in the Grand Duchy compared with €10 in the Netherlands and €13 in France.

    Meanwhile, revenue from new nicotine products is “difficult to estimate” for 2024, a finance ministry spokesperson said. According to initial figures, around €1 million has been collected in taxes on these products between May and September.

    Overall excise revenue across all sectors is expected to hit €2.4 billion in 2025, up from €1.89 billion just three years previously.

  • Flashlight Offers to Buy KT&G’s Ginseng Business

    Flashlight Offers to Buy KT&G’s Ginseng Business

    Photo: Fan Chen

    Flashlight Capital Partners (FCP) wants to purchase KT&G Corp.’s Ginseng business. The activist investor, which is also a shareholder in KT&G, has submitted a letter of intent to acquire all shares of KT&G subsidiary Korea Ginseng Corp. (KGC).

    FCP is offering KRW1.9 trillion ($1.4 billion), which is 50 percent higher than the enterprise value analyst estimates mentioned at KT&G’s 2023 investor day.

    FCP believes that figure significantly undervalues the business. “It’s like watching parents who downplay their own child,” said FCP Managing Partner Sanghyun Lee in a statement. “We see immense potential in the poor kid. We aim to develop Korea ginseng into a global brand, comparable to Manuka honey or Maotai.”

    Despite the growing demand for health food, KGC’s operating profit halved from KRW202.1 billion in 2019 to KRW103.1 billion in 2023, and KT&G’s guidance indicates further decline in 2024.

    FCP has argued that the tobacco-ginseng pairing was a “wrong marriage,” and that KGC’s value is not reflected in KT&G’s stock price at all. Since 2022, FCP has advocated for a horizontal spinoff of KGC, but KT&G’s board rejected the proposal in 2023.

    Lee compared KT&G’s stance on KGC as “Not good enough for me, but too good for others.” He emphasized the need for either a spinoff or sale of KGC and warned that “If KT&G’s board opposes our proposal without a proper rationale, it will only prove that they are serving the interests of management rather than those of the shareholders.”

    Headquartered in Singapore, FCP has repeatedly pushed for changes at KT&G. In recent years, it has pushed for a greater emphasis on smoking alternatives, more transparent procedures in filling the company’s leadership, and a new CEO pay structure.

  • Activists Celebrate Declining Smoking Rates

    Activists Celebrate Declining Smoking Rates

    Photo: sezerozger

    New Zealand has achieved its Smoke-Free 2025 goal ahead of schedule, with smoking rates plummeting to unprecedented lows, according to the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA).

    Data from the most recent New Zealand Health Survey reveals that smoking rates have fallen dramatically, particularly among youth. The decline has been so significant that statisticians now struggle to accurately measure the small proportion of young smokers due to sample size limitations, says the CAPHRA, which attributes the success to New Zealand’s accommodation of new nicotine products as tools to help nicotine users transition away from cigarettes.

    “New Zealand’s success in reducing smoking rates is a testament to the country’s progressive approach to tobacco harm reduction,” said Nancy Loucas, executive coordinator of the CAPHRA. “By embracing vaping and other less harmful alternatives, we’ve seen smoking rates drop from 11.9 percent in 2020 to an astounding 6.8 percent in 2023. This is a clear indication that our strategy is working.”

    Our success story should be a wake-up call for countries like Australia who are still clinging to prohibitionist policies.

    Nancy Loucas, executive coordinator, CAPHRA

    The success is particularly notable among young people, with youth smoking rates reaching historic lows. “The fact that we’re having difficulty measuring youth smoking rates due to their minuscule prevalence is a cause for celebration,” Loucas added. “It’s a clear sign that we’re winning the battle against smoking-related harm.”

    Despite this undeniable success, some in the tobacco control and public health sectors seem reluctant to acknowledge the effectiveness of New Zealand’s approach, according to the CAPHRA.

    “It’s perplexing that some individuals in tobacco control can’t seem to accept our successful strategy,” said Loucas. “We’ve achieved what many thought impossible, yet instead of celebrating, they’re focusing on potential issues with vaping. We need to recognize this victory and continue supporting policies that have proven effective in reducing smoking rates.”

    The CAPHRA urges policymakers and health advocates worldwide to look to New Zealand as a model for successful tobacco harm reduction. The organization emphasizes the importance of embracing evidence-based approaches that include a range of less harmful alternatives to smoking.

    “Our success story should be a wake-up call for countries like Australia who are still clinging to prohibitionist policies,” said Loucas. “It’s time to put aside preconceived notions and focus on what works—a pragmatic harm reduction approach that prioritizes public health over ideology.”

  • Zimbabwe: Preparation for Growing Season on Track

    Zimbabwe: Preparation for Growing Season on Track

    Photo: Taco Tuinstra

    The Zimbabwean tobacco industry is increasingly confident it will achieve 300 million kg in the 2024–2025 season, reports The Herald.

    In a statement on Oct. 10, Tobacco Industry and Marketing Board Public Affairs Officer Chelesani Tsarwe said preparations for the upcoming growing season were progressing well, with most farmers expressing optimism about the cropping period.

    With consistent rainfall and moderate temperatures expected, farmers are better positioned to maximize their outputs than they were in the most recent growing season.  

    “We are optimistic about achieving the set target, thanks to the favorable weather forecast,” said Tsarwe.

    Despite the drought caused by El Nino, tobacco fared relatively well last year. The yield decreased by 20 percent from the previous season, reaching about 231 million kg in 2023.

    As of Oct. 4, 2024, Zimbabwe had exported 159.43 million kg of tobacco valued at $833.99 million compared to 143.23 million kg during the same period last year.

    “The average export price this year stands at $5.23, marking an increase from $4.99 recorded during the same period last year,” said Tsarwe.

    Last year, the country earned $1.3 billion from tobacco exports, up 30 percent over 2022.

    Eager to capture more value from the tobacco business, the government wants Zimbabwe to boost leaf output and move into value-added activities such as cigarette manufacturing.

  • French City Offers Honey in Exchange for Butts

    French City Offers Honey in Exchange for Butts

    Image: Dionisvera

    The French city of Darnetal is offering residents honey in exchange for cigarette litter, reports Euro Pulse.

    For each 1.5 liter bottle filled with butts, volunteers receive a pot of honey from local apiaries.

    According to city hall estimates, 200 kilograms of cigarette butts end up on the sidewalks of Darnetal every year despite the fact that France punishes litterbugs with a fine of €135 per improperly discarded butt.

    The plastic contained in the filters presents risks for water and soil, poisoning people and animals. The initiative is designed to motivate people to think about their contribution to environmental pollution.

    European cities have been getting creative in tackling the problem of cigarette litter. In January, Slovakia announced a project to turn discarded butts into asphalt. The first road made of cigarette butts was constructed in the city of Ziar nad Hronom.

  • EU Fraud Office Boosts Cooperation Against Illicits

    EU Fraud Office Boosts Cooperation Against Illicits

    Photo: Europol

    The European Anti-Fraud office (OLAF) held its annual tobacco conference Oct. 8-10 in Dublin. The event brought together over 90 participants representing customs and national police authorities of EU member states and third countries, the World Customs Organization, Europol and industry officials, among other stakeholders.

    Participants discussed strategies and trends and exchanged best practices in order to enhance international cooperation in combating tobacco smuggling. During the conference, OLAF presented an overview of developments on water pipe tobacco and new generation tobacco products, which have gained popularity in recent years.  

    According to OLAF, the illegal tobacco trade poses a significant threat to public health, deprives the EU and member states of substantial tax revenues and fuels organized crime networks. It undermines anti-smoking and public health campaigns, and violates the EU and EU member state rules on manufacturing, distribution and sale. In 2023, OLAF-associated operations led to the seizure of 616 million illicit cigarettes, 140 tons of raw tobacco and 6 tons of water pipe tobacco, preventing the loss of an estimated €150 million ($164 million) in revenue loss in the EU.

    The goal of the conference was to build stronger, more robust and coordinated international efforts to combat the illegal tobacco trade, thereby protecting public health, safeguarding revenues and disrupting the illicit networks involved in smuggling operations.

  • California Governor Signs Bill Against Fake Menthols

    California Governor Signs Bill Against Fake Menthols

    Photo: fizkes

    California Governor Gavin Newsom signed into law two bills to strengthen enforcement of California’s law ending the sale of flavored tobacco products. On Jan. 1, 2023, California implemented one of United States’ strongest laws prohibiting the sale of flavored tobacco products, including flavored e-cigarettes and menthol cigarettes.

    In response, tobacco and e-cigarette companies introduced products mimicking the taste and cooling effects of menthol without actually using the prohibited substance.

    The new laws are designed to thwart those initiatives.

    One bill (AB 3218) requires the state Attorney General to establish and maintain a list of unflavored tobacco products, putting the onus on the tobacco industry to demonstrate that a product does not have a flavor and can be legally sold in California.

    The bill also updates the definition of a prohibited “characterizing flavor” to include products that impart a menthol-like cooling sensation, thereby making it illegal to sell the menthol-like cigarettes that tobacco companies introduced to evade California’s prohibition on the sale of menthol cigarettes.

    The second bill (SB 1230) authorizes the California Department of Tax and Fee Administration to seize illegal, flavored tobacco products discovered during routine tobacco tax inspections.

  • Tobacco Workers to Protest in Jakarta

    Tobacco Workers to Protest in Jakarta

    Photo: Taco Tuinstra

    Tobacco workers represented by the Federation of Tobacco Cigarette Food Beverage Trade Unions planned to protest outside the Ministry of Health in Jakarta today to denounce a proposed government regulation of tobacco sales.

    Security risk management consultancy Crisis24 anticipated “hundreds” of participants and warned of the possibility of transport disruptions and minor clashes with police.  

    Indonesian lawmakers have been reevaluating the country’s tobacco control laws, including those on packaging.

    In September, more than 20 industry organizations signed a joint statement against plans to require plain packaging for tobacco and vaping products. The signatories included groups representing manufacturers, tobacco and clove farmers, labor unions, traders/retailers, creative industries, broadcasters and advertisers.

  • EU Urged to Adjust Regulatory Framework

    EU Urged to Adjust Regulatory Framework

    Unless the EU changes its strategies, the trading bloc is unlikely to achieve “smoke-free status by the target date,” according to a briefing published by We Are Innovation (WAI).

    Titled “The EU’s Smoke-Free Future and the Role of Innovation—Findings from the Special Eurobarometer 539,” the paper notes that 24 percent of Europeans still smoke, placing the EU significantly behind its goal of becoming “smoke-free” by 2040. Global public health experts define a country as “smoke-free” when its smoking prevalence is 5 percent or less. The slow rate of smoking decline suggests that this scenario may not be reached until 2100—60 years after the target date.

    According to the authors of the paper, countries that enable smokers to move and stay away from cigarettes through progressive regulatory frameworks for alternative products are witnessing more significant decreases in their smoking rates. This is the case of Sweden, where smoking rates have been in freefall since 2006, and Czechia and Greece more recently. On the other hand, countries that do not endorse the role of innovation, like Estonia, have seen the opposite trend.

    The paper’s findings are consistent with research conducted outside the EU. The decline of smoking rates in the U.K., Switzerland, the U.S., New Zealand and Japan are linked to an uptake of vaping and tobacco-heating products, among others, according to its authors.

    WAI’s analysis suggests that innovative products act as an “off-ramp” to quit smoking rather than an “on-ramp” for nonsmokers to start using nicotine.

    The authors note that a smart regulatory environment for alternative products may have further benefits, like stimulating economic growth through enhancing entrepreneurship, innovation and job creation. It can also help reduce health disparities, as lower income groups tend to smoke more.

    The briefing paper suggests that the EU’s path toward a smoke-free future should include a reassessment of the current policies and a combination of traditional measures and programs with innovative alternatives to smoking. Prioritizing the accessibility, acceptability and affordability of diverse options to help with cessation can be the key.

  • Retailers Push to Delay Display Ban

    Retailers Push to Delay Display Ban

    Photo: Heorshe

    The Federation of Sundry Goods Merchants Associations of Malaysia (FSGMA) has asked the government to postpone a ban on displaying tobacco products at retail outlets, reports The Star.

    The Control of Smoking Products for Public Health Act 2024 requires sellers to store tobacco products out of view starting April 1, 2025. The FSGMA has calculated that implementing the ban could cost its members up to MYR300 million ($70 million).

    “Each store will have to invest significant resources into making physical modifications to hide these products from customers, but the government has not offered financial assistance or a phased rollout,” said FSGMA President Hong Chee Meng.

    The organization reckons each retailer would incur up to MYR6,000 to comply with the display ban, putting financial strain especially on small, family-run businesses.

    Hong said the association is also concerned that the display ban will encourage the rise of illegal cigarettes and vape products as legitimate products will be hidden from view. What’s more, according to Hong, the lack of clear instructions has left retailers unsure about how to implement the ban.

    “Many have raised concerns about the need for additional staff to manage concealed products and the potential disruption to customer service,” he said. “Retailers deserve to know how to comply, and we deserve time and support to implement these changes.”