Author: Taco Tuinstra

  • Zimbabwe Debates Curing Fuel Options

    Zimbabwe Debates Curing Fuel Options

    Photo: Taco Tuinstra

    Tobacco grower representatives in Zimbabwe are urging contractors to provide their members with sustainably produced wood rather than coal for leaf curing, according to an article in The Herald.

    The compliance enforcement framework (CEF) agreement signed by tobacco buyers and the Tobacco Industry and Marketing Board requires contractors to fund tobacco growing inputs, such as fertilizer and curing fuel.

    Under the CEF, a 1 hectare pack for small-scale production includes 500 kg of coal or its sustainable wood equivalent as curing fuel.

    While most contractors are providing farmers with coal, grower representatives believe wood is more sustainable. “We think wood of an equivalent to the coal component would be better as less charges would be incurred by farmers in U.S. dollar terms,” said Tobacco Farmers Union Trust Vice President Edward Dune.

    “Sustainable wood is the way forward as coal use is unsustainable and will likely be phased out in the near future if the current lobbying by environmentalists prevails,” echoed Rodney Ambrose, CEO of the Zimbabwe Tobacco Association.

    In 2021, the Zimbabwean government crafted the tobacco value chain transformation plan, which seeks to increase tobacco production to 300 million kg by 2025.

    The plan emphasizes sustainable production through reforestation programs, fuel-efficient curing facilities and the use of alternative energy sources for curing. It calls for research into the suitability as a fuel source of alternative tree species, such as giant bamboo.

  • ITC Quarterly Profit Up

    ITC Quarterly Profit Up

    Photo: Wirestock

    ITC reported a profit of INR50.31 billion ($614.52 billion) in the October–December quarter, up from INR40.56 billion in the comparable 2021 period, reports Reuters. The company attributed the increase to strong cigarette sales and steady demand for its packaged foods.

    ITC’s overall revenue from operations rose about 3 percent to 172.65 billion rupees, of which more than 40 percent came from its cigarette business.

    Revenue in that business, which includes the Classic and Gold Flake brands, jumped nearly 17 percent to 72.88 billion rupees.

    ITC said its cigarette business “continues to reinforce market standing by fortifying the portfolio through innovation, democratizing premiumization across segments and enhancing product availability backed by superior on-ground execution.”

    It also praised the government’s actions against illegal cigarettes sales. “Stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, continues to enable volume recovery for the legal cigarette industry from illicit trade leading to higher demand for Indian tobaccos and bolstering revenue to the exchequer from the tobacco sector,” the company wrote in a statement.

    “The company continues to engage with policymakers for a framework of equitable, nondiscriminatory, pragmatic, evidence-based regulations and taxation policies that disincentivize illicit trade in cigarettes, balance the economic imperatives of the country and tobacco control objectives while cognizing for the unique tobacco consumption pattern in India.”

    This week, the government raised the National Calamity Contingent Duty on cigarettes by 16 percent, which some analysts said could mean a “modest” 1.5 percent increase in tax. Others expect ITC to counter with price hikes.

  • Kaival’s Fiscal 2022 Hit by Marketing Denial

    Kaival’s Fiscal 2022 Hit by Marketing Denial

    Photo: Kaival Brands

    Kaival Brands Innovations Group reported revenues of $3 million for the fourth quarter that ended Oct. 31, 2022, compared with revenues of $100,000 million for the prior fourth fiscal quarter. Revenues for the full fiscal year were approximately $12.8 million, down from $58.8 million for fiscal year 2021.

    Kaival attributed the full-year decrease to the U.S. Food and Drug Administration’s marketing denial orders (later overturned), which temporarily prevented the company from selling its products, and to increased competition in general, which Kaival suspects resulted from lax enforcement by federal and state authorities against subpar and low-priced vaping products that continued to enter the market illegally without FDA authorization.

    “Fiscal 2022 was an exceptionally challenging year for us, primarily due to regulatory action by the FDA that was ultimately overturned in August,” said Kaival Brands President and Chief Operating Officer Eric Mosser in a statement.

    “For a portion of fiscal 2022, we were prohibited from selling our flavored Bidi Sticks, and our 2022 revenues reflect the significant extended impact of this. The good news is that this impediment is behind us. Moreover, despite the challenges, we accomplished several important milestones during the year, which we believe has laid the foundation for renewed growth and progress in 2023, including expanding existing sales channel relationships and initiating significant new ones. We expect and hope that the FDA will continue to pull bad actors from the marketplace, paving the way for companies like ours to provide our products to adult smokers deserving of premium e-cigarette product and experience.”

  • Gudang Garam Owner Accused of Fraud

    Gudang Garam Owner Accused of Fraud

    Photo: Dani

    The Indonesian affiliate of Oversea-Chinese Banking Corp. has accused a billionaire owner of Gudang Garam of fraud, according to Bloomberg.

    PT Bank OCBC NISP reportedly filed a police report against Susilo Wonowidjojo, an owner and president director of Gudang Garam, concerning some INR232 billion ($15.5 million) in troubled loans.

    The bank disbursed the loan in 2016 to a wig-making company owned by Wonowidjojo’s family, according to the lender’s lawyer. The case involves a total of INR1 trillion of funds when including loans from other lenders, he said.

    Gudang Garam shares fell 5.7 percent Jan. 3 in their biggest drop since Jan. 5.

  • Bloomberg Commits Millions to Tobacco Control

    Bloomberg Commits Millions to Tobacco Control

    Photo: Elenathewise

    Bloomberg Philanthropies has committed another $420 million over four years to the Bloomberg Initiative to Reduce Tobacco Use. This fourth investment brings Bloomberg’s total commitment to tobacco control to more than $1.58 billion since 2005.

    The Bloomberg Initiative to Reduce Tobacco Use is helping cities and countries implement measures such as smoke-free public places, banning tobacco advertising, increasing tax on tobacco products, requiring graphic warnings on cigarette packaging and mass-media public awareness campaigns.

    Currently, the initiative spans more than 110 low- and middle-income countries (LMICs)—including China and India, which together account for nearly 40 percent of the world’s smokers.

    From the new $420 million in funding, $280 million will be aimed at reducing tobacco use in LMICs and $140 million will target reducing e-cigarette use among teenagers in the United States.

    “Over the past two decades, we’ve made major progress in reducing tobacco use and the death and disease connected to it, but it continues to take a devastating toll, and it remains the leading cause of preventable death,” said Michael R. Bloomberg, founder of Bloomberg Philanthropies and WHO Global Ambassador for Noncommunicable Diseases and Injuries, in a statement.

    “This latest investment will help to spread strategies that have proven so effective at saving lives — including smoke-free laws and advertising restrictions—to more nations and communities around the world.”

  • Iranian Tobacco Co. to Build in Zimbabwe

    Iranian Tobacco Co. to Build in Zimbabwe

    Photo: www.akolosov.art

    The Iranian Tobacco Co. (ITC) will build a cigarette factory in Zimbabwe, reports Press TV.

    According to local media reports, ITC CEO Mohammad Sheikhan and Zimbabwe’s agriculture minister, Anxious Jongwe Masuka, signed an agreement in Harare on Jan. 26.

    The facility will manufacture ITC’s Bahman brand using Zimbabwean leaf tobacco. As part of the agreement, Zimbabwe will also supply tobacco for cigarette manufacturing in Iran or for re-exports to Central Asia.

    Other Iranian-made cigarette brands will be exported to Zimbabwe under the deal.

    Iran’s tobacco sector has grown in recent years amid lower imports of international brands and increasing demand for local products.

    The boom has enabled the ITC to revive idle plants and to start exporting to several countries in West and Central Asia.

    The company’s planned cigarette factory dovetails with Zimbabwe’s ambition to move up the tobacco value chain. While the country exports hundreds of millions of kg of leaf each year, most of the value is captured by the buyers who process the tobacco into consumer products.

    The country aims to generate US$5 billion from tobacco by 2025, up from US$1 billion today.

  • Essentra Filters Rebrands as Filtrona

    Essentra Filters Rebrands as Filtrona

    Following the announcement about a change of ownership, the former filters and tapes businesses of Essentra will now begin the process of rebranding as Filtrona.

    “This is an exciting time for our business, marking a new chapter in our journey to build a global market-leading company that supports our partners to transform and grow,” said Filtrona CEO Robert Pye in a statement.

    “Many of our customers and suppliers will know that Filtrona was the company name prior to rebranding to Essentra plc. Having talked to them about our plans, it was clear that the Filtrona name represented a rich history of innovation and partnership. It was only right that we adopted the brand again, which had such a strong foundation, and gave it a fresh contemporary design to take us forward.”

    With its rebrand well underway, the business enters 2023 with exciting plans for the future.

    “Both the tobacco and packaging industries are focused on driving innovation in response to ever-changing consumer preferences,” says Pye. “Our customers therefore need global partners that are investing in the future of their business.

    “At Filtrona, we now have a truly global presence with facilities in all major markets worldwide supported by a 2,000-strong team of talented employees working across our 11 manufacturing locations, 3 innovation centers, an accredited laboratory and a center of excellence focused on sustainability. Our mission is to be a responsible, customer-focused innovation leader creating excellence in sustainable solutions for today and tomorrow. We look forward to delivering on this commitment.”

    “We are delighted to welcome Filtrona into our diverse portfolio,” said a representative of the new shareholder. “The business has a rich heritage in providing innovative solutions to a well-established customer base with a global footprint, high quality people and exciting prospects. We continue to support our partners through the next phase of growth relying on our combined expertise in identifying and unlocking value creation opportunities.”

  • An Essential Component

    An Essential Component

    Nina Ritter-Reischl |Photo: Glats Feinpapiere

    Manufacturers of tipping papers adapt to a changing cigarette market.

    TR Staff Report

    Valued at $1.6 billion in 2021, the global cigarette paper market is projected to reach $2.2 billion by 2031, according to Allied Market Research. Tipping base paper represents only a small part of this market but is an essential component in cigarette construction, where it has to meet many requirements.

    “As tipping base paper is a printing paper, the printability is most important,” says Nina Ritter-Reischl, CEO of German cigarette paper manufacturer Glatz Feinpapiere. “Printability is mainly depending on sheet formation and smoothness as well as the sizing. The latter is important to prevent color bleeding in the printing process. Our papers show a very good printability due to their formation and constant quality parameters, especially in sizing. Our know-how in tipping base paper goes back for decades and is one of our main assets.”

    Other considerations are water absorption, which determines ink absorption; smoothness, which plays a role in printability; and a “dynamic contact angle” for the gluing process; along with flammability, according to Liem Khe Fung, Innovation Center director at Indonesian cigarette paper manufacturer BMJ.

    Liem Khe Fu

    “The print quality of BMJ’s tipping base paper is excellent,” says Liem. It allows for 12-color print and the inclusion of tactile and embossed features along with security features. Flavored and sweetened papers are also possible, according to Liem. The company started to significantly supply the market only a few years ago, so the potential growth for BMJ in this field is still high, according to Liem.

    Ritter-Reischl views her company as a specialist for tipping base paper within the cigarette industry. “Therefore, we started focusing even more on our tipping base paper customers and were able to raise our sales within this market segment,” she says. “Tipping base paper customers are demanding and have high quality standards; they expect close customer relationships and interlinks in addition to excellent services. Those are challenges we can meet and are specialized in. As an example, we even deliver our tipping base paper with our own transportation company to one of our most valued customers, door to door every day.”

    The tipping base paper market has become highly competitive. Liem, whose company mainly caters to the Asian market, says that price competition is the main challenge, followed by small order quantity per stock-keeping unit.

    Julius Glatz is strong in Europe. “However, we also deliver to Asia and Latin America as there are printers too,” says Ritter-Reischl.

    As tipping base paper is an essential part of the cigarette, the tipping base paper market is facing the same challenges as the cigarette market in general. “Rising inflation and therefore declining purchasing power of consumers, political instability, rising costs and stumbling logistics worldwide are afflicting the market,” says Ritter-Reischl.

    Following a modest uptick during the Covid-19 pandemic, when many people where stuck at home, global cigarette consumption has resumed its long-term decline. In 2024, Statista projects volumes to shrink by 0.4 percent. That still leaves a market of around 5 trillion cigarettes, however—and the vast majority of them will require a tipping paper.

  • Exploring ‘Belated’ Mortality

    Exploring ‘Belated’ Mortality

    Photo: Nopphon

    How did the 1980–2020 fall in U.S. smoking incidence impact smoking-related deaths?

    By George Gay

    I have a question. What proportion of smokers die “belatedly,” a word I shall use to mean later than predicted or expected, the opposite of “prematurely”? What I am getting at is, if, as I am told, 50 percent of smokers die prematurely from smoking-related diseases and, as I assume, X percent of smokers die prematurely from nontobacco-related causes, unless X is equal to 50, there must be a proportion of smokers who either die on their allotted day or after their allotted day, either from a tobacco-related disease or other causes. But you rarely hear of these people outside of the odd sensational newspaper story that tells how Joan Naughtie has just celebrated her 105th birthday with a cigarette, a glass of whiskey and a bout of raunchy, unprotected sex.

    There are probably a number of reasons why you rarely hear about these people, one of which is that they are an embarrassment, especially in the case of the Joan Naughties of this world who have clearly been having too much fun.

    But firstly, it is necessary to be clear what we mean by a smoker dying prematurely, on time or belatedly. Although it is difficult to impossible to prove a negative, experience tells me that none of us comes into this world tattooed or otherwise marked with a use-by date, so the day on which we are “supposed” to die must be predicted in some way by people who dabble in necromancy, I assume on the basis of past years’ age-related death statistics. I don’t know how sophisticated longevity figures are, but what I see usually are nationwide figures, stated separately for men and women. I trust the breakdown is more intricate than this, however, because, in a country such as the U.K., for instance, where inequality is rife, longevity varies hugely by region, so judging whether a smoker died prematurely against a national average would lead to overestimations.

    Given such concerns, I think that, in the cause of balance, the percentage of smokers who die belatedly should from now on always be stated whenever the percentage of smokers who die prematurely of smoking-related diseases is given.

    I wrote above that the number of smokers who died on their allotted day or after was an embarrassment, and one reason is that they, especially those who die not of a smoking-related disease, give the lie to the general statement that “smoking kills.” Smoking might be the indirect cause eventually of the deaths of a proportion—even a high proportion—of smokers, but, if I am correct in my assumptions above, given that people smoke and live beyond their allotted lives, it cannot be stated, without caveat, that smoking kills.

    One other embarrassment concerns whether, given that it is claimed that smokers who die before their allotted time die because of their smoking unless there is clear evidence to the contrary (they were hit by a bus, perhaps), it can be said that smokers who die after their allotted time live longer because of their smoking, unless there is clear evidence to the contrary (they were genetically modified, perhaps).

    Cause and Effect

    I started to think about such things after reading what struck me as a strange story in The Hill titled “Despite drop in popularity, cigarette smoking continues to be a leading cause of U.S. cancer deaths.” The story was based around some figures from the oddly named U.S. Centers for Disease Control and Prevention (CDC) and new research from the American Cancer Society. The CDC input was that the cigarette smoking rate in the U.S. dropped from 33 percent in 1980 to a little above 12 percent in 2020.

    The story followed up these figures by saying, in part: “But new research from the American Cancer Society shows smoking is still taking a huge toll on American life expectancy and the economy. According to a new study published in the International Journal of Cancer, nearly 123,000 U.S. cancer deaths were caused by cigarette smoking in 2019, making up close to 30 percent of all cancer deaths for that year. Cancers associated with smoking included cancers of the oral cavity, pharynx, esophagus, stomach, lungs and bronchus, among others.”

    This is interesting as far as it goes, but it was what was not revealed that I found frustrating and interesting. Nowhere in the story does it say whether the fall in the incidence in smoking between 1980 and 2020 was mirrored by a fall in smoking-related deaths. Clearly, this is the critical point because if the fall in the incidence of smoking-related deaths has mirrored or closely followed, at a certain time remove, the fall in the incidence of smoking, then many of the claims and assumptions that have been made surrounding smoking and its effects will have been confirmed. However, if there is a largish variation, then questions need to be asked. We certainly need to know if the fall in the incidence of smoking-related deaths in the U.S.—I take it there has been one, though you wouldn’t know from the story—has fallen behind or raced ahead of the fall in the incidence of smoking. And, in either case, we need to know why what has occurred has occurred. Could it be, perhaps, that smoking between 1980 and 2020 became more or less dangerous?

    It might be an uncomfortable truth for politicians and those who refuse to cut back on car journeys, but if the fall in the incidence of “smoking-related” deaths has not kept up with the fall in the incidence of smoking, it would be fairly obvious where to start investigating—the incidence of pollution exposure. I am not a medical person, but some of the smoking-related cancers listed above could seemingly be caused wholly or partly by pollution.

    None of this is meant to support tobacco smoking. On the contrary, it is meant to help us understand what the facts—rather than the myths—are surrounding “smoking-related” deaths and in this way lessen those deaths.

  • U.S. Cigarette Sales Down in 2020-2021

    U.S. Cigarette Sales Down in 2020-2021

    Photo: www.akolosov.art

    The number of cigarettes that the largest cigarette companies in the United States sold to wholesalers and retailers nationwide decreased from 203.7 billion in 2020 to 190.2 billion in 2021, according to the Federal Trade Commission’s most recent Cigarette Report. The report also states that in 2021, menthol flavored cigarettes comprised 37 percent of the market among major manufacturers, more than double the 16 percent market share they held in 1963.

    The amount spent on cigarette advertising and promotion increased from $7.84 billion in 2020 to $8.06 billion in 2021. Price discounts paid to cigarette retailers ($6.01 billion) and wholesalers ($917 million) were the two largest expenditure categories in 2021. Combined spending on price discounts accounted for 86 percent of industry spending.

    According to the Smokeless Tobacco Report, smokeless tobacco sales decreased from 126.8 million pounds in 2020 to 122 million pounds in 2021. The revenue from those sales rose from $4.82 billion in 2020 to $4.96 billion in 2021. Menthol flavored smokeless tobacco products comprised more than half of all sales and fruit flavored smokeless tobacco products comprised 2.7 percent.

    Spending on advertising and promotion by the major manufacturers of smokeless tobacco products in the U.S. increased from $567.3 million in 2020 to $575.5 million in 2021. As with cigarettes, price discounts made up the two largest spending categories, with $308.2 million paid to retailers and $81.3 million paid to wholesalers in 2021. Combined spending on price discounts represented 67.7 percent of all industry spending.

    Smokeless tobacco manufacturers also reported selling $804.8 million of nicotine lozenges or nicotine pouches in 2021, not containing tobacco, up from $422.7 million in 2020.

    The Commission has issued the Cigarette Report periodically since 1967 and the Smokeless Tobacco Report periodically since 1987.