Author: Taco Tuinstra

BAT Reports Continued Gains in Noncombustibles

Photo: BAT
BAT gained 3.2 million consumers within its noncombustible business during the first nine months of 2022, thanks in part to new product launches and geographic expansion, CEO Jack Bowles wrote in a trading update.
The New Category business continues to drive strong volume, revenue and market share growth and has become a significant contributor to group performance, according to BAT.
The global value share of Vuse vapor cigarettes reached 35.7 percent in key vapor markets by September 2022, up 2.2 percentage points over full-year 2021. In the U.S., the brand extended its leadership position by 6.8 percentage points, achieving a total value share of 39.3 percent.
BAT’s Glo tobacco-heating product (THP) increased its category volume share by 1.6 percentage points in key THP markets to reach 19.5 percent by September 2022. In Europe, Glo achieved a 20.4 percent volume share in key THP markets, up 4 percentage points. In Japan, Hyper drove Glo’s total nicotine volume share up 50 base points versus 2021 to reach a share of 7.3 percent.
BAT’s Velo modern oral brand reached a volume market share in Europe of 69.1 percent.
Meanwhile, BAT reported a flat combustible cigarette value share, with gains in the United States, Asia-Pacific and the Middle East offset by declines in the company’s Americas, Sub-Saharan Africa and Europe regions. In the U.S., BAT begun new sales strategies in the second half to offset “early signs of accelerated downtrading,” according to Bowles.
BAT reiterated its guidance for mid-single percentage growth in adjusted earnings per share at constant currency this year. Price increases and marketing campaigns should offset higher raw material prices, according to the company.
December 8, 2022
Court Blocks FDA Graphic Health Warnings

Image: FDA
A federal judge has blocked the U.S. Food and Drug Administration from enforcing a rule requiring tobacco manufacturers to print graphic warning labels on their products, citing the companies’ First Amendment rights, reports Law360.
The Family Smoking Prevention and Tobacco Control Act of 2009 instructs the FDA to create visual health warnings, but the D.C. Circuit in 2012 blocked the agency’s first attempt, saying that regulators had not convincingly demonstrated that the warnings would actually reduce smoking.
In March 2020, the FDA released the final rule requiring new graphic warnings for cigarettes that feature some of the lesser known but still serious health risks of smoking, such as diabetes, on the top half of the front and back of cigarette packages and at least 20 percent of the area on the top of cigarette advertisements.
R.J. Reynolds Tobacco Co., ITG Brands and Liggett Group filed a First Amendment challenge in April 2020. The rule was set to take effect in November 2023 after it was repeatedly pushed back by court.
In a lengthy opinion issued Dec. 7, U.S. District Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas vacated the FDA’s rule after finding that the required label statements and graphic images are not narrowly tailored to the agency’s interest in promoting public awareness of the health risks of smoking.
“The government has not shown that compelling these large graphic warnings is necessary in light of other options,” the judge said, noting that the government could put more effort into public awareness campaigns.
Public health campaigners were aghast. “Today’s decision by a federal judge to block implementation of graphic cigarette warnings ordered by the Food and Drug Administration is wrong on the law, inconsistent with decades of precedent and harms public health,” read a joint statement issued by the American Academy of Pediatrics, American Cancer Society, American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, Campaign for Tobacco-Free Kids and Truth Initiative.
“We urge the justice department to appeal this decision, and we are confident that the FDA’s warnings will ultimately be upheld by a higher court.”
The health groups also noted that the U.S. had fallen behind other countries with its tobacco control policies. Prior to 2009, when Congress passed the Tobacco Control Act, only 18 countries required graphic warnings for tobacco products, they pointed out. Today, more than 120 countries require them.
December 8, 2022
Bristol Mayor Vetoes ‘Navy Cut’ Road

Illustration: iconsgraph
Bristol Mayor Marvin Rees vetoed naming a South Bristol road after a tobacco product following pushback from Action on Smoking and Health (ASH), reports Bristol Live.
The road was set to be named Navy Cut Road after a brand produced by the Imperial Brands tobacco factory that formerly occupied that area. After ASH said that was “morally unacceptable,” however, Rees vetoed the name in favor of naming the road after Florence Mills Brown, the first female lord mayor.
Councilor Richard Eddy criticized the move, saying that Mayor Rees is “imposing” his will on the citizens of the area.
“Having served on Bristol City Council for 30 years, it does not escape me that, contrary to all previous practice, your team is not seeking the views of my local community and its elected councilors on a proposed street-naming within my neighborhood,” Eddy wrote in an email.
“Whilst I’m sure former Lord Mayor Florence Brown was a creditworthy woman, why name a road here after a Labour politician who represented two wards miles away in North Bristol and has no discernible links to Bishopsworth?
“This is not just a small disagreement over street naming in a southern city suburb, but it goes to the heart of the debate about whether Bristol should be ruled by one man with a ‘God complex’ or whether local communities and their duly elected councilors should determine their own destinies.”
December 8, 2022
Juul Settles More than 5,000 Lawsuits

Photo: steheap
Juul Labs has settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs, reports The Wall Street Journal. The deal resolves much of the legal uncertainty that had driven the company close to bankruptcy.
Juul announced on Dec. 6 that it has secured an investment to cover the cost of the settlement. The company has been in talks with two early investors to fund a bailout that would cover legal liabilities.
According to Juul CEO K.C. Crosthwaite, the settlement addresses the vast majority of outstanding litigation facing the company, including two pending bellwether trials that were set to go to court early next year and four broad groups: personal injury plaintiffs, Juul consumers, government entities such as school districts and Native American tribes. Lawsuits brought by several attorneys general are pending.
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.
Thousands of lawsuits have been filed against Juul over the past several years, alleging that the company marketed its e-cigarettes to children. Juul has said it never marketed to underage users.
In September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products.
Juul’s e-cigarettes were briefly banned in the U.S. in late June after the Food and Drug Administration concluded that the company had failed to show that the sale of its products would be appropriate for public health. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul’s marketing application.
In October, Juul published the details of its marketing denial order appeal. In late September, Juul shareholder Altria Group exercised the option to be released from its noncompete deal with the e-cigarette maker.
December 7, 2022
U.K. Smoking Levels at All Time Low

Photo: be free
U.K. smoking levels have fallen to just 13.3 percent—the lowest since records began—according to new government data that says vaping played a “major role” in the decline.
The latest data from the Office of National Statistics (ONS) shows that the smoking rate for 2021 is down from the previous low of 14 percent in 2020, which means that there are around 6.6 million smokers in the U.K.
The ONS said this was the lowest proportion of current smokers since records started in 2011, based on estimates from the Annual Population Survey.
The report said: “Vaping devices such as e-cigarettes have played a major role in the decrease in smoking prevalence in the U.K.
“In this bulletin, we have reported an increase in e-cigarette use, and organizations such as Action on Smoking and Health (ASH) have reported similar increases in e-cigarettes (vapes) usage among adults in Great Britain.”
In the U.K. as a whole, 15.1 percent of men and 11.5 percent of women smoked, a trend that has been consistent since 2011.
The 25–34 age group had the highest proportion of current smokers (15.8 percent) while those aged 65 and over came in lowest (8 percent).
People without qualifications were more likely to be current smokers (28.2 percent) than those whose highest level of education was a degree or equivalent (6.6 percent).
Among respondents to the ONS survey, 7.7 percent said they currently used an e-cigarette daily or occasionally.
According to the authors, this equates to around 4 million adults in the population, an increase on the estimate from 2020, when 6.4 percent of people reported daily or occasional e-cigarette use.

“This is absolutely fantastic news, and I am delighted that the U.K.’s vaping industry is playing its part in making this happen.”
John Dunne, director general, UKVIA
Tobacco harm reduction advocates were elated by the decline in smoking. “This is absolutely fantastic news, and I am delighted that the U.K.’s vaping industry is playing its part in making this happen,” said John Dunne, director general of the U.K. Vaping Industry Association, in a statement.
“The government must now redouble its efforts to ensure that it gets its 2030 smoke-free ambitions back on track so that smoking can finally be consigned to history.”
Dunne said stakeholders should capitalize on the momentum by reaching out to remaining smokers and giving them the facts that they need to make the switch to vaping. “We must allow vape companies to use agreed health claims and switching messages to encourage adult smokers to switch to e-cigarettes and make full use of the different methods of communication available to the government and public health bodies,” he said.
December 7, 2022
Excessive Tax Rates Boost Illicit Markets

Photo: Tobacco Reporter archive
Excessive tax rates on cigarettes induce substantial black and gray market movement of tobacco products into high-tax U.S. states from low-tax states or foreign sources, according to a new report by the Tax Foundation.
New York has the highest inbound smuggling activity, with an estimated 53.5 percent of cigarettes consumed in the state deriving from smuggled sources in 2020. New York is followed by California (44.8 percent), New Mexico (45.5 percent), Washington (41.5 percent), and Minnesota (34.8 percent).
New Hampshire has the highest level of net outbound smuggling at 52.4 percent of consumption, likely due to its relatively low tax rates and proximity to high-tax states in the northeastern United States. Following New Hampshire is Indiana (35.6 percent), Virginia (27.6 percent), Idaho (25.8 percent), Wyoming (24.4 percent), and North Dakota (18.6 percent).
Illinois and New Mexico significantly increased their cigarette tax rate from 2019 to 2020. Both states saw major increases in cigarette smuggling.
“Policymakers interested in increasing tax rates should recognize the unintended consequences of high taxation rates,” the Tax Foundation wrote on its web site. “Criminal distribution networks are well-established and illicit trade will grow as tax rates rise.”
The authors stress that excessive taxation is not the only driver of illicit trade. Measures such as flavor bans and reduced-nicotine mandates, they argue, also have the potential to push tobacco sales into the illegal sphere.
December 7, 2022
BAT Nigeria Recognized as Top Exporter

Photo: eyegelb
The Nigerian Export Promotion Council (NEPC) recognized BAT Nigeria as a top contributor to non-oil exports to African markets, reports Business Day.
NEPC issues the award based on the pre-shipment inspection reports by the non-oil exporters, according to Ezra Yakusak, executive director and CEO of NEPC.
BAT Nigeria exports to 14 countries in West Africa and Central Africa, generating more than $500 million in revenue. BAT Nigeria is one of the country’s top five non-oil exporters each month and generates and repatriates over $110 million in foreign exchange annually. The company employs, directly and indirectly, more than 350,000 Nigerians.
“The Nigerian Export Promotion Council’s recognition of the volume of our exports to African markets is a testament to BAT’s contribution to the region’s economic growth and development,” said Odiri Erewa-Meggison, external affairs director at BAT West and Central Africa. “We have been involved with Nigeria as well as the West and Central Africa region. We remain committed to advancing the non-oil sector in Nigeria as we create ‘A Better Tomorrow.’”
Non-oil exports accounted for 11.32 percent of 2021 exports in Nigeria.
December 5, 2022
Swisher Appoints Neil Kiely as President/CEO
Neil Kiely
Swisher has appointed Neil Kiely to the positions of president and CEO and Jeffrey Brown as executive vice president of sales. Kiely previously served as Swisher’s president, and Brown was previously the general manager of E-Alternative Solutions (EAS), a sister company of Swisher.
As president and CEO, Kiely will lead the strategic growth, transformation and diversification of Swisher’s portfolio in a variety of lifestyle categories, bringing over three decades of experience growing and transforming consumer packaged goods (CPG) companies.
One of Kiely’s first moves as president and CEO was to tap Brown, who has more than 37 years of industry and leadership experience in several CPG categories, including cigars, vapor and CBD, to lead Swisher sales. At EAS, Brown was responsible for staffing the team and developing and implementing strategic plans for new products.
Jeffrey Brown
“Jeff has shown tremendous growth since joining EAS in 2014 and has demonstrated the leadership and acumen required for managing Swisher’s global sales strategy,” said Kiely. “Between his experience leading large sales teams and introducing new products in innovative ways, Jeff has earned this opportunity and is well equipped to lead us as we continue to transform and diversify our product portfolio.”
The Kiely and Brown appointments follow the recent transition of Chris Howard to the role of executive vice president of external affairs and new product compliance. Kiely, Brown and Howard are part of the company’s executive leadership team, which comprises Jacinta Carter, executive vice president of human resources, people and culture; Christopher Casey, executive vice president of legal/general counsel; and Edward Barlow, senior vice president of operations.
December 5, 2022
Zim Farmers Pleased with Early Tobacco

Photo: Taco Tuinstra
Farmers in Zimbabwe’s Karoi and Headlands area have been pleased with the quality of early planted tobacco, reports The Herald.
The crop is generally reported to be in good condition and many small-scale farmers, who rely on rainfall, are still in the process of planting.
This year to date, Zimbabwean tobacco farmers have planted 53,571 ha of tobacco compared with 38,312 ha during the previous growing season, according to the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development.
Statistics also revealed that about 18,614 ha were put under irrigated tobacco and 34,957 under dryland tobacco.
The Tobacco Industry and Marketing Board recently increased the number of licensed tobacco contractors to 42 from 39 as more merchants qualified.
Tobacco continues to rank as one of Zimbabwe’s most important non-food crops.
Zimbabwe earned $650 million during the 2022 tobacco marketing season, which closed Oct. 21. The figure was up from $589 million last year.
December 2, 2022
Kenya Urged to Reverse Tobacco Export Deal

Photo: prehistorik
Anti-smoking activists are urging the government of Kenya to reverse a deal to export more tobacco to South Korea, reports The Star.
During a recent visit to South Korea, Kenyan President William Ruto signed a bilateral trade agreement that will see Kenya increase its exports of tea, coffee and tobacco.
The Kenya Tobacco Control Alliance (KETCA) has asked the president to reconsider his decision, citing fears that the agreement will persuade farmers to grow tobacco even as health advocates are encouraging them to replace the golden leaf with other cash crops.
Concerned about the environmental and health effects of tobacco production and consumption, the World Health Organization, the World Food Program and the Food and Agriculture Organization in collaboration with the Kenyan government launched a project to discourage tobacco production in western Kenya in March.
The project enables the farmers to stop tobacco growing contractual agreements and switch to food crops that will help feed communities.
According to KETCA national coordinator Thomas Lindi, Kenya’s Tobacco Control Act also commits the government to continually phase out tobacco farming in Kenya.
“Any treaty or agreement that binds Kenya to promote tobacco farming is against the Tobacco Control Act and is therefore illegal,” he said. “We ask the government to immediately cancel aspects of the Kenya-South Korea agreement that touch on tobacco.”
Tobacco is a key cash crop for at least 55,000 farmers in Kenya, mostly from the western and southeastern parts of the country. Though the overall contribution to the national economy is relatively small (about 0.03 percent of GDP), tobacco is an important economic activity in the regions where it is farmed.
December 1, 2022