Author: Taco Tuinstra

  • Snowplus Expands in the Philippines

    Snowplus Expands in the Philippines

    Photo: Snowplus

    Snowplus of China is expanding its vaping business in the Philippines, reports The Philippine Star.

    Co-founder and head of overseas markets Derek Li is confident the company can build a good distribution network in the country.

    Snowplus has invested $2 million in quality and safety research since 2019 and has received over $150 million in financing, which is among the largest funding for any startup in the e-cigarette industry.

    Snowplus has also committed to raising industry quality and standards to deliver safe and reliable e-cigarettes to consumers in the Philippines.

    In line with new vapor industry regulations in China, Snowplus recently obtained permission to operate from the State Tobacco Monopoly Administration. The license authorizes the company to produce 80 million pods per year.

    The company established three advanced scientific laboratories with equipment to test its products’ power supply and durability, among other characteristics.

    “Consumers can trust Snowplus. We work only with the most reputable partners and deliver products of the highest quality that are 100 percent safe,” Li said.

  • Magellan Denies Receiving MDO

    Magellan Denies Receiving MDO

    Photo: Surendra

    Magellan Technology insists it did not receive a marketing denial order (MDO) for its Hyde Brand, despite a U.S. Food and Drug Administration announcement to the contrary.

    In an email to Tobacco Reporter’s sister publication, Vapor Voice, Magellan CEO Jon Glauser said his company had received a “refuse to accept” (RTA) letter. An RTA is not a judgment on the product’s appropriateness for the protection of public health. It is merely a determination that the premarket tobacco product application doesn’t conform to the FDA’s standards, and it leaves the applicant the option to refile.

    “A refuse to accept letter is a refusal based on nothing more than a technical review of the applications’ contents, which, in this case, was a missing document, i.e., a sworn certification related to the translation of certain components of the application,” wrote Gauser. “In other words, the refusal to accept was based on bureaucratic technicalities.”

    In its letter to Magellan, the FDA wrote that the absence of the forms prevented the agency from accepting and processing the applications. “In other words, FDA could not have conducted any scientific review because it refused to accept the application,” wrote Glauser. “Our counsel has demanded that FDA not only retract the press statement it made but also issue a corrective statement making clear that FDA did not issue an MDO to Magellan and that it has not yet conducted a scientific review of Magellan’s products.”

    Magellan is not the first company to take issue with the FDA’s handling of the PMTA process. The agency is currently facing more than 20 lawsuits and has had to backtrack on MDOs issued to companies such as Juul Labs, Turning Point Brands and Kavial Brands.

  • Campaigners Welcome Delay Tobacco Bill

    Campaigners Welcome Delay Tobacco Bill

    Photo: sezerozger

    Legalizing vape sales in Malaysia remains on the table despite the heath minister postponing the “generational endgame” anti-smoking bill after considerable public and political pressure, according to the Malaysian Organization of Vape Entities (MOVE).

    Malaysia’s Minister of Health, Khairy Jamaluddin, made the decision not to table the bill despite the bipartisan special parliamentary select committee making amendments and reaching consensus. 

    Samsul Arrifin

    “This delay now gives MPs time to get the country’s tobacco control strategy right. We strongly believe that vaping should be not part of the generational endgame bill. It would only criminalize vape consumers and retailers,” said MOVE President Samsul Arrifin.

    MOVE would like vaping and noncombustible products out of the legislation and for the government to treat them as harm reduction tools.

    Tobacco harm reduction (THR) advocates were heartened in April when the regulation of vaping devices was announced to take effect in August. It was assumed the move would precede the legalization of vape sales in Malaysia.

    They also took heart from a visit last month to New Zealand by a Malaysian parliamentary delegation to understand what policies are required to achieve smoke-free. New Zealand has legalized and regulated vape sales and is now on track to achieve its national ambition of Smoke-free 2025—where 5 percent or less of the population smoke regularly.

    New Zealand is also looking to implement a similar generational smoking ban, which would see the prohibition of tobacco product sales to anyone born in 2009 or after. However, Malaysia’s proposal for those born in 2007 or after would also ban vaping product sales.

    “New Zealand’s smoking rate is less than half of ours because they’ve regulated adult-only retail access to vaping products. New Zealand actively steers smokers toward safer nicotine products, with vaping an incredibly effective off-ramp to smoking. If Malaysia is to reduce smoking to below 5 percent by 2040, then we need to regulate, not ban, vaping products,” said Arrifin.

    The Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) says about 70 countries have already proven that a THR approach works. In contrast, Australia is showing just how badly vaping bans fail.

    “As well as giving the 21 percent of Malaysians who smoke a less harmful alternative, regulating vaping will ensure Malaysia has product safety standards, not to mention extra tax revenue. We are pleased the government is taking its time on this one. An evidence-based approach will serve them well,” said Nancy Loucas, executive coordinator of CAPHRA.

  • Malaysia Removes NRT from Poisons List

    Malaysia Removes NRT from Poisons List

    Photo: dalaprod

    Malaysia’s Health Ministry has categorized nicotine-replacement products as nonpoisons to make them more accessible to consumers, reports The New Straits Times.

    Minister Khairy Jamaluddin said the move was done by granting an exemption to nicotine under the Poisons Act 1952 for products in the form of patches or gum registered under the Control of Drugs and Cosmetics Regulations 1984.

    “This exception is expected to help smokers, who are motivated to quit smoking, in dealing with the withdrawal symptoms,” said Khairy.

    At present, smokers who want to quit smoking have limited access to nicotine-replacement products as they are regulated under the Poisons Act 1952.

    Under the law, nicotine is classified as a “Group C poison” and can be dispensed only by licensed pharmacists or registered medical practitioners.

    The New Straits Times article made no mention of nicotine vapor products, which tobacco harm reduction advocates consider to be the most effect nicotine-replacement products on the market.

    Malaysian lawmakers are currently considering the Control of Tobacco Product and Smoking Bill 2022, which, among other measures, would ban the sale of tobacco products, including e-cigarettes, to anyone born after 2007.

  • JTI Investing in Philippines

    JTI Investing in Philippines

    Photo: Skórzewiak

    Japan Tobacco International is expanding its operations in the Philippines, hiring additional workers for its global business service center (GBSC).

    The GBSC was established in 2020, at the height of the Covid-19 pandemic, to service JTI’s affiliates in Asia-Pacific and the Americas. In an interview with the Manila Bulletin Business, JTI Philippines General Manager John Freda said the company would be hiring an additional 150 people, bringing the center’s overall manpower to 600.

    Although there are no immediate plans, Freda did not discount the possibility of JTI producing its Ploom heated-tobacco sticks in the Philippines, which serves as the company’s manufacturing hub for the Asia-Pacific region. Ploom is currently produced in Japan and in the EU.

    JTI’s cigarette factory in Malvar, Batangas, exports more than 50 percent of its production mainly to 16 countries in the Asia-Pacific region. The factory employs 800 people with marketing team support of over 4,000 personnel across the country.

    In the interview, Freda also expressed his concern about the growing illicit cigarette trade in the Philippines, which is estimated to account for 16 percent to 18 percent of the market. In some areas in Mindanao, the share of smuggled cigarettes could reach 60 percent of the market.

    Citing the experience of Malaysia as a cautionary example, Freda urged the Philippines to step up enforcement and adopt reasonable rates of taxation.

    “We are paying PHP55 [$0.94] per pack in taxes, and clearly the illicit operator is not paying like that, and as prices increase due to taxation, it becomes even more profitable for smugglers and therefore need[s] strong enforcement measures,” he said.

  • Imperial Announces Share Buyback

    Imperial Announces Share Buyback

    Stefan Bomhard (Photo: Imperial Brands)

    Imperial Brands has announced the start of a multi-year share buyback program.

    The company intends to repurchase up to £1 billion ($1.12 billion) of shares between Oct. 7, 2022, and the end of September 2023. This would represent approximately 5.5 percent of the issued share capital of Imperial Brands based on the Oct. 5, 2022, market close.

    “The launch of our new buyback program is an important milestone in our five-year strategy announced in January 2021,” said Imperial Brands CEO Stefan Bomhard in a trading update. “Over the past two years, increased investment and a more consumer-centric approach have improved delivery in both our priority combustible markets and next-generation product operations. Disciplined capital allocation has strengthened our balance sheet to reach our target leverage levels.

    “Today’s announcement is underpinned by this improving performance and our confidence in being able to continue generating strong cash flows to support growing shareholder returns in the years to come,” Bomhard added. “We are committed to a progressive dividend and an ongoing buyback program to meaningfully reduce the capital base over time.”

    According to Imperial Brands, trading in the year has been in line with expectations. Targeted investment in the company’s five largest combustible markets (which account for around 70 percent of operating profit) has driven an improvement in aggregate market share.

    A stronger price mix accelerated the growth rate of tobacco net revenue at constant currency exchange rates in the second half of fiscal 2022. The recovery of international travel has led to a return to pre-Covid purchasing patterns, with increased volume declines, particularly in Northern Europe, partly offset by volume growth in Southern Europe and duty-free.

    Imperial Brands reported good progress in implementing its refreshed next-generation product strategy. The company’s Pulze and iD tobacco-heating products debuted in Italy, Europe’s largest heated-tobacco market, while gaining market share in Greece and the Czech Republic. The company says its new Blu 2.0 pod-based vapor device was well received during a consumer trial in France.

    Imperial Brands will report its annual results for the year ended Sept. 30, 2022, on Nov. 15, 2022.

  • Speculation Mounting About Juul Bankruptcy

    Speculation Mounting About Juul Bankruptcy

    Photo: andranik123

    Juul Labs may be preparing to file for Chapter 11 bankruptcy, according to reports by Bloomberg and The Wall Street Journal and a tweet by Reorg reporter Harvard Zhang.

    The vaping company has reportedly received inquiries from lenders and will soon formally request debtor-in-possession financing options.

    “We will continue the preparation process for both a restructuring and other strategic options as we determine what path is best for our company,” a Juul spokesman said on Oct. 4.

    Chapter 11 allows a company to continue operating while it works with a court and its creditors to reorganize its finances. It doesn’t necessarily herald the end of the company.

    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 June, the U.S. Food and Drug Administration ordered Juul’s products off the market, then stayed the decision pending Juul’s appeal.

    Last month, Juul agreed to pay at least $438.5 million in a settlement with more than 30 states.

    The uncertainty over Juul’s ability to remain on the market could make it difficult for the vaping company to raise money or secure traditional loans to pay for legal settlements or court judgments.

    In September, Juul’s largest shareholder, Altria Group, terminated its noncompete agreement with Juul. Altria’s decision gives Juul more options to secure its business, including the freedom to sell itself—or a significant stake—to one of Altria’s competitors.

    The rumors about a possible Juul bankruptcy are not new. Clive Bates, director of The Counterfactual, described them as a “nothing burger with a side of thin air.”

    “It has been obvious since @FDA maliciously denied Juul’s marketing application that Chapter 11 is a possibility,” Bates wrote in a tweet. “The ‘scoop’ is that this has not changed.”

  • Stricter Rules Ahead

    Stricter Rules Ahead

    Photo: michaeljung

    The South African Parliament accepted submission of the Tobacco Products and Electronic Delivery Systems Control Bill, which will replace the Tobacco Products Control Act of 1993, reports Business Insider.

    The bill, which was tabled in 2018, aims “to deter people, especially children and youth, from using tobacco products, encourage existing users to quit and protect nonsmokers from tobacco smoke exposure.” Regulation will cover sale, advertising, packaging and labeling of tobacco products as well as where smoking and vaping are allowed.

    Under the bill, smoking and vaping in enclosed public spaces will be prohibited. Smoking too close to “an operable window or ventilation inlet of an entrance or exit” of “an enclosed public place, enclosed workplace or in or on a public conveyance” is also prohibited.

    The health minister can also prohibit smoking in certain outdoor areas to “reduce or prevent the public’s exposure to smoking.” Smoking in vehicles or enclosed private spaces while in the presence of a child or nonsmoker will be prohibited. Smoking in an enclosed common area of a multi-unit residence will be banned as well.

    The bill will also mandate generic packaging for tobacco products; the packaging “must have a uniform plain color and texture” and be of the same “size, type and shape.” The health minister will be responsible for setting standardized packaging and labeling requirements.

    The only branding allowed on packaging will be brand name and product name in a standard color and typeface. Packages will be dominated by graphic health warnings.

    Additionally, stores will only be allowed to display “a single prescribed notice informing consumers that a list of relevant or related products for sale, along with their prices and quantities, may be requested at the sales counter.” Retailers and wholesalers will no longer be allowed to display tobacco products. They “may make the product available to consumers upon request, provided that the requestor is not a child.”

    This bill could also affect flavored vapor products. The health minister can prohibit “any substance or ingredient that creates a specified color, characterized flavor, smell or effect on the consumer.”

    “The industry wants to be regulated,” said Asanda Gcoyi, CEO of the Vapour Products Association of South Africa. “We have to be regulated.”

    “But we propose that government use [vapes and e-cigarettes] as a tobacco harm reduction product, [and] this bill does not actually go that far.”

  • Jonathan Adler

    Jonathan Adler

    Photo: Chris Ferenzi

    There are numerous challenges to achieving the goal of tobacco harm reduction. Addressing these challenges might require thinking differently about how to approach the regulatory process and perhaps the extent to which the regulatory process needs to be changed, according to Jonathan Adler, the inaugural Johan Verheij Memorial Professor of Law and the founding director of the Coleman P. Burke Center for Environmental Law at the Case Western Reserve University School of Law, where he teaches courses in environmental, administrative and constitutional law.

    Speaking at the GTNF 2022, Adler said that the U.S. Food and Drug Administration’s handling of premarket tobacco product applications (PMTAs) has been arbitrary. It’s been sloppy. It hasn’t followed its own guidances. “It’s pretty clear that the FDA was not prepared for this onslaught of applications, prepared for the volume, prepared for the type of analyses it would have to conduct,” he told attendees. “And [the agency] responded to that with a mixture of cutting corners and adopting shortcuts that would enable it to make decisions, typically negative decisions, so that it could process these applications.”

    Companies aren’t happy with how the FDA has handled the PMTA process. Numerous companies have taken the agency to court, with mixed results. There are currently more than 30 court cases surrounding PMTA actions. Adler said that the FDA has responded inconsistently to these lawsuits. After denying Juul’s application, for example, the FDA decided to reconsider and review all the things it was supposed to review before issuing a marketing denial order. The agency took the same type of action with Turning Point Brands.

    In other cases, however, the FDA has been willing to let the courts decide. The challenge in this approach is that the FDA is being strategic about which cases it fights in court and which cases it retreats on. “As someone that follows a lot of administrative litigation, it certainly looks as if FDA is retreating where the cases against its actions are the strongest and allowing cases to proceed where it thinks the challenges are weak,” said Adler. “[This is] either because issues haven’t been raised or because issues haven’t been printed in the strongest way possible or perhaps because the applications were weaker to begin with.

    “As these precedents build, it will become easier and easier for FDA to defend against challenges to even the strongest arguments, so this is certainly part of the regulatory challenge …. We know—and this is all information that you’re all aware of—that the majority of people in the United States believe that ENDS [electronic nicotine-delivery systems] are as [dangerous] if not more dangerous than combustible cigarettes.”

    There are other challenges too. Adler said the United States also has trust issues on both sides of the aisle. Many of the institutions and authorities that historically have been seen as trustworthy and would provide accurate information aren’t considered to be as reputable anymore.

    “And certainly, the experience of Covid and the like has eroded that trust even more,” he said. “We need to think more broadly about how we might overcome this challenge. My own view is that we need to think more about the competitive process and how we discover how to communicate to consumers. And that word ‘discover’ is important. Because it’s not always clear what consumers want, why they want it and how you let them know that what you have might be what they want.”

    In the case of nicotine products, due to FDA regulations, companies can’t compete in trying to convince smokers that their product will satisfy the desire for nicotine, or whatever else, in a less risky way. In Section 911 of the Tobacco Control Act, there are strict restrictions on what can be said about modified-risk tobacco products, including factually true statements. Adler said that’s a problem because if companies are able to compete on characteristics like health impact, it affects not only the behavior of those companies, but it also affects consumer understanding.

    “This statute has also been interpreted, I would argue quite aggressively, by the FDA. The FDA’s position is that producers of electronic cigarettes can’t quote things that Brian King said here yesterday [the CTP director spoke at the GTNF on Sept. 28]. Can’t quote things the FDA has put in the Federal Register that are indisputably factually true. And if they say things like ‘This might help you quit smoking,’ well, then the FDA’s position is ‘forget [the modified-risk order] …. That makes you a drug device.’ And there’s a whole different approval process you have to go through for that.”

    A constitutional law professor, Adler views Section 911 as a potential First Amendment issue. The U.S. Supreme Court, he said, has stated repeatedly that courts should be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good. That includes attempts to deprive consumers of accurate information about their chosen product.

    “We’re not talking about sensational claims about unproven medications or unproven treatments. We are talking about claims that the FDA itself acknowledges are true. [In a case involving the FDA and a compounding pharmacy that the agency wanted to prevent from advertising,] we rejected the notion that the government has an interest in preventing the dissemination of truthful, commercial information in order to prevent members of the public from making bad decisions with the information.

    “And the circuit, in the context of nutritional supplements, has also said that it is clear that when the government chooses a policy of suppression over disclosure, at least where there was no showing that disclosure would not suffice to cure misleadingness, government disregards are far less restrictive means. It violates the relevant standards under the First Amendment.

    “The FDA’s position is that no disclaimer, no disclosure can somehow cure the problem of telling people what the FDA itself has said about noncombustible products. It’s not clear to me—I mean that’s not only not rational, [but] it’s not clear to me why that’s constitutional.”

  • China: Flavored E-cigarettes Still Available After Ban

    China: Flavored E-cigarettes Still Available After Ban

    Photo: Timothy Donahue

    Many businesses in China continued selling fruit-flavored e-cigarettes after a ban on such products took effect Oct. 1.

    A journalist working for Beijing Youth Daily reportedly found several stores violating the new rules while a small number appeared to have closed.

    In stores that are still in operation, the reporter saw only an estimated six vaping products on display, with only two or three varieties of products. Some stores experienced increased sales of combustible tobacco products.

    In November 2021, Chinese law was amended to bring the vapor industry under control of the State Tobacco Monopoly Administration, which regulates China’s tobacco products.

    Products meant for export will not have to meet Chinese standards unless the destination country does not have its own specific standards.