Author: Taco Tuinstra

SM Chairman Corrects Share Sale Reporting

Photo: BillionPhotos.com
Swedish Match Chairman Conny Karlsson has corrected the reporting that was mistakenly made to the Swedish Financial Supervisory Authority regarding a sale of his shareholding in Swedish Match, the company announced in a press note.
The background to the mistake is the chairman’s instruction to his bank to accept the public offer from Philip Morris in respect of his shares in Swedish Match.
Such acceptance of the offer may be withdrawn at any time until the expiry of the acceptance period in accordance with the terms of the offer and Swedish Takeover Regulation. However, an acceptance of the offer should only be reported if and when the offer is declared unconditional and provided it has not then been withdrawn.
In May, the Swedish Match board of directors accepted Philip Morris’ $16 billion offer for their firm, pending shareholder approval. The multinational recently extended the acceptance period from Sept. 10 to Oct. 21, following indications that European regulators needed more time to review the deal.
The EU competition enforcer has indicated it will complete its evaluation by Oct. 11.
September 9, 2022
Study: Smoking More Prevalent in Rural Areas

Photo: Scott Brook
Cigarette smoking is more prevalent among Americans residing in rural areas, and they also have a more difficult time quitting smoking than urban residents, according to a study involving Rutgers researchers.
The study, published in JAMA Network Open, found smoking prevalence was higher in rural areas than in urban areas—19.2 percent versus 14.4 percent. While the number of smokers quitting in 2020 was similar in both rural and urban areas—52.9 percent compared with 53.9 percent—the odds of quitting between 2010 and 2020 were 75 percent lower in rural areas compared with urban areas.
“Higher cigarette smoking prevalence and lower cessation in rural populations have led to higher rates of smoking-attributable cancer incidence and death in rural [residents] compared with urban residents,” said study co-author Andrea Villanti, associate professor in the department of health behavior, society and policy at the Rutgers School of Public Health and deputy director of the Rutgers Center for Tobacco Studies, in a statement. “Tobacco cessation, therefore, is a high-impact target for cancer prevention efforts in rural populations.”
The study used data from the U.S. Department of Health and Human Services’ 2010–2020 National Survey on Drug Use to analyze adults who had smoked at least 100 cigarettes in a lifetime, which they defined as lifetime cigarette smoking. Current smoking was defined as smoking one or more cigarettes in the past month and former smoking as no cigarettes in the past year. Overall and annual quit ratios were estimated as proportions of former smokers among lifetime smokers.
The researchers found that of the 161,348 lifetime cigarette smokers analyzed, 33.5 percent were former smokers.
According to the researchers, the findings support the existence of a persistent rural/urban disparity, possibly attributed to the fact that rural residents may face more barriers to using smoking cessation services than urban residents or may be in an earlier stage of motivation to quit.
They suggest smoking intervention at the clinical setting, health system or population level might improve reach and sustainability of cessation services for rural residents. Tobacco cessation resources, including telephone quit lines and telehealth counseling, could also reduce barriers to accessing tobacco treatment in rural residents.
The study team was led by Indiana University and included researchers at Yeshiva University.
September 9, 2022
FDA Reports Progress With NTN Applications

Photo: Postmodern Studio
The U.S. Food and Drug Administration has sent more than 44 warning letters to manufacturers and over 300 warning letters to retailers for violations relating to nontobacco nicotine (NTN) products since President Joe Biden signed legislation authorizing the agency to regulate tobacco products containing nicotine from any source. Additionally, the FDA has issued new warning letters to 102 retailers for illegally selling NTN products to underage purchasers.
In an update, the agency detailed what it described as “significant progress” in processing and reviewing premarket tobacco product applications for synthetic nicotine products.
On March 15, 2022, a new federal law gave the FDA the authority to regulate tobacco products containing nicotine from any source. This law took effect April 14, 2022, and after July 13, 2022, any new NTN product that has not received premarket authorization from the FDA cannot be legally marketed.
The FDA says it received nearly 1 million NTN applications from more than 200 companies. To date, all applications submitted by May 14 have been processed, and more than 85 percent have been reviewed to determine if they meet the minimum requirements to be accepted for further review, according to the agency. In total, the FDA has issued refuse to accept (RTA) letters for more than 800,000 NTN products in applications that do not meet the criteria for acceptance.
In total, the FDA has accepted over 350 applications for NTN products, with the vast majority being for e-cigarette or e-liquid products. The agency stresses that acceptance is not a determination about the products’ authorization status. “Accepted applications will enter further review, which ensures certain criteria are met for applications to proceed with further review,” the FDA wrote in its update.
More information about the FDA’s premarket review progress and compliance and enforcement actions is available at the agency’s NTN product webpage.
September 8, 2022
Ousted Prime Minister Urges Smuggling Probe

Photo: Ivan Semenovych
Montenegro’s outgoing prime minister, Dritan Abazovic, urged the state prosecutor to investigate tobacco smuggling, claiming that organized crime groups contributed to the no-confidence vote that brought him down in mid-August, reports Balkan Insight.
Abazovic provided the prosecutor’s office with documents detailing schemes and naming individuals. According to the outgoing prime minister, cigarette smugglers have been funding political groups to further their causes. “I expect an avalanche to be triggered,” Abazovic told reporters on Sept. 5. “I had to show the roadmap of the tobacco smuggling in Montenegro.”
In May 2019, a probe by the Balkan Investigative Reporting Network showed how Montenegro had become a hub of global tobacco smuggling, funneling millions of counterfeit cigarettes into the EU with “ghost” ships, shell companies and forged paperwork.
The Port of Bar is reportedly at the center of this illicit trade. In several large-scale operations in recent years, Montenegro police and customs seized hundreds of tons of smuggled cigarettes and more than two tons of cocaine in the port.
Top officials are rumored to be complicit in the schemes.
In April, Montenegrin police arrested Vesna Medenica, former head of the supreme court, on charges of illegal activities that included drug trafficking and tobacco smuggling.
September 8, 2022
EU to Decide on Swedish Match Deal by Oct. 11

Photo: Berk
European Antitrust regulators will review Philip Morris International’s $16 million bid for Swedish Match by Oct. 11, reports Reuters, citing a Sept. 6 European Commission filing.
At the end of its scrutiny, the EU competition enforcer can clear the deal with or without remedies or it can open a four-month-long investigation if it has serious concerns.
In August, PMI extended the acceptance period for its offer from Sept. 10 to Oct. 21 following indications that the European regulators needed more time to review the proposed takeover.
The multinational says it has already obtained approvals from other prominent regulators, including those in the United States and Brazil.
September 8, 2022
Paper Calls for More Balanced Vaping Rules

Photo: defri
Four tobacco control specialists have called for a more balanced approach toward vaping regulation.
In a paper titled “A Proposed Policy Agenda for Electronic Cigarettes in the U.S.: Product, Price, Place and Promotion,” the authors observe that many Americans are confused about the relative harms of nicotine use and that public messaging around the substance tends to be more focused on stopping youth use than educating adults, according to Filter.
“Policy regarding e-cigarettes in the U.S. has focused on measures intended to reduce youth vaping, including imposing taxes on e-cigarettes and restricting flavors,” said Kenneth Warner, who wrote the paper with his University of Michigan colleagues Cliff Douglas and Karalyn Kiessling, along with Alex Liber of Georgetown University.
“Unfortunately, some of the measures may be backfiring. For example, if not matched by at least comparable increases in cigarette taxes, e-cigarette taxes that reduce youth vaping may also increase kids’ smoking. As well, some of these youth-oriented taxes appear to be reducing adult smokers’ use of e-cigarettes, increasing their smoking and reducing smoking cessation. We need to find policies that simultaneously address the widely shared dual goals of preventing youth vaping and increasing adult smoking cessation.”
The authors advocate for the U.S. Food and Drug Administration to reduce nicotine levels in combustibles, adding that it would have the best outcome if “accompanied by regulations ensuring the availability of alternative products, such as e-cigarettes.”
They also advocate for “states and the federal government [levying] large excise taxes on cigarettes and other combustible tobacco products and a more modest excise tax on e-cigarettes.”
The authors insist that only vape and tobacco shops should be allowed to sell nicotine products, that flavors should be banned in combustible tobacco products and that “all e-cigarette flavors other than tobacco and menthol and possibly a relatively small selection of other flavors with clearly adult-oriented marketing” should be banned.
September 8, 2022
Reynolds Hit with $95 Million Verdict in Vapor Patent Dispute

Photo: New Africa
A jury in the U.S. District Court for the Middle District of North Carolina awarded Altria Client Services more than $95 million after finding that Reynolds Vapor Co.’s Vuse Alto e-vapor product infringed three Altria patents.
The jury awarded $95.23 million in past damages through June 30, 2022. Post-trial proceedings will address ongoing damages through the expiration of Altria’s patents in 2035. At trial, Altria urged the jury to find a royalty rate of 5.25 percent, which the jury accepted in returning its award of past damages.
“Patents are at the core of innovation, and we take very seriously protecting our intellectual property,” said Murray Garnick, executive vice president and general counsel of Altria, in a statement. “We are pleased that the jury recognized the importance of Altria’s innovation and the value of its patent rights.”
At issue in this case were three patents awarded to Altria Client Services by the U.S. Patent and Trademark Office based on filings dating back to April 2015. The jury found that Reynolds Vapor violated Altria’s patents covering the pod assembly used in Vuse Alto.
The case is Altria Client Services vs. Reynolds Vapor Company et al.
September 7, 2022
Management Changes at 22nd Century

Photo: Naka
22nd Century Group is changing its management team as the company accelerates growth in its reduced nicotine content tobacco business. President and Chief Operating Officer Michael Zercher will depart the company effective Sept. 30, 2022. John Miller, who leads 22nd Century’s tobacco business team, will assume the tobacco-related duties of the chief operating officer’s role while CEO James A. Mish will assume the title of corporate president.
“With exceptionally successful VLN pilot results in hand, 22nd Century is expanding sales and planning rollouts in strategic regions across the United States,” said Mish in a statement. “In order to coordinate all of the critical elements of this expansion plus additional planned market launches, John Miller, who already leads our tobacco product, marketing and partnership efforts, will assume full operational responsibility for the tobacco product lines, bringing to bear his more than 30 years of industry experience to direct a fully integrated national VLN sales strategy.
“On behalf of the board of directors and the entire company, I thank Mike for his work at 22nd Century Group, including his important role in helping bring VLN through the regulatory process to secure the first and only FDA modified-risk tobacco product marketing order ever granted to a combustible cigarette.
“Mike has also been instrumental in developing our initial VLN industry partnerships and successful Chicagoland pilot program,” said Mish. “As a result, 22nd Century represents a completely new type of tobacco business focused on disrupting the industry and, most importantly, helping adult smokers to smoke less. We thank Mike for the incredible success he has helped the company achieve and wish him well in his future endeavors.”
September 7, 2022
Cuba Marks Cohiba Anniversary

Leopoldo Cintra Gonzalez (Right) -Photo: Timothy Donahue
Although a year late, Habanos is celebrating its most iconic brand’s 55th birthday.
By Timothy S. Donahue
Cuba is trying to get back to a sense of normalcy. Covid served a crushing blow to the reclusive island’s tourism industry. It also caused chaos in its cigar production chain from the farms to the factory floor. However, after a year’s delay, Habanos, the government-owned distributor of Cuban cigars, is welcoming cigar connoisseurs to celebrate the 55th anniversary of its most iconic brand, Cohiba.
While officially the event began on Wednesday with a cocktail reception at the El Laguito event center nearby where Cohibas are produced, media were given an opportunity Tuesday to mingle with representatives of Habanos. During the media event, Leopoldo Cintra Gonzalez, commercial vice president for Habanos, told Tobacco Reporter that the Cohiba brand has shown strength throughout its history and remains one of the most exclusive cigars on the global market.
He mentioned Cuba’s “always present” former leader Fidel Castro who first launched the Cohiba brand in 1966 and passed away in 2016. “It has not been an easy 55 years. We have had to be very innovative, which is normal for Habanos,” Cintra Gonzalez said through a translator. “But for this [exquisite] brand, because of the love everyone puts into the brand … especially the hands of the torcedors in El Laguito who put in so much effort … remains a favorite of consumers around the world.”
Typically, brand anniversaries for Habanos happen during the company’s annual cigar festival held in February. However, that event has been cancelled the past two years due to the Covid-19 pandemic. Next year, the festival will return, and the 2023 Festival del Habano XXIII will take place from Feb. 27 to March 3.
Thursday, attendees will attend a tour of the El Laguito factory during operating hours and have an opportunity to see how the Cohiba cigars are produced followed by a gala dinner Friday evening that will include an auction of two exclusive humidors, the proceeds from which will help support the Cuban healthcare system.
The Cohiba 55 Aniversario, which measures 5 9/10 inches (150 mm) long with a 57 ring gauge, is a new vitola called Victoria. The cigar also wears a foot band, the first time an Edicion Limitada release from Habanos has done so. All of the tobacco blend comes from the Pinar del Rio province of Cuba and includes seco and ligero filler leaves, undergoing an additional fermentation in barrels to give the brand a distinctive aroma and flavor.
According to media reports, Phoenicia Trading Co. stated in May that the retail price of the Cohiba 55 Aniversario at its duty-free location in the Beirut airport would be $300 per cigar.
Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.

September 7, 2022
22nd Century Launches VLN in Colorado

Photo: 22nd Century Group
Encouraged by the strong results of its pilot program in Chicago, 22nd Century Group will launch its VLN low-nicotine cigarette in Colorado and expand sales of the brand in Illinois.
In addition to its existing partnerships with cigarette retailers Circle K and Smoker Friendly, 22nd Century will announce two distribution partners as part of its launch in Colorado.
To date, the company has already completed state attorney general registrations for VLN in 44 U.S. states and the District of Columbia.
“We are excited to expand our VLN launch to Colorado with both current and new partners. The overwhelmingly positive feedback from consumers during our Chicago pilot has demonstrated impressive demand and rapid market entry for VLN as the first and only tobacco cigarette that actually helps adult smokers smoke less,” said John J. Miller, president of 22nd Century’s tobacco business, in a statement
“Extrapolating our strong pilot market results to a national scale with additional points of sale and geographic coverage gives us confidence we can disrupt and rapidly take significant share in the more than $80 billion U.S. market and $800 billion global tobacco market to create substantial value for our stakeholders.”
In December 2021, the U.S. Food and Drug Administration authorized 22nd Century to market its VLN King and VLN Menthol King cigarettes as modified-risk tobacco products, making them the first combustible products to receive such a designation.
September 7, 2022