Author: Taco Tuinstra

Cigarette Smugglers Busted in Hungary

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An operation, led by Hungary and supported by Europol and Eurojust, and involving law enforcement authorities in Austria, the Czech Republic and Poland has led to the dismantling of a criminal network involved in large-scale tax fraud concerning cigarette smuggling.
The investigation was initiated as the result of intelligence analyzed by Europol. In a recent action day, law enforcement officers arrested one suspect and seized a large amount of valuables.
In March 2021, the Hungarian Tax and Customs Administration seized nearly 23 million unsealed cigarettes that arrived by plane from Dubai to the Hungarian airport of Debrecen. Produced in the United Arab Emirates, the tobacco products were concealed in car parts being shipped on cargo planes. Hungarian authorities intercepted one shipment as it was leaving the airport in four trucks with Polish license plates.
Officials suspect that there were two similar deliveries earlier that year, on Jan. 29, 2021, and Feb. 26. 2021. The estimated economic damage to the European Union budget caused by this organized crime group’s tax evasion on the tobacco products amounts to more than €8.75 million.
On August 16, 2022, law enforcement officers seized €750,000 in various currencies, seven luxury vehicles and 49 luxury watches from the Hungarian citizen who was arrested.
The authorities are looking for three further suspects for whom European and international arrest warrants have been issued.
Europol facilitated the information exchange, cross-checked operational information against Europol’s databases and provided additional analytical support to help advance the national law enforcement authorities’ investigations. Eurojust actively facilitated cross-border judicial cooperation between the national authorities involved, including the execution of European investigation orders.
August 30, 2022
Court Rejects Gripum’s MDO Appeal

Photo: Mikhail Reshetnikov
A U.S. appeals court denied a petition to review the Food and Drug Administration’s marketing denial order (MDO) to Illinois-based e-liquid manufacturer Gripum, reports Vaping360.
Gripum submitted premarket tobacco product applications (PMTAs) in September 2020 for about 200 bottled e-liquid products in nontobacco flavors. The company received an MDO on Sept. 8, 2021. Gripum filed a petition for review on Oct. 8 and was granted a stay of FDA enforcement in November 2021. The company participated in oral arguments before the court on April 20.
Gripum argued that the MDO was unfairly issued because Congress and the FDA did not establish any “ascertainable standards” to determine if the company’s products are “appropriate for the protection of public health.” The company also said that the agency changed the evidentiary standard for a successful PMTA after the application deadline had passed and that the agency failed to conduct individualized PMTA reviews as required by the Tobacco Control Act.
The 7th Circuit Court of Appeals rejected all of Gripum’s arguments, finding that the FDA’s approach to resolving the application was both reasoned and consistent with the Tobacco Control Act.
Gripum’s defeat follows a successful MDO challenge by six vapor companies. On Aug. 23, the U.S. Court of Appeals for the 11th Circuit granted petitions for review filed by Bidi Vapor, Diamond Vapor and four other companies challenging the FDA’s rejection of their e-cigarette applications.
August 30, 2022
KT&G to Build Tobacco Packaging Factory

Photo: KT&G
KT&G plans to build a new eco-friendly tobacco packaging factory in Sejong City, reports The Korea Herald.
Under the KRW180 billion ($133.5 million) project, the factory will be constructed at Sejong Mirae Industrial Estate, a government-developed area for local manufacturing companies, by 2025.
KT&G said the factory will produce tobacco packaging, such as cigarette papers and boxes, based on a cutting-edge logistics automation system and a digital printing process.
Keen to fulfill a leadership position in energy and environmental design, the company aims to secure an eco-friendly certification by using renewable energy, including solar energy, and upgrading infrastructure for air (pollution) and wasted water.
August 30, 2022
Judge Denies Altria Investor Settlement

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A U.S. federal judge declined to give preliminary approval to a proposed $117 million settlement between Altria Group and shareholders in a lawsuit over the company’s investment in Juul Labs, calling the deal “inadequate,” reports Law360.
The lawsuit contends that Altria’s executives threw caution to the wind when they bought a 35 percent stake in Juul for $12.8 billion in 2018.
According to the shareholders, the Altria executives also engaged in illegal and anti-competitive conduct that cost Altria billions of dollars as Juul faced an increasing number of legal battles over the alleged health risks of its products and alleged marketing to underage consumers—problems that the plaintiffs say Altria knew about at the time of the investment but ignored.
The value of Altria’s investment has declined steadily as Juul Labs faced litigation and increased regulatory scrutiny.
The plaintiffs argued for approval of the settlement, saying the recovery is fair and reasonable when weighed against the costs and risks of further litigation. U.S. District Judge David J. Novak did not explain why he considered the settlement inadequate.
August 29, 2022
Kaival Expects Boost From Court Ruling

Photo: Kaival Brands Innovations Group
Kaival Brands, the U.S. distributor of products manufactured by Bidi Vapor, expects sales of its Bidi Stick vapor product to benefit from a recent court decision instructing the U.S. Food and Drug Administration to take another look at the company’s premarket tobacco product applications (PMTAs).
On Aug. 23, the U.S. Court of Appeals for the 11th Circuit granted petitions for review filed by Bidi Vapor, Diamond Vapor and four other companies challenging the FDA’s rejection of their e-cigarette applications. According to Chief Judge William Pryor, the agency didn’t properly assess the companies’ marketing and sales-access-restriction plans designed to minimize youth exposure and access.
This ruling effectively reverses the marketing denial orders and allows Bidi Vapor to continue to market all flavor varieties of the Bidi Stick in the United States. The company submitted PMTAs for all 11 flavor of its Bidi Stick prior to the Sept. 9, 2020, PMTA deadline.
“As the exclusive U.S. distributor of Bidi Vapor’s products, this [ruling] is a significant event for us and our downstream partners, as many awaited the decision before expanding distribution, and paves the way for potential revenue growth for our company,” said Eric Mosser, president and chief operating officer of Kaival Brands, in a statement.
“But more than that, we are glad the appellate court recognized the potential importance and direct effects that an adult-focused marketing plan and strict sales and access restrictions may have on addressing the youth access problem.”
At press time, the FDA had not announced how it would respond to the court ruling. The agency could appeal the ruling or put Bidi Vapor’s PMTAs for its nontobacco-flavored devices into scientific review.
August 29, 2022
U.K. Vaping Reaches All-Time High

Photo: Daisy Daisy
A record 4.3 million people are active vapers in Britain, reports The Guardian, citing new research by Action on Smoking and Health (ASH).
The data suggests that 8.3 percent of adults in England, Wales and Scotland vape, compared with 1.7 percent 10 years ago.
Of the 4.3 million current vapers, around 2.4 million are ex-smokers, 1.5 million are current smokers and 350,000 have never smoked.
The figures also show that the proportion of current e-cigarette users who have never smoked has increased from 4.9 percent last year to 8.1 percent this year.
The authors of the report said this figure was an “all-time high.”
“Over the last decade we’ve seen a vaping revolution take hold,” said Hazel Cheeseman, deputy chief executive of ASH.
“There are now five times as many vapers as there were in 2012, with millions having used them as part of a quit attempt.
“However, they haven’t worked for everyone. Just under half of smokers who have tried them have stopped using them and 28 percent have never tried one at all.”
Meanwhile, smoking is becoming less popular in the U.K. Data from the annual population survey found smoking prevalence among adults aged 18 and over in England declined from 20 percent to 14 percent between 2011 and 2019. The ASH report found e-cigarettes were responsible for an estimated 69,930 additional former smokers in England in 2017.
August 29, 2022
Continental Starts Processing in New Hall

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The Continental Tobacco Group has started processing tobacco in the new preparation hall of its tobacco factory in Satoraljaujhely, Hungary.
According to Hungary Today, The company is constructing a HUF10 billion ($24.28 million) production hall comprising three stories with a floor area of 1,800 square meters each and modern machinery.
The investment will increase the tobacco factory’s capacity by around a quarter.
A family-owned business, the Continental Tobacco Group operates several tobacco companies in Europe and employs around 700 people.
According to publicly available data, Continental Tobacco last year generated sales of HUF56.41 billion and a profit of HUF6.35 billion. The company’s products are available in more than 30 countries.
Facing regulatory and competitive challenges, many Hungarian tobacco farmers have left the sector in recent years. While around five thousand people were growing tobacco in Hungary when the country joined the EU in 2004, this number has now fallen to around 600, according to Hungary Today.
August 29, 2022
‘Flavor Bans Failed to Reduce Youth Vaping’

Photo: Pixel-Shot
Restrictions on the sale of flavored tobacco products were not associated with a decrease in current or ever e-cigarette use among high school students in the California Bay Area one-year after their implementation, according to a new study.
Researchers analyzed data from the California Healthy Kids Survey to look at e-cigarette use among high-school students in the California Bay Area. They compared changes in e-cigarette use between 2018 and 2019 among students attending school in a city with a flavored e-cigarette ban and students attending school in a city without a flavor ban.
The researchers concluded that flavored vape bans “did not significantly change” the odds of current and ever e-cigarette use among students.
Vapor industry advocates contend that flavor bans have negative consequences for public health because flavors are essential for adults trying to quit smoking. State finances are impacted by flavor bans as well. For example, Massachusetts’ ban on flavored vaping and tobacco products is costing the state an estimated $10 million in revenues each month, according to Americans for Tax Reform.
August 29, 2022
South Korea to Mandate New Health Warnings

Image: Tobacco Reporter archive
Cigarette manufacturers will have to start printing new graphic health warnings in late December, reports The Korea Herald, citing new regulations announced by the Ministry of Health and Welfare.
The ministry plans to distribute the updated manual for labeling health warnings on cigarette packaging today, as a follow-up to the government’s tobacco industry regulation revision passed in June.
New graphic health warnings specified in the document include a warning about second-hand smoking showing a rendered image of a newborn child sucking on a baby bottle stuffed with cigarette butts.
The new rules, which come into effect Dec. 23, impact vapor products, too. E-cigarettes manufacturers will be required to cover more than 50 percent of each pack with health warnings, officials said.
August 29, 2022
EU Registers ‘Smoke-Free’ Citizens’ Initiative

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The European Commission has registered a European Citizens’ Initiative (ECI) to “achieve a tobacco-free environment and the first European tobacco-free generation by 2030.”
The ECI urges the Commission to propose legislation banning the sale of nicotine products to people born in or after 2010 and to act against the environmental risks presented by tobacco use.
The ECI also calls on measures to reduce cigarette litter, extend outdoor vaping restrictions and to eliminate tobacco advertising.
By registering the ECI, the Commission acknowledges that it is legally admissible without expressing a view on the substance of the initiative.
The organizers of the ECI now have six month start collecting signatures. If the initiative receives at least 1 million statements of support from citizens in at least seven EU member states within one year, the Commission will have to respond.
The Commission can at that point take the request forward or reject it. If it rejects the ECI, the Commission will have to explain its reasoning.
Introduced with the Treaty of Lisbon in 2007, the ECI initiative was created to increase direct democracy by empowering EU citizens to participate directly in the development of the union’s policies.
Since the beginning of the ECI, the Commission has received at least 118 requests to launch ECI, 91 of which were admissible and thus qualified to be registered.
August 28, 2022