Author: Taco Tuinstra

‘BAT key beneficiary of Juul MDO’

Photo: BAT
The removal of Juul products from the U.S. market would boost the prospects of British American Tobacco, create opportunities for Philip Morris International but represent a problem for Altria Group, according to Morgan Stanley.
In a letter to investors, the financial institution evaluated the impact of the U.S. Food and Drug Administration’s leaked plans to deny Juul Labs’ premarket tobacco product application (PMTA). While the FDA has not issued a formal statement yet, shares in Altria Group were down more than 9 percent in the immediate wake of the news. Altria owns about a third of Juul Labs.
According to Morgan Stanley, Juul is Altria’s only exposure to the growing vapor category. While a Juul marketing denial order (MDO) would give Altria an opportunity to terminate its noncompete agreement with Philip Morris International, allowing it to step-up its vapor product research and development or acquire vapor technology, the company would not be coming from a position of negotiating leverage, according to the investment bank.
“In addition, there are few larger scale independent e-vapor assets on the market,” wrote Morgan Stanley.
The investment bank believes that removing market leader Juul from U.S. store shelves would create opportunities for other products, such as PMI’s IQOS heat-not-burn device, which has already received PMTA approval.
The key beneficiary of a Juul MDO, however, would be British American Tobacco, according to Morgan Stanley.
Several of the company’s products have already received PMTA authorizations, the investment bank points out. Though its Vuse brands, BAT recently overtook Juul as the leading U.S. e-cigarette player with a market share of more than 33 percent. The company has gained significant momentum in the category over the past 24 months and a Juul MDO could lead to further BAT market share gains, according to Morgan Stanley.
June 23, 2022
Zinwi Receives E-Liquid Production License

Credit: Zinwi
Zinwi Bio-Tech has secured a production license for electronic cigarettes (e-liquid category) in China, becoming one of the first manufacturers to do so under the country’s new regulatory framework.
In March, the State Tobacco Monopoly Administration passed the Electronic Cigarette Administration Measures, which took effect May 1. Under the new rules, a production license issued by the STMA is a precondition for the incorporation of a company involved in the manufacture of vapor hardware, e-liquids or e-cigarette nicotine.
Companies applying for the license must supply documents showing financial and manufacturing fitness, among other evidence.
Zinwi Bio-Tech was established in 2016 and is headquartered in Shenzhen’s Guangming District. A high-tech enterprise integrating the R&D, production and sales of e-liquid, the company ships more than 2,000 tons of e-liquid and approximately 1.3 billion pods per year. Products are exported to Europe, America and Canada, the Middle East, Russia and other destinations.
In a press note, the company said its commitment to quality is demonstrated by numerous accreditations, including the ISO9001 quality system, national CNAS laboratory and GMP certifications.

June 23, 2022
Greenbutts Taps Luis Sanches as Chief Strategy Officer

Luis Sanches (Photo courtersy of Greenbutts)
Greenbutts, a company that specializes in biodegradable filter technology, has appointed tobacco veteran Luis Sanches as chief strategy officer.
Sanches is a senior corporate executive with more than 30 years of international, cross-functional and cross-cultural experience responsible for managing business teams, supporting growth and leading transformations across multiple geographies such as Australasia, North and South America and Europe.
He was previously the senior vice president of R&D for Reynolds American Inc., a subsidiary of British American Tobacco. His corporate tenure under BAT spanned 31 years in total, including the position of group head of product development in the United Kingdom and vice president of Kentucky BioProcessing KBP, a leader in developing and employing cGMP processes to manufacture recombinant proteins using novel plant-based technology. He successfully led the development of novelty scientific knowledge and multi-category consumer lead product innovations.
“Never before in history have industry and humanity at large shared such a commitment to understand and urgently address matters that negatively impact the sustainability of our planet and, ultimately, our lives,” said Sanches in a statement.
“Greenbutts is pioneering solutions that will allow business partners to focus on their growth strategy and deliver their product innovation pipeline while materially advancing their ESG agendas. I am proud to join the Greenbutts team and am committed with them ‘to give every fiber of our being’ to offering meaningful sustainable solutions to our partners.”
“We are delighted to have an executive of Mr. Sanches’ caliber and industry presence, knowledge and experience join our already accomplished team,” said Tadas Lisauskas, founder and CEO of Greenbutts.
“For the past 11 years, Greenbutts has been focused on developing a viable alternative to cellulose acetate filters for the global cigarette industry, through extensive R&D and cross-continental partners. While we have had much success in achieving this goal; patenting our technology, continuously adding intellectual property to our portfolio and validating business cases on a global stage, the addition of Luis Sanches to the team is an opportunity to reintroduce ourselves to the global cigarette industry and assist in their efforts to make the inevitable transition to a zero-plastic alternative as seamless as possible,” said Tadas.
Sanches will oversee the company’s global expansion strategy regarding material and filter production. In addition, Sanches will work on optimizing the company’s filter manufacturing process to meet the regulatory needs and customer specifications.
June 23, 2022
Bidi Workers Demand Protection Against Cigarettes

Photo: WESTOCK
Bidi workers in Bangladesh formed a human chain on June 21 outside of the Pabna Deputy Commissioner’s office, demanding protection against competition from “foreign” cigarettes, reports The New Nation.
According to the leaders of the group, the biggest competitors to bidis are low-quality cigarettes, which are mostly owned by foreign companies and have not been set to increase in price much in the 2022/2023 budget.
“Bidi industry is a domestic worker-friendly industry,” the group leaders said. “Bidi is a 100 percent indigenous technology-based industry. On the other hand, everything in cigarettes is imported from abroad and depends on technology. Foreign multinational companies are smuggling thousands of crores of rupees by burning the lungs of the people of this country.
“If all kinds of conspiracies against the domestic bidi industry, including the withdrawal of discriminatory advance income tax, are not stopped, we will be forced to wage a fierce agitation.”
After the protest, the leaders of the group presented a memorandum to the prime minister through the deputy commissioner of Pabna.
The group demanded an increase in the price of low-quality cigarettes, withdrawal of a 10 percent tax on bidis, and legislation to protect bidi workers.
June 22, 2022
Feelm Joins Carbon Disclosure Project

Photo: Feelm
Feelm has joined the Carbon Disclosure Project (CDP), as part of the listing of its parent company, Smoore.
CDP is an independent not-for-profit organization that manages a global disclosure system and repository for environmental reporting by corporations, municipalities and organizations around the world.
In 2021, more than 680 financial institutions, representing $130 trillion in assets, supported CDP’s request for data sharing, while over 13,000 companies, accounting for 64 percent of the world’s market capital, disclosed through CDP’s database. Phillip Morris International, British American Tobacco, Japan Tobacco International, Altria Group and Imperial Tobacco also take part in the CDP.
In May 2022, Feelm announced its commitment to achieve carbon neutrality by 2050, with a strategic executive plan that includes introducing zero-carbon vape technology solutions, adopting eco-friendly materials and green packaging, supporting the global supply chain in de-carbonization and activating a recycling program of vape pod cartridges and devices with clients.
“Carbon neutrality is an important component of our integrated ESG strategic plan as it helps to accelerate our business transformation, said Sofia Luo, marketing director of Feelm’s business division, in a statement.
“That is why Feelm follows the measures and roadmap outlined in the ‘Corporate Net-zero Pathway’ published by the UN in 2021. Feelm will press ahead with its commitment to comply with UN standards, disclose information transparently, and welcome scrutiny from international organizations and the public; in order to reach our vision of developing an eco-friendly and low-carbon economy.”
June 22, 2022
Medad Pioneers Ultrasound Water Pipe

Image: Studio217
Medad Technology has developed a shisha pipe that it says is less harmful to health than traditional hookah, reports The National.
Unveiled at the recent World Vape Show in Dubai, the company’s Nesta pipe delivers a nicotine hit via ultrasonic vibrations, which could cut cancer risk from inhaling toxic fumes, according to Medad Technology.
The device’s patented algorithm reportedly produces mist droplets containing nicotine that are evenly distributed as they are inhaled.
Misting is distinct from vaping as it uses ultrasound technology rather than heat. The absence of charcoal and tobacco means the product generates none of the harmful carbon emissions or toxic fumes that are usually inhaled by users of traditional hookah pipes, according to the company.
“The challenge was to develop real, alternative products that were safer than shisha and e-cigarettes, not categorized under vaping, so a completely new product,” Medad Holding CEO Mohammed Al Mazrouei was quoted as saying.
The device has been approved by the European Union Medical Agency and by the U.K.’s Medicines and Healthcare Products Regulatory Agency, according to Medad Holding.
It is under review by UAE authorities. The company is planning to also apply for approval by the U.S. Food and Drug Administration.
An estimated 100 million people use shisha, or similar water pipes, on a daily basis around the world.

June 22, 2022
FDA Poised to Order Juul Off the Market

Photo: Juul Labs
The U.S. Food and Drug Administration is preparing to order Juul Labs to take its e-cigarettes off the U.S. market, reports The Wall Street Journal, citing people familiar with the matter.
The marketing denial order would follow a nearly two-year review of data presented by the vaping company, which sought authorization for its tobacco- and menthol-flavored products to stay on the U.S. market.
The future of Juul Labs has been uncertain since regulators started scrutinizing the company four years ago, when its fruity flavors and hip marketing were blamed for fueling a surge of underage vaping.
The company since then has been trying to regain the trust of regulators and the public. It limited its marketing and in 2019 stopped selling sweet and fruity flavors.
Once the undisputed U.S. market leader, Juul Labs has seen its sales nosedive in recent years.
The FDA has barred the sale of all sweet and fruity e-cigarette cartridges. However, the agency authorized Reynolds American and NJOY Holdings, to keep tobacco-flavored e-cigarettes on the market.
Industry observers had expected Juul to receive similar clearance.

The FDA’s misdirected efforts to limit nicotine, ban flavors in vapes, and now order Juul off the market, if fully implemented, will increase death and disease from combustible cigarettes.
Derek Yach, global health expert
Stocks of Altria Group, which owns about a third of Juul Labs, plunged after the news broke. The tobacco giant in 2018 paid $12.8 billion for a 35 percent in the e-cigarette company, valuing Juul Labs at about $35 million. Since then, Juul’s value has plummeted amid the regulatory crackdowns and declining sales. Altria valued its Juul stake at $1.6 billion as of March 31.
Wells Fargo analyst Bonnie Herzog, however, called the sell-off overdone, noting that Juul Labs has options to challenge any marketing denials orders (MDO), citing the example of Kaival Brands, which had its MDOs stayed in court.
With no detail available on the FDA’s rationale, Herzog said it was difficult to know how the agency is thinking about an MDO on Juul in the context of its broader efforts to encourage adult smokers to quit and/or move down the continuum of risk to less harmful “We have a hard time imagining the FDA would categorically remove highly popular e-cig brands without ensuring a suitable off-ramp for users (that isn’t back to combustible cigs),” she wrote in a note to investors.

This isn’t appropriate for the protection of public health, and it isn’t good for the industry. It hurts adult smokers because Juul is a product that is successful in helping smokers switch.
George Cassels-Smith, CEO, Tobacco Technologies.
Industry leaders and tobacco harm reduction advocates were aghast by the prospect of an MDO for Juul.
“The FDA’s misdirected efforts to limit nicotine, ban flavors in vapes, and now order JUUL off the market, if fully implemented, will increase death and disease from combustible cigarettes,” said public health expert Derek Yach. They should applaud Juul for their deep investments in science, innovations to end youth vaping, their commitments to reduce the 480,000 annual tobacco deaths in the USA. Let’s hope legal challenges succeed in opposing these measures.”
“For a company that has that has been a standard in this industry and has some of the highest quality products on the market, it’s shocking,” George Cassels-Smith, CEO of Tobacco Technologies, told Tobacco Reporter’s sister publication, Vapor Voice.
“The company has tried hard to move past its early issues of appealing to youth. This isn’t appropriate for the protection of public health, and it isn’t good for the industry. It hurts adult smokers because Juul is a product that is successful in helping smokers switch.”

While [Juul Labs] has certainly been at the epicenter of conflict, the amount of rigorous, peer reviewed science supporting their products’ ability to help smokers quit, raises serious questions about the FDA’s subjective balancing test, and whether public pressure campaigns will steer science policy.
Tony Abboud, executive director, VTA
The decision is likely celebrated by some anti-nicotine groups who blame Juul Labs for the rise in teen vaping (which had also declined dramatically in recent years).
Tony Abboud, executive director of the Vapor Technology Association (VTA) told Vapor Voice that he was surprised by the news because the industry had widely expected Juul Labs to receive marketing authorization.
“The reported denial of Juul’s PMTA application is stunning,” said Abboud. “While the company has certainly been at the epicenter of conflict, the amount of rigorous, peer reviewed science supporting their products’ ability to help smokers quit, raises serious questions about the FDA’s subjective balancing test, and whether public pressure campaigns will steer science policy.”
In 2019, Juul Labs announced it was suspending its print, broadcast and online advertising in the United States. That same year it halted the sale of its fruit and dessert flavors—including mango, creme brulee and cucumber—that were seen as a significant lure for teen users. The FDA also recently proposed a rule to ban flavored cigars and menthol in combustible cigarettes. The menthol ban will not yet cover next-generation tobacco products, such as e-cigarettes, but the FDA has the authority to include them if it sees fit.
Juul Labs submitted its PMTAs in July 2020. At the time, the company said its submission included comprehensive scientific evidence for the Juul device and Juul pods in Virginia Tobacco and Menthol flavors at nicotine concentrations of 5.0 percent and 3.0 percent, as well as information on its data-driven measures to address underage use of its products.
June 22, 2022
Prague to Regulate Pouches Like Tobacco

Photo: Andrii
The Czech Ministry of Health is preparing rules that would treat nicotine pouches as tobacco products, according to a Radio Prague international report.
Nicotine pouches are currently unregulated in the Czech Republic. “We are aware of the problems this causes,” said Ministry of Health spokesman Ondřej Jakob. “We are working on a decree that would determine the properties, the labelling and the regulation of the product. We are also working on an amendment to the current legislation.”
According to Jakob, the new decree could come into force within a few months.
Health activists have expressed concern about the growing popularity of nicotine pouches, especially among young people, in the Czech Republic. According to Marek Lžičař, an addictologist at St. Anne’s University Hospital in Brno, children can develop an addiction in just a few weeks.
“The risk of addiction is huge for anyone, both for children and adults, and it shouldn’t be downplayed,” he said. “It is definitely risky behavior that could be a gateway to the use of other tobacco products. It could also lead to the use of softer or harder drugs.”
Experts attribute the growing use of addictive substances among children to the long social isolation caused by the Covid-19 pandemic.
June 22, 2022
‘Bloody Complex’: PMI’s Tricky Exit From Russia

Photo: Anton Gvozdikov
Exiting Russia represents a considerable headache for Philip Morris International, according to an article in The Wall Street Journal. The process, begun in March shortly after Russia’s invasion of Ukraine, includes navigating Moscow’s shifting regulations, avoiding missteps that could prompt the government to seize the business and trying to protect employees from becoming targets for arrest.
Russia’s February invasion triggered Western sanctions, and hundreds of businesses, including tobacco companies, have pledged to exit or cut back operations in Russia. In early March, PMI announced it would suspend its investment and scale down its manufacturing operations in Russia. Later that month, the company announced it would exit the market altogether.
PMI is trying to sell its Russian business and has had talks with suppliers interested in buying it. However, from the outset, it hasn’t been clear which Russian authority would approve such a sale or what the process was for seeking that approval. “It’s so bloody complex,” The Wall Street Journal quoted PMI CEO Jacek Olczak as saying. “This one is really mind-blowing.”
Russia is a significant market for PMI. In 2021, it accounted for almost 10 percent of PMI’s global volume of cigarette and heated-tobacco shipments and around 6 percent of its $31.4 billion in net revenue. At the beginning of this year, PMI had more than 3,200 employees in the country.
The company entered the Soviet Union in 1977, when it signed a licensing agreement with the state-owned industry to manufacture Marlboros. It now has a factory in St. Petersburg and sales offices in about 100 cities.
Because of the withdrawal, the company will meet a global sales goal for its smoke-free products a year later than expected, Emmanuel Babeau, the company’s chief financial officer, said at a conference in May.
June 22, 2022
Sweden: Lawmakers Reject Vape Flavor Ban

Photo: WDnet Studio
Sweden’s Parliament, the Riksdag, rejected a ban on sales of flavored vaping products, with 177 lawmakers voting against the proposal and 126 lawmakers voting in favor, reports Vaping360.
Introduced by the government’s Ministry of Social Affairs in late February, the new rules would have taken effect next January, and would have prohibited flavors other than tobacco in all e-liquid, including zero-nicotine vape juice.
In rejecting the proposal, lawmakers heeded the advice of the Riksdag’s social affairs committee, which had recommended adopting proposed regulations for nicotine pouches and synthetic nicotine but eliminating the flavor ban.
Seven other European countries have banned non-tobacco vape flavors. In Denmark, Estonia, Finland, Hungary and Ukraine, flavored vape restrictions are currently in place. Lithuania’s flavor ban will take effect July 1. In the Netherlands, the flavor prohibition scheduled to begin in July has been postponed until January 2023.
No European country has banned vaping products outright.
June 22, 2022