Author: Taco Tuinstra

Global THR Proponents Unite Ahead of COP10
A global audience, via multiple platforms, tuned into watch sCOPe’s two-day broadcast during the recent World Vape Day (WVD) and World No Tobacco day (WNTD).
“sCOPe22’s success was critical given delegates will be discussing and debating harm reduced products at next year’s COP10 [the 10th session of the Conference of the Parties to the World Health Organization’s Framework Convention on Tobacco Control]. sCOPe22 showed that consumer advocates worldwide are united and highly motivated to fight for millions of smokers’ lives,” said Nancy Loucas of the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA).
Tobacco harm reduction (THR) consumer advocates livestreamed for eight hours on May 30 and May 31. The panel discussions and presentations included representatives from Asia Pacific, Africa, Europe, North America and Latin America.
sCOPe’s return on #WVD22 and #WNTD22 followed its five-day livestream last year during COP9—the ninth Conference of Parties to the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC).
“Countries represented at COP10 need to fully understand that millions of lives depend on delegates’ substantive discussions and subsequent recommendations on safer nicotine products next year. The red light must turn green—It’s long overdue.
“Last year the FCTC kicked the subject for touch, but next year it’s all on. All eyes will be on COP10 to see if delegates start following the evidence not the emotion. THR works. Vaping bans don’t, and THR advocates are keener than ever to expose and change WHO’s fraught position,” said Loucas.

Countries represented at COP10 need to fully understand that millions of lives depend on delegates’ substantive discussions and subsequent recommendations on safer nicotine products next year.
Nancy Loucas, CAPHRA
sCOPe22 participants included the European Tobacco Harm Reduction Advocates, Vaping Saved My Life South Africa, Association of Vapers India and CAPHRA.
The Americas were also well represented with Latin American-based ARDT Iberoamerica, Rights For Vapers Canada, the Tobacco Harm Reduction Association of Canada, and the U.S. Consumer Advocates for Smoke-free Alternatives Association.
“sCOPe22 uncovered many powerful personal stories of ex-smokers whose lives have been saved by switching to 95 percent-less harmful vaping. Instead of demonizing safer nicotine products, WHO needs to embrace them. Outrageously, WHO’s misguided advice and bullying sees hundreds of millions of smokers still blocked from accessing these life-saving products,” said Loucas.
According to Loucas, THR advocates are buoyed by the fact that every year more and more countries are ignoring WHO’s anti-vaping campaign. Instead, they’re legalizing and regulating safer nicotine products.
“In the Asia Pacific region alone, The Philippines, Malaysia and Thailand are set to join nearly 70 countries worldwide which have wisely regulated vaping with dramatic declines in their overall smoking rates. If WHO wants to improve global health and save smokers’ lives, they’d promote a THR approach next year—at the latest,” she said.
June 6, 2022
U.S. Health Groups Call off Menthol Lawsuit

Photo: eccolo
Action on Smoking and Health (ASH), the African American Tobacco Control Leadership Council (AATCLC), the American Medical Association (AMA) and the National Medical Association (NMA) are dismissing their joint lawsuit against the United States Food and Drug Administration. A rulemaking process to ban menthol as a characterizing flavor is in progress, and “we are grateful to be able to declare victory in this case,” the plaintiffs wrote in a joint statement.
The lawsuit followed the 2013 Citizen’s Petition, which called on the FDA to prohibit menthol in cigarettes.
“As African American physicians, we are thrilled with the FDA’s proposed rule to ban menthol in cigarettes and flavored cigars as a remedy to settle our lawsuit,” said Rachel Villanueva, president of the NMA. “This proposed rule will save lives and improve health within Black communities. This would not have been possible without the leadership and assistance of our co-plaintiffs and attorneys, whom we wish to sincerely thank.”
“We are encouraged by the FDA’s recent action to propose a ban on menthol-flavored cigarettes. We look forward to participating in the rulemaking process as we continue our collective push to ensure these harmful products are removed from the market once and for all,” said AMA President Gerald E. Harmon.
“The FDA has finally taken a major step forward to protect the health of Black Americans, but the work is far from done. We will not stop until no more Black lives are lost due to the predatory marketing of menthol cigarettes and flavored little cigars,” promised Phillip Gardiner, co-chair of the AATCLC.
“ASH’s goal is to use litigation as a tool to protect the right to health of all citizens against the harms of the tobacco industry,” said Kelsey Romeo-Stuppy, managing attorney at ASH. “We are proud to have been a co-plaintiff in this extraordinary demonstration of the power of proactive litigation.”
June 3, 2022
Singapore Cracks Down on Illegal Vape Products

Photo: nuttawutnuy
Singapore authorities destroyed an some 6,500 seized vape products with an estimated value of more than SGD1 million ($726,639) on May 31, reports Channel News Asia. Among the seized items incinerated on World No Tobacco Day were 6,500 e-vaporizers, 83,500 pods and 8,000 e-liquids. Together, they weighed more than a ton.
In Singapore, it is an offence to sell, possess for sale, import or distribute e-vaporizers and related components. Violators risk fines of up to SGD10,000 and jail up to six months.
The penalty for possessing and using a vape is a fine of up to SGC2,000.
Between 2017 and 2021, the Health Sciences Authority (HSA) caught 383 illegal e-vaporizer sellers. HSA, which works with the Immigration and Checkpoints Authority to enforce against vaping, noted that some illegal importers have started to change tactics to avoid detection, by concealing products in lighting fixtures, for example.
The agency says it has stepped up vigilance and enforcement actions.
Last year, authorities destroyed almost 12,300 e-vaporizers, about 4,500 e-liquids and nearly 175,000 pods and components, with an estimated street value of almost SGD2 million.

June 2, 2022
Dutch Mull ‘Australian’ Cigarette Prices

Photo: auremar
The Dutch government is considering increasing the price of cigarettes to between €30 ($31.96) and €47 per pack in 2040, reports the NL Times.
Inspired by the example of Australia, where a pack of cigarettes costs the equivalent of €24, Public Health Secretary Maarten van Ooijen hopes the high prices will deter people from smoking.
Currently a pack of cigarettes currently cost about €8 in the Netherlands. The government’s coalition agreement calls for an increase to €10 per pack.
Scientific research reveals that financial disincentives to smokers work only when prices are raised substantially. A recent study by Maastricht University showed, for example, that half of smokers will quit only once a pack costs €60 or more.
The proposed price hike is one step in the government’s plan to achieve a “smoke-free generation” by 2040, as set down in the National Prevention Agreement of 2018. The government wants only 5 percent of Dutch residents to smoke by 2040. Currently about 20 percent are smokers.
June 2, 2022
Mexico Outlaws E-Cigarettes

Photo: niroworld
Mexican President Andrés Manuel López Obrador signed a decree on May 31 outlawing the sale of e-cigarettes, reports AP.
Assistant Health Secretary Hugo López Gatell lashed out at industry claims that vaping is safer than smoking, calling it “a big lie.”
Mexico has aggressively legislated against vapor products. Imports of vaping devices have been prohibited since at least October. Before that, legislators used consumer protection and other laws to discourage sales.
Despite the most recent decree, many Mexicans import or buy vaping cartridges or fluid illicitly.
At least 5 million Mexicans have tried vaping at least once, according to government figures.
June 1, 2022
A New Sheriff in Town

Photo: Taco Tuinstra
China’s tobacco monopoly asserts its authority over vapor products.
By George Gay
It is wise to take seriously the warning that you should be careful what you wish for.
At the Global Tobacco and Nicotine Forum (GTNF) in London in September, which was held about six months after new vaping industry regulations had been publicly mooted in China, one speaker told those listening how vaping industry regulations were overdue, necessary and to be welcomed. At the time, I assumed this welcome was predicated on the belief that the regulations would be beneficial—that they would allow the industry to grow in a stable way and, in doing so, serve the interests of the businesses involved, smokers wanting to quit their habit, and society at large while, at the same time, helping to remove from the industry cowboy operators and substandard products.
Things have moved on since then. The regulations, formulated by the State Tobacco Monopoly Administration, were foreshadowed at the end of 2021, published in March 2022, became effective from May and are due to come fully into force in October.
The question is: Are the regulations beneficial? I would say they are far from ideal, but then ideal would probably have been an ambition too far. Looking on the bright side, they are better than a ban, as has been introduced in Hong Kong and elsewhere, and, furthermore, given the considerable investment in these regulations and the systems necessary to operate them, unless some unforeseen catastrophe occurs, they seem to rule out a ban being introduced, at least in the short term to medium term. But they will undoubtedly rein in the country’s vaping industry—severely in some areas.
The rise of China’s vaping industry has been hugely impressive, and the future had held out the offer of phenomenal growth, but now, predictions must surely be revised downward, particularly in respect of the domestic market, probably much less so in respect of exports. But in taking stock of this situation, it is necessary to bear in mind the relative importance of the huge and so far largely untapped domestic market.
Domestic Sales Versus Exports
One of the provisions of the regulations that will likely have upset those businesses and consumers looking for beneficial outcomes, assuming consumers in China tend to prefer the sorts of vaping products most popular in other countries, is the ban on flavored products other than those with tobacco flavors. They are unlikely, too, to have been overjoyed by a ban on nicotine-free products.
On the other hand, the industry can take heart from the fact that products with flavors other than tobacco and those that are nicotine-free may be manufactured for export where such products do not conflict with the laws of the country of destination. Basically, export products must comply with the laws, regulations and standards of the destination country, though, where the country of destination does not have vaping regulations in place, export products will have to comply with China’s regulations.
This difference between the requirements for local and export products raises an interesting question. The ban on the sale of nontobacco flavored and nicotine-free vaping products in China seems to be based, at least in part, on the idea that products with these properties are the ones favored by young people, who should be discouraged or, where minors are concerned, banned from vaping. This seems to be an ethical stance, but it is difficult to see how, given such an ethical stance, exports of such products could be allowed, even to countries that do not ban them.
The regulation’s authors say, in translation, the “Measures for the Administration of Electronic Cigarettes” are being put in place in order “to further strengthen the supervision of new tobacco products such as e-cigarettes, regulate the market order, ensure the health and safety of the people, and promote the legalization and standardization of industrial governance in accordance with the Tobacco Monopoly Law of the People’s Republic of China, the Law of the People’s Republic of China on the Protection of Minors [and] the Regulations on the Implementation of the Tobacco Monopoly Law of the People’s Republic of China.” The regulations are said to cover the production, sale, transport, import and export, supervision and management of vaping products.
Market Order
There seem to be some curiosities in the regulations. From my reading, the regulators have gone down the U.S. route in deeming electronic cigarettes to be tobacco products, at least for the purposes of incorporating them under expanded tobacco laws. And while they refer to “vaping products,” they tend to refer to the use of these products as involving “smoking” rather than “vaping.” Having said that, I should point out that these are issues picked up by Western eyes from a translation of the regulations, which, unsurprisingly, have gone through a number of revisions.
One of the things that jumps out at a Westerner from the stated aims of the regulations is the idea of regulating “the order of the market.” China’s economic system is such that, in part, the regulations are concerned with supply-side matters whereas in much of the rest of the world, such considerations would not come into the picture. Elsewhere, the market is controlled, if that is the right word, by demand, so if it becomes oversupplied, prices fall and, eventually, companies go bust. Or that’s the basic theory. In reality, some companies are considered to be too “important” to fail and have to be bailed out by taxpayers.
The regulations aim to balance supply with demand through such mechanisms as setting production and sales targets, overseeing imports, controlling the expansion of companies, concentrating production sites, restricting product transport and overseeing wholesale and retail trading.
Some of these controls are to be exercised through the licensing and registration of existing and new manufacturers, wholesalers and retailers, and even the expansion of their operations, or other changes, including moves into the trading of imported products. One of the requirements for obtaining a license will be that the applicant has access to sufficient funds to carry out whatever enterprise it wants to engage in, which, along with certain other restraints, some observers believe will tend to favor the bigger companies and weed out smaller ones. Again, this weeding out of the smaller players seems to be following the U.S. route, though by using a registration requirement applied to the company rather than the product.
Big Versus Small
Whether you view such provisions as good or bad will probably depend on whether you are a small vaping industry operator in China likely to be driven out of business or a big one that will benefit from fewer competitors. Of course, if China is successful in using such a system to stabilize the market and ensure underfunded companies don’t go bust with all the social fallout such failures can cause, it will probably be seen to have done a good job. But there are clearly dangers in disadvantaging smaller businesses working within an industry that, because of its youth, is dependent on innovation for its success, commercially and socially.
In addition, the market will be closely controlled by “a unified national e-cigarette transaction management platform” through which manufacturers, wholesalers and retailers will have to process and record all their trading and transactions. Wholesalers wishing to trade in imported vaping products will have to obtain permission to do so, and the imported goods will have to comply with all local technical requirements and regulations and be sold, appropriately labeled, through the transaction management platform.
There are provisions in the regulations for dealing with counterfeit and inferior products and the infringement of intellectual property rights, including through the encouragement by rewards of people reporting cases of the illegal production and sale of vaping products.
The regulations will govern registered trademarks along with warnings and other messages applied to tobacco packaging, and they hold that e-cigarette advertising will be in line with tobacco advertising, which is consistent with their being regarded as tobacco products. E-cigarette exhibitions aimed at promoting such products are banned.
Sales of vaping products through “information networks” other than the transaction management platform are banned, as are sales through vending machines and sales to minors, with the onus being on retailers to check identity documents where the age of the would-be purchaser is in doubt.
The regulations will see the introduction of a product traceability system, and they will control the sites of retail outlets, including in respect of banning such outlets “around” schools. And they will provide for quality control through the inspection, testing, monitoring and evaluation of products under institutions set up to conduct technical reviews based on the submission of application materials, such as inspection and testing reports. Those engaged in production will be required to establish product quality assurance systems and be responsible for the quality of their products.
Meanwhile, in April, the State Administration for Market Regulation, the standards committee, published the national standards for electronic cigarettes (GB 41700-2022), which provides, among other things, details about the technical requirements for vaping products and relevant test methods, safety standards, permitted ingredients and nicotine levels and concentrations.
Encouragingly, some reports indicate that the newly regulated industry players will be encouraged to carry out vaping industry R&D in respect of raw materials, finished products and risk assessments, and that they will be encouraged to promote the application of green technology and other environmentally friendly practices.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

June 1, 2022
The Takeaways

Photo: Jhvephotos | Dreamstime.com
What lessons should regulators learn from the United States?
By Clive Bates
The U.S. Food and Drug Administration has had jurisdiction over tobacco products since Congress passed the Tobacco Control Act and it entered into force in 2009. Through its Center for Tobacco Products (CTP), the FDA regulates tobacco products, which include nicotine products such as e-cigarettes and e-liquids in the United States. With the recent retirement of Mitchell Zeller, the CTP’s director since 2013, it is an excellent time to take stock. Here we look at six lessons from the experience that might help guide regulation in other jurisdictions.
First lesson: Understand how well-intentioned but poorly designed regulation can harm public health. The regulation of newer, safer products should reflect the political reality that the most hazardous products, cigarettes, will remain pervasively available. In the United States, variants of just under 3,000 cigarette products have been on the market since 2009, largely untouched by onerous regulation. The Royal College of Physicians signaled the risks that flow from excessive regulation of safer alternatives in its 2016 report Nicotine without smoke: “… if [a risk-averse and precautionary] approach also makes e-cigarettes less easily accessible, less palatable or acceptable, more expensive, less consumer-friendly or pharmacologically less effective, or inhibits innovation and development of new and improved products, then it causes harm by perpetuating smoking.”
Regulatory regimes that are tougher on the alternatives to cigarettes function as anti-competitive barriers to entry. Sound regulatory practice requires efficiency, transparency and predictability with burdens proportionate to risk. Unfortunately, the premarket tobacco product application process by which safer products must enter the market to compete with cigarettes is astonishingly expensive and opaque and fails any test of proportionate regulation. It functions to protect the cigarette trade and concentrate the vape market into a monoculture of uninspiring products. This is partly the law itself, but much is down to how the FDA has interpreted its responsibilities under the law.
Second lesson: Use standards and a notification regime rather than a product-by-product regime. The problem with an authorization regime is that it requires a public health agency to say “yes” to allowing a nicotine product onto the market. For institutional cultural reasons, many will find this challenging to do. Asymmetries in risk aversion mean regulators tend to be far more reluctant to accept the risk of saying “yes” and something bad happening than saying “no” and something good not happening. Both outcomes are harmful, but the former is what energizes regulators while the latter is hidden. A further issue with authorization systems is that they are easily politicized, providing a focus for campaign organizations to press for the decisions they want from regulatory agencies. For example, the FDA has been pushed hard by well-funded campaigns to ban flavored e-cigarette products. In contrast, the European Union has used a notification system with standards codified into the EU’s Tobacco Products Directive and, as a result, has a diverse and competitive market without a huge problem of youth uptake and far less political tension.
Third lesson: The regulator should accept the same disciplines it imposes on the regulated entities. The Tobacco Control Act, which is the FDA’s regulatory foundation, repeatedly refers to “appropriate for the protection of public health” as a guiding principle. For example, this test is applied to new nicotine products as part of the premarket review process. But does the FDA ensure that its own approach is appropriate for the protection of public health? By setting the burden of proof so high, the FDA has implemented a de facto ban on flavors other than tobacco and (possibly) menthol in vaping products. This is probably a response to intense and well-funded activism. But it will have the effect (if not the intent) of closing all the vape shops and radically collapsing the diversity of products on the U.S. market. Imagine if the FDA had to prove that its approach to flavors is “appropriate for the protection of public health.” That is precisely what it would have to do if it introduced a product standard to ban flavored products. The agency would not be able to do it, and it should not be doing it by default.
Fourth lesson: Risk perceptions matter, and regulators can help. One of the important purposes of public health regulation is to promote consumer behaviors that improve health. That should include, for example, making it easier and more desirable to vape than to smoke. But that cannot work if consumers do not understand which options are safer. In the United States, despite federal communications budgets of hundreds of millions of dollars, the public risk perceptions about nicotine are in a terrible state and, in many cases, deteriorating. In 2020, less than 3 percent of adults held the correct belief that e-cigarettes are much less harmful than cigarettes, but 62 percent wrongly believed that e-cigarettes are as harmful or more harmful than cigarettes—a view for which there is no evidence. Seventy-two percent wrongly believe that smokeless tobacco is no less harmful than cigarettes. A majority (56 percent) wrongly believe that nicotine is the primary cause of smoking-related cancer. The statements and communications campaigns of regulators and public health agencies like the Centers for Disease Control and Prevention in the United States can improve these perceptions or make them worse. Either through risk aversion or by design, the leading federal agencies have contributed to the landscape of poor risk perceptions and have hence undermined their own effectiveness. This has especially been the case through agency efforts to deter youth use. These have strayed into the exaggeration of the harms of nicotine vaping and inappropriately capitalized on the scare over the outbreak of lung injuries in 2019 that was widely but falsely attributed to nicotine vaping.
Fifth lesson: Apply some skepticism and science to the claims of activists. A regulator should be objective and cautious about activists’ claims and draw on the best possible science to guide its actions. Between 2017 and 2019, the rate of vaping among U.S. high school students shot up from 11.7 percent to 27.5 percent, an alarming rise by any standard. This generated a climate of moral panic in the public, media and politics—with flavored vapes and the marketing practices of e-cigarette companies blamed for the rise. Cooler heads advised caution and to look more carefully at the underlying patterns. That was good advice. It turned out that most teen vaping was infrequent, most frequent use was concentrated in young people who might otherwise be smoking, and very few tobacco-naive users showed any sign of dependence. We know that the causes of youth vaping are similar to the causes of youth smoking: characteristics of the individual and their circumstances rather than the products being the primary driver. For many young people, their frequent vaping may have been a beneficial displacement from smoking or diversion from cigarette uptake. From 2019 to 2021, teenage vaping fell sharply, especially among the infrequent users, suggesting that the dramatic rise had been a frothy and transient fad. Yet, by basing a response on the headline numbers rather than the underlying usage patterns, the FDA may have done more harm than good to both adolescents and adult smokers by overreacting to a moral panic based on a false premise. The science and data were there to navigate this crisis with a steady hand, but the FDA chose the path of least resistance and accepted activists’ claims at face value and acted accordingly.
Sixth lesson: Adopt a realistic economic and behavioral model. How can a regulator use its powers wisely and make proper determinations if it has a poor grasp of the products and behaviors it is regulating? One way of looking at vaping products is that they are a form of smoking cessation device, a kind of pimped-up nicotine-replacement therapy. In that case, a regulator might demand clinical trials to show efficacy in smoking cessation and intervene to reduce “abuse liability”—the risk that the product will attract users for reasons other than its therapeutic indication. The other way of looking at vaping products is that they are competitive alternatives to cigarettes for people who wish to use nicotine for whatever reason. They work by presenting a rival value proposition to smokers. To do this successfully, they must be appealing and pleasurable and meet the needs of people who do not even want to quit smoking (those most at risk from smoking-related harm). Few medical or public health regulators have the conceptual tools to deal with ideas like pleasure or appeal without seeing them as an abuse liability. In reality, vaping and heated-tobacco products are best understood as part of a major technology transition from combustible to noncombustible technologies in the consumer nicotine market. The regulatory regime for such products needs to encourage and not suppress innovation, allowing innovators to do the heavy lifting in securing the eventual obsolescence of cigarettes. That is a far more ambitious aim than placing smoking cessation products on the market. Alas, few regulators, including the FDA, appear equipped for the challenge.
Clive Bates is the director of Counterfactual Consulting and the former director of Action on Smoking and Health (U.K.).

June 1, 2022
Fruitful Cooperation

Photos: Alliance One International
By partnering with Bayer Crop Science, Alliance One International improves farmer livelihoods.
By Stefanie Rossel
Ending poverty is the first of the United Nations’ 17 sustainable development goals, which are supposed to be achieved by 2030. According to the U.N. Food and Agriculture Organization (FAO), the battle to end hunger and poverty must be principally fought in rural areas, which is where almost 80 percent of the world’s hungry and poor live. Success requires investment in “agents of change,” according to the FAO—smallholders, family farmers and other vulnerable groups. To feed more people with less water, farmland and biodiversity, better management and improved techniques in agriculture will be needed.
Agriculture is central to all activities in smallholder communities. In economic terms, most activities in these communities revolve around being able to develop a system that provides food security and improves the health of its members. The work of smallholders is an economic driver, creating prosperity for the community.
Keen to enhance farmers’ incomes, Alliance One International recently embarked on a new project. In June 2021, the company announced that its Alliance One Brazil (AOB) subsidiary was partnering with Bayer Crop Science to provide quality maize seeds and agronomic support to smallholder tobacco farmers in Brazil. AOB’s goal is to help its contracted farmers diversify their income by strengthening the quality and yield of a crop that is cultivated complementary to tobacco in the country.
“For AOI, improving farmer livelihoods is a top priority, and we are committed to maximizing all farmers’ income potential by 2030 through appropriate training in good agricultural practices and the opportunity for crop diversification,” explains AOI President Alex Strohschoen. “Through this partnership, we are making strides to achieve this goal and have already seen positive impacts for growers and their communities.”
During the 2020 growing season, AOB implemented a pilot project in which 2,300 of its contracted Brazilian smallholder tobacco farmers received a high-quality agronomic package for maize. “While many of our contracted growers in Brazil already grow maize in addition to tobacco, they lacked access to high-quality crop inputs such as seed, fertilizer and agronomic support,” says Strohschoen. “This prevented them from scaling up their production and limited their financial return. This agronomic package provides our contracted growers with access to Bayer’s maize seed varieties as well as fertilizer and hands-on guidance from our agronomists and field technicians, helping improve crop quality and yield, in turn, increasing the farmer’s bottom line.”
Globally, AOI employs approximately 1,000 trained agronomists and field technicians that conduct more than 1 million farm visits annually. “These individuals regularly share their expertise to support our contracted growers and are key to this partnership,” says Strohschoen.

Alex Strohschoen
Research Required
Bayer Crop Science offers a range of maize varieties with enhanced features. For instance, a maize variety can be more water efficient, high yielding or resistant to typical maize pests than other varieties.
In the case of AOI’s contracted Brazilian growers, use of Bayer maize varieties, grown using high-quality fertilizer and agronomic support from AOI, made a difference. “Prior to this project’s implementation, our Brazilian tobacco farmers that also cultivate maize produced on average less than 5,500 kg/ha,” says Strohschoen. “The agronomic package that we provide gives growers access to some of the most advanced technology available on the market, potentially increasing yields to over 10,000 kg/ha.”
As part two of the initiative, AOB offered the opportunity to participate in the program across its grower base during the 2021 growing season. Following the season’s completion, Strohschoen said, participating farmers saw a 15 percent increase in maize yield compared to the 2020 growing season, increasing a farmer’s income by $270 per hectare on average. “This additional income supplements the livelihood of our contracted growers and is an important piece of addressing other concerns, such as child labor, deforestation, etc.”
Similar to Africa, where climate change appears to be a big challenge for farmers, extreme weather patterns are impacting crop production in Brazil. Less and less predictable weather patterns make it difficult for growers to determine the right time to plant whereas the worsening precipitation deficit as well as increased frequency and severity of droughts are becoming more prevalent and more concerning. “Food insecurity is a global issue driven by various factors, including increased demand, war and conflict, climate change, and economic slowdowns and downturns exacerbated by Covid-19,” says Strohschoen.

An AOB leaf instructor (left) and a contracted farmer
Expansion Envisaged
Over the next three years, AOB intends to expand the project to include other crops—and other countries. AOI works with nearly 300,000 farmers in 20 countries across five continents, and it is the company’s aim to provide all of its contracted growers with the opportunity to diversify their income and increase their bottom line, says Strohschoen. “To do this, we must evaluate a number of factors to ensure we are implementing projects in the appropriate regions with crops that offer our contracted growers the greatest potential return. For example, we began this project in Brazil because approximately 75 percent of our contracted Brazilian farmers produce maize in addition to tobacco. Since these farmers were already growing maize, many had the infrastructure necessary to produce the crop prior to implementing the project.”
Following the success of the project’s first two phases in Brazil, it makes sense to expand it to a country with a similar climate and where growers have a seminal relationship with maize. “As we enter the 2022 growing season, we plan to introduce the program to our contracted farmers in Argentina, where a significant portion of our grower base could benefit from improving the quality and yield of their maize crops,” says Strohschoen.
In addition to the maize project in Brazil, AOI is also working on other projects around the globe. “For example, in Malawi, we have commercialized new groundnut and soya seed varieties,” says Strohschoen. “We provide interested tobacco growers with inputs, including agronomic expertise, helping them diversify their crop portfolios and produce high-quality crops for domestic, regional and international markets.”
With tobacco accounting for 54 percent of merchandise exports in 2019 and about 15 percent of GDP, the landlocked Southeastern African country is one of the world’s most economically tobacco-dependent nations. Not only in Malawi does food security remain an issue; it’s also a global problem that is being exacerbated by various factors, including increased demand, war and conflict, and economic slowdowns and downturns aggravated by Covid-19. Currently, Russia’s war against Ukraine is severely jeopardizing food security around the world.
“AOI is committed to doing whatever we can to transform people’s lives so that together we can grow a better world,” Strohschoen says. “This starts within our immediate network. To do our part to address global crises, we must first look at what improvements can be made within our supply chain. This begins with providing our contracted farmers with the tools they need to diversify their income and create additional food sources in their communities.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

June 1, 2022
Fighting for Farmers

Photo: BAT
ITGA’s past and present CEOs, Antonio Abrunhosa and Mercedes Vazquez, reflect on the prospects for tobacco farmers in a rapidly changing business environment.
By Stefanie Rossel
In November 2021, Mercedes Vazquez took over as CEO of the International Growers’ Association (ITGA). She succeeded Antonio Abrunhosa, who announced his retirement after serving in the position since 1998. In a three-way conversation with Tobacco Reporter, the tobacco industry veterans shared their views on the past, present and future of tobacco farming.
Tobacco Reporter: Mr. Abrunhosa, in your 22 years at the helm of the ITGA, how has the leaf growing sector changed?
Antonio Abrunhosa: The main changes I witnessed in my tenure were the moves to decrease production in high-cost countries and move it to developing or underdeveloped countries, with much lower costs of production, especially salaries, which are the main [cost] component in many producing countries. Production went down by almost 1,200 million kg in the USA, Canada and the European Union in 30 years, and it increased by a similar amount in Brazil, Zimbabwe and Malawi, Tanzania and Zambia in the same period. Sales also switched from the auctions system, which prevailed in the U.S., Canada, Zimbabwe and Malawi, to contract growing—the Brazilian system. All this meant a substantial decrease in the [significance] of commercial, large-scale farmers—especially in Zimbabwe after land reform—and a radical loss of bargaining power of millions of growers all over the world [who were] facing seven main buyers with an oligopolistic power seldom seen in other sectors.
Then there was the invasion of tobacco regulation into all aspects of common life, in almost all countries, at different speeds and with different impacts, but [it] translated into the almost total absence of smoking in any public areas anywhere outside of China, and the disappearance of tobacco advertising from almost all media and sponsorship of public events. A visual example of this change can be seen by watching the difference between the Mad Men series and any recent movie of people in offices today.
That regulation got a totally different scale with the creation of the Framework Convention on Tobacco Control (the FCTC) by the United Nations, the first world treaty of the World Health Organization, which turned many dispersed local anti-tobacco initiatives into international law and created an enormous, rich and global anti-tobacco industry with thousands of NGOs [nongovernmental organizations] and companies, funded by public money, covering the whole world.
Furthermore, the technical revolution started by electronic cigarettes, vaporizers and heated-tobacco has deeply changed the consumers’ market and will continue to do so.
In the past years, the world has become much more aware of the dangers of reckless economic development based on the depletion of vital natural resources and the impact of such economic models on the planet’s capacity to sustain a population that has increased more in the past 30 years than it had in all the [previous] centuries. This awareness is impacting all kinds of businesses, especially in agriculture and, thus, in tobacco growing. That attention has pushed tobacco companies to request more and more stringent conditions of production from growers, especially in sensitive areas like labor conditions and child labor, deforestation, use of chemicals and water management.
These four changes have created a completely different tobacco sector compared to the one we had 20 years ago.

Antonio Aburnhosa (Photos: ITGA)
What has the ITGA done to help its members cope with these challenges?
Abrunhosa: Those changes impacted ITGA heavily, as some of its founder members lost thousands of growers and volume of production.
The widespread move to contract growing also meant a much more dependent relationship between growers and buyers, requiring a more intervenient role of ITGA in those relations and in the relations between growers and their governments.
ITGA’s role was also radically modified due to the inclusion into the FCTC of articles conditioning the ways in which growers could produce tobacco in the future or even aimed at ending tobacco production altogether. This required a much stronger presence of ITGA in international fora and a continuous participation in all kinds of members’ initiatives related with national or international issues affecting their businesses.
How much has actual tobacco farming changed during your tenure?
Abrunhosa: The pressure from the public and the published opinion about environmental and business sustainability, especially in a sector as controversial as ours, prompted the main buyers to [implement] radical measures in the management of their supply chains.
As it happens often in corporate praxis, research was done, plans were designed and screaming orders came down the corporate ladder, with little attention given to the opinions of the final and central recipients of those orders—the growers.
The typical case is GAP [good agricultural practices], about which I have said in many meetings that it threatens growers with the big stick of contract suppression in case they disrespect the unending list of mandatory rules for their production but seldom, if ever, shows the carrot of better prices to cover the increased costs that those rules imply.
Child labor is a typical case. Moving production to a country like Malawi requires acknowledging the fact that local infrastructures for childcare are limited or nonexistent. This means that parents have nowhere to leave their children while working—in environments with wild animals. And, in recent years, particularly now, significant increases in the costs of production have not been followed by correspondent increases in tobacco prices. That means additional difficulties for growers to hire workers.
Acknowledging these problems, ITGA, together with IUF, the main worldwide trade union for agriculture workers and almost all the important tobacco companies, except Indian and Chinese ones, created an international foundation, the ECLT, based in Geneva, which, for more than a decade now has been implementing projects in tobacco areas all over the world to address the problem.
What achievements are you most proud of?
Abrunhosa: I am most proud of having established ITGA as the world brand for tobacco growers in spite of the increasingly difficult regulatory, structural and financial conditions of the sector; of our members and of ITGA’s office, which always had between two and four officers. This was particularly relevant when the anti-tobacco lobby, much reinforced by the FCTC, aimed at legally banning tobacco production.
I am also proud of having been able to pass this heritage to the highly capable hands of my successor, Mercedes Vazquez.
Ms. Vazquez, what, in your view, are the most pressing issues for farmers now and in the midterm?
Mercedes Vazquez: Pricing and sustainability, which are intrinsically linked. Sustainability includes all social and environmental challenges but also—and most importantly from farmers’ point[s] of view—the economic survival of their businesses. Without it, other sustainability issues become irrelevant. For years, we have been trying to make this message get through, especially during the prolonged period of stagnation in prices combined with rises in costs of production everywhere.
Now, considering the unprecedented times we are living in, after two years of the pandemic and still comprehending the realities of the war in Ukraine, “long-term” in tobacco production is 12 months. Consequently, in some countries, growers are moving to more profitable crops. If we consider the generational problem in agriculture where youngsters do not feel attracted to follow their family businesses plus this demoralizing scenario, in countries not too dependent on tobacco, companies will face a gap to fulfill their demand for clean, good-quality crop.
For highly dependent countries, there is not a cent that has not been squeezed to the limit. Unless substantial changes are made—mainly in poverty alleviation to grant margins that will allow growers to be in compliance with good agriculture practices—sustainability of the sector will be ever more at stake. Changes will only happen with all main players involved, and ITGA will do its part on behalf of our growers’ associations and tobacco growers in general.

Mercedes Vasquez
What are your plans to help ITGA members to cope with these challenges?
Vazquez: ITGA is at the core of the tobacco conversation. We have been around for almost 40 years. Our experience and global network capacity make us a pivotal player in all discussions related to tobacco around the world. More than ever, we need to work as the vehicle to spread growers’ messages and to promote dialogue among key players in the sector. Outside the sector, ITGA is liaising with agriculture agencies and entities to make sure tobacco growers are taken into account in the global sustainability agenda. With this, we also mean to normalize our sector in the global context, getting rid of the negative connotation we have carried all these years.
Our main concerns are related to those developing countries that are very reliant on tobacco production. There is no transition plan for the near future. To a certain extent, this is due to the lack of collective work done in this regard. After two years of pandemic with limited access or none to our growers’ gatherings, ITGA is committing its time and resources this year to meet them, to bring them together and make their voices be heard. We feel that there is momentum to raise this united collective voice, and growers are responding to this call.
This shouldn’t require a special mention in the 21st century anymore, but you are the first female CEO in the ITGA’s history and one of only a few women at the top of a tobacco-related organization. What is it like?
Vazquez: It seems pretty normal to me because during my more than 10 years of work in ITGA, I have never had reason to think that this could not be possible at some point if I made my work meaningful to our members. I never worked thinking about becoming the CEO, though, and this was important, too, because it did not get me distracted and allowed me to focus on my duties and in making my work worthwhile. The process was very natural, but I think the turning point was my personal investment, going to visit all members’ associations and getting to know their boards and staff. Now I can say—and I think my members would agree—we have built a personal relationship, and I am very close to most of them.
Are we going to see a stronger ITGA focus on gender equality and the issues facing women in the tobacco cultivating sector?
Vazquez: I will do everything in my powers to advance this agenda. Before becoming the CEO, I have always done my best to shed light on women working in the tobacco sector and more specifically those involved in tobacco production. I introduced this item into ITGA’s key priorities with no objection [from others]. The current edition of our flagship publication, The Tobacco Courier, pays tribute to women in tobacco, and we managed to interview many of them from various parts of the globe. I highly recommend the reading of these interviews to learn about their realities. What got my attention was to see that regardless of their specificities, they all agree about the need of education and capacity building. They all want to improve and become more relevant in business decision-making. I have met many of them, and they are all a source of inspiration.
What are the ITGA’s goals for the future?
Vazquez: The future has never been as uncertain as it is now. ITGA must keep advancing the growers’ legitimate and independent agenda. Tobacco production has dramatically changed over the years, diminishing growers’ control over their product. Twenty years ago, the scenario was very different with auctions operating at a higher rate than contracts. ITGA is here to assess the impact of these changes, to help growers make informed decisions through market analysis and [to improve] our tools to provide accurate information. We aim to bring the sector together and expand our network to run efficient advocacy. At this moment, we need to put pressure in the pricing improvement as a paramount issue, and growers are telling us that this is the time to act and to speak out, so we will be up to these expectations.
Provided the challenges for the tobacco growing sector, such as the continuous global decline of cigarette consumption, will persist, where do you see the ITGA and its members 22 years from now?
Vazquez: In 22 years from now, I honestly believe that unfortunately some, not to say many, tobacco farmers and ITGA members will be out of this business. This can happen overnight, as we witnessed with the case of Colombia. Only the ones with the ability to absorb the increasing demands and with a diversified portfolio will remain. Some will be forced to disappear; some others will simply move out.
Tobacco growers’ associations are rare these days. Those remaining are ITGA members. Unless their governments reinforce their role and make sure they are included in every conversation taking place about tobacco, its contribution, its future, its sustainability … at some point, they will be made redundant by companies, taking over their part with the direct contract system.
As for ITGA, we will stick to our commitment even after that. If there is no tobacco production the way we see it now, there will have to be a transition for those vulnerable growers forced to quit. Consumption is declining at a fair pace to permit the changes needed for this sector to adapt. The problem is that farmers are getting ambiguous messages that stimulate productions in some regions while depreciating it in others, and that situation continuously changes. Our partners should be more consistent in that regard because this uncertainty is certainly harming this industry.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

June 1, 2022
African Ambition

Adam Molai (Photo: Pacific Cigarette Co.)
The Pacific Cigarette Co. continues to gain momentum.
By Daisy Jeremani
The Pacific Cigarette Co. of Zimbabwe has made significant progress toward becoming one of Africa’s No. 2 cigarette makers as it now produces more than 3 billion sticks per year, according to company founder and chairman Adam Molai.
In a recent interview with Tobacco Reporter, Molai said Pacific was on track to becoming the largest indigenous African cigarette manufacturer by 2020 and the second-largest cigarette manufacturer on the continent, but its growth was disrupted by the Covid-19 outbreak.
“Significant gains have been made toward this objective, growing from inception to over 3 billion sticks per annum. However, the Covid-19 pandemic merely delayed—it did not destroy or disrupt—our ultimate goal. Our vision for global success through value addition and tobacco beneficiation remains undeterred, and we continue to strive to create value for the African economy and enhance the lives of Africans,” he said.
Born into an entrepreneurial family, Molai attended some of southern Africa’s most prestigious schools, including Peterhouse Boys, northeast of Harare. He worked at Ernst and Young in Zimbabwe and proceeded to the University of Buckingham in the U.K. where he graduated with a business degree in August 1992. Four years later, he left Lakehead University in Canada with a first-class commerce degree.
Molai returned home and ran some small businesses, but his biggest break came at 31 years old when he, together with Nick Havercroft, founded Savanna Tobacco, later renamed Pacific Cigarette Co. They launched it in 2002 as a threshing enterprise in Africa’s No. 1 tobacco growing country. This entailed buying tobacco stems from farmers, processing them and exporting them. They did not immediately have the resources to import a cigarette manufacturing plant, but investing in threshing and starting to export were the first serious steps that propelled Pacific to be the brand it is now.
Molai and Havercroft recognized the opportunity that lay in processing tobacco into cigarettes, and through innovative financing structures to raise foreign currency in a market plagued by foreign currency shortages, they were able to import the required equipment and became the first indigenously owned cigarette maker in Zimbabwe. In addition to the challenge presented by the foreign currency shortage, they also had to overcome the difficulties presented by the then poor relations between Zimbabwe and Germany, which is home to some of the world’s leading tobacco equipment manufacturers. At that time, Europe and the U.S. were sanctioning Harare over the land acquisition program and human rights issues. Despite this, Molai was still able to pay for the company’s first cigarette maker and packer to start producing Pacific Blue cigarettes for export in 2004
While this represented a big break at a personal level, breaking into a market that had been dominated by established brands for decades presented a considerable challenge, according to Molai. Competitors tried to derail and sabotage the newcomer in a variety of ways, at times using underhanded methods, he says.
Nonetheless, Molai persisted. “Although it was challenging competing with established global multinationals with infinite resources, we used this as a learning experience,” he said.
“Our competition provided us with the best education on business. They triggered the tenacity, resilience and boldness which has facilitated our growth and expansion into the region.”
A few years later, Molai turned the company’s focus to tobacco contract farming. He won government approval to establish contract farming in a country still dominated by auction sales. Critics labeled him an economic saboteur who wanted to use contracting to help white farmers, most of whom just had been evicted from their farms under the land acquisition program, externalize funds. But he was not deterred, having realized that the new, resettled farmers lacked the technical know-how, inputs and financing to seriously grow tobacco.
After two years of lobbying and hard work, the company was finally licensed to contract but with extremely stringent conditions that gave it no recourse against any defaulting farmers. This first contract scheme was called Zimbabwe Tobacco Growing Co., later rebranded to Northern Tobacco.
“I believe our foremost contribution to the tobacco industry is not cigarette manufacturing,” says Molai. “The most important contribution we made was fighting for permission to introduce contract farming of tobacco in Zimbabwe.”
Other companies launched their contract schemes later, and today, more than 100,000 farmers produce some 95 percent of the local crop under contracts.
Four years ago, Pacific partnered with China Tobacco Shaanxi Industrial Corp. (CTSIC), in an effort to serve the Chinese market. In January 2022, Pacific invested $9.5 million to relaunch two of its brands, Pegasus and Branson, to ensure that they would be able to not only cater to the premium segment but also offer world-class quality cigarettes at an affordable price. The Branson brand family was expanded with Branson flame, toasted and mint varieties while Pegasus now comes in a toasted flavor and a Chinese blend named Hong Ma.
Molai recognizes that the Chinese blends are still in their infancy but says the company is working to ensure that it is able to grow that market given that China has the world’s largest population, which is getting increasingly affluent and traveling or settling in other countries.
“As a disruptor and a trendsetter, Pacific will continue innovating to keep ahead of the competition,” he says. “The relaunch of some of our brands was not only driven by our Chinese partnership but also part of our DNA to ensure we satisfy our customers.”
Pacific’s deal with CTSIC, he said, was the first of its kind, where Chinese brands got licensed to an African entity. The partnership, which is in line with Zimbabwe’s “Look East” investment policy, remains a key part of the strategy to build Pacific’s market share, considering that China has the world’s highest number of smokers and there are an estimated 10,000 Chinese living in Zimbabwe.
It takes time to establish and grow a brand, says Molai, so Pacific is working tirelessly to gain the trust and loyalty of consumers.
“Our aspiration was to get African cigarettes into the Chinese market,” he says. “Africa is the only continent without a quota to supply cigarettes into China, and with Zimbabwe being the largest tobacco player on the continent, it was therefore my responsibility, on behalf of our continent, to make this happen.”
Pacific is also making inroads into neighboring South Africa, and they recently launched their Acacia brand and intend to continue expanding. As Covid-19 hit in March 2020, Pacific had to innovate and began a campaign centered on its mission that “People are the recipe for maximizing stakeholder value,” so they have been cementing and capitalizing on the relationships that they have on the market to ensure that they get the desired product placement and sales traction.
Speaking on the prospects for the African economy, Molai said the economy can only grow when businesses identify opportunities for beneficiation and increase their levels of domestic value addition, creating employment and industrializing while enhancing and developing its people. Value addition is especially imperative for Zimbabwe, which exports 98 percent of its tobacco raw and processes just two percent of local production into cigarettes.
“My personal objective was to democratize the tobacco industry from a highly racialized industry to one whose participation mirrors the continental demographics. This has been largely achieved with indigenous Zimbabweans now major players from growing to cigarette manufacturing.
“It is our responsibility, and as Pacific, we remain committed to the well-being and long-term sustainability of Zimbabwe’s golden crop by manufacturing and distributing products of international quality,” he said.
The businessman said his personal ambition has now expanded beyond tobacco and is now also focusing on the industrialization of Africa and beneficiation of other value chains so that the continent becomes an alternative supply chain to the world. Covid-19, he added, has exposed the risk concentration of current supply chains, thus Africa has a phenomenal opportunity to industrialize and create opportunities for it’s very young and unemployed youth.
In November 2020, his self-titled foundation launched JUA Kickstarter, a $1 million initiative to support startups on the continent. With support from partners, the fund was doubled in January 2021. Announcing the development, Molai recalled the grueling journey he traveled to launch a successful brand and felt the need for him to assist startups.
“With 65 percent of our population below 35 years of age, this population represents a significant threat or opportunity for our continent,” he told Tobacco Reporter.
June 1, 2022