Author: Taco Tuinstra

  • JT Extends Vector Tender

    JT Extends Vector Tender

    Photo: Paul Brady

    Japan Tobacco has withdrawn and refiled its premerger notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act) in connection with the JT Group’s pending acquisition of Vector Group.

    On Sept. 4, 2024, the JT Group commenced a cash tender offer to purchase all outstanding shares of common stock of Vector Group for $15 per share.

    JT withdrew and refiled its premerger notification and report form to provide the Federal Trade Commission with additional time for review. Following such refiling, the waiting period under the HSR Act will expire Oct. 3, 2024, at 11:59 p.m. Eastern Time.

    The acquisition is expected to be completed by the end of JT Group’s current fiscal year, ending Dec. 31, 2024, subject to receipt of antitrust approvals and satisfaction of customary closing conditions.

  • British American Tobacco Launches ‘Omni’

    British American Tobacco Launches ‘Omni’

    Photo: BAT

    BAT unveiled Omni during the company’s first-ever Transformation Forum in London.

    According to BAT, Omni is an evidence-based, accessible and dynamic resource that shows how science and innovation can combine to achieve a smokeless world.

    “Tobacco harm reduction—encouraging smokers who would otherwise continue to smoke to switch completely to less risky alternatives—is the fastest route to achieving a smokeless world,” said Kingsley Wheaton, BAT’s chief corporate officer, in a statement. “And we’re committed to working with others to make this a reality.

    “While we have history of humans smoking tobacco for more than 8,000 years, innovation has now delivered smokeless products with reduced risks compared to cigarettes. We stand on the threshold of a breakthrough science-backed change.”

    Omni brings together hundreds of independent scientific studies, BAT’s own research into its innovations and examples of tobacco harm reduction in action, such as Sweden, which according to BAT stands on the cusp of becoming the first country to go smokeless as defined by the World Health Organization.

    Omni also looks to answer some of the most challenging questions facing the industry and society, including: What is the risk of using smokeless products compared to smoking?; Are smokeless products a gateway to cigarette smoking?; What is the role of flavors in smokeless products and tobacco harm reduction?; What is nicotine?; and What is BAT doing to address underage access to tobacco and nicotine products?

    “With Omni, BAT is showcasing its world-class research,” said James Murphy, BAT’s director of research and science. “Omni means all, and we are committed to opening it up to all stakeholders in the THR policy discussion so that we can seize this exciting opportunity to build a smokeless world.

  • PMI Sells Vectura at a Loss

    PMI Sells Vectura at a Loss

    Photo: PMI

    Philip Morris International is selling Vectura to Molex Asia Holdings for £150 million ($198 million) cash upfront and potential deferred payments of up to £148 million—about a third of the price it paid for the company three years ago. Vectura will be operated by Molex’ Phillips Medisize unit.

    In 2021, PMI paid about $1.2 billion for the U.K. maker of asthma inhalers as part of its efforts to diversify into the pharmaceutical business.

    The deal attracted heavy criticism from anti-smoking campaigners who said the cigarette manufacturer should not benefit from a company that offers treatments of ailments caused or worsened by tobacco products.

    The fierce opposition played a roll in PMI’s decision to sell the unit at a loss. “Despite the investment and commitment to developing products and therapies vital to patients, unwarranted opposition to PMI’s transformation has impacted Vectura’s scientific engagement and commercial CDMO [contract developing and manufacturing organization] relationships.” PMI wrote in statement.

    “With its experience in pharmaceutical drug delivery devices and its global manufacturing footprint, Phillips Medisize is best placed to lead Vectura into the future—while releasing it from the unreasonable burden of external constraints and criticism related to our ownership,” said PMI CEO Jacek Olczak.

    Vectura is part of a “health and wellness” unit that also includes Fertin Pharma, the producer of a smoking-cessation aid, that PMI bought for about $820 million in 2021. Last year, PMI took a $680 million impairment charge on the unit after unsuccessful clinical trials and slower-than-expected development of other products.

    Selling Vectura will allow PMI to “rid itself of a financially struggling unit,” said Kenneth Shea, a Bloomberg Intelligence analyst. “But it also represents a strategic backpedal to the company’s once-bold ambition to serve the inhaled therapeutics medical market,” he added.

  • BAT Announces Management Board Changes

    BAT Announces Management Board Changes

    Photo: adragan

    BAT has announced management board changes. Kingsley Wheaton will be appointed as chief corporate officer, a newly created role. Wheaton’s current role of chief strategy and growth officer will cease to exist.

    As chief corporate officer, Wheaton will have overall responsibility for the strategy and execution of the group’s sustainable future pillar, including:

    • Establishing broad acceptance of BAT’s tobacco harm reduction (THR) agenda, working with BAT’s director of research and science, James Murphy, to ensure the scientific basis for harm reduction and encouraging a fact-based discussion on nicotine among key stakeholders;
    • Shaping the landscape through responsible and transparent dialogue with regulators, policymakers and other relevant stakeholders; and
    • Enhancing BAT’s leadership in sustainability and integrity.

    Paul McCrory, director of corporate and regulatory affairs, will continue to report to Wheaton in this role. Donato Del Vecchio, chief sustainability officer, will also continue to report to Wheaton.

    Luciano Comin, marketing director for combustibles and new categories, will be appointed chief marketing officer, reporting directly to Tadeu Marroco, CEO.

    James Barrett, director of business development, will report to Soraya Benchikh, chief financial officer.

    All changes are effective immediately.

    “We will be taking an important step later today in our journey to encourage THR acceptance with the launch of a compelling science and evidential case for THR in the form of ‘The Omni: Forward Thinking for a Smokeless World,’” said Marroco.

    “I would like to thank Kingsley for all that he has done as chief strategy and growth officer. He has stepped into the role at a critical time for BAT and has helped shape the strategy and establish new functional capabilities. In all of these areas, BAT is now stronger and more robust.”

    “I feel honored to take up this new challenge,” said Wheaton. “As BAT moves forward toward ‘A Better Tomorrow,’ the focus on this area of the strategy will be all-important. I am looking forward to bringing my experience and understanding of both BAT and the external environment and making a real difference.”

  • EU Wants to Ban Outdoor Smoking and Vaping

    EU Wants to Ban Outdoor Smoking and Vaping

    The European Commission will propose extending smoking bans to outdoor areas, such as cafe terraces, bus stops and zoos. The proposal will also include nicotine-free products, according to leaked documents.

    The recommendations include “heated-tobacco products and electronic cigarettes, whether containing nicotine or nicotine-free.” The commission also wants to include “tobacco surrogates and any other smoke and/or aerosol emitting products, according to the documents.

    “The evidence on the use of emerging products as a cessation aid is inconclusive,” the documents said. The recommendations follow growing evidence that secondhand exposure to “aerosols from electronic cigarettes, both with and without nicotine, expose bystanders to quantifiable levels of particulate matter and key toxicants and contaminants.”

    “The level of coverage of smoke-free rules varies greatly based on the type of smoke-free environments, and the general level of coverage of outdoor spaces in smoke-free policies is low,” the commission said.

    The new guidelines would include outdoor or semi-outdoor, meaning partially covered or enclosed spaces like rooftops, balconies, porches and patios, associated with service establishments such as restaurants, bars and cafes. Public transport hubs like bus stops and airports and outdoor areas linked to workplaces, hospitals and nursing homes would also be included. Recreational areas where children are present would also be covered, including public playgrounds, amusement parks, swimming pools and zoos as well as educational premises ranging from preschool childcare to university.

    The new recommendations are expected to be announced Sept. 17.

    The leaked proposal has already received backlash from the World Vapers’ Alliance (WVA). “The commission is making a disastrous mistake by lumping vaping with smoking,” said Michael Landl, director of the WVA. “This sends a dangerous message to millions of smokers who need vaping to quit. This falsely equates vaping with smoking, misleading millions into believing vaping is just as harmful when it’s actually 95 percent less harmful. There is virtually no secondhand vaping, and it is way less harmful than smoking. These recommendations will keep more people smoking and put public health at greater risk by equating vaping with smoking.”

    “The commission is outright misleading smokers by claiming vaping and smoking are the same,” said Alberto Gomez Hernandez, policy manager at the WVA. “This blatant disregard for science and consumer choice ignores the facts. Allowing vaping in smoke-free areas could drive more smokers to switch, cutting smoking deaths across Europe. Instead, they’re blocking a proven harm reduction tool and putting lives at risk.”

  • New Zealand Cracks Down on Illegal Nicotine Sales

    New Zealand Cracks Down on Illegal Nicotine Sales

    Image: mehaniq41

    New Zealand has started sentencing for repeat violators of its cigarette and vape laws, according to the ministry of health.

    Christchurch tobacco retailer Canteros received a fine of NZD28,000 for eight breaches of the Smoke-free Environments and Regulated Products Act. The violations related to the selling, labeling and advertising of cigars.

    The owner and an employee of Discount Specialist were fined a total of NZD8,000 for repeatedly selling single cigarettes and allowing tobacco products to be visible to the public inside the store.

    While infringement notices with fees of NZD500 are routinely issued for sales of regulated products to minors, this chain of prosecutions is among the strongest action to be taken against illegal vape and cigarette sales to date.

    In August, a Christchurch dairy owner was fined NZD56,000 under the act.

    “A significant majority of retailers comply with the law and do not sell restricted products to young people, though it’s disappointing to see some retailers fail to abide by the law and sell cigarettes or vapes to children and young people,” said Jo Pugh, compliance manager at the national public health service.

    “This compliance work is a high priority for the health agencies. We will continue to monitor and identify retailers who are not complying with the law.”

  • Tax Hike Sparks ‘Chaos’ in Jordan Market

    Tax Hike Sparks ‘Chaos’ in Jordan Market

    Photo: Rodworks

    Jordan’s recent tobacco tax hike has sparked turmoil in the market, reports Roya News.

    Smokers reported price differences of JOD1 ($1.41) or more for the same brand across various shops. Some suspect traders have been exploiting the tax increase to boost their profits.

    Critics are urging the government to standardize prices.

    On Sept. 12, the government approved an amended special tax system for 2024, adjusting tobacco taxes to align with the national strategy to discourage tobacco use.

    The revision aims to curb the spread of electronic smoking devices, particularly among children, and to address the disparities in taxes between traditional cigarettes and their alternatives.

  • ‘Vapes Lacking Health Labels on Social Media’

    ‘Vapes Lacking Health Labels on Social Media’

    Photo: Nattakorn

    Many synthetic nicotine brands on social media lack the required health labels, according to a Boston University study published in JAMA Network Open.

    The U.S. Food and Drug Administration passed a requirement in 2022 that says health warnings need to take up 20 percent of the advertising and appear in the upper portion of the advertisement for e-cigarettes that contain synthetic nicotine.

    “When synthetic nicotine started appearing in products, we really wanted to know how it was being received and how it was being promoted,” says Traci Hong, a Boston University College of Communication professor of media studies.

    The researchers studied more than 2,000 Instagram posts from 25 different synthetic nicotine brands, identified whether an image posted on Instagram included the required health warning and, if it did, whether it took up the right amount of space.

    The Instagram posts were analyzed using a custom-built AI algorithm, which uses computer vision to detect if health warnings follow the FDA rules. The team found that only 13 percent of the analyzed posts complied with FDA health warning requirements.

    They also discovered that the posts with health warnings received fewer likes and comments than posts without the warnings. According to the paper, the larger the warning label, the less comments the posts received. According to the paper’s authors, this suggests that having health warning labels could reduce how many social media users, especially young adults, are seeing and engaging with this content.

    “These are brands that I think have a legitimate responsibility to inform their potential consumers that there are health risks and you need to be aware of them,” said Hong in a statement.

  • Cigarette Seizures up in the Netherlands

    Cigarette Seizures up in the Netherlands

    Photo: think4photop

    The number of illegal cigarettes seized in the Netherlands to date this year has already reached the volume confiscated in all of 2023, reports DutchNews.

    Customs and finance ministry investigators seized 120 million illegal cigarettes since the start of 2024. The biggest haul so far this year was made in Rotterdam, where officials found 27 million cigarettes, which would have generated €6 million in tax had they been legal.

    In July, customs officials confiscated 8 million illegal cigarettes in Someren. That same month, they seized 6 million cigarettes and 4.5 tons of rolling tobacco in Rotterdam.

    Critics attribute the increase in seizures to rising prices. In April, the price of a packet of 20 cigarettes rose to around €11 in the Netherlands, encouraging more smokers to source their tobacco abroad.

    In a 2023 empty pack survey, a quarter of cigarettes had avoided Dutch tobacco duties, up from 15 percent in 2021.

    While nearly 19 percent of the cigarettes had been bought abroad, 4 percent were either fake branded cigarettes or had been smuggled. Two years previously, just 1 percent were either fake or illegal.

    Research by the public health institute RIVM indicates that smokers buy around 10 percent of their tobacco abroad.

  • Malawi Tobacco Earnings up Despite Drought

    Malawi Tobacco Earnings up Despite Drought

    Photo: Taco Tuinstra

    Malawi earned 40 percent more from tobacco sales in the 2024 marketing season than it did the previous year, despite an El Nino-induced drought, reports Reuters, citing the Tobacco Commission.

    The Tobacco Commission said that leaf sales increased to $396.28 million, up from $283.76 million the previous season. Over the same period, volumes increased to 133.1 million kg from 120.5 million kg.

    “This represents a substantial surge,” the Tobacco Commission wrote in its final season report. “The increase in sales volume, revenue and the average price per kilogram indicates a strong and positive performance compared to the previous year.”

    Despite the drought, which hit most of Malawi’s agricultural output, especially the staple food maize, the tobacco crop proved resilient, helping the country to profit from a surge in global demand.

    “Global demand is high due to consecutive calamitous weather impacts in major producing countries,” said Limbani Kakhome, a spokesperson for Japan Tobacco Leaf, one of the commodity’s top buying companies in Malawi.