Author: Taco Tuinstra

Record Year for Swedish Match

Photo: Swedish Match
Swedish Match reported record sales and operating profit in 2021, with double-digit growth in both revenues and earnings in local currencies across all product segments.
Full-year growth was driven by strong performance in the Smokefree product segment with considerable growth in both the U.S. and Scandinavia. Growing demand for natural leaf cigars drove the robust full year local currency financial performance for the Cigars product segment. The lights product segment too displayed strong underlying performance.
Fourth-quarter performance was driven by the company’s Smokefree segment, with continued strength in the U.S. and Scandinavia. Sales and earning for the Cigars segment declined during the fourth quarter, due in part to production restraints.
In local currencies, sales increased by 16 percent for the full year and by 12 percent for the fourth quarter. Reported sales increased by 11 percent to SEK18.49 billion ($2 billion) for the full year and by 15 percent to SEK4.75 billion for the fourth quarter.
In local currencies, operating profit from product segments increased by 19 percent for the full year and by 11 percent for the fourth quarter. Reported operating profit from product segments increased by 14 percent to SEK8.14 billion for the full year and by 15 percent to SEK1.96 billion for the fourth quarter.
“Our sales performance in 2021 was outstanding, hitting a new all-time high,” said Lars Dahlgren, CEO of Swedish Match, in statement. Dahlgren was particularly pleased with the performance and potential of the company’s nicotine pouches, which grew by more than 50 percent in the U.S. and Scandinavia in 2021.
“The total addressable market for nicotine pouches includes cigarette smokers, but also draws from other oral tobacco products, as well as from the growing pool of consumers who currently use vape
products but have found our nicotine pouches to have greater appeal,” said Dahlgren.
February 16, 2022
Robert Califf Confirmed as FDA Commissioner

Photo: FDA
The U.S. Senate on Feb. 15 narrowly confirmed Robert Califf as commissioner of the Food and Drug Administration, reports The New York Times.
The vote was 50-to-46, with six Republicans crossing the aisle to support him while five senators who caucus with Democrats opposed him. One senator voted present.
A cardiologist who has served as the deputy commissioner of the FDA’s Office of Medical Products and Tobacco, as President Barack Obama’s FDA commissioner and as the head of medical strategy at Alphabet, Google’s parent company, Califf takes over the position from Janet Woodcock, the acting commissioner since President Joe Biden assumed office more than a year ago.
According to Vaping360, Califf has been generally antagonistic toward vaping as a consumer product. He was at the FDA helm in 2016 when the agency rolled out the Deeming Rule, which gave the FDA authority over e-cigarettes and other tobacco-free nicotine products.
Tellingly, the Campaign for Tobacco-Free Kids (CTFK) enthusiastically welcomed Califf’s appointment. “Dr. Califf is highly qualified and prepared on day one to address the enormous challenges facing the FDA, including the most significant decisions on tobacco in the agency’s history,” wrote CTFK President Matthew L. Myers in a statement.
Califf is expected to be sworn in this week. He faces a looming flurry of decisions, including reviews of premarket tobacco applications from leading e-cigarette companies, such as Juul Labs. He will also have to contend with litigation from vapor companies over marketing denial orders (MDOs).
After issuing MDOs to hundreds of manufacturers for hundreds of thousands flavored product, the agency has been challenged in court by more than 30 companies that claim their PMTAs were denied based on a standard that was not in place when the applications were submitted.
One of the new commissioner’s first tasks will be working with Health and Human Services Secretary Xavier Becerra to find a replacement for Center for Tobacco Products Director Mitch Zeller, who plans to retire in April.
February 15, 2022
FTC Complaint Against Altria’s Investment in Juul Dismissed

Photo: Aerial Mike
A U.S. Administrative Law Judge has dismissed the Federal Trade Commission’s (FTC) claims against Altria and Juul Labs arising out of Altria’s 2018 minority investment in Juul. Following a three-week trial, the judge found that the evidence failed to sustain the alleged violations.
The judge’s decision is subject to review by the FTC. Any decision by the FTC may be appealed to any U.S. Court of Appeals.
“We are pleased with this decision and have said all along that our minority investment in JUUL does not harm competition and does not violate the antitrust laws,” said Murray Garnick, executive vice president and general counsel of Altria, in a statement
In April 2020, the FTC issued an administrative complaint against Altria and Juul alleging that Altria’s 35 percent investment in Juul and the associated agreements constitute an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust Act of 1890 and Section 5 of the Federal Trade Commission Act of 1914, and substantially lessened competition in violation of Section 7 of the Clayton Antitrust Act.
A public version of the decision is expected to be made available late this month.
February 15, 2022
Dahlia Garwe to Leave Tobacco Research Board

Photo: Taco Tuinstra
After eight years at the helm of Zimbabwe’s Tobacco Research Board (TRB), Dahlia Garwe is leaving the institution to pursue other interests.
Garwe joined the TRB in 1991 as a research officer in the analytical chemistry department. In 2003, she became a divisional coordinator, and in 2009, she was named assistant general manager of research and extension. In 2012, Garwe was appointed acting general manager, and in 2014, she became the TRB’s first female CEO.
In an interview with The Herald, Garwe reflected on the TRB’s achievements during her tenure. Despite the challenging economic environment, the institution continued to record surpluses thanks to several income-generating initiatives, such as the seed potato project.
During Garwe’s time at TRB, the institute’s scientists contributed significantly to international tobacco conferences and congresses, with quite a few of them assuming leadership roles in various international tobacco research bodies.
The TRB also released several new tobacco varieties, eight of which were released, including to other countries, such as Ethiopia, Rwanda and Tanzania.
Confronted with declining tobacco consumption, the TRB has also been exploring alternative crops, such as industrial hemp, in Zimbabwe.
Asked why she was leaving the TRB, Garwe cited Who Moved My Cheese by Spencer Johnson, a self-help book that encourages readers to adapt to change. According to Zimbabwe’s Public Corporate Governance Act, Garwe must retire within the next two years as her 10 years in office will be up.
“In the interim, I received a really exciting offer from a local agricultural player, which will allow me further growth,” Garwe told The Herald. “I decided to take it, and I am relishing the new challenge. I will miss TRB, but I am ready to move on.”
February 15, 2022
Universal Named ‘Engagement Leader’

Photo: Universal
Universal Corp. has been recognized as a 2021 Supplier Engagement Leader by CDP, a nonprofit charity that runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.
The CDP’s Supplier Engagement Rating (SER) system independently evaluates how effectively companies are engaging their suppliers on climate change using the CDP’s annual climate change questionnaire that covers governance, targets, scope 3 emissions and value chain engagement. The top 8 percent of assessed companies were selected as 2021 Supplier Engagement Leaders.
“We are honored to be recognized by the CDP as a 2021 Supplier Engagement Leader,” said Universal Chairman, President and CEO George C. Freeman III in a statement. “At Universal, we are committed to setting high standards of social and environmental performance and working in partnership with our suppliers to reinforce the sustainability of our supply chains and meet our climate change goals.”
Earlier, CDP recognized Pyxus International, Altria Group and Imperial Tobacco for their efforts to promote sustainability.
February 15, 2022
Governments Warned Against Big Price Hikes
Policymakers should consider the risks of encouraging the illicit trade of tobacco products before raising the prices through higher taxes, according to Alvarez & Marshall.
In a 2021 report titled “Causes and Control of Illegal Tobacco,” the U.S. consultancy says that taxation policy and its effect on the affordability of tobacco products is an important factor in the global illegal tobacco trade.
“There is a 97 percent correlation between taxes and tobacco consumption,’’ the A&M report said.
“Illegal trade grows when legal tobacco products become less affordable,” it added. “When cigarette prices rise more quickly than consumer incomes, consumers begin to seek cheaper options and switch to illegal products.”
This suggests that increasing the price of tobacco and reducing affordability encourages smokers to seek cheaper products and creates opportunities for criminals. In other words, less affordable tobacco products result in more illegal trade.
“We find that … if cigarettes become 10 percent more expensive for consumers relative to their income, the share of illegal tobacco will rise by an average of almost 7 percent,” A&M added.
In a separate study, relayed by the Business Inquirer, the EU-ASEAN Business Council and Transnational Alliance to Combat Illicit Trade estimates that governments in Southeast Asia lose tax revenues of about $3.32 billion yearly.
Aside from causing monetary losses to governments and legitimate businesses, the illegal tobacco trade undermines public health initiatives, contributes to underage smoking, and funds organized crime and terrorist activities, according to the EU-ASEAN study.
February 14, 2022
Bosnia’s FDS Factory to Close Next Month

Photo: Richard Darko
Badeco Adria will close its Fabrika Duhana Sarajevo (FDS) tobacco factory due to financial losses, FDS said on Feb 14.
In the past three years, losses have reached KM7.5 million ($4.3 million), FDS told SeeNews.
The decision will be put to the vote at a Badeco Adria shareholders meeting in early March, after which the 200 employees at the factory will be laid off and will receive severance pay.
Badeco Adria is the legal successor to FDS, which was established in 1880 as a tobacco company. After a restructuring process, the company changed its name to Badeco Adria in 2018. Badeco Adria is majority owned by Austria’s CID Adriatic Investments, which holds an 89.2 percent stake, according to the Sarajevo Stock Exchange.
FDS plans to halt its operations on March 31, according to Faktor news agency.
February 14, 2022
Swiss Support Tighter Limits on Tobacco Ads

Photo: twinsterphoto
A majority of Swiss voters want to limit tobacco advertising seen by minors, reports SWI.
During a ballot on Feb. 13, 56.6 percent of voters and most of the country’s 26 cantons backed a proposal to ban all tobacco and e-cigarette advertising that may reach young people in Switzerland. About 5.3 million people took part in the vote.
Gregoire Vittoz, director of Addiction Switzerland, described the outcome as a “big step forward.”
“The people have understood that health is more important than economic interests,” said Stefanie de Borba of the League Against Cancer.
Home to some of the world’s largest tobacco companies, including Philip Morris International and Japan Tobacco International, Switzerland currently has some of the weakest laws against tobacco advertising in Europe.
While cigarette ads in general on television and radio are prohibited at the federal level, each region has different rules for tobacco promotions in cinemas and public places, such as festivals or public transport. Only a few cantons ban cigarette ads in the written press or on the internet.
Around one in four people in Switzerland smokes—a share that has remained stable over the past decade. The figure is slightly higher among 15-year-olds to 24-year-olds. Research shows that most adult smokers began when they were minors.
Critics of the people’s initiative, which included the Swiss government, argued unsuccessfully that the proposal represented an intrusion on economic freedoms and would be hard to implement in the digital age. They submitted a counterproposal that would have still allowed tobacco advertising at points of sale.
Federal authorities must now adjust Switzerland’s Tobacco Product Law to incorporate the proposal. A law must be drafted and put forward for consultation and discussion in Parliament. Once adopted, the law must be subjected to a facultative referendum. Health Minister Alain Berset said the new rules are unlikely to take force in 2022.
February 14, 2022
JT Reports Robust 2021 Driven by Tobacco

Photo: JTI
The JT Group’s revenue increased 11.1 percent to ¥2.32 trillion ($20.15 billion) in 2021. Adjusted operating profit a constant exchange rates was up 22.9 percent to ¥598.4 billion. On a reported basis, operating profit increased 25.4 percent to ¥610.4 billion. The company reported an operating profit of ¥449 billion, up 6.4 percent over that reported in the previous year.
“The JT Group reported a robust performance in 2021, driven by strong momentum across the tobacco business,” said JTI President and CEO Masamichi Terabatake in a statement. “Our consumer-centric approach and strong brand portfolio have enabled share gains in the majority of our markets and resulted in a record sales volume in the international tobacco business.
“Despite a challenging operating environment, including the ongoing pandemic, the group accomplished several important milestones in the year. We implemented measures to generate sustainable growth, notably in our priority investment category where we launched our new HTS [heated tobacco sticks] device, Ploom X, starting in Japan. We also successfully implemented various initiatives related to the new operating model for the consolidated tobacco business, which went live this January.”
Going forward, JTI’s priority will be to expand its presence in the reduced-risk product (RRP) category, with an emphasis on HTS products. The company aims to break even in the RRP category by 2027 by achieving a heated tobacco segment share in the mid-teens across its key HTS markets.
“To reach this goal, we are accelerating necessary business investments and expect an annual average growth rate of adjusted operating profit at constant currency to be mid-single digit during the 2022 business plan period,” said Terabatake. “Furthermore, we plan to grow profit, which in turn will increase shareholder returns, in line with our shareholder return policy.”
February 14, 2022
Activists Welcome Thai Plan to Legalize E-Cigs
Asa Saligupta
Tobacco harm reduction advocates have welcomed Thailand’s plans to legalize and regulate vapor products.
“Countries which have chosen to legalize and regulate e-cigarettes have seen a fall in overall smoking rates and have much better control over youth vaping. It’s exciting for Thailand, and in fact the world, that the government is now set to overturn its ban on the sale of vape products,” says Asa Saligupta, director of ENDS Cigarette Smoke Thailand (ECST).
According to Saligupta, Thailand’s harsh ban and penalties on vape sales has meant too many smokers have been stuck with cigarettes, while young people buy e-cigarettes in the underground economy with no control over the purchase age or product safety standards.
“We’ve seen the legalization and regulation of vaping in places like the United States, United Kingdom and New Zealand work very well. I’m delighted the Thai government is now listening to the science with the adoption of effective tobacco harm reduction (THR) policies now increasingly imminent,” he says.
The ECST director says Digital Economy and Society Minister Chaiwut Thanakamanusorn, government officials, public health experts and advocates have all been key to finally addressing Thailand’s failed tobacco control policies.
He says that, despite the minister adopting an evidence-based approach, local conservative health groups continue to unfairly target him and publicly scaremonger.
“It was a big breakthrough last year when the minister told local media that vaping is safer for people trying to quit smoking. Since then, he has walked the talk—looking at ways vaping can be legalized. He fully understands it offers smokers a less harmful alternative to deadly cigarettes and protects non-smokers from the dangers of second-hand smoke.
“Consumer groups like ours have worked hard to encourage our politicians and officials to follow the significant international public health evidence. It has been a long journey, but we’re pleased with the progress the government’s working group continues to make on legalizing e-cigarette sales,” says Saligupta.
International research also shows countries which have adopted progressive policies around vaping have seen their smoking rates fall twice as fast as those countries that haven’t.
Nancy Loucas
Nancy Loucas, executive coordinator of The Coalition of Asia Pacific Tobacco Harm Advocates (CAPHRA), says that by lifting its long ban on vape sales, Thailand will join about 70 countries that have legalized vaping.
“Around the world, vaping is saving millions of ex-smokers’ lives and can save many more if safer nicotine products are embraced, not demonized,” says Loucas. “Thailand’s 10 million smokers have long deserved a readily and legally available alternative to cigarettes. The country’s sky-high smoking rate is totally unacceptable but thanks to the work of ECST and others, it’s about to be seriously addressed.”
According to Loucas, Thailand has become increasingly isolated internationally with its harsh policies. Vapers currently risk arrests, sanctions and even imprisonment.
“By legalizing that sale of vapes, Thailand will join countries like the Philippines and Malaysia which are also waking up to the fact that vaping bans inevitably fail, leading to unnecessary smoking-related illnesses and deaths,” says Loucas.
February 14, 2022