Author: Taco Tuinstra

  • R Street Urges Tobacco Policy Revamp

    R Street Urges Tobacco Policy Revamp

    Jeffrey Smith

    The R Street Institute, a U.S. think tank promoting free markets and limited government, has published the first of three papers on tobacco issues and policy. Authored by Resident Senior Fellow Jeffrey Smith, the first installment addresses the health risks of smoking through the lens of preserving individual liberty.

    According to the R Street Institute, new reduced-risk products, such as e-cigarettes, oral nicotine and heat-not-burn products, offer smokers an unprecedented opportunity to reduce their health risks by transitioning to less harmful methods of nicotine consumption.

    However, the U.S. regulatory environment makes it nearly impossible for such products to enter the market. In addition, consumers must contend with considerable volumes of misinformation. As a result, too many Americans continue to die and suffer from smoking-related diseases.

    The R Street Institute urges industry stakeholders, regulatory bodies and public health experts to work together—instead of in opposition—to reduce smoking-related death rates and provide smokers with safer options.

  • Republic Launches Plastic-Free Tips

    Republic Launches Plastic-Free Tips

    Image: Republic Technologies

    Republic Technologies has launched Just Paper plastic-free filter tips in the United Kingdom, reports Talking Retail.

    According to Republic Technologies, Just Paper filters provide consumers with an experience that is similar to that of traditional cellulose acetate filters but with a lower environmental impact.

    “The Just Paper range represents a breakthrough in the development of filter tips with a significantly reduced impact on the environment,” said Gavin Anderson, sales and marketing director at Republic Technologies (U.K.).

    “We know that there’s more to do on this journey, but innovation of this kind is a major step for the brand and category. We’re confident that it will attract new shoppers to Swan, strengthening its position as the brand of choice for retailers and roll-your-own shoppers.”

  • CoEHAR to Open Branch in Indonesia

    CoEHAR to Open Branch in Indonesia

    Photo: CoEhar

    The Center of Excellence for the acceleration of Harm Reduction (CoEHAR) at the University of Catania, Italy, signed a letter of intent with the Universitas Padjadjaran to create a new CoEHAR branch in Indonesia. The branch will serve as a regional center for research, outreach and education on smoking harm reduction in the Asia-Pacific region.

    According to statistics from the World Health Organization and other groups, Indonesia had nearly 80 million smokers aged 15 and older in 2022. This places the country third in the world in terms of the number of tobacco users. Conventional cigarette smoking remains the second-highest risk factor in Indonesia.

    “The research conducted by the CoEHAR team at the University of Catania is changing the world, contributing to the revolution of policies aimed at protecting public health in many countries,” said CoEHAR founder Riccardo Polosa in a statement. “Supporting the CoEHAR efforts in Indonesia is a great source of pride for us but also a promise of further commitment to change the fate of a country plagued by unhealthy habits and lifestyles.”

    “Low[-income] and middle-income countries in the Asian region represent a different and multifaceted field of investigation and activity,” said CoEHAR Director Giovanni Li Volti. “Our goal is to enhance research activities by developing joint projects that can fully utilize both the human and technological resources of all the universities and institutions involved, which will contribute to change and the exchange of knowledge and skills.”

    Previously, the universities had already agreed to promote joint research, mobility and training in the field of smoking harm reduction.

  • Irish Minister Proposes Vape Flavor Ban

    Irish Minister Proposes Vape Flavor Ban

    Irish Health Minister Stephen Donnelly proposed bans on nontobacco vape flavors and advertising in nonspecialized shops, reports The Irish Times. He tabled the suggestions as Ireland’s cabinet approved restrictions on disposable vapes on Sept. 9.

    Donnelly said the proposals are aimed at protecting children. He believes companies are “very cynically” targeting children. The proposed legislation, he said, would see just one flavor, tobacco, being sold.

    “We live in a country where around 13 percent of people between the ages of 12 and 17 have vaped in the last 30 days,” said Taoiseach Simon Harris, who described vaping as “the revenge of the tobacco industry.”

    Minister of State for Public Health Colm Burke said the regulations are necessary because “many people who used vaping products subsequently moved on to smoking.”

  • Joel Sherman Passes Away

    Joel Sherman Passes Away

    Photo: New Africa

    Joel J. Sherman, former president and CEO of Nat Sherman, passed away Sept. 9 in New Jersey surrounded by his family.

    Born on August 2, 1939, Joel Sherman spent decades shaping and elevating the family business, leaving behind a lasting legacy in the world of premium cigars and fine tobacco.

    At the age of 10, Joel Sherman worked in the original Nat Sherman store on Broadway in New York City. Nat Sherman later relocated to 42nd Street near Grand Central Terminal, where it became a symbol of sophistication and high-quality cigars.

    In 1990, after the passing of his father, Nat Sherman, Joel Sherman returned to lead the family business. Under his leadership, Nat Sherman expanded into a prestigious name in the premium cigar world, developing its own lines of cigars and cigarettes.

    In 2017, Nat Sherman was acquired by Altria Group. Although the iconic Nat Sherman store closed in 2020, the cigar blends live on under the Ferio Tego brand, now led by Michael Herklots, who previously served as the vice president of Nat Sherman International and was a longtime associate to Joel Sherman and his family.

    “Mr. Sherman was an industry icon,” Herklots told the Premium Cigar Association. “He was beloved by everyone who knew him and certainly those who had the good fortune of working for him. His moral and ethical compass was always guiding the business and above all, he led with love.”

    Throughout his career, Joel Sherman received many industry honors and awards, including TMA’s “Giant of the Industry” award in 2014. He served as director of Tobacco Reporter’s parent organization, the Tobacco Merchants Association, and was an active participant in, and board member of, several other industry associations. 

  • Dutch MPs Alarmed About Dwindling Tax Take

    Dutch MPs Alarmed About Dwindling Tax Take

    Photo: mdbildes

    Dutch lawmakers are growing concerned about dwindling tax receipts as legal tobacco consumption plummets in the wake of higher tobacco duties, reports DutchNews.

    In April, the price of cigarettes increased to more than €11 ($12.14) per pack, a figure that includes €7.80 in taxes.

    According to the finance ministry, tobacco sales fell 40 percent in June and 30 percent in July and August, causing the government to miss its revenue targets.

    “The government’s forecast of a €400 million increase in taxes threatens to become a loss of €100 million,” tobacco retail group NSO said.

    Figures from the regional statistics office suggest some 35 percent of tobacco products consumed in the Netherlands are not bought there. Government research last year showed 25 percent of discarded cigarettes packs originated abroad.

    Research by the public health institute RIVM also indicates that smokers buy around 10 percent of their tobacco abroad, either importing it themselves or asking others to do so.

    Members of the pro-countryside party BBB called on the finance minister to confirm whether the tax figures are accurate. “If that is the case, we have to reverse the tax increase,” said Member of Parliament Henk Vermeer.

    In July, customs officials seized 6 million cigarettes and 4.5 tons of rolling tobacco at Rotterdam port. If seized product had been sold officially, it would have generated €3.9 million in tax income, officials said.

  • Brand Ranking Released

    Brand Ranking Released

    Photo: PMI

    Marlboro remains the world’s most valuable tobacco brand, but smokeless alternatives are gaining ground.

    Contributed

    The total value of the world’s top 10 most valuable tobacco brands has decreased by 6 percent, with eight out of 10 brands experiencing a decline in brand value this year, according to the latest ranking by Brand Finance, a leading brand valuation consultancy. The ranking reveals a significant shift in the industry toward smokeless alternatives, driven by changing consumer preferences and increasing regulatory pressures. Despite these changes, traditional combustible tobacco brands remain the most valuable, supported by loyal customer bases and effective pricing strategies.

    IQOS (brand value up 8 percent to $3.5 billion) is the fastest-growing tobacco brand, driven by rising revenue from smoke-free products. Philip Morris International reported smoke-free products reached nearly 40 percent of total net revenues in the fourth quarter of 2023. This was driven by the continued growth of IQOS, which has now surpassed Marlboro in net revenues, solidifying its position as the leading premium nicotine brand less than 10 years after its launch.

    Despite a 6 percent drop in brand value to $32.6 billion, Marlboro retains its position as the world’s most valuable tobacco brand for the 10th consecutive year. It leads the sector by a significant margin, with a brand value more than five times that of L&M, which holds the second spot.

    Altria Group, which owns Marlboro in the United States, and PMI, which owns the brand elsewhere, have both faced declining revenue from combustible products. Altria has struggled with lower shipment volumes and increased promotional investments, including a recent $0.17 per pack price increase on Marlboro and other brands in the U.S. Similarly, PMI has reported a drop in revenue from combustible tobacco. Nevertheless, Marlboro retains its top position due to its loyal customer base and strong promotional strategies.

    L&M (brand value $6.2 billion) has climbed to second in the ranking, despite recording a 2 percent decline in brand value. It has overtaken Pall Mall, which now sits in third following a 9 percent loss in brand value to $5.9 billion. L&M’s brand value has taken a hit as shipment volumes have declined. L&M is the sector’s strongest brand with a Brand Strength Index score of 77 out of 100.

    Richard Haigh

    “While Marlboro continues to lead as the most valuable tobacco brand for the 10th consecutive year, the industry is undergoing significant transformation,” said Richard Haigh, global managing director at Brand Finance.

    “The rise of smokeless alternatives like IQOS highlights shifting consumer preferences and changing market dynamics. Earlier this year, BAT’s announcement of a $31.5 billion impairment on the value of some of its U.S. cigarette brands marked the first significant write-down in a major market.

    “Acknowledging the reality that the market for traditional cigarettes is shrinking and taking action should be seen both as a bold and an important step in addressing an existential problem for the company. With eight out of the top 10 brands experiencing declines in value, tobacco giants must be brave in admitting market shifts and strategically planning their next moves to sustain global dominance and relevance.”

    Chesterfield (brand value $3.1 billion) has maintained its brand value year-on-year and advanced one position to seventh place. The brand has seen a rise in shipment volume, with an 8 percent increase in the fourth quarter of 2022 and a 14 percent increase for the full year, which has contributed to its stable brand value this year.

    The latest rankings highlight the dominance of U.S. tobacco brands, which make up a remarkable 92 percent of the total brand value in the ranking, totaling $61 billion. Only two brands in the ranking are from outside the U.S., the U.K.’s Rothmans (brand value down 8 percent to $2.9 billion) and Indonesia’s Sampoerna (brand value down 12 percent to $2.7 billion).

  • Vapes Major Culprit in Aviation Battery Incidents

    Vapes Major Culprit in Aviation Battery Incidents

    Image generated with Adobe Firefly

    The rate of “battery thermal Runaway incidents”—instances of lithium-ion batteries overheating on passenger planes—hit a five-year peak last year, with e-cigarettes being the biggest culprit, according to a report from UL Standards & Engagement (ULSE), a nonprofit organization focused on safety standards.

    The data comes from ULSE’s Thermal Runaway Incident Program (TRIP), a voluntary lithium-ion battery incident reporting system. TRIP comprises 35 passenger and cargo airline participants. The program was designed with the aviation industry to better understand the extent of thermal runaway incidents caused by lithium-ion batteries onboard aircraft and how to prepare for, or ideally prevent, future incidents.

    “Passengers are often unaware that many devices they bring on board are powered by lithium-ion batteries, let alone the risks they carry, and it’s much harder to solve a problem that they do not know exists,” said David Wroth, director of technology and systems at ULSE and the leader of TRIP, in a statement. “Thermal runaway incidents on board aircraft are largely preventable but admittedly more difficult to contend with at 40,000 feet. TRIP provides a unique opportunity for the aviation industry to come together to find strategies to mitigate the risk of these incidents.” 

    As technology evolves and more products rely on rechargeable power, lithium-ion batteries are getting more powerful and in some cases larger, further complicating the thermal runaway threat. Damaged, substandard, or counterfeit batteries run the greatest risk of going into thermal runway, presenting serious consequences in flight.

    Key takeaways from the report include:

    • Incidents are at the highest point in five years of data collection, rising 28 percent from 2019-2023. There are an average of two thermal runaway incidents reported in the TRIP database each week. While on the rise, with approximately 180,000 flights in U.S. airspace per week, it is still highly unlikely to experience a thermal runaway incident.
    • The average passenger brings four rechargeable devices on board. Most common items include smartphones (82 percent), laptops (41 percent), wireless headphones (39 percent), and tablets (36 percent). E-cigarettes were responsible for the most incidents in 2023, with 35 percent of reported incidents attributed to vaping devices on passenger flights, followed by power banks, representing another 16 percent of incidents.
    • Most incidents happen on the aircraft with devices that are stored near the passenger’s seat. Almost nine out of 10 (87 percent) incidents are reported on the aircraft, with the remaining 13 percent occurring when baggage and personal items are on the move. On the aircraft, thermal runaway incidents occur in or around the passenger’s seat nearly 60 percent of the time.
    • The vast majority of incidents are addressed before reaching the fire or explosion stage of thermal runaway. Most (85 percent) incidents in 2023 were addressed when batteries showed warning signs such as overheating and smoking prior to entering full thermal runaway. While only 15 percent of incidents resulted in fire or explosion, the speed in which thermal runaway can develop means that the events in the majority could have been more serious had the issue not been addressed quickly.
    • Rechargeable devices are being packed in checked luggage. The devices that were most cited in thermal runaway incidents in 2023 were also the two most frequently put in checked luggage, according to passengers surveyed. More than a quarter (27 percent) of travelers reported checking portable chargers, and another 27 percent said they checked e-cigarettes. Devices that enter thermal runaway in checked baggage cannot be accessed by crew while in flight, and fires may not be detected as quickly in the cargo hold as they would be in the cabin.

    “Our research highlights several trouble spots that need to be addressed, from passengers missing warnings about lithium-ion batteries to packing rechargeable devices out of reach,” said Lesley Rohrbaugh, head of insights and policy analysis for ULSE. “But we also see clear opportunities to reduce the risk and that’s where we’re focused.” 

    Through additional passenger and cabin crew focus groups and interviews conducted by ULSE and data from TRIP, strategies to reduce these risks include passenger education, cabin crew training, and standards for aircraft baggage handling.

  • Mixed Feelings at PMTA Anniversary

    Mixed Feelings at PMTA Anniversary

    Photo: stokkete

    Representatives of the U.S. vapor industry expressed mixed feelings at the four-year anniversary of the filing of the first premarket tobacco product applications (PMTAs).

    Since the Sept. 9, 2020, deadline, the Food and Drug Administration’s Center for Tobacco Products (CTP) has received applications for 26 million novel tobacco products, mostly electronic cigarettes or e-cigarettes.

    However, despite its acknowledgement that e-cigarettes overall are less harmful and less toxic than combustible cigarettes, the agency has rejected more than 99 percent of PMTAs for these products.

    At the same time, the FDA has authorized 6,670 new combustible tobacco products to be sold in the U.S., including 3,232 new cigars, 1,291 new pipe tobacco products,1,073 new hookah tobacco products and 973 new cigarettes.

    According to the Vapor Technology Association (VTA), current CTP Director Brian King has authorized only four vaping devices for as alternatives to cigarettes, compared with 1,270 combustible products.

    Director King has justified his refusal to authorize flavored e-cigarettes that are widely used by American adults with the need to protect youth. Yet the most recent National Youth Tobacco Survey revealed that the youth vaping rate—the share of users who say they’ve used an e-cigarettes at least once in the past 30 days—has declined to 5.9 percent, the lowest level in more than a decade.

    “Since Sep. 9, 2020, 1.93 million Americans have died from smoking cigarettes (480,000 each year), and approximately 64 million Americans suffered from smoking-related disease (16 million each year), according to the CDC, at a cost of hundreds of billions of dollars to the U.S. health care system and gross domestic product,” the VTA wrote in a statement.

    “In this time, the FDA has only allowed the purveyors of these deadly combustible products to strengthen their grip on the market. Meanwhile, more and more Americans die from smoking, making this anything but a happy anniversary.”

  • Illicit Market Remains a Concern: KPMG

    Illicit Market Remains a Concern: KPMG

    Photo: Europol

    European smokers bought more than 35 billion illicit cigarettes in 2023, accounting for 8.3 percent of total EU cigarette consumption, according to a KPMG study commissioned by Philip Morris Products.

    Counterfeit cigarettes remain one of the main sources of illicit tobacco consumption in the region, with 12.7 billion (36 percent) cigarettes consumed, as criminal networks increasingly target higher-taxed and higher-priced markets. Overall, governments in the EU lost an estimated €11.6 billion (12.82 billion) in tax revenue, up from €11.3 billion in 2022. France is still leading the ranking as the country with the largest illicit consumption in all of Europe, with 16.8 billion illicit cigarettes and an estimated €7.3 billion in tax revenues lost.

    “We are witnessing an evolution of organized crime groups in Europe, as they are increasingly locating production facilities nearer Western European countries,” said PMI Senior Vice President of External Affairs Christos Harpantidis in a statement.

    “We consider this phenomenon to be a direct consequence of failed policy approaches that have not done enough to curb illicit trade and reduce smoking prevalence, and it is putting consumers, governments, legitimate businesses, and society alike at risk.”

    We consider this phenomenon to be a direct consequence of failed policy approaches that have not done enough to curb illicit trade and reduce smoking prevalence, and it is putting consumers, governments, legitimate businesses, and society alike at risk.

    Christos Harpantidis, senior vice president, external affairs, PMI

    Interviews with law enforcement agencies included in the KPMG report shed light onto transnational organized crime’s professionalization of their role in the supply chain of illicit cigarettes. According to information from law enforcement agencies, publicly available media articles, and PMI estimates, criminals have expanded the setup of illegal cigarette factories; in 2023 alone, law enforcement data shows that at least 113 clandestine cigarette manufacturing sites in 22 European countries were disrupted by regional and local authorities.

    The steady increase of counterfeit cigarette consumption for the fourth consecutive year across Europe—mainly driven by the U.K. and Ukraine—is now coupled with the rise of all other illicit trade categories, including illicit whites and contraband. Combined with the continued recovery of cross-border legal volumes, after Covid-related travel restrictions ended in 2022, total non-domestic consumption across the 38 European countries in the study has also reached its highest level ever (15.5 percent), equal to more than one cigarette out of six.

    Despite this scenario, KPMG revealed that in 26 European countries illicit consumption share was less than 10 percent of total consumption. Of these, 16 markets had an illicit consumption share of less than 5 percent. And in 25 of the 38 European countries included in the study, the share of illicit cigarette consumption was either stable or declining, compared to 2022.

    We need to continue working together with law enforcement agencies and governments to ensure that illicit trade does not become an even larger problem across the EU.

    Massimo Andolina, president, Europe region, PMI

    “It’s truly encouraging to see a decrease in illicit consumption in countries like Italy, Poland, Romania, and Spain. We need to continue working together with law enforcement agencies and governments to ensure that illicit trade does not become an even larger problem across the EU,” stated Massimo Andolina, president, Europe region, PMI.

    For the first time since its publication in 2006, the KPMG annual research study has broadened its scope and incorporated all Balkan countries. Now, the research covers 38 countries: the 27 EU member states, as well as Albania, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, North Macedonia, Norway, Serbia, Switzerland, Ukraine, and the U.K.

    The Balkan region has shown lower presence of illicit cigarettes compared to some of the Western European countries, such as France or the U.K. Ukraine, on the other hand, remains the country with the second highest volume of illicit cigarettes consumed, at 8.4 billion.