Author: Taco Tuinstra

  • Pakistan Urged to Block Small Pack Exports

    Pakistan Urged to Block Small Pack Exports

    Image: Maksym Kapliuk

    The African Tobacco Control Alliance (ATCA) has urged Pakistan to prevent British American Tobacco from exporting cigarettes in packs of 10 sticks to Sudan, reports The Independent.

    Pakistan prohibits the sale of cigarettes in such packs on its domestic market. BAT subsidiary Pakistan Tobacco Co. (PTC) has asked the government to make an exemption for a large order from Sudan, which permits the sale of 10-stick packs on its territory.

    In its statement, the ATCA urged the Pakistani government to reject PTC’s request, emphasizing the need to protect children from the dangers of smoking.

    According to the ATCA, the 20-cigarette per-pack rule is the global standard for the protection of children. Because packs with fewer than 20 cigarettes are less expensive, the argument goes, it is more likely that underage buyers will purchase them. The ATCA refers to such packs as “kiddie packs.”

    At least 82 countries have laws requiring a minimum of 20 cigarettes a pack.

    “BAT is pushing you to change regulations so that it can manufacture 10-stick cigarette packs and export them to Sudan, the ATCA wrote in its letter to the government of Pakistan. “However, the WHO Framework Convention on Tobacco Control in its Article 16 calls on parties to prohibit the sale of cigarettes in small packets, which increases the affordability of such products to minors. Consequently, Pakistan as a party to the convention should not allow manufacturing of 10-stick cigarette packs.”

    The organization condemned BAT’s explanation that the 10-stick packs will be sold only in Sudan, noting that if the tobacco giant is allowed to succeed with this plan in Sudan, other African countries would be next. “It is unconscionable that BAT thinks it is ok to change a law on one continent in order to target vulnerable populations on another,” ATCA wrote.

    “In Sudan and other countries in Africa, people need food, medicine and other lifesaving supports. What they do not need is kiddie packs of cigarettes that put them at increased risk of tobacco addiction, diseases and death. And we know that once BAT gets kiddie packs into one country, they will make their way across Africa.”

  • Delayed Payments for Malawi Growers

    Delayed Payments for Malawi Growers

    Photo: Taco Tuinstra

    Malawi tobacco growers have been complaining about tardy payments, with some receiving the proceeds of their leaf sales up to a week late, reports The Nyasa Times.

    “We are expecting the Tobacco Commission [TC], as the regulator, to come out with measures to eradicate this problem,” said TAMA Trust Vice President Rhodes Sulumba.

    TC spokesperson Telephorus Chigwenembe said the problem was limited to isolated cases. “However, we will find out the extent of the problem and the bottlenecks are,” he was quoted as saying.

    Malawi has earned $327 million from tobacco sales since the start of this year’s marketing season, up from $282.62 million from the same period last year.

    After 11 weeks of sales, growers have sold 112 million kg of all tobacco types, according to AHL Tobacco Sales. During the comparable period of 2023, the figure was 94.3 million kg.

  • Ireland to Raise Tobacco Sales Age

    Ireland to Raise Tobacco Sales Age

    Photo: Vasyl

    Ireland will to raise the minimum age for tobacco sales to 21.

    With the measure, the government hopes to accelerate the decline in adult smoking prevalence, which has plateaued at 18 percent for several years, and reduce underage smoking prevalence to zero.

    “My goal with this measure is to assist our young people to avoid a lifetime of addiction and illness from tobacco smoking. The modelling shows us that this measure will not only protect the targeted age group and but will also protect those under 18 as they will be less likely to be in social groups with 21 year olds who can legally purchase cigarettes,” said Health Minister Stephen Donnelly in a statement.

    “Countries around the world are looking at endgame measures for smoking. We are no longer regulating it; we are seeking to eliminate it from our lives and the lives of our children. I’m very proud that Ireland is continuing its tradition of leading the way on this issue, and today’s measure is another important step on our journey towards a tobacco-free Ireland.”

    Ireland will be the first EU country to raise the smoking age to 21. The measure will be phased in so that that those already entitled to be sold tobacco products—that is, persons over 18 but under 21—will not be affected.

  • The Wrong Answer

    The Wrong Answer

    Photo: makcoud

    An e-cigarette ban would bring new public health concerns to Costa Rica.

    By Peter Clark

    Recently, Costa Rica’s Ministry of Health issued “Resolution MS-DM-RC-2381-2024” prohibiting the sale and importation of synthetic nicotine and cannabinoid vaping products. This measure appears to be a response to the uptick in vaping-related illnesses and injuries. The ban will remain until regulators promulgate rules guiding the “use and commercialization” of electronic vaping devices.

    The ban might be an effort to protect public health, but there are several downsides to banning vaping. Costa Rican officials should look to the example of other countries implementing failed e-cigarette bans because prohibition never works. Even a temporary ban is a disastrous policy since people will continue to vape, exposing Costa Ricans to the dangers of black market e-cigarettes.

    Most countries that prohibit the sale of e-cigarettes have seen increased vaping rates over the past couple of years. One of the best examples is Brazil. Brazil banned the sale, manufacture and importation of vaping devices in 2009.

    Despite stringent vaping laws, Brazil has seen an increase in vaping rates over the past couple of years. Some Brazilian states have seen over 100 percent increase in vape usage between 2022 and 2023. Approximately 4 million Brazilians vape regularly. There has been an approximate 600 percent increase in e-cigarette consumption since 2018.

    Brazil has made attempts to ramp up enforcement of vaping laws, but it has done little to dampen the burgeoning black market for e-cigarettes. E-cigarette sales have increased “fourfold” between 2018 and 2022.

    There are extreme risks with buying bootleg e-cigarettes that outweigh the benefits of protecting kids from nicotine addiction and cannabis exposure. Prohibition of marijuana and flavored vapes in the U.S. has created multiple public health crises. 

    In 2019, the United States experienced an outbreak of e-cigarette or vaping product use-associated lung injury (EVALI) associated with the use of illicit THC vape pens. Experts suspect that vitamin E acetate caused EVALI. A cutting agent is used to thicken and dilute the cannabis oil to “make it go further.” Vaporizing vitamin E acetate produces the toxic gas ketene, which causes lung damage. It was less common to find products contaminated with this adulterant in states with legal marijuana.

    The most insidious byproduct of the contraband market is the emergence of fentanyl-laced e-cigarettes. The iron law of prohibition at work; the “harder” the laws, the “harder” the drugs. The temptation lingers for black market e-cigarette sellers to lace nicotine or THC e-cigarettes with more potency-dense and addictive drugs, increasing profitability and the ease of smuggling.

    Fentanyl vapes illegally entered the U.S. market as the result of federal marijuana prohibition and restrictions on flavored nicotine vaping devices. These deadly cartridges are frequently mistaken for less dangerous vaping products. Most alarming of all, kids have gotten ahold of these illicit vapes, leading to school-aged children being hospitalized and even deaths.

    The other risk of a vaping ban is that many vapers will return to combustible cigarettes. Contrary to popular belief, e-cigarettes are significantly less harmful than analog cigarettes. That is not to say vaping is risk-free, but it is a better alternative to smoking. Public Health England has found e-cigarettes to be 95 percent less harmful than traditional cigarettes. E-cigarette vapor contains less toxic chemicals and biomarkers than tobacco smoke. Smokers who switched to vaping decreased their risk for cardiovascular harm by lessening the narrowing of their arteries.

    Beyond the harm reduction benefits of vaping, nontobacco-flavored vapes have been effective in helping adults quit cigarettes. A study published by The New England Journal of Medicine found that when combined with counseling, 59.6  percent of the participants using e-cigarettes completely abstained from smoking. In comparison, only 20.1 percent of participants who went cold turkey were able to quit smoking.

    Banning e-cigarettes is not the answer. I hope regulators quickly enact a reasonable regulatory framework guiding the sale, marketing, production and importation of nicotine and cannabinoid vaping products. Continuing to uphold the ban or dragging their feet on enacting regulation will generate new public health concerns for Costa Rica. Whether it is more Costa Ricans smoking or kids getting ahold of deadly vaping devices, banning e-cigarettes can have some devastating consequences.

    Peter Clark is a fellow with the World Vapers’ Alliance. You can follow him on X at @blog_logic.
  • Reynolds Files PMTA for Age-Gated Vuse Pro

    Reynolds Files PMTA for Age-Gated Vuse Pro

    R.J. Reynolds Vapor Co. has filed the final pre-market tobacco product application submissions with the U.S. Food and Drug Administration for its Vuse Pro age-gated device. The electronic nicotine delivery system device platform connects to a mobile application that verifies the consumer’s age through a third-party provider.

    Once verified, the device will unlock. It uses a unique design to only allow compatible Vuse Pro pods to be used. The technology and mobile application also enable features such as auto-lock and proximity lock to further secure device access.

    “Our PMTA submissions to the FDA underscore our commitment to both offering adult tobacco and vapor consumers choices as well as underage access prevention,” said Reynolds Executive Vice President of Scientific Research and Development Tim Nestor in a statement. “We don’t want our products in the hands of youth, period. The Vuse Pro ENDS platform provides a solution that limits access to adult consumers while also offering flavors that appeal to current adult smokers and a unique vapor experience.”

  • Scandinavian Tobacco to Acquire Mac Baren

    Scandinavian Tobacco to Acquire Mac Baren

    Photo: andrey

    Scandinavian Tobacco Group (STG) has agreed on the terms and conditions for the acquisition of all the shares of Mac Baren Tobacco Co. from Halberg. On a debt and cash-free basis, the transaction is valued at DKK535 million ($76.87 million). The acquisition will be financed by cash at hand and debt.

    A family-owned business founded in 1826, Mac Baren is a global smoking tobacco company. Its portfolio includes pipe tobacco brands such as Mac Baren, Amphora and Holger Danske as well as fine-cut tobacco brands such as Amsterdamer, Choice and Opal. The company also produces and sells nicotine pouches with the brands ACE and GRITT.

    Mac Baren’s products are sold in 74 countries with the majority of net sales generated in the U.S., Denmark and Germany. Other key markets include the U.K., France, Spain and Italy. The company is based in Svendborg, Denmark, with production facilities in Denmark and in Richmond, Virginia, USA. The company has approximately 200 full-time employees.

    Mac Baren’s reported annual net sales (April 2024) were DKK723 million with a reported EBITDA of DKK85 million. Nicotine pouches accounted for close to 20 percent of net sales with a small negative contribution to EBITDA.

    The acquisition will contribute to our already well-established position on the global market for pipe tobacco and will expand our attractive range of brands of the highest standards to our consumers.

    Niels Frederiksen, CEO, STG

    “I am very pleased that we have taken this important step to strengthen our smoking tobacco business with the acquisition of Mac Baren,” said STG CEO Niels Frederiksen in a statement. “The acquisition will contribute to our already well-established position on the global market for pipe tobacco and will expand our attractive range of brands of the highest standards to our consumers. The combination with our existing business is expected to deliver meaningful synergies when fully integrated and good value for our shareholders.”

    “Scandinavian Tobacco Group is acquiring a strong company with a lot of know-how, loved brands and skilled employees,” said Halberg chairman Torben Sorensen. “Since its inception in 1826, a central part of Mac Baren’s DNA has been its focus on new opportunities and ensuring optimal competitiveness. In light of this, it is timely prudence to now let the company become part of a stronger constellation. It is a particular pleasure that ownership has been retained in Danish hands. This is the best possible solution for both Mac Baren and Halberg.”

    STG’s full-year financial guidance for 2024, excluding the impact from the acquisition of Mac Baren, remains unchanged. The integration planning period is expected to take up to 120 days

  • KT&G Supports Farmers

    KT&G Supports Farmers

    Photo: KT&G

    KT&G delivered welfare improvement support funds amounting to approximately KRW420 million ($303,020) to tobacco farmers.

    This year’s support funds will be used for health checkup fees, child scholarships and the purchase of fuel-saving devices for drying facilities targeting leaf tobacco growers.

    KT&G has been delivering welfare improvement support funds to leaf tobacco farmers annually since 2013, reaching a total of KRW4.28 billion this year. During the same period, the cumulative number of benefiting growers reached 15,212.

    Korean tobacco farmers have been struggling to secure labor due to the declining and aging rural population. Tobacco cultivation is difficult to mechanize, which makes it imperative to look after growers’ health, according to KT&G.

    The fuel-saving device recirculates the heat discharged during tobacco drying. Since 2022, KT&G has provided 214 units.

    The company also assists its farmers by purchasing all domestic leaf tobacco every year and dispatching employee volunteer groups to assist during the planting and harvesting seasons.

    “We continue to support the welfare improvement projects for farmers to alleviate their difficulties and provide practical help,” said Kim Jeong-ho, head of KT&G SCM headquarters, in a statement.

    “We will continue to provide consistent support to improve the health and economic conditions of leaf tobacco farmers.”

  • Altria Submits PMTA for ‘On! Plus’ Pouches

    Altria Submits PMTA for ‘On! Plus’ Pouches

    Image: maurice norbert

    Altria Group has submitted premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration for its “On! Plus” oral nicotine pouch products. The PMTAs were submitted by Altria’s wholly owned subsidiary Helix Innovations.

    On! Plus is a spit-free, oral tobacco-derived nicotine (TDN) pouch product made from a proprietary “soft-feel” material to provide a more comfortable product experience. The On! Plus pouch is designed for adults who dip and adult dual users (i.e., adults who smoke and dip).

    According to Altria, On! Plus pouches are seamless and larger than the leading U.S. TDN brands. Similar to the currently marketed On! products, On! Plus packaging features a compartment to responsibly dispose of used product. Helix submitted PMTAs for three distinct On! Plus varieties: tobacco, mint and wintergreen. Each variety comes in three different nicotine strength options.

    “Helix’s submission of the On! Plus applications underscores Altria’s commitment to addressing consumers’ evolving preferences through innovation in potentially reduced risk products. We firmly believe that On! Plus is a transformative product that will meaningfully contribute to Helix’s growth in the U.S. market, upon timely FDA authorization,” said Nick MacPhee, managing director and general manager of Helix in a statement.

    “We’ve long believed in the value of a robust marketplace of authorized smoke-free products for adult tobacco consumers. We believe that these PMTAs demonstrate that responsibly marketed On! Plus pouches can provide a compelling alternative in the marketplace,” said Paige Magness, senior vice president of regulatory affairs, Altria Client Services.

    Upon authorization, Altria expects the products to be distributed by Altria Group Distribution Co.

    Helix currently sells On! nicotine pouches in the U.S. In the first quarter of 2024, On! shipment volume grew 32 percent versus the prior year and the brand achieved a 7.1 percent retail share of the total U.S. oral tobacco category.

    Altria entered the U.S. oral nicotine products market in 2019 after signing a deal with Burger Söhne to acquire an 80 percent ownership stake in some companies that commercialized On! Products, according to The Wall Street Journal. In December 2020 and April 2021, Altria subsidiaries concluded transactions to buy the remaining 20 percent stake of the global on! business for about $250 million.

    Altria’s PMTA announcement comes after Philip Morris International’s Swedish Match North America unit suspended nationwide sales on its U.S. website as local officials in Washington, D.C., investigate whether the company is in compliance with the district’s ban on the sale of flavored products.

  • PCA Names Habursky as Executive Director

    PCA Names Habursky as Executive Director

    Photo: PCA

    The Premium Cigar Association (PCA) has promoted Joshua Habursky to the role of executive director. Habursky’s tenure at PCA includes outside government affairs consultant (2018), Director of Federal Affairs, head of government affairs, and deputy executive director (2019-present). Since May 2024, Habursky has served as interim executive director of the PCA following Scott Pearce’s departure.

    “For the past five years we have been able to work effectively with Josh to accomplish the goals of the association related to advocacy. We are confident of his ability to take on the additional responsibility of running the full association moving forward. This internal promotion is a testament to both Josh and the entire PCA staff who have been diligently working with the board to make the association a powerhouse in all departments,” says Scott Regina, president of the PCA board of directors in a statement.

    Habursky will continue to serve as the organization’s chief lobbyist but will work with internal staff and consultants to identify new priorities and responsibilities. The PCA will implement a new five-year Strategic Plan and is expected to announce additional positive changes in the coming months, including new hires to support the trade show team.

    Habursky has spent over a decade working in government affairs roles in trade and membership associations, including the American Motorcyclist Association, American Diabetes Association, and Independent Community Bankers of America.

  • New Reports Exposes Illegal Tobacco Trade

    New Reports Exposes Illegal Tobacco Trade

    Photo: IvanSemenovych

    A new study, titled “Fighting the Dark Underworld: How the illegal trade in tobacco threatens to overwhelm us,” by Intrinsic Insight and commissioned by Japan Tobacco International, sheds new light on the pervasiveness of organized crime within global society, focusing on four countries with high levels of illicit tobacco trade: Canada, France, Philippines and the United Kingdom.

    The report examines how unstable geopolitical environments, fragile economies and a lack of serious deterrents create the ideal conditions for a surge in criminal activity and increased profits for criminal networks.

    The report highlights key indicators—found across the four countries—that are allowing illegal trade to flourish.

    “A combination of factors ranging from poor border controls and ineffective penalties to corruption, excessive taxation and legislation, are contributing to both the increase in demand for illicit products while making it easier for criminals to grow substantial criminal empires,” said JTI’s global anti-illicit trade operations director Vincent Byrne in a statement.

    1. Cost of living crisis

    Compromised living standards are forcing greater numbers of consumers into making difficult lifestyle decisions, creating ripe environments for criminals to push a larger number of smokers towards cheaper illegal channels and illegal products. Buying illegal tobacco products is in danger of becoming normalized behavior, with four in 10 (43 percent) adult smokers surveyed across these four countries now finding themselves comfortable with the idea of buying cigarettes, even if they know they are produced or sold illegally.

    1. Excessive taxation and loss in government revenue

    As illegal sales continue to bombard the legal tobacco market, governments are facing a decline in tax revenue. According to the World Bank, governments globally are estimated to be losing out on $40 billion to $ 50 billion annually in excise alone due to consumers being lured into buying illegal tobacco products. According to 88 percent surveyed, governments’ inability to collect tax revenue because of illegal trade is a significant issue.

    1. Rapid technological progress

    The criminal shift towards e-commerce and the advancement of artificial intelligence is leading to an increased sophistication of production, distribution and sale of illegal goods. Of those adult smokers surveyed, 14 percent have claimed to have recently purchased illegal tobacco via social channels.

    1. Not cracking down on illegal tobacco trade to curb other serious crime

    Not only is the money being lost to governments, thus limiting their capacity to fund public services such as law enforcement and important public services, the illegal tobacco trade is a direct gateway to other serious crime such as people trafficking and terrorism. The study found that policy makers underestimate the extent of the worry for the public, with 50 percent of respondents citing illegal tobacco trade as being a threat to their country, which is close to parity with those citing drugs/narcotics (54 percent) and terrorism (49 percent) as national dangers. The sale of illegal tobacco is not a victimless crime, according to 61 percent of those surveyed.

    1. Existing penalties are not severe enough to deter criminals

    More collaboration is needed to crack down on illegal trade and its intricate international criminal networks. According to 61 percent surveyed, authorities are not taking the situation as seriously as they should. The United Nations Office of Drugs and Crime estimates that no more than 2 percent of global shipping containers are inspected, signaling to criminal gangs that illegal trade is a relatively “risk free” enterprise with large financial upsides.

    “While the drivers fueling illegal trade are evident in each of the four countries, they have global impact,” Byrne said. “Given the borderless nature of illegal trade, in the future, countries that currently do not have an illicit tobacco problem, are advised to notice the triggers to avoid the onset and spread of criminality linked to illicit trade in their countries.”

    A synopsis of the situation in the four countries and consolidation of key report findings includes:

    Canada

    Contraband tobacco has spread unchecked across the country to the detriment of revenue receipts due to serious disparities in tax harmonization because of Canada’s geography and complicated relationship with First Nation states.

    • In Canada, the high volume of tobacco products produced by First Nation states is a major anomaly that drives illegal trade there. This bears a similarity to ‘free trade zones’ such as those that exist in places like the UAE. Tobacco produced legally in these zones often ends up in other jurisdictions where it then becomes an illegal product.
    • The report found that for 57 percent of Canadians, the economy and general cost of living is one of their top five concerns.
    • Seven out of ten (71 percent) Canadians believe that the proceeds of the illegal tobacco trade should fund law enforcement.
    • Eight out of ten (81 percent) Canadians believe government should work with industry to combat illegal trade.

    France

    High levels of taxation, an absence of border controls and issues of affordability caused by rising living costs are having a big impact on the increase in illegal trade. The French government’s cornerstone policy in the run up to this summer’s 2024 Paris Olympics is to remove illegal tobacco sellers from the streets and has pledged to impose stronger fines, penalties, and arrests of street sellers. Cracking down on clandestine factories is also a focus for government.

    • The report found that one in three members of the French public cite local crime as one of their top five concerns.
    • Seven out of ten (76 percent) French nationals feel that the sale of illegal and fake tobacco by street vendors makes their neighborhoods less safe.

    Philippines

    In a recent reclassification of tobacco as an agricultural product, the Philippines Congress has passed amendments to the country’s agricultural bill that established the smuggling of tobacco as an act of economic sabotage. This amendment, which is expected to be signed into law by the President, includes harsher penalties and fines, and it has the potential to have a significant impact on smuggling and the illegal distribution of tobacco products in Philippines.

    • As a result of legislation passed in 2013 (the RA 10351, known locally as “the sin tax” laws), revenues raised through tobacco sales have been used to finance public services. Several independent studies have shown that these laws have created an increase in demand for illegal tobacco and revenue losses for the government.

    United Kingdom

    While the U.K. is experiencing its largest ever cost-of-living crisis, with public debt standing at over 184 percent GDP, and with 11.7 million of the U.K.’s 67 million population living in poverty according to official figures, the U.K. government is scrambling for revenue.

    • The customs and revenue service estimates that in 2021, the loss in revenue to the U.K. exchequer due to illegal tobacco trade was £2.5 billion ($3.24 billion), money that could be used to fund the U.K. economy and social programs, instead of being funneled directly into criminal networks.
    • While many U.K. authorities, including Customs & Excise, Trading Standards, Border Force, the Police, and the National Crime Agency, have significant roles to play in tackling illegal trade, oftentimes they have conflicting and overlapping responsibilities and dwindling resources.
    • Harsher deterrents and penalties are needed for criminals who are only too eager to exploit these loopholes.
    • The study found that 72 percent of U.K. adult tobacco consumers would be happier paying the tax on tobacco products if the government spent more of these taxes on law enforcement.

    In the report, a multi-faceted approach for tackling the “dark underworld” includes:

    • Increased cooperation between governments and law enforcement at both international and national levels. This includes information sharing between industry and authorities.
    • In the case of tobacco, there needs to be a concerted effort to increase the fines and punishments for those producing, distributing, and selling illicit products to increase the risk and consequences for criminals. This should be coupled with stronger enforcement.
    • Law enforcement agencies should also explore using powers other than anti-smuggling and anti-counterfeiting laws, for example, anti-money laundering, anti-income tax evasion and anti-organized crime laws.

    Reasonable and moderate taxation is vital to maintain affordability of legal produc