Author: Taco Tuinstra

  • Growers Reject Official Tobacco Price

    Growers Reject Official Tobacco Price

    Photo: Taco Tuinstra

    Tobacco grower representatives in Khyber Pakhtunkhwa province accused Pakistan’s federal government of violating the tobacco law by fixing the leaf price for the current crop below the previous year’s rate, reports Dawn.

    Martial Law Order 487 requires the weighted average price for the tobacco crop of any year to be equal to or higher than the weighted average price paid to them for the crop of the immediately preceding year.

    According to the grower representatives, the Federal Ministry of National Food Security and Research has set the minimum indicative price at PKR505 ($1.81) per kilogram for flue-cured Viriginia tobacco this year. Last year, the weighted average price was PKR709 per kilogram.

    The growers said the move was a flagrant violation of the tobacco marketing law that should be immediately corrected.

  • Azerbaijan Mulls Stricter Rules for Importers

    Azerbaijan Mulls Stricter Rules for Importers

    Photo: Taco Tuinstra

    Lawmakers in Azerbaijan want to introduce stricter rules for cigarette importers, reports the Azerbaijani Press Agency.

    Among the proposed conditions is a requirement for importers to have operated at least one year in the tobacco business before they can bring in product from abroad.

    On May 24, legislators proposed to amend the law on tobacco and tobacco products. The objectives cited were to protect the domestic market, increase the potential for exports and “control a person’s sustainable and purposeful activity.”

  • Bangladesh Urged to Raise Cigarette Prices

    Bangladesh Urged to Raise Cigarette Prices

    Photo: Shahadat222

    Anti-tobacco organizations are urging Bangladesh to increase cigarette prices in fiscal year 2024–2025, reports The Business Post.

    Even as the prices of essential goods have soared, cigarette prices have remained comparatively stable in Bangladesh. Over the past five fiscal years, the price of low-tier cigarettes has increased by only BDT10 ($0.09), averaging an increase of BDT2 per year. Since 2019–2020, the price of such cigarettes has increased only once, by BDT1.

    Critics say the failure to adjust cigarette prices in line with inflation has made smoking more accessible and attractive to low-income groups. Low-tier cigarettes now account for 80 percent of the cigarette market.

    Experts have suggested raising the price of a 10-stick pack of low-tier cigarettes from BDT45 to BDT60. Aligning prices with inflation, they suggest, would increase government revenue by approximately BDT100 billion.

    “Low-income individuals are the most affected by malnutrition,” said Nasrin Sultana, a professor at the Institute of Health Economics at Dhaka University. “Increasing the price of low-tier cigarettes would reduce the number of smokers in this demographic. This would not only decrease health risks but also enhance revenue flow even amid economic downturns.”

  • China Tobacco Deputy Head Investigated

    China Tobacco Deputy Head Investigated

    Photo: RomanR

    Chinese authorities are investigating Xu Ying, deputy head of China’s State Tobacco Monopoly Administration, for suspected “severe violations of disciplines and laws,” reports China Daily, citing the Communist Party’s Central Commission for Discipline Inspection and the National Commission of Supervision.

    Xu started his career in the administration in 1988. In March 2014, he became the deputy head of the administration.

    Earlier this month, law enforcement officers arrested former STMA head Ling Chengxing on suspicion of accepting bribes and abusing power.

  • Industry Still Targeting Children: WHO

    Industry Still Targeting Children: WHO

    Photo: v-a-butenkov

    Despite its talk about harm reduction, the tobacco industry is still targeting youth via social media, sports and music festivals and flavored products, according to the World Health Organization, reports Reuters.

    In a joint report issued with STOP, an industry watchdog, the global health body alleged that tobacco companies’ alternative smoking products such as vapes are often marketed with designs and flavors that are appealing to young people.

    “It’s dishonest to talk about harm reduction when they are marketing to children,” said Tedros Adhanom Ghebreyesus, the WHO’s director-general.

    The WHO pointed to flavors like bubblegum as a driver of youth vape use increases. The industry, however, argues that flavors are a key tool in helping adult smokers switch to less harmful alternatives. Most large companies have moved away from youth-appealing flavors.

    The WHO says that companies use social media and sponsorship of music festivals and sports festivals to target youth, allowing the companies to promote their brands to younger audiences and to hand out free samples.

    In addition, the WHO argues that there is insufficient evidence that vapes help smokers quit. Rather, the entity said that there is evidence vaping increases traditional cigarette use, especially among youth.

    Sarah Jackson, principal research fellow at University College London’s Tobacco and Alcohol Research Group, contradicted that view, however, saying that the WHO statements, “do not accurately reflect current evidence on e-cigarettes.”

  • Sunak’s Ban on Hold

    Sunak’s Ban on Hold

    Image: Mark

    Britain’s proposed generational tobacco ban will not become law before the July 4 election announced by Prime Minister Rishi Sunak this week, reports Reuters.

    The U.K. Tobacco and Vapes Bill aims to phase out the sale of cigarettes. It would make it illegal to sell tobacco products to anyone born on or after Jan. 1, 2009, after they turn 18. It would also provide powers to address vaping among young people.

    The bill had passed its first parliamentary hurdle in April despite dozens of lawmakers in Sunak’s Conservative party voting against it.

    However, the government failed to put forward the tobacco and vapes bill as part of the legislation to be passed in the “wash-up” period before parliament dissolves.

    Unless ministers resuscitate the bill at the last minute with an emergency statement today, it will be up to the next government to re-introduce the smoking ban in a fresh bill. The Labour party is committed to the policy and could include it in its manifesto. “Our position hasn’t changed so if it doesn’t come through, then we will look at putting it in the manifesto and introducing a bill,” a Labour representative told The Guardian.

    The U.K. Vaping Industry Association (UKVIA) welcomed the news that the  bill would not be rushed through the legislative process. Earlier, the group had complained that the Department of Health and Social Care had failed to carry out any risk assessments into the health impacts of fewer people using vapes to quit smoking as a result of potential changes to flavor offerings, point of sale displays or packaging and product presentation.

    “It is wrong to rush any legislation through parliament without proper scrutiny but with a bill like this, where lives are quite literally at stake, it is even more important that the correct checks and balances are in place when considering what new powers to introduce,” said UKVIA Director General John Dunne in a statement.

    “We believe that properly drafted new measures to ban child-friendly designs and flavor names and ensure that products, backed up by a powerful and effective enforcement regime will continue to see smoking rates fall while ensuring that youth uptake rapidly comes down.”

    Anti-smoking activists took the news in stride. “While the tobacco and vapes bill appears to be a victim of a snap election, all is not lost,” said Deborah Arnott, chief executive of Action on Smoking and Health. “This bill has the strong support of the chief medical officers of all four nations in the U.K. as well as the overwhelming majority of the public.”

  • Icelandic Snuff Sales Hurt By Pouches

    Icelandic Snuff Sales Hurt By Pouches

    Photo: Burtsc

    Rising sales of nicotine pouches are depressing demand for snuff in Iceland, reports Iceland Review, citing comments made by State Alcohol and Tobacco Co. Director Sveinn Víkingur Arnason.

    Iceland began producing snuff in 1941, and consumption peaked in 2019, when 46 tons were produced and sold domestically. Since then, the trend has been steadily downwards, with only 10 tons of snuff tobacco sold in 2023.

    While snuff is intended for nasal use, surveys have shown that it has been used predominantly orally in Iceland, which prohibits the sale and production of chewing tobacco.

    The decline in snuff sales has been driven in part by the growing popularity of nicotine pouches, which at ISK40 ($0.29) per gram are significantly cheaper than snuff. Snuff tobacco sold by the State Alcohol and Tobacco Co. sells for around ISK80 per gram.

    The main reason for this price difference is the fact that nicotine pouches and snuff tobacco fall under different tax schedules.

    Arnason said he expects the downward trend in snuff sales to continue.

  • ITC Reports Growth in Cigarette Business

    ITC Reports Growth in Cigarette Business

    Timon Schneider/Wirestock

    ITC reported gross Revenue of INR694.46 billion ($8.34 billion) for the 12 months that ended March 31, up 6.8 percent over the comparable period a year earlier. Net revenue of conglomerate’s cigarette businesses was up 7.1 percent.

    “After a period of sustained growth momentum, the business witnessed consolidation in volumes on a high base amidst subdued demand conditions in the overall consumption space, even as illicit trade remained at elevated levels,” the company wrote in a statement.

    “Differentiated and premium offerings saw robust traction during the year. Sharp escalation in leaf tobacco prices and other inputs, along with increase in taxes were largely mitigated through improved mix, strategic cost management and calibrated pricing.”

    During the reporting period, ITC launched several new cigarette brands, including Classic Alphatec, Classic Icon and Gold Flake Indie Mint.

    The company continues to be concerned about the strength of the illicit market. While recent stability in cigarette taxes has enabled the legal cigarette industry to claw back some of the volumes lost to illegal traders, India remains the world’s third largest illicit cigarette market, according to ITC, with tax-avoiding products accounting for roughly one-third of the market.

    The company said it continues to engage with policy makers for a framework of evidence-based regulations and taxation policies that balance India’s economic imperatives and tobacco control objectives.

  • Agencies Urged to Remove Unauthorized Products

    Agencies Urged to Remove Unauthorized Products

    Photo: ksena32

    Seventy-eight U.S. public health and other organizations urged the U.S. Food and Drug Administration, the U.S. Department of Justice and the U.S. Customs and Border Protection to utilize all the enforcement tools at their disposal to clear the market of unauthorized e-cigarette products, including flavored products.

    To date, the FDA has authorized the sale of only 23 tobacco-flavored e-cigarette products.

    “This means that virtually the entire e-cigarette market consists of unauthorized, illegal products, including a wide variety of flavored products—largely disposables—that FDA has found to be highly appealing to youth,” the groups wrote in a letter addressed to all three agencies.

    “This is a wholesale failure to enforce the Family Smoking Prevention and Tobacco Control Act by FDA and other government enforcement agencies. There must be an intensified and coordinated, multi-agency federal effort to enforce the law against these illegal products in an effective and equitable manner.”

    The groups urged the adoption of several concrete changes in tobacco enforcement policies and activities, including more frequent use of enforcement tools, such as civil monetary penalties; and prioritization of efforts to stop illegal importation of unauthorized products.

     “The failure to adequately enforce the law against unauthorized products has real, and significant public health consequences. We urge FDA, DOJ and CBP to respond with an ‘all hands on deck’ strategy that will use all enforcement tools at their disposal to protect the public health, and particularly the health of our young people, from the flood of illegal, unauthorized e-cigarettes,” the letter writers concluded.

  • Universal Income Up

    Universal Income Up

    Photo: Taco Tuinstra

    Universal Corp. reported sales and other operating revenue of $2.75 billion in fiscal year 2024, up 7 percent over that recorded in 2023. Operating income grew 23 percent to $222 million. The company’s tobacco operations contributed sales and operating revenues of $2.44 billion, $180.5 million more than in 2023.

    “Universal Corp. had a positive finish to a strong fiscal year 2024 with notable financial and operational performance in both the fiscal year and quarter ended March 31, 2024,” said chairman, President and CEO George C. Freeman III in a statement.

    “Fiscal year 2024 was an exceptional year for our tobacco business, as a favorable product mix, strong customer demand and the sale of larger crops in Africa, compared to fiscal year 2023, drove our strong operating results. Fiscal year 2024 was also a significant building year for our ingredients business.”

    While expecting leaf tobacco supply and demand to return to a more balanced position over time, Freeman said tobacco supply remains tight and green tobacco prices elevated. “We continue to leverage our diverse global footprint and financial flexibility to manage these conditions and to execute our tobacco strategies,” he said.

    “For example, during the fourth quarter of fiscal year 2024 and into the first quarter of fiscal year 2025, we accelerated buying in Brazil to ensure access to the tobacco we need for our customers [also see “The Great Scramble,” Tobacco Reporter, May 2024].

    “This accelerated buying, combined with higher green tobacco prices, resulted in increased use of working capital and higher debt levels at March 31, 2024. We expect most of the net impact on working capital from our accelerated buying strategy to naturally unwind over the next two years.”