Author: Taco Tuinstra

  • Show Them the Numbers

    Show Them the Numbers

    By Neil McKeganey and Andrea Patton

    To prevent nicotine pouches from being legislated out of the market, manufacturers must demonstrate the extent to which they are benefiting adult smokers, and quantify underage usage.

    By Neil McKeganey and Andrea Patton

    As tobacco companies seek to market lower harm alternatives to combustible cigarettes, there is one issue that is seriously undermining those efforts—youth use of their products. If you were in any doubt as to the scale of the threat that youth use of tobacco products represents for manufacturers, think Juul, Puff Bar, Elf Bar and disposable e-cigarettes in general. And now, critics of the tobacco industry have a new product in their sight. Fresh from their success in calling for the banning of disposable e-cigarettes, they are shifting attention to nicotine pouches with an increasingly familiar playbook of media alarm, political pronouncements and regulatory action.

    The widest-selling nicotine pouch product in the U.S. is Philip Morris International’s Zyn, which grew in sales from 126 million units in 2019 to 808 million units by March 2022 (Majmundar et al. 2022). Accounting for 58 percent of the U.S. nicotine pouch market, Zyn has become a key part of PMI’s next-generation nicotine product range. It is also a product that has not had to work hard to find its critics.

    Zyn is “a pouch packed with problems,” according to Senator Chuck Schumer. “These nicotine pouches seem to lock their sights on young kids—teenagers, and even lower—and then use the social media to hook them,” the senator said. Alongside Schumer’s dire warnings of a future in which young Americans are increasingly dependent on oral nicotine products, there has been a torrent of media articles casting Zyn as a major new threat to U.S. youth. In a New York Times article published at the start of the year, Emily Dreyfuss opened parents’ eyes to a world of “Zynfluencers”—social media personalities assiduously promoting oral nicotine products such as Zyn to their followers. Dreyfuss has called for age-gated advertising restrictions to limit young peoples’ exposure to “Zynfluencer” activities.

    In contrast to the often hysterical tone of the media reporting on underage use of nicotine pouches, the National Youth Tobacco Survey (NYTS) estimated that in 2023, 1.5 percent of U.S. middle school and high school students had used oral nicotine pouches in the past 30 days. Likewise, the 2023 Tobacco Product Prevalence Study (TPPS) undertaken by the Centre for Substance Use Research (CSUR) in Scotland estimated that 1.7 percent of 13-year-olds to 20-year-olds in the U.S. had used a nicotine pouch in the past 30 days.

    While the NYTS data relates to the category of oral nicotine pouch use, rather than Zyn in particular, the TPPS also quantifies the prevalence of underage use of Zyn and other tobacco products and devices, with 0.5 percent of 13-year-olds to 20-year-olds in the U.S. reporting past-30-day use of Zyn. Neither the NYTS nor the TPPS are detecting epidemic levels of oral nicotine pouch use among young people in the U.S. TPPS estimates show further that Zyn use is infrequent, with 70.8 percent of underage past-30-day pouch users reporting use on between one day and five days of the past 30 days.

    If most U.S. Zyn sales, and subsequent use, are among those aged over 21, the possibility exists that these products may be helping adult smokers to switch from combustible to noncombustible tobacco products. Despite this, the U.S. Truth Initiative has called for a nationwide ban of Zyn.  

    In the face of such calls, it will be inadequate for the industry to stress that these products are intended solely for adult smokers as an alternative to combustibles. The problem facing PMI and other oral nicotine product manufacturers is how to respond to claims of widespread use of their products by young people.

    There are two things that companies must do if they are to stand any chance of keeping their products on the market. The first is to show the extent to which these products are benefiting adults who smoke. The data required here involves showing the impact of an oral nicotine product such as Zyn on an adult smoker’s ability to completely switch away from smoking or to substantially reduce their use of combustible cigarettes over a six-month to 12-month period.

    Secondly, companies must quantify the extent to which their oral nicotine products are indeed being used by those below age 21. The CSUR’s Tobacco Product Prevalence Study is the only national probability-based study that collects data on a range of individual tobacco products among both adults and youth within the U.S. and provides timely estimates of use. As such, it can help manufacturers present important data to regulators on the actual extent of youth use of their products.

    Unless the industry assembles the evidence with which to respond to political and media commentators’ calls to ban oral nicotine products, these companies are going to face an increasingly difficult future. The calls to ban oral nicotine products, in the absence of data showing how widely specific products and devices are being used by youth, provides an indication of just how influential a coordinated campaign against a specific product or category of products can be. It is ironic that many of those calling for such bans, no doubt motivated by a commitment to public health, find themselves advocating for legislation that will narrow rather than expand the routes out of smoking.

  • New U.K. Vaping Levy is ‘Stupid’: Critics

    New U.K. Vaping Levy is ‘Stupid’: Critics

    Image: vadymstock

    The imposition of a vape levy in the U.K. is “stupid, short-sighted and potentially counterproductive,” according to smokers’ rights group Forest.

    During his budget speech in Parliament on March 6, Finance Minister Jeremy Hunt said he is planning to introduce an extra tax on e-cigarettes from October 2026, aiming to make vaping more expensive and deter nonsmokers from taking it up.

    Currently, most vapes in Britain are subject to value-added tax at the standard 20 percent rate, but there is no extra levy applied. Hunt said the government would also introduce a one-off increase in tobacco duty to maintain the financial incentive to choose vaping over smoking.

    Nonetheless, critics warned that the new vape tax would discourage smokers from transitioning to less harmful nicotine products.

    “If the government is serious about advocating vaping as a substantially less harmful alternative to smoking, a levy on vaping products sends completely the wrong message to consumers,” said Simon Clark, director of Forest.

    “Vaping products are already subject to VAT. Imposing excise duty as well is a stupid, short-sighted and potentially counterproductive measure that could deter many existing smokers from switching to a reduced-risk product that has helped millions of smokers to quit.”

    Maggie Rae, president of the Epidemiology and Public Health Section of the Royal Society of Medicine, said any tax must be carefully considered to ensure it benefits public health.

    “It’s imperative we ensure medicinal use of vapes continues to be encouraged, as smoking cessation remains the matter of greater importance,” she said.

    Clark noted that above-inflation increases in the cost of tobacco disproportionately punish those on lower incomes.

    “Further tax hikes will drive even more smokers to the black market, taking money from legitimate retailers and putting it into the hands of criminal gangs,” he said.

    Jefferies analyst Owen Bennett said the tax could benefit larger players like BAT by making it harder for smaller players to compete.

    “BAT, especially given its highly profitable broader cigarette business, can afford to swallow the tax and not adjust prices,” he told Reuters, whereas it could make smaller firms’ products unviable.

  • On-Screen Tobacco Imagery Surges: Report  

    On-Screen Tobacco Imagery Surges: Report  

    Photo: Drobot Dean

    Tobacco imagery is surging in shows, social media, music videos and movies—including nearly every Best Picture nominee at the 2024 Academy Awards—according to the Truth Initiative.

    The Truth Initiative says this development is concerning because exposure to such images makes young people up to three times more likely to start vaping, according to research. In 2021, the U.S. Surgeon General concluded that youth and young adults were twice as likely to smoke compared to those with less exposure.

    Titled Lights, Camera, Tobacco?, the Truth Initiative report reveals that the number of tobacco depictions in streaming shows popular among 15-year-olds to 24-year-olds more than doubled in 2022, exposing nearly 25 million young people. The rise was largely driven by Netflix’s Dahmer—Monster: The Jeffrey Dahmer Story, which contained a third of all tobacco depictions. The number of tobacco depictions in binge-watched shows nearly quadrupled, highlighting a significant source of exposure.

    “Tobacco imagery plays a bigger role in youth and young adult tobacco initiation than many people realize, so this report intends to educate the Hollywood community about the impact these shows are having,” said Truth Initiative CEO and President Kathy Crosby. “As youth e-cigarette use continues to remain a public health threat, the entertainment industry has an opportunity to play a significant role in protecting young people’s physical and mental health by clearing the smoke-filled screens.”

  • STG Results ‘in Line with Expectations’

    STG Results ‘in Line with Expectations’

    Photo: STG

    Scandinavian Tobacco Group (STG) delivered net sales of DKK8.7 billion ($1.27 billion) in 2023, down slightly from the previous year.

    For the fourth quarter of 2023, net sales were DKK2.3 billion. Organic growth of 5 percent for net sales was driven by the group’s “growth enablers,” which in the fourth quarter accounted for close to 10 percent of group net sales, as well as an improved performance in the machine-rolled cigar business in Europe.

    The growth enablers comprise three opportunities that currently represent a small proportion of the group’s overall business but that have significant potential to contribute to greater net sales and earnings, according to STG. They are continued retail expansion in the U.S., international growth in handmade cigars and development of next-generation products, such as nicotine pouches and hemp products in key markets.  

    For the full year 2024, net sales are expected to be in the range of DKK8.8 billion to DKK9.1 billion.

    “Despite a challenging consumer environment STG delivered solid results for 2023 due to the commitment and performance of our employees across the globe,” said STG CEO Niels Frederiksen in a statement.

    “We continued to execute well on our strategy with two acquisitions, and I am particularly happy to see the progress in our growth enablers, where we saw healthy growth in international handmade cigars, retail expansion and next generation products. As we move into 2024, we are increasing our investments in the growth enablers and we expect 2024 to be a year of growth for STG.” 

    At the annual general meeting on April 4, 2024, the board of directors will propose an increase in the ordinary dividend of 2 percent to DKK8.40 per share, complementing the up to DKK850 million share buy-back program, which was started in Nov. 2023.

    The group’s annual report is here.

  • Belarus Bans 47 Vapes

    Belarus Bans 47 Vapes

    Image: natatravel

    Belarus’ State Committee for Standardization has banned 47 types of electronic cigarettes from sale, reports Novosti.

    In January and February, authorities in the Gomel region identified traders that were selling electronic smoking systems that failed to comply with legislative requirements. Some vapes exceeded the permissible nicotine level of 20 mg per ml, while others lacked health warnings, declaration on usage limitations and expiration dates,

    Many of the vapes were sold without documents proving compliance and safety of the product.

    The dangerous products were withdrawn from sale, and authorities have taken administrative measures against their sellers.

  • Heated, Oral Tobacco Output Jumps in Russia

    Heated, Oral Tobacco Output Jumps in Russia

    Photo: Delovoy Petersburg

    Cigarette manufacturers in Russia produced 182 billion cigarettes in 2023, reports CRPT, which operates the Honest Mark product labeling system. Accounting for 87.7 percent of domestic tobacco production, cigarette manufacturing was largely stable (up 1 percent) from the previous year.

    Production of heated tobacco products, by contrast, jumped 26 percent to 1 billion packs, claiming 10 percent of the Russian tobacco market in 2023. Output of oral tobacco products more than doubled to over 5.8 million. Production of cigarillos increased to 61.5 million packs in 2023 from 32 million in 2022.

    The only categories of tobacco products whose production decreased in 2022-2023 were cigars and smoking tobacco, according to CRPT. The production of cigars fell by 38 percent to 4.2 million packs, and smoking tobacco decreased by 8 percent to 1.3 million packs.

    Domestic tobacco companies manufactured 96.6 percent of the nicotine products on the Russian market in 2023.

    Following Russia’s 2022 invasion of Ukraine, leading international nicotine companies, such as British American Tobacco and Imperial Brands have sold their operations to domestic investors.

    The multinationals that remain are finding it increasingly difficulty to extract themselves from the market due to onerous government restrictions on such transactions (see, “A New Reality,” Tobacco Reporter, March 2024).

  • New Tobacco Control Measures in Russia

    New Tobacco Control Measures in Russia

    Photo: Kalyakan

    Russia has strengthened state control over the production and circulation of tobacco and nicotine-containing products, effective March 1, reports Mail.ru.

    The Federal Service for Control of Alcohol and Tobacco Markets, Rosalkogoltabakcontrol, will now monitor production and circulation of tobacco, suppressing illegal production and trafficking of products and monitoring compliance with licensing and mandatory requirements during production supply, purchase and transportation.

    Control activities include on-site inspections, test purchases and inspection visits.

    Effective March 1, manufacturers are required to have a license to produce tobacco. An electronic register of these licenses came into effect on Sept. 1, 2023.

  • UKVIA Seeks Clarity on Advertising Notice

    UKVIA Seeks Clarity on Advertising Notice

    Photo: New Africa

    The U.K. Vaping Industry Association (UKVIA) is seeking clarification following the recent Committee of Advertising Practice (CAP) enforcement notice on the prohibition of vaping ads on social media.

    The UKVIA is particularly concerned that “factual (nonpromotional) information” should only be made available to those who have “actively and specifically sought it out,” which would limit such content to social media accounts set to “private.”

    The industry group is especially worried that this means factual posts, such as repeating evidence-based statistics such as vaping is 95 percent less harmful than smoking, for its annual VApril Vape Awareness Month will now be deemed unlawful.

    “Around 40 percent of U.K. smokers wrongly believe that vaping is at least as harmful as, or even more harmful than, cigarettes, which suggests we need more evidence-based vaping facts on social media, not less,” the UKVIA wrote in a statement.

    One of the main aims of VApril is to use both paid and organic posts on LinkedIn, X and Facebook to give facts to smokers to help them make informed decisions over how they consume nicotine.

    The CAP says that after March 28, it will enforce restrictions under the Tobacco and Related Products Regulations 2016, which prohibit “ads that have the direct or indirect effect of promoting nicotine-containing electronic cigarette products” from being shown in most social media.

    The Enforcement Notice says: “Electronic cigarette ads are prohibited in any online media where content is shared to users who have not specifically sought it out.

    “This means paid-for display ads in all online space are prohibited, but it also means that regular, non-paid-for posts and content in social media, which might get shared by an algorithm to users, are prohibited too.”

    The Advertising Standards Authority will hold a webinar on March 21 where the rules on social media vape ads will be explained.

  • U.S. Trade Commission to Probe ALD and Stiiizy

    U.S. Trade Commission to Probe ALD and Stiiizy

    Photo: New Africa

    The U.S. International Trade Commission (ITC) will investigate oil vaporizing devices, components and products manufactured and sold by ALD Group and Stiiizy in response to patent violation complaints filed by Pax Labs.

    Pax Lab has asked the ITC to issue a limited exclusion order and a cease and desist order.

    In a note on its website, the ITC stressed that is has not yet made any decision on the merits of Pax Lab’s complaint. The ITC’s chief administrative law judge will now assign the case to one of the ITC’s administrative law judges, who will schedule and hold an evidentiary hearing. That judge will make an initial determination as to whether there is a violation of section 337 of the Tariff Act; that initial determination is subject to review by the Commission.

    The ITC said it will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the ITC will set a target date for completing the investigation. ITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

  • PMI Sued Over Zyn

    PMI Sued Over Zyn

    Photo: PMI

    In the first major legal challenge to oral nicotine pouches, a consumer has sued Philip Morris International over its popular Zyn brand, saying the product is addictive and harmful to young people, reports BNN Bloomberg.

    The plaintiff, Bailey Wolters, alleges addiction and dental issues as a result of his Zyn use. The lawsuit says that the pouches deliver more nicotine than cigarettes, and that PMI benefits from “Zynfluencers” who promote the brand on social media.

    The suit, which is seeking class-action status, also names as a defendant Swedish Match, which made the pouches before PMI bought it for $16 billion in 2022.

    According to the plaintiff, the companies failed to warn consumers about the risk of addiction and other harmful effects like cognitive issues, cardiovascular injuries, gastrointestinal problems and gum disease.

    PMI insists its pouches are intended only for existing users of nicotine products.

    The case was brought by Schlesinger Law Offices, whose initial lawsuit against Juul Labs investors including Altria Group expanded into thousands of legal actions and led to Altria’s eventual settlement of $235 million.