Author: Taco Tuinstra

  • Defending Liberty

    Defending Liberty

    Photo: Wieslaw

    The U.K.’s proposed generational tobacco products sales ban was variously described as nuts, insane, ludicrous, mad, illiberal, impractical and petty minded by speakers at a House of Commons reception on Feb. 7.

    The reception, which was lively, going on boisterous at times, was hosted by the Conservative MP Giles Watling on behalf of the Freedom Organisation for the Right to Enjoy Tobacco (Forest), whose director, Simon Clark, told the gathering of about 50 invited people the purpose of the event was to bring together a broad coalition of groups to show the breadth of opposition to the ban: the Institute of Economic Affairs, the Taxpayers’ Alliance, the Adam Smith Institute, the Consumer Choice Centre, Students for Liberty and the LSE Hayek Society.

    Watling, a non-smoker but at one time a 60-Marlboro-a-day man, described the proposed ban as insane and said it was not good for the Conservative Party. There were better things that it should be doing than this piece of legislation.

    The idea that there were more important things for the government to be doing was taken up forcefully by Baroness (Claire) Fox of Buckley, who sits in the second chamber, the House of Lords, as a non-affiliated life peer. After outlining some of the huge and urgent domestic and international issues facing the government, she said she found it unbelievable that the prime minister had dedicated precious legislative time and energy on the most ludicrous anti-smoking law.

    Clark, who organised the event, said that, in his view, smoking was a bellwether for liberty and that the war on smoking should be of concern to anybody who cared about individual freedoms. Freedom was all about supporting things that you yourself might not like, he added, before describing how a Forest banner showing a cartoon depiction of the prime minister, Rishi Sunak, pushing a pram under the heading, “Say No to Nanny,” had been confiscated by parliamentary security on the grounds that it might be offensive to some people.

    The generational tobacco sales ban as it is currently proposed would make it illegal to sell tobacco products to anyone born on or after Jan. 1, 2009, which, Clark said, would lead to the ludicrous situation where, for instance, at some point these products could be sold legally to a person of 30 but not to a person of 29.

    This would seem to put retailers in an invidious position and, given the U.K.’s dislike of identity cards, might perhaps sink the proposed ban if it were focused on any other product. But there was a sense that the ban would be difficult to stop. Fox made the point that the government might find it difficult to extricate itself from the proposed ban, even if it wanted to, because it was the one thing around which all the political parties had united.—George Gay 

  • Flavors Help Save Lives

    Flavors Help Save Lives

    Image: Fotofabrika

    Today, the R Street Institute released a new report that explores how flavors are processed by the brain, especially as it pertains to tobacco and nicotine products. Using these findings, the author, Jeffrey Smith, resident senior fellow for integrated harm reduction policy at R Street, explains how flavor can influence behavior and why well-intentioned efforts to ban flavored tobacco and nicotine products can have unintended consequences in the fight to reduce smoking rates in the United States.

    This report comes at a crucial time as the debate over flavored tobacco and nicotine products continues at state, national, and international levels. Across the United States, policymakers are proposing or enacting flavor bans without fully appreciating the impact of their actions for adult smokers. And just this week, the World Health Organization’s Framework Convention on Tobacco Control is hosting their 10th session of the Conference of the Parties (COP10), where many expect the WHO to continue its crusade against flavored, reduced-risk nicotine products.

    To reduce the nearly 500,000 smoking-related deaths that occur each year in the United States, the CTP must take a scientifically driven approach that recognizes the neurobiological rationale for allowing a wide variety of flavored, reduced-risk products to be available to adults—while minimizing youth access.

    Jeffrey Smith, resident senior fellow for integrated harm reduction policy, R Street

    Smoking rates have declined in recent years and, under the Trump administration, the age to purchase tobacco products was raised to 21. This has reduced youth use, and continued enforcement will help lower rates even more. However, millions of adults in the United States still smoke combustible cigarettes to the detriment of their health.

    A number of tools exist to help these individuals quit smoking. Flavor, for example, has been shown to help move adult smokers away from combustible cigarettes to alternative, reduced-risk products. This makes sense on the surface; if it tastes good, then it’s more appealing. However, in R Street’s report, author Jeffrey Smith goes far deeper and explains the neurobiological connections between flavor and behavior. While adults may seek tobacco flavored products to initially switch, other flavors help them maintain abstinence from cigarettes. In the end, flavor will save more lives, according to Smith’s research.

    “To reduce the nearly 500,000 smoking-related deaths that occur each year in the United States, the FDA Center for Tobacco Products (CTP) must take a scientifically driven approach that recognizes the neurobiological rationale for allowing a wide variety of flavored, reduced-risk products to be available to adults—while minimizing youth access,” said Smith in a statement. “It is essential that the CTP approve non-tobacco-flavored, reduced-risk products.”

  • Product Mix, Demand Boost Universal Income

    Product Mix, Demand Boost Universal Income

    Photo: Tobacco Reporter archive

    Universal Corp. reported operating income of $153.8 million for the nine months that ended Dec. 31, up 20 percent over the comparable period in 2022. Tobacco operations contributed 148.9 million in income, 25 percent more than in the first nine months of the previous year. Universal attributed the performance of its tobacco operations largely to higher prices and a more favorable product mix, partially offset by lower tobacco sales volumes.

    “Our tobacco business continued to perform very well, driven by a favorable product mix and strong demand from our customers,” said Universal Chairman, President and CEO George Freeman III in a statement.

    “Improved margins, larger crops in Africa, and strong tobacco shipments in line with our expectations benefited our results in the nine months and quarter ended Dec. 31, 2023, compared to the same periods in fiscal year 2023.

    “Global leaf supply for all types of leaf tobacco continues to be tight, and as of December 31, 2023, our uncommitted tobacco inventory was at a low level of 8 percent. While we expect global leaf tobacco supply to remain tight in fiscal year 2025, in part due to El Nino weather conditions, we believe the strength of our diverse global footprint will help us satisfy our customers’ leaf tobacco needs.”

    Freeman also expressed satisfaction with the progress made by Universal’s ingredients business, particularly with the expansion of the company’s factory in Lancaster, Pennsylvania, USA, and the advancement in achieving Universal’s sustainability agenda. The company recently published its 2023 sustainability report and announced its participation in a solar project that it believes will help Universal reduce its operational greenhouse gas emissions by a third by 2030.  

  • IQOS Surpasses Marlboro in Revenue

    IQOS Surpasses Marlboro in Revenue

    Photo: Arkadiusz Fajer

    Philip Morris International reported net revenues of $9.05 billion for the fourth quarter and net revenues of $35.17 billion for fiscal year that ended Dec. 31, 2023. On a reported basis, the figures were up 11 percent and 10.7 percent, respectively, over the comparable 2022 periods.

    Performance was driven by revenue growth in both the combustible cigarette business, where pricing offset reduced volumes, and the company’s smoke-free operations, which continued to increase their share of the company’s business mix.

    “We are pleased that smoke-free products reached nearly 40 percent of our total net revenues and over 40 percent of our gross profit in the fourth quarter,” said PMI CEO Jacek Olczak in a statement.

    “This was led by the continued growth of IQOS, which has now surpassed Marlboro in terms of net revenues, confirming its position as the leading premium nicotine brand less than 10 years from launch. The fourth quarter also marked the first anniversary of our combination with Swedish Match, which delivered very strong results in 2023 driven by the stellar U.S. performance of ZYN.”

    PMI shipped 116.3 million cans of ZYN in the fourth quarter of 2023, representing growth of 78.2 percent versus fourth-quarter 2022 Swedish Match shipments of 65.3 million cans.

    “We are entering 2024 with strong momentum, and we expect it will be another year of excellent performance underpinned by an acceleration in organic smoke-free net revenue and profit growth,” said Olczak.

    PMI also expects to benefit this year from a recent settlement with British American Tobacco that resolves all ongoing patent infringement litigation between the parties related to heated tobacco and vapor products. The deal allows each party to innovate and introduce product iterations.

  • Write-Down Weighs on Results

    Write-Down Weighs on Results

    Photo: BAT

    British American Tobacco reported a loss of £15.75 billion for 2023. The company’s results were heavily impacted by its decision last year to write down the value of some its traditional cigarette brands in the United States to reflect the diminishing outlook for combustible tobacco products.

    Revenue was £27.28 billion, dragged by the sale of its businesses in Russia and Belarus, foreign-exchange pressures and lower cigarette volumes, and partially offset by the increased new categories revenue, according to The Wall Street Journal.

    Revenue from ‘new categories’ rose to £3.35 billion, up 21 percent from 2022 on an organic basis.

    “2023 was another year of resilient financial performance and delivery in line with our guidance, underpinned by our global footprint and multi-category strategy, despite a challenging macro-environment, said BAT CEO Tadeu Marroco in a statement.

    “New categories delivered continued volume-led revenue growth and increased profitability, driven by Vuse and Velo. As a result, our new categories portfolio has turned profitable two years ahead of our original target.

    “In combustibles, our commercial plans in the U.S. are enabling early signs of portfolio recovery.” The company’s Africa and Middle East business performed well in 2023, as did BAT’s Asia Pacific/Middle East/Africa region, according to Marroco, who credited strong revenue and profit performance, along with a well-balanced portfolio.

    2023 was another year of resilient financial performance and delivery in line with our guidance, underpinned by our global footprint and multi-category strategy, despite a challenging macro-environment.

    Tadeu Marroco, CEO, BAT

    During the presentation of BAT’s results, Marocco also suggested the company would sell some it shareholding in ITC, the Indian consumer goods giant that makes much of its revenue from cigarettes but also runs hotels and a paper business, among other operations.

    Such a sale would allow BAT to pay down debt and accelerate toward the leverage range at which it could resume the share buybacks that some investors have been pressing for. BAT owns approximately one-third of ITC and would need to retain 25 percent to keep its veto rights.

    In related news, BAT announced that it has submitted an modified risk tobacco product application to the U.S. Food and Drug Administration to make certain health claims about its Glo Hyper Pro tobacco heating device, which the company launched in Japan, Italy and Poland earlier this year.

  • Counter-COP Laments Bloomberg’s Influence

    Counter-COP Laments Bloomberg’s Influence

    Photo: TPA

    Participants in the Taxpayers Protection Alliance (TPA) Good COP/Bad COP event in Panama lamented the influence of U.S. billionaire philanthropist Michael Bloomberg over tobacco control policies.

    “Michael Bloomberg is spending money to reduce consumer choice…He thinks he’s this big philanthropist, that he’s helping kids, helping adults—he’s not,” said TPA President Davd Williams. “By limiting these products, he’s not helping anyone but himself and his own ego.” 

    The Bloomberg-backed and funded Campaign for Tobacco-Free Kids  (CTFK) has nearly 40 representatives in the provisional attendees listing while Bloomberg-created Vital Strategies has nearly 20 representatives present.

    According to the TPA, CTFK takes Bloomberg funding to spread misinformation and myths to pressure international agencies to implement draconian regulations on tobacco harm reduction products while Vital Strategies supports bans on the sales of flavored harm reduction products across the world.

    “Bloomberg’s billions and groups may have TPA’s Good COP outnumbered and outspent, but the science and facts are on our side,” the TPA wrote in a press note.

    On Feb. 7, participants in the Good COP/Bad COP panels focused on the science, consumers, and policy of tobacco harm reduction. Experts discussed struggles unique to low and middle income countries in embracing harm reduction, misinformation, along with Bloomberg’s influence. 

  • Zimbabwe Markets to Open March 13

    Zimbabwe Markets to Open March 13

    Photo: Taco Tuinstra

    Zimbabwe’s tobacco auctions will open March 13, 2024, reports The Herald, citing a Tobacco Industry and Marketing Board (TIMB) announcement. Contract floors will open one day later,

    Last year, the tobacco marketing season started on March 8 for auction floors and March 9 for the contract buyers.

    TIMB statistics show that farmers had planted 113,101 hectares under the crop by Feb. 2, a 4 percent decline from last year’s 117,645 ha.

    Meanwhile, some farmers welcomed the announcement of the dates, saying that would help improve liquidity in the market.

     Zimbabwe Tobacco Association (ZTA) chief executive officer, Rodney Ambrose said he expects the market to be significantly firmer than previous seasons to counter the high production costs. Zimbabwe’s tobacco growing season has been impacted by alternating wet and dry conditions, which has contributed to an increase in pests and diseases. Given that other leaf origins, such as Brazil, have also struggled with extreme weather conditions this year, Ambrose expects leaf prices to be high.

    The ZTA has asked the Reserve Bank of Zimbabwe (RBZ) to increase the share of earnings that growers are allowed to retain in U.S. dollars from the current 75 percent.

     The government standardized all export retentions to 75 percent with the balance of 25 percent liquidated at the ruling interbank rate. Last year, farmers retained 85 percent of their earnings in foreign currency, with the 15 percent balance liquidated into local currency.

  • Health Department Building Case for Stricter Vape Rules

    Health Department Building Case for Stricter Vape Rules

    Image: Oleksii

    The Philippines Department of Health (DOH) is gathering data on vaping prevalence in the country, reports Malaya Business Insight.

     DOH Undersecretary Eric Tayag said the information will be used to convince policymakers to strengthen laws against vaping.

    According to the Global Youth Tobacco Survey (GYTS), e-cigarette users among the youth increased from 11.7 percent in 2015 to 24.5 percent in 2019.

    The DOH statement comes after nine former health officials called on the Philippine delegation to the 10th Session of the Conference of the Parties (COP10) of the World Health Organization Framework Convention on Tobacco Control (FCTC) to take the lead in pushing for the fight against vapes and electronic cigarettes.

    The former DOH secretaries and undersecretaries believe the Philippine delegation should speak about the serious threat to public health brought about by weak Philippine regulations on e-cigarettes and vapes.

  • Taxpayers Group Holds ‘Counter COP’

    Taxpayers Group Holds ‘Counter COP’

    Photo: TPA

    Concurrent with the 10the Conference of the Parties (COP10) to the World Health Organization Framework Convention on Tobacco Control (FCTC), which takes place in Panama City this week, the Taxpayers Protection Alliance (TPA) is hosting an event at the Central Hotel Panama under the name “Good Cop/Bad Cop.” The event will be livestreamed on TPA’s YouTube channel.

    Good COP will feature nearly two dozen tobacco harm reduction experts, representing 14 different countries and highlighting some of the leading experts on consumer issues, national and global policies, and the science surrounding harm reduction.

    Throughout the event, TPA and the Good COP participants will be monitoring the WHO’s meeting and providing running commentary via livestreams, media interviews, blogs, and social media.

    “The taxpayer-funded WHO ignores science and puts billions of smokers at risk of not having access to life-saving technology to quit smoking,” said TPA’s President, David William in a statement.

    “The participants of Good COP will hold the WHO accountable for denying life-saving access to tobacco harm reduction products and denying access to the public and media to these meetings. “In real time, harm reduction experts from around the globe will be fact-checking and providing commentary on the WHO’s anti-science agenda at COP10.”

  • KT&G Posts Record Revenue

    KT&G Posts Record Revenue

    KT&G posted revenue of KRW1.45 trillion ($1,09 billion) and operating profit of KRW198.6 billion in the fourth-quarter of 2023. For the full-year, the company reported record revenue of KRW5.872 trillion and operating profit of KRW 1.168 trillion.

    KT&G’s record annual revenue was driven mainly by the performance of its overseas combustibles business. The overseas combustibles business reported record annual revenue of KRW1.14 trillion. The combined annual revenue of KT&G’s three core business areas, which also include next-generation products (NGP) and health functional foods, reached KRW3.31 trillion, a 1.1 percent increase year on year.

    KT&G’s NGP business sold 8.24 billion sticks overseas and 5.71 billion sticks in South Korea, reflecting growth rates of 43 percent and 14.4 percent, respectively.

    KT&G achieved an all-time high total overseas sales volume of 61.4 billion sticks, surpassing 60 billion sticks for the first time.

    KT&G projects its annual revenue and operating profit to exceed growth rates of 10 percent and 6 percent, respectively, in 2024. It expects its consolidated year-on-year revenue growth to exceed 15 percent. Additionally, the operating profit from the core business areas is expected to grow 31.5 percent, year on year.

    “Last year was a year dedicated to the successful implementation of a business transformation strategy that focuses on the core business areas, KT&G wrote on its website. “This year, we will continue to strengthen the competitiveness of the core business areas, expand a sustainable business portfolio, and faithfully carry out the shareholder return policy.”