Author: Taco Tuinstra

  • Malawi Extends Grower Registration Deadline

    Malawi Extends Grower Registration Deadline

    Photo: Taco Tuinstra

    Malawi’s Tobacco Commission (TC) has extended the registration and licensing period for tobacco growers until Jan. 31, reports The Nyasa Times.  

    TC spokesperson Telophorus Chigwenembe said the extension period will allow farmers who missed the December deadline to obtain the proper documentation.

    The regulator has also waved late registration penalties and will allow farmers to pay the associated fees after the sale of their tobacco this year.

    The TC said it would conduct its first crop estimates in February for the upcoming growing season.

  • Monoceros Buys Quarter of Bulgartabac

    Monoceros Buys Quarter of Bulgartabac

    Photo: Tobacco Reporter archive

    Monoceros has acquired nearly a quarter of Bulgartabac Holding from Liechtenstein-based Woodford Establishment for an undisclosed amount, reports Seenews.

    Headquartered in the Cayman Islands, Monoceros is an early-stage investor and proprietary trading firm, with a portfolio chiefly made up of cryptocurrency and AI technology companies.

    As of the end of 2022, Woodford Establishment was Bulgartabac holding’s second largest investor. Other prominent shareholders include UAE-registered Gifted Master, with 24.10 percent stake; UAE-registered Wardia (15.23 percent) and Lichtenstein-registered Stiga Ansalt (14.75 percent).

    In 2022, Bulgartabac Holding reported a consolidated net profit of BGN36.1 million ($20.2 million) compared to a consolidated net loss of BGN70.6 million in the previous year, according to the company’s annual report.

    Total operating revenue increased to BGN 271.5 million from BGN187.1 million as revenue from sales jumped 40 percent to BGN252.7 million.

    In 2017, Bulgartabac Holding sold its biggest cigarette brands to British American Tobacco for more than €100 million ($109.7 million).

    The company has since diversified its investments.

  • Lucy Gum Helps Prevent Cravings: Study

    Lucy Gum Helps Prevent Cravings: Study

    Credit: Lucy

    Lucy Gum, a nonmedicinal nicotine product, helped prevent nicotine cravings among participants in a behavioral study published in Harm Reduction Journal.

    Based on the results, respondents who smoked and were planning to quit, as well as those not intending to quit, were most interested in trying Lucy Gum, which is manufactured by oral nicotine product manufacturer Lucy Goods. Quitting or cutting down consumption of cigarettes, vapes and other tobacco products were the most common motivation for trying Lucy Gum. Many reported that it was helpful in preventing nicotine cravings, managing stress or maintaining focus. Notably, females who smoked showed interest in Lucy Gum in contrast to low female interest in traditional smokeless tobacco products.

    Lucy Gum did not appear to attract those who never used tobacco products and has low potential to promote relapse in nicotine use for former tobacco users. Results for young adults suggest minimal appeal to youth, and there was no evidence that flavors of Lucy Gum appealed more to young adults than to older adults.

    Current smoking cessation methods show limited effectiveness, with just a 0.3 percent reduction in population-level smoking prevalence projected for a 2.3 percent quitting rate.

    “The fact that Lucy appeals to people who smoke, regardless of their intent to quit smoking, highlights the potential of Lucy to reach more adult tobacco users than medicinal NRT [nicotine-replacement therapy] products and to facilitate their transition to less harmful alternatives,” said David Renteln, CEO of Lucy Goods, in a statement.

  • Navaneel Kar to Lead IPM India

    Navaneel Kar to Lead IPM India

    Navaneel Kar (Photo: IPM India)

    Philip Morris International appointed Navaneel Kar as the managing director of its India operations, IPM India Wholesale Trading (IPM India). Prior to joining IPM India, Kar served as the president of sales at Tata Consumer Products. He will be reporting to Ankur Modi, cluster head of South Asia and Indochina for PMI.

    With over 25 years of experience, Kar has been associated with reputed brands like ITC and Tata Motors. He has successfully led teams and organizations across multiple categories and channels in the food, tobacco, personal care and beverage sectors.

    “I am pleased to welcome Navaneel Kar as IPM India’s managing director,” said Modi in a statement. “Navaneel has displayed leadership and strength in delivering exceptional results through his career. His entrepreneurship and learning mindset will be central to bring the next phase of growth for our India business.”

    Kar said, “I am excited to assume the new role at this interesting juncture and contribute to the company’s growth and overall success. I look forward to working with the team to deliver competitive performance along with building an inclusive, diverse and a progressive workplace.”

  • KT&G CEO Won’t Seek Reappointment

    KT&G CEO Won’t Seek Reappointment

    Baek Bok-in (Image: KT&G)

    KT&G’s governance committee on Jan. 11 finalized a longlist of CEO candidates, the company announced on its website. The list comprises 24 individuals including 14 external candidates and 10 internal candidates. The incumbent CEO, Baek Bok-in, has been excluded from the list as he has expressed his intention not to seek reappointment.

    For the external candidates, eight individuals who applied through open recruitment and six individuals recommended by search firms have all been included in the longlist. In addition, 10 internal candidates who have participated in the company’s senior management training program have also been included.

    The CEO appointment process is expected to take about three months. KT&G insists it will be conducted in a fair and transparent manner, following a three-step procedure involving the governance committee, the CEO candidate recommendation committee and approval at the general meeting of shareholders.

    Following the procedure, the governance committee plans to conduct a comprehensive assessment of the candidates who have been longlisted. The governance committee also intends to consider and weigh impartial and objective opinions from the advisory panel, composed of five external experts. The committee will finalize the first shortlist of CEO candidates by the end of this month and recommend it to the CEO candidate recommendation committee.

    Then, the CEO candidate recommendation committee will engage in a systematic and in-depth discussion regarding the candidates included in the first shortlist to form the second shortlist by mid-February. The second shortlist will be disclosed in a transparent manner upon its finalization.

    The final CEO candidate will be named by the end of February. The appointment will be subject to approval at the annual general meeting of shareholders in late March.

    The CEO candidate recommendation committee will be composed entirely of outside directors. Additionally, KT&G’s board of directors plans to propose an agenda item at the upcoming annual general meeting of shareholders to amend the articles of incorporation and make it obligatory to constitute the CEO candidate recommendation committee exclusively of outside directors, regardless of the incumbent CEO’s intentions regarding reappointment.

    Late last year, KT&G shareholder Flashlight Capital Partners urged the tobacco company to select its next CEO in a more transparent manner after expressing disappointment with the current CEO’s performance and identifying several shortcomings in the previous selection procedure.

  • Hong Kong Mulls Higher Tobacco Tax

    Hong Kong Mulls Higher Tobacco Tax

    Photo: Tobacco Reporter archive

    Authorities in Hong Kong are considering a further increase in tobacco duty, reports South China Morning Post, citing the city’s health minister.  

    Lo Chung-mau, secretary for health, did not confirm whether the measure would be included in Financial Secretary Paul Chan Mo-po’s budget next month. Tobacco taxes were previously increased in February 2023 by HKD0.60 ($0.07) per cigarette. A pack of 20 cigarettes now costs around HKD78.

    “Data from the World Health Organization and the global experience proves that an increase in tobacco tax is one of the most effective methods [to reduce smoking]. We will definitely consider it,” Lo said.

    Following last year’s tax increase, calls to the government’s smoking cessation hotline increased threefold to fourfold, showing that the move was effective to encourage people to quit smoking, according to Lo. The current smoking rate is 9.5 percent, and authorities hope to cut that down to 7.8 percent by next year.

    Currently, tobacco duty accounts for 64 percent of cigarette retail price in Hong Kong. The World Health Organization recommends 75 percent.

    The government is currently analyzing data from a public consultation on its tobacco control plans. Lo stated that the government aims to deliver short-term and long-term strategies.  

  • ‘States Shortchange Tobacco Prevention’

    ‘States Shortchange Tobacco Prevention’

    Photo: Tobacco Reporter archive

    Most U.S states continue to shortchange programs to prevent kids from using tobacco products and help tobacco users quit despite over $1.1 billion in legal settlement payments from Juul, according to a new report.

    Maine is the only state to fully fund tobacco prevention and cessation programs at Centers for Disease Control and Prevention (CDC)-recommended levels. Eight other states provide at least 50 percent of the CDC’s recommended funding, and 31 states and the District of Columbia are spending less than a quarter of the CDC’s recommendation.

    The report, Broken Promises to Our Children: A State-by-State Look at the 1998 Tobacco Settlement, was released by the Campaign for Tobacco-Free Kids, the American Cancer Society Cancer Action Network, the American Heart Association, the American Lung Association, Americans for Nonsmokers’ Rights and Truth Initiative. These organizations have issued annual reports since the November 1998 Master Settlement Agreement.

    This year, states have additional revenues that could be dedicated to tobacco prevention programs because of more than $1.1 billion in recent legal settlements with Juul for its deceptive marketing practices and its role in the youth e-cigarette epidemic.

    Key findings of the report include:

    • Even without counting the Juul settlement funds, the states this year (fiscal year 2024) will collect $25.9 billion from the tobacco settlements and tobacco taxes. But they will spend just 2.8 percent—$728.6 million—on tobacco prevention and cessation programs, down from $733.1 million in fiscal year 2023. This funding amounts to less than a quarter (22 percent) of the total funding recommended by the CDC.
    • The amount states are spending on tobacco prevention pales in comparison to the $8.6 billion a year tobacco companies spend to market cigarettes and smokeless tobacco products in the United States. This means tobacco companies spend nearly $12 to market their products for every $1 the states spend to fight tobacco use.

    “We know what works to win the fight against tobacco, and states have plenty of resources from tobacco settlements and taxes to invest in programs that can accelerate progress. Unfortunately, most states are falling short in funding these lifesaving programs,” said Yolonda C. Richardson, president of the Campaign for Tobacco-Free Kids, in a statement. “The tobacco industry continues to do everything it can to target our kids, Black communities and other vulnerable communities, especially with flavored products like menthol cigarettes and flavored e-cigarettes. We know their playbook, and policymakers should be using every tool available to protect our kids and help those already addicted.”

  • Clearing the Smoke

    Clearing the Smoke

    Image: Tobacco Reporter archive

    What can the next-generation nicotine industry expect in 2024?

    By Paul Hardman

    The U.K. government’s proposal for a “smoke-free” generation and changing consumer opinions toward nicotine products are causing a shift in consumer habits. The year 2023 shone a spotlight on e-cigarette compliance, with a potential ban on disposable vapes on the horizon. So, how will this year’s events impact the manufacturing of nicotine products, and what trends and regulations are we likely to see going into 2024?

    Nicotine Pouches

    Nicotine pouches represent an extraordinary opportunity to support tobacco harm reduction in adult smokers. Sweden, the world’s most advanced nicotine pouch market, is on the brink of being smoke-free, with less than 5 percent of its population smoking.

    However, in the U.K., there is a regulatory gap that allows those under 18 to purchase nicotine pouches legally. In addition, there are concerns that nicotine pouch manufacturers could fall into the same traps as some disposable e-cigarette companies, by creating products that appeal to youth.

    If youth use becomes an issue, the easiest move for regulators is to categorize nicotine pouches in the same way as oral tobacco products like snus—rendering them illegal. An alternative response might be to categorize these products as nicotine-replacement therapies and place them under medical product regulations, which would restrict their access.

    To keep these products available to adult smokers who wish to quit, manufacturers can act as if regulation is already in place: generate data, devise safety frameworks and ensure the quality of products entering the market. Importantly, manufacturers should present and market their products in responsible ways, including avoiding bright colors, not imitating other consumer goods (e.g., soft drinks) and refraining from using any type of cartoon/video game characters.

    Non-Heated Technologies

    We have yet to witness a vape product approved via the U.K. Marketing Authorization Application (MAA) pathway, which enables nicotine products to be marketed as smoking cessation nicotine-replacement tools and prescribed by healthcare professionals. However, non-heated vape technology might facilitate MAA approval by addressing the core problem of delivered dose uniformity (DDU).

    One example of a non-heated vape technology involves ultrasound sonication, which enables the atomization of e-liquids to create an aerosol, similar to technology used in medical nebulizers. The droplet size and dosage can be predefined according to the dimensions of the mesh, ensuring uniformity in the vapor, thus improving DDU. As we go into 2024, we will likely see more manufacturers exploring this approach. In parallel, e-liquids will be developed specifically for this technology.

    Product Development

    Nicotine product manufacturers have been moving toward a quality-by-design (QbD) development process, and we will see this continue in 2024. There are no specific guidelines or requirements for the stability testing of nicotine products other than the scientific justification for shelf life. Employing a QbD approach demonstrates a higher level of due diligence, which could produce safer, higher quality nicotine-delivery systems.

    In addition, manufacturers are starting to implement extractables and leachables studies during the development process in anticipation of the new guidelines being set out by the European Committee for Standardization. Once these guidelines are published, we can expect to see a more standardized approach throughout the industry.

    Paul Hardman is a managing consultant at Broughton, an independent life sciences contract research organization offering analytical testing services integrated with scientific consultancy and global regulatory support.
  • Supermarkets Dodging Ban With Tobacco Shops

    Supermarkets Dodging Ban With Tobacco Shops

    Dutch supermarkets are opening specialist tobacco shops next to their food retail stores in anticipation of a tobacco sales ban set to come into force on July 1, reports Dutch News.

    Beginning in July, the Netherlands will prohibit supermarkets from selling cigarettes and rolling tobacco, but tobacconist shops can be opened without a license.

    TabakNee, an anti-tobacco group, is pushing for the introduction of licenses to sell tobacco.

    “There was a lot of demand,” said Rolf Hoogkamer, a Jumbo franchise owner who opened a specialist store next to his shop. “It is often older people who live in the flats near here and can’t walk far. They can now easily still pick up [their cigarettes] and that is a good thing.”

    “There is a 7.5 percent profit margin on each packet,” said Hoogkamer. The total tobacco product market reached €4.4 billion ($4.8 billion) in 2020, €2.4 billion of which came from supermarkets.

    “Some 7 percent of our turnover comes from tobacco, so you are talking about €700 million a year,” Jumbo chief executive Ton van Veen said.

    The outgoing government has raised taxes, bringing the price of a 20-pack of cigarettes to €10, banned advertising and introduced plain packaging. Tobacco sales will be restricted to specialist stores only by 2032.

    The government agreed to leave the issue of tobacco shop licensing to the next administration.

  • PCA Previews 2024 Cigar Industry

    PCA Previews 2024 Cigar Industry

    The U.S. premium cigar industry will face both challenges and opportunities in 2024, according to the Premium Cigar Association (PCA).

    In a commentary published on its website, the trade group details the issues it expects to impact its business this year.

    With congressional gridlock and narrow partisan margins in the U.S. Congress, the PCA expects few pieces of legislation to be signed into law in 2024. As a result, government action is likely to be more regulatory than legislative.

    In both the U.S. House of Representatives and Senate, active legislation remains a threat to the premium cigar and pipe industry that would result in massive federal tax increases. Standalone legislation exists in the form of the Tobacco Tax Equity Act and the Care for Moms Act that use tobacco tax revenue to pay for new maternal health programs.

    The White House Office of Information and Regulatory Affairs is conducting meetings and a review of the Tobacco Product Standard for Characterizing Flavors in Cigars, which would prohibit characterizing flavors (other than tobacco) in all cigars.

    In November 2023, the PCA raised several objections to the product standard and asked the Office of Management and Budget (OMB) to remit the rule back to the Food and Drug Administration for further analysis. The Center for Tobacco Products (CTP) has since delayed the release of the final rule, which was expected in December 2023. Although the FDA is working toward completing the final rule in 2024, the PCA believes it could prove politically challenging to release a final rule that would deprive millions of adult consumers of their preferred product choice before the election.

    The FDA is also proposing new requirements for tobacco product manufacturers regarding their products’ manufacture, design, packing and storage. The PCA participated in many public forums and submitted written comments opposing the proposed rule, including its applicability to premium cigar factories. The rule is expected to be sent to the OMB in 2024 for regulatory review.

    In 2022, the Biden administration announced plans to develop a proposed product standard that would establish a maximum nicotine level to reduce the addictiveness of cigarettes and certain other combustible tobacco products. The agency has not moved on releasing a proposed rule, and the main question for the PCA is whether this rule will apply to premium cigars, cigars more generally or pipe tobacco.

    In September 2023, the Department of Justice, which represents the FDA, informed the court of its decision to appeal the decision rendered by Judge Amit Mehta in Cigar Association of America et al. v. United States Food and Drug Administration et al., which vacated the deeming rule as it applies to premium cigars. The decision is being appealed to the United States Court of Appeals for the District of Columbia Circuit before a three-panel group of judges. The case is expected to be argued in 2024. At present, the vacatur of the deeming rule for premium cigars stands during the appeals process. However, the appeals court may be asked to block the ruling while it considers the arguments.