Blog - Tobacco Reporter

Lithuania Urged to Reconsider Flavor Ban

The Independent European Vape Alliance (IEVA) has called on Lithuania to reconsider a proposed ban on key e-liquid ingredients, including sweeteners.

The country’s Draft Law No XIVP-2791(2) amending Article 9(2) of Law No I-1143 on the control of tobacco, tobacco products and related products proposes a “ban on placing on the market e-cigarettes and e-cigarette fillers with liquid adapted for filling electronic cigarettes if this liquid contains sugar and/or sweeteners.”

In comments submitted under the EU Technical Regulations Information System, IEVA warns that the measure will encourage the illicit trade, boost smoking rates, jeopardize employment and lower government revenues due to reduced vape tax collections.

According to the alliance, the draft law shows a lack of understanding of the technical and chemical characteristics of e-cigarettes, as well as a disregard for the negative consequences for Lithuania’s public health and for the country’s vaping small and medium-sized enterprises.

“Banning sugar and sweetener chemicals, which are necessary for the manufacturing of e-liquids, will lead to a quasi-ban of e-cigarettes,” the IEVA wrote in a statement. “It will lead to a boom in black market sales of dangerous products and to a surge of tobacco smoking by depriving smokers of a less harmful alternative. Finally, this measure, not justified by any scientific evidence, is bound to be ineffective in addressing its purported goal of limiting young people’s access to vaping.”

The group encourages the Lithuanian government to adopt measures adapted to the pursued aim and based on thorough scientific evidence.

October 27, 2023

Netherlands to Tax E-cigarettes

Dutch lawmakers on Oct. 26 voted for a motion to introduce a tax on vapor products, reports Dutch News. The move follows earlier reports that the Netherlands would not impose such a levy prior to the elections scheduled for November.

The government had been planning to wait until the introduction of Europe-wide legislation but given that is unlikely to happen before 2026, ministers agreed to take unilateral measures, if that is what MPs wanted.

One in five Dutch youngsters under the age of 25 uses e-cigarettes, and 70 percent of vapers also smoke tobacco cigarettes, according to the Trimbos addiction institute.

The 18 age limit for using vapes is also widely flouted and internet sales have flourished, De Telegraaf reported earlier this month.

Vaping is cheaper than smoking in the Netherlands, where a pack of cigarettes now retails for around €11 ($11.64). An e-cigarette with the equivalent of two packets of cigarettes in terms of nicotine costs around €6.

October 27, 2023

European Union Reviewing Snus

The future of Sweden’s snus, a moist oral tobacco product banned in the EU since 1992, is currently under review as part of the EU’s evaluation of the tobacco directive, reports Euractiv.

Originating in the 18th century, snus is a unique Swedish tobacco product and differs from newer alternatives like heated tobacco, e-cigarettes or nicotine pouches. Sweden secured an exemption for snus during its EU accession negotiations, limiting its sale to within the country.

The EU aims to achieve a “Tobacco-free Generation” by 2040 as tobacco is a major health risk, responsible for 27 percent of all cancers in the EU. Sweden, expected to have smoking rates drop below 5 percent in 2023, is at the forefront of this effort.

Patrik Strömer, Secretary-General of the Swedish Snus Manufacturers’ Association, believes that the EU’s ban on snus is due to a lack of knowledge about the product, and he highlights that it has proven beneficial in reducing smoking-related diseases in Sweden.

Karl Fagerström, a tobacco and nicotine researcher, finds it odd that the U.S. has allowed snus in the market while the EU has banned it, despite using similar data. He points to WHO data showing that Swedish snus users have lower smoking-attributable deaths, especially regarding lung cancer.

On the other hand, Italian MEP Alessandra Moretti argues that snus is associated with diseases like cardiovascular issues and cancers of the digestive system. Fagerström counters that snus usage in Sweden is not linked to oral cancer and should be avoided during pregnancy, similar to any nicotine use.

The EU Court of Justice deems tobacco products for oral use harmful, addictive and potentially a gateway to tobacco use. Advocates for snus maintain that in Sweden, snus use doesn’t lead to subsequent smoking, supported by declining smoking rates among the young population.

October 27, 2023

Taiwan Worried About Popularity of Flavors

Health authorities in Taiwan are worried about the growing popularity of flavored tobacco products, especially among young students and women, reports Taiwan News.

In a 2022 survey, 18.2 percent of those aged 18 and older who smoke reported using flavored tobacco products, up from the 15.6 percent recorded in 2020. Female respondents exhibited a higher usage rate, with 43.8 percent showing an interest in these products, compared to 14.3 percent reported among males, according to the Health Promotion Administration (HPA).

Data from 2021 revealed that 40 percent of adolescent smokers in Taiwan were using flavored tobacco products. Among, junior high and senior high school female students the usage rates were 57.2 percent and 60.7 percent, respectively, surpassing their male counterparts.

The HPA emphasizes that flavored tobacco products are as harmful to health as nonflavored varieties, adding that young smokers are at an increased risk of developing addictions to other substances.

Lawmakers have initiated a public consultation on plans to ban specific fragrances, such as chocolate and mint.

October 26, 2023

Belgium Announces Crackdown on Tobacco

Belgium Health Minister Frank Vandenbroucke announced measures to curtail tobacco consumption and ban the display of tobacco products, reports The Brussels Times.

About 24 percent of Belgians smoke, according to Cancer Foundation reports, and of smokers, one in five smoke daily. To help discourage smoking, the federal government previously announced plans to increase excise taxes on tobacco products.

The latest announcement will reduce points of sale—large supermarkets and festivals will no longer be able to sell cigarettes. Smoking in public spaces will also be restricted, and these new regulations will be effective Jan. 1, 2025.

The government says it will carry out widespread controls with heavy penalties for those who do not comply with the new rules, including forced closure.

The Belgian government’s goal is to reduce daily tobacco use to 10 percent of the population by 2028 and to 5 percent by 2040. Sciensano research predicts that these goals will be overshot; if the current rate continues, the 2028 targets will not be fully achieved by 2040.

Comeos, Belgium’s commerce federation, called the measures “pure hypocrisy,” and Philip Morris said the country’s government is “getting rich off the back of smokers” and that the measures will encourage the black market—Belgium is a known hub for counterfeit cigarettes.

October 26, 2023

Growers Want Amends for Below-Market Prices

Tobacco growers in Pakistan have asked tobacco companies to compensate them for tobacco purchased at below-market prices and losses caused by rains and hailstorms in Khyber Pakhtunkhwa Province, reports The News International.

In a letter to their representative organizations, the farmers said that independent purchasers paid high price while some domestic and multinational companies purchased the produce at a lower rate.

They urged the organizations to take up the matter with the companies to repay the growers for the lowest price. The tobacco growers also urged the companies to tap into the corporate social responsibilities fund to accommodate the growers.

Pakistan law requires tobacco companies to spend a certain percentage of their profit on the welfare of farmers.

October 26, 2023

Altria Revenues Down 4.1 Percent

Altria Group reported net revenues of $6.28 billion in the third quarter of 2023, down 4.1 percent from the comparable 2022 quarter. The decrease was driven primarily by lower net revenues in the company’s smokeable products segment.

Altria’s domestic cigarette shipment volume decreased 11.6 percent from quarter to quarter, driven by the industry’s overall decline rate, retail share losses, calendar differences and trade inventory movements, among other factors.

Following the completion of its Njoy Holdings acquisition on June 1, 2023, Altria has been strengthening Njoy’s global supply chain to support the anticipated volume increase associated with its expansion plans for the Njoy Ace brand.

The company shipped 7.5 million Ace pods during the quarter. The retail share of Ace pods in U.S. muti-outlet and convenience stores was essentially unchanged since the completion of the Njoy transaction.

The U.S. cigarette retail share of Altria’s Marlboro brand dropped 0.3 points, to 42.3 percent versus the prior-year quarter, primary due to increased macroeconomic pressures on disposable income and increased competitive activity.

Net revenues in the oral tobacco products segment increased 2.2 percent, driven by higher pricing and lower promotional investments.

“Our highly profitable traditional tobacco businesses were resilient in a dynamic operating environment during the third quarter and first nine months, providing fuel for our business transformation and significant cash returns to our shareholders,” said Altria CEO Billy Gifford in a statement.

“I believe we have the appropriate strategies and people in place to execute our growth plans. I continue to believe that we can achieve our vision and create long-term value for our shareholders.”

October 26, 2023

Nabil Sakkab To Retire From Altria Board

Nabil Y. Sakkab will retire as a member of Altria Group’s board of directors following the completion of his current term. Consequently, Sakkab will not stand for re-election to the board of directors at Altria’s 2024 annual meeting of shareholders, which Altria anticipates holding on May 16, 2024.

“Nabil’s contributions have significantly benefited Altria over the past 15 years,” said Kathryn McQuade, Altria’s independent chair of the board, in a statement. “We thank him for his long and distinguished service and wish him the very best upon his retirement.”

Sakkab chairs Altria’s innovation committee and is a member of the company’s executive, finance and nominating, corporate governance and social responsibility committees. He held a variety of positions at The Procter & Gamble Co. beginning in 1974. He retired in November 2007 as senior vice president, corporate research and development. He is a director of several privately held companies. He served as a director of Deinove from 2010 to April 2016, Givaudan from 2008 to March 2015 and Pharnext from 2012 to July 2020.

October 25, 2023

Panel: Economics of Harm Reduction

The panel was moderated by economist and author Sinclair Davidson, who argued that through irresponsible fiscal policy on tobacco and nicotine products, the Australian government had created a well-organized illegal market that would be impossible to eliminate even if the government changed course.

The market for next-generation products (NGPs), Tim Phillips, managing director of Tamarind Intelligence, said, is a complicated, quickly moving sector, which today has a significant global volume of over $50 billion and more than 100 million users. Market development heavily depends on product regulation. In North America, vape products dominate the market, with a small but growing portion of nicotine pouches. In Europe, the Middle East and Africa, vapes are still growing but at a slower pace while heated-tobacco products (HTPs) are establishing themselves in some markets. In the Asia-Pacific region, HTPs are the most popular NGPs. Despite overall increase, the global NGP market still has headroom compared to the combustible cigarette market with its value of $800 billion. Phillips suggested that in 10 years’ time, vape products and HTPs could overtake combustible cigarettes, but he pointed out regulatory issues, consumer confidence and the debate about disposable vapes as headwinds for the sector. The latter issue, he added, could be solved through innovative technologies.

James Lambert, director of economic consulting Asia at Oxford Economics, warned that a harsher regulatory and fiscal stance on reduced-risk products (RRPs) could create negative economic and health consequences over time. Bans of RRPs will favor the illicit trade, especially in markets where illicit trade is difficult to manage and mitigate and where price sensitivity is higher. For optimal policy, Lambert proposed three key principles: Tailoring the restrictions of use to different market segments to eliminate youth use and at the same time provide adult smokers access to options; differentiating the treatment of RRPs from conventional tobacco products to incentivize the adoption of healthier alternatives; and finding constructive policy stances that include regulatory and fiscal measures to incentivize innovation of less hazardous products.

Comparing the U.S. tobacco market pre-2005 and after, David Levy, professor of oncology at Georgetown University, said that the advent of Juul in 2018 was a game changer that fueled competition among the cigarette industry, which had reluctantly ventured into vape products and independent players. At the same time, nicotine pouches were growing, like vapes taking market share from cigarettes. Levy predicted that HTPs will become more popular and are likely to be favored by tobacco companies because they are more profitable and because the companies have a first-mover advantage. He expected competition among HTP manufacturers and nicotine pouch manufacturers to intensify and wondered whether the Food and Drug Administration, in its focus on a menthol cigarettes and cigars ban, would recognize the role of harm-reduced substitutes.

Paul Blair, regional director of external affairs at Philip Morris International, emphasized that there is no one-size-fits-all approach to the transformation opportunities and needs of the tobacco industry. The industry, he said, must be aware of three areas. First, supply: Companies have to take the risks of transformation to meet consumer demand. Second, demand: Consumers will continue to want to quit or are looking for less hazardous products, regardless of any stringent regulations on reduced-harm products. Third, an affordable and accessible marketplace: Cost incentives to quit smoking are extremely important to consumers even in high-income countries as smokers are often from low-income and middle-income groups. A tax differential between RRPs and combustible cigarettes is hence essential, Blair stated, both in the signal it sends to consumers and businesses and because of the cost differential in this journey. To further reduce the U.S. smoking rate, which presently stands at 11 percent, Blair recommended making available a wide range of RRPs and creating a favorable public policy environment.

Anna Choi, assistant professor in the Department of Public Administration at Sejong University, presented the results of her study on the role of vape products and HTPs in encouraging smokers in South Korea to switch from combustible cigarettes.

A huge tax hike on cigarettes of about 40 percent in 2015, she said, significantly depressed cigarette consumption. A subsequent health ministry report implying that RRPs were potentially even more dangerous than smoking impacted negatively on the electronic nicotine-delivery system (ENDS) market.

Since 2017, RRPs and combustibles have been taxed at almost the same rate, eliminating the cost advantage of the former. Despite this, ENDS’ market share increased from 2 percent in 2017 to 17 percent in 2023.

October 25, 2023

Panel: Regulation: International Perspectives

Regulation of nicotine products is at a tipping point, said David Bertram, director at EUK Consulting, who moderated the panel. Generational bans and mandatory nicotine reduction for combustible cigarettes have been introduced, whereas taxation of flavors and the move against disposable vapes have the potential to threaten the whole next-generation products (NGPs) category. Panelists provided overviews of the regulatory situation in their respective countries.

Dave Dobbins, former chief operating officer of the American Legacy Foundation/Truth Initiative, criticized the U.S. Food and Drug Administration’s authorization process for novel products as lacking order. He called for the agency to “clear the field.” “The FDA has two choices: either a market serviced by unregulated actors that don’t have to report to the agency and don’t follow its rules, mandates and instructions or a robust market of approved products that fulfill the demand for adult consumers, and then the FDA can focus its enforcement on actors targeting youth.” The agency, he added, could use its power of post-market surveillance and regulation. Dobbins was concerned that the FDA was paralyzed by fear, making it unable to analyze the benefits of reduced-risk products (RRPs) for adult smokers.

Adam Afriyie, member of Parliament for Windsor, U.K., said his country was in the pole position in tobacco harm reduction (THR) because of five factors: operating according to the principles of THR and encouraging the good instead of the perfect; treating RRPs as consumer products not medicine; encouraging public bodies to spread the word; trying to de-politicize the issue; and applying pragmatism as a response to changes. Pointing out that the U.K. government was currently consulting on disposable vapes and underage vaping on the base of evidence, he argued that it would only ban the products if this made sense from a point of view of harm reduction to the environment, children and healthcare. Regarding the upcoming tenth Conference of the Parties (COP10) to the Framework Convention on Tobacco Control, Afriyie said he was encouraging his contacts to help the U.K. delegation feel sufficiently emboldened to stress that THR needs to be the principle behind regulation and that a greater degree of transparency is required in how decisions at the COP are made.

In its traditionally heavy regulation of nicotine products, Australia has always been driven by health considerations, according to Kezia Purick, member of the Northern Territory Legislative Assembly for Goyder, Australia. Tobacco-related diseases are the single biggest cause of death from behavioral risks in the country, with the disadvantaged indigenous population being affected most. Australia banned all tobacco advertising in 1976 and was the first country to introduce plain packaging in 2012. Nicotine vape products are available only from pharmacies with a doctor’s prescription. Health Minister Butler’s approach to ban all disposable vapes is primarily driven by concerns about the rising popularity of vaping among young school children. Purick expects regulation of RRPs to become ever stricter in the future.

Marina Foltea, managing director at Trade Pacts Consultancy, outlined the complex policy-making process in the European Union. Directives, such as the Tobacco Products Directive (TPD), are binding for all 27 member states and have to be transposed into national law to take effect. The revision of the present TPD2, which already has strict requirements for combustible cigarettes and sets clear product standards for vape products, is currently being discussed. The regulation of tobacco products in the EU is regarded as a model by many countries. However, Foltea said, she didn’t see any explicit recognition of THR in the EU system. “But if you already have this category in the TPD, this means some indirect recognition,” she noted.

Douglas Ming Deng, head of the NGPs Industry Study at Yunnan University, reminded his listeners of Asian diversity and the resulting differences in regulation of NGPs across countries. South Korea and Japan, he emphasized, have set up good tobacco control systems together with the provision of suitable RRPs, thus becoming blueprints for other countries to follow. He noted that the industry had changed more rapidly in the past 20 years than it had in the century before, meaning the sector was no longer static but dynamic. “As a consequence, regulators, consumers and the industry don’t know each other as they did in the combustible era,” Deng said. “Regulators should study the industry and vice versa.”

October 25, 2023