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  • Tobacco Outranks Electric Vehicles on ESG

    Tobacco Outranks Electric Vehicles on ESG

    Photo: uflypro

    Tobacco companies perform better in environmental, social and governance (ESG) rankings than manufacturers of electric vehicles, reports The Washington Free Beacon.

    Earlier this month, S&P Global raised eyebrows when it gave Tesla, the world’s largest manufacturer of electric cars, a lower ESG score than Philip Morris International.

    Tesla earned just 37 points on the 100-point scale compared with PMI’s 84.

    It’s not the first time that tobacco companies have outranked companies with greener reputations. Sustainalytics, a widely used ESG ratings tool, gives Tesla a worse score than Altria Group. And the London Stock Exchange gives BAT an ESG score of 94—the third highest of any company on the exchange’s top share index—while Tesla earns a middling 65.

    The strong ESG performance of tobacco companies is due in part to their emphasis on inclusion and social justice. Altria, for example, has gone out of its way to emphasize the diversity of its corporate board and the breadth of its social justice initiatives. Tesla, by contrast, has resisted that bandwagon, going so far as to fire its top LGBT diversity officer last year.

    Imperial Brands touts its trainings on “microaggressions” and a board that is 40 percent women. PMI and BAT promote their scores on Bloomberg’s Gender Equality Index.

    Critics contend that tobacco companies’ ESG scores mask the negative impact of their activities, which they say include pollution from filters and nondegradable e-cigarettes along with the soil erosion and deforestation associated with tobacco growing.

  • Brexit Boosted Illicit Trade Conditions

    Brexit Boosted Illicit Trade Conditions

    Photo: J

    The United Kingdom’s departure from the European Union has increased the risk of illegal tobacco trade, reports Wales Online, citing a new report by Public Health Wales (PHW).

    For starters, Brexit had reduced the U.K.’s access to EU databases for identifying criminals and illicit activity across Europe, potentially reducing its ability to detect and prevent illicit trade. And while being outside the EU allows the U.K. to implement additional checks at its borders, this advantage could be undermined by the government’s proposed freeports in Wales. Featuring fewer checks and regulations, these facilities are designed to boost international trade but can also be exploited by criminals, according to PHW.

    In addition, international trade agreements currently under negotiation have the potential to create new supply routes and opportunities for criminal exploitation, according to the report. Brexit also has the potential to shape the demand for illicit tobacco by increasing risk of unemployment in sectors highly exposed to trade and poorer mental health due to uncertainty. Stress and poverty are associated with higher rates of smoking.

    “To effectively reduce the illicit trade of alcohol, tobacco and drugs in the U.K. and Wales and benefit population health and well-being, strategies will need to reduce both the supply and demand of these goods, and this will mean taking account of the potential impact of Brexit on both factors,” said Louisa Petchey, senior policy specialist at the World Health Organization Collaborating Centre at Public Health Wales.

    “This includes understanding its impact on supply chains, border controls and law enforcement cooperation. It also means responding to the ways in which Brexit may have negatively impacted on health and well-being in Wales to decrease demand for these goods in the first place.”

  • Putin Signs Tobacco Law

    Putin Signs Tobacco Law

    Photo: sezerozger

    Russian President Vladimir Putin has signed a new tobacco law, reports Interfax.

    The legislation requires the licensing of production, tobacco imports, nicotine-containing products and raw materials. It also compels manufacturers to register their machinery and mothball any unused equipment.

    While the law does not require retailers to obtain licenses, it bans the retail sale of tobacco products and nicotine-containing products not in consumer packaging and imposes restrictions on the movement of products.

    Titled “On the State Regulation of Production and Turnover of Tobacco Products, Nicotine-Containing Products and Raw Materials for Their Production,” the law is modeled on Russia’s regulatory framework for the tobacco industry. Observers expect Russia to extend the Federal Service for Alcohol Market Regulation’s remit to include tobacco and nicotine-containing products.

    Prepared by the Ministry of Finance, the legislation passed the State Duma on June 1 and the Federation Council on June 7. The law will come into force on Sept. 1, 2023, and the articles introducing licensing will take effect March 1, 2024.

  • FDA Urged to Wrap Up E-Cigarette Reviews

    FDA Urged to Wrap Up E-Cigarette Reviews

    Photo: BillionPhotos.com

    U.S. lawmakers are urging the Food and Drug Administration to wrap up its review of pending e-cigarette premarket tobacco product applications, reports Law360.

    In a letter to FDA Commissioner Robert Califf, 50 members of Congress requested the agency finalize its review of pending applications for e-cigarette products; deny applications for all nontobacco-flavored e-cigarette products, including menthol; and utilize the enforcement tools that have been given to the agency to remove all synthetic nicotine products from the market, including those with pending applications.

    The lawmakers’ call comes after the FDA failed to meet a court-ordered deadline of Sept. 9, 2021, to complete its review of all pending e-cigarette applications submitted to the agency. In its most recent filings with the court, the FDA has indicated that it will not be able to finalize its review of products with the largest market share until December 2023.

    “FDA’s repeated delays in removing flavored e-cigarettes from the market is putting children’s health at risk,” said Colorado Representative Diana DeGette in a statement. “FDA needs to step up its enforcement of these harmful products and get them off our store shelves now. Every day that these products remain on the market, the more harm they cause to young people’s health.”

    While the FDA has completed its review of many e-cigarette products, it has not yet completed its review of thousands of pending applications—including those for popular products manufactured by Juul Labs, Reynolds Vapor Co. and Smok.

    The lawmakers urged the agency to complete its review of all its pending applications no later than Dec. 31, 2023.

  • Shipper Responsible for Tax on Stolen Cigarettes

    Shipper Responsible for Tax on Stolen Cigarettes

    Photo: Siwakorn1933

    JTI Polska is responsible for hundreds of thousands of pounds in excise duties on cigarettes stolen during transport, the U.K. Supreme Court ruled June 14, reports Law360.

    Thieves took 289 cases from a JTI Polska vehicle parked at a U.K. service station during a trip from Poland to Jakubowski in the U.K.

    Jakubowski sought to recover from JTI the excise tax of about £450,000 ($570 million) owed on the stolen goods.

    The ruling in a similar case that determined which party pays the tax in the event goods are stolen remains valid, and there is no pressing reason to overturn it, the court said.

  • Kaival Reports Flat Quarterly Revenues

    Kaival Reports Flat Quarterly Revenues

    Photo: wichayada

    Kaival Brands Innovations Group reported revenues of $3 million in the second quarter of fiscal 2023, down from $3.1 million in the comparable 2022 quarter. Gross loss was $100,000 compared with a gross profit of $400,000 in the prior-year period.

    While sales were slightly down versus the prior year quarter due to customer credits, discounts and rebates, Kaival believes that continued U.S. Food and Drug Administration enforcement of noncompliant electronic nicotine-delivery system products has allowed the company to position its Bidi Stick as a compliant alternative subject to FDA enforcement discretion. The company believes this should also help in securing new orders for the Bidi Stick.

    “We remain excited and confident in the future of Kaival Brands,” said Eric Mosser, president and CEO of Kaival Brands, in a statement. “Over the past four months, we signed new broker and distribution agreements for our core Bidi Stick distribution business, focusing on partners that share our vision of regulatory compliance and youth access prevention. We believe we have positioned ourselves for increased sales in the second half of the year.”

    In addition to its quarterly results, Kaival announced the renewed distribution of its Bidi Stick in Circle K convenience stores. “As of this week, we have activated over 1,000 new Circle K locations, with the goal of ramping up to 5,000 this year,” said Mosser.

    The company also announced the initial shipment of Bidi Sticks to over 900 Kwik Trip and Mapco locations.

  • Tom Briant Retires as NATO Director

    Tom Briant Retires as NATO Director

    Image: National Association of Tobacco Outlets

    Tom Briant will be retiring from his position as the executive director of the National Association of Tobacco Outlets (NATO).

    Briant was instrumental in founding NATO 23 years ago and has grown the association to be a leading voice in the industry, according to a press release.

    “I want to express my sincere gratitude to all of those NATO members that I have worked with over the years and who supported the association since it was formed in 2001, and I look forward to seeking new challenges in the industry,” said Briant.

    NATO’s mission is to enhance the business interests of retailers that sell tobacco and nicotine products, support the legislative and regulatory interest of its members and encourage the expansion of the retail tobacco and nicotine market in a responsible manner. NATO currently has 66,000 members.

    The board of directors has begun a search for the next executive director, and interested candidates should contact Chris Beaulier, board president.

  • South Africa: Illicit Products Destroyed

    South Africa: Illicit Products Destroyed

    Image: Tobacco Reporter archive

    The Customs Division of the South African Revenue Service (SARS) has begun destroying illicit and smuggled cigarettes at the Beitbridge border post, reports SA News.

    According to SARS Deputy Commissioner Johnstone Makhubu, 2,000 master cases, or 20 million cigarettes, will be destroyed.

    The illicit products were seized in multi-agency and intelligence-driven operations led by Customs’ National Rapid Response Team.

    “SARS has a zero-tolerance for persons or organizations that are involved in tax crime or illicit trade, and SARS will pursue them relentlessly,” said Makhubu.

    Customs has put into place measures to grant benefits to compliant traders through the Accredited Economic Operator Model, according to Beyers Theron, SARS director of customs and excise. SARS is also implementing SMART border technology to increase detection capability and response.

    “Since the inception of its coordinated and focused investigations Customs has been conducting over the past three years in the tobacco and cigarette industry, there has been a noticeable shift to increased cross-border smuggling using ‘runners.’ These are not individuals smuggling these cigarettes as an entrepreneurial opportunity but organized criminal syndicates exploiting the unemployed and the poor by employing individuals as runners to carry goods, often for miles, across borders,” said Theron.

    “These runners carry at least two master cases of illicit cigarettes on their backs per run, often repeating these trips multiple times. These cigarettes are then loaded into trucks, small goods vehicles, cars and taxis that wait at locations along the border for distribution to their intended destinations on the local market.”

  • Cambodia: New Tax Stamp Introduced

    Cambodia: New Tax Stamp Introduced

    Image: Tobacco Reporter archive

    Cambodia has revealed the features of the new stamp tax to vendors in prime locations across the country, reports Khmer Times. According to the General Department of Taxation (GDT) in a working group with the General Department of Customs and Excises (GDCE), the dissemination and presentation of the obligations and features of the new stamp tax have been conducted in 1,305 places in five different areas.

    Tobacco products produced in Cambodia need to be labeled with a tax stamp issued by the GDT, and products imported from other countries need to be labeled with a tax stamp issued by the GDCE, said Ming Ban Kosal, the GDT’s deputy director and co-chief of the working group.

    “Both stamp tax for domestically produced and imported tobacco products were produced using a kind of high-quality paper with QR code and safety features that cannot be copied or fraudulently duplicated,” said Kosal.

  • Tobacco Smuggling Costs Billions

    Tobacco Smuggling Costs Billions

    Image: somemeans | Adobe Stock

    Cigarette manufacturers estimate that tobacco smuggled across Canada costs billions in lost taxes, according to a report to Parliament, reports Western Standard.

    “The excise reporting gap was estimated to be on average $400 million of federal excise revenue for the tax years 2014 to 2018,” the Cabinet wrote in an Inquiry of Ministry tabled in the Commons. The $400 million figure included tax revenue lost to contraband of all kinds.

    “How much does the government collect in tobacco taxes annually, and what is the amount of federal tax revenue that is lost from the sale of illegal, untaxed tobacco?” asked Conservative Member of Parliament Philip Lawrence.

    “Illegal tobacco costs around $2 billion annually in lost tax revenue with that money diverted to some of Canada’s most notorious organized crime groups,” wrote Ralf Wittenberg, Imperial Tobacco Canada CEO. “Despite this, the federal government has barely mentioned illegal tobacco since 2015, let alone taken any measures to address it.”

    “Canada’s illegal tobacco problem is now a national issue that spills beyond our borders, with illegal Canadian product turning up in the United States, Mexico, the Caribbean and Central America,” said Wittenberg. “Domestically, after several years of relative stability, the illegal market is growing again.

    “This has been driven mainly by persistently high rates in Ontario estimated at 35 percent to 40 percent and a recent explosion in British Columbia, where we estimate the rate has grown to 35 percent.

    “Numerous reports from law enforcement agencies, think tanks and media have drawn clear links between illegal tobacco and other criminal activities, including drug and weapons trafficking.”