Blog - Tobacco Reporter

Higher Cigarette Taxes in Bangladesh

Cigarette manufacturers in Bangladesh will likely pay higher taxes on gross receipts from the next fiscal year as the National Board of Revenue (NBR) collects more taxes to discourage the “health hazardous” business, reports The Daily Star.

The proposed tax increase is part of the Income Tax Bill 2023 introduced to Parliament by Finance Minister A.H.M. Mustafa Kamal earlier this month. The proposed bill will replace the current Income Tax Ordinance 1984.

The new bill would have manufacturers of cigarettes, bidis or handmade cigarettes, chewing tobacco and smokeless tobacco paying a 3 percent tax on turnover at minimum, up from the current 1 percent. It would also place a flat 10 percent tax deducted at source (TDS) traders supplying tobacco leaf to tobacco companies, replacing the multiple rates of TDS.

“We have proposed a hike in tax rates to discourage tobacco use,” said a senior official of the NBR.

“We appreciate the NBR for responding positively to the call of raising tobacco taxes by the social activists,” said Atiur Rahman, chairperson of the think tank Unnayan Shamannay.

June 14, 2023

Zimbabwe Leaf Sales Approach $800 Million

Since Zimbabwe’s tobacco auction and contract floors opened in March, at least 256.6 million kg of leaf worth $774.4 million have been sold, according to ZimLive.com. During the same period last year, 165.4 million kg of leaf worth $500.5 million were sold.

The government’s target for tobacco sales was 230 million kg.

The increase in sales has been attributed to good rains and an increase in farmers planting tobacco.

According to the Tobacco Industry and Marketing Board, sales have increased 54.72 percent from the same period in 2022.

The average price at auction and contract floors was $3.02 per kilogram, with the highest price at $6.20 per kilogram and the lowest price at $0.10. Rejected bales rose to 88,057 this year from 63,842 in 2022.

“We have surpassed our 2022/2023 target of 230 million kg and are bound to break the all-time record of 259 million kg,” said John Basera, lands and agriculture permanent secretary.

June 14, 2023

Golden Tobacco Directors Face Prison

The Madras High Court in India has sentenced four Golden Tobacco directors to prison for contempt, according to The Hindu. The case involves a trademark dispute between Golden Tobacco and market leader ITC over the Gold Flake trademark.

Despite a July 2018 interim injunction, Golden Tobacco continued imitating ITC’s Gold Flake cigarette brand, according to ITC.

“Merely because of subsequent statutory requirement as indicated by the learned counsel on either side, this court is unable to hold in favor of respondent/company and its directors,” the judges wrote. “As a result, this court finds that there is willful disobedience of the order of injunction granted by this court.”

The court adjusted the length of the prison sentence to take account of the high ages of the defendants.

The punishment will come into force from July 15, 2023, to allow the directors to appeal before the Supreme Court.

June 13, 2023

Scotland: Calls for Individual Cig Warnings

Ministers in Scotland are being urged to add health warnings to individual cigarettes, reports Metro.

Action on Smoking and Health (ASH) is pushing for the government to follow countries like Canada, Australia and New Zealand in reforming the country’s anti-smoking plans. Scotland aims to create a “tobacco-free” generation by 2034.

ASH is also recommending limiting visibility of tobacco products in retail spaces and giving accessible support to people with high tobacco usage.

“With the Scottish government refreshing its tobacco action plan later this year, it is vital that Scotland matches the level of bold and ambitious measures set by New Zealand, Australia and Canada in recent months if we are to achieve the goal of a tobacco-free generation by 2034,” said Sheila Duffy, chief executive of ASH Scotland. “We need measures to be introduced that will save lives and address the substantial inequalities in our communities facing the greatest challenges during the cost-of-living crisis.”

“Removing addictive nicotine from cigarettes, adding health warnings to cigarettes, reducing the visibility and availability of tobacco and related products, implementing evidence-based public health campaigns to motivate people who use tobacco to quit smoking, and providing increased easily accessible person-centered support to those in communities with a high prevalence of tobacco use are just some of the measures that merit strong consideration,” said Duffy.

A Scottish government spokesperson said, “A range of world-leading tobacco control measures have already been introduced in Scotland, which are steadily reducing the proportion of people smoking.

“We remain committed to a tobacco-free Scotland by lowering smoking rates in our communities to 5 percent or less by 2034. Achieving this ambitious target will allow us to protect children born since 2013 so that when they turn 21, they will be tobacco-free and will come of age in a Scotland that will remain tobacco-free for generations to come.

“We are considering a range of next steps to reach this target, which will be published as part of our refreshed tobacco action plan in the autumn.”

June 13, 2023

Guantanamera Loses Duo Trademark Lawsuit

Guantanamera has lost a dispute over the Duo trademark with Swedish Match, reports Halfwheel.

The lawsuit alleged that Swedish Match, Sam’s Club and Costco infringed on the Duo trademark with the sale of White Owl Duos.

Judge Jonathan Goodman of the U.S. District Court for the Southern District of Florida ruled that Guantanamera “was able to establish two of seven factors used to determine whether there is a likelihood of consumer confusion among cigar customers; it failed to tip the scales in its favor.” He said the company “concedes that it has no evidence of even a single instance of actual confusion, which is often cited as among the most important of the seven factors.”

“GCC did not provide any survey evidence or expert witness testimony concerning actual confusion or even a likelihood of confusion,” the judge wrote in his ruling. “Given the length of time that the parties’ products coexisted and White Owl duos’ ample sales figures, the court would certainly expect evidence of actual confusion if any consumers were actually confused. But there was none.

“Plaintiff’s failure to come forward with evidence of actual confusion is not from a lack of effort. The president and founder of GCC testified that he and his lawyers actively monitored the marketplace for potential infringers of its Duo mark. The president also testified that he had continuous, daily interactions with his customers and that he had personally visited convenience stores and gas stations on almost a weekly basis throughout the relevant time period. Yet, he admitted that he first learned of White Owl duos cigarillos only through his attorneys in April 2021, a year after their introduction. This factor weighs in favor of Swedish Match.”

June 13, 2023

Streaming Sites Protest India’s Health Warnings

Streaming sites including Amazon, Netflix and Disney are pushing back against India’s tobacco warning rules, stating that they are impossible to implement on streaming sites and that they will impinge on content creators’ freedom of expression, reports Reuters.

India’s health ministry ordered streaming platforms to insert static health warnings during smoking scenes and at least 50 seconds of anti-tobacco disclaimers, including audio-visual, at the start and middle of each program.

According to Reuters, Amazon, Netflix, Disney and Indian streaming platform JioCinema had a discussion on options to push back against the measure, including a legal challenge, as the companies worried that the tobacco rules would require editing millions of hours of Indian and Hollywood content.

In a letter to the Indian government, the Internet and Mobile Association of India (IAMAI) makes clear that because the multilingual content on streaming platforms “is very high … there is a practical impossibility associated with including such warnings across content.”

The IAMAI asked the health ministry to revisit the “onerous” rules. Content descriptors—a label saying “smoking” alongside the title—were more effective, according to the IAMAI. “Disruptions” caused by the new rules are “problematic for creators that put in considerable investments,” according to the group.

Activists welcomed the new rules, saying they would discourage smoking. Cinema and TV require health warnings for smoking and alcohol, but streaming services do not have the same regulations.

Digital platforms should be no different from cinema and TV in terms of health warnings, according to Sanjay Seth from the Sambandh Health Foundation. “They must implement this. It will save lives.”

June 13, 2023

ANDS Creates 99 Percent Recyclable Vape

ANDS has created a disposable vape that is 99.29 percent recyclable, according to Waste Experts, reports UKVIA.

Slix is constructed of an outer casing made of 100 percent recyclable high-grade cardboard with a biodegradable silicone mouthpiece and end piece.

“While the analysis carried out by Waste Experts suggests that our single-use vape is highly recyclable, we will continue to work toward zero waste,” said Marina Murphy, senior director of scientific and medical affairs at ANDS. “We aim to build a high rate of recyclability into all our products by using high-quality recyclable materials and simple construction that allows for highly efficient dismantling. This contributes to a fast, efficient overall recycling process, which reduces waste management costs. This in turn helps to keep product prices competitive, creating a win-win for the environment and adult consumers who value our products.”

“We’re very much on a journey, and by the end of this year, we hope to launch a 100 percent recyclable and recoverable version of Slix, which will reduce the tonnage of waste going to landfill even further,” said Fadi Maayta, president of ANDS. “If these single-use vapes are restricted or banned over environmental fears as is being talked about in some circles—smokers could lose what many believe to be a very convenient, accessible and compelling alternative to conventional cigarettes.”

ANDS is partnering with Waste Experts to create a recycling program.

June 13, 2023

Kaival Releases Details of Acquired Patents

Kaival Brands Innovations Group provided additional details of its recently acquired extensive patent portfolio from GoFire as it looks to expand its current product offerings to explore near-term and long-term revenue opportunities, according to GlobeNewswire.

In the near term, Kaival Brands expects to seek third-party licensing opportunities in the cannabis, hemp/CBD, nicotine and nutraceutical markets as a means of monetizing its new patents. Longer term, the company believes it can utilize the acquired patents to create innovative and market-disruptive products for its growing base of adult consumers, including patent protected vaporizer devices and related hardware and software applications.

The consideration for the purchased patents consisted primarily of Kaival Brands equity securities, consisting of common stock, newly designated Series B Preferred Stock and a warrant to purchase common stock. Importantly, in certain key aspects, the equity consideration was structured in a forward-looking manner with valuations or exercise prices struck at premiums to the current market price of Kaival Brands’ common stock. The weighted price per share of the common stock issued and the common stock underlying the Series B Preferred Stock was $1.53 per share on the May 30 closing date, accompanied by warrants with exercise prices ranging from $3 and $6.

Included in the acquired technologies are patented systems and methods that are designed to overcome common issues regarding reliability and consistent dispensing over the entire life of a cartridge or reservoir as well as improvements to the vaporizing chamber to ensure complete vaporization with minimum residue.

The acquired patent portfolio includes the following: Bluetooth Child Safety App and Mechanical Cartridge Protection; Controlled Delivery; Flavor Delivery and Experience to Last Puff; Leak Proof Design and Removal of Cutting Agents; Authentication System/Counterfeit Protection; Dry Puff Protection; 510 and Pod Compatibility; Product Remaining Indicators; and MHRA Requirements.

The GoFire patent portfolio includes 12 existing patents and 46 pending applications with novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities (i.e., different methods of vaporizing) and child safety. The patents and patent applications cover territories including the United States, Australia, Canada, China, the EPO (European Patent Organization), Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes a proprietary mobile device software application that is used in conjunction with certain patents in the portfolio.

The acquired assets are housed in Kaival Labs, a wholly owned subsidiary of Kaival Brands, which develops new branded and white label products and services in the vaporizer and inhalation technology sectors.

June 12, 2023

Philter Gets $1 Million Investment

Philter Labs secured an AUD1 million ($675,376) investment from Atayf Investments and a warrant for an equivalent investment by the end of 2023, according to PR Newswire. Btomorrow Ventures, the venture capital arm of BAT, originally led the financing round. The allocated funds will further propel R&D initiatives within the company. They will also back the introduction of a heat-not-burn device designed specifically for organic substrates with the ability to eliminate secondhand smoke.

Atayf Investments is the Family Office investment group associated with Charlie (Khalil) Shahin AO, managing director of Peregrine Corp. Peregrine operates the On the Run brand of service stations and convenience stores in South Australia; this privately owned Australian company has a broad reach. It also manages Smokemart and GiftBox tobacconists vape and other retail stores throughout Australia.

Charlie (Khalil) Shahin AO, CEO of Peregrine, said, “We are excited about our investment in Philter. Their unique technology and products address consumer trends in vaping and smoking. I’m especially impressed with the caliber of the management team and their vision to address the secondhand smoke issues.”

Philter holds nine granted utility patents and has filed over a dozen additional patents for advanced technologies that miniaturize the filtration footprint. These patents enable Philter technology to be ubiquitous within any vaping device and any form factor for combustibles.

Philter CEO Christos Nicolaidis added, “We are thrilled about this strategic investment from Atayf Investments Pty Ltd. This relationship expands the global reach of our current products in areas where Peregrine has a strong retail footprint. We are excited about advancing our proprietary technologies that will be very disruptive to the smoking and vaping markets that are growing at 14–27 percent CAGR, based on independent industry research.”

June 12, 2023

Farmer Group Calls for Lower Tobacco Tax

Mushfiq Ali Khan, president of Anjuman-e-Kashtkaran, a farmers’ group, has asked the government of Pakistan to reduce the federal excise duty on cigarettes so the regulated industry can resume purchasing from tobacco farmers, ensuring timely payments and safeguarding farmers’ livelihoods, reports the Pakistan Observer.

A recent hike in tobacco excise taxes has prompted legal tobacco companies to cut production, driving down demand for leaf and prompting some farmers to sell their leaf on the black market. Farmers are not getting fair returns on their crops due to a decrease in sales in the legal industry, according to Khan. High taxes and a decline in sales, he said, have led the regulated industry to limit tobacco purchases.

“On the other hand, the illicit cigarette manufacturing industry offers farmers unfair prices for their tobacco, with no guarantee of timely payment. Faced with this predicament, farmers are left with no choice but to rely on the illegal cigarette industry,” he said.

June 12, 2023