Blog - Tobacco Reporter

Ukraine Steps Up Crackdown on Illicit Trade

Since the start of the war with Russia, Ukraine has dismantled at least six illegal cigarette factories, reports EUreporter. These illegal facilities were found to be well-equipped operations that used relatively new cigarette machinery.

When Ukrainian President Volodymyr Zelensky took office in 2019, he announced an ambitious agenda to combat the illicit tobacco trade, stating that defending a 1,500 km border with the European Union against cigarette smuggling would be a key task as illicit tobacco trade has close connections to criminal activity, organized crime and other areas of black market trade.

However, since Ukraine’s war with Russia began in February 2022, illicit tobacco trade increased due to factors including the deteriorating economic situation, disruption of logistical channels, lower purchasing power due to inflation and a tobacco product excise tax increase. Due to the illegal cigarette trade, Ukraine has estimated that it lost over €375 million ($443.3 million) in 2021 and almost €500 million in 2022.

Other methods to battle illicit trade have included central coordination at the highest administrative level, intensified cooperation with EU member states, the strengthening regional and international collaboration, the vetting of the civil service, stronger control of customs and border inspectors, strengthening of police forces and legislation, and awareness campaigns for consumers.

May 8, 2023

‘BAT North Korea Trade Was Legal in Singapore’

British American Tobacco’s Singaporean affiliate did not break local laws when it sold cigarette components to North Korea, despite receiving a multi-million dollar fine in the U.S. for flouting North Korean sanctions, reports The Straits Times.

In April, BAT and its indirect subsidiary in Singapore agreed to pay U.S. authorities $635.24 million plus interest to resolve investigations into suspicions of sanctions breaches concerning business activities relating to the Democratic People’s Republic of Korea between 2007 and 2017.

North Korea is subject to sanctions by the United Nations and individual countries for developing nuclear weapons, money laundering and human rights violations, among other activities.

According to the Straits Times, Singapore authorities became aware in 2018 that BAT Marketing Singapore was involved in selling cigarette components to the Democratic People’s Republic of Korea (DPRK), but stopped sales since June 2017—five months before Singapore implemented the UN sanctions.

The authorities concluded that the company did not breach Singapore’s UN regulations. “The trade of cigarette components with the DPRK was not prohibited under our laws at that time,” the city’s police were quoted as saying by the Straits Times.

Today, trade sanctions against North Korea make it a crime for anyone in Singapore, as well as Singapore citizens based overseas, to supply, sell or transfer designated export items to anyone in North Korea, whether directly or indirectly.

Those found guilty of doing so can be fined up to SGD100,000 ($75,473) or three times the value of the goods that were dealt with, whichever is greater. They can also be jailed for up to two years or both.

May 8, 2023

Zinwi to Hold Flavoring Event at UK Vapor Expo

Zinwi Biotech, a major Chinese e-liquid manufacturer, has announced it will bring its Good Flavor products to the UK Vaper Expo from May 12 – 14 in Birmingham. Attendees of the occasion will have the opportunity to witness firsthand Zinwi’s Good Flavor and will be able to customize their own flavors during the event.

“Zinwi’s products are known to be equivalent to three keywords in the industry: high return to flavor, high smoothness and high stability,” stated to a Zinwi spokesperson. “The primary reason behind the ‘high return to flavor’ characteristic is the stringent fragrance selection process.”

The “high return to flavor” concept is the requirement that each component of Zinwi’s e-liquids to have the highest levels of quality and purity. One of the most important components of an e-liquid is fragrance and the fragrance selection process begins in Quality Control where Zinwi analyzes a fragrance’s physical and chemical indicators and the legality of the components used, according to the spokesperson.

“It is then followed by our sensory evaluation team to evaluate the richness and purity level of the fragrances,” the spokesperson said. “The samples and the finished products will then be evaluated by Quality Control to ensure the highest level of quality of the e-liquid after the fragrances have been added to the products in the testing and manufacturing stage.”

Another reason Zinwi’s e-liquid has an enhanced flavor profile is the company’s Atomization Technology Research Center, which has self-developed nicotine salts and the sweeteners used in the e-liquids to ensure the highest quality of those components of the e-liquid formula, according to the spokesperson.

“Nicotine salt has been delicately developed taking into close consideration the stirring time, the temperature, and the amount of nicotine added in combination with other components such as benzoic acid. The diverse range of sweeteners are also developed to match different vaping devices, for example, different puff-range disposable devices and ceramic core vaping devices,” the spokesperson explained.

“Sweeteners can easily affect the flavor either to be ‘too sweet’ or ‘not enough sweet.’ Having a diverse range of sweeteners can avoid the “too sweet” or “not enough sweet” challenge and help the finished products to maintain the ‘high return to flavor’ characteristic.”

Additionally, Zinwi’s flavoring team are some of the most experienced in the industry. Apart from flavorist’s own flavoring experiences, Zinwi’s flavoring team together has created over 50, 000 formulas, and hundreds more are added every day on average.

“Zinwi’s good flavor products are not attributed by one single factor,” said the spokesperson. “It is the combined factors including the raw materials selection, the self-developed e-liquid components such as nicotine salts and sweeteners, the quality control procedures and the well-trained flavoring team that guarantee the good flavor.”

Established in 2016 and headquartered in the Guangming District of Shenzhen, China, Zinwi Biotech is a high-tech company that specializes in providing integrated e-liquid solutions including R&D, production and sales services to global e-cigarette manufacturers and brands. Due to its strong R&D capabilities, stringent quality control procedures and premium client network, Zinwi has become the world’s leading integrated e-liquid solutions provider.

May 8, 2023

Pakistan Urged to Stick with Tax Hike

The government of Pakistan should stick with its decision to significantly increase the federal excise duty on cigarettes, according to Sana Ullah Ghumman, general secretary and director operations of Pakistan National Heart Association reports Business Recorder.

Ghumman suggested that multinational tobacco companies may reduce production after the government announced this tax hike in the mini budget presented earlier this year. The proposed tax increase would force the Pakistani smokers to spend around an average of 10 percent of their monthly incomes on cigarettes, according to estimates.

The increase is expected to generate an additional PKR60 billion ($212.57 million) in revenue for Pakistan’s treasury.

Citing a report by Our World in Data showing that smoking causes millions of premature deaths every year, Ghumman argued that higher taxes on tobacco products are the only solution to protect youth from the harmful effects of smoking.

May 8, 2023

Firms Hiked Prices Without Consultation

Jordanian Minister of Industry and Trade, Yousef Al-Shamali, has accused tobacco companies of raising prices without government consultation, according to reports Jordan News citing Al-Mamlaka TV.

The minister said that the government would examine the production costs of the tobacco industry and use legal tools if necessary. Meanwhile, the Income and Sales Tax Department has confirmed that no new taxes will be imposed on any commodity or service, including tobacco, as part of the government’s policy not to raise taxes and financial burdens on citizens.

Jordanians have been complaining about rising tobacco product prices despite government assurance that taxes will not be raised and no new taxes will be imposed.

Dirar Al-Harasees, chairman of the financial committee in the lower house, expressed surprise by the hike as well, calling on the government to clarify the reason behind the increase and questioning who decided to raise the prices.

Manufacturing companies are not authorized to raise prices unilaterally without approval of the House of Representatives to impose new taxes, according to Harasees.

May 8, 2023

Malaysia to Sell Only Sealed Bottles

The Malaysian Substance Abuse Council (Masac) has recommended that only locally made vape liquids in sealed glass bottles be allowed for sale in the country, reports The Star. Using glass bottles will minimize the risk of undesirable substances being added, according to Masac’s secretary-general Raja Azizan Suhaimi.

A joint study by Masac, the Asian Center for Research on Drug Abuse and Universiti Sains Islam Malaysia found that teenage girls are increasingly using vape liquids laced with psilocybin, a psychoactive compound found in fungi such as “magic mushrooms.”

Raja Azizan suggested that the age limit for vaping should be raised from 18 to 21 to minimize the abuse of vape liquids, which may contain drugs. So far, only 10 manufacturers producing liquid nicotine are registered with the Customs Department, despite the registration deadline ending on April 30, 2023.

Masac also suspects that the three 13-year-old girls who were allegedly gang-raped by four teenagers in Kota Kinabalu on April 26, 2023, may have been given a vape liquid laced with psilocybin. The Malaysian government attempted to regulate the use of vapes among youth in October 2022 through the Tobacco and Smoking Control Bill, but it was referred to a Special Parliamentary Select Committee for refinement.

Prime Minister Datuk Seri Anwar Ibrahim revealed during the revised Budget 2023 in February that vape liquids containing nicotine are still illegally sold in the country with estimated sales of MYR2 billion.

Meanwhile, Health Minister Zaliha Mustafa has stated that the Generational Endgame Bill—a piece of legislation that aims to gradually raise the smoking age until it covers the entire population—will be expedited and retabled.

May 8, 2023

Vietnam Urges Stricter Control of New Products

The Ministry of Health in Vietnam has called for stricter control of e-cigarettes and heated tobacco products that are not licensed in the country, reports VnExpress International.

In a recent document addressed to various government ministries and committees, the ministry asked for increased communication about the dangers of such products and for stronger measures to be taken against their purchase, sale, and trading.

Despite not being allowed in Vietnam, these products are becoming increasingly popular and are widely available on the internet. According to statistics from the World Health Organization, a growing number of Vietnamese students are using e-cigarettes, with 2.6 percent of those aged 15-17 vaping in 2019, and a 2022 survey revealing that 3.5 percent of those aged 13-15 use e-cigarettes.

There have been reports of students being poisoned by nicotine and liquids used in these products. The ministry also highlighted the risk of these products leading to social problems and addiction-related crime.

May 7, 2023

Cavendish Plans More Shisha Auctions

Cavendish Lloyd Zimbabwe (CLZ) plans to hold two more shisha auction sales, according to NewsDay.

CLZ is the first company to hold an auction sale of shisha tobacco.

“This tobacco has extremely low nicotine,” said Koen Monkau, CEO and founder of Cavendish. “So our target with the farmers is to grow a maximum nicotine crop of 1 percent while the traditional crop that you see is traditionally anywhere between 2 percent and 3 percent with sugars ranging from, let’s say, 14 percent to 20 percent. This is less than 1 percent nicotine and up to 30 percent sugar.”

“We are going to do three or four (auction sales) in total, and this is number two,” he added.

Cavendish sold between 60 bales and 80 bales on the first day at auction, each bale weighing between 90 kg and 100 kg. Sales increased to 300 bales on the second auction day.

The company is working with about 13 farmers who supply the crop.

“The cost of growing is about half that of the traditional crop. If you look at a commercial farmer in Zimbabwe, the cost of growing per hectare of the traditional tobacco is anything between US$12,000 and $13,000, and this (shisha) is about $6,000 to $7,000, so it is about half the cost of growing. However, the yield per hectare is slightly less,” Monkau said.

“So, when you look at the return on investment for the farmer, it’s definitely much better than the traditional crop.”

Cavendish is targeting the European and Arab markets with the final product. “The original source of this style of tobacco is Europe, but from there, it’s sold worldwide. So we are basically competing with countries such as France, Poland and Germany. These are the major producers of this style of tobacco in Europe. And we see that there is stabilization or a slight decline in what they are growing for whatever reasons, so that means there is an opening for us to enter that market as well,” Monkau said.

“For the last two seasons, there has been a shortage of this style of tobacco. Traditionally, most of this tobacco is being used in the Middle East because that is where most shisha is coming from. But what we see now, even in Africa or Zimbabwe, recently, a small manufacturer started to make a small product that is going into the water pipe.”

May 5, 2023

Jordan Citizens Complain of High Tobacco Prices

Citizens in Jordan have raised concerns about increasing tobacco product prices despite government assurance that taxes will not be raised and no new taxes will be imposed, reports Jordan News.

The price of tobacco products has reportedly increased significantly without prior warning to consumers. Many smokers have expressed frustration, stating they cannot afford to pay the new prices and criticizing the government for failing to control the price increase.

Dirar Al-Harasees, chairman of the financial committee in the lower house, expressed surprise by the hike as well, calling on the government to clarify the reason behind the increase and questioning who decided to raise the prices.

Manufacturing companies are not authorized to raise prices unilaterally without approval of the House of Representatives to impose new taxes, according to Harasees.

May 5, 2023

Israel’s Mulls Vaping Restrictions

Israel’s health ministry discussed the possibility of banning marketing of electronic cigarettes, according to i24 News. The ministry said, “options are being examined due to two difficult cases and the widespread phenomenon,” referring to the increase of youth using e-cigarettes.

The ministry is considering the possibilities of banning the marketing of electronic cigarettes altogether, banning only those flavored or requiring dissuasive images on packaging.

May 5, 2023