Blog - Tobacco Reporter

KT&G Recognized for Sustainability

KT&G received the Prime Minister’s commendation in the general environmental, social and governance (ESG) sector at the 2022 Sustainable Management Government Award ceremony at the Korea Chamber of Commerce and Industry.

The Government Award for Sustainable Management is the only government award in the sustainable management sector given by the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups. It is awarded to institutions or organizations that have contributed to the expansion and leadership of sustainable management, thereby enhancing industrial competitiveness, creating social values and generating achievements.

KT&G was recognized for its efforts to establish and execute a mid-term to long-term vision of environmental management that extends throughout the value chain; for receiving the Equal Salary Certification from the European Commission for the first time for a listed company in South Korea; and for evaluating and supporting the ESG of partner companies to build partnership.

“We are actively promoting the ESG management at the group level to enhance long-term corporate value,” said Kim Jin-han, director of KT&G’s strategic planning, in a statement. “We will continue to strive for mutual growth with our shareholders and other stakeholders through various sustainability management activities.”

December 13, 2022

Kiwi Lawmakers Pass Generational Ban

Lawmakers in New Zealand passed legislation today that makes it illegal to sell tobacco to anyone born on or after Jan. 1, 2009, reports the South China Morning Post.

“There is no good reason to allow a product to be sold that kills half the people that use it,” Associate Health Minister Ayesha Verrall told Parliament, adding that New Zealand’s healthcare system would save billions of dollars in the cost of treating sick smokers.

New Zealand’s pioneering law means that the minimum age for buying cigarettes will increase year after year. For example, somebody trying to buy a pack of cigarettes 50 years from now would need to prove they were at least 63 years old.

In addition to its age provision, the law will also cut the number of retailers allowed to sell tobacco by 90 percent and require companies to reduce the level of nicotine in combustible products.

The new legislation is part of New Zealand’s drive to become “smoke-free” by 2025, a situation in which fewer than 5 percent of the population smokes, according to the government definition.

Opponents of the legislation said the bill would force many small corner shops, known in New Zealand as dairies, out of business because they would no longer be able to sell cigarettes. They also predicted it would boost illicit tobacco sales.

“Denying adults the right to buy cigarettes legally will infantilize future generations and could make cigarettes more [and] not less desirable.”

Simon Clark, director, Forest

Smokers’ rights group Forest called the generational tobacco ban “absurd.”

“Banning younger adults from buying cigarettes legally won’t stop people smoking. It will merely drive the sale of cigarettes underground with consumers buying unregulated cigarettes on the black market, like any other prohibited product,” said Forest Director Simon Clark.

“Absurd policies like this are what happens when governments set targets for countries to become smoke-free,” he added. “Denying adults the right to buy cigarettes legally will infantilize future generations and could make cigarettes more [and] not less desirable.”

The share of people in New Zealand who smoke cigarettes daily has dropped to an all-time low of 8 percent, down from 9.4 percent this time last year, the annual NZ Health Survey revealed in November. By comparison, OECD data shows 25 percent of French adults smoked in 2021.

The decline in smoking has been accompanied by a rise in vaping. Some 8.3 percent now use e-cigarettes daily compared with 6 percent 12 months ago.

22nd Century Group, an agricultural biotechnology company that has invested heavily in reduced-nicotine cigarettes, applauded New Zealand’s plan to lower nicotine levels. “This policy is exactly what we were hoping for and more, particularly considering the inclusion of ‘testing variance’ in evaluating nicotine content,” said John D. Pritchard, vice president of regulatory science at 22nd Century, in a statement.

By including testing variance in the maximum permitted nicotine content of smoked tobacco products, New Zealand is compelling cigarette makers to target an average value of approximately 0.5 mg of nicotine per gram of tobacco content, which, according to Pritchard, also happens to be the level achieved by 22nd Century Group’s VLN products.

December 13, 2022

Avail Loses MDO Case

A U.S. court rebuffed Avail Vapor’s appeal of the Food and Drug Administration’s refusal to allow its products on the market, reports Reuters. The ruling is the latest in a series of court orders upholding the agency’s regulation of the e-cigarette industry.

The 4th U.S. Circuit Court of Appeals on Dec. 12 found that the FDA had acted within its authority in rejecting Avail Vapor’s premarket tobacco product applications.

In 2016, the FDA determined that e-cigarettes were subject to its regulation and gave manufacturers until 2020 to apply for approval of vapor products.

Avail Vapor sought approval for its products in 2020, telling the FDA that they could help smokers quit by switching to e-cigarettes. The company said it had measures in place that would ensure that its liquids would not be sold to minors.

The FDA denied the application in 2021, saying that the company had not presented long-term studies supporting its claim that its products, which included fruit flavors, were more effective at helping smokers quit than tobacco-flavored liquids, which the agency has said are less appealing to minors.

Avail lost an administrative appeal and then petitioned the 4th Circuit to overrule the agency. The company argued that the FDA failed to inform applicants in 2019 that they would need long-term studies. It also said the agency was obligated to consider the sales plan.

Circuit Judge J. Harvie Wilkinson wrote that Avail “encourages us to neglect the forest for the trees” by focusing on procedural objections rather than the FDA’s mandate to protect public health.

The FDA has denied more than 55,000 applications from e-cigarette products. Those denials have been previously upheld by the D.C. Circuit, 3rd Circuit and 7th Circuit.

December 13, 2022

Juul Settles Marketing Suit With Pennsylvania

Juul Labs has agreed to pay Pennsylvania $38.8 million to end the state’s claims that the company targeted young people with its products, state Attorney General Josh Shapiro announced in a release. As part of the deal, Juul denied any wrongdoing.

“Juul knowingly targeted young people with tactics similar to the tobacco companies’ playbook,” said Shapiro. “They disregarded their growing audience of young users, taking no action as their market share skyrocketed on the backs of American kids. About 13 percent of Pennsylvania students have vaped in the past 30 days—this settlement is only the beginning of keeping our kids safe from the dangers of vaping.”

Filed in Philadelphia County court, the Pennsylvania settlement forbids Juul from marketing its products near schools and playgrounds, advertising at events that include kids or in media outlets where audiences are made up of 15 percent or more of kids.

“This settlement is a continuation of Juul Labs’ progress to resolve issues from the past. We applaud the attorney general’s plan to deploy resources to address underage use in the commonwealth,” the company said in a statement. “The terms of the agreement are aligned with our current business practices, which we started to implement after our company-wide reset in the fall of 2019.”

Earlier this month, Juul settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs, resolving much of the legal uncertainty that had driven the company close to bankruptcy.

Juul announced on Dec. 6 that it has secured an investment to cover the cost of the settlement. The company has been in talks with two early investors to fund a bailout that would cover legal liabilities.

A pioneer in the vaping business, Juul Labs has gone from dominating the U.S. e-cigarette market to fighting for its survival in a relatively short time.

Following its initial success, the company quickly came under regulatory scrutiny over its marketing practices. Critics blame Juul Labs for contributing to an “epidemic” of underage vaping.

Thousands of lawsuits have been filed against Juul over the past several years, alleging that the company marketed its e-cigarettes to children. Juul has said it never marketed to underage users.

In September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products.

Juul’s e-cigarettes were briefly banned in the U.S. in late June after the Food and Drug Administration concluded that the company had failed to show that the sale of its products would be appropriate for public health. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul’s marketing application.

In October, Juul published the details of its marketing denial order appeal. In late September, Juul shareholder Altria Group exercised the option to be released from its noncompete deal with the e-cigarette maker.

December 13, 2022

Officials Urged to Fix Vaping Misinformation

A group of public health experts along with the attorney general of Iowa have asked the U.S. Centers for Disease Control and Prevention (CDC) and the U.S. Surgeon General to correct misinformation overstating the dangers of e-cigarettes.

In an editorial published Dec. 12 in Addiction, the authors cite the 2019 outbreak of EVALI and the Surgeon General’s 2016 youth vaping report, which claims that nicotine vaping is a gateway to smoking.

The authors take issue with the CDC’s failure to amend the name EVALI (e-cigarette or vaping product use-associated lung injury) even after it became clear that the health problems were brought about by vitamin E acetate (mixed with cannabis oil by black market sellers) rather than nicotine vapes.

“Smokers are still twice as likely to incorrectly identify e-cigarettes as the cause of a serious lung disease outbreak in 2019 than to correctly identify marijuana vape products contaminated by vitamin E acetate as the cause,” said lead author Michael Pesko of Georgia State University in a press note. “Because many smokers then falsely believe e-cigarettes to be as or more dangerous than cigarettes, the misinformation reduces smoking cessation that would otherwise occur. Population health suffers as a result.”

The Surgeon General’s gateway claim, meanwhile, is simply untrue, according to the authors. “Significant evidence now exists that this association between vaping and smoking is not causal, which is a source of confusion for the lay public and healthcare professionals,” wrote Georgia State University health economist Pesko.

“The lack of causation is underlined by real-life data collected since the SG report’s publication. Even as youth vaping hit its peak in 2019, youth smoking was sinking rapidly, and that decline has continued.”

December 13, 2022

Top Court Clears Way for California Flavor Ban

The U.S. Supreme Court on Dec. 12 refused to block California’s ban on flavored tobacco, clearing the way for the law to take effect next week, reports The New York Times. Consistent with its practice when ruling on emergency applications, the court gave no reason for its decision.

Originally passed by lawmakers in 2020, California’s flavor ban was put on hold after opponents gathered enough signatures to force a referendum on the measure.

After Californians voted to uphold the law on Nov. 8, tobacco companies challenged it in court, arguing that only the federal government can ban tobacco flavors, as the Family Smoking Prevention and Tobacco Control Act gives the U.S. Food and Drug Administration authority to regulate tobacco.

State officials responded that the federal law was meant to preserve the longstanding power of state and local authorities to regulate tobacco products and to ban their sale.

The tobacco companies also argued that they would suffer “irreparable harm” from being shut out of one of the country’s largest markets. Small retailers, they argued, would potentially have to lay off employees and close. The plaintiffs further noted that menthol cigarettes make up about a third of the cigarette market and are disproportionally smoked by people of color, suggesting that that group would suffer disproportionally from a flavor ban.

In their Supreme Court brief, state officials urged the justices not to delay the law any longer. “The unsuccessful referendum campaign has already delayed the implementation” of the law for nearly two years, they wrote, “allowing children and teenagers across the state to be initiated into the deadly habit of tobacco use via flavored tobacco products throughout that period.”

Previously, the 9th Circuit Court of Appeals denied the tobacco companies’ request to block the law pending appeal.

Industry critics welcomed the Supreme Court ruling. “The tobacco companies’ battle against the California law shows once again that they haven’t changed and are lying when they claim to care about anything other than their bottom line,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, in a statement.

The California flavor ban applies to flavored e-cigarettes, menthol cigarettes and flavored cigars but exempts loose-leaf tobacco, premium cigars and shisha tobacco.

The state joins Massachusetts and the District of Columbia in ending the sale of flavored tobacco products, including flavored e-cigarettes, menthol cigarettes and flavored cigars. Three other states—New Jersey, New York and Rhode Island—prohibit the sale of flavored e-cigarettes. With local laws included, 25 percent of the U.S. population will now be covered by laws ending the sale of flavored e-cigarettes.

December 13, 2022

Black Market Thrives in Bosnia and Herzegovina

About 49 percent of citizens in Bosnia and Herzegovina buy tobacco products from the black market, according to 2020 research data published by the Center for Policies and Management, a Sarajevo think tank organization that deals with European integration and public administration reform, reports the Sarajevo Times.

The legal sale of cigarettes decreased by 7.6 billion cigarettes per year from 2008 to 2020, though the number of smokers did not significantly decrease. The Liberal Forum, a nongovernmental organization, suggests that that means smokers turned to the black market for cheaper products.

Illegal cigarettes and tobacco are often smuggled into Bosnia and Herzegovina from Montenegro, Serbia and Albania; Bosnia and Herzegovina is a transit country on the international smuggling route leading to European Union countries, according to the Indirect Tax Administration.

The Bosnia and Herzegovina prosecutor’s office filed indictments against 13 people this year for illegal tobacco product trade, three of whom were border police members.

December 12, 2022

Egypt Shops Must Formalize Operations

Egypt has implemented a law requiring unlicensed shops to legalize their businesses and putting restrictions on cafes serving shisha, reports Ahram Online.

The new law requires previously licensed shops to make a one-time payment of half the newly required fees to receive a permanent license. Licensed shops will have a two-year grace period to submit their permanent licenses.

New businesses will receive their licenses within 60 days of applying.

A fine of EGP20,000 ($811.19) to EGP50,000 will be imposed on unlicensed shops and those failing to adhere to the law will be sentenced to prison, according to the Cairo government.

The law will specify fees based on the location of the shops as well as social and economic dimension of the shops’ activities.

The law also puts restrictions on cafes serving shisha. Cafes and restaurants serving shisha must license their shops or face fines of EGP10,000 to EGP20,000.

These cafes and restaurants must be located at least 1,000 meters away from places of worship, schools, educational institutions and fuel stations. They must also keep their doors closed except for entering and exiting, and they cannot serve shisha in more than 50 percent of their total area.

Shop floors cannot be covered in flammable materials and used coals must be stored in specialized ceramic or metal containers. Stored coal must be located in isolated places.

December 12, 2022

Law Review Urges Action to Protect Youth

While Canada’s Tobacco and Vaping Products Act (TVPA) is making progress toward meeting the objectives it set out in relation to vaping, more works remains to be done, particularly in terms of protecting youth, according to the first review of the legislation, which was recently tabled in Parliament by Minister of Mental Health and Addiction and Associate Minister of Health Carolyn Bennett, reports Health Canada.

The review identifies areas for potential action, including examining access to vaping products by youth, communicating the potential benefits of vaping as a less harmful source of nicotine for people who smoke and completely switch to vaping as well as the health hazards, strengthening compliance and enforcement, and addressing scientific and product uncertainty to better understand the vaping product market and the health impacts of vaping.

“Vaping products offer the 3.8 million Canadians who smoke a less harmful source of nicotine than tobacco products and do help people to stop smoking,” said Bennett. “These products, however, are not without risk—particularly to youth and people who do not smoke cigarettes. This first legislative review of the Tobacco and Vaping Products Act is a valuable opportunity to take stock of the progress we’ve made to address youth vaping—but there is more to do. Our government will continue to work to put the right safeguards in place to protect young people from the harms of vaping and nicotine addiction.”

The TVPA was implemented in 2018 to respond to the increasing availability of vaping products in Canada and to help ensure that Canadians would be informed about and protected from the health hazards associated with vaping. It regulates the manufacture, sale, labeling and promotion of vaping products sold in Canada.

The TVPA includes a requirement for a legislative review three years after coming into force and every two years thereafter to provide a means to examine and respond to tobacco-related and/or vaping-related issues that may emerge over time.

The review was informed by a public consultation that ran from March 16, 2022, to April 27, 2022.

December 12, 2022

Push to Close Tobacco Advertising ‘Loophole’

U.S. Senators Jeanne Shaheen and Richard Blumenthal reintroduced the No Tax Subsidies for E-Cigarette and Tobacco Ads Act, which would end a tax provision that allows manufacturers to claim federal tax deductions for the cost of advertising for e-cigarettes and tobacco products, according to Shaheen’s website. Senators Brown, Reed, Durbin, Van Hollen and Merkley also joined in reintroducing the bill.

“E-cigarettes are fueling a public health crisis—particularly among teenagers. E-cigarette and Big Tobacco companies must be held responsible for deliberately advertising these dangerous products to youth,” said Shaheen. “It’s outrageous that a tax loophole allows companies to write off the costs of their ads, having taxpayers foot the bill and subsidize the advertising of harmful products. That’s why I’m reintroducing legislation to close this loophole and hold e-cigarette companies accountable for their harmful marketing practices.”

“Old regulatory loopholes are helping Big Tobacco addict more Americans to lethal products,” said Blumenthal. “This bill will close a gaping tax loophole, putting an end to Big Tobacco’s tax write-offs of dangerous ads and preventing young people from starting up a deadly addiction.”

The bill also bars tax deductions for advertising expenses related to tobacco cigarettes, cigars, snuff, chewing tobacco, pipe tobacco and roll-your-own tobacco.

December 12, 2022