Blog - Tobacco Reporter

Juul Settles More than 5,000 Lawsuits

Juul Labs has settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs, reports The Wall Street Journal. The deal resolves 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.

According to Juul CEO K.C. Crosthwaite, the settlement addresses the vast majority of outstanding litigation facing the company, including two pending bellwether trials that were set to go to court early next year and four broad groups: personal injury plaintiffs, Juul consumers, government entities such as school districts and Native American tribes. Lawsuits brought by several attorneys general are pending.

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 7, 2022

Companies to Post ‘Corrective Statements’

Tobacco companies will have to start displaying signs with “corrective” statements about the health effects and addictive nature of cigarettes at U.S. points of sale in the second half of 2023, according to the Department of Justice (DOJ), reports Fox News. A court order requiring the statements will take effect July 1, 2023, after which tobacco companies will have three months to start posting the statements for 21 months in English and Spanish.

The order “resolves the government’s long-running civil racketeering lawsuit against the largest United States cigarette companies,” according to the DOJ. The racketeering lawsuit was filed in 1999 and ended in 2005; however, the DOJ said the new court order is the last of several corrective remedies related to that case.

Altria Group, Philip Morris USA, R.J. Reynolds Tobacco Co. and four cigarette brands owned by ITG Brands are subject to the order. An estimated 200,000 of 300,000 retail stores in the U.S. that sell cigarettes have agreements with the tobacco companies. The order requires the companies to amend their agreements, requiring corrective statements to be placed at the stores on color signs that are eye-catching. Messaging will include adverse health effects of smoking, the addictive nature of nicotine and adverse health effects of secondhand smoke, among others.

“Justice Department attorneys have worked diligently for over 20 years to hold accountable the tobacco companies that defrauded consumers about the health risks of smoking,” said Associate Attorney General Vanita Gupta. “Today’s resolution implements the last remedy of this litigation to ensure that consumers know the true dangers of the smoking products they may consider purchasing.”

“This is an important moment in the history of cancer control in the United States,” said William Klein, associate director of the National Cancer Institute’s behavioral research program. “Smoking causes about 30 percent of all cancer deaths in the United States, and therefore, the court-ordered corrective statements appearing at the point of cigarette sale will help support our mission to reduce the burden of cancer. We are grateful to our colleagues at the Department of Justice for having completed this significant work.”

December 7, 2022

Sweden Approaching ‘Smoke-Free’ Goal

Smoking in Sweden has fallen to 5.6 percent, making Sweden the only European nation close to reaching the smoke-free goal set by the EU ahead of the 2040 target, Swedish authorities confirmed, according to BusinessWire.

According to participants in an event organized by the Oral Nicotine Commission in Stockholm, Sweden is about to become the first country in the world to be defined as “smoke-free,” representing a share of less than 5 percent of the population smoking.

Sweden’s smoking rates have plunged since the 1980s from 35 percent to below 6 percent. The next lowest smoking rate in Europe is double that of Sweden’s, with the EU average sitting around 23 percent, four times higher than in Sweden.

“If all smokers in the world, some 1.1 billion people, would switch to one of [the] less harmful alternative smoke-free, nicotine-based products, it could prevent disease and save millions of lives worldwide. Sweden has found the fire escape for smokers. We need to work together to repeat the Swedish experience globally to save lives,” said Delon Human, president of Health Diplomats and organizer of the Oral Nicotine Commission event.

“The upcoming Swedish EU presidency is a great opportunity to share their 5 percent success story to other EU countries,” said Karl Fagerstrom, professor, at the event. “We hope that Sweden will be generous with sharing this know-how internationally.”

Speakers at the conference emphasized the need for sound evidence-based policy interventions in tobacco control.

December 7, 2022

U.K. Smoking Levels at All Time Low

U.K. smoking levels have fallen to just 13.3 percent—the lowest since records began—according to new government data that says vaping played a “major role” in the decline.

The latest data from the Office of National Statistics (ONS) shows that the smoking rate for 2021 is down from the previous low of 14 percent in 2020, which means that there are around 6.6 million smokers in the U.K.

The ONS said this was the lowest proportion of current smokers since records started in 2011, based on estimates from the Annual Population Survey.

The report said: “Vaping devices such as e-cigarettes have played a major role in the decrease in smoking prevalence in the U.K.

“In this bulletin, we have reported an increase in e-cigarette use, and organizations such as Action on Smoking and Health (ASH) have reported similar increases in e-cigarettes (vapes) usage among adults in Great Britain.”

In the U.K. as a whole, 15.1 percent of men and 11.5 percent of women smoked, a trend that has been consistent since 2011.

The 25–34 age group had the highest proportion of current smokers (15.8 percent) while those aged 65 and over came in lowest (8 percent).

People without qualifications were more likely to be current smokers (28.2 percent) than those whose highest level of education was a degree or equivalent (6.6 percent).

Among respondents to the ONS survey, 7.7 percent said they currently used an e-cigarette daily or occasionally.

According to the authors, this equates to around 4 million adults in the population, an increase on the estimate from 2020, when 6.4 percent of people reported daily or occasional e-cigarette use.

“This is absolutely fantastic news, and I am delighted that the U.K.’s vaping industry is playing its part in making this happen.”

John Dunne, director general, UKVIA

Tobacco harm reduction advocates were elated by the decline in smoking. “This is absolutely fantastic news, and I am delighted that the U.K.’s vaping industry is playing its part in making this happen,” said John Dunne, director general of the U.K. Vaping Industry Association, in a statement.

“The government must now redouble its efforts to ensure that it gets its 2030 smoke-free ambitions back on track so that smoking can finally be consigned to history.”

Dunne said stakeholders should capitalize on the momentum by reaching out to remaining smokers and giving them the facts that they need to make the switch to vaping. “We must allow vape companies to use agreed health claims and switching messages to encourage adult smokers to switch to e-cigarettes and make full use of the different methods of communication available to the government and public health bodies,” he said.

December 7, 2022

FDA Urged to Expand Menthol Ban

The U.S. Food and Drug Administration should extend the ban on menthol cigarettes to other products, like pipe tobacco and cigarette tubes, according to researchers at the Rutgers Center for Tobacco Studies and Ohio State University, reports EurekAlert!.

“Tobacco companies have rebranded their roll-your-own cigarette tobacco as pipe tobacco to avoid taxes and rebranded flavored cigarettes as flavored cigars to skirt a federal ban,” said Andrea Villanti, deputy director of the Rutgers Center for Tobacco Studies and co-principal investigator of a study published in Tobacco Control discussing the addiction potential of menthol cigarette alternatives. “We have already seen companies advertising pipe tobacco and cigarette tubes alongside cigarettes and filtered cigars. The products we tested in our study are likely to be products that tobacco companies will promote following a ban on menthol cigarettes.”

Research showed that mentholated pipe tobacco and tubes in a roll-your-own cigarette were the most appealing substitutes for menthol cigarettes and resulted in the highest number of indicators for future nicotine addiction. The proposed menthol ban does not include these products, however.

“The present findings suggest that components of menthol roll-your-own products, including menthol rolling papers, cigarette tubes and pipe tobacco, should be included in the menthol cigarette and flavored cigar product standards,” said Theodore Wagener, director of the Center for Tobacco Research at the Ohio State University Comprehensive Cancer Center—Arthur G. James Cancer Hospital and Richard J. Solove Research Institute and corresponding author of the study. “Their absence from this restriction will result in a critical loophole that is already being exploited by the tobacco industry and has the potential to lessen the potential public health benefits of the proposed menthol ban.”

December 7, 2022

Filipino Smoking Rate Decreases

The rate of current tobacco use and smoking among Filipinos aged 15 and older decreased to 19.5 percent, or 15.1 million, in 2021, according to GMA News.

Exposure to secondhand smoke in homes and public places “significantly declined,” according to Vito Roque Jr. from the Department of Health’s Epidemiology Bureau, citing the 2021 Global Adult Tobacco Survey (GATS). The largest decline was in public transportation, decreasing from 37.6 percent in 2015 to 12.2 percent in 2021.

While the quit rate among past 12-month users decreased, the number of adult smokers thinking of quitting because of health warnings increased from 37.4 percent in 2009 to 43.7 percent in 2021.

“Key results from 2009 to 2021 showed a favorable trend in the country’s initiative on tobacco prevention and control. Results show a consistent downward trend in tobacco use prevalence [and] exposure to secondhand smoke,” Roque said.

“These successes may be attributed to the adoption and implementation of tobacco prevention and control health policies and interventions. The results also reflect the effectiveness of the enforced key policies on tobacco taxation, graphic health warnings, protection of bureaucracy against tobacco industry interference and smoke-free environments,” he added.

December 7, 2022

Excessive Tax Rates Boost Illicit Markets

Excessive tax rates on cigarettes induce substantial black and gray market movement of tobacco products into high-tax U.S. states from low-tax states or foreign sources, according to a new report by the Tax Foundation.

New York has the highest inbound smuggling activity, with an estimated 53.5 percent of cigarettes consumed in the state deriving from smuggled sources in 2020. New York is followed by California (44.8 percent), New Mexico (45.5 percent), Washington (41.5 percent), and Minnesota (34.8 percent).

New Hampshire has the highest level of net outbound smuggling at 52.4 percent of consumption, likely due to its relatively low tax rates and proximity to high-tax states in the northeastern United States. Following New Hampshire is Indiana (35.6 percent), Virginia (27.6 percent), Idaho (25.8 percent), Wyoming (24.4 percent), and North Dakota (18.6 percent).

Illinois and New Mexico significantly increased their cigarette tax rate from 2019 to 2020. Both states saw major increases in cigarette smuggling.

“Policymakers interested in increasing tax rates should recognize the unintended consequences of high taxation rates,” the Tax Foundation wrote on its web site. “Criminal distribution networks are well-established and illicit trade will grow as tax rates rise.”

The authors stress that excessive taxation is not the only driver of illicit trade. Measures such as flavor bans and reduced-nicotine mandates, they argue, also have the potential to push tobacco sales into the illegal sphere.

December 7, 2022

Swedish Match Applies for Delisting

The board of Swedish Match said it will apply for delisting of the company’s shares from Nasdaq Stockholm, according to a press release. The last day of trading in the company’s shares on Nasdaq Stockholm will be announced as soon as the company has received confirmation from the exchange.

Philip Morris Holland Holdings, an affiliate of Philip Morris International, declared the public offer for Swedish Match unconditional on Nov. 7, 2022. PMHH controls more than 90 percent of the shares in Swedish Match and has initiated squeeze-out proceedings in respect of the remaining shares in the company.

December 6, 2022

Biden Signs Federal Marijuana Bill

U.S. President Joe Biden officially signed the first piece of standalone federal cannabis reform Friday, according to the National Law Review. The U.S. president signed a marijuana research bill into law that cleared the House in July and the Senate last month.

The act is aimed at providing federal support to facilitate research of cannabis and its potential health benefits. The law gives the U.S. attorney general 60 days to either approve a given application or request supplemental information from the marijuana research applicant.

The Marijuana and Cannabidiol Research Expansion Act also creates a more efficient pathway for researchers who request larger quantities of cannabis.

The act does three things: provides a mechanism for the scientific study of cannabidiol and cannabis for medical purposes; arranges a pathway for the Food and Drug Administration to approve the commercial production of drugs containing or derived from cannabis; and protects doctors, who may now discuss the harms and benefits of using cannabis and cannabis derivatives.

The president remains opposed to federal cannabis legalization, but he campaigned on a number of more modest marijuana reforms, including promoting research, decriminalization and rescheduling cannabis under the Controlled Substances Act.

Biden also issued a mass pardon in October for Americans who have federal marijuana possession cases and directed an administrative review into cannabis scheduling.

December 6, 2022

BAT Nigeria Recognized as Top Exporter

The Nigerian Export Promotion Council (NEPC) recognized BAT Nigeria as a top contributor to non-oil exports to African markets, reports Business Day.

NEPC issues the award based on the pre-shipment inspection reports by the non-oil exporters, according to Ezra Yakusak, executive director and CEO of NEPC.

BAT Nigeria exports to 14 countries in West Africa and Central Africa, generating more than $500 million in revenue. BAT Nigeria is one of the country’s top five non-oil exporters each month and generates and repatriates over $110 million in foreign exchange annually. The company employs, directly and indirectly, more than 350,000 Nigerians.

“The Nigerian Export Promotion Council’s recognition of the volume of our exports to African markets is a testament to BAT’s contribution to the region’s economic growth and development,” said Odiri Erewa-Meggison, external affairs director at BAT West and Central Africa. “We have been involved with Nigeria as well as the West and Central Africa region. We remain committed to advancing the non-oil sector in Nigeria as we create ‘A Better Tomorrow.’”

Non-oil exports accounted for 11.32 percent of 2021 exports in Nigeria.

December 5, 2022