Blog - Tobacco Reporter

Belgium to Curb Tobacco Vending Machines

Belgium will prohibit tobacco vending machines in bars and restaurants but not in supermarkets, reports The Brussels Times, citing an Oct. 19 decision by the country’s Parliamentary Committee on Public Health.

The federal government backed a bill by Federal Health Minister Frank Vandenbroucke to ban tobacco vending machines in the hospitality industry. Federal MP Els Van Hoof, who paved the way with a similar bill in 2016, stressed that the ban should make it harder for minors to access cigarettes.

Since 2006, tobacco vending machines in Belgium can be accessed only with a special proof-of-age coin that may not be given to minors. In reality, however, the coins have been widely available, including to underage buyers.

The ban will take effect after a yet-to-be-determined transition period to give the industry time to remove the machines.

With its new rule, Belgium will join the Netherlands, the U.K. and France, among other countries that restrict mechanical sales of tobacco products.

October 26, 2022

Greenbutts to Attend COP27

Greenbutts will be joining the official Canadian delegation at COP27, the United Nations Climate Change Conference of 2022.

The company will bring attention to the issue of plastic pollution caused by cigarette filters and highlight its ability to assist in the transition away from cellulose acetate filters used in the global tobacco industry, a problem the U.N. describes as “the most discarded waste item worldwide.”

“We are honored to be invited to participate in COP27 as part of the official Canadian delegation, where we intend to shed meaningful light on the global crisis of single-use plastic cigarette filters and offer an impactful solution,” said Luis Sanches, chief strategy officer of Greenbutts, in a statement.

“Greenbutts is in a unique position to deliver a sustainable innovation that can drastically decrease the amount of harmful plastic that is discarded every day and ends up in our oceans. Our IP and technology have advanced greatly, and we believe that we can now offer this solution to the global tobacco industry for mass implementation, effectively ending the reliance on single-use plastic filters,” said Tadas Lisauskas, CEO of Greenbutts.

Since 2010, Greenbutts has worked with R&D institutions, tobacco companies and industry experts to develop biodegradable filter technology. The company has developed and patented a “zero-plastic” filter that is 100 percent biodegradable and water dispersing.

This year’s COP will take place in Sharm el-Sheikh, Egypt, Nov. 6–18.

October 26, 2022

Announcing the 2022 Golden Leaf Awards

Tobacco Reporter presents its 2022 Golden Leaf Awards.

It’s hard to exaggerate the extent of the changes that have taken place in the nicotine business since the Golden Leaf Awards were conceived more than 15 years ago. When the program debuted in 2006, the news headlines in Tobacco Reporter were mostly about consolidation, privatization and litigation—topics associated with a controversial legacy business playing defense in an increasingly hostile environment.

Fast-forward to 2022 and the landscape has changed completely. Many of our columns are now dedicated to tobacco harm reduction—a goal that has become feasible in the wake of the breathtaking innovations that have occurred in recent years (which are eloquently described in Tobacco Reporter’s April 2022 special innovation issue). The transformation has been so great that a reader from 2006 would likely struggle to recognize many of the devices evaluated in our new products section.

Environmental, social and governance (ESG) topics also feature prominently in our news coverage today, reflecting a societal shift in attitudes. Corporations are not only more aware of their societal responsibilities but are also prepared to make a difference. The Golden Leaf Award’s exclusive sponsor, BMJ, for example, has developed impressive programs to reduce the amount of water and energy used in its papermaking process, to source its wood pulp sustainably and to meaningfully engage its employees (for more information, visit www.bmjpaperpack.com).

To better reflect these changing industry dynamics, the Golden Leaf Awards will place greater emphasis on innovation and ESG initiatives going forward. Starting this year, our judges will recognize initiatives designed to deliver a brighter future not only for the manufacturers and consumers directly involved but also for society at large.

In the 2022 edition of our awards program, we recognize three companies for various types of innovation and one company for its ESG initiatives. The winners accepted their trophies during a ceremony at the Four Seasons Hotel in Georgetown, Washington DC. We hope that you agree with our judges that the awarded products and programs hold significant potential to help deliver what one well-known multinational on the forefront of our industry’s transition describes as “a better tomorrow.”

ALD Group has earned a Golden Leaf Award for its Green Cig, an eco-friendly disposable vaping solution.

Driven by regulatory and competitive developments, disposable e-cigarettes have captured significant market share in recent years. In the United States alone, they now account for about a third of the vapor market, according to data from the market research firm IRI. But while disposable products offer convenience, they also raise environmental issues.

Alert to societal concerns about mounting waste, ALD Group has developed an e-cigarette with components that are easy to detach and recycle.

By using biodegradable plastic materials, including PLA and PBAT, for the Green Cig shell and eco-friendly paper-plastic materials for its packaging, ALD Group has managed to decrease the carbon footprint of its vaporizer by approximately 36 percent over that of similar products—without compromising on taste and flavor.

The degradation rate of the bioplastic component reaches up to 80 percent, according to ALD Group, while battery life is prolonged by sophisticated technology that prevents dry burning.

Recyclable parts of the Green Cig include its battery, pressure sensor, pogo pin and atomizer. To promote pod recycling, ALD Group has partnered with a third party to develop a program aimed at giving discarded pods a second life.

Pyxus Agriculture Malawi (PAM) has earned a Golden Leaf Award for its efforts to promote responsible fuel production in Malawi.

Deforestation is a challenge in many tobacco origins. In Malawi, the main contributors are agriculture and fuel production. About 7 percent of Malawi’s wood is used for curing tobacco or as a construction material for barns.

In recent years, Malawi has been transitioning from wood as a fuel source to charcoal, which is easier to obtain than electricity or gas in the region. Unfortunately, the systems currently used to produce charcoal are unregulated and threaten woodlands.

PAM is addressing this threat by utilizing existing business structures to produce charcoal responsibly. The company has 15 forest plantations across Malawi that supply firewood to tobacco farmers contracted by its Alliance One Tobacco Malawi subsidiary. After harvesting, there is often wood left that does not meet the criteria for tobacco curing. Now, PAM is using this wood to produce charcoal.

The company’s existing track-and-trace technology allows the fuel to be traced back to the source with assurance that any lumber used in the manufacturing process will be replenished within the plantation.

The project not only supports Malawi’s goal to transition from unsustainable wood fuel to sustainable wood fuel but also helps conserve indigenous woodlands. As of November 2021, the initiative was estimated to have saved at least 650 slow-growing indigenous trees. By 2024, PAM aims to be at a level of production that will save more than 12,100 trees per year.

FEELM has earned a Golden Leaf Award for its FEELM Max, the world’s first ceramic coil disposable pod solution.

Almost all disposable pods on the market contain traditional cotton coils, which can compromise flavor, generate a burnt taste and produce hazardous substances due to inaccurate temperature control.

Using FEELM’s updated ceramic coil technology, the FEELM Max offers improved flavor consistency, more puffs and reduced harshness through smaller aerosol particles.

Most importantly, the FEELM Max offers greater potential for harm reduction. The addition of a platinum group element to the ceramic coil’s metallic heating film improves the anti-corrosion performance and reduces the emission of heavy metals.

A 24 karat gold coating of conductive components enhances resistance to oxidation while a ceramic substrate resistant to temperatures of over 1,000 degrees Celsius prevents burns and the creation of hazardous substances.

The introduction of the FEELM Max fits into the company’s mission to enhance the experience for vapers around the world. Founded in 2006, FEELM’s parent company, Smoore, has grown into the world’s leading atomization technology firm, with a 22.8 percent share of the global vaping device market in 2021, according to Frost & Sullivan.

The company operates 10 research centers, including seven in China and three in the United States, with an additional three under construction.

Innokin and Aquios Labs have earned a Golden Leaf Award for the Lota Pod, the first and only water-based vaping solution.

E-juice generally consists of propylene glycol (PG) and vegetable glycerin (VG) along with flavor and nicotine. When heated, PG and VG produce vapor, which allows them to be inhaled. At 189 degrees and 292 degrees Celsius, respectively, the boiling points of PG and VG are relatively high, however.

Adding water to e-liquid brings down the boiling point and vape temperatures, thus reducing harmful substances in vapor. Water also minimizes dehydration and irritation and helps to deliver nicotine more efficiently while producing a more natural flavor.

Until now, the low viscosity level of water made it unsuitable for use in vaping devices at any meaningful level. Aquios Labs developed a technology that can support up to 30 percent water vaping but still needed proper hardware to support its new e-liquid.

Utilizing its extensive experience with vaping hardware, Innokin created new heating, wicking and airflow systems to unleash the potential of water-based e-liquid.

While the vaping industry has become accustomed to major hardware innovations every 12–18 months, e-liquids have been evolving at a gentler pace. Water-based vaping arguably represents one of the most significant breakthroughs since the introduction of nicotine salts in the vaping industry.

October 26, 2022

China to Start Taxing E-cigarettes Nov. 1

The Chinese government will start taxing e-cigarettes on Nov 1., reports Reuters.

Producers and importers of e-cigarettes will incur a 36 percent levy while wholesale distributors must pay an 11 percent tax.

Experts said that the annual sales revenue of domestic e-cigarette makers is about RMB20 billion ($27.36 billion), so the tax may contribute an additional RMB10 billion to the government’s annual revenue, according to The Global Times.

China has long been the world’s largest producer of e-cigarettes, though consumption lags behind that of Western countries.

Inspired by the overseas success of the Juul, venture-backed startups started marketing e-cigarettes to domestic consumers in 2018.

These companies operated in a legal gray area until the State Tobacco Monopoly Administration (STMA) asserted its authority over the business. In 2021, the STMA announced that it would require e-cigarette companies to obtain a license in order to continue selling to consumers.

Tobacco products remain a major revenue generator for Beijing, with cigarette sales generating roughly 5 percent of the central government’s tax revenue each year.

The STMA operates under China’s Ministry of Industry and Information Technology. China Tobacco, STMA’s commercial arm, is a shareholder in China’s state-backed investment fund for the chip industry.

October 26, 2022

‘Juul Discussing Bailout with Investors’

Juul Labs is discussing a bailout with two long-time investors to help stave off bankruptcy, reports The Wall Street Journal, citing unnamed sources.

Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani are reportedly considering putting up money to cover the vaping company’s operations and near-term legal liabilities. Valani and Pritzker were Juul’s largest shareholders before Altria Group in 2018 bought a 35 percent stake in the company for $12.8 billion, according to The Wall Street Journal sources.

The goal of the bailout would be to help Juul stay in business and pursue a dispute with federal regulators over whether Juul products can remain on the U.S. market. Once the undisputed leader in the domestic vaping market, Juul Labs has struggled in the face of regulatory scrutiny and legal challenges over its marketing practices.

On June 23, 2022, the Food and Drug Administration rejected Juul Labs’ premarket tobacco product application and ordered the company to remove its products from the market. Juul appealed and on July 5, the FDA stayed its marketing denial order (MDO), announcing that it would review the decision after determining “there are scientific issues unique to this application that warrant additional review.”

On Oct. 21, Juul Labs published the details of its MDO appeal.

The uncertainty around the FDA ban has made it difficult for Juul to secure financing for legal settlements. Juul has been searching for an alternative that could avoid a bankruptcy filing. Earlier this month, Juul began discussions with lenders for financing that would carry the company through a potential Chapter 11 filing.

In a statement to The Wall Street Journal, Juul said it continues to explore several strategic options to secure its business and address the impact of the FDA’s stayed order “as we fight to preserve our mission of transitioning adult smokers away from cigarettes while combating underage use.”

October 25, 2022

Juul Lab Publishes Details of MDO Appeal

Juul Labs has published its administrative appeal of the marketing denial order (MDO) issued by the U.S. Food and Drug Administration, which explains the company’s position, based on science and evidence, that the MDO was substantively and procedurally flawed. This appeal, referred to as a 10.75 appeal, is currently under review by the FDA.

In its press release for the MDO, the FDA stated that Juul Labs’ premarket tobacco product applications (PMTAs) “lacked sufficient evidence regarding the toxicological profile of the products” and that some of the “study findings raised concerns due to insufficient and conflicting data.”

Juul Labs believes that each of the deficiencies in the MDO is based on an incorrect and incomplete assessment of the data, and when the data are appropriately evaluated within the PMTAs, the FDA can properly assess the toxicological profile of Juul products and relative to other tobacco products, including combustible cigarettes. The appeal also shows that all perceived limitations could have been resolved by clarifications through the usual, iterative process that the FDA has followed for prior applications.

Through its 10.75 appeal, Juul Labs requests that the MDO be rescinded and its PMTAs be placed back into substantive review so that the FDA can complete a full and fair review to determine whether the Juul system is appropriate for the protection of public health. “We believe that once the FDA does a complete review of all of the science and evidence presented in the applications, without political interference, as required by law, we should receive marketing authorization for our products,” Juul Labs wrote in a press note.

For context: In July 2020, Juul Labs submitted PMTAs to the FDA for its currently marketed products and a new device with age-verification technology. The PMTAs included over 125,000 pages of data, information and analysis from over 110 scientific studies across nonclinical (75-plus studies), clinical (14 studies) and behavioral (21 studies) research programs to support the marketing of Juul products. The company also assessed its products relative to combustible cigarettes, an FDA-authorized heated-tobacco product (IQOS) and other marketed vapor products.

Despite this science and evidence, on June 23, 2022, the FDA issued an MDO for Juul Labs’ PMTAs. On July 5, the FDA stayed the MDO, announcing, on its own, that it would review the decision after determining “there are scientific issues unique to this application that warrant additional review.”

A summary of the Juul Labs responses to what the company believes are the deficiencies of the MDO is available here.

October 24, 2022

Philippines Starts Vape Law Consultation

The Philippines Department of Trade and Industry (DTI) will begin consulting the public for the crafting of the implementing rules and regulations (IRR) of the country’s new vape law today, reports ABS-CBN News.

“For private stakeholders who have an interest on the crafting of the IRR, they are included, and we will consider all inputs or all comments that were sent,” said DTI Undersecretary Ruth Castelo.

The Philippines’ Vaporized Nicotine Products Regulation Act governs the importation, manufacture, sale, distribution and use of vape products. Among other measures, it calls for lowering the vaping age to 18 from 21.

The DTI was tasked to craft the IRR following the transfer of the regulation of vapes from the Food and Drug Administration.

The proposal was submitted to the Presidential Palace on June 24, days before then-President Rodrigo Duterte stepped down from office. Because the executive branch did not act on it within 30 days, the proposed legislation lapsed into law in July.

October 24, 2022

Nicotine-Degrading Bacteria Identified

Chinese and U.S. scientists have identified a bacteria in the human stomach that can degrade nicotine, reports the Xinhua News Agency, citing a new study published in Nature.

A colony of gut bacteria was found to have reduced intestinal nicotine concentrations in nicotine-exposed mice.

Nicotine is known to activate an intestinal molecule called AMPKα. These molecules contribute to the progression of nonalcoholic fatty liver disease (NAFLD), according to the study.

The authors suggest that Bacteroides xylanisolvens can help reduce smoking-exacerbated NAFLD progression.

The study involved researchers from Peking University, Zhejiang University, Fudan University, the First Affiliated Hospital of Wenzhou Medical University and the U.S. National Institutes of Health.

October 24, 2022

Smoore Presents Feelm Max in Jakarta

Smoore presented its Feelm Max disposable technology solution at the Indonesia Electronic Atomization Exhibition (IECIE 2022), which took place at the Jakarta International Convention and Exhibition Center.

Speaking at the exhibition, Smoore Vice President Clayton Shen highlighted the importance of technological innovation in driving progress in the vaping industry.

Feelm Max features a ceramic coil technology that offers more puffs and consistent flavor, according to a company press release. It is currently sold in more than 10 countries, including the United States and the United Kingdom. Other features include a semi-translucence mouthpiece and environmentally friendly packaging.

During his presentation of the Feelm Max, Shen explained that the closed system is the fastest-growing category in the new tobacco market and will claim a significant market share in the long run.

According to Smoore, ceramic coils solve longstanding challenges such as liquid leakage and burnt taste. Ceramic coils, said Shen, are used by leading vapor product manufacturers, such as Reynolds Vapor Co., Relx and Njoy.

One of the most influential exhibition platforms for companies operating in the vaping sector, the IECIE covered an area of over 12,000 square meters in Jakarta, with over 100 exhibitors and more than 10,000 visitors.

In recent years, Southeast Asia has become a new industry hub by virtue of its population base and market development potential. Euromonitor expects the Southeast Asian vaping market to grow by 29 percent in 2023.

October 24, 2022

ITC Reports Strong Quarter

ITC of India reported continued strong performance across its business segments for the quarter that ended Sept. 30, 2022. The company’s gross revenue and EBITDA were up 27.1 percent year-one-year.

Revenue from the cigarettes segment was up 23.3 percent over the comparable 2021 quarter, benefiting from a stable fiscal environment and authorities’ enforcement actions against the illicit tobacco trade.

“As seen in the past, stability in taxes on cigarettes, backed by deterrent actions by enforcement agencies, continues to enable volume recovery for the legal cigarette industry from illicit trade, thereby engendering domestic demand for Indian tobaccos while also mitigating loss of tax revenue to the exchequer,” ITC wrote in a statement.

“The company continues to engage with policymakers for a framework of equitable, nondiscriminatory, pragmatic, evidence-based regulations and taxation policies that balance the economic imperatives of the country and tobacco control objectives, cognizing for the unique tobacco consumption pattern in India.”

ITC also reported progress in the construction of a modern facility to manufacture and export nicotine and nicotine derivatives, which is carried out by the company’s wholly owned IndiVision subsidiary.

Designed to manufacture high-purity nicotine derivatives conforming to U.S. and EU pharmacopoeia standards, the facility is expected to be commissioned by the end of the current financial year.

October 21, 2022