Blog - Tobacco Reporter

BAT Appoints Sustainability Officer

BAT has appointed Mike Nightingale as its first chief sustainability officer to lead the company’s sustainability and ESG agenda.

Nightingale has been the group head of investor relations for the past 10 years. Prior to that, he held senior leadership positions in sustainability, regulation and marketing.

Additionally, to reflect BAT’s corporate intent and the increasing strategic importance of both ESG and sustainability for the group, the role of Kingsley Wheaton as chief marketing officer with responsibility for corporate affairs, will be redesignated as chief growth officer.

Beyond overseeing the marketing efforts to drive value from combustibles while ensuring a step-change in New Categories performance, Kingsley has also led the initiatives to place ESG front and center of the group’s strategy.

Nightingale will report to Kingsley in his new role as chief sustainability officer with effect from Sept. 1.

Victoria Buxton, senior investor relations manager, will be promoted to the role of group head of investor relations and will report to Finance and Transformation Director Tadeu Marroco, also with effect from Sept. 1.

“I am delighted that Mike has been appointed as our first chief sustainability officer,” said BAT CEO Jack Bowles in a statement. “Mike will lead us into a new era of sustainability ‘thought leadership.’ With his extensive experience of the business, most recently as group head of investor relations, he is uniquely suited to this challenge.

“Likewise, Victoria has an excellent track record, both as a consumer sector equity analyst and, more recently, as a senior member of Mike’s team. Her promotion is testament to her energy, commitment and drive.”

August 30, 2022

Judge Denies Altria Investor Settlement

A U.S. federal judge declined to give preliminary approval to a proposed $117 million settlement between Altria Group and shareholders in a lawsuit over the company’s investment in Juul Labs, calling the deal “inadequate,” reports Law360.

The lawsuit contends that Altria’s executives threw caution to the wind when they bought a 35 percent stake in Juul for $12.8 billion in 2018.

According to the shareholders, the Altria executives also engaged in illegal and anti-competitive conduct that cost Altria billions of dollars as Juul faced an increasing number of legal battles over the alleged health risks of its products and alleged marketing to underage consumers—problems that the plaintiffs say Altria knew about at the time of the investment but ignored.

The value of Altria’s investment has declined steadily as Juul Labs faced litigation and increased regulatory scrutiny.

The plaintiffs argued for approval of the settlement, saying the recovery is fair and reasonable when weighed against the costs and risks of further litigation. U.S. District Judge David J. Novak did not explain why he considered the settlement inadequate.

August 29, 2022

Kaival Expects Boost From Court Ruling

Kaival Brands, the U.S. distributor of products manufactured by Bidi Vapor, expects sales of its Bidi Stick vapor product to benefit from a recent court decision instructing the U.S. Food and Drug Administration to take another look at the company’s premarket tobacco product applications (PMTAs).

On Aug. 23, the U.S. Court of Appeals for the 11th Circuit granted petitions for review filed by Bidi Vapor, Diamond Vapor and four other companies challenging the FDA’s rejection of their e-cigarette applications. According to Chief Judge William Pryor, the agency didn’t properly assess the companies’ marketing and sales-access-restriction plans designed to minimize youth exposure and access.

This ruling effectively reverses the marketing denial orders and allows Bidi Vapor to continue to market all flavor varieties of the Bidi Stick in the United States. The company submitted PMTAs for all 11 flavor of its Bidi Stick prior to the Sept. 9, 2020, PMTA deadline.

“As the exclusive U.S. distributor of Bidi Vapor’s products, this [ruling] is a significant event for us and our downstream partners, as many awaited the decision before expanding distribution, and paves the way for potential revenue growth for our company,” said Eric Mosser, president and chief operating officer of Kaival Brands, in a statement.

“But more than that, we are glad the appellate court recognized the potential importance and direct effects that an adult-focused marketing plan and strict sales and access restrictions may have on addressing the youth access problem.”

At press time, the FDA had not announced how it would respond to the court ruling. The agency could appeal the ruling or put Bidi Vapor’s PMTAs for its nontobacco-flavored devices into scientific review.

August 29, 2022

U.K. Vaping Reaches All-Time High

A record 4.3 million people are active vapers in Britain, reports The Guardian, citing new research by Action on Smoking and Health (ASH).

The data suggests that 8.3 percent of adults in England, Wales and Scotland vape, compared with 1.7 percent 10 years ago.

Of the 4.3 million current vapers, around 2.4 million are ex-smokers, 1.5 million are current smokers and 350,000 have never smoked.

The figures also show that the proportion of current e-cigarette users who have never smoked has increased from 4.9 percent last year to 8.1 percent this year.

The authors of the report said this figure was an “all-time high.”

“Over the last decade we’ve seen a vaping revolution take hold,” said Hazel Cheeseman, deputy chief executive of ASH.

“There are now five times as many vapers as there were in 2012, with millions having used them as part of a quit attempt.

“However, they haven’t worked for everyone. Just under half of smokers who have tried them have stopped using them and 28 percent have never tried one at all.”

Meanwhile, smoking is becoming less popular in the U.K. Data from the annual population survey found smoking prevalence among adults aged 18 and over in England declined from 20 percent to 14 percent between 2011 and 2019. The ASH report found e-cigarettes were responsible for an estimated 69,930 additional former smokers in England in 2017.

August 29, 2022

Continental Starts Processing in New Hall

The Continental Tobacco Group has started processing tobacco in the new preparation hall of its tobacco factory in Satoraljaujhely, Hungary.

According to Hungary Today, The company is constructing a HUF10 billion ($24.28 million) production hall comprising three stories with a floor area of 1,800 square meters each and modern machinery.

The investment will increase the tobacco factory’s capacity by around a quarter.

A family-owned business, the Continental Tobacco Group operates several tobacco companies in Europe and employs around 700 people.

According to publicly available data, Continental Tobacco last year generated sales of HUF56.41 billion and a profit of HUF6.35 billion. The company’s products are available in more than 30 countries.

Facing regulatory and competitive challenges, many Hungarian tobacco farmers have left the sector in recent years. While around five thousand people were growing tobacco in Hungary when the country joined the EU in 2004, this number has now fallen to around 600, according to Hungary Today.

August 29, 2022

‘Flavor Bans Failed to Reduce Youth Vaping’

Restrictions on the sale of flavored tobacco products were not associated with a decrease in current or ever e-cigarette use among high school students in the California Bay Area one-year after their implementation, according to a new study.

Researchers analyzed data from the California Healthy Kids Survey to look at e-cigarette use among high-school students in the California Bay Area. They compared changes in e-cigarette use between 2018 and 2019 among students attending school in a city with a flavored e-cigarette ban and students attending school in a city without a flavor ban.

The researchers concluded that flavored vape bans “did not significantly change” the odds of current and ever e-cigarette use among students.

Vapor industry advocates contend that flavor bans have negative consequences for public health because flavors are essential for adults trying to quit smoking. State finances are impacted by flavor bans as well. For example, Massachusetts’ ban on flavored vaping and tobacco products is costing the state an estimated $10 million in revenues each month, according to Americans for Tax Reform.

August 29, 2022

South Korea to Mandate New Health Warnings

Cigarette manufacturers will have to start printing new graphic health warnings in late December, reports The Korea Herald, citing new regulations announced by the Ministry of Health and Welfare.

The ministry plans to distribute the updated manual for labeling health warnings on cigarette packaging today, as a follow-up to the government’s tobacco industry regulation revision passed in June.

New graphic health warnings specified in the document include a warning about second-hand smoking showing a rendered image of a newborn child sucking on a baby bottle stuffed with cigarette butts.

The new rules, which come into effect Dec. 23, impact vapor products, too. E-cigarettes manufacturers will be required to cover more than 50 percent of each pack with health warnings, officials said.

August 29, 2022

EU Registers ‘Smoke-Free’ Citizens’ Initiative

The European Commission has registered a European Citizens’ Initiative (ECI) to “achieve a tobacco-free environment and the first European tobacco-free generation by 2030.”

The ECI urges the Commission to propose legislation banning the sale of nicotine products to people born in or after 2010 and to act against the environmental risks presented by tobacco use.

The ECI also calls on measures to reduce cigarette litter, extend outdoor vaping restrictions and to eliminate tobacco advertising.

By registering the ECI, the Commission acknowledges that it is legally admissible without expressing a view on the substance of the initiative.

The organizers of the ECI now have six month start collecting signatures. If the initiative receives at least 1 million statements of support from citizens in at least seven EU member states within one year, the Commission will have to respond.

The Commission can at that point take the request forward or reject it. If it rejects the ECI, the Commission will have to explain its reasoning.

Introduced with the Treaty of Lisbon in 2007, the ECI initiative was created to increase direct democracy by empowering EU citizens to participate directly in the development of the union’s policies.

Since the beginning of the ECI, the Commission has received at least 118 requests to launch ECI, 91 of which were admissible and thus qualified to be registered.

August 28, 2022

Gold Leaf Assets Seized

The South African Revenue Service (SARS) on Aug. 26 took charge of all assets belonging to the Gold Leaf Tobacco Co. and those of its directors following a probe into tax evasion.

According to News24, SARS investigators believe they have evidence that GLTC was involved in in money laundering and may owe up to ZAR3 billion ($177.7 million) in undeclared taxes.

Fearing that GLTC’s assets alone may not cover its possible fiscal debts, the SARS targeted the assets of the assets of GLTC directors Simon Rudland and Ebrahim Adamjee.

Yusuf Abramjee, the founder Tax Justice SA, described the development as a “huge breakthrough in the battle against the illicit cigarette trade.”

“For over a decade, GLTC have been the prime suspects as South Africa’s illegal cigarette trade has grown into a national menace of devastating proportions,” he said.

Rudland and Adamjee told the tax inquiry they had done nothing wrong and declared all GLTC’s taxes to SARS.

The South African press has described Rudland as an “oligarch” associated with Zimbabwean President Emmerson Mnangagwa. “The Rudlands consistently make the news as members of the powerful political and economic elite in Zimbabwe, propping up [Zimbabwe’s governing party] Zanu-PF,” wrote The Daily Maverick.

August 28, 2022

Court Upholds Public Housing Smoking Ban

The U.S. Department of Housing and Urban Development (HUD) is entitled to ban smoking in federally subsidized public housing, an appeals court ruled on Aug. 25, reports Reuters.

The D.C. Circuit Court of Appeals decided that the HUD properly enacted a 2016 rule requiring state and local public housing agencies to ban cigarettes, cigars and pipes inside housing units and indoor common spaces, and outside within 25 feet of those areas.

Six tenants and a smokers’ rights group challenged the ban, saying it improperly invaded their privacy and violated due process by preventing them from engaging in lawful activity—using tobacco—inside the home.

But Chief Judge Sri Srinivasan said HUD provided “considerable” evidence that the rule helped protect residents against the health risks of secondhand smoke, prevent fires and reduce property maintenance costs. The HUD, he said, did not act arbitrarily and capriciously in promulgating the rule.

Srinivasan also rejected a claim that the ban improperly restricted how the government spends money, violating a provision of the U.S. Constitution governing federal spending.

The plaintiffs plan an appeal, arguing that the case involves significant issues involving federalism and whether Congress actually empowered HUD to ban smoking.

Srinivasan’s decision in NYC CLASH Inc et al v Fudge, D.C. Circuit Court of Appeals, No. 20-5126 upheld a March 2020 lower court ruling.

August 28, 2022