Blog - Tobacco Reporter

Strong Opposition to FDA Flavor Bans

The U.S. Food and Drug Administration has received more than 110,000 comments on the proposed rule that would end the sale of menthol cigarettes and nearly 60,000 comments on the proposed rule that would prohibit characterizing flavors in cigars.

Many wrote to oppose the ban, including business owners who said it would force them to cut jobs.

“If implemented, this proposal could hurt retailers and wholesalers in the U.S. and directly impact my bottom line,” wrote a tobacco retailer in Florida. “This ban targets a significant portion of my revenue; menthol cigarettes alone make up 36 percent of all cigarette sales in the United States. Additionally, adult customers who purchase menthol cigarettes also purchase gas, food and other items that my store depends on.”

Thousands of letters submitted online came from menthol cigarette smokers who perceived the proposed restrictions as an unfair attack on personal liberty.

“This regulation far beyond overreaches the authority that the government should have over the American people,” wrote one respondent. “We have age restrictions for a reason, and once you reach that age you should be able to make the choice to use any legal product that you wish.”

Others supported the proposal, saying removing menthol and other flavors would improve health and help rectify racial injustices.

“The ban on menthol in cigarettes is a necessary step toward health equity and health promotion,” wrote Kaelor Gordon. “This substance unjustly and unfortunately places the burden of tobacco use and death on Black individuals and communities of color at higher and disproportionate rates, so to ban menthol would be in tune with the anti-racist and health equitable culture we are strongly cultivating today.”

The FDA recently extended the comment period from July 5 to Aug. 2, 2022.

July 8, 2022

U.K. Launches New Track-and-Trace System

The United Kingdom has a new track-and-trace system for tobacco products, established and operated by Dentsu Tracking. Launched on July 1, the system provides the U.K. government with digital, data-driven traceability functionality across the entire tobacco supply chain. The system is part of the U.K.’s anti-illicit trade strategy, supporting Her Majesty’s Revenue & Customs’ (HMRC) efforts to fight illicit trade.

“We are honored to work with HMRC and help the U.K. in the fight against illicit tobacco trade,” said Philippe Castella, managing director of Dentsu Tracking, in a statement. “Our digital system is tailored to the policy objectives of HMRC and designed to address the specific characteristics of the U.K. market. This ensures that the system provides HMRC with the highest level of visibility and government control over the entire U.K. tobacco supply chain.”

The new track-and-trace system leverages the advantages of digital technology to enable the movement of legal tobacco products to be monitored (tracking) and allow U.K. authorities to detect and fight the different forms of illicit trade, thereby curbing the circulation of non-compliant products for which taxes have not been paid and that do not meet all legal requirements in terms of content and packaging. Reducing the circulation of non-compliant tobacco products enables the U.K. to increase national tax collection while protecting citizens and legitimate businesses.

The new system was designed in line with all applicable U.K. and international laws, including full compliance with the FCTC Illicit Trade Protocol that requires parties to ensure the tracking and tracing of tobacco products along both manufacturing and key distribution points.

By integrating sophisticated data analytics tools, Dentsu’s system transforms the collected supply chain data into meaningful information that helps U.K. authorities to identify potentially fraudulent events. The new U.K. system supplies HMRC with real-time detailed analyses, statistics and alerts, which some stakeholders have already described as “groundbreaking,” according to Dentsu.

“At Dentsu Tracking, we strongly believe that the added value of tracking and tracing is only as strong as the level of supply chain insights that the system delivers to government bodies,” said Jan Hoffmann, director of government business. “Collecting data therefore is not enough. We generate powerful business intelligence that will help the U.K. authorities to carry out targeted controls and real-time investigations in the field.”

All businesses engaged in the manufacture, importation, exportation, storage, distribution and sale of tobacco products into and through the U.K. supply chain must use the new track-and-trace system. Track-and-trace requirements have existed in the U.K. since May 2019 and currently apply to cigarettes and roll-your-own tobacco. All other tobacco products will have to comply with the requirements from May 20, 2024.

Dentsu Tracking was appointed as provider for establishing and operating a new U.K. tobacco track-and-trace system in November 2021 by means of a public procurement process. Dentsu replaces the previous provider De La Rue.

July 7, 2022

Geekvape Shares Fluid Dynamics Expertise

Geekvape shared its expertise in computational fluid dynamics (CDF) at the 14th International Conference on Computer Modeling and Simulation, hosted June 24-26 by the Chongqing University of Posts and Telecommunications.

Geekvape has used CFD to structurally optimize ceramic atomizers. In designing electrically heated atomizers, the heat and mass transfer phenomenon is essential for maximizing the product’s performance. The company’s engineering team developed patented product designs with higher heat efficiency and better atomization performance.

“This invitation is a great honor for Geekvape to communicate with many international experts and scholars in related research fields, to discuss the latest technological progress and share our most recent findings,” said Jiadong Zang, who represents Geekvape’s advanced technology and application research institute, in a statement.

“This has profound implications for the future development of the global e-cigarette industry, as well as for the improvement of scientific and technological innovation to facilitate the industry’s high-quality development.”

July 7, 2022

RELX Trains UAE Customs Officials on Illicit Trade

RELX International and SABA IP recently trained officials from the Abu Dhabi Customs Authority and Department of Economic Development to help them combat the illegal trade in vapor products.

The session covered topics such as distinguishing legal products from illegal ones, raising awareness about the consequences of the illegal e-cigarette trade and sharing research and intelligence. The program also discussed product authentication, tracking and tracing technologies.

According to RELX, contraband and counterfeit e-cigarettes are produced in unregulated facilities and pose a serious health risk to legal age consumers and minors. Counterfeit e-cigarettes often use inferior e-liquid formulas; capsules frequently leak and provide misleading information about the nicotine dosage in the capsules.

“The training sessions for the Abu Dhabi Customs Authority, Department of Economic Development and Ras Al Khaimah Customs Authority showcase RELX International’s commitment, as a responsible company, to working with local authorities, investigation firms and e-commerce platforms to identify and remove contraband and counterfeit e-cigarette products from the market, as part of the RELX Pledge,” said Robert Naouss, external affairs director, MENA and Europe at RELX International, in a statement.

In 2019, RELX International established the Golden Shield Program to prevent the production and sale of illicit goods. Since its inauguration, the program has helped remove more than 550,000 fake products from the market, plus over 77,000 websites.

Additional training sessions are planned in countries across the Middle East, including in Egypt and Jordan. Earlier this year, RELX concluded a training session with customs officials in Saudi Arabia.

July 7, 2022

FDA Ignored Evidence in ‘Deeming’ Premium Cigars

The U.S. Food and Drug Administration ignored evidence about health risks in considering premium cigars to be subject to same law as cigarettes, a federal judge ruled on July 5, reports Reuters.

The litigation focuses on the 2016 Deeming Rule, in which the agency identified a wide range of tobacco products, including premium cigars, to be subject to its regulatory authority along with cigarettes under the Family Smoking Prevention and Tobacco Control Act.

The FDA rule requires cigar makers to register their products annually, provide ingredient lists for each product and submit products for laboratory testing—procedures the premium cigar industry considers impractical for its handmade, “artisan” products.

The Premium Cigar Association and Cigar Rights of America challenged the Deeming Rule, arguing that, unlike cigarettes and e-cigarettes, premium cigars do not appeal to young people and are not associated with addiction. They cited studies showing that young people are unlikely to use premium cigars, that users of premium cigars are unlikely to smoke them frequently and that infrequent cigar use is not associated with increased mortality.

U.S. District Judge Amit Mehta in Washington DC agreed that the FDA had not adequately considered the studies cited by the plaintiffs, instead asserting that there was “no evidence” that premium cigars were less harmful.

“Where, as here, an agency speaks in absolute terms that there is no evidence, it acts arbitrarily and capriciously when there is in fact pertinent record evidence and the agency ignores or overlooks it,” the judge wrote.

Judge Mehta asked the FDA and the industry groups to submit briefs on whether he should vacate the FDA’s decision or simply remand the matter back to the agency.

July 6, 2022

Gwinner Named Consumer Goods Tech CIO of the Year

Aaron Gwinner, chief information officer and senior vice president of digital business solutions for the Reynolds group of companies, has won the 2022 Consumer Goods Technology (CGT) CIO of the Year Award.

The CIO of the Year Award recognizes a consumer goods company’s senior-most technology leader who has made a significant impact through the implementation and utilization of successful technology.

Those who nominated Gwinner applaud his success in driving transformation within the organization and, in turn, developing a strong company culture.

“Aaron has been a driving force behind the creation of new capabilities that allow us to operate a stronger, faster and simpler organization,” said Reynolds CEO Guy Meldrum in a statement. “His exceptional leadership continues to accelerate the transformation of our business. All of us at Reynolds congratulate him on this outstanding achievement.”

Since joining Reynolds in 2019, Gwinner’s impact has been substantial, with notable accomplishments including launching a new e-commerce platform that improved e-commerce growth and enhanced mobile website performance by 500 percent. Gwinner attributed these successes, among others, to his team of more than 400 professionals for the excellent work they do every day.

Additionally, his team established a hub in Silicon Valley to partner on new technology innovations, replaced all aging marketing platforms and websites while migrating 80 percent of the company data to the cloud, and built a new data science and e-commerce team that increased mobile conversion by 35 percent while delivering $200 million in benefits from data analytics.

“It is an honor to receive CGT’s CIO of the Year award and a testament to our remarkable teams at the helm of our digital transformation,” said Aaron Gwinner. “They’re the ones who do the work. My job is to set a clear vision, get the roadblocks out of their way and empower them to deliver. When they deliver, and we get recognized for it, I think it’s a great endorsement of my team and the fantastic work they’ve done. Thank you to CGT and all those who submitted nominations for this extraordinary recognition.”

July 6, 2022

Smoore to Research Nicotine Addiction

Smoore, the world’s largest vapor product manufacturer, today announced it has launched the first real-time monitoring research project on nicotine addiction.

In partnership with the Shenzhen Institute of Advanced Technology, Smoore’s new research project aims to explore how best to minimize the nicotine strength in vaping products and ultimately to bring it to below the levels that cause addiction.

The research will look at the secretion and metabolism of dopamine in animal brains, and will use this data to simulate the human brain when ingesting nicotine. As part of the project, the Shenzhen Neher Neural Plasticity Laboratory will conduct controlled trials by exposing subjects to the aerosol environments created by the atomization of Smoore’s Feelm vaping device and the aerosol environment created by combustible tobacco.

In addition providing a better understanding of nicotine absorption through different organs, the research will aid Smoore in improving the design of vape devices, including through changes to heating elements and atomizers, to enhance the vaping experience through increased efficiency of delivery.

“The atomization process between an e-cigarette and a combustible cigarette is very different, hence the physical and chemical properties derived from atomization and tobacco combustion also varies distinctively,” said Xiong Yuming, deputy dean of Smoore Shenzhen Fundamental Research Institute, in a statement.

“Focusing on the underlying mechanism of atomization and tobacco combustion, our research aims to explore nicotine delivery and absorption, so as to reduce the health impacts of these products.”

Supported by Southwest University in Chongqing, the researchers expected to release a stage report in the second half of 2022.

July 6, 2022

SWM and Neenah Complete Merger

Mativ Holdings today announced the completion of the merger of equals between Schweitzer-Mauduit International (SWM) and Neenah, two leading global manufacturers of specialty materials, effective July 6, 2022.

Mativ has approximately $3 billion in sales, supporting customers in more than 100 countries, and manufacturing capabilities on four continents. Beginning Wednesday, July 6, 2022, the company will commence trading on the New York Stock Exchange, under the new ticker symbol MATV.

“I am extremely excited and proud to mark this important milestone in the journey of our two companies with the formation of Mativ, said Julie Schertell, president and CEO of Mativ, in a statement.

“This merger is a unique opportunity to boldly reimagine our future as a stronger and faster-growing global enterprise. As we come together, we see significant near and long-term value creation opportunities to accelerate growth and amplify margins. With compelling strategic touch-points in key market categories, complementary geographies and technologies, increased global scale, and a passionate workforce with deep roots in material science, we are ideally suited to help solve our customer’s most critical challenges, which is the foundation of our cultural, commercial and financial success.

“As we bring the best of these two organizations together, our priorities are centered around supporting our customers, accelerating our growth, delivering the $65 million, or more, of deal-enabled cost synergies, and driving margins and cash flows to support deleveraging and a strong dividend. We will also continue to execute our strategy, including investments in our fastest growing and most profitable business units and decisive actions to optimize our portfolio over time. Mativ has tremendous potential, and, as we celebrate this new beginning, I want to recognize the efforts of our outstanding employees who work tirelessly every day to push the limits of what is possible.”

This merger is a unique opportunity to boldly reimagine our future as a stronger and faster-growing global enterprise.

Julie Schertell, president and CEO, Mativ

“Today marks an exciting new chapter in the rich histories of both companies, forming a scaled global leader in specialty materials to drive value for customers, employees, stakeholders, and our shareholders,” said John Rogers, chairman of Mativ’s board of directors. “We will continue executing a well-defined strategy, maintain an attractive financial profile, and advance our corporate stewardship and governance efforts. Mativ is committed to providing attractive returns to shareholders while maintaining a prudent balance sheet and disciplined approach to capital allocation. We have assembled an exceptional, diverse, and experienced leadership team, and we look forward to working with Julie and her talented group of leaders to deliver on the promise of this transaction.”

Mativ will disclose financial results for two reporting segments: advanced technical materials (ATM) and fiber-based solutions (FBS). The ATM segment is comprised of five non-reporting business units: filtration, protective solutions, release liners, healthcare, and industrials. This segment generally represents the combination of SWM’s legacy advanced materials and structures and Neenah’s technical products reporting segments. ATM will deliver solutions that filter and purify air and liquids, support adhesive and protective applications, advance healing and wellness, and solve some of material science’s most demanding performance needs.

The FBS segment is comprised of two non-reporting business units: engineered papers and packaging and specialty paper—and represents SWM and Neenah’s respective legacy paper segments. FBS will leverage the combined company’s extensive natural fiber capabilities to provide specialty solutions for various end-uses, including sustainable packaging, imaging and communications, home and office, and consumer goods, among other applications.

For the second quarter of 2022, Mativ will report financial results for legacy SWM and select financial and business highlights from Neenah.

July 6, 2022

FDA Suspends Juul Ban Pending Appeal

The U.S. Food and Drug Administration has temporarily halted its ban on Juul Labs products while the e-cigarette maker appeals the agency’s decision, the FDA announced on Twitter.

On June 23, the FDA ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.”

A federal appeals court then granted Juul Labs a emergency stay of the order to give the judges time to evaluate the merits of Juul’s appeal. The e-cigarette company separately asked the FDA to stay its own order pending the appeal.

In a series of Twitter messages, the FDA said it had determined that there are scientific issues unique to the Juul application that warrant additional review. The agency stressed that the stay suspends but does not rescind it the marketing denial order (MDO).

The FDA initially rejected Juul’s request for a stay, prompting Juul to seek a stay of the ban in court, according to The Wall Street Journal.

In its court filing challenging the FDA ruling, Juul said the agency had overlooked more than 6,000 pages of data that the company had submitted to the FDA on the aerosols that users inhale. Juul also suggested that the FDA’s decision was influenced by political pressure.

The FDA’s marketing denial order for Juul surprised many in the vaping business, especially in the wake of marketing authorizations for vapor products manufactured by competitors such as Reynolds American Inc. and NJOY Holdings. A pioneer in the vaping segment and backed by Altria Group—a company boasting decades of experience with regulatory compliance—Juul labs appeared in a better position than most to meet the agency’s exacting standards.

Public health advocates criticized the stay of the FDA ruling.

“It is deeply disappointing and harmful to our nation’s kids that the FDA has issued an administrative stay of its marketing denial order for Juul’s e-cigarette products,” wrote Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, in a statement.

“This decision will allow the continued sale, at least for now, of the brand most responsible for creating and fueling the youth e-cigarette epidemic. We are nearly 10 months past a court-ordered deadline for the FDA to complete its review of e-cigarette marketing applications and can’t afford more delays by the FDA in removing kid-friendly products from the market.”

July 6, 2022

Zim Tobacco Earnings Surpass Last Year’s

Zimbabwean tobacco growers had sold 167 million of tobacco and earned $505 million by the end of June, reports The Herald, citing statistics from the Tobacco Industry and Marketing Board.

By comparison, in the entire 2021 marketing season, farmers pocketed $504 million from the sale of 183 million kg.

While this year’s volumes are lower than in 2021, the higher quality has been commanding better prices, according to experts.

The average price for this year is $3.02 per kg while that of last season was $2.76 per kg. The lion’s share of Zimbabwean tobacco is sold under a contract system. Only 5 percent of farmers are sufficiently solvent to borrow from banks or fund their own operations.

Tobacco is a key crop for Zimbabwe, with exports and supporting activities contributing earnings of more than $1.2 billion annually.

Eager to capture more value from the golden leaf, the government aims to transform the business into a $5 billion industry by 2025. Its Tobacco Value Chain Transformation plan calls for increasing primary production to 300 million kg by 2025 and localizing financing for smallholder farmers, among other initiatives.

July 6, 2022