Blog - Tobacco Reporter

PM Eager to Partner in Ukraine Recovery

Philip Morris may act as a partner and advisor in Ukraine’s recovery in line with the concepts adopted during the recent Ukraine Recovery Conference in Lugano, Switzerland, Philip Morris Ukraine CEO Maksym Barabash told journalist on July 6.

According to Barabash, Philip Morris has a solid record of operation in Ukraine. “Philip Morris is a key American investor, employer and taxpayer in Ukraine,” Barabash was quoted as saying by Interfax. “And this is how we see our future in Ukraine.”

The company has experience in both upgrading outdated production facilities building a new ones, he added.

“Therefore, I see our role not only as an exporter, one of the biggest taxpayers, and an employer, but also as a partner and advisor on the country’s recovery,” Barabash said.

Philip Morris has operated in Ukraine for more than 20 years and owns a factory in the Kharkiv region. Before Russia’s invasion on Feb. 24, its Ukrainian facilities employed about 1,300 people. The factory served as an export hub for over 20 countries, including major markets such as Japan and Egypt.

In 2020, Philip Morris Ukraine reported a net profit of UAH2.73 billion ($92.38 million), up 5 percent from 2019.

July 6, 2022

Convention Alliance Publishes 2021 Report

The Framework Convention Alliance (FCA) has published its 2021 annual report.

In addition to highlighting projects carried about in 2021, the annual report covers topics such as the ninth Conference of the Parties to the Framework Convention on Tobacco Control (FCTC), the alignment of tobacco control with development and the UN sustainable development goals, and the inclusion of tobacco control in Covid-19 recovery initiatives.

The report also discusses he FCA’s upcoming plans to transition to the Global Alliance for Tobacco Control, a move intended to help the organization position itself for new challenges.

Created in 1999, the FCA is a confederation of nearly 500 organizations from more than 100 countries that supports the negotiation, ratification and implementation of the World Health Organization Framework Convention on Tobacco Control (FCTC).

July 5, 2022

E-Cig Batteries Power Drones in Ukraine War

Ukrainian volunteers have started using e-cigarette batteries to help power drones deployed in the war against Russia, according to a report in The Independent.

The batteries are being used to power release systems attached to drones so that they can carry and drop anything from medical supplies to grenades. The release systems are built using 3D printers.

The initiative was developed in response to the rising price of lithium batteries. War-related airport closures have driven up the cost of many imports. To collect disposable e-cigarettes and retrieve lithium polymer batteries, the volunteers set up drop-off bins outside the Kyiv Polytechnic Institute

“Lithium batteries used to cost $1 each but went up five times in price adding significantly to our costs,” says engineer and PhD student Maksym Sheremet. “So we started powering dropping systems from the batteries in disposable e-cigarettes. It’s free, easy to repurpose and environmentally friendly because we are recycling.”

A team of around 60 volunteers are making the drone systems, with 30 working specifically on the e-cigarette plan.

In four months they have built 4,000 dropping systems – which cost under $30 – and are sent to the front. They are also building drones from scratch and repurposing existing commercial drones to go with their dropping systems.

Seriously outgunned by Russia, Ukraine relies heavily on drones, which allow its forces to spot artillery and so direct fire efficiently, saving ammunition.

July 4, 2022

Cigarette Firms Shift to Biodegradable Films

Cigarette makers have shifted from regular plastic wrapping to biodegradable wrapping for cigarette packs, well ahead of the India’s single-use plastic ban, reports The Economic Times, citing the Tobacco Institute of India (TII).

The single-use plastic ban took effect on July 1. The biodegradable material being used is compliant with international standards and the recently released BIS standards, according to the TII.

“Biodegradation of the biodegradable plastic starts upon coming into contact with soil. This material is extremely beneficial, as it would biodegrade naturally in landfills as well. The biodegradable plastic will not add any strain to the solid waste collection and recycling system,” TII said in a statement.

TII represents cigarette makers such as ITC, Godfrey Phillips India and VST Industries.

July 4, 2022

Taat Shares 2022-2023 Financial Outlook

Following its recent acquisition of HLND Holdings, Taat Global Alternatives anticipates generating approximately CAD88 million ($68.31 million) in sales between June 1, 2022, and May 31, 2023.

Repeat orders of Taat, which comprised over 54 percent of the company’s gross revenue in the second quarter of 2022, are expected to continue at a steady pace as the company services its existing accounts while capturing new market share.

Anticipated revenues for the company’s fiscal year ending Oct. 31, 2022, are CAD92 million. Taat projects a loss on operations excluding non-cash items of CAD1.9 million. The company anticipates continued quarterly losses through the remainder of calendar 2022 as it invests heavily in brand-building, distribution and further development of its nationwide sales network.

To exploit its recently acquired distribution capabilities, the company plans to expand the scope of its offerings beyond Taat Original, Smooth and Menthol, with the objective of also becoming a global player in nontraditional smokable and non-smokable products.

Shifting its business model from being “product-centric” to “brand-centric,” the company expects to benefit considerably from its enhanced management capabilities between ADCO executive team members as well as the addition of 20-year global tobacco industry veteran Michael Saxon as CEO of Taat.

“In the approximately 18 months since Taat was first launched in the United States, we have established a solid foundation through strong execution of our priorities as well as continued attention to research and development,” said Taat Founder Joe Deighan in a statement. “The advanced formulation of Beyond Tobacco known as V3 has proven exceptionally popular among adult smokers and we have proactively taken steps to replace inventory of Taat made with previous iterations, thus ensuring that V3 is as widely available as possible.

“Our acquisition of ADCO provides us more than just distribution bandwidth, which is to say that we can obtain priceless feedback and various types of insights (whether qualitative or quantitative) to continuously evaluate the performance of a given product on the market and shape our business decisions accordingly to drive sell-through and long-term brand equity.

“Perhaps most exciting, we are branching out into segments that complement our core offerings, such as Taat heat-not-burn as well as a zero-hemp formulation of Beyond Tobacco that can enable us to commercialize Taat more broadly at a global level. We anticipate great outcomes in the rest of 2022 and throughout 2023 and are keen to continue with actively commercializing Taat as a better alternative to legacy tobacco products.”

July 4, 2022

B2B Vaping Conference to Tackle ‘Big Issues’

The U.K. Vaping Industry Association (UKVIA) will organize a B2B conference at the QEII Centre in London on Sept. 9.

Among other topics, participants in the Vaping Industry Forum and Exhibition will discuss the challenge of tackling rogue vape traders, preventing underage access to e-cigarettes and creating a sustainable vaping industry.

Entitled “Vaping for a Better Future,” the conference will also look at how the sector can maximize its public health, economic and social impact.

The industry’s first ever economic impact report, conducted by the Centre for Economics & Business Research, will also be unveiled at the event.

Confirmed speakers and panelists include Adam Afriyie MP, vice chair of the Vaping All Party Parliamentary Group; James Lowman, chief executive, Association of Convenience Stores; Pippa Bailey, head of climate change and sustainability practice, IPSOS Mori; Dan Marchant, managing director, VapeClub; Doug Mutter, director, VPZ; and Siyang Yu, global marketing manager, SMOK

The event follows the government-commissioned independent review into tobacco control policies—the Khan Review—which has recommended that vaping feature prominently as a tool to meet England’s smokefree target by 2030.

“This year’s Vaping Industry Forum is set to be the biggest yet,” said John Dunne, director-general of the UKVIA, in a statement. “The conference and exhibition come at a hugely exciting time for the vaping industry following the extremely positive Khan Review which has presented vaping as having a pivotal role in making smoking obsolete. It also comes ahead of the highly anticipated publication of the new Tobacco Control Plan.

“Whilst vaping presents a huge public health, economic and social opportunity for the nation there are a number of challenges that the industry has to face up to. The Khan Review is placing its trust in the vaping industry to play a critical role in its harm reduction strategy, and we’ve got to show that we are a highly responsible industry that can live up to the government’s high expectations.”

July 4, 2022

EPA Ruling Threatens FDA’s Tobacco Plans

The U.S. Supreme Court’s recent decision to block the Environmental Protection Agency from curbing power-plant emissions also threatens the Food and Drug Administration’s attempts to limit nicotine and ban menthol in cigarettes, according to an article published by Bloomberg Law.

In their ruling, the Supreme Court judges endorsed a legal approach that requires agencies to obtain Congressional approval to address issues of major financial or political importance in novel ways. The court’s conservative members have lamented the power agencies have to create and enforce their own rules.

According to Lindsay Wiley, a professor at UCLA School of Law, the decision will be considered in any situation where an administrative agency is trying to solve a problem using authority given to it by Congress in more general terms.

In the case of tobacco, the FDA will face greater pressure to prove it is authorized by Congress to propose its draft ban on menthol in cigarettes and cigars and other major rule changes, according to Marc Scheineson, a former FDA commissioner.

While the Tobacco Control Act gives the FDA the authority to adopt product standards—including on the content of cigarettes—through notice and comment rulemaking, legal experts believe the June 30 court ruling will embolden tobacco manufacturers to challenge the menthol ban and other policies once they are finalized.

“It definitely provides a roadmap that the industry will follow trying to attack the menthol regulation with everything they can come up with,” said Joelle Lester, director of commercial tobacco control programs at the Mitchell Hamline School of Law’s Public Health Law Center.

July 2, 2022

RJR Vaping Technology Claims Invalidated

A U.S. administrative tribunal has invalidated two claims in a R.J. Reynolds vaping patent, reports Law360.

The Patent Trial and Appeal Board said on June 30 that two claims in U.S. Patent No. 9,814,268, which covers “a tobacco-containing, electrically-powered smoking article” designed to burn a minimal amount of tobacco, can’t stand because they are obvious in light of previous e-cigarette patents.

The ruling represents a second win for Philip Morris Products after a Virginia federal jury awarded it more than $10 million last month in drawn-out clash between the tobacco giants.

July 2, 2022

Court Tosses Punitive Award Against PM

A U.S. federal appeals court tossed out a $9 million punitive-damages award awarded by a lower court against Philip Morris USA in a case filed by a woman who suffered a smoking-related illness that led to her legs being amputated, reports The Free Press.

Donna Brown filed the lawsuit in 2007 in the federal Middle District of Florida, and a jury sided with her on claims for strict liability, negligence, fraudulent concealment and conspiracy to fraudulently conceal. It awarded Brown nearly $8.29 million in compensatory damages and $9 million in punitive damages.

In its appeal, Philip Morris pointed to a recent Florida Supreme Court opinion that said plaintiffs must show that they relied on misleading information from cigarette makers to prevail on claims for fraudulent concealment and conspiracy to fraudulently conceal.

In its June 30 ruling, the 11th U.S. Circuit Court of Appeals said Brown had presented “insufficient evidence” to show that she relied on specific false or misleading statements by the company.

The Atlanta-based court overturned the verdicts on the fraud-related claims but upheld the verdicts against the cigarette maker on strict liability and negligence.

The lawsuit was one of thousands of cases filed against tobacco companies after a 2006 Florida Supreme Court decision established critical findings about issues such as the dangers of smoking and misrepresentation by cigarette makers. Those lawsuits are known as Engle Progeny cases.

July 2, 2022

Report Supports Vaping as Smoking Alternative

A new report published by Belgian’s Superior Health Council supports vaping as a safer alternative to smoking or as a quitting aid that can significantly reduce health risks.

Based on the current state of knowledge, the report concludes that the exclusive use of e-cigarettes by (ex-)smokers—provided that they actually stop smoking—could lead to a significant reduction in health risks

The report also states that vaping is not risk-free and is therefore not recommended for nonsmokers, especially the young. Further long-term safety data are needed.

The council prepares scientific advisory reports to guide Belgian political decisionmakers and health professionals. The report took two years to prepare and was a consensus document prepared by a wide range of experts with different views.

While restrictions on vaping are prudent the report warns that “limiting vaping and other nicotine use does not jeopardize the goal of reducing the prevalence of smoking.”

Advocates of tobacco harm reduction welcomed the report. “Wisely, the guidelines advise risk-proportionate regulation of vaping,” wrote Colin Mendelsohn, a medical professional and founding chairman of the Australian Tobacco Harm Reduction Association, on his website. “Vaping is much less harmful than smoking and should be regulated much more lightly in line with the lower risk.

July 2, 2022