Blog - Tobacco Reporter

VPR Settles Auto-Draw Technology Case

XL Vape, VGOD and Saltnic have agreed to pay VPR brands $155,000 to settle patent-infringement litigation related to VPR’s auto-draw technology, according to a press release. As part of the deal, VPR brands has granted each of the companies a non-exclusive license to practice the invention set forth in the disputed intellectual property.

Dating from 2009, U.S. patent 8,205,622 covers electronic cigarette products containing an electric airflow sensor, including a sensor comprised of a diaphragm microphone. The sensor turns the battery on and off, and covers most auto-draw, button less e-cigarettes, cig-a-likes, pod devices and vaporizers using an airflow sensor rather than a button. The technology is covered under electronic cigarette utility patent

VPR Brands has started to identify and notify over 50 of the leading companies using its auto-draw technology. XL Vape, VGOD and Saltnic were prioritized based on their sales volumes and popularity.

According to VPR Brands, most nicotine vaping devices sold in the U.S. today utilize an auto-draw/button-less technology. The company is investigating all button-less vape devices within the nicotine, CBD, and cannabis space that initiate vaporization from the user’s airflow inhalation as they would be suspect of infringement.

The company says it may also seek a buyer for its patent in the future, citing the example of Ruyan, which in August 2013 sold its e-cigarette patent to Imperial Tobacco group for $75 million.

VPR’s settlement with XL Vape, VGOD and Saltnic follows earlier settlements with Nepa 2 Wholesale and PHD Marketing.

March 25, 2022

PMI Scaling Down Russian Operations

Philip Morris International today announced the concrete steps it has taken to suspend planned investments and scale down its manufacturing operations in Russia, following that country’s military invasion of Ukraine.

PMI said it has discontinued a number of its cigarette products offered in the market and is reducing its manufacturing activities accordingly. It has also suspended marketing activities in the country and canceled all product launches planned for 2022 in Russia, including the launch of its flagship heated tobacco product IQOS Iluma, originally planned for March 2022. In addition, PMI has canceled its plans to manufacture more than 20 billion Terea sticks (for IQOS Iluma) in Russia and the related ongoing investment of $150 million.

PMI’s board of directors and senior executives are working on options to exit the Russian market in an orderly manner, in the context of an increasingly complex and rapidly changing regulatory and operating environment.

“Our focus and all our efforts over the last four weeks have been to ensure the safety and security of our Ukrainian colleagues. We stand in solidarity with the innocent men, women and children who are suffering,” said PMI CEO Jacek Olczak in a statement. “We employ more than 3,200 people in Russia. We continue to support them, including paying their salaries, and we will continue to fulfil our legal obligations. We will continue to make decisions with their safety and security as a priority.”

Russia accounted for almost 10 percent PMI’s total shipment volumes and around 6 percent of PMI’s net revenues in 2021.

March 25, 2022

Swedish Match Publishes 2021 Report

Swedish Match has published its annual report for 2021.

The annual report describes Swedish Match’s operations, strategy and financial development and is available to download at www.swedishmatch.com/annual-reports.

Swedish Match reported record sales and operating profit in 2021, with double-digit growth in both revenues and earnings in local currencies across all product segments.

Full-year growth was driven by strong performance in the Smokefree product segment with considerable growth in both the U.S. and Scandinavia. Growing demand for natural leaf cigars drove the robust full year local currency financial performance for the Cigars product segment. The lights product segment too displayed strong underlying performance.

“Our sales performance in 2021 was outstanding, hitting a new all-time high,” said Lars Dahlgren, CEO of Swedish Match, in statement. Dahlgren was particularly pleased with the performance and potential of the company’s nicotine pouches, which grew by more than 50 percent in the U.S. and Scandinavia in 2021.

March 25, 2022

FDA Marketing Orders for Logic Technology

The U.S. Food and Drug Administration has authorized several tobacco-flavored ENDS products from Logic Technology Development under the Logic Vapeleaf, Logic Power and Logic Pro brands, including devices.

Logic Technology is the vape product arm of Japan Tobacco International.

Based on the Logic’s product applications, the agency concluded that the likely benefit for adult smokers who cease or significantly reduce their cigarette consumption outweighs the risk to youth, provided that the company follows postmarketing requirements to reduce youth access and youth exposure to their marketing.

At the same time, the agency issued marketing denial orders to Logic for multiple other ENDS products, which the company must now remove from the market. Applications for additional Logic products, including menthol, remain under FDA review.

We know that there is a demand among adult smokers to use e-cigarette products to try to switch from more harmful combusted cigarettes, but millions of youth are using these products and getting addicted to nicotine. The balance of these issues was considered by the agency’s career scientists when evaluating the potential marketing of e-cigarette products.

Robert M. Califf, FDA Commissioner

The FDA’s review of the applications for the products authorized today determined that the marketing of the tobacco-flavored products and associated components is appropriate for the protection of the public health.

Specifically, available data showed that current tobacco users who used these tobacco-flavored products were more likely to significantly decrease their use of combusted cigarettes and that those who don’t smoke are unlikely to start using these products.

Most study subjects decreased the number of combusted cigarettes they smoked each day by greater than 80 percent, from an average of 13-16 cigarettes per day at screening to 1-2 by day 59. The data also showed that the products produce fewer or lower levels of some toxins, like carbon monoxide, than combustible cigarettes and the products’ abuse liability, or their ability to encourage continued tobacco use, addiction or dependence, was lower than that of combusted cigarettes.

“We know that there is a demand among adult smokers to use e-cigarette products to try to switch from more harmful combusted cigarettes, but millions of youth are using these products and getting addicted to nicotine,” said FDA Commissioner Robert M. Califf in a statement.

“The balance of these issues was considered by the agency’s career scientists when evaluating the potential marketing of e-cigarette products. They have made great progress and I know they will use the best available evidence with the most robust methods to ensure that products that continue to be marketed are appropriate for the protection of the public health.”

“We take the quality of our products extremely seriously, along with the way they are marketed and sold, and we are proud that we have received marketing orders from FDA for our Logic products to remain on retailers’ shelves,” said Corrado Mautone, president of Logic, in a statement.

“By receiving FDA marketing orders now, Logic can remain a reliable partner for retailers going forward,” said Mautone.

Logic, based in Teaneck, New Jersey, is a part of the JT Group of Companies. JTI is a leading international tobacco and vaping company with operations in more than 130 countries. Headquartered in Geneva, Switzerland, JTI employs over 50,000 people and was awarded Global Top Employer for the eighth consecutive year.

The FDA has taken action on approximately 99 percent of the nearly 6.7 million ENDS products submitted for premarket authorization, including issuing marketing denial orders for more than 1 million ENDS products.

The agency says it is close to making additional decisions on applications for popular ENDS products that account for a large part of the market. The continued marketing of these products has the potential to have a substantial public health impact—either positively or negatively—as they hold an overall large market share and are used by a lot of people.

March 24, 2022

South Korea Smoking Rate Hits All-Time Low

The smoking rate of South Koreans aged 19 and up fell below 20 percent for the first time in 2020, reports the Yonhap News Agency, citing a new Statistics Korea study.

The smoking rate of Korean adults declined to a record low of 19.2 percent in 2020, down 1 percentage point from 20.2 percent a year earlier.

The smoking rate fell 7.7 percentage points from 26.9 percent in 2010.

The results cover those who have consumed more than five packs of cigarettes over their lifetime and are currently smoking.

In 2020, the smoking rate among Korean men aged 19 and older reached a record low of 33 percent, down from 34.7 percent a year earlier.

The corresponding rate for Korean women aged 19 and older came to 5.5 percent, down from 5.9 percent in 2019.

Experts attributed the decline in smoking to growing public awareness of health and the government’s anti-smoking drive.

In January 2015, the government raised the price of cigarettes by 80 percent to KRW4,500 ($3.70) per pack from KRW2,500.

March 24, 2022

Dubai Businessman Buys Mostar Tobacco Factory

Jassim Abdullah Ibrahim Alhuwai is buying the Mostar Tobacco Factory in Bosnia and Herzegovina after making the best offer at public sale, reports the Sarajevo Times.

Alhuwai will pay BAM6 million ($3.4 million) for the factory. He has already paid BAM10,000 as a deposit and has been given a deadline of April 22 to pay the remainder.

“I hope that the investor from Dubai will pay the money by the appointed deadline and that our agony will end, that there will be the bridging of our service periods and that some money will be paid to us,” former Mostar worker Aida Kajtaz said.

This was not the first attempt to sell the factory. Previously, Mirsad Rahimic, a Swiss entrepreneur and Mostar native, attempted to buy the factory, but there were a number of complications that arose during the purchase process.

Production at the factory ended in 2007, but workers campaigned to restart manufacturing.

Mostar Tobacco Factory complex has an estimated value of BAM21 million, but due to lawsuits and debts, the Mostar Municipal Court declared that the complex should have been sold for BAM3 million.

March 24, 2022

Kenya: Push to End Tobacco Farming

Kenya’s Ministry of Health along with the World Health Organization and the U.N. Food and Agriculture Organization (FAO) launched an initiative to end tobacco farming in the country, reports Xinhuanet.

The initiative is called the Tobacco-Free Farms project, and it will support farmers’ shift to alternative crops, such as legumes, that are less harmful to human health and the environment. It was launched in Migori, which is located in western Kenya.

The goal is a gradual phasing out of tobacco farming at the smallholder level, replacing tobacco with crops that will boost food security and help achieve health-related sustainable development goals.

According to Mutahi Kagwe, cabinet secretary in the Ministry of Health, tobacco has worsened the burden of respiratory diseases in the country, harmed vital ecosystems like watersheds, escalated gender inequality, rural poverty, deforestation and soil degradation.

Ministry of Health data shows that more than 6,000 Kenyans die annually from tobacco-related diseases, and 2.7 million adults and 220,000 children use tobacco products daily.

March 24, 2022

Canada Opens Consultation on Tobacco and Vaping Act

The government of Canada has opened public consultation on the Tobacco and Vaping Products Act (TVPA) ahead of its mandatory parliamentary review. Stakeholders can provide input until April 27, 2022.

In 2018, the TVPA was amended to protect youth and nonsmokers. The amended act recognized that vaping was significantly less harmful than smoking, and smokers that switched to vaping could reduce their exposure to thousands of chemicals. The act introduced measures to protect youth through various labeling and promotion regulations.

Tobacco harm reduction advocates welcomed the consultation. “Vaping has helped millions of smokers quit and has the potential to help millions more if it weren’t for the misrepresentations of the industry by media and misperceptions surrounding the product itself. It is imperative that Parliamentarians have the opportunity to hear from a wide range of experts as part of the TVPA review process,” said Darryl Tempest, government relations advisor to the Canadian Vaping Association (CVA).

Health Canada’s discussion paper states, “For adults who smoke, there appears to be a lack of awareness that vaping products are a less harmful source of nicotine for those who currently smoke and switch completely to vaping. A 2020 survey found that only 22 percent of current smokers recognized that vaping is less harmful than smoking cigarettes.”

In its consultation submission, the CVA will urge Health Canada to rectify this through the issue of relative risk statements for approved use by licensed specialty vape shops. In 2018, Health Canada proposed a “List of Statements for Use in the Promotion of Vaping Products.” According to the CVA, this proposal has been put on the back burner and has languished in Health Canada’s bureaucracy to the detriment of potential public health gains from smokers switching to vaping.

“Instead of issuing reasonable statements for use by specialty vape shops, the TVPA has effectively gagged the vape industry through Section 30.43,” the CVA wrote in a press release. Section 30.43 prohibits “the promotion of a vaping product in a manner that could cause a person to believe that health benefits may be derived from the use of the product or from its emission or by comparing the health effects arising from the use of the product or from its emissions with those arising from the use of a tobacco product or from its emissions. The purpose of this prohibition is to prevent the public from being deceived or misled with respect to the health hazards of using vaping products.”

“The CVA looks forward to actively participating in the review process and will advocate for enhanced measures to protect youth as well as increased smoker-targeted messaging on the benefits of switching to vaping. We encourage all stakeholders to submit feedback,” said Tempest.

March 24, 2022

Study: Most E-Cigarette Research Flawed

Errors are disturbingly common in e-cigarette research, resulting in misinformation and distortion of scientific truth, according to a new study.

Under the guidance of Cother Hajat of the United Arab Emirates University and Riccardo Polosa, founder of the Center of Excellence for the Acceleration of Harm Reduction (CoEHAR) at the University of Catania, a team of international researchers examined the 24 most frequently cited vaping studies published in medical journals.

The researchers found almost all of the examined studies to be methodologically flawed. Among other shortcomings, the studies lacked a clear hypothesis, used inadequate methodology, failed to collect data relevant to the study objectives and did not correct for obvious confounding factors.

“Most of the included studies utilized inappropriate study design and did not address the research question that they set out to answer. In our paper, we offer practical recommendations that can massively improve the quality and rigor [of] future research in the field of tobacco harm reduction,” said Hajat.

“Systematic reiteration of the same errors that result in uninformative science is the new pandemic,” said Polosa. “I’m astounded that such low-quality studies have made it through editorial review in prestigious scientific journals. The credibility of tobacco control scientists and their research is on the line.”

The findings are concerning, according to the academics, because without methodologically valid scientific research, it is impossible to generate balanced and accurate information for the adoption of more effective tobacco control policies and healthier lifestyles. “The dissemination of inaccurate information about combustion-free alternatives in the news media contributes to public skepticism and uncertainty, particularly among smokers,” the center wrote in a press release. “Many smokers may be discouraged from switching to less harmful nicotine-delivery products as a result of this.”

This investigator-initiated study was sponsored by ECLAT, a spin-off of the University of Catania, with the help of a grant from the Foundation for a Smoke-Free World, which in turn is backed by Philip Morris International.

March 24, 2022

Zimbabwe: Contractors Succumb to Competition

Nine Zimbabwean tobacco contractors have collapsed in the past year due to cutthroat competition, according to the Tobacco Industry and Marketing Board (TIMB).

“There is a lot of competition in the contracting space in terms of pricing,” TIMB CEO Meanwell Gudu told The Zimbabwe Independent. “If a contractor does not pay the correct price, that contractor will not get tobacco. Last year, we had 42 companies, and now, we have 33. Some of them have fallen by the wayside because they could not compete.”

Once characterized by auction sales, Zimbabwe’s tobacco trade is now dominated by contract growing, with up to 96 percent of leaf tobacco being produced under agreements between buyers and farmers.

More than half of the $748 million earned by Zimbabwe’s golden leaf farmers in 2020 was pocketed by contractors, mainly big foreign corporations that repatriate the hard currency back to their countries, according to critics.

Last week, Gudu also said the TIMB was set to crack the whip on tobacco “side marketers”—buyers who illegally purchase leaf from farmers contracted with other organizations—with stiff penalties that will see offenders serving up to six month jail terms.

March 23, 2022