Blog - Tobacco Reporter

Bantam Vape Exempted from Shipping Ban

The U.S. Postal Service (USPS) has granted Bantam Vape an exception from its ban on shipping vapor products. Bantam Vape will be allowed to ship its e-liquid products to select vape retailers and distributors throughout the United States.

The postal service’s decision comes in response to Bantam’s application for a business purposes exception to the Prevent All Cigarette Trafficking (PACT) Act, which was amended by Congress on Dec. 27, 2020, prohibiting the shipment of e-cigarettes and vapor products through the USPS.

“Bantam’s ability to reengage USPS as a shipper of our high-quality, flavor-filled e-liquids allows us to more effectively serve our trusted retail and distribution partners,” said Bantam spokesperson Anthony Dillon. “Utilizing USPS as an alternative shipping channel provides our business-to-business customers with increased purchase order flexibility and decreased shipping timelines and costs.”

Bantam provided the USPS with the necessary documentation to obtain its exception to the PACT Act prohibition against shipment of vapor products through the USPS. This included submission of applicable state and federal permits and licenses for both Bantam and its customers named in the application.

“We thank USPS for processing our application in a timely manner and in helping us deliver alternatives to combustible cigarettes to our customers across the U.S.,” said Dillon. “As we continue to grow our brand’s customer base, Bantam is committed to adding retailers and distributors to the list of those we can ship to using USPS.”

March 8, 2022

Campaigners Urge Criminal Charges

Tobacco control advocates should consider holding tobacco corporations and executives criminally liable for their actions, according to a study published in Tobacco Control. Doing so, the authors write, could provide a workaround in legislative systems that lack the political will to support or implement tobacco control policies.

The authors highlight what they perceive as shortcomings of civil cases, where victory usually means an award of money to the injured party—which the tobacco industry easily pays and then goes back to business as usual. In the United States, tobacco industry still prevails in at least 25 percent of civil cases brought against it.

A criminal case, by contrast, could include court orders and possibly even the dissolution of the corporation or jail time for executives. It could also help delegitimize the industry, make it harder for tobacco companies to recruit top talent, have a deterrent effect and allow anti-tobacco groups and governments to learn more about the harms perpetuated by the industry through the discovery process, according to the authors.

To support their suggestions, the authors cite a proof-of-concept case in the Netherlands, where an antismoking group asked the public prosecutor to bring criminal charges against Philip Morris International, BAT, Japan Tobacco International and Imperial Tobacco Benelux for fraud, manslaughter and attempted murder. While the public prosecutor eventually declined to press charges, the case generated an enormous amount of publicity about the harms of smoking, resulting in a “communication and education” victory, according to the authors.

March 8, 2022

Suvanto-Harsaae Nominated For Board

Swedish Match’s nominating committee will propose the election of Sanna Suvanto-Harsaae as a new member of the company’s board of directors during the annual general meeting on April 27, the company announced in press release.

Suvanto-Harsaae has experience across a number of industries, notably in the areas of consumer and B2B2C for fast-moving consumer goods, logistics, e-commerce and service supply. The nominating committee has made particular note of Suvanto-Harsaae’s broad industry knowledge and board experience in Nordic listed companies.

She is currently also chair of the boards of BoConcept, Posti Group, Nordic Pet Care Group and Babysam.

The nominating committee proposes reelection of the current board members Conny Karlsson, Charles A. Blixt, Jacqueline Hoogerbrugge, Alexander Lacik, Pauline Lindwall and Joakim Westh. Current Swedish Match board members Andrew Cripps and Wenche Rolfsen will not be available for reelection.

The nominating committee proposes Conny Karlsson as chairman of the board.

March 8, 2022

Eastern to Move to 6th of October City

Eastern Co. of Egypt intends to transfer all production capacities from its factories to the industrial complex in 6th of October City within two years, reports Daily News Egypt.

According to Managing Director Hany Aman, the company inaugurated the industrial complex with the aim of integrating all its production capacity.

The license of the Moharram Bey factory is about to expire. An economic feasibility study revealed that Eastern Co. would be better off transferring production of that factory than increasing investment at the exiting location.

The Ministry of Environment and the Industrial Development Authority must still approve the transfer process.

In related news, Eastern Co.’s board of directors approved new consumer prices for the company’s cigarette products to account for higher raw material cost and fourfold increase in freight prices caused by the disruption of supply chains around the world.

Cleopatra Box 10 now costs EGP11.5 ($0.73), Cleopatra King Size costs EGP18.5 and Boston/Belmont costs EGP19.5.

Aman said the company seeks to strike a balance between maintaining its profit margin and the interests of smokers. Eastern Co. is currently studying the prices of cigars and molasses.

Eastern Co.’s profits increased by 15 percent to EGP2.92 billion in the first half of fiscal year 2021–2022. The company’s revenues grew to EGP8.53 billion from EGP8.16 billion during that period. Eastern Co. sold about 5.5 billion cigarettes in February.

March 7, 2022

Smoore and Relx Among Top Patent Applicants

Smoore and RELX were among the vaping business’ most prolific patent applicants in 2021, according to the Chinese Enterprise PCT International Patent Application Ranking. Smoore topped the list with 84 international patent applications under the Patent Cooperation Treaty (PCT), the company announced in a press release. RELX filed 74 international patent applications during the year.

Based on the number of PCT international patent applications in 2021, the ranking is published by IPRdaily, an intellectual property publication, and incoPat, a global patent database.

By Dec. 31, 2021, Smoore had more than 3,408 patent applications cumulatively, including 1,674 authorized patent applications. The company’s patent applications relate to atomization and other technologies. In January, the company launched the world’s thinnest ceramic coil vape pod solution. Equipped with a new generation of the Ultra-slim Bionic Film Ceramic Coil, FEELM Air features seven breakthroughs, including in reliability, flavor and interactive experience, according to Smoore.

To date, the company has hired 1,500 R&D experts from different scientific backgrounds and established 10 centers for cross-disciplinary research. Five additional centers are under construction.

The company says it’s committed to protecting its intellectual property. In October 2021, Smoore filed a complaint to the United States International Trade Commission against 38 American and Canadian enterprises and individuals for copying certain features of its oil-vaping cartridges and components technologies.

March 7, 2022

Illicit Trade Up In Massachusetts

Massachusetts law enforcement officials seized nearly 213,000 smuggled electronic nicotine-delivery system products in 2021, according to a report by the Multi-Agency Illegal Tobacco Task Force.

The seizures of vaping products reportedly dwarfed those of untaxed cigarettes, cigars and smokeless tobacco products. Massachusetts banned the sale of flavored cigarettes and vaping products more than two years ago, but those products are still getting into the state through the black market. The law imposed a 75 percent excise tax on the wholesale cost of vaping products.

The task force, which is overseen by the Department of Revenue, has partnered with federal officials to dismantle cross-border smuggling operations and recover millions of dollars in unpaid tobacco and vaping product excise taxes. Under the new law, anyone caught bringing untaxed e-cigarettes or vaping products into the state can be fined $5,000 for a first offense and up to $25,000 for multiple violations.

The provisions also allow police to seize untaxed vaping products as well as vehicles, boats and airplanes. The state collected more than $370 million in cigarette taxes alone in its last budget year, a 23 percent decline over the previous fiscal year, according to the Department of Revenue. The state collected more than $13 million in taxes on vaping products.

While many anti-nicotine groups have praised Massachusetts’ ban of flavored tobacco products, the ban is not the success its proponents make it out to be, according to Ulrik Boesen of the Tax Foundation. While a study published in JAMA Internal Medicine found that the sale of flavored tobacco in Massachusetts decreased more than in 27 control states in the wake of the state ban, the authors failed to consider the impact of cross-border trade.

According to Boesen, increased sales in neighboring New Hampshire and Rhode Island almost completely made up for the decrease in Massachusetts. “The end result of the ban, in fact, is that Massachusetts is stuck with the societal costs associated with consumption while the revenue from taxing flavored tobacco products is being raised in neighboring states,” Boesen wrote on the Tax Foundation’s website.

March 7, 2022

Brazil Recyling Tobacco Pesticide Containers

Tobacco growers in Brazil’s Rio Grande do Sul area are eligible to take part in the empty pesticide container collection program from March 7 to May 19. The move is part of a project by the Interstate Tobacco Industry Union, SindiTabaco, and associate companies, in partnership with the Tobacco Growers’ Association of Brazil, Afubra, and now benefits 113,000 tobacco growers and 395 municipalities in Rio Grande do Sul and Santa Catarina.

According to SindiTabaco President Iro Schuenke, the project is one of the various examples in which the sector puts environmental, social and governance principles into practice.

“The pesticide collection program was created before legislation now in force, with the purpose to preserve the environment and farmers’ health and safety through proper disposal of empty pesticide packaging,” said Schuenke in a statement.

In its 21 years of operation, the program has collected 18 million empty pesticide containers and become a benchmark for other sectors in reverse logistics.

Of the containers collected, 93 percent are destined for recycling, providing raw materials to other plastic products, according to program coordinator Carlos Sehn. Containers that cannot be recycled are taken to licensed landfills.

March 7, 2022

Rising Oil Prices May Affect Cigarette Sales

Rising gas prices will likely depress cigarette demand due to consumers having less cash to spend at gas stations, according to CNBC.

The Russian invasion of Ukraine has driven oil prices up as the U.S. and other Western countries have imposed sanctions on Russia. On Thursday, West Texas Intermediate crude futures, the U.S. oil benchmark, was trading at prices not seen since the financial crisis of September 2008, and Brent crude hit a high from May 2012.

Gaurav Jain, a Barclays analyst, estimates that a 1 percent increase in oil prices will cause U.S. cigarette volume to decline by 0.1 percent. “The trend seems to suggest that as consumers saved more money at the gas station and went to the attached convenience store, they bought more cigarettes (impulse purchase item). Now as oil prices move higher, the reverse could happen,” Jain wrote in a note to clients.

Jain predicts that U.S. cigarette volume for fiscal 2022 will fall by 5 percent with prices rising 7 percent. It’s also expected that some consumers will switch to other tobacco products, such as e-cigarettes or modern oral nicotine pouches, in search of cheaper alternatives.

March 4, 2022

U.S. States Target Synthetic Nicotine

Georgia, Maryland and Mississippi legislators recently introduced bills in their respective states that would only allow the sale of vapor products that are authorized by or pending authorization from the U.S. Food and Drug Administration, according to a Filter article.

The pieces of legislation would also establish directories to inventory authorized vapor products, which would eventually be made public. On the surface, these bills look like they are reiterating what the FDA is already doing through its premarket tobacco product application (PMTA) process, through which the FDA has denied millions of products. However, many have noted that the bills serve as a roundabout way to ban synthetic nicotine.

Many manufacturers have turned to synthetic nicotine as a way to continue selling their products since synthetic nicotine is not currently regulated.

“The elected officials sponsoring these bills may be under the mistaken impression that their proposals are only targeted at illicit and counterfeit dealers,” Greg Conley, president of the American Vaping Association, told Filter. “The reality is that these bills would shut down licensed small businesses that are operating in full compliance with federal, state and local laws.”

The Republican lawmakers who introduced the bills—Maryland State Senator JB Jennings, Georgia State Senator Jeff Mullis and Mississippi Representative Nick Bain—have all received campaign funds ranging from $500 to $4,800 from Juul Labs, according to Filter. Some feel that Juul and other large companies want to see synthetic nicotine (and competition) diminished.

“To preserve the harm reduction opportunity for adult smokers, Juul Labs supports a fully regulated, science-based marketplace,” a Juul spokesperson said. “Illegally marketed and illicit products and products designed to evade federal and state oversight undermine harm reduction and a responsible e-vapor category.”

March 4, 2022

Multinationals Continue to Monitor Situation in Ukraine

Multinational tobacco manufacturers have not stopped their operations in Russia but have done so in Ukraine.

In the wake of Russia’s invasion of Ukraine and the stance taken by companies such as Apple and Stora Enso in halting sales in Russia, Tobacco Reporter asked the multinationals whether they had stopped sales of their products in Russia or when, if ever, they intended to do so. They were further asked why they had not stopped sales, given that this was the case.

“Our priority is our employees, and we are taking the necessary measures to ensure their safety,” said a spokesperson for Japan Tobacco International. “Our operations in Russia are fully functional and we have contingency plans in place to ensure business continuity if the situation were to change. As a responsible international company, we are fully committed to complying with all applicable national and international sanctions.

“We are closely monitoring the situation and cannot comment any further.”

Meanwhile, a spokesperson for Imperial Brands said: “We are monitoring the situation in both Ukraine and Russia very closely. Our prime concern remains for the welfare of our people in Ukraine, where we have suspended our operations for safety reasons. We will continue to update our plans as necessary.”

And a spokesperson for British American Tobacco said: “We are deeply concerned about the conflict in Ukraine. The safety and wellbeing of our people in Ukraine and across the region is our first priority.

“We have suspended all business and manufacturing operations in Ukraine and are providing all the assistance we can to our colleagues, including relocation and temporary accommodation.

“In Russia, our wholly owned subsidiary has been in operation for more than 30 years. BAT always complies with relevant regulation and legislation wherever we operate, and we are aligned with all international sanctions.’

“We continue to closely monitor the situation as it evolves.”

Philip Morris International had not responded by the deadline.

March 4, 2022