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  • Flavor Ban Pushes Sales Next Door

    Flavor Ban Pushes Sales Next Door

    Photo: Borgwaldt Flavor

    Massachusetts’ ban of flavored tobacco products 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.

    Looking at the New England region as a whole confirms that the flavor ban did not work as intended, according to Boesen. “Sales moved around rather than disappeared, and the ban evidently did not impact consumption,” he wrote. “Total sales for the region decreased by slightly more than 1 percent comparing the 12 months preceding the ban to the 12 months following the ban—largely comparable to the national sales trends.”

    As the U.S. Food and Drug Administration and other states consider Massachusetts’ example, Boesen urges lawmakers to think twice before banning flavored tobacco products. “The experience out of Massachusetts has not been a success story and other states should be wary of conducting their own expensive experiments,” he wrote.

  • Ulster Bans Smoking in Cars with Children

    Ulster Bans Smoking in Cars with Children

    Photo: Nenov Brothers

    Northern Ireland has banned smoking in a car with children, bringing its laws in line with other regions of the United Kingdom, reports the BBC.

    Violators face fines of up to £2,500 ($3,391), but police will be taking an educational, advisory and non-confrontational approach when enforcing the new legislation until the end of February 2022.

    It is already illegal to smoke on public transport or to smoke in work vehicles used by more than one person in Northern Ireland.

    Chief Inspector Graham Dodds said people caught smoking in cars with children would initially be given warnings rather than fines, giving time for public awareness of the offences to build.

    Health advocates welcomed the new laws as a “significant move to a tobacco-free Northern Ireland.” Naomi Thompson, from Cancer Focus NI, said the laws would protect children’s health and reduce the perception for children that smoking is normal behavior.

    A ban on smoking in vehicles carrying children has been in force in England and Wales since October 2015. In Scotland and the Republic of Ireland, a ban took effect in 2016.

    Northern Ireland also banned the sale of e-cigarettes and other nicotine inhaling products to anyone aged under 18.

  • Guns N’ Roses Guitarist Lauds Snus

    Guns N’ Roses Guitarist Lauds Snus

    Popular Guns N’ Roses guitarist Slash recently described snus as the “the best discovery in the world” when discussing his experience quitting combustible cigarettes.

    The Nordic rock station Rockklassiker interviewed Slash last month, and the musician responded to questions from fans, one of which was from Bengt Wiberg, founder of EUforsnus and creator of Sting Free AB and the sting free snus pouch.

    Wiberg asked Slash via social media, “Hi Slash, I think it is great that you quit smoking with the help of Swedish snus and love it! Do you support an end to the European Union snus ban, and do you support EUforsnus?”

    “I used to (use snus),” Slash replied. “I did it for years and years and years, and I finally quit a few years ago, but when I first quit smoking, which was in 2009, pretty soon after that I discovered snus, and it was like the best discovery in the world. My God, it’s the greatest! So I did it from probably 2009 until 2015 or something like that. I used to have General snus shipped in from Sweden.”

    Slash speaks further in the interview about his experience switching from combustible cigarettes to Swedish snus and eventually quitting nicotine completely in 2015. He visited Swedish Match’s flagship store in Stockholm while in town for a concert that year, where he stated that he received an “informative background on snus and how it’s made,” according to Snusforumet.

    Snus is currently banned in the EU with the exception of Sweden. Sweden has a 5 percent rate of daily smokers (close to the World Health Organization’s smoke-free goal), attributing the low number to the use of snus and tobacco-free modern oral nicotine pouches, such as Velo, Zyn and Loop.

    Slash did not specifically say whether he supports lifting the EU ban on snus, but Wiberg feels confident that Slash’s sentiments on snus speak for themselves.

  • Universal Corp. Reports ‘Solid’ Results

    Universal Corp. Reports ‘Solid’ Results

    George Freeman III (Photo: Universal Corp.)

    Universal Corp. reported net income of $60.8 million for the nine months ended Dec. 31, 2021, compared with $48 million for the nine months ended Dec. 31, 2020.

    Excluding restructuring and impairment costs and certain other non-recurring items, net income increased by $4.5 million. Operating income increased by $18.1 million to $103.2 million. Adjusted operating income was $116.5 million, compared to adjusted operating income of $107.6 million for the comparable period in 2020.

    Net income for the quarter ended Dec. 31, 2021, was $34.9 million, compared with $33.3 million for the quarter ended Dec. 31, 2020.

    Excluding restructuring and impairment costs and certain other non-recurring items, net income decreased by $9.7 million. Operating income increased by $2.6 million to $62.8 million. Adjusted operating income was $74.9 million, compared to adjusted operating income of $85.2 million for comparable 2020 quarter.

    “Our operations produced solid results in the nine months ended Dec. 31, 2021,” said Universal Corp. President and CEO George C. Freeman III in a statement. “We are especially pleased by the strong results from our Ingredients Operations segment. That segment is developing nicely and was bolstered by our acquisition of Shank’s Extracts Inc. on Oct. 4, 2021. Shank’s adds valuable capabilities to the segment, including flavors and extracts, custom packaging, bottling, and product development.

    “We continued to experience the impact of tobacco shipment timing on our results in the nine months and quarter ended Dec. 31, 2021.

    “Tobacco shipments through the nine months ended Dec. 31, 2021, were lower, compared to the same period in fiscal year 2021, in part due to elevated tobacco shipments in the third quarter of fiscal year 2021 related to earlier customer mandated shipment timing.

    “Logistical challenges due to continued limitations in worldwide shipping availability stemming from the ongoing Covid-19 pandemic also slowed tobacco shipments in the nine months ended Dec. 31, 2021. However, despite the shipment timing variations and logistical challenges, we believe that our tobacco business remains robust with strong customer demand, and our uncommitted tobacco inventory levels remain well within our target range.”

  • Philippines Losing Billions to Illicit Trade

    Philippines Losing Billions to Illicit Trade

    Photo: Piotr Pawinski

    The Philippine government has lost nearly PHP3 billion ($588.17 million) in tax revenues since 2019 due to smuggling or illegal entry of cigarettes into the country, reports Philstar.

    The Bureau of Customs (BOC) has intercepted 127,675 master cases of illicit cigarettes since the Tobacco Tax Law was approved in 2019, according to BOC Deputy Commissioner Teddy Raval.

    The estimated value of the seized cigarettes reached PHP9.73 billion, more than half of which was accounted for in 2020 at PHP5.77 billion. The government forfeited PHP2.9 billion in excise revenues between 2019 and January 2022 due to smuggling of cigarettes.

    “They took advantage of the mobility restrictions, including Customs restrictions, but you caught them,” said Albay Representative Joey Salceda in a House hearing, referring to smugglers attempts to take advantage of Covid-19 restrictions.

  • Court Stays Bidi Vapor Marketing Denial Order

    Court Stays Bidi Vapor Marketing Denial Order

    The U.S. Court of Appeals for the Eleventh Circuit has stayed the marketing denial order (MDO) issued by the U.S. Food and Drug Administration to Bidi Vapor in September 2021.

    The Feb. 1, 2022, ruling allows Bidi Vapor and Kaival Brands to market and sell all of its Bidi Stick electronic nicotine-delivery systems (ENDS), including its tobacco, menthol and flavored products, while Bidi Vapor continues with its merits lawsuit compelling the FDA to place Bidi Vapor’s premarket tobacco product application (PMTA) for the flavored ENDS back under scientific review.

    With the judicial stay decision going in favor of Bidi Vapor, the company expects many distribution partners to reestablish their previous sales volumes, with potentially new distribution chains added as well.

    “We expect this judicial stay will result in a rebounding of Bidi Stick sales,” said Niraj Patel, president and CEO of both Kaival Brands and Bidi Vapor, in a statement. “Many wholesale and retail partners had discontinued or slowed purchases of the Bidi Stick until we heard back from the courts on the likelihood of our merits case succeeding. This is what our wholesale and retail partners have been waiting for.”

    “We believe that Bidi Vapor has developed substantial, robust and reliable scientific evidence through, among other things, surveys, behavioral studies and clinical trials establishing support that the product is appropriate for the protection of the public health,” Patel said. “Following on FDA’s initial administrative stay of the MDO, we believe that this recent judicial stay is a good indication that the court finds some merit in Bidi Vapor’s arguments and puts Bidi Vapor’s PMTA one step closer to being properly and fully evaluated by FDA. We are extremely pleased with the court’s decision on this judicial stay order and continue to expect to be successful on the merits case as well.”

    “The company believes that this decision signals a new milestone in the path toward providing adult smokers 21 and older with a viable alternative to combustible cigarettes. Distributors, wholesalers, retailers and adult consumers are all anxious to see positive outcomes not just for Bidi Vapor, but for the vaping industry as a whole. We believe in science-based regulation of ENDS and hope the courts will require FDA to adhere to the law as it reviews Bidi Vapor’s PMTAs,” Patel said.

  • Jacinta Carter to Lead HR at Swisher

    Jacinta Carter to Lead HR at Swisher

    Jacinta Carter (Photo: Swisher)

    Swisher has hired Jacinta Carter as executive vice president, human resources, people and culture effective Jan. 31. In this new role, Carter will lead all aspects of Swisher’s human resources operations, with a priority focus on organizational alignment, building strong pipelines for future hiring needs, promoting inclusion and opportunity in the workplace, and designing and evaluating career paths to meet the company’s business growth goals.

    Carter will have a vital role in shaping the organization and in transforming the culture necessary to achieve Swisher’s long-term vision, and to empower employees in an inclusive culture of growth and opportunity.

    “Jacinta is the right leader to help us continue to build an engaged, inclusive, and high-performing culture, which is vital for our business to thrive in 2022 and beyond,” said Swisher President Neil Kiely in a statement. “Her background and skills align with our guiding principles and business transformation goals. We are excited to have her join our team.”

    Most recently, Carter served as senior vice president, human resources for Atrium Hospitality, where she created a highly sustainable and employee-centric organization and as a key member of the executive leadership team, grew the company from a small start-up into an industry leader. Before Atrium, she was vice president, corporate human resources and corporate communications at Graphic Packaging International, where she was responsible for strategic planning, communications, succession planning and employee learning.

    “Joining Swisher represents a wonderful opportunity to build on what is already a positive, engaging and thriving environment,” said Carter. “I especially appreciate the strong intrapreneurial culture of growth and opportunity at Swisher, and look forward to forging new partnerships and creating opportunities in further developing existing talent and attracting new talent.”

  • FDA Webinar on Pending Product Standards

    FDA Webinar on Pending Product Standards

    Photo: Postmodern Studio

    The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) will hold a live webinar, titled “FDA’s Rulemaking Process and Upcoming Tobacco Product Standards,” on Feb. 10 from 2 p.m. to 3 p.m. Eastern Time.

    The webinar will address the FDA’s planned tobacco product standards to prohibit menthol as a characterizing flavor in cigarettes and to prohibit characterizing nontobacco flavors in cigars; the FDA’s rulemaking process and how stakeholders can submit comments on proposed rules; and available cessation resources and tools.

    The webinar will feature a presentation from the FDA’s Office of Minority Health and Health Equity, the CTP’s Office of Health Communication and Education, and the CTP’s Office of Regulations. There will also be a question-and-answer session.

    The FDA will respond only to questions submitted by Feb. 4. To submit a question, please register for the webinar and complete the appropriate field on the registration form.

    The FDA stresses this webinar is not intended to communicate contents of the proposed rules or details about the timeline for their release.

    The webinar is live and free of charge, but prior registration is required by Feb. 9.

  • Israel: Knesset Finalizes Vapor Tax

    Israel: Knesset Finalizes Vapor Tax

    Photo: Spiroview Inc.

    The finance committee of Israel’s Knesset has approved a slightly modified version of the tax on vaping hardware and e-liquid that was imposed last November, reports Vaping360.

    Although the committee reportedly eliminated a separate tax on disposable products, Israel will still have the highest vape tax in the world. Effective immediately, all vaping products will be subject to a tax equaling 270 percent of the wholesale cost, plus NIS15.6 ($4.94) per milliliter of e-liquid.

    Both the finance and health ministries aimed to tax vaping products at the same rate as cigarettes. Maintaining that vaping is just as dangerous as smoking, the health ministry initially sought an even higher tax. According to Israel Hayom, Finance Committee Chairman Alex Kushnir “reduced the conversion formula by 30 percent compared to what the Ministry of Health wanted.”

  • Tipping the Scales

    Tipping the Scales

    Tipping papers serve both functional and aesthetic purposes. Not only do they help ensure the integrity of the rod-filter construction and play a role in cigarette ventilation, but they also provide useful real estate for decorations. Using sophisticated printing and embossing technologies, manufacturers can appeal to senses of sight and touch. For this article, Tobacco Reporter interviewed two prominent industry suppliers about their innovations relating to tipping papers.

    What you see is what you feel—the growing interest in embossed tipping papers

    It is always interesting when opportunities are identified and exploited within business sectors, such as the traditional tobacco products market, that are, overall, less than vibrant. It seems to indicate that somebody, a team perhaps, or even a whole company, has been thinking outside the box—or, in one case at least, thinking big inside the box.

    Toward the end of last year, the Tann Group told Tobacco Reporter that for the past five years it had been enjoying a “tremendous” increase in interest for embossed tipping papers—an increase that had required it to make major investments in machinery and personnel to keep up with demand. And it seems that, for at least three reasons, this increase in interest is likely to be maintained. One is the vital feedback loop that is powered by consumer demand and that is clearly working hard in this case. Another is that while the increase in demand has been widely spread, it has not gone global—yet. And yet another is that, working within the letter and spirit of even strict regulations, cigarette manufacturers can use some embossed tipping papers to help maintain the attractiveness of their products even when and where those regulations are being imposed so as to reduce product appeal.

    But more of that later. Firstly, it is necessary to explain for those not already familiar with embossing as it applies to tipping paper, something about the types of embossing that are available for such applications, which comprise macro-technology, micro-technology and nanotechnology. Macro-embossing delivers a haptic effect, one that doesn’t require any special surface treatments of the tipping paper, such as printing or coatings, and that is experienced by a smoker through her fingers and lips because the bosses produced by this process, which are in the submillimeter range, are large enough for them to be detected by touch. By contrast, in the case of both micro-embossing and nano-embossing, the surface deformations produced are respectively within the micrometer and nanometer ranges, which are too small to be detected by touch but which interact with visible light and in this way provide some spectacular visual effects.

    In the case of micro-embossing, the structures produced influence the reflection of visible light, so this technology is used only on tipping papers that have metallized surfaces, such as those produced by metallic hot foil stamping, and not on plain paper. Without micro-embossing, the light reflected by stamped hot foil items, such as lines and logos, would be clear and shiny as it would be when reflected by polished metallic surfaces. But with micro-embossing, the light reflection becomes diffuse and scattered as it is on matte metallic surfaces, and this gives the hot foil designs a satiny appearance.

    The nano-embossed structures, meanwhile, cause the light that strikes them to be diffracted in such a way as to produce an interference effect—to be split into the spectrum of colors and thereby to deliver rainbow visuals, holographic impressions and the “tilted image” effects that are strongly dependent on the angle at which they are viewed. Nano-embossing, which requires the tipping paper to have a full-surface color, produces its strongest effects the darker that the background color is.

    Of the three types of embossed tipping paper on offer, the Tann Group says it is the macro-embossed one that is currently most in demand because it communicates with consumers on both a haptic and a visual level, something the company describes as a “what you see is what you feel” concept. But it is the case that embossed tipping papers, whether they employ macro-embossing, micro-embossing or nano-embossing, are used mainly on premium brands, partly because of the haptic and visual upgrades they provide but also simply because of the higher prices that such tipping papers command.

    It follows, then, that embossed tipping papers, whether macro-embossed, micro-embossed or nano-embossed, are particularly popular in those places where premium brands are most in demand, including duty-free outlets. Currently, demand for embossed tipping paper is mainly coming from the countries of the CIS and Asia, including China and South-East Asia, but it is expected that the trend will move to parts of Europe and Central and Latin America.

    Of course, due to stricter regulations that will govern tobacco products in the future, including those imposed through the EU’s second Tobacco Products Directive, it will become more and more difficult in certain regions to apply to tipping papers special features, such as special inks, aromas/flavors and metallic elements. However, embossing technologies—and especially macro-embossing—provide potential options to maintain the appeal of tipping papers while complying with such regulations, because no extra chemical treatment of the tipping paper or application of special inks is required. With the help of purely mechanical converting of tipping papers, there will still be opportunities for effective design upgrades that do not come into conflict with regulatory or sensory/toxicological restrictions.

    Given the importance of maintaining product appeal while complying with regulatory requirements, it is worth mentioning, too, that the embossing techniques described here can be applied also to printed paper inner liners, which is the first point of interaction, contact and, therefore, communication that the consumer has with a brand after opening a pack of cigarettes.

    Examples of off-the-shelf macro-embossed, micro-embossed and nano-embossed tipping papers are available from the Tann Group, which also offers a design service as part of development projects in which customers get to see and feel the finished product prior to a market launch. —George Gay

    Into the Void: The Fine Art of Cigarette Ventilation

    Thinking recently about the perforation of cigarette tipping paper, I was reminded that Leonardo da Vinci is credited with once having said that among the great things that are found among us, the existence of nothing is the greatest. I’m sure you can see where this is leading. The perforation of tipping paper allows for the controlled dilution of tobacco smoke, so, given that in many parts of the world, controlling the deliveries of tobacco smoke constituents is the subject of government regulation, it is no overstatement to say that perforating technology plays a vital role in cigarette manufacture. And so here is a case where a vital role is played by perforations—holes if you like, and what are holes if not nothing?

    Of course, this introduction is somewhat misleading because, in the case of perforations, the nothingness “created” is defined by the material in which they are made—the tipping paper, though it is still the case that some such papers are not perforated.

    But in the main they are. Axel Nather, head of sales and marketing at Micro Laser Technology (MLT), told Tobacco Reporter in an email exchange early this year that a few manufacturing processes still used electrostatic perforation, which worked well where only very low levels of ventilation were required. However, he said, as government regulations and end users demanded cigarettes with increasingly lower deliveries, laser perforation was ultimately the solution. Laser perforation could be used to produce very stable low-ventilation, medium-ventilation and high-ventilation levels, and ventilation level adjustment was very simple, requiring only changing the hole sizes, track numbers and hole quantities.

    With MLT systems, the operator can instigate these adjustments, and, in the case of online equipment, additional parameters can also be set, so, for example, thicker cardboards can be perforated or cut.

    The use here of the word “cut” needs some explanation as does the reference to “online” equipment. When it started in business 20 years ago, MLT developed and supplied offline laser perforation machinery, but during the past 10 years, it has also been offering and supplying online equipment. This means the company has three main groups of tobacco industry customers comprising cigarette manufacturers of all sizes, paper converters and machine builders that integrate MLT’s laser equipment into their production lines.

    Offline machinery, which comprises stand-alone machinery, is almost always supplied directly to customers. On the other hand, online equipment can, as stated above, be taken up by manufacturers when MLT’s equipment is fitted to OEM cigarette making machinery, and it can be retrofitted to existing manufacturing lines either by MLT or by specialist rebuilders. And finally, there are laboratory systems, which, Nather said, could be delivered with many technically exciting elements.

    Finally, that is, in relation to perforation machinery and equipment. The tobacco industry also uses MLT’s systems for laser cutting and laser scribing, mainly in the production of cigarette packaging, where cardboard and foils are cut and scribed. But MLT’s laser perforating and cutting systems have come into their own with the rise of heat-not-burn (HnB) products. Mostly, HnB products are made with relatively thick materials, such as cardboard, said Nather, so for this reason, MLT had developed laser systems that could generate extremely short pulses of very high powered lasers. This allowed the creation of very small, clean holes, and it also meant that many thousands of “cardboard sticks” could be perforated per minute. And if the speed was still not sufficient, two lasers could be used simultaneously to double the speed.

    All this adds up to what Nather described as a pleasing and increasing level of project inquiries and sales, despite the fact that in 2020 the coronavirus pandemic had had a significant impact on the entire tobacco industry, with projects often being delayed. Nather mentioned in particular steadily increasing inquiries in the area of online perforation and HnB products. And he said MLT’s service department was currently very busy because, in part, it now maintained older laser systems produced by other suppliers and refurbished their laser sources.

    One of the reasons that Nather gave for the increasing level of interest was the innovative nature of the tobacco industry, especially in the area of new product developments, for which MLT’s laser systems were often needed. “This is, of course, very gratifying; development projects are always a great pleasure when exciting products are created,” he said. “As a medium-sized company, we are very flexible and can react relatively quickly.”

    The one challenge Nather mentioned concerned the effects of the coronavirus pandemic, and I asked him what difficulties MLT had faced and what steps it had been able to take to ameliorate those difficulties. Some tobacco industry projects had been postponed and others had taken longer than normally would have been the case, he said, especially during 2020 and early 2021. In addition, travel had been difficult, and, in some cases, it had not been possible to enter some countries, such as the U.S., for a relatively long time.

    In response, MLT had created the circumstances whereby systems could be put into operation virtually, often by helping customers through webcam-based remote maintenance. Interestingly, Nather added that while MLT was glad traveling had become easier again, it would continue to use or even expand the possibilities offered by online maintenance and commissioning. —George Gay