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  • Setting It Fre

    Setting It Fre

    Image: Turning Point Brands

    Turning Point Brands prepares to roll out its FRE nicotine pouch nationally in the U.S. this year.

    By Timothy S. Donahue

    It’s looking like a FRE market in 2024. Turning Point Brands (TPB) is expected to release its 2023 financial results in late February. While the Louisville, Kentucky, USA-based nicotine product conglomerate remains one of the best stock bets in the tobacco sector, its 2024 goals are taking a more “modern” approach. TPB is getting ready to go full force with its premium modern oral nicotine product and is expecting that this year more consumers will trade in their combustible sticks for its FRE white pouch nicotine product.

    Graham Purdy, president and CEO of TPB, said during an earnings call that the company is excited about FRE’s U.S. national rollout in 2024. The product will compete in a billion-dollar-plus market that continues to grow rapidly. The company spent much of 2023 shoring up FRE’s supply chain to ensure consistent product quality, according to leadership.

    “[We have been] analyzing consumer feedback and testing online [and] select in-store marketing and merchandising programs to ensure a successful national rollout. Given our progress to date, we are now focusing on prudently ramping up our sales and distribution efforts to achieve steady growth over time,” said Purdy. “Our early learnings and performance in test markets have given us more confidence to now leverage our sales and distribution expertise to profitably expand FRE’s profile in-store count similar to what we achieved with Stoker’s Moist Snuff over time.”

    While confident about FRE’s prospects, Purdy expects market share gains to be “small and incremental.” “I think Q4 is sort of the time of the year where we [start] expanding out the foundation. I think our expectation for the product is to look similar to Stoker’s over time as we compete against the large players in the category,” Purdy explained. “It’s really a store output focus on the product, similar to some of the past practices we’ve had with other categories, specifically Stoker’s …. We focus on the stores that have the highest volume.”

    TPB reported a 5.6 percent drop in sales for the third quarter, ending Sept. 30, as it faces stiff challenges in a tight market. The company, known for its Zig-Zag and Stoker’s brands, reported a decline in consolidated net sales to $101.7 million, which is believed to be due to the current economic challenges faced by the consumer goods sector.

    Zig-Zag, a stalwart in TPB’s portfolio, suffered a 10.2 percent sales decrease compared to the same quarter last year. However, sales in the Stoker’s segment, TPB’s smokeless tobacco division, which includes FRE, rose by 10.1 percent. This illustrates modern nicotine’s growing popularity among consumers seeking traditional tobacco alternatives.

    It isn’t surprising that TPB is embracing FRE’s potential. The global modern oral market is booming. In a recent report, Polaris Market Research valued the worldwide nicotine pouches market at an estimated $1.6 billion in 2022 and projected the segment’s revenue to reach more than $26.8 billion by 2032.

    Summer Frein, chief revenue officer at TPB, said FRE has been well received in the marketplace and that consumer engagement has been encouraging. “We continue to focus on maximizing the value of our brands, executing against the plan we’ve established and growing our business with both our retail and end consumers,” she said. “We continue to focus on maximizing [the] value of our world-class brands and extensive distribution capabilities.”

    Asked during the conference call whether the company would go after stores with higher volumes and potentially higher price points, Frein said the company considers FRE a premium brand that can hold its own against bigger brands.

    “We have a strong belief in our point of difference … which is higher nicotine strength options available for our consumers, which we continue to see resonate both in-store and there’s been a strong response online, and [we] plan to profitably compete in the segment against those big brands,” she said.

    Purdy added that despite this year’s challenges, which included navigating wholesale inventory reductions at Zig-Zag Canada, and continuing with some additional difficult comparisons, he feels good about 2024. “Particularly our progress in the [alternative] channel and FRE,” he said. “We remain focused on demonstrating further progress for the balance of the year and into 2024.”

    TPB is also going to continue expanding into the alternatives markets, such as cannabis products. Purdy said that as additional states greenlight medical and recreational cannabis, his company will focus on providing a better shopping experience for consumers. In addition to more legal dispensaries and manufacturing and processing facilities, other retail outlets like head shops are drafting off this trend, he explained. “Our alternative B2B business saw Zig-Zag sales accelerate, growing over 40 percent during the quarter,” he said. “We also continue to be proactive in optimizing our capital structure.”

    Frein said the company’s future isn’t based exclusively on next-generation nicotine products. Online sales are also growing. While it may be making progress on its multiyear roadmap to establish FRE and continue Zig-Zag as lifestyle brands, it’s particularly focused on the cannabis market with Zig-Zag. After all, Zig-Zag continues to increase its brand awareness, and TPB’s leadership wants to build on Zig-Zag being well-known in the alternative market segment.

    The company is also focusing firmly on FRE being a premium product and continuing to boost its growing online sales segment. Frein said the nicotine market can be challenging and often takes a company in multiple directions simultaneously.

    “In our B2B alternative segment, we had a strong quarter with increased sales of Zig-Zag papers and cones. We also saw a double-digit rise in both the number of customers and orders on our alternative platform, with an increase in average order size. We made significant progress across the business this past quarter as we saw growth in every subcategory with the alt channel, which includes head shops, smoke shops, dispensaries, including … distributors, cultivators and manufacturers and processors,” Frein emphasized. “Additionally, we are seeing increased engagement across our digital platforms. The total online traffic sessions on our dedicated B2C site are up 33 percent [compared] to a year ago.”

    Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.
  • Inscrutable Islands

    Inscrutable Islands

    Photos: Taco Tuinstra

    Home to an infinite number of tobacco varieties, Indonesia is among the world’s most diverse leaf origins.

    By Taco Tuinstra

    Forget Zimbabwe. Forget Brazil. If you want to understand Indonesian leaf tobacco, you may gain more insights by studying at the Hogwarts School of Witchcraft and Wizardry, the fictional magical boarding school in J.K. Rowling’s Harry Potter series, where nothing is what it seems. At least, that was the advice one aspiring leaf trader received upon arrival in the archipelago. His mentor was joking, of course, but the analogy isn’t entirely frivolous: The baffling Indonesian market is not the easiest place to start your career in leaf tobacco. Unraveling its mysteries takes time and dedication.

    In 2022, Indonesia’s growers harvested 225.58 million kg of leaf, according to the Ministry of Agriculture, but it’s not the volume that is likely to confound the trainee. Rather, it’s the seemingly endless variety of tobaccos. Whereas the novice in Zimbabwe or Brazil will be learning about one or two internationally recognized tobacco types, his counterpart in Indonesia will have to memorize a bewildering list of local names and regional variations, many of them unique to the island nation.

    Indonesia is home to a seemingly unlimited number of tobaccos. AOI’s team alone procures 17 different tobacco varieties across Java, Madura and Lombok.

    “You may have one seed variety that’s cured, grown and handled under very similar practices—but if it’s from a different area, it will have a different name,” explains Michael Green, country manager at Alliance One International (AOI), which procures 17 different tobacco varieties across Java, Madura and Lombok. Likewise, a seed planted on one side of a mountain will yield a very different tobacco than its identical counterpart sown on the other side.

    That may have something to do with Indonesia’s size and topographical variety. Sprawling across three time zones and at least 17,000 islands, the country boasts majestic highlands, lush rainforests and barren volcanic landscapes, among other features. Projected onto a map of the United States, Indonesia’s extremities would extend 1,000 km from the mainland into the Pacific Ocean and the Atlantic Ocean, respectively.

    Yet leaf tobacco production is concentrated in a relatively small region of this vast nation: Flue-cured Virginia on the islands of Lombok and Bali, burley in the Lumajang regency of East Java and dark fire-cured tobaccos in Central Java’s Klaten and Boyalali regencies. In addition, there are countless sun-cured varieties, which are typically named after the region where they are grown. Prominent sun-cured tobaccos include Jatim and Kasturi. Many of these are used to manufacture Indonesian clove cigarettes (kretek), although Kasturi is also exported to the European Union and the United States, where it is used in chewing tobaccos.

    Indonesia projected on map of the United States

    Among foreign tobacco buyers, Indonesia has historically been known for the dark air-cured tobaccos cultivated in East Java. With a volume of 8 million kg in a good year, the largest of these is Besuki Na Oogst (NO), which means “late harvest” in Dutch, the language of Indonesia’s former colonial rulers. Besuki NO is widely employed in machine-made cigars as well as in the bobbins used in the manufacturing of such cigars.

    In addition, there is Besuki Tembakau Bawah Naungan (TBN), or “tobacco under sheet,” in Bahasa Indonesia, the country’s lingua franca. This plant was developed in the 1970s and 1980s and is grown under shade for cigar wrappers. The reduced exposure to direct sunlight results in thinner and more elastic leaves, which not only facilitates handling but also contributes to a smoother smoking experience. Shade-grown tobaccos are typically more uniform in appearance than sun-grown varieties, with fewer blemishes and imperfections—and thus highly valued by premium cigar manufacturers. A crossbreed of the Besuki and Connecticut styles, TBN is among the world’s most expensive wrappers on the market today.

    Indonesian dark air-cured tobaccos also include Vorstenlanden and Sumatra. Interestingly, the famous Sumatra cigar wrappers that were originally derived from seeds native to the eponymous Indonesian island are now cultivated primarily in Central America.

    Indonesia’s largest tobacco product by far, however, is Rajangan cut rag, which accounts for up to 70 percent of the country’s total leaf production volume. Rajangan is widely deployed in kretek production, with individual varieties named after the region where they are produced. Unlike the cut rag produced elsewhere, Rajangan tobaccos are cut while they are still green and then dried in direct sunlight on mats. Ranging in color from lemon to brown, this product may remind some Western visitors of the straw used to decorate Easter baskets.

    Shadegrown tobaccos are typically more uniform tin appearance than sun-grown varieties, with fewer blemishes and imperfections–and thus highly valued by cigar manufacturers.

    Multiple Players

    Contrary to the situation in many other leaf origins, where growers cultivate tobacco primarily for exports, at least 70 percent of the tobacco planted in Indonesia is smoked locally. With an annual consumption of nearly 300 billion sticks, according to TMA, Indonesia is not only one of the world’s largest cigarette markets, but it is also a unique place in terms of taste preferences, with kreteks outselling white cigarettes by a factor of 10. Despite the efforts of some multinationals to steer Indonesian smokers toward “international” cigarettes, the transition from dark tobaccos to blond tobaccos that occurred in southern Europe and elsewhere never took place in the archipelago.

    Numerous leaf merchants, serving both domestic and foreign customers, operate throughout the archipelago. Aside from AOI, whose footprint stretches from Central Java to Lombok and includes a processing factory in Mojokerto, there are well-known players such as Universal (known as Universal Tempu Rejo locally), Premium Tobacco and Hail & Cotton, which goes by the name Mayangsari in Indonesia. In addition, the country has multiple home-grown players, including Sadhana and Mangli Djaya Raya (MDR).

    Sadhana was established by former Sampoerna executives after the 2004 sale of their company to Philip Morris International. The leaf dealer exclusively supplies Sampoerna, which has evolved into the cigarette market leader since becoming part of the multinational. MDR is a privately owned Indonesian operator, established in 1960 and acquired in 2007 by Njoto Permadi. Today, the business is run by his son, Christian A. Njoto Njoo. MDR is the only company with a redrying facility in Jember, the heart of Indonesia’s dark air-cured tobacco business in East Java. Since 2009, MDR has also had a dedicated cigar business, manufacturing products for both the domestic market and the international market.

    Steeped in Tradition

    Tobacco cultivation is a massive, labor-intensive business in Indonesia, involving as many as half a million growers. Averaging between 0.25 ha and 0.5 ha, plots tend to be small and scattered. Farmers either grow under contract with one of the leaf merchants or sell their produce on the open market through middlemen. Contract growing provides buyers with a high degree of oversight of the production process. By providing their farmers with the appropriate crop protection agents (CPAs), personal protective equipment, inputs and knowledge of good agricultural practices, the leaf merchants ensure that tobacco meets both their own standards and those of their customers, which sometimes exceed those set by the Indonesian government. For example, some CPAs still permitted in Indonesia are no longer accepted by many international cigarette manufacturers.

    Jasper Kuitems

    Farmers who grow tobacco under contract benefit not only from greater yields, better quality and consistent prices but also from the certainty that they will sell their crop. Contracting also helps growers cope with adverse events such as crop failures and natural disasters. For example, after the Mount Raung volcano erupted in 2015 and covered much of the region’s tobacco in ash, Mayangsari had to take on the additional expense of washing tobacco—but it kept buying. Farmers selling in the free market, by contrast, were stuck with their ash-covered crops because many middlemen decided to take a break that year. “We support our contracted growers in both good times and bad times,” says Jasper Kuitems, leaf manager for Mayangsari.

    Despite the advantages of working with growers directly, most buyers also purchase leaf on the open market. Not only is contract growing an expensive and big logistical undertaking, but it also represents competition for the middlemen, who represent a powerful constituency in Indonesia. Buying through both channels allows merchants to supplement their contracted volumes and helps maintain social harmony in their communities.

    Tobacco is a notoriously demanding crop, requiring more human interventions throughout the growing cycle than, say, corn or rice. Nonetheless, it remains a solid cash crop for both contract growers and free-market farmers in Indonesia, as evidenced by the fact that landlords charge tobacco growers higher rents than producers of other crops. “If done correctly, tobacco offers an attractive return on investment,” says Green. Of course, everything depends on supply and demand. When prices are poor, farmers may look at alternative crops; in good times, they may plant extra tobacco.

    Demand has been strong in recent years, particularly for Indonesia’s dark air-cured tobaccos. According to Martijn Schaap, acting country manager for Universal Tempu Rejo, this is partly a result of two consecutive poor Besuki NO harvests and partly due to cigar makers’ reduced inventories in the wake of the Covid-19 pandemic. The growing popularity of cigar smoking in China has, too, boosted demand for Indonesian dark air-cured leaf.

    No machine can mimic the fine motor skills required to sort, open and stack the delicate cigar tobaccos.

    Post-Harvest

    The Indonesian tobacco industry’s contribution to employment is not limited to the field. A significant share of kretek cigarettes continues to be constructed by hand, and the government favors manual production with lower tax rates. Its policies have helped reverse a long-term trend toward mechanized manufacturing, and handmade products now account for nearly one-third of the market, according to Sampoerna, which in November 2022 announced a major investment in new factories for hand-rolled cigarettes.

    The leaf merchants, too, employ large numbers of workers post-harvest, particularly in the dark air-cured segment. After the leaf is delivered to the buyer, it is separated based on quality, moisture, length and color, among other parameters. Unlike in Latin America, where the bundles go directly into the fermentation rack, Indonesian companies open the leaves one by one—a painstaking process involving hundreds of women, who are said to be more patient and dexterous than their male counterparts.

    Martijn Schaap (right)

    After opening, the leaves are stacked into fermentation piles that can reach up to several meters in height and weigh up to 12 tons. During fermentation, which can last several months, enzymes and microorganisms break down organic compounds within the tobacco leaves, triggering various biochemical changes. The combination of temperature, humidity and pressure causes the leaves to obtain the desired color, flavor and aroma. To achieve uniform fermentation, the piles must be regularly “turned”—restacked from the ground up to ensure an even distribution of moisture and temperature, along with proper aeration. Timely restacking is crucial because if the temperature in a bale rises too high, it will turn the tobacco black and cause it to fall apart.

    The labor-intensive nature of their operations causes tobacco processors’ payrolls to swell significantly during the season. While Indonesian wages are low by international standards, they have been rising rapidly. In 2023, the minimum wage in the Jember area jumped by 8.5 percent compared with an overall inflation rate of 3.08 percent nationwide. The industry expects another hefty minimum wage increase, of approximately 10 percent, in 2024.

    The rising cost of labor presents a challenge for the cigar leaf companies because few of their activities lend themselves to mechanization. Tobacco farm plots tend to be too small and too dispersed to effectively deploy farm equipment, and no machine can mimic the fine motor skills required to sort, open and stack the delicate tobacco leaves yet. Universal did recently purchase a new seeding machine, however. Due to more accurate seed placement and other improvements, the new device offers significantly higher germination rates than the company’s existing seeder.

    The rise in labor cost presents a challenge for the cigar leaf tobacco merchants because few of their operations lend themselves to mechanization.

    Taking Responsibility

    Like their counterparts elsewhere, leaf dealers in Indonesia are investing heavily in environmental, social and governance (ESG) projects. AOI, for example, has been fitting its contracted farmers’ curing barns with new gasifying systems that burn biomass rather than wood. Not only does this reduce pressure on Indonesia’s forest cover, but it is also more efficient because biomass has a higher calorific value than wood. On a cost-per-kilo basis, it’s about 30 percent cheaper than using wood, according to Green.

    This year, AOI and its processing joint venture partner ITS have planted 5,000 trees in cooperation with a local organization, Trees4Trees. The project aims to plant 60,000 trees by 2030. In addition, AOI installed four deep water wells and tanks, assisting almost 300 families on Madura Island. The company intends to expand the project into other AOI regions where water scarcity is common through the dryer months.

    The company has also engaged professional storytellers to educate the communities where it sources tobacco about the importance of health and safety, fair treatment and avoiding child labor. To date, the program has reached almost 20,000 participants. AOI aims to maintain an audience of more than 5,000 participants annually. In Jember, meanwhile, the tobacco sector is building playgrounds and supporting schools to keep children out of the fields.

    The industry has also invested in waste management, which represents a considerable problem in Indonesia, where 40 percent of the country’s 142 million urban residents still lack basic waste collection services. In the Jember region, Universal has helped set up facilities that purchase waste from local communities, reducing litter and offering villagers an additional source of income. The money generated by the waste depots helps pay for the playgrounds, among other projects. Universal also sponsors initiatives that help people in the communities where it operates set up small businesses. The goal, says Schaap, is to make the projects self-sustainable so that they will endure and grow to serve the community as a whole.

    Mayangsari recently made a remarkable contribution to tackling the waste problem. A regional superstition that burning disposable diapers brings bad luck to the baby prompted many mothers in the Jember area to dispose of used nappies in rivers, where they would leach chemicals, spread bacteria and cause blockages in waterways, including irrigation canals. By supplying more than 2,000 young mothers in its growing communities with reusable diapers, Mayangsari not only helped decrease diaper waste by more than 300 tons but also reduced the occurrence of diaper rashes, urinary tract infections and, importantly, household expenses. According to Kuitems, the money saved by not having to buy disposable diapers for six months is equivalent to 150 kg of rice, enough to feed two adults for an entire year.

    A Tilted Playing Field

    While the leaf dealers’ investments in ESG make them good corporate citizens, the business case is not always straightforward. According to the merchants featured in this article, it can be challenging to communicate and recover the added value provided by such projects. Whereas programs in the coffee and cacao business allow suppliers to charge a premium for responsibly sourced products through certification labels, there is no equivalent in the tobacco business. “A smoker cannot tell the difference between a responsibly sourced cigar and another product from its packaging,” says Kuitems.

    Another challenge is that not everyone plays by the rules. Leaf dealers that pay minimum wages, forgo harmful crop protection agents and provide their growers with personal protective equipment must compete with players who don’t (and thus enjoy lower operating costs).

    This means that responsible companies must work twice as hard as their less conscientious counterparts. “It forces us to operate as cleverly and efficiently as possible,” says Kuitems. While acknowledging the challenges, the merchants who contributed to this piece said they remain firmly committed to their standards—not only because their blue-chip customers insist on it but also because it is the right thing to do. The extra work, they noted, comes with the territory. It’s just one of the ways in which the complex Indonesian leaf tobacco market will keep the traders on their toes.

    Taco Tuinstra is Tobacco Reporter’s editorial director. Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors. On his watch, Tobacco Reporter has won several awards for editorial excellence. Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.
  • The Potential of Pouches

    The Potential of Pouches

    Photo: Stefanie Rossel

    Some markets have been more receptive to modern oral products than others.

    By Stefanie Rossel

    The modern oral nicotine category continues growing but struggles to reach a wider global audience. Modern oral nicotine products, which are white, pre-portioned little bags comprising a nicotine-containing carrier material, are considered the advanced, cleaner version of Swedish snus, a pasteurized oral tobacco that is available as loose products or pouches and is credited with helping Sweden achieve its record-low smoking prevalence by offering smokers a less harmful way to consume nicotine.

    According to Euromonitor International, global sales of nicotine pouches grew from 17.09 billion units in 2022 to an estimated 20.77 billion units in 2023. The overwhelming majority of sales, however, take place in the U.S., where an estimated 14.97 billion units were sold in 2023 compared to 12.61 billion units in 2022. Sweden ranks second, with 1.8 billion units sold in 2022 and an estimated 2.2 billion units sold in 2023. It is followed by Denmark with a forecast 745.3 million units in 2023 (versus 589.2 million units in 2022), Pakistan and Austria with estimated sales of 695 million units and 477 million units, respectively.

    As far as value is concerned, Euromonitor estimates the category to be worth $10.29 billion globally, up from $8.47 billion in 2022. By 2027, the business intelligence firm expects the segment’s value to reach $15.99 billion. Despite their relentless expansion, modern oral nicotine products remain a niche within a niche—they are a small part of a larger oral tobacco market, which accounted for only around 2 percent of the global nicotine industry in 2022.

    Raphael Moreau

    In the U.S., retail sales of nicotine pouches generated $8.58 billion in 2023 compared to $7.23 billion in the previous year. Raphael Moreau, head analyst at Euromonitor, expects the U.S. modern oral nicotine market to reach $11.03 billion by 2027.

    “The U.S. has benefited from a solid legal framework, with the Food and Drug Administration controlling the market chain, requiring authorization to market, nicotine health warnings and premarket assessment,” Moreau says. “Generally, the U.S. has a strong tradition of oral, i.e., chewing, tobacco. This definitely helped. Nicotine pouches are convenient and discreet to use, and they are taking share from chewing tobacco and Swedish-style snus, which has boosted U.S. sales.”

    As consumers become more familiar with the product, Moreau anticipates the market to continue growing rapidly. In 2023, just under 3 percent of the U.S. adult population consumed modern oral nicotine products. “Over the next five years, we will see an increase because of more awareness of the brands,” he says. “There is a wide flavor selection, which appeals to consumers who can’t use flavored vape products anymore as they are banned. The return to office work after the Covid pandemic will also contribute to the category’s growth: When working from home, people were more likely to vape. At the office, pouches are more convenient. Besides, the products are used as a cessation aid away from cigarettes and other combustibles.”

    Moreau suspects that the majority of modern oral nicotine is used in combination with other tobacco products. “This also has caveats because potentially, consumers may just try them and not become regular users, so prediction is difficult,” he says.

    With a 77 percent category retail value share in the third quarter of 2023, Zyn remains the U.S. market leader.
    (Photo: Swedish Match)

    Zyn Pulls Further Ahead

    With a 77 percent category retail value share in the third quarter of 2023, Zyn is the U.S. market leader by a large margin. Shipment volume of Zyn nicotine pouches amounted to 104.5 million cans during that period, a 65.7 percent increase compared to the third quarter of 2022, according to Philip Morris International. PMI became the owner of the Zyn brand through its acquisition of Swedish Match for $16 billion in late 2022. The move has given PMI a comfortable lead in the U.S. nicotine pouch market, where it previously had no presence to speak of, and will help the company to achieve its goal of becoming substantially smoke-free by 2023.

    At PMI’s Investor Day Conference in September 2023, Lars Dahlgren, president of smoke-free oral products and CEO of Swedish Match, forecast “stellar growth” for the product also because Zyn is cheaper than cigarettes, retailing at $5 per can compared to a price of $8 for a pack of cigarettes. According to news platform Seeking Alpha, the brand is popular among Generation Z, which has otherwise been a hard market for traditional tobacco companies to crack.

    In addition to Zyn, some other brands have made gains recently, according to Moreau. With a retail volume of 15.4 million units and a value share of 11 percent in 2022, Altria’s On! Brand ranks second behind the market leader, followed by Swisher International Group’s Rogue nicotine pouches, with 7.9 million units sold during that period.

    The “attractive category dynamics” in the highly competitive U.S. nicotine pouch market also holds potential for new players. In June 2023, ITG Brands acquired a range of nicotine pouches from Canada-based TJP Labs in order to facilitate its entry into the U.S. modern oral market. Following further consumer testing, ITG Brands plans to launch 14 pouch product variants in 2024.

    “The category still is very young, so there is no strong brand loyalty, and consumers are likely to try new brands,” comments Moreau. “This makes the market attractive to new entrants. And there’s quite a lot of room for them, as the category is growing very fast.”

    Regulation Required

    Except for the Nordic countries, where consumers have been familiar with snus for two centuries, the modern oral category is still underdeveloped in the rest of the world.

    Japan Tobacco International, present in the segment with its brand Nordic Spirit, sees vast untapped potential. Nordic Spirit was developed in Sweden and has rapidly grown since its launch in 2018. The product is available in the U.K., Ireland, the Philippines and Switzerland. “While the tobacco-free nicotine pouches category is still in its infancy, we already see that many adult tobacco and nicotine consumers globally will be interested in trying the product, helping the new category to grow significantly over the coming years,” says a JTI spokesperson. “For example, smoke-free nicotine pouches have become increasingly popular in the U.K. Responding to this growing trend, the Nordic Spirit brand has witnessed growth and increased its market share to around 45 percent.”

    According to Euromonitor, U.K. consumers bought 92.1 million nicotine pouches in 2022. In 2023, the category there grew 54.6 percent.

    Pakistan, however, was the country with the largest year-on-year growth rate, with sales in 2023 expected to be 70.7 percent, up from the 127.8 million units sold in 2022. In Pakistan, an estimated 10 million people use smokeless tobacco, which corresponds to more than 40 percent of the country’s total tobacco market. In December 2022, BAT announced that its modern oral nicotine brand Velo, which it had launched in Pakistan in early 2020, had achieved a monthly volume of more than 40 million pouches in the country, making it the company’s third-largest market for nicotine pouches.

    Most growth in the category will come from Asia-Pacific and Eastern Europe, according to Moreau. In Poland, for instance, the category increased by 69.5 percent in 2023. “The Czech Republic is also interesting because it had quite strong demand in 2022 and 2023,” Moreau says. “This is likely to stay [this way], particularly since nicotine pouches are regulated in the country now.”

    In May 2023, Czechia’s Ministry of Health issued a decree, modeled on tobacco and e-cigarette legislation, which regulates the composition, appearance, quality and characteristics of nicotine sachets. It also defines the legal age for sale and requires manufacturers and importers of nicotine sachets to register their products with the Ministry of Health. The legislation entered into force on July 1, 2023.

    Other countries, by contrast, have been less accommodating, with the Netherlands and Belgium banning modern oral products in April 2023 and October 2023, respectively. The European Commission, too, is reportedly mulling a ban on nicotine pouches for the common market. The products are also prohibited in Australia and New Zealand.

    “History has repeatedly shown that bans of legal products often do not lead to their intended goals and instead encourage criminal gangs to increase supply of illegal products to make up for the shortfalls,” warns JTI’s spokesperson. “Instead of an outright ban, we should aim for an evidence-based regulatory framework that acknowledges the potential of nicotine pouches to reduce the risks associated with smoking. At the same time, we must ensure that oral nicotine products aren’t marketed or sold to minors under any circumstances.”

    In Germany, modern oral tobacco continues to operate in a regulatory gray area. Nicotine pouches are classified as food in the country, which makes them subject to European food law. Because the EU has not approved nicotine as a food or food ingredient, this means that nicotine pouches cannot be legally traded in Germany.

    Despite the German Federal Institute for Risk Assessment’s October 2022 acknowledgement that tobacco-free nicotine pouches could reduce the health risks compared to smoking, the products’ legal status remains unchanged. “It will only change after a decision at EU level,” says Moreau. “Germany is a typical case where an uncertain or hostile landscape and a lack of familiarity with the products are two negative factors that are feeding each other. Whenever the legal status is unclear, not exactly defined or restrictive, retailers will basically avoid selling them. Therefore, consumers will not be aware of the products, and they will not trust them. In Germany, nicotine pouches are still available online, but the products are obviously now not as widespread as [they would have been] if they were sold in stores.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • A Persistent Problem

    A Persistent Problem

    JTI’s Julian Cheung during the 2023 GTNF in Seoul

    The combination of substantial potential profits and low risk that has fueled the illicit cigarette trade is now also driving criminals’ interest in new nicotine products.

    By Stefanie Rossel

    Globally, the illicit cigarette trade is a growing problem. Recently, criminals have expanded into contraband novel nicotine products as well. Tobacco Reporter spoke about this topic with Julian Cheung, who is anti-illicit trade operations director for Japan Tobacco International’s Asia-Pacific region. Before working with JTI, Cheung worked for the Independent Commission Against Corruption in Hong Kong, bringing much experience to the subject of anti-illicit trade. JTI works closely with law enforcement agencies to stop illicit trade, according to Cheung.

    Tobacco Reporter: Could you please provide an overview of the current illicit cigarette market in the Asia-Pacific region? What are the hot spots, and which shifts have you recently observed? 

    Julian Cheung: Over the past decade, the Asia-Pacific region has experienced remarkable economic growth. In parallel, there has been growth in illicit trade. Illicit consumption of tobacco products is primarily fueled by a surge in illicit whites,[1] which are mass-produced in countries like Indonesia, Vietnam, China and the United Arab Emirates. These illicit whites often bear well-known brand names within their regions but remain absent from legal retail channels. 

    Smuggling networks use these leaky borders to transport illicit tobacco. The Thailand-Cambodia, Vietnam-China, and Eastern Malaysia-Indonesia borders are typical examples of areas where smugglers skillfully evade checkpoints or capitalize on remote and unmonitored regions for their unlawful activities.

    How does the current illicit cigarette market in the region compare to 10 years ago, and which developments do you anticipate in the near future?

    The market for counterfeit products in Southeast Asia is worth approximately $35 billion annually, with $3.3 billion in tax revenue lost annually from smuggled cigarettes, according to a 2020 report by the EU-ASEAN Business Council and the Transnational Alliance to Combat Illicit Trade.2

    The reality is that criminal organizations see tobacco as a high-profit, low-risk source of revenue. The criminal groups are incredibly adaptable and highly motivated. In Europe, they are moving counterfeit cigarette production closer to high-value markets such as France and the U.K. Another example of how quickly criminals adapt their operations to a changing environment is a steep increase in online sales of illicit cigarettes after pandemic-related restrictions were introduced. Despite the restrictions no longer in place, this shift toward online commerce remains, making it hard for consumers to tell the difference between genuine and counterfeit products.

    The high taxes imposed on tobacco products and then evaded by criminals allow them to gain massive profits at the expense of nations and their citizens. Unfortunately, we do not expect illicit trade issues to be solved completely in a mid-term perspective. However, through innovative strategies, cooperation with international and national law enforcement agencies and a focus on disrupting the financial foundations of these criminal networks, we can curtail the illegal tobacco trade and safeguard our communities and economies.  

    What can legislators do to prevent illicit trade?

    Evidence shows that higher taxes drive consumers to seek cheaper alternative products, such as those sold through illegal trade. We warn governments about the consequences of steep and sudden tax increases.

    For example, in Malaysia in 2015, an excise tax hike drove prices up by 42 percent compared with the previous year. The hike immediately pushed the illegal cigarette market share to 52 percent in 2016 from 37 percent in 2015. The long-term impact was that illegal products constituted almost 60 percent of cigarettes consumed in 2022, and Malaysia remains one of the countries with the highest level of illicit cigarette consumption worldwide.

    At the GTNF last September, you called for greater cooperation between the industry, governments and law enforcement agencies. What could such cooperation look like?

    Illegal trade cannot be dealt with in isolation. We work with governments, regulators, police and customs to crack down on illegal trade and criminality by sharing information and developing specific programs. We do this to protect our customers, businesses and brands.

    Better intelligence sharing between public and private partnerships, including the tobacco industry and law enforcement agencies (LEAs), is critical to tackling illegal trade.

    JTI engages with, and provides information to, law enforcement and other government agencies globally. For example, we have built a good working relationship with the European Anti-Fraud Office and law enforcement agencies across Europe to share industry expertise and information on all aspects of the illegal trade: criminal operations, locations and trends.

    We also provide various LEAs globally with anti-illicit trade awareness sessions, including counterfeit recognition training, information on evolving trends, modus operandi and actionable information on multiple aspects of illegal trade. 

    In August [2023 to] September 2023, my team supported law enforcement in Malaysia and the Philippines, who seized 37 million illicit cigarettes in successful enforcement actions.

    In how far would closer collaboration between individual tobacco companies operating in the region be helpful?

    While tobacco companies in the region already work together, we recognize that we need a more unified approach and cohesive voice so we can make a more significant impact in supporting authorities in the fight against illegal trade. 

    One example of the industry’s collaborative efforts is the Empty Pack survey. This survey, conducted quarterly or annually in selected countries across the Asia-Pacific, helps assess illicit cigarette prevalence in overall tobacco consumption. By evaluating the effectiveness of anti-illicit measures based on facts and evidence, authorities can adopt and fine-tune appropriate regulations to protect consumers and society from criminal groups that deprive state budgets of tax revenues.

    We are also involved in cooperation platforms like the Tobacco Association, which engages with authorities, advocating for protecting rights of legitimates businesses, particularly regarding tobacco-related policies and regulations. Using this platform, we also work with other tobacco companies to exchange information, experiences and best practices to share with authorities to help curb illegal trade.  

    At the GTNF, you said that in order to eliminate the illicit cigarette trade, it’s important to follow the money. What would be an effective strategy to tackle the problem?  

    The main driver of all illegal trade, but especially the illegal tobacco trade, is the ability of crime groups and individuals to generate huge illegal profits with very little deterrent. Across the globe, there is an increase in enforcement activity focusing on confiscating the proceeds of crime. However, more needs to be done; criminals especially do not like it when “they are hit in the pocket.” There is a very low imprisonment rate for people charged with tobacco-related smuggling offences—and even if they do receive jail time, it is taken as an occupational hazard. So, it is very important for LEAs and other government agencies to follow the money and infiltrate the complex world of money laundering and other criminal activities linked to these groups. Investigating these connections is essential to disrupt their criminal operations.

    For example, in July 2023, Malaysia’s Multi-Agency Task Force launched a major investigation into a prominent businessman with ties to local politicians and celebrities using these very methods. The arrested businessman, identified as the mastermind behind various criminal activities including cigarette smuggling operations, was apprehended during a series of well-coordinated raids. 

    This high-profile and complex case was investigated, with authorities employing the Anti-Money Laundering and Anti-Terrorism Financing Act and the more conventional Anti-Smuggling Act.

    Do you have examples of instances where a government successfully curbed illicit cigarette trade? What could we learn from those examples?

    Intelligence and research show that the main drivers for illegal trade are steep and sudden tax increases, making legal tobacco products less affordable and pushing consumers to seek cheaper alternatives. That is why balanced, reasonable and predictable taxation are prerequisites to curbing illicit trade.

    The illegal tobacco trade is, by nature, a transborder crime, with illegal cigarettes smuggled into a country and quite often with legitimately declared transit goods. While countries like Taiwan, Malaysia or Singapore recognize the economic benefits of being a transshipment hub, criminal groups exploit these hubs for their illicit activities. The following are a few examples of where government action was successful: 

    • Taiwan: Illegal tobacco smuggling often takes place through containers, utilizing a carousel-like approach to evade detection by law enforcement authorities. The Taiwan government has taken significant measures in this regard and has successfully intercepted containers suspected of carrying cigarettes with incorrect declarations while transiting through Taiwanese ports.
    • Malaysia: Starting in January 2021, the Malaysian government took action to address the widespread diversion of illegal cigarettes within the country. As part of this effort, a policy was implemented to restrict the transshipment of cigarettes to five designated ports in Malaysia. This policy successfully reduced smuggling activities at these ports by strengthening control and monitoring measures related to the illicit tobacco trade. By doing so, the government aimed to safeguard its revenue and protect against losses.
    • Singapore: Being the world’s second-busiest container port and largest transshipment hub, Singapore’s strategic position also attracts criminal activities. Starting from 2024, the Singapore government will implement a new licensing regime in phases and enhance the enforcement powers of customs officials. These measures aim to prevent smugglers from exploiting the free trade zones and ensure the security and integrity of these areas from illegal activities.

    Criminals have also started targeting reduced-risk nicotine products (RRPs). Can you please describe your findings in this regard?

    Currently, national regulations on RRPs vary from market to market and are even nonexistent in many countries, leaving room for illegal trade to operate in a gray area. For example, Taiwan has banned the sale of e-cigarettes but allows the sale of heat-not-burn sticks and devices. There are a lot of relatively new products, such as disposable vapes, coming into markets, and it is often not clear to enforcement officers what is legal and what is not. So apart from better regulation, there is an education factor often required for the officers charged with enforcing the law. Unfortunately, organized crime groups are exploiting either the lack of clear regulation or legislation or the confusion within enforcement authorities regarding the various products.

    Since RRPs are a relatively new category, illegal product distribution through online channels—including websites and instant messengers—gained significant popularity and widespread adoption, especially in the wake of the Covid-19 pandemic. 

    The increase in online sales presents a challenge for law enforcement officials because of cross-border distribution and the ability to conceal the IP host. This makes it difficult to identify and track the source of the products. These challenges are even more pronounced due to the limited resources available to many governments.

    Australia is probably a special case: Its strict regulation of tobacco products has contributed to the emergence of a black market for cigarettes. Now it has adopted a tough stance on vaping products too. What is this doing to illicit trade in the country?

    The less affordable legal cigarettes are, the higher the demand [is] for illegal products from consumers. The cost of a pack of cigarettes in the country is well over AUD40 ($26) and can be twice as much as an illegal pack, making it a lucrative market for criminal tobacco operations.

    To safeguard tax revenue and combat the negative impact of illegal trade, the Australian government has taken several measures. The Australia Border Force—custom—established the Illicit Tobacco Taskforce, which collaborates closely with industry stakeholders and ASEAN’s customs. Through information sharing and best practice exchanges, they target tobacco smuggling and protect Australia’s interests. 

    However, cracking illegal operations takes a lot of time and effort as criminal groups have constantly changed tactics. For example, smugglers have recently started breaking down consignments into smaller units to make detection and enforcement more challenging.

    As for the government’s position on a regulation on reduced-risk products, effective January 2024, Australia has implemented a ban on importing disposable vapes. However, history shows that such bans always have dangerous side effects, as seen in South Africa, where the illicit market boomed in 2020 following a temporary ban on cigarettes. An effective ban on disposable vapes will potentially create an illegal or black market that organized crime groups could exploit. This situation poses risks to consumers who may unknowingly purchase counterfeit or substandard products.

    1 “Illicit whites” are cigarettes manufactured by legitimate businesses that are smuggled to the markets outside the jurisdiction where they are produced and then traded illegally without any relevant duties being paid, causing a loss of revenue to governments and legitimate retailers.

    2 www.tracit.org/uploads/1/0/2/2/102238034/illicit_trade_paper_final_final.pdf

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • A Momentous Occasion

    A Momentous Occasion

    Photos courtesy of Godioli & Bellanti

    Godioli & Bellanti celebrates its 100th anniversary.

    By George Gay

    If you are ever due to visit the historic town of Citta di Castello, before you head off, you might like to take some time to read up on Italian artist and physician Alberto Burri, who was born there in 1915 and some of whose later works are on display at a venue repurposed from former Kentucky tobacco curing barns.

    The tobacco connection need come as no surprise. Citta di Castello, located in the province of Perugia, Northern Umbria, is the home of Godioli & Bellanti, which was founded in 1923 by Gino Godioli and Angelo Bellanti as an engineering company providing agricultural equipment, much of it to a thriving local tobacco-growing community. One hundred years on, Godioli & Bellanti has evolved and expanded into a company that is known to those working in the global tobacco sector for supplying machinery and equipment for complete leaf and primary processing lines, though it supplies, too, machinery and processing lines for medicinal herbs, other plants and food products.

    I would suggest that part of the reason why the company was able in October 2023 to celebrate 100 years of continuous business, during which it has become an important player in the global tobacco industry, is that it had, and has maintained, solid local, family and extended-family roots. Lorenzo Curina, a company veteran who really needs no introduction, told Tobacco Reporter earlier this year that its centenary celebrations were held in premises that had been, in 1923, the company’s headquarters but that had been donated to an educational and training institution when the company needed more space and moved to an industrial area in 1963 under its second-generation leadership.

    The institution, the Scuola Operaia Giovanni Ottavio Bufalini, was where Curina’s grandfather had taught and where students are now trained in, among other things, the culinary arts. Appropriately, the formal celebrations, which went hand in hand with a factory and city tour, were held on the ground floor of the institution, where the Godioli & Bellanti workshop had once been but where the institution now runs a typical Italian restaurant for the benefit of its students and customers.

    The event was addressed by speakers representing the political, ecclesiastical and academic life of Citta di Castello and attended by 140 guests, including Godioli & Bellanti’s Italian-based tobacco customers, its international agents and its employees, past and present. One of the guests was Elise Rasmussen, the executive director of The GTNF Trust and publisher of Tobacco Reporter, who said it had been an honor to attend the 100th anniversary celebrations and to be asked to propose the congratulatory toast on behalf of the assembled guests. “But it was an honor wrapped in pleasure—the pleasure of catching up with long-standing friends and meeting new ones as we came together from around the world in celebration of that momentous occasion,” she added.

    “In my work with Tobacco Reporter magazine, which this year is also celebrating a major anniversary, I have for a long time had the honor of working with the Godioli & Bellanti team, particularly Lorenzo Curina, who is a valued customer and treasured friend, so I took much pleasure in congratulating them all on reaching this milestone and look forward to working with them in the future as this dynamic engineering company forges ahead.”

    The Ability to Evolve

    The reference to a “momentous occasion” was not overwrought. In a changing world, more latterly, a rapidly changing world, it is not easy for a business, particularly, perhaps, a family business, to prosper through 100 years. And Curina, who has been with Godioli & Bellanti for 47 years and who is a shareholder and vice president, was well placed and not afraid to make this point when he spoke at the start of the event, in part thanking all the company’s customers, agents and employees for their various roles in ensuring Godioli & Bellanti’s success. “It wasn’t all rosy,” he admitted. While there were many good times and exciting moments, he said, each generation had faced difficult times during which they had had to draw on all their strengths just to continue in business.

    But this reference to the difficult times was brief, and Curina demonstrated his confidence in the company’s future when he talked of the high professional standards that had underpinned its performance during “these first 100 years.” And this commitment to the future was a theme taken up by the company’s managing director, Angelo Benedetti, who represents the family’s fourth generation and who, in his address, promised to carry forward and build upon the successes achieved by previous generations.

    Meanwhile, Curina, who knew both the company’s founders, one of whom was his grandfather, and who was mentored by the second-generation partners, spoke with pride of the work carried out by Godioli & Bellanti from the 1920s to the 1950s, when the company’s workshop was engaged in manufacturing products that few were capable of making—products that demonstrated, too, the flexibility of the company and its ability to evolve. For instance, during that time, the company provided equipment that pumped water from the Shebelle River to irrigate fields in Ethiopia and Somalia. And during the economic boom of the post-war era, the company was able to turn its hand to the construction of civil and industrial heating systems for a widening circle of customers.

    Then, in the 1960s, came the mechanization of tobacco processing in which Godioli & Bellanti became a significant player, in part because of the relationships built up with two Italian companies, Deltafina and Fattoria Autonoma Tabacchi—relationships that allowed Godioli & Bellanti to grow. Giorgio Marchetti, vice president and production director at Deltafina, on being asked to comment on the anniversary, said Godioli & Bellanti had actively served the tobacco industry with passion and professionalism over the years. “This blend has allowed a family company to achieve 100 years without showing ‘gray hairs’ but still looking young and dynamic,” he said in an email exchange. “The cooperation and experiences gained over the decades working with Deltafina have been beneficial for the growth of both companies.”

    Devotion and Passion

    And from its solid Italian base, the company expanded, offering its machinery to companies around the world—wherever tobacco was being processed. One such country is Bangladesh, where Godioli & Bellanti operates through a local agent headed by Shahroze Kabir, though the word “agent” does not do justice to the close relationship. Shahroze told TR in an email exchange that he had returned to Bangladesh from Australia, where he had been working as an accountant following the sudden death in 2018 of his father, Mohammed Jahangir Kabir, who had run the agency and who, incidentally, was a former head of marketing for BAT. Shahroze readily admits that, at that time, he had no experience working as an agent and had never been inside a tobacco factory but was offered the role on the basis of an agreement made between his father and Curina, for whom he said, “a promise is a promise.” ‘‘I suppose they adopted me as a part of the Godioli & Bellanti family and taught me everything I know about the business,” he said.

    “I work with many leading European machinery companies, but Godioli and Bellanti are special. They build their machines not just with engineering perfection but with love, devotion and passion …. We have supplied so much tobacco machinery in Bangladesh that it has upgraded the quality of processed tobacco in the country to very high global standards.”

    The reference to passion came up again when Mohammed Abob, who was Godioli & Bellanti’s agent in Ethiopia from 2010 to 2019, who is still in touch with the company and who, indeed, attended the anniversary celebrations, replied to a request for comment. Abob said his impression of Lorenzo and his brother Cesare was that they were dedicated and passionate about their work and proud of their company and their city. The company was important to them beyond the business and financial aspects of it. It represented a proud heritage that they were committed to now and in the future.

    And the devotion to engineering perfection mentioned by Shahroze was also alluded to by Curina in his opening speech when he said that Godioli & Bellanti had never made mass-produced products. With each project, the company committed to identifying the technical solution that the particular customer and the particular situation required. Each project was a new project, he said.

    Like Swiss Watches

    Away from the celebrations, TR had an opportunity to ask Curina a few questions, focused mainly on the way that the market for primary processing machinery and equipment had changed and is changing. The first asked how the primary processing facilities of the average factory that Godioli & Bellanti currently served differed from how those facilities were set up 25 years to 30 years ago. Not surprisingly, Curina’s answer focused on technology. Nowadays, the primary departments in which Godioli & Bellanti worked, he said, were characterized by high levels of technology, which meant that, in turn, the operations of those primaries were characterized by high standards of automation, synchronization and cleanliness. They were like Swiss watches, he added.

    And asked what would have been the most in-demand pieces of primary processing machinery and equipment 25 years to 30 years ago and what were the most in-demand pieces now, Curina replied that whereas in the past, his company made many lines for Burley toasting, comprising equipment for toasting, casing and top-flavoring, nowadays demand tended to favor lines for producing low-nicotine cut rag. Demand was relatively high, also, for automatic feeding lines, with equipment for de-cartoning tobacco, slicers, direct conditioning cylinders and direct conditioning and casing cylinders.

    Turning to the question of whether demand for primary processing machinery and equipment was increasing or decreasing, Curina described the situation as stable, which he found unsurprising since investing in a primary required broad financial shoulders and an intimate knowledge of the tobacco business.

    Finally, in answer to another question about demand, Curina said he had noticed that the world of green leaf threshing had moved massively toward the Far East and that the world of primaries was moving in the same direction, though more slowly.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • A Greener Leaf

    A Greener Leaf

    Yi people with high-quality flue-cured tobacco from electric barns
    (Photos: Jingmei Zhang)

    Chuxiong tobacco flue-curing enters the “zero carbon” era.

    By Min Lu, Xiaojiao Du, Jingmei Zhang

    Tobacco flue-curing is a critical tobacco production procedure and a relatively concentrated carbon emission process. By reducing carbon emissions during flue-curing, green production of flue-cured tobacco would be achieved. China is striving to achieve carbon neutrality by 2060 based on its responsibility to promote a shared future for mankind and its inherent requirements for achieving sustainable development. Under the “carbon peak and neutrality strategy,” the green and low-carbon transformation of the tobacco industry is imminent. China Tobacco proposes to accelerate the green and low-carbon transformation of the industry’s development mode, focusing on the green development goals outlined in the next five-year plan. This initiative aims to expedite promoting green tobacco agriculture and facilitate the overall low-carbon transformation and upgrading of the entire industrial supply chain.

    The Chuxiong region has a long history of cultivating flue-cured tobacco. As early as 1613, tobacco was successfully grown in Wuding and Lufeng counties, which was then known as CaoYan. This area was among the earliest tobacco-planting regions in Yunnan. Today, Chuxiong has emerged as the second-largest tobacco-producing area in the province, supporting the economic and social development and contributing significantly to the increase in the Yi nationality people’s income.

    Situated in the central northern part of Yunnan Province, Chuxiong Yi Nationality Autonomous Prefecture is located on an inland plateau, with over 90 percent of its total area covered by mountains and semi-mountainous terrain. The region experiences a subtropical low-latitude plateau monsoon climate, providing an ideal geographical environment and climate conditions for cultivation of flue-cured tobacco. With its picturesque landscapes and favorable ecological advantages, Chuxiong Prefecture stands out as one of the most scenic tobacco-producing areas in Yunnan.

    A picturesque tobacco area in Nanhua County, Chuxiong Prefecture, Yunnan Province, China

    In recent years, Chuxiong Tobacco Co. has actively developed new energy electric flue-curing barns. In order to reduce the energy cost of electric flue-curing barns, solar power technology has been used to find clean energy for tobacco leaf flue-curing while also possessing the function of cold and freezing storage. Chuxiong Prefecture has taken a pioneering step toward “zero carbon” flue-curing in the province, aiming to reduce environmental impact significantly.

    A group of electric flue-curing barns developed in Chuxiong Prefecture, Yunnan Province

    At present, coal has been the primary energy source for tobacco leaf flue-curing in Chuxiong Prefecture, leading to high energy consumption and inefficiency. Coal combustion has high carbon emissions, contributing to environmental pollution. Additionally, coal-fired flue-curing barns often lack precise temperature and humidity control, leading to issues such as rapid heating, temperature fluctuations and damage to tobacco leaves during flue-curing. These challenges have hindered the long-term development of green tobacco production, making the transition to clean and renewable energy sources imperative.

    Chuxiong boasts abundant sunshine, with an average annual sunshine duration of 2,447 hours and an average daily sunshine duration of 6.7 hours, making it one of the best areas for solar energy technology. The local government, particularly in Gonghe Town, Mouding County, has proactively sought funding to explore the construction of photovoltaic power stations atop 300 electric flue-curing barns in the region. This initiative converts solar energy into electricity, contributing to the reduction of carbon emissions and promoting sustainable energy practices. For example, a photovoltaic power station has been built on the roof of the 60 electric flue-curing barns of the Tiantai Village in Gonghe Town, with an installed capacity of 1,076 kW, 1,957 photovoltaic panels and an average annual power generation of 1,506,400 kWh. Based on full grid connection, the average annual income would be CNY505,849 ($70,933).

    Construction of a solar power station on the roof of an electric energy flue-curing barn

    Gonghe Town has also innovatively transformed electric barns into multifunctional units suitable for local conditions. Refrigeration equipment has been installed in 36 electric barns, enabling them to serve as cold and freezing storage units after the tobacco leaf flue-curing season. This comprehensive use of resources not only increases the efficiency of the barns but also supports the planning and development of nontobacco industries in the region—for example, to provide for keeping fresh conditions for planting green peas and green broad beans.

    To enhance flue-curing management practices, Chuxiong Tobacco has developed an Internet of Things (IoT) hardware device for flue-curing barns. Leveraging IoT technology, flue-curing technicians can monitor flue-curing conditions in real time through their mobile phones. They can adjust parameters, such as dry bulb and wet bulb temperature, providing precise guidance and real-time monitoring. By the end of 2022, the IoT hardware equipment had been successfully implemented across 4,894 barns, connecting them to the smart flue-curing management system.

    After the completion of the electric energy flue-curing barn, Chuxiong Tobacco Co. strengthened the training of the tobacco leaf flue-curing team, focusing on the electric energy flue-curing barn’s technology. Flue-curing technicians initially faced challenges in understanding the debugging and use techniques of the electric flue-curing barn. To address this, Chuxiong Tobacco organized multiple training sessions to enhance the team’s proficiency in operating the electric flue-curing barn and improving flue-curing technology.

    Starting from early August 2023, a comprehensive benefit analysis was conducted on three types of flue-curing barns: electric, biomass and coal. Through their own experiments, tobacco farmers gained firsthand insights into the advantages of electric flue-curing barns. A total of 38 flue-curing tests were conducted. From an economic perspective, the analysis revealed three key points.

    First, the flue-curing cost, including electricity and labor, for the electric energy flue-curing barn was CNY1.60 per kilogram, significantly lower than the biomass flue-curing barn (CNY2.60 per kilogram) and the coal-fired flue-curing barn (CNY3.30 per kilogram). The electric energy flue-curing barn reduced costs by 66.5 percent and 109.5 percent compared to biomass and coal-fired options, respectively.

    Second, the flue-curing loss rate was also analyzed. Electric energy flue-curing barns demonstrated a loss rate of 4.88 percent, outperforming biomass flue-curing barns (5.16 percent) and coal-fired flue-curing barns (5.8 percent). The electric energy flue-curing barn reduced quality flue-cured leaf losses by 5.7 percent and 19 percent compared to biomass and coal-fired alternatives.

    Third, the flue-curing output value was considered. Electric energy barns were priced at an average of CNY31.16 per kilogram, surpassing biomass barns (CNY30.5 per kilogram) and coal-fired barns (CNY29.10 per kilogram). Electric energy barns saw a price increase of 2.23 percent compared to biomass and 6.75 percent compared to coal-fired barns.

    Overall, electric flue-curing barns significantly lowered flue-curing costs, reduced flue-cured leaf losses and improved tobacco quality compared to biomass and coal-fired alternatives. Furthermore, the comprehensive output value of electric flue-curing barns increased by CNY2,890.30 per furnace and CNY4,535.20 per furnace, respectively (calculated based on a single furnace of 650 kg of dry tobacco), in comparison to biomass and coal-fired options. There has been a significant improvement in the economic benefits of 3,030 electric flue-curing barns in the state compared to coal-fired flue-curing barns.

    In terms of ecological and environmental benefits, the operation of the electric energy flue-curing barn has achieved the goal of “zero carbon” emissions, marking a significant step toward green and sustainable development. Alliance One International, Philip Morris International and PwC Price Waterhouse Coopers visited Chuxiong Prefecture to inspect and study the construction of electric energy barns. They highly praised and fully recognized this innovative approach. Chuxiong Tobacco Co. has successfully navigated the challenges of clean energy flue-curing, leading the industry toward “intelligent flue-curing.” This innovation has established a new service model for “intelligent flue-curing” and also promoted green and sustainable development in tobacco-growing areas. More importantly, it has increased the income of tobacco farmers, consolidated achievements in poverty alleviation and contributed significantly to rural revitalization efforts.

  • Clearing the Smoke

    Clearing the Smoke

    Image: Tobacco Reporter archive

    What can the next-generation nicotine industry expect in 2024?

    By Paul Hardman

    The U.K. government’s proposal for a “smoke-free” generation and changing consumer opinions toward nicotine products are causing a shift in consumer habits. The year 2023 shone a spotlight on e-cigarette compliance, with a potential ban on disposable vapes on the horizon. So, how will this year’s events impact the manufacturing of nicotine products, and what trends and regulations are we likely to see going into 2024?

    Nicotine Pouches

    Nicotine pouches represent an extraordinary opportunity to support tobacco harm reduction in adult smokers. Sweden, the world’s most advanced nicotine pouch market, is on the brink of being smoke-free, with less than 5 percent of its population smoking.

    However, in the U.K., there is a regulatory gap that allows those under 18 to purchase nicotine pouches legally. In addition, there are concerns that nicotine pouch manufacturers could fall into the same traps as some disposable e-cigarette companies, by creating products that appeal to youth.

    If youth use becomes an issue, the easiest move for regulators is to categorize nicotine pouches in the same way as oral tobacco products like snus—rendering them illegal. An alternative response might be to categorize these products as nicotine-replacement therapies and place them under medical product regulations, which would restrict their access.

    To keep these products available to adult smokers who wish to quit, manufacturers can act as if regulation is already in place: generate data, devise safety frameworks and ensure the quality of products entering the market. Importantly, manufacturers should present and market their products in responsible ways, including avoiding bright colors, not imitating other consumer goods (e.g., soft drinks) and refraining from using any type of cartoon/video game characters.

    Non-Heated Technologies

    We have yet to witness a vape product approved via the U.K. Marketing Authorization Application (MAA) pathway, which enables nicotine products to be marketed as smoking cessation nicotine-replacement tools and prescribed by healthcare professionals. However, non-heated vape technology might facilitate MAA approval by addressing the core problem of delivered dose uniformity (DDU).

    One example of a non-heated vape technology involves ultrasound sonication, which enables the atomization of e-liquids to create an aerosol, similar to technology used in medical nebulizers. The droplet size and dosage can be predefined according to the dimensions of the mesh, ensuring uniformity in the vapor, thus improving DDU. As we go into 2024, we will likely see more manufacturers exploring this approach. In parallel, e-liquids will be developed specifically for this technology.

    Product Development

    Nicotine product manufacturers have been moving toward a quality-by-design (QbD) development process, and we will see this continue in 2024. There are no specific guidelines or requirements for the stability testing of nicotine products other than the scientific justification for shelf life. Employing a QbD approach demonstrates a higher level of due diligence, which could produce safer, higher quality nicotine-delivery systems.

    In addition, manufacturers are starting to implement extractables and leachables studies during the development process in anticipation of the new guidelines being set out by the European Committee for Standardization. Once these guidelines are published, we can expect to see a more standardized approach throughout the industry.

    Paul Hardman is a managing consultant at Broughton, an independent life sciences contract research organization offering analytical testing services integrated with scientific consultancy and global regulatory support.
  • Difficult Dynamics

    Difficult Dynamics

    Photo: Taco Tuinstra

    The oriental leaf business struggles with adverse weather conditions and farmer attrition.

    By Stefanie Rossel

    “Complex” is probably the word that best describes the prevailing situation for classical oriental tobacco. In 2023, the sector again struggled with adverse weather conditions and farmer retention.

    “A shared challenge faced by all countries in the current season is the impact of adverse weather conditions,” comments Stelios Grigoriadis, regional director of Europe at Alliance One International (AOI).

    “The crop encountered difficulties early on with an extended rainy season, reducing transplanted acreage. Subsequently, an exceptionally dry and hot summer exacerbated the situation, resulting in volume losses for the industry ranging from 10 percent to 30 percent in specific countries. These weather-related challenges have been a common denominator in the diminished crop volumes across the region.”

    The current crop volumes in the four principal cultivating countries for classical oriental tobacco, comprised of Turkiye, Greece, Bulgaria and North Macedonia, will likely to be down, says Grigoriadis, marking a departure from the trends observed in the preceding two years to three years. “This decline is attributed to different factors influencing each country’s production landscape.”

    AOI emphasizes that its production estimates provide only a snapshot of the current expectations, adding that external variables may play a significant role in shaping the results. The company expects market leader Turkiye to produce 50,400 tons this season compared with 51,320 tons in 2022 and more than 55,000 tons under typical weather conditions.

    AOI anticipates 37,500 tons of the Izmir variety, basically flat from the 37,450 tons recorded in the previous year. It projects the Samsun crop to decline from 3,575 tons in 2022 to 3,000 tons in 2023.

    Basma dropped from 1,645 tons in the 2022 crop to 1,400 tons in the current season while Turkish Prilep increased from 850 tons in 2022 to 2,250 tons in 2023. East Izmir declined from 7,800 tons in 2022 to 6,250 tons in the current season.

    Weather conditions played a crucial role in determining the quality of the different varieties. Izmir experienced a negative impact on quality compared to previous years, primarily due to the hot and dry summer conditions. “This reflects a deviation from the standards observed in earlier crops,” says Grigoriadis.

    By contrast, the quality of Samsun and Basma was positively impacted. “The warm and favorable weather conditions during the curing period have contributed to an improvement in the quality of these varieties,” observes Grigoriadis. “This positive influence underscores the importance of climate factors during critical stages of cultivation.”

    The East Izmir variety remained stable in terms of quality, according to Grigoriadis.

    Photo: Prestige Leaf

    Lack of Labor

    Projections for the 2023 classical oriental crop in Greece vary. Dora Gleoudis, managing director of Greek leaf tobacco exporter Nikos Gleoudis Kavex, expects it to amount to 6,500 tons, comprising 4,300 tons of Basma and 2,200 tons of Katerini. This compares to a total crop of 8,000 tons in the 2022 season. “The quantity reduction is due to labor shortages,” says Gleoudis. “However, the crop quality in all areas is higher compared to last year’s, favored by weather conditions.”

    Nikos Tzoumas, managing director of Missirian, anticipates a crop of 5,700 tons divided between 3,700 tons of Basma and 2,000 tons of Katerini. “The Greek oriental crop decreased overall by almost 30 percent,” he says. “The reasons for this decrease, in sequence of importance, are abandonment of cultivation, absence of external workforce and low field yields due to dry weather.”

    The Katerini crop volume dropped by 35 percent, according to Tzoumas. “Eighty percent of this decrease was due to less cultivated land—that is, farmers who abandoned cultivation and farmers who decreased their cultivated land due to absence of workers—and 20 percent due [to] lower leaf yield following dry weather conditions,” he says. “Basma production decreased by 25 percent, caused mainly by farmers who abandoned cultivation.”

    Tzoumas  agrees that the quality of this year’s crop is very good. “Transplanting was accomplished under rainy conditions,” he says. “Later in the season, the extreme heat wave during July and the total absence of rainfall for four months stressed the plants and resulted in small, ripe and bodied leaves.”

    Bulgaria also experienced a significant reduction in volume. According to AOI, the country is expected to harvest approximately 3,200 tons of classical oriental tobacco in 2023. Like Greece, Bulgaria has struggled with farmer attrition and unfavorable weather conditions. “The attrition of farmers raises concerns about the sustainability and resilience of the tobacco industry in these countries,” says Grigoriadis.

    Photo: AOI

    Up and Coming

    North Macedonia appears to be a rising star among oriental-producing countries. Although its volume is projected to reach 16,000 tons in 2023, down from 21,000 tons in 2022, its farmer base remains committed. The number of growers cultivating Prilep has remained relatively stable in recent years. Yaka volumes, meanwhile, have declined to 150 tons this season from 248 tons in 2022.

    Hot and arid conditions during summer in Prilep, the center of North Macedonian tobacco growing, significantly reduced the crop quantity. However, the abundant sunshine also positively impacted the quality of the Prilep crop, according to Grigoriadis. “Particularly in the middle and upper harvests, the overall quality of this crop can be characterized as above average.”

    Rising Production Costs

    In addition to the already mentioned challenges, oriental tobacco growers have had to cope with the still-simmering Covid-19 pandemic, the Russia-Ukraine conflict and the escalation of hostilities in the Middle East. According to Gleoudis, the war in Ukraine has dramatically increased the prices of growers’ inputs as well as labor costs. On top of that, rising prices for other crops, such as corn or cotton, have prompted some growers to abandon the golden leaf. Tzoumas notes that the war in Ukraine and the subsequent economic sanctions against Russia have affected exports to Russian manufacturers. 

    Tobacco farmers in North Macedonia, meanwhile, have been struggling with continuously rising labor expenses, according to Grigoriadis. “This is a result of both the government-mandated annual increase in the minimum wage and a labor shortage stemming from increased population migration,” he explains.

    Turkiye, too, copes with the fallout from these crises. High inflation coupled with uncertainties in the pricing of crop inputs such as fuel, fertilizer and chemicals has created an environment of uncertainty. “The uncertain pricing of other crops has led some farmers to switch crops in the short term, disrupting planning and creating inefficiencies in the production of alternative crops,” says Grigoriadis.

    “This, in turn, results in fluctuations in farmer income, further increasing the challenges faced by those in the oriental sector. The uncertain and volatile conditions in the wake of these crises not only impact the financial aspects for farmers but also disrupt long-term planning. The uncertainty in input pricing and the unpredictability of crop prices create challenges in decision-making, affecting the overall efficiency of tobacco production.”

    Photo courtesy of Nikos Tzoumas

    Still in Undersupply

    While there have been shortages in all tobacco varieties, buyers of classical oriental tobacco, in particular, have been suffering from undersupply over the past two years. A return to balance in supply and demand is possible but depends on several factors, according to Grigoriadis.

    The challenges posed by weather-related uncertainties may require growers to adjust their agricultural practices and embrace new technologies along with risk mitigation strategies.  “Collaborative efforts among stakeholders, including farmers, state institutions and industry players may also contribute to a more resilient and sustainable supply chain for classical oriental varieties,” says Grigoriadis.

    “Supply and demand for oriental tobaccos are and will remain unbalanced,” predicts Gleoudis. “Regretfully, options of mechanizing the oriental tobacco crop have not proven successful.” She is referring to the HMO oriental tobacco harvesting machine developed by VIT and Philip Morris International that was trialed in Greece in the summer of 2020 to reduce farmers’ reliance on manual labor.

    “The opportunity to make the oriental tobacco cultivation a sustainable and mechanized crop was lost five years ago when the buyers did not embrace the HMO and the tobacco which was produced as such,” says Tzoumas. “Ten years of hard work by many individuals, five versions of improved HMO models, a new pure Basma seed with increased field yields registered in Greece and many young farmers with enthusiasm were all gone! At that time, even the farmers were ready to invest as they had understood sustainability as a tool for security and balance for their product and their life.”

    His forecast for the Greek oriental crop in 2024 is therefore pessimistic. “A further decrease in production is projected to happen in the 2024 crop,” says Tzoumas. “Farmers will keep on shifting from manual to mechanized crops, missing the work force needed for oriental tobacco, and to food crops, with the latter being in higher demand.” Aggravating the situation, the European Union’s Common Agricultural Policy 2023–2027 significantly reduced the funds allocated to tobacco growers by adopting a flat rate per hectare, which is not in the favor of small holdings common in oriental tobacco farming.

    Gleoudis expects Greek and Bulgarian oriental production to remain stable in 2024. “Depending on weather conditions, North Macedonia could increase its production back to 22,000 tons.”

    Grigoriadis shares this prognosis for North Macedonia. “This optimistic estimate emphasizes the significance of weather conditions in determining the success of the crop,” he says. “It also indicates a potential for North Macedonia to maximize its production capacity, provided that external factors align favorably. However, it is essential to remain attentive to potential challenges and fluctuations in supply/demand dynamics that may influence the actual outcome.”

    Given favorable weather conditions, Turkiye’s 2024 oriental crop could increase by between 5 percent and 10 percent, according to Grigoriadis. “The competitiveness of oriental tobacco against other rival crops and the careful management of production costs are key considerations in shaping the final outcome.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • Putting Faith in Cessation

    Putting Faith in Cessation

    Image: doidam10

    The role of religion in encouraging smoking cessation

    By Cheryl K. Olson

    The start of a new year is a perennially popular marker for initiating change. This includes fresh attempts to quit smoking. To that end, the U.S. Centers for Disease Control website features a multilingual “New Year, New Possibilities: Start Living a Smokefree Life Today!” advice and resources page.

    A study of 2018–2020 social media posts expected to find the Covid-19 pandemic linked to more posts on quitting. Nope. Instead, New Year’s resolutions made a difference.

    There’s nothing magic about a new year, of course. But setting some sort of targeted quit date does seem to increase motivation to follow through. A date in the near future—say, a couple of weeks away—seems best. Making a public commitment to quit, and preparing coping aids and skills, may also help.  

    The best thing about New Year’s resolutions is that they provide another chance to try. Research suggests that encouraging more quit attempts adds up to more success. Finding ways to do this is especially important for people who aren’t particularly motivated to quit in the near future.

    One often-overlooked path to encourage the discouraged or unmotivated to make quit attempts comes from religious observations. Major world religions have days every year where smoking is discouraged or forbidden.

     “Jews don’t smoke for 25 hours on Yom Kippur,” says Derek Yach, a physician who focused on smoking cessation at the World Health Organization and the Foundation for a Smoke-Free World. “Muslims refrain during daylight for the month of Ramadan. Some Christians stop during Lent.”

    “This raises the question of how people who smoke can continue quitting post the fast,” Yach adds. “How could you build on that?”

    The role of religion in encouraging smoking cessation deserves a closer look. And what, if anything, do we know about how major religions feel about tobacco harm reduction, including vaping?

    Religion and Smoking: The Basics

    “Systematic evidence of religious affiliation differences in tobacco use is surprisingly limited,” says a recent paper on religion’s role in smoking and vaping. One problem is distinguishing between the effects of religious affiliation, general religiosity and specific beliefs. Overall, studies show that people with no religious affiliation are more prone to smoking. Faiths with clear anti-tobacco positions, such as Seventh-day Adventists and Latter-day Saints, are less likely to smoke.

    Things get murky beyond that. Regular church attendance is often linked to lower smoking, for example. People more engaged with religion may have more nonsmokers in their social networks. Religious doctrines feed into social norms that affect smoking behavior.

    Of course, the texts of most major religions were written before tobacco spread across the globe. This means that religious scholars have had to interpret those texts and issue decrees regarding how smoking (and more recently, vaping) fits or clashes with their doctrines.

    Islam is one example. Until the early 20th century, according to an article in the BMJ, most Muslim jurists did not believe that smoking had any negative health effects. Some thought it might even aid digestion or reduce stress. As evidence of health risks increased, smoking became discouraged (mukrooh). Some scholars and institutions went further and declared smoking to be prohibited (haram). 

    Smoking is not explicitly banned by Christianity, Judaism, Hinduism or Buddhism. But religious values that promote avoiding deliberate harm to the body, and disapprove of addiction, mitigate against smoking.

    At times, religion has been a smoking promoter. The website of the U.S. Conference of Catholic Bishops notes that the Catholic Church played a major role in bringing tobacco to Italy and spreading its use. In 2017, Pope Francis, stating that “No profit can be legitimate if it puts lives at risk,” announced plans to ban Vatican cigarette sales. The Vatican City State reportedly earned €10 million ($10.97 million) per year in profit from smokes sold (sans Italian taxes) through duty-free shops to its citizens and employees, who could purchase 50 or more discounted packs a month.

    Yach has long been intrigued about the potential of religious organizations to combat smoking. “In 1999, when I was at WHO, I convened a meeting through the World Council of Churches,” he recalls. Despite the name, the council represented a range of major religions. The meeting focused on what religions say about tobacco control and smoking.

    “What were the commonalities that suggested they supported tobacco control?” he wondered at the time. “We found there were three: Thou shalt not kill; thou shalt not kill others; and you should tell the truth.”

    Yach has recently returned to studying the issue of faith and health, with a new emphasis on tobacco harm reduction. Religious doctrines are still unsettled on that point. However, Yach notes that in most religions, “to save a life” is the highest value and ought to be supportive of harm reduction.

    In most religions, “to save a life” is the highest value and ought to be supportive of harm reduction.

    Derek Yach, global health expert

    Hitting Pause

    A review of studies on religiosity and smoking cessation found that few actually focused on quitting. There are a handful of published studies on smoking and Ramadan. In most Muslim-majority nations, religion and culture discourage smoking during the daytime fast, both in public and at home. Many Muslims perceived quitting smoking to be easier during Ramadan.

    One Malaysian study of 61 men who smoked found decreased Fagerstrom nicotine dependence scores during and shortly after Ramadan. The Ramadan environment, with most Muslims abstaining from smoking, was credited with helping men to reduce the number of cigarettes smoked or to stop smoking completely. The authors suggested that cessation support from health professionals might boost this effect.

    During Ramadan in 2015, a cessation effort targeted Malay men working in public offices who smoked. The intervention group got a booklet educating on smoking-related health effects and religious rulings as well as practical and motivational tips and religious encouragements. All participants had reduced nicotine dependence scores and saliva cotinine levels during Ramadan, and these remained significant for the intervention group after Ramadan.

    A study in Croatia focused on the first day of Lent, which some Christian groups observe for roughly six weeks leading up to the Easter holiday. Lent is a period of self-denial, which might involve fasting or giving up favored activities. A television and radio campaign for this “smoke out day” led to high awareness, and a quarter of people in the study abstained from smoking for 24 hours. People with lower levels of education were more likely to participate. 

    Religion Meets Technology

    Religion-based smoking cessation efforts could potentially reach groups that conventional methods have failed to help. In the U.S., older adults are more likely to attend religious services, and their smoking rates have been stagnant for the past two decades. The combination of faith communities and new technologies is particularly intriguing.

    One recent study sent twice-daily text messages (half religiously tailored) to 50 Somali Muslim men in Minnesota during Ramadan. Research participants saw the messages as appropriate and encouraging, and they smoked fewer cigarettes per day. Seven quit smoking.

    A published protocol for a new study describes a “Christian faith-based Facebook intervention for smoking cessation in rural communities.” Researchers plan to create and test a private moderated online group that uses peer and pastoral support, accessible to people who lack access to city resources.

    Ideally, we will eventually see studies that add harm reduction innovations, such as e-cigarettes, reduced-risk shisha and heated-tobacco products, to this mix of faith and tech.

    Religion and Harm Reduction

    Religious perceptions regarding reduced-harm nicotine options, such as vaping, are still evolving. Research on vaping and religion is extremely limited. Several studies found that religiosity bears no relationship to e-cigarette use among teens and young adults.

    The Malaysian study that looked at ways to encourage smoking cessation during Ramadan in 2015 was disrupted by the “vaping phenomenon,” with some subjects in both study groups starting to vape. Because vaping was not part of the protocol, it was ignored. A 2023 paper on e-cigarettes in Malaysia grouped “e-cigs, electronic shisha and shisha pens” as haram, along with cigarette smoking, due to perceived health risks.

    Perceptions of effects on health may be important. For example, a 2019 article on Judaism and e-cigarettes gives multiple perceived reasons for prohibiting their use, including that e-cigarettes are dangerous, are a gateway to smoking and are addictive. Further, “even if medical literature has not firmly and definitively established the long-term dangers of e-cigarette use independent of combustible cigarettes, the suspicion that these products are dangerous is sufficient to prohibit their use.”

    Clearly, strong evidence that reduced-harm nicotine products are a positive for health would be needed to overcome these concerns. Spreading credible information, such as the Cochrane review showing that vaping can successfully promote smoking cessation, might show that reduced-risk alternatives can fit with religious doctrines.

    Encouragingly, two recent studies (with the same lead author) looked favorably at e-cigarette use during Ramadan. One looked at vaping preferences and reasons for using e-cigarettes in the United Arab Emirates. A majority reported starting vaping to quit smoking. Over half reported no withdrawal symptoms during the Ramadan fasting time. The second study had a similar focus and findings but took place in Jordan. It noted that “Ramadan offers a good opportunity for smokers to quit, as the reported physical and psychological e-cig withdrawal symptoms were found to be relatively weak.” In both studies, e-cigarettes were accurately perceived as less risky than smoking.

    Faith-Based Harm Reduction

    The challenge now, as Yach sees it, is to think through how to explain harm reduction in clear and meaningful ways to faith-based groups. “People say, well, we don’t want to get into religion. But health is not merely the absence of disease. And the word ‘spiritual’ should be included alongside mental, physical and social well-being.”

    As a parallel, Yach points to the success of faith-based HIV/AIDS programs run through churches: “What’s at the core of an AIDS program? Harm reduction.” Given the billions of people who identify with religious groups, he says, the potential benefit could be huge.

    Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.
  • Organized Skepticism

    Organized Skepticism

    Image: Mintoboru

    How can the science of tobacco and nicotine serve the public good?

    By Clive Bates

    There are almost as many definitions of science as there are scientists, but one that I like is “organized skepticism.” This is one of four norms of the scientific ethos proposed by sociologist Robert K. Merton in 1942. Robert May, the former U.K. government chief scientist, explained organized skepticism as “a journey, over time, toward contingent understanding guided by experimental tests and sceptical questioning.” Skepticism underpins the scientific process, and uncertainty is a pervasive, permanent and evolving feature of scientific understanding.

    How well are we living up to this ideal? I will break science down into five categories: exploration, observation, interpretation, intervention and values.

    Firstly, “exploration.” This is about which research questions are asked—or not asked—in the first place and why. In many ways, this is the most critical part of the scientific process because it can set, shape or sink a policy agenda. It should be driven by organized curiosity, the alter ego of organized skepticism. But too often, the control over the questions is governed by forces other than curiosity in the public interest. Why has there been so little curiosity about the countries with the lowest smoking rates or most rapid declines, such as Sweden? The halving of cigarette sales in Japan in just 10 years has attracted minimal interest (though with some notable exceptions), but why? Are researchers flocking to New Zealand to understand the dramatic decline in Maori smoking driven by the uptake of vaping? No, the research community has been distracted by its favored “endgame” measures.

    Another example is the expenditure of at least $100 million researching “very low-nicotine cigarettes,” mainly through a series of trials. The U.S. Food and Drug Administration’s enthusiasm for rulemaking in this area drove the research. But after a company, 22nd Century, put these products on the market, there was minimal interest in understanding the consumer reaction. Why? Surely, this should inform the nicotine rulemaking process. Poor questions can exclude important issues or contain false, unsurfaced assumptions. For example, the U.K. recently asked the research community “What can we do to reduce youth vaping?” But do they want to reduce youth vaping if it increases adult smoking? What about young people who would be smoking if they were not vaping? The question limits the possible answers and excludes much we should be curious about.

    A final example is the extraordinary lack of interest in the reasons why there is a demand for nicotine and, therefore, why it is likely to persist. In my view, users experience positive hedonistic, functional and therapeutic effects, which underpin the demand. But curiosity in this area has been suppressed beneath a crude narrative of “addiction.”

    Secondly, “observation.” This is the careful business of discovering what is happening through surveys, test measurements, experiments, qualitative studies, etc. Much good work goes on in this area, but it could be far better. Given how much money and public and political concern nicotine attracts, shouldn’t we have better data and faster? The English Smoking Toolkit Survey provides monthly data on nicotine use trends published with only a few weeks of delay between the survey and publication. Why doesn’t every country have a surveillance system like this? Every country has a sizeable share of its population dying from smoking-related diseases; why not have the data to understand the phenomenon? In the energy sector, the International Energy Agency produces in-depth statistics on every aspect of energy use for nearly every country in an advanced Data Explorer. But for nicotine, we have only crude prevalence data and nothing that will show us the evolving trends in nicotine use as it develops and diversifies over the next two decades. The FDA regulates the recreational nicotine market in the United States, yet it has no systematic assessment of how that market is developing. Instead, individual manufacturers must report on their own products. It would be so much better to have one extensive survey, including all the main product types and all those products not authorized but on sale. The FDA’s Center for Tobacco Products receives annual user fees of $712 million yet does not even have a basic and timely picture of the market, including the illicit market, in the products it regulates.

    Thirdly, “explanation.” This is where scientists try to determine cause and effect. Did vaping flavors cause teenage vaping? Does vaping cause heart disease? Do more people quit smoking if they have access to vapes, or are vapes a gateway to smoking? Alas, in this domain, skepticism is too often replaced with its inverse, confirmation bias, and its more assertive counterpart, motivated reasoning. There are strong incentives to find or claim causal relationships, even where none exist. Why is it hard to establish causal explanations? I tend to focus on three main issues.

    1. Confounding. One thing appears to be caused by another, but they are both caused by a third factor. If we observe a 50-year-old vaper for signs of illness, how do we account for the effect of several decades of prior smoking? It is almost impossible to make allowances for that. For conditions that arise from cumulative exposure over decades (like chronic obstructive pulmonary disease or heart disease), it is impossible to isolate the effects of vaping and confounding by prior smoking. Yet, claims are repeatedly made that vaping is a cause of these diseases.
    2. Reverse causation. One thing appears to be caused by another, but the relationship is the other way around. Some studies show that young people who are exposed to vape advertising are more likely to vape. In these studies, “exposure” usually means recall, the ability to remember seeing an advert. But suppose those inclined to vape for other reasons are more interested in vaping ads and more likely to remember them? The vaping causes the recall of advertising, not the reverse.
    3. Poor external validity. The experiment doesn’t adequately reflect reality. Some machine measurements of vaping aerosol show relatively high levels of some toxicants. But they have often been run with power and flow rates that greatly overheat the liquids, creating conditions no users could tolerate. The machine registers a toxic exposure, but no human would ever be exposed to it. In a clinical trial, volunteers with a declared intention to quit are paid to participate. They are given free products and incentivized to use them. But how well does that experiment reflect the impact of a new product on people who buy their cigarettes at a corner shop? Hardly at all. Yet a giant edifice of support for de-nicotinization of cigarettes has been built on such trials. Those affected are more likely to switch to illicit or smoke-free products.

    Fourth, “intervention.” This is the science of deciding what to do or what happened after a policy was implemented. Curiosity and skepticism seem to be actively discouraged in this area of tobacco control research, though with exceptions. One of the largest tobacco control interventions ever is the 2019 ban on vapes and heated-tobacco products in India, which earned a World Health Organization medal. Yet almost nothing has been done to discover what happened, and the WHO continues to promote these prohibitions. I think this is because, for many in that field, the policy and law are the outcomes, not their actual effects on behavior and, ultimately, health. Too many scientists are regulatory literalists, believing that people will do what the regulators hope they will. Armed with observations of harm and explanations for its cause, they wrongly believe that intervention is simply a matter of removing the cause with a law. Not so. An intervention is a disturbance of a complex system of human, technological and economic interactions. It is vulnerable to at least three forms of unintended consequences: first, adverse behavior change (a vape flavor ban causes more smoking); second, workarounds (a vape flavor ban causes people to mix their own flavors using food ingredients); third, illicit trade (an informal economy develops, possibly with organized crime groups extending their portfolio). Intervention always requires a systems approach and an economic appraisal to assess the likely outcomes and their cost-effectiveness or value for money. Far too many biomedical scientists trespass into the economic discipline of intervention without the necessary skills and experience.

    Fifth, “values.” Politicians often declare they are “led by the science.” But no policies can or should ever be determined by science alone. Values or ethics must have a central role—just because something might work doesn’t make it right or acceptable. For example, if we could show that misleading young people about vaping risks reduced youth vaping, would that be an acceptable policy? Should we intervene to stop smoking in private homes? Should children be separated from parents who smoke? Should smokers be denied healthcare for reasons of contributory negligence? There are boundaries to what we find acceptable, whatever the science tells us might work. But different people have different boundaries.

    Clive Bates is the director of Counterfactual Consulting and the former director of Action on Smoking and Health (U.K.).