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Category: Around the Industry

  • Japanese Consumers Facing Double Hit

    Japanese Consumers Facing Double Hit

    The first phase of Japan’s tax increases on tobacco products and corporate income will take effect April 1, marking the first phase of a broader revenue plan to finance expanded defense spending, with additional increases planned for October and January 2027. Both conventional cigarettes and heated tobacco products will be affected, with the long-standing tax gap between the two categories set to narrow. The government aims to raise ¥1.3 trillion ($8.2 billion) in fiscal 2027 through staged hikes on tobacco, corporate, and personal income taxes to help fund a ¥43 trillion ($271 billion), five-year defense buildup that began in 2023.

    In response to the new corporate taxes, Philip Morris Japan said it will raise prices by ¥40–¥50 (25 to 32 cents) per pack on 50 heated tobacco products from April 1, while Japan Tobacco plans ¥20–¥30 (13 to 19 cent) increases on 37 products. Manufacturers have not yet outlined pricing responses for October’s tax hike.

    The Finance Ministry estimates tobacco tax revenue will increase by ¥44 billion ($277 million) in fiscal 2026, ¥116 billion in 2027 ($731 million), and ¥212 billion ($1.3 billion) annually thereafter as additional levies take effect. The measures come as Japan seeks to secure more than ¥9 trillion ($56.7 billion) in defense spending for fiscal 2026, reaching its 2% of GDP target ahead of schedule.

  • Baltimore Argues 1998 MSA Doesn’t Cover Cigarette Litter

    Baltimore Argues 1998 MSA Doesn’t Cover Cigarette Litter

    The City of Baltimore told a Maryland state court that the 1998 Master Settlement Agreement does not shield tobacco companies from liability in its lawsuit over environmental harm caused by nonbiodegradable cigarette filters. The city is seeking to proceed with claims against R.J. Reynolds Tobacco Company, Philip Morris USA, and Liggett Group LLC, arguing that the decades-old settlement addressed healthcare costs related to smoking, not municipal expenses tied to cigarette butt litter and environmental cleanup. Baltimore contends that its suit targets a separate issue involving plastic filter waste and the burden placed on city services, and therefore should not be dismissed on preemption grounds.

  • Appeals Court Vacates 93A Defense Verdict in Philip Morris Case

    Appeals Court Vacates 93A Defense Verdict in Philip Morris Case

    The Massachusetts Appeals Court ruled that a jury does not need to find liability on underlying tort claims to hold a tobacco company accountable under Chapter 93A, the state’s consumer protection statute. The decision comes in the case of Peter Agnitti, who sued Philip Morris USA over the death of his wife, alleging negligence, fraud, misrepresentation, breach of warranty, and Chapter 93A violations.

    At trial, the Superior Court instructed jurors that a 93A violation could only be found if they also found Philip Morris liable for fraud or misrepresentation. The jury returned a defense verdict on all counts. On appeal, the court found that the instruction improperly conflated 93A liability with fraud, noting that a 93A claim based on deceptive acts does not require proof of reliance or intent to deceive. The panel also clarified that the plaintiff’s pre-charge objections preserved the issue for appeal under Rule 51(b).

    The court emphasized that Chapter 93A is a standalone statutory cause of action, intended to protect consumers independently of other tort claims. Citing evidence that Philip Morris misrepresented the risks of smoking and marketed “light” and “low-tar” cigarettes as safer alternatives despite knowing otherwise, the Appeals Court vacated the 93A judgment and allowed the claim to proceed.

    Legal experts say the ruling reinforces that 93A claims are sui generis and provides guidance on preserving jury instruction objections at trial.

  • S. Africa Trying to Flip ‘Inadequate’ Illicit Tobacco Response

    S. Africa Trying to Flip ‘Inadequate’ Illicit Tobacco Response

    South Africa’s response to illicit tobacco remains inadequate, with legislative gaps, weak enforcement, and entrenched criminal networks that have been flourishing since the Covid-19 cigarette ban, Stefano Betti of the Transnational Alliance to Combat Illicit Trade said at the EMEA Security Conference in Cape Town. He said illicit cigarettes may now account for between 50% and 75% of the market, driven largely by local under-declaration of production to evade taxes, creating severe price distortions between legal and illegal products and fueling money laundering risks.

    While acknowledging progress such as the creation of the Border Management Authority, efforts by the National Prosecuting Authority, and South Africa’s exit from the Financial Action Task Force grey list, Betti stressed that political commitments must translate into operational results. Echoing the call for stronger action, Kobus Lategan of the South African Police Service said authorities are preparing a large, intelligence-led national operation under direction from Cyril Ramaphosa to target illicit trade and counterfeit goods through coordinated enforcement across agencies and with private-sector support.

  • Australia Moving to Ban R&D Tax Credits on Tobacco, Gambling  

    Australia Moving to Ban R&D Tax Credits on Tobacco, Gambling  

    Australia is moving to block tax incentives for research tied to the gambling and tobacco industries under new legislation introduced in the Lower House today (March 25). Assistant Treasurer Daniel Mulino said the measure would prevent taxpayers from subsidizing research that could worsen addiction and other health harms. The exclusion applies to all types of gambling- and tobacco-related R&D, though a carve-out ensures that studies aimed at harm reduction — such as addiction prevention or cessation strategies — remain eligible for R&D tax offsets.

  • Virginia Enacts ‘Vape Enforcement Act’

    Virginia Enacts ‘Vape Enforcement Act’

    Virginia passed the Vape Enforcement Act (House Bill 308 and Senate Bill 620), giving regulators new authority to enforce existing laws prohibiting the sale of tobacco and vaping products to anyone under 21. Oversight of retail sales shifts from the state tax department to the Alcoholic Beverage Control Authority, which will conduct unannounced buyer operations on licensed retailers at least once every 24 months.

    Retailers will now require ABC permits to sell tobacco or liquid nicotine products and must maintain detailed records subject to auditing. Penalties for selling to minors include fines escalating from $1,000 for a first offense to $10,000 for a third, along with potential license revocation. The law also targets the sale of unapproved vaping products listed by the Attorney General, imposing fines for noncompliance. Legislators say the measure addresses rising youth vaping rates and ensures enforcement tools are in place to protect public health.

  • Pouch Maker to Refile FDA Lawsuit in D.C.

    Pouch Maker to Refile FDA Lawsuit in D.C.

    Fontem US, the maker of Zone nicotine pouches, has dropped its lawsuit against the U.S. Food and Drug Administration after a Texas federal court transferred the case to South Carolina, saying it plans to refile in Washington, D.C. The company had alleged the FDA was unfairly delaying review of its premarket tobacco product application, which is required to market new nicotine products in the U.S.

    U.S. District Judge Mark T. Pittman in Texas said Fontem had little connection to the state and its congested Northern District, and sent the case to South Carolina, where Fontem is based. By voluntarily dismissing the case, the company is seeking a more favorable venue in D.C. federal court, where many regulatory disputes involving federal agencies are typically heard. Zone is manufactured by TJP Labs in Canada, and marketed by ITG Brands, a subsidiary of Imperial Brands.

  • Sesh Nicotine Pouches Move to Final PMTA Stage

    Sesh Nicotine Pouches Move to Final PMTA Stage

    Sesh Products US Inc. said the U.S. Food and Drug Administration has accepted its bundled Premarket Tobacco Product Application (PMTA) covering 64 SKUs of its Sesh+ nicotine pouch line for substantive scientific review. The filing determination confirms the application is sufficiently complete to proceed to the final stage of the PMTA process. The submission spans multiple flavors, strengths, and formats aimed at adult consumers.

    The company said the milestone reflects several years of scientific preparation and engagement with regulators, positioning it among a limited number of independent U.S.-based brands advancing through the PMTA pathway.

  • IMF Calls for Risk-Proportionate Nicotine Taxes

    IMF Calls for Risk-Proportionate Nicotine Taxes

    A report by the International Monetary Fund earlier this month called for risk-proportionate taxation of nicotine products, arguing that excise policies should better reflect relative health harms. The IMF paper states that while newer alternatives such as vapes, nicotine pouches, and heated tobacco products are not risk-free, they expose users to fewer toxicants than combustible cigarettes and therefore warrant lower tax rates that can be adjusted as evidence evolves. The authors suggest that aligning fiscal policy with health outcomes could support smoking reduction by incentivizing consumers to shift toward less harmful products.

    Writing for Filter, Kiran Sidhu said the report has drawn support from tobacco harm reduction advocates, who say it reinforces longstanding arguments that price differentials can accelerate declines in cigarette use, citing examples such as New Zealand where lower-risk products and tax gaps have coincided with falling smoking rates. The report also implicitly challenges approaches backed by the World Health Organization that favor equal taxation across nicotine categories, warning that misaligned policies may sustain cigarette consumption or push users toward illicit markets, while emphasizing that taxation remains a key lever for shaping public health outcomes.

  • Industry Mobilizing to Support UK Vapers

    Industry Mobilizing to Support UK Vapers

    The UK vaping industry is mobilizing to support adult smokers and protect access to vaping amid potential regulatory changes. The UK Vaping Industry Association (UKVIA) will run the ninth annual VApril campaign in April 2026, providing evidence-based guidance, expert advice, and personal success stories to help smokers switch to vaping. The campaign also aims to raise awareness of the Tobacco and Vapes Bill — which would restrict flavors, packaging, and product displays — and to encourage vapers to engage with policymakers.

    Meanwhile, the New Nicotine Alliance has launched the Save Vaping campaign to oppose a proposed public vaping ban, warning it could push former smokers back to cigarettes, create enforcement burdens for businesses, and mislead the public on relative risk. Both campaigns provide resources for vapers to contact MPs, highlight successful quitting stories, and ensure consumers have access to reliable information on vaping as a safer alternative to smoking.