Category: News This Week

  • World Bank Urges Laos to Increase Taxes

    World Bank Urges Laos to Increase Taxes

    Image: Skórzewiak

    The World Bank has urged Laos to raise its value-added tax rate and increase taxes on cigarettes and alcohol to help address high inflation and currency depreciation, according to Radio Free Asia.

    Alex Kremer, the World Bank’s representative in Laos, said in a report last month that the government should spend more money on healthcare and education to set a foundation for future development.

    Laos’ economy has struggled with rapidly rising prices, low foreign investment and public debt that could increase to 125 percent of GDP in 2024. The country’s debt reached $18.7 billion by the end of 2022. Over half the debt is owed to China.

    Kremer said the debt has destabilized the country’s macroeconomy and slowed economic growth.

  • 22nd Century to Host Fireside Chat Event

    22nd Century to Host Fireside Chat Event

    Image: connected2000

    22nd Century Group will host a fireside chat event on Wednesday, Jan. 17, 2024, beginning at 1:00 p.m. Eastern Time. The event will be hosted by a covering research analyst and feature interactive Q&A with Larry Firestone, who was appointed chairman and CEO in December 2023.

    Firestone will address the new corporate strategy to create a lean operating cost structure focused on the company’s tobacco manufacturing and tobacco harm reduction products, return the company to growth and strengthen the balance sheet to ultimately self-fund the company’s development plans.

    “We have made significant progress at 22nd Century in a very short time, demonstrating our shared commitment to streamline the business, reduce costs and position the company on sustainable growth strategies that can lead to positive cash flows,” said Firestone in a statement. “We are by no means finished with our efforts and expect to further reduce costs, pay off our debt and diversify our continuing operations as the year progresses. This will enable the company to fully focus on the best path to achieving commercial success, particularly with our FDA [U.S. Food and Drug Administration]-authorized VLN harm reduction products.”

    A webcast link to join the live webcast or a replay of the event will be available on the investor relations section of the 22nd Century Group website at https://ir.xxiicentury.com under “Events and Presentations.”

  • Taxes had ‘No Impact’ on Singapore’s Vape Ban

    Taxes had ‘No Impact’ on Singapore’s Vape Ban

    The Singapore government said that the potential loss in revenue from tobacco tax was not a factor in its decision to ban the use of e-cigarettes in 2018.

    In his reply to a question by a Workers’ Party and Sengkang member of Parliament, Deputy Prime Minister Lawrence Wong, who is also the Minister for Finance, said, “The Government’s decision to ban the use of e-cigarettes in 2018 was based on public health considerations, to protect our population from the harms of these products. The potential loss in tobacco tax revenue from the reduced consumption of tobacco products was not a factor in this decision.”

    … our priority is to protect the health of our population and prevent e-cigarettes from causing harm to our people, especially to younger Singaporeans.”

     

    Lawrence Wong

    Wong added that if the government were to legalize and tax e-cigarettes “the challenges would be similar to those we encounter for cigarettes and other tobacco products today,” according to a Yahoo news report.

    “In any case, the government has no plans to change our current approach, as our priority is to protect the health of our population and prevent e-cigarettes from causing harm to our people, especially to younger Singaporeans,” he said.

  • Monoceros Buys Quarter of Bulgartabac

    Monoceros Buys Quarter of Bulgartabac

    Photo: Tobacco Reporter archive

    Monoceros has acquired nearly a quarter of Bulgartabac Holding from Liechtenstein-based Woodford Establishment for an undisclosed amount, reports Seenews.

    Headquartered in the Cayman Islands, Monoceros is an early-stage investor and proprietary trading firm, with a portfolio chiefly made up of cryptocurrency and AI technology companies.

    As of the end of 2022, Woodford Establishment was Bulgartabac holding’s second largest investor. Other prominent shareholders include UAE-registered Gifted Master, with 24.10 percent stake; UAE-registered Wardia (15.23 percent) and Lichtenstein-registered Stiga Ansalt (14.75 percent).

    In 2022, Bulgartabac Holding reported a consolidated net profit of BGN36.1 million ($20.2 million) compared to a consolidated net loss of BGN70.6 million in the previous year, according to the company’s annual report.

    Total operating revenue increased to BGN 271.5 million from BGN187.1 million as revenue from sales jumped 40 percent to BGN252.7 million.

    In 2017, Bulgartabac Holding sold its biggest cigarette brands to British American Tobacco for more than €100 million ($109.7 million).

    The company has since diversified its investments.

  • Durbin Blasts FDA Failures in Vape Rules

    Durbin Blasts FDA Failures in Vape Rules

    Senator Dick Durbin

    U.S. Senate Majority Whip Dick Durbin has again decried the Food and Drug Administration on its unacceptable failure to “protect children from the dangers of vaping” as the agency continues to miss and delay critical deadlines.

    In a press release, Durbin stated that he has repeatedly criticized the FDA for its long-overdue review of premarket tobacco product applications (PMTAs) from e-cigarette manufacturers, which originally had a federal court deadline of September 9, 2021.

    FDA has missed that court-ordered deadline by 28 months as unauthorized e-cigarettes flood the market.

    During his speech, Durbin also called on the Biden Administration to swiftly implement a proposed public health rule to prohibit the production and retail sale of menthol cigarettes and flavored cigars.

    “I know this President cares deeply about the toll of cancer. It has touched his family personally, as it has mine,” the Senator said. “If we want to make a difference in the health of Americans—and set a legacy for future generations—then the Administration must finalize this public health measure to end Big Tobacco’s predatory promotion of menthol cigarettes. Lives hang in the balance.”

    The FDA stated in prior status reports for PMTAs that the agency would complete a review of 100 percent of the applications by the end of 2023. The agency is now estimating that completion of the reviews may be delayed as the FDA considers the D.C. Circuit’s opinion in Fontem US v. FDA, affirming in part and vacating and remanding in part marketing denial orders for certain vaping products.

  • Lucy Gum Helps Prevent Cravings: Study

    Lucy Gum Helps Prevent Cravings: Study

    Credit: Lucy

    Lucy Gum, a nonmedicinal nicotine product, helped prevent nicotine cravings among participants in a behavioral study published in Harm Reduction Journal.

    Based on the results, respondents who smoked and were planning to quit, as well as those not intending to quit, were most interested in trying Lucy Gum, which is manufactured by oral nicotine product manufacturer Lucy Goods. Quitting or cutting down consumption of cigarettes, vapes and other tobacco products were the most common motivation for trying Lucy Gum. Many reported that it was helpful in preventing nicotine cravings, managing stress or maintaining focus. Notably, females who smoked showed interest in Lucy Gum in contrast to low female interest in traditional smokeless tobacco products.

    Lucy Gum did not appear to attract those who never used tobacco products and has low potential to promote relapse in nicotine use for former tobacco users. Results for young adults suggest minimal appeal to youth, and there was no evidence that flavors of Lucy Gum appealed more to young adults than to older adults.

    Current smoking cessation methods show limited effectiveness, with just a 0.3 percent reduction in population-level smoking prevalence projected for a 2.3 percent quitting rate.

    “The fact that Lucy appeals to people who smoke, regardless of their intent to quit smoking, highlights the potential of Lucy to reach more adult tobacco users than medicinal NRT [nicotine-replacement therapy] products and to facilitate their transition to less harmful alternatives,” said David Renteln, CEO of Lucy Goods, in a statement.

  • Navaneel Kar to Lead IPM India

    Navaneel Kar to Lead IPM India

    Navaneel Kar (Photo: IPM India)

    Philip Morris International appointed Navaneel Kar as the managing director of its India operations, IPM India Wholesale Trading (IPM India). Prior to joining IPM India, Kar served as the president of sales at Tata Consumer Products. He will be reporting to Ankur Modi, cluster head of South Asia and Indochina for PMI.

    With over 25 years of experience, Kar has been associated with reputed brands like ITC and Tata Motors. He has successfully led teams and organizations across multiple categories and channels in the food, tobacco, personal care and beverage sectors.

    “I am pleased to welcome Navaneel Kar as IPM India’s managing director,” said Modi in a statement. “Navaneel has displayed leadership and strength in delivering exceptional results through his career. His entrepreneurship and learning mindset will be central to bring the next phase of growth for our India business.”

    Kar said, “I am excited to assume the new role at this interesting juncture and contribute to the company’s growth and overall success. I look forward to working with the team to deliver competitive performance along with building an inclusive, diverse and a progressive workplace.”

  • KT&G CEO Won’t Seek Reappointment

    KT&G CEO Won’t Seek Reappointment

    Baek Bok-in (Image: KT&G)

    KT&G’s governance committee on Jan. 11 finalized a longlist of CEO candidates, the company announced on its website. The list comprises 24 individuals including 14 external candidates and 10 internal candidates. The incumbent CEO, Baek Bok-in, has been excluded from the list as he has expressed his intention not to seek reappointment.

    For the external candidates, eight individuals who applied through open recruitment and six individuals recommended by search firms have all been included in the longlist. In addition, 10 internal candidates who have participated in the company’s senior management training program have also been included.

    The CEO appointment process is expected to take about three months. KT&G insists it will be conducted in a fair and transparent manner, following a three-step procedure involving the governance committee, the CEO candidate recommendation committee and approval at the general meeting of shareholders.

    Following the procedure, the governance committee plans to conduct a comprehensive assessment of the candidates who have been longlisted. The governance committee also intends to consider and weigh impartial and objective opinions from the advisory panel, composed of five external experts. The committee will finalize the first shortlist of CEO candidates by the end of this month and recommend it to the CEO candidate recommendation committee.

    Then, the CEO candidate recommendation committee will engage in a systematic and in-depth discussion regarding the candidates included in the first shortlist to form the second shortlist by mid-February. The second shortlist will be disclosed in a transparent manner upon its finalization.

    The final CEO candidate will be named by the end of February. The appointment will be subject to approval at the annual general meeting of shareholders in late March.

    The CEO candidate recommendation committee will be composed entirely of outside directors. Additionally, KT&G’s board of directors plans to propose an agenda item at the upcoming annual general meeting of shareholders to amend the articles of incorporation and make it obligatory to constitute the CEO candidate recommendation committee exclusively of outside directors, regardless of the incumbent CEO’s intentions regarding reappointment.

    Late last year, KT&G shareholder Flashlight Capital Partners urged the tobacco company to select its next CEO in a more transparent manner after expressing disappointment with the current CEO’s performance and identifying several shortcomings in the previous selection procedure.

  • Nicotine Market Shares Flat in December

    Nicotine Market Shares Flat in December

    Tobacco Reporter Archive

    Consumer demand for nicotine products has fluctuated due to inflation and rising cigarette prices over the past 13-19 months. However, the Neilsen report covering the four-week period ending Dec. 30 shows that market shares are holding steady for both next-generation and traditional tobacco brands.

    The market share of R.J. Reynolds’ top-selling Vuse e-cigarette remained flat at 42 percent in December at convenience stores, according to the report. While Vuse’s market share was unchanged, No. 2 Juul dropped from 24.3 percent to 24.2 percent for the report covering the four-week period ending Dec. 30.

    As recently as May 2019, Juul held a 74.6 percent share in the U.S. electronic cigarette market. That’s when a series of regulatory actions led to product-reduction concessions, according to media reports.

    Meanwhile, Altria Group’s ownership of No. 3 NJoy hasn’t resulted in a meaningful market-share increase so far. Nielsen cited a research error by why it did not include an update for NJoy in the latest report. It was at 2.6 percent in the previous report.

    Fontem Ventures’ blu eCigs, an affiliate of Imperial Brands Plc, was unchanged at 1.2 percent.

    The overall e-cigarette category was down 9.9 percent.

    In traditional cigarettes, Philip Morris’ top market share was at 50.6 percent in the latest Nielsen report with top-selling Marlboro representing 45.6 percent of overall market share.

    Meanwhile, Reynolds was at 33.2 percent with Newport at 12.9 percent and followed by Camel (7.8 percent), Natural American Tobacco (3.7 percent) and Pall Mall (3.7 percent).

    ITG was at 8.5 percent overall, although ITG has said its market share is closer to 10 percent. Its No. 7 Winston brand remained at 2 percent, while Kool and Maverick remained tied for No. 8 at 1.8 percent.

    Goldman Sachs analyst Bonnie Herzog said that “in terms of specific company trends, total nicotine sales declines improved across the board for Altria, BAT, Imperial and Juul, while decelerating for all other manufacturers broadly in the latest period.”

    The decline in cigarette sales continues at a strong pace, said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.

    “Yet, as Altria results showed and Barclays recently highlighted, much of this is due to cross-category migration,” Sweanor said.

    “People are switching to far lower-risk options. But disposable vaping products appear to currently be the greatest factor in this migration.”

    TD Cowen analyst Vivian Azer said consumers’ cigarette “downtrading to discount and deep discount continues to benefit Imperial’s share trends.”

  • Hong Kong Mulls Higher Tobacco Tax

    Hong Kong Mulls Higher Tobacco Tax

    Photo: Tobacco Reporter archive

    Authorities in Hong Kong are considering a further increase in tobacco duty, reports South China Morning Post, citing the city’s health minister.  

    Lo Chung-mau, secretary for health, did not confirm whether the measure would be included in Financial Secretary Paul Chan Mo-po’s budget next month. Tobacco taxes were previously increased in February 2023 by HKD0.60 ($0.07) per cigarette. A pack of 20 cigarettes now costs around HKD78.

    “Data from the World Health Organization and the global experience proves that an increase in tobacco tax is one of the most effective methods [to reduce smoking]. We will definitely consider it,” Lo said.

    Following last year’s tax increase, calls to the government’s smoking cessation hotline increased threefold to fourfold, showing that the move was effective to encourage people to quit smoking, according to Lo. The current smoking rate is 9.5 percent, and authorities hope to cut that down to 7.8 percent by next year.

    Currently, tobacco duty accounts for 64 percent of cigarette retail price in Hong Kong. The World Health Organization recommends 75 percent.

    The government is currently analyzing data from a public consultation on its tobacco control plans. Lo stated that the government aims to deliver short-term and long-term strategies.