Category: News This Week

  • Kaival Amends Philip Morris Deal

    Kaival Amends Philip Morris Deal

    Credit: More

    Kaival Brands International (KBI) has amended its agreement with Philip Morris Products, a wholly owned affiliate of Philip Morris International, for the development and distribution of electronic nicotine-delivery system products in markets outside of the U.S.

    Eric Mosser, CEO of Kaival Brands, the exclusive distributor of all products manufactured by Bidi Vapor, said in a press note that with more than a year of operational history for KBI and given the recent changes to regulations in international markets, it became clear that there were a number of opportunities to improve the terms of the original licensing agreement with PMI and reduce the burden of administering it.

    “We are extremely pleased to reach an agreement that shall enable us to achieve our objectives. The revised licensing agreement simplifies the payment structure resulting in cost savings of approximately $2.7 million for the company over the lifetime of the license agreement,” said Mosser. “It also enables better predictability and forecasting for KBI and streamlines data reporting. Finally, we anticipate that the acceleration of royalty payments will be a net positive to our financial performance over the duration of the agreement.”

    Under the terms of the amended agreement, the parties agreed to revise certain terms, which provide for, among other things, a fixed pricing structure with volume-driven increases and a recapture of nonrecurring engineering costs by KBI.

    Accordingly, Kaival Brands expects a reconciliation payment of approximately $135,000. It projects approximately $300,000 in additional royalties to be earned through the end of 2023.

  • ALD launches Fresor B8000 X1

    ALD launches Fresor B8000 X1

    Photo ALD

    ALD has launched the Fresor B8000 X1, disposable vape that offers 8,000-puffs and several customization options.

    According to its manufacturer, key features include:

    • A digital display screen that keeps track of e-liquid and battery levels;
    • A CMF design that offers elegance and innovation;
    • A smart dual mesh coil that provides consistent flavor throughout the devices lifespan;
    • Original equipment manufacturer and original design manufacturer versions are
    • also available with custom flavors, several nicotine levels (0/1/2/5 percent) and branded packaging.

    “The Fresor B8000 X1 promises an elevated vaping experience,” ALD wrote in a press note announcing the launch. “Its digital display, unique design, Fresor MAX technology, and customization options cater to vapers worldwide. Embrace the future confidently, knowing each puff is enhanced by intelligent technology. For experienced vapers seeking innovation or newcomers exploring vaping, the Fresor B8000 X1 offers an indulgent journey of vaping pleasure.”

  • RLX Technology Net Revenue Decreases

    RLX Technology Net Revenue Decreases

    Image: Mongkol

    RLX Technology announced its unaudited financial results for the second quarter ended June 30, 2023.

    Net revenues were RMB378.1 million ($52.1 million) in the second quarter of 2023 compared with RMB2.2 billion in the same period of 2022. The decrease was primarily due to the discontinuation of our older products and the negative impact of illegal products in the market after regulators’ special action ended in April, which disrupted users’ adoption of our new products that comply with national standards.

    Gross margin was 26.1 percent in the second quarter of 2023 compared with 43.8 percent in the same period of 2022. The decrease was primarily due to the imposition of a 36 percent excise tax, which came into effect on Nov. 1, 2022.

    U.S. GAAP net income was RMB204.7 million in the second quarter of 2023 compared with U.S. GAAP net income of RMB441.6 million in the same period of 2022.

    Non-GAAP net income was RMB86.2 million in the second quarter of 2023 compared with RMB634.7 million in the same period of 2022.

    “During the second quarter of 2023, we continued to firmly execute our core strategy amid the challenging market environment,” said Ying (Kate) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement. “Specifically, we remained dedicated to offering compliant, high-quality products while developing new products to meet users’ evolving needs. Though the recent resurgence of illegal products has had a lingering impact on our sales, we believe the impact will be temporary rather than a major trend that could derail our recovery trajectory. As a trusted e-vapor brand for adult smokers, we remain confident that, supported by regulatory oversight, our premium products will continue to win users’ trust and gradually supplant inferior and harmful illegal products. Moving forward, we will continue prioritizing product innovation, harm reduction and quality control initiatives while further enhancing our product portfolio as we strive to create sustainable value for all stakeholders.”

    Chao Lu, chief financial officer of RLX Technology, commented, “In light of the external challenges, especially the disruptions from illegal products, we deepened our focus on efficiency and profitability improvement during the second quarter. Thanks to our supply chain optimizations and product design enhancements, our topline improved sequentially to RMB378.1 million, and our gross margin rebounded by 1.9 percentage points from the first quarter of 2023. We also strengthened cost control, which helped significantly narrow our non-GAAP operating loss. Notably, our operating cash flow turned positive for the first time since the new regulations were enacted. We believe our strong cash position will continue to support us in navigating the evolving markets, and we will pursue further gains in cost optimization and efficiency improvement to accelerate the pace of recovery.”

    The company hosted an earnings conference call at 8:00 a.m. U.S. Eastern Time on Aug. 18, 2023 (8:00 p.m. Beijing/Hong Kong Time on Aug. 18, 2023).

    A live and archived webcast of the conference call will be available on the company’s investor relations website at https://ir.relxtech.com.

    A replay of the conference call will be accessible approximately two hours after the conclusion of the call until Aug. 25, 2023.

  • Egypt: Measures to End Tobacco Monopoly

    Egypt: Measures to End Tobacco Monopoly

    Image: efesenko | Adobe Stock

    Tobacco producers and authorities in Egypt are implementing measures to end the distributors’ market monopoly, according to Ahram Online.  

    The price of locally produced cigarettes has almost doubled over the last three months. The Eastern Company, which holds a 75 percent share of the market, responded by increasing supply.

    “The Eastern Company has increased supply in the market from 20 percent to 30 percent,” said Hani Aman, CEO of the Eastern Company.

    The prime minister also held a meeting involving the minister of finance to review available stock and plans being implemented by the Eastern Company to increase production and help stabilize the market.

    The meeting was used to look at measures being taken to provide necessary raw materials for manufacturing, according to Cabinet spokesperson Nader Saad.

    The current crisis was partly caused by a hard currency shortage, affecting the import of necessary raw materials.

    Aman stated that it will take efforts of four parties to end the crisis. The first is Eastern Company; regulatory bodies are the second—these are already intensifying efforts to combat monopolization and traders’ exploitation of the market crisis.

    “The third party is the merchants whom I call upon to cease stockpiling cigarettes, particularly given the ineffectiveness of such practices in light of the measures taken by regulatory entities,” Aman said. “The fourth participant is the consumer. I appeal to consumers to refrain from purchasing quantities beyond their actual needs and to avoid hoarding.”

    “Authorities have confiscated over 200,000 packs of cigarettes in various locations, including Basateen, Matariya, Bab Al-Bahr, Tanta, Alexandria and Sayeda Zeinab,” said Ibrahim Imbabi, head of the Tobacco Division at the Federation of Egyptian Industries, who believes the current measures are not enough.

    “I have proposed channeling the confiscated quantities to national gas stations [many of which sell different tobacco brands], thereby ensuring that prices remain stable. This approach would also involve a restructuring of the distribution network, with the Eastern Company directly supplying retailers instead of relying on distributors.”

  • Public Meeting on PMTA Process

    Public Meeting on PMTA Process

    Credit: JHVEPhoto

    The U.S. Food and Drug Administration will hold a two-day public meeting on the agency’s premarket tobacco product application (PMTA) process on Oct. 23–24, 2023.

    The meeting will be held on the FDA’s White Oak Campus in Silver Spring, Maryland, and will be in a hybrid format with the option to attend virtually.

    Staff from the Center for Tobacco Products’ Office of Science will present on topics related to the PMTA process and be available to respond to questions received from stakeholders on the topic, according to a press note.

    Additional information, including registration and question submission processes, will be available soon.

  • Indonesian Customs Seizes Millions in Goods

    Indonesian Customs Seizes Millions in Goods

    Image: Tobacco Reporter archive

    Customs in Batam, Indonesia, have seized illicit goods worth IDR1.37 trillion ($89.35 million) in the first half of 2023, including tobacco products, illegal cigarettes, e-cigarettes and alcoholic beverages containing methanol, according to 2Firsts.

    The operation was a result of tax operations aiming to ensure compliance of retail tax paying sellers as part of the area’s free-trade zone and free port, according to Anbang Puriyongo, director of Batam Customs.

    Three individuals have been named as suspects and undergone trial, according to Puriyongo. He called on citizens to report suspicious activities and actively participate in creating a fair trading environment.

    “We will further enhance inter-department coordination and cooperation, leveraging the latest technology,” Puriyongo said. “We aim for such actions to continue in the future, creating a better trading environment for Indonesia.”

  • Zimbabwe Approves New Agrochemicals

    Zimbabwe Approves New Agrochemicals

    Photo: Taco Tuinstra

    Kutsaga, formerly the Tobacco Research Board, approved new agrochemicals for tobacco crops to help support farmers in producing high-quality crops for global markets, according to the Zimbabwe Independent. The new agrochemicals will boost tobacco quality, according to Kutsaga.

    “As over 90 percent of the Zimbabwean tobacco crop is exported, the tobacco must meet stringent international agrochemical regulations for international acceptance and maintenance of markets, especially in an increasingly competitive global market,” Kutsaga said.

    “Furthermore, compliance with global health standards, correct and safe use of crop protection agents as well as good agronomic practices in tobacco production is key to sustainable agriculture.”

    A number of agrochemicals have also been recalled due to safety concerns.

  • Zimbabwe Moving Up Value Chain

    Zimbabwe Moving Up Value Chain

    Photo: Taco Tuinstra

    Zimbabwe is making steady progress toward achieving the goals set out in the government’s Tobacco Value Chain Transformation Plan (TVCTP), reports The Herald.

    Cigarette exports jumped to $47 million in the first half of this year, up 70 percent from the corresponding period in 2022, according to the Zimbabwe National Statistics Agency (ZimStats).

    The country’s tobacco product export earnings rose 19 percent from $378 million over the period January to June 2022 to $450 million over the same period this year.

    The country exports partly or wholly stemmed/stripped or not stemmed/stripped tobacco, tobacco refuse, cigars, cheroots and cigarillos tobacco, cigarettes and manufactured tobacco.

    The portion of tobacco product exports accounted for by partly or wholly stemmed/stripped tobacco decreased from 91 percent in 2022 to 88 percent this year.

    This was simultaneously accompanied by a three percent increase in the portion of export of cigarettes containing tobacco from seven percent last year to 10 this year.

    Tobacco Farmers Union Trust President Victor Mariranyika welcomed the increase in value- added tobacco products export.

    “We encourage exporters to increase value addition of our raw tobacco from the low figure of 2 percent until as a country we reach 30 percent,” he was quoted as saying. “Though this increase may not have an immediate impact on the farmer, it is a positive step in the right direction.”

    Zimbabwe Tobacco Growers Association (ZTGA) Chairman George Seremwe said if the country maintains this trajectory, then the benefits will eventually improve farmers’ livelihoods and the economy at large.

    The TVCTP aims to achieve a $5 billion tobacco industry by 2025.

  • Malawi Regulator Satisfied With Prices

    Malawi Regulator Satisfied With Prices

    Photo: Taco Tuinstra

    Malawi’s Tobacco Commission (TC) is satisfied with the prices that buyers offered in the 2023 tobacco marketing season, reports Malawi24. The regulator hopes the prices will motivate farmers to grow more tobacco next season

    “This year’s trade demand was at 170 million kilograms and we have supplied 120 million, which means there is a great market opportunity at our disposal,” TC Board Chair Godfrey Chapola was quoted as saying. “One of our strategic goals for the next five years is to raise our annual production to 200 million kilograms.”

    The TC will also be pushing to increase scale and irrigation in tobacco farming over the next five years.

    Chapola said proposed tobacco legislation currently being considered in Parliament would create a more conducive environment for all players and ensure that tobacco remains a strategic crop for Malawi.

    During the 2023 tobacco marketing season, Malawi earned $282.62 million after selling more than 120 million kg of tobacco at an average price of $2.35.

  • Activists Urge COP10 Consumer Participation

    Activists Urge COP10 Consumer Participation

    Photo: Tobacco Reporter archive

    Consumer advocates are calling for the next New Zealand government to support greater consumer advocacy participation in the 10th Conference of the Parties (COP10) to the World Health Organization’s Framework Convention on Tobacco Control (FCTC) in Panama.  

    “The WHO Framework Convention on Tobacco Control has contributed to some progress in the implementation of tobacco control measures, but they need to provide honest, risk-proportionate communication and regulatory recommendations for Tobacco Harm Reduction [THR] products,” says Nancy Loucas, executive coordinator of the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA). 

    “While not perfect, these THR products can be a less harmful alternative to smoking and can help smokers quit. It is critical that smokers have access to accurate information about these products and that regulations are proportionate to their risks,” says Loucas. 

    The WHO FCTC should stop denying smokers, vapers and other tobacco users of their right to have a meaningful participation and inclusion in the formulation of policies that hugely impact them.

    Nancy Loucas, executive coordinator, CAPHRA

    “The WHO FCTC should stop denying smokers, vapers and other tobacco users of their right to have a meaningful participation and inclusion in the formulation of policies that hugely impact them.”  

    CAPHRA is calling on the New Zealand government and next minister of health to ask all member states who will be attending COP10 to reject the prohibitionist proposals contained in COP10 provisional agenda items 6.1 to 6.4 that the organization insists will just further contribute to millions more of unnecessary deaths from smoking. 

    “New Zealand should prioritize science-based inclusive policy making, including at the WHO Framework Convention on Tobacco Control. It is essential that policy making is based on the best available evidence and that all stakeholders—including consumer advocates are included in the decision-making process,” said Loucas.