Category: News This Week

Iran: Smuggling Ring Busted

Image: Tobacco Reporter archive
Iran’s intelligence ministry busted a large tobacco smuggling network, reports Press TV. According to the ministry, members of the network were operating in 10 Iranian provinces as part of 15 connected smuggling bands.
Millions of dollars from the illicit products were funneled into bank accounts outside Iran via illegal currency exchange shops. Foreign sanctions have caused a shortage of hard currency resources, leading to Iran introducing strict regulations to crack down on smuggling. Preventing smuggling is also part of Iran’s plans to help domestic manufacturers and prevent use of unsafe products.
Increased prices of domestically produced cigarettes have led to an increase in smuggling, according to some experts.
The smuggling bust led to 60 arrests and the closure of over 100 warehouses used to store the illicit tobacco products.
July 27, 2023
PMI Takes Charge on Healthcare Business

Photo: PMI
Philip Morris International’s foray into pharmaceuticals is proving more challenging than expected, according to The Wall Street Journal.
The tobacco multinational took a $680 million charge in the latest quarter on its wellness and healthcare business, two years after agreeing to buy inhaled-medicine maker Vectura Group for £1 billion ($1.31 billion).
After an unsuccessful clinical trial, Vectura won’t be submitting its inhalable aspiring product to the U.S. Food and Drug Administration this year.
PMI is postponing its 2025 goal to exceed $1 billion in net revenues from health and wellness products. The company still sees growth potential in products such as smoking-cessation treatments and medicinal cannabis.
The setbacks have been compounded by the recent departures of several top Vectura executives.
According to a report in The Times, Vectura CEO Michael Austwick is stepping down having been in the role only since he joined from Novartis in June last year.
Thomas Gibbs, Vectura’s chief executive in the United States, also left in 2023 after just over a year at the company to join Lundbeck, a drugs company based in Denmark, and there is uncertainty over the future of Lizzie Knowles as Vectura Group’s chief financial officer.
Austwick’s predecessor, Will Downie, and Chief Financial Officer Paul Fry stepped down shortly after PMI’s takeover of Vectura.
The tobacco group’s acquisition of Vectura caused a backlash among public health professionals, with pharmaceutical conferences banning Vectura representatives from their events.
July 27, 2023
New Categories Boost BAT Half-Year Revenues

Photo: BAT
British American Tobacco reported revenue of £13.44 billion ($17.35 billion) in the first six months of 2023, up 4.4 percent over the figure recorded in the comparable 2022 period. Growth was driven by the company’s “New Categories” segment. Revenue from noncombustible products now accounts for 16.6 percent of group revenue, up 180 base points (bps) versus fiscal year 2022.
BAT’s Vuse and Velo brands enjoyed strong revenue growth, and New Categories’ financial delivery significantly improved, contributing a £201 million increase to group profit as losses reduced.
Reported profit from operations was up 61.4 percent (with reported operating margin up 1,560 bps to 44.2 percent). Adjusted profit was up 3.6 percent at constant exchange rates. Adjusted operating margin was up 40 bps to 44.3 percent.
“Having been in my new role for 10 weeks, I’m pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organization,” said BAT Tadeu Marroco, who assumed the top job in May. “It is a challenging external environment. High inflation and slower global growth are impacting consumers and business. Yet our revenue, profit from operations and earnings are all up.
“We are making great progress in New Categories. Revenues are up by 29 percent, and we are now close to break[ing] even, with consumers of noncombustible products up by 1.5 million versus FY 2022. While it’s encouraging to see continued good performance in vapor and modern oral, we recognize more work is required in heated tobacco.
“I remain confident that New Categories will deliver a positive contribution in 2024. However, we do not expect contribution growth to be linear, as levels of investment will align with the phasing of our big innovation platforms.
“While more focus is required in the U.S., our sequential performance improvement in the critical premium U.S. combustibles business since January 2023 is encouraging.
July 26, 2023
Taiwan Mulls Cigarette Tax Hike

Photo: Taco Tuinstra
The government of Taiwan is considering raising cigarette taxes next year, reports the Taipei Times, citing the Health Promotion Administration (HPA)
Regulations require an expert committee to deliberate the tobacco tax every other year. During its most recent gathering, last year, the committee decided to leave tobacco taxes unaltered due the Covid-19 pandemic.
HPA Director-General Wu Chao-chun told the Central News Agency that “controlling consumption through cost” is a successful tactic for smoking prevention, and vowed to continue promoting other methods, such as labeling and banning smoking in more areas.
Smoking declined significantly after Taiwan raised the tobacco tax in 2009 and 2017, according to Lee Yue-chune, a professor of public health at National Yang Ming Chiao Tung University.
Last year, a pack of cigarettes cost TWD116 (US$3.71) on average, with taxes accounting for 53 percent, below the WHO recommended minimum of 75 percent, she said.
Taiwan spends an estimated TWD80 billion annually on treating smoking-related diseases, Lee said, recommending that the government set a target for the tobacco tax as a percentage of cigarette cost.
July 26, 2023
Zimbabwe Seed Sales Hint at Larger 2024 Crop

Photo: Taco Tuinstra
Zimbabwe has sold 673 kg of tobacco seed with the capacity to cover 112,104 hectares as of July 20, 2023, reports The Herald, citing Tobacco Industry Marketing Board (TIMB) statistics. The country’s aim, formulated in the government’s Tobacco Value Chain Transformation Plan, is to reach 300 million kg of tobacco a season by 2025.
“This season, we are expecting an increase in hectarage, thanks to the coming on board of new growers and players in the industry as well as the decision by those who have already been in the industry to increase production,” TIMB public relations officer Chelesani Tsarwe said.
“We are currently exploring economically viable alternatives to tobacco through robust diversification programs,” Tsarwe said. “We are glad that we can now ride on the fact that TIMB recently became a certified member of global Good Agricultural Practices (GAP), and we have registered trainers and farm assurers who will work with farmers to ensure compliance with global standards for export crops.”
Tsarwe also noted that there is a focus on implementing the sustainable tobacco program and becoming environmental, social and governance compliant.
“Sustainable agricultural practices will reduce the negative effects of tobacco production, and our tobacco products will be better ranked on the global market,” said Tsarwe.
Tobacco accounts for a large margin of the country’s exports.
Zimbabwe’s tobacco growers produced a record 291.1 million kg of tobacco worth $882.2 million this season.
July 26, 2023
Red Algae Protein Doub Boosts Tobacco Growth

Photo: YanaKho
Researchers out of Cornell University have successfully transferred key regions of red algae into a tobacco plant using bacteria as an intermediary, resulting in doubled photosynthesis and plant growth compared to tobacco grown with the unaltered protein, according to a story in the Cornell Chronicle.
The study centers on Rubisco, the most abundant protein across ecosystems. The protein performs the first step of photosynthesis by fixing carbon, but it is slow and struggles to differentiate between carbon dioxide and oxygen, often limiting plant growth and crop yield.
The researchers found a species of red algae, Griffithsia monilis (Gm), that contains Rubisco that is 30 percent more efficient at fixing carbon than Rubisco in other organisms. Laura Gunn and her co-authors of the study used the 3D structure of GmRubisco to successfully graft a small number of regions from Rhodobacter sphaeroides (RsRubisco) into a bacterial Rubisco.
“RsRubisco is not very efficient, but it is very closely related to GmRubisco—they’re like cousins—which means that unlike land-plant Rubisco, it accepts the grafted sequences,” said Gunn. “RsRubisco also doesn’t need any special chaperones for it to fold and assemble in land plants.”
Using the altered Rubisco increased the carboxylation rate by 60 percent, increased carboxylation efficiency by 22 percent and improved RsRubisco’s ability to distinguish between carbon dioxide and oxygen by 7 percent. When transplanted into tobacco, it doubled photosynthesis and plant growth compared to tobacco with unaltered RsRubisco.
“We’re not at the point where we’re outperforming wild-type tobacco, but we’re on the right trajectory,” said Gunn. “We only need fairly modest improvements to Rubisco performance because even a very small increase over a whole growing season can lead to massive changes in plant growth and yield, and the potential applications span many sectors: higher agricultural production; more efficient and affordable biofuel production; carbon sequestration approaches; and artificial energy possibilities.”
The research was supported by the Australian Research Council Centre of Excellence for Translational Photosynthesis, Formas Future Research Leaders and the European Regional Development Fund.
July 26, 2023
Brief Supports Limiting ‘Chevron Deference’

Image: Tobacco Reporter archive
Keller and Heckman has filed an amicus brief with the U.S. Supreme Court on behalf of members of the electronic nicotine-delivery system (ENDS) industry in support of petitioners in a case to overturn or limit the so-called Chevron deference.
Named after a landmark Supreme Court decision dating from 1984, the Chevron deference is a legal doctrine that generally requires courts to defer to an administrative agency’s interpretation of ambiguous statute so long as that interpretation is reasonable.
In practice, Chevron deference often gives agencies broad leeway to reach beyond the limits of a statute’s plain language, often bypassing the rulemaking process otherwise required under the Administrative Procedure Act and making it more difficult to challenge an agency action in court.
In the years since ENDS became subject to Food and Drug Administration regulation, the vast majority of courts reviewing ENDS industry challenges to premarket application denials, as well as FDA rulemakings and guidance documents, have rubber-stamped the agency’s interpretation of the Family Smoking Prevention and Tobacco Control Act (TCA) and the “appropriate for the protection of the public health” standard, Keller and Heckman wrote on its blog.
Critics contend that the Chevron deference has enabled the FDA to impermissibly interpret the TCA to implement a de facto ban on all nontobacco-flavored ENDS products without any requisite notice and comment rulemaking or congressional amendments to the TCA.
The filers on the amicus brief urge the Supreme Court to at least restrict the application of Chevron deference so that it is the exception, not the rule. The Supreme Court will hear oral arguments in the case in its fall 2023 term.
The petition to overturn or limit the Chevron deference was brought by a group of fishing companies challenging the National Marine Fisheries Service’s construction of the Magnuson-Stevens Act to require the industry to pay the salaries of federal monitors.
The ENDS industry amici include the American Vaping Manufacturers Association, the American Vapor Group and Bidi Vapor.
July 25, 2023
TPSAC Meeting Materials Available

Credit: Postmodern Studio
The U.S. Food and Drug Administration’s Tobacco Products Scientific Advisory Committee (TPSAC) met on May 18 to discuss the “Requirements for Tobacco Product Manufacturing Practice” proposed rule. All the meeting materials, including the recording, transcript and summary minutes, are now available online.
The proposed rule, if finalized, lays out the FDA’s requirements for tobacco product manufacturers regarding the manufacture, design, packing and storage of tobacco products.
Comments on the proposed rule must be submitted by 11:59 p.m. Eastern Time on Sept. 6, 2023.
July 25, 2023
Zimbabwe Records Best Ever Sales

Image: Taco Tuinstra
Zimbabwe’s tobacco auctions will close July 31 after four months of record sales, according to Bulawayo24.
Final cleanup sales for the auction system will take place on Aug. 30, according to the Tobacco Industry and Marketing Board (TIMB).
“After consultations with all stakeholders, the board wishes to advise that the official date of closure for the 2023 auction floors is 31 July.
“However, growers will still be able to sell their auction tobacco through a mop-up sale. The final auction cleanup sales will be held on Wednesday, 30 August 2023,” the TIMB said.
“Contract sales will continue to operate until such a time when individual contractors have fully received all their tobacco,” the TIMB added.
“The closure was approved by the Minister of Lands, Agriculture, Fisheries, Water and Rural Development, Honorable Dr. Anxious Jongwe Masuka,” said the TIMB.
A total of 291.1 million kg of tobacco worth $882.2 million has been sold at an average price of $3.03 per kilogram. Of the total tobacco sold, 271.2 million kg were sold via the contract system.
This year’s sales volumes put Zimbabwe on track to achieve its target of 300 million kg by 2025, as formulated in the Tobacco Value Chain Transformation Plan, ahead of schedule.
July 25, 2023
Former China Monopoly Leader Arrested

Image: Bonsales
He Zehua, former deputy chief of China’s State Tobacco Monopoly Administration, has been arrested on charges of alleged bribe taking, reports China Daily.
The Supreme People’s Procuratorate, the Liaoning Provincial People’s Procuratorate ordered the arrest. His case was investigated by the National Commission of Supervision.
July 25, 2023