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Category: News This Week

  • KT&G Rumored to be Entering Nicotine Pouch Market

    KT&G Rumored to be Entering Nicotine Pouch Market

    KT&G Corp. is in talks to acquire a leading nicotine pouch company in Northern Europe for $200 million, according to The Korea Economic Daily. The belief is that South Korea’s dominant tobacco and ginseng producer is exploring new growth drivers amid tightening regulations and a shrinking traditional cigarette market, investment banking sources said this week.

    If completed, the deal would mark KT&G’s first overseas M&A since it acquired a 60% stake in Indonesian tobacco maker Trisakti Purwosari Makmur in 2011 for about $90 million, the newspaper said.
    According to reports, Flashlight Capital Partners, KT&G’s activist investor, urged the company to emulate global peers such as Philip Morris and accelerate its entry into new segments. PMI got into the nicotine pouch market in 2022 when it purchased Swedish Match, the maker of Zyn, for $16 billion. KT&G declined to comment on the acquisition talks, saying no decision has been finalized.

  • House Working with Trump’s $6.8B FDA Budget

    House Working with Trump’s $6.8B FDA Budget

    House appropriators advanced a bill to fund the FDA for fiscal 2026 on a party-line vote out of a subcommittee yesterday (June 5)— but, according to Politico, the bill has a long path ahead before it potentially becomes law. The topline number from the House bill aligns with President Donald Trump’s budget proposal, which sought $6.8 billion for the FDA.

    The budget calls for $3.2 billion in direct appropriations, with the rest coming from user fee revenue. It also represents a $300 million cut in taxpayer funding compared to what the House Appropriations subcommittee sought last year for fiscal 2025.

    According to Politico, the Senate is likely to fund the agency at a higher level than the House. Sen. John Hoeven, the Republican senator in charge of FDA appropriations, said Trump’s proposal is a starting point.

    “We now have the president’s budget proposal,” Hoeven said. “But we’re going through our process now, and it will be different. … I think that you’ll see when we bring it out that we adequately fund FDA.”

  • SEC Approves Cabbacis to Sell Stock

    SEC Approves Cabbacis to Sell Stock

    Cabbacis, a U.S.-licensed tobacco-product manufacturer focused on harm-reduction products that produces the iBlend brand, announced that the U.S. Securities and Exchange Commission (SEC) qualified the company’s offering statement on Form 1-A for a Regulation A (Tier 2) offering. The company seeks to raise $7 million through the public sale of its common stock at $2 per share.

    The company said it will use the proceeds for product development and commercialization expenses, including FDA costs related to filing premarket tobacco product applications (PMTAs) for the U.S. market, tobacco and hemp plantings, general corporate purposes, and potential acquisitions.

    “Cabbacis is committed to commercializing reduced-nicotine cigarettes and vaporizer pods,” the company said in a press release. “Both types of products in development are predominantly tobacco and include hemp. The company also plans to move forward with reduced-nicotine tobacco cigarettes (and little cigars) without hemp.”

    Cabbacis holds 35 issued patents in more than 15 countries, including seven in the United States. Access to the offering is available at www.cabbacis.com, where the offering circular and subscription agreement are publicly accessible.

  • Dutch Switching Focus from Tobacco to Nicotine 

    Dutch Switching Focus from Tobacco to Nicotine 

    The nicotine content in some tobacco-free smoking products is 18 to 25 times the maximum advisory amount for tobacco products, Dutch health institute RIVM concluded following an investigation on behalf of the health ministry. As the EU has no official regulations in place for nicotine limits in tobacco-free products, the RIVM is recommending the limit be the same as the existing limits for tobacco products.

    Esther Croes, an expert on tobacco at public health institute Trimbos, said strict regulations are needed for products that contain nicotine but no tobacco, and is calling for a ban on new nicotine products entering the market.

    “Manufacturers have done this before, as with Swedish snus,” she said. “That also used no tobacco, but cellulose with nicotine. Tomorrow they will use something else. We have already seen nicotine-infused toothpicks. None of this falls under tobacco legislation.” 

  • Pakistan’s Illicit Cigarette Trade Surges to 58% of Market

    Pakistan’s Illicit Cigarette Trade Surges to 58% of Market

    The director of the Pakistan Tobacco Company (PTC), Asad Shah, voiced concern over the growing share of illicit cigarette trade in Pakistan, now estimated at 58% of the market. Speaking at a pre-budget media briefing, Shah highlighted that the total size of the cigarette industry in Pakistan stands at approximately 82 billion sticks annually. Despite this, only 34 billion sticks are currently taxed, a stark decline from 67 billion a decade ago.

    He emphasized the significant loss in potential tax revenue, stating that the sector could generate up to Rs 570 billion ($2 billion) annually. However, only Rs 292 billion ($1 billion) was collected during the fiscal year 2023-24, with Rs 223 billion ($781 million) received in the first 11 months of the current fiscal year.

    Shah revealed that while the legal cigarette sector holds just 42% of the market, it contributes a staggering 98% of the total tax revenue. He criticized the lack of penalties for violating minimum pricing laws, stressing that no policy can be effective without equal enforcement across the board. He also raised alarm over the sale of locally produced cigarettes without tax stamps, which undermines the government’s track-and-trace system.

    To address these issues, Shah proposed several measures, including a revision of the minimum pack price to counter the perception that cigarettes are inexpensive in Pakistan. He also recommended a significant reduction in the adjustable tax on cigarette filter material (acetate tow) from Rs 44,000 $154) per kg to Rs 4,000 (14) per kg to discourage smuggling. Authorities have already seized 450 metric tons of smuggled acetate tow this year.

  • U.S. Faces Vape Shortage as Tariffs Hit, Seizures Increase

    U.S. Faces Vape Shortage as Tariffs Hit, Seizures Increase

    Popular vape brands like Geek Bar may get more expensive in the U.S.—if you can find them at all, Reuters reports. Shipments of vapes from China to the U.S. ground to a near halt in May from a year ago, official data shows, hit by U.S. President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives.

    That includes Geek Bar, which is not authorized to sell in the U.S. but has been widely available due to porous import controls. Geek Bar was by far the most popular unauthorized vape brand in the U.S. last year, accounting for around a quarter of sales tracked by market research company Circana in 2024 despite lacking a license to sell from the FDA.

    One retailer, who asked not to be named because their business sells unauthorized vapes, told Reuters that one of the store’s vape suppliers normally receives 100 boxes of Geek Bar vapes per week, but is now getting just 10. Another supplier imposed unprecedented purchase limits of five boxes.

    “There were a lot of supply chain issues” during COVID-19, the person said. “But I’ve never seen this.”

    Trump’s decision to impose steep tariffs on China, now at 30% after peaking at 145% in April, as well as blockbuster seizures of unauthorized vapes, have constrained the supply of Chinese-owned vape brands and Geek Bar in particular, according to five industry sources and notices from U.S. Geek Bar wholesalers reviewed by Reuters. In May 2025, the FDA recorded just 71 shipments of products labelled as e-cigarettes or vapes from China, compared with nearly 1,200 over the same period last year.

    To mitigate tariffs, illicit vape producers can mislabel or undervalue their shipments or spoof their origin entirely to make it look like they came from a lower-tariff country like Indonesia, Vietnam or Mexico, said Luis Pinto, a spokesperson for British American Tobacco. Vapes from China are often smuggled into the U.S. disguised as other items entirely, such as shoes or toys, to evade officials hunting for unauthorized vapes at the border, according to public statements from the FDA and Customs and Border Protection.

    The growth of Geek Bar and other unregulated vape brands has eaten into the market share of cigarette companies like Altria and BAT, which estimates unauthorized e-cigarettes accounted for some 70% of all U.S. vape sales last year.

  • PMI Ukraine Running at Full Capacity

    PMI Ukraine Running at Full Capacity

    Philip Morris Ukraine is considering exporting cigarettes manufactured at its newly built factory in the Lviv region, company CEO Maksym Barabash said during a roundtable discussion on Ukraine’s economic recovery. Ukraine Business News (UBN) said the PMI factory in Kharkiv, which closed at the outbreak of war with Russia, produced 20 billion cigarettes annually, 50% of which were exported, including to Japan.

    By launching a new $30 million factory in the Lviv region, the company sees the potential to resume exports to geographically close countries. The new factory in the Lviv region opened in May 2024 and features five production lines that this year reached their planned capacity of 10 billion cigarettes per year. This factory has become an important part of the company’s supply chain in Ukraine.

    Philip Morris Ukraine has been active in the Ukrainian market since 1994 and has invested over $750 million in the Ukrainian economy during this time, according to UBN.

  • Switzerland Bans Disposable Vapes

    Switzerland Bans Disposable Vapes

    Yesterday (June 4), the Swiss Senate passed a motion to ban the sale of disposable e-cigarettes. The People’s Party and most center-right Radical-Liberals opposed the motion, which passed by a 19 to 11 vote. The motion had already been validated by the House of Representatives in 2024.

    The Federal Council initially opposed the motion, rejecting any ban that would create technical trade barriers. Switzerland should not go it alone, Hannes Germann of the right-wing Swiss People’s Party said, urging pragmatism and pointing out the European Union has no ban on such products.

    However, Health Minister Elisabeth Baume-Schneider accepted the decision, saying she was aware of the problem. European countries such as France and the United Kingdom have already taken measures, as well as Swiss cantons such as Valais and Jura. The minister admitted that other measures proposed by the government, such as making tax breaks less attractive or setting a higher tax rate, would not have the same effect.  

  • Study: Chinese Going Online to Bypass Flavor Ban 

    Study: Chinese Going Online to Bypass Flavor Ban 

    More than 90% of stores selling e-cigarettes in two major Chinese cities provided WeChat accounts or QR codes for quick delivery services, allowing consumers to bypass a nationwide ban on online sales that took effect in May 2022, a new study has found. Research conducted by the Health Communication Institute of Fudan University in Shanghai, compared e-cigarette stores in Shanghai and Chengdu, Sichuan province, before and after the implementation of the regulations.  

    In the first observation period in 2021, about 25% of stores offered a WeChat account and 17% provided a QR code for delivery services. These figures jumped to 90% and 91%, respectively, in the second observation period (December 2023 to March 2024), indicating a significant shift of customers from in-person to online purchases.

    The regulations explicitly prohibit the sale of flavored e-cigarettes other than tobacco flavor and the sale of e-cigarette products to minors. They also ban the use of vending machines for such products and require warning labels on packaging. However, the study revealed that one-third of the surveyed stores continued to sell flavored e-cigarette cartridges, and only 83% had implemented age restrictions on sales.

  • Vietnam Considering Large Tobacco Tax Hikes

    Vietnam Considering Large Tobacco Tax Hikes

    Vietnam’s National Assembly is considering amending the Law on Special Consumption Tax this year to create a robust increase in tobacco taxes, pointing to the World Health Organization (WHO)’s recommendation that the tax be 75% of the retail price. Currently, tobacco taxes in the country are 36% to 38.8% of the price.

    A 2023 report by the Vietnam Health Economics Association estimated that the total cost of tobacco-related healthcare and economic losses reached 108 trillion VND ($4.14 billion) annually, equivalent to 1.14% of GDP and five times higher than the budget revenue generated by the tobacco industry. The report also said cigarettes are too accessible, with 40 domestic tobacco brands selling for less than 10,000 VND (38 cents) per pack.

    The draft amendment being considered in the June session proposes two options: Introducing a fixed tax of 2,000 VND (8 cents) per pack in 2027 or introducing a fixed tax of 5,000 VND (19 cents) per pack in 2026. Both would increase annually until reaching 10,000 VND and 15,000 VND (57 cents) per pack, respectively, by 2031. According to officials, the second, higher-taxed option would generate an annual additional 29 trillion VND ($1.1 billion) in 2030, an increase of 169% compared to scenarios without tax increases, and make the tax rate 59.4% of the retail price.