Category: News This Week

  • PM Korea Says Science Demands E-Cigarette Recognition

    PM Korea Says Science Demands E-Cigarette Recognition

    The head of Philip Morris Korea cited scientific evidence today (February 5) in defense of the global tobacco company’s ongoing efforts to shift from traditional cigarettes to electronic vaping products for healthier living. Managing Director Hannah Yun emphasized the importance of scientifically proven data in persuading the government about the benefits of electronic cigarettes. Her remarks were directed at the Korean government, which has highlighted their harmfulness, urging citizens to quit both tobacco and electronic smoking.

    Yun acknowledged that, as a cigarette company, it has often faced criticism regarding public health. She added that the company’s efforts to encourage smokers to quit by promoting a potentially less harmful alternative have rarely received outright support from outside the industry, including from the Korean government.

    The government has consistently criticized smoking without distinguishing between e-cigarettes and traditional cigarettes or acknowledging the potential benefits of the former. Instead, it has treated e-cigarettes as “just another type of smoking you must quit” through various advertisements and TV campaigns.

    The Ministry of Health and Welfare in November released the results of an external report, which studied synthetic nicotine used in vaping, a type of e-cigarette smoking. The report concluded that synthetic nicotine contains multiple types of hazardous chemicals, which is contrary to what vaping product makers have said.

    “We have been stacking up scientific data and making reports promoting those data to prove the benefits of e-cigarettes. This is our only way to get at the government,” Yun said at a press conference in Seoul, where Philip Morris International (PMI) and its Korean subsidiary unveiled a new model for its flagship e-cigarette device brand IQOS to Korea.

    “We want the government to know that our e-cigarette business is not about pursuing our own business interests. It is rather our campaign promoting a healthier way to smoke based on scientific data. We wish the government would look at our business and understand it scientifically.”

    Philip Morris Korea’s External Affairs Director Kim Joo-han asked the government to “check a broader range of data before introducing policies or pursuing campaigns” to better understand e-cigarette smoking.

    “Member states of the Organisation for Economic Co-operation and Development [OECD] have introduced e-cigarette-friendly policies to promote the practice and help the public quit smoking more effectively,” Kim said. “The Korean government should look into those examples.”

    During the event, Philip Morris Korea unveiled IQOS Iluma i, the latest version of its IQOS product, which was first launched globally in 2014 and in Korea in 2017.

    As of last October, the company occupied a 40 percent share of Korea’s e-cigarette market, while KT&G led with 49 percent and BAT Rothmans accounted for 11 percent. Meanwhile, JTI Korea, a Korean subsidiary of Japan Tobacco International, also released its new e-cigarette device model, Ploom X Advanced, in October 2024.

    “One out of every five adults in Korea are now smoking e-cigarettes,” Yun said. “We believe we are truly doing the right thing by helping the rest four out of every five adults quit tobacco smoking.”

    Vassilis Gkatzelis, PMI’s president of East Asia, Australia, and Duty-Free Region, said during the press conference that PMI aims to log two-thirds of its entire sales from e-cigarette products by 2030.

    “What is truly expected of a tobacco company? The answer is straightforward,” Gkatzelis said. “It is introducing the smoke-free future.”

    Gkatzelis said that among PMI’s 180 market countries, Korea “holds a very special place” because it is among the top five countries in its global e-cigarette market. “IQOS is accelerating the transition away from tobacco cigarettes,” he said. “It is ushering in the world where combustion smoking is increasingly becoming obsolete and will [just be seen in] a museum.”

  • Massachusetts: Council Pushes Back on Cigar Hikes

    Massachusetts: Council Pushes Back on Cigar Hikes

    Several city councilors in New Bedford, Massachusetts, are criticizing the mandated increase in cigar prices that are meant to dissuade young smokers, as they are also hurting small businesses. “Minimum cigar pricing” was part of updated tobacco regulations adopted by the Board of Health in October 2024 that went into effect January 1. Councilor Ian Abreu said the fact a cigar that not long ago could have been purchased for $1.25 now costs $2.90 is having a “negative economic impact on our small-business community who retails these products.”

    Massachusetts is one of the most progressive states when it comes to the war on tobacco, allowing each of its 351 cities and towns the authority to enforce a range of laws, regulations, and local codes.

    Abreu said the feedback from local retailers has been overwhelmingly negative and that cigar sales have plummeted, forcing them to raise the prices of other products.

    “These are the unintended consequences that you see when certain legislation and actions like these happen to the small business community here in New Bedford,” Abreu said.

    Another problem is that many retailers say they weren’t notified of the changes.

    “There was a little bit of government overreach, is what I’m hearing,” Councilor Shawn Oliver said. “Now they’re forced to not only raise prices and exile some of their consumers but also possibly eat some inventory and a loss of money. That doesn’t sound like a city that is pro-business to me.”

    Councilors unanimously voted to set up a meeting with health officials and local retailers, as well as a representative of the New England Convenience Store & Energy Marketers Association to discuss the regulations, is what is being called a “noxious environment” for small business.

    “As the expression goes, the road to hell was paved with the best of intentions,” Councilor Leo Choquette said. “I don’t understand where the Board of Health thinks it has the right to interfere in the free market or the economy of this area in that regard.

     “And now you want to do idiotic things like this to drive business owners out who are trying to get by. It’s ridiculous.”

  • PTB Dissolution Hurts Farmers, Opens Illicit Market

    PTB Dissolution Hurts Farmers, Opens Illicit Market

    The Pakistani government’s decision to dissolve the Pakistan Tobacco Board (PTB) and hand over the regulatory authority to provincial governments has sparked months of controversy, and will likely have severe economic, social, and regulatory consequences, said Osama Siddiqui, a macroeconomic expert.

    “The PTB has played a pivotal role in regulating tobacco production and the industry under a centralized system that benefits all stakeholders, including farmers and the legal tobacco sector,” Siddiqui said.

    He added that the dismantling of the system could lead to a surge in illegal tobacco cultivation and sales, which would undermine the legal industry. One of the PTB’s critical contributions has been ensuring fair prices for tobacco farmers, especially in Khyber-Pakhtunkhwa (K-P), where the majority of Pakistan’s tobacco is produced. By maintaining a balance between supply and demand, the PTB has safeguarded farmers’ interests, providing them with a stable income.

    The expert fears that provincial governments lack the capacity to manage this responsibility effectively. Without the PTB’s oversight, the farmers could face financial hardships due to falling prices and market instability. A decline in tobacco production will deprive the farmers of their livelihoods and leave them vulnerable to exploitation.

    The PTB’s centralized regulation has also fueled growth in tobacco exports, which increased from $42 million in 2019-20 to $108 million by the end of 2024. Additionally, legal tobacco sales have made a substantial contribution to the national treasury by generating Rs237 billion ($853 million) in revenue through the federal excise duty and sales tax.

  • JT Not Adjusting Russian Business

    JT Not Adjusting Russian Business

    In a statement issued to This Week in Asia, a Japan Tobacco (JT) official said: “As announced in early 2022, the JT Group has suspended all new investments and marketing activities in Russia. At present, the group continues its manufacturing and sales operations in the country in full compliance with all applicable regulations, including but not limited to economic sanctions and export controls. We continue to closely monitor legislative developments as well as the situation on the ground and review our options.”

    JT announcing that it was not pulling out of the lucrative Russian market makes news as the Ukrainian government continues its efforts to get some of the world’s largest companies to exit its combative neighbor. A Ukrainian report said JT contributed $182.3 million in taxes to the Russian government in 2023, fourth among taxpaying companies behind only Austria’s Raiffeisen Bank International ($491 million), China’s Chery Automobile, and Philip Morris, the world’s leading tobacco company.

    International companies that did not exit the Russian market immediately after the invasion of Ukraine began but later pulled out from bad press include Heineken, Citigroup, and Kraft-Heinz.

    JT, which is still one-third owned by the government, faces minimal criticism in Japanese media and as a result, the public – which is strongly supportive of Ukraine – is offering few objections.

    “There has been no comment from the government, no pushback from the public, and nothing in the media,” said James Brown, a professor of international relations at the Tokyo campus of Temple University who specializes in Russian affairs. “So the sense at [JT] headquarters appears to be ‘why should we walk away from it?’

    “The position in Japan was that if being there was not explicitly sanctioned, then it was fine to carry on. And that meant it was not a problem for the company, which was open about what it was doing.”

    In May 2024, Japan Tobacco CEO Masamichi Terabatake made that stance clear when he told the Financial Times that the company’s supply chains had been adjusted to meet international sanctions and that it would remain active in Russia to protect investors’ interests.

    “If worse comes to worst, there is even the risk of a shareholder lawsuit if we were to discontinue a business that we are able to continue,” he said.

  • Small Business Owners Fighting Denver’s Flavor Ban

    Small Business Owners Fighting Denver’s Flavor Ban

    Phil Guerin, the owner of Myxed Up Creations, a small tobacco, nicotine, and accessory shop that has been operating in Denver since 1992, is leading a fight among small business owners to send the city’s upcoming ban on flavored tobacco products to a vote in November’s election. Previously, the Denver City Council voted 11-1 to ban such products beginning March 18. 

    “We really are advocates for our customers and advocating for doing things in a safe way, and we’ve been able to really stay ahead of these trends,” Guerin said. “But we are not the problem, and we really regret being blamed for this whole situation and we are not big tobacco. We are family-owned businesses that are just trying to survive in an anti-small business climate that’s been created by municipal government.”

    Guerin said he is working with other small business owners around the city, and they have filed the paperwork needed to circulate a petition that would delay the ban until voters could weigh in. He says they have already gathered more than 2,000 of the needed 9,494 valid signatures for the city’s election division to deem the petition sufficient.

    “The greatest thing that’s happened is small businesses across the entire Denver city limits, we’ve all come together,” Guerin said. “Before, we were all kind of rivals and we were all competing against each other, and now we’ve all come together to really fight this misinformation and this ban.

    “We think this will be on the ballot in November and we’re excited for a campaign, and we’re really excited to inform the public because there has been so much bad information put out there about this, [it] is really big tobacco doing this. It’s actually small business people that are being responsible and really trying to do the responsible thing and give adults the right to choose an alternative to smoking cigarettes.”

  • Foreign Company Investing $8.2 Million for Tobacco Processing Machinery in Bangladesh

    Foreign Company Investing $8.2 Million for Tobacco Processing Machinery in Bangladesh

    Lee’s Tobacco Machinery Company Limited signed an agreement yesterday (February 3) to invest $8.32 million into the Bangladesh Export Processing Zones Authority (Bepza) to manufacture tobacco processing machinery. According to a press release, the investment from the UAE- and Singapore-owned company is expected to create 92 jobs for Bangladeshi nationals.

    Li Meng, chairman of Lee’s Tobacco Machinery, emphasized his commitment to transferring technical expertise to local workers, thereby building a skilled workforce in machinery manufacturing.

    “This milestone underscores our commitment to diversifying export-oriented industries,” Major General Abul Kalam Mohammad Ziaur Rahman, executive chairman of Bepza said. “We anticipate further investments in machinery production, which will contribute to the broader industrial landscape of Bangladesh.”

  • Philippines: Tobacco Orgs Backing Tax Moratorium

    Philippines: Tobacco Orgs Backing Tax Moratorium

    Seeking a “sweet spot,” the Philippines’ government is considering a moratorium on tobacco excise tax hikes in order to curb illicit trade and protect its revenue. Currently, the excise tax is P60 ($1.03) per pack and grows 5% annually. A pack of illicit cigarettes can be purchased for P40 ($0.69) per pack, less than the tax itself.

    According to the Food and Nutrition Research Institute, smoking in the country increased from 18.5% in 2021 to 23.2% in 2023. Over the same period, illicit cigarettes increased 13.6% to 19.8%. Despite the increase in smoking, the Bureau of Internal Revenue has watched its collected excise taxes steadily decline each year, going from P176.48 billion ($3 billion) in 2021 to P134 billion ($2.3 billion) last year, P51 billion below budget.

    “Illicit trade thrives due to the availability of untaxed cigarettes sold at a fraction of legitimate products,” said Jericho Nograles, president of the Philippine Tobacco Institute (PTI). “Legal cigarettes are up to five times more expensive than their illicit counterparts.”

    Both the PTI and the National Tobacco Administration (NTA) supported the tax moratorium for 2026, saying it is a “practical” and “targeted” solution against illicit cigarette trade.

    “By pausing the excise tax increase for 2026, we can temporarily stabilize the market and reduce the price disparity between legitimate and illicit cigarettes,” NTA administrator and CEO Belinda Sanchez said. “This pause will help legitimate manufacturers regain competitiveness, which is crucial to restoring demand for locally produced tobacco leaf for local consumption.

    “The widening gap between the prices of legitimate and illicit cigarettes, aggravated by successive excise tax increases, has incentivized the proliferation of smuggled and counterfeit products.”

    While the moratorium has been discussed for some time, the House of Representatives recently passed on second reading House Bill 11360, which would replace the moratorium and instead impose lower tax rates on tobacco products, proposing a schedule where the excise tax is raised 2% in even-numbered years and 4% in odd.

    Pointing to the billions they are losing in revenue, Department of Finance Secretary Ralph Recto said they are open to all proposals and “hopes the government can find a sweet spot.”

  • Thailand: Despite Ban, Vaping Surges with Teens

    Thailand: Despite Ban, Vaping Surges with Teens

    Thailand’s government is being urged not to legalize e-cigarettes, citing the example of the Philippines, where it has led to increased smoking, a rise in the illegal tobacco trade, and reduced tax revenues. Despite being banned in 2014, e-cigarettes are abundantly available in the country, and the government is presumably missing out on significant tax revenues.

    Numerous organizations banded together at a parliament committee meeting hoping to make this a national agenda item, pointing to the drastic rise in youth use as a catalyst, saying there has been a tenfold increase in young vapers in just one year. Citing a 2022 e-cigarette report, Senate committee chair Varapas Phaiphannarat said the number of e-cigarette users aged 15 to 24 increased from 24,050 to 269,533. She also said 43% of primary school students aged nine to 12 had already tried e-cigarettes,

    “These figures indicate a serious public health crisis that threatens the well-being and future of Thai youth,” Varapas said.

  • Habanos Introduces Final Limited Edition of 2024

    Habanos Introduces Final Limited Edition of 2024

    Habanos S.A introduced its Ramon Allones Absolutos last night (February 3), the third and final of its Edición Limitada of 2024.  José María López Inchaurbe, vice president of development for Cuban monopoly, presented the new offering at a gala in Basel. Called Nuevos in Cuban cigar factories, the Ramon Allones Absolutos is a large format cigar that measures 6 3/8 inches by 49 ring gauge, and comes in a unique, 20-count box designed especially for this release.

    “The Edición Limitada program was launched in 2000 and features Cuban cigars produced in limited runs and rolled in unusual sizes,” Gregory Mottola wrote for Cigar Aficionado. “The wrappers are also considerably darker than those found on Cuba’s regular-production smokes.

    “For the first 15 or 16 years of the program, Edición Limitadas were typically announced at the Habanos Festival in the early part of the year and then released by the fourth quarter. No more. Timetables have changed drastically and Habanos often struggles to get its cigars out on time.”

    The Ramon Allones Absolutos is the third and last Edición Limitada for 2024, following the Trinidad Cabildos and the H. Upmann Magnum Finite. There’s no official release date yet, but according to Intertabak A.G., Switzerland’s Habanos distributor, the cigar is set to retail for 45 Swiss francs each (about $50), or 900 Swiss francs per box ($990). It will be trickled into other global markets at unspecified times throughout the year.

  • Ohio Pushed to Up Cigarette Tax by $1.50

    Ohio Pushed to Up Cigarette Tax by $1.50

    In continued sprawl from last week’s “State of Tobacco Control” report from the American Lung Association, Ohio lawmakers are being pushed to raise the state’s cigarette tax by $1.50 per pack. The report was particularly harsh on the Buckeye state, giving it failing grades in the categories of funding for tobacco prevention programs, level of state tobacco taxes, and ending the sale of all flavored tobacco products.

    “Here in Ohio, we are seeing tobacco industry lobbyists working to stop or weaken proven tobacco control policies,” said Kezia Ofosu Atta, Advocacy Director at the American Lung Association. “The tobacco industry is also introducing new products that appeal to youth like e-cigarettes that mimic smartphones, kid-friendly flavors, and flavored nicotine pouches that are heavily marketed by social media influencers.”

    The report stated a 10% increase in cigarette prices can lead to a 4% reduction in consumption among adults and a 7% reduction among youth.