Category: News This Week

  • CTP to Detail its Reagan-Udall Response

    CTP to Detail its Reagan-Udall Response

    Brian King at the GTNF 2022
    (Photo: Chris Frenzi)

    The U.S. Food and Drug Administration Center for Tobacco Products (CTP) will provide an update in February on its planned actions in response to the Reagan-Udall Foundation’s evaluation of its program, CTP Director Brian King wrote in a letter published on the FDA website today.

    In July 2022, FDA Head Robert Califf instructed the Reagan-Udall Foundation to review the agency’s food and tobacco programs following months of criticism over its handling of the baby formula shortage and e-cigarette reviews.

    The report, published in December, highlighted several problems at the agency and offered suggestions for improvements in regulations and guidance, application review, compliance and enforcement.

    “We are in the process of closely reviewing this feedback and in February will provide an update on our planned actions in response to the evaluation,” wrote CTP Director Brian King.

    In his letter, King also noted the CTPs priorities for 2023, which include finalizing the product standards relating to menthol cigarettes and flavored cigars, along with developing a proposed product standard that establish a maximum nicotine level to reduce the addictiveness of cigarettes and other combusted tobacco products.

  • BAT Restructures its Operations

    BAT Restructures its Operations

    Photo: BAT

    British American Tobacco is restructuring its operations to streamline and accelerate the transformation of its business. The new structure will feature fewer but larger business units to improve collaboration and speed up decisionmaking.

    “As our transformation journey towards our strategic milestones gathers pace, we need to further sharpen our operating model, streamline our business to drive agility, and continue to enhance organizational capabilities,” said BAT CEO Jack Bowles in a statement.

    “As part of our commitment to building ‘A Better Tomorrow,’ the changes we have announced today will drive increased focus, accelerate our transformation and fuel growth as we strengthen the foundations of our future as a category-led enterprise.”

    BAT will reduce the number of regions from four to three, and the number of business units from 16 to 12, while also accelerating its market exit plans. After the restructuring, the company will have the following regions: USA (Reynolds American Inc.), Americas & Europe (AME), and Asia Pacific, Middle East & Africa (APMEA)

    In addition, two new management board roles will be created in order to ensure clarity of ownership, accountability and focus: chief transformation officer and director, combustibles.

    The chief transformation officer will be responsible for driving faster transformation, accelerating greater capability build in key areas and enabling an even faster, simpler and more agile organization. The director, combustibles will lead the focus on driving value from combustibles to fuel further investment in new categories.

    The changes we have announced today will drive increased focus, accelerate our transformation and fuel growth as we strengthen the foundations of our future as a category-led enterprise.

    Jack Bowles, CEO, BAT

    The following structural changes and appointments will take effect April 1, 2023:

    • Johan Vandermeulen, currently regional director, Europe, will be appointed to the new role of chief transformation officer
    • Luciano Comin will be appointed to the new role of director, combustibles
    • Frederico (Fred) Monteiro will be promoted to the management board as regional director, AME
    • Guy Meldrum will continue to lead BAT’s largest business in the USA as president, Reynolds American Inc.
    • Michael Dijanosic will take on an expanded role as regional director, APMEA
    • Javed Iqbal, director, digital and information, will work with the regional directors and chief transformation officer to ensure that the digital and information agenda is fully aligned with BAT’s corporate transformation

    The president of Reynolds American Inc. and regional directors for AME and APMEA, and the director, digital & information, will report to the chief transformation officer. The director, combustibles will report to the chief growth officer.

    Vandermeulen joined the management board in 2014 and has extensive leadership experience across BAT, previously leading the Asia Pacific and Africa & Middle East regions, following general and marketing management roles in Russia, Turkey and as a global brand director. Vandermeulen will report to Bowles.

    Comin was regional director, Americas & Sub-Saharan Africa, prior to which he held senior general and marketing management positions in Europe, Mexico and Malaysia.

    Monteiro has spent more than 20 years with BAT, most recently as area director of central Europe south, based in Romania. Prior to this role, Monteiro has held numerous senior leadership positions including marketing director, next generation products; head of marketing for the Europe Region and general manager, BAT Japan.

    Further, David O’Reilly, director, research and science, will step down from the management board on Feb. 28, 2023, and leave BAT with effect May 31, 2023, to pursue other interests.

    O’Reilly joined the management board in January 2012, and has been instrumental, both internally and externally, in driving the science agenda that has underpinned BAT’s transformation.

    O’Reilly will be succeeded by James Murphy, currently executive vice president of scientific research and development at Reynolds American Inc.

    Murphy has been with BAT for over 17 years and has held a number of senior roles in the center in R&D, operations and marketing as well as in the Americas and Sub-Saharan Africa region. Murphy will join the management board as the director, research and science designate, with effect from Feb. 1, 2023, before assuming the role of director, research and science, reporting to the CEO, on March 1, 2023.

  • German Trade Group Blasts Call for Vape Ban

    German Trade Group Blasts Call for Vape Ban

    Jan Muecke
    (Photo: German Association of the Tobacco Industry and Novel Products)

    Recent calls to ban e-cigarettes lack a scientific basis, according to the German Association of the Tobacco Industry and Novel Products (BVTE).

    In a recent interview with Deutsche Presse-Agentur, Manne Lucha, minister of social affairs, health and integration for Baden-Württemberg, said that e-cigarettes should be treated the same as combustible cigarettes and that flavored vapor products should be banned.

    “It is a scientific consensus that the intake of harmful substances when vaping e-cigarettes is much lower than when smoking tobacco. With his ‘post-factual’ statements, the minister is causing consumer uncertainty with counterproductive consequences for health policy,” said BVTE CEO Jan Muecke in a statement.

    Muecke cited a 2020 statement by the German Cancer Research Center, which acknowledged that a complete switch from smoking to vaping reduces the consumer’s exposure to harmful substances. He also quoted Public Health England’s finding that e-cigarettes are at least 95 percent less harmful than smoking.

    According to the BVTE, e-cigarettes are the most frequently used smoking-cessation tool in Germany, ahead of less effective methods such as medical nicotine replacement products. The wide choice of flavored liquids, meanwhile, is a significant factor for adult smokers to switch to vaping, the organization wrote.

    “Instead of fueling fears with false claims and misguided demands for bans, e-cigarettes should finally be promoted in Germany as an opportunity to minimize risks for smokers,” Muecke said.

  • PMI and KT&G Boost Collaboration

    PMI and KT&G Boost Collaboration

    Photo: KT&G

    Philip Morris International and KT&G are extending their cooperation in selling smoke-free devices with a long-term deal. The arrangement builds on a deal signed in March 2020 that has seen PMI commercialize the South Korean cigarette manufacturer’s Lil heat-not-burn product in more than 30 markets.

    The new agreement, signed on Jan. 30, runs until Jan. 29, 2038, with performance-review cycles and associated commitments, based on volume, to be confirmed for each three-year period. PMI and KT&G expect these commitments to increase over the full duration of the agreement, starting with a total commitment for the first three-year period equivalent to 16 billion consumables.

    The agreement gives PMI continued exclusive access to KT&G’s smoke-free brands and product-innovation pipeline, including offerings for low- and middle-income markets, that will enhance PMI’s existing portfolio of smoke-free products.

    It gives KT&G continued access to PMI’s global commercial infrastructure and experience commercializing smoke-free products to support the further expansion of KT&G’s smoke-free business outside South Korea.

    “We have been pleased with the success of our cooperation with KT&G so far and believe a long-term collaboration will accelerate the achievement of a smoke-free future. We want everyone who does not quit smoking to switch to a better alternative, for the benefit of their own health, public health, and society at large,” said PMI CEO Jacek Olczak in a statement, adding the KT&G’s Lil products play a complimentary role to PMI’s popular IQOS heat-not-burn device.

    “With KT&G’s technology and speed of innovation and PMI’s science and commercial infrastructure, we believe our partnership will accelerate our shared vision of a smoke free future.”

    “We are now able to further raise the competitiveness of KT&G’s smoke-free products in the overseas market and establish a basis for stable growth of our global business through the advancement of the strategic partnership with PMI,” said KT&G CEO Baek Bok-In in a statement. “KT&G will make efforts to acquire world-class capabilities to become a global top-tier company in NGP earlier than planned and to lead the next generation tobacco market.”

    KT&G introduced Lil in 2017 and has been launching updated versions of the product at frequent intervals.

    Following their March 2020 agreement, PMI and KT&G first introduced Lil in three markets including Japan. Later, they expanded sales to into 31 to countries in Europe and Central America, among other regions.

  • Judge Lowers Royalty Payments in Alto Case

    Judge Lowers Royalty Payments in Alto Case

    Photo: RJRVC

    A U.S. federal judge in North Carolina lowered the rate of ongoing royalties R.J. Reynolds Vapor Co. will have to pay to Altria Client Services in an intellectual property dispute involving RJR’s Vuse Alto e-cigarette, reports Law360.

    In September 2022, the U.S. District Court for the Middle District of North Carolina awarded Altria Client Services more than $95 million after finding that Reynolds Vapor Co.’s Vuse Alto e-vapor product infringed three Altria patents.

    In his Jan. 27 opinion, U.S. District Judge N. Carlton Tilley Jr. ruled that continuing royalties on Vuse Alto are justified but not at double the rate decided by the jury.

    The opinion lowers Altria’s requested rate for ongoing royalties from 10.5 percent to 5.25 percent, which Reynolds will have to pay quarterly until the last of Altria’s patents expire on April 22, 2035.

    “Altria has not shown that the pod patents’ contribution to the Alto’s performance since May 2019 justifies increasing the jury’s royalty rate of 5.25 percent,” Judge Tilley wrote.

    Earlier this month, Judge Tilley denied Reynolds a new trial in the Vuse Alto dispute.

    Reynolds Vapor Co. has requested a new trial, stating that “Altria’s improper injection of inflammatory evidence regarding patent infringement allegations against Reynolds in other cases denied Reynolds a fair trial.”

  • Belgium Health Minister Pushes For Pouch Ban

    Belgium Health Minister Pushes For Pouch Ban

    Photo: Liudmila

    The Belgian health minister, Frank Vandenbroucke, has called for a ban on nicotine pouches, citing concerns about youth exposure to tobacco products.

    “Our goal is to prevent our children and young people from smoking,” Vandenbroucke said. “If you are fully committed to a smoke-free generation, you must ensure that young people come into less contact with smoking or anything related to it.”

    Nicotine pouches are popular with youth, according to The Brussels Times, because they are easy to use, like snus, which is banned in the EU except for Sweden, but without the tobacco, and because they are cheaper than other tobacco products. Dutch research has shown that nicotine pouches are addictive and cause harm to the brain.

    “These nicotine pouches, like electronic cigarettes and vaping, can be a steppingstone to smoking at an early age,” Vandenbroucke said. “That is why we are resolutely opting for a ban on them. We are doing this because protecting the health of children and young people is an absolute priority.”

  • Group Predicts Growth for Holograms in 2023

    Group Predicts Growth for Holograms in 2023

    Photo: Taco Tuinstra

    Commercial holograms will maintain robust growth in 2023 despite the global challenges, according to the International Hologram Manufacturers Association (IHMA), which marks its 30th anniversary this year.

    Authentication and track-and-trace systems featuring holograms will continue to help to underpin international efforts by government and law enforcement agencies to bolster overt and covert protection strategies in the next 12 months, said IHMA chair Paul Dunn.

    “Counterfeiting is and will remain a massive global threat, continually placing governments, brands and the public at risk—and will continue to be tackled effectively to minimize the impact on society. Despite the economic, social and global supply chain challenges, we expect to see [growth] in 2023 with countries enhancing and bringing forward their anti-counterfeiting plans, which feature holograms,” he said.

    “These holograms will become even more integrated with other technologies to create intuitive brand engagement programs while, simultaneously, authentication through scanning a QR code on the label acts as a secondary product verification method. This provides a simple unified platform for brands to interact and engage with their customers.”

    Dunn also sees the hologram on labeling continuing to become part of a wider function to track a product throughout its lifecycle and post-life cycle in 2023. This combination of authentication and tracking, he says, will give brand owners complete visibility and control from sourcing raw materials through to recycling.

    This year will also see continued growth in high security print applications as, increasingly, holography origination capabilities are brought in-house. This cuts the innovation cycle and enables printers to get their technologies specified for new banknote work.

    Sustainability will also be one of the key themes of the next 12 months with manufacturers developing strategies to cut their carbon footprints as part of their corporate responsibility strategies. “The IHMA will be leading efforts through its Sustainability Working Group to encourage best practice by sharing information and showcasing companywide initiatives,” Dunn said.

  • KT&G: Half of Sales from Abroad by 2027

    KT&G: Half of Sales from Abroad by 2027

    Photo: KT&G

    KT&G Corp. aims to earn over half of its sales from overseas businesses in 2027, the company told participants in an investor event.

    The South Korean cigarette manufacturer targets sales of KRW10 trillion ($8.1 billion) by that year compared with an estimated annual sales of KRW5.9 trillion for 2022. Last year, KT&G likely earned about one-third of its sales from overseas operations. 

    In addition to focusing on its combustible cigarette business, the company will reinforce its next-generation product (NGP) businesses, which include heat-not-burn (HnB) products and health functional food products, KT&G Senior Executive Vice President Bang Kyung-man was quoted a saying by the Yonhap News Agency.

    “We will invest KRW4 trillion to build new overseas production facilities and expand existing ones in the next five years to meet growing demand for NGPs, like HnB products,” he said.

    The company is also considering building a new factory, either in Kazakhstan or eastern Europe, Bang said. To raise the necessary capital, the company plans to sell unused property and borrow money from banks, he said. 

    KT&G has exported its HnB products to more than 30 countries since 2020 when it signed an agreement with Philip Morris International for the commercialization of KT&G’s smoke-free products outside of South Korea.

    KT&G currently earns 90 percent of its revenues from cigarette sales and 10 percent from HnB products. The company has four tobacco manufacturing plants—one each in South Korea, Russia, Turkey and Indonesia—with a combined capacity of 13.6 billion cigarettes a year. 

  • Three Heating Products Authorized in the U.S.

    Three Heating Products Authorized in the U.S.

    Photo: Destina

    The U.S. Food and Drug Administration has authorized the marketing of three new tobacco-flavored heated-tobacco products included in Philip Morris Products’ supplemental premarket tobacco product applications (PMTAs). The products receiving marketing granted orders are Marlboro Sienna HeatSticks, Marlboro Bronze HeatSticks and Marlboro Amber HeatSticks, each of which is used with the IQOS tobacco-heating device.

    Based on the FDA’s review of the supplemental PMTAs, the agency determined that the marketing of these products should be authorized because, among other things, the net population-level benefits to adult smokers outweigh the risks to youth.

    In 2019, the FDA authorized the marketing of IQOS and several other Marlboro HeatSticks products through the PMTA pathway. Philip Morris pursued marketing authorization for these new Marlboro HeatSticks by submitting supplemental PMTAs for modified versions and line extensions of the tobacco-flavored product for which the company had previously received a marketing granted order. A supplemental PMTA can be submitted in situations where an applicant is seeking authorization for a new tobacco product that is a modified version of a tobacco product for which they have already received a marketing granted order. 

    Following the FDA’s rigorous scientific evaluation of the applications, the agency determined that Marlboro Sienna HeatSticks, Marlboro Bronze HeatSticks and Marlboro Amber HeatSticks are comparable to the previously authorized tobacco-flavored product. Like the previously authorized products, the FDA has placed stringent marketing restrictions on the new products in an effort to prevent youth access and exposure.

  • Indonesia Mulls Ban on E-Cigarettes

    Indonesia Mulls Ban on E-Cigarettes

    Photo: ink drop

    Indonesia may ban cigarettes if they are found to be harmful to public health, reports Antara News.

    Speaking at the University of Indonesia in Jakarta on Jan. 26, Vice President Ma’ruf Amin stated that thorough assessment of the effects of e-cigarettes on public health would be conducted before the government takes its decision. 

    If e-cigarettes are found to be safe for public health, the government will consider how to tax the products, he noted. 

    Earlier, the government proposed to strengthen health warnings on tobacco packaging, restrict advertising and prohibit the sale of single cigarettes, among other measures.