Category: News This Week

UKVIA Publishes Annual Report

Image: Tobacco Reporter archive
The U.K. Vaping Industry Association (UKVIA) has published its 2022 annual report.
Among the highlights of 2022 was the launch of the UKVIA-commissioned Economic Impact Report from the Centre for Economics and Business Research, which—for the first time—detailed the national and regional contribution that the U.K. vape industry made to the economy, according to the UKVIA.
“Our industry is under scrutiny like never before, and we must tackle the big issues, such as underage vaping, the environmental impact of disposable devices and the massive influx of fake and illegal imports,” said John Dunne, director general of the UKVIA. “Any one of these issues has the potential to see regulators clamp down hard on vaping, and the fact that they are all happening at once demonstrates that it is crucial that we get our house in order without delay.”
January 26, 2023
CAPHRA Comments on Proposal to Tighten Vaping Restrictions

Image: Tobacco Reporter archive
The Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) has submitted comments on New Zealand’s Proposals for the Smoked Tobacco Regulatory Regime. The proposals include tightening current restrictions on vaping product safety requirements and packaging and reducing nicotine levels in disposable vapes as well as restricting the location of specialist vape retailers.
“Whilst we have absolutely no issues with restrictions around primary and secondary schools and Kura, we do have issue with adult community locations, such as universities, and other tertiary facilities,” said Nancy Loucas, executive coordinator of the CAPHRA.
“Specialist vape retailers provide a service that is not available in general retailers. It is a disservice to adults who smoke in Aotearoa, New Zealand, to restrict their access to specialist shops and guidance.”
“The main issue, however, is that the regulations, as they are, work perfectly well,” said the CAPHRA in reference to the other proposed restrictions. “The issues are public education and enforcement. The regulations, as they are written, are working at getting citizens to make the switch from combustible tobacco to less harmful vaping.”
The comment period closes on March 15.
January 26, 2023
Juul in Talks With Tobacco Companies

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Juul Labs is in talks with leading cigarette manufacturers about a partnership, alliance or sale of its business, reports The Wall Street Journal.
Juul executives have had separate discussions with Philip Morris International, Japan Tobacco and Altria Group, according to the newspaper.
The talks are at an early stage and might not result in a sale of partnership, The Wall Street Journal’s sources pointed out. Altria, which owns one-third of Juul, valued the vaping company at $1 billion in October.
Once the undisputed leader of the U.S. vape market, Juul reached the brink of bankruptcy last year after the Food and Drug Administration denied its marketing applications and ordered the company to remove its products from the market.
The order has been stayed pending appeal but the still-unresolved dispute made it difficult for Juul to raise money to cover its legal liabilities. In December, Juul agreed to pay $1.7 billion in a broad legal settlement covering more than 5,000 lawsuits accusing the company of marketing its products to teens and children. Juul denies targeting underage consumers.
To pay for the deal, Juul secured an equity investment from a group including two Juul directors. The settlement and financing put Juul on firmer ground and allowed the company to begin talks with potential strategic partners.
On Sept. 30, Altria announced it was ending its noncompete agreement with Juul. The decision gave Juul the freedom to sell itself—or a significant stake—to one of Altria’s competitors.
Altria can’t buy Juul outright because of antitrust concerns: The Federal Trade Commission is seeking to unwind Altria’s 2018 investment in Juul. Altria and Japan Tobacco in October formed a partnership to develop and sell heated-tobacco devices in the U.S. and other new tobacco products abroad.
If the FDA ultimately halts Juul’s sales, Juul could seek U.S. authorization for a newer version of its vaporizer that has been released in Canada and the U.K. Juul also has other products under development.
January 26, 2023
Taiwan Set to Ban Nicotine Vapes

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Taiwan is set to become the next Asian country to ban nicotine vaping products, reports Filter.
The Tobacco Hazards Prevention Act cleared the legislative floor earlier this month and now awaits presidential approval, which is expected because President Tsai Ing-wen is a member of the party that proposed the act.
Taiwan seems to be following behind Japan, which banned nicotine vapes but allows heated-tobacco products. India and Thailand have also banned vapes.
Taiwan’s ban will include use of e-cigarettes, and violators will face penalties of up to $330.
“The issue did not have enough public discussion, and the approach to harm reduction should be more thoroughly debated,” said Simon Lee, the Taiwan policy fellow at the Consumer Choice Center, a global consumer advocacy group in Washington. “For instance, we have seen misinformation, especially with regard to nicotine, circulating among anti-tobacco activists. It is beyond reasonable doubt that Taiwan’s consumers deserve a much better outcome.”
January 25, 2023
Reynolds to Appeal Menthol MDOs

Photo: BAT
BAT will appeal the U.S. Food and Drug Administration’s marketing denial orders for its Vuse Vibe Tank Menthol 3.0 percent and Vuse Ciro Cartridge Menthol 1.5 percent, the company announced in a statement.
On Jan. 24, the FDA denied marketing applications for two menthol refills used in Vuse Vibe and Vuse Ciro vaporizers, which are sold in the U.S. by BAT subsidiary R.J. Reynolds. According to the agency, Reynolds’ applications presented insufficient evidence to show that the potential benefit to adult smokers outweighs the risks of youth initiation and use.
“Reynolds intends to seek a stay of enforcement immediately and will pursue other appropriate avenues to allow Vuse to continue offering its innovative products to adult nicotine consumers age 21-plus without interruption,” the company said.
“We believe that menthol vapor products are critical to helping adult smokers migrate away from combustible cigarettes. FDA’s decision, if allowed to go into effect, will harm, not benefit, public health.
“We remain confident in the quality of all of Reynolds’ applications, and we believe that there is ample evidence for FDA to determine that the marketing of these products is appropriate for the protection of public health.”
Anti-tobacco campaigners countered that menthol e-cigarettes appeal to underage consumers. “Existing evidence demonstrates that nontobacco-flavored e-cigarettes, including menthol flavored e-cigarettes, have a known and substantial risk with regard to youth appeal, uptake and use; in contrast, data indicate tobacco-flavored e-cigarettes do not have the same appeal to youth and therefore do not pose the same degree of risk,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, in a statement.
Morgan Stanley said it expected the rejected products to remain on the U.S. market for the duration of BAT’s appeal, with minimal impact on the company’s operations. “Longer term, should today’s denial order reflect a broader effort by the FDA to ban menthol e-cigarettes, BAT’s U.S. cigarette business could benefit given its menthol mix as it might discourage some smokers from quitting or switching to reduced-risk products,” the bank wrote in a note to investors. Reynolds’ Newport brand represents about 40 percent of BAT’s U.S. cigarette dollar sales, according to Morgan Stanley.
The Jan. 24 rejection of the Vuse refills underscores the FDA’s ongoing reluctance to approve menthol e-cigarette flavors. To date, the agency has approved only tobacco-flavored e-cigarettes.
However, the FDA has granted both a premarket tobacco product application and modified-risk tobacco product designation to IQOS’ menthol variant, which may eventually leave Philip Morris International’s heat-not-burn product as one of the few menthol reduced-risk alternatives on the market.
The FDA is targeting publishing a final rule to ban menthol cigarettes in August 2023, but considering expected industry litigation, final implementation could be five to six years away, according to Morgan Stanley.
January 25, 2023
In Memoriam: Kay O’Neill
Kay O’Neill
Tobacco Reporter will be celebrating its 150th anniversary next year, and, understandably, no one today was present for its beginning. However, for Tobacco Reporter’s “modern era”—that is, when its headquarters moved to Raleigh, North Carolina, USA, in 1982—the magazine has been fortunate to enjoy an extraordinarily consistent existence in terms of its personnel. In fact, though many people have contributed over the years, we can easily point to a small handful who have been fundamental and foundational to the evolution of what Tobacco Reporter has today become. Our Mount Rushmore, if you will.
One of those people, without question, was Evelyn O’Neill. She was better known to the industry, her colleagues and friends simply as Kay. Kay joined Tobacco Reporter in 1991 and served numerous roles for the magazine and its family-like parent companies. On Jan. 17, 2023, after battling illness for far too long, Kay passed away surrounded by her loving family.
In her professional life, Kay did everything you can imagine on the sales side, developing relationships and fostering partnerships around the globe. She eventually earned the title of associate publisher, but to those who worked with her, her most important role was always being the “sales coordinator.” To translate that term, Kay was the buffer between the editors and designers back at the office who cared way too much about when the magazine was scheduled to go to the printer and the salespeople out on the road who were unfamiliar with the concept of deadlines. Kay handled each side with a magical blend of charm, humor and force as only she could, kept the peace and helped everything move forward with the big picture in mind.
As her former colleagues shared stories, it became apparent that Kay was the true definition of dichotomy. On one hand, she was a Carolina girl—that is to say, she came off as small-town country with the beautiful Southern twang in her voice—but she was as sharp and worldly as they came. She was equally comfortable networking with industry executives at five-course dinners as she was sharing a plate of Carolina barbecue with tobacco farmers at local extension meetings.
She wasn’t shy about mincing words and wouldn’t hesitate to kick you in the butt when needed but would protect you like a mother lion in her next breath. Each September, she would travel to one of the world’s great cities as part of the Global Tobacco and Nicotine Forum, staying in lush accommodations, then just a few weeks later, she would be in a giant tent standing over a space heater trying to stay warm as she worked a booth at the fairgrounds for the North Carolina Farm Show. Each of those moments was pure Kay. She was a professional, and she was a friend.
Those who knew her will not only miss her generous personality and infectious laughter but also her ability to disarm the moment and bring perspective. While Kay appreciated the value of hard work, she never lost sight of what truly matters: health, friends and family.
Kay is survived by her husband Mike, her children Laura and Ryan and their spouses, her beloved grandchildren and a group of grateful friends from more than three decades at Tobacco Reporter. She deeply loved all her family and friends, and her legacy will live on through them.
January 24, 2023
FDA Denies Two Vuse Menthol Vapor Products

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The U.S. Food and Drug Administration issued marketing denial orders (MDOs) for R.J. Reynolds Vapor Co.’s Vuse Vibe Tank Menthol 3.0 percent and the Vuse Ciro Cartridge Menthol 1.5 percent.
“Consistent with the authorities granted by Congress, the FDA remains committed to evaluating new tobacco product applications based on a public health standard that considers the risks and benefits of the tobacco product to the population as a whole,” said Brian King, director of the FDA’s Center for Tobacco Products. “The applications for these products did not present sufficient scientific evidence to show that the potential benefit to adult smokers outweighs the risks of youth initiation and use.”
“Existing evidence demonstrates that nontobacco-flavored e-cigarettes, including menthol-flavored e-cigarettes, have a known and substantial risk with regard to youth appeal, uptake and use; in contrast, data indicate tobacco-flavored e-cigarettes do not have the same appeal to youth and therefore do not pose the same degree of risk,” the FDA wrote in a statement.
“Given these existing differences in youth risk, applicants need to provide robust evidence to demonstrate that using their menthol-flavored e-cigarette products are likely to promote a complete switch or are likely to significantly reduce combustible cigarette use in adult smokers beyond that facilitated by tobacco-flavored e-cigarette products. Data from the 2022 National Youth Tobacco Survey found that Vuse was the second most common brand youth e-cigarette users reported ‘usually’ using.”
“Today’s decision pertains to the specific application submitted for review by FDA,” said King. “It is the responsibility of the applicant to provide sufficiently robust scientific evidence to demonstrate that the necessary public health standard has been met. In this case, the presented evidence did not meet that standard.”
In assessing the implications of the most recent MDOs for RJRV’s parent company, BAT, Morgan Stanley noted that Vuse Vibe and Vuse Ciro represent only a small portion of BAT’s overall e-cigarette sales in the U.S.
“Should it choose to appeal, we would expect its products to remain on the market as the appeal is ongoing, resulting in minimal/no operating impact,” the investment bank wrote in a note to investors.
Morgan Stanley said the MDO provides another example of the FDA’s ongoing reluctance to approve menthol e-cigarette flavors. To date, the agency has approved only tobacco-flavored e-cigarettes.
The financial institution also noted that the FDA has granted both a premarket tobacco product application and modified-risk tobacco product designation to IQOS’ menthol variant, which may make it one of the few menthol reduced-risk alternatives on the market.
The FDA is targeting publishing a final rule to ban menthol cigarettes in August 2023, but considering expected industry litigation, final implementation could be five to six years away, according to Morgan Stanley.
January 24, 2023
22nd Century Acquires RX Pharmatech

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22nd Century Group acquired privately held RX Pharmatech (RXP), a leading United Kingdom distributor of cannabinoids with 1,276 novel food applications with the U.K. Food Standards Agency (FSA), according to a company press release. Terms of the agreement include an up-front payment of $650,000 in cash and stock and a three-year equity earn-out based on revenue milestones.
“The acquisition of RXP establishes GVB as the leader in the U.K. Consumer Products isolate market, which is expected to reach an estimated $1.26 billion by 2025 and secures direct access to key European markets for CBD products,” stated James A. Mish, CEO of 22nd Century Group. “RXP has exclusively utilized GVB’s technical data and worked closely with the FSA on developing their highly effective application and compliance programs that secured 1,276 novel food applications, the second most CBD products to pass through the first round of approval. We look forward to leveraging their leadership team’s vast cannabis industry experience and strong relationships with U.K. and EU regulatory agencies as we move forward.”
Mish continued, “We expect the addition of RXP will be immediately accretive to the company and facilitate significant operating efficiencies leading to additional revenue and gross margin improvement. In particular, the addition of RXP with our recently opened distribution facility in the Netherlands will allow us to scale our operations and capture more market share in the growing European Consumer Products market.”
RXP’s products include CBD isolate and numerous variations of finished products like gummies, oils, drops, candies, tinctures, sprays, capsules and others.
January 24, 2023
Pyxus Makes Board Changes

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Pyxus International announced the resignation of Patrick B. Fallon, managing principal of Monarch Alternative Capital, from its board of directors and the appointment of two new members of the board, John S. Alphin and Patrick J. Bartels Jr., effective Jan. 18, 2023, according to a press release. The changes to the board result in an increase in the total number of directors from six to seven individuals.
“On behalf of the company’s board of directors, I thank Mr. Fallon for his guidance in redefining the company’s strategy, helping position the business for growth and long-term success,” said Pyxus President and CEO Pieter Sikkel. “I am pleased to welcome Mr. Alphin and Mr. Bartels to Pyxus’ board of directors and look forward to their strategic direction as we work to accelerate business growth, increase stakeholder value and together grow a better world.”
Alphin has 24 years of tobacco industry experience, including serving as a corporate director and head of global leaf sourcing for BAT. His areas of expertise include strategy and business development, generation of sales and operational efficiencies, navigation of complex, global supply chains and implementation of robust sustainability and corporate governance programs. Alphin will serve as a member of the Environmental, Social, Governance and Nominating Committee of Pyxus’ board of directors.
Bartels brings more than 20 years of experience in the financial sector and currently serves as a managing member of Redan Advisors. He previously held positions with Monarch Alternative Capital, Invesco and PricewaterhouseCoopers. Additionally, Bartels has served as a director on numerous public and private boards and has experience in corporate governance, finance, capital markets and mergers and acquisitions. Bartels will serve as a member of the Audit Committee and chair of the Compensation Committee of the company’s board of directors.
January 24, 2023
Pouch Trade Secrets Dispute Settled

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Kretek International, Modoral and Swedish Match have settled a legal dispute relating to nicotine pouch trade secrets, reports Law360.
In 2020, Swedish Match alleged that Kretek and its subsidiary Dryft Sciences, as well as Modoral, misappropriated six trade secrets concerning the manufacturing and formulation of nicotine pouches.
The defendants all denied Swedish Match’s claims and said they don’t owe the company any damages.
Swedish Match sells nicotine pouch products under the name Zyn based on U.S. Patent No. 9,161,908 and trade secrets that it bought from Swedish nicotine company TillCe. According to Swedish Match, one of TillCe’s affiliates in 2016 breached its agreements with Swedish Match by selling the trade secrets to Kretek, which formed Dryft Sciences to sell products in competition with Swedish Match.
Kretek then formed Dryft Sciences to sell products that misappropriated Swedish Match’s trade secrets, the complaint states.
In November 2020, BAT—which owns Modoral’s parent company Reynolds American—bought Dryft Sciences’ nicotine pouch business and its product line.
After Swedish Match informed BAT that it owned the U.S. patent and other trade secret information, Modoral filed a declaratory judgment action for noninfringement and also sought invalidity of the patent as well as for no misappropriation of Swedish Match’s trade secrets, the complaint states.
On Jan. 19, U.S. District Judge Stanley Blumenfeld Jr. entered partial judgment in favor of Modoral, finding that Swedish Match couldn’t establish that Modoral’s accused product infringed any of the asserted claims of the patent.
In their trial briefs filed earlier this month, Modoral and Kretek both argued that Swedish Match can’t sustain its trade secret misappropriation claims because its alleged trade secrets aren’t actually secret.
January 24, 2023