Category: News This Week

World Tobacco Asia: The Countdown is on!
Photo courtesy of Quartz Business Media
World Tobacco Asia is returning Sept. 7-8, 2022, to Surabaya, Indonesia, co-located with the award-winning World Vape Show. The first major tobacco event to take place in the region for over three years, WT Asia is a unique opportunity for professionals to see the next generation of innovative products, ingredients, materials and insight for the tobacco industry all in one place.
Registration for the event is free for all industry-related personnel and includes the following:
Exclusive show-only offers and deals from 60+ leading suppliers, including Evergrowing, Mcairlaids, Prestige Leaf, Indesso, Aiger, Truewell Filter, Focke & Co, Voedsel, BMJ, Miquel Y Costas and Aroma King.
Access to a large and growing market at one of the most prestigious events for the industry
The chance to improve and gain new industry insights by getting hands on with machinery and equipment that is designed for the next generation of smokers
Face-to-face networking with influential business leaders and senior decision makers within the tobacco industry, as well as friends – old and new
Better your understanding of available alternative tobacco and nicotine products. As this sector of the industry continues to grow, learn what sourcing and procurement options are available to help you create and build your own range of products
Insight into what the future holds for leaf tobacco-associated businesses: machinery, services, communities, and more
Access to the co-located World Vape Show, which provides free insight to exhibitors and the vaping industry
Trusted by the industry’s biggest brands and manufacturers, Quartz Business Media now delivers the world’s largest network of smoking-related B2B events in the world. In the last 12 months alone, World Tobacco, World Vape Show and World Shisha events have gathered more than 17,000 professionals in Dubai, London, Sofia and now Surabaya.
WT Asia will take place on the Ground Floor of the Grand City Convex Convention Hall in Surabaya. For more information and free registration, visit http://www.wtprocessandmachinery.com/asia.
August 11, 2022
Avanti Cigar Moves to the Dominican Republic

Photo: sezerozger
The Avanti Cigar Co. is moving its production from the United States to the Dominican Republic, citing high labor cost and difficulty in finding employees as reasons for the decision, according to a report in the Standard-Speaker.
After manufacturing premium cigars for more than 90 years in Dunmore, Pennsylvania, Avanti will shut down its U.S. factory on Aug. 31.
“The last two years have been difficult due to the Covid-19 pandemic; it is getting harder and harder to hire skilled people, able to learn and manage production activities and to guarantee business sustainability in the medium [term] and long term,” the company wrote in a statement.
Founded in 1912 in New York City as Suraci Brothers, the company moved to Scranton, Pennsylvania, around 1930, then to Dunmore in 2013.
David Ozgo, president of the Cigar Association of America, said Avanti’s move overseas fits a trend.
“This is a trend that’s been going on for decades,” Ozgo said. “In the U.S., we make a lot of premium tobacco. There is a real issue in hiring employees that probably makes it more attractive for them to move to the Dominican Republic.”
August 10, 2022
22nd Century Reports Second-Quarter Results

Photo: 22nd Century Group
22nd Century Group reported net revenue of $14.48 million for the three months ended June 30, 2022, up 73 percent over the comparable 2021 quarter. Gross profit was $892,000 for the quarter compared with $449,000 for the second quarter of 2021.
The increase in net revenue was due to increased contract manufacturing volumes as well as the addition of GVB Biopharma revenue for approximately half of the second quarter. 22nd Century Group acquired GVB Biopharma on May 13.
Revenue from tobacco-related products was $10 million, an increase of 19 percent from 2021. Revenue from hemp/cannabis-related products was $4.5 million compared to zero in the prior year, reflecting a partial quarter of GVB revenues.
22nd Century Group said it will step up the rollout of its VLN King and VLN Menthol King reduced-nicotine content cigarettes. After receiving permission from the Food and Drug Administration in December to market its VLN brands as modified-risk tobacco products (MRTPs), 22nd Century started a pilot program to sell the product at select Chicagoland Circle K stores.
“Our VLN pilot in Chicago is exceeding expectations, driving us to accelerate and expand our launch plans,” said 22nd Century Group CEO James A. Mish in a statement. “The pilot and consumer studies have made clear that our approach focusing on awareness, education and trial is working with adult smokers. We are now testing specific offers designed to increase trial and repeat purchase among existing smokers looking to smoke less/reduce their nicotine consumption while also expanding our presence in Chicago and the state of Illinois.
“We are also expanding our VLN launch to the state of Colorado ahead of plan. Colorado offers a reduced taxation rate for MRTP-authorized products, providing a favorable cost structure for our VLN products in that state as compared to traditional premium cigarettes.
“Additionally, and more importantly, we are working closely with a major consumer packaged goods distributor and a longstanding specialty distributor covering convenience, grocery and drug stores across the state, giving us full access to a broad range of more than 3,000 targeted statewide potential points of sale.”
August 10, 2022
PMI Extends Period for Swedish Match Offer

Photo: SergeVo
Philip Morris Holland Holdings has extended the acceptance period for its offer to Swedish Match shareholders until Oct. 21, 2022, as the bid awaits approval in Europe.
On May 11, Philip Morris International, through its Dutch subsidiary, offered SEK161.2 billion ($16.14 billion) to purchase Swedish Match. The acceptance period for the offer commenced on June 29, 2022, and was initially set to expire on Sept. 30, 2022.
In a statement, PMI said it has obtained all international approvals required for the transaction other than merger control approval from the European Commission, which is still pending.
Based on customary pre-notification discussions with the European Commission, the company believes the European Commission will not complete its review of the transaction before the Sept. 30 expiry date of the initial acceptance period.
Other than the extension of the acceptance period, the terms and conditions of the offer remain unchanged.
The Swedish Match board of directors has recommended shareholders accept PMI’s offer, but some shareholders have raised objections.
Earlier this year, Swedish Match shareholder Bronte Capital opposed the takeover, saying the offer price was “unacceptable,” according to Reuters.
Another shareholder has also said it was not clear whether the long-term value of Swedish Match was reflected in PMI’s offer price.
Meanwhile, Elliot Investment Management has reportedly been building a stake in Swedish Match and plans to oppose the pending takeover of the Scandinavian tobacco company by PMI under its current terms.
However, according to Danske Bank analyst Mads Rosendal, it is unlikely that Elliott will succeed in building a large enough stake in Swedish Match to stop the deal on its own

August 10, 2022
Delnevo to Chair TPSAC

Photo: Rutgers
Cristine Delnevo has been appointed chairperson of U.S. Food and Drug Administration’s Tobacco Products Scientific Advisory Committee (TPSAC).
Delnevo is the director of the Rutgers Center for Tobacco Studies and a professor of health behavior, society and policy at the Rutgers School of Public Health. She was appointed to serve on the TPSAC in March 2021. Her appointment as chair will run through Jan. 31, 2025.
Established in 2009, TPSAC reviews and evaluates safety, dependence and health issues related to tobacco products and provides advice, information and recommendations to the FDA’s commissioner. The FDA commissioner selects the committee members from among people with expertise in medicine, medical ethics, science or technology involving the manufacture, evaluation or use of tobacco products.
“I have valued the importance of this FDA advisory committee since the signing of the Family Smoking Prevention and Tobacco Control Act in 2009,” said Delnevo in a press note published by Rutgers. “This advisory committee plays an important role in several ways, perhaps most notably on the review of modified risk tobacco product applications, as required under the Tobacco Control Act.
“I value the service of Dr. Jonathan Samet and Dr. Robin Mermelstein who served admirably before me as chair, and I look forward to working with an esteemed group of colleagues to help the FDA make regulatory decisions to protect public health and reduce tobacco-related morbidity and mortality.”
Delnevo’s expertise spans population-level tobacco behavior trends—particularly non-cigarette tobacco products like cigars and e-cigarettes—tobacco control policy and regulation, and survey methods research.
In 2022, she received the John Slade Award from the international Society for Research on Nicotine and Tobacco for outstanding contributions to public health and tobacco control through science-based public policy and public advocacy. Her work has been extensively cited in two FDA proposed rules that would ban menthol in cigarettes and characterizing flavors in cigars and she recently served as an external peer reviewer on the FDA’s Scientific Assessment of Impact of Menthol in Cigarettes.
In addition, she served as a committee member on the National Academies of Sciences, Engineering and Medicine report on the Health Effects and Patterns of Use of Premium Cigars.
Delnevo co-leads one of nine Tobacco Centers of Regulatory Science and has published extensively on tobacco-use behavior patterns. She has authored more than 250 scientific articles, reports and book chapters and serves on the Editorial Advisory Board for the journal Tobacco Control.
“We are excited that an RBHS faculty member was selected to be a member, and indeed the leader, of an important committee like TPSAC,” said Brian Strom, chancellor of Rutgers Biomedical and Health Sciences. “I am confident that Dr. Delnevo will bring to this role her passion, commitment, and leadership skills, which she has already exhibited at the Rutgers Center for Tobacco Studies, and will help FDA make decisions for the country that will help save lives.”
August 9, 2022
Vector Reports Strong Tobacco Revenue

Photo: tadamichi
Vector Group reported revenues of $387.2 million for the second quarter of 2022, up 14.7 percent over that for the comparable 2021 quarter. Operating income was $90.71 million and net income was $39.15 million compared with operating income of $93.89 million and net income of $93.3 million in the second quarter of 2021. Tobacco contributed $374.31 million of the 2022 second-quarter revenues, with the balance coming from Vector Group’s real estate business.
“Vector Group delivered strong tobacco revenue performance in the second quarter as we capitalized on favorable market opportunities to substantially increase value and market share,” said Howard M. Lorber, president and CEO of Vector Group, in a statement. “Our price-fighting Montego brand is now our largest brand and the third-largest discount brand in the United States. This strong performance demonstrates our commitment to optimizing long-term profit through the effective management of volume, pricing and market share growth.”
According to data from Management Science Associates, the retail market share of Vector Group’s Liggett Group subsidiary increased to 5.5 percent for the second quarter of 2022 from 4.1 percent for the second quarter of 2021. For the six months ended June 30, 2022, Liggett’s retail market share increased to 5.3 percent compared to 4.1 percent for the six months ended June 30, 2021.
August 9, 2022
Ukraine Redefines ‘Tobacco Product’

Photo: Dmytro
The government of Ukraine has changed the definition of “tobacco product” to include heated-tobacco products (HTPs), making HTPs subject to the same restrictions as combustible cigarettes, according to the Framework Convention on Tobacco Control.
As a result, it is now illegal to smoke HTPs in public places. Moreover, the new rules prohibit smoking rooms on company premises and empower local authorities to establish additional smoke-free places.
Smoking of tobacco products, hookahs and e-cigarettes has been prohibited in Ukrainian workplaces since 2012, but until recently, smoking areas were still permitted.
The new law holds both smokers and businesses responsible for compliance.
Earlier this year, Ukraine started requiring manufacturers of e-cigarettes and e-liquids to print health warnings covering 30 percent of the packaging.
Starting on July 11, 2023, it will also become illegal to promote e-cigarettes, e-liquids and HTPs or to sell such products with flavors.
From Jan. 11, 2024, traditional, combustible cigarettes will be required to carry pictorial health warnings covering 65 percent of both sides of their packaging.
According to the World Health Organization, up to 85,000 Ukrainians die from smoking-related diseases each year. Experts estimate smoking to result in annual economic losses equivalent to 3.2 percent of Ukraine’s GDP, in part due to the cost of treating smoking-related illnesses.
August 9, 2022
Florida: Drop in Smoking Hits MSA Revenues

Photo: JF19
Florida will likely collect lower-than-expected revenues from a landmark settlement with the tobacco industry because fewer people are smoking, and the remaining smokers are smoking less, reports The Free Press.
In 1998, America’s largest tobacco companies settled litigation brought by state attorneys general over the cost of treating sick smokers. The tobacco industry agreed to pay billions of dollars over more than two decades, with the level of payments depending on the number of cigarettes sold.
In a report released on Aug. 5, economists anticipated Florida to receive $412.1 million in settlement payments by the end of year, down from the earlier anticipated $413.8 million.
The report pointed to a forecast last month that cigarette sales would decline by 2.5 percent annually over the next decade.
The decline had earlier been projected between 1.44 percent and 1.75 percent. The report also said that tobacco manufacturer payments were $1.7 million less than anticipated for the recently completed 2021–2022 fiscal year.
Meeting at the state Revenue Estimating Conference, the economists also revised anticipated payments for the coming years.
After earlier projecting $442.5 million in revenue for the 2023–2024 fiscal year, the state is now forecast to receive $417.9 million through the settlement during that period.
August 9, 2022
KT&G Profit up Slightly

Photo: KT&G
KT&G reported a consolidated operating profit of KRW327.6 billion ($249.7 million) for the second quarter of 2022, up by 1 percent from a year earlier, the company said in an earnings release.
Revenue for the April-June period amounted to KRW1.42 trillion, up 10.9 percent from a year ago, with net profit gaining 34 percent to KRW330.1 billion.
Sales increased thanks to brisk overseas sales and real estate margins, the company said.
International sales from the company’s traditional cigarette business surged 47.1 percent, driven by the growth of Latin America and other emerging markets and improved sales in Indonesia.
KT&G’s share of the domestic market for heat-not-burn (HnB) products increased to 47 percent in 2022, up from 40.4 percent in 2021. HnB products now account for 16.7 percent of all tobacco sales in South Korea, according to KT&G.
Despite rising interest rates and soaring commodity prices, KT&G’s traditional and HnB business will continue strong growth in the months ahead, a company official said.
August 8, 2022
Universal Reports First-Quarter Results

Photo: Taco Tuinstra
Universal Corp. reported sales and other operating revenue of $429.8 million for the three months ended June 30, up 23 percent over the comparable 2021 quarter. Tobacco operations sales and other operating revenues increased 18 percent to $348.1 million, but tobacco operations income declined 9 percent to $8.1 million.
George C. Freeman, III, chairman, president and CEO of Universal Corp. expressed satisfaction with the start of the company’s 2023 fiscal year.
“In the quarter ended June 30, 2022, we continued to effectively navigate increased costs, particularly rising prices for green leaf tobacco and shipping constraints,” Freeman said in a statement. “We succeeded in getting a significant amount of carryover tobacco shipped out of Brazil, and our plant-based ingredients platform continued to exceed our expectations.
“Results for our Tobacco Operations segment were down modestly in the quarter ended June 30, 2022, compared to the quarter ended June 30, 2021, largely on unfavorable foreign currency comparisons due to the strong U.S. dollar.
“Demand for leaf tobacco remains strong, and flue-cured, burley, oriental and wrapper tobacco remain in an undersupply position. We are also anticipating a reduction in African burley tobacco crop sizes due to weather conditions there.
“While we were able to ship a greater amount of carryover tobacco out of Brazil in the quarter ended June 30, 2022, compared to the quarter ended June 30, 2021, we continue to face a challenging logistical environment. We are also continuing to see increased costs for leaf tobacco across virtually all markets.”
August 7, 2022