Category: News This Week

  • U.K. Counterfeit Cigarettes Sales up by One-Third

    U.K. Counterfeit Cigarettes Sales up by One-Third

    Photo: BAT

    Consumption of counterfeit cigarettes jumped by more than a third in the U.K. in 2021, reports Talking Retail, citing a recent KPMG study commissioned by Philip Morris International.

    As a result, the number of counterfeit cigarettes smoked in the U.K. topped 3 billion for the first time since the study began 16 years ago.

    “The KPMG report highlights how both illicit tobacco and vapes are becoming increasingly prevalent in the U.K., with the situation getting steadily worse over the past five years,” said Cem Uzundal, head of Philip Morris’ U.K. field force.

    “There’s a real job to be done to tackle this issue by authorities, tobacco manufacturers and even convenience retailers, who can help by reporting stores selling illicit tobacco in their area.”

    “The KPMG report underlines what my team see on British streets month in, month out: illicit products—particularly counterfeits—widely available for sale,” said Will O’Reilly, a former Scotland Yard detective chief inspector who carries out regular test purchases of illicit products on behalf of Philip Morris.

    “Organized criminal groups appear to consider the risk of being caught well worth the prospect of making around £1.5 million profit [$1.79 million] for every container load they bring into the U.K.”

  • Pouch Segment Growing Rapidly in Spots

    Pouch Segment Growing Rapidly in Spots

    Photo: Swedish Match

    While not yet widely available, sales of nicotine pouches are developing rapidly in select geographies, according to a blog post by the Foundation for a Smoke-Free World (FSFW) of reduced-risk products. The largest markets are currently in high-income and middle-income countries, with Sweden and the United States topping the list, partly as a result of their strong oral tobacco cultures.

    Of the 15 companies ranked by the FSFW’s Tobacco Transformation Index, which measures the extent to which nicotine companies are making progress toward reducing the consumption of high-risk products, seven currently offer nicotine pouches. In 2021, nicotine pouches represented 0.3 percent of the world tobacco market in value terms.

    Twenty-four of the 36 countries covered by the Tobacco Transformation Index allow nicotine pouches. Of those 24 markets in 2021, the market size exceeded 10 million units in seven: the United States, Sweden, the United Kingdom, Germany, Ukraine, Switzerland and Poland.

    Legislation differs among the studied geographies, with some countries treating nicotine pouches as consumer products and others viewing them as tobacco products. Germany’s Federal Office of Consumer Protection and Food Safety determined that nicotine pouches are a foodstuff containing an unauthorized novel food ingredient—nicotine—and thus illegal for sale.

  • Canada Working on Medicago’s ‘Tobacco Problem’

    Canada Working on Medicago’s ‘Tobacco Problem’

    Photo: Auramar, artwork: Dan Kurtz

    The government of Canada is “working on a solution” to help Medicago donate its Covid-19 vaccine to low-income countries, reports CTV News.

    In February, Health Canada approved the pharmaceutical firm’s Covifenz vaccine for people aged 18–64. The federal government has signed a contract to buy up to 76 million doses with plans to donate vaccines to low-income countries.

    However, the World Health Organization has rejected the vaccine because Philip Morris is a minority shareholder in Medicago, and the U.N. agency has a strict policy about engagement with the tobacco industry. Donations are not allowed without WHO approval.

    Medicago’s majority shareholder, Mitsubishi Tanabe Pharma, has approached the Quebec government for support so Medicago’s vaccines “can receive a favorable reception from the WHO and be marketed on a large scale,” according to an entry in the Quebec Registry of Lobbyists.

    During a meeting with Mitsubishi executives in Japan, Innovation, Science and Industry Minister Francois-Philippe Champagne indicated that there were discussions about the future of Medicago as a global vaccines manufacturer.

    While ruling out buying shares in Medicago for the time being, Champagne indicated that the government was looking at other ways to help make Medicago a “global champion.”

    Quebec Economy Minister Pierre Fitzgibbon said in June that he has been in discussions with Mitsubishi Tanabe Pharma executives to resolve the impasse, but the Japanese company must first negotiate the purchase of Philip Morris’ stake itself.

  • Malaysia: Cabinet to Consider Generational Smoking Ban

    Malaysia: Cabinet to Consider Generational Smoking Ban

    Photo: sezerozger

    Malaysia’s Cabinet will review a bill this week that would ban smoking for those born after 2005, reports The Edge.

    According to Health Minister Khairy Jamaluddin, the bill’s “implementation of the generational endgame” provision aims to prevent Malaysia’s younger generations from picking up the smoking habit and getting addicted to tobacco products when they grow older, as well as to reduce the number of smokers in Malaysia to less than 5 percent by 2040.

    “This will be able to reduce the risk of premature deaths, chronic diseases and treatment costs that have to be borne by the government due to smoking complications among the community,” Jamaluddin said.

    Presently, some 40.5 percent of men and 20 percent of women smoke in Malaysia.

    Anticipating resistance to the bill from cabinet members worried about tax revenues and tourist spending, Khairy said that without the legislation, the government would have to bear treatment costs of about MYR8 billion ($1.81 billion) to treat health problems linked to smoking.

    Malaysia’s bill, which would also regulate vapor products, is modeled on legislation in New Zealand, which in December 2021 revealed a plan to phase out smoking by gradually raising the smoking age until it covers the entire population.

  • Boka Tobacco Sales Suspended

    Boka Tobacco Sales Suspended

    Photo: Taco Tuinstra

    Zimbabwe’s Tobacco Industry Marketing Board (TIMB) has suspended the Boka Tobacco Sales Floor (BSF) from purchasing tobacco from farmers with immediate effect, reports Africa Press.

    The regulator acted on July 14 following several reports by growers that they have spent more than a month without receiving payment for their produce.

    TIMB Public Affairs Officer Chelesani Moyo said the suspension will be reviewed after the BSF clears all its outstanding dues and provides proof of adequate financial resources.

    “We have received several complaints from growers who have not been paid by Boka Tobacco Sales Floor after sales,” she said.

    “As a regulator, we have engaged with Boka management to resolve the issue in an amicable manner.

    With immediate effect, TIMB has suspended all tobacco purchases by Boka until they have cleared all outstanding payments and provided proof of adequate financial resources.”

  • Activist Investor to Oppose Match’s Sale

    Activist Investor to Oppose Match’s Sale

    Photo: Swedish Match

    Elliot Investment Management is building a stake in Swedish Match and plans to oppose the pending takeover of the Scandinavian tobacco company by Philip Morris International under its current terms, according to Bloomberg.

    In May, Swedish Match’s board of directors accepted Philip Morris International’s offer of SEK161.2 billion ($16.14 billion), which is subject to shareholder approval. Financial analysts said a deal has strategic merit for PMI given the Swedish Match’s strength in oral nicotine products and exposure to the lucrative U.S. tobacco market.

    It’s unlikely that Elliott will succeed in building a large enough stake in Swedish Match to stop the deal on its own, according to Mads Rosendal, an analyst at Danske Bank.

    “Even if they were to be successful in blocking the deal it would not necessarily be bad for Swedish Match spreads, as they were trading tighter than PMI before the deal announcement,” he wrote in a research note Friday.

    Earlier this year, Swedish Match shareholder Bronte Capital also 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.

    Some 90 percent of shareholders need to agree to the deal for it proceed under Swedish law.

  • Pakistan Mandates Tobacco Track-and-Trace System

    Pakistan Mandates Tobacco Track-and-Trace System

    Photo: Taco Tuinstra

    Several tobacco companies are challenging Pakistan’s Federal Board of Revenue (FBR) in court, seeking relief from the country’s new track-and-trace system, according to reports in The International News and Dawn.

    Starting this month, all tobacco companies operating in Pakistan must implement the country’s track-and-trace system. Tobacco products may enter the domestic market only if they carry stamps and unique identification markers.

    To date, only three tobacco manufacturers—Pakistan Tobacco Co., Philip Morris International and Khyber Tobacco Co. (KTC)—have installed the track-and-trace system and made it operational. KTC Chief Technology Officer Shahid Sattar said the system would help the company enhance its presence in the Pakistani market and improve the quality of its products to international standards.

    The companies challenging the FBR want to continue selling old stock. The agency instructed them to discontinue such sales on June 30.

    The tobacco companies that are already operating the system maintain that it will succeed only if all players implement it. According to critics, the companies challenging the FBR instructions engage in illicit trade and fear the track-and-trace system will expose their illegal activities.

    In addition to the multinationals, there are at least 21 tobacco companies operating in Pakistan, including 18 in Khyber Pakhtunkhwa and three in the country’s federally and provincially administrated tribal areas.

    Out of the PKR134 billion ($645.47 million) in taxes collected from the tobacco industry in 2020, PKR131 was paid by two companies, which together held a 65 percent market share.

  • Brazil Maintains E-cigarette Ban

    Brazil Maintains E-cigarette Ban

    Photo: Brenda Blossom

    Brazil’s national health surveillance agency, Anvisa, decided on July 6 to maintain its ban on the import, advertising and sale of electronic cigarettes in Brazil, according to News Bulletin 24/7. The restriction began in 2009, but marketing continues illegally in the country, so Anvisa also called for increased inspections and educational campaigns  to curb the illicit trade in e-cigarettes.

    The decision was taken unanimously during a meeting of the body’s collegiate board. According to Anvisa Director Cristiane Rose Jourdan, scientific studies show that the use of electronic smoking devices increases the risk of smoking in young people, the potential for dependence and the likelihood of lung, cardiovascular and neurological health problems.

    The Brazilian Medical Association (AMB) applauded Anvisa’s position. ​”This is a wise decision, as there is increasing scientific evidence that the use of electronic smoking devices, the DEFs, is not harmless, does not support smoking cessation or is a form of harm reduction, but a product that causes dependence and can cause several diseases, especially cardiovascular, respiratory and cancer,” said Ricardo Meirelles, coordinator of the Commission to Combat Tobacco at AMB.

    A survey carried out in the first quarter of 2022 by the Vital Strategies organization and the Federal University of Pelotas, revealed that 19.7 percent of Brazilians aged between 18 and 24 have tried electronic cigarettes.

    BAT Brasil (formerly Souza Cruz) said it will assess the regulatory impact analysis of Anvisa’s decision when it is published.

    “Dozens of countries have already understood the importance of risk reduction as part of their tobacco control policies and, given this reality, have advanced in the regulation of these devices,” the company said in a statement, citing the examples of United States, the European Union and the United Kingdom, among others.

    Japan Tobacco International regretted Anvisa’s decision. “The use of electronic devices in the country is current and supplied exclusively by illicit trade. Legalized companies do not sell the product and the growth in consumption that affects the population comes from the illegal acquisition of devices,” the company said.

  • Strong Opposition to FDA Flavor Bans

    Strong Opposition to FDA Flavor Bans

    Image: nosyrevy

    The U.S. Food and Drug Administration has received more than 110,000 comments on the proposed rule that would end the sale of menthol cigarettes and nearly 60,000 comments on the proposed rule that would prohibit characterizing flavors in cigars.

    Many wrote to oppose the ban, including business owners who said it would force them to cut jobs.

    “If implemented, this proposal could hurt retailers and wholesalers in the U.S. and directly impact my bottom line,” wrote a tobacco retailer in Florida. “This ban targets a significant portion of my revenue; menthol cigarettes alone make up 36 percent of all cigarette sales in the United States. Additionally, adult customers who purchase menthol cigarettes also purchase gas, food and other items that my store depends on.”

    Thousands of letters submitted online came from menthol cigarette smokers who perceived the proposed restrictions as an unfair attack on personal liberty.

    “This regulation far beyond overreaches the authority that the government should have over the American people,” wrote one respondent. “We have age restrictions for a reason, and once you reach that age you should be able to make the choice to use any legal product that you wish.”

    Others supported the proposal, saying removing menthol and other flavors would improve health and help rectify racial injustices.

    “The ban on menthol in cigarettes is a necessary step toward health equity and health promotion,” wrote Kaelor Gordon. “This substance unjustly and unfortunately places the burden of tobacco use and death on Black individuals and communities of color at higher and disproportionate rates, so to ban menthol would be in tune with the anti-racist and health equitable culture we are strongly cultivating today.”

    The FDA recently extended the comment period from July 5 to Aug. 2, 2022.

  • U.K. Launches New Track-and-Trace System

    U.K. Launches New Track-and-Trace System

    Photo: Uzfoto

    The United Kingdom has a new track-and-trace system for tobacco products, established and operated by Dentsu Tracking. Launched on July 1, the system provides the U.K. government with digital, data-driven traceability functionality across the entire tobacco supply chain. The system is part of the U.K.’s anti-illicit trade strategy, supporting Her Majesty’s Revenue & Customs’ (HMRC) efforts to fight illicit trade.

    “We are honored to work with HMRC and help the U.K. in the fight against illicit tobacco trade,” said Philippe Castella, managing director of Dentsu Tracking, in a statement. “Our digital system is tailored to the policy objectives of HMRC and designed to address the specific characteristics of the U.K. market. This ensures that the system provides HMRC with the highest level of visibility and government control over the entire U.K. tobacco supply chain.”

    The new track-and-trace system leverages the advantages of digital technology to enable the movement of legal tobacco products to be monitored (tracking) and allow U.K. authorities to detect and fight the different forms of illicit trade, thereby curbing the circulation of non-compliant products for which taxes have not been paid and that do not meet all legal requirements in terms of content and packaging. Reducing the circulation of non-compliant tobacco products enables the U.K. to increase national tax collection while protecting citizens and legitimate businesses.

    The new system was designed in line with all applicable U.K. and international laws, including full compliance with the FCTC Illicit Trade Protocol that requires parties to ensure the tracking and tracing of tobacco products along both manufacturing and key distribution points.

    By integrating sophisticated data analytics tools, Dentsu’s system transforms the collected supply chain data into meaningful information that helps U.K. authorities to identify potentially fraudulent events. The new U.K. system supplies HMRC with real-time detailed analyses, statistics and alerts, which some stakeholders have already described as “groundbreaking,” according to Dentsu.

    “At Dentsu Tracking, we strongly believe that the added value of tracking and tracing is only as strong as the level of supply chain insights that the system delivers to government bodies,” said Jan Hoffmann, director of government business. “Collecting data therefore is not enough. We generate powerful business intelligence that will help the U.K. authorities to carry out targeted controls and real-time investigations in the field.”

    All businesses engaged in the manufacture, importation, exportation, storage, distribution and sale of tobacco products into and through the U.K. supply chain must use the new track-and-trace system. Track-and-trace requirements have existed in the U.K. since May 2019 and currently apply to cigarettes and roll-your-own tobacco. All other tobacco products will have to comply with the requirements from May 20, 2024.

    Dentsu Tracking was appointed as provider for establishing and operating a new U.K. tobacco track-and-trace system in November 2021 by means of a public procurement process. Dentsu replaces the previous provider De La Rue.