Category: News This Week

BAT Reiterates Full Year Guidance

Photo: BAT
British American Tobacco reiterated its revenue guidance of £5 billion ($6.27 billion) for 2022, anticipating that its diversification into noncombustible products will pay off.
The new business line “is increasingly contributing to group performance, and we are confident in delivering our £5 billion New Category revenue and profitability targets by 2025”, said BAT CEO Jack Bowles in a statement, adding that the company continues to drive value through its combustibles business.
The noncombustible product consumer base reached 19.4 million in the first quarter of the year, according to BAT. In the first half of the fiscal year, the company invested more than £1 billion to build its brands in this product segment. Its portfolio of non-combustible products includes vapor products, nicotine pouches, tobacco heating products and other oral products.
BAT’s Vuse vapor cigarette now holds a value market share of 35.9 percent in the U.S., up 3.4 percentage points in the year to date versus 2021. Vuse debuted in the U.K. in May and the company anticipates further rollouts for the second half of 2022.
BAT said it continues to enjoy volume share leadership in Modern Oral in Europe, with 69.3 percent of the market.

We are confident in delivering on our current financial targets, irrespective of the timing of the transfer of our Russian business.
Jack Bowles, CEO, BAT
Like many multinationals, BAT has been impacted by the war in Ukraine, which has increased global uncertainty and disruption, further exacerbating inflationary pressures on supply chains. In March, BAT announced that its ownership of the business in Russia was no longer sustainable. The company is in the process of transferring its Russian business to a third party.
“While we are not immune to these pressures, we are confident in delivering on our current financial targets, irrespective of the timing of the transfer of our Russian business,” said Bowles. “This is thanks to our well-established multi-category strategy, our strong portfolio of global brands and our resilient, highly cash generative business.”
While considering BAT’s aspiration to reach £5 billion of sales and achieve profitability in its new products stream “achievable,” Ross Hindle, an analyst at Third Bridge, noted the significance of Russia and Ukraine to BAT. “Russia and Ukraine are very important heated tobacco markets, they are even more important for BAT than PMI, with 26 percent of their heated tobacco sales coming from the region historically,” he told Proactive.
June 9, 2022
Health Crises Worsened Vaping Confusion: Study

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A new study led by researchers at the American Cancer Society (ACS) shows perceptions of e-cigarettes as being “more harmful” than cigarettes by adults in the United States more than doubled between 2019-2020 and perceptions of e-cigarettes as “less harmful” declined between 2018-2020.
The study also found that an increase in cigarette smoking prevalence in 2019-2020 was restricted to those who perceived e-cigarettes as “more harmful” than cigarettes, while increases in prevalence of e-cigarette use was restricted to those who perceived e-cigarettes as “less harmful” than cigarettes.
Prevalence of dual use of both products increased only among those who perceived these products as “equally harmful” or “as harmful.” The results coincide with the e-cigarette or vaping use-associated lung injury outbreak (Evali) and the Covid-19 pandemic. The data was published in the American Journal of Preventive Medicine (AJPM).
“While all tobacco products, including e-cigarettes, pose a risk to the health of the user, major health events, such as the Evali epidemic in late-2019 and the Covid-19 pandemic in 2020, paved the way to new smoking/e-cigarette health risks,” the ACS wrote in a press release.
“During this time, the quality and type of information individuals were exposed to may have shaped how they compare the potential harms of tobacco products, which in turn, may have altered tobacco use behaviors.”
How individuals perceive the harm of e-cigarettes vs. traditional cigarettes can predict their individual decision to use tobacco products, but according to the study authors, this is the first study to provide evidence this relationship translates to population-based prevalence changes.
“While this study showed sharp changes in public perceptions of e-cigarette vs. cigarette harms during Evali and Covid-19, the more relevant finding for public health is that increases in cigarette smoking and e-cigarette use prevalence occurred primarily in individuals who perceived their preferred product as relatively less harmful,” said Priti Bandi, principal scientist, risk factors and screening surveillance research at the American Cancer Society and lead author of the study. “This suggests that public perceptions of e-cigarettes vs. cigarettes harms influences population tobacco use patterns.”
In this study, researchers analyzed data from the National Cancer Institute-sponsored Health Information National Trends Survey collected from more than 10,000 U.S. adults from 2018-2020. The results showed perceptions of e-cigarettes as “more harmful” than cigarettes doubled each year, increasing most between 2019-2020 (2018: 6.8 percent, 2019: 12.8 percent, 2020: 28.3 percent), while uncertainty (responses of “don’t know”) in relative harm declined (2018: 38.2 percent, 2019: 34.2 percent, 2020: 24.7 percent). “Less harmful” relative perceptions declined (2018: 17.6 percent, 2019: 15.3 percent, 2020: 11.4 percent), while “as harmful” perceptions remained steady (2018: 37.4 percent, 2019: 37.7 percent, 2020: 35.6 percent).
Exclusive cigarette smoking increased between 2019-2020 among those who perceived e-cigarettes as relatively “more harmful” (2018: 18.5 percent; 2019: 8.4 percent; 2020: 16.3 percent), exclusive e-cigarette use increased linearly among those who perceived them as relatively less harmful (7.9 percent; 15.3 percent, 26.7 percent), and dual use increased linearly in those who perceived them as harmful (0.1 percent, 1.4 percent; 2.9 percent).
“It is challenging for individuals to make conclusions about the short- and long-term health effects of tobacco products without clear, effective, and ongoing communication from public health authorities, especially when new contextual events that change health harms happen,” said Bandi.
“There is a need for behavioral interventions to encourage individuals to be informed consumers of available scientific findings and appreciate that while no tobacco products is safe, there are inherent differences between relative and absolute harms between tobacco products that can influence behavior. In turn, public health education campaigns must facilitate informed decision making by translating emerging scientific evidence accurately to appropriate audiences.”
June 9, 2022
PMI Publishes ESG Protocol

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Following the introduction of PMI’s Sustainability Index, Philip Morris International made its ESG KPI Protocol publicly available. This document describes how the Sustainability Index will measure PMI’s progress toward reaching the goals outlined in its 2025 Roadmap and provides details about the 19 metrics that comprise PMI’s Sustainability Index. This announcement follows the release of PMI’s Integrated Report 2021, which includes details of the company’s Sustainability Index and the 2022 Proxy Statement, which provides details on how long-term executive compensation is linked to the company’s 2025 Roadmap through the Sustainability Index.
The ESG KPI Protocol is a separate, dedicated explanation of the Sustainability Index’s mechanics. It includes the definition, methodology and scope of each of the Sustainability Index’s KPIs to provide measurable, verifiable, consistent and accurate reporting on progress.
Through publication of its ESG KPI Protocol, PMI aims to provide further transparency on the key metrics used to measure how the company is progressing toward achieving its purpose and creating value for shareholders and other stakeholders. Further, the ESG KPI Protocol establishes a framework, which is specific to the company, and clearly defines KPIs that can provide the organization with a method for making the connection between the company’s purpose, strategic direction, financial performance and environmental and social considerations.

We developed a clear process for establishing concrete definitions, documentation and controls for sustainability with the aim of standardizing how we measure ESG performance.
Jennifer Motles, chief sustainability officer, PMI
“As sustainability matures and gains importance inside and outside our company, the question of how to measure ESG performance is something many continue to grapple with. Accordingly, we developed a clear process for establishing concrete definitions, documentation and controls for sustainability with the aim of standardizing how we measure ESG performance,” said Jennifer Motles, chief sustainability officer, in a statement.
Additionally, PMI published its 2021 ESG Highlights—a data-driven document based on the company’s 2021 Integrated Report and tailored to complement investor relations materials. It aims to further strengthen investor engagement and understanding of the relevance and robustness of PMI’s sustainability strategy and transformation.
June 9, 2022
Kazakhstan to Ban Vaping

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Kazakhstan will outlaw the sale and use of vaping devices, reports AKIPress, citing Member of Parliament Amanzhan Zhamalov.
Lawmakers also decided to introduce an excise tax on “smoking sticks” at 70 percent of the excise tax on cigarettes. It wasn’t immediately clear from the AKIPress article whether “smoking sticks” refers to tobacco-heating sticks or something else.
Earlier, the country’s national economy minister, Alibek Kuantyrov announced a plan to raise cigarette excise taxes to nearly $30 by 2024.
It was also suggested to raise excise taxes on other tobacco products, such as heated-tobacco, to harmonize tobacco product excise within the Eurasian Economic Union. According to the minister, this will require a staged increase in duties.
June 9, 2022
Taat Adds Southern California Locations

Photo: Taat Global Alternatives
Taat Original, Smooth and Menthol are now sold in over 100 franchised stores in Southern California belonging to a major global convenience chain, an increase of more than 80 stores in eight weeks following an initial placement in 23 stores, the company announced in a press release.
Taat established dialogues with the owners of these franchises through an independent association of franchise owners in Southern California who are part of the convenience chain’s network of over 9,300 stores in the United States and more than 70,000 stores worldwide. Approximately 35 percent of the initial group of franchised stores carrying Taat have already placed reorders.
The company is currently planning to begin initiatives in Southern California to promote Taat Menthol in light of an upcoming ban of flavored tobacco products in Los Angeles set to begin on Jan. 1, 2023. On Wednesday, June 1, 2022, the Los Angeles City Council unanimously voted to ban the sale of flavored tobacco products, such as menthol tobacco cigarettes. Menthol tobacco cigarettes have proven to be exceptionally popular in Los Angeles, with 94.5 percent of tobacco retailers carrying products in this segment and 31.2 percent displaying menthol cigarette price promotions.
June 8, 2022
China Cracks Down on Tobacco Counterfeiters

Photo: Tobacco Reporter archive
Chinese authorities seized 2.1 million counterfeit cigarettes, nearly 100,000 metric tons of leaf tobacco and about 1,700 cigarette-making machines between 2017 and 2021, reports China Daily. They also detained 44,000 suspects. The law enforcement actions prevented CNY100 billion ($15 billion) in lost tax earnings, according to the Ministry of Public Security (MPS), which coordinated its campaign with the State Tobacco Monopoly Administration (STMA).
The joint crackdown targeted the production and distribution of counterfeit cigarettes in key areas. Authorities focused on disrupting the criminal networks’ logistics, strangling the supply of production materials for fake cigarettes at the source.
Officials insisted the crackdown on counterfeiting will continue, with emphasis on combating activities such as illegal sales of leaf tobacco and illegal transport of cigarettes, and on cutting off the underground supply chain for the production and sale of counterfeit cigarettes.
June 7, 2022
China: E-Cig Licensing Rules Explained

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The law firm Kelller & Heckman has published an article summarizing the requirements for obtaining an e-cigarette manufacturing license in China.
The State Tobacco Monopoly Administration (STMA) has now published a rule outlining the process for Chinese e-cigarette manufacturers to obtain the required manufacturer license. This rule applies not only to manufacturers producing e-cigarettes for the domestic Chinese market, but also to the manufacturing of e-cigarettes solely for export.
According to Keller & Heckman, manufacturers will have to prepare many materials for their license application. Among other information, they will have to provide proof of suitable funds, production and sales information, including the balance sheet, income statement, cash flow statement and production and sales statistics.
E-liquid manufacturers will have to supply a license for operating dangerous chemicals and identify the sources of nicotine used in the past three years. Applicants for export must submit materials explaining the export business and the scale of export, including the customs declaration forms for the past three years
Remarkably, the rules require companies manufacturing exclusively for export to obtain trademark registration in China. Although Keller and Heckman considers it unlikely that the STMA intended to impose the Chinese trademark registration requirement on exporters, the law firm advises clients to seek clarification from the authorities.
June 7, 2022
EU Sanctions Belarusian Tobacco Firms

Photo: Tobacco Reporter archive
The European Union has imposed sanctions against Neman Grodno Tobacco Factory and Inter Tobako in Belarus, reports Interfax. The measures were announced in The Official Journal of the European Union as part of a larger package of sanctions to punish Russia and its allies for the war in Ukraine.
The package also targets Russian oil exports, financial institutions and vehicle manufacturers whose trucks and cars have been used in the “special military operation.”
The Newman Grodno Tobacco Factory was already subject to sanctions following the controversial re-election of Alexander Lukashenko and the regime’s subsequent crackdown on protests challenging the outcome in 2020.
Accounting for 70 percent of domestic cigarette sales, Neman effectively has a monopoly on the Belarusian tobacco market. The United States says it is one of several entities that receive preferential treatment from the regime in return for providing funds to Lukashenko.
The Neman factory has also been fingered as a major source of illicit cigarettes in Europe. Around 10 percent of the 5.5 billion cigarettes sold illegally in the U.K. annually are believed to have originated in Belarus.
With the average price of a pack of cigarettes in Belarus running the equivalent of about $0.80 compared to $4.30 in Latvia and much higher in other parts of the EU, there is plenty of room for profit in smuggling.
June 7, 2022
BAT Conducts Real-World Vuse Study

Photo: BAT
BAT has conducted a first-of-its-kind study of Vuse designed to assess and provide insights into the real-world health impact of vaping. The study compares biomarker measures from Vuse consumers who have been using the product for over six months with the results from smokers, former smokers and never-smokers. Protocol details explaining the innovative design of the latest study were published in the Journal of Health and Environmental Research.
The cross-sectional study design uses a single set of data readings to measure exposure to certain toxicants and indicators of potential harm related to several smoking-related diseases in people who have been exclusively using Vuse.
BAT hopes that the results, which are currently being analyzed and will be published later this year, will provide further supportive evidence that using Vuse can reduce relative risk for certain diseases among adult consumers compared to smoking. The company expects that once available, the results will add to the growing body of evidence on Vuse’s potential as a reduced-risk product.
“This innovative study demonstrates our commitment to researching the reduced-risk potential of our new category products,” said Sharon Goodall, BAT’s group head of regulatory sciences, in a statement.
“What makes it particularly relevant and exciting is that the results generated will be from people who have been using Vuse as they normally would for more than six months prior to testing. The results will provide important new insights and show us the differences between Vuse users, smokers and former smokers across a range of important biomarkers thought to be predictive of disease development. We look forward to sharing the data once available.”
June 6, 2022
UAE Bans Vaping in Public Spaces

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Vaping e-cigarettes is prohibited inside offices and closed spaces across the United Arab Emirates (UAE), the health ministry has confirmed. The use of e-cigarettes is now subject to the federal law on tobacco control in the country.
This came as the Ministry of Health and Prevention (MoHAP) highlighted the dangers of consuming tobacco products, including e-cigarettes, according to the Khaleej Times.
According to the UAE government website, the federal law also forbids and penalizes: the sale of tobacco products to those under 18; smoking in private cars when a child under the age of 12 is present; smoking in houses of worship, educational institutions (such as universities and schools), health and sports facilities; automatic vending equipment and devices for tobacco distribution inside the country; and tobacco advertisement.
The MoHAP said it has collaborated with the Telecommunications Regulatory Authority to block websites that advertise and promote electronic nicotine-delivery systems.
The UAE had originally planned to ban vaping products because UAE-based doctors had said that e-cigarettes would create a whole new generation of smokers. However, the country changed course after advocacy groups pushed for the harm reduction products.
Meanwhile, citing the National Health Survey, the ministry said the prevalence of adult tobacco smoking has declined from 11.1 percent in 2010 to 9.1 percent in 2018.
The latest edition of the Tobacco Atlas suggests that the UAE has among the lowest cigarette consumption rates. A graphic shared as part of the report shows that an adult smoker consumes 438 cigarettes a year in the country.

June 6, 2022