Category: News This Week

PMI Reaches Gender Balance Goal

Photo: Tobacco Reporter Archive
Philip Morris International has reached its global company-wide target to improve gender balance, ensuring at least 40 percent female representation in managerial roles by 2022, according to a company press release.
Jacek Olczak, CEO at PMI, commented, “I am immensely proud of PMI’s vision, commitment and achievement in ensuring equal opportunities are given to all in the workplace, irrespective of gender. Meeting this target demonstrates that our inclusion and diversity strategy is working. Diverse profiles, backgrounds and perspectives allow us to make better and more considered decisions as well as contribute to better and more sustainable performance. I firmly believe that a culture of fairness, inclusion and diversity [is] crucial to PMI’s progress in achieving a smoke-free future and will continue to benefit the company as we become more reflective of our consumer base.”
“What gets measured really does get done,” said Silke Muenster, chief diversity officer. “This was a whole company effort requiring everyone to take responsibility. I am delighted that we have met our target on time but recognize that we still have a long way to go on our diversity, equity and inclusion journey. With this in mind, we have our next gender representation target: 35 percent of women in senior roles by 2025.
“Having a truly diverse workforce is an essential part of our goal to achieve a smoke-free future. I am very proud of the progress we have made to date, and I am confident about achieving more in the future.”
PMI has also been recertified as a global EQUAL-SALARY organization for the second time since 2019 by the independent EQUAL-SALARY Foundation. The recertification verifies that PMI continues to pay female and male employees equally for equal work in the more than 90 markets where PMI operates.
The EQUAL-SALARY Foundation is an independent, nonprofit organization based in Switzerland. The EQUAL-SALARY certification verifies that organizations have sustainable policies and practices to ensure that they pay their male and female employees equally for equal work.
May 12, 2022
Swedish Match Accepts PMI’s $16 Billion Offer

Photo: Swedish Match
Swedish Match’s board of directors has accepted Philip Morris International’s offer of SEK161.2 billion ($16.14 billion), according to The Wall Street Journal. The deal is subject to shareholder approval.
PMI hosted a live audio webcast today to discuss the offer. An archived copy of the webcast will be available at www.pmi.com/investors until 5 p.m. ET on June 9, 2022.
“We are pleased to announce this exciting next step in Philip Morris International’s and Swedish Match’s trajectory toward a smoke-free future,” said PMI CEO Jacek Olczak in a statement. “Underpinned by compelling strategic and financial rationale, this combination would create a global smoke-free champion—strengthened by complementary geographic footprints, commercial capabilities and product portfolios—and open up significant platforms for growth in the U.S. and internationally.
“Swedish Match’s dedicated employees and management have steadfastly pursued the company’s vision of a world without cigarettes while delivering very strong results. We look forward to building upon this success and joining forces to accelerate our shared smoke-free mission.”
In 2016, PMI announced its new mission to replace cigarettes with science-based, less harmful alternatives as soon as possible, and the company says it has made considerable progress toward that goal. While in 2015, essentially all of PMI’s net revenues came from cigarettes, last year nearly 30 percent came from smoke-free products. By 2025, PMI aims to be a predominantly smoke-free company, with more than half of its net revenues coming from such products. PMI says it has built world-class scientific assessment capabilities, notably in the areas of preclinical systems toxicology, clinical and behavioral research as well as postmarket studies.

Underpinned by compelling strategic and financial rationale, this combination would create a global smoke-free champion.
Jacek Olczak , CEO, PMI
Swedish Match embarked on its smoke-free journey two decades ago, starting with its decision to divest its cigarette business. PMI says it values how Swedish Match has relentlessly pursued tobacco harm reduction through its range of smoke-free products; received authorizations for its products via strict regulatory pathways in the U.S.; and reshaped the public health environment in countries such as Sweden and Norway.
“As PMI continues to evolve its business for the long term, it believes that the two companies would be a perfect pairing of strategic vision, culture and enterprise,” PMI wrote in a press note. “Together, the companies would be able to create a global, science-led smoke-free champion, combining expertise in heated tobacco and oral nicotine—including multiple MRTP [modified-risk tobacco product] authorizations—as well as PMI’s emerging presence in e-vapor products, to switch more adult smokers to better alternatives than the two could achieve as separate companies. Swedish Match would lead the combined company’s oral nicotine business.”
Financial analysts confirmed the deal has strategic merit, citing Swedish Match’s access to the lucrative U.S. market. Cigarette sales have been declining almost unabated for years because of the health hazards and the stigma attached to smoking. Meanwhile, “modern oral” products, such as nicotine pouches and lozenges, are driving growth in the oral tobacco category, which includes traditional chewing tobacco and moist snuff. Swedish Match’s Zyn pouch leads the U.S. modern oral category with a volume market share of 64 percent in 2021.
According to PMI, the combination would immediately enhance PMI’s already strong growth profile and support additional opportunities in the U.S. and internationally over time. It is also expected to be accretive to adjusted diluted earnings per share before any synergies and excluding transaction-related costs as well as the amortization of acquired intangibles. Swedish Match’s operating cash flow comprises meaningful U.S. dollar net income, thereby improving PMI’s currency profile.
From January through March 2022, Swedish Match’s sales and operating profit from product segments increased on the back of continued strong momentum for the U.S. smoke-free business, according to the company’s interim report.
Group sales increased by 10 percent to SEK4.89 billion ($492.05 million). In local currencies, sales increased by 2 percent for the first quarter.
Operating profit from product segments increased to SEK2.12 billion. In local currencies, operating profit from product segments decreased by 7 percent for the first quarter.
Profit after tax amounted to SEK1.49 billion.
PMI says it intends to preserve and develop Swedish Match’s operational presence in Sweden, where much of the company’s skills base is located, as well as in Richmond, Virginia, the site of the head office for Swedish Match’s U.S. Division. PMI has no plans to divest Swedish Match’s Lights business.
May 11, 2022
Habanos Reports Record Turnover

Photo: Habanos
Habanos reported a turnover of $568 million in 2021, up 15 percent growth over the previous year.
“The 2021 results confirm the solid path we are on, despite the crisis caused by Covid-19. Last year we surpassed the $500 million mark for premium cigar sales worldwide, an all-time record for the category and a testament to the enormous potential of our business,” Habanos wrote in a statement attributed to its co-presidents, Inocente Núñez Blanco and Luis Sánchez-Harguindey Pardo de Vera.
“We are very proud to lead the premium cigar category and to continue to grow despite the situations experienced over the past two years,”
In terms of volume, Habanos, top markets were Spain, China, Germany, France and Switzerland. Europe remains Habanos’ main regional market, with 59 percent of global sales volume, followed by Asia Pacific (16 percent), America (14 percent) and Africa and the Middle East (11 percent).
“At Habanos, we maintain our commitment to offer the best experience to our aficionados, exclusive products and novelties, all in keeping with the quality, tradition and unique origin that make our Habanos a luxury product appreciated all over the world,” Commercial Vice President Leopoldo Cintra González and Vice-President of Development José María López Inchaurbe wrote in a press note.
“Our aficionados have remained loyal to Habanos and their tastes and, in many cases over the past year, they have incorporated into their domestic consumption vitolas and brands that used to be part of a more social consumption.”
According to Habanos, the Covid-19 pandemic has changed consumer habits. However, working with its distributors, the company said it was able to keep alive smokers’ passion for Habanos with a combination of product launches, virtual events and—when possible—face-to-face events.
While strong demand, in combination with the pandemic, has delayed the supply of some of Habanos’ bestselling vitolas, the company managed to export 38 new products in 2021. Habanos says it the supply situation has gradually improved after the first quarter of 2022.
Following the pandemic-related cancelation of the Habanos Festival in 2021 and 2022, the company presented several new products, including : Cohiba Ambar Cohiba Ideales and Cohiba Edición Limitada 2021, at is virtual Habanos World Days.
Habanos will commemorate the 55th anniversary of its prestigious Cohiba brand on Sept. 9 in Havana.
May 10, 2022
PMI Mulls Offer for Swedish Match

Photo: SecondSide
Philip Morris International and Swedish Match confirmed that they are talking about a possible offer by PMI for Swedish Match.
“The discussions are in progress, and it is uncertain whether an offer will be made,” PMI wrote in a statement. “PMI intends to make no further comment regarding the discussions unless and until it is appropriate to do so.”
“There can be no certainty that an offer will be made,” Swedish Match wrote in a press note.
The statements were made in response to market speculation, first reported in The Wall Street Journal, about a possible deal.
Swedish Match has a market capitalization of SKR120.92 billion ($11.99 billion), and Philip Morris is valued at about $154 billion.
Financial analysts said a deal has strategic merit for PMI given the attractive U.S. market. The U.S. is the world’s most lucrative nicotine market, with strong and highly predictable cash flows.
Morgan Stanley said that purchasing Swedish Match could accelerate PMI’s smoke-free transition. “Swedish Match is one of the few larger scale tobacco assets with a meaningful smoke-free business and attractive growth profile,” the investment bank wrote in a note to investors. Morgan Stanley believes Swedish Match could increase PMI’s smoke-free revenue from 29 percent in 2021 to 44 percent by 2025.
PMI aims to generate about 50 percent of its revenue from smoke-free product by 2025.

Purchasing Swedish Match could accelerate PMI’s smoke-free transition. (Photo: Swedish Match)
Goldman Sachs, too, was enthusiastic about the opportunities presented by a possible tie-up. A deal would provide PMI access to the fast-growing and high-margin U.S. oral nicotine pouch category, in which Swedish Match’s Zyn is the market leader, with a volume share of 64 percent in fiscal 2021. Goldman Sachs expects the U.S. nicotine pouch category to reach $4 billion retail sales value by 2025.
What’s more, buying Swedish Match would provide PMI with a platform to bring its Veev vapor product to the U.S. once approved by the Food and Drug Administration. This would be beneficial because PMI’s current partner, Altria Group, is unable to distribute Veev in the U.S. due to its stake in Juul Labs.
Purchasing Swedish Match would also provide PMI with potential distribution for IQOS in the U.S. and allow it to capture the product’s full revenue and margins in the event that Altria loses the right to distribute IQOS, according to Goldman Sachs. Altria’s IQOS distribution deal expires in April 2024, but PMI and Altria currently disagree about whether Altria has thus far met the milestones to earn the renewal option for an additional five-year deal.
The U.S. currently bans IQOS imports following an intellectual property dispute with BAT.
Acquiring Swedish Match would also provide PMI with a move diversified geographic exposure, reducing the impact of swings in currency exchange rates.
While considering a potential deal positive for PMI, Goldman Sachs says it could be potentially negative for Altria as PMI could evolve from a partner to a formidable competitor on Altria’s home turf. Morgan Stanley said it would also make the long-mulled recombination of PMI and Altria less likely.
May 10, 2022
Vector Announces First-Quarter Results

Photo: MIND AND I
Vector Group released its first-quarter 2022 results for the quarter ended March 31, 2022.
Consolidated revenues were $312 million, an increase of 15.1 percent compared to the prior year period. Tobacco Segment revenues were $309 million, an increase of 15.1 percent compared to the prior year period.
Reported net income attributed to Vector Group was $32.5 million compared to $32 million in the previous year. Adjusted net income from continuing operations was $26.6 million compared to $34.9 million in the prior year period. Reported operating income was $75.1 million, a decline of $0.8 million compared to the prior year.
Tobacco segment operating income was $77.6 million, a decline of 4.9 percent compared to the prior year, attributable to the investment in Montego’s significant volume and market share growth.
“Vector Group delivered strong tobacco business revenue performance in the first 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 timely investments in expanding our price-fighting Montego brand further demonstrate our proven long-term strategy of optimizing long-term profit through the effective management of volume, pricing and market share growth.”
May 10, 2022
Aspire Withdraws NYSE Listing Application

Photo: kmiragaya
Shenzhen-based Aspire Global has asked U.S. regulators to withdraw its New York Stock Exchange (NYSE) listing application. The move comes as Beijing clamps down on the growth of vaping companies, mandating pre-approval for initial public offerings and restricting foreign investment.
Aspire filed a withdrawal request to the Securities and Exchange Commission on May 9, without providing a reason for the decision in its filing, according to the South China Morning Post. It had originally planned to sell 15 million shares at $7 to $9 each, and had applied to trade on the Nasdaq exchange under the ticker “ASPG.”
Aspire applied for a Nasdaq listing last June, and updated its draft prospectus in January this year. The company was expected to raise $135 million. Its withdrawal comes as recent rules introduced in China make expansion and distribution more challenging for e-cigarette manufacturers.
Other rules introduced last month include a ban on foreign investors in a sector that once attracted venture capital giants such as Sequoia Capital and IDG. Manufacturers and retailers must also get a license before they can produce and market their products. The government banned online advertising in late 2019, and sales in shops are restricted.
More than half of Aspire Global’s sales in 2021 were generated from Europe, with China and the U.S. accounting for 18.5 percent and 10 percent respectively, according to the company’s draft prospectus. In the U.S., Aspire has been marketing its cannabis vaping product, Ispire, since late 2020. “Our strategy is … directed at increasing our e-cigarette vaporizer technology products and developing our cannabis vaporizer technology products,” the company stated in its draft prospectus.
May 10, 2022
Taat Preparing to Launch in Switzerland
Taat Global Alternatives is preparing to introduce its tobacco-free cigarettes in Switzerland
In a press note, the company announced that it is working with a tobacco distributor with a presence in Zurich and Zug to coordinate a near-term launch of Taat Original, Smooth and Menthol in Switzerland with a primary objective of capitalizing on recent changes to Switzerland’s market landscape causing tobacco brands to be prohibited from advertising in public places.
Although tobacco advertising has long been banned in most Western markets, Switzerland was among the last to allow tobacco product advertisements in public spaces (e.g., on billboards, in movie theaters and at events such as music festivals). On Feb. 13, 2022, voters in Switzerland overwhelmingly approved legislation forbidding tobacco companies from advertising in public spaces.
Taat Global Alternatives has been exploring several launch opportunities throughout Europe, particularly after finalizing the advanced formulation of its Beyond Tobacco product using reconstituted material.
Taat says its advanced Beyond Tobacco formulation yielded excellent feedback from tobacco wholesalers in markets to include Germany, Poland, France and Switzerland. Pending final regulatory approval of the Taat product by Swiss authorities, the company expects Switzerland to be the first new international market to be added for Taat in 2022 following the pending finalization of a distribution agreement and initial purchase order. Switzerland currently has a higher adult smoking rate than the European average at 27 percent, more than double the national rate of 12.5 percent in the United States.
Because Taat’s offerings contains no tobacco, the company expects to enjoy a comparatively high degree of freedom to market the products in Switzerland.
In the United States, Taat has advertised its brand as a better alternative to tobacco cigarettes through methods such as in-store displays at the point of sale as well as sports sponsorships (e.g., a stock car racing team, the entourage of world champion boxer Floyd Mayweather). The company intends to strategically place German-language advertisements as part of its launch plan in Switzerland, with French-language variations for markets in western Switzerland such as Geneva, the country’s second-ranking city by population.
“As the tobacco industry continues to evolve, it is a major part of our playbook to jump on opportunities to do things that tobacco companies cannot do as a way for Taat to gain a competitive advantage. Switzerland was already a target market for a future Taat launch due to its relatively high adult smoking rate of 27 percent and its optimal location in the center of Europe, sharing a border with five other nations.
“However, with Switzerland set to put an end to tobacco advertising based on a vote for new legislation last quarter, we recognized this impending change for the timely opportunity that I believe it to be. We are working closely with a Swiss tobacco distributor who is now in the final stages of obtaining government approval for Taat to be sold in Switzerland, and I am excited for the next steps as we continue to build out our tobacco industry footprint.”
May 9, 2022
Bangkok to Impose Tobacco Tax

Photo: anankkml | Adobe Stock
According to the Bangkok Metropolitan Administration (BMA), the city will implement its first-ever tobacco tax. The new structure will tax each cigarette up to THB0.10 ($0.003) satang per stick, according to Thaiger.
The Tobacco Tax for Local Maintenance is intended to limit tobacco consumption, and the tax collected will be used “for maintenance of Bangkok city,” according to Suthathip Son-iam, permanent secretary of the BMA.
Other jurisdictions in Thailand already have tobacco taxes in place, and many companies previously warehoused their cigarettes in Bangkok to avoid paying taxes prior to distribution.
“The new tobacco tax can be announced after the city finished amending the Bangkok Administration Act of 1985 to include tax collection and other related clauses under the Plans and Process of Decentralization to Local Government Organization Act of 1999,” according to Son-iam. Previous attempts to amend the act failed.
There is no date for the tax’s introduction as of yet; the Cabinet must approve it first.
May 6, 2022
Hong Kong Police Make First E-Cig Ban Arrests

Photo: Svetliy | Adobe Stock
Hong Kong police arrested two men, who are being held in custody under suspicion of selling and possessing a poison in Part 1 of the Pharmacy and Poisons Regulations as well as selling alternative smoking products, according to a report in the South China Morning Post. The arrests follow the implementation of a new e-cigarette ban.
The new law went into effect last weekend, banning the import, sale and manufacture of electronic cigarettes, heated-tobacco products and herbal cigarettes. Those caught breaking the law are subject to a maximum fine of HKD50,000 ($6,370) and six months’ imprisonment. Under the law, consumers are still allowed to use vaping products.
Police seized 94 boxes of suspected nicotine-containing electronic cigarette cartridges and 74 smoking devices from a mobile retail outlet in Mong Kok.
“The government appeals to smokers to quit smoking as early as possible for their own health and that of others,” said a Department of Health spokesperson.
May 6, 2022
Hausmann Retires From Pyxus International

Photo: jovannig | Adobe Stock
Carl L. Hausmann intends to retire from the Pyxus International’s board of directors effective as of the 2022 annual shareholders meeting, according to a company press release.
Hausmann was appointed to Pyxus’ board of directors in October 2020 and serves on the environmental, social, governance and nominating committee as well as the audit committee. Additionally, Hausmann served as a member of the board of directors of Pyxus International’s predecessor, Alliance One International, from June 2013 to August 2018.
“On behalf of the board of directors, as well as Pyxus’ management team, we thank Carl for his guidance and many contributions over the years,” said Pyxus President and CEO Pieter Sikkel. “His extensive experience in the agricultural industry, thorough understanding of our operations and support of our ESG framework has been instrumental in establishing the foundation necessary to position Pyxus for success moving forward. It has been a privilege to work with Carl during both of his board appointments, and we wish him all the best in the years to come.”
The board of directors plans to fill Hausmann’s seat with an independent director, though this may not occur until after the company’s 2022 annual shareholders meeting.
May 6, 2022