Category: News This Week

  • New EPR Requirements for Companies Selling Tobacco and Nicotine Products

    New EPR Requirements for Companies Selling Tobacco and Nicotine Products

    A wave of new “Extended Producer Responsibility” (EPR) programs is beginning to impact companies placing packaged products, including tobacco products, on the market in U.S. states, including California, Colorado, Maine, Minnesota, and Oregon. 

    Kathryn C. Skaggs, a partner with Keller and Heckman, writes “The five EPR programs for packaging enacted thus far have different facets. However, at their core, each of the EPR programs requires companies that sell packaged products (with some limited exceptions) to join a newly formed, state-recognized organization (typically called a “Producer Responsibility Organization” or “PRO”) and pay annual dues based on the amount and type of packaging placed on the market in that state. California’s PRO, for one, must collect $500,000,000 annually from producers of covered products, like single-use packaging. Producers also will need to eventually meet certain sustainability goals for single-use packaging, such as ensuring compostability or recyclability of packaging or meeting minimum post-consumer recycled content targets. What is more, the EPR programs encompass not just primary packaging that directly contacts a good, but often shipping and display packaging as well.”

    EPR program obligations typically fall on the “producer” of the covered product, generally defined to be the brand owner that places a packaged good on the market. Accordingly, it is the companies marketing the finished products, not packaging companies, that will need to register as producers of tobacco product packaging in the states with packaging EPR programs.

    Certain state EPR programs – including Colorado’s and Minnesota’s – also include “paper products” as a covered product. While tobacco companies making roll-your-own (RYO) papers and other such paper-based products may be able to avail themselves of certain exemptions, they must assess this on a case-by-case basis.

    Skaggs says the existing EPR laws do not include any explicit exemptions for tobacco product packaging or paper used in tobacco products. Accordingly, absent another applicable exemption, tobacco product manufacturers are likely to meet the producer definition under the state EPR laws, and thus will need to register with applicable state PROs, pay dues based on the product packaging sold in the state, and eventually meet certain goals for the packaging.

    In complying with the state EPR schemes, the tobacco and nicotine product industries can expect to face not only supply chain challenges (e.g., the availability of post-consumer recycled content), but also possibly significant regulatory hurdles under the Family Smoking Prevention and Tobacco Control Act. Under the EPR programs, producers may need to make changes to product packaging to meet sustainability targets. Changes to the container-closure system for a legally marketed tobacco product may well require a new premarket authorization from the U.S. Food and Drug Administration (FDA), which can be a costly and timely endeavor. 

  • Stock Buybacks Underway

    Stock Buybacks Underway

    Several large tobacco industry stalwarts have continued with stock buyback programs this week.

    British American Tobacco announced the repurchase of 134,079 ordinary shares at an average price of 2,904.6775 pence per share as part of its ongoing buyback program. This move is aimed at reducing the number of shares in circulation, potentially increasing the value of remaining shares and benefiting shareholders. Following the completion of this transaction, the company will have 2,208,154,745 shares outstanding, with 133,266,206 held in treasury, thereby impacting shareholders’ notifications under regulatory guidelines.

    Imperial Brands PLC announced the repurchase and cancellation of 152,276 of its ordinary shares as part of its GBP 1.25 billion share repurchase program. This transaction, executed through Morgan Stanley on the London Stock Exchange, aims to reduce the overall number of shares in circulation, potentially enhancing shareholder value by increasing earnings per share.

  • Hawaii Introduces Generational Bill Against Tobacco Products

    Hawaii Introduces Generational Bill Against Tobacco Products

    The Hawaii State Senate introduced a bill on January 16 that would seek to implement a generational ban on tobacco and nicotine product purchases for anyone born after January 1, 2005.

    The bill, SB429, introduced by Sens. Karl Rhoads and Stanley Chang, would prohibit the possession or consumption of a tobacco product in a public place by a person born after that date. Violations for the consumer would include having their products seized and destroyed and would receive a fine ranging from $10 to $50, while the retailers who sold the products would face fines between $500 and $2,000. The bill has not yet been assigned to a committee, but if passed as written, would go into effect on Jan. 1, 2026.

    The bill states “’tobacco product, means any product made or derived from tobacco that contains nicotine or other substances and is intended for human consumption or is likely to be consumed, whether smoked, heated, chewed, absorbed, dissolved, inhaled, or ingested by other means.  ‘Tobacco product’ includes but is not limited to a cigarette, cigar, pipe tobacco, chewing tobacco, snuff, snus, or an electronic smoking device. ‘Tobacco product’ does not include drugs, devices, or combination products approved for sale by the United States Food and Drug Administration, as those terms are defined in the Federal Food, Drug, and Cosmetic Act.”

    The bill further explains, “The legislature also finds that a prohibition based on a person’s date of birth is fair to everyone—those who have not yet attained the age of twenty-one and cannot presently purchase tobacco will never be able to buy it, while the right to purchase tobacco will remain available to those who are legally permitted to do so and who may have already formed addictive habits as a result.”

  • Growers: Pakistan Government to Establish New Tobacco Board

    Growers: Pakistan Government to Establish New Tobacco Board

     Representatives of farmers in Khyber Pakhtunkhwa (KP), Pakistan, petitioned the Pakistan Tehreek-e-Insaf-led provincial government to establish the Pakhtunkhwa Tobacco Board through legislation to protect and safeguard the rights and interests of poor growers in the province.

     “According to Pakistan’s Constitution, agriculture is a provincial subject,” said Liaqat Yousafzai, central president of the Tobacco Growers Association Pakistan. “However, the federal government had illegally and unconstitutionally taken control of it. Now, under the downsizing policy, the federal government has decided to either abolish or transfer certain government departments and institutions to the provinces, including the Pakistan Tobacco Board (PTB).”

    He urged the provincial government to seize the opportunity and set up the Pakhtunkhwa Tobacco Board to stop the ongoing exploitation of growers at the hands of existing PTB and the multinational and national tobacco companies. Local leaders have long argued control of tobacco should be handed over to the province as per the constitution.

    The Tehreek-e-Ittehad Kashtkaran Pakhtunkhwa leaders, including TIKP’s chairman Arif Ali Khan, senior vice-chairman Dawood Jan Khan of Ismaila, vice-chairman Iqbal Khan of Shewa, general secretary Asfandyar Khan, joint secretary Shahab Khan, Ahmad Jan Kaka of Marghuz and others also attended the meeting.

    “Now that the federal government has decided to withdraw from it and transfer the Pakistan Tobacco Board to the province, it is the responsibility of the KP government to move forward and take the control of the province’s most lucrative crop, tobacco, into its own hands,” Khan said.

    The speakers said the existing PTB was established in 1968 but did not include any provisions for the protection of the interests of tobacco farmers. Some protections for farmers were added over time, however, “due to the federal government’s lack of interest and at the behest of tobacco companies, the implementation of these laws had not been carried out in recent years, and the tobacco crop has been under the control of multinational companies,” they said. 

  • FDA Authorizes 20 ZYN Pouch Products

    FDA Authorizes 20 ZYN Pouch Products

    Today, the U.S. Food and Drug Administration (FDA) authorized the marketing of 20 ZYN nicotine pouch products through the premarket tobacco product application (PMTA) pathway following an extensive scientific review. This is the first time the agency has authorized products commonly referred to as nicotine pouches, which are small synthetic fiber pouches containing nicotine designed to be placed between a person’s gum and lip. 

    The FDA determined that the specific products receiving marketing authorization met the public health standard legally required by the 2009 Family Smoking Prevention and Tobacco Control Act. This standard considers the risks and benefits of products to the population as a whole.

    “As a public health scientist and former Director of the Office of Science at FDA’s Center for Tobacco Products, I couldn’t be more excited for public health with FDA’s decision today,” Matt Holman, vice president of U.S. Scientific Engagement and Regulatory Strategy at PMI said on X. “Authorizing products that can help the nearly 30 million smokers in the United States switch to a better form of nicotine has the potential to save countless lives.”

    Among several key considerations, the agency’s evaluation showed that, due to substantially lower amounts of harmful constituents than cigarettes and most smokeless tobacco products, such as moist snuff and snus, the authorized products pose a lower risk of cancer and other serious health conditions than such products. The applicant also provided evidence from a study showing that a substantial proportion of adults who use cigarette and/or smokeless tobacco products completely switched to the newly authorized nicotine pouch products.

    “To receive marketing authorizations, the FDA must have sufficient evidence that the new products offer greater benefits to population health than risks,” said Matthew Farrelly, Ph.D., director of the Office of Science in the FDA’s Center for Tobacco Products. “In this case, the data show that these nicotine pouch products meet that bar by benefiting adults who use cigarettes and/or smokeless tobacco products and completely switch to these products.”

    Additionally, the FDA found that the applicant showed these nicotine pouch products have the potential to provide a benefit to adults who smoke cigarettes and/or use other smokeless tobacco products that is sufficient to outweigh the risks of the products, including to youth. As part of its evaluation, the FDA reviewed data regarding youth risk and found that youth use of nicotine pouches remains low despite growing sales in recent years. For example, the 2024 National Youth Tobacco Survey showed that 1.8% of U.S. middle and high school students reported currently using nicotine pouches.

    “It’s critical that the manufacturer market these products responsibly to prevent youth use,” said Brian King, Ph.D., M.P.H., director of the FDA’s Center for Tobacco Products. “While current data show that youth use remains low, the FDA is closely monitoring the marketplace and is committed to taking action, as appropriate, to best protect public health.”

    While today’s actions permit these specific tobacco products to be legally marketed in the U.S. to adults 21 and older, it does not mean these tobacco products are safe, nor are they “FDA approved.” There is no safe tobacco product; youth should not use tobacco products and adults who do not use tobacco products should not start. 

    The FDA will closely monitor the marketing and use of these products. To reduce the potential for youth exposure to advertising of these products, the authorizations impose stringent marketing restrictions for digital, television, and radio, including measures to ensure ads are carefully targeted to adults ages 21 and older and the demographics of the audiences reached by the ads are tracked and measured by the manufacturer. The company also stated that they intend to implement additional measures to restrict youth access, reduce youth appeal, and limit youth exposure to their labeling and advertising, such as: not using mass-market advertising on radio and TV; employing actors/models for marketing that are no younger than 35 years old, or styled to appear under 35; and avoiding any content designed to target youth, including characters, images or themes. The agency may suspend or withdraw a marketing granted order issued under the PMTA pathway for a variety of reasons if the agency determines the continued marketing of a product no longer meets the necessary public health standard, such as if there is a notable increase in youth initiation.

    The products for which the FDA issued marketing granted orders are the following, each with two nicotine strengths (3 milligrams and 6 milligrams): ZYN Chill, ZYN Cinnamon, ZYN Citrus, ZYN Coffee, ZYN Cool Mint, ZYN Menthol, ZYN Peppermint, ZYN Smooth, ZYN Spearmint and ZYN Wintergreen. Importantly, today’s actions are specific to these products only; the authorizations do not apply to any other nicotine pouch or other ZYN products. Additionally, the authorization does not allow the company to make reduced-risk claims about the authorized products, which would require a modified-risk tobacco product application.

    Today’s actions are the latest of many the FDA has taken to ensure all new tobacco products marketed in the U.S. undergo science-based review and have received marketing authorizations by the agency. To date, the FDA has received applications for nearly 27 million products and has made determinations on more than 26 million of those applications. This includes authorization of other flavored oral tobacco products, including nicotine mints and chews in 2021 and mint smokeless tobacco in 2015. To find a list of tobacco products that may be legally marketed and sold in the U.S., visit the FDA’s Searchable Tobacco Products Database.

  • Wisconsin Targets Menthol

    Wisconsin Targets Menthol

    On January 15, the Wisconsin Department of Health Services (DHS) launched a targeted digital education campaign highlighting the dangers of menthol tobacco products. The campaign targets groups the department feels have been “disproportionately targeted” by menthol marketing, including Blacks and other people of color, youth, young adults, and members of the LGBTQ+ community.

    The DHS and other health officials say the commercial tobacco industry is using tactics like high-density advertising – such as sponsorships of events and music festivals – retail promotions, and the sale of flavored products to get people addicted to smoking.

    “Over generations, menthol in tobacco has had a catastrophic health impact on Wisconsinites,” said State Health Officer Paula Tran. “Each year 7,900 Wisconsinites die from tobacco use. National studies have shown that if menthol cigarettes were no longer available in Wisconsin, an estimated 17,200 adults in the state would quit smoking.”

    The DHS says menthol is used by nine of 10 Black Wisconsinites who smoke, contributing to the three leading causes of death in the community: heart disease, cancer, and stroke. It also said the prevalence of smokers in Black communities is “sometimes nearly twice as high compared to other communities across the state.”

    “The result will be that we will continue to see generations of people dying from smoking-related illnesses or suffering long-term addictions,” said Vicki Huntington, section manager with the DHS Commercial Tobacco Prevention and Treatment Program. “Through this awareness campaign, we want to inform people about the harm that comes from menthol tobacco use and call attention to the tactics that the industry is using to get people addicted.”

  • BAT Shifts Voting Rights

    BAT Shifts Voting Rights

    British American Tobacco (BAT) announced a change in the voting rights composition involving The Capital Group Companies, Inc., which now holds 15.075429% of the voting rights, up from a previous 14.040509%. This adjustment in holdings indicates a notable change in the company’s stakeholder landscape, potentially impacting its governance and decision-making processes.

    The Los Angeles-based Capital Group is BAT’s largest shareholder, growing from a 13% stake in July 2024 and 14% stake in December 2024.Capital Group is the world’s largest active fund manager, with $2.7 trillion AuM (assets under management).

  • China: Former Tobacco Head Pleads Guilty on Bribery Charges

    China: Former Tobacco Head Pleads Guilty on Bribery Charges

    Ling Chengxing, former director of the State Tobacco Monopoly Administration of China, pleaded guilty and expressed remorse on charges of bribery and abuse of power in a Changchun court today. He was charged with illegally accepting property worth over 43.1 million yuan ($5.9 million).

    Previously, Ling also held several other high-level positions, including vice-governor of Jiangxi province, the Party committee member of the Ministry of Industry and Information Technology, and general manager of China National Tobacco Corporation.

    According to accusations by the procuratorate in Changchun, between 2006 and 2023, Ling took advantage of his positions to seek benefits for certain units and individuals in project contracting, business operations, and job adjustments. He was also accused of malpractice and abuse of power during the facilitation, review of related investments, and acquisition of equity, causing significant losses to state-owned companies and resulting in particularly severe damage to national interests.

    The court will conclude the trial at a later date.

  • Report: E-Cig Market to Reach $23B by 2029

    Report: E-Cig Market to Reach $23B by 2029

    The E-cigarette market is projected to grow from its current $18.98 billion to $23.15 billion by 2029, an increase of 3.4%, that according to the “E-Cigarette Market Research Report 2020-2029” that was released today.

    The global e-cigarette market is highly competitive, characterized by the presence of key players such as Altria Group, British American Tobacco (BAT), Imperial Brands, and Japan Tobacco International (JTI). With the declining sale of traditional cigarettes due to increasing health awareness and regulatory pressures, such companies have aggressively entered the e-cigarette market, pushing innovation and technology.

    The global e-cigarette market continues to see user-friendly products introduced that are popular with beginners, as well as open systems including mods that offer greater customization options for experienced vapers. Advancements in battery technology and improvements in e-liquid formulation have likewise helped advance the vaping experience.

    Governments, non-profit organizations, and healthcare providers have for decades been pushing awareness against the health risks of smoking, which is positively impacting the e-cigarette market.

  • Zimbabwe farmers nearing shisha tobacco target

    Zimbabwe farmers nearing shisha tobacco target

     Cavendish Lloyd Zimbabwe’s chief executive officer, Dr. Rebecca Manford, welcomed the government’s extension of the seedbed destruction date to January 15, saying it would allow more farmers to continue transplanting as the nation approaches its shisha tobacco target.

     “For the 2024-25 season, the target is 514 hectares, and so far, 450 have been planted, making the set goal achievable,” Manford said. “Cavendish Lloyd has contracted 149 growers to produce a target yield of 775,000 kilograms, and with the ongoing support to farmers, we are optimistic of achieving this goal while ensuring a high-quality crop.”

    Now in its third year in production in Zimbabwe, Manford said the nation could become a significant player in the global shisha tobacco market with the crop driving economic growth and farmer empowerment. For this to happen, the farmers need the government to continue with its incentives which include expanding irrigation infrastructure, helping secure new export markets, and investing in research to develop high-yielding varieties, as well as subsidized inputs, loans, or grants. Cavendish Lloyd is currently the only registered and licensed shisha merchant by the Tobacco Industry and Marketing Board (TIMB).

    Statistics from TIMB show commercial shisha production rose from 110 hectares in 2022-23 to 407 hectares in 2023-24, totaling nearly 400,000 kilograms worth US$1.3 million.

    Prolonged dry spells and insufficient irrigation facilities made farmers hesitant to jump into full-scale production, however, recent rains have made a positive impact on the crop. Cavendish Lloyd has begun an awareness campaign to attract more growers, that includes technical training and engagement with stakeholders to promote sustainable production solutions.