Category: News This Week

Philip Morris Bids for Factory License in Egypt

Photo: Konstantin
Philip Morris International made a “technical” offer for a new cigarette factory license in Egypt, reports Mubasher.
British American Tobacco; Al-Mansour Group, the distributor of Imperial Tobacco products; and Japan Tobacco International failed to submit their offers, asking to delay the process instead, according to Ibrahim Embaby, the head of the tobacco division at Egypt’s Industrial Development Authority.
The three companies have conservations regarding the bidding terms, which were amended earlier. Their requests will be submitted to Egypt’s prime minister, Embaby said.
One of the companies also asked for separating the new licenses for conventional cigarettes and heated-tobacco products, he added.
August 3, 2021
Covid Border Closures Yield Tax Windfall

Photo: marcyano79
The U.K. treasury received a £1.35 billion ($1.88 billion) windfall last year as Covid-related border closures made cigarette smuggling nearly impossible, reports The Express.
The huge rise in duty has prompted tobacco manufacturers to push for tougher sanctions on those involved in the smuggling, production and distribution of illegal cigarettes.
“Covid stripped some illegal volumes into the market, and there was a revenue bounce for the Treasury as a result,” said Ian Howell, fiscal and regulatory affairs manager for Japan Tobacco International.
“It shows how we need to tackle illicit tobacco as every illegal product that is sold takes money away from the government and the increased revenue during lockdown shows the scale of it.”
HM Revenue and Customs estimates that the sale of illegal tobacco products has resulted in a tax revenue loss of more than £47 billion since 2000.
An HMRC spokesman said the agency would continue to work with authorities to tackle the illicit tobacco trade problem.
August 3, 2021
SRNT Urged to Undo Industry Exclusion

David O’Reilly (Photo: BAT)
BAT has asked the board of directors of the Society for Research on Nicotine and Tobacco (SRNT) to reverse its decision to ban employees of the tobacco industry from attending the society’s annual conference in 2022.
“We share in SRNT’s stated commitments to the open dissemination of rigorous, peer-reviewed nicotine and tobacco science, with the ultimate goal of reducing public health impact of tobacco use,” wrote BAT Director of Scientific Research David O’Reilly in a letter to the SRNT.
“However, your recent exclusion of employees of the tobacco industry and the contributions of tobacco industry scientists to dialogue at the annual meeting is contrary to your code of conduct and guiding principles.”
Exclusion, O’Reilly noted, impedes “the generation and dissemination of new knowledge concerning nicotine and tobacco.” “In an FDA-regulated market, the industry must routinely provide FDA regulators with scientific evidence about its products. As a result, some of the best science in the tobacco and nicotine space is being generated from tobacco companies,” he wrote.
Exclusion also undercuts the SRNT’s commitment to “open science without bias,” “promoting scientific dialogue” and “empowering members to make their own informed decisions,” according to O’Reilly. “The board’s decision contradicts the evidence-based principles that underpin the U.S. policy approach, which prioritizes science, irrespective of the source,” O’Reilly wrote.
“In light of our concerns, we respectfully request that the SRNT board reconsider its decision and reaffirm that ‘SRNT is committed to nicotine and tobacco researchers around the world.’”
August 2, 2021
Ukrainian Lawmakers Crack Down on Vaping

Photo: slava2271
Lawmakers in Ukraine passed a law on July 31 prohibiting the use of electronic nicotine-delivery systems (ENDS) in public places as well as advertising, sponsorship and promotion of e-cigarettes. The law also bans the sale of flavored e-liquids other than tobacco flavors.
Justifying their action, the parliamentarians referred to a recent World Health Organization report, which suggests that e-cigarettes are a gateway to smoking and that they are as harmful as conventional cigarettes, according to the Independent Women’s Forum. Lawmakers also claimed the flavor ban would reduce underage vaping in Ukraine.
In its July 27 report, the WHO lauds countries that have banned the sale and use of vaping devices.
Tobacco harm reduction advocates and vaping industry representatives denounced the WHO report as “nonsensical and dangerous.”
“The WHO has a long-standing anti-vaping stance and this latest attack on a sector that is literally saving millions of lives worldwide flies in the face of scientific evidence, common sense and harm reduction,” said John Dunne, director general of the U.K. Vaping Industry Association (UKVIA).
“This report demonstrates that, sadly, the WHO still doesn’t understand the fundamental difference between addiction to tobacco smoking, which kills millions of people every year, and addiction to nicotine, which doesn’t,” said John Britton, professor of epidemiology at the University of Nottingham.
August 2, 2021
IQOS Pauses Expansion After Patent Ruling

Photo: Kuznietsov Dmitriy
Philip Morris USA has paused U.S. expansion of its IQOS heat-not-burn (HnB) cigarettes following an unfavorable U.S. International Trade Commission (ITC) ruling, reports The Winston-Salem Journal, citing the company’s second-quarter report.
In April 2020, British American Tobacco subsidiaries R.J. Reynolds Tobacco Co., RAI Strategic Holdings and R.J. Reynolds Vapor Co. filed a patent infringement lawsuit against Philip Morris USA.
The complaint focuses on three HnB technology patents held by the company. An additional two patents are involved in a separate legal proceeding before the patent and trademark office.
In May, an ITC administrative law judge found that the IQOS system infringes two of the plaintiff’s patents and recommended imposition of a ban on the importation of the IQOS system.
On July 27, the ITC accepted review of the administrative law judge’s findings and recommendations on certain issues, including issues relating to the patent infringement claims and potential remedies, including a ban on the importation of the IQOS electronic device, Marlboro HeatSticks and component parts into the United States and on the sale of any such products previously imported into the United States.
The ITC’s ultimate order is subject to review by the U.S. Trade Representative and federal court. Due to this uncertainty, PM USA has delayed further expansion of IQOS and Marlboro HeatSticks.
IQOS is the only HnB product authorized for sale in the U.S., where it is sold by Altria. Last year, the U.S. Food and Drug Administration allowed the company to market IQOS as reducing consumers’ exposure to harmful chemicals found in cigarettes.
The IQOS products debuted in test markets in Atlanta, Georgia, in October 2019 and Richmond, Virginia, in November 2019.
During the second quarter, PM USA expanded retail distribution of Marlboro HeatSticks into the Triad and other metro areas of North Carolina as well as northern Virginia and Georgia.
The expansion contributed to Marlboro HeatSticks’ retail sales volume jumping by nearly 40 percent, including reaching a 0.8 percent market share for overall cigarettes in Atlanta as well as 0.5 percent in Charlotte.
July 30, 2021
BAT Invests in Bangladesh

Photo: Piotr Pawinski
BAT is investing BDT322 crore ($38 million) in its Savar, Bangladesh, factory to help meet growing demand from abroad, reports the Daily Star.
It’s the company’s second local investment in six months. In February, the cigarette manufacturer announced an investment of BDT192.50 crore to increase its manufacturing capacity.
Commercial operations at the plant are expected to start in October.
BAT Bangladesh in recent months sent products to China, the Maldives and other countries despite the challenges of the pandemic, according to company Secretary Azizur Rahman.
Net revenue from BAT’s Bangladeshi operations rose 25 percent to BDT3,841 crore. During the same period, its profits rose 43 percent to BDT862 crore.
Performance was driven by growth in volume offset by growth in operating expenses.
July 30, 2021
‘Young Vapers More Likely to Start Cigars’

Photo: Bette Ennen
A new study from the Truth Initiative revealed that people aged 15 to 21 who use e-cigarettes or have ever used Juul have over three-time higher odds of initiating use of cigars, little cigars or cigarillos (CLCCs) compared with those who never vaped.
The study is the first to find that using e-cigarettes strongly predicts future use of CLCCs and flavored CLCCs.
Young people who had ever used Juul had 3.3 times higher odds of using CLCCs for the first time from 2018 to 2019 compared to those who had not used e-cigarettes by 2018. This group had 2.5 times higher odds of using flavored CLCCs compared to nonflavored CLCCs. Many CLCCs are available in an array of flavors, such as mint, menthol and fruity flavors, which are similar to those found in many e-cigarette brands.
“We have long known that young people who vape are more likely to go on to smoke cigarettes, but these new data make it clear that e-cigarette usage can also predict other types of equally dangerous tobacco product use, including cigars, little cigars and cigarillos,” said Robin Koval, CEO and president of Truth Initiative, in a statement.
“E-cigarettes like Juul and its competitors have some of the highest nicotine content among e-cigarettes as well as youth-appealing flavors and as this study shows, create an easy on-ramp to nicotine addiction that can swiftly progress to smoking combustible tobacco, which is still the leading cause of preventable death in the U.S. That is how the tobacco industry is initiating a new generation into a lifelong addiction and why Truth Initiative is working to help hundreds of thousands of young people in their journey to quit nicotine.”
July 30, 2021
WHO ‘War on Nicotine’ Lambasted

Photo: Aleksey Novikov
Knowledge-Action-Change (KAC) condemned the recently released WHO Report on the Global Tobacco Epidemic, 2021, which describes e-cigarettes as harmful.
“The World Health Organization and its single most significant funder for anti-smoking efforts, U.S. billionaire Michael Bloomberg, have today sought to distract from years of failure under the WHO’s MPOWER tobacco control strategy by focusing instead on what U.K.-based public health agency Knowledge-Action-Change and other observers are calling a new ‘war on nicotine,’” KAC wrote in a press release.
“On publication of the WHO’s ‘eighth annual report on the global tobacco epidemic,’ the organization is continuing its misguided insistence that vapes (e-cigarettes), snus, nicotine pouches and heated-tobacco devices, collectively known as safer nicotine products, are a threat,” KAC wrote. “This ignores the growing international, independent evidence that they offer millions of adult smokers the opportunity to quit deadly combustible tobacco.”
“The WHO’s self-congratulatory focus on strategy over outcomes indicates the lack of vision and ambition underpinning the international tobacco control establishment,” said Gerry Stimson, co-director of the Global State of Tobacco Harm Reduction (GSTHR) project and emeritus professor at Imperial College, London. “This report offers no surprises and no hope for the world’s 1.1 billion smokers who need and deserve better.”
The GSTHR estimates that there are 68 million vapers worldwide, 20 million users of heated-tobacco products and 10 million snus users. By comparison, there are 1.1 billion smokers.
July 30, 2021
JT Ups Guidance After Strong Quarter

Masamichi Terabatake (Photo: JT)
Japan Tobacco reported revenue of ¥1.14 trillion ($10.45 billion) in the first six months of 2021, up 11.1 percent from the comparable 2020 period. Adjusted operating profit at constant currency increased 26.9 percent to ¥365.1 billion. On a reported basis, adjusted operating profit increased 24.5 percent to ¥358.2 billion. Operating profit was ¥322.1 billion, up 27.8 percent from the comparable six months in 2020.
JT revised its revenue and adjusted operating forecasts upward by ¥120 billion and ¥10 billion, respectively.
“JT Group delivered a robust performance in the first half, driven by strong business momentum. This was a result of continued market share gains in combustibles in many markets and continued tailwinds of strong industry volume trends due to travel restrictions in some mature markets,” said Masamichi Terabatake, president and CEO of the JT Group, in a statement.
“Considering this robust performance, we have revised our full year guidance upward.
“We have launched Ploom X, our next-generation device for heated-tobacco sticks in Japan, the world’s largest heated-tobacco market. Listening carefully to our consumers around the world, we have developed our first global model, offering a richer and enhanced taste, improved design and a more intuitive user experience. Ploom X will gradually be rolled out across other markets.
“We are also making steady progress on several initiatives announced in February this year, including the rollout of our new operating model for the combined one tobacco business as well as measures to strengthen competitiveness in the Japan market. These initiatives will act as a catalyst for future growth while we continue to offer products and services which exceed our consumers’ expectations.”
July 30, 2021
Altria Raises Guidance on Strong Six Months

Photo: Altria Group
Altria Group’s net revenue was $6.9 billion in the second quarter, up 8.9 percent compared to the same quarter in 2020. Net revenue was $13 billion in the first half of 2021, up 1.9 percent compared to 2020.
“Altria delivered outstanding results in the second quarter thanks to the continued strength of our tobacco businesses and the hard work of our highly talented employees,” said Billy Gifford, Altria’s CEO, in a statement. “Our teams have continued their commitment to ‘Moving Beyond Smoking’ by deepening their understanding of adult tobacco consumer preferences, expanding the awareness and availability of our smoke-free product portfolio and amplifying our voice on harm reduction within the scientific and public health communities.”
“With our strong financial performance in the first half, we have raised the lower end of our full-year 2021 adjusted diluted EPS guidance range and now expect full-year adjusted diluted EPS to be in the range of $4.56 to $4.62, representing a growth rate of 4.5 percent to 6 percent from a $4.36 base in 2020. This updated guidance reflects continued confidence in our tobacco businesses, investments in smoke-free products and the expected impact of the recently announced agreement to sell our Ste. Michelle Wine Estates business.”
July 29, 2021