Category: News This Week

  • Brookline Bans Sales to Those Born After 2000

    Brookline Bans Sales to Those Born After 2000

    Photo: Ryan

    The town of Brookline, Massachusetts, will prohibit the sale of all tobacco-related products to anybody born after Jan. 1, 2000, reports Filter. The restriction, the first of its kind in the United States, is designed to prevent future generations from using not only tobacco but also nicotine.

    The law also prohibits individuals and companies from selling vapor products to anyone in that age category.

    In November 2020, Brookline officials voted overwhelmingly for the “first-in-the-nation tobacco-free generation,” paving the way for the current ban. On July 19, Massachusetts Attorney General Maura Healey confirmed that the measure did not interfere with any state laws or the constitution of the Commonwealth of Massachusetts, ensuring its legality.

    Public health groups lauded Brookline’s decision, which they view as a potential model for others to follow.

    “In addition to preventing a new generation from being addicted to nicotine—and facing the long-term health issues that come with it—Brookline citizens who smoke will be further motivated to quit as smoking becomes rarer around them,” said Lauren Huber, the executive director of Action on Smoking and Health (ASH), in a statement.

    Harm reduction proponents, by contrast, lambasted the idea. “Not only will enforcement of this become a nightmare, but it continues to push prohibitionist policies that inevitably send people to underground, unregulated markets,” said Matt Sutton, the director of media relations for the Drug Policy Alliance.

    “The whole measure is ridiculous, especially if you imagine how it will function in 2030 or 2040,” echoed Clive Bates, a tobacco control expert and former director of ASH (U.K.). “It infantilizes adults, sets up illegal trade between older and younger age groups, and ultimately aims at creeping prohibition, with all the crime and abuse that will bring.”

    Brookline has a history of aggressive tobacco control. The suburb was an early adopter of indoor smoking bans, raised the legal age to purchase tobacco to 21 in 2014 and capped the number of tobacco licenses for retailers in the market. In the spring of 2019, Brookline banned the sale of flavored tobacco and vaping products, including menthol. Six months later, Massachusetts passed the same kind of flavor ban statewide.

  • Patent for ‘Bulb’ Technology Cartridge

    Patent for ‘Bulb’ Technology Cartridge

    Photo: phive2015

    Healthier Choices Management Corp. (HCMC) has received a patent for its “bulb” technology vaping cartridge, which avoids a potentially toxic reaction between e-liquid, cannabis or CBD oils and the heated metal components of the cartridge.

    “The issuance of this patent is significant in our attempts to make vaping safer,” said Jeff Holman, CEO of HCMC, in a statement. “Studies have shown that liquids and oils can act as solvents when they sit in direct contact with a metal coil, thereby leeching out heavy metals, which can then be ingested during the vaping process. This breakthrough technology has the potential to completely eliminate this problem.”

    Holman compared the technology to a light bulb. “A light bulb has a metal filament inside, but you can only touch the outer glass, which gets hot from the heat of the filament,” he said. “Similarly, the metal coil being encased in a quartz ‘bulb’ prevents the liquid or oil from coming in direct contact with or ‘touching’ the metal coil. The metal coil heats the quartz, the substance is in contact with the heated quartz, and the vapor is produced without the substance ever touching the metal coil directly.”

  • PMI Reports Higher Quarterly Revenues

    PMI Reports Higher Quarterly Revenues

    Photo: PMI

    Philip Morris International reported net revenues of $7.59 billion in the quarter that ended on June 30, 2021, up 14.2 percent from the net revenues reported in the comparable 2020 quarter. Adjusted net revenues were $7.84 billion compared with $6.65 billion in the 2020 second quarter. Second-quarter 2021 operating income stood at $3.13 billion versus $2.73 billion for the previous year’s second quarter. Adjusted quarterly operating income was $3.45 billion, up from $2.8 billion a year ago.

    The company shipped 180.49 billion cigarettes and heated-tobacco units during the 2021 second quarter, 6.1 percent more than during the 2020 second quarter. Sales of heated-tobacco units increased 30.2 percent from the 2020 quarter to 24.36 billion units. Combustible cigarette sales increased by 3.2 percent to 156.14 billion sticks over the same period.

    “We delivered strong financial performance in the quarter, with adjusted diluted EPS of $1.57 up by 17.8 percent on an organic basis,” said Jacek Olczak, CEO of PMI, in a statement.

    “IQOS continued its impressive growth, surpassing an estimated 20 million total users by quarter-end and driving sequential quarterly heated-tobacco unit in-market sales volume growth of 8 percent. We expect this momentum to be bolstered by the launch of IQOS ILUMA starting next month in Japan.”

    “We are increasing our full-year adjusted outlook, with organic net revenue growth of 6 percent to 7 percent and adjusted diluted EPS growth of 12 percent to 14 percent on the same basis, mainly reflecting improved total industry volume. This outlook further supports our recently announced three-year share repurchase program of up to $7 billion.”

    “In addition, the proposed acquisitions of Fertin Pharma and Vectura Group will reinforce our long-term growth potential in the beyond nicotine space.”

    PMI’s adjusted net revenues exclude the impact related to a Saudi Arabia customs assessments. In June 2021, the Customs Appeal Committee in Riyadh notified the company’s distributors in Saudi Arabia of its decisions to largely reject their challenges of Saudi Arabia Customs General Authority assessments.

    Based on these decisions, PMI recorded a pre-tax charge of $246 million in the second quarter of 2021, resulting in a $0.14 per share adverse impact on the company’s reported diluted earnings per share. In accordance with U.S. generally accepted accounting principles, the charge was recorded as a reduction of net revenues on the consolidated statement of earnings.

  • Russia Bans Brazilian Leaf Over Pest Concerns

    Russia Bans Brazilian Leaf Over Pest Concerns

    Photo: Tobacco Reporter archive

    Russia has banned tobacco imports from Brazil and four other countries as of Monday, July 19, reports Datamar News, citing authorities’ concerns about infestation.

    The announcement was made on July 15 by the Russian federal service for veterinary and phytosanitary surveillance, which cited concerns about the phytosanitary status of tobacco from various countries destined for the Russian Federation and the systematic violation of the phytosanitary requirements of the Eurasian Economic Union (EAEU).

    To date this year, Russian inspectors have detected the Megaselia scalaris fly in 28 tobacco shipments, according to a statement published on the website of the Russian Trade Representative in Brazil. Megaselia scalaris is considered a quarantine pest throughout the EAEU.

    Brazil’s Ministry of Agriculture said it had not been officially informed about the decision. According to data from the ministry, Brazil exported almost 20,000 tons of leaf tobacco and related products valued at $43.7 million to Russia in 2020.

    The ban comes at a bad time for Brazil’s leaf merchants, many of whom are in the shipping stage of the tobacco season and have been forced to postpone shipments to a major market. 

  • Sgambelluri Named EVP of Sales at ITG Brands

    Sgambelluri Named EVP of Sales at ITG Brands

    Photo: tadamichi

    ITG Brands has appointed Shane Sgambelluri executive vice president of sales. Sgambelluri will report to Kim Reed, who previously held the top sales role before being named president and CEO on June 1. Sgambelluri has more than 23 years of leadership experience in the consumer packaged goods industry and most recently served as vice president of Kellogg Company’s U.S. grocery business.

    At Kellogg, Sgambelluri was responsible for $2.5 billion in sales, representing over 25 percent of the company’s business. He oversaw Kellogg’s grocery portfolio serving national, regional and independent customers and led strategic joint business planning partnerships with major accounts that included Wal-Mart, 7-Eleven and Walgreens. Prior to his nearly two decades with Kellogg, Sgambelluri held positions at two national broker agencies, Crossmark and Advantage Sales & Marketing.

    “Shane’s dedication to strong customer relationships and creative solutions to win in the marketplace will immensely benefit our sales operation while his experience managing large, diverse teams will be an asset to our dynamic sales force,” said Reed in a statement. “I am thrilled to welcome Shane to the ITG Brands team.”

  • Aspire Sets Terms for Public Offering

    Aspire Sets Terms for Public Offering

    Photo: Aspire Global

    Aspire Global, an e-cigarette and vaping brand, announced terms for its IPO on July 16.

    The Shenzhen, China-based company plans to raise $120 million by offering 15 million shares at a price range of $7 to $9, according to Renaissance Capital. At the midpoint of the proposed range, Aspire Global would command a market value of $1.3 billion.

    Aspire is a vertically integrated provider of e-cigarette vaporizing technology. Its tobacco vaping products are sold through a distribution network of more than 150 distributors in 30 countries. In December 2020, the company also commenced the marketing of cannabis vaping technology products in the U.S.

    Aspire Global was founded in 2010 and booked $82 million in sales for the 12 months ended Dec. 31, 2020. It plans to list on the Nasdaq under the symbol ASPG. Tiger Brokers, EF Hutton, TF International and China Merchants Securities are the joint bookrunners on the deal.

    Aspire Global would be the second Chinese vaping company to list on the New York Stock Exchange. Unlike RLX Technology, which is being sued for misleading investors about regulatory risks in China, Aspire sells most of its products outside the Chinese market.

  • Momentum Continues for Swedish Match

    Momentum Continues for Swedish Match

    Lars Dahlgren (Photo: Swedish Match)

    Swedish Match reported sales of SEK4.5 billion ($518 million) in the second quarter of 2021, up 9 percent from those reported in the second quarter of 2020. Operating profit was SEK1.96 billion compared with SEK1.69 billion in the 2020 quarter. The company’s operating margin increased to 45 percent from 42.9 percent from quarter to quarter.

    The performance was driven by continued momentum for Swedish Match’s ZYN nicotine pouch in the U.S. Sales and operating profit also grew in Scandinavia.

    For the cigars product segment, sales and operating profit were up significantly in local currency compared to a relatively soft prior year period due to improved pricing and increased natural leaf shipments.

    “Following an impressive financial performance in the first quarter, Swedish Match today reported another quarter with double-digit sales and operating profit growth across all product segments in local currencies,” said Swedish Match CEO Lars Dahlgren in a statement.

    “Our strategic focus on growing categories and segments is paying off as consumers are seeking alternatives and enhanced experiences.”

    “Swedish Match is very well positioned to build upon its strong platforms, and we are excited to determinedly pursue the growth opportunities that lie ahead while working toward our vision of a world without cigarettes.”

  • EU Sanctions Target Belarus Tobacco Sector

    EU Sanctions Target Belarus Tobacco Sector

    Photo: andriano_cz

    New economic sanctions placed on Belarus by the European Union focused on seven economic sectors, which include petroleum, finance, arms and surveillance technology, and the nation’s tobacco-processing business.

    Belarus’ lucrative tobacco-processing industry—the source of a flourishing trade in cigarettes smuggled to the EU—was also targeted with bans on exporting to Belarus goods used in the manufacture of tobacco products. The goods listed include filters, cigarette papers, tobacco flavorings and machinery.

    Belarus is a dominant player in cigarette smuggling, which rebounded recently with the increase in EU excise duties on cigarettes and the banning of menthol cigarettes in the bloc. 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.

    Cigarettes are a huge moneymaker for Belarus and for one of the country’s richest men, Alyaksey Aleksin, who now finds himself among the 166 individuals blacklisted from traveling or doing business with the EU. Aleksin, who was involved in the construction of a new tobacco factory in Minsk, is a major player in the distribution of cigarettes in Belarus and in recent years by presidential decree gained the exclusive rights both to import tobacco and to sell products both at home and abroad produced by the Hrodno Tobacco Factory, Belarus’ largest cigarette manufacturer.

  • Zimbabwe: Leaf Sales Up by a Third in 2021

    Zimbabwe: Leaf Sales Up by a Third in 2021

    Photo: Taco Tuinstra

    Zimbabwe sold 186.6 million kg of leaf tobacco valued at $515.9 million during the 2021 marketing season, reports All Africa, citing data from the Tobacco Industry Marketing Board (TIMB). The figures are up 16.8 percent in volume and 31 percent in value over the 2020 sales.

    The TIMB noted that contract farming was the dominant supplier of tobacco, accounting for 93.4 percent of total sales compared to 6.6 percent for sales on auction floors. Average leaf prices ranged between $2.47 and $2.82 per kg.

    After gold, tobacco is Zimbabwe’s biggest foreign currency earner with expected earnings to increase from last year’s $452 million to $800 million. “The tobacco’s potential is immense,” said Agriculture Minister Anxious Masuka, who wants to increase tobacco leaf production over the next four years. “It is in this regard that the government, together with stakeholders in the industry, is at an advanced stage of developing a three-pronged strategy. First, to increase annual production to 300 million kg largely from small holder farmers by 2025.”

    Industry analysts, however, have criticized Zimbabwe’s plans for not outlining a value addition strategy arguing that improving general output will not yield much benefit. By only exporting raw tobacco leaf, Zimbabwe could be losing out on at least $5 billion annually.

  • Rwanda Working on Anti-Tobacco Laws

    Rwanda Working on Anti-Tobacco Laws

    Photo: Taco Tuinstra

    Rwanda’s Parliament has ordered the Ministry of Health in the next three months to formulate a strategic plan on how it intends to raise awareness about the negative effects of tobacco and its prohibition among minors, reports The New Times.

    Although one must be at least 18 years old to purchase or consume tobacco products, research indicates that those as young as 15 are also consuming them. Member of Parliament Germaine Mukabalisa noted that some children are exposed to cigarette consumption at an early age in markets and boutiques, which could influence children to believe that cigarette smoking is acceptable across all age groups.

    Mukabalisa proposed that the government tackle the promotion of tobacco use on social media platforms where youth are present. Rwanda does have high cigarette import duties, which do reduce cigarette imports, according to Uwamariya. MPs have also recently asked the government to designate public smoking areas.