Category: News This Week

PMI to Repurchase up to $7 Billion in Shares

Photo: PMI
The board of directors of Philip Morris International (PMI) has authorized a new share repurchase program of up to $7 billion, with target spending of $5 billion to $7 billion over a three-year period expected to commence after the company’s second-quarter 2021 earnings call.
The board also declared a regular quarterly dividend of $1.20 per common share payable on July 12, 2021, to shareholders of record as of June 25, 2021. The ex-dividend date is June 24, 2021.
“Since our spinoff in March 2008, we have returned, on a cumulative basis, approximately $115 billion to our shareholders through dividends and share repurchases,” said PMI CEO Jacek Olczak in a statement.
“Our announcements today are further testament to our steadfast commitment to generously reward our shareholders as we transform into a smoke-free company.”
June 15, 2021
Germany Approves Tobacco Tax Hike

Photo: JFL Photography
The Bundestag on June 11 approved legislation to make smoking in Germany more expensive as of next year, reports Iamexpat. The tax on a pack of 20 cigarettes will rise by an average of €0.10 ($0.12) in 2021. A year later, a further €0.10 will be added, and in both 2025 and 2026, another €0.15 per pack will be added.
The greatest increases, however, have been reserved for e-cigarettes and tobacco-heating products, which were previously only lightly taxed.
Currently, a 10 mL bottle of vape liquid costs around €5 in Germany. In 2022, an extra €1.60 will be added to this price in taxation, and this will rise to €3.20 by 2026. An additional tax is also to be introduced for heated-tobacco, so that in the future, it will be treated similarly to cigarettes for tax purposes.
Vapor industry representatives slammed the tax hikes, arguing that their products contain significantly fewer harmful substances than tobacco cigarettes and should therefore be taxed at lower levels.
The Association of the E-Cigarette Trade (VdeH) warned that the move would not only prompt vapers to revert to smoking but also destroy numerous small and medium-sized businesses.
“The mere fact that e-cigarette liquids are generally taxed more heavily than tobacco cigarettes and thus ignore the 95 percent lower potential for damage is insane health policy,” said VdeH Managing Director Michal Dobrajc in a German-language statement. Taxing nicotine-free products as well as cigarettes defies common sense, he added.
Dobrajc said Germany should learn from the experience of other countries that were forced to lower their vapor taxes as vapers returned to smoking and anticipated revenues failed to materialize.
“The Tobacco Tax Modernization Act is a disaster in both health and economic terms,” said Dobrajc. “If you are serious about reducing the smoking rate, then you have to support the industry that is making a significant contribution to reducing it instead of destroying it.”
The Alliance for Tobacco-Free Enjoyment said that it intends to go to the Federal Constitutional Court to file a complaint against what it sees as a disproportionate tax increase.
Around one in four adults in Germany smokes regularly. Last year, tobacco taxes contributed approximately 14.7 billion to the government’s coffers. The last time the tobacco tax was increased was in 2015.
June 13, 2021
Brazil: Anti-Child Labor Initiatives Paying off

Iro Schuenke
The tobacco industry in Brazil has made great strides in its battle against child labor, SindiTabaco announced on the International Labor Organization’s (ILO) World Day Against Child Labor on June 10.
SindiTabaco launched its “The Future is Now” program in 1998—four years before the ILO debuted World Day Against Child Labor.
Today, the tobacco sector is the only one to require proof of school enrollment of its farmers’ school-age children. Tobacco companies will renew production contracts with growers only if they can present a certificate of school attendance.
According to SindiTabaco president Iro Schuenke, the first actions intended to create awareness of the importance of school attendance. “At that time, the companies got organized in contact with the municipalities in order to actively solve one-off questions related to school evasion, mainly caused by the lack of schools or deficient transport systems affecting farmers’ children,” he explains.
As the years went by, these initiatives evolved and gave rise to the Growing Up Right Institute, which has already benefited 500 teenagers in rural areas. The institute pioneered professional learning programs for the young in the countryside, qualifying adolescents through rural management and entrepreneurship courses.
“For most of the young, besides being an opportunity for developing their skills without having to leave their communities, it is also their first formal job, as the program complies with the learning law, and the young participants receive a salary proportional to 20 hours a week,” says Schuenke, who is also the director president of the Growing Up Right Institute. “It is a manner for them to spend their time in the course and at school, far away from tasks inappropriate for their age.”
Tobacco Reporter profiled the Growing Up Right Institute in April.
June 13, 2021
Broad Support for Vaping During Debate

Photo: Ana Gic from Pixabay
MPs from the U.K.’s two main political parties agree that vaping holds the key to Britain achieving its ambitious target to be a “smoke-free” nation by 2030, according to a report by the U.K. Vaping Industry Association (UKIVA).
The All Party Parliamentary Group (APPG) on Smoking and Health presented its latest recommendations for a new Tobacco Control Plan (TCP) at Westminster yesterday.
Among its range of proposals to curb smoking prevalence in the U.K. were recommendations to expand the use of vaping based on the mounting “data and evidence” pointing to e-cigarettes’ efficacy in helping smokers to quit.
In a departure from most cross-party debates, there was universal consensus that vaping should be a central part of any plan for the U.K. to meet its smoke-free targets and save lives.
The first MP to bring vaping into the debate was Mary Glindon (Labour) who sits on the APPG on E-cigarettes.
She said, “The forthcoming Tobacco Control Plan presents an enormous opportunity to cement the U.K. as the global leader in tobacco harm reduction.
“Having left the EU, the government must alongside the post-implementation review of the Tobacco and Regulated Products Regulations (TRPR) set a clear direction for reducing smoking prevalence.
“To achieve its ambitions, the forthcoming control plan must champion less harmful alternatives to smoking combustible tobacco, in particular the growing body of evidence showing vaping to be the most effective alternative for adult smokers looking to quit smoking.
“In its Blueprint for Better Regulation, the U.K. Vaping Industry Association made recommendations to the Department for Health for consideration when reviewing TRPR, a process already under way.
“Those recommendations, many of which I support, could also be applied to the government’s TCP.
“One of those recommendations is effectively tackling increasing levels of misinformation and misperceptions about the relative harm of e-cigarettes versus tobacco.
“ASH data suggests millions of smokers could be dissuaded from switching to e-cigarettes because of incorrect views or confusion about vaping.
“To combat this, the UKVIA recommends that the Department of Health launch an effective communications strategy, including the introduction of approved health claims, and switch messages displayed on vape devices and e-liquid packaging.
“It also recommends that medical professionals at local stop-smoking services are supported with clinicians signposted to the latest clinical guidance and evidence about e-cigarettes.
“An evidence-based approach to smoking cessation must be adopted consistently by local services to support patients and their harm reduction journey—this is critical, considering the trials in NHS A&E departments.
“There should also be a review of regulations of nicotine in e-cigarettes to better understand the role nicotine plays in allowing e-cigarettes to be a satisfying alternative for adult smokers.
“For vaping to compete with combustible cigarettes and provide and alternative, it must provide a comparably satisfying nicotine experience.
“It is the toxic byproducts, not the nicotine, that are responsible for smoking-related deaths and diseases.
“Understanding alternatives and making clear distinctions between smoking and vaping are critical to our smoke-free ambitions.
“The APPG on Vaping made several recommendations on vaping in the workplace and in public places; these are endorsed by the UKVIA and if implemented would support adult smokers in their transition to less harmful alternatives and give those who already made the switch the best chance of sticking with it.”
To achieve its ambitions, the forthcoming control plan must champion less harmful alternatives to smoking combustible tobacco, in particular the growing body of evidence showing vaping to be the most effective alternative for adult smokers looking to quit smoking.
Mary Glindon (Labour)
David Jones (Conservative), Honorary Life Governor at Cancer Research U.K., said, “The key issue with smoking is, of course, the smoke. Any evidence-based policy to assist the U.K.’s 7 million smokers must put forward alternative products to combustible tobacco.
“Continuing to raise awareness of those products is also key. E-cigarettes and the use of other alternatives saves lives, and we should make sure that message reaches every smoker in Britain.
“E-cigarettes are hugely important in the fight against smoking, and I commend NHS England for promoting them to smokers. It’s based on evidence and has a proven positive effect on the health of the nation.”
Jones pointed out that, in 2017, more than 50,000 smokers who would have carried on stopped with the aid of a vaping product.
“The TCP should embrace new products and allow for more measures for companies to promote them,” he said. “And the plan should contemplate legislation for a robust regulatory framework for all the products we have on the market.”
Next to speak was Adam Afriyie (Conservative), also Chair of the Parliamentary Office of Science and Technology who sits on the APPG on Vaping.
“We’re in an era where we must be driven by data and evidence,” he said. “And it can’t be any clearer that when it comes to vaping devices, electronic nicotine-delivery devices and other technologies and ways nicotine can be used to help smokers to cease, that the data is only one way.
“It is so much safer to vape or use an electronic device than it is to smoke. Smoke is the killer. Tobacco is the killer.”
Afriyie urged the government to “not do what the EU has done and not do what the WHO seems to be doing by mangling the two issues (smoking and vaping) together.”
“Smoking is one thing,” he continued. “Smoking cessation devices that contain nicotine [are] a complete[ly] different thing. A completely different scale of harm and completely different scale of risk.
“Nobody really wants to smoke. It’s a good idea to remind people on an annual basis that there are alternatives, and not just nicotine patches but certainly to be looking at vaping devices.
“There is still ambiguity about whether or not vaping is a smoking cessation device or just another way of inhaling nicotine. The truth is, and this is clear from the evidence, it’s a smoking cessation device that woks and is twice as effective—if not higher than that—at helping smokers to cease smoking relative to the other treatments available.”
He concluded, “We are the first in the world at genomics, first in the world for the vaccine rollout, first in the world for fintech and financial services—let’s make this another one: Let’s be the first in the world to implement a TCP that clearly takes on board the wonderful innovations of vaping, e-cigarettes and all the other technologies and not mangle it together in a smoking directive.”
We are the first in the world at genomics, first in the world for the vaccine rollout, first in the world for fintech and financial services—let’s make this another one: Let’s be the first in the world to implement a TCP that clearly takes on board the wonderful innovations of vaping, e-cigarettes and all the other technologies and not mangle it together in a smoking directive.
Adam Afriyie (Conservative)
Labour MP Virendra Sharma told the committee that he came from “a family of nonsmokers” and that he himself does not smoke.
“I cannot see the appeal,” he said. “But clearly, people are addicted, and addiction needs treatment not moralizing. There are 3 million people who vape in Britain and nearly all are former smokers. That’s 3 million who choose a less harmful option. This is good news, but BAME communities and those with manual jobs and without university degrees are 2.5 times more likely to smoke than white, office working, university educated colleagues. This has to be addressed.
“In the Asian community, we need to offer alternatives to tobacco. There are terrible statistics about rates of oral cancers, and anything we can do to reduce these rates will save lives.”
Another Labour MP, Alex Norris, spoke next and emphasized the consensus nature of the debate.
“We are all here in the spirit of cross-party cooperation,” he said.
“E-cigarettes and vaping must be a feature of the TCP. I hope the minister and government generally, via its role in the WHO, push harder for stronger messages and clearer messages around the data and evidence at WHO level.
“I looked at the WHO website myself and could not fathom what it was trying to tell me. That makes it really hard for people thinking about alternatives to know what they’re supposed to do or not.
“Personally, I always rely on the Public Health England position from 2018 that vaping represents a 95 percent reduction in harm.
“The APPG’s report says that in 2017, vaping helped 50,000 people to stop smoking, and that concerns around children starting have not materialized.”
Bringing the debate to an end, Jo Churchill (Conservative), who is also Parliamentary Under-Secretary of State for Prevention, Public Health and Primary Care at the Department of Health and Social Care, said, “Within our plan, we will recommit to the role of e-cigarette products. They certainly have a place in supporting smokers to quit, and we will ensure they remain accessible while protecting nonsmokers and young people.”
Speaking after the session, John Dunne, director general of the U.K. Vaping Industry Association, said:
“It was a very proud moment for the UKVIA to be quoted so extensively during this important debate and at such a crucial moment in the U.K.’s journey toward harm reduction.
“It’s not often that you witness different political parties reaching a consensus in this way, but, it appears, the urgent need to reduce smoking rates in Britain and the vital role vaping can play in achieving [a] smoke-free 2030 are the issues where tribalism is put aside and common sense prevails.”
June 11, 2021
Suit: RLX Downplayed Regulatory Risks

Photo: iQoncept
A group of investors is suing RLX Technology, claiming the Chinese vaping company overstated its financials and misrepresented potential regulatory risks when it filed the paperwork for its initial public offering in the U.S., reports The Wall Street Journal.
Submitted June 9 by shareholder Alex Garnett in the U.S. District Court for the Southern District of New York, the lawsuit alleges RLX’s registration statement from last October omitted the impact of ongoing efforts by Chinese regulators to tighten sales of electronic cigarettes.
Under rules established by the U.S. Securities and Exchange Commission, companies must disclose any known events or uncertainties.
Founded in 2018, Beijing-based RLX went public on the New York Stock Exchange in January. The offering raised $1.39 billion, according to data provider Dealogic. Its stock price fell sharply after Chinese regulators in March proposed treating vapor products like regular cigarettes.
The lawsuit alleges investors purchased RLX shares at artificially inflated prices in part because the company omitted and misrepresented information in the registration statement. As the stock price dropped, RLX investors lost hundreds of millions of dollars, the lawsuit said.
At least two other law firms in recent weeks said they are investigating on behalf of investors to determine whether RLX failed to disclose relevant information to investors. Rosen Law Firm and Bronstein, Gewirtz & Grossman, among others, are reportedly seeking RLX investors who want to join a class-action suit.
RLX on June 2 reported revenue of CNY2.4 billion ($366.1 million) for the quarter ended March 31, up from CNY368.6 million in the prior year period. The company booked a net loss of CNY267 million compared with a profit of CNY12.1 million during the prior year quarter.
The company’s financial statements in recent months have raised eyebrows among accounting experts, who have questioned RLX’s unusually high ratio of cash and securities to total assets, among other issues.
On June 1, Tobacco Reporter published an article explaining how tobacco regulations could change China’s vapor business.
June 11, 2021
Survey: Harm Reduction Gains Momentum

Photo: Тарас Нагирняк
The concept of tobacco harm reduction is gaining momentum in Europe, according to a new report by the European Tobacco Harm Reduction Advocates (ETHRA). On July 8, ETHRA published the results of its 2020 EU Nicotine Users Survey.
Launched online by ETHRA in the last quarter of 2020, the questionnaire addressed consumer use of nicotine products. Topics included smoking and the desire to quit, use of safer nicotine products and barriers to switching caused by European and national regulations. More than 37,000 people, including more than 35,000 EU residents, participated in the ETHRA survey.
According to ETHRA, more than 27,000 of the survey participants had completely quit smoking. Vapes, snus and nicotine pouches are the main harm reduction products used to quit. Among the respondents who had ever smoked, 83.5 percent of vapers and 73.7 percent of snus users had successfully stopped smoking.
Over 93 percent of vapers and 75 percent of snus users cited harm reduction and improvements to health as their reasons for adopting these products. The report shows that the reduced cost compared to smoking, the availability of flavors, the availability of products and the ability to adjust vaping products are other major factors for consumers when switching to harm reduction products.
The lack of availability of low-risk nicotine products presents a major obstacle to consumers wishing to quit smoking.
ETHRA
However, smoking remains the predominant way of consuming nicotine in Europe. More than 67 percent of the current smokers who responded to the survey want to quit, but the ETHRA report shows they face barriers in their desire to be smoke-free.
The lack of availability of low-risk nicotine products presents a major obstacle to consumers wishing to quit smoking. The EU ban on the sale of snus (which exempts Sweden), illustrates this barrier, with 31 percent of current smokers indicating that they would be interested in trying snus if its sale were legalized in the EU.
A quarter (24.3 percent) of those who smoke but who want to quit cited the high price of safer alternatives as a barrier to quitting smoking. This number rises to 44.7 percent in countries with a high tax on vaping products, such as Estonia, Finland and Portugal.

The EU Tobacco Products Directive (TPD) restrictions of a maximum nicotine concentration of 20 mg/mL and a maximum bottle volume of 10 mL have driven vapers to very low nicotine e-liquids. More than 30 percent of people who vape and smoke (“dual users”) believed they could completely quit smoking if the EU nicotine limit were increased.
Meanwhile, harm reduction advocates are anxiously awaiting pending amendments to the TPD. If the EU bans flavors, 28 percent of vapers are likely to restart smoking, and 71 percent would consider using the black market or other alternative sources, according to the survey. In the 16 EU countries without a vape tax, only 1 percent of vapers are currently using alternative sources.
If the EU repealed the 10 mL bottle limit, 89 percent of vapers said they would buy larger bottles of e-liquid to reduce plastic waste. Eighty-three percent of vapers are in favor of having access to an EU database on e-liquid ingredients.
Considering the results from the EU Nicotine Users Survey 2020, ETHRA recommends the lifting of the EU ban on the sale of snus, revising upward the 10 mL refill bottle and 20 mg/mL nicotine concentration limits and the publication of databases on vaping products.
The organization also urges a repeal of vaping taxes in 12 countries and the lifting of flavor bans in Estonia, Finland and Hungary to give European smokers the freedom to quit smoking using low-risk products.
June 10, 2021
FDA Asked to Extend PMTA Grace Period

Photo: Grispb
The U.S. Small Business Administration (SBA) has urged the FDA to allow nicotine products to remain on the market for another year while their premarket reviews are in progress, reports Vaping 360.
In a letter sent to the FDA on June 7, the SBA Office of Advocacy asked the agency to seek a court order extending for an additional year the current freeze on enforcement actions against small vape manufacturers who submitted premarket tobacco product applications (PMTAs) before last year’s Sept. 9 deadline.
In the current situation, manufacturers who submitted PMTAs on time may leave those products on the market until Sept. 9, 2021. The SBA advocacy office is asking the FDA to request that U.S. District Court Judge Paul Grimm allow the agency to extend the deadline until September 2022.
Considering the large volume of PMTAs submitted—the FDA says it received more than 6 million applications—It is unlikely that the agency will be able to process all submissions before manufacturers are required to pull their products off the market.
“Small ENDS manufacturers cannot afford to have their products pulled from store shelves while the FDA continues to review the timely submitted PMTAs for millions of ENDS products,” the SBA writes. “Most small ENDS manufacturers do not have the resources to absorb the losses from having their products pulled from the marketplace for several months or more. Once the FDA orders small ENDS manufacturers’ products removed from the market, those small businesses will close permanently.”
The letter also urges the FDA to end its current practice of processing PMTAs in order of manufacturer market share. By doing so, the FDA all but guarantees that small vaping companies will be unable to have their reviews completed in time to remain on the market, according to the SBA.
The SBA is a federal agency that represents the views of small businesses to the various branches of government.
June 10, 2021
Trade Body Slams German Vapor Tax

Photo: katatonia
The German association for the e-cigarette trade, VdeH, has sharply criticized the passage by the financial committee in Parliament of a tobacco tax reform bill that calls for significant tax hikes on vapor and tobacco-heating products, including nicotine-free variants.
Until now, e-cigarettes have been subject only to value-added tax. Tobacco-heating products will reportedly be taxed at the same level as combustible cigarettes.
The plans will not only boost the black market but also destroy numerous small and medium-sized businesses, according to VdeH.
“The mere fact that e-cigarette liquids are generally taxed more heavily than tobacco cigarettes and thus ignore the 95 percent lower potential for damage is insane health policy,” said VdeH Managing Director Michal Dobrajc in a German-language statement. Taxing nicotine-free products as well as cigarettes defies common sense, he added.

If you are serious about reducing the smoking rate, then you have to support the industry that is making a significant contribution to reducing it instead of destroying it.
Michal Dobrajc, managing director, VdeH
Dobrajc said Germany should learn from the experience of other countries that were forced to lower their vapor taxes as vapers returned to smoking and anticipated revenues failed to materialize.
“The Tobacco Tax Modernization Act is a disaster in both health and economic terms,” said Dobrajc. “If you are serious about reducing the smoking rate, then you have to support the industry that is making a significant contribution to reducing it instead of destroying it.”
June 10, 2021
U.K. Urged to End Tobacco ‘Epidemic’
Photo: Vladimir
The All Party Parliamentary Group (APPG) on Smoking and Health is urging the U.K. government to use the opportunity provided by Brexit to step up and take its place on the world stage as a global leader in tobacco control.
In its new report, Delivering a Smoke-Free 2030, the APPG makes several recommendations for the Tobacco Control Plan 2021, which the House of Commons was set to debate today.
The recommendations include:
Funding for tobacco control programs to be secured through a “polluter pays” amendment to the Health and Social Care Bill, forcing manufacturers to pay to deliver the end of smoking.
Targeted investment to provide additional support to help smokers quit in regions and communities where smoking does the most damage. This includes those in routine and manual jobs and the unemployed; those living in social housing; those with a mental health condition; and pregnant smokers.
Tougher tobacco regulations to protect children and young people from becoming smokers and help smokers quit, such as putting health warnings on cigarettes and raising the age of sale to 21.
“Our report sets out measures, which will put us on track to achieve the government’s ambition to end smoking by 2030, but they can’t be delivered without funding,” said MP Bob Blackman, chairman of the APPG, in a statement. “Tobacco manufacturers make extreme profits selling highly addictive, lethal products while government coffers are bare because of Covid-19. The manufacturers have the money; they should be made to pay to end the epidemic.”
APPG Vice Chair Mary Kelly Foy, who represents the City of Durham, said, “I’m an MP from the North East, the poorest region in the country where smoking rates have historically been high. That’s why, although we’ve made good progress in recent years, we still suffer disproportionately from disease, disability and death caused by smoking. The APPG report recommendations will sever the ‘iron chain’ linking smoking and disadvantage. They are essential if we are to build back fairer and level up communities like my own.”
“We all applauded when the government announced its ambition for a smoke-free 2030,” said Deborah Arnott, chief executive of Action on Smoking and Health. “But that was two years ago; the time has now come to deliver.”
June 10, 2021
BAT Recognized for Supply Chain Excellence

Photo: BAT
BAT has been ranked 19th in the Gartner Supply Chain Top 25 for 2021—marking the first time BAT has made the top 20.
In its second consecutive year in the Gartner rankings, BAT has moved up two places from 21st in 2020. The Gartner rankings recognize companies globally who have demonstrated excellence in supply chain management, effectively navigating through the Covid-19 landscape.
As BAT evolves into a multi-category consumer products and brands business, its transformation is being powered by digital technology. This allows BAT to respond with greater agility and resilience to the complexity of its growing new category portfolio supply chain. According to the company, this transformation is underpinned by BAT’s commitment to put ESG front and center of its operations, with sustainability firmly embedded into its supply chain management strategies.

To move up the ranks during a global pandemic is testament to the hard work and excellence of BAT’s operations teams across the world.
Zafar Khan, group operations director, BAT
“We are honored to have our supply chain operations recognized in the Gartner Supply Chain Top 25 rankings for the second year in a row,” said Zafar Khan, BAT’s group operations director, who joined the company in February, in a statement. “To move up the ranks during a global pandemic is testament to the hard work and excellence of BAT’s operations teams across the world.”
June 9, 2021