Category: News This Week

Imperial Cleared of Anti-competition Charges

Photo: Taco Tuinstra
The Supreme Court of Ukraine has thrown out a UAH460 million ($16.83 million) fine imposed by the Antimonopoly Committee of Ukraine (AMCU) on Imperial Tobacco Ukraine and Imperial Tobacco Production Ukraine for alleged anticompetitive behavior, reports the Kyiv Post.
In October 2019, the Antimonopoly Committee fined the local affiliates of Philip Morris International, British American Tobacco, Japan Tobacco and Imperial Brands along with Tedis Ukraine. Concerted actions by the tobacco companies had unlawfully left Ukraine with only one cigarette distributor, Tedis, the AMCU maintained.
Imperial appealed to the Commercial Court of Kyiv, which ruled in favor of the AMCU. On July 21, 2020, the company paid the full fine to prevent the imposition of additional penalties and to avoid further pressure on the company’s operations by the AMCU.
After an appeal to the Northern Commercial Court of Appeal was also rebuffed, Imperial turned to the Supreme Court, which has now found in its favor.
In a Ukrainian-language press release, Imperial Tobacco Ukraine CEO Rastislav Cernak said the ruling was an encouraging sign for all foreign investors in Ukraine.
“Our company has always acted completely transparently and decently, advocating fair and honest competition, observing all antimonopoly laws not only in Ukrainian legislation but also the principles of protecting economic competition laid down in EU legislation,” he was quoted as saying.
Earlier, Ukrainian courts threw out the AMCU fines against British American Tobacco and Tedis.
Imperial Tobacco Ukraine manufactures cigarettes in Kyiv. About 50 percent of its products are exported to 20 markets, including Armenia, the United Arab Emirates and the United States.
June 3, 2021
India: ITC Shares Fall With Covid Restrictions

Photo: Seemanta Dutta | Dreamstime.com
Shares of ITC fell nearly 3 percent after the company warned that lockdown restrictions could cause supply chain disruptions soon, according to Reuters.
ITC’s statement came as its cigarette business barely staged a recovery from last year’s lockdown, according to Reuters. March quarter revenue rose 14 percent to INR58.50 billion ($799.1 million). Cigarette volumes were short of pre-Covid-19 levels toward the end of the year.
“ITC’s cigarette division posted a strong outperformance versus peers during the year, indicating market share gains. However, fresh restrictions in urban and rural markets may delay cigarette volume recovery going ahead,” the Reuters article states.
Limited lockdowns were reintroduced following surges in Covid-19 infections in April and May. Analysts at Prabhudas Lilladher stated that the lockdowns are only “temporary hiccups,” according to Reuters, and they expect the first quarter to pick up.
June 3, 2021
FITA Complains About Loose Cigarette Sales

Photo: Tobacco Reporter archive
The Fair-Trade Independent Tobacco Association (FITA) has filed a criminal complaint with the South African Police Service against British American Tobacco South Africa (BATSA) for violating the Tobacco Products Control Act 83 of 1993 and the Customs and Excise Act 91 of 1964.
“On or about May 28, 2021, we received information that BATSA and certain retail stores in and around the greater Johannesburg area were contravening provisions of inter alia the Tobacco Products Control Act and the Customs and Excise Act by selling loose cigarettes and giving and/or gifting to the consumer ZAR5 [$0.36] worth of mobile telephone airtime vouchers together with a small rectangular metallic box, which holds up to three loose cigarettes, branded with one of the many BATSA brands,” the organization wrote on its website.
FITA “conducted test purchases” to confirm the alleged sales and states that it has “photographs and video footage depicting the promotional material and packaging for the sale of loose cigarettes.”
Selling loose cigarettes and gifting promotional material like the boxes and phone cards is prohibited in South Africa.
June 3, 2021
Opposition to Investor Dispute Settlements

Photo: AA+W
Opposition is growing to investor-state dispute settlement (ISDS) provisions in trade deals, according to a report in The Guardian.
ISDS began when former colonies became independent and provided compensation to companies if their assets were expropriated. But the system has developed concepts that allow corporations to seek compensation by claiming that regulatory changes reduce the value of their investment and/or that they were not fairly consulted about the change.
Philip Morris famously used the ISDS provision of the Australia-Hong Kong investment after Australia’s High Court in 2012 held that Australia’s plain cigarette packaging laws were legal and did not constitute an unjust confiscation of trademarks and intellectual property.
In 2015, the tribunal decided that the plaintiff was not a Hong Kong company and had moved ownership of its Australian operations to Hong Kong only to take advantage of the ISDS provision. While prevailing in the case, Australia spent nearly AUD24 million ($18.59 million) to defeat the challenge and only half of this was recovered. Critics say poor countries lack the resources to defend themselves against ISDS challenges.
There are now 1,104 known ISDS cases, with increasing numbers against health and environment laws, including laws to address climate change and to protect Indigenous rights.
Community opposition has pressured increasing numbers of governments to reject ISDS. The 27 EU member states have terminated ISDS arrangements between themselves, and ISDS has been excluded from current talks for the EU-Australia free trade agreement. The U.S. and Canada have excluded ISDS cases against each other from the revised North America free trade agreement, known as the United States-Mexico-Canada Agreement.
More recently, strong community campaigns resulted in exclusion of ISDS from the Regional Comprehensive Economic Partnership signed in November 2020 between Australia, New Zealand, China, Japan, South Korea and the 10 ASEAN nations.
Despite such moves, ISDS provisions are not on their way out quite yet. For example, the British trade minister has confirmed to The Guardian that corporate rights to sue governments are being discussed in the final negotiations for the Australia-U.K. free trade agreement.
June 2, 2021
Italy Scrutinizes BAT Social Media Activities

Photo: Panuwat D
The Italian Competition Authority has launched an inquiry into BAT’s social media activities, reports Market Watch.
According to the regulator, three Italian influencers who had a commercial agreement with BAT Italia posted content related to BAT’s Glo Hyper tobacco-heating device without disclaiming the promotional nature of the posts.
The antitrust section of Italy’s financial crime investigation unit reportedly carried out an inspection at BAT’s offices on May 27.
June 2, 2021
RLX Technology Reports ‘Solid’ First Quarter

Photo: RLX Technology
RLX Technology today announced its unaudited financial results for the first quarter ended March 31, 2021. Net revenues were RMB2.4 billion ($366.1 million), up 48.2 percent from RMB1.62 billion in the fourth quarter of 2020. Gross margin was 46 percent compared to 42.9 percent in the fourth quarter of 2020. GAAP net loss was RMB267 million compared with RMB236.7 million in the 2020 fourth quarter. Non-GAAP net income was RMB610.5 million, representing an increase of 45.6 percent from RMB419.3 million in the fourth quarter of 2020.
“2021 began on a solid note, with strong growth in key performance metrics of our business,” said Ying (“Kate”) Wang, co-founder, chair of the board of directors and CEO of RLX Technology, in a press note. “Specifically, our expansion in distribution network fueled a strong sequential growth, further demonstrating sustained user demand for our e-vapor product portfolio.”
“As the go-to brand of e-vapor products in China, we remain dedicated to investing in deepening our scientific research, improving our technology and product development, expanding our distribution network and retail outlets as well as enhancing supply chain and production capabilities.
“In the first quarter, we opened our Quality Lab to further strengthen our quality assurance and control capabilities and started developing our second and third exclusive production plants to enhance our production capabilities. We believe we are well positioned to further capture the growth potential in the e-vapor industry in China,” Wang concluded.
We remain dedicated to investing in deepening our scientific research, improving our technology and product development, expanding our distribution network and retail outlets as well as enhancing supply chain and production capabilities.
Kate Wang, CEO, RLX
“Our robust results in the first quarter of 2021 exemplify our strong capabilities in meeting user demands for reliable, innovative and trustworthy products,” said Chao Lu, chief financial officer who joined the company in February. “Building on rapid revenue growth and continued efforts in improving operating leverage, our gross margin and non-GAAP net margin have remained steady in the first quarter. We will continue to pursue user value creation by enhancing our suite of product offerings and strengthening our brand leadership in the market.”
For the second quarter of 2021, RLX Technology expects net revenues to exceed RMB2.85 billion and expects non-GAAP net income to exceed RMB720 million. The company’s expected GAAP net income will include share-based compensation expenses, which depend on the company’s share price. The company currently also expects gross margin to remain steady.
June 2, 2021
KT&G Recognized for Innovation

Chi-Bum Oh, senior managing director at KT&G Corp (left) accepts the Prime Minister’s Commendation on May 31. (Photo: KT&G)
KT&G was awarded the Prime Minister’s Commendation on May 31 in recognition of its contribution to the development of national industry at the 56th Invention Day commemoration ceremony.
Hosted by the Korean Intellectual Property Office and organized by the Korea Invention Promotion Association, the event rewards individuals and organizations that have contributed to the promotion of inventions in South Korea.
This year, KT&G was recognized for its contribution to protecting national industrial technology and for the development of the intellectual property system through its unique technology development and job invention promotion policy.
KT&G CEO Baek Bok In, who took office in 2015, has emphasized the importance of technology in the tobacco industry and focused on securing intellectual property. In 2016, KT&G established a special division for intellectual property. It has also expanded its employee proprietary information and inventions agreement for researchers to encourage patent applications.
In 2018, KT&G built its own computer system to effectively manage the company’s intellectual property rights. As a result of these and other actions, KT&G’s patent applications rose from 43 in 2016 to 1,203 in 2020.
“Last year, our researcher received the Prime Minister’s Commendation at the 55th Invention Day ceremony, but not stopping there, KT&G’s technological capabilities were recognized once again this year,” said Chi-Bum Oh, senior managing director at KT&G, in a statement. “In the future, we will focus on technological innovation and the management of intellectual property rights to enhance corporate value.”

June 2, 2021
Poda and Eson Pursue Partnership

Photo: Poda Lifestyle and Wellness
Poda Lifestyle and Wellness and Shenzhen Eson Technology Co. have signed a binding letter of intent to facilitate a joint development agreement, whereby Poda will join Eson’s existing distribution network in Europe and Asia where Eson is currently selling over 50 million units per month.
Poda has developed and patented a heat-not-burn (HnB) platform while Eson has developed a patented proprietary blend of tobacco-free products that it currently sells through the brand Neafs.
“We are incredibly excited to partner with Eson, who is recognized as one of the leading manufacturers of electronic cigarette devices and more recently as one of the global leaders in tobacco-free heat-not-burn products,” said Ryan Selby, CEO of Poda, in a statement.
“Daniel Chen and his team at Eson are currently filling and distributing millions of Neafs products per month into the Chinese market, providing us with tremendous opportunities to scale. There are over 400 million adult smokers in China, and we believe that this partnership with Eson will provide us with a fast-track opportunity to rapidly develop our market share in the Chinese market,” said Selby.
Eson has designed numerous electronic nicotine-delivery systems and has licensed its IP to some of the biggest tobacco companies in the world. In addition, Eson has served as an original equipment manufacturer for some of the biggest tobacco companies globally, including Japan Tobacco International, Imperial, British American Tobacco, Godfrey Philips India, Philip Morris International and China National Tobacco.
“Poda has developed an incredible HnB platform, and their zero cleaning pods offer consumers a hassle-free HnB product that delivers consistently great results, day after day” said Daniel Chen, CEO of Eson. “Additionally, the vapor is flavorful and robust, offering cigarette-like satisfaction to discerning adult smokers.”
This partnership will provide us with a fast-track opportunity to rapidly develop our market share in the Chinese market.
Ryan Selby, CEO, Poda
“We are already selling over 50 million Neafs sticks per month and are currently expanding our production facilities to produce over 250 million Neafs sticks per month, which should be completed within the next 60 days. Since we launched the Neafs products in October 2020, the demand for Neafs products has been overwhelming. We are extremely excited to offer the Neafs by Poda products to our existing distribution channels, and we anticipate tremendous success with the Neafs by Poda products.”
June 2, 2021
BAT Publishes Review of Vaping Science

Photo: BAT
BAT has published a comprehensive review of the scientific evidence for vaping products, their potential health effects and their role in tobacco harm reduction.
The review shows that, over the past decade, the number of people who incorrectly believe vaping is as harmful or more harmful than smoking conventional cigarettes has risen in the U.K., Europe and the U.S. This is despite several scientific reviews published in the same period showing that vaping products manufactured in accordance with quality standards present less risk to health than combustible cigarettes.
According to population modelling studies cited in the review, a significant reduction in premature deaths could be achieved if current smokers switched exclusively to vaping rather than continuing to smoke. These modelling studies use population data and simulations to project the health-related outcomes associated with the long-term risks of smoking versus vapor use over time.
David O’Reilly, director of scientific research at BAT, said the paper is a comprehensive summary of more than 300 peer-reviewed scientific papers and other evidence published by an estimated 50 institutions over the past decade.

The scientific evidence is clear—but consumer misperceptions remain.
David O’Reilly, director of scientific research, BAT
“The scientific evidence is clear—but consumer misperceptions remain. In England and the United States, only one in three adults is aware that there is scientific evidence available, including from leading public health authorities, that supports the conclusion that vaping is less harmful than smoking,” O’Reilly said.
“The reality is that many leading public health authorities have reported that vaping is less harmful than smoking and that this harm reduction potential can be maximized if those smokers who would otherwise continue to smoke switch exclusively to using vapor products.”
The review highlights that vaping products can effectively compete with combustible cigarettes by providing nicotine and the sensorial enjoyment sought by smokers, according to a BAT press note.
June 1, 2021
Saudi Arabia Launches Anti-Smoking Campaign

Photo: butenkow
Alwaleed Philanthropies, chaired by Prince Alwaleed Bin Talal Al Saud, and the Ministry of Health have launched a two-year anti-smoking campaign, targeting smokers and nonsmokers across Saudi Arabia.
The campaign is part of Saudi Arabia’s plan to reduce smoking rates from 19.8 percent to 8 percent and enhancing the quality of preventive and therapeutic healthcare services as a part of its Vision 2030.
“We are determined to enhance the quality of lives of citizens and residents across the Kingdom and are pleased to be partnering with the Ministry of Health to reduce the prevalence of smoking and raise awareness of its dangers in Saudi Arabia,” said Prince Alwaleed Bin Talal Al Saud, in a press note. “This partnership is very much in line with our commitment to making sustainable philanthropic investments to empower people, near and far.”
The first phase of the awareness campaign will target nonsmokers while the second phase will focus on smokers. Moreover, in an effort to identify violators of government anti-smoking regulations, Alwaleed Philanthropies and the Ministry of Health will be directing people to a mobile application to report and monitor violations of anti-smoking regulations, including smoking in public places, selling tobacco to minors and advertising cigarette or shisha smoking on television channels.
According to the World Health Organization, tobacco use is one of the major global public health challenges, causing over 7 million deaths due to smoking-related diseases each year, 70,000 of which are Saudi citizens. A previous Saudi Health Information Survey revealed Saudi Arabia had a total of 5.5 million smokers, equating to 23 percent of the Kingdom’s population.
June 1, 2021