Category: News This Week

Taat to Stand Out Among U.K. Plain Packs

Taat Global Alternatives has developed the pack designs for Taat Original, Smooth and Menthol for sale at retail in the United Kingdom.
Packaging for all tobacco cigarettes in the United Kingdom must adhere to requirements, including a designated principal color, a smooth surface with no texture or embossing and the absence of promotional images or logos. Because Taat is a nontobacco product, it is subject to different packaging regulations. The company expects its brightly colored packages to stand out compared to the plain packaging of traditional cigarettes.

Anytime your product is visually outstanding from its competition, a lot of work is already done for you.
Setti Coscarella, CEO, Taat
“We are very excited about our impending entrance into the U.K. market and our advantageous product distinction on the shelf. Anytime your product is visually outstanding from its competition, a lot of work is already done for you,” said Setti Coscarella, CEO of Taat, in a statement.
“As we continue to explore opportunities outside of the U.K., we recognize that the European Union presents a complicated regulatory network, with each member country implementing its own rules with respect to importation, packaging tariffs and other factors. Interest in our product from legal-aged smokers in Europe has been overwhelming, and we will navigate the regulations on a country-by-country basis.”
May 20, 2021
Bates: Juul Publication Complaints Absurd

Clive Bates
Recent complaints about The American Journal of Health Behavior “Special Issue on Juul” are absurd, anti-scientific and somewhat disturbing, according to Clive Bates, director of The Counterfactual.
In a letter to the editor, Bates said the Juul Labs monograph provides highly salient information on changes in smoking status, drivers of transition, population health impact and retailer behaviors. “The summary for the introduction to the series should be enough to whet the appetite of the genuinely curious and scientifically engaged,” he wrote.
According to Bates, the fact that research is done by a company in the nicotine-delivery business does not invalidate the findings. In his view, Juul’s scientists have done excellent work that stands on its merits and has now been published after thorough peer review in a reputable journal with transparent disclosure of its provenance.
“The real question here is why these tobacco control activists show so little curiosity about the changes that are reshaping the U.S. tobacco and nicotine market,” he wrote. “As Juul rose in popularity, we saw unusually rapid declines in cigarette sales and smoking prevalence in both adults and adolescents.
“The right response to that is to want to know more. The wrong response is to try to suppress or discredit informative data and analysis just because it tells a story that is at variance with a narrative about the evils of both e-cigarettes and the companies that make them.”
May 20, 2021
Imperial Brands Named Climate Leader

Photo: Casimirokt | Dreamstime.com
Imperial Brands has been recognized as a 2021 Climate Leader by the Financial Times in its first-ever ranking of actions taken by European businesses.
The Financial Times’ listing identifies the 300 companies across the continent that achieved the highest reduction in core greenhouse gas emissions between 2014 and 2019.
Imperial is committed to further reducing its carbon footprint. By 2030, from a base year of 2017, the business will cut its own greenhouse emissions by 25 percent and emissions in its supply chain by 20 percent.
“We are pleased to be highlighted by the Financial Times for our efforts to reduce our impact on the climate,” said Stefan Bomhard, CEO of Imperial, in a statement. “There’s more we need to achieve to address this critical issue, but the recognition we’ve received demonstrates that we’re heading in the right direction.”
In late 2020, Imperial maintained its position on the CDP’s “A List” for climate change. CDP’s annual environmental disclosure and scoring process recognizes corporate leaders in climate transparency and action.
May 20, 2021
PMI Reports Progress Toward ‘End of Smoking’

Photo: krsmanovic
Philip Morris International on May 18 published its Integrated Report, a comprehensive overview of the company’s environmental, social and governance (ESG) performance and its progress toward its purpose of delivering a smoke-free future.
This includes its 2025 ambitions to have switched more than 40 million adult smokers to its smoke-free products, with half from non-OECD countries, and for smoke-free products to account for more than 50 percent of PMI’s total net revenues.
Further accelerating PMI’s transformation, this year, the company introduced two new 2025 ambitions linked to its business transformation metrics: for its smoke-free products to be available in 100 markets and for at least $1 billion in annual net revenues to come from “beyond nicotine” products. The Integrated Report also outlines case studies of early indications of PMI’s smoke-free products’ impacts in markets where such products have a meaningful presence.
“I present this report with pride in what we have already achieved in just five years, such as smoke-free products accounting for nearly one-quarter of our total net revenues in 2020 from essentially zero in 2015. I also have a deep recognition of the immense work ahead. Our new ambitious goals signal our confidence in our ability to monumentally change our company’s long-term future,” said Jacek Olczak, chief executive officer, in a statement.

I present this report with pride in what we have already achieved in just five years, such as smoke-free products accounting for nearly one-quarter of our total net revenues in 2020.
Jacek Olczak, CEO, PMI
“PMI is committed to serving as an agent of change and advocate of positive values. Innovation and inclusiveness are key to solving our challenges, whether related to tobacco harm reduction, environmental impact or social impact. We aim to create a sustainable future that benefits our company, shareholders, consumers and society.”
PMI’s Integrated Report 2020 demonstrates how the organization’s strategy, governance and performance create value. To showcase impact, the company reports on progress in various ESG areas, including toward achieving its ambitious 2025 Roadmap—a set of forward-looking targets pertaining to all Tier 1 topics from PMI’s sustainability materiality assessment.
The report highlights PMI’s most material sustainability topics, including the health impacts of its products—an aspect often not captured by external ESG assessments—and describes how the company is working toward researching, developing and commercializing scientifically substantiated better alternatives to continued smoking for those adults who do not quit. It also includes a new section on the company’s business transformation—which extends beyond changing the product—and an update on its business transformation metrics (BTMs).
The company’s BTMs are a set of bespoke key performance indicators introduced in 2016 to complement its ESG disclosure. These metrics allow stakeholders to transparently assess both the pace and scale of PMI’s transformation. Since then, based on stakeholder feedback, PMI has expanded the number of metrics to 28, with three new metrics introduced in this report.
The report also outlines the company’s belief that sustainability strategy is corporate strategy and that ESG issues are business issues. Reflecting this commitment to sustainability, the global sustainability team is now part of the finance function, reporting directly to the chief financial officer. In addition, executive compensation is now more clearly linked to ESG performance, complementing the strong product transformation incentives already in place.
“Sustainability stands at the core of PMI’s transformation and drives our development of strong ESG programs to mitigate the risks associated with our value chain while spurring innovation and growth to secure our success over the long term,” said Emmanuel Babeau, chief financial officer. “It is our firm belief that sustainability and corporate performance do not follow separate paths, and I am proud that we have spent the last year continuing to strengthen our sustainability governance and ensuring that ESG is integrated into decision-making at all levels of our organization.”

I am proud that we have spent the last year continuing to strengthen our sustainability governance and ensuring that ESG is integrated into decision-making at all levels of our organization.
Emmanuel Babeau, CFO, PMI
Acknowledging the unique and difficult challenges of the past year, PMI dedicated sections throughout its Integrated Report to showing how it addressed the impacts of the Covid-19 pandemic on its workers, business and value chain as well as instances where the pandemic directly affected the company’s sustainability efforts and the adjustments made in response.
“Despite the unprecedented challenges brought on by the global pandemic, we have not deviated from our efforts to show care, support those in our orbit and continue our quest to become a more sustainable company,” said Jennifer Motles, chief sustainability officer. “As we continue to transform, stakeholder engagement and constructive dialogue remain paramount to this evolution. In 2020, multi-stakeholder partnerships were key to the significant progress we made toward addressing many of our priority sustainability topics, ranging from protecting the health and safety of our employees to safeguarding the human rights of those impacted by our business and accelerating efforts to mitigate our impact on climate change throughout our value chain.”
The report was prepared following the Integrated Reporting framework and is in accordance with the Global Reporting Initiative Standards (core option).
It aligns with the principles and standards of the U.N. Global Compact and indicates contributions to the U.N. Sustainable Development Goals and corresponding targets.
PMI’s Integrated Report addresses some recommendations of the Task Force on Climate-related Financial Disclosures, with its environmental reporting to CDP covering most of the remainder.
Despite the unprecedented challenges brought on by the global pandemic, we have not deviated from our efforts to show care, support those in our orbit and continue our quest to become a more sustainable company.
Jennifer Motles, chief sustainability officer, PMI
It also considers guidance from the Sustainability Accounting Standards Board (SASB). Furthermore, for the first time—and as a result of PMI’s business transformation—it cross-references most aspects of the SASB standards defined for technology and communications, more concretely the Hardware Standard, and it also describes alignment with some aspects of the standards developed for the healthcare industry, specifically the medical equipment and supplies standard.
Finally, the content of PMI’s Integrated Report 2020 is mapped against the 21 metrics defined by the International Business Council/World Economic Forum’s “Measuring Stakeholder Capitalism: Toward Common Metrics and Consistent Reporting of Sustainable Value Creation” white paper to further reflect the importance of stakeholders, as per PMI’s statement of purpose.
On June 2, PMI will host an ESG-focused webcast during which the company will offer additional insight into how integrating sustainability across its business creates value for its shareholders and stakeholders. PMI will also publish in the coming week an ESG Highlights document, which will provide a more data-focused executive summary of the Integrated Report and will be made available on PMI.com/investor-relations.
Stakeholders can download the full Integrated Report 2020 as well as indexes mapping the company’s disclosures to internationally recognized frameworks on PMI.com/sustainability, including details about the company’s 16 Tier 2 sustainability topics.
May 19, 2021
Netherlands Pressed to Restrict ENDS

Photo: vichie81
Anti-smoking groups and pharmaceutical company Pfizer are urging the next Dutch government to extend smoking bans and restrict tobacco alternatives such as e-cigarettes, reports Dutch News.
The outgoing government has increased cigarette prices and limited sales outlets as steps toward a smoke-free generation by 2040, and the number of smokers has gone down from 25 percent to 20 percent in the last five years.
However, even though there are fewer smokers, the total amount of tobacco being consumed has remained stable. “The remaining smokers are smoking more,” campaigner Wanda de Kanter told Financieele Dagblad.
De Kanter is skeptical about Philip Morris International’s attempts to market its IQOS tobacco-heating device as a less risky alternative to smoking. The multinational is trying to persuade the Dutch government to relax rules around such products. Health institute RIVM has stated that heated-tobacco still contains cancer-causing substances and can damage lung cells.

I am concerned about these reports, especially in light of the global World Health Organization’s COP9 summit, which takes place in the Netherlands in November 2021.
John Dunne, Director-General, UKVIA
The U.K. Vaping Industry Association (UKVIA) warned that cracking down on smoking alternatives would be counterproductive.
“To further reduce smoking rates in the Netherlands, legislators should be embracing alternative tobacco products, such as vaping—not introducing stricter regulations, which will only serve to facilitate tobacco consumption,” the group wrote in a press note. “Adopting an evidence-based approach, like that which has been successful in the United Kingdom, will help cement the concept of tobacco harm reduction.”
“I am concerned about these reports, especially in light of the global World Health Organization’s COP9 summit, which takes place in the Netherlands in November 2021,” said UKVIA Director-General John Dunne.
“Smoking-related illness still kills many thousands of people each year in both the U.K. and the Netherlands. It is imperative on both governments to do all that they can to reduce this number of smoking-related deaths. They should trust the science and the overwhelming evidence and embrace vaping products and e-cigarettes. They are the most popular and effective nicotine-replacement products on the market.”
May 19, 2021
KT&G Volume Surges by Nearly One-Third

Photo: KT&G
KT&G’s sales surged 30.1 percent to 9.5 billion cigarettes in 2020, reports The Korea Times, citing recently released regulatory filings. In terms of value, the company’s sales rose 15.8 percent year-on-year to KRW193.7 billion ($171.68 million).
KT&G attributed the performance to its expansion into new markets as well as customized strategies for different regions.
Last year alone, KT&G launched its products in 23 new markets with the total number of export countries exceeding 100.
In South Korea, KT&G sales rose by 60 million cigarettes from the previous year. Boosted by product launches such as “88 Returns,” the company’s domestic market share rose 0.6 percent to 64.5 percent—a remarkable accomplishment at a time when the Korean cigarette market shrunk by 0.1 percent.
In the vapor segment, KT&G posted growth too. The company’s Lil tobacco-heating product accounted for more than a 60 percent market share at convenience stores in October.
Starting this year, the company intends to enter new markets. In the first quarter of 2020, KT&G signed a strategic partnership with PMI to cooperate in exporting Lil while introducing the product in Russia, Ukraine and Japan, where it gained positive feedback.
May 19, 2021
Request to Drop Malawi Exploitation Case

Photo: AA+W
British American Tobacco (BAT) and Imperial Brands will ask the high court in London on Wednesday to throw out a case against them alleging the exploitation of Malawian farmers and their children, reports The Guardian.
Denying the allegations, the companies are asking that the case be dismissed on the grounds that lawyers for the farming families cannot prove the tobacco they grew ended up in their cigarettes and other products.
“BAT believes that there is no legal or factual basis to bring these claims, therefore BAT has made an application for the claims to be struck out or stayed,” a BAT spokesperson told The Guardian.
The case was brought after investigations by The Guardian suggested the companies employed child labor and subjected farmers to poor working conditions.
Leigh Day lawyers argue that the farmers’ conditions of work breach the definition of forced labor, unlawful compulsory labor and exploitation under Malawian law.
They also say that they breach the U.K. Modern Slavery Act, article 14 of the European convention on human rights and the International Labor Organization definition of forced labor.
The heart of the claim is that two of the largest tobacco companies cynically exploited impoverished tobacco farmers from Malawi and their children.
Martyn Day, senior partner, Leigh Day
“The heart of the claim is that two of the largest tobacco companies in the world cynically exploited impoverished tobacco farmers from Malawi and their children,” said Martyn Day, senior partner at Leigh Day.
“Fortunately, the two defendant companies are based here in Britain, giving our courts jurisdiction to adjudicate these claims.” He said he was optimistic the judge would allow the claims to progress toward a full trial.
Several thousand of Malawi’s poorest tobacco tenant farmers have joined the claim. They sell their crop to a leaf-buying company in Malawi, which they say supplies BAT and Imperial.
May 19, 2021
Website Profiles RLX Founder Kate Wang

Photo: RLX Technology
The Celebrity Net Worth website recently published a profile of RLX Technology Founder Kate Wang, who the publication describes as one of the richest self-made women in the world.
Wang graduated from Jiatong University with a degree in finance in 2005 and took a management trainee job at Proctor & Gamble in Guangzhou. In 2011, she moved to New York City to get her Master of Business Administration degree at Columbia.
After grad school, Wang spent a year at the Beijing office of Bain & Co. She then moved to Uber China, followed by the Chinese ride-sharing service Didi Chuxing, which merged with Uber China in 2016.
In 2017, Wang tried e-cigarettes to help her quit smoking, but she found the Chinese offerings available at the time to be terrible. She saw an opportunity and decided to focus on older smokers who were trying to quit, like her father, who was suffering the health consequences from his two-packs-per-day habit.
Through crowdfunding on JD.com, Wang raised $6 million in seed capital in June 2018, positioning the RLX Technology as a tech startup.
After a little more than a year of operation, RLX had garnered almost half of the largely unregulated domestic vaping market in China.
In January, RLX went public on the New York Stock Exchange and raised $1.4 billion.
However, when Chinese regulators in October 2019 banned internet sales of e-cigarettes to discourage underage vaping, 20 percent of the company’s business evaporated overnight.
Undeterred, RLX started building a physical store presence. In January 2020, RLX opened a flagship store in Shanghai. Today, RLX has more than 5,000 stores in 250 cities in China. The company requires ID and put facial recognition in place to prevent minors from shopping for e-cigarettes in RLX stores. RLX still has more than 60 percent of China’s growing e-cigarette market.
Despite the challenges, RLX’s sales grew 147 percent to $585 million in 2020, up from $19 million in 2018.
In March, however, Chinese regulators revealed a draft of rules that would reclassify e-cigarettes as tobacco products and bring them under the control of the State Tobacco Monopoly Administration (STMA). Such a move would greatly diminish vapor companies’ potential earnings. All tobacco products in China are sold through government-owned stores. In response to the news, the share price of RLX dropped 54 percent—erasing $16 billion from the company’s market cap.
Meanwhile, the U.S. Securities and Exchange Commission announced it would begin enforcing a law that Chinese companies listed on the New York Stock Exchange would have to provide audits or be de-listed.
In the worst-case scenario, Wang would be forced to sell at a price set by China Tobacco (which would likely jeopardize most, if not all, of her profit) and be forced to de-list in the U.S.
May 19, 2021
Cronos Group Hires U.S. Regulatory Expert

Photo: tadamichi
Cronos Group, a Canadian cannabis producer partially owned by cigarette maker Altria Group, has hired Thomas Cohn as head of regulatory and product, reports Bloomberg Law.
Cohn is a U.S. Federal Trade Commission (FTC) expert who spent the past year as general counsel for privately held consumer products company Avon Co. in New York.
Cronos sought FTC and Food and Drug Administration expertise for “building disruptive intellectual property by advancing cannabis research, technology and product development,” according to an online job posting by the Toronto-based company for a head of regulatory affairs.
In 2018, Cronos became the first Canadian pot producer to be listed on the Nasdaq. Since then, the marijuana market has continued to grow, with Canadian cannabis companies looking to the United States and other cigarette giants like Philip Morris International and British American Tobacco evaluating their legal weed investments.
May 19, 2021
PMI Highlights IQOS Momentum at Forum

Jacek Olczak
Presenting at the Goldman Sachs Global Staples Forum on May 18, Philip Morris International CEO Jacek Olczak highlighted the next steps in the company’s strategy to becoming a majority smoke-free company in terms of net revenue by 2025.
Olczak highlighted IQOS’ strong and accelerating topline momentum and potentially lucrative opportunities to expand beyond nicotine into broader lifestyle/wellness markets, such as high-margin botanicals and respiratory drug delivery.
IQOS added more than 1.5 million users in the first quarter of 2021, according to Olczak—well above its historical average of 1 million new users per quarter. Robust conversions at 70 percent to 80 percent continue to dwarf the average conversion rates of many vapor products, which are in the mid-teens.
The heat-not-burn device is now available in 66 markets, with a user base of 19.1 million, of which 14 million have stopped smoking and fully converted to IQOS.
Olczak was particularly excited about the launch, scheduled for the second half of 2021, of PMI’s ILUMA IQOS product, which he believes could drive even higher conversion rates and margins as PMI continues to leverage its fixed cost base on IQOS while streamlining its customer acquisition and retention.
Olczak also reviewed management’s ongoing efforts to digitalize and simplify business processes, including PMI’s commercialization strategies around IQOS. According to him, these efforts have already yielded $60 million of gross savings in selling, general and administrative expenses toward management’s target of $1 billion in 2021–2023.
Olczak believes that PMI’s digitalization efforts will not only further reduce the cost of acquiring and retaining new users and ultimately drive more profitable growth but also accelerate conversion and customer acquisition, especially with the eventual global rollout of PMI’s digital customer experience.
Olczak also touched on PMI’s longer term opportunities beyond heat-not-burn and vaping, including nicotine pouches and next-generation devices.
Management is also looking into adjacencies, such as broader lifestyle/wellness markets, such as high-margin botanicals (including pure CBD) and respiratory drug delivery. The company aspires to achieve at least $1 billion in incremental net revenue from its beyond nicotine efforts by 2025.
Olczak expressed optimism about PMI’s competitive advantages in terms of its capabilities around product safety and efficacy and validating/substantiating scientific claims.
May 19, 2021