Category: News This Week

Haynes: Critical Gaps in Deemed Products List

Bryan Haynes (Photo: Troutman Pepper)
The U.S. Food and Drug Administration’s public list of “deemed” tobacco products fails to apprise stakeholders of unlawfully marketed products and fails to identify products that are lawfully marketed, according to Bryan Haynes of the Troutman Pepper law firm.
On Feb. 16, 2021, the FDA published the long-awaited list of products that were on the U.S. market on Aug. 8, 2016, are currently on the U.S. market and were the subject of a request for marketing authorization submitted to FDA by Sept. 9, 2020.
The initial version of the list includes cigar, pipe tobacco and waterpipe tobacco products that were the subject of substantial equivalence (SE) or exemption from substantial equivalence applications filed by Sept. 9, 2020. However, the list excludes submissions for electronic nicotine-delivery systems (ENDS), apparently because the FDA has not yet completed its intake review of the thousands of premarket tobacco product applications (PMTAs) submitted for ENDS products.
Writing on The Tobacco Law Blog, Haynes says this omission is striking, given what appears to be the plethora of ENDS products that are currently on the market and for which no PMTA was submitted by the manufacturer or importer. Although the FDA has issued a few warning letters to sellers of these unauthorized products, it appears that these warning letters have only scratched the surface of unauthorized products.
Haynes says the list also excludes “deemed” products that are grandfathered from the premarket review process and “deemed” products that have received FDA marketing authorization.
“In order to better advise the public as to which products can legally be sold, FDA will need to expedite the inclusion of ENDS products on the list, as well as consider better ways to advise the public of products that are exempt from premarket review or that have obtained marketing authorization,” writes Haynes.
February 23, 2021
Authorities Crack Down on Single Stick Sales

Photo: Taco Tuinstra
Authorities in Nigeria and Sri Lanka want to restrict sales of individual cigarettes to discourage smoking. Sales of single sticks are common in developing countries where many smokers are unable to afford packs.
Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) says it will start confiscating cigarettes sold by the stick at the expiration of the moratorium given in the Tobacco Control Law, according to the Premium Times.
Scheduled to come into effect by mid-2021, new rules require tobacco companies to sell cigarettes in sealed and tamper-proof packaging, allowing law enforcement to easily spot illegally opened packs.
“Once it is tamper-proof, anybody who is selling by the sticks at that point is violating the law in a significant manner, and we will have absolutely no apologies in confiscating the products on their shelves,” said Babatunde Irukera, executive vice chairman of the FCCPC.
Sri Lanka, too, is drafting legislation banning the retail sale of individual cigarettes, reports News 1st, citing the country’s National Authority on Tobacco and Alcohol (NATA).
“By drafting regulations to ban the retail sale of [single] cigarettes, those who cannot quit the habit of smoking will be compelled to purchase a full packet of cigarettes, which will contain 20 per pack,” said NATA Chairman Samadhi Rajapaksa. “Thereby, buying capacity will reduce, meaning, the tendency for smoking in the country could be brought down drastically by imposing a ban on retail sale of [single] cigarettes.”
Rajapaksa noted that about 110 people die daily due to the consumption of tobacco and alcohol in Sri Lanka. He also stated that consumers spend close to LKR1billion ($5.2 million) on tobacco and liquor daily.
February 23, 2021
RLX Hires Citigroup Dealmaker as CFO

Photo: RLX Technology
The China-based vapor company RLX Technology has hired Lu Chao as its chief financial officer, according to people with knowledge of the matter.
Lu, a managing director and head of Asia healthcare investment banking at Citigroup, is expected to join the U.S.-listed e-cigarette maker as soon as March. Lu will help RLX Technology to identify expansion and investment opportunities in the healthcare industry that could apply its vaping technology, said the source, who asked to remain anonymous.
A Princeton University graduate, Lu joined Citigroup in December 2013, according to his LinkedIn profile.
RLX Technology, which is known for its RELX-branded devices, raised about $1.4 billion in an initial public offering in the U.S. earlier this year, according to Bloomberg. Lu was a lead banker on the deal, the source said, as Citigroup and China Renaissance Holdings arranged the offering.
Shares in RLX Technology have risen more than 75 percent since its January debut, giving the company a market value of about $32.7 billion.
February 23, 2021
Imperial to Cut CEO Compensation

Stefan Bomhard (Photo: Imperial Brands)
Imperial Brands is cutting CEO Stefan Bomhard’s performance-linked pay in response to shareholders’ concerns over his remuneration package, reports Reuters.
Bomhard and the remuneration committee have agreed that the value of his 2021 long-term incentive plan award will be cut to 315 percent from 350 percent of his salary.
Around 40 percent of shareholders voted against the directors’ remuneration proposal during Imperial Brand’s annual general meeting earlier this month.
The shareholder revolt over Bomhard’s salary came as it was “significantly larger” than his long-running female predecessor, reported The Times.
When Imperial Brands announced Bomhard’s appointment in February last year, it said he would receive an annual salary of about £1.3 million ($1.82 million) and a pension allowance equivalent to a maximum of 14 percent of salary and other usual benefits.
Since joining, the former Inchcape executive has promised to boost the company’s performance by bringing in new talent, changing incentive structures and sharpening focus on top markets.
In 2017, Imperial Brands shareholders balked a proposal to increase the salary of then-CEO Alison Cooper to almost £8.5 million annually from £5.5 million.
February 22, 2021
Reynolds Cleared in Oregon Cancer Suit

Photo: succo from Pixabay
Oregon jurors on Feb. 19 cleared R.J. Reynolds Tobacco Co. of responsibility for the terminal lung cancer Patricia Rickman developed after decades of smoking the company’s cigarettes, reports the Courtroom View Network.
The case, Rickman v. R.J. Reynolds, turned in part on whether tobacco industry messaging swayed Rickman’s smoking decisions. Rickman claims that Reynolds’s participation in a decades-long campaign to misrepresent the health effects of smoking ultimately caused her cancer.
Reynolds countered that Rickman smoked despite knowing the dangers of cigarettes. Representing Reynolds, attorney Steven Geise told jurors Rickman began smoking years after mandatory warnings went onto cigarette packs and continued despite widespread information concerning smoking’s dangers.
The evidence, Geise said, undercut Rickman’s contention that she did not believe smoking was dangerous until about 2015. “It stretches the bounds of reason,” Geise said, “to think that somebody could go into the 2010s and not have any idea that cigarette smoking was bad.”
The plaintiff’s attorney had requested up to $12.7 million for Rickman plus loss-of-consortium damages for her husband and a finding that punitive damages were warranted.
February 22, 2021
Illicit Juul Products Uncovered in Florida

Photo: Steveheap – Dreamstime.com
About 3.3 percent of surveilled retail outlets in Miami-Dade County and Broward County were found to be selling illicit Juul Labs products during a recent enforcement campaign by the company.
Juul Labs’ Brand Protection Team investigated 917 retailers in the Florida counties, which are near a U.S. port of entry and international mailing facility—known entry points for the importation of illicit products. With the support of a third-party compliance auditor, the team conducted product surveillance and obtained samples across retailers. The samples were then evaluated to determine whether they were illicit products.
Of the 30 outlets in South Florida selling illicit products, six outlets sold counterfeit Juul pods, primarily offered in illegally marketed flavors, while one sold counterfeit Juul devices. Ten outlets sold diverted Juul pods, primarily diverted from Canadian and Russian markets, and 13 outlets sold illegal and unauthorized compatible pods, with most of these compatible brands subject to International Trade Commission exclusion orders.
Juul Labs said it would deliver its findings to law enforcement authorities and support their efforts to bring legal action. “We need to be a responsible and trusted steward of vapor products,” said Adrian Punderson, vice president of brand protection at Juul Labs, in a statement. “As such, it is our obligation to support enforcement against illicit and illegal products as we strive to reset the vapor category and earn a license to operate in society.”
February 22, 2021
Tobacco Cultivation up in Africa, Down Globally

Photo: Taco Tuinstra
Even as tobacco cultivation declined globally, it increased in Africa, reports Down to Earth, citing a study by the World Health Organization (WHO).
Worldwide, the area under tobacco cultivation decreased by 15.66 percent between 2012 and 2018—but in Africa, it increased 3.40 percent during the same period. Leaf production decreased globally by 13.9 percent between 2012 and 2018; in Africa, however, it increased by 10.6 percent. In 2018, global tobacco leaf production was 6.3 million tons; in Africa, it was 722,187 tons, representing 11.4 percent of global production.
In 1995, there were only two major tobacco leaf growing countries in Africa—Malawi and Zimbabwe. Over the past two decades, other African nations have substantially increased their production of tobacco leaves.
Today, the main tobacco leaf growing countries in Africa are Zimbabwe (25.9 percent of Africa’s output), Zambia (16.4 percent), Tanzania (14.4 percent), Malawi (13.3 percent) and Mozambique (12.9 percent).
Many African governments view tobacco farming as a tool to alleviate poverty. From 2012 to 2018, the value of tobacco leaf exports from Africa increased by 10.51 percent to $2.08 billion.
African countries thus showed a favorable trade balance of approximately $1.26 billion in 2018. Two main tobacco leaf exporters in Africa in 2018 were Zimbabwe (40.61 percent) and Malawi (25.27 percent).
The WHO maintains that tobacco farming has many negative consequences on the health and well-being of farmers as well as for the environment and the long-term well-being of the countries concerned. The health body believes domestic leaf cultivation also boosts local cigarette consumption.
The number of tobacco users in the WHO African Region increased to 73 million in 2018 from 64 million adult users in 2000. This increase contrasted with a decline in the number of tobacco users globally to 1.34 billion from 1.4 billion over the same period.
February 19, 2021
Zimbabwe Marketing Board Seeks New CEO

The TIMB headquarters in Harare (Photo: Taco Tuinstra)
Andrew Matibiri will step down as CEO of Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) after his term ends in April, according to Newsday.
Andrew Matibiri
Matibiri has led the industry regulator for 15 years. Government regulations restrict a parastatal CEO’s term to 10 years, but the rule was not yet in effect when Matibiri took the helm.
The TIMB board has contracted Industrial Psychology Consultants (IPC) to search for the new CEO.
“Industrial Psychology Consultants (Pvt.) Ltd. has been contracted by the Tobacco Industry and Marketing Board to assist with the recruitment and selection of a suitable candidate for the position of chief executive officer,” IPC said in a vacancy advert published in late 2020.
“The CEO is accountable for leading the business through the initiation and implementation of strategies to unlock its full potential through the effective utilization of the material, financial and human resources, and supervision of all operational units.”
According to TIMB data, 180.8 million kg valued at $452.3 million was delivered to the country’s contract and auction floors during the 2020 season. During the same period last year, 240 million kg valued $479 million went under the hammer.
February 19, 2021
Postal service Invites Input on ENDS ban
Photo: Vladimir Daragan – Dreamstime.com
Stakeholders will have 30 days to comment on the proposed U.S. Postal Service rules for mailing electronic nicotine-delivery systems (ENDS). The USPS posted the rules on Wednesday and they were published in the Federal Register today. Comments must be submitted by March 22. The rules are expected to take effect March 27.
“The Postal Service proposes to revise Publication 52, Hazardous, Restricted and Perishable Mail, to incorporate new statutory restrictions on the mailing of electronic nicotine-delivery systems,” the listing reads. “Such items would be subject to the same prohibition as cigarettes and smokeless tobacco, subject to many of the same exceptions.”
The Preventing Online Sales of E-Cigarettes to Children Act, which placed ENDS under the PACT Act, was enacted on Dec. 27, 2020, and becomes effective 90 days after enactment (March 27, 2021). The USPO rule states that the agency will only mail ENDS products under narrowly defined circumstances.
Exceptions from the ban include:
Intrastate shipments within Alaska or Hawaii;
Shipments between verified and authorized tobacco industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes;
Lightweight shipments mailed between adult individuals, limited to 10 per 30-day period;
Limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes;
Limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
The unpublished rules suggest that business-to-business shipments will be allowed. According to Azim Chowdhury, a partner at Keller and Heckman, the PACT Act has historically exempted business-to-business deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products mailed only for business purposes between legally operating businesses that have all applicable state and federal government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation or research.
February 19, 2021
Illicit Cigarettes One-Fifth of Sales in Latvia

Photo: Makalu from Pixabay
Illicit cigarettes accounted for 20.4 percent of the Latvian tobacco market in 2020, 3.6 percentage points more than in 2019, reports the Baltic News Network, citing Nielsen figures.
The Latvian Chamber for Commerce and Industry (LTRK) notes that with this share, Latvia has come close to Lithuania where the percentage of illegal cigarettes was 21.8 percent last year. In Estonia, by contrast, the percentage of illegal cigarettes on the market was only 9.5 percent of the total market volume.
LTRK Chairman Janis Endzins attributed the increase to the impact of Covid-19 on consumer purchasing power, a recently enacted ban on menthol cigarettes and Latvia’s excise tax policy.
“At the end of 2020, we observed continued reduction of the illegal market, reaching its lowest point in the past 10 years. However, currently, there is no reason to expect positive changes,” he said. “Likely, this negative trend with illegal trade will remain in the future and will definitely affect alternatives to cigarettes, such as smokeless products, for which the government decided to rapidly increase excise tax in spite of experts’ recommendations.”
According to Endzins, illegal online trade of e-cigarettes is on a rise, and there have been cases of contraband tobacco-heating devices being intercepted by the State Border Guard.
Data from the study shows that 2.4 percent of all cigarettes consumed in Latvia last year were counterfeit. This means the total percentage of counterfeit cigarettes among all illegal cigarettes consumed in Latvia last year was nearly 12 percent. The largest portion of illegal cigarettes was carried to Latvia from Belarus (67.2 percent). Similarly to previously reported study periods, 61 percent of the total illegal cigarettes volume consisted of cigarette brands such as NZ, Premier, Queen, Minsk and Fest.
Nielsen studies the illicit market every year by collecting empty cigarette packs and determining the origin of tobacco products based on excise labels and health warnings.
February 19, 2021