Category: News This Week

Ceylon Tobacco Co. Appoints New Chairman

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Ceylon Tobacco Co. (CTC) has appointed Suresh Kumar Shah as its chairman, reports The Daily Mirror. He succeeds William Francis Pegel, who served as chairman from August 2019.
The succession follows changes to CTC’s board announced on Feb. 1, with the appointment of three new nonexecutive directors—Suresh Kumar Shah, Stuart Kidd and Rumana Rahman—bringing the number of directors on CTC’s board to eight.
Previously, Shah served as chairman of the Ceylon Chamber of Commerce and chairman of the Employers Federation of Ceylon.
He also served as Commissioner on the Securities and Exchange Commission of Sri Lanka and was a member of the Monetary Policy Consultative Committee with the Central Bank of Sri Lanka and of the Council at the University of Moratuwa.
Currently, British American Tobacco’s (BAT) regional head of finance for Asia-Pacific and the Middle East, Kidd joined BAT Australia in 2001. He has held various senior finance roles in New Zealand, Vietnam, the United Kingdom, Switzerland, Hong Kong and Japan. Prior to his appointment as regional head of finance, he was finance director at BAT Japan from 2015.
Rahman is BAT’s regional head of talent, culture and inclusion for Asia-Pacific and the Middle East. She is the first South Asian female and first Bangladeshi to sit on the regional leadership team and is also the first South Asian female leader of the top 120 leaders of BAT.
Prior to moving to Hong Kong, Rahman was the head of human resources for BAT Bangladesh. With more than 18 years of experience, she has an extensive background in human resources and specialist functions. Rahman was recognized as the most inspiring woman leader by Brand Forum in 2016.
February 17, 2021
FDA to Prioritize Bestsellers’ PMTAs

Mitch Zeller (Photo: David Parker)
In reviewing premarket tobacco product applications (PMTAs), the U.S. Food and Drug Administration is prioritizing products with the greatest market share where scientific review will have the greatest public health impact, the agency said in a Feb. 16 update on its website.
As of mid-January, the FDA had completed the processing step of applications for more than 4.8 million products from over 230 companies. “We have accepted applications for about 84,000 products and refused to accept applications for about 3,100 products submitted through the PMTA pathway,” wrote Mitch Zeller, director of the FDA Center for Tobacco Products. “As of mid-January 2021, of the applications submitted by Sept. 9, we have filed applications for about 29,000 products and refused to file applications for about 1,650 products submitted through the PMTA pathway.
According to Zeller, the agency’s progress has been slowed by the great variety of ways in which applicants submitted their PMTAs. For example, some applicants provided information on one product per submission while other applicants provided information for all of their products within one submission.
The FDA is prioritizing enforcement against electronic nicotine-delivery devices (ENDS) that continue to be sold and for which the agency did not receive a product application. To date, the FDA has sent warning letters to 30 firms selling ENDS products, specifically e-liquids, without premarket authorization.
The agency also stated that the likelihood of the FDA reviewing all the applications by Sept. 9, 2021, is low. Because of the sheer number of applications, the agency has set aside the products with the greatest market share and will push those products through the process more quickly. “[We will] focus resources on products where scientific review will have the greatest public health impact, based on their market share, while also committing to providing an opportunity for review to all companies,” Zeller wrote.
The FDA could not confirm when it would release a list of products that are approved to be on the market. Zeller wrote that the agency continues to work on processing submissions and verifying the dates of initial marketing and current marketing status of products that submitted a timely PMTA.
“We have already verified this information for around 86,000 products received through the PMTA pathway,” he wrote. “Due to the size and volume of the PMTA submissions and the variable quality, format and presentation of these submissions, processing these submissions and verifying this information will take more time.”
February 17, 2021
Baek Recommended for Second Tenure

Bok-in Baek (Photo: KT&G)
KT&G’s Director Candidate Recommendation Committee (DCRC) has recommended Bok-in Baek, the current president of KT&G, as a candidate for the next president of KT&G.
If appointed as the next president in the general meeting of shareholders scheduled to be held in March, Bok-in Baek would be expected to manage KT&G for the next three years.
The DCRC said that it had selected Baek as a candidate after carefully considering his achievements, vision and strategy, among other factors.
The DCRC added that Baek has been highly regarded for his leadership of KT&G. Baek’s tenure at the helm of the company included expansion into more than 100 foreign markets and the conclusion of an export contract for tobacco-type electronic cigarettes with Philip Morris International.
February 17, 2021
BAT Earnings up Despite Covid-19

Photo: BAT
British American Tobacco (BAT) reported revenue of £25.78 billion ($35.69 billion) and profit of £9.96 billion in its preliminary announcement for 2020. The figures are down 0.4 percent and up 10.5 percent, respectively, over those of 2019. Operating margin improved 380 base points to 38.6 percent.
Jack Bowles
“As the largest, and only truly global company in our industry, we take seriously our role to transform ourselves and demonstrate thought leadership,” said BAT CEO Jack Bowles. “We have a clear purpose to reduce the harm footprint of our business. We are uniquely positioned to encourage the switch to reduced-risk products.
“We operate worldwide, including the U.S., which represents 40 percent of the global industry’s value. Our well-embedded consumer-centric, multi-category strategy is activated on a global scale, leveraging our insights on consumer satisfaction, innovation needs and taste preference. We are building the brands of the future—strong, global brands, specifically positioned in each target consumer segment.”
The number of people consuming BAT’s noncombustible products grew by 3 million to 13.5 million in 2020, doubling the rate of consumer adoption in the second half of 2020. A fifth consecutive year of value share growth in combustibles enables the company to increase its investment in “new category” products by £426 million compared to 2019.
Initiatives aimed at driving efficiencies and simplifying the company delivered £660 million of cost savings, putting BAT well on track to achieve its target of £1 billion of savings by 2022.
“We are committed to reducing the health impact of our business whilst delivering sustainable results that create long-term multi-stakeholder value,” said Bowles.
February 17, 2021
Imperial Appoints Chief Financial Officer

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Imperial Brands has appointed Lukas Paravicini as chief financial officer effective Aug. 5, 2021, or at an earlier date to be announced. Paravicini is currently chief financial officer of agricultural commodities and brokerage group ED&F Man Holdings. He will succeed Oliver Tant, who announced his retirement last year.
Paravicini will step down from the board upon Paravicini’s appointment and leave the business following an orderly handover.
“I am delighted to welcome Lukas to the business,” said Imperial Brands CEO Stefan Bomhard in a statement. “He is a disciplined, results-oriented leader with a proven track record in international consumer goods companies. As well as his impeccable finance credentials, Lukas has considerable operational experience as well as expertise in driving transformational change including in global shared services in large international organizations. These qualities will be invaluable to Imperial as we implement our new strategy. I would like to thank Oliver for his support since I joined Imperial and for his contribution to the business during his seven-year tenure.”
“I am delighted to be joining Imperial at such an exciting time,” said Paravicini. “I look forward to supporting the new strategic direction and working with the board and my new colleagues to strengthen performance and enhance shareholder value.”
Before joining ED&F Man Holdings, Paravicini held senior positions at Fonterra, a New Zealand and Australia listed cooperative and the world’s largest dairy exporter with sales in 130 countries. He was chief financial officer from 2013 to 2017 and chief operating officer of global consumer and foodservice business from 2017 to 2018. Prior to that, he spent 22 years with Nestle in various senior finance and general management roles, working in South America and latterly in Switzerland for Nestle Professional, the food service arm of Nestle, first as chief financial officer and then as vice president and general manager of Europe.
February 17, 2021
Taat Launching Online

Photo: Taat Lifestyle and Wellness
Taat will be available for purchase online by most smokers aged 21-plus in the United States through the company’s e-commerce portal, which is scheduled to launch at 9 a.m. Eastern Standard Time on Feb. 17, 2021, the company announced in a press release.
Through the company’s online shop, cartons of Taat Original, Smooth and Menthol can be purchased by smokers aged 21-plus and shipped to addresses in eligible jurisdictions. As of December 2020, Taat is available in chain and independent tobacco retailers across Ohio. By accelerating the availability of Taat in new U.S. markets, the company anticipates it could seed interest among smokers aged 21-plus as a method of prioritizing new regions in which to distribute Taat at retail. Online sales of Taat are intended to complement retail placements made and managed through Crossmark as part of the company’s scope of initiatives to gain market penetration in the United States.
The company has undertaken extensive development work on the Taat online store, which began in the fourth quarter of 2020. Key considerations in planning the online store included layout optimization for desktop, tablet and mobile web browsers as well as the implementation of mechanisms to confirm that visitors are at least 21 years of age.
Marissa Dean profiled Taat in the January edition of Tobacco Reporter.
February 16, 2021
U.S. Mail Ban Claims its First Victim

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The Prevent All Cigarette Trafficking (PACT) Act, which prohibits the shipping of vapor products through the U.S. Postal Service (USPS), has claimed its first victim.
In a letter to its business partners, Securience announced it would be closing its doors at the end of March. Securience is the parent company of vapor brands such as DuraSmoke, Forge, AmericaneLiquidStore and VapeMoar.
In its letter, Securience cites its inability to mail product to consumers; however, the PACT Act also prevents business-to-business shipments by the USPS, according to a representative from the Bureau of Alcohol, Tobacco and Firearms who spoke during the recent Tobacco and Vapor Law Symposium presented by the Keller and Heckman law firm.
“Because of the complexity of these new shipping rules, FedEx, UPS and DHL have all informed us that they will stop shipping vaping products completely—including our shipments to you, our wholesale vape shop customers and distributors,” wrote Securience owner Don Muehlbauer. “While we have looked at some alternatives, given the geographic locations of our customers, the significant increase in compliance costs, and our capabilities as a small business, we have been unable to find a feasible alternative and have been left in a situation that makes continuing business impossible.”
Securience opened its doors in 2008 and has since been a staple in the vaping industry. Muehlbauer stated that he anticipates the PACT Act will not only impact his company, but many small e-liquid manufacturers. “Those manufacturers who are able to afford the increased compliance costs will have increased shipping costs that may impact [retail] shops,” he wrote. “The last day we will be able to accept orders for shipping is March 25 or until supplies run out.”
February 15, 2021
FDA Warns Sellers of Unauthorized Liquids

Photo: Eugene Onischenko
The U.S. Food and Drug Administration on Feb. 12 sent warning letters to 11 firms for selling unauthorized e-liquids.
The firms receiving warning letters are Jojo’s Smokeless World (Mod Shield), Sugar Vapor Co., DC Vapor, Take Off Corp., The Vapor Spot, Premium Vapor Technologies, Vaping Xtreme, Vapes Gone Wild Juice, Vapeoholic, Vaporescence (Vape King USA) and Elemental Vapor Bar.
The firms did not submit a premarket tobacco product application by the Sept. 9, 2020, deadline.
Collectively, these companies have listed a combined total of more than 150,000 products with the FDA.
Following an initial set of such warning letters announced earlier this year, the FDA has continued to issue additional warning letters for these types of products. The FDA sent 10 warning letters in mid-January.
“Per a court order, applications for premarket review for certain deemed new tobacco products on the market as of Aug. 8, 2016—including e-liquids—were required to be submitted to FDA by Sept. 9, 2020,” the agency wrote in a statement.
“For companies that submitted applications by that deadline, FDA generally intends to continue to defer enforcement for up to one year pending FDA review unless there is a negative action taken by FDA on the application. In line with the agency’s stated enforcement priorities, after Sept. 9, 2020, FDA is prioritizing enforcement against any ENDS product that continues to be sold and for which the agency has not received a timely product application.”
February 15, 2021
ITC Reports Quarterly Results

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ITC reported a net profit of INR36.29 billion ($504.14 million) for the three months ending Dec. 31, 2020, down 3.7 percent from comparable 2019 quarter. Gross revenue stood at INR124.92 billion, up 5 percent and driven mainly by the Indian company’s agribusiness and other fast-moving consumer goods segment.
Cigarette volumes and revenue witnessed strong sequential recovery during the reporting period, led mainly by urban markets on the back of progressive easing of Covid-19-related restrictions and enhanced mobility.
ITC launched several new brands of cigarette variants, including Gold Flake Neo, Classic Connect, American Club Clove Mint, Gold Flake Indie Mint and Capstan Fresh Flavour, catering to evolving consumer preferences.
“The operating environment remained challenging even as economic activity picked up pace progressively during the quarter with the easing of restrictions and increased mobility,” ITC wrote in a press statement. “High frequency lead economic indicators pointed to green shoots of recovery in aggregate demand and supply, leading to upward revisions in GDP growth estimates for FY 2020 to [20]21.”
A 13 percent tax hike that came into effect in February 2020 continues to weigh on legal industry volumes, according to ITC. “Wide availability of smuggled cigarettes continues despite deterrent actions and heightened levels of seizures by concerned authorities,” the company wrote.
In its Union Budget 2021, India’s central government kept the cess and taxes on tobacco unchanged.
With a share of nearly 80 percent, ITC is the undisputed market leader in India’s factory-made cigarette segment.
February 12, 2021
China Shuts Down Counterfeit Juul Factory

Chinese authorities have shut down an illicit enterprise involved in the manufacture and international distribution of counterfeit Juul products in China, Juul Labs announced in a press release. The operation resulted in the seizure of more than 110,000 counterfeit products, closure of the production facility and arrest of criminal actors behind the illicit enterprise.
Through its global enforcement operations, Juul Labs was able to identify individuals who were offering suspected counterfeit Juul products at wholesale from China. After in-depth surveillance and monitoring, the company was able to locate a clandestine factory manufacturing counterfeit Juul products for international distribution. Juul Labs then shared this information with Chinese law enforcement and supported its efforts to investigate and raid the illicit factory.
In addition to seizures of counterfeit Juul products, packaging and labeling, officials were able to retain a significant amount of documentation on businesses and individuals with purchase history, which will be used in follow-up investigations and enforcement actions. As a result of the raid, both the factory owner and manager have been arrested and will be subject to criminal prosecution.
The raided factory had thousands of counterfeit packaging for Juul products at 5 percent nicotine by weight in various flavors, with production runs ongoing for counterfeit Juul pods in menthol flavor. Juul Labs suspects the that the products were intended for the U.S. market. In addition, the factory appeared to have been manufacturing disposable vapor products under various brand names.
February 11, 2021