Category: News This Week

  • Pyxus to Divest Cannabis Business

    Pyxus to Divest Cannabis Business

    Photo: Pyxus International

    Pyxus International intends to divest its cannabis business in order to focus on its more profitable tobacco and e-liquid businesses. In addition, the company has taken action to restructure its industrial hemp and CBD operations to minimize financial investment in that business.

    “Our strategic decision to exit cash-flow negative cannabinoid operations will allow us to reduce corporate SG&A [Selling, general and administrative expense] and sharpen our focus on growing our more profitable tobacco and e-liquid businesses such that these complementary businesses can fully leverage Pyxus’ 145-year heritage and existing relationships,” said Pieter Sikkel, president and CEO of Pyxus International, in a statement.

    “We maintain our belief that there is value in FIGR and its growth can be accelerated with the right capital structure and partner. The completion of our financial restructuring, global operations efficiency program, and continued investment in agronomy, traceability and sustainability are proving to be of significant value to our tobacco customers as we have started to work together on long-term strategic partnerships that support our objective of growing our market share.”

    In connection with the plan, the company’s three Canadian cannabis subsidiaries, FIGR Brands, Canada’s Island Garden (FIGR East) and FIGR Norfolk filed for and received protection from their creditors under the Companies’ Creditors Arrangement Act (Canada).

     

  • Californians to Vote on Flavor Ban

    Californians to Vote on Flavor Ban

    A referendum to overturn California’s ban on flavored tobacco products qualified on Friday, reports AP.

    Voters will nw decide in November 2022 whether to uphold the ban. The law won’t take effect until voters have decided.

    The ban restricts the sale of flavored products but doesn’t criminalize possession of these products. Loose-leaf tobacco, premium cigars and shisha tobacco are exempt. Flavors including, but not limited to, “fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, menthol, mint, wintergreen, herb or spice” are included in the ban. Those caught selling banned products face a fine of $250.

    Supporters of the law argue that these products are targeted at youth and Latino and Black communities while opponents of the ban argue that it goes too far and takes away products preferred by these communities while allowing continued sales of products preferred by wealthy communities.

    Former state Senator Jerry Hill sponsored the legislation. He stated that his goal is to target products contributing to youth addiction, and he said tobacco companies are attempting to “delay the inevitable.”

    “Voters are a lot smarter than Big Tobacco thinks they are,” Hill said.

  • Next Generation Assigns Patent

    Next Generation Assigns Patent

    Photo: Martinmark – Dreamstime.com

    Next Generation Labs (NGL), the world’s largest manufacturer of TFN R-S, S and R isomer nicotine, has assigned the rights of its Republic of Korea R-S nicotine manufacturing patent to NextEra Co.

    NGL said it has taken this step “to help strengthen direct in-market enforcement efforts by NextEra against unscrupulous manufacturers who have attempted to ship unauthorized synthetic, nonsynthetic and, in some instances, counterfeit or mislabeled TFN synthetic nicotine vape products into the South Korea market.”

    NextEra is NGL’s exclusive TFN partner and is the largest flavor formulator and distributor of synthetic nicotine vape products in South Korea. Under the assignment, NextEra products containing TFN will continue to be sold, and NextEra will use all means available to protect the market and prohibit violative brands from entering South Korea.

    “This is a strategic patent assignment that will give NextEra the full freedom to use all legal means at its disposal to seek enforcement of existing intellectual property rights related for TFN recreational nicotine in the market,” NGL wrote in a statement

    “Next Generation Labs fully expects NextEra to immediately take action against violators and utilize all necessary legal remedies against any business seeking to either: divert R-S nicotine product sales into South Korea from other markets, attempt to sell mislabeled tobacco-derived nicotine as a synthetic product, or to sell counterfeit TFN products in South Korea,” the company added.

    The terms of the patent transaction have not been made public, and the transaction will not impact Next Generation Labs’ other patents in South Korea or impact control of patents in any other jurisdiction worldwide.

  • Tobacco Firms Named Top Employers

    Tobacco Firms Named Top Employers

    Image: Top Employer Institute

    British American Tobacco (BAT), Japan Tobacco International (JTI) and Imperial Brands have been recognized by the Top Employers Institute.

    BAT and JTI were certified as two of only 16 “Global Top Employers.” Imperial Brands was named a “Top Employer Europe” for a fourth consecutive year in 2021.

    “Receiving Global Top Employer certification for the fourth-year running is a fantastic achievement as it acknowledges our commitment to creating an inclusive and innovative working environment that our employees enjoy being a part of,” said Hae In Kim, director, talent, culture and inclusion at BAT, in a press note.

    “Our employees are our most important asset, and we are particularly proud of the resilience and determination they have displayed during the pandemic. Without doubt, they are a key driver in our continued strong performance as we transform our business and build A Better Tomorrow for all our stakeholders.”

    “The Top Employer certification is not an end-in-itself,” said Steve Dyer, JTI’s vice president, global talent management, in a statement. “For us, it is confirmation that we have always been on the right track by making our workplace a safe and flexible environment for all our employees, whether they are farmers, scientists, office or factory workers.

    “This seventh consecutive certification also sends a strong message to our future employees: we constantly give our people the opportunity to develop their career under the best conditions in order to perform to their highest abilities while being themselves.”

    “I am delighted that Imperial has been recognised for another year with the Top Employer certification,” said Alison Clarke, chief people and culture officer at Imperial Brands, in a statement.

    “Our HR Practices have been surveyed against an international benchmark with a thorough methodology. This accreditation is a symbol of the high standards that we aspire to deliver every day for our people.”

    “Despite the challenging year we have experienced, which has certainly made an impact on organisations around the globe, our regional top employers have continued to demonstrate the power of putting their people first in the workplace,” said David Plink, CEO of the Top Employers Institute.

    Top Employers Institute is the global authority on recognizing excellence in the conditions that businesses create for their people.

    Companies participating in its prestigious certification program have the potential to gain top employer status following a comprehensive analysis of people development practices.

    The institute’s analysis covers 600 practices across a number of areas including: talent strategy, workforce planning, on-boarding, learning and development, performance management, leadership development, career and succession management, compensation and benefits and culture.

  • Tobacco Tax Collections up in Germany

    Tobacco Tax Collections up in Germany

    Photo: Rene Van Den Berg | Dreamstime.com

    Germany taxes $34.7 billion worth of tobacco products reports Xinhua, citing the country’s Federal Statistical Office (Destatis). This is an increase of 5 percent year-on-year.

    The quantity of fine-cut rolling tobacco taxed last year increased by 10.6 percent. The quantity of pipe tobacco taxed rose 44.3 percent.

    Covid-19 lockdowns and border closures played a role in the growth of fine-cut cigarettes. “In search of an alternative to the lower priced cigarettes from abroad, consumers probably increasingly turned to fine-cut to roll their own cigarettes,” stated.

    Cigarette sales fell by 1.1 percent to 73.8 billion pieces. Taxed retail sales values for cigarettes rose 43.5 percent.

  • Egypt Raises Cigarette Prices

    Egypt Raises Cigarette Prices

    Photo: Taco Tuinstra

    Egypt plans to increase cigarettes prices by EGP0.25 per pack in July 2021, reports The Daily News.

    The proceeds of the increase will contribute to funding for the Universal Healthcare Insurance program. When the program was launched in July 2018, the government increased cigarette prices by EGP0.75 per pack to raise funding.

    Under the program’s regulations, an additional EGP0.25 per pack will be added every three years until the total tax reaches EGP1.50/ per pack.

    Domestic market leader Eastern Co. said it expects the rises to be enforced as per schedule.

    The company is expected deliver a strong performance in fiscal year 2020-2021, on the back of higher production capacity and utilization rates. The company recently upgraded its production facilities, increasing the production capacity from 200 million cigarettes per day to 250 million cigarettes per day.

    Eastern’s performance is further boosted by the reduction in the retailer’s margin on cigarettes through indirect price increases, from EGP0.10 per pack to EGP 0.025 per pack in December 2020.

    The appreciation of the Egyptian pound will likely also enhance Eastern’s performance as it relies entirely on imports for raw tobacco, which make up more than 80 percent of raw materials.

  • New Info on PMTA and SE Requirements

    New Info on PMTA and SE Requirements

    Photo: Jhvephotos | Dreamstime.com

    The U.S. Food and Drug Administration on Jan. 20 finalized two foundational rules for the premarket review of new tobacco products. These final rules provide additional information on the minimum requirements for the content, format and review of premarket tobacco product applications (PMTAs) and substantial equivalence (SE) reports. PMTA and SE are two of the pathways through which a manufacturer can seek marketing authorization for a new tobacco product from the FDA.

    Stephen Hahn

    “The finalization of these foundational rules is an important milestone in the FDA’s regulation of tobacco products. The rules enable greater transparency and efficiency of the FDA’s critical task of reviewing applications for tobacco products before new products can be sold in the United States and they describe information that any company must provide if they seek to market a new tobacco product in this country, fulfilling the promise of the Tobacco Control Act,” said FDA Commissioner Stephen M. Hahn.

    Mitch Zeller

    “These final rules, together with our commitment to ongoing enforcement action against e-cigarettes and other tobacco products that illegally target youth, will help us continue to protect the public from the dangers of tobacco-related disease and death,” said Mitch Zeller, director of the FDA’s Center for Tobacco Products. “These final rules will provide greater clarity and efficiency as we ensure that tobacco products are put through an appropriate series of regulatory gates so that products can be marketed only if they meet the standards under the law.”

    Both of these final rules are effective 30 days after publication in the Federal Register. 

    More information about the two foundational rules is available on the FDA website.

  • Raising Awareness of Black-Market Vapor

    Raising Awareness of Black-Market Vapor

    Photo: Timothy S. Donahue

    The National Crime Prevention Council (NCPC) and National Intellectual Property Rights Coordination Center (IPRC) in the U.S. have released an innovative toolkit as part of their nationwide campaign to raise awareness on the dangers of black-market vapor products and empower law enforcement and adult community leaders to prevent and enforce against these illicit activities.

    The IPRC and NCPC launched this public-private partnership, with the support of Juul Labs, in October 2019, seeking to raise awareness on the consequences of illicit vapor products, with the objective of delivering tools and resources to communities grappling with this critical issue across the country. Now, the IPRC and NCPC have expanded upon this initiative by providing law enforcement and other key stakeholders with a toolkit that will aid in their efforts to educate and mobilize their communities against this dangerous illicit trade.

    The toolkit is a comprehensive resource that details the various forms of illicit vapor products, such counterfeit, compatible and diverted products, and teaches the community how to spot such products. It also contains broader educational resources, along with strategies on how best to elevate these vital messages through social media, community events and meetings, and in cooperation with local businesses.

    According to Juul, Illicit vapor products present a number of public health, economic and security consequences. Critically, they undermine underage-prevention measures because of their ease of access and may present additional health and safety risks for adult consumers given that they often are produced in unsanitary conditions without manufacturing and quality controls and lack ingredient testing and product characterization. They also may contain harmful chemicals not present in other, authentic products.

    As part of this campaign, and with the support of IPRC, NCPC will leverage its vast, nationwide network to get this toolkit into the hands of law enforcement, trade partners, and other adult community leaders.

    “It is imperative that we continue to partner across stakeholders, including law enforcement, to address the illicit market of vapor products,” Juul wrote in a statement. “Supporting public-private partnerships like the IPRC/NCPC initiative is one way we can actively fight back against illicit trade of vapor products. By empowering stakeholders through awareness and education, we can address the illicit trade of vapor products and foster a more responsible marketplace for the category.”

  • RLX Seeks up to $1.17 Billion From Offering

    RLX Seeks up to $1.17 Billion From Offering

    Photo: Tobacco Reporter archive

    RLX Technology is looking to raise as much as $1.17 billion from a U.S. initial public offering, reports Bloomberg.

    The Chinese vapor company, known for its RELX-branded devices in China, had earlier considered Hong Kong as a listing venue, but it ultimately opted for the U.S.

    Founded in 2018, RLX is China’s largest e-cigarette maker. The vaping industry has boomed in China even as the country banned online sales of e-cigarettes just over a year ago.

    China is the world’s largest potential vaping market, with an estimated 286.7 million adult smokers in 2019, RLX said in its prospectus. But vaping products only have a 1.2 percent penetration rate, compared with 32.4 percent in the U.S.

    RLX’s revenues increased to CNY2.2 billion ($340 million) in the first nine months of 2020 from CNY1.14 billion a year earlier. It started turning a profit in 2019 and recorded net income of CNY109 million in the nine months to Sept. 2020.

    The company plans to price the IPO on Jan. 20 after the U.S. market closes, according to a term sheet. Citigroup and China Renaissance are joint bookrunners for the offering.

    Earlier reports suggested the company planned to raise up to $100 million in its IPO. 

  • BAT Names New Operations Director

    BAT Names New Operations Director

    Zafar Khan (Photo: BAT)

    Zafar Khan will succeed Alan Davy as director of operations at British American Tobacco (BAT) and will be appointed to the management board effective Feb., 1. Kahn started with BAT in Pakistan 24 years ago. Through his career he has acquired extensive global operations and supply chain experience, including regional operations director, Asia Pacific and Middle East and group head of plan, service and logistics.

    Davy will step down from the management board on Jan. 31, and will leave the BAT Group on May 31 to pursue new challenges and spend more time with his family. Davy joined BAT in 1988 and has been with the group for 32 years, eight years of which as a member of the management board.

    “I would like to thank Alan for the enormous contribution he has made to the group throughout his 32-year career at BAT,” said said BAT CEO Jack Bowles, in a statement. “Alan’s transformation of operations into a dynamic, multi-category function has been a key component of our ‘A Better Tomorrow’ strategy. Most recently, the group’s ability to navigate the challenges presented by Covid-19 is testament to the efficient, agile and globally integrated supply chain he has created. We wish him and his family all the very best for the future.

    “BAT has around 13 million consumers of our non-combustible products and Zafar’s experience of expanding our capabilities and embedding an end-to-end supply chain for our new category products makes him the natural choice as director, operations, to accelerate the delivery of our ‘A Better Tomorrow strategy.’

    “We are very proud of the depth and breadth of our management talent at BAT. By carefully developing careers on a global stage, we are, once again, able to ensure a well thought through and orderly internal succession to a key leadership role. Alan and I are confident that Zafar is the right leader, at the right time for the opportunities ahead. I wish Zafar the very best in his new role.”