Category: News This Week

Zimbabwe Earns $763 Million From Tobacco

Photo: Taco Tuinstra
Tobacco exports earned Zimbabwe $763 million in 2020, reports The Street Journal.
More value-added tobacco in the form of cut rag and cut stems were exported in 2020 compared to 2019, the Tobacco Industry and Marketing Board (TIMB) said.
Exports of byproducts increased from 36 million kg in 2019 to 43 million kg in 2020.
Despite Covid-19, Zimbabwe exported 187 million kg of tobacco, equal to the previous year’s volumes, according to the TIMB. “Global tobacco movements in the year 2020 have not been impacted significantly regardless of the global pandemic,” the TIMB said in a statement. “More value-added tobacco in the form of cut rag and cut stems have been exported this year [2020] compared to 2019. The Far-East was the top destination for Zimbabwean tobacco as 33 percent of total exports were destined for China.”
The average tobacco export price in 2020 was $4.06 per kg compared to $4.51 per kg in the same period in 2019.
Tobacco generates 30 percent of Zimbabwe’s foreign currency, bringing in more than $600 million annually.
January 7, 2021
Swisher Names Rossi SVP Sales & Marketing

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Swisher has named Jeff Rossi as senior vice president, sales and marketing. In his new role, Rossi will oversee both sales and marketing functions, including the trade marketing group, focusing on driving success and collaboration. Previously, Rossi was vice president, trade marketing and category development.
“Jeff has demonstrated exceptional work in every position he has held at Swisher,” said John Haley, Swisher’s chief growth officer, in a statement. “His leadership and business acumen will continue to drive success and synergies within the three groups.” Reporting to Jeff will be Dean Simmons, vice president field sales, Dave Untiedt, vice president consumer marketing and Andrew Swartz, senior director trade marketing.
In the fourth quarter of 2020, Swisher announced an expansion of the company’s vision, offerings and focus on adult consumer lifestyles. As part of the strategic focus, Swisher’s five strategic businesses—Swisher Sweets Cigar Company (large & little/filtered cigars); Fat Lip Brands (smokeless); Drew Estate (premium cigars); Hempire (hemp products); and Rogue Holdings (modern oral nicotine)—provide category expertise, product knowledge and a focused approach under a renewed purpose for the company.
The new corporate growth department will also include a renewed focus on servicing the needs of Swisher’s trade partners with better market and in-store data insights, including packaging and merchandising solutions.
“As we begin our 160th year in business, I’m excited to take on this new role and lead Swisher sales and marketing into a new era focused on our five strategic growth categories and continue to drive the implementation of our purpose, mission and vision,” said Rossi.
January 7, 2021
India Mulls Crackdown on Tobacco

Photo: Taco Tuinstra
India’s health ministry wants to ban public smoking, prohibit the sale of loose cigarettes and increase the minimum smoking age from 18 to 21, reports The Economic Times.
Earlier this week, the Union Health Ministry published the draft Cigarettes and Other Tobacco Products Amendment Act, which if implemented in its entirety could have long-term ramifications for the cigarette industry.
However, some analysts believe the government’s draft policy is ambitious and may not be fully implemented.
“In India, there are rules out there for many things, but implementation will be a major challenge,” said Abneesh Roy, executive vice-president at Edelweiss Securities.
Tobacco companies operating in India’s $12 billion cigarette market are likely to raise objections before the public consultation period of the proposal ends on Jan. 31.
“Some of the measures are very extreme and problematic,” one tobacco industry executive told Reuters. A second executive said concerns around the impact on employment and how farmers could be affected will also be shared with the government.
India had proposed sweeping changes to its tobacco-control law in 2015 as well but the proposal was dropped following protests from the tobacco industry.
Shares of market leader ITC tanked 2.9 percent on Wednesday to INR205.35 ($2.80) on the national stock exchange. Prior to this correction, shares of the soap-to-tobacco maker had risen 30 percent since November as analysts saw signs of recovery in the cigarette and non-cigarette fast-moving consumer goods businesses.
January 7, 2021
Different Packaging Rules After Brexit

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Manufacturers selling tobacco products in the United Kingdom must comply with two sets of health warnings in the wake of the country’s departure from the European Union.
Cigarettes sold in Northern Ireland must continue to bear the warnings prescribed by the EU Tobacco Products Directive. There are three sets of pictures that are rotated on an annual basis starting on May 20 and ending on May 19.
Manufacturers selling in Great Britain must ensure that products placed on market after Jan. 1, 2021, feature one of the text warnings with the corresponding color photograph listed in the picture library in Schedule A1 to the Tobacco and Related Products Regulations 2016 as amended by the 2019 Regulations, according to the U.K. Department of Health and Social Care.
There is one set of pictures and no rotations between sets.
The U.K.-EU withdrawal agreement allows the continued supply of tobacco products that were lawfully placed on the market in the U.K. before Jan 1, 2021.
Through the Tobacco Products and Nicotine Inhaling Products (Amendment) (EU Exit) Regulations 2020, regulation 9 of the 2019 Regulations has been amended to remove the 12-month sell-through deadline.
The regulation allows products featuring the EU pictures that were produced and first supplied on the U.K. market before Jan. 1, 2021, to remain on the market until they reach their end-user.
The diverging packaging requirements for Great Britain and Northern Ireland have prompted cigarette manufacturers to reevaluate their portfolios.
In December, Imperial Brands said it would likely shrink its portfolio in Northern Ireland due to Brexit.
January 7, 2021
EU Urged to Embrace Risk-Based Taxation

Photo: Gerd Altmann from Pixabay
The EU should embrace a risk-proportionate tax system for tobacco-related products, according to the Independent European Vape Alliance (IEVA).
“Revising the current Tobacco Excise Directive presents an opportunity to apply the right incentives for current smokers to improve their health, ideally by stopping the use of nicotine altogether but also by switching to reduced-risk alternatives where this is impossible or unlikely for the individual smoker,” the IEVA wrote in its response to the EU excise duties roadmap.
“Vaping has been found to be significantly less carcinogenic than smoking and an acceptable replacement for cigarettes for many smokers. It follows that any policy designed to reduce cancer rates through prevention must focus on the needs of this particularly at-risk section of the population.”
The consultation period for the revision of excise duties is scheduled for the first quarter of 2021, and commission adoption is scheduled for the fourth quarter of the year.
The feedback period to the roadmap closed on Jan. 5.
January 6, 2021
Record Tobacco Spending in South Korea

Photo: Tobacco Reporter archive
South Korean households spent a record KRW4.3 trillion ($3.96 billion) on liquor and cigarettes between July and September—6.2 percent more than in the same period the previous year, reports The Korea Herald, citing data from the country’s central bank.
The figure marks the highest quarterly figure since the central bank started keeping records in 1970.
The bump in spending follows stricter social distancing measures as coronavirus cases surged in South Korea.
Economic slumps have led to an increase in alcohol and tobacco spending in the past.
The first and second quarters of 1997 saw liquor and cigarettes spending increase by 20 percent and 18.6 percent, respectively, in the runup to the Asian financial crisis.
According to data from Statistics Korea, South Korean households spent an average of KRW43,000 on alcohol and tobacco during the same period, posting a 10.7 percent year-on-year increase.
January 6, 2021
‘Altria Pushed Cigarette Floor Price’

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Colorado passed its recently enacted minimum cigarette price at the request of Altria Group, according to e-mails obtained by The Colorado Sun.
The cigarette giant reportedly asked Colorado Governor Jared Polis’ office to meet several conditions in exchange for agreeing not to fight legislation that put a question on the November ballot asking voters to raise tobacco and nicotine taxes in Colorado.
One of those conditions was adding a clause to the measure that requires a pack of cigarettes to be sold for at least $7 starting this year. The move is seen as benefiting Altria, which competes primarily in the premium cigarette segment.
“It’s like forcing our Honda to sell for the same amount as Mercedes,” Craig Hughes, a high-powered Democratic political consultant, wrote about the minimum-price clause in a June 3 email to Cary Kennedy, a senior adviser to Polis, according to The Colorado Sun.
The U.S. discount cigarette manufacturers Liggett Group, Vector Tobacco and Xcaliber International filed legal complaints, alleging that the minimum price was anti-competitive and anti-consumer.
Liggett Vector’s lawyers are arguing in state court that Proposition EE violates Colorado’s single-subject rule in the state constitution, which requires legislation to address only one topic at a time. In federal court, the company is arguing that the ballot initiative violates interstate commerce laws.
The lawsuits remain pending, though a federal judge last week rejected Liggett Vector’s request for a preliminary injunction that would have temporarily invalidated the minimum-price provision.
In a written statement to The Colorado Sun, Governor Polis’ office described the proposition that includes the minimum price requirement as a “win-win” for the state of Colorado. “We are able to fund free universal preschool for every child while protecting children and other vulnerable populations from cheap, harmful and addictive nicotine products.”
Polis and the health groups failed to pass a similar tobacco and nicotine tax increase bill in 2019 in large part because big tobacco interests successfully lobbied against the measure.
In 2016, Altria spent more than $16 million to block a tobacco tax increase that was on the ballot in Colorado.
January 6, 2021
RELX Plans $100 Million U.S. Stock Sale

Photo: RELX
RLX Technology, parent to the RELX brand of vaping products, has filed with the Security Exchange Commission in the U.S. to raise up to $100 million in an initial public offering (IPO).
The $100 million request is well below the $1 billion the company said it expected to raise when it announced Citigroup as the bank of record for its planned initial public offering in the U.S., people with knowledge of the matter said.
The Shenzhen-based company, which counts Sequoia Capital among its backers, boasts a 62.6 percent market share in China for closed-system vaping products in terms of retail sales, according to a press release.
“The company has partnered with 110 authorized distributors to supply its products to over 5,000 RELX Branded Partner Stores, and over 100,000 other retail outlets nationwide, covering over 250 cities in China,” the release states.
Revenue for the company nearly doubled in the nine months ended Sept. 30, 2020 to $324 million, with net income of $16 million.
The Beijing, China-based company was founded in 2018 and booked $400 million in sales for the 12 months ended Sept. 30, 2020. It plans to list on the NYSE under the symbol RLX. RLX Technology filed confidentially on Oct. 26, 2020. Citi is the sole bookrunner on the deal. No pricing terms were disclosed.
Chinese companies are choosing to list in the U.S. at a rapid pace despite Congress approving legislation that could force firms to withdraw from American exchanges in a dispute over audit inspection rules. Mainland and Hong Kong firms have raised $14.8 billion through U.S. initial public offerings in 2020, the second-best year on record, data compiled by Bloomberg show.
The IPO plan comes on the heels of fellow e-cigarette device maker Smoore International Holdings’ much sought-after Hong Kong debut share sale. Smoore raised HKD8.19 billion ($1.06 billion) in July after pricing its IPO at the top end of a marketed range.
The share price has soared more than 300 percent.
January 5, 2021
California Cities Remove Tobacco From Stores

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Beverly Hills and Manhattan Beach removed tobacco products from all store shelves on Jan. 1, becoming the only jurisdictions in the U.S. to eliminate the sale of commercial tobacco. Both cities included a phase-out period to allow retailers to adjust and to help smokers quit.
“Somebody’s got to be first, so let it be us,” said John Mirisch, council member and ex-mayor of Beverly Hills, who first proposed the concept in 2017 when debating the banning of flavorings in tobacco products, according to Action on Smoking and Health.
Mirisch recently joined the Board of Trustees of the advocacy group Action on Smoking & Health (ASH), which coordinates Project Sunset, an effort to phase out tobacco sales worldwide.
“Cigarettes have become so normalized that to some this might seem like a drastic step,” said Chris Bostic, ASH Policy Director. “But if another product emerged tomorrow that was highly addictive and killed when used as intended, of course we’d ban its sale. We’d probably charge the people who marketed it with manslaughter too.”
While Beverly Hills and Manhattan Beach are the first in the U.S. to pass legislation, the idea of eliminating tobacco sales is not new. When Surgeon General Luther Terry released a landmark report connecting tobacco use to death and disease in 1964, he was convinced that the sale of cigarettes would be outlawed, holding the press conference on a Saturday to lessen the impact on the stock market.
The concept has been gaining traction more recently, within the public health community and more broadly. The Danish Institute for Human Rights, after concluding a human rights assessment of Philip Morris International in 2017, concluded that “there can be no doubt that the production and marketing of tobacco is irreconcilable with the human right to health. For the tobacco industry, the UNGPs [United Nations Guiding Principles on Business and Human Rights] therefore require the cessation of the production and marketing of tobacco.”
At its most recent world conference, the global tobacco control community adopted The Cape Town Declaration on Human Rights and a Tobacco-Free World.
January 5, 2021
South Africa to Appeal Tobacco Ban Ruling

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The government of South Africa will appeal the Dec. 11 court ruling that declared the ban on the trade of tobacco products during the coronavirus lockdown was unnecessary and unconstitutional.
The government stated that the court erred in finding that a different but similar case involving the Fair Trade Independent Tobacco Association (Fita), which was dismissed on grounds that tobacco products were not essential, was not binding to it.
From March to August 2020, the government prohibited sales of tobacco products and alcohol to help stem the spread of the coronavirus. Market leader British American Tobacco South Africa (BATSA) and smaller companies united in the Fita challenged the ban, arguing that a short-term ban on a product whose health risks become evident only in the long run makes no sense.
They also questioned the rationale of the argument around cigarette sharing. Tobacco shortages and high prices of black-market cigarettes would only increase the likelihood of smokers sharing their “stompies,” the tobacco companies said.
The government lifted the ban before the matter had been heard in court, but BATSA decided to proceed with the court action to prevent the ban from being reintroduced at a later stage of the pandemic.
In its ruling, the Western Cape High Court judges who presided over the case said Regulation 45, which the government relied upon for the ban, “cannot and does not withstand constitutional scrutiny.”
The Fita expressed disappointment with the government’s decision to appeal.
“We feel that this step by government is regrettable given the irreparable harm on the tobacco industry along its value chain which was occasioned by the five month-long ban on the sale of cigarettes and tobacco related products for consumption by the local market, and which ban has led to the exponential and unabated growth of the illicit cigarette market, which issue has the knock-on effect of increased losses to the fiscus as less taxes are collected by the receiver,” the Fita wrote in a statement.
“This step by government is further worrisome in that it signals the potential arrival of yet another cigarette sales ban given that the pending appeal will suspend the operation of the Western Cape High Court judgment until the matter is properly ventilated before the courts, which matter could take months if not more to resolve.”
FITA previously came to an agreement with the government stating it be consulted in the case that other cigarette bans are being considered.
January 5, 2021