Category: News This Week

New Graphic Health Warnings in Korea

Image: Ministry of Health and Welfare
South Korea will require cigarette manufacturers to print nine new graphic health warnings from Dec. 23, reports The Korea Herald.
The new warnings include images depicting lung cancer, oral cancer, heart disease and stroke. The current images of laryngeal cancer and sexual dysfunction will not be replaced as they are thought to be highly effective, officials said.
The changes are intended to boost effectiveness of the warning against smoking and tobacco use by replacing the existing warning pictures that had been used for too long, according to the Ministry of Health and Welfare.
Under the Enforcement Decree of the National Health Promotion Act, the warning images and messages on cigarette packs should change every two years. The current images had been displayed on the tobacco packs since Dec. 23, 2018.
Tobacco sales and smoking rate among adult males have steadily decreased since the installation of warning pictures and phrases on cigarette packs in 2016.
The ministry also plans to introduce standardized packaging in South Korea.
December 22, 2020
Olczak: Investors Underestimating PMI

Jacek Olczak
(Photo: PMI)
Investors are underestimating Philip Morris International’s (PMI) smoke-free future, according to Jacek Olczak, the company’s chief operating officer and CEO in waiting.
Philip Morris stock has risen just under 1 percent year to date, lagging far behind the S&P 500, a measure of the broader market.
In an interview with Barron’s, Olczak said that IQOS is the most advanced reduced-risk product on the market, with the most rigorous science behind it. He highlighted the company’s valuable first-mover advantage in many markets, which should also help it rebuff competition from smaller rivals.
PMI hopes to sell between 90 billion and 100 billion heated-tobacco units in 2021, a 20 percent to 30 percent increase from this year and a target that the company is closing in on.
Olczak also has high hopes for Veev, a vaping product that has already rolled out in New Zealand. To prevent underage use, the Veev device can be activated only by users who can verify their age. According to Olczak, this extra, built-in layer of protection should give “a level of confidence to regulators in various geographies, that they can offer a solution to adults while [excluding] audiences that shouldn’t have access.”
Olczak said PMI has successfully overcome many of the challenges presented by Covid-19, including supply chain shutdowns. Increased focus on digital sales of IQOS has helped the company build valuable relationships directly with consumers. The resulting shift from a business-to-business to a business-to-consumer model is differentiating PMI from the competition.
As part of a long-planned leadership transition, Olczak will take over for Andre Calantzopoulos in May 2021.
December 22, 2020
Vapor Market Booming Despite Online Ban

Photo: Timothy Donahue
China’s vapor market has mushroomed offline after the country banned online sales of e-cigarettes about a year ago, reports Bloomberg. Not even the coronavirus has stopped the expansion.
RELX Technology, the country’s largest player, opened more than 1,000 stores in the first half of 2020, and said in January it planned to add 10,000 outlets within the next three years. Its rival, Yooz, has also boosted the number of stores.
Shares in Smoore International Holdings, the world’s largest maker of vaping devices and components for brands, have more than quadrupled in value since the company’s July debut, making it one of Hong Kong’s best-performing initial public offerings of the year. RELX and Yooz are both clients of Smoore.
Smoore founder Chen Zhiping’s net worth has surged to $14.2 billion, according to the Bloomberg Billionaires Index.
While the coronavirus outbreak affected Smoore’s production and operations in the first quarter of the year, it still managed to post a 19 percent increase in revenue to CNY3.9 billion ($592 million) for the first six months, with more than half of its sales coming from mainland China and Hong Kong.
Smoore held one-sixth of the global market share for vaping products by revenue last year, and that pie is poised to grow further, according to Frost & Sullivan data it cited in its prospectus. The $36.7 billion global e-cigarette market will reach $111.5 billion by 2024, increasing at an annual compound rate of 25 percent, projections show.
Mounting restrictions on vapor products globally, including a ban on certain e-cigarette flavor in the world’s largest vapor market, the United States, haven’t scared off investors. Stocks linked to China’s consumer sector have been particularly popular this year as the nation has been among the first to emerge from the pandemic.
December 22, 2020
Scandinavian Tobacco Raises 2020 Guidance

Photo: STG
Scandinavian Tobacco Group has raised its full-year guidance for 2020.
According to the company, Covid-19-induced changes in consumer behavior led to higher-than-anticipated consumption of handmade cigars in the U.S. throughout 2020. U.S. demand increased further in the latter part of the year, both online and in stores.
Between January and November 2020, STG’s net sales were 7 percent higher than previously expected.
The higher U.S. volumes have positively impacted operational leverage and resulted in stronger profit margins and an increased organic growth in EBITDA.
STG’s other business categories perform as expected.
Overall, the fourth quarter results continue to be negatively impacted by the loading in previous quarters and very strong comparison numbers partly driven by a change in sales taxes in France in the fourth quarter of 2019.
Meanwhile, an anticipated negative timing impact of payables in the fourth quarter did not materialize.
For the full year 2020, STG anticipates a positive impact on the free cash flow before acquisitions of more than DKK200 million ($32.87 million). The company expects the increased demand for handmade cigars to continue into next year.
December 21, 2020
Australia to Require Prescription for Nicotine

Photo: Taco Tuinstra
Australians importing liquid nicotine for e-cigarettes will need to have a prescription from Oct. 1, reports The Sydney Morning Herald, citing the country’s medical watchdog.
The Therapeutic Goods Administration (TGA) said its decision balanced consumer demand for the product as a smoking cessation aid and the potential for nicotine e-cigarettes to lead to addiction.
“A patient’s doctor is uniquely placed to give the support required for long-lasting smoking cessation,” the agency said, adding that it had not yet approved any vapor product as a smoking-cessation aid.
In response to the TGA’s decision, the government will scrap contentious customs regulations, which included a fine of up to $200,000 for those illegally importing nicotine. The regulation was opposed by a large group of backbenchers, and due to kick in from the start of next year.
The possession of nicotine-containing e-cigarettes is illegal without a prescription in every state and territory, besides South Australia.
Health Minister Greg Hunt said it was important to note that any doctor could prescribe nicotine-based e-cigarettes.
“This is not widely understood, and it is an important matter of public information that over 30,000 GPs may currently, and in the future, prescribe nicotine-based e-cigarettes for smoking cessation,” he said.
Critics say Australia’s prescription-only policy is hampered by the reluctance of many general practitioners to prescribe liquid nicotine and by a requirement to seek a special exemption for each patient.
December 21, 2020
Canada Calls for Lower Nicotine Concentrations

Photo: Souleyephoto from Pixabay
Health Canada wants to lower the nicotine limits for e-cigarettes to 20 mg/ml. The current limit is 66 mg/ml.
Minister of Health Patty Hajdu announced a public consultation on Dec. 18, inviting Canadians to share their thoughts on the proposal by March. 4
According to the government, the proposed changes build on existing measures to address the rise in youth vaping, including extensive public education campaigns and banning the advertising of vaping products in public spaces if the ads can be seen or heard by youth.
Health Canada is also considering to further restrict flavors in vaping products. It wants to require the vapor industry to provide more information about its products, including on sales, ingredients and research and development activities.
“Our work to protect Canadians from the harms of vaping products continues. These changes will help reduce the appeal of vaping products to youth,” said Hajdu in a statement.
The Canadian Cancer Society (CCS) welcomed the plans. “The proposed regulations requiring a maximum nicotine concentration for vaping products of 20 mg/mL are essential to reduce youth vaping and deserve strong support,” said CCS Senior Policy Analyst Rob Cunningham.
The Canadian Vaping Association (CVA) urged the government to balance youth protection with adult harm reduction. “It is without question that Canada must act to restrict nicotine concentrations to protect youth, but it should not be an all-or-nothing approach,” the association wrote in a press note.
“Ontario has restricted high nicotine products to age-restricted environments, effectively eliminating all retail access points for youth. This policy has proven effective in mitigating youth use while balancing the needs of adult smokers. The CVA encourages the government of Canada to adopt this policy federally,” said Darryl Tempest, executive director of the CVA.
December 21, 2020
Illicit Cigarettes Seized Throughout Europe

Photo: Lithuania Customs
European law enforcement authorities seized 67 million cigarettes and 2.6 tons of tobacco worth €35.82 million ($43.62 million) last month, according to Europol. They arrested 17 suspects.
The most significant seizures of the illegally traded cigarettes were made in Lithuania (28.75 million), the U.K. (9 million), Poland (6 million), Ireland (3.5 million), Romania (2.2 million), Sweden (500,000), Latvia (740,000) and Croatia (150,000). Eighty-eight percent of the cigarettes seized were produced in Belarus.
Supported by Europol and the European Anti-Fraud Office, the joint operation took place Nov. 2-13, 2020. Led by the customs departments of Lithuania and the U.K., the operation was facilitated by intelligence analysis of excise duty suspension abuse. The fraud scheme consisted of illegally diverting cigarettes from EU internal and external transit customs procedures to the black market without paying millions in taxes.
December 21, 2020
RJR must continue legal payments for old brands

Photo: Okan Caliskan from Pixabay
The Florida Supreme Court on Friday declined to hear an appeal by R.J. Reynolds Tobacco Co. in a lawsuit rooted in a landmark legal settlement between Florida and leading tobacco companies.
The Supreme Court’s decision effectively let stand a July decision by the 4th District Court of Appeal that required R.J. Reynolds to make more than $100 million in disputed payments.
The 1997 settlement forced tobacco companies to pay hundreds of millions of dollars a year to the state because of smoking-related health costs. In exchange for the payments, the companies received liability protections.
But in the lawsuit, R.J. Reynolds contended that it should not have to make payments to the state related to four brands of cigarettes—Salem, Winston, Kool and Maverick—that it agreed to sell in 2014 to ITG Brands.
Upholding a ruling by a Palm Beach County circuit judge, an appeals court pointed to a lack of changes in the 1997 settlement that would have freed R.J. Reynolds from making the payments.
December 21, 2020
Claim: Tobacco Profiting from Child Labor

Tobacco companies say they go to great lengths to keep their supply chains free of child labor.
(Photo: Timothy Donahue)
British American Tobacco (BAT) and Imperial Brands profited from child labor on tobacco farms in Malawi, according to a legal claim initiated after an investigation by The Guardian.
The claim alleges “widespread use of unlawful child labor, unlawful forced labor and the systematic exposure of vulnerable and impoverished adults and children to extremely hazardous working conditions with minimal protection against industrial accidents, injuries and diseases.”
The Guardian’s 2018 investigation reported that tobacco farmers were exposed to nicotine poisoning, toxic pesticides and harsh weather conditions during labor-intensive shifts in areas where up to 63 percent of children were engaged in child labor.
Due to that investigation, several countries, including the U.S., suspended leaf imports from Malawi over the child labor allegations. U.S. Customs and Border Protection later cleared imports from Malawi by Limbe Leaf Tobacco Co. and Alliance One International after investigations determined that the tobacco imported by those companies was not harvested and produced with child labor.
(Tobacco Reporter recently featured Alliance One’s actions to keep its supply chain free of child labor and forced labor in a feature article, titled, “Up to the Task.”)
BAT and Imperial Brand declined to comment on the specifics of the case.
“BAT takes human rights very seriously and expects all employees and suppliers to respect and uphold them. It would not be appropriate for us to comment on the specifics of this situation, given the possibility of future litigation,” a BAT spokesperson said. “We take the issue of child labor extremely seriously and strongly agree that children must never be exploited, exposed to danger or denied an education.”
“We take the issue of child and forced labor very seriously and do not condone exploitative practices in our supply chains, as made clear in our code of conduct, which is published on our corporate website,” an Imperial Brands spokesperson said.
“We actively seek to prevent exploitation through multi-stakeholder initiatives, including an industry-wide sustainable tobacco program, which is aligned to the U.N. guiding principles. We will defend any claim vigorously, and it would be inappropriate to comment further.”
Leigh Day, the law firm that filed the legal claim, said that more details of the claim will be filed in January 2021 with the monetary value to be set later.
December 18, 2020
Next Generation Labs Expands its TFN Brand

Photo: Martinmark – Dreamstime.com
Next Generation Labs, the developer of the patented pure synthetic nicotine sold under the TFN brand, has expanded sales and distribution of its S, R-S and R isomer synthetic nicotine products to vape, oral smokeless and tobacco product manufacturers internationally.
“TFN non-tobacco derived synthetic nicotine has increasingly become the industry benchmark for both quality and consumer acceptance in many branded nicotine alternative products in the U.S. market, select European countries, and in emerging novel-nicotine markets in Asia,” Next Generation Labs noted in a press statement
“We are actively developing customized formulations of TFN S, R-S and R isomer nicotine for vaping products, nicotine portion pouch and novel reduced risk products such as herbal non-tobacco-alternatives and heat-not-burn products,” the company stated.
In association with strategic partners in key markets, Next Generation Labs has also recently expanded availability of its isomeric TFN nicotine formulations direct to customers, or via certified compounding and formulating companies, both in bulk diluted freebase nicotine, or in nicotine salt formulations specific to individual market or brand owner requirements.
In China, Next Generation Labs is working closely with vape device manufacturers, such as ITSUWA, to deliver authorized TFN formulations into vape devices for sales worldwide. In the USA, America Juice Co, has become a key formulator and shipper of customized TFN liquids to Chinese manufacturers of vape products. In India, Dholakia is formulating TFN nicotine into manufactured white label nicotine portion pouch products for customers in the USA and Europe. In South Korea, the EU and U.K., Next Generation Labs is direct shipping nicotine to formulators who onward sell to brand owners in their respective markets.

December 18, 2020