Category: News This Week

  • Japan Tobacco Invests in its Trier Factory

    Japan Tobacco Invests in its Trier Factory

    Photo: Hansruedi Etter from Pixabay

    Japan Tobacco International (JTI) has invested €22.5 million ($26.6 million) in expanding production at its Trier, Germany, plant, reports Lokalo.de.

    “Our plant in Trier has a special place in the JTI group,” said Peter Kilburg, plant manager. “We are one of only two plants in which all production steps are mapped—from raw tobacco storage to preparation and processing of the tobacco to the finished product. The investment in the double-digit million range strengthens the strategic importance of the Trier plant within JTI’s global supply chain—it is a clear commitment to the Trier production location.”

    Further investments are planned for the coming years.

    JTI invested €30 million in 2001 for the construction of the facility.

  • Fewer Young Americans Vaping

    Fewer Young Americans Vaping

    Photo: Aliaksandr Barouski – Dreamstime.com

    The U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) have released new data from the 2020 National Youth Tobacco Survey (NYTS) showing a decline in youth use of e-cigarettes but an increase in use of disposable products.

    Compared to 2019, the number of youth using e-cigarettes is down 1.8 million. However, the number of youth using disposable e-cigarettes has risen: 26.5 percent of high school users are using disposables, up from 2.4 percent in 2019, and 15.2 percent of middle school users are using disposables, up from 3 percent last year.

    The use of flavored products is also high—more than eight out of 10 surveyed youth reported using flavored products. Fruit, mint, candy and menthol were the most commonly reported.

    This is the first year the NYTS has distinguished between mint and menthol. Previously, products were identified in the survey as “mint/menthol.”

    “After two years of disturbing increases in youth e-cigarette use, we are encouraged by the overall significant decline reported in 2020,” said FDA Commissioner Stephen Hahn. “This is good news; however, the FDA remains very concerned about the 3.6 million U.S. youth who currently use e-cigarettes and we acknowledge there is work that still needs to be done to curb youth use”

  • Companies Challenge Flavor Ban

    Companies Challenge Flavor Ban

    Photo: Michal Kalasek | Dreamstime.com

    R.J. Reynolds Tobacco Co., American Snuff Co., R.J. Reynolds Vapor Co., Santa Fe Natural Tobacco Co., Philip Morris USA, John Middleton Co., U.S. Smokeless Tobacco Co., Helix Innovations, Neighborhood Market Association. and Morija filed a lawsuit seeking to repeal the California flavor ban law on Oct. 9.

    The California law bans the sale of menthol cigarettes as well as all other flavored tobacco and vapor products except premium cigars, shisha and loose-leaf tobacco beginning Jan. 1, 2021.

    The lawsuit seeks a ruling that “declare[s] that the Family Smoking Prevention and Tobacco Control Act pre-empts the California ban on the sale of all flavored tobacco products, making the law invalid and unenforceable; declare[s] that the law is invalid and unenforceable under the Commerce Clause of the U.S. Constitution; [and] issue[s] preliminary and permanent injunctions preventing the enforcement and implementation of the California ban on the sale of all flavored tobacco products,” according to CSP.

    California Governor Gavin Newsom signed the ban Aug. 28. Opponents filed a petition to put the question to voters in a referendum to overturn it shortly after its passage. 

  • Tobacco Growers Convene Online

    Tobacco Growers Convene Online

    The International Tobacco Growers Association (ITGA) will hold an online meeting, due to Covid-19, with its community of growers on Oct. 28, 2020 at 1 p.m. Western European Time in Portugal to celebrate World Tobacco Growers’ Day.

    “This meeting aims to celebrate and thank the importance of the role of tobacco growers in the economies and social and rural environments of their regions and in these times of pandemic particularly, continuing with the activities inherent to the sector to ensure the proper functioning of value chains,” the organization wrote in a statement.

    The session will be composed of the technical staff of the ITGA, growers’ associations from around the world and invitees.

    The session is free to attend.

     

  • Medicago to Supply Covid-19 Vaccine

    Medicago to Supply Covid-19 Vaccine

    Photo: Arek Socha from Pixabay

    Medicago, a biopharmaceutical company headquartered in Quebec City, Canada, has reached an agreement with Public Services and Procurement Canada to supply up to 76 million doses of its vaccine candidate for Covid-19, subject to Health Canada approval.

    Innovation, Science & Economic Development, another department of the Canadian federal government, will contribute CAD173 million ($131 million) to Medicago to support its ongoing vaccine development and clinical trials, and for the construction of its Quebec City manufacturing facility.

    Since 2008, Philip Morris Investments B.V. (PMIBV), a subsidiary of Philip Morris International (PMI), has been a shareholder of Medicago (in which it currently holds an approximately one-third equity stake) and has supported Medicago’s innovative plant-derived research and development focused on vaccines.

    The investment is consistent with PMI’s own efforts to leverage science and innovation. Japan-based Mitsubishi Tanabe Pharma Corporation (MTPC) is the majority shareholder and PMIBV’s partner in Medicago. Among other things, PMIBV and MTPC will contribute additional funding to support Medicago’s efforts to develop a Covid-19 vaccine candidate.

    “We welcome the collaboration announced between two departments of the Canadian government and Medicago to accelerate its efforts against Covid-19,” said PMI CEO André Calantzopoulos in a statement.

    “Better outcomes can be achieved when governments and companies join efforts to promote shared objectives for the greater good. We are pleased to be able to support Medicago’s work to develop, substantiate, manufacture, and make available a Covid-19 vaccine candidate. We all hope they will be successful.”

    Medicago began Phase 1 testing on volunteers on July 14 and is anticipating that Phase 2 trials will begin in early November 2020. If Phase 2 trials are successful, Phase 3 trials are expected to begin in December 2020.

  • New Tender for Tobacco Stamps

    New Tender for Tobacco Stamps

    Photo: Taco Tuinstra

    The Inland Revenue Department in Nepal has invited a fresh global tender for excise duty stickers for tobacco and alcohol products, reports The Kathmandu Post. A tender notice was issued on Oct. 14, and all participants must submit their bids by Nov. 29.

    There has been a shortage of excise duty stickers in Nepal since the Indonesian supplier that was selected to supply them did not show up to sign the contract. The second-best bidder, a company from Lithuania, was not offered the contract due to “issues” with the company.

    The company has moved to the Supreme Court, arguing that the law states the second bidder should be awarded the contract if the highest bidder does not sign the contract.

    “Although the case is still pending in the court, it didn’t stop us from moving forward to call a fresh tender,” said Mukti Pandey, deputy director general at the Inland Revenue Department.

  • Stora Enso Reports ‘Solid Performance’

    Stora Enso Reports ‘Solid Performance’

    Photo: Tobacco Reporter archive

    Sales of Stora Enso decreased by 13.5 percent to €2.08 billion ($2.46 billion) in the third quarter of 2020 over the comparable 2019 quarter, due to lower deliveries and prices. The company reported an operating profit of €145 million, down from €170 million in the previous quarter.

    “We have delivered a solid result for the quarter and I am satisfied with our performance, considering the unprecedented uncertainty and volatility on markets around the world,” said Stora Enso President and CEO Annica Bresky in the company’s interim report.

    “Although we report a decreased operational EBIT of €175 million compared to last year, excluding paper, operational EBIT remained at the same level due to strong results in the packaging materials, wood products and forest divisions.

    “The pandemic’s biggest effect continues to be on our paper business. I was very glad to see a return to positive cash flow for the quarter. The market also remains challenging for biomaterials, with low pricing. On a positive note, excluding paper, our operational EBIT margin increased to 11.8 percent, a sign of the resilience of our growth businesses and good cost management.”

    Stora Enso has discontinued its quarterly guidance and annual outlook until further notice, due to the uncertainty in the global economy.

     

  • Study: Lower Nicotine Reduces Addiction

    Study: Lower Nicotine Reduces Addiction

    A recent study shows that lowering nicotine content in cigarettes reduces nicotine addiction in vulnerable populations (those with psychiatric disorders, those suffering with addiction or those with socioeconomic disadvantage).

    For 12 weeks, participants were randomly assigned research cigarettes that contained 0.4 mg of nicotine per gram of tobacco, 2.4 mg of nicotine per gram of tobacco or 15.8 mg of nicotine per gram of tobacco. The latter is equivalent to standard cigarettes currently on the market while the two former are considered very low nicotine content.

    Daily smoking rate decreased by about 30 percent in those using the very low nicotine cigarettes.

    “We know that lower smoking rate and dependence severity are two important predictors of successful smoking cessation should someone attempt to quit,” said Stephen T. Higgins, director of the Vermont Center on Behavior and Health at the University of Vermont’s Larner College of Medicine.

    “Our findings in this and earlier studies suggest that lowering the nicotine content in all cigarettes to minimally addictive levels would benefit all smokers, including those most vulnerable to smoking and addiction.”

  • PMFTC Vows Support for Filipino Farmers

    PMFTC Vows Support for Filipino Farmers

    Photo: PMFTC

    Philip Morris Fortune Tobacco Corp. (PMFTC) plans to spend more than $100 million on leaf from Filipino farmers over the next few years, reports Business World Online, citing company officials.

    “While dependent on tobacco industry dynamics and the government’s excise tax policies, we anticipate spending approximately $130 million for more than 45,000 tons of Philippines green tobacco leaf over the next three years,” said PMFTC President Denis Gorkun in a letter addressed to the secretaries of Finance and Agriculture departments.

    According to Gorkun, Philippine leaf production has been falling in the wake of recent tax hikes on tobacco products and the expected surge in the illicit trade of cigarettes because of an increase in prices.

    A new round of excise tax increases on tobacco and vapor products took effect this year after Republic Act No. 11467 was signed into law in January.

    PMFTC sourced 43 percent of its leaf purchases from local farmers in 2019, both directly and through suppliers.

    PMFTC is also contemplating a $1 million investment to boost the National Tobacco Administration’s capacity to test aerosols and check product compliance.

    The company will continue its program that helps 15,000 tobacco farmers in tobacco-producing provinces become more competitive, said Gorkun.

    “We would also like to take this opportunity to assure PMFTC’s support for reasonable regulations applicable to tobacco products. The development of balanced and fair regulations will not only protect the interest of various stakeholders but also ensure the sustainability of the tobacco industry and the livelihood of our Filipino tobacco farmers, especially with the economic challenges we are facing today,” he said in his letter.

    Finance Secretary Carlos G. Dominguez III and Agriculture Secretary William D. Dar earlier asked tobacco manufacturers to buy more from local farmers and help the industry recover from the impacts of the coronavirus disease 2019 (COVID-19) pandemic.

    The lockdowns and other restrictions imposed to curb the spread of the disease has affected the flow of agricultural goods including tobacco.

    Japan Tobacco International on Monday said it would increase its purchases of Philippine tobacco to 4.6 million kg next year.

    Philippine law requires tobacco companies in the country to buy at least 15 percent of their leaf requirements from local farmers. 

  • PMI Reports Third-Quarter Results

    PMI Reports Third-Quarter Results

    Photo: PMI

    Philip Morris International (PMI) reported net revenues of $7.45 billion in the third quarter of 2020, down 2.6 percent from the comparable 2019 quarter. Operating income was $3.24 billion, compared to $2.79 billion in last year’s quarter. On an adjusted basis, operating income was up 1.9 percent, while the company’s adjusted operating income margin improved to 43.6 percent from 41.7 percent between the two quarters.

    PMI’s cigarette and heated tobacco unit shipments were down by 7.6 percent, reflecting a decline in cigarette shipments of 9.8 percent to 165.46 billion units and an increase of heated tobacco unit shipments of 18.7 percent to 19 billion units.

    The company estimates the total number of IQOS users at quarter-end at approximately 16.4 million, of which approximately 11.7 million have stopped smoking and switched to IQOS.

    “We delivered stronger-than-anticipated results in the third quarter, despite the ongoing challenges of the pandemic, with adjusted diluted EPS [earnings per share] growth of 5.6 percent on an organic basis,” said PMI CEO Andre Calantzopoulos in a statement.

    “The sustained momentum of IQOS was excellent, with an estimated 16.4 million total users at the end of September and smoke-free products accounting for nearly one-fourth of our total net revenues in the quarter.

    “Furthermore, our combustible tobacco business recorded an improved sequential performance, supported by better underlying total industry volumes across both developed and emerging markets.

    “Despite continued headwinds for our duty-free business and in Indonesia, we are raising our full-year 2020 guidance and now anticipate adjusted diluted EPS growth of around 5 percent to 6 percent on an organic basis, compared to a range of approximately 3.5 percent to 5.0 percent previously,” Calantzopoulos said.

    PMI further noted that, despite the ongoing Covid-19 pandemic, it has sufficient access to inputs for its products and is not facing any significant business continuity issues with respect to key suppliers.

    Most of its manufacturing facilities, including all heated tobacco unit factories, are operational. The company also has adequate inventories of finished goods based on existing sales trends.