Category: News This Week

Regulator Criticized Over Bloomberg Funds

Photo: Philip Morris Fortune Tobacco Corp.
Consumer advocates have threatened to file graft charges against the Philippine Food and Drug Administration (FDA), reports The Manila Bulletin.
Previously, the FDA admitted to receiving funds from Bloomberg Initiative and the Union, both of which are known anti-tobacco groups. Under Republic Act 6713, this is prohibited.
The admission came out during a discussion on heated-tobacco products and resulted in a call for an investigation of the FDA.
“If the FDA ignores the views of legitimate and impacted stakeholders and proceeds with the adoption of an administrative order lifted from the playbook of their anti-tobacco patrons, we would be constrained to file an anti-graft case with the Ombudsman,” said Anton Israel, president of the Nicotine Consumers Union of the Philippines.
October 21, 2020
‘Global State of THR’ Set for Release

Photo: Knowledge-Action-Change
Knowledge-Action-Change is set to launch a new report documenting the advances and significant challenges facing tobacco harm reduction in 2020.
Titled, “Burning Issues: The Global State of Tobacco Harm Reduction 2020,” the report will be released Nov. 4, 2020.
The report is the second in a biennial series from the Global State of Tobacco Harm Reduction (GSTHR), a project established to map the development of tobacco harm reduction and use, availability and regulatory responses to safer nicotine products around the world.
The launch event, being held in partnership with THR Malawi, will be livestreamed over three interactive sessions from London; Lilongwe, Malawi; and locations around the world. Guest speakers include the neuropsychopharmacologist David Nutt, Australian Member of Parliament Fiona Patten, the Counterfactual’s Clive Bates, INNCO President Samrat Chowdhery, New Nicotine Alliance U.K.’s Martin Cullip and THR Malawi’s Chimwemwe Ngoma.
The audience will also hear from members of the GSTHR team, including Executive Editor Harry Shapiro and Project Director Gerry Stimson, who will explore the report’s findings in detail. Burning Issues addresses both progress and achievements in the field since the first edition was published in 2018 but also identifies the major obstacles preventing tobacco harm reduction from fulfilling its public health potential worldwide.
Registered audience members will be invited to pose their questions live at the end of each panel. Sessions will be available for playback, and the full report will be available for download from Nov. 4. Registration is free.
October 21, 2020
‘U.S. Election a Net Negative for Tobacco’

Photo: Tobacco Reporter archive
The U.S. election will likely be a net negative for tobacco companies with exposure to the U.S. market regardless of the outcome, according to Goldman Sachs.
The investment bank recently took an in-depth look at the key tobacco policy issues potentially at stake, including greater excise taxes, flavor bans, a federal nicotine cap on cigarettes and possibly a push for raising the minimum tobacco purchasing age to 25.
Goldman Sachs says the highest likelihood is for greater excise tax increases, regardless of the election outcome, given the severity of government budget shortfalls in the wake of Covid-19.
The bank also expects more states and local jurisdictions to pursue flavor bans for tobacco and nicotine products, following such actions in five states and the negative public sentiment since the youth e-cigarette crisis of 2018-2019.
At the same time, Goldman Sachs predicts a multi-year and uncertain path for a potential cigarette menthol ban or nicotine cap due to the complexity of the U.S. Food and Drug Administration’s rulemaking process, the risk of significant unintended consequences and prolonged litigation.
Inaction on menthol would be most beneficial to British American Tobacco, which has the greatest exposure to menthol cigarettes in the U.S. among the major tobacco companies.
Altria Group is most at risk from the likely tax increase scenario, considering its market share leadership in combustible cigarettes, according to Goldman Sachs.
For the industry overall, social distance and remote working practices have resulted in more tobacco and nicotine use. Nonetheless, Goldman Sachs expects cigarette volume declines to re-accelerate toward historical declines in 2021.
October 20, 2020
Zeller to Present at FDLI Conference

Photo: David Parker
Mitchell R. Zeller, director of the Center for Tobacco Products (CTP) at the U.S. Food and Drug Administration (FDA), will provide an update on the FDA’s comprehensive plan for tobacco and nicotine products at the Food and Drug Law Institute’s (FDLI) Tobacco and Nicotine Products Regulation and Policy Conference on Oct. 21, 2020, at 11:15 a.m. Eastern time.
This year’s conference brings together a diverse group of stakeholders, including public health advocates, researchers, manufacturers, lawyers, consumer interest groups, entrepreneurs, governmental agencies and others to discuss effective regulation across the broad spectrum of tobacco and nicotine products in the United States.
Panelists will examine the public health impact of regulating nicotine content across the broad spectrum of tobacco and nicotine products; the ways in which policies can help minimize users’ health risks; and the mitigation of potential unintended consequences.
October 20, 2020
HMRC Testing U.K.-Only Tracking System

Photo: Tobacco Reporter archive
Her Majesty’s Revenue and Customs (HMRC) is testing a new U.K.-only track-and-trace system this month to prepare for the country’s full exit from the European Union (EU) on Dec. 31, 2020, reports The Grocer.
Wholesalers will not need to buy new hardware for the new system, but they will have to upgrade software to comply. Retailers selling directly to the public will not have to make any changes.
“To minimize changes for businesses, it will be possible to use existing scanning devices,” sand an HMRC spokesman. “However, businesses will need to make arrangements with their scanning equipment solution provider to connect and submit data to the new U.K. gateway.”
Wholesalers in Northern Ireland will need to submit data to both the new system and the existing EU system; some EU rules will continue to apply in Northern Ireland after the U.K. leaves the EU.
October 20, 2020
Juul Labs to Exit Germany

Photo: Juul Labs
Juul Labs will withdraw from Germany at the end of the year, reports W&V, citing a company spokesman in Hamburg.
The company said it needed to set priorities in to be successful in the long term. “In this way one can invest in research and development and future products in core markets,” it stated.
German consumers will be able to purchase Juul products until stocks run out.
Following a wave of layoffs, Juul’s German subsidiary had only about a dozen employees left, which have now been terminated, as well.
Juul had already exited Austria this summer and plans to leave Switzerland soon.
The company, which enjoyed great success in the United States until a regulatory backlash, has found it challenging to crack the European market due to EU limits on nicotine.
Juul products sold in the EU contain significantly lower doses of nicotine than those on the U.S. market, making it difficult for them to compete against combustible cigarettes in Europe.
Recently, Juul was also forced to temporarily halt shipments in Germany because its packages were missing a mandatory recycling symbol.
October 19, 2020
UKVIA Appoints Dunne as General Director

John Dunne (Photo: UKVIA)
John Dunne has been confirmed as director general of the UK Vaping Industry Association (UKVIA) after a vote by the trade body’s full membership.
Dunne was previously responsible for the UKVIA’s member recruitment activity, where he oversaw significant growth in membership levels. He is also the UKVIA’s primary media spokesperson on television, radio and in print.
Dunne has a long and well-respected background in European vaping and has held senior positions at some of the sector’s leading firms. In addition, he has advised industry analysts and financial institutions on the vaping industry, both in the U.K. and globally.
The new role has been established to support future planned growth of the UKVIA, as it extends its role and influence, while building its membership base significantly.
“I am honored that the UKVIA membership has put its faith in me.,” said Dunne. “The association is well placed to go from strength to strength, with membership growing consistently despite the challenges of the pandemic.
“The next 12 months are hugely important to the vaping industry, with the government review of the Tobacco & Related Products Regulations set to shape the future of our sector. It is crucial that we have a unified voice to influence these regulations, for the benefit of the industry and the public health of the nation. We have already started formulating our contribution to the government’s review, working closely with all our members.”
October 19, 2020
Advocates Welcome Cessation Findings

Photo: Sergey Shibut – Dreamstime.com
The U.K. Vaping Industry Association (UKVIA) has welcomed new research that has found that vaping is 70 percent more effective in helping smokers to quit cigarettes than nicotine replacement therapy (NRT), such as patches and gum.
The study undertaken by Cochrane, which reviewed 50 studies across the world, with more than 12,000 participants, also showed that an additional 60 percent could potentially quit smoking with nicotine containing electronic cigarettes. In addition, the review found that “there was no evidence that people using nicotine containing e-cigarettes reported more serious health problems than people using nicotine-free e-cigarettes, NRT or no therapy at all.”
John Dunne
John Dunne, director general at the UKVIA, said the findings add to a growing catalogue of evidence supporting vaping’s role in smoking cessation.
“Quitting cigarettes can be difficult, which is why adult smokers must have access to the most effective tools available,” he said. “This review underlines the enormous potential vaping holds for public health, particularly as the government aims for a smoke-free U.K. by the end of the decade. We call on all stakeholders, from policymakers to health professionals, to seize the opportunity which vaping represents, and to give smokers the best chance of quitting successfully.”
According to Dunne, the recent review builds on research by the National Institute of Health Research and Cancer Research UK, which shows that vaping was far more effective than nicotine replacement therapy products.
October 16, 2020
Manufacturers Sue Colorado

Photo: jessica45 | Pixabay
The U.S. discount cigarette manufacturers Liggett Group, Vector Tobacco and Xcaliber International have filed a complaint against the State of Colorado and several Colorado officials, including Governor Jared Polis, Attorney General Phil Weiser, and members of the Colorado General Assembly, alleging violations of federal and state law in connection with Proposition EE, a $294 million tax hike on the ballot this November in Colorado.
The complaint, filed in the federal district court in Denver, Colorado, seeks to invalidate a specific anti-competitive and anti-consumer provision of Proposition EE that would fix the minimum price of cigarettes in Colorado at $7 per pack, beginning Jan. 1, 2021.
The complaint alleges that the state made a back-room deal with Philip Morris USA, the largest U.S. seller of premium cigarettes such as Marlboro, to fix cigarette prices at premium levels, effectively eliminating competition from discount cigarettes which have increasingly taken market share from Philip Morris. In return, Philip Morris agreed not to oppose the proposed cigarette excise tax increase of $1.10 per pack. Proposition EE would nearly double the price of cigarette brands sold by discount manufacturers, creating an unfair burden on value conscious Colorado consumers. Furthermore, only about half of the state-imposed price increase would flow through to the State Treasury.
The complaint asserts that the price-fixing component of Proposition EE is not disclosed in the ballot question, but buried within a proposed tax hike, because the governor and other proponents of the new law knew that it would draw widespread criticism. The plaintiffs are asking that the federal court invalidate the price-fixing component, if approved by the voters, as an unconstitutional and illegal exercise of state power and the result of improper legislative due process.
“We are deeply concerned that Colorado politicians have agreed to price-fixing in what has been reported as a ‘back-room deal’ with Philip Morris to secure its support for a tax increase,” said Nicholas Anson, president and chief operating officer of Liggett Group and Liggett Vector Brands, in a statement. “The price-fixing component of Proposition EE would not only benefit Philip Morris and hurt value conscious consumers; it was intentionally omitted from the ballot question, leaving Colorado voters in the dark about this unconstitutional proposal.”
October 16, 2020
Dutch Authorities Raid Illegal Tobacco Factory

Photo: Europol
The investigation service of the Dutch tax authorities, FIOD, raided an illegal tobacco factory near Utrecht in the Netherlands, according to Europol. It is one of the largest illegal cigarette factories uncovered in the Netherlands. The factory was in full operation when law enforcement entered the premises. Thirteen suspects were arrested comprising mostly of nationals from Eastern Europe. Investigators seized 3.6 million cigarettes and 32,000 kilos of tobacco along with packaging material, cigarette paper, filters and glue. The tax loss prevented to the Dutch state revenue for the illegal production is estimated at €6 million ($7.04 million).
Supported by Europol, this operation is the result of cross-border cooperation between the Dutch authorities and Ukrainian State Border Guard Service.
In general, illegally processing and producing tobacco is dispersed across multiple facilities so criminals can spread the risk, according to Europol. In this case, the entire production cycle took place in one factory. The factory was in a rural warehouse allowing the criminals to go unnoticed with their illegal activities. Dutch authorities estimated that the machinery could potentially produce 1 million cigarettes a day. The production is believed to have been destined for the black market in countries where the retail price of cigarettes is high. The factory is presumed to have produced 18 million illegal cigarettes seized abroad in recent months.
Europol’s Analysis Project Smoke dedicated to investigating the unlawful manufacturing and smuggling of excise goods supported the investigation. The exchange of information between law enforcement authorities and the analysis of operational data contributed to the identification of the potential location of the factory. Links established with recent seizures of tobacco in other countries helped further the investigation.
FIOD is also an active member of the ongoing special operational taskforce set up in 2018 between Europol and Member States to tackle top organized crime groups facilitating the supply of tobacco, machinery, skilled workers and non-tobacco material to illicit factories.
October 16, 2020