Category: News This Week

Zimbabwe Auction Season Closes

Photo: Taco Tuinstra
Zimbabwe’s tobacco auction season ends tomorrow while contract sales remain open until further notice, said the Tobacco Industry and Marketing Board (TIMB).
The golden leaf is being sold through auction and contract arrangements with the selling season traditionally beginning in March.
This year’s selling season began in April because of the adverse impact of the Covid-19 pandemic. The delay required TIMB to make adequate preparations to curb the spread of the deadly disease.
So far, about 176 million kg of tobacco have gone under the hammer generating close to US$440 million.
Zimbabwe exports 98 percent of its tobacco leaf with tobacco receipts from the foreign markets expected to reach $1,2 billion this year, up from $904 million last year.
August 27, 2020
Smoore Thrives Amid Difficult Environment

Photo: Timothy Donahue
Smoore International Holdings, the world’s biggest maker of e-cigarettes, posted a 40 percent year-on-year jump in underlying net profit for the first half of 2020, to CNY1.3 billion ($188.8 million), reports The South China Morning Post. Revenue rose 18.5 percent to CNY3.88 billion.
The increase comes despite the challenges of the coronavirus, the U.S.-China trade war and tougher regulations.
Smoore, which recently listed in Hong Kong, held a 16.5 percent share of the $763 billion global vapor devices market last year, up from 10 percent in 2018, said Wang.
While only half its production capacity was used in the first six months, the company plans to double capacity by next year. Additional expansion will boost production by a further two-thirds by 2023.
Global e-cigarette sales are projected to see compound annual growth of 25 percent between last year and 2024 compared to 5.2 percent for traditional cigarettes, according to Frost & Sullivan.
China produces 90 percent of the world’s e-cigarettes, of which 90 percent are exported, according to Smoore’s listing prospectus. The industry is concentrated in Shenzhen, the country’s technology hub, which hosts more than 600 e-cigarette manufacturers.
The U.S. accounted for around half of Smoore’s sales, while 18.6 percent came from mainland China and 12.5 percent came from Japan and Europe each.
Since 2018, its U.S. customers have had to pay a 25 percent additional import tariff as part of the fallout from the trade spat between Washington and Beijing. The firm said the tariff has not stopped U.S. demand from growing since its products are “technologically superior.”
August 27, 2020
Fita Drops Appeal in Tobacco Ban Dispute

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The Fair-Trade Independent Tobacco Association (Fita) has dropped its bid to appeal an earlier court ruling that upheld South Africa’s temporary ban on tobacco sales.
In a statement issued on Wednesday, Fita chairman Sinenhlanhla Mnguni said the association will withdraw its pending appeal before the Supreme Court of Appeal in Bloemfontein.
The move comes after Minister of Co-operative Governance and Traditional Affairs Nkosazana Dlamini-Zuma promised to consult the public should she at any stage seek to reinstate a temporary prohibition of the sale of tobacco and related products.
Fita had criticized the government for not seeking public input when it banned tobacco sales on March 27 as part of its coronavirus lockdown. South Africa lifted its ban mid-August, but the legal action was not immediately halted.
Both parties agreed to pay their own legal expenses incurred during the tobacco ban litigation.
August 27, 2020
Pyxus Emerges From Chapter 11

Pieter Sikkel
Photo: Pyxus International
Pyxus International has successfully completed its financial restructuring and emerged from Chapter 11 with its debt reduced by more than $400 million and maturities extended. The company announced that the Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Pyxus International and its Affiliated Debtors confirmed by the U.S. Bankruptcy Court for the District of Delaware on Aug. 21, 2020, has become effective.
“Over the last two months, we have been keenly focused on enhancing the company’s financial flexibility, and the completion of our financial restructuring process is a significant step forward,” said Pieter Sikkel, Pyxus’ president and CEO. “We are now a stronger and more competitive company with a foundation that bolsters our position in targeted markets and enables us to drive long-term value for all of our stakeholders. I want to thank our exceptional team at Pyxus for their commitment and continued focus through this process. We are also grateful for the support of our vendors, suppliers, customers and partners, and we look forward to working together for years to come.”
Under the terms of the plan, Pyxus has completed a comprehensive balance sheet restructuring that includes but is not limited to extending the maturity of its existing first lien debt, eliminating $635 million in principal amount of existing second lien debt, while adding a $213 million exit term loan, which replaced the debtor-in-possession financing incurred in connection with the Chapter 11 cases, and a $75 million exit asset based revolving facility. The elimination of the second lien debt and access to new working capital lines of credit, including foreign credit facilities, substantially strengthens the company’s balance sheet.
A series of corporate transactions resulted in the company being a new corporation renamed Pyxus International, which through its subsidiaries continues to operate the company’s businesses, while the corporation formerly known as Pyxus International has changed its name to Old Holdco All outstanding shares of Old Holdco were canceled.
August 25, 2020
FDA Accepts Vaporesso’s PMTA

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Vaporesso received an acceptance letter for its first round of premarket tobacco product applications (PMTAs) from the U.S. Food and Drug Administration (FDA) on Aug. 20, 2020.
The acceptance letter came three days after the company submitted its PMTAs. The application received positive comments from the FDA on its preparation, according to the company’s U.S. scientific CRO agent.
“A successful acceptance has boosted the confidence of Smoore to keep investing in bringing more vaping products into PMTA in the future,” the company wrote in its press release. “Our commitment to vapers in the USA remains the same: We will make vaping as easy as possible, and we will consistently provide high-quality vaping experiences for vapers all over the world. So the first round of application accomplished by Smoore is merely the start with more products to come.”
August 25, 2020
Philippines-Thailand trade dispute reignites

Photo: hectorgalarza from Pixabay
The Philippines has asked the World Trade Organization (WTO) dispute settlement body (DSB) to suspend the country’s concessions to Thailand for products such as motor vehicles exported to Manila.

Thailand has continued to avoid compliance with the WTO ruling that it must align its unfair tax treatment on Philippine cigarette exports, according to the Philippines.

“There are only two options under the reverse-consensus rule of DSU Article 22.6: the DSB granting authorization to suspend concessions or the DSB referring the matter to arbitration,” said the Philippines. “At this meeting of the DSB, the Philippines asks once again that the DSB grant the Philippines the authority it seeks.”

The Philippines sought retaliation against Thailand from the WTO to force the country to align its tax treatment on Philippine cigarettes in February 2020. The WTO first ruled favorably in 2011 and the Philippines won subsequent appeals from Thailand. The Philippines requested from the WTO a suspension of $594 million in trade concessions.
August 24, 2020
Reynolds Submits First Velo PMTA

Photo: RAI
Reynolds American Inc. submitted a group of premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration (FDA) seeking orders authorizing the marketing of Velo dissolvable nicotine lozenges. A grant of these marketing orders would allow these products to remain on the market after the FDA’s Sept. 9, 2020, deadline for PMTAs.

Velo Lozenges—formerly sold under the Revel brand—were reintroduced under the Velo brand in 2020 by Reynolds subsidiary R.J. Reynolds Vapor Company. Velo’s dissolvable oral nicotine lozenge products are available in hard and soft forms and four flavor variants, dark mint, mint, berry and crema. Velo Lozenges are manufactured using tobacco-derived nicotine.

The PMTAs for Velo Lozenges highlight key evidence demonstrating that the continued marketing of these products is appropriate for the protection of the public health. The applications include a range of scientific studies using established methodologies for the comparative assessment of tobacco products and associated health risks, including product analyses, information on human health risks and assessments showing the impact of Velo Lozenges on the health of the population as a whole—including users and nonusers of tobacco products.

“Velo is an award-winning brand bringing consistently innovative products to adult tobacco users, and a potential marketing order for PMTA submission would help to ensure adult tobacco consumers have access to FDA-regulated, consumer-acceptable product alternatives to combustible tobacco,” said James Figlar, Reynolds’ executive vice president and head of scientific and regulatory affairs.
August 24, 2020
Premium Cigar Makers Get Reprieve from FDA

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The District of Columbia on Aug. 19 ruled that the U.S. Food and Drug Administration (FDA) cannot enforce premarket review requirements for premium cigars until it considers a “streamlined” process for cigar makers to equate their products to older ones.
The ruling means that premium cigar companies will not have to file for product approval on the Sept. 9, 2020, deadline. This ruling applies to almost all cigars found in humidors across the country except for flavored and infused cigars, which are not considered premium by the FDA.
Companies will not need to file paperwork with the FDA to prove that their products are premium; rather, any company selling a cigar that does not meet the definition of “premium cigar” will be subject to the Sept. 9 premarket approval deadline and will need to file for substantial equivalence or another approval pathway.
The ruling does not require the FDA to enact a “streamlined” process for premium cigars but says it must study the issue and cannot require premium cigars to go through substantial equivalence or another process until after that study is complete.
The ruling came from a lawsuit against the FDA by three cigar trade groups: Cigar Association of America, Cigar Rights of America and the Premium Cigar Association (PCA). “This is another monumental victory for the premium cigar industry,” said PCA’s Scott Pearce. “This comes on the heels of legal victories striking down warning labels for premium cigars.”
August 21, 2020
Critics Lambast Axing of Public Health England

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The abolition of Public Health England (PHE) puts at risk staff who specialize in tackling alcohol abuse, obesity and smoking, according public health experts.
Earlier this week, U.K. Health Secretary Matt Hancock announced that PHE was being scrapped and merged into a new National Institute for Health Protection alongside National Health Service Test and Trace and the Joint Biosecurity Centre.
PHE had come under fire for its performance in the coronavirus crisis, but critics suspect government officials view the agency as a convenient scapegoat for flawed decisionmaking in the early weeks of the coronavirus crisis.
The timing is also controversial. “It’s an incredibly stupid move,” a health official told The Economist. “We’re in the middle of a pandemic.”
PHE was created in 2013 with responsibilities including preparing and responding to health-related emergencies, such as pandemics. It currently employs around 5,500 full-time staff made up mostly of scientists, researchers and public health professionals.
In the nicotine business, PHE is best known for its 2015 assertion that vaping is 95 percent less harmful than smoking. The agency has been credited with Britain’s comparatively pragmatic vapor policies and progressive attitude toward tobacco harm reduction.
August 21, 2020
Vaping up Among High School Students

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Nearly 11 percent of U.S. high school students used e-cigarettes frequently in 2019, according to the most recent Youth Risk Behavior Survey (YRBS), which was released by the Centers for Disease Control (CDC) on Aug. 20.
The YRSB defines “frequent” use as consuming a product on at least 20 of the 30 days preceding the survey. It also distinguishes “ever” use and “current” use (at least one day during the 30 days prior to the survey).
The YRBS found that 32.7 percent of high school students were current e-cigarette users in 2019, up from 24.1 percent in 2015. Six percent of high school students were current cigarette smokers in 2019, down from 27.5 percent in 1991. Of these 6 percent, 22.2 percent were frequent users.
Current smokeless tobacco use was 3.8 percent among high school students last year. Nearly 29 percent of these students consumed smokeless tobacco frequently.
Among current electronic vapor product users aged 17 years or younger, the most reported source was “borrowing them from someone else” (42.8 percent). Among current electronic vapor product users aged 18 years or older, the most cited source was “buying them in a store” (56.4 percent).
“Although current cigarette smoking, cigar smoking, and smokeless tobacco use has decreased among high school students, the increased prevalence of electronic vapor product use among youths is concerning,” the CDC wrote in a statement. “Continued surveillance for all tobacco product use is warranted for guiding and evaluating public health policy at the local, state, tribal, and national levels.”
The Campaign for Tobacco-Free Kids (CFTFK) called for regulatory action. “The 2019 YRBS results released today by the CDC are a powerful reminder of the severity of the youth e-cigarette epidemic and demonstrate that it is as urgent as ever that policymakers eliminate the flavored, nicotine-loaded products that have addicted millions of kids,” said Matthew L. Myers, president of the CFTFK.
August 21, 2020