Category: News This Week

Honduras Orders Cigar Factories to Close

Photo courtesy of Sebastian Zimmel
The Honduran government has ordered the closure of cigar factories as the number of Covid-19 cases in the area spikes.

The city of Danli and the district of El Paraiso will return to phase zero as of Wednesday, July 22. This means only pharmacies, supermarkets and gas stations will remain open.

The closure will reportedly last for at least 15 days.

This will be the second government-mandated closure this year. The first came after Covid-19 began to hit the area—only six cases were confirmed at the time. The number of confirmed cases has now reached over 30,000, including the Honduran president. There have been 835 deaths as of Friday.
July 20, 2020
TPB Completes Merger

Photo: Alexas Fotos
Turning Point Brands (TPB) and Standard Diversified (SDI) announced that the merger of SDI with and into Standard Merger Sub, a wholly owned subsidiary of TPB, closed on July 16, 2020.

Pursuant to the merger, each share of SDI’s Class A common stock and SDI’s Class B common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive 0.52095 shares of TPB’s voting common stock.

As a result of the merger, the SDI common stock has ceased trading on, and is being delisted from, the NYSE American.

“The transaction significantly improves the public float of our shares outstanding and eliminates the overhang of a controlling holding company structure,” said Bobby Lavan, TPB’s chief financial officer. “We are excited to welcome all of the new shareholders and thank our existing shareholders that participated in the related secondary offering.”
July 20, 2020
PMI Campaigns Against Cigarette Litter

Photo: PixaBay
Philip Morris International (PMI) launched “Our World is Not an Ashtray,” a new global initiative to raise awareness and drive a long-term change in behavior and attitudes around cigarette-butt littering.
The initiative supports PMI’s litter reduction target to achieve a 50 percent reduction of the plastic litter from its products by 2025 (vs. 2021 baseline). The initiative, launched on WorldNoAshtray.com, aims to educate the public about the environmental impact of cigarette-butt littering and inspire adult smokers to change littering habits.

“We seek to make cigarette-butt littering socially unacceptable,” said Huub Savelkouls, chief sustainability officer at PMI. “‘Our World is Not an Ashtray’ is an important initiative in our multipronged approach to addressing this important issue.”

To track progress against its goal, PMI is working with three organizations—Litterati, Cortexia, and CARTO—to implement a data-driven approach and assess the prevalence of cigarette-butt litter across the globe; identify litter hotspots; and monitor the impact of anti-littering activities. A pilot assessment will take place this summer in a pilot city before being rolled out in representative countries across the world in 2021 as part of a five-year assessment.
July 20, 2020
FDA Orders Retailers to Stop Selling 13 Products
Photo: Jhvephotos | Dreamstime.com
The U.S. Food and Drug Administration (FDA) on July 16 ordered retailers to cease selling 13 tobacco products that received nonsubstantially equivalent orders. These 13 products, which are deemed “misbranded and adulterated” by the FDA, include:
Camel Sticks Mint, Viceroy Flex, Camel Strips Mint and Camel Orbs Mint from R.J. Reynolds Tobacco Co.
Skoal Smooth Mint Tobacco Stick, Skoal Rich Tobacco Stick, Skoal Mint Tobacco Stick and Skoal Original Tobacco Stick from U.S. Smokeless Tobacco Co.
Union Full Flavor 100’s Box, Union Gold 100’s Box, Union Platinum 100’s Box, Union Menthol 100’s Box and Union Menthol Gold 100’s Box from Heritage Tobacco.
The FDA added that any retail with remaining inventory should work with the product manufacturer or supplier to discuss options for disposing of the products.
In response to the FDA announcement, R.J. Reynolds said that the FDA order has no impact on the company as the three brands listed have not been sold since 2013. R.J. Reynolds spokeswoman Kaelan Hollon said July 16, “We received the FDA’s orders earlier this year. Given these products have not been commercially sold in several years, these orders will have no commercial impact.”
July 17, 2020
Puff Bar Sued for Online Vape Sales

Massachusetts Attorney General Maura Healey is suing Puff Bar, alongside Cool Clouds Distribution, for allegedly selling its flavored vapor products online. The company is also being accused of failing to protect against delivery of their products to minors, in violation of state law, according to the suit.
The complaint filed in Suffolk Superior Court on Wednesday also seeks a preliminary injunction to prevent Puff Bar and its distributor from selling its products in Massachusetts while the lawsuit is ongoing. Puff Bar has already suspended all US sales of its products.
Last November, Massachusetts became the first state in the country to ban the sale of flavored vapor and tobacco products. The law also banned the sale of all menthol flavored tobacco products.
Much remains unknown about Puff Bar. For example, it is unclear who owns the company, according to FairWarning. A document filed with the California Secretary of State lists Patrick Beltran as the chief financial officer and Nick Minas as the CEO, but both men have stated that despite their titles, they are in charge only of running the company’s website.
“These products are dangerous, addictive and particularly appealing to young people, which is why Massachusetts moved quickly to regulate them. Companies that blatantly violate these laws will face legal action from my office,” Healey said in a statement.
July 17, 2020
Zyn Boosts Swedish Match’s Second Quarter

Photo: Swedish Match
Swedish Match reported a strong second quarter, driven largely by sales of its Zyn tobacco-nicotine pouches in the United States.
In local currencies, Swedish Match’s sales increased by 11 percent for the second quarter. Reported sales increased by 11 percent to SEK4.13 billion ($457.18 million).
In local currencies, operating profit from product segments) increased by 19 percent for the second quarter. Reported operating profit from product segments increased by 17 percent to SEK1.7 billion.
Operating profit amounted to SEK1,67 billion for the second quarter. Profit after tax amounted to SEK1,23 billion for the second quarter.
According to Swedish Match, the second quarter financial performance was negatively affected by Covid-19 impacts.
“The strength of the second-quarter performance was largely attributable to the continued success of Zyn in the U.S., with shipments in the first half of the year already exceeding total shipments for 2019,” said Lars Dahlgren, CEO of Swedish Match.
“Shipment volumes for our Scandinavian smokefree business declined in the quarter versus the prior year as deliveries to travel retail and border trade outlets were severely impacted by COVID-19 travel restrictions.”

July 17, 2020
Essentra Settles Case Over North Korea Trade

Photo: Essentra
Essentra FZE Co., a subsidiary of Essentra PLC incorporated in the United Arab Emirates, has agreed to pay a $665,112 fine and enter into a deferred prosecution agreement with the U.S. Department of Justice (DOJ) for conspiring to violate the International Emergency Economic Powers Act and defrauding the United States in connection with evading sanctions on North Korea, according to a DOJ news announcement.
The public filing against Essentra FZE is the first-ever Department of Justice corporate enforcement action for violations of these regulations. Essentra FZE has also entered into a settlement agreement with the U.S. Treasury Department’s Office of Foreign Assets Control.
“This is an important case as it demonstrates the FBI will not hesitate to hold businesses accountable for violating sanctions involving North Korea,” said Alan E. Kohler Jr, assistant director of the FBI’s counterintelligence division. “We will aggressively go after enterprises using front companies, false documents, or other illegal methods to evade sanctions. We want North Korea and private industry to know that efforts to dodge our laws will never be tolerated as business as usual.”
According to admissions and court documents, beginning in at least October 2017 and continuing until at least December 2018, Essentra FZE deceived banks in the U.S. and in the UAE into processing transactions for a North Korean tobacco company. Essentra FZE and its co-conspirators utilized financial cutouts and front companies to conceal the North Korean nexus, as well as falsified shipping records, according to the DOJ.
In a statement published on its website, Essentra PLC said none of the transactions were approved or known by senior management outside of the UAE and both employees have since been exited from the business.
“A very thorough and in-depth investigation has been carried out to fully understand the root cause of the issues we have seen,” said Paul Forman, CEO of Essentra PLC. “We have made a very significant investment of both time and money, which has now equipped us with enhanced protection against any potential future issues of this nature.”
July 17, 2020
Court Upholds Verdict Against Reynolds

Photo: Tobacco Reporter archive
A three-judge panel of the 3rd District Court of Appeal from South Florida on July 15 upheld a $7.25 million verdict against R.J. Reynolds Tobacco Co. (RJR) in a lawsuit filed by a man who smoked two packs of cigarettes a day by age 17 and later suffered from coronary artery disease.
The panel rejected RJR’s arguments that the plaintiff had not proven an allegation related to the tobacco company fraudulently concealing the dangers of smoking. The appeal came after a Miami-Dade County jury awarded $5 million in compensatory damages and $2.25 million in punitive damages to the plaintiff.
“In sum, not only did [the plaintiff] Rouse present evidence that he was exposed throughout his life to the tobacco companies’ broad-based, misleading advertising campaign, he also testified that his decision to smoke Winston filtered cigarettes was influenced by the way the tobacco companies promoted filtered cigarettes in their advertisements,” the panel said in a statement.
“From this evidence, a reasonable jury could have inferred that Rouse might have never started smoking Winston filtered cigarettes or would have quit earlier had he known true facts about filtered cigarettes.”
July 17, 2020
Zimbabwe Leaf Sales Earnings Up

Photo: Taco Tuinstra
Zimbabwe earned $326 million from the sale of 135.42 million kilograms of tobacco leaf since the beginning of the selling season in April, according to statistics from the industry regulator.
The Tobacco Industry and Marketing Board said the sales as of July 12 were about 18.36 percent higher than the same period last year, which stood at $275.69 million. The crop sold at an average price of $2.41 per kilogram, higher than the $1.84 during the same period last year.
July 16, 2020
South African Tobacco Ban Back in Court

Photo: Michal Kalasek | Dreamstime.com
The North Gauteng High Court heard an appeal by the Fair-Trade Independent Tobacco Association (FITA) against the ban on tobacco products.
The court previously dismissed a case by FITA that argued the ban of cigarette sales was “irrational.” The government’s argument was that smoking could lead to more coronavirus cases and potentially death, but FITA argued the issue was not limited to cigarettes.
Appeal proceedings began Wednesday morning via Zoom. Arnold Subel argued on behalf of FITA, stating that banning tobacco products is based on “low-quality evidence” and that the ban would not have a significant effect on smoking in South Africa.
FITA is hopeful that the court will rule in its favor. “The judgment will be delivered by the course of next week, and we are hoping to have the judgment by next Friday,” said Sinenhlanhla Mnguni, FITA chairperson. “At this point in time, it’s a question of waiting a week or so.”
July 16, 2020