Category: News This Week

Hungary Wins EU Tax Fight

Photo: Steve Woods – Dreamstime.com
Hungary has won its fight at the European Union’s top court to topple part of an EU decision to stall the government’s progressive taxes on retailers and tobacco companies, reports Bloomberg.
The EU Court of Justice in Luxembourg on Thursday backed Hungary’s appeal and annulled the European Commission’s 2015 decision to order the suspension of the system.
The commission in 2015 opened a probe into the measure and temporarily barred the nation from collecting special taxes from retailers and tobacco companies on suspicion the “steeply” progressive levies violated EU rules.
June 5, 2020
Zimbabwe: Tobacco Earnings Double From Last Year’s

Photo: Taco Tuinstra
Zimbabwe has earned US$117 million from leaf sales since the tobacco season opened on April 29, according to the Tobacco Marketing and Industry Board (TIMB). Farmers have sold 51.66 million kg to date.
This year’s season was characterized by delayed rains and prolonged drought.
The TIMB said sales increased twofold from $46.83 million earned from 26.70 million kgs of the golden leaf sold in the comparable period last year.
Average price at both auction and contract floors stood at $2.26 per kg, nearly 30 percent higher than during the comparable period of the 2019 marketing season.
Despite the comparatively good prices, farmers are concerned about their income.
Half of their crop is paid at a fixed exchange rate of US$1:$25. The other half is paid into local currency bank accounts at the pegged interbank rate and they feel the huge gap between the official and black market rates might affect their viability since many of their suppliers use the black market rate when calculating prices.
Tobacco is Zimbabwe’s second largest foreign currency earner after gold.
June 5, 2020
BAT Launches E-cigarette Subscription Services

Photo: British American Tobacco
British American Tobacco (BAT) has launched personalized subscription services for its Vuse and Vype e-cigarette brands. With a variety of plans to choose from, vapers can sign up for monthly deliveries that offer “value, convenience and personalization.”
In the United Kingdom, BAT has introduced two monthly subscription services focusing on its award-winning Vype ePen3 and Vype ePod.
Each subscription plan includes a Vype ePen3 or Vype ePod every three months with a 25 percent saving on a three-month plan or a 33 percent saving on a six-month plan, both with no delivery charges. Each plan requires a minimum order of six packs per month.
In the United States, BAT continues to offer its popular Vuse Alto pod subscription service that includes a 10 percent discount on pods and free delivery.
June 5, 2020
New Leadership at Beumer Corp.

Joseph Dzierzawski
Joseph Dzierzawski has been named president and CEO of Beumer Corp., the U.S. subsidiary of the Beumer Group in Somerset, New Jersey, USA, effective April 27, 2020. He will be responsible for the business lines conveying and loading systems, palletizing and packaging technology, and sortation and distribution systems in the North American market.
With a degree in metallurgical engineering, he previously served at a German system supplier for the metallurgy industry. He then joined an international engineering and management consulting company, where he served as global director of technology and business development.
With annual sales of about €950 million ($1.07 billion) the Beumer Group employs 4,500 employees worldwide.
June 5, 2020
Caught off-guard by Covid, the U.K. raises RYO taxes
Struggling to contain a crisis that it ignored for a month, the U.K. government raises the tax on roll-your-own cigarettes.
By George Gay

Photo: zikamatej from Pixabay
In its March budget, and in the midst of the coronavirus crisis, the U.K. government increased the duty on roll-your-own (RYO) tobacco by inflation plus 6 percent. I am told that anti-smoker campaigners had been calling for an increase of inflation plus 15 percent.
I find it difficult to understand how the government and campaigners can act in such an unfair, discriminatory and callous way, especially at this time. Smokers are largely made up of the financially less wellvoff, and many RYO consumers are smokers who cannot afford cigarettes. At the same time, a lot of RYO smokers are elderly, perhaps lonely. Are they to be allowed no solace as they are forced by government diktat into isolation because of the threat that they may contract Covid-19? Having been told for most of their lives—wrongly as it turns out—that smoking will kill them, are they in fact to be killed by a type of virus nobody bothered to warn them about—and without the comfort of a final rollie? Is it not possible for those with power and influence to forget their alcohol (no duty increase, of course), cocaine (illegal, so ditto) and other apparently more acceptable habits for a while and imagine themselves in the shoes of the less well off?
The U.K. government proved to be woefully unprepared to protect its people from the perfectly predictable arrival of a deadly coronavirus that those people, individually, have almost no protection against. But it stands ready to fight any 70-plus-year-old who chooses to indulge in the legal habit of smoking an RYO cigarette.
In one of his statements, the U.K.’s prime minister, Boris Johnson, widely viewed as a libertarian, suggested that one of the reasons why the government was taking a “gently, gently” approach to curbing people’s ability to fraternize during the coronavirus crisis was that the U.K. was a bastion of liberty. Given that smoking tobacco, a legal product, is banned from public places in the U.K., the argument seemed to be that people should, in the name of liberty, be allowed to gather together to spread the deadly virus, which kills within weeks, whereas smokers should not be allowed to gather together because of the miniscule threat that secondhand smoke will kill a bystander within 40 years or so. Of course, as the “science changed,” (you couldn’t make this up) he was soon in full retreat from his defense of liberty and moving to his more usual stance of taking liberties.
The argument seemed to be that people should, in the name of liberty, be allowed to gather together to spread the deadly virus, which kills within weeks, whereas smokers should not be allowed to gather together because of the miniscule threat that secondhand smoke will kill a bystander within 40 years or so.
But one can expect no more. The government, run apparently by a bunch of self-styled weirdos and misfits and bent on undervaluing the country’s experienced, serious-minded and formerly internationally respected civil servants, found itself way out of its depth as it reaped the whirlwind of 10 years of austerity and the onward march of Covid-19 through a nation it had torn apart over Brexit. Covid-19, marching in lockstep with an economic meltdown and a financial panic, emerged on the back of the free market and proved unmoved by the prime minister’s only weapons: bluster and a pantomime-like imitation of Winston Churchill that surely would not earn him an Equity card.
The government couldn’t and, as I write, still cannot provide an efficient or anything like adequate testing regime for the virus. Indeed, a new cabinet, seemingly made up mainly of poodles and patsies who a few months earlier had bleated for the cameras how the government was going to build 40 new hospitals, couldn’t, even by the end of March, provide face masks for all frontline medical staff.
And this, of course, was the reason for the huge increase in RYO tax. It wasn’t about forcing RYO smokers to quit their habit (they are addicted, after all). It was about the government casting about among the financially poor to find the funds necessary to face up to the crisis that it appeared to have largely ignored for a month.
The government’s duty increases on tobacco products will, of course, have greatly pleased the World Health Organization (WHO), which advocates taxing poor smokers heavily (for their own good, of course), but the government’s response to the coronavirus outbreak went down less well with the WHO, which at times seemed nonplussed by the government’s approach, or lack of it. Still, what can the WHO expect? The U.K. is a fully paid-up member of the WHO’s Framework Convention on Tobacco Control, but there is, of course, no Framework Convention on Coronavirus Prevention and Control.
Prevention. Now there’s a thing. What are the chances that, with the world’s health defenses not reserved for tobacco all pointing at Covid-19, anyone is watching our backs for the arrival of the next deadly coronavirus? Not great, I would suggest. And it will arrive as sure as night follows day unless things change and prevention is pushed to the fore. We know what some of the main risk factors in respect of such viruses are, so even if we cannot prevent their outbreak, we can greatly reduce their likelihood. But we won’t; the free market, marching in lockstep with inept leaders around the world, will see to that.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

June 4, 2020
U.S. Customs Clears Malawi Imports

Tobacco being prepared for export in Lilongwe. Photo: Taco Tuinstra
U.S. Customs and Border Protection (CBP) modified a withhold release order (WRO) such that tobacco imported from Malawi by Alliance One International will be admissible at all U.S. ports of entry effective June 3, 2020. CBP previously prevented these tobacco imports from entering the United States based on reasonable suspicion that they were produced using forced labor.
CBP modified the WRO based on a rigorous evaluation of Alliance One International’s social compliance program and efforts to identify and minimize the risks of forced labor from its supply chain. These actions produced evidence that sufficiently supports Alliance One International’s claim that the tobacco produced and harvested from their farms does not use forced labor.
The WRO continues to apply to imports of tobacco from Malawi by any company that has not demonstrated to CBP that there is no forced labor in its supply chain.
“CBP recognizes the impact that withhold release orders have on importers and exporters, therefore we diligently work to carefully and thoroughly review petitions and admissibility requests,” said Brenda Smith, executive assistant commissioner of CBP’s office of trade. “If companies demonstrate that there is no forced labor in their supply chain, we will modify the withhold release order to exclude them.”

June 4, 2020
Calls to Ban ‘Juul Replacement’ Puff Bar

Photo: Puff Bar
U.S. lawmakers have asked the Food and Drug Administration (FDA) to ban Puff Bar, an e-cigarette that is quickly replacing Juul as the vape of choice among young people, reports The New York Times.
The disposable devices come in more than 20 flavors, including pina colada and pink lemonade. Although the Trump administration banned fruit, mint and dessert flavors in refillable cartridge-based e-cigarettes like Juul earlier this year, it exempted brands that are used once and thrown away.
Launched last year, Puff Bar has been the key beneficiary of the loophole. Based on data used for tracked channels, which exclude online sales or vape shops, Puff Bar sales have consistently been more than $3 million a week since April, with volumes now over 300,000 sticks per week.
Juul’s business, by contrast, has shriveled since it restricted sales in the United States to tobacco and menthol varieties last fall.
When the FDA started regulating e-cigarettes, it permitted the continued sale of products that were on the market as of Aug. 8, 2016, pending agency review. Because Puff Bar was introduced after that date, the agency should have the authority to remove it even though the product is disposable and even if the FDA cannot prove the company is targeting youths.
The exception would be if Puff Bar had already been on the market before the 2016 deadline, under a different name or sold by another company.

June 4, 2020
South Africa Asks More Time to Defend Tobacco Ban

Blanks for Peter Stuyvesant cigarettes waiting to be transformed into cigarette packs at a South African tobacco packaging factory. Photo: Taco Tuinstra
South Africa’s government has requested more time to defend its cigarette ban in court.
State attorney Arista Wasserman has written the judge president of Gauteng to request that the initial hearing in the challenge against the ban brought by the Fair Trade Tobacco Association be postponed in light of the pressures facing the Ministry of Cooperative Governance and Traditional Affairs, including the coronavirus pandemic.
South Africa banned the sale of tobacco at the start of the nationwide lockdown in late March, citing health reasons. The ban was extended under level 4 and again under level 3 of the lockdown. The government has argued that smoking leads to more severe cases of Covid-19, and the ban is necessary to reduce strain on the country’s health system.
The Federation of International Trade Associations, whose members include Carnilinx and Gold Leaf Tobacco, petitioned the court in May to reauthorize the sale of tobacco products.
British American Tobacco South Africa (BATSA) last week lodged a separate legal challenge against the ban. According to BATSA, the ban has cost it between ZAR300 million ($17.64 million) and ZARR350 million in lost revenues per week. It estimates that about ZAR2.4 billion has been lost in tax revenue during the first eight weeks of lockdown.
June 4, 2020
Fawky Abdallah Listed in Marquis Who’s Who

Fawky Addallah
Tobacco industry consultant Fawky Abdallah has been included in Marquis Who’s Who.
According to the publication, Abdallah researched correlations between smoking and health and concluded that cigarette smoking is a serious health hazard. He then developed methods and techniques to make less harmful cigarette products. Abdallah shared his knowledge at more than 60 seminars worldwide.
Abdallah authored three books covering smoke evaluation, product development and product quality, which were translated into Spanish, Russian and Chinese.
In 2017, Tobacco Reporter recognized Abdallah with a Golden Leaf Award in the Most Outstanding Service to the Industry category.
First published in 1899, Marquis Who’s Who chronicles the lives of accomplished individuals “from every significant field of endeavor.”
June 4, 2020
Lil Hybrid 2.0 Goes Nationwide in Korea

Photo: KT&G
KT&G will expand the sales of its Lil Hybrid 2.0 heated tobacco cigarette to all cities in South Korea.
The product debuted in February in major cities, such as Seoul, and expanded to 37 metropolitan areas in April.
The expansion follows a series of inquiries from consumers in areas where the product had not yet been released, according to Lim Wang-seop, business director for next-generation products at KT&G.
“Since the launch of the product, we have continued to expand our sales outlets,” Lim said. “We will continue to lead the e-cigarette market by strengthening product competitiveness and enhancing customer satisfaction through technological innovation.”
Lil Hybrid 2.0 is equipped with a function that automatically warms up when a stick is inserted for the first time. An OLED display provides information on the battery charge, the cartridge level and the remaining number of puffs.
The recommended consumer price is KRW110,000 ($90.27).

June 4, 2020