Category: News This Week

  • Demanding a say

    Moira Gilchrist
    Moira Gilchrist

    Philip Morris International (PMI) has taken Vital Strategies to task after the special interest group prevented Moira Gilchrist, one of PMI’s leading scientists, from participating in a forum about e-cigarettes.

    “The world is home to more than 1 billion people who smoke today,” PMI wrote in a statement. “Can we at least talk about their right to better alternatives than continuing to smoke?”

    The company says there is growing recognition among governments, scientists and public health experts that scientifically substantiated smoke-free alternatives—in combination with existing measures to prevent initiation and encourage cessation—can play an important role in addressing the global public health issue of smoking.

    “What’s wrong with having an open, informed debate, with all sides involved?” PMI wrote. “We believe it’s OK to disagree, but we adamantly refuse to accept an honest debate is not possible—or necessary.”

    Gilchrist is PMI’s vice president of strategic and scientific communications. She is responsible for driving the transparent and comprehensive communication of PMI’s smoke-free vision and scientific research to stakeholders across society including in the scientific, public health and regulatory communities.

  • Bernstein to retire

    Bernstein to retire

    Ronald J. Bernstein, president and CEO of Liggett Group and Liggett Vector Brands, will retire March 31 after nearly 30 years of service. Bernstein will continue to serve on Vector’s board of directors and has agreed to transition into the role of nonexecutive chairman of Liggett Vector Brands and senior advisor to both companies.

    Nicholas Anson, current executive vice president for finance and administration, and chief financial officer of Liggett Vector Brands, will assume the role of president and chief operating officer of Liggett Group and Liggett Vector Brands. Anson joined Liggett Vector Brands in 2001 and has served in numerous senior roles during his tenure with the company.

    “On behalf of the board and management, we sincerely thank Ron for his outstanding contributions over a successful tenure of almost three decades,” said Howard M. Lorber, president and chief executive officer of Vector. “Under Ron’s leadership, Vector’s tobacco segment has grown annual revenues to over $1 billion and gained meaningful market share.”

    “It has been an honor and privilege to serve this great company for nearly 30 years, and I look forward to remaining involved with Liggett in my new roles,” said Bernstein.

  • Well-positioned

    Well-positioned

    Philip Morris International (PMI) reaffirmed its 2020 reported diluted earnings per share (EPS) guidance, announced on Feb. 6, for 2020 full-year reported diluted EPS to be at least $5.50 versus $4.61 in 2019.

    The company expects its shipments of cigarettes and heated tobacco units to decline by between 2.5 percent and 3.5 percent this year. This development partly reflects factors affecting overall industry volumes outside of China and the United States, including the impact of an above-inflation excise tax increase in Indonesia and out-switching to the cigarillo category in Japan.

    The decline in PMI’s overall shipments is driven by the combustible cigarette category. PMI expects its sales of heated tobacco units to grow significantly, reaching between 90 billion and 100 billion units by 2021.

    “PMI is leading the industry’s transformation through IQOS, which is seeing accelerated market share momentum,” wrote Pamela Kaufman and Christine Yang of Morgan Stanley. “IQOS should benefit from additional geographic expansion, new device/heatstick launches and PMI’s improved marketing approach.”

    According to PMI, only 2 percent of the world’s 1.1 billion adult smokers have fully switched to reduced-risk products, suggesting considerable opportunity for growth. While the number of IQOS users lags the number of vapers, IQOS adoption should continue to increase as it has been more successful in driving full smoker conversion, senior PMI officials told investors at the Consumer Analyst Group of New York conference in Boca Raton, Florida, USA, yesterday. According to PMI, 71 percent of IQOS users have stopped smoking versus 25 percent of vapers.

    PMI has invested some $7.2 billion in IQOS since 2008 and should begin to more meaningfully leverage this investment over the coming years, allowing it to bring down consumer acquisition cost, for example, according to Morgan Stanley.

    Meanwhile, the recently announced partnership with KT&G of South Korea will allow PMI to broaden its portfolio with KT&G’s Lil Hybrid and vapor products.

  • Taxes up

    Taxes up

    The Ethiopian Parliament passed legislation to curb smoking in the country, according to the World Health Organization (WHO).

    The legislation involves a 30 percent tax rate of the cost of producing cigarettes in addition to a specific excise rate of ETB8 ($0.25) on each individual packet. The increased tax on cigarettes will boost cigarette tax revenues by as much as 81 percent.

    “It is a powerful example of how the government, civil society and [the] WHO can work together to enact meaningful change,” said Boureima Hama Sambo, WHO representative for Ethiopia.

    The WHO estimated that the tax increase would reduce the rate of cigarette smoking among adults by as much as 10 percent and reduce the number of deaths attributable to smoking by around 91,000 people.

    Prior to the approval of this bill, cigarettes in Ethiopia were among the cheapest in the world.

  • Creating antibodies

    Reynolds American is infecting fast-growing tobacco plants with a genetically modified version of the coronavirus to see if they can produce antibodies for a possible vaccine.

    Reynolds is working through Kentucky Bioprocessing, a small lab the tobacco company bought in January 2014.

    Kentucky Bioprocessing has reached out to the Department of Health and Human Services, stating it could provide a sample of its work by early March.

    Kentucky Bioprocessing also helped in creating an Ebola treatment during an outbreak of that illness in 2014. “Kentucky BioSciences quickly focused on producing a tobacco-derived component for the combination therapy ZMapp, one of the first experimental Ebola treatments to become available. ZMapp ultimately fell short as data piled up for other drugs’ effectiveness against the virus,” according to Politico.

    The idea of using tobacco plants to fight viruses is not new—in 2012, tobacco plants aided in the production of 10 million flu vaccines. The plants are hardy and grow fast, allowing scientists to create vaccines more quickly.

    Though there is promise in the science, it would take thousands of doses to come up with an experimental treatment for coronavirus, according to experts, and it’s possible the outbreak could subside before a vaccine is perfected.

  • Marlboro still top brand

    Marlboro has maintained its status as the world’s most valuable tobacco brand despite a 3 percent decrease in brand value to $32.7 billion in 2020, according to a Brand Finance report.

    L&M is the second most valuable brand with a brand value of $6.3 billion. L&M is the fourth best-selling international cigarette brand outside of the U.S. and China.

    Pall Mall, Winston and Copenhagen have recorded solid brand value growth, with Winston seeing a 9 percent increase in brand value to $4.1 billion. Winston is the second best-selling cigarette brand globally.

    Camel suffered a 14 percent drop in brand value to $3.4 billion. The drop is attributed to menthol bans around the world.

    Newport suffered a 6 percent drop in brand value, causing it to drop out of the Brand Finance Tobacco 10 ranking this year.

    Rothmans and Gold Flake have entered the ranking this year. Rothmans has a brand value of $3.1 billion and Gold Flake has a brand value of $3 billion.

  • GPI for sale

    GPI for sale

    Cigarette maker Godfrey Phillips India is up for sale, confirmed Lalit Modi in a tweet on Jan. 27.

    Krishan Kumar “KK” Modi, who was the chairman of Modi Enterprises, passed away in November 2019. His wife, Bina Modi, was named chairperson after his death. His son, Lalit Modi, did not approve of this appointment, according to a follow-up tweet.

    Godfrey Phillips, the manufacturer of Marlboro cigarettes in India, currently has two major stakeholders—Phillip Morris (which owns 25.1 percent) and the KK Modi Group (which owns 47.09 percent).

    Other Modi Enterprise companies that are up for sale are Modicare, Modicare Healthcare Placement and 24Seven convenience stores.

  • Preparing to party

    Havana is getting ready to host the XXII Habanos Festival, which will begin Feb. 24 with a welcome evening and will end Feb. 28 with the traditional gala dinner.

    The event will be attended by cigar enthusiasts from all over the world, with the Bolivar, Montecristo and Romeo y Julieta brands taking center stage.

    Attendees at the XXII Habanos Festival will enjoy a five-day activities’ program and learn about the origin, production and various aspects concerning the culture of Habanos. This year, there will be plantation tours to the area of Partido, San Antonio de los Banos, in Artemisa, and tours of the La Corona and Partagas factories.

    Other highlights include three evenings of the best live music from renowned international artists, the finest gastronomy in Cuba and the opportunity to try Habanos and drinks from different corners of the world.

    The program will also feature practical sessions and keynote speeches led by renowned experts in the world of Habanos.

    The gala evening is dedicated to the Romeo y Julieta brand and will conclude with the Habanos Awards and the traditional Humidors Auction, with all proceeds going to the Cuban public healthcare system.

     

  • Seeking input

    Seeking input

    The U.S. Food and Drug Administration has opened a docket to obtain data and information related to the use of vaping products that are associated with e-cigarette, or vaping, product use-associated lung injury (EVALI).

    This request for information responds to direction from Congress to gather information from the public that could help identify and evaluate additional steps the FDA could take to address the recent lung injuries associated with the use of vaping products and to help prevent similar occurrences in the future.

    The FDA is seeking unpublished data or information related to the use of vaping products that are associated with recent lung injuries including information on specific chemicals, compounds, ingredients or combinations of ingredients that when inhaled or aerosolized, may be associated with EVALI symptoms, as well as product design and potential ways to prevent consumers from modifying or adding substances to these products that are not intended by the manufacturers.

    “Since last year, the Food and Drug Administration, the Centers for Disease Control and Prevention and state health authorities have diligently worked to identify substances of concern and characterize the outbreak of lung injuries associated with vaping products,” said FDA Commissioner Stephan Hahn.

    “We remain deeply concerned about these injuries and deaths and continue to work with other agencies, as well as state and local public health officials, on this complex investigation. National and state data from patient reports and product sample testing suggest vaping products containing tetrahydrocannabinol, particularly from informal sources like friends, or family, or in-person or online dealers, are linked to most cases and play a major role, and that the presence of the compound vitamin E acetate in vaping products is strongly linked to the outbreak.

    “Our investigation has brought to the forefront the serious risks of using illicit, black market products. As part of our efforts to mitigate and prevent a potential future outbreak of vaping injuries, we are asking the public for input on additional steps the FDA can take to inform our regulatory work and address the illegal modification of these products.”

     

  • Selling season delayed

    Selling season delayed

    The start of Zimbabwe’s 2020 tobacco marketing season will be delayed due to late rains, reports NewsDay, citing Patrick Devenish, chairman of the Tobacco Industry and Marketing Board (TIMB).

    Last year, the marketing season commenced on March 21.  Tobacco deliveries hit an all-time high of 259 million kg in 2019 but, at $2 per kg, average prices were the lowest in years.

    As of Dec. 20, farmers had planted 81,977 hectares of tobacco against 79,708 hectares planted during the same period last year, according to TIMB data. Output for this year is estimated at 225 million kg.

    Tobacco is one of the country’s top earners of foreign exchange, which is necessary for the importation of raw materials, fuel and pharmaceuticals among others.