R.J. Reynolds Vapor Co. has filed the final pre-market tobacco product application submissions with the U.S. Food and Drug Administration for its Vuse Pro age-gated device. The electronic nicotine delivery system device platform connects to a mobile application that verifies the consumer’s age through a third-party provider.
Once verified, the device will unlock. It uses a unique design to only allow compatible Vuse Pro pods to be used. The technology and mobile application also enable features such as auto-lock and proximity lock to further secure device access.
“Our PMTA submissions to the FDA underscore our commitment to both offering adult tobacco and vapor consumers choices as well as underage access prevention,” said Reynolds Executive Vice President of Scientific Research and Development Tim Nestor in a statement. “We don’t want our products in the hands of youth, period. The Vuse Pro ENDS platform provides a solution that limits access to adult consumers while also offering flavors that appeal to current adult smokers and a unique vapor experience.”
Scandinavian Tobacco Group (STG) has agreed on the terms and conditions for the acquisition of all the shares of Mac Baren Tobacco Co. from Halberg. On a debt and cash-free basis, the transaction is valued at DKK535 million ($76.87 million). The acquisition will be financed by cash at hand and debt.
A family-owned business founded in 1826, Mac Baren is a global smoking tobacco company. Its portfolio includes pipe tobacco brands such as Mac Baren, Amphora and Holger Danske as well as fine-cut tobacco brands such as Amsterdamer, Choice and Opal. The company also produces and sells nicotine pouches with the brands ACE and GRITT.
Mac Baren’s products are sold in 74 countries with the majority of net sales generated in the U.S., Denmark and Germany. Other key markets include the U.K., France, Spain and Italy. The company is based in Svendborg, Denmark, with production facilities in Denmark and in Richmond, Virginia, USA. The company has approximately 200 full-time employees.
Mac Baren’s reported annual net sales (April 2024) were DKK723 million with a reported EBITDA of DKK85 million. Nicotine pouches accounted for close to 20 percent of net sales with a small negative contribution to EBITDA.
The acquisition will contribute to our already well-established position on the global market for pipe tobacco and will expand our attractive range of brands of the highest standards to our consumers.
“I am very pleased that we have taken this important step to strengthen our smoking tobacco business with the acquisition of Mac Baren,” said STG CEO Niels Frederiksen in a statement. “The acquisition will contribute to our already well-established position on the global market for pipe tobacco and will expand our attractive range of brands of the highest standards to our consumers. The combination with our existing business is expected to deliver meaningful synergies when fully integrated and good value for our shareholders.”
“Scandinavian Tobacco Group is acquiring a strong company with a lot of know-how, loved brands and skilled employees,” said Halberg chairman Torben Sorensen. “Since its inception in 1826, a central part of Mac Baren’s DNA has been its focus on new opportunities and ensuring optimal competitiveness. In light of this, it is timely prudence to now let the company become part of a stronger constellation. It is a particular pleasure that ownership has been retained in Danish hands. This is the best possible solution for both Mac Baren and Halberg.”
STG’s full-year financial guidance for 2024, excluding the impact from the acquisition of Mac Baren, remains unchanged. The integration planning period is expected to take up to 120 days
KT&G delivered welfare improvement support funds amounting to approximately KRW420 million ($303,020) to tobacco farmers.
This year’s support funds will be used for health checkup fees, child scholarships and the purchase of fuel-saving devices for drying facilities targeting leaf tobacco growers.
KT&G has been delivering welfare improvement support funds to leaf tobacco farmers annually since 2013, reaching a total of KRW4.28 billion this year. During the same period, the cumulative number of benefiting growers reached 15,212.
Korean tobacco farmers have been struggling to secure labor due to the declining and aging rural population. Tobacco cultivation is difficult to mechanize, which makes it imperative to look after growers’ health, according to KT&G.
The fuel-saving device recirculates the heat discharged during tobacco drying. Since 2022, KT&G has provided 214 units.
The company also assists its farmers by purchasing all domestic leaf tobacco every year and dispatching employee volunteer groups to assist during the planting and harvesting seasons.
“We continue to support the welfare improvement projects for farmers to alleviate their difficulties and provide practical help,” said Kim Jeong-ho, head of KT&G SCM headquarters, in a statement.
“We will continue to provide consistent support to improve the health and economic conditions of leaf tobacco farmers.”
Altria Group has submitted premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration for its “On! Plus” oral nicotine pouch products. The PMTAs were submitted by Altria’s wholly owned subsidiary Helix Innovations.
On! Plus is a spit-free, oral tobacco-derived nicotine (TDN) pouch product made from a proprietary “soft-feel” material to provide a more comfortable product experience. The On! Plus pouch is designed for adults who dip and adult dual users (i.e., adults who smoke and dip).
According to Altria, On! Plus pouches are seamless and larger than the leading U.S. TDN brands. Similar to the currently marketed On! products, On! Plus packaging features a compartment to responsibly dispose of used product. Helix submitted PMTAs for three distinct On! Plus varieties: tobacco, mint and wintergreen. Each variety comes in three different nicotine strength options.
“Helix’s submission of the On! Plus applications underscores Altria’s commitment to addressing consumers’ evolving preferences through innovation in potentially reduced risk products. We firmly believe that On! Plus is a transformative product that will meaningfully contribute to Helix’s growth in the U.S. market, upon timely FDA authorization,” said Nick MacPhee, managing director and general manager of Helix in a statement.
“We’ve long believed in the value of a robust marketplace of authorized smoke-free products for adult tobacco consumers. We believe that these PMTAs demonstrate that responsibly marketed On! Plus pouches can provide a compelling alternative in the marketplace,” said Paige Magness, senior vice president of regulatory affairs, Altria Client Services.
Upon authorization, Altria expects the products to be distributed by Altria Group Distribution Co.
Helix currently sells On! nicotine pouches in the U.S. In the first quarter of 2024, On! shipment volume grew 32 percent versus the prior year and the brand achieved a 7.1 percent retail share of the total U.S. oral tobacco category.
Altria entered the U.S. oral nicotine products market in 2019 after signing a deal with Burger Söhne to acquire an 80 percent ownership stake in some companies that commercialized On! Products, according to The Wall Street Journal. In December 2020 and April 2021, Altria subsidiaries concluded transactions to buy the remaining 20 percent stake of the global on! business for about $250 million.
Altria’s PMTA announcement comes after Philip Morris International’s Swedish Match North America unit suspended nationwide sales on its U.S. website as local officials in Washington, D.C., investigate whether the company is in compliance with the district’s ban on the sale of flavored products.
Estonia’s government has plans to expand smoke-free outdoor spaces, including places like beaches and parks, according to ERR News.
The government approved Estonia’s positions on tobacco policy, including the expansion of smoke-free outdoor areas to include terraces, parks, beaches and other recreational areas where many people gather.
“Today, we are talking about a restriction that still allows individuals to smoke but in a way that does not harm the health of those around them,” said Aive Telling, head of environmental health and chemical safety at the Ministry of Social Affairs. “This is the most important point in ensuring a smoke-free environment. We must consider others, and this is also about changing societal attitudes to ensure our actions do not harm others.”
“Let’s say that today, alcohol consumption on the beach is monitored, people are reminded that drinking alcohol on the beach is not allowed,” said Piret Valjaots, head of the Tartu Health Service. “Similarly, it will likely be possible to monitor tobacco use during the beach season. It becomes more complicated with parks as there is no constant law enforcement presence in public spaces.”
A detailed plan is not yet in place.
“Things do not change overnight, and this is just the beginning of a longer and broader process,” said Telling. “Today, these positions are the direction in which we are moving throughout Europe.”
To celebrate its 77th anniversary, SindiTabaco launched the document “Controversial issue, counterpoint necessary.” In 54 pages, the document addresses the history of tobacco in Brazil and the most relevant numbers of the supply chain. Its larger objective, however, is to challenge themes that are not always duly contextualized and end up being treated as contradictions by society.
“The tobacco supply chain is one of the most organized and advanced in Brazilian agriculture, with initiatives that set an example to other sectors. Not rarely, however, it is left aside in terms of agribusiness. The launch of this document has the purpose to demystify and provide the necessary counterpoint to those who insist in refusing to state the obvious: Tobacco is agro!” Iro Schuenke, SindiTabaco president, said.
Questions like indebtedness, monoculture, deforestation, the use of pesticides, suicides, green tobacco sickness, child labor and slave labor are themes addressed by the paper, now beginning to circulate among the main stakeholders of the entity in printed format, but it is also available online at www.sinditabaco.com.br.
“Over the years, we have given visibility to the social and economic importance of the sector to hundreds of municipalities in South Brazil, and we have promoted a series of initiatives about agricultural practices that turn Brazilian tobacco into one of the most demanded in the world. In the meantime, we have suffered uninterrupted attacks on account of the finished product, which is legal and an adult choice. Not rarely, we witness anti-smoking activists attacking the production of tobacco, and the list of attacks has been gradually expanded over the years. From polluters to slavers are some of the biased written lines. It is about them we are talking,” said Schuenke.
The Premium Cigar Association (PCA) has promoted Joshua Habursky to the role of executive director. Habursky’s tenure at PCA includes outside government affairs consultant (2018), Director of Federal Affairs, head of government affairs, and deputy executive director (2019-present). Since May 2024, Habursky has served as interim executive director of the PCA following Scott Pearce’s departure.
“For the past five years we have been able to work effectively with Josh to accomplish the goals of the association related to advocacy. We are confident of his ability to take on the additional responsibility of running the full association moving forward. This internal promotion is a testament to both Josh and the entire PCA staff who have been diligently working with the board to make the association a powerhouse in all departments,” says Scott Regina, president of the PCA board of directors in a statement.
Habursky will continue to serve as the organization’s chief lobbyist but will work with internal staff and consultants to identify new priorities and responsibilities. The PCA will implement a new five-year Strategic Plan and is expected to announce additional positive changes in the coming months, including new hires to support the trade show team.
Habursky has spent over a decade working in government affairs roles in trade and membership associations, including the American Motorcyclist Association, American Diabetes Association, and Independent Community Bankers of America.
Australia will soften a proposed ban on vaping following opposition from the Greens party, leading the government to agree to revise a bill that would have limited vapes to those with a doctor’s prescription.
The agreement between the ruling center-left Labor Party and the Greens will lead to the passage of legislation later this week that restricts the sale of vapes to pharmacies and removes them from retail shelves. This move is aimed at curbing the rise in youth vaping.
However, the bill falls short of the government’s initial ambition to restrict sales only to those with a doctor’s prescription, which would have been a world first. The amended bill will take effect on July 1, reports Reuters.
Under the compromise deal, vapes will be moved “behind the counter” in October. Customers will need to have a conversation with the pharmacist before making a purchase, and those under 18 years old will need a prescription.
Health Minister Mark Butler said in a statement that the government “welcomed constructive engagement with the crossbench and secured the support of the Greens for our world-leading vaping laws.”
The Labor Party does not have a majority in the upper house and must negotiate with other parties and independent senators to pass legislation.
Vapes are a powerful tool for adult smokers making the transition from cigarettes to reduced-risk products (RRP). The category is governed by market-specific regulation, often influencing public perception and, therefore, uptake.
Last week, following an extensive scientific review, the U.S. Food and Drug Administration authorized the marketing of four menthol-flavored e-cigarette products for Altria-owned vaping company Njoy. This is a watershed moment for the sector and one which will have a huge and significant impact on the global RRP market.
This announcement signifies the FDA’s acknowledgment that menthol vaping products have the potential to be an important and effective tool for adult smokers looking for reduced-risk alternatives. This is significant for the wider sector in a number of ways; above all, it sets a precedent for other markets, paving the way for other regulators, particularly those looking at bans, to consider flavors in the context of public health.
Across the globe, we are seeing an increasing number of markets introduce bans on flavors on a precautionary basis in a bid to mitigate youth uptake. At Plxsur, we have long advocated against the ban of flavors on vape products, arguing that it has the potential to negatively impact those making the transition from conventional cigarettes, who often are drawn to vapes for their flavor, amongst other factors such as price and convenience. There are also arguments and emerging evidence that flavor bans drive the black market sale of unregulated, dangerous products.
There will be many that, understandably, say this decision is “too little, too late,” but it is nonetheless encouraging to see the FDA, with its extensive science and evidence-based review, validating that with effective regulation and enforcement, flavored vape products are “in the interest of public health.” Those countries that have considered flavor bans should look to the U.S. and conclude that it can’t be justified from a scientific review perspective.
While this is the first authorization of a “characterizing flavor” by the FDA for vaping products, two of the major regulatory influencing bodies, the FDA and the Medicines and Healthcare Products Regulatory Agency (MHRA), now acknowledge that there is value in non-tobacco-flavored vaping products.
This decision has the potential to impact the world. The U.S. has long influenced international markets, so it sets a benchmark that we expect other, less vape-supportive governments and regulatory bodies will follow.
Rob Burton
In Italy, tobacco-flavored vapes constitute 40% of the vape market, while menthol represents 21%.[1] This demonstrates the significance of flavored products in the market as a whole. If such flavors were to be banned, this would act as a barrier for smokers to move to reduced-risk alternatives and potentially lead vapers to return to cigarettes.
In some geographies, it is great to see that vapes are being accepted as an effective alternative to conventional cigarettes, even this week’s news from Australia announcing that vapes – which until now have only been available through prescription – will soon be available for sale within pharmacies without the need for a prescription, offering an effective pathway to end the smoking epidemic in the country.
As we anticipate the potential revision of the Tobacco Product Directive Review next year, the justification for banning flavors, from a scientific point of view, simply isn’t there. In the case of Njoy, this has been shown through closed-system pod-based devices, which offer a more cost-effective avenue for existing smokers and disposable systems while incorporating child lock systems that will restrict access to children, as is already applied by a Plxsur company, ProVape, in its SALT and KUBIK brands.
While the FDA’s authorization is specific to these four products made and sold by Njoy and does not apply to any other menthol-flavored e-cigarettes, our expectation is this will open a channel for other such products to achieve authorization by providing the necessary framework and the potential for knowledge-sharing and guidance. With the weight of data-led evidence, the category can advocate for the democratization of this framework, enabling further regulatory authorizations for products produced by responsible vaping companies in the interest of the adult smoker.
At Plxsur, we have a clear purpose – to facilitate adult smokers to make positive health decisions by transitioning away from cigarettes to reduced-risk products. Flavor is a key factor in supporting smokers moving completely to such alternatives, and we look forward to seeing a more science and data-led approach being adopted across all markets as we work to save the lives of those impacted by smoking, mitigate the risk of youth uptake, and do so sustainably and responsibly.
We view this FDA decision as a significant step forward in broadening the pathway for adult smokers, and previously lacking “off-ramp” for U.S. menthol smokers looking to make the switch, which, according to Public Health England, is 95% less harmful and, therefore, undeniably, “in the interest of public health.”[2]
Robert Burton is Group Scientific and Regulatory director for Plxsur.
A new study, titled “Fighting the Dark Underworld: How the illegal trade in tobacco threatens to overwhelm us,” by Intrinsic Insight and commissioned by Japan Tobacco International, sheds new light on the pervasiveness of organized crime within global society, focusing on four countries with high levels of illicit tobacco trade: Canada, France, Philippines and the United Kingdom.
The report examines how unstable geopolitical environments, fragile economies and a lack of serious deterrents create the ideal conditions for a surge in criminal activity and increased profits for criminal networks.
The report highlights key indicators—found across the four countries—that are allowing illegal trade to flourish.
“A combination of factors ranging from poor border controls and ineffective penalties to corruption, excessive taxation and legislation, are contributing to both the increase in demand for illicit products while making it easier for criminals to grow substantial criminal empires,” said JTI’s global anti-illicit trade operations director Vincent Byrne in a statement.
Cost of living crisis
Compromised living standards are forcing greater numbers of consumers into making difficult lifestyle decisions, creating ripe environments for criminals to push a larger number of smokers towards cheaper illegal channels and illegal products. Buying illegal tobacco products is in danger of becoming normalized behavior, with four in 10 (43 percent) adult smokers surveyed across these four countries now finding themselves comfortable with the idea of buying cigarettes, even if they know they are produced or sold illegally.
Excessive taxation and loss in government revenue
As illegal sales continue to bombard the legal tobacco market, governments are facing a decline in tax revenue. According to the World Bank, governments globally are estimated to be losing out on $40 billion to $ 50 billion annually in excise alone due to consumers being lured into buying illegal tobacco products. According to 88 percent surveyed, governments’ inability to collect tax revenue because of illegal trade is a significant issue.
Rapid technological progress
The criminal shift towards e-commerce and the advancement of artificial intelligence is leading to an increased sophistication of production, distribution and sale of illegal goods. Of those adult smokers surveyed, 14 percent have claimed to have recently purchased illegal tobacco via social channels.
Not cracking down on illegal tobacco trade to curb other serious crime
Not only is the money being lost to governments, thus limiting their capacity to fund public services such as law enforcement and important public services, the illegal tobacco trade is a direct gateway to other serious crime such as people trafficking and terrorism. The study found that policy makers underestimate the extent of the worry for the public, with 50 percent of respondents citing illegal tobacco trade as being a threat to their country, which is close to parity with those citing drugs/narcotics (54 percent) and terrorism (49 percent) as national dangers. The sale of illegal tobacco is not a victimless crime, according to 61 percent of those surveyed.
Existing penalties are not severe enough to deter criminals
More collaboration is needed to crack down on illegal trade and its intricate international criminal networks. According to 61 percent surveyed, authorities are not taking the situation as seriously as they should. The United Nations Office of Drugs and Crime estimates that no more than 2 percent of global shipping containers are inspected, signaling to criminal gangs that illegal trade is a relatively “risk free” enterprise with large financial upsides.
“While the drivers fueling illegal trade are evident in each of the four countries, they have global impact,” Byrne said. “Given the borderless nature of illegal trade, in the future, countries that currently do not have an illicit tobacco problem, are advised to notice the triggers to avoid the onset and spread of criminality linked to illicit trade in their countries.”
A synopsis of the situation in the four countries and consolidation of key report findings includes:
Canada
Contraband tobacco has spread unchecked across the country to the detriment of revenue receipts due to serious disparities in tax harmonization because of Canada’s geography and complicated relationship with First Nation states.
In Canada, the high volume of tobacco products produced by First Nation states is a major anomaly that drives illegal trade there. This bears a similarity to ‘free trade zones’ such as those that exist in places like the UAE. Tobacco produced legally in these zones often ends up in other jurisdictions where it then becomes an illegal product.
The report found that for 57 percent of Canadians, the economy and general cost of living is one of their top five concerns.
Seven out of ten (71 percent) Canadians believe that the proceeds of the illegal tobacco trade should fund law enforcement.
Eight out of ten (81 percent) Canadians believe government should work with industry to combat illegal trade.
France
High levels of taxation, an absence of border controls and issues of affordability caused by rising living costs are having a big impact on the increase in illegal trade. The French government’s cornerstone policy in the run up to this summer’s 2024 Paris Olympics is to remove illegal tobacco sellers from the streets and has pledged to impose stronger fines, penalties, and arrests of street sellers. Cracking down on clandestine factories is also a focus for government.
The report found that one in three members of the French public cite local crime as one of their top five concerns.
Seven out of ten (76 percent) French nationals feel that the sale of illegal and fake tobacco by street vendors makes their neighborhoods less safe.
Philippines
In a recent reclassification of tobacco as an agricultural product, the Philippines Congress has passed amendments to the country’s agricultural bill that established the smuggling of tobacco as an act of economic sabotage. This amendment, which is expected to be signed into law by the President, includes harsher penalties and fines, and it has the potential to have a significant impact on smuggling and the illegal distribution of tobacco products in Philippines.
As a result of legislation passed in 2013 (the RA 10351, known locally as “the sin tax” laws), revenues raised through tobacco sales have been used to finance public services. Several independent studies have shown that these laws have created an increase in demand for illegal tobacco and revenue losses for the government.
United Kingdom
While the U.K. is experiencing its largest ever cost-of-living crisis, with public debt standing at over 184 percent GDP, and with 11.7 million of the U.K.’s 67 million population living in poverty according to official figures, the U.K. government is scrambling for revenue.
The customs and revenue service estimates that in 2021, the loss in revenue to the U.K. exchequer due to illegal tobacco trade was £2.5 billion ($3.24 billion), money that could be used to fund the U.K. economy and social programs, instead of being funneled directly into criminal networks.
While many U.K. authorities, including Customs & Excise, Trading Standards, Border Force, the Police, and the National Crime Agency, have significant roles to play in tackling illegal trade, oftentimes they have conflicting and overlapping responsibilities and dwindling resources.
Harsher deterrents and penalties are needed for criminals who are only too eager to exploit these loopholes.
The study found that 72 percent of U.K. adult tobacco consumers would be happier paying the tax on tobacco products if the government spent more of these taxes on law enforcement.
In the report, a multi-faceted approach for tackling the “dark underworld” includes:
Increased cooperation between governments and law enforcement at both international and national levels. This includes information sharing between industry and authorities.
In the case of tobacco, there needs to be a concerted effort to increase the fines and punishments for those producing, distributing, and selling illicit products to increase the risk and consequences for criminals. This should be coupled with stronger enforcement.
Law enforcement agencies should also explore using powers other than anti-smuggling and anti-counterfeiting laws, for example, anti-money laundering, anti-income tax evasion and anti-organized crime laws.
Reasonable and moderate taxation is vital to maintain affordability of legal produc
