Category: News This Week

  • Imperial Appoints Chairman

    Imperial Appoints Chairman

    Therese Esperdy

    Therese Esperdy will succeed Mark Williamson as chairman of Imperial Brands effective Jan. 1, 2020.

    Williamson will be stepping down as chairman in anticipation of new U.K. corporate governance code requirements regarding a chairman’s tenure on a board.

    Esperdy is currently senior independent director and has a background in investment banking. She began her banking career at Lehman Brothers and retired from JP Morgan in 2015.

    Esperdy joined the Imperial Brands board in July 2016 and was appointed senior independent nonexecutive director in May 2019. She is also a nonexecutive director and chairman of the finance committee of National Grid and a nonexecutive director of Moody’s Corp.

    “Therese has made a significant contribution to Imperial since she became a nonexecutive director in 2016, and the board is delighted that she has agreed to succeed Mark as chairman,” Imperial Brands said in a statement.

    “Her international executive experience and the acute understanding she has of the business, the sector we operate in and the concerns of investors, many of whom were consulted during the recruitment process, is invaluable. Today’s announcement provides stability through the chief executive officer recruitment process, which is a key priority for Therese.”

    In early October, Imperial Brands announced Alison Cooper would step down as CEO once a suitable successor is found.

  • Funding Hemp Research

    Funding Hemp Research

    Pyxus International has signed an agreement with North Carolina State University’s College of Agriculture and Life Sciences (CALS) to fund research designed to determine the impacts of using differing fertility rates on hemp plants grown in a greenhouse environment.

    The research will identify and quantify if the hemp plant’s overall growth, as well as its cannabinoid and CBD quantity and quality, are impacted by varying fertility rates. Information gathered from the trials will be used to address knowledge gaps in hemp production in order to help farmers optimize their operations and grow the highest-quality hemp crops.

    “It is our intention that findings from this research will help to establish best practices in hemp cultivation,” said Bryan Mazur, executive vice president of global specialty products at Pyxus International.

    “These best practices can then be transferred to hemp farmers, and in turn, will lead to a reliable, high-quality source of CBD, which can be incorporated in products like our affiliate Criticality’s Korent and Korent Select brands”

    Pyxus’ agreement with NC State is the second research partnership the company has announced in 2019. In August, Pyxus and Cornell University’s College of Agriculture and Life Sciences entered into an agreement that will also result in hemp cultivation data.

    “In a rapidly growing industry, these partnerships will provide valuable data and insight to farmers, as well as consumers looking to understand hemp and CBD,” said Mazur. “We value the work NC State’s talented researchers have already accomplished in this space and we are excited to work with them to further advance the industry for farmers and consumers in our home state and around the world.”

    “The interest in hemp production is vast, and although we’ve made progress, there’s still a lot we do not know about the most efficient and profitable ways to grow hemp,” said Brian Whipker, professor and extension specialist in commercial floriculture production for NC State. “Pyxus’ funding will help continue to advance our research to identify the fundamental agronomic science necessary to empower hemp growers.”

    Aspects of the research generated in collaboration with NC State will help to populate open-source best practices for hemp cultivation. The project is expected to continue through 2022.

     

  • PMI Revises Forecast

    PMI Revises Forecast

    Philip Morris International (PMI) today revised its 2019 full-year reported diluted earnings per share forecast for restructuring charges in Germany.

    The revision is related to the company’s decision to end cigarette production at its factory in Berlin. PMI expects to record estimated pretax charges of approximately $355 million.

    This estimated amount includes pension and employee separation costs of approximately $265 million, which will be paid in cash, and asset impairment costs of approximately $90 million primarily related to machinery and equipment, which are noncash charges.

    The Berlin factory has a projected 2019 production capacity of approximately 40 billion units. Approximately 950 employees are impacted under the agreement. PMI will continue to produce expanded tobacco in Berlin.

    Cost savings anticipated from this initiative are included in PMI’s annualized cost efficiencies target of more than $1 billion for the period 2019–2021.

  • Layoffs at BAT Malaysia

    Layoffs at BAT Malaysia

    British American Tobacco (BAT) will lay off about 20 percent of its workforce in Malaysia, reports The Edge Markets. The company employs about 500 people in Malaysia.

    Earlier, Japan Tobacco International (JTI) announcement that it was laying off more than one-third of its 450-strong workforce in the country.

    In 2017, both BAT and JTI closed down their manufacturing plants in Malaysia, which affected about 500 workers.

    BAT Malaysia Managing Director Erik Stoel attributed the layoffs to challenging external market forces, including stubbornly high levels of illicit cigarette trade and tax-led price increases along with a rapidly growing market for illegal vapor products.

    “With the reorganization, the company will be able to optimize its way of working,” said Stoel. “This will ensure that the company is better placed to meet ever-evolving consumer needs and deliver savings that can be reinvested into accelerating growth into the new categories.”

  • ‘Gateway’ Questioned

    ‘Gateway’ Questioned

    Vaping does not raise the likelihood a teenager will smoke, according to a new U.S. study by Arielle Selya at Sanford Research in Sioux Falls, South Dakota, and Sooyong Kim at the University of North Dakota in Grand Forks.

    Smoking can be entirely attributable to other factors, such as parental education, peer smoking, anxiety and other substance abuse, the authors found.

    The study examined the relationship between vaping and conventional cigarette smoking, looking at 14 shared risk factors, based on surveys of more than 12,000 middle schoolers and high schoolers conducted in 2015 and 2016.

    While the vapers were more likely to smoke cigarettes, the effect was muted once the analysis accounted for risk factors that are shared between the two activities. However, the researchers did find an association between vaping and lifetime cigarette use and said further study is needed to determine if there is a causal link.

    Earlier research, such as a 2018 study from the University of California, San Francisco, linked vaping to “established cigarette smoking” in adolescents. The new study has a simple explanation for that apparent link: People who tend to vape may just be more similar to those who tend to smoke.

    Lead author Selya said her research undermines the “gateway hypothesis” that vaping leads to smoking. She cautioned against regulating vapor products as combustible cigarettes, which could push teenagers back to smoking.

    The study was published in Nicotine & Tobacco Research, a scientific journal whose publisher doesn’t accept funding from the tobacco industry.

  • Net Income Down

    Net Income Down

    Turning Point Brands reported net sales of $96.8 million in the third quarter that ended Sept. 30, up 16.1 percent from that in the comparable 2018 quarter.
    Gross profit increased 18.2 percent to $42.8 million, but net income decreased $1.7 million to 6.3 million.

    “Vaping headlines dramatically disrupted our third-party vaping distribution business starting in mid-August,” said Larry Wexler, president and CEO of
    Turning Point Brands.

    “While third-party vaping saw a step function down in the quarter, we produced strong quarterly performance in the smokeless and smoking segments. We
    have proactively taken steps to address weakness in the third-party vaping distribution business.”

  • Promoting Clean Air

    Promoting Clean Air

    Austria banned smoking in bars and restaurants on Friday, bringing the country’s laws into line with other European nations.

    Previously, Austrians were able to light up while drinking and eating inside bars and restaurants larger than 50 square meter, and as long as it was in a separate area.

    Violators will have to pay €1,000 ($1,115), and owners of establishments who allow patrons to smoke will be fined $2,000 rising to €10,000 for repeat offenders.

    Austria has traditionally been more tolerant of smoking than other European countries, earning it a reputation as “the ashtray of Europe” among tobacco critics.

    The debate about the ban has been ongoing for over 10 years, with the far-right Freedom Party—formerly led by a keen smoker—opposing the measure.

    A quarter of Austrians smoke, compared with an average of 18 percent in other EU states.

  • Hahn Eyed for FDA

    Hahn Eyed for FDA

    Stephen Hahn

    U.S. President Donald Trump plans to nominate Stephen Hahn, chief medical executive of the University of Texas MD Anderson Cancer Center, to lead the Food and Drug Administration (FDA).

    Hahn is a radiation oncologist specializing in treating lung cancer and sarcoma. From 1996-2014, Hahn was at the University of Pennsylvania, where he was Henry K. Pancoast professor and chair of the department of radiation oncology. Hahn was a senior investigator at the National Cancer Institute (NCI) from 1989-1996.

    Hahn received his medical degree from Temple University in 1984 and his Bachelor of Arts degree in biology from Rice University in 1980.

    If confirmed, Hahn would succeed former FDA Commissioner Scott Gottlieb, who stepped down from the post earlier this year. Acting FDA Commissioner Ned Sharpless will return to his role at NCI, the U.S. Department of Health and Human Services announced on Friday.

  • Malawi Leaf Imports Halted

    Malawi Leaf Imports Halted

    The U.S. government has suspended all imports of tobacco from Malawi over child labor allegations, reports The Guardian.

    U.S. Customs and Border Protection on Friday issued a “withhold release” order on tobacco from Malawi, meaning shipments arriving in the United States will be
    detained at the port of entry. Importers will have to prove the tobacco is not produced with labor prohibited under U.S. law to have the shipments released.

    The ban follows the news that human rights lawyers are to bring a case against British American Tobacco (BAT) in the high court in London over child labor in Malawi’s tobacco fields.U.K. law firm Leigh Day alleges that BAT is responsible for the low price paid for the leaf in Malawi, which keeps tenant farmers in such poverty that they have no choice but to make their children work in the fields.

    BAT says its core policies “specifically state that we do not condone forced, bonded or involuntary labor and that we do not condone or employ child labor,
    and [we] seek to ensure that the welfare, health and safety of children are paramount at all times.”

  • Closing the Door

    Closing the Door

    China’s tobacco regulator on Friday asked e-commerce platforms and businesses to shut online stores that sell e-cigarettes, in a move aimed at stopping minors from purchasing e-cigarettes through the internet, reports Reuters.

    The notice comes after online platforms and retailers in the U.S. started removing vapor products amid government scrutiny of vaping’s effects on health.

    It also arrives as Chinese startups race to capture a piece of China’s potentially massive market for e-cigarettes.

    Dated Oct. 30, the notice was published one day later on the website of China Tobacco, which is overseen by the country’s tobacco regulator.

    In order to protect “the physical and mental health of minors,” the regulator urged e-cigarette producers, retailers, or individual sellers to temporarily close online sales websites or channels and urged e-commerce platform to temporarily close e-cigarette shops.

    China is home to more than 300 million smokers, making it the world’s largest tobacco market.