Category: News This Week

  • Logical Launch

    Logical Launch

    Japan Tobacco International (JTI) will launch its Logic e-cigarettes in Portugal on Nov. 4, reports The Portugal News.

    The product will be available at 1,000 points in Lisbon and Porto by the end of this year, according to JTI Country Manager Yannick Girault.

    In a second phase, JTI will extend the distribution to 4,000 points of sale, Girault said, adding JTI considers Portugal a competitive market with considerable growth potential. Portuguese smokers, he noted have a great appetite for innovation, quality and modernity.

    JTI has a market share of 17 percent in Portugal and is the country’s fastest-growing tobacco company, according to Girault.

    “JTI has already invested around $1 billion in the manufacture of this e-cigarette and expects to invest as much again by 2020,” Girault said.

  • Drive for Smoke-Free Yangon

    Drive for Smoke-Free Yangon

    The People’s Health Foundation (PHF) wants to make Myanmar’s commercial capital, Yangon, smoke free, by the end of 2022, reports The Irrawaddy.

    “Around 10 million people smoke in Myanmar and another 40 million non-smokers have to inhale secondhand smoke,” said PHF Chairman Than Sein. “We have launched this campaign to protect them from secondhand smoke.”

    Myanmar banned smoking in government offices, hotels, restaurants, tea shops, hospitals, schools, universities and transport hubs in 2006. However, compliance has been patchy.

    The country ratified the World Health Organization’s Framework Convention on Tobacco Control in 2013.

  • Illicit Influx

    Illicit Influx

    The Philippine Bureau of Customs (BOC) is concerned about an influx of illicit cigarettes and cigarette manufacturing equipment from China, according to a report in The Philippine Daily Inquirer.

    Speaking to reporters, BOC Commissioner Rey Leonardo B. Guerrero said he would raise the issue with his Chinese counterpart when they meet this month.

    On Oct. 27,  authorities seized 2,727 master cases of smuggled Canon and Fort cigarettes worth about PHP95 million ($1.88 million) from a vessel in the waters of Siasi.

    Two days earlier, the Bureau of Internal Revenue raided a warehouse in Binondo, Manila, which yielded 145 master cases containing 1.45 million sticks of Chinese-branded cigarettes.

    Revenue officials acknowledged that recent tax hikes could be factor the proliferation of illicit cigarettes and fake tax stamps.

  • Tackling E-waste

    Tackling E-waste

    The Tobacco Institute of Japan (TIOJ) is set to implement rules for the disposal of heat-not-burn (HnB) products that use lithium-ion batteries, reports The Mainichi.

    The initiative is a response to multiple reports of fire incidents attributed to tobacco cartridges discarded as noncombustible trash.

    Japan requires local governments and electronics manufacturers to collect lithium-ion battery-powered products including smartphones and portable video game consoles.

    However, HnB cartridges are not subject to such requirements. Without clear rules regarding the collection of these products, many local bodies do not accept them as trash.

    Japan Tobacco (JT) launched a pilot program in May to collect used HnB tobacco products at its shops in Tokyo, and the tobacco companies will set rules based on JT’s system.

    HnB products have been on sale in Japan for about five years, sold by TIOJ member companies JT, Philip Morris Japan and British American Tobacco Japan. To date, more than 10 million units have been sold in the country.

  • Reiterating Vaping Stance

    Reiterating Vaping Stance

    John Newton, director of health improvement at Public Health England (PHE), insists e-cigarettes are far less harmful than smoking, even after a spate of vaping-related deaths and illnesses in the United States.

    As of Oct. 31, 1,604 Americans have been hospitalized and at least 34 have died from a mysterious lung illness attributed to vaping, according to the U.S. Centers for Disease Control and Prevention.

    PHE claims vaping is 95 percent less harmful than smoking and encourages traditional smokers who can or will not quit smoking to switch.

    Newton reiterated that PHE’s advice on nicotine-containing e-cigarettes had not changed in the wake of the American vape scare.

    “Our concern is that the responses we have seen to the problem in the U.S. and in other countries may increase the already widespread misunderstanding about the relative safety of nicotine e-cigarettes, deterring smokers from switching and risk driving vapers who have switched back to smoking,” said Newton, adding that vapers should avoid buying unregulated devices.

    Newton’s comments come after new data revealed that a record number of Britons are vaping.

    Action on Smoking and Health (ASH) estimates that there are 3.6 million vapers in Great Britain compared with 7.2 million smokers in the U.K. in 2018.

    The proportion of vapers who are ex-smokers continues to grow, reaching 54.1 percent in 2019. Only 0.8 percent of never-smokers are current vapers.

    A declining proportion, 39.8 percent, of vapers also smoke, according to ASH.

  • JT Revenue Down

    JT Revenue Down

    Japan Tobacco reported revenue of ¥575.2 billion ($5.32 billion) in the third quarter of 2019, down 4.2 percent from the comparable 2018 quarter. Adjusted operating profit was ¥163.7 billion compared with ¥193.2 billion in last year’s period. Operating profit declined 26 percent to ¥129.3 billion. At constant exchange rates, adjusted operating profit was down 1.8 percent to ¥189.7 billion.

    For the year to date, adjusted operating profit at constant exchange rates increased 3 percent to ¥526.2 billion, driven by growth in the international tobacco and processed food businesses, partially offset by the Japanese domestic tobacco and pharmaceutical businesses.

    “On a reported basis, our third quarter results continued to decline due to currency headwinds and intense competition in the Japanese market,” said Masamichi Terabatake, president and CEO of the JT Group.

    “At constant FX, consolidated adjusted operating profit growth in the year to date was driven by market share and pricing gains in the international tobacco business. In the Japanese domestic tobacco business, we are committed to reinforcing our portfolio in both RRP and conventional products as well as improving our marketing and sales activities with a sense of speed.

    “In an increasingly evolving industry due to dynamic consumer needs, we must transform ourselves by embracing new ways of working and cultures. We are also implementing a number of initiatives focusing on our operational excellence to increase speed, agility and promote bolder actions. We believe that these initiatives will support our sustainable business growth.”

  • Value Slashed

    Value Slashed

    Altria Group has written down its investment in Juul Labs by more than a third, citing a proposed federal ban on flavored e-cigarettes and regular crackdowns by states and municipalities throughout the U.S.

    The tobacco giant now values the e-cigarette maker at about $24 billion.

    Facing declining sales of traditional cigarettes, Altria last year agreed to pay $12.8 billion for a 35 percent stake in Juul Labs, which dominates the U.S. vapor market.

    In recent months, Juul Labs has faced intense criticism for a spike in underage vaping. Juul Labs is the subject of several investigations, including a criminal probe by federal prosecutors in California. By May, the company must submit for U.S. Food and Drug Administration (FDA) review any products it wants to remain on the U.S. market beyond that point.

    Juul Labs’ sales have fallen since the Centers for Disease Control and Prevention in September warned the public to stop using e-cigarettes as it investigated a mysterious vaping-related lung illness.

    The company plans to cut between 400 and 600 jobs by the end of the year as part of a reorganization aimed at mending damaged relationships with regulators.

    Hedge fund Darsana Capital Partners also recently wrote down its investment in Juul Labs by more than a third. Fidelity Investments this week disclosed that it had slashed the value of its Juul Labs investment by nearly half, to around $20 billion.

    Despite the challenges facing Juul Labs, Altria CEO Howard Willard expressed confidence in the future.

    “We continue to believe the evolution of the tobacco industry represents a significant opportunity for Altria,” he said in a statement accompanying the presentation of Altria’s third quarter financial results.

    “We marked major milestones in our transformation journey this year, including launching IQOS and completing the on! transaction. We believe that, with current adult smoker trends and e-vapor disruption, it’s an opportune time to expand the availability of these options.”

    Analysts believe IQOS holds a distinct competitive advantage in the U.S., given that it’s the only reduced-risk product authorized by the FDA that will also be allowed to sell mint/menthol flavors in the event the FDA clears the market of nontobacco flavor variants.

  • Contaminated Shipment

    Contaminated Shipment

    A former Juul Labs executive is alleging in a lawsuit that the company shipped 1 million contaminated pods without informing consumers or issuing a recall, reports Buzzfeed.

    Plaintiff Siddharth Breja, a former senior vice president of global finance who worked at Juul Labs from May 2018 to March 2019, claims he was retaliated against for raising concerns about the contaminated shipment.

    Breja alleges that on March 12, 2019, he learned that some batches of mint e-liquid had been found to be contaminated. Approximately 250,000 mint refill kits, the equivalent of 1 million pods, were manufactured with the contaminated e-liquid, shipped to retailers and sold to customers.

    Not only did management refuse to recall the batches, it also asked Breja to charge the supplier of the e-liquid $7 billion for the contaminated batches, the lawsuit alleges.

    According to the lawsuit, Breja was terminated on March 21, just over a week after he raised concerns about the contaminated pods. He was told it was because he had misrepresented himself as the chief financial officer at Uber.

  • Preparing for Plain Packs

    Preparing for Plain Packs

    Canada’s plain packaging law will take effect on Nov. 9.

    All packaging will feature the same brown base color, basic gray text and minimalist layout under the new requirements. The measure will also standardize the size and appearance of cigarettes, cigars and other products inside the packages.

    Tobacco companies will have 90 days to offload their branded inventory.

    In 2021, slide-and-shell packages will become mandatory in Canada, providing a wider surface area that will display the largest health warnings in the world, he said.

    “The package designs [are] really amazingly glitzy and very attractive, especially to kids,” said University of Waterloo psychology professor Geoffrey Fong, the founder and chief principal investigator of the International Tobacco Control Policy Evaluation Project.

    “What we’ve found is that plain packaging has tremendous effects on reducing the appeal of these deadly products.”

    Eric Gagnon, head of regulatory affairs at Imperial Tobacco Canada, said plain packaging would boost the illicit sale of tobacco products while disrupting the tobacco supply chain.

    “It’s not like you just turn a key on and off,” he said. “You need to change all your artwork, all your equipment, retool all your machines, so obviously, it’s very costly and a very complex operation.”

  • U.S. Creates Hemp Program

    U.S. Creates Hemp Program

    

    U.S. Secretary of Agriculture Sonny Perdue announced Tuesday the establishment of the U.S. Domestic Hemp Production Program. This program, as required by the 2018 Farm Bill, creates a consistent regulatory framework around hemp production throughout the United States.

    “At [the] USDA [U.S. Department of Agriculture], we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets,” said Perdue.

    “We have had teams operating with all hands on deck to develop a regulatory framework that meets congressional intent while seeking to provide a fair, consistent and science-based process for states, tribes and individual producers who want to participate in this program.”

    Later this week, an interim final rule formalizing the program will be published in the Federal Register that will allow hemp to be grown under federally approved plans and make hemp producers eligible for a number of agricultural programs.

    The rule includes provisions for the USDA to approve hemp production plans developed by states and Indian tribes, including requirements for maintaining information on the land where hemp is produced; testing the levels of delta-9 tetrahydrocannabinol; disposing of plants not meeting necessary requirements; and licensing requirements.

    It also establishes a federal plan for hemp producers in states or territories of Indian tribes that do not have their own approved hemp production plan.

    The interim final rule becomes effective upon publication in the Federal Register. Following publication, the USDA invites public comment on the interim rule and the information collection burden. A preview of the rule is posted on the USDA’s website.