Category: News This Week

  • Stepping in

    Stepping in

    The U.K.’s largest vapor retailer will launch a support service to help smokers give up cigarettes, reports Yahoo Finance.

    VPZ announced its initiative in the wake of government cuts to smoking-cessation programs.

    According to Action on Smoking and Health and Cancer Research UK, funding to promote quit attempts has fallen by £41.3 million ($51 million), or around 30 percent, since 2014.

    “Our customer engagement tells us that most smokers want to quit,” Doug Mutter, director at VPZ, was quoted as saying.

    “Sadly, the huge cuts in public health spending is currently failing smokers throughout the country and they are being denied the vital help that can truly transform their health and wellbeing.”

  • Reassuring growers

    Reassuring growers

    The government of Tanzania has promised to ensure that all 12,000 tons of tobacco currently in the hands of farmers will be purchased, according to a local news report.

    Tobacco merchants stopped buying leaf after being fined THS11 billion ($4.78 million) by the Fair Competition Commission.

    Deputy Minister for Agriculture Hussein Bashe told the National Assembly on Wednesday that the crisis had been solved.

    “The crisis which caused them to stop buying the cash crop is now over, and all the remaining tobacco will be bought,” said Bashe.

    Tobacco is Tanzania’s second-largest export earner after cashew nuts.

  • Consumption down

    Consumption down

    Around 1.4 billion fewer cigarettes are being smoked in England every year, according to new research funded by Cancer Research U.K.

    Between 2011 and 2018, average monthly cigarette consumption fell by nearly a quarter, equating to around 118 million fewer cigarettes being smoked every month.

    Over the whole period, the average number of cigarettes smoked monthly declined by 24.4 percent based on survey data and 24.1 percent based on sales data from 3.40 billion and 3.41 billion a month to 2.57 billion and 2.58 billion, respectively.

    “It’s brilliant that over a billion fewer cigarettes are being sold and smoked in England every year,” said lead author Sarah Jackson from UCL’s Tobacco and Alcohol Research Group.

    Cancer Research U.K. said the decline suggested that stricter tobacco laws and taking action to encourage people to quit smoking are working.

     

  • JTI restructures

    JTI restructures

    Japan Tobacco International (JTI) is planning to reduce staff at its headquarters in Geneva, Switzerland, by a quarter over a three-year period as part of restructuring measures, according to a report by Swissinfo. JTI currently employs more than 1,100 people in the city.

    Some of the 268 cut posts may be relocated to east Asia and eastern Europe, JTI said. Worldwide cuts are expected to affect 3,720 employees or 6 percent of the workforce.

    JTI will reportedly concentrate its resources in Warsaw, Poland; St. Petersburg, Russia; and Manila, Philippines.

    The company, which employs 45,000 people worldwide and has been based in Geneva since 2015, said it would remain headquartered in Geneva.

    Declining sales, especially in Japan, have hurt JTI’s bottom line in recent years. The potential merger of rivals Philip Morris and Altria could also put further pressure on the industry.

  • Michigan bans flavors

    Michigan bans flavors

    The U.S. state of Michigan has imposed a six-month ban on the sale of flavored e-cigarettes to curb teen smoking, reports CNBC. The ban can be extended for another six months, but Governor Gretchen Whitmer said she hopes state lawmakers will make it permanent by writing the ban into law.

    Whitmer directed the state health department to issue emergency rules to ban the sale of flavored nicotine vaping products in stores. She will also restrict marketing, preventing companies from advertising vaping products as “clean,” “safe,” “healthy” and other terms that portray the products as “harmless.”

    Michigan is the first U.S. state to ban sales of flavored e-cigarettes.

    Earlier this year, San Francisco became the first U.S. city to prohibit the sales of flavored e-cigarette products. Lawmakers in Boulder, Colorado, passed a similar measure last week.

    Vaping is generally considered less harmful than smoking, but health activists are concerned about an increase in underage use of e-cigarettes. Many blame flavors for attracting teenagers.

    Greg Conley, president of the American Vaping Association, called the ban “a shameless attempt at backdoor prohibition. He warned the measure would close down several hundred Michigan small businesses and could send tens of thousands of ex-smokers back to deadly combustible cigarettes.

    “These businesses and their customers will not go down without a fight,” he said.

    Last year, an attempt by the New York Department of Health to ban flavor was withdrawn for further legal review.

    “Governor Whitmer’s order will effectively wipe out tobacco harm reduction in the Great Lakes State,” said Lindsey Stroud, state government relations manager at The Heartland Institute, a free market think tank. “There is little to no evidence flavor bans actually reduce youth use. In fact, after similar bans in California, youth use of e-cigarettes actually increased.”

    Stroud also took issue with Whitmer’s suggestion that vapor companies are marketing their products as safe.

    “Per the U.S. Food and Drug Administration’s 2016 deeming regulations, no vaping manufacturer or retailer is allowed to assert any health claim about these products unless they have obtained a modified risk tobacco product certification,” she said.

    Michigan’s ban follows numerous claims of vaping-related hospitalizations that are increasingly being linked to black market cannabis products. According to The Heartland Institute, the Wisconsin Department of Health Services stated last week that 89 percent of their vaping-related hospitalizations were caused by such products. The Centers for Disease Control and Prevention have also found that most of these hospitalizations are linked to black market cannabis products.

     

     

  • New Glo in Japan

    New Glo in Japan

    British American Tobacco (BAT) has launched two new tobacco-heating products (THP) in Japan—Glo Pro and Glo Nano.

    Powered by induction heating, Glo Pro features significantly miniaturized technology to deliver a THP experience with better taste and more rapid heating for quicker taste release.

    As the slimmest device in the Glo range, Glo Nano offers convenience without compromising taste, according to BAT.

    The unveiling of the products in Japan follows the recent launch of Glo Sens in South Korea and Japan in August. Using innovative “taste fusion” technology, Glo Sens combines vaping technology with real tobacco.

    “The launch of these new products is a clear sign of how technological innovation is driving fundamental change in our business and the products we are able to offer our consumers,” said Kingsley Wheaton, BAT’s chief marketing officer.

    “These products are based on cutting-edge, brand new THP technology, and we are confident that they will provide our consumers with more satisfying options when looking for alternatives to cigarettes.”

  • Knock-on effect

    Knock-on effect

    CVS’s decision to quit selling tobacco products in September 2014 has resulted in almost 100 million fewer packs of cigarettes being sold in the United States, according to CVS CEO Larry Merlo.

    Speaking to USA Today on the fifth anniversary of the retail store’s landmark decision, Merlo said that in states where CVS Pharmacy has a market share of 15 percent of more, there was a direct correlation between the company’s decision and the amount of tobacco that was sold in those markets.

    “What we found from research was that people who purchased their cigarettes exclusively from CVS Pharmacy were about 38 percent more likely to stop buying cigarettes altogether,” said Merlo.

    CVS sold approximately $2 billion of tobacco and related items prior to September 2014. While the company didn’t make up for the loss of that revenue directly, the decision became a “foundational moment” for CVS on its journey to becoming more of a healthcare company.

    According to Merlo, customers buying tobacco that were using CVS Pharmacy primarily as a convenience store shifted to convenience stores and gas stations selling tobacco products.

    But customers who used the drugstore to purchase additional items such as personal care and pharmacy products remained CVS customers.

  • Objection to plain packaging

    Objection to plain packaging

    British American Tobacco said it will file a motion with Belgium’s highest administrative court against the planned implementation of plain packaging, reports De Morgen.

    Announced in May, the new measure is scheduled to take effect in January 2020.

    BAT said that the introduction of neutral packaging was a “symbolic measure,” which, alone, had little impact on consumption and could lead to complications within the industry.

    “Tobacco consumption does not decrease as a result of neutral packaging, but because of price and excise tax increases,” company spokesman Filip Buntinx said in an interview with L’Echo, citing the experiences of countries like France and England.

    “Traders will take longer to find the right package and [the measure] could lead to errors in stock management,” he added.

    While conceding that plain packaging would have little impact on the habits of regular smokers, Suzanne Gabriels of the Belgian Foundation against Cancer said the measure’s primary objective was to discourage young people from picking up the habit.

    “The full effect of neutral packaging will only become clear in the long term,” she told De Morgen, adding that with “all the glamour” stripped from the packs, next generations would no longer be targeted by marketing strategies.

  • New pouch plant in Hungary

    New pouch plant in Hungary

    British American Tobacco (BAT) has inaugurated a HUF7.5 billion ($24.9 million) nicotine pouch factory at its site in Pecs, Hungary, reports Hungary Today.

    The facility’s production is intended for export. Production volume is set to more than triple by next year. BAT plans to increase the number of pouch production lines at Pecs from one to five.

    BAT regional production manager Bernd Meyer said the company chose Pecs as the location of the investment because of the skills of local workers. The investment has created 100 new jobs.

    Since acquiring the facility in 1992, BAT has invested HUF40 billion in its Pecs operations.

    BAT Pecsi Dohanygyar had after-tax profit of HUF5.1 billion on revenue of HUF138 billion last year.

    The unit of BAT employs 800 people.

  • Trade war takes toll

    Trade war takes toll

    The stock price of China Tobacco International (CTI) declined 17 percent after the company announced a 30 percent drop in net profit during the first half of 2019.

    CTI, which procures leaf tobacco for its parent company, the China National Tobacco Corp. (CNTC), was listed on the Hong Kong stock exchange in June.

    Investors were initially excited to get their hands on part of the state monopoly. Shares of the company have more than quadrupled the initial offer price.

    However, CTI has recently been hit hard by China’s trade war with the United States where the company purchased 30 percent of its leaf requirements in 2018.

    Analysts have also cautioned that CTI is a poor proxy for the lucrative Chinese cigarette industry.

    Although CNTC sells three times as many cigarettes as the world’s largest publicly listed tobacco firm, Philip Morris International, the primary beneficiary of its business is the Chinese government.