Category: News This Week

Altria shares slide
Altria shares slid 5 percent on July 30 as the company warned that cigarette sales declines are accelerating and it’s “too soon” to judge Juul’s international expansion, a key piece of Altria’s $12.8 billion investment last year.
According to a CNBC report, critics have worried that Altria paid too much for too little of Juul. Those concerns were raised again as analysts pressed Altria executives on a call reviewing the company’s second-quarter earnings results.
Altria expects cigarette volumes in the U.S. to decline by 5 to 6 percent this year, which the company attributes to cigarette smokers switching to e-cigarettes. Altria has now revised the estimate twice this year. The company initially forecast volumes to fall by 3.5 to 5 percent.
“There is still a bit of investment spending mode, both domestically and overseas, and I think it’s simply too soon to make a judgment on the progress they’re making overseas,” said Altria CEO Howard Willard about Juul’s growth. “That’s more of early days there.”
Wells Fargo Securities analysts say that Altria’s second quarter results confirm the company’s profit model is working.
“In our view, MO (Altria) has wisely diversified its exposure to multiple on-trend, non-combustible/reduced risk segments to offset increasing headwinds, while protecting (and growing) its rich margins and driving faster l.t. EPS growth,” an analyst said.
July 31, 2019
JT reports results
Japan Tobacco has posted its second quarter 2019 results.
Highlights include:
- First half adjusted operating profit at constant FX increased 5.9 percent year-on-year, mainly driven by pricing gains in both the international and Japanese domestic tobacco businesses. On a reported basis, adjusted operating profit decreased 9.4 percent due to unfavorable currency movements.
- Operating profit and profit attributable to owners of the parent increased driven by a one-time compensation gain in the pharmaceutical business.
- JTI announced the interim dividend of ¥77 per share as stated in the “Business Plan 2019.”
“Our solid first half results were driven by additional market share gains and pricing benefits across many markets in conventional tobacco products,” said Masamichi Terabatake, President and CEO of JTI. “This reconfirms our conviction that these products will continue to be the platform of JT Group’s profitability and remain the major category of the industry.”
July 31, 2019
Standing up for alternatives
Phillip Morris International (PMI) is lobbying the Thai government to reverse a ban on smoking alternatives, such as e-cigarettes and heat-not-burn tobacco products, reports The Bangkok Post.
According to Phillip Morris Thailand’s managing director, Gerald Margolis, the company has met with the ministry of commerce and the excise department and has sent numerous scientific studies on the health advantages of smoke-free alternatives to the ministry of public health.
“We will continue to present fact-based, non-ideological studies and results from other countries with the government,” Margolis said. “It would be silly to make an electric vehicle regulation without consulting automotive manufacturers, so there should be dialogue with the tobacco industry when crafting tobacco regulation.”
There are 10.7 million smokers in Thailand as of 2017 (19.1 percent of the country) and despite a variety of anti-smoking regulations, the number of smokers has only dropped 4 percent in the past 13 years, or 0.3 percent per year. Thailand is one of the most restrictive markets for cigarettes, with bans on marketing and in-store displays, as well as plans to introduce plain, non-branded, packaging by the end of the year.

July 30, 2019
Plain packaging in Uruguay
Uruguay will require plain tobacco packaging starting January 2020 to discourage smoking, Uruguay’s Public Health Minister Jorge Basso said on Monday.
The announcement follows a 2016 court ruling against Philip Morris International which had sued to throw out a bill demanding plain packaging.
“Justice, in this case, ruled in favor of the bill,” said Basso, noting that “prevention and the promotion of healthy habits are the leading concerns of public policy on matters of health.”
Since the government’s anti-tobacco campaign was launched, the smoking rate in the country has fallen from 25 percent among those aged above 15 in 2009 to 21.6 percent in 2017.
July 30, 2019
Seed sales plunge
Tobacco seed sales in Zimbabwe have plummeted 55.2 percent as farmers grapple with viability challenges ahead of the 2019/2020 season, reports Newsday.
As of July 22, 2019, only 320 kilograms had been bought by farmers against the 715 kilograms purchased during the same period last year.
“Poor prices (at the auction floors) are said to have affected the preparation of seedbeds for the coming crop,” said Zimbabwe Tobacco Association chief executive Rodney Ambrose.
“These seedbeds should have been planted in June, but many growers were not in a good enough financial position to start the process. So, more bad news might be on the way. We sincerely hope seed sales and farmers crop preparations improve in the next month.”
July 29, 2019
Teen use ‘unintended’
Juul co-founder James Monsees testified before the U.S. House Oversight and Government Reform subcommittee last week and said his company never intended its electronic cigarettes to be adopted by underage teenagers.
“Juul Labs isn’t big tobacco,” Monsees told the House subcommittee, adding that “combating underage use” is the company’s highest priority.
The two hearings convened last week after launching an investigation last month into Juul’s marketing, technology and business practices.
During his testimony, Monsees reiterated past steps taken by Juul, including shutting down its Facebook and Instagram pages and pulling several of its flavored pods out of retail stores to keep Juul out of the hands of teens. Monsees said he understands the negative scrutiny of his company, but assured lawmakers Juul’s aim is to “eliminate cigarettes for good.”
July 29, 2019
Larger warnings coming
South Korea’s health ministry has announced that the graphic warnings on cigarette packs will be enlarged starting in 2020, reports Yonhap News.
The Ministry of Health and Welfare said it plans to adopt a revised law that mandates expanding the warning images from the current 50 percent of the package’s exterior to 75 percent. Currently, the size of the warning photos must cover more than 30 percent of both sides of cigarette packages with warning text making up an additional 20 percent.
The revision—which mandates 55 percent of the warning photos and another 20 percent with warning text—comes amid growing calls to send a stronger message discouraging smoking.
Currently, 105 countries have adopted pictorial warnings, with 43 of them mandating more than 65 percent of tobacco packages to be covered with disturbing pictures that depict the consequences of smoking.
July 29, 2019
WHO in no doubt
E-cigarettes are “undoubtedly harmful,” according to a new report by the World Health Organization (WHO).
“Although the specific level of risk associated with ENDS (electronic nicotine delivery systems) has not yet been conclusively estimated, ENDS are undoubtedly harmful and should therefore be subject to regulation,” the WHO wrote in its report.
The report, funded by Bloomberg Philanthropies, also highlighted that progress has been made in the fight against tobacco, but more action is needed such as raising taxes, enforcing bans on advertising, and protecting others from tobacco smoke.
The report showed that while only 23 countries have implemented cessation support policies at the highest level, 116 more provide fully or partially cost-covered services in some or most health facilities, and another 32 offer services but do not cost-cover them, demonstrating a high level of public demand for support to quit.
Tobacco use has also declined proportionately in most countries, but population growth means the total number of people using tobacco has remained high. Currently, there are an estimated 1.1 billion smokers, around 80 percent of whom live in low- and middle-income countries.
July 29, 2019
Sicignano steps down
Henry Sicignano III has resigned as president and CEO of 22nd Century Group for personal reasons. He will continue to serve the company on a consultancy basis.
Michael Zercher, 22nd Century’s chief operating officer, will oversee the company’s operations as the board of directors looks for a new president and CEO.
“The board is thankful for Henry’s years of service and leadership, and we wish him and his family the very best,” said James W. Cornell, director and chairman of the board of 22nd Century Group. “He has made tremendous contributions to our company, and we are grateful that we can retain his deep expertise and knowledge on a consulting basis for the next several years as the company moves into what we believe is an exciting phase of growth.”
“It has been an enormous privilege to lead 22nd Century through a period of profound change. I am proud to have worked with such a talented team that has made important and growing contributions to improving public health,” said Sicignano. “I look forward to continuing to support the company’s efforts, in a consultative capacity, as 22nd Century works to realize the promise that our very low nicotine technology represents.”
22nd Century recently submitted a premarket tobacco application and modified risk tobacco product application with the U.S. Food and Drug Administration seeking authorization to commercialize its proprietary very low nicotine cigarettes. It also strives to become a leader in hemp/cannabis.

July 28, 2019
Brand axed
Japan Tobacco (JT) will terminate sales of its Golden Bat cigarettes this fall in response to new tax rules.
Golden Bat was released in 1906 by JT’s predecessor, Japan Tobacco and Salt Public Corp. as a “third-class” product. Third class products are subject to lower tax than are other tobacco products.
However, the preferential treatment will be scrapped at the end of September.
Sales of Golden Bat will cease as soon as JT runs out of stock.
July 26, 2019