Category: News This Week

The market share of heat-not-burn (HNB) cigarettes in South Korea has increased more than five-fold over the past two years, according to Yonhap News.

Sales of HNB cigarettes stood at 92 million packs in the first quarter of this year, up 34 percent from a year earlier. The market share of those cigarettes, including Phillip Morris’ IQOS and KT&G Corp.’s  Lil, soared to 11.8 percent as of the end of March, up from 2.2 percent two years ago.

The Health Ministry attributed the soaring market share of HNB cigarettes to aggressive marketing and publicity activities, which claim they are less harmful than traditional tobacco. In a bid to curb their rising sales, the ministry said it will move to revise a related law next year, which would require e-cigarette packs and devices carry warning images and texts.

New legislation will require cafes and restaurants in Saudi Arabia to pay up to SAR100,000 ($26,675) a year to sell tobacco products, reports The Arab News.

The measure is meant not only to discourage smoking but also to replace declining oil revenues as Saudi Arabia attempts to diversify its streams of income, according to Sean Foley, an associate professor of history at Middle Tennessee State University who is writing a book on smoking in Saudi Arabia and the wider Muslim world.

Saudi Arabia has some of the highest smoking rates in the world. According to Foley, the number of smokers is expected to rise from six million to 10 million in the coming years.

Saudi Arabia was one of the first countries to ratify the World Health Organization (WHO) Framework Convention on Tobacco Control in 2005.

The Health Ministry has taken steps to curb smoking through awareness campaigns and cessation clinics. Taxes on cigarettes doubled in 2017, leading to a 213 percent increase in smokers seeking help to kick the habit in the months that followed.

The health ministry of South Korea has called for an independent assessment of the chemical components in Juul products, reports The Korea Times.

Juul was released in stores across South Korea on May 24 and is likely to gain a firm foothold as consumers shift from smoking to vaping.

The product dominates the e-cigarette segment in the United States and has been blamed by that country’s health authorities for an ‘epidemic’ of vaping among young people.

Advocates say that Juul and similar products present an unprecedented opportunity to wean smokers off traditional cigarettes.

During a press conference marking the company’s entry into Korea, Juul co-founders James Mosees and Adam Bowen said they wanted to offer “a better alternative” for the country’s 9 million smokers who rely on combustible cigarettes and heat-not-burn tobacco.

“We have a long shared belief that through innovation, combustible cigarettes and tremendous healthcare costs can be eliminated by offering a better solution to consumers,” Mosees told reporters.

Through a decadelong trial-and-error efforts and consumer-centric research, he said the invention of Juul was “a once-in-a-century opportunity to improve public health.”

In 2018. South Korea’s ministry of food and drug safety tested several tobacco heating devices, including Philip Morris International’s (PMI) IQOS, and found five cancer-causing substances.

PMI then filed a lawsuit against the South Korean government demanding disclosure of detailed information on the test results.

The company said it was denied relevant information on the ministry’s test results, including the experimental data and the method of analysis, even though South Korean law requires key health information to be shared with the public.

Kretek International, a U.S. importer, marketer and distributor of specialty tobacco products, has announced new appointments to its sales team

Patrick Hurd has been promoted to chief sales officer. A nearly 20-year Kretek veteran , Hurd brings a wealth of expertise and a proven track record for aligning products and goals, teams and strategies from his previous positions at the company, which include general manager for Kretek Canada, general manager for Ventura Cigar Company and most recently, vice president of sales for Kretek US.

John Tirpak will assume the title of vice president of sales. Having worked within the Premium Cigar industry for more than 23 years, Tirpak most recently held the title director of sales at Kretek International. Prior to that, he was director of sales for Kretek subsidiary Ventura Cigar Co.

Sean Teninty has been promoted to vice president of sales strategy from his previous position as senior director of sales strategy at Kretek International. He has been with Kretek for more than five years, helping to transform Kretek’s business analytics and business planning, and creating channel-specific strategies.

“We are excited for what these appointments mean for the future of Kretek,” says Mark Cassar, CEO of Kretek International. “We’ve put together a team that offers a well-rounded perspective of our business, and a strong understanding of our customers. We are investing in our people, our products, and our processes, which will position Kretek for continued success in today’s ultra-competitive marketplace.”

The Jordan Food and Drug Administration (JFDA) has suspended the operations of 19 tobacco shops and shut down 41 unlicensed tobacco-selling establishments, in addition to confiscating dozens of pieces of e-cigarette equipment, reports The Jordan Times.

On May 19, Jordan’s Cabinet tasked the JFDA with monitoring and controlling the trade and sale of electronic and non-electronic tobacco-related commodities.

To date, the agency has seized 104 pieces of e-cigarette and e-arghileh equipment, Jordan’s News Agency, Petra, reported.

The JFDA additionally disposed of 470 packs of e-liquid that failed to meet the general quality, safety and production requirements and standards.

Pre-registration for the TFWA World Exhibition & Conference and the TFWA Innovation Lab is now open. To register for this year’s event, please visit https://www.tfwa.com/tfwa-world-exhibition-conference/book-your-place-100004721.

The TFWA World Exhibition & Conference will offer delegates an opportunity to view the latest brand innovations, network with leading players in duty free and travel retail, and join the debate on pressing industry issues in a comprehensive conference and workshop program.

The gathering will take place at the Palais des Festivals in Cannes, France, from Sept. 29-Oct. 4 2019.

This year’s show will see the debut of the new TFWA Innovation Lab, which is a development of TFWA Digital Village. Situated at a new location within the event perimeter close to the Majestic Beach, it will provide TFWA Innovation Lab exhibitors with the opportunity to showcase novel ideas and fresh thinking in areas such as customer engagement, digital technology, brand activations, instore design and sustainability. It will run from Oct. 1-4 alongside the main exhibition.

Additional changes at the TFWA World Exhibition & Conference include increased exhibition space at the Beach Village, a new location for the registration area at the Gare Maritime, and a new venue for the opening cocktail, The Scene and Le Premium Evening, which will now all be held at Port Canto. For the first time, the opening cocktail will be open to all visitor and exhibitor badge holders, while delegates registered under the full delegate package and attending Le Premium Evening will have full free access to The Scene nightspot on Thursday night.

“At a time of both great challenge and opportunity for duty free and travel retail, this year’s TFWA World Exhibition & Conference will aim to showcase industry excellence and provide solutions in a fast-moving world,” said TFWA President Alain Maingreaud.

“I’m certain that our new TFWA Innovation Lab and our great line-up of exhibitors and speakers will provide delegates with essential new ideas and inspiration to help drive their businesses forward.”

The office of Brazil’s attorney general is suing British American Tobacco (BAT) and Philip Morris International (PMI) to recover the costs of treating tobacco-related diseases over the past five years, reports Reuters.

The suit seeks to recover the cost of treating patients for 26 illnesses related to smoking tobacco or coming into contact with cigarette smoke, the Brazilian solicitor general’s office said in a statement. These are costs that the Brazilian government is legally bound to pay as healthcare is a constitutional right in Brazil.

Tobacco remains the Brazil’s leading cause of preventable death, killing more than 156,000 people each year and costing the healthcare system about BRL57 billion ($14.1 billion), according to local estimates.

“Since the profit from this business is sent abroad, it is fair that these multinational companies pay for this responsibility they have left to Brazilian society,” prosecutor Davi Bressler said in a statement.

The lawsuit was heralded as historic by the Campaign for Tobacco-Free Kids.

“The suit is the first of its kind for Brazil and a significant step toward holding the two major tobacco companies who do business in Brazil and their parent companies responsible for the enormous financial and health burdens caused by tobacco use,” a statement from the Campaign for Tobacco-Free Kids said.

PMI Brasil said it had not been informed of the case and would hold off from commenting on the lawsuit. BAT’s Souza Cruz said it had not been given access to the court documents.

Brazil is one of the world’s largest exporters of leaf tobacco.

Universal Corp. reported net income of $104.1 million for the fiscal year that ended on March 31, compared with $105.7 million in the prior fiscal year. Excluding certain non-recurring items, net income increased by $11.7 million during the reporting period.

The company’s operating income of $161.2 million was impacted by restructuring and impairment charges and decreased by $9.7 million compared with the 2018 fiscal year

Segment operating income was $186.8 million in fiscal 2018, an increase of $6.8 million over 2018. Results reflected earnings improvements in the Other Regions and Other Tobacco Operations segments and flat results for the North America segment for fiscal year 2019.

Consolidated revenues increased by $193.2 million to $2.2 billion for the fiscal year 2019, compared with the prior fiscal year, primarily due to higher sales and processing volumes.

“Fiscal year 2019 was another strong year for Universal,” said George C. Freeman, III, chairman, president, and CEO of Universal. “We increased our tobacco volumes handled, earned additional business with our customers by expanding the services we provide, and have continued to improve our market share. Net income for fiscal year 2019, excluding non-recurring items, was up 12 percent over fiscal year 2018.”

Freeman said Universal was committed to maintaining its position as the leading global leaf supplier and expressed confidence in opportunities to help mitigate the impact of tobacco consumption declines. The company, he said, also continues to explore opportunities in adjacent industries and has hired a dedicated business development officer for this purpose.

The South Korean Health Ministry announced on May 21 that the graphic warnings on cigarette packs will be larger and all bright colors and logos must be eliminated, according to reports in The Korea Times and Yonhap News. The new measure stipulates that pictorial health warnings must cover 75 percent of tobacco packs, up from the current 50 percent.

All tobacco products will be required to be sold in plain standardized packaging, which prevents manufacturers from using brand colors, logos and imagery on the pack and permits them to print only the brand name in a mandated size, font and place. Eight other countries—Australia, Britain, France, Norway, Ireland, New Zealand, Hungary and Slovenia—already enforce similar measures.

The ministry will also ban tobacco producers from using cartoon characters in their ads, while mandating anti-smoking ads in the introduction of dramas and movies containing smoking scenes.

In addition, the ministry is set to prohibit smoking inside public facilities. Currently, people cannot smoke inside public buildings with a gross floor area of 1,000 square meters or above, and the threshold will be lowered to 500 square meters by 2021 before a complete smoking ban takes effect in 2025.

Anti-smoking education will be provided at daycare centers, kindergartens and schools. To this end, practical programs and educational materials will be developed and distributed, while a program helping schools manage smoking students will be devised.

Electronic cigarettes, which have been cited for sustaining the number of smokers overall, will also be subject to warning labels on smoke devices, while importers and producers of tobacco will be required to submit detailed information on harmful materials in the goods they handle.

The smoking rate for Korean men was 38.1 percent in 2017, the fourth-highest among the OECD member nations, following Turkey, Latvia and Greece.