Category: News This Week

The government of Canada has announced new regulations for “plain and standardized appearance of tobacco packages and products” that will go into effect Nov. 9, 2019.

“These packages and products are powerful promotional vehicles,” the government said in a statement. “Reducing the appeal of tobacco products is an important step toward protecting Canadians, particularly youth, from inducements to using tobacco products and from the consequent dependence on them.”

The new regulations are part of Canada’s Tobacco Strategy, which aims to drive tobacco use by Canadianz down to 5 percent by 2035.

After the announcement, Rothmans, Benson and Hedges (RBH), an affiliate of Philip Morris International, released a statement saying that the new rules for the plain packaging are a missed opportunity for Canada to transition smokers off cigarettes to less harmful smoke-free technologies.

“The new rules require the packaging of combustible cigarettes and smoke-free alternatives to appear identical, even though the products inside are very different,” RBH said. “But with all packs looking the same, Canadian smokers may have the misconception that all tobacco products have the same health risk instead of knowing there are better alternatives to cigarettes.”

Representatives from Juul have met with officials in Lexington County, South Carolina, USA to discuss the possibility of establishing a production plant, reports The State. 

State Senator Katrina Shealy said the possibility of a South Carolina plant is still “up in the air and negotiations are ongoing,” but bringing more jobs to Lexington County would be a big bonus. A Juul spokesperson said the company did not have plans to announce as Juul does not disclose which contractors it works with or where production plants are located.

However, according to The State, recent job postings have shown that Juul Labs is seeking to fill two key positions: A site manufacturing engineer in Columbia, South Carolina, and a senior supplier quality engineer is needed to work as a “quality representative at our Columbia site…”

U.S. lawmakers introduced bipartisan legislation in the House and Senate on Tuesday that would raise the minimum age to buy tobacco products to 21, reports CNBC. The bill, known as the Tobacco to 21 Act, would raise the age for all tobacco products, including cigarettes, cigars and e-cigarettes, and prohibit retailers from selling tobacco products to anyone under the age of 30 without photo identification.

“Unlike other bills drafted by the industry, our bill has no special-interest carve-outs or limitations on state and local governments,” said Colorado Representative Diana DeGette. “Unlike other bills, our bill was drafted with one simple goal in mind and that’s to protect public health by keeping tobacco products out of the hands of young people.”

Public health groups, including the Campaign for Tobacco-Free Kids, the American Academy of Pediatrics, the American Cancer Society Cancer Action Network and American Heart Association, support the legislation.

“The Tobacco to 21 Act will be an important step to protect kids from the nation’s leading cause of preventable death and disease in the United States, and we urge our nation’s leaders to quickly pass this lifesaving legislation,” American Lung Association CEO Harold Wimmer said in a statement.

Imperial Brands intends to sell its worldwide premium cigar business, including two major cigar factories, JR Cigar, and 50 percent of Cuba’s Habanos and Altadis, which makes the non-Cuban Montecristo, Romeo y Julieta and H. Upmann brands.

According to Imperial, the move is part of £2 billion ($2.6 billion) divestment program to support its simplification agenda and will release capital to pay down debt and invest in its growth program. In addition to premium cigars, Imperial makes cigarettes, mass-market cigars, and has a logistics business.

In statement, Imperial said the Premium Cigars has performed well over a number of years with good revenue and profit growth.

“However, it is a unique luxury business with a different consumer base and route to market relative to Imperial’s other businesses,” the company wrote. “The sale of the business provides an attractive opportunity to realize shareholder value.

The divestment program was announced in May 2018 and is expected to generate proceeds of up to £2 billion ($2.6 billion) by May 2020. Imperial has so far realized £280 million from the sale of a portfolio of other tobacco products in the U.S. and a further 9.99 percent of Logista.

The import of tobacco products to Saudi Arabia dropped by 43.1 percent last year to SAR1.78 billion ($475 million) compared with the previous year, reports the Saudi Gazette.

The drop is likely due to the implementation of an excise tax.

According to figures released by the Saudi Customs Authority, the country imported 8,720 tons of tobacco products worth SAR$500 million during the first quarter of 2019.

In June 2017, Saudi Arabia started imposing a selective tax of 100 percent on tobacco products and energy drinks and 50 percent on fizzy drinks. The United Arab Emirates and Bahrain followed suit.

Last year, Minister of Labor and Social Development Ahmed Al-Rajhi issued an order effectively banning smoking in all workplaces and offices in the country.

The New Zealand government’s annual 10 percent tax hike on cigarettes and tobacco has resulted in a higher cost of living for beneficiaries and Māori.

Stats NZ revealed the cost of living for beneficiaries rose 0.6 percent in the three months through March, and rose 0.4 percent for Māori. The national average increase in the cost of living for the same period was 0.1 percent. The government said the rise was primarily due to more expensive cigarettes and tobacco, which typically account for 4.1 percent of a beneficiary’s household spending, 4.8 percent of spending in a Māori household and 2.5 percent across all households.

“One cigarette cost about NZD1.50 ($ 0.99) in the March 2019 quarter, up from about NZD$0.54 cents a decade ago, partly a result of regular excise tax increases over the past 10 years,” said consumer prices manager Gael Price.

The United Kingdom’s Advertising Standards Authority (ASA) is investigating British American Tobacco’s (BAT) use of social media platforms like Instagram, Twitter and Facebook to promote its Vype e-cigarettes. The investigation follows complaints by the Campaign for Tobacco-Free Kids, Action on Smoking and Health (ASH U.K.) and Stopping Tobacco Organizations & Products (STOP).

According to the complaints, BAT’s social media posts are designed to reach the widest possible audience by using popular hashtags like #throwbackthursday or #style and features celebrities and social media influencers using Vype.

U.K. regulations prohibit online advertising of e-cigarettes, but allow a manufacturer to provide factual product information such as the name, content and price of the product on its own websites. The ASA advises that e-cigarette manufacturers’ social media accounts may also provide factual content as long as the content can only be found by “those actively seeking it.”

Japan Tobacco’s (JT) adjusted operating profit at constant exchange rates was up 7.2 percent in the first quarter of 2019, driven by robust pricing in both the international and Japanese tobacco businesses.

On a reported basis, adjusted operating profit decreased 6.3 percent due to currency movements.

Total shipments increased as a result of acquisitions in Bangladesh and Russia. JT also reported market share increases in several markets, including France, Italy, Russia, Spain, Taiwan and the U.K.

“We began 2019 with strong results, delivering a 7.2 percent growth in adjusted operating profit at constant FX,” said Masamichi Terabatake, president and CEO of the JT Group.

“In conventional tobacco products, the platform of the group’s profitability, pricing remains robust both in the International and Japanese domestic tobacco businesses. We are confident that pricing will continue to be the main driver of our earnings growth. Our top-line was supported by acquisitions and positive cigarette market share gains in key markets as well as in Japan.”

Terabatake expressed confidence in the company’s reduced-risk products, including Ploom Tech+ and Ploom S, which the company launched in Japan in January.

“We received positive feedback from consumers and the new products are off to a good start. We will bring forward the nationwide sales expansion of Ploom Tech+ in mid-June. Our RRP portfolio including Ploom Tech, Ploom Tech+ and Ploom S serves the diversified needs of consumers, and we will be extending their roll out,” he said.

“In the International tobacco business, we also expanded our Logic portfolio with the introduction of Logic Compact in several markets.”

Terabatake added that the company is well-positioned to achieve its full-year currency “neutral adjusted” operating profit target, while remaining committed to invest in both conventional tobacco and reduced risk products for its mid-to long-term growth objective.

Altria net revenues decreased 7.9 percent to $5.6 billion, primarily due to lower net revenues in the smokeable products segment.

Revenues net of excise taxes decreased 6 percent to $4.4 billion.

Cigarette shipment volumes declined 14.3 percent to 23.59 billion sticks—worse than analysts had feared. Altria attributed the decline to trade inventory movements, the overall industry’s rate of decline, retail share losses and one fewer shipping day during the reporting period.

The company reaffirmed its guidance for 2019 full-year earnings per share (EPS).

“After taking steps to position Altria for long-term success at the end of 2018, we entered 2019 with an evolved business platform that includes our strong core tobacco businesses and new strategic investments with tremendous potential for growth,” said Howard Willard, Altria’s chairman and CEO.

“We believe we’ve made significant progress in the first quarter on key initiatives to realize the potential of our evolved business platform.

“As expected, Altria’s first quarter adjusted diluted EPS declined in the mid-single digit range as we incurred higher interest expense as a result of our recently issued debt, without the full benefit of savings from our cost reduction program, which began to ramp up at the end of the quarter. We continue to expect full-year adjusted diluted EPS growth of 4 percent to 7 percent.”