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Category: News This Week

  • PMI Reports $40B in Revenue, Including 42% from Smoke-Free Products

    PMI Reports $40B in Revenue, Including 42% from Smoke-Free Products

    Philip Morris International reported strong 2025 fourth-quarter and full-year results, driven largely by the continued expansion of its smoke-free product portfolio. The company recorded more than $40 billion in annual net revenues, including nearly $17 billion from smoke-free products, which accounted for 41.5% of total net revenues. Smoke-free shipment volumes rose 12.8% for the year, with PMI’s products now available in 106 markets and used by an estimated 43 million adult consumers. IQOS maintained a dominant position in heat-not-burn, holding about 76% global category share, while nicotine pouch brand Zyn continued rapid growth, particularly in the U.S., where shipment volumes reached 794 million cans for the year.

    PMI’s combustible business remained stable despite expected volume declines, supported by pricing strength and productivity improvements. Marlboro reached a record 11% global category share, while total company shipment volumes remained flat as growth in smoke-free products offset cigarette declines. The company also reported strong performance across multiple regions, including double-digit heated tobacco growth in Europe and sustained category leadership in Japan, where heat-not-burn products now exceed 50% of total nicotine offtake in several major markets.

    Looking ahead, PMI expects continued momentum, forecasting 2026 adjusted diluted EPS growth of 7.5% to 9.5% excluding currency effects. The company also introduced 2026–2028 targets calling for 6% to 8% organic net revenue growth and 9% to 11% adjusted EPS growth, driven primarily by high single-digit to low-teens expansion in smoke-free product volumes.

    In response to the financials, Morgan Stanley said it expects a modest negative market reaction to PMI’s fourth-quarter results and forward guidance, which were largely in line with expectations following the stock’s strong rally since December.

    “On balance, 4Q results were broadly in line, and guidance looks reasonable, but is unlikely to settle the debate around the stock,” Morgan Stanley wrote. “Bears continue to point to a 2H-weighted year with headwinds from IQOS competition and excise tax increases in Japan, the flavor ban in Poland, and continued competition in U.S. nicotine pouches. Bulls point to PM delivering the best mid-term growth in large-cap CPG despite these known headwinds. We are [rating the stock] Overweight, and continue to expect growth to reaccelerate in 2H as these headwinds dissipate, and for US Zyn trends to improve with the likely FDA authorization of Zyn Ultra.”

  • Plans to Toughen Vape Trade Licensing in Belarus

    Plans to Toughen Vape Trade Licensing in Belarus

    Belarus is preparing draft legislation to tighten licensing requirements for electronic cigarette and e-liquid trade, with the proposal expected to reach parliament in the first half of 2026. Officials considered both a full ban and stricter regulation, ultimately opting to maintain retail availability while limiting which entities can manufacture, import, and conduct wholesale distribution. President Aleksandr Lukashenko cited rising youth vaping rates as a key concern but warned that an outright ban could fuel illicit cross-border trade, particularly with Russia. Authorities said the new framework would introduce tougher retail licensing standards and stronger enforcement, following inspections that found roughly 70% of retail outlets selling non-compliant products. The proposal, developed by state food industry group Belgospishcheprom, would apply to both vaping devices and nicotine liquids as part of broader public health oversight.

  • DR Opens School for Tobacco Artisans

    DR Opens School for Tobacco Artisans

    The National Institute of Technical and Vocational Training (INFOTEP), in partnership with the Association of Dominican Cigar Manufacturers (Procigar), has opened the Procigar–INFOTEP School of Tobacco Artisans in Tamboril, Santiago, to support workforce development in the Dominican premium cigar sector. The program will initially train 88 participants across four groups, each completing 135 hours of hands-on instruction covering cigar production processes, including leaf selection, blending, bunching, finishing, and quality control. The school, which accommodates 24 students per course with flexible scheduling, is intended to preserve craftsmanship, expand employment opportunities, and strengthen the Dominican Republic’s position in the global premium cigar market through public-private collaboration.

  • Illicit Cigarettes: When Enforcement Alone Cannot Shrink a Shadow Market

    Illicit Cigarettes: When Enforcement Alone Cannot Shrink a Shadow Market

    By Foo Lee Khean

    Malaysia’s long-running battle against illicit cigarettes is often framed as an enforcement challenge. Each major seizure reinforces the perception that the problem is being actively contained. New border controls and tougher crackdowns signal resolve.

    If this is true, why do illicit cigarettes continue to occupy a significant share of the domestic market? By most estimates, the illicit cigarette trade now costs Malaysia up to RM5 billion ($1.3 billion) annually in lost revenue. This persistence raises an uncomfortable but necessary question: if enforcement has been consistently strengthened, why does the shadow market remain so resilient?

    This is not a criticism of enforcement agencies. Malaysia’s customs and security authorities have demonstrated sustained operational commitment, with regular seizures and increasingly targeted interdiction strategies. But enforcement outcomes should ultimately be assessed not by the value of contraband seized, but by whether demand for illegal products is meaningfully reduced over time. If demand remains intact, supply will inevitably find new routes.

    Here lies the policy blind spot.

    Illicit markets persist when economic incentives favour non-compliance. In the case of cigarettes, a wide and enduring price gap between legal and illegal products continues to shape consumer behaviour. When the legal product becomes significantly less affordable relative illicit alternatives, price-sensitive consumers are pushed toward the illegal market. As long as illegal cigarettes remain readily available at a fraction of the price,enforcement alone cannot fundamentally alter consumption patterns.

    International experience reinforces this reality. In Australia, former deputy chief medical officer Dr Nick Coatsworth has  warned that the scale of illicit cigarette consumption reflects a policy failure that enforcement alone cannot contain, noting how organised crime has stepped in to meet demand created by market distortions. Independent estimates indicate that illicit tobacco consumption accounted for 28.6 % of total tobacco use in Australia in 2023, a significant increase from earlier years and suggestive of a market that organised criminal networks have moved into as legal prices rise.

    Across Europe, authorities have reported a similar pattern of adaption.  . In 2024 alone, an estimated nearly 39 billion illicit cigarettes were consumed across Europe, a double-digit increase from the previous year, representing a double-digit increase from the previous year.

    The lesson is consistent. When regulation focuses primarily on supply suppression without addressing demand-side dynamics, illicit trade does not disappear. Instead, it becomes more resilient. Risks are priced in, enforcement losses are absorbed, and the market survives because consumer demand remains unchanged.

    This highlights a broader policy challenge. Enforcement is essential, but it cannot operate in isolation. When the economic logic of illicit consumption remains unaddressed, enforcement risks becoming reactive rather than corrective — capable of disruption, but not resolution.

    None of this suggests that enforcement should be weakened. Strong borders, inter-agency coordination and technology-enabled surveillance remain critical. But enforcement must be complemented by a broader policy conversation that considers regulatory calibration, consumer behaviour and market realities. This includes reassessing whether current tax and pricing structures unintentionally incentivise illegal substitution.

    Illicit cigarettes should therefore be recognised not merely as a law enforcement issue, but as a structural policy challenge at the intersection of regulation, taxation and consumer behaviour. Until this is acknowledged, the shadow market will continue to adapt, quietly imposing costs on public revenue and market integrity.

    Good policy does not rely solely on punishment. It reduces the incentive to bypass the system in the first place. That is the conversation Malaysia now needs to have.

  • Florida Moving Toward Taxing HTPs Differently

    Florida Moving Toward Taxing HTPs Differently

    A Florida House panel advanced legislation that would establish a separate tax structure for heated tobacco products (HTPs), distinguishing them from traditional cigarettes under state law. The bill (HB 377), introduced by Rep. Chase Tramont, reinforces an existing Department of Business and Professional Regulation interpretation that classifies HTPs as “other tobacco products” rather than cigarettes. The change would allow HTPs to be taxed at a lower rate than cigarettes, which are currently taxed at approximately $1.34 per pack. The measure cleared the House Industries and Professional Activities Subcommittee with bipartisan support, though some lawmakers raised concerns about offering tax incentives for products that still pose health risks.

    The legislation defines HTPs as tobacco-containing products used in electronic devices that heat, rather than burn, tobacco to produce an inhalable aerosol. Supporters, including Florida TaxWatch, argue that differentiated taxation could encourage smokers to transition away from combustible cigarettes. The bill now heads to the Commerce Committee, while a companion Senate measure (SB 754) continues moving through committee review.

  • Aussies Stop $700M in Illegal Nicotine Products at Border in Q2

    Aussies Stop $700M in Illegal Nicotine Products at Border in Q2

    Australian authorities intercepted illicit tobacco and vaping products representing an estimated AUD 1 billion ($700 million) in evaded duties during the second quarter of the 2025–26 financial year, according to the Australian Border Force (ABF). The agency seized more than 467 tons of illegal cigarettes and loose-leaf tobacco through intensified offshore and domestic enforcement operations, alongside growing vape-related detections. Major seizures included 14.4 million cigarettes from China, 2.5 tons of molasses tobacco concealed in cargo, 52,800 vapes hidden in a shipment from Kuala Lumpur, and 5.4 million cigarettes in a falsely declared container from Poland.

  • 20M Illegal Cigarettes Seized in Thailand Raid

    20M Illegal Cigarettes Seized in Thailand Raid

    Thai authorities recently seized 20 million illicit cigarettes and arrested 14 suspects in a major smuggling crackdown in Hat Yai, Songkhla, Prime Minister and Interior Minister Anutin Charnvirakul announced. Officials confiscated more than 2,000 cartons of cigarettes and 11 vehicles, estimating the operation prevented over 67 million baht ($2.1 million) in lost tax revenue, with potential penalties exceeding 1 billion baht ($31 million). Authorities said the products were prepared for nationwide distribution and noted survey data suggesting illicit cigarettes account for about 90.1% of the market in Songkhla, with most smuggled from neighboring countries.

  • Smuggling Convictions Upheld by Lithuanian Court

    Smuggling Convictions Upheld by Lithuanian Court

    The Lithuanian Court of Appeal upheld convictions against two former Lithuanian customs officers and two Belarusian nationals for smuggling more than 3 million packs of Belarusian cigarettes into the country, confirming the lower court’s ruling and rejecting appeals. The case, investigated by the European Public Prosecutor’s Office, found the defendants operated as part of an organized criminal group that bypassed customs inspections using insider assistance, causing an estimated €10 million in damages. The court also upheld a civil claim requiring the defendants to repay more than €9.7 million, although total fines were reduced from €300,000 to about €266,000 following criminal code amendments. The defendants have three months to appeal to Lithuania’s Supreme Court before the ruling becomes final.

  • PCA and Partners With Honduran Cigar Festival

    PCA and Partners With Honduran Cigar Festival

    The Premium Cigar Association (PCA) announced a partnership with Honduras’ Festival del Puro y el Café, an annual event in Danlí, El Paraíso, a key hub for Honduran tobacco production. The agreement aims to expand international collaboration, increase visibility for PCA members and festival stakeholders, and strengthen engagement between retailers, manufacturers, and enthusiasts. The festival, launched in 2021, celebrates Honduras’ premium cigar and specialty coffee industries and has quickly grown into a major industry event.

    Under the partnership, PCA will support festival branding and member awareness, while festival organizers will provide registration opportunities for PCA staff. PCA CEO Joshua Habursky said the agreement expands the association’s international partnerships following similar collaborations in Nicaragua and the Dominican Republic, reflecting Honduras’ growing influence in the global premium cigar sector.

  • KT&G Reports Record Numbers on 10% Growth

    KT&G Reports Record Numbers on 10% Growth

    KT&G reported record financial performance for 2025, with fourth-quarter consolidated revenue rising 10.1% year over year to KRW 1.7 trillion ($1.2 billion) and operating profit increasing 17.1% to KRW 248.8 billion ($169.2 million). In financials released today (Feb. 5), the company said full-year revenue grew 11.4% to a record KRW 6.58 trillion ($4.5 billion), while operating profit climbed 13.5% to KRW 1.4 trillion ($918 million), or KRW 1.4 trillion ($965.6 million) on an adjusted basis excluding one-time labor costs. The company attributed the results to structural reforms and global competitiveness initiatives implemented under CEO Kyung-man Bang, with its global cigarette business delivering record revenue, volume, and operating profit. International cigarette revenue rose 14.6% to KRW 1.9 trillion ($1.3 billion) and, for the first time, accounted for 54.1% of total cigarette revenue, supported by volume growth and strategic pricing actions.

    KT&G’s next-generation product (NGP) segment also expanded, with revenue increasing 13.5% to KRW 890.1 billion ($605 million) and stick volumes reaching 14.8 billion units. The company signaled a broader NGP strategy beyond heated tobacco, including portfolio diversification into nicotine pouches following its acquisition of Another Snus Factory. Management emphasized that NGP expansion is intended to complement core combustible operations while strengthening long-term tobacco category competitiveness across domestic and international markets.

    Looking ahead, KT&G outlined 2026 growth targets supported by a KRW 2.4 trillion ($1.6 billion) capital investment program aimed at expanding global manufacturing capacity, including new facilities in Kazakhstan and Indonesia. The company expects these investments to support cost reductions, pricing optimization, and business model diversification through OEM and licensing partnerships. KT&G is targeting revenue growth of 3% to 5% and operating profit growth of 6% to 8% while maintaining a total shareholder return of at least 100%, supported by a dividend payout ratio of 50% or higher and potential share repurchases.