Category: News This Week

Tax Hike Boosts ‘Tobacco Tourism’

Image: Antony McAulay
A recent tobacco tax hike in the Netherlands has boosted tobacco tourism to Luxembourg, reports The Luxembourg Times.
Dutch smokers have been chartering buses to stock up on cigarettes in the Grand Duchy, where cigarettes are considerable cheaper than in surrounding countries.
For regular smokers, a trip to Luxembourg can be very profitable. Passengers on one such bus said the journey, which takes six hours one way, costs around €40 per person and allowed them to save between €400 and €500 on cigarette purchases in just one trip.
The Netherlands allows smokers to bring up to four cartons of cigarettes from one EU country.
According to De Telegraaf, the tax-fueled increase in demand has led to the bus operator to expand its schedule.
Luxembourg is not the only country attracting tobacco tourists. A few months ago, Le Parisien reported on a similar excursion from the Toulouse region to Andorra, where taxes on tobacco and alcohol are much lower than in France.
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November 11, 2024
JTI Turkey to Invest in Torbali

Japan Tobacco International will invest $40 million over the next three years in its Torbali factory in Turkey, reports Merhaba.
“We are constructing a new tobacco processing building, and the installation of two cigarette manufacturing machines has been completed,” said JTI Turkey Engineering Director Barış Tevattepe. “Our solar energy installation plans have also started as part of our sustainability goals.”
Located on 250 acres with 94,000 square meters of covered space, Torbali is the third-largest factory in the JTI network, according to Tevattepe.
According to JTI Turkey Regional Operations Leader Wojciech Odzimek, many innovations within JTI originated in Torbali. “We lead the industry in exports,” he said. “This facility is also a talent pool and center of excellence for JTI. Many individuals trained here have the opportunity to work in JTI’s factories in other countries. We have a team of 2,900 people in Turkey, generating great value for the country and region through production, employment, exports and taxes.”
JTI Turkey Production Director Sarper Ege Ulukaya expects a record production volume at Torbali this year. “We are set to reach 54 billion units, with 28 percent of this being exported,” he said.
“We are also growing in the domestic market. Our factory has improved efficiency through integrated management systems. We started these efforts in 2020 and achieved a 3 percent performance increase, which significantly contributed to our production records. Other JTI facilities come here to observe best practices. We have a young team, making it easy to adapt to innovations.”
November 11, 2024
Bangladesh Fulfills Small-Pack Export Order

Image: PX Media
Bangladesh fulfilled a cigarette export order that failed to obtain regulatory approval in Pakistan, reports Profit.
The order came from Blue Nile Cigarette Co. (BNCC), a subsidiary of British American Tobacco in Sudan, which in the midst of a civil war. To ensure continuity of supply, BNCC ordered $20.5 million worth of cigarettes from Pakistan Tobacco Co. (PTC), another BAT subsidiary. In line with local market preferences, the BNCC order required the cigarettes to be delivered in packs of 10 sticks.
However, Pakistan is one of more than 80 countries that require cigarettes to be sold in packs of at least 20 sticks, a measure that health advocates believe will make tobacco less accessible to underage buyers. Because Sudan has no such restrictions, PTC asked the government to exempt the export order from Pakistan’s 20-stick minimum.
Despite support from Prime Minister Shehbaz Sharif and the Special Investment Facilitation Council, delays in decisionmaking at the ministry of health and fierce opposition from anti-tobacco activists, prompted BNCC to look for other suppliers.
The issue attracted considerable attention from health groups. The African Tobacco Control Alliance, for example, urged Pakistan to withhold permission for the export order, arguing that the 20-cigarettes- per-pack rule is the global standard for the protection of children.
PTC’s senior regulatory affairs manager, Qasim Tariq, said the company’s critics misinterpreted certain clauses of the World Health Organization’s Framework Convention on Tobacco Control (FCTC).
“Ironically, the neighboring country that ultimately won the contract is also an FCTC signatory, like Pakistan and Sudan,” Tariq told the Associated Press of Pakistan. “This incident illustrates the harmful effects of misinformation and the economic harm that can arise from the unchecked influence of certain advocacy groups on public policy,” he remarked.
November 8, 2024
Sales and Profits up at TPB

Stoker’s MST continued to grow share while FRE sales more than quadrupled versus last year’s quarter.
Turning Point Brands (TPB) announced financial results for the third quarter ended Sept. 30, 2024.
Total consolidated net sales increased 3.8 percent to $105.6 million compared to the third quarter of 2023. Zig-Zag product net sales increased 5.5 percent during the same period. Stoker’s product net sales increased 12.1 percent. Creative Distribution Solutions net sales decreased 17.4 percent.
Gross profit increased 4 percent to $53.7 million compared to 2023. Net income increased 14.3 percent to $12.4 million. Adjusted net income increased 9.8 percent to $15.9 million. Adjusted EBITDA increased 11.3 percent to $27.2 million.
“We were pleased by our third-quarter results,” said TPB president and CEO Graham Purdy in a statement. “We believe Zig-Zag is on a sustainable growth trajectory. Stoker’s MST continued to grow market share while FRE sales more than quadrupled versus year-ago and grew 26 percent sequentially as we continue to expand our national footprint.”
November 8, 2024
Haypp Group Sales up by a Quarter

Image: Haypp Group
The Haypp Group reported net sales of SEK944.2 million ($87.98 million) for the third quarter of 2024, up 23 percent over the comparable 2023 period. At constant currency exchange rates, net sales increased by 25 percent.
Gross profit increased to SEK134.8 million, while adjusted EBIT for the third quarter increased to SEK33.1 million. In terms of volume, the company’s nicotine pouch business grew 42 percent.
“Haypp Group retained its strong business momentum in the third quarter of 2024 with net sales growth of 23 percent, the highest rate over the last two years driven by strong performances from all three divisions,” said Haypp Groups CEO Gavin O’Dowd in a statement.
“Moreover, the Insights business continues to develop as brand owners leverage Haypp Group’s unique and powerful consumer data.”
The company’s third quarter report is here.
November 8, 2024
FDA Renews MRTPs for General Snus

After a scientific review, the U.S. Food and Drug Administration issued a renewal of modified risk granted orders to Swedish Match USA, Inc., for eight General Snus products.
With the renewal, the products may continue to be marketed – as they have been authorized to do so since 2019 – with the following modified risk claim: “Using General Snus instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis.”
The products receiving modified risk granted orders are: General Loose, General Dry Mint Portion Original Mini, General Portion Original Large, General Classic Blend Portion White Large-12ct, General Mint Portion White Large, General Nordic Mint Portion White Large-12ct, General Portion White Large, and General Wintergreen Portion White Large.
The modified risk granted orders issued by FDA are specific to the products as mentioned above and expire Nov. 7, 2032. If the agency determines that, among other things, the continued marketing of the products no longer benefits the health of the population as a whole, the agency may withdraw the orders.
“The FDA’s review determined that this modified risk claim is supported by scientific evidence, that consumers understand the claim, and that consumers appropriately perceive the relative risk of these products compared to cigarettes,” the FDA stated in a release. “FDA found that these modified risk products, as actually used by consumers, will significantly reduce harm and the risk of tobacco-related disease to individual tobacco users and benefit the health of the population as a whole.
“In particular, the available scientific evidence, including long-term epidemiological studies, shows that relative to cigarette smoking, exclusive use of these products poses lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis. The available evidence does not indicate significant youth initiation of these products.”
The modified risk granted order does not permit the company to market the product with any other modified risk claim that conveys or could mislead consumers into believing that the products are endorsed or approved by FDA, or that the agency deems the products to be safe for use by consumers.
November 7, 2024
Canada’s Tobacco Deal not ‘Doomed’: Judge
An Ontario judge says any outstanding issues regarding a proposed $32.5 billion settlement between three major tobacco companies and their creditors should be solvable in the coming months. Ontario Superior Court Chief Justice Geoffrey Morawetz released his reasons for approving a motion last week to have creditors’ representatives review and vote on the proposal in December.
One of the companies, JTI-Macdonald Corp., said last week it objects to the plan in its current form and asked the court to postpone scheduling the vote until several issues were resolved. The other two companies, Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd., didn’t oppose the motion but said they retained the right to contest the proposed plan.
The proposal announced last month includes $24 billion for provinces and territories seeking to recover smoking-related healthcare costs and about $6 billion for smokers across Canada and their loved ones.
If a majority of creditors accept the proposed deal, it will move on to the next step: a hearing to obtain the court’s approval, tentatively scheduled for early next year. In a written decision released Monday, Morawetz said it was clear that not all issues had been resolved at this stage of the proceedings.
He pointed to “outstanding issues” between the companies regarding their respective shares of the total payout and debate over the creditor status of one of JTI-Macdonald’s affiliate companies. In order to have creditors vote on a proposal, the court must be satisfied the plan isn’t “doomed to fail” either at the creditors or court approval stages, court heard last week, media reports.
Lawyers representing plaintiffs in two Quebec class actions, those representing smokers in the rest of Canada, and 10 out of 13 provinces and territories have expressed their support for the proposal, the judge wrote in his ruling. While JTI-Macdonald said its concerns have not been addressed, the company’s lawyer “acknowledged that the issues were solvable,” Morawetz wrote.
“At this stage, I am unable to conclude that the plans are doomed to fail,” he said. “There are a number of outstanding issues as between the parties, but there are no issues that, in my view, cannot be solved.”
The proposed settlement is the culmination of more than five years of negotiations in what Morawetz has called one of “the most complex insolvency proceedings in Canadian history.”
November 7, 2024
KT&G Reports Results and Presents Growth Plan

Image: KT&G
KT&G reported consolidated revenue for the third quarter of KRW1.64 trillion and operating profit KRW415.7 billion, up 2.2 percent year-on-year.
The growth trend centered on the main business continued in the third quarter. Revenue of the three companies core growth businesses—overseas cigarettes, next generation products (NGP) and health-functional foods exceeded KRW1 trillion, achieving the highest-ever quarterly revenue, while the revenue of the tobacco business also reached a record high.
Revenue in the tobacco business reached KRW1.048 trillion, up 7.7 percent from the same period last year, while operating profit grew 23.6 percent to KRW333 billion, outpacing the revenue increase.
In the tobacco business, growth was particularly strong in overseas cigarettes. In the third quarter, revenue of the overseas cigarette business reached KRW419.7 billion, up 30.5 percent year-over-year, setting a new record in revenue for two consecutive quarters, while sales volume and operating profit also increased by 10.1 percent and 167.2 percent, respectively, achieving growth trifecta in sales volume, revenue and operating profit.
While reporting its financial results, KT&G also announced a plan to achieve 15 percent return on equity (ROE) by 2027, to increase cash returns and to repurchase and cancel shares.
Since the appointment of CEO Kyung Man Bang in March, KT&G has been working to increase its competitiveness and upgrade the group’s financial structure. In particular, the company has been prioritizing the group’s ROE enhancement project, which is based on profitability improvement, asset efficiency and financial optimization.
Under the new corporate value-up plan, shareholder return will also be expanded in 2024. KT&G’s board of directors resolved to repurchase 1.35 million shares with KRW150 billion of the financial resources secured through the securitization of non-core and low-yield assets and to cancel them in full within the year.
“We are in full swing in creating results by strengthening our business structure centered on our core business and upgrading our financial structure to become a ‘global top-tier’ company,” KT&G wrote in a press note. “We will continue to focus our resources and capabilities on our three core businesses to strengthen our intrinsic competitiveness and return the fruits of our achievements to our shareholders to achieve true value-up where corporate value and shareholder value grow together.”
November 7, 2024
Greece to Boost Penalties for Youth Vape Sales

Credit: Lefteris Papaulakis
Greece is set to introduce a new bill in its Parliament that would impose stricter penalties for businesses supplying alcohol, electronic cigarettes, and vaping devices to minors in the government’s efforts to revamp alcohol laws in the country.
This is a joint decision made by the ministries of Citizen Protection, Justice, and Health, and it comes after repeated incidents of selling alcohol to under-aged individuals.
According to sources, violators who sell these harmful products to minors could be punished with imprisonment, financial fines, and other administrative penalties, including the immediate closure of the business involved, media reports.
Ministerial officials report that past oversights have also been identified regarding the access minors have to these harmful products. Specifically, under the previous government, the number of police officers assigned to enforce the anti-smoking law, for example, had been drastically reduced, penalties had been minimized, and there was also a decision allowing for the use of alcohol by minors at private events.
The Minister of Justice Giorgos Floridis commented on the new law, “Everything is now becoming stricter for the protection of minors, with increased enforcement.”
November 7, 2024
Rafael Targets Cuba’s Tobacco Regions

Image: lavizzara
Cuba’s leading tobacco-producing regions were expected to take a direct hit as Hurricane Rafael slammed into the island’s southwest shore on Nov. 6, packing sustained winds of 185 kph, reports Reuters.
Farmers in Artemisa and Pinar del Rio provinces had moved to protect 8,000 metric tons of tobacco in the area, according to Agriculture Minister Ydael Pérez Brito, as well as ripening fruits and vegetables.
The U.S. National Hurricane Center warned of a “life-threatening storm surge, damaging hurricane-force winds and flash flooding” across much of western Cuba. The region, including Havana, remained under a hurricane warning.
Cuba’s state-run grid operator said the high winds had caused the country’s electrical system to collapse. State-run television reported the entire population of 10 million people was without electricity—the second such incident in less than a month on the island.
The hurricane is the latest blow to the country’s already precarious grid and infrastructure. Cuba’s obsolete oil-fired power plants reached a full crisis this year as oil imports from Venezuela, Russia and Mexico dwindled.
November 7, 2024