Category: News This Week

  • KT&G Builds Factory in Kazakhstan

    KT&G Builds Factory in Kazakhstan

    Image: KT&G

    KT&G is building a new factory in Kazakhstan to meet global demand for its overseas business.

    In October 2023, KT&G held a groundbreaking ceremony for the new plant in Almaty and began building a “hybrid production base” for overseas sales on a site of about 200,000 square meters. When the plant is completed in 2025, Kazakhstan will become a production hub for supplying products to Europe, the CIS and the rest of Eurasia.

    In early 2023, KT&G established a sales and manufacturing subsidiary in Kazakhstan to grow its business in Eurasia and has been focusing on establishing a local business foundation. Currently, the company employs more than 150 locally recruited employees, and the completion of the plant is expected to create additional local employment as it establishes a complete local value chain from production to marketing and sales.

    The establishment of KT&G’s new factory in Kazakhstan is part of a growth investment aimed at achieving the company’s vision of becoming a “global top-tier” player. KT&G has announced its goal to increase the proportion of sales from overseas business to more than 50 percent of its total revenue by 2027 through future growth investments.

    As of the third quarter, KT&G’s overseas cigarette sales amounted to 163.2 million pieces, the largest sales volume of the company for the second consecutive quarter.

  • Philippines Using Drones to Map Plantations

    Philippines Using Drones to Map Plantations

    The Philippines National Tobacco Administration (NTA) has started using drones to map tobacco plantations nationwide, reports The Manila Times.

     According to NTA Administrator and CEO Belinda Sanchez, drone technology is part of a digitalization program that will also help validate tobacco plantation data.

    The drones’ high-resolution aerial imaging and geospatial analysis will accurately measure plantation areas and will help farmers in estimating the volume of production.

    Each of the eight NTA branch offices was issued one DJI Mavic 3 Enterprise Drone while an additional unit was provided to the Farm Technology and Services Department.

    NTA Undersecretary Deogracias Victor Savellano said the use of drones was in line with Agriculture Secretary Francisco Tiu Laurel Jr.’s push for modernization and digitalization in the agency.

    NTA Deputy Administrator for Operations Nestor Casela and Deputy Administrator for Support Services Benedicto Savellano said the technology would help the NTA in ensuring fairness in tobacco plantation validation and enhancing its regulatory ability.

  • Bulgaria to Raise Excise Taxes

    Bulgaria to Raise Excise Taxes

    Photo: Rodworks

    Bulgaria will increase excise taxes on tobacco products in 2025, reports Novinite.

    The finance ministry has proposed to fast-track the increases originally set for 2025 and 2026. Specifically, the excise tax on cigarettes will rise from LEV194 ($104.09) for 1,000 cigarettes to LEV211, which will likely increase the cost of a pack by LEV0.7 to LEV0.8.

    The excise duty on smoking tobacco will also increase, rising from LEV184 per kilogram to LEV0222, while the tax on heated tobacco will jump from LEV331 to LEV400 per kilogram. The excise tax will also rise for other smoking products, including those with or without nicotine, such as herbal mixtures. The ministry expects that these accelerated increases will generate over LEV230 leva in revenue in 2025.

    Despite these planned increases, the Ministry of Finance asserts that the rise in excise duties will not hinder the country’s goal of maintaining 2 percent inflation as part of its preparations for joining the eurozone.

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  • Creditors Approve Canadian Litigation Deal

    Creditors Approve Canadian Litigation Deal

    Creditors have approved a proposed litigation settlement that would require three leading tobacco companies to pay billions to Canada’s provinces and territories, reports CBC.

    The proposed CAD32.5-billion deal between JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada and their creditors was announced in October after more than five years of negotiations.

    Representatives for the creditors, which include provincial governments seeking to recover smoking-related health-care costs as well as plaintiffs in two Quebec class-action lawsuits, voted on the plan in a virtual meeting Dec. 12.

    The proposed settlement includes $24 billion for provinces and territories, $4 billion for tens of thousands of Quebec smokers and their heirs, and more than $2.5 billion for smokers in other provinces and territories. It also includes more than $1 billion for a foundation to help those affected by tobacco-related diseases.

    If approved in court, the proposed deal would end more than a decade of litigation.

    In 2015, a Quebec court ordered the three companies to pay about $15 billion in two class-action lawsuits involving smokers in the province who took up the habit between 1950 and 1998 and either fell ill or were addicted, or their heirs.

    Four years later, the landmark ruling was upheld by the province’s Appeal Court. The companies then sought creditor protection in Ontario in order to negotiate a global settlement with their creditors.

    All of the legal proceedings against them were put on hold during the talks. That order has now been extended until Jan. 31, 2025.

    The court is scheduled to review the proposed settlement toward the end of January.

  • Illegal Cigarette Factory Dismantled in Latvia

    Illegal Cigarette Factory Dismantled in Latvia

    Photo: Europol

    Latvian authorities dismantled a large illegal cigarette factory last week.

    The massive illegal manufacturing site was fully equipped with production machinery and raw materials. Police detained 32 people and seized nearly 300 million cigarettes, along with approximately 47 tons of leaf tobacco.

    If the cigarettes had entered the market, they would have deprived the Latvian state of more than €75 million in revenues, according to authorities.

    Searches were conducted simultaneously at multiple locations. Police carried out 26 searches in Riga, discovering warehouses containing cigarettes and detaining seven individuals, including six Latvian and one Russian national.

    Meanwhile, the state border guard carried conducted eight searches in Ludza, Rēzekne and Daugavpils, detaining 25 Ukrainian nationals at the Ludza factory, where counterfeit cigarettes were being manufactured under well-known brand names.

    The investigation was supported by Europol, which provided analytical support, and the Lithuanian Customs Criminal Service.

  • STMA Appoints New Deputy Director

    STMA Appoints New Deputy Director

    China’s State Tobacco Monopoly Administration (STMA) has appointed Liu Sanjiang as its deputy director, reports 2Firsts.

    Previously, Liu served as the director of the department of quality development at the State Administration for Market Regulation,

    This appointment follows a series of corruption investigations targeting senior STMA officials.

    The STMA is the country’s official regulatory body overseeing the tobacco industry and market, including NGPs such as e-cigarettes.

  • PMI Settles D.C. Flavor Ban Violations Case

    PMI Settles D.C. Flavor Ban Violations Case

    Image: PMI

    Swedish Match North America (SMNA) will pay $1.2 million to settle an investigation into violations of Washington D.C.’s flavored tobacco ban, reports Reuters.

    The District of Columbia attorney general’s office accused SMNA of facilitating online sales of “tens of thousands” of flavored Zyn nicotine pouches to D.C. consumers between Oct. 1, 2022, when the ban was enacted, and June 30, 2024.

    SMNA parent company Philip Morris International must now monitor its distributor’s compliance with D.C.’s ban quarterly and stop sales of flavored Zyn pouches through Zyn.com and related e-commerce platforms.

    Nicotine pouches became the second most commonly used tobacco product in the U.S. after combustible cigarettes, according to the Centers for Disease Control and Prevention.

    PMI suspended sales on Zyn.com after it had been issued a subpoena by the D.C. attorney general earlier this year.

    Swedish Match would continue to focus on its brick-and-mortar stores, PMI said in a statement e-mailed to Reuters.

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  • Bangladesh to Ban E-cigarette Imports

    Bangladesh to Ban E-cigarette Imports

    Bangladesh will ban the import of e-cigarettes and related products, reports bdnews24.

     According to a statement issued by the cabinet division, the health services division proposed to take urgent measures to ban the import of all products tied to the electronic nicotine delivery systems or e-cigarettes “to protect public health and keep future generations safe.”

     After the discussion, it was decided that e-cigarettes will be included in the list of banned products in the import policy order of the ministry of commerce.

  • FDA Submits Proposal to Limit Nicotine

    FDA Submits Proposal to Limit Nicotine

    The U.S. Food and Drug Administration has submitted a proposal to limit the amount of nicotine in tobacco products, reports CNN.

    The FDA has been discussing limiting nicotine levels since 2018, and this week, the FDA submitted the proposal to the Office of Management and Budget (OMB). This move comes as the Biden administration enters into its last weeks and President-elect Donald Trump prepares to take office in January 2025.

    “A proposed product standard to establish a maximum nicotine level to reduce the addictiveness of cigarettes and certain combusted tobacco products, when finalized, would be among the most impactful population-level actions in the history of U.S. tobacco product regulation,” the FDA said in a statement.

    “Once finalized, this rule could be a game-changer in our nation’s efforts to eliminate tobacco use,” said Harold Wimmer, president and CEO of the American Lung Association. “Making tobacco products nonaddictive would dramatically reduce the number of young people who become hooked when they are experimenting. To fully address the toll of tobacco on our nation’s health and across all communities, it is critical to reduce nicotine levels to nonaddictive levels in all commercial tobacco products, including e-cigarettes.”

    “Certainly, there would be individuals who would benefit from substantially lower nicotine levels and find it easier to quit,” said Rose Marie Robertson, a cardiologist and chief science officer at the American Heart Association. “It’s really hard to quit. I’ve seen patients over many years who have gotten the wake-up call with a heart attack or a stroke and really want to improve their health and reduce their risk, but it’s just very, very hard to do.”

    The submitted proposal does not mean that there will be any immediate changes. The OMB’s approval process can take months, and there must be a public comment period. It is likely that the tobacco industry will sue the government as well, as has been seen with other proposed regulations.

    It is unclear what will happen with the proposal following the change in presidency. In Trump’s first term, the Trump administration signaled that it wanted to limit nicotine, but during this year’s election season, the tobacco industry donated heavily to Republicans, and Trump’s pick for chief of staff was previously a tobacco lobbyist.

  • BAT on Track To Deliver Fiscal Year Guidance

    BAT on Track To Deliver Fiscal Year Guidance

    Image: BAT

    British American Tobacco said it is on track to deliver its fiscal year guidance, with 2024 investment driving positive momentum toward long-term sustainable growth

    “Our second-half performance acceleration is driven by the phasing of new categories innovation, the benefits of investment in U.S. commercial actions and the unwind of wholesaler inventory movements,” said BAT CEO Tadeu Marroco in a statement.

    “In October, I was delighted to host our capital markets day together with our management team in our Innovation Centre in Southampton. This event demonstrated how BAT’s science, innovation, breadth of capabilities and people can combine to achieve a smokeless world and deliver long-term sustainable value for all our stakeholders. We continue to make progress towards our ambition of becoming a predominantly smokeless business by 2035.

    “Our ‘quality growth’ imperative is delivering higher returns on more targeted investments across all three new categories, and that prioritization and focus is already transforming our business in Europe. We are making further progress increasing profitability across new categories, and I am particularly pleased with the improvements in heated products and modern oral.

    “In the U.S., I am encouraged that our investment approach, taken over the last 18 months to strengthen our business, is working, despite a challenging macro-economic backdrop. Through our commercial actions, we have invested in our portfolio and improved our executional capabilities. With these previously announced plans now completed, we can prioritize driving sharper execution and opening incremental white space, related to modern oral.

    “We continue to prioritize shaping a sustainable future and call for more appropriate regulation and enforcement of new categories, including vapor in the U.S. and Canada.

    “We are making good progress and while there is still more to do, I believe that the choices we have made and the actions we are taking through this investment year are the right way forward for BAT.”