Category: Business

  • PMI to Record £220 Million Loss on Vectura Sale

    PMI to Record £220 Million Loss on Vectura Sale

    Image: Aliaksandr Marko

    Philip Morris International expects to record a record loss of about £220 million ($198 million) on the sale of its inhaled-therapeutics Vectura Group unit to Molex Asia Holdings in the third quarter, reports The Wall Street Journal, citing a securities filing.

    On Sept. 17, PMI’s pharmaceutical subsidiary, Vectura Fertin Pharma, announced it would sell its Vectura Group business to Molex. The company acquired Vectura Group in 2021 for $1.24 billion as part of PMI’s drive to diversify beyond nicotine.

    The company now says that “unwarranted opposition” to its transformation has affected Vectura Group’s engagement with the scientific community and its commercial relationships.

    The remaining units of Vectura Fertin Pharma will continue to operate under a new corporate identity and develop oral consumer health and wellness offerings as well as inhaled prescription products for pain management and cardiovascular emergencies.

  • PMI Sells Vectura at a Loss

    PMI Sells Vectura at a Loss

    Photo: PMI

    Philip Morris International is selling Vectura to Molex Asia Holdings for £150 million ($198 million) cash upfront and potential deferred payments of up to £148 million—about a third of the price it paid for the company three years ago. Vectura will be operated by Molex’ Phillips Medisize unit.

    In 2021, PMI paid about $1.2 billion for the U.K. maker of asthma inhalers as part of its efforts to diversify into the pharmaceutical business.

    The deal attracted heavy criticism from anti-smoking campaigners who said the cigarette manufacturer should not benefit from a company that offers treatments of ailments caused or worsened by tobacco products.

    The fierce opposition played a roll in PMI’s decision to sell the unit at a loss. “Despite the investment and commitment to developing products and therapies vital to patients, unwarranted opposition to PMI’s transformation has impacted Vectura’s scientific engagement and commercial CDMO [contract developing and manufacturing organization] relationships.” PMI wrote in statement.

    “With its experience in pharmaceutical drug delivery devices and its global manufacturing footprint, Phillips Medisize is best placed to lead Vectura into the future—while releasing it from the unreasonable burden of external constraints and criticism related to our ownership,” said PMI CEO Jacek Olczak.

    Vectura is part of a “health and wellness” unit that also includes Fertin Pharma, the producer of a smoking-cessation aid, that PMI bought for about $820 million in 2021. Last year, PMI took a $680 million impairment charge on the unit after unsuccessful clinical trials and slower-than-expected development of other products.

    Selling Vectura will allow PMI to “rid itself of a financially struggling unit,” said Kenneth Shea, a Bloomberg Intelligence analyst. “But it also represents a strategic backpedal to the company’s once-bold ambition to serve the inhaled therapeutics medical market,” he added.

  • Helme Tobacco Returns

    Helme Tobacco Returns

    Photo: Burtsc

    Swisher announced a rebrand of its smokeless tobacco portfolio with the return of the historic Helme Tobacco Co.

    The company’s smokeless division previously fell under the Fat Lip Brands umbrella and comprises 24 individual brands, including Kayak moist snuff tobacco, Starr loose leaf chew tobacco and Navy dry snuff.

    The Helme Tobacco Co. name traces its roots back to the 1880s and founder George W. Helme, who established the snuff and chewing tobacco company in Helmetta, New Jersey, USA. By 1925, Helme was reportedly the world’s largest snuff maker. The Helme Tobacco Co. and its products became part of the Swisher family of products and brands in 1986. Swisher later branded its smokeless tobacco portfolio under Fat Lip Brands and now rebrands that portfolio under the Helme name.

    While Swisher’s corporate headquarters is based in Jacksonville, Florida, the Helme Tobacco Co. smokeless division is located in Wheeling, West Virginia.

    “This year is a historic one for Swisher as we celebrate 100 years of continuous operations in Jacksonville, Florida. We believe now is the perfect time to reintroduce this historic and prominent smokeless tobacco name to adult consumers,” said Swisher President and CEO Neil Kiely. “The Helme name is synonymous with high-quality products and reflects the unwavering commitment of the Wheeling, West Virginia team.”

    The following brands will now fall under the Helme Tobacco Co. name:

    Kayak, Creek and Gold River moist snuff tobacco; Starr, Bowie, Chattanooga Chew, Lancaster and Mailpouch chewing tobacco; and Buttercup, Checkerberry, Dixie Sweet, Honey Bee, Lorillard, Navy, Railroad Mills, Ralphs, Society, Square, Starr, Strawberry, Superior, Three Thistle, Tops and Wild Cherry dry snuff.

  • Stop & Shop to Stop Selling Tobacco

    Stop & Shop to Stop Selling Tobacco

    Credit: Flickr

    This month, Stop & Shop stores will discontinue the sale of all tobacco products, aligning with other major chains that have already ceased cigarette sales.

    The grocery retailer with 360 stores across Massachusetts, Rhode Island, Connecticut, New York, and New Jersey plans to end sales of all tobacco products at all stores by August 31 as a part of the brand’s commitment to community wellness. The changes are part of its “dedication to community wellness” and will discontinue the sale of all cigarettes and tobacco products on Saturday, August 31.

    “Our responsibility as a grocer goes far beyond our aisles, and we are committed to taking bold steps to help our associates, customers, and communities work towards better health outcomes,” said Gordon Reid, Stop & Shop president, in a statement, according to a press release.

    Public health advocates have long urged retailers to stop selling tobacco products, and some cities and states have also banned tobacco sales in pharmacies. The American Cancer Society responded that it was “pleased to partner” with Stop & Shop to end sales.

    “This is a step in the right direction toward ending Big Tobacco’s influence on kids, and we know even more can be done to reduce the toll of tobacco in our communities,” said Karen Knudsen, CEO of the American Cancer Society and the American Cancer Society Cancer Action Network, in the statement. “We urge state lawmakers to prioritize tobacco control program funding so that those inspired to quit by this effort have the resources they need to help them succeed.”

    Previously, Walmart in 2022 announced it would stop selling cigarettes at some of its US stores. In 2014, CVS stopped selling tobacco, saying it was “inconsistent with our purpose” as a health care provider. Target ended tobacco sales in 1996.

  • Ispire Partners With Hidden Hills

    Ispire Partners With Hidden Hills

    Photo: Africa Studio

    Ispire Technology and Aspire North America have signed a global licensing agreement with the U.S. lifestyle brand Hidden Hills Club.

    Under the agreement, Ispire will globally manufacture, distribute and commercialize Hidden Hills’ branded nicotine products, including reduced-risk e-cigarettes. The initial Hidden Hills nicotine products are scheduled to roll out in the United Arab Emirates and South Africa in the coming weeks, followed by the United Kingdom and European Union over the next few months.

    “Our partnership with Hidden Hills Club enables us to bring more innovative and reduced-risk nicotine products to a global audience,” said Ispire Co-CEO Michael Wang.

    “The 30-year exclusive license will allow us to make significant investments in the Hidden Hills brand, ensuring robust distribution and a deep product portfolio that captures the essence of this iconic lifestyle brand. Hidden Hills’ popularity as a lifestyle brand—encompassing apparel, clothing and cannabis and hemp products—has grown at an exponential rate over the last two years. Partnering with Hidden Hill will help Ispire to capture this west-coast culture and energy, and infuse it into its nicotine product offerings globally, under the Hidden Hills brand flag.”

    “Teaming up with Ispire was a strategic decision for us,” said Hidden Hills Club CEO Dre Liang. “Ispire’s expertise in vaping technology and its global distribution network provide the perfect platform to expand our brand into the nicotine products market. We believe this collaboration will redefine the market with products that reflect our brand’s commitment to quality and innovation.”

  • PMI and KT&G to Partner on Submissions

    PMI and KT&G to Partner on Submissions

    Photo: KT&G

    Philip Morris International and KT&G will collaborate on regulatory submissions for KT&G heat-not-burn products in the United States. The companies have signed a memorandum of understanding.

    On Jan. 30, 2023, PMI obtained exclusive rights to commercialize KT&G’s smoke-free products outside South Korea.

    KT&G’s new platform products are expected to be launched first outside the U.S. Thereafter, the partners plan to work on a premarket tobacco product application submission for review by the U.S. Food and Drug Administration.

    “We want every adult smoker who does not quit smoking to switch to a science-backed, better alternative for the benefit of their own and public health,” said PMI CEO Jacek Olczak in a statement.

    “The heat-not-burn category, with different tiers of FDA-authorized products, has a pivotal role to play in making cigarettes obsolete in the U.S.”

    KT&G “is currently pursuing global expansion and structural transformation centered on its three core businesses—next-generation products, overseas cigarettes, and health supplements,” said KT&G President Bang Kyung-man in a statement.

    “We will do our utmost to achieve our future vision of becoming global top-tier by leveraging innovative NGP products and scientific R&D capabilities that will be introduced to overseas markets.”

  • Eastern Sells Factory to PMI

    Eastern Sells Factory to PMI

    Image: Stephen Finn

    Eastern Co. will sell the land, buildings and currently rented equipment of its Factory No. 9 to United Tobacco Co. (UTC), a subsidiary of Philip Morris International, for EGP1.58 billion ($32.66 million), reports Ahram Online.

    According to an Eastern Co. statement to the Egyptian Exchange, the sales price was the average of three valuations offered by valuation companies.

    As part of the deal, UTC will waive its right to recollect the remaining annual rent value of the factory that was paid in full according to the rent contract that ends on April 26, 2026.

    Egypt is in the process of privatizing many state-owned companies. The government hopes to earn $5 billion from this program.

    In November 2023, Egypt’s Ministry of Public Enterprise sold a 30 percent stake in Eastern Co. to the United Arab Emirates’ Global Investment Holding Co. for EGP19.34 billion.

    In May 2024, PMI acquired an indirect 14.7 percent stake in Eastern Co.

  • KTI to Make and Distribute KT&G Products in Europe

    KTI to Make and Distribute KT&G Products in Europe

    Photo: KTI/KT&G

    KT International (KTI) will be manufacturing and distributing KT&G’s products in Europe.

    Under the terms of an Oct. 20, 2023, agreement, KTI will have exclusive rights to manufacture and distribute KT&G’s products within the EU for three years. KT&G and KTI have agreed to a market entry plan aimed at expanding into strategic markets within the Western European region, with an initial focus on KT&G’s flagship Esse brand, which is the world’s bestselling super-slim cigarette.

    “We are delighted to join hands with KTI, a company with a robust footprint across Europe. Having already established a strong market presence in Asia, AMEA and Latin America, we believe that the agreement with KTI will serve as a pivotal step in accelerating our footprint across Europe,” said Chad Sul, general manager of KT&G’s Europe office.

    “After three years of collaborative efforts leading to the signing of this agreement, we see a strong cultural fit between our two companies. Also, we expect the synergy between our complementary brand portfolios to strengthen the market position of both companies. A significant amount of time had been taken to structure a competitive business model and to develop an innovative and consumer relevant product portfolio that is consistent to the global objectives and standards of KT&G. We thus look forward to a long and fruitful partnership between our companies,” said Stuart Buchanan, chief commercial officer of KTI.

    KT&G is a leading tobacco manufacturer in South Korea and the fifth-largest in the world by sales volume, with an annual sales revenue of approximately KRW6 trillion ($4.34 billion). Established in 2008, KTI is one of Europe’s fastest growing independent tobacco companies.

  • Imperial Certified as Great Workplace

    Imperial Certified as Great Workplace

    Image: Ricochet64

    Imperial Tobacco Canada has been certified as a Great Place to Work.

    “We are immensely proud of this recognition, especially that it comes directly from feedback received by our employees. We put enormous efforts into creating an environment where we can all shine and achieve our full potential,” said Frank Silva, president of Imperial Tobacco Canada. “We face many challenges in our business, but we do so together, and our people know that we will always do the right thing.”

    To achieve this certification, Great Place to Work surveyed all 500 employees of Imperial Tobacco Canada. This employee-led certification is based on employees’ direct feedback as part of an extensive and anonymous survey about their workplace experience, which measures the level of trust that employees experience in their leaders, the level of pride they have in their jobs and the extent to which they enjoy their colleagues.

    “This certification reflects our ongoing efforts to prioritize employee satisfaction, well-being and professional development. We remain committed to fostering an inclusive environment where every team member feels valued and empowered to contribute their best work. This achievement inspires us to continue our journey toward excellence in workplace culture, ensuring that we remain a preferred employer of choice in our industry,” said Lito Charet, vice president of human resources and inclusion.

  • PMI Accused of ‘Manipulating Science’

    PMI Accused of ‘Manipulating Science’

    Image: Xistudio

    Philip Morris International has been accused of “manipulating science for profit” through funding research and advocacy work with scientists, according to The Guardian.

    Leaked documents from PMI and its Japanese affiliate revealed plans to target politicians, doctors and the 2020 Tokyo Olympics as part of the company’s marketing strategy to attract nonsmokers to its IQOS heated-tobacco product. Japan is a launch market for IQOS.

    A Tobacco Control Research Group paper from the University of Bath stated that Philip Morris Japan (PMJ) funded a Kyoto University study into smoking cessation via a third-party organization. The researchers found no public record of PMJ’s involvement, however. According to a PMI spokesperson, the company’s involvement was attributed when the results were presented at a scientific conference in Greece in 2021.

    PMJ reportedly paid £20,000 ($25,287.48) a month to FTI-Innovations, which is a life sciences consultancy run by a professor from Tokyo University. The payments were for tasks like promoting PMI’s science and products at academic events, which, according to an internal email, a PMJ employee claimed they had been told “to keep it a secret.”

    The paper, which was published in Nicotine & Tobacco Research, is based on 24 leaked company documents from between 2012 and 2020.

    “These activities resemble known strategies to influence the conduct, publication and reach of science and conceal scientific activities,” the researchers said.

    “The manipulation of science for profit harms us all, especially policymakers and consumers trying to make potentially life-changing decisions,” said Sophie Braznell, one of the paper’s authors. “It slows down and undermines public health policies while encouraging the widespread use of harmful products.”

    The leaked documents undermined PMI’s claims to conduct “transparent science,” according to Braznell, who called for reforms to funding and governance of tobacco research “to protect science from vested corporate interests.”

    In a different report from Stopping Tobacco Organizations and Products (STOP), also based on leaked documents, PMJ appeared to lobby for IQOS to be permitted in places where smoking was banned.

    Entities like medical and hospitality groups and Japan’s Fire and Disaster Management Agency were targeted for endorsements, “which, if secured, could give the appearance of organic, widespread acceptance of IQOS,” said STOP.

    Moreover, the report stated that aiming for a presence at the Tokyo Olympics “echoes a known industry tactic of advertising addictive, harmful tobacco products at sports events—associating these products with health, misleading consumers and reaching children and young people.”

    “PMI’s intentions with IQOS seem to extend far beyond what they’ve stated,” said Jorge Alday, director of STOP. “This revelation adds weight to the mounting evidence questioning the credibility of PMI’s claims about their intentions and their products.

    “Disturbingly, it hints at a broader pattern of deceptive tactics, potentially laying the groundwork for a new chapter in the tobacco epidemic,” he said.

    “This is yet another specious story from an organization more interested in criticizing our company than helping reduce the harm from cigarettes,” said a PMI spokesperson. “Like any highly regulated multinational company, PMI regularly seeks to share our positions on issues that affect our consumers, our company and our communities. Not only is this type of engagement entirely legal and appropriate, [but] it is essential to the type of inclusive policymaking that will lead to better outcomes for the people affected by those policies.”