Category: Business

  • BAT Cleared in Corruption Probe

    BAT Cleared in Corruption Probe

    Photo: Anucha Pongpatimeth – Dreamstime.com

    Britain’s Serious Fraud Office (SFO) has closed its investigation into potential corruption at British American Tobacco (BAT), citing lack of evidence, reports The Daily Mail.

    In 2017, the fraud team launched an investigation over allegations that BAT paid bribes in east Africa to undermine anti-smoking policy.

    On Friday, the SFO confirmed that the results of its investigation and review “did not meet the evidential test for prosecution.”

    BAT welcomed the SFO’s announcement. “BAT is pleased that the SFO has closed its investigation and that the SFO is taking no further action in respect of this matter,” the firm wrote in a statement to shareholders.

    Paul Hopkins, who worked for BAT in Kenya for 13 years, told BBC’s Panorama in 2015 he had begun paying bribes after being told it was the cost of doing business in Africa. “The truth is that we do not and will not tolerate corruption, no matter where it takes place,” BAT told Panorama at the time.

    In April, BAT said it was also under investigation in the U.S. for a possible breach of sanctions.

    The London-based firm said it was cooperating with the Justice Department and the Treasury Department’s Office of Foreign Assets Control, which enforces economic sanctions.

  • Bangladesh: New Factory Draws Ire

    Bangladesh: New Factory Draws Ire

    Photo: Kolozov | Dreamstime.com

    Health activists have criticized plans to build a new tobacco factory in Bangladesh, reports The Financial Express.

     Asian Tobacco recently signed an agreement with the Bangladesh Export Processing Zones Authority (BEPZA) to establish a modern cigarettes and tobacco processing plant in the Ishwardi Export Processing Zone.

    The company will reportedly invest $2 billion to produce 1.2 billion cigarettes and 73,205 kg of tobacco annually.

    Voices for Interactive Choice & Empowerment (VOICE) said the move goes directly against Prime Minister Sheikh Hasina’s vision to make Bangladesh a tobacco-free nation by 2040.

    “Permitting a tobacco company to establish a new factory in the country directly contradicts with the prime minister’s vision and what she said back in 2016 in the South Asian Speaker’s Summit on achieving the sustainable development goals,” said VOICE Executive Director Ahmed Swapan Mahmud.

    “If things continue this way, becoming a tobacco-free country by 2040 will remain as a dream.”

     

  • Brexit Claims First Cigarette Brands

    Brexit Claims First Cigarette Brands

    Illustration Skypixel – Dreamstime.com

    Imperial Brands will reduce its range of products in Northern Ireland as a result of Brexit, reports The Grocer.

    Northern Ireland will remain under EU legislation, making it subject to the EU rules requiring pictorial health warnings on tobacco packaging. Tobacco manufacturers would have to produce separate products for Northern Ireland and Great Britain to comply with these laws.

    “Due to the smaller volumes, it is likely that there will be a significant reduction to the product range for NI [Northern Ireland] accounts, final range still to be confirmed,” Imperial said in a letter to wholesalers.

    “We continue to plan and prepare for different Brexit scenarios, which includes a range of different regulatory requirements across the U.K.,” said an Imperial spokesperson. “We continue to work closely with our customers on the potential changes and would encourage them to speak to their account manager if they have any questions.”

    Brexit is likely to impact the nicotine business in several ways. Earlier this month, researchers at the University of Bath argued that withdrawing from the EU offered Britain new opportunities to strengthen tobacco control.

    Meanwhile, vapor advocates are hoping that breaking with EU rules will allow the U.K. to continue and even strengthen its comparatively permissive policies on e-cigarettes.

    Earlier this year, Tobacco Reporter contributor Clive Bates examined the impact of Brexit on the tobacco and vapor businesses in-depth.

  • KT&G Recognized for Intellectual Property

    KT&G Recognized for Intellectual Property

    KT&G was selected as the “Intellectual Property Management Enterprise of the Year” at the 2020 KINPA annual conference hosted by the Korea Intellectual Property Association. The photo features Kim Jong-yeol, Head of the Future Technology Research Institute at the KT&G R&D headquarters. (Photo: KT&G)

    KT&G received the Commissioner Award from the Korean Intellectual Property Office (KIPO) at the Intellectual Property Management Enterprise of the Year ceremony organized by the KIPO and the Korea Intellectual Property Association (KINPA) on Dec. 8.

    The award ceremony was hosted to identify enterprises that contributed to the development of national industries by strengthening the capacity of intellectual properties at enterprises and reflecting them in their management activities. KT&G has reportedly received excellent reviews in the creation of intellectual property and rights, including patents, as well as intellectual property management.

    Between 2016 and 2019, KT&G increased its number of patent applications from 43 to 431.

    “Through this award, KT&G’s technology was recognized once again since receiving the prime minister’s citation on the Day of Invention in June,” said Chi-beom Oh, head of KT&G’s R&D division, in a statement. “We will continue to lead the global tobacco market by focusing our competencies on developing our own technologies and making patent applications.”

  • Juul Closes South Carolina Plant

    Juul Closes South Carolina Plant

    Juul starter kit
    Photo: Juul

    Juul Labs has shuttered its assembly plant in Lexington County, South Carolina, USA, amid a deteriorating business environment and pushback from local politicians.
     
    “There has been rapid change in the landscape of the vapor category, and these operations are no longer viable,” the company said in a statement to The Post and Courier on Wednesday. “Earlier this summer, we unfortunately had to begin reductions to our manufacturing team.”
     
    In May 2019, Juul announced the new assembly and packaging plant in Lexington County, boosting South Carolina’s economy by about $125 million and creating 500 jobs.
     
    Juul has since suffered a backlash over its marketing practices and heightened restrictions on the vapor business, including flavor bans in many jurisdictions. It has laid off a substantial share of its workforce, discontinued certain products and exited several international markets.

  • Star Agritech Eyes Agroduhan

    Star Agritech Eyes Agroduhan

    Photo: SAI

    Star Agritech International (SAI) has expressed interest in the potential privatization of Agroduhan Slatina in Croatia.

    In a letter to the country’s Restructuring and Sales Center, SAI proposes to expand the volume and varieties of tobacco grown in Croatia, reactivate the reconstituted tobacco plant in Agroduhan and base the headquarters of its European operations in Croatia by moving its current operations from Belgium to Agroduhan.

    As part of its financial consideration, SAI said it would assume responsibility for the private sector bank loans that Agroduhan has contracted with Post bank of Croatia.

    “Using our rich experience in the tobacco industry, with the aim of growing the business using new technologies, we believe this investment would yield positive benefits,” SAI wrote in its letter.

    “With this proposal, we intend to achieve leaf production of at least 3 million kilos minimum per annum in Croatia. This program will increase the number of employees required at the Agroduhan factory as well as at the farm level.”

    In addition to creating employment, the proposal would increase economic activity and generate substantial export revenues from the sale of larger quantities of tobacco and recon, according to SAI.

    SAI CEO Iqbal Lambat

    SAI was established by the Lambat family in 2008 with the mission of providing full tobacco raw materials supply to privately owned tobacco product manufacturers as well as government tobacco monopolies. The company now operates in more than 40 countries. The firm also owns and operates two recon factories—a slurry type recon factory in Indonesia and a nano fiber recon factory in Brazil.

    In addition, SAI has started investment programs for a CRES factory in Cambodia and a second one in Indonesia.

  • BAT Buys Dryft Pouch Business

    BAT Buys Dryft Pouch Business

    Photo: Dryft Sciences

    British American Tobacco (BAT) has bought the nicotine pouch product assets of Dryft Sciences, a U.S.-based modern oral nicotine product company.

    The acquisition expands BAT’s modern oral portfolio in the U.S. from four to 28 product variants. It follows the acceptance of Dryft’s recent pre-market tobacco product application submission for filing by the U.S. Food and Drug Administration. The enhanced portfolio will include a wider range of nicotine strengths and flavors.

    BAT will rebrand Dryft’s U.S. portfolio under its global modern oral brand, Velo, and expects to accelerate growth through superior distribution, marketing and channel capabilities.

    “Today’s announcement underscores our societal commitment to accelerate our transformation and build ‘a better tomorrow’,” said BAT CEO Jack Bowles in a statement. “Our multi-category strategy is key to our transformation. The addition of Dryft to our U.S. Velo brand is a major step forward, further enhancing our successful vaping and oral portfolio.”

    “We’re proud of the tremendous momentum we’ve built with Dryft and thrilled that our strong product portfolio will now serve to enhance the Velo brand,” said Jason Carignan, president of Dryft Sciences. “We remain confident that modern oral innovations like Dryft and Velo will continue to find an adult consumer base seeking alternatives to traditional products.”

    According to BAT, the acquisition fits into its mission to reduce the health impact of its business. The company aims to accelerate the growth of its new category revenues at a faster rate than its total revenue, reaching £5 billion ($6.5 billion) in 2025. BAT wants to have 50 million consumers of non-combustibles worldwide by 2030.

  • Daughters & Ryan Sells Majority Stake

    Daughters & Ryan Sells Majority Stake

    Mark Ryan (right)
    Photo: Timothy Donahue

    Daughters & Ryan tobacco company has sold a majority stake to Inter-Continental Trading USA for an undisclosed sum. Mark Ryan, founder and president of Daughters & Ryan, told Tobacco Reporter today that the time was right. Ryan said he will stay with the company for at least five more years.

    “The main thing was keeping our pipe tobaccos on the market,” said Ryan. “I have been fighting for this industry for 30 years; it just seemed like the right time to sell a portion of the company. I want to enjoy myself more. We started having some issues with tube production in the Philippines so we wanted to make sure we could move manufacturing here domestically and this allows us to accomplish that.”

    Inter-Continental will take control of the manufacturing of Daughters & Ryan cigarette tubes and pipe tobacco.

    Daughters & Ryan’s began in 2002 as a manufacturer and distributor of roll-your-own (RYO) tobacco and expanded into the pipe market with its line of premium pipe tobaccos, as well as cigars and e-liquids. The company also offers other tobacco products (OTP) such as cigarette tubes, rolling papers and rollers, filter plugs, injection machines and shisha accessories.

    Daughters & Ryan is housed in an 80,000-square-foot facility that sits on a 20-acre lot in Kenly, North Carolina, USA. The company has 17 employees and sales reached nearly $5 million in 2014, according to the most recently available data.

    Ryan, who also owns the L.A. Poche Perique Tobacco Co. in Louisiana, USA, said the Perique company was not included in the stock sale. Perique is a unique type of tobacco that is grown exclusively on a small swath of land near New Orleans.

    Shargio Patel, president of Inter-Continental, is well-known for acquisitions and investment in growth opportunities. He did not immediately respond to a request for comment.

    Based in Mount Prospect, Illinois, USA, Inter-Continental Trading USA manufactures OHM pipe tobacco, cigarette tubes and filtered cigars, 752 pipe tobacco and filtered cigars, Shargio cigarette tubes and accessories, Roxwell pipe tobacco and cigarettes tubes, Westport filtered cigars and Kashmir rolling papers, hemp wraps, pre-rolled tubes and accessories. –T.S.D

  • Taat Starts Commercial-Scale Production

    Taat Starts Commercial-Scale Production

    Photo: Taat Lifestyle and Wellness

    Taat Lifestyle & Wellness’ contract manufacturing partner has begun commercial-scale production after receiving a supply of Beyond Tobacco base material from the company.

    This batch will be packaged using an updated Taat pack design, similar to the provisional pack designs published in September. Beginning in November 2020, when initial production of Taat is expected to be completed, inventory of Taat is to be shipped from the manufacturer’s warehouse to tobacco wholesalers in Ohio, who will then be able to fulfill orders for Taat from tobacco retailer accounts in the convenience channel.

    Beyond Tobacco is the nicotine-free and tobacco-free base material of Taat, an alternative to traditional cigarettes, the company explained  in a press note. Taat has been engineered to closely replicate every aspect of the cigarette-smoking experience, including a combustible stick format, cigarette-style packaging, an enhanced volume of smoke exhaled, and a taste and smell similar to tobacco attained by way of a patent-pending refinement technique.

  • Turning Point Invests in Cannabinoid Business

    Turning Point Invests in Cannabinoid Business

    Photo: Herbal Hemp from Pixabay

    Turning Point Brands (TPB) will invest $15 million Dosist, a global cannabinoid company. It has also signed an exclusive co-development and distribution agreement for a new CBD brand, created in partnership with Dosist’s THC-free business unit.

    TPB has an option to invest another $15 million at predetermined terms within the next 12 months.

    “The cannabis market is exploding, and now is the opportune time to invest in the space and significantly expand our addressable market,” said Larry Wexler, CEO of TPB, in a statement. “With its leadership in results-oriented plant-based formulas and dose control technology, global recognition, consumer trust and scalability, Dosist was the clear choice to be our new partner in this critical growth market.”

    “We are extremely proud to partner with Turning Point Brands on our next phase of growth and distribution as we continue to transcend the way consumers think about their health and wellness,” said Gunner Winston, CEO of Dosist. “Turning Point’s leadership team has demonstrated remarkable foresight and vision about the future and opportunity for federally legal cannabinoid products. The synergy between our brands around this scope and mission is incredible and we are excited by what we will achieve together with this partnership.”

    Dosist’s cannabis products are currently available in California, Colorado, Nevada and Canada, serving a total dispensary network of more than 700 stores. The company has plans to launch into key new markets in the coming months, adding geographies as they continue their North American expansion.