Category: Featured

  • Gibraltar Increases Cigarette Duty

    Gibraltar Increases Cigarette Duty

    Image: anetlanda

    The government of Gibraltar has increased the duty on cigarettes by GIP0.25 ($0.32) per pack, reports The Gibraltar Chronicle.

    Health authorities on the British Overseas Territory continue to voice concern about the high number of smokers in Gibraltar, which is about double the rate in the U.K.

    A lifestyle survey conducted on the Rock in 2021 showed that nearly one in four people on the peninsula smoke. The majority of smokers (51.9 percent) had started by the age of 16. Health advocates blame low tobacco prices.

    “The number of people that smoke in Gibraltar is definitely over 20 percent and it’s nearly twice the rates that they have in the U.K.,” Helen Carter, director of public health, told the Gibraltar Chronicle.

     “That’s not surprising taking into account how cheap cigarettes are here in Gibraltar.”

  • Maldives Ends Bonding Option for Tobacco

    Maldives Ends Bonding Option for Tobacco

    Image: grigvovan

    Tobacco products can no longer be bonded in the Maldives following an amendment of the island nation’s customs regulations, reports The Edition.

    Bonding allows companies to store imported products in a warehouse without having to immediately pay import duties. The goods are kept “in bond” under customs control until they are taken out of the warehouse for sale or distribution within the country.

    Following the change of rules, importers of tobacco products in Maldives must pay import duties as a lump sum in one go when goods are cleared within the set timeframe.

    The amendment also changes the penalties for fraudulent imports. Individuals or organization caught bringing products into the country without inward and outward cargo manifests risk a fine of MVR200,000 ($12,937) per instance.

    These regulations also impose a fine of MVR100,000 if the vessel carrying goods travels or docks contrary to the documents submitted to customs as the place of port, route or area used to enter Maldives. Mariners who turn of their vessels automatic identification system risk a fine of MVR200,000.

    Last month, the government announced  a ban on e-cigarettes, set to take effect between Nov. 15, 2024, and Dec. 15, 2024. It also raised duties on cigarettes and roll-your-own tobacco.

  • Illicit Market Thriving After Flavor Ban: ITCAN

    Illicit Market Thriving After Flavor Ban: ITCAN

    Image: Ahmed

    One year after Quebec banned non-tobacco flavored vapes, most vapers are buying such products illegally in the province, according to Imperial Tobacco Canada (ITCAN).

    In a survey carried out by Leger, 61 percent of vapers said that they purchased non-tobacco flavored vapor products in the past 12 months. Forty percent of those respondents said that they purchased an illegal flavored vapor product from a vape shop, and 33 percent of those respondents said they purchased flavored vapor products online. Forty-seven percent of those respondents said they knew it was illegal when they purchased a flavored vapor product

    “If the government’s objective was to create an untaxed and unregulated vapor market, then well done and mission accomplished,” said ITCAN Vice President of Corporate and Regulatory Affairs Eric Gagnon in a statement.

    ITCAN attributed the problem in part to weak enforcement. “A report from the Ministère de la Santé et des Services Sociaux (MSSS) website reveals that only 150 (38 percent of all vape shops) have been inspected by MSSS,” the company wrote. “Worse yet, very few fines have been issued with reports showing only 28 of those 150 received fines, even though more than 90 percent are uncompliant.”

    ITCAN urged the government to train inspectors, issue fines heavy enough to deter illegal players and conduct an “enforcement blitz” to demonstrate the gravity of the situation, among other suggestions.  

  • JTI Opposes Canada Settlement

    JTI Opposes Canada Settlement

    Image: helgidinson

    JTI-Macdonald Corp. opposes a proposed multi-billion-dollar settlement of long-running tobacco litigation announced earlier this month, reports Financial Post, citing a company filing made to an Ontario court.

    As part of a court-appointed mediator’s plan, Canada’s three leading cigarette manufacturers would pay CAD32.5 billion ($23.6 billion) to provinces and territories and more than CAD4 billion to tens of thousands of Quebec smokers and their heirs.

    Before it can be implemented, the proposed plan must be voted on by creditors, which include plaintiffs in two class-action lawsuits in Quebec as well as provincial governments seeking to recover smoking-related health costs. It must also be approved by the court.

    In its court filing, JTI-Macdonald Corp. indicated it does not support the proposal due to “critical outstanding issues.”

  • Forestation Rules Underway

    Forestation Rules Underway

    Image: patpitchaya

    Companies should avoid pushing back plans to ensure that they and their products comply with the EU Deforestation Regulation, warns the Crowell law firm.

    On Oct. 2, the European Commission published proposals to postpone some of the application deadlines to give companies more time to comply with core provisions of the legislation, which entered into force in June 2023.

    The legislation specifically targets products like cocoa, coffee, soy and palm oil, but the tobacco business, too, has faced criticism for its contribution to deforestation, especially in countries where farmers use wood as a fuel to cure their leaf.

    EU Institutions are currently in the process of deciding whether the new (delayed) deadlines will apply. The proposal must be approved by both the European Parliament and the Council of the EU, which represents the member states. If passed, larger companies will have until Dec. 30, 2025, to comply with the new rules, while small and medium-sized enterprises will have until June 30, 2026, according to Euro News.

    According to Crowell, the potential delay should not be taken as an excuse to postpone action. Ensuring that products and supply chains comply with the deforestation regulation is no easy feat and can take considerable time and effort. What’s more, failure to comply may attract significant penalties—including criminal liability—in the future.

    The law firms advises companies to assess the scope and application of the deforestation regulation as soon as possible, and ensure commodities and products they themselves supply – comply with the Deforestation Regulation. Moreover, companies should ensure that upstream commodities, products and raw materials are fully compliant to avoid supply-chain disruption.

    The EU has been criticized for its role in global deforestation. Estimates suggest the bloc is responsible for deforesting over 2480 square km annually—an area nearly the size of Luxembourg.

  • Brazil Leaf Exports Could Top $3 Billion: SindiTabaco

    Brazil Leaf Exports Could Top $3 Billion: SindiTabaco

    The value of Brazil’s tobacco exports could surpass $3 billion this season, according to the interstate tobacco industry union SindiTabaco.

    During an Oct. 30 meeting of the Sectoral Chamber of the Tobacco Production Chain, stakeholders shared information on the sector’s performance during the most recent growing season and their expectations for the upcoming crop year.

    According to the Ministry of Development, Industry, Commerce and Services, Brazil shipped 316 million kg of leaf tobacco between January and September, representing a 14 percent reduction compared to the same period in 2023.

    Production volumes were down 16.12 percent, to 508.04 million kg, in 2023–2022 due to excessive rainfall during the growing season. However, the depressed volume boosted the average price by almost 28 percent (see “The Great Scramble,” Tobacco Reporter, May 2024).

    In dollar terms, the value of the shipments to date are up 3.44 percent to $2.03 billion. The largest export destinations for Brazilian tobacco were Belgium, China, the United States, Indonesia and Egypt. In 2023, Brazil exported 512 million kg worth $2.73 billion to 107 countries, with the European Union acquiring the bulk (42 percent) of Brazilian leaf exports.

    SindiTabaco’s newly appointed president, Valmor Thesing, credited Brazil’s integrated system for the sector’s strong performance. “This is a demonstration that our integrated system is fully active, generating income, jobs and revenue,” he said in a statement.

    Some 133,000 families were involved in producing southern Brazil’s 2023–2024 crop—6.62 percent more than during the previous season, according to the Brazilian Tobacco Growers’ Association, Afubra. A similar increase was seen in the planted area, which grew 8.57 percent to 284,184 hectares. “In recent harvests, there has been a more satisfactory average return for producers, which ends up stimulating the expansion of area and producers adopting tobacco cultivation,” explained Afubra President Marcilio Drescher.

    This year’s firm prices may boost next year’s harvest. “We are wrapping up cultivation in almost all areas, and we have noticed an increase in area, encouraged by the recent return,” said Drescher. “By mid-November, we should have some forecast regarding the cultivated area and the number of producer families involved in the activity,” he added.

  • U.S. Urged to Bolster Post-Employment Rules

    U.S. Urged to Bolster Post-Employment Rules

    Image: bluraz

    Public policy experts are calling for stronger federal post-employment regulations as U.S. regulators, including those overseeing the tobacco business, are increasingly losing talent to the private sector.   

    A recent article in The Examination details how, over the past 15 years, nearly two dozen lawyers have left the U.S. Food and Drug Administration and its Center for Tobacco Products to advise, litigate for or work with the tobacco and vaping industry.

    “It seems like every time we get sued in the tobacco industry, a former FDA lawyer is leading the lawsuit,” Commissioner Robert Califf told an FDA oversight organization last year.

    After gaining  FDA experience, lawyers can significantly increase their salaries by moving to a major law firm or corporation. While a lawyer’s salary in the FDA’s chief counsel’s office, for example, starts at around $83,000, a first-year lawyer at a firm made on average $200,000 a year in 2023, according to the National Association for Law Placement.

    Daniel Aaron, a former FDA attorney, says lawyers who’ve left the agency to work on behalf of the tobacco industry not only increase their renumeration but can also have a powerful impact on what lands on store shelves.

    “It’s a huge advantage to getting your product to market.” said Aaron, now a University of Utah law professor. “Ex-FDA lawyers know what the agency is worried about, and how a client can maximize its options. They know not just what the law is, but they know how the FDA will enforce the law.”

    Federal post-employment rules also bar former employees from communicating with or lobbying a federal employee for two years on behalf of a client or employer under certain circumstances. That said, employees are allowed to work “behind the scenes” advising clients, according to the FDA’s post-employment guidelines. 

    Genevieve Kanter, a professor at the University of Southern California who co-published a study in 2023 on the revolving door in health care regulation, believes the rules should be strengthened if society is truly interested in preserving independent government.

    Kanter’s study focused specifically on conflicts of interest of employees at the highest level of the U.S. Department of Health and Human Services; It found that 38 percent percent of the political appointees from the FDA went into private industry, the fourth highest out of roughly two dozen offices and divisions.

    Eric Lindblom, director of the Center for Tobacco Products’ Office of Policy from 2011 to 2016, proposed blocking former staff from working for the tobacco industry for at least one or two years, in all cases, after leaving the policy office. “I thought it was really important that we had that independence,” said Lindblom, now a senior scholar at Georgetown University’s O’Neill Institute.

    The proposal went nowhere.

    The Examination is a publication supported by Bloomberg Philanthropies.

  • Japan Tobacco Reports Third-Quarter Results

    Japan Tobacco Reports Third-Quarter Results

    Masamichi Terabatake (Photo: JT Group)

    Japan Tobacco reported revenue of ¥2.21 trillion and adjusted operating profit of ¥681.7 billion at constant currency exchange rates for the third quarter of fiscal 2024, up 6.8 percent and 2.6 percent, respectively, from the comparable 2023 quarter. On a reported basis, core revenue increased 11 percent to ¥2.39 trillion and adjusted operating profit increased 1.2 percent to ¥672.5 billion. Operating profit increased 0.8 percent to ¥636.6 billion, and profit rose 0.1 percent to ¥442.4 billion.

    “The JT Group posted another set of strong results for the third quarter, mainly driven by solid pricing in the tobacco business,” said JT Group President and CEO Masamichi Terabatake in a statement.

    “Our solid market share momentum, combined with better-than-expected overall demand in a number of markets and the significant Ploom volume growth of 40 percent, resulted in total volume increasing by 2.2 percent year-on-year.

    “The geo-expansion of Ploom, our investment priority, has now reached 23 markets, and in Japan, the largest Ploom market, we continued to gain share in the HTS segment, reaching 11.8 percent quarter-to-date. Overall, RRP-related revenue increased by approximately 22 percent year-on-year.

    “Following the successful acquisition of Vector Group, I am very pleased to welcome the employees of VGR to the JT Group. I am confident that our expanded presence in the highly profitable U.S. market will improve the JT Group’s returns in combustibles and strengthen our mid[term] to long-term financial position through sustainable hard currency profit and cash flows.”

  • Altria Posts $6.26 Billion in Revenues

    Altria Posts $6.26 Billion in Revenues

    Photo: Maurice Norbert

    Altria Group reported net revenues of $6.26 billion for the third quarter of 2024, down 0.4 percent from the comparable 2023 quarter. Revenue net of excise taxes increased 1.3 percent to $5.34 billion.

    “Altria delivered outstanding results in the third quarter,” said Altria CEO Billy Gifford in a statement. “The smokeable products segment delivered solid operating companies income growth behind the resilience of Marlboro, and in the oral tobacco products segment, our MST brands continued to drive profitability while On! maintained momentum in the marketplace. We also continued to reward shareholders through a growing dividend and share repurchases while making investments in pursuit of our vision.”

    “We also announce today a new Optimize and Accelerate initiative designed to modernize our processes, which we believe will accelerate progress toward our vision, and we reaffirm our guidance to deliver 2024 full-year adjusted diluted EPS in a range of $5.07 to $5.15. This range represents an adjusted diluted EPS growth rate of 2.5 percent to 4 percent from a base of $4.95 in 2023.”

  • U.K. Announces Cigarette and Vape Tax Hikes

    U.K. Announces Cigarette and Vape Tax Hikes

    Image: John Gomez

    The U.K. government will increase tobacco duties by 2 percent above inflation for the remainder of the current parliamentary session and increase duty by a further 10 percent on roll-your-own tobacco this year, Finance Minister Rachel Reeves announced during the presentation of her budget plans on Oct. 30. From October 2026, the U.K. will also introduce a flat-rate duty on all vaping liquid alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking, reports Reuters.

    Smokers’ rights activists warned that the plans would backfire.

    “Increasing the tax on tobacco above inflation will drive even more smokers to the black market, fueling illicit trade and hurting legitimate retailers,” said Simon Clark, director of FOREST, in a statement.

    “It discriminates against consumers from poorer backgrounds for whom smoking may be one of the few pleasures available to them.

    “Instead of punishing the low-paid, the government should focus on improving the environmental conditions that drive many people to smoke in the first place.”

    The U.K. Vaping Industry Association (UKVIA) described the planned duty on e-liquid as a penalty for smokers seeking to transition to less harmful nicotine products.

    “Whilst a flat-rate tax versus one graded on different nicotine strengths is favored so as not to deter smokers who rely on higher concentrations of nicotine when they start transitioning over to vapes, the additional cost of £2.64 (including VAT) per 10 ml of e-liquid is a kick in the teeth for former adult smokers who have switched to vaping to quit their habits. It will also be the highest rate in Europe,” said UKVIA Director General John Dunne in a statement.

    “Some 3 million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS [National Health Service] millions of pounds in treating patients with smoking-related conditions. This announcement today deters adult smokers from considering vapes as a method to give up their habits and hits the lowest-paid who go for more price-sensitive e-liquid options, which currently start at 99 pence and will rise to £3.83, representing a shocking rise of 267 percent.

    “For a government that places a great focus on the NHS, it is a nonsensical move to put a severe punitive tax level on vaping when the category has done so much to reduce the number of adult smokers requiring medical attention by being a driving force in the decline of smoking rates to record-low levels in recent years.”