Category: Featured

JT Group Reports ‘Solid’ Quarter

Masamichi Terabatake | Photo: JT Group
The JT Group’s revenues increased 9.9 percent to ¥1.39 trillion ($9.17 billion) in the second quarter of 2023, up 9.9 percent over the comparable 2022 period. Core revenue at constant exchange rates increased by 6.8 percent to ¥1.3 trillion, while adjusted operating profit at constant exchange rates increased by 4.7 percent to ¥434.3 billion. On a reported basis, adjusted operating profit increased by 6.7 percent to ¥442.8 billion. Operating profit increased by 8 percent to ¥413.6 billion, and profit increased by 8.7 percent to ¥287 billion.
“The JT Group posted another strong set of results for the first half, said JT Group President and CEO Masamichi Terabatake in a statement. “In particular, the tobacco business reported solid growth across its indicators, driven by a more resilient industry volume and continued market share gains, as well as robust pricing.
“Considering the accelerated investment towards heated tobacco sticks (HTS) in the second half of 2023, we have kept the full year forecast for adjusted operating profit at constant FX unchanged. On a reported basis, recognizing the current positive foreign exchange trend, we have revised upward our forecast, including the adjusted operating profit. Dividend per share guidance for full year remains unchanged taking into account our dividend policy at 188 yen per share. The interim dividend is 94 yen per share.
As announced in February, we are accelerating investment towards HTS to establish the foundation of our future growth. Ploom X is now available in six markets, following the launch in the Czech Republic in June, and will be launched in Switzerland in September. Geographical expansion is on track with the expectation to complete launches in 14 markets by the end of 2023 and 28 markets by the end of 2024.
July 31, 2023
Mastermind Sounds Alarm Over Illicit Trade

Photo: Axel Bueckert
Mastermind Tobacco has asked the government of Kenya to crack down on the illicit cigarette trade, reports The Standard.
“We are concerned at the growing level of illicit cigarettes making their way into the country, especially from Uganda,” Mastermind said in a statement.
“We are the biggest losers in the market because when we have 80 percent of illicit products bearing the name of our product and are sold cheaply in the country, we will not be able to compete.”
Mastermind said it is ready to work with government agencies including Kenya’s Inter-Agency Anti-Illicit Working Group and the Anti-Counterfeit Agency, regional bodies including the East African Community and COMESA as well as international organizations such as the World Trade Organization and World Health Organization to eliminate the illicit tobacco trade.
“If we do not work together, we may be forced to shut down because we will not be able to compete against products that are not paying tax,” Mastermind Tobacco stated.
A recent survey by its competitor British American Tobacco found that Kenya is losing up to KES6.5 billion ($45.67 million) annually in taxes as a result of the illicit cigarettes.
An estimated one in every five products sold in Kenya is counterfeit and almost 4 million Kenyans are using counterfeit goods that include sugar, cigarettes, bottled water and cooking oil.
Last month, the Kenya Revenue Authority in collaboration with the Inter-Agency Team destroyed an assortment of illicit goods seized from the market worth KES500 million with an estimated tax value of KES150 million.
July 31, 2023
ITC Plans To Spin off Hotel Business

Timon Schneider/Wirestock
ITC plans to spin off its hotel business, separating it from its cigarettes and food units. The company intends to retain a 40 percent stake in the new entity, with ITC shareholders holding the rest.
At its July 24 meeting, the board noted that the ITC’s hotels business has matured and is well positioned to chart its own growth path as a separate entity in the fast-growing hospitality industry with sharper focus on the business and an optimal capital structure, while continuing to leverage ITC’s institutional strengths, brand equity and goodwill.
According to the board, the demerger will help the new entity in attracting appropriate investors and partners whose investment strategies and risk profiles are aligned more sharply with the hospitality industry.
Driven by strong macroeconomic fundamentals and the Indian economy’s strong growth prospects, the Indian hospitality industry is expected to witness rapid growth going forward.
“The proposed demerger of the hotels business is testament to the company’s commitment to creating sustained value for stakeholders,” said ITC Chairman Sanjiv Puri in a statement. “Creation of a hospitality focused entity will engender the next horizon of growth and value creation by harnessing the exciting opportunities in the Indian hospitality industry.”
ITC’s largest revenue contributor is its consumer goods business, led by cigarettes.
July 28, 2023
Distributors Warned Over Unauthorized Products

Photo: Ljupco Smokovski
The U.S. Food and Drug Administration has put ABS Distribution, EC Supply and Easy Wholesale on notice for selling and/or distributing multiple unauthorized e-cigarette products. The illegal products listed in the warning letters include the popular and youth-appealing e-cigarette products Elf Bar/EB Design, Esco Bars and Puff Max.
“FDA is committed to keeping a finger on the pulse of the rapidly evolving e-cigarette landscape, including through a variety of scientific assets equipped to quickly identify products with high youth appeal,” said FDA Center for Tobacco Products Director (CTP) Brian King in a statement. “We will continue to use this data-driven approach to inform actions across the entire supply chain, including against those who distribute illegal products between manufacturers and the point of sale.”
Warning letters are generally the first step once an inspection reveals a violation of the law. “We will monitor to ensure these violations are corrected, and if they are not, the recipient is at risk of further actions such as civil money penalties, seizures, and injunctions,” said Ann Simoneau, director of the CTP Office of Compliance and Enforcement.
July 28, 2023
Iran: Smuggling Ring Busted

Image: Tobacco Reporter archive
Iran’s intelligence ministry busted a large tobacco smuggling network, reports Press TV. According to the ministry, members of the network were operating in 10 Iranian provinces as part of 15 connected smuggling bands.
Millions of dollars from the illicit products were funneled into bank accounts outside Iran via illegal currency exchange shops. Foreign sanctions have caused a shortage of hard currency resources, leading to Iran introducing strict regulations to crack down on smuggling. Preventing smuggling is also part of Iran’s plans to help domestic manufacturers and prevent use of unsafe products.
Increased prices of domestically produced cigarettes have led to an increase in smuggling, according to some experts.
The smuggling bust led to 60 arrests and the closure of over 100 warehouses used to store the illicit tobacco products.
July 27, 2023
PMI Takes Charge on Healthcare Business

Photo: PMI
Philip Morris International’s foray into pharmaceuticals is proving more challenging than expected, according to The Wall Street Journal.
The tobacco multinational took a $680 million charge in the latest quarter on its wellness and healthcare business, two years after agreeing to buy inhaled-medicine maker Vectura Group for £1 billion ($1.31 billion).
After an unsuccessful clinical trial, Vectura won’t be submitting its inhalable aspiring product to the U.S. Food and Drug Administration this year.
PMI is postponing its 2025 goal to exceed $1 billion in net revenues from health and wellness products. The company still sees growth potential in products such as smoking-cessation treatments and medicinal cannabis.
The setbacks have been compounded by the recent departures of several top Vectura executives.
According to a report in The Times, Vectura CEO Michael Austwick is stepping down having been in the role only since he joined from Novartis in June last year.
Thomas Gibbs, Vectura’s chief executive in the United States, also left in 2023 after just over a year at the company to join Lundbeck, a drugs company based in Denmark, and there is uncertainty over the future of Lizzie Knowles as Vectura Group’s chief financial officer.
Austwick’s predecessor, Will Downie, and Chief Financial Officer Paul Fry stepped down shortly after PMI’s takeover of Vectura.
The tobacco group’s acquisition of Vectura caused a backlash among public health professionals, with pharmaceutical conferences banning Vectura representatives from their events.
July 27, 2023
New Categories Boost BAT Half-Year Revenues

Photo: BAT
British American Tobacco reported revenue of £13.44 billion ($17.35 billion) in the first six months of 2023, up 4.4 percent over the figure recorded in the comparable 2022 period. Growth was driven by the company’s “New Categories” segment. Revenue from noncombustible products now accounts for 16.6 percent of group revenue, up 180 base points (bps) versus fiscal year 2022.
BAT’s Vuse and Velo brands enjoyed strong revenue growth, and New Categories’ financial delivery significantly improved, contributing a £201 million increase to group profit as losses reduced.
Reported profit from operations was up 61.4 percent (with reported operating margin up 1,560 bps to 44.2 percent). Adjusted profit was up 3.6 percent at constant exchange rates. Adjusted operating margin was up 40 bps to 44.3 percent.
“Having been in my new role for 10 weeks, I’m pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organization,” said BAT Tadeu Marroco, who assumed the top job in May. “It is a challenging external environment. High inflation and slower global growth are impacting consumers and business. Yet our revenue, profit from operations and earnings are all up.
“We are making great progress in New Categories. Revenues are up by 29 percent, and we are now close to break[ing] even, with consumers of noncombustible products up by 1.5 million versus FY 2022. While it’s encouraging to see continued good performance in vapor and modern oral, we recognize more work is required in heated tobacco.
“I remain confident that New Categories will deliver a positive contribution in 2024. However, we do not expect contribution growth to be linear, as levels of investment will align with the phasing of our big innovation platforms.
“While more focus is required in the U.S., our sequential performance improvement in the critical premium U.S. combustibles business since January 2023 is encouraging.
July 26, 2023
Taiwan Mulls Cigarette Tax Hike

Photo: Taco Tuinstra
The government of Taiwan is considering raising cigarette taxes next year, reports the Taipei Times, citing the Health Promotion Administration (HPA)
Regulations require an expert committee to deliberate the tobacco tax every other year. During its most recent gathering, last year, the committee decided to leave tobacco taxes unaltered due the Covid-19 pandemic.
HPA Director-General Wu Chao-chun told the Central News Agency that “controlling consumption through cost” is a successful tactic for smoking prevention, and vowed to continue promoting other methods, such as labeling and banning smoking in more areas.
Smoking declined significantly after Taiwan raised the tobacco tax in 2009 and 2017, according to Lee Yue-chune, a professor of public health at National Yang Ming Chiao Tung University.
Last year, a pack of cigarettes cost TWD116 (US$3.71) on average, with taxes accounting for 53 percent, below the WHO recommended minimum of 75 percent, she said.
Taiwan spends an estimated TWD80 billion annually on treating smoking-related diseases, Lee said, recommending that the government set a target for the tobacco tax as a percentage of cigarette cost.
July 26, 2023
Zimbabwe Seed Sales Hint at Larger 2024 Crop

Photo: Taco Tuinstra
Zimbabwe has sold 673 kg of tobacco seed with the capacity to cover 112,104 hectares as of July 20, 2023, reports The Herald, citing Tobacco Industry Marketing Board (TIMB) statistics. The country’s aim, formulated in the government’s Tobacco Value Chain Transformation Plan, is to reach 300 million kg of tobacco a season by 2025.
“This season, we are expecting an increase in hectarage, thanks to the coming on board of new growers and players in the industry as well as the decision by those who have already been in the industry to increase production,” TIMB public relations officer Chelesani Tsarwe said.
“We are currently exploring economically viable alternatives to tobacco through robust diversification programs,” Tsarwe said. “We are glad that we can now ride on the fact that TIMB recently became a certified member of global Good Agricultural Practices (GAP), and we have registered trainers and farm assurers who will work with farmers to ensure compliance with global standards for export crops.”
Tsarwe also noted that there is a focus on implementing the sustainable tobacco program and becoming environmental, social and governance compliant.
“Sustainable agricultural practices will reduce the negative effects of tobacco production, and our tobacco products will be better ranked on the global market,” said Tsarwe.
Tobacco accounts for a large margin of the country’s exports.
Zimbabwe’s tobacco growers produced a record 291.1 million kg of tobacco worth $882.2 million this season.
July 26, 2023
Red Algae Protein Doub Boosts Tobacco Growth

Photo: YanaKho
Researchers out of Cornell University have successfully transferred key regions of red algae into a tobacco plant using bacteria as an intermediary, resulting in doubled photosynthesis and plant growth compared to tobacco grown with the unaltered protein, according to a story in the Cornell Chronicle.
The study centers on Rubisco, the most abundant protein across ecosystems. The protein performs the first step of photosynthesis by fixing carbon, but it is slow and struggles to differentiate between carbon dioxide and oxygen, often limiting plant growth and crop yield.
The researchers found a species of red algae, Griffithsia monilis (Gm), that contains Rubisco that is 30 percent more efficient at fixing carbon than Rubisco in other organisms. Laura Gunn and her co-authors of the study used the 3D structure of GmRubisco to successfully graft a small number of regions from Rhodobacter sphaeroides (RsRubisco) into a bacterial Rubisco.
“RsRubisco is not very efficient, but it is very closely related to GmRubisco—they’re like cousins—which means that unlike land-plant Rubisco, it accepts the grafted sequences,” said Gunn. “RsRubisco also doesn’t need any special chaperones for it to fold and assemble in land plants.”
Using the altered Rubisco increased the carboxylation rate by 60 percent, increased carboxylation efficiency by 22 percent and improved RsRubisco’s ability to distinguish between carbon dioxide and oxygen by 7 percent. When transplanted into tobacco, it doubled photosynthesis and plant growth compared to tobacco with unaltered RsRubisco.
“We’re not at the point where we’re outperforming wild-type tobacco, but we’re on the right trajectory,” said Gunn. “We only need fairly modest improvements to Rubisco performance because even a very small increase over a whole growing season can lead to massive changes in plant growth and yield, and the potential applications span many sectors: higher agricultural production; more efficient and affordable biofuel production; carbon sequestration approaches; and artificial energy possibilities.”
The research was supported by the Australian Research Council Centre of Excellence for Translational Photosynthesis, Formas Future Research Leaders and the European Regional Development Fund.
July 26, 2023