Category: Featured

‘Mimic Menthols’ Soar Following Flavor Ban
R.J. Reynolds Tobacco Co.’s (RJR) “California compliant” cigarettes, which contain an artificial, flavorless cooling chemical, have proven a big hit among smokers in the wake of the state’s ban on menthol cigarettes and other flavored tobacco products, according to an article in Politico.
By March, sales of the new cigarettes were on track to replace nearly half of the menthol sales compared to last year, according to an expert cited by Politico who tracks cigarette sales trends.
RJR sold 2.8 million packs of Camel-branded menthol cigarettes and 2 million packs of Newport-branded menthol cigarettes in California in March 2022, according to Alex Liber, an assistant professor in the department of oncology at Georgetown University’s School of Medicine who studies tobacco sale trends.
This year, the company sold 1.4 million “California compliant” Camel branded cigarette packs and about 800,000 “California compliant” packs of its Newport brand.
According to RJR, the new products don’t violate California law because they don’t have a distinguishable taste or aroma other than tobacco. California law defines a flavored tobacco product as any product that has a “distinguishable taste or aroma, or both, other than the taste or aroma of tobacco, imparted by a tobacco product or any byproduct produced by the tobacco product.”
Some of RJR’s new products, like the Camel Crisp, contain a lab-made chemical called ethyl menthane carboxamide, or WS3. That chemical has less of the minty odor than menthol, but it provides the same cooling, soothing sensation as conventional menthol cigarettes.
Other new “California-compliant” cigarette products don’t list WS3 as an ingredient. The company considers many of its ingredients to be propriety and is required to list them only under a general description of “natural and artificial flavors.”
The success of RJR’s “mimic menthols” comes as the U.S. Food and Drug Administration prepares to ban menthol cigarettes nationwide this year.
Menthol cigarettes make up nearly 40 percent of U.S. cigarette sales and are particularly popular in minority communities, with an estimated 90 percent of Black smokers using menthol products.
The California Department of Public Health said it is aware of the new products, but doesn’t have the power to enforce the ban.

Photo: New Africa
April 20, 2023
Court Rejects Challenge to PMI Heating Patents

Image: nimalGraphic
The High Court of Justice in London ruled April 17 that Philip Morris Products’ (PMP) patents protecting a tobacco-heating technology are valid, reports Law360. The ruling represents a defeat for BAT and its Nicoventures subsidiary, which had sought to revoke PMP’s patents.
While considering the patent valid, the court also said that BAT’s Glo heated-tobacco products did not infringe the patents, heading off an infringement counterclaim filed by PMP.
The April 17 ruling is the latest chapter in an ongoing intellectual property dispute between the tobacco giants.
PMP initially sued BAT and Nicoventures, claiming they infringed several of its tobacco-heating technology patents. This prompted BAT and Nicoventures to file counterclaims seeking to invalidate the patents.
The proceedings have now branched off into several different actions before the High Court.
In the current case, Nicoventures argued, among other things, that the PMP technology was obvious in light of a 1998 patent application referred to as “Pienemann,” which covers a “system for providing an inhalable aerosol.”
While Pienemann, like PMP’s technology, has multiple heating elements, Judge Michael Tappin said that a skilled team would consider the multiple heaters to “mimic” one heater. Pienemann also did not specify the inclusion of a thin-film heater as seen in the PMP patent, instead describing a “graphite loaded sheath,” according to the judgment.
Regarding the infringement claim, Tappin said that BAT’s Glo products did not infringe the patents because they did not include a method of allowing different parts of the heating system to be heated at different times.
April 19, 2023
BAT Chair Lauds Progress in 2022

Luc Jobin (Photo: BAT)
BAT made great progress against its strategy in 2022 despite a challenging external environment, according to chairman Luc Jobin.
Speaking at the company’s annual general meeting on April 19, Jobin noted that BAT’s new category business delivered strong volume, revenue and market share growth. The group, he said, delivered a 150 basis points improvement in adjusted operating margin at current rates and delivered another year of 100 percent operating cash conversion. “We also returned £6.9 billion ($8.57 billion) to shareholders through dividends and share buybacks,” said Jobin in a statement.
Around 15 percent of BAT’s revenue is now generated from noncombustible products, a twofold increase since 2018, according to Jobin. “At the end of 2022, we had 22.5 million consumers of our noncombustible products,” he said. “The upward trajectory, and the momentum we have, provides a clear pathway to reaching our goal of 50 million consumers by 2030.”
While expressing satisfaction with the progress BAT had made in transitioning smokers toward less harmful nicotine products, Jobin noted that BAT could not reduce the health impact of its business by itself.
“Policymakers, regulators and public health advocates must help build the science base and create the policy frameworks necessary for adult smokers to switch to less risky alternatives,” he said.
“As a board, it is our responsibility to make sure that BAT’s own transformation continues apace.”
April 19, 2023
Korea Backtracks on Hnb Tax Increase

Photo: KT&G
The government of South Korea has ditched a plan to raise the tax on heated-tobacco products just two days after the finance minister proposed the measure, reports The Korea Herald.
South Korea currently taxes regular cigarettes at higher levels than noncombustible tobacco products because it considers the former to be more harmful to health.
Combustible cigarettes attract a tax of KRW3,323 ($2.52) per pack, which includes a KRW1,007 tobacco excise tax, a KRW443 education tax, a KRW594 consumption tax, a KRW409 value-added tax, a KRW841 health promotion fee, a KRW24.4 waste charge and KRW5 to support tobacco farmers.
Noncombusted cigarettes, by contrast, are subject to a tax of KRW3,004, which represents 90.4 percent of the taxes imposed on regular tobacco products.
However, on April 17, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said noncombusted cigarettes “should be treated similarly to regular cigarettes.”
His comments immediately provoked a public backlash, prompting the government to backtrack. The government “is not currently considering raising the tobacco tax at the moment,” the finance ministry said in a statement on April 19.
South Korea’s revenue from tobacco products has shrunk in recent years due to declining sales of combustible cigarettes. In 2022, the government collected KRW11.8 trillion in taxes on all tobacco products compared with KRW12 trillion in 2020. While sales of tobacco-heating products increased during the same periods, their comparably low volumes and lower tax rates meant that they did not offset the revenue lost due to declining cigarette sales.
April 19, 2023
Philip Morris Korea Appoints New MD

Photo: Celt Studio
Philip Morris Korea (PMK) has appointed Hannah Yun as its new managing director. Yun will take the helm at the Seoul office on May 1, reports The Korea Times.
“With its cutting-edge technology and dynamic market environment, Korea is one of the most important countries leading Philip Morris’ transformation to a ‘smoke-free future,’” said Yun, who is currently the managing director of Philip Morris Australia. “I will further strengthen the competitiveness of Philip Morris Korea by implementing consumer-centric strategies and services based on my international experience.”
Yun joined PMK in 1997, where she took charge of corporate affairs, business strategy and budget management. From 2003 to 2007, she worked for Philip Morris International in Malaysia, Switzerland and Hong Kong, supporting the development of business growth strategies and operational plans for each market.
She led PMI’s financial analysis and support division in Switzerland from 2008 to 2013, where she was responsible for managing the communication of consolidated PMI financial information.
In 2019, Yun was entrusted with overseeing Philip Morris Australia’s financial and commercial strategies. Two years later, she was appointed as managing director of that affiliate, leading the business in Australia, New Zealand and the Pacific Islands.
PMK’s current managing director, Paik Young-jay, will move on to new opportunities, the firm said. Paik assumed the position amid the Covid-19 pandemic and is credited with establishing a corporate culture of agility and collaboration.
April 19, 2023
Minnesota Settles Juul Lawsuit

Photo: mehaniq41
Minnesota has settled its legal case against Juul Labs and Altria Group for deceptively marketing e-cigarettes. The terms of the deal will be kept confidential until formal papers are publicly filed with the court.
“After three weeks of trial highlighting and bringing into the public record the actions that Juul and Altria took that contributed to the youth vaping epidemic, we reached a settlement in the best interest of Minnesotans,” said Attorney General Keith Ellison in a statement.
“We followed in the footsteps of former Attorney General Skip Humphrey, who led the historic 1998 tobacco trial in Minnesota. Once again, Minnesota has demonstrated leadership in taking these cases head on, including going to trial to hold tobacco companies accountable, protect our community’s health and protect our kids. One of my goals in bringing this case was to send a message: We will not tolerate youth marketing of nicotine products in Minnesota,” said Ellison.
Minnesota’s deal comes less than a week after Juul Labs agreed to pay $462 million to settle similar claims brought by New York, California, Colorado, Illinois, Massachusetts, New Mexico and the District of Columbia.
Of the more than a dozen states and hundreds of local governments that have sued Juul, Minnesota was the first to go to trial. Filed in 2019, the state’s lawsuit alleges that Juul developed sleek devices and flavors that were appealing to youth and that Juul’s marketing deceptively attracted and addicted young people. In 2020, Minnesota amended its complaint to include Altria as a defendant: In 2018, Altria spent $12.8 billion to acquire a 35 percent share in Juul.
In a statement, Juul Labs stressed the importance of resolving legal challenges from the company’s past. “We are pleased to have reached a settlement with the state and will work to finalize this agreement over the coming weeks,” the company wrote.
Juul Labs has now settled with 48 states and territories, providing over $1 billion to participating states to further combat underage vaping and develop cessation programs. In addition, the company has resolved private litigation that covers more than 5,000 cases brought by approximately 10,000 plaintiffs.
“As we reach total resolution of the company’s past, we are focused on our path forward to maximize the value and impact of our product technology and scientific foundation,” wrote Juul. “Our technology already has transitioned over 2 million adult smokers from combustible cigarettes. And our priorities remain to secure authorization of our PMTAs [premarket tobacco product applications] based on the science and lead the category with innovation to accelerate our mission and advance tobacco harm reduction for over 31 million adult smokers in the U.S. and over 1 billion adult smokers worldwide.”
April 18, 2023
EU Commission Chided Over Tobacco Contacts

Photo: Robert Kneschke and Lulla
The European Commission’s failure to be fully transparent about its meetings with tobacco industry representatives constitutes maladministration, according to the European Ombudsman, reports Reuters. Such transparency is required by the World Health Organization Framework Convention on Tobacco Control.
In a letter to the commission, ombudswoman Emily O’Reilly detailed preliminary conclusions from her office’s inquiry into EU executive contacts with the tobacco industry in 2020 and 2021. The investigation follows an earlier study concluded in 2016, when the ombudsman urged the commission to adopt the transparency policy of the EU health and food safety directorate-general. Apart from improvements at the tax and customs unit, this had not happened, the letter noted.
The ombudsman found a deficiency in record-keeping and a failure to keep and make available minutes on all commission meetings with tobacco interest representatives.
The ombudsman also questioned whether commission officials were limiting their interactions with the tobacco industry only to those that were “strictly necessary.”
EU institution contacts with lobbyists have come under scrutiny after a cash-for-influence scandal hit the European Parliament, two of whose members have been charged with corruption and money laundering in Belgium.
The ombudsman’s recommendations are not legally binding.
April 18, 2023
Glo Hyper Under Scrutiny

Photo: BAT
Italian regulators are investigating BAT and Amazon for potentially misleading advertising for the Glo Hyper X2 tobacco-heating product, reports Reuters.
According to the Italian Competition Authority, the companies have made it insufficiently clear to consumers that Glo Hyper X2 is a nicotine-based product and that it is intended for an adult audience. The agency also said it had seen the product being marketed as “nicotine-free.”
“The omission and/or deceptiveness of this essential information” in advertising could influence consumers’ decisions and expose them, “minors in particular,” to the risk of unknowingly damaging their health, the Competition Authority said.
A spokesperson for BAT said the company was committed to responsible marketing in addition to the requirements set by local applicable laws.
“We are available to cooperate with the Italian Competition Authority to ensure a swift conclusion of these proceedings,” the spokesperson added.
April 18, 2023
22nd Century Adds Private Label Brand

John Miller
(Photo: Tobacco Reporter archive)
22nd Century Group has started producing a new private label premium cigarette brand, Pinnacle, under a new manufacturing agreement. Pinnacle is for sale at a leading U.S. gas station convenience store chain comprising almost 1,700 stores in 27 states.
“We are excited to launch a new store-brand product with one of the largest convenience store chains in the country and one of the highest volume cigarette points of sale per outlet square foot,” said John Miller, president of tobacco products at 22nd Century Group, in a statement.
“We believe that working with premier retailers on conventional products like Pinnacle offers value to current adult smokers as we aggressively expand our flagship product, FDA [Food and Drug Administration]-authorized VLN reduced-nicotine cigarettes designed specifically to help adult smokers to smoke less,” said Miller.
22nd Century Group provided the trademarked brand name and predicate tobacco blend for the new Pinnacle product, which is produced at its manufacturing operations in North Carolina. Pinnacle is approved in 22 states to date where the retail partner has stores and is available in approximately half of eligible stores to date as availability continues to expand.
“Pinnacle represents a key opportunity to further scale our revenue and margins, advancing 22nd Century toward its goal of cash positive operations,” said 22nd Century Group CEO James A. Mish.
“The rollout of this new brand into such a large number of stores across more than two dozen states also demonstrates how we expect to benefit from expanded utilization of our new national scale distribution relationships for our VLN products, supporting placement into a broader range of well-known retail points of sale for both our conventional cigarette products and our new VLN 95 percent reduced-nicotine content products designed specifically for adult smokers who want to smoke less,” Mish said.
April 18, 2023
KT&G Assists Tobacco Growers

Photo: KT&G
KT&G volunteers helped tobacco growers in Nong’am-myeon plant about 20,000 seedlings on April 14. Since 2017, KT&G workers have been assisting tobacco farmers, who face difficulties recruiting labor in South Korea.
“KT&G engages in employee volunteer activities every year to support the activities of leaf tobacco farms, which have a problem of labor shortages,” said Kim Jeong-ho, director of KT&G’s raw materials department, in a statement. “We will continue to make the best efforts for mutual growth with farmers.”
Since 2013, KT&G has also provided KRW3.34 billion ($2.53 million) in financial support to tobacco growers. The money has paid for scholarships and medical checkups, among other things.
April 18, 2023