Category: Featured

Texas Court to Hear Exploding Battery Case

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The Supreme Court of Texas has agreed to hear a lawsuit by a vaper burnt by an exploding battery to determine if Texas courts have jurisdiction over LG Chem America, a subsidiary of South Korea-based LG Chem, which made the battery, reports Law360.
In 2016, Texas resident Tommy Morgan bought an 18650 lithium-ion battery manufactured by LG Chem. He claims it unexpectedly exploded and caught on fire, leading to him suffering permanent and severe injuries, according to his lawsuit filed in 2019 in Brazoria County District Court.
The companies are facing other lawsuits by Texas residents with similar claims concerning batteries exploding. But intermediate appeals courts have come to different conclusions on whether LG Chem has enough contacts in the state to face claims.
LG Chem America and LG Chem have argued that Texas courts lack jurisdiction because the companies don’t sell individual batteries in Texas nor directly to Texas customers. LG has consistently stated in litigation throughout the country that this battery was never intended to be used in e-cigarettes or vaping devices.
Morgan told the Texas high court that the company deliberately shipped its products to Texas customers who were later injured, therefore Texas courts have jurisdiction.
February 27, 2023
Investors Press KT&G on Ginseng Spinoff

Photo: KT&G
A group of activist funds has filed an injunction at the Deajeon District Court in South Korea demanding that KT&G address their demand to spin off its lucrative ginseng business, appoint certain outside directors and strengthen its shareholder return policy, reports The Korea Times.
Led by the Singaporean activist private equity fund Flashlight Capital, the group has repeatedly demanded that the ginseng business be spun off for to recover corporate value and share prices.
However, during an investor relations event last month, KT&G rebuffed the request. “The spinoff will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” said KT&G Senior Executive Vice President Bang Kyung-man.
Bang expressed concern that KT&G would potentially lose “synergy” in the event of the ginseng unit’s separation.
During the meeting, KT&G also dismissed the funds’ demand to strengthen KT&G’s shareholder return policy. The cigarette and ginseng product manufacturer said the current policy “should hold for now.”
Flashlight Capital founder Lee Sang-hyun believes KT&G’s share price will bounce back to over KRW140,000, a level last seen in 2016, once the firm reorients its investment portfolio to better achieve environmental, social and governance goals.
KT&G’s share price hit a low of KRW87,100 on Feb. 17 but has recovered since.
February 27, 2023
Study: Filter Ban Only Way to Halt Pollution

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Banning cigarette filters is the only way to stop tobacco product pollution, according to a new study published by the Dutch sustainability think tank CE Delft and reported by Dutch News.
Every year, Dutch smokers discard an estimated 200 million to 7.1 billion cigarette butts into the environment.
The current policy of limiting toxic waste by discouraging smoking is not working, according to CE Delft. The organization is also skeptical about the potential of butt deposit schemes. Consumer research has shown that just over one quarter of smokers said they would be willing to hold on to their butts until they had an opportunity to discard them at a collection point.
Dutch Junior Environment Minister Vivianne Heijnen wants to reduce the number of discarded filters, which contain plastics and chemicals, by 70 percent in 2026. The current measures, which include general awareness campaigns and a smoking ban on beaches, have resulted in only a 15 percent decrease, CE Delft found.
In 2022 alone, volunteers collected almost 90,000 cigarette butts during a two-week cleanup of the Dutch beaches, amid 4,400 kilos of waste left by beachgoers.
A ban on cigarette filters will become feasible in 2026 when the European Union will review its rules on single-use plastics, the report noted.
February 27, 2023
Mativ Holdings Reports Results

Photo: SWM
Mativ Holdings reported sales of $660.1 million in the fourth quarter of 2022, up 69 percent over those reported in the comparable 2021 quarter, reflecting 6 percent constant currency organic sales growth and the benefit of the merger between Neenah and Schweitzer-Mauduit International that created the holding. GAAP Income was $2.5 million and GAAP operating profit was $26.9 million, which all included significant expenses related to the Neenah merger integration.
For the full year 2022, sales increased 51 percent to $2.17 billion, reflecting 11 percent constant currency organic sales growth and the benefit of the merger. GAAP loss was $6.6 million and GAAP operating profit was $51.4 million, which all included significant expenses related to the Neenah merger closing and integration.
“2022 was a historic year for Mativ, bringing together two strong companies to leverage our combined technologies and products to drive value for all of our stakeholders,” said Mativ Holdings CEO Julie Schertell in a statement. “We closed out the year with strong year-over-year fourth-quarter growth for the combined company from continued positive price/cost performance, and we enter 2023 with clear momentum on integration and synergy execution.
“Despite macro uncertainties, our conviction in the opportunities ahead for Mativ is unwavering. We have significant controllable actions to enable strong performance as we enter 2023, specifically cost synergies, innovation and programs focused on commercial and operational excellence, as well as broader, longer term decisions and actions to capitalize on our increased scale.”
February 27, 2023
FDA Appeals Rejection of Graphic Warnings

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The U.S. Food and Drug Administration has appealed a court ruling that found the agency’s graphic health warning rule unconstitutional, reports CSP.
On Dec. 7, a federal judge in Texas blocked the FDA from enforcing a rule requiring tobacco companies to print graphic health warnings on their products, saying they violated free speech protections under the First Amendment.
The graphic cigarette health warning rule required manufacturers and retailers who sell cigarettes to rotate 11 health warnings on cigarette packs, which consisted of textual statements and color graphics depicting the negative health consequences of cigarette smoking.
The Texas court said the graphic cigarette health warnings would have compelled manufacturers and retailers to speak by displaying cigarette packages on store shelves and advertising cigarettes when, if given the choice, manufacturers and retailers would choose not to do so. The court also said the warnings were not purely factual and were open to interpretation by consumers and more extensive than necessary.
The FDA appealed that decision on Feb. 1 in the U.S. Court of Appeals for the Fifth Circuit, according to court documents.
The Family Smoking Prevention and Tobacco Control Act of 2009 instructs the FDA to create visual health warnings, but the D.C. Circuit in 2012 blocked the agency’s first attempt, saying that regulators had not convincingly demonstrated that the warnings would actually reduce smoking.
In March 2020, the FDA released the final rule requiring new graphic warnings for cigarettes that feature some of the lesser known but still serious health risks of smoking, such as diabetes, on the top half of the front and back of cigarette packages and at least 20 percent of the area on the top of cigarette advertisements.
Several tobacco companies, including R.J. Reynolds Tobacco Co., filed a First Amendment challenge in April 2020. The rule was set to take effect in November 2023 after the deadline was repeatedly pushed back by court.
According to health groups, the U.S. has fallen behind other countries with its tobacco control policies. Prior to 2009, when Congress passed the Tobacco Control Act, only 18 countries required graphic warnings for tobacco products, they pointed out. Today, more than 120 countries require them.
February 24, 2023
Malaysia PM Urges Regulation E-liquids

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The government of Malaysia wants to regulate and tax nicotine liquids, reports New Straits Times, citing Prime Minister Anwar Ibrahim.
Speaking during the presentation of the government’s 2023 buget, Anwar said that although vape with nicotine is illegal, the product is still being sold widely with an estimated market size of more than MYR2 billion. “Would it not be great if it is monitored and taxed to discourage the usage of vape,” asked Anwar, who is also the finance minister.
While welcoming the proposal to introduce a regulatory and taxation framework for e-cigarettes, industry groups insisted on consultations. “Regulations and tax rates need to be balanced given it will impact local industry players,” said The Malaysian Vape Chamber of Commerce.
In his presentation, Anwar also expressed support for the Generational Endgame (GEG) bill, which would make it illegal for people born after 2007 to buy tobacco products, including e-cigarettes.
The Advanced Centre for Addiction Treatment Advocacy (ACATA) said the government must conduct more studies on the GEG proposal before making any decision.
While ACATA is encouraged by the government is taking steps to regulate vape, the agency said prohibition was likely to backfire. “There is substantial and credible evidence to prove that vape products are less harmful than smoking cigarettes,” the organization stated. It also cited evidence showing that vaping is effective in helping smokers to quit smoking cigarettes without attracting many never-smokers. ACATA cited a 2020 study, which found that only 0.6 percent of Malaysian nonsmokers vape.
The Malaysian Vapers Alliance, meanwhile, expressed disappointment that the government supported the GEG proposal, saying that cigarettes and vapor products should be treated differently, given the vast difference in risk they present.
February 24, 2023
CTP Outlines Responses to Reagan-Udall Report

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The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) on Feb. 24 outlined the steps it plans to take in response to an external evaluation of its operations conducted by evaluators working through the Reagan-Udall Foundation.
The expert panel issued its final report on Dec. 19, 2022, and included 15 recommendations across a number of areas.
To address concerns raised in the report about transparency, the CTP said it would appoint internal transparency liaisons within each CTP Office, who will be responsible for objectively identifying areas for transparency enhancement. The center will also create a new webpage to feature its responses to citizen petitions and will resume posting scientific policy memos and reviewer guides “when appropriate.”
To enhance efficiency of its premarket tobacco product application review process, the CTP said it has started developing a more efficient framework for high-quality reviews. The center said it aims to better communicate on scientific issues and practices; hire additional staff and increase internal communication to improve scientific engagement and deliberation. Among other activities, the CTP said it will resume posting of scientific policy memos and reviewer guides, along with communication through public events, such as workshops and listening sessions.
The CTP also expressed its intention to hold more frequent meeting of the Tobacco Products Scientific Advisory Committee to obtain input on scientific issues.
To improve its operations in the areas of regulations and guidance, the CTP said it will create a new policy unit within the Office of the Center Director that would be responsible for providing overall policy coordination across the CTP.

The FDA has advocated for the authority to collect user fees from e-cigarette companies, which currently do not pay user fees despite the enormous workload to review and make decisions regarding these products.
Robert Califf, Commissioner, FDA
Recognizing opportunities to enhance its compliance and enforcement work, the CTP said it will convene a summit related to enforcement with senior officials from the Department of Health and Human Services, the FDA, and the Department of Justice (DOJ). The CTP will consider whether statutory changes are needed to assist the center in enforcing the law. It will also explore approaches to achieve compliance outside of judicial enforcement actions through DOJ.
The CTP said it plans to create a comprehensive webpage for all enforcement activities for products that are illegally marketed without FDA authorization; routinely reach out to industry stakeholders to keep them apprised of new enforcement priorities and updates; and enhance the FDA’s tobacco product marketing order webpage. Planning has already begun for development of a searchable public database of all tobacco products that have an FDA marketing order, according to the center.
To improve engagement on its public education campaigns, the CTP said it will develop, publish and promote resources that describe the mechanisms it currently uses to solicit and consider public input on its campaigns. It will also explore new ways for soliciting and considering public input on its campaign program.
Consistent with the Reagan-Udall report recommendation, the CTP is also engaging with relevant entities within FDA, the Department of Health and Human Services, and the Office of Personnel Management to identify solutions to facilitate more timely and efficient hiring of professionals that match CTP’s needs.
To achieve its goals, the CPT stressed the importance of having appropriate resources, which it suggested could be raised through additional user fees for regulated products, including e-cigarettes. “Since the agency’s fiscal year 2020 budget request, the FDA has advocated for the authority to collect user fees from e-cigarette companies, which currently do not pay user fees despite the enormous workload to review and make decisions regarding these products,” said FDA Commissioner Robert Califf in a statement.
A detailed description of the CTP’s plan for addressing the Reagan-Udall recommendations is available at the center’s new website.
February 24, 2023
U.S. Court Orders Halt to Elfbar Sales

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A U.S. federal judge on Feb. 23 ordered Shenzhen Weiboli Technology to stop marketing its Elfbar e-cigarettes in the U.S., finding that VPR Brands, which makes and sells Elf brand vapes, is likely to succeed on its claims that the Elfbar vapes infringe its trademark, reports Law360.
According to U.S. District Judge Aileen M. Cannon, VPR has shown there is a likelihood of confusion and the company stands to suffer harm if its Chinese competitor is allowed to keep selling the Elfbar vapes.
In November, VPR asked for an injunction blocking Shenzhen Weiboli from continuing to use the Elfbar mark, arguing the alleged infringement is costing VPR about $100 million because of the effect on future sales.
VPR claims Shenzhen Weiboli is not only infringing VPR’s Elf trademark but also its patent for its e-cigarette device.
While there is no direct evidence that Shenzhen Weiboli deliberately intended to adopt the Elf mark to take advantage of the existing trademark, Judge Cannon wrote that the company was well aware of the Elf mark and that there was potential for confusion, as the U.S. Patent and Trademark Office denied the registration of an Elfbar trademark specifically for those reasons.
VPR welcomed the judge’s decision. “VPR is pleased that the court found Elf is a strong trademark and granted the injunction,” said Joel B. Rothman of Sriplaw, which represented VPR in the case. “The injunction will allow VPR to move quickly against infringers and counterfeiters in the marketplace.”
An attorney for Shenzhen Weiboli said the company intends to appeal the order.
February 24, 2023
Sales Down at Turning Point

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Turning Point Brands reported consolidated net sales of $103.4 billion the fourth quarter of 2022, down 1.8 percent from the comparable 2021 quarter. Gross profit decreased 1.5 percent to $49.6 million. Net sales for the Zig-Zag and Stoker products increased 0.9 percent and 2.6 percent, respectively, while sales of new-generation products declined by 11.1 percent.
For the full year, consolidated net sales decreased by 6.8 percent to $415 million. Gross profit was down 5.6 percent to $205 million. Net sales for Zig-Zag and Stoker’s products increased 7.9 percent and 5.3 percent, respectively, while sales of new generation declined by 35.2 percent
“The fourth quarter operating results finished in-line with our expectations with solid execution across our segments,” said TPB President and CEO Graham Purdy in a statement.
“The Zig-Zag segment grew during the quarter despite the impact of a previously disclosed pull-forward in the prior quarter, benefitting from continued market share gains and the contribution from a full quarter of CLIPPER lighters. We are pleased with the ongoing roll-out and strong channel receptivity to the world’s No. 1 reusable lighter. Stoker’s MST experienced strong share gains as consumer trade-downs to value accelerated, consistent with the current inflationary and economic backdrop.
“The challenging regulatory environment continues to negatively affect the NewGen segment which was down materially vs. 2021, but with declines moderating in the back half of the year. In addition to returning capital to our shareholders through share repurchases, we opportunistically purchased $10 million notional of our convertible notes during the fourth quarter while maintaining a strong cash balance.
”Over the last few months since taking on the CEO role, my primary objective has been to re-direct our focus and energy towards driving organic long-term growth. This starts with allocating resources to products, initiatives, and channels best positioned towards this goal. Our organization is now better aligned towards capitalizing on the opportunities in front of us and we look forward to delivering against our long-term plans going forward.”
February 24, 2023
Hong Kong Hikes Cigarette Prices

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The average price of a pack of cigarettes in Hong Kong increased to HKD73.75 ($9.40) on Feb. 22, following a 31 percent tax hike, reports the South China Morning Post.
With the increase, the city government aims to boost its coffers and cut the number of smokers by 100,000 in the next three years.
“Increasing tobacco duty is recognized internationally as the most effective means to reduce tobacco use,” Financial Secretary Paul Chan Mo-po said in his budget speech. “A rise in cigarette price will increase the incentive of smokers to reduce or quit smoking.”
The government estimates the price increase would bring in an extra HKD1 billion a year in revenue.
The prevalence of smoking in Hong Kong has dropped from 23.3 percent of the population in 1982 to 9.5 percent at present. With the new measure, authorities hope to bring the figure down to 7.8 percent by 2025, or reduce the number of smokers from about 580,000 to 480,000.
Tobacco taxes now account for 68 percent of the pack price. This is higher than the 62 percent prior to the tax hike but still lower than the 75 percent rate recommended by the World Health Organization.
By comparison, tax makes up 67.1 percent of the price of a pack of cigarettes in Singapore, 73.9 percent in Australia and 82 percent in New Zealand, according to figures from 2020.
A government representative said that an increase in tobacco tax had led to more inquiries to the Department of Health’s smoking cessation hotline in the past. After the tobacco tax was raised by 50 percent in 2009, calls to the hotline rose by 257 percent.
February 23, 2023