Category: Featured

  • Judge Lowers Royalty Payments in Alto Case

    Judge Lowers Royalty Payments in Alto Case

    Photo: RJRVC

    A U.S. federal judge in North Carolina lowered the rate of ongoing royalties R.J. Reynolds Vapor Co. will have to pay to Altria Client Services in an intellectual property dispute involving RJR’s Vuse Alto e-cigarette, reports Law360.

    In September 2022, the U.S. District Court for the Middle District of North Carolina awarded Altria Client Services more than $95 million after finding that Reynolds Vapor Co.’s Vuse Alto e-vapor product infringed three Altria patents.

    In his Jan. 27 opinion, U.S. District Judge N. Carlton Tilley Jr. ruled that continuing royalties on Vuse Alto are justified but not at double the rate decided by the jury.

    The opinion lowers Altria’s requested rate for ongoing royalties from 10.5 percent to 5.25 percent, which Reynolds will have to pay quarterly until the last of Altria’s patents expire on April 22, 2035.

    “Altria has not shown that the pod patents’ contribution to the Alto’s performance since May 2019 justifies increasing the jury’s royalty rate of 5.25 percent,” Judge Tilley wrote.

    Earlier this month, Judge Tilley denied Reynolds a new trial in the Vuse Alto dispute.

    Reynolds Vapor Co. has requested a new trial, stating that “Altria’s improper injection of inflammatory evidence regarding patent infringement allegations against Reynolds in other cases denied Reynolds a fair trial.”

  • Belgium Health Minister Pushes For Pouch Ban

    Belgium Health Minister Pushes For Pouch Ban

    Photo: Liudmila

    The Belgian health minister, Frank Vandenbroucke, has called for a ban on nicotine pouches, citing concerns about youth exposure to tobacco products.

    “Our goal is to prevent our children and young people from smoking,” Vandenbroucke said. “If you are fully committed to a smoke-free generation, you must ensure that young people come into less contact with smoking or anything related to it.”

    Nicotine pouches are popular with youth, according to The Brussels Times, because they are easy to use, like snus, which is banned in the EU except for Sweden, but without the tobacco, and because they are cheaper than other tobacco products. Dutch research has shown that nicotine pouches are addictive and cause harm to the brain.

    “These nicotine pouches, like electronic cigarettes and vaping, can be a steppingstone to smoking at an early age,” Vandenbroucke said. “That is why we are resolutely opting for a ban on them. We are doing this because protecting the health of children and young people is an absolute priority.”

  • Group Predicts Growth for Holograms in 2023

    Group Predicts Growth for Holograms in 2023

    Photo: Taco Tuinstra

    Commercial holograms will maintain robust growth in 2023 despite the global challenges, according to the International Hologram Manufacturers Association (IHMA), which marks its 30th anniversary this year.

    Authentication and track-and-trace systems featuring holograms will continue to help to underpin international efforts by government and law enforcement agencies to bolster overt and covert protection strategies in the next 12 months, said IHMA chair Paul Dunn.

    “Counterfeiting is and will remain a massive global threat, continually placing governments, brands and the public at risk—and will continue to be tackled effectively to minimize the impact on society. Despite the economic, social and global supply chain challenges, we expect to see [growth] in 2023 with countries enhancing and bringing forward their anti-counterfeiting plans, which feature holograms,” he said.

    “These holograms will become even more integrated with other technologies to create intuitive brand engagement programs while, simultaneously, authentication through scanning a QR code on the label acts as a secondary product verification method. This provides a simple unified platform for brands to interact and engage with their customers.”

    Dunn also sees the hologram on labeling continuing to become part of a wider function to track a product throughout its lifecycle and post-life cycle in 2023. This combination of authentication and tracking, he says, will give brand owners complete visibility and control from sourcing raw materials through to recycling.

    This year will also see continued growth in high security print applications as, increasingly, holography origination capabilities are brought in-house. This cuts the innovation cycle and enables printers to get their technologies specified for new banknote work.

    Sustainability will also be one of the key themes of the next 12 months with manufacturers developing strategies to cut their carbon footprints as part of their corporate responsibility strategies. “The IHMA will be leading efforts through its Sustainability Working Group to encourage best practice by sharing information and showcasing companywide initiatives,” Dunn said.

  • KT&G: Half of Sales from Abroad by 2027

    KT&G: Half of Sales from Abroad by 2027

    Photo: KT&G

    KT&G Corp. aims to earn over half of its sales from overseas businesses in 2027, the company told participants in an investor event.

    The South Korean cigarette manufacturer targets sales of KRW10 trillion ($8.1 billion) by that year compared with an estimated annual sales of KRW5.9 trillion for 2022. Last year, KT&G likely earned about one-third of its sales from overseas operations. 

    In addition to focusing on its combustible cigarette business, the company will reinforce its next-generation product (NGP) businesses, which include heat-not-burn (HnB) products and health functional food products, KT&G Senior Executive Vice President Bang Kyung-man was quoted a saying by the Yonhap News Agency.

    “We will invest KRW4 trillion to build new overseas production facilities and expand existing ones in the next five years to meet growing demand for NGPs, like HnB products,” he said.

    The company is also considering building a new factory, either in Kazakhstan or eastern Europe, Bang said. To raise the necessary capital, the company plans to sell unused property and borrow money from banks, he said. 

    KT&G has exported its HnB products to more than 30 countries since 2020 when it signed an agreement with Philip Morris International for the commercialization of KT&G’s smoke-free products outside of South Korea.

    KT&G currently earns 90 percent of its revenues from cigarette sales and 10 percent from HnB products. The company has four tobacco manufacturing plants—one each in South Korea, Russia, Turkey and Indonesia—with a combined capacity of 13.6 billion cigarettes a year. 

  • Three Heating Products Authorized in the U.S.

    Three Heating Products Authorized in the U.S.

    Photo: Destina

    The U.S. Food and Drug Administration has authorized the marketing of three new tobacco-flavored heated-tobacco products included in Philip Morris Products’ supplemental premarket tobacco product applications (PMTAs). The products receiving marketing granted orders are Marlboro Sienna HeatSticks, Marlboro Bronze HeatSticks and Marlboro Amber HeatSticks, each of which is used with the IQOS tobacco-heating device.

    Based on the FDA’s review of the supplemental PMTAs, the agency determined that the marketing of these products should be authorized because, among other things, the net population-level benefits to adult smokers outweigh the risks to youth.

    In 2019, the FDA authorized the marketing of IQOS and several other Marlboro HeatSticks products through the PMTA pathway. Philip Morris pursued marketing authorization for these new Marlboro HeatSticks by submitting supplemental PMTAs for modified versions and line extensions of the tobacco-flavored product for which the company had previously received a marketing granted order. A supplemental PMTA can be submitted in situations where an applicant is seeking authorization for a new tobacco product that is a modified version of a tobacco product for which they have already received a marketing granted order. 

    Following the FDA’s rigorous scientific evaluation of the applications, the agency determined that Marlboro Sienna HeatSticks, Marlboro Bronze HeatSticks and Marlboro Amber HeatSticks are comparable to the previously authorized tobacco-flavored product. Like the previously authorized products, the FDA has placed stringent marketing restrictions on the new products in an effort to prevent youth access and exposure.

  • Indonesia Mulls Ban on E-Cigarettes

    Indonesia Mulls Ban on E-Cigarettes

    Photo: ink drop

    Indonesia may ban cigarettes if they are found to be harmful to public health, reports Antara News.

    Speaking at the University of Indonesia in Jakarta on Jan. 26, Vice President Ma’ruf Amin stated that thorough assessment of the effects of e-cigarettes on public health would be conducted before the government takes its decision. 

    If e-cigarettes are found to be safe for public health, the government will consider how to tax the products, he noted. 

    Earlier, the government proposed to strengthen health warnings on tobacco packaging, restrict advertising and prohibit the sale of single cigarettes, among other measures.

  • UKVIA Publishes Annual Report

    UKVIA Publishes Annual Report

    Image: Tobacco Reporter archive

    The U.K. Vaping Industry Association (UKVIA) has published its 2022 annual report.

    Among the highlights of 2022 was the launch of the UKVIA-commissioned Economic Impact Report from the Centre for Economics and Business Research, which—for the first time—detailed the national and regional contribution that the U.K. vape industry made to the economy, according to the UKVIA.

    “Our industry is under scrutiny like never before, and we must tackle the big issues, such as underage vaping, the environmental impact of disposable devices and the massive influx of fake and illegal imports,” said John Dunne, director general of the UKVIA. “Any one of these issues has the potential to see regulators clamp down hard on vaping, and the fact that they are all happening at once demonstrates that it is crucial that we get our house in order without delay.”

  • Juul in Talks With Tobacco Companies

    Juul in Talks With Tobacco Companies

    Photo: vchalup

    Juul Labs is in talks with leading cigarette manufacturers about a partnership, alliance or sale of its business, reports The Wall Street Journal.

    Juul executives have had separate discussions with Philip Morris International, Japan Tobacco and Altria Group, according to the newspaper.

    The talks are at an early stage and might not result in a sale of partnership, The Wall Street Journal’s sources pointed out. Altria, which owns one-third of Juul, valued the vaping company at $1 billion in October.

    Once the undisputed leader of the U.S. vape market, Juul reached the brink of bankruptcy last year after the Food and Drug Administration denied its marketing applications and ordered the company to remove its products from the market.

    The order has been stayed pending appeal but the still-unresolved dispute made it difficult for Juul to raise money to cover its legal liabilities. In December, Juul agreed to pay $1.7 billion in a broad legal settlement covering more than 5,000 lawsuits accusing the company of marketing its products to teens and children. Juul denies targeting underage consumers.

    To pay for the deal, Juul secured an equity investment from a group including two Juul directors. The settlement and financing put Juul on firmer ground and allowed the company to begin talks with potential strategic partners.

    On Sept. 30, Altria announced it was ending its noncompete agreement with Juul. The decision gave Juul the freedom to sell itself—or a significant stake—to one of Altria’s competitors.

    Altria can’t buy Juul outright because of antitrust concerns: The Federal Trade Commission is seeking to unwind Altria’s 2018 investment in Juul. Altria and Japan Tobacco in October formed a partnership to develop and sell heated-tobacco devices in the U.S. and other new tobacco products abroad.

    If the FDA ultimately halts Juul’s sales, Juul could seek U.S. authorization for a newer version of its vaporizer that has been released in Canada and the U.K. Juul also has other products under development.

  • Taiwan Set to Ban Nicotine Vapes

    Taiwan Set to Ban Nicotine Vapes

    Image: Tobacco Reporter archive

    Taiwan is set to become the next Asian country to ban nicotine vaping products, reports Filter.

    The Tobacco Hazards Prevention Act cleared the legislative floor earlier this month and now awaits presidential approval, which is expected because President Tsai Ing-wen is a member of the party that proposed the act.

    Taiwan seems to be following behind Japan, which banned nicotine vapes but allows heated-tobacco products. India and Thailand have also banned vapes.

    Taiwan’s ban will include use of e-cigarettes, and violators will face penalties of up to $330.

    “The issue did not have enough public discussion, and the approach to harm reduction should be more thoroughly debated,” said Simon Lee, the Taiwan policy fellow at the Consumer Choice Center, a global consumer advocacy group in Washington. “For instance, we have seen misinformation, especially with regard to nicotine, circulating among anti-tobacco activists. It is beyond reasonable doubt that Taiwan’s consumers deserve a much better outcome.”

  • Reynolds to Appeal Menthol MDOs

    Reynolds to Appeal Menthol MDOs

    Photo: BAT

    BAT will appeal the U.S. Food and Drug Administration’s marketing denial orders for its Vuse Vibe Tank Menthol 3.0 percent and Vuse Ciro Cartridge Menthol 1.5 percent, the company announced in a statement.

    On Jan. 24, the FDA denied marketing applications for two menthol refills used in Vuse Vibe and Vuse Ciro vaporizers, which are sold in the U.S. by BAT subsidiary R.J. Reynolds. According to the agency, Reynolds’ applications presented insufficient evidence to show that the potential benefit to adult smokers outweighs the risks of youth initiation and use.

    “Reynolds intends to seek a stay of enforcement immediately and will pursue other appropriate avenues to allow Vuse to continue offering its innovative products to adult nicotine consumers age 21-plus without interruption,” the company said.

    “We believe that menthol vapor products are critical to helping adult smokers migrate away from combustible cigarettes. FDA’s decision, if allowed to go into effect, will harm, not benefit, public health.

    “We remain confident in the quality of all of Reynolds’ applications, and we believe that there is ample evidence for FDA to determine that the marketing of these products is appropriate for the protection of public health.”

    Anti-tobacco campaigners countered that menthol e-cigarettes appeal to underage consumers. “Existing evidence demonstrates that nontobacco-flavored e-cigarettes, including menthol flavored e-cigarettes, have a known and substantial risk with regard to youth appeal, uptake and use; in contrast, data indicate tobacco-flavored e-cigarettes do not have the same appeal to youth and therefore do not pose the same degree of risk,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, in a statement.

    Morgan Stanley said it expected the rejected products to remain on the U.S. market for the duration of BAT’s appeal, with minimal impact on the company’s operations. “Longer term, should today’s denial order reflect a broader effort by the FDA to ban menthol e-cigarettes, BAT’s U.S. cigarette business could benefit given its menthol mix as it might discourage some smokers from quitting or switching to reduced-risk products,” the bank wrote in a note to investors. Reynolds’ Newport brand represents about 40 percent of BAT’s U.S. cigarette dollar sales, according to Morgan Stanley.

    The Jan. 24  rejection of the Vuse refills underscores the FDA’s ongoing reluctance to approve menthol e-cigarette flavors. To date, the agency has approved only tobacco-flavored e-cigarettes.

    However, the FDA has granted both a premarket tobacco product application and modified-risk tobacco product designation to IQOS’ menthol variant, which may eventually leave Philip Morris International’s heat-not-burn product as one of the few menthol reduced-risk alternatives on the market.

    The FDA is targeting publishing a final rule to ban menthol cigarettes in August 2023, but considering expected industry litigation, final implementation could be five to six years away, according to Morgan Stanley.