Category: Featured

  • BAT South Africa to Restructure Operations

    BAT South Africa to Restructure Operations

    Photo: Tobacco Reporter archive

    BAT is looking to restructure its South African business following a drop in legal cigarette sales. The process may affect 200 jobs.

    The cigarette maker attributed its predicament in part to the five-month cigarette sales ban that South Africa implemented in 2020. Intended to help prevent the spread of Covid-19, the measure was later declared unconstitutional by country’s Supreme Court.

    By then, however, the damage had been done, according to BAT.

    “The 2020 tobacco sales ban resulted in an explosion of growth for the illicit market. This has continued even after the ban on tobacco sales was lifted,” the company said in a statement.

    In 2019, BAT South Africa permanently employed around 1,800 staff across its South African operations. Since 2020, it has been forced to retrench more than 30 percent of its workforce, the company said.

    Over the same period, the company’s cigarette sales dropped by around 40 percent as the illicit market accelerated, it said.

    Based on independent studies, BAT South Africa estimates that the illicit cigarette trade accounts for up to 70 percent of South Africa’s total cigarette market. This illegal trade has severely impacted the sustainability of the legal tobacco industry and is a source of funds for criminal organizations in South Africa,” BAT wrote.

    The company urged for stronger enforcement and new policies to combat the illicit trade.

    “While BAT South Africa applauds recent efforts by the South African Revenue Service (SARS) and law enforcement agencies to clamp down on the illicit cigarette market, it also calls for even stronger action, given that the current approach has not stopped the growth of illicit cigarettes.

    “SARS has issued important new policies, but now it is time to audit manufacturer policy compliance. To support law enforcement agencies and increase their effectiveness, as well as help consumers differentiate between illicit and legal market offers, a minimum retail price policy is required.

    “The illicit trade robs South Africa of billions of rands in much-needed tax revenue, and the impact of this is now clearly being seen on legitimate businesses, their operations, and, unfortunately, the livelihoods of those in their value chains. Legitimate businesses cannot operate competitively if the country’s laws are not enforced.”

    BAT did not give details of how it would restructure its business or which jobs might be cut.

  • Call for Innovation to Facilitate Recycling

    Call for Innovation to Facilitate Recycling

    Image: alexlmx

    The U.K. Vaping Industry Association (UKVIA) is calling upon its members and the wider industry to innovate products that make them easier to recycle for the waste management sector.

    The move comes as pressure mounts to ban single-use disposable devices.

    On Jan. 3, upmarket supermarket chain Waitrose announced a complete withdrawal from the single use vapes market. “Selling single use vapes is not something we could justify given the impact on both the environment and the health of young people,” said Commercial Director Charlotte Di Cello.

    While environmental campaigners applauded the move, vaping advocates said Waitrose could do more to protect both public health and the planet by instead refusing to sell combustible cigarettes, which are the world’s most littered item.

    Just five days later, Scottish Ph.D. student Laura Young made national headlines in the U.K. when a video she posted on Twitter of her collecting 55 discarded disposable vapes while out walking her dog went viral.

    Young, who goes by the Twitter handle @LessWasteLaura, gained public support when she posted two more follow-up posts and called for single-use vapes to be banned.

    Following the publicity surrounding her anti-disposable campaign, the Scottish government said it was “considering the emerging issues around single-use disposable vapes’ and urged consumers to dispose of them responsibly.”

    “We are working to find a waste management solution that minimizes the impact of vapes on the environment so they are seen for what they do best—helping adult smokers kick their habits.”

    John Dunne, director-general, UKVIA

    According to the UKVIA, as campaigns like this gain traction, it may be only a matter of time before regulators decide to look closer at the disposable sector of the vape market.

    UKVIA Director-General John Dunne said that while the vaping industry recognizes its responsibilities to the environment, the recycling of vapes requires collaboration between adult vapers, retailers, manufacturers, the regulators and companies in the waste management sector, which are involved in the current producer compliance schemes under the Waste Electrical and Electronic Equipment (WEEE) regulations.

    “Up to now, there has been genuine confusion amongst the vaping sector about their responsibilities under the WEEE directive,” said Dunne in a statement. “Earlier this year, the Institute of Environmental Management and Assessment alluded to uncertainty around whether regulations covered the type of batteries found in vapes and also questioned the recycling infrastructure in place to support the sector to be more sustainable.

    “This is why we are working hard as an industry to find a waste management solution that minimizes the impact of vapes on the environment, particularly when it comes to single-use disposables, so they are seen for what they do best—helping adult smokers kick their habits and save the lives of millions as well as millions of pounds for the health service.”

  • Taiwan Lawmakers Approve Vape Ban

    Taiwan Lawmakers Approve Vape Ban

    Photo: sharafmaksumov

    Lawmakers in Taiwan approved amendments to the Tobacco Hazards Prevention Act that would ban e-cigarettes, raise the legal buying age for combustibles and require heated-tobacco products to comply with strict regulations, reports Taiwan News.

    People caught using unauthorized vapor products or tobacco-heating devices risk fines of between TWD2,000 ($66) and TWD10,000.

    Manufacturers and sellers of such products would be required to submit health risk assessment reports backed by product samples. Unauthorized tobacco manufacturers, importers and advertisers are subject to fines ranging from TWD10 million to TWD50 million, according to the amendments.

    Other changes involve raising the legal smoking age from 18 to 20, increasing the proportion of tobacco package warning messages from 35 percent to 50 percent and designating childcare centers and schools as no-smoking areas.

    The amendments to the Tobacco Hazards Prevention Act were proposed in part due to concern about the growing popularity of vaping among youth.  

    The share of e-cigarette users in junior high schools grew from 1.9 percent in 2018 to 3.9 percent in 2021, according to a survey by the Health Promotion Administration, while the share in senior high and vocational schools rose from 3.4 percent to 8.8 percent during the same period. Some critics blame flavors for the increase.

    The clauses on e-cigarettes and heated-tobacco products are to take effect one month after the amendments’ contents are announced to the public. The clauses on vapes with additional flavors as well as regulations on packaging are to take effect one year after the amendments are announced.

    The last time the Tobacco Hazards Prevention Act was amended was in 2009.

  • Brazil: Highest Tobacco Earnings Since 2014

    Brazil: Highest Tobacco Earnings Since 2014

    Photo: Taco Tuinstra

    Brazil earned $2.2 billion from leaf tobacco exports in 2022—the most since 2014 when the country sold $2.3 billion worth of leaf in the international market, reports Kohltrade. The 2022 figures were up 72 percent in value and 30.7 percent in volume over 2021, although comparisons with that year were impacted by the Covid-19 pandemic and related logistical challenges.

    Throughout 2022, Brazil shipped 412 million kg of leaf tobacco. When adding other non-leaf tobacco products, the export value reached $2.45 billion.

    Brazilian tobacco companies exported 32.1 million kg of cigarettes and cigars worth $156.33 million and 136.9 million kg worth $59.25 of stems and product extracts throughout the year.

    Europe was the main destination for Brazilian leaf tobacco in 2022. As a gateway to the continent, Belgium accounted for 28 percent ($610 million) of shipments. China placed second, buying 21 percent ($471 million) of Brazil’s tobacco, followed by the United States, which bought 6.5 percent ($143 million) of Brazil’s exported tobacco.

  • Buyer Loses License Over Side Marketing

    Buyer Loses License Over Side Marketing

    Photo: Taco Tuinstra

    Zimbabwe’s Tobacco Industry Marketing Board (TIMB) canceled Leanrise Tobacco’s buying license after finding the company guilty of side marketing, reports Zimeye.

    According to the TIMB, Leanrise illegally leased its license to Munyasha Tobacco.

    Leanrise denied the accusations and accused the regulator of misinterpreting the law. “We are not side marketing and there is nothing to substantiate any allegation of such nature,” the company said.

    Leanrise argued it is entitled to have agents to advance its business. “Any tobacco purchased by the use of the Leanrise license is tobacco purchased for Leanrise,” the company noted. “In any event, the Leanrise license cannot be used to purchase tobacco from growers who are not contracted with Leanrise.”

    The TIMB was unpersuaded by Leanrise’s defense, however. “After considering the contents therein, your justification for leasing your license to Munyasha Agro Pvt. Ltd. and all circumstances surrounding the matter, the Tobacco Industry and Marketing Board has decided to cancel your license in terms of the Tobacco Industry and Marketing (Prohibition of side marketing) Regulations, 2022 SI 77 of 2022,” the TIMB wrote.

  • FDA Accepts L!X Pouches’ PMTA

    FDA Accepts L!X Pouches’ PMTA

    Image: TJP Labs

    The U.S. Food and Drug Administration has accepted for review TJP Labs’ premarket tobacco product application for L!X nicotine pouches. 

    “TJP Labs created L!X nicotine pouches for adult (21+) users of nicotine-containing products who cannot or choose not to discontinue nicotine use, especially those who wish to transition to noncombustible, oral-use products,” said TJP Labs CEO David Richmond-Peck in a statement.

    “The acceptance of our application by the FDA showcases our team’s dedication to providing adult users with alternatives that can potentially reduce the harm associated with traditional combustible tobacco products.

    “Our facility’s Health Canada Drug Establishment License (DEL), Natural Health Products Site-License, ISO 9001:2015, HACCP and cGMP certifications speak to the rigorous quality standards at TJP Labs and will further bolster our ability to service high-volume international markets.”

    TJP Labs is a full-service contract manufacturer of premier next-generation products, focusing on modern oral nicotine pouches and oral delivery solutions for caffeine and other nutraceutical products. The company is headquartered in Pickering, Ontario, Canada.

    L!X nicotine pouches are marketed by TJP Labs’ subsidiary L!X Innovations.

  • Altria to Conduct Civil Rights Assessment

    Altria to Conduct Civil Rights Assessment

    Image: nanzeeba | Adobe Stock

    Altria Group will conduct an equity and civil rights assessment, according to a company press release. The assessment follows last year’s passage of a shareholder proposal recommending Altria commission a civil rights equity audit and seeks to address feedback received from recent robust shareholder engagement.

    The assessment will review Altria’s policies, practices, programs and services intended to address the harm associated with tobacco use and the effectiveness of the company’s harm reduction efforts, including underage tobacco use prevention programs, tobacco cessation support, responsible marketing practices and regulatory engagement and public policy. The assessment will include an evaluation of these policies, practices, programs and services on communities of color and youth as well as the company’s inclusion, diversity and equity (ID&E) progress.

    The assessment will be led by Altria and overseen by an external advisory review board consisting of third-party, independent members who possess relevant expertise in fields such as civil rights, ID&E, legal/law enforcement, public policy, public health and youth development. The external advisory review board will advise on and oversee the assessment, including the scope, stakeholder engagement and, ultimately, the presentation of the findings in a published report, which will be subject to assurance by a third-party firm.

    Altria plans to post on its website a report discussing the results of the assessment within 12 months from when the assessment begins.

  • Zimbabwe Keen to Move up the Value Chain

    Zimbabwe Keen to Move up the Value Chain

    Image: Tobacco Reporter archive

    The Zimbabwe government has put in place modalities to ensure value addition for tobacco before export, reports the Zimbabwe Independent.

    The government plans to reach its USD5 billion tobacco industry goal by 2025 through beneficiation of the crop, according to Anxious Masuka, minister of lands, agriculture, water and rural resettlement.

    “What we want to do is to ensure that there is more value addition and beneficiation of tobacco. We export 98 percent of our tobacco in raw form, thereby exporting jobs and value. It is estimated that we produce more than 200 million kilograms of tobacco, and as it crosses the border, the same tobacco fetches USD15 billion, and we only get USD1 billion,” Masuka said.

    “Our tobacco is worth billions on the international market, but as Zimbabwe, we only get USD1 billion. So the government has now put in place the transformation plan to ensure that we increase the volume and also value add so that by 2025 we can have a USD5 billion industry.”

    In 2022, Zimbabwe earned USD650 million, up from USD589 million in 2021.

  • Green Light for EU Flavor Ban Challenge

    Green Light for EU Flavor Ban Challenge

    Photo: alexlmx

    Ireland’s High Court has granted two tobacco companies permission to challenge the EU ban on flavored tobacco-heating products, reports The Irish Times.

    The ban, which covers all flavors except tobacco, took effect Nov. 23, 2022. EU member states have until July 23, 2023, to transpose the rule into national legislation.

    BAT subsidiaries PJ Carroll and Co. and Nicoventures Trading claim the EU directive is invalid. Their challenge targets the minister for health, Ireland and the attorney general.

    PJ Carroll contends the EU ban undermines its “ability to capitalize fully on the unique opportunity of being the first company to launch heated-tobacco products on the Irish market for adult smokers who would otherwise continue to smoke.”

    The company, which holds 10 percent of the Irish market for e-cigarettes, started commercializing heated-tobacco products in Ireland in 2021.

    In an affidavit, PJ Carroll Director and Head of Trade Simon Carroll said the ban will also undermine BAT’s significant investment in the development of “products with reduced-risk profile (relative to cigarettes) to cater to the preferences of adult smokers in Ireland who would otherwise continue to smoke.”

    In addition, the ban has significant implications for the implementation of public health policy and anti-smoking campaigns where there are acceptable alternatives to traditional cigarettes, he said.

    PJ Carroll and Nicoventures have also challenged the directive at the EU General Court, which is part of the EU Court of Justice.

  • Indian Tobacco Exports up in 2021–2022

    Indian Tobacco Exports up in 2021–2022

    Photo: Tobacco Reporter archive

    India exported tobacco and tobacco products worth $846 million during 2021–2022, reports The Hindu.

    In terms of quantity, value in rupees and value in U.S. dollars, exports grew 1.35 percent, 5.91 percent and 5.34 percent, respectively, according to A. Sridhar Babu, executive director of the Indian Tobacco Board.

    Flue-cured Virginia (FCV) tobacco accounted for the majority of unmanufactured tobacco exports, representing 53.62 percent in terms of quantity and 68.47 percent in terms of value.

    India is the world’s fourth-largest producer of FCV tobacco and third-largest exporter, selling its leaf to more than 50 countries.

    According to Babu, the crop in the southern region of Andhra Pradesh was severely affected by Cyclone Mandous in December 2022, forcing some farmers to replant their tobacco.

    In response, the Ministry of Commerce extended interest-free loans to the growers participating in the Tobacco Board’s Growers’ Welfare Fund Scheme.