Category: Featured

  • Malaysia to Table ‘Endgame’ Bill

    Malaysia to Table ‘Endgame’ Bill

    Photo: PX Media

    The government of Malaysia plans to table its ‘generational endgame’ (GEG) bill during the next parliamentary session in October after making amendments to address concerns by some lawmakers, reports Bloomberg.

    Announced in February, the GEG would make it illegal for people born after 2007 to buy, possess or use tobacco-related products, including e-cigarettes. The bill was referred to a parliamentary select committee in August for further scrutiny amid criticism that some of its features would infringe on personal freedom. 

    Health Minister Khairy Jamaluddin believes the amendments have addressed critics’ concerns.

    “The enforcement powers really are focused and restricted only against distribution, manufacturing and supply,” Khairy said on Sept. 23. “We’ve clarified that in the latest amendments, so if you contravene the law in terms of GEG smoking offense, then the enforcement officer cannot frisk you; they cannot take away your computer or your phone or things like that.”

    Malaysian lawmakers delayed a vote last month on the bill and referred it to the select committee to examine and make recommendations for improvement.

  • Hong Kong: Record Seizures of Cigarettes

    Hong Kong: Record Seizures of Cigarettes

    Photo: Kal’vān

    Hong Kong authorities confiscated HKD1.23 billion ($157 million) worth of illicit cigarettes to date this year—the largest haul of the contraband in 20 years, reports the South China Morning Post, citing figures from the Customs and Excise Department.

    As of Sept. 22 this year, customs officials had seized about 440 million untaxed cigarettes, well above the 427 million cigarettes worth HKD1.19 billion found in the whole of 2021.

    If legally imported, this year’s contraband would have generated HKD839 million in tax, according to a law enforcement source.

    The source attributed the rise in contraband seizures to the resumption of seaborn logistics after Covid-19 disruptions and a possible rise in the price of tobacco products in Europe.

    “As the resumption of seaborne logistics business in May, syndicates have started to accumulate their storage of illicit cigarettes in the city while trying to find buyers in Hong Kong and overseas,” the source told the South China Morning Post.

    He said some of the gangs also stockpiled a huge volume of illicit cigarettes in the city as they anticipated a possible rise in the price of tobacco products in Europe amid high inflation.

    This year’s seizures reached 440 million cigarettes after authorities discovered 21.6 million untaxed cigarettes worth HKD59 million hidden in two shipping containers in Tsing Yi and Yuen Long in their latest operation on Sept. 19.

  • Hospitality Sector Frets About ‘Endgame’ Bill

    Hospitality Sector Frets About ‘Endgame’ Bill

    Photo: sezerozger

    Representatives of the hospitality business have asked the government of Malaysia to consider the impact of its proposed “generational endgame” (GEG) law on operations of food and beverage outlets in the country, reports the New Straits Times.

    On Feb. 17, Minister of Health Khairy Jamaluddin announced that Malaysia would introduce bold new legislation to ban smoking and vaping and possession of tobacco products and e-cigarettes for people born after 2005.

    “We are supportive of the Health Ministry’s agenda in reducing the number of smokers in the country,” said Wong Teu Hoon, president of Malaysian Singapore Coffeeshop Proprietors’ General Association (MSCSPGA) “However, we strongly believe any new measures should be carefully evaluated when it has a socioeconomic impact.”

    The MSCSPGA, which has 43 affiliates under it, is one of the largest trader associations in the country, boasting a membership of 20,000 coffeeshop operators nationwide and employing some 500,000 people.

    Wong’s view was echoed by C. Krishnan, deputy president of the Malaysian Indian Restaurant Owners Association, who called for a detailed study and consultation with the retailers and other stakeholders.

    Krishnan worries that the ministry has insufficient manpower to control and inspect every tobacco-based product purchase.

    “Therefore, we (retailers) automatically become the frontliners in the implementation of the GEG bill,” he said. “Let’s not forget the issue of asking for identity cards. We are afraid that this will lead to arguments and unpleasant situations in our outlets, which any coffeeshop owner knows is bad for business.”

  • Myle Vape Opens Dubai Office

    Myle Vape Opens Dubai Office

    Photo courtesy of Myle Vape

    Myle Vape has opened an office and warehouse facility in Dubai to service its customers in the Middle East. The United Arab Emirates is one of Myle Vape’s most important markets in terms of brand loyalty and market share.  

    “This move has been in the works for some time, and we could not be happier to announce this opening,” said Myle Vape co-founder and CEO Ariel Gorelik in a statement. “We have been operating from afar for too long, traveling back and forth from the USA multiple times a year, and it has become critical to the growth of our business that we made a serious move to [build] a major operations center in the UAE.”

    Launched in 2015, Myle Vape manufactures disposables, pod systems, rechargeable devices and vape accessories that are distributed globally outside the United States.

  • Taat Reports Third-Quarter Results

    Taat Reports Third-Quarter Results

    Photo: Taat Global Alternatives

    Taat Global Alternatives reported revenue of CAD17.47 million ($12.93 million) and a gross profit of $567,404 for the three-month period ended July 31, 2022. Assets grew 48.77 percent to $23.38 million over the comparable 2021 quarter.

    “I am very pleased with our results for FQ3 2022, as they reflect the many steps we have taken to fortify the financial landscape of the company as an integrated innovator, manufacturer and distributor of tobacco alternatives, legacy convenience offerings and other emerging product categories,” said Taat CEO Michael Saxon in a statement.

    “We continue to strategically commercialize Taat as a category creator, which is now sold in thousands of stores between our U.S. and U.K. footprints, including placements in major convenience and gas chains.”

  • Vuse Widens Lead Over Juul

    Vuse Widens Lead Over Juul

    Photo: BAT

    Vuse has widened its U.S. market share lead over Juul to double digits, reports the Winston-Salem Journal, citing the most recent Nielsen analysis of convenience store data.

    The analysis, released Sept. 20, covers the four-week period ending Sept. 10.

    Vuse’s market share rose from 39 percent in the previous report to 39.7 percent compared with Juul declining from 29.4 percent to 28.1 percent.

    Vuse, which is made by Reynolds Vapor Co., has also now edged ahead of Juul in the year-over-year comparison at 32.9 percent to 32.7 percent, respectively. It’s the first time Vuse has led the year-over-year comparison.

    According to Barclays, Nielsen largely covers the big chains. For the smaller chains, the group extrapolates trends, which is why trend changes don’t appear immediately in Nielsen. Meanwhile, No. 3 Njoy dropped from 2.9 percent to 2.8 percent while Fontem Ventures’ blu eCigs slipped from 1.6 percent to 1.4 percent.

    Juul’s four-week dollar sales in the latest report have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to a 17.7 percent decline in the latest report.

    By comparison, Vuse was up 41.4 percent in the latest report while Njoy was down 5.6 percent and blu eCigs fell to 30.2 percent.

    Experts attribute the growing gap between Vuse and Juul to the possibility that Juul Labs may have to pull its products from the U.S. market if the Food and Drug Administration’s marketing denial order (MDO) remains in place.

    The FDA has suspended its MDO for the duration of Juul Labs’ appeal.

  • Framtiden Opposes PMI Bid for Swedish Match

    Framtiden Opposes PMI Bid for Swedish Match

    Photo: Swedish Match

    Framtiden Management Co. announced its opposition to the proposed takeover of Swedish Match by Philip Morris International. The Framtiden Partnerships own over 14.5 million shares representing about 1 percent of outstanding shares.

    As a long-term Swedish Match shareholder since 2003, Framtiden believes that the acquisition offer of SEK106 per share deeply undervalues the company, which Framtiden estimates to be worth nearly SEK200 per share.

    The company detailed its position in a white paper.

    According to Framtiden, the offer inadequately values Swedish Match’s leading position in the rapidly growing nicotine pouch segment and the latent market potential worldwide. Furthermore, the investors believe the offer underappreciates the uniqueness of a fast-growing established global consumer staples business and forces the realization of capital gains that would otherwise be deferred for long-term investors who want to participate in the company’s continued growth.

    “My partner Chris Anderson and I believe that this deal does not make sense for long-term shareholders,” said Dan Juran, managing member of the Framtiden Partnerships, in a statement. “I have closely followed Swedish Match’s development for nearly two decades, built relationships with its managers and currently serve as the chairman of the company’s nominating committee. I was dismayed to see the board recommend the sale of this Swedish jewel at a bargain price in the early stage of probably the greatest chapter in its long history.

    Juran said that while investors may be tempted by the short-term premium, especially during a period of market declines, he compared the potential of Swedish Match to that of Coca-Cola in the 1980s and Philip Morris in the 1950s.

    “Those companies compounded earnings at a superior rate for many years, and shareholders who stuck with them were rewarded mightily,” he said. “We believe sticking with Swedish Match is likely to prove far more remunerative to shareholders over time than cashing out. We hope other shareholders see the merits of our position, further detailed in our white paper.”

    Framtiden Management Co. joins Elliott Management Corp. and Bronte Capital in asserting that PMI’s offer undervalues Swedish Match. Elliott Management Corp. is believed to be increasing its stake in Swedish Match in order to get a better price from PMI.

    PMI says it has already obtained approvals for its acquisition by regulators in Brazil and the United States. European regulators have indicated that they intend to review the bid by Oct. 11.

  • Juul Sues FDA for Docs Justifying Product Ban

    Juul Sues FDA for Docs Justifying Product Ban

    Juul Labs is suing the U.S. Food and Drug Administration to force the agency to disclose documents supporting its order banning the company’s products, reports Reuters.

    On June 23, the FDA ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.”

    A federal appeals court then granted Juul Labs an emergency stay of the order to give the judges time to evaluate the merits of Juul’s appeal. The e-cigarette company separately asked the FDA to stay its own order pending the appeal.

    In a complaint filed on Sept. 21 with a federal court in Washington, D.C., Juul accused the FDA of invoking the deliberative process privilege to improperly withhold scientific materials that are key to understanding the basis for the June 23 sales ban.

    Juul said the materials would show whether the FDA conducted a legally required balancing of the public health benefits and risks of its products, including claims they help smokers quit cigarettes, and whether the agency’s reasoning was scientifically sound.

    “The public deserves a complete picture of the scientific facts behind one of the agency’s most controversial and closely scrutinized decisions in recent years,” Juul said.

    Juul accused the FDA of violating the federal Freedom of Information Act by withholding a majority of the “scientific disciplinary reviews” underlying the sales ban.

  • Revenue Down as RLX Adjusts to New Rules

    Revenue Down as RLX Adjusts to New Rules

    Photo: RLX Technology

    RLX Technology reported net revenues of RMB2.23 billion ($333.5 million) for the second quarter of its fiscal year 2022 compared with RMB2.54 billion in the same period of 2021. Gross profit was RMB977.9 million compared with RMB1.15 billion in the comparable 2021 period.

    The company attributed the decrease in net revenues primarily to the suspension of store expansions and new product launches to comply with regulatory requirements.

    Chinese authorities have recently moved the vapor business under the regulatory framework for tobacco products. E-cigarette manufacturers now require operating licenses from the State Tobacco Monopoly Administration (STMA) while vapor products must satisfy various standards and technical requirements before entering the market.

    On June 10, 2022, one RLX Technology subsidiary obtained an STMA license to manufacture e-liquids. On July 22, 2022, another subsidiary was licensed to own the RELX brand and manufacture RELX branded e-vapor rechargeable devices, cartridge products and products sold in combination with e-vapor rechargeable devices and cartridge products.

    “Over the past several months, we have made meaningful strides in adapting our business and product development to the new regulatory framework,” said Ying (Kate) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement. “Specifically, we have obtained the License for Manufacturing Enterprise and received regulatory approvals for some of our new products, demonstrating our operational excellence and industry-leading R&D capabilities.”

    “In light of the regulatory changes, we are off to a slow start of the sales of our new products that are compliant with the National Standards in the new transaction system mandated by the regulators,” said Chao Lu, chief financial officer of RLX Technology. “Despite the macro headwinds, we will continue to steadily focus on cost optimization while reinforc[ing] our product competitiveness under the new regulatory regime to create sustainable, long-term growth for our shareholders.”

  • 22nd Century Partners With Eagle Rock

    22nd Century Partners With Eagle Rock

    Photo: 22nd Century

    22nd Century Group will start placing its VLN reduced-nicotine cigarettes in thousands of stores across Colorado with Eagle Rock Distributing Co. With more than 90 years of history, Eagle Rock Distributing Co. is a leading beverage distributor of premium alcoholic beverages servicing license retailers across Georgia and Colorado.

    “We’re thrilled to partner with Eagle Rock as we open VLN sales across Colorado. In addition to our existing retail partnerships from our Chicago pilot, we now have access to nearly 7,000 prospective new locations through Eagle Rock’s network, to include both on-premise and off-premise locations,” said John J. Miller, president of 22nd Century’s tobacco business, in a statement.

    “We are excited to partner with 22nd Century Group to market VLN across the state of Colorado,” said Michael Economos, president of Eagle Rock Distributing Co. “We want Colorado to be the first state to have a combustible cigarette brand that meets the U.S. Food and Drug Administration[‘s]

    and Biden administration’s proposed nicotine cap broadly available to adult smokers across the state to truly help them smoke less. We have had similar ‘nonalcoholic’ adult beverage offerings for decades, and we are way overdue for adult cigarette smokers to have an analogous option.”

    22nd Century also partners with Circle K, one of the largest convenience chains in North America, and Smoker Friendly, a leading pioneer in the cigarette and tobacco store category with more than 800 independently owned and operated retail stores.