Category: Featured

PMI’s Swedish Match Offer Document Now Public

Photo: Swedish Match
The Swedish Financial Supervisory Authority has approved and registered the document of Philip Morris International’s offer for Swedish Match.
Last month, PMI’s Philip Morris Holland Holdings affiliate offered SEK161.2 billion ($16.14 billion). Swedish Match’s board of directors has advised the company’s shareholders to accept the offer.
The offer document is available on the offer website in English and Swedish and will be available on the Swedish Financial Supervisory Authority’s website in Swedish.
A copy of the offer document and a preprinted acceptance form will be sent to shareholders of Swedish Match whose shares were directly registered with Euroclear Sweden as of June 29, 2022.
The acceptance period ends on Sept. 30, 2022.
June 29, 2022
Nigeria Raises Tobacco Taxes

Photo: Richard Darko
The Nigerian government has enacted a new tax regime this month, reports ICIR Nigeria
On June 1, the ad valorem tax rate has increased to 30 percent from 10 percent. In addition, the government raised the excise rate on cigarettes to NGN84 ($0.20) from NGN58 per pack of 20 sticks. The excise tax is set to increase further to NGN94 per pack in 2023 and NGN104 per pack in 2024.
Shisha tobacco, which is currently taxed at NGN3,000 per liter and NGN1,000 per kg will increase yearly by NGN500.
“This pro-health tax is an effective public health control measure against behavioral risk factors as it can reduce demand and consumption of tobacco products,” said Minister of State for Health Olorunimbe Mamora.
“It will also prompt tobacco users to switch spending their resources on tobacco products to healthy alternatives such as education, health and others.”
In compliance with the National Tobacco Act (2015) and Regulations (2019), the government has also commenced screening and issuing operational licenses to qualifying tobacco businesses.
The new licensing guideline requires strict adherence to regulations requiring graphic health warnings on tobacco product packaging.
According to Mamora, about 4.5 million Nigerians 15 years and older use tobacco products, and about 3.1 million are current smokers.
June 29, 2022
Juul: FDA ‘Overlooked’ Aerosol Data

The U.S. Food and Drug Administration overlooked a key part of Juul’s premarket tobacco product application (PMTA) when the agency ordered Juul Labs’ products off the U.S. market, according to court documents.
In court filings Tuesday, Juul said the agency overlooked more than 6,000 pages of data that the company had submitted to the FDA on the aerosols that users inhale, according to the Wall Street Journal.
Juul also said the agency failed to consider the totality of Juul’s evidence, which the company said established that the public-health benefits of Juul products significantly outweighed the potential risks.
“FDA’s order acknowledged that ‘exposure to carcinogens and other toxicants present in cigarette smoke were greatly reduced with exclusive use’ of Juul products compared with combustible cigarettes,” Juul Labs stated in court documents.
A federal appeals court last week granted Juul Labs a temporary stay of the FDA’s marketing denial order that requires the vaping company to pull its e-cigarettes off the U.S. market.
“The purpose of this administrative stay is to give the court sufficient opportunity to consider petitioner’s forthcoming emergency motion for stay pending court review and should not be construed in any way as a ruling on the merits of that motion,” the court wrote.
The FDA has until July 7 to respond to Juul’s motion and Juul Labs has until July 12 to reply to the FDA response if submitted.
June 28, 2022
Bangladesh Mulls Ban on E-Cigs and Pouches

Photo: sezerozger
Bangladesh’ Ministry of Health and Family Welfare wants to amend the country’s tobacco act to ban e-cigarettes and oral nicotine pouches, reports The Business Standard. The proposal also includes new restrictions on combustible tobacco products.
Health activists have been calling for prohibition of e-cigarettes, which are not mentioned in the current legislation. The proposal would prohibit not only the consumption of vapor products, but also the production, import, export, storage, sale and transportation of e-cigarettes or their parts.
People caught vaping would face maximum fine of BDT5,000 ($53.80) under the plan, while producers and traders would risk imprisonment for a maximum of six months or a fine not exceeding BDT200,000 or both for the first time. The punishment would double each time the offence is repeated.
E-cigarettes started arriving informally in Bangladesh a few years ago and quickly became popular. As demand increased, British American Tobacco started producing and selling e-cigarettes in the market. Japan Tobacco is also reportedly preparing to market e-cigarettes in Bangladesh.
The health ministry’s proposal would also tighten restrictions on traditional tobacco products. Among other provisions, it includes a ban on flavors and an increase in the size of graphic health warnings to 90 percent of the packaging’s surface from the 50 percent required under current legislation. The draft also foresees new retail licensing requirements and limitation on where tobacco can be sold.
The health ministry has recently sent copies of the draft to stakeholders. The Directorate General of Health Services is accepting opinions on the draft until July 14.
June 28, 2022
Police: Menthol Ban Will ‘Create Crime’

Photo: Nomad Soul
The U.S. Food and Drug Administration’s proposed ban on menthol cigarettes could have unintended consequences, according to leading law enforcement officers.
Among other problems, it could boost the illicit cigarette market. In 2020, of the $203 billion cigarettes sold in the United States, 37 percent were menthol. “Transitioning from a regulated market to an illicit one will lead to about $30 billion of an illicit market,” said Major Neill Franklin, former executive director of the Law Enforcement Action Partnership, in a statement published by Menthol is Not a Crime.
If the FDA bans menthol cigarettes, this will “create crime,” and you will get “homemade menthol cigarettes,” said retired Bureau of Alcohol, Tobacco, Firearms and Explosives agent John Rotunno.
Charles Giblin from the Center for the Advancement of Public Safety and Security stated, “Despite the good intentions … the ban will have unintended consequences. Cross-border smuggling will fill the gap of the prohibition.”
Others highlighted the racist implications of the ban since more than 80 percent of African Americans who smoke prefer menthol cigarettes.
“Bans do not work. During the war on drugs, more Black and Brown people went to jail than in all of slavery. About 90 percent of people targeted by stop-and-frisk were Black and Brown people,” according to John Dixon III, former police chief of Petersburg, Virginia, and former president of the National Organization of Black Law Enforcement Executives.
“We are not promoting people to smoke,” but “we don’t want another situation like that of Eric Garner [Garner was killed by New York Police Department officers after they approached him on suspicion of selling single cigarettes],” said Charles Billups, founding member of the NCJP, retired law enforcement officer and chairperson of the New York State Grand Council of Guardians.
Franklin expanded, “An illicit market is even more problematic for the Black community. Law enforcement will have no option other than to aggressively enforce smuggling and smoking bans … In an effort to identify smugglers, police will ‘creatively interact’ with citizens for minor crimes, like jaywalking, loitering, trespassing, traffic violations—using those crimes for leverage for information on their tobacco sources. This is the same tactic we use for locating guns and drugs.”
The public has until Aug. 2 to submit a written comment via the FDA website.
June 27, 2022
Poda Completes Asset Sale to Altria

Photo: Poda Holdings
Poda Holdings has completed the sale of substantially all of the assets and properties used in the company’s business to Altria Client Services for a total purchase price of $100.5 million, subject to certain adjustments and holdbacks, pursuant to a definitive agreement dated May 13, 2022.
Pursuant to the Asset Purchase Agreement, Poda will change its name to Idle Lifestyle and its trading symbol to IDLE.X. The company expects to trade as an inactive issuer under the policies of the Canadian Stock Exchange.
“The completion of this sale represents the culmination of a tremendous amount of effort from the entire Poda team, and I am extremely proud of what we have accomplished,” said Poda Director, CEO and Chairman Ryan Selby in a statement.
I believe this transaction provides maximum value for the company and its shareholders, and I know our innovative technology is now in good hands with Altria.”
June 27, 2022
Analyst: Nicotine Rule Could Take a Decade

Photo: Leo Lintang
It could take up to a decade to resolve whether the Food and Drug Administration could require traditional cigarettes to contain minimal nicotine levels, reports The Winston-Salem Journal, citing Barclays analyst Jain Gaurav.
On June 21, the FDA formally announced its proposal to reduce nicotine content in traditional cigarettes to minimal and potentially non-addictive levels.
The FDA proposal is expected to draw legal challenges from tobacco manufacturers that could take several years to address.
“We think it will take a decade or longer for the FDA to introduce nicotine caps due to the long nine-step process at the FDA, the inevitable litigation, and then the one-year time given to retailers to get rid of excess inventory,” Barclays analyst Jain Gaurav said in an investor note.
“The FDA will need to take into consideration inputs from scientific, legal, law enforcement, public health, industry and budgetary stakeholders, and respond to all the comments in an iterative process before it can publish a final rule.”
Some analysts also question whether the FDA has the authority to purposefully decrease demand for a legal product, in this instance by reducing nicotine levels to 5 percent of what most popular traditional cigarettes contain.
In June 2019, Morgan Stanley analysts issued an “industry risk navigator” report that predicted a significant decline in revenue—up to 50 percent by 2034—for tobacco companies if the FDA succeeds in establishing significantly lower nicotine levels.
With the lower nicotine levels, the tobacco industry could lose up to $165 billion in combined profits over the next 15 years even if manufacturers gain revenue from innovation nicotine products, such as electronic cigarettes, heat-not-burn traditional cigarettes and oral nicotine products.
The analysts project BAT taking up to a 13 percent decline to its $88 billion market capitalization, partially limited because just 40 percent of BAT’s profits come from the U.S. Altria could experience up to a 20 percent decline of its $92 billion market capitalization.
The only apparent manufacturing benefactor of the FDA proposal is 22nd Century Group, which specialized in nicotine-reduction and has said it is ready to license its technology to others.
Those are the only combustible cigarettes that the FDA had authorized in the modified-risk tobacco product process. In December 2021, the FDA authorized 22nd Century to market its low-nicotine VLN King and VLN Menthol King cigarettes as modified risk tobacco products. They are currently the only cigarettes with such an authorization on the U.S. market.
June 27, 2022
Motley Fool: Juul Exit Would Crown BAT King

Photo: BAT
The removal of Juul products would hand the U.S. market to British American Tobacco, according to Motley Fool.
Juul, which is partly owned by Altria Group, had been the undisputed e-cigarette leader, with a near-80 percent share of the market at the height of its success. The latest Nielsen data puts Vuse’s share at 35.1 percent compared to 33.1 percent for Juul. Third-place NJOY has a 3.1 percent share.
Last year, the U.S. International Trade Commission ruled that Philip Morris International’s IQOS heated tobacco device infringed on BAT’s patents, and that device was prohibited from being imported and sold in the U.S. Altria had partnered with PMI to market and distribute IQOS in the U.S., but the ITC ruling disrupted those plans.
Because Altria shelved its MarkTen e-cigarette brand in favor of partnering with PMI, the ITC ruling leaves it without a vapor product. The FDA has all but wiped out the rest of its investment in Juul. In 2018, Altria paid $12.8 billion for a 35 percent in the vapor company. As of the end of the first quarter of 2022, Altria had reduced the fair value of its Juul position to just $1.6 billion.
If the FDA is successful in eliminating Juul, BAT will essentially have no roadblocks in its way to market dominance.
Vuse turned profitable in the U.S. for BAT in the second half of last year, and it’s been able to grow its share because it discounted the device and the consumables to attract users. Earlier this month, BAT said it was now ready to raise prices on both. With a major competitor removed from the market, this should provide the company with a big boost in profits.
BAT’s vapor revenue grew 59 percent last year to £927 million ($1.14 billion), while its own heated tobacco products, marketed under the Glo brand, saw a 46 percent rise in sales to £853 million.
June 27, 2022
Leadership Changes at Kaival

Photo: Nirajkumar Patel
(Photo: Kaival Brands Innovations Group)
Kaival Brands Innovations Group Founder and CEO Nirajkumar Patel will transition to chief science and regulatory officer. Eric Mosser, the company’s current chief operating officer, will become president and remain COO. Mosser will serve as the company’s principal executive officer for purposes of its filings with the Securities and Exchange Commission. Patel will remain on the board of directors for Kaival Brands.
The management changes follow the company’s recently announced international licensing agreement with Philip Morris Products (PMP) on June 13, 2022.
The agreement grants to PMP a license of certain intellectual property rights relating to Bidi Vapor’s premium electronic nicotine delivery system (END”) device, the Bidi Stick, in the U.S., as well as potentially newly developed devices, to permit PMP to manufacture, promote, sell and distribute such ENDS device and newly developed devices, in markets outside of the U.S.
Eric Mosser
“What Mr. Patel has accomplished, from initial concept to an international distribution agreement with Philip Morris is extraordinary,” said Mosser in a statement. “With unwavering belief and integrity, he established himself as a true visionary within the vaping category.
Mr. Patel has been both inventor and salesman, developing a product and everything that goes around it to make it successful. We have grown from a no-name brand to the No. 1-selling self-contained disposable ENDS device in the U.S based on the Nielsen retail sales data for the 52-week period ending June 4, 2022, according to a recent Goldman Sachs’ Equity Research Report.”
The transition will allow Patel to focus on developing new products and expanding the Bidi Vapor product portfolio, which is directly related to the new agreement with PMP, and allow Mosser to focus on expanding sales distribution channels and increasing the revenues and profits of Kaival Brand.
“My passion for the business is in creating, designing and delivering new products for adult tobacco users to the market,” said Patel. “Mr. Mosser understands the core values, mission and goals of the Company, and I am confident he will take Kaival Brands to new levels.”
The management changes are effective immediately, with roles and responsibilities to transfer over the coming weeks.
June 27, 2022
Juul Granted Emergency Stay of FDA Order

Photo: steheap
Court Grants Juul Emergency Stay of FDA Order
Juul Labs received an emergency stay of the Food and Drug Administration’s order for the vaping company to pull its e-cigarettes off the U.S. market.
The U.S. Court of Appeals for the D.C. Circuit on June 24 granted Juul’s request to delay the FDA’s ban. The temporary stay gives the court time to hear arguments and wasn’t a ruling on the merits of the case, the judges wrote.
In its court filing, Juul argued that the FDA’s order was extraordinary and unlawful and it would suffer significant irreparable harm without a stay, according to The Wall Street Journal.
Juul said that the requirement to immediately remove all Juul products from U.S. stores was a departure from the agency’s practices, which typically have a transitional period.
The e-cigarette maker also questioned the agency’s handling of the announcement, noting The Wall Street Journal reported on the ban a day before it was announced.
“Regulation through leaks and press releases is no way to handle agency action, much less to order a company to cease essentially all business operations,” Juul said in the court filing.
Former FDA Center for Products Director Mitch Zeller said that Juul’s e-cigarettes were judged solely on the strength of the company’s application. Political pressure to ban Juul didn’t influence the ruling, nor did Juul’s past actions, he said. “This was a scientific review conducted by subject-matter experts,” he said. “That’s the way the system is supposed to work.”
In a statement, Juul Labs it was exploring all its options under the FDA’s regulations and the law.
“We respectfully disagree with the FDA’s findings and decision and continue to believe we have provided sufficient information and data based on high-quality research to address all issues raised by the agency,” said Juul Labs Chief Regulatory Officer Joe Murillo.
“In our applications, which we submitted over two years ago, we believe that we appropriately characterized the toxicological profile of Juul products, including comparisons to combustible cigarettes and other vapor products, and believe this data, along with the totality of the evidence, meets the statutory standard of being “appropriate for the protection of the public health.”
“We remain committed to doing all in our power to continue serving the millions of American adult smokers who have successfully used our products to transition away from combustible cigarettes, which remain available on market shelves nationwide.”
Among other options, Juul is reportedly exploring a bankruptcy filing if the company is unable to get relief from the government’s ban, reports The Wall Street Journal, citing people familiar with the matter.
June 24, 2022