Category: Featured

  • TPB’s Quarter ‘In Line With Expectations’

    TPB’s Quarter ‘In Line With Expectations’

    Yavor Efremov (Photo: TPB)

    Turning Point Brands announced financial results for the first quarter ended March 31, 2022.

    Net sales for the first quarter of 2022 decreased 6.3 percent to $100.9 million compared to the previous year. Net sales for Zig-Zag and Stoker’s Products increased 10.1 percent over 2021. Gross profit decreased 2.8 percent to $51.8 million while net income decreased 6.7 percent to $11 million.

    “Our first- quarter results were in line with our expectations as we continued to grow our market share for both Zig-Zag and Stoker’s while navigating a difficult consumer and regulatory environment to drive profitability in each of our segments, including NewGen. Sales decreased 6 percent from the previous year driven by a 37 percent decline in NewGen sales but showed double-digit growth excluding NewGen,” said Yavor Efremov, president and CEO of Turning Point Brands, in a statement.

    “Zig-Zag delivered another strong growth quarter led by our U.S. papers business, which built on its market-leading share during the quarter. At the same time, Stoker’s maintained its growth trajectory driven by double-digit growth in the moist snuff tobacco business, which benefited from consumer trade-down as a leading value brand. Despite the expected sales decline, NewGen maintained positive profitability during the quarter while improving the distribution reach for its regulated products.”

    “We continue to monitor FDA developments. While added regulation may cause short-term disruption, this is a necessary step to fully regulate the industry, create a level playing field and provide consumers with additional reduced-risk alternatives to cigarettes,” continued Efremov.

    “We maintain a strong balance sheet that is allowing us to deploy a substantial amount of our free cash flow toward share repurchases, which continued during the quarter. While inflationary pressures, including a spike in gas prices, are impacting the consumer wallet, we remain favorably positioned as we continue to execute and outpace the overall industry. In addition to solid execution on the business side, we have completed both the ERP and CRM scopes we discussed on our last earnings call. I am particularly proud of the fact that the organization undertook a detailed review of the business with heavy involvement from every level of the company while delivering a solid quarter.”

     

  • FDA Authorizes Several NJOY Products

    FDA Authorizes Several NJOY Products

    Photo: NJOY

    The U.S. Food and Drug Administration on April 26 authorized four NJOY products through the premarket tobacco product application (PMTA) pathway. The FDA issued marketing granted orders to NJOY for its Ace closed e-cigarette device and three accompanying tobacco-flavored e-liquid pods—NJOY Ace Pod Classic Tobacco 2.4 percent, NJOY Ace Pod Classic Tobacco 5 percent and NJOY Ace Pod Rich Tobacco 5 percent.

    The decision is significant because, unlike previous marketing orders—the FDA earlier authorized varieties of BAT’s Vuse Solo brand and Japan Tobacco International’s Logic e-cigarette—this one covers a product with a decent market share. While Vuse overall is a bestseller, the variety that received marketing approval in October 2021 is based on outdated technology and used by only a few people.

    According to Nielsen and analyst reports, which measure financial data typically from convenience stores (and not vape shops), NJOY is the third-largest vape manufacturer in the United States, holding a little more than 3 percent of the market.

    The most recent authorization is also the first for a brand not owned by a major tobacco firm.

    “Looking at the situation with rose-colored glasses, an independent pioneer like NJOY getting two nicotine vaping products through the convoluted FDA authorization process is something to celebrate,” Greg Conley, the president of the American Vaping Association, told Filter. “Unlike the only two other companies with authorizations, NJOY could not subsidize their applications with cigarette sales, so they were at a disadvantage from the start.”

    While authorizing NJOY Ace tobacco-flavored pods, the FDA rejected other Ace e-cigarette products. Applications for two menthol-flavored Ace e-liquid pods remain under FDA review.

    No flavored product has yet received FDA authorization, even though tobacco harm reduction advocates insist flavors are necessary to lure smokers away from combustible cigarettes. “The FDA’s current policy of denying all flavors and deferring action on menthol applications is evidence of just how broken the agency is,” Conley told Filter. “The FDA still has not accepted that millions of adult vapers will not be switching to tobacco flavors anytime in the future.”

    Under the PMTA pathway, the applicant must demonstrate to the FDA that marketing of the new tobacco product would be appropriate for the protection of the public health, the FDA explained in a statement. According to the agency, the authorized NJOY products were found to meet this standard because chemical testing was sufficient to determine that overall harmful and potentially harmful constituent (HPHC) levels in the aerosol of these products is lower than in combusted cigarette smoke.

    “Further, data provided by the applicant demonstrated that participants who had used only the authorized NJOY Ace products had lower levels of exposure to HPHCs compared to the dual users of the new products and combusted cigarettes,” the FDA wrote. “Therefore, these products have the potential to benefit adult smokers who switch completely or significantly reduce their cigarette consumption.”

  • Activist: Minister Won’t Stop Legalization

    Activist: Minister Won’t Stop Legalization

    Asa Saligupta

    Tobacco harm reduction advocates remain optimistic that Thailand will legalize e-cigarettes, despite vocal opposition from the country’s health minister.

    On April 26, Public Health Minister Anutin Charnvirakul said he opposes legalization of vapor products in the country, citing concern about underage consumption and the plight of tobacco farmers.

    Asa Saligupta, director of ENDS Cigarette Smoke Thailand (ECST), suggested Charnvirakul was playing politics. “After his abysmal handling of the pandemic, among other things, he could easily lose his seat at Thailand’s upcoming general election. He’s simply panicking but has completely underestimated the wide support for legalizing and regulating vaping,” said Saligupta.

    With draft legislation to legalize e-cigarettes currently before a sub-committee, the ECST director remains confident that the vaping bill will be passed by Thailand’s parliament this year.

    “The Thai government can and will regulate safer nicotine products regardless of what one minister says,” said Saligupta. “Let’s not forget that Digital Economy and Society Minister Chaiwut Thanakamanusorn, government officials and public health experts have all been key to finally confronting Thailand’s failed tobacco control policies,” he says.

    According to Saligupta, Thailand’s harsh ban and penalties on vape imports and sales have failed.

    “Smoking continues to kill about 50,000 Thai people each and every year. Too many smokers have been stuck with cigarettes or are forced onto the black market for vapes where there’s no control over the purchase age or product safety standards. An effective public health minister would not accept this dire situation, let alone support it,” he says.

    ECST believes it’s no surprise the minister made his anti-vaping statement to ThaiHealth board members. Its senior adviser, Prakit Vathesatogkit, recently received the Dr Lee Jong-wook Memorial Prize by the World Health Organization for his work against tobacco. He has also been a high-profile voice against legalizing vaping.

    “ThaiHealth along with some local conservative health voices continue to publicly scaremonger, conveniently ignoring the growing tobacco harm reduction success globally,” said Saligupta. “By joining the minority, Thailand’s Public Health Minister is now among an increasingly isolated crowd who continue to follow the WHO’s discredited anti-vape agenda,” he says.

    According to Saligupta, nearly 70 countries have now adopted regulatory frameworks on safer nicotine products despite the WHO position, leading to dramatic declines in their overall smoking rates. The Philippines and Malaysia are also set to legalize vaping.  

    “Thankfully the Thai government remains on the right side of the debate,” he said. “Regulating will give consumers better protection, encourage more smokes to quit deadly cigarettes, and ensure we have much better control over youth vaping with a strict purchase age,” he says.

  • Russian Tobacco Mogul Faces Scrutiny

    Russian Tobacco Mogul Faces Scrutiny

    Photo: GAlexS

    Metro published a profile of Russian tobacco mogul Igor Kesaev, who has been sanctioned by the EU and the U.K. for aiding Russia’s invasion of Ukraine.

    Listed by Forbes as Russia’s 35th-richest person last year, Kesaev’s holdings have included a major stake in the V.A. Degtyarev factory, which makes machine guns, anti-tank and anti-aircraft weapons, some of which have been used in Ukraine, according to sources.

    Until recently, Kesaev was also the board chairman of Russia’s leading tobacco distributor, TC Megapolis. Kesaev resigned from the board on April 11, 2022, according to a Russian-language press release, which stressed that Megapolis was not subject to EU sanctions and Kesaev did not influence the company’s business.

    Kesaev’s involvement in tobacco dates to the early 1990s. As the Soviet Union broke up into its constituent republics, he started an importing business that worked with international tobacco companies eager to get their products into the Russian market, according to a 2014 profile of the magnate published on Forbes’ Russian website.

    Russia was—and continues to be—an attractive market for international tobacco companies, with its large population of around 145 million people and one of the highest smoking rates in the world. More than 40 percent of men there light up, according to the World Health Organization.

    According to the Forbes profile, Kesaev graduated from Russia’s prestigious Moscow State Institute of International Relations. In the 1990s, he lived in Switzerland, where he developed personal connections with executives at Philip Morris International’s regional headquarters in Lausanne.

    Over time, Kesaev built the largest tobacco distributor in Russia through acquisitions of regional competitors, according to Forbes’ Russian website. Today, Megapolis delivers to 160,000 retailers across the country, according to the firm’s website. In 2013, PMI and Japan Tobacco International both purchased 20 percent stakes in Megapolis’ holding company for $750 million each.

    Kesaev has also been involved with the tobacco business in Ukraine. Following the toppling of Ukraine’s pro-Russian president, Viktor Yanukovych, in 2014 and Russia’s subsequent annexation of Crimea, Ukrainian officials began scrutinizing the role of Russian companies in various sectors of its economy.

    At the time, Trading Company Megapolis-Ukraine controlled 99 percent of Ukraine’s tobacco distribution market, according to research from the Anti-Monopoly Committee of Ukraine.

    Kyiv sanctioned Kesaev in 2016 for unspecified actions that it said threatened Ukraine’s national security. A top Ukrainian prosecutor later accused Kesaev of supporting “terrorist organizations” by supplying arms to Russian-backed separatist groups that have been fighting for nearly a decade to carve out two independent states—Donetsk and Luhansk—in eastern Ukraine.

  • NY May Verify Legal Age With Facial Recognition

    NY May Verify Legal Age With Facial Recognition

    Photo: zapp2photo

    The New York State Senate is moving forward with proposed legislation that would allow bars and restaurants to use facial recognition or fingerprint scanners to verify customers’ ages before allowing them to buy alcohol, tobacco or electronic cigarettes, according to the New York Post.

    “This is the new frontier of age verification,” said state Senator James Skoufis, who is sponsoring the biometrics bill. “It does advance the interests of convenience.”

    Skoufis envisions that bars and restaurants could scan fingerprints, faces or retinas of customers who want to be spared the trouble of showing an ID when they return to an establishment in the future. The proposed legislation requires all data to be encrypted and prohibits businesses from selling biometric data to third parties.

    “No one’s forced into engaging with this technology, but they would have the choice,” Skoufis said. “There’s no Big Brother involved.”

    Age verification based on facial recognition technology is widespread in China, but has yet to catch on in Western countries, where critics have voiced concerns about consumer privacy.

  • China Drafts Guidelines for E-Cig Production

    China Drafts Guidelines for E-Cig Production

    Photo: Taco Tuinstra

    China’s tobacco regulator on Jan. 25 released draft rules for e-cigarette production, according to Reuters.

    The State Tobacco Monopoly Administration said it would “reasonably” control manufacturing to prevent overcapacity.

    The regulator said it would ban foreign investment in domestic e-cigarette retail operations while reviewing foreign involvement in production, requiring vapor companies that want to list in China or abroad to obtain pre-approval.

    China has in recent months been tightening its scrutiny of e-cigarettes, and last year amended its tobacco monopoly law to include vaping products. Since then, it instructed e-cigarette and vaping companies to sell their products only through authorized channels, and barred vendors from selling e-cigarette flavors other than tobacco.

    Earlier this month, China unveiled technical standards for e-cigarettes and vaping products.

    China’s cigarette industry operates under a state-run monopoly directly controlled by the STMA, which dictates pricing and distribution for brands and generates tax income for the government.

  • Egypt Legalizes E-Cigs

    Egypt Legalizes E-Cigs

    Photo: Dzmitry

    The vapor industry has welcomed Egypt’s decision to allow the import and commercialization of e-cigarette product.

    “The lifting of the ban highlights the Egyptian authorities’ progressive approach to e-cigarettes and sets the stage for the creation of a regulated market rich with business opportunities, through serving the demand for easily accessible, quality products by legal age (adult) consumers across the country,” wrote RELX International, a leading player in the segment, in a statement dated April 24.

    With its recent decision, Egypt joins global and regional markets, such as Kuwait, Saudi Arabia and the United Arab Emirates, which have legalized and commercialized the consumption of e-cigarettes. As regulators around the world become more accepting of e-cigarettes, the market is expected to continue its steady growth in the coming years.

    As of March 2022 global e-cigarette market revenues were $22.95 billion, and the market is expected to expand annually at a compound annual growth rate of 4.19 percent until 2027, according to Statista.

    “The decision by Egyptian authorities reflects its commitment to support legal businesses in the country while cracking down on the illicit trade of those products, in line with what we are seeing in an increasing number of markets around the globe,” said Robert Naouss, REXL International’s external affairs director for the Middle East, Northern Africa and Europe

    “The business and investment environment in the country will significantly benefit from this decision, as will adult consumers who can now conveniently, and legally, purchase better alternatives to combustible cigarettes. We look forward to working with our partners to grow and protect their income via our portfolio of quality products”

    By lifting the ban on e-cigarette products, Egyptian authorities have opened the door to a plethora of business and investment options, according to RELX International. “Authorized e-cigarette products are traditionally retailed by small- and medium-sized businesses, so the move will bolster existing businesses that sell such products, and will attract entrepreneurs wishing to set up new retail points across the country. It will likewise draw investment into the country from e-cigarette brands who wish to set up shop in the country and address the market,” the company wrote in its statement.  

    “Adult consumers stand to benefit from the move, as they now have legal access to e-cigarettes whether they wish to switch to a better alternative to traditional cigarettes. Several health authorities and regulators including the U.K.’s NHS and the Ministry of Health of New Zealand have positively clarified their position on vaping as a way for people to move away from smoking combustible cigarettes.

    “In addition, the decision will contribute to the country’s economic recovery post-pandemic via the collection of tax revenues from legally imported products. Simultaneously, it will allow Egyptian authorities to clamp down on tax evasion issues associated with illegal market players. In a similar vein, the move and balanced regulation of the market offers authorities and e-cigarette vendors a path to stem the spread of inferior and dangerous black-market products that do not meet the standards and regulations outlined by Egyptian and international authorities. In doing so, adult consumers can rest assured the products they do find on sale are indeed a reliable alternative to traditional cigarettes.”

     

  • Thailand Health Minister Says No To Vaping

    Thailand Health Minister Says No To Vaping

    Photo: kikujungboy

    Public Health Minister Anutin Charnvirakul insisted that Thailand’s Public Health Ministry will not support legalizing electronic cigarettes in the country, reports The Bangkok Post.

    He made his remark on Monday during a meeting with board members of the Thai Health Promotion Foundation (ThaiHealth) to discuss tobacco control.

    Anutin, in his capacity as chairman of the ThaiHealth board, said he has noticed e-cigarettes trending among teenagers, and some of them are aiming to have sales legalized.

    To help boost e-cigarette control, Anutin said he has assigned a tobacco control panel under the Department of Disease Control (DDC) to review current regulations to determine whether they should be revised or new rules should be issued.

    However, current laws can still suppress the rise of e-cigarettes, he said.

    “The DDC has also been instructed to coordinate with police to come up with a solution in preventing e-cigarettes from becoming more popular in the future,” he said.

    Surachet Satitniramai, second deputy chairman of ThaiHealth, said that currently, many business operators are attempting to legalize the import of e-cigarettes to the country, which is a topic of concern among members of the committee.

    “E-cigarettes will have a widespread effect on tobacco farmers in the country,” he said. “As the materials of e-cigarettes don’t consist of tobacco but chemical, farmers will suffer income loss.”

  • U.S. Industry Braces for Menthol Announcement

    U.S. Industry Braces for Menthol Announcement

    Photo: kasetch

    The U.S. Food and Drug Administration could announce a detailed proposal for phasing out menthol cigarettes as early as this week.

    On April 21, the White House concluded its review of FDA proposal to ban menthol cigarettes after nearly 40 virtual meetings with outside groups.

    According to an Associated Press report, dozens of interest groups have met with White House staffers to try to persuade them to oppose the proposal.

    Menthol is the only cigarette flavor that wasn’t banned under the 2009 Family Smoking Prevention and Tobacco Control Act, which gave the FDA authority over tobacco products. Menthol cigarettes account for more than one-third of the U.S. cigarette market.

    Health advocates oppose menthol because the ingredient’s “cooling” effect make it easier to start smoking and harder to quit. The health consequences have disproportionally fallen on black smokers, 85 percent of whom use menthols.

    In recent weeks, menthol ban opponents have stepped up their campaign against the proposed measure, meeting with lawmakers and publishing editorials. For example, earlier this month, Guy Bentley of the Reason Foundation warned that banned banning menthol cigarettes is a high-risk strategy.

    All major federal regulations—particularly those that could impact the economy—must be reviewed before publication by the White House Office of Management and Budget. Outside groups and individuals can request a meeting, offering a last chance to try and shape the final product.

    According to the Associated Press, more than half of the budget’s office on the menthol proposal were requested by group that traditionally oppose tobacco restrictions. Correspondence shows the groups raised concerns about unintended consequences of a ban, including increases in illegal market sales and increased policing of Black communities to contraband cigarettes.

    More than a quarter of meeting were reportedly requested by gas station owners, convenience stores and distributors. Members of the Southern Association of Wholesale Distributors, for example, said that some convenience stores could lose a third of their cigarette revenue, forcing them to close and create “food deserts”—geographical areas in which it is difficult to buy affordable or good-quality fresh food.

    Other groups, such as the Americans for Tax reform, which has received funding from Altria Group, warned of lost government revenue.

    Health advocates dismiss concerns about over-policing of Black communities and illicit sales. The proposed rules, they say, target distribution rather than possession, and most cigarette smuggling in the U.S. today is across state lines to take advantage of difference in tax rates. If menthol production stops, there will be little supply to smuggle, say health advocates. Canada banned menthol cigarettes in 2018.

  • FEELM Joins Vaping Awareness Campaign

    FEELM Joins Vaping Awareness Campaign

    Photo: Smoore

    SMOORE’s flagship atomization tech brand FEELM has signed up to the VApril 2022 consumer awareness campaign to offer specialist smoking-cessation advice to U.K. smokers and encourage them to switch to less harmful alternatives.

    Established by the U.K. Vaping Industry Association (UKVIA), VApril is the largest campaign worldwide to promote smoking cessation through switchover to vaping.

    “Research has shown that vaping increases the likelihood of a successful cigarette quit attempt by 50 percent and is now the U.K.’s most popular way to quit” said John Dunne, director-general of UKVIA.

    “However, suspect science and misinformation on vaping are discouraging many smokers from switching to a less harmful alternative. We need to take an evidence-based approach to educate the public about vaping which is what Vapril was designed to do. It is great to see UKVIA member FEELM supporting these events this month.”

    During VApril vaping awareness month, FEELM will present the most up-to-date evidence-based vaping facts on social media targeting adult smokers, to help them make the most informed choices.

    In April, FEELM teamed up with specialist vape retailer Vapourcore, to give away Core Pro disposable vapes to adult vapers and smokers seeking to switch in London and Manchester. Vapourcore and FEELM jointly introduced this ultra-slim disposable product with ceramic coil in early 2022.

    Built to be lightweight and compact, Core Pro is designed specifically for adult smokers looking to switch. It includes a bowl-shaped FEELM ceramic coil with a microporous surface, which increases the surface area in contact with the e-liquid, hence uniform temperatures around the whole coil, lowering the risk of burnt tastes. Moreover, the FEELM ceramic coil features a unique anti-condensation and maze-shaped structure that prevents leakage and spit-back. In 2021, Pro Core won 2021 MUSE Design Award for its technology and design.

    “Our aim was to produce a high quality and elegant vaping product for adult smokers and the Core Pro is just this” said Vapourcore CEO Charles Bloom. “Utilizing the FEELM ceramic coil gives the Core Pro a uniquely smooth, flavorsome and very efficient nicotine delivery far superior to other disposables.”