Category: Featured

Vaping Tax Dropped From U.S Bill

Photo: cn0ra
A proposal to impose U.S. federal taxes on vaping has been removed from the Democrats’ healthcare, education and climate change bill, reports The Wall Street Journal, citing people familiar with the matter.
Nevada Senator Catherine Cortez Masto, a Finance Committee member in a tough re-election race, reportedly pushed to remove the tax and helped force its deletion.
The removed provision would have levied a tax on vaping products designed to parallel the existing federal cigarette tax rate of $1.01 per pack.
The tax had draw considerable criticism from vapor industry representatives and tobacco harm reduction advocates, who said it would in some cases make e-cigarettes more expensive than combustible cigarettes—a perverse outcome, given that vaping is widely believed to be less harmful than smoking.
Critics also noted the tax would be regressive. According to a recent Gallup poll, Americans with an annual household income of less than $40,000 are significantly more likely to vape than higher-income groups.
Vaping advocates welcomed the decision. “The evidence is clear that imposing a new excise tax on vaping products will discourage adults from quitting smoking and shut down small businesses already dealing with industry-crushing federal regulations,” Gregory Conley, president of the American Vaping Association, was quoted as saying by The Wall Street Journal.
December 10, 2021
Zeller to Retire from CTP in April

Mitch Zeller (Photo: David Parker)
Mitch Zeller, the director of the Food and Drug Administration’s Center for Tobacco Products, plans to retire in April 2022 after serving in the post since 2013, reports The Washington Post. In a letter to staff, acting FDA Commissioner Janet Woodcock praised his work as “invaluable and instrumental” to advancing “numerous historic public health milestones in tobacco regulation.”
A graduate of Dartmouth College and the American University Washington College of Law, Zeller has been working on FDA issues for more than 30 years. He began his career as a public interest attorney in 1982 at the Center for Science in the Public Interest (CSPI). In 1988, Zeller left CSPI to become counsel to the human resources and intergovernmental relations subcommittee of the House of Representatives’ government operations committee, where he conducted oversight of enforcement of federal health and safety laws.
In 1993, Zeller joined the staff of then FDA Commissioner David Kessler. What began as a two-week assignment by Kessler to examine the practices of the tobacco industry led to his serving as associate commissioner and director of the FDA’s first Office of Tobacco Programs. Instrumental in crafting the agency’s 1996 tobacco regulations, Zeller also represented the FDA before Congress, federal and state agencies. Zeller also served as an official U.S. delegate to the World Health Organization working group for the Framework Convention on Tobacco Control.
In 2000, Zeller became executive vice president of the American Legacy Foundation. His responsibilities there included marketing, communications, strategic partnerships and, in 2002, creating the foundation’s first Office of Policy and Government Relations. That year, Zeller joined PinneyAssociates, where, as senior vice president, he provided strategic planning and communications advice.
He left PinneyAssociates in 2013 to begin his second stint at the FDA.
December 9, 2021
Pyxus Announces ESG Framework

Pieter Sikkel (Photo: Pyxus International)
Pyxus International has announced the framework of its environmental, social and governance (ESG) strategy, which builds off of the company’s legacy of sustainable agricultural production. With a focus on advancing progress on key global issues, such as climate change, farmer prosperity and human rights, the company is working across its operations and supply chain to enhance the sustainability of the business and deliver value to its stakeholders.
Pyxus’ ESG strategy includes three key pillars: Implementing solutions that further improve the company’s environmental performance while reducing its environmental footprint (environment); supporting its employees, contracted farmers and communities while protecting human rights and providing an equal opportunity for success to all (social); and operating responsibly and ethically in every action its takes (governance).
“Pyxus’ ESG strategy provides the connection between our purpose and our business priorities,” said Pieter Sikkel, president and CEO of Pyxus, in a statement. “As our company continues on its journey, the implementation of this strategy is expected to strengthen our business as well as help to recruit and retain top talent. This is an important milestone for Pyxus, and we are excited about the impact this strategy will have on our business, our supply chain and the world.”

December 9, 2021
New Zealand to Phase Out Cigarette Sales

Photo: sezerozger
New Zealand unveiled a plan on Dec. 8 to phase out smoking by gradually raising the smoking age until it covers the entire population. The proposed legislation is expected to become law next year and health activists are hoping it will inspire other countries to follow suit.
Starting in 2023, anyone under age 15 would be barred for life from buying cigarettes under the new rules. This would mean, for example, that in 2050, people under the age of 42 would not be able to buy tobacco products.
“We want to make sure young people never start smoking, so we will make it an offense to sell or supply smoked tobacco products to new cohorts of youth,” Ayesha Verrall, the country’s associate health minister, said in Parliament on Thursday. “People aged 14 when the law comes into effect will never be able to legally purchase tobacco.”
The legislation was among several proposals, including a reduced nicotine mandate, announced on Thursday that aim to reduce smoking levels in New Zealand across all ethnic groups, below 5 percent by 2025. Currently the rate is just under 10 percent. Since announcing this target in 2011, New Zealand has steadily raised the price of cigarettes to among the highest in the world. A pack in New Zealand costs about NZD30 ($20.35), second only to Australia.

This is prohibition in all but name, and prohibition very rarely works.
Simon Clark, Director, Forest
Smokers’ rights campaigners described New Zealand’s plans as “absurd” and “illiberal.”
“This is prohibition in all but name and prohibition very rarely works,” said Simon Clark, director of the smokers’ group Forest.
“If tobacco is made illegal to people born after 2008 it won’t stop younger generations smoking. The sale of tobacco will simply be driven underground, and consumers will buy tobacco on the unregulated black market. The impact of this policy will hit nonsmokers as well because the government will have to replace lost revenue by taxing something else,” said Clark.
While unveiling its proposal, the government acknowledged the possible effects on the black market, which currently makes up at least 10 percent of tobacco sales in the country.
Robert Beaglehole, a professor emeritus of medicine at the University of Auckland, suggested the problem was manageable. “We can deal with it, if we only scanned every container coming into the country, which we don’t,” he said.
Fear of smuggling and concern about civil liberties have prevented other countries from banning tobacco sales. In 2010, Bhutan prohibited the sale of tobacco products, only to suspend the restrictions last year amid worries that cigarette traffickers would bring in the coronavirus.

It’s a shame our vaping regulations are not proportionate to the lack of risk, compared to combustible tobacco.
Nancy Loucas, co-founder, Aotearoa Vapers Community Advocacy
While welcoming New Zealand’s action against smoking, tobacco harm reduction advocates said were disappointed the plan ignored the role of vapor products as a tool to help smokers quit cigarettes.
“Vaping has been key to reducing our national smoking rate,”said Nancy Loucas, co-founder of the Aotearoa Vapers Community Advocacy (AVCA). “Encouraging more smokers to switch to much safer and less expensive nicotine alternatives is critical to achieving smokefree. Sadly, on that score, the just-released Smokefree Aotearoa 2025 Action Plan fails to acknowledge this fact.”
According to Loucas, New Zealand has made it harder for adults to access vaping products in recent months.
“It makes total sense to reduce the availability of tobacco products, but it made no sense to reduce the availability of vaping products which are 95 percent less harmful. However, that’s what has happened since 11 August, with general retailers now only permitted to sell three vaping flavors,” she said.
“There needs to be more promotion and resourcing for vaping as the reduced risk alternative to smoking. The smokefree action plan should have signaled that the government’s will review recent vaping regulations to ensure they’re fit-for-purpose and future-proofed,” she said.
Loucas lamented that New Zealand’s vaping regulations and smokefree action plan have been done in silos when the two are in fact intrinsically linked and should dovetail towards the same end goal.
“Congratulations to the government on giving smokefree a big push,” she said. “It’s a shame our vaping regulations are not proportionate to the lack of risk, compared to combustible tobacco, and are not utilized to further assist the country’s Smokefree 2025 goal.”
December 9, 2021
U.K. Vaping Hits Record High as Smoking Drops

Photo: Rain
The number of people who vape in the U.K. has risen to its highest level since records began while the number of U.K. adults who smoke has fallen below 14 percent for the first time in years, according to just released government figures.
The Office for National Statistics (ONS) has published its annual report into smoking prevalence in the U.K., which includes figures on the number of adults who vape, just one month after the Department of Health’s announcement that vaping devices could soon be prescribed to smokers through the National Health Service.
In 2014, when data on the number of U.K. vapers started being collected, 3.7 percent of the population reported using e-cigarettes. In 2020, that had risen to 6.4 percent, equivalent to around 3.3 million people.
The report also reveals that the number of adult smokers in the U.K. currently stands at 13.8 percent of the population—its lowest percentage since at least 2015.
“This is a hugely welcome announcement as everyone on the side of harm reduction knows that vaping is far less harmful than smoking—by as much as 95 percent, according to the former health protection watchdog Public Health England [now part of the U.K. Health Security Agency]—so more people vaping and less smoking can only be cause for celebration,” said John Dunne, director-general of the U.K. Vaping Industry Association, in a statement.

This is a hugely welcome announcement as everyone on the side of harm reduction knows that vaping is far less harmful than smoking.
John Dunne, director-general, UKVIA
The ONS Smoking Prevalence Report highlighted that the number of ex-smokers who now vape had risen from 11.7 percent in 2019 to 12.3 percent while the number of smokers who also vape increased from 15.5 percent in 2019 to 17.8 percent in 2020.
However, according to the ONS monthly data, smoking rates rose sharply during the pandemic and national lockdown to a peak of 16.3 percent in August before slowly decreasing to 13.8 percent by the end of 2020.
“While this rise in smoking prevalence during lockdown could be attributed to increased anxiety because of the pandemic, I would also point toward the fact that specialty vape shops were not granted ‘essential retail’ status and therefore had to close their doors as another significant contributing factor,” said Dunne.
December 9, 2021
Final Guidance on Tobacco User Fees

Photo: Stranislav Nyenahov
The U.S. Food and Drug Administration has issued a final guidance relating to tobacco product user fees.
Titled, “Tobacco Product User Fees: Responses to Frequently Asked Questions,” this document provides details about what information is needed to assess user fees owed by each domestic manufacturer or importer of tobacco products and how FDA determines whether a company owes user fees in each quarterly assessment.
Among other topics, this guidance explains how the FDA determines which companies are included in the quarterly tobacco user fee assessments; whether water pipe tobacco is subject to user fee requirements; and how companies should submit their monthly report to the agency.
The Federal Food, Drug and Cosmetic (FD&C) Act requires FDA to “assess user fees on, and collect such fees from, each manufacturer and importer of tobacco products subject to” the tobacco product provisions of the FD&C Act.
The tobacco products that are subject to user fee assessments are cigarettes, snuff, chewing tobacco, roll-your-own tobacco, cigars, and pipe tobacco. ENDS products, such as e-cigarettes, are not subject to user fee assessments.
The FD&C Act provides for the total quarterly assessment to be allocated among specified classes of tobacco products. The class allocation is based on each tobacco product class’s volume of tobacco products removed into commerce. Within each class of tobacco products, an individual domestic manufacturer or importer is assessed a user fee based on its market share for that tobacco product class.
December 8, 2021
VPR Brands Settles Airflow Patent Case

Photo: Vitalii Vodolazskyi
HQDTECH USA and Nepa 2 Wholesale have agreed to pay more than $275,000 to VPR Brands to settle an intellectual property dispute. VPR will now license the IP to Nepa.
VPR Brand’s U.S. patent No. 8205,622 dates to 2009 and includes independent claims covering electronic cigarette products containing an electric airflow sensor, including a sensor comprised of a diaphragm microphone.
The sensor turns the battery on and off and covers most auto-draw, buttonless e-cigarettes, cigalikes, pod devices and vaporizers using an airflow sensor rather than a button.
“I want to thank our legal team at SRIPLAW for their hard work and diligence in settling this matter. They have been preparing to go to court and litigate on our behalf for the better of two years now, and preparation is key in negotiating and settling any dispute,” said Kevin Frija, CEO of VPR Brands, in a statement.
“Ultimately, it is a win-win for all parties when a dispute can be settled ahead of trial, but you must be prepared to take it all the way, and the litigation team at SRIPLAW is ready, willing and able to go the distance if needed, and that is what counts when protecting intellectual property.”
The case was filed on May 3, 2021, in the Florida Southern District Court.
December 8, 2021
Cullip: China Could Revolutionize THR

Martin Cullip (Photo: Tobacco Reporter archive)
China has the potential to revolutionize global tobacco harm reduction now that its government has asserted authority over e-cigarettes, according to consumer advocate Martin Cullip.
On Nov. 26, China’s State Council on Nov. 26 amended the country’s tobacco monopoly law to include vapor products, which means that vaping products and their manufacturers will be regulated by the Chinese government under the same process as cigarettes.
The announcement triggered feverish speculation about the impact of the new rules, with some commentators fretting that tobacco rules would put vapor companies out of business and others welcoming the prospect of enhanced product safety and quality.
Writing in Filter, Cullip points not only to the vapor industry’s economic significance to China, but also to the potential domestic health benefits of sensible regulation. China, argues Cullip, has a lot to gain from financially from domestic harm reduction, when the country’s high smoking prevalence in an aging population creates heavy costs in health care and lost productivity.
Cullip is also encouraged by China’s willingness and ability to stand up the World Health Organization, which remains ideologically opposed to tobacco harm reduction.
While the government would seem to have much to gain from blocking the growth of safer alternatives such as e-cigarettes and tobacco-heating products—the state-owned CNTC sells more than 40 percent of the world’s cigarettes—there are many incentives for the government to push things in an entirely different direction, according to Cullip.
China manufactures the vast majority of the world’s vape products. More than 170,000 businesses engage in e-cigarette production and the supply chain, employing around 3 million people. The CNTC is also the world’s biggest holder of tobacco harm reduction patents, owning almost 27 percent of all related patent publications.
“It is difficult to imagine the government strangling the market—even if this is motivated more by profit than by its citizens’ health,” writes Cullip.
December 8, 2021
K&H Presents Tobacco Law Symposium
Keller and Heckman will has announced the agenda for its sixth Annual E-Vapor and Tobacco Law Symposium.
The two-day virtual seminar will focus on legal and regulatory issues critical to the vapor, tobacco and CBD industries in the aftermath of the U.S. Food and Drug Administration’s decisions on millions of premarket tobacco product applications (PMTA).
Among other topics, the seminar will cover PMTA marketing denial order challenges, new requirements for PMTAs and substantial equivalence reports and the outlook for synthetic nicotine products.
In addition to Keller and Heckman’s regulatory attorneys and scientists, this year’s program features numerous expert guest speakers, including from Tobacco Vapor Cannabis Group, the American Vaping Association, McKinney Regulatory Science Advisors and the Tax Foundation.
The symposium will take place Feb 2-3 from 10:30 am to 6:30 pm Eastern Time.
December 8, 2021
BAT on Track to Meet 2025 Revenue Target

Photo: BAT
BAT is making “excellent progress” toward its £5 billion ($6.62 billion) revenue target by 2025, CEO Jack Bowles said in a trading update. New category products are now a sizable contributor to group revenue growth and will continue to profit growth for the first time as their losses start to reduce, he noted.
“We are building strong, fast-growing, global brands of the future, adding another 3.6 million consumers of noncombustible products in the first nine months of the year—more than in all of 2020,” said Bowles.
“Our strong focus on cash flow and deleveraging continues. We recognize the clear value of a share buyback at the current valuation. We also continue to be clear on the need to deliver on our 2021 commitment to reduce leverage to circa three times adjusted net debt/adjusted EBITDA and expect to reach this by the year end. This will provide greater capital allocation flexibility as we enter 2022.”
According to BAT, the company’s Vuse vapor cigarette is approaching nationwide leadership with a 31.4 percent value share of the U.S. vapor market. Glo Hyper reached a category volume share of 17.7 percent in the top nine tobacco-heating products markets.
Meanwhile, the company continued to enjoy value growth in combustibles, with strong pricing partially offset by geographic mix and the absorption of about £260 million profit impact in Australia and New Zealand.
December 7, 2021