Category: Featured

E-Cig Leaders Welcome China Tobacco Rules

Photo: Timothy S. Donahue
China’s recently announced regulatory framework for e-cigarettes should secure the vapor industry’s future in that country, according to leading players in the business.
On Nov. 26, China’s state council amended the tobacco monopoly law to include vapor products, meaning that, going forward, e-cigarettes will be managed like combustible cigarettes.
With more than 300 million smokers—27 percent of adults—China is the world’s largest tobacco market. It also produces about 90 percent of the world’s e-cigarettes, primarily in the technology manufacturing hub Shenzhen.
The government and the tobacco industry are, essentially, one entity in China, with the State Tobacco Monopoly Administration regulating the industry and China National Tobacco manufacturing tobacco products.
To date, the vapor industry in China has operated in a legal grey area. Regulation had been widely anticipated, but many feared that it would wipe out the sector. The Nov. 26 announcement, however, was welcomed by leading players in the business. Industry representatives say it removes uncertainty and will weed out bad actors.
In background article on the recent news from China, Filter cited Smoore global PR manager Frankie Chen, who expects national mandatory standards to significantly improve product safety and provide global vapers with better products.
“Since the standards set higher requirements for vaping manufacturing, it is expected that only the responsible manufacturer with comprehensive safety management can be compliant,” Chen was quoted as saying.
RLX Technology, too, welcomed the new regulatory framework. “We believe the sector will enter a new era of development—an era marked by enhanced product safety and quality, augmented social responsibilities, and improved intellectual property protection,” said RLX Technology chairperson and CEO Ying Wang at the presentation of the company’s third quarter results.
RLX Technology Chief Financial Officer Chao Lu said the company is well prepared for the new operating environment. “The investments we made in products, talents, research, and compliance in the third quarter and beyond will place us in advantageous positions under the new regulatory paradigm,” he said.
December 3, 2021
RLX Reports Lower Quarterly Revenues

Photo: Freedomz
RLX Technology today announced its unaudited financial results for the third quarter ended Sept. 30, 2021.
Net revenues were CNY1.68 billion ($260.2 million), representing a decrease of 34 percent from CNY2.54 billion in the second quarter of 2021.
Gross margin was 39.1 percent, compared to 45.1 percent in the second quarter of 2021. U.S. GAAP net income was CNY976.4 million, compared with CNY824.3 million in the second quarter of 2021.
Non-GAAP net income was CNY452.7 million, compared with CNY651.8 million in the second quarter of 2021.
“In the third quarter, we continued to develop our business through concerted efforts deepening our scientific research abilities, adding to our differentiated product portfolio, and enhancing our sustainability initiatives. We also strengthened our core capabilities by expanding our talent pool, optimizing our retail network and making digitalization upgrades to our operating infrastructure,” said Ying (“Kate”) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement.
“Looking ahead, with the formal confirmation of the amendment to the implementation rules of tobacco monopoly law announced last week bringing innovative tobacco products including e-cigarettes under the regulatory framework, together with the draft administrative measures for electronic cigarettes and the draft national electronic cigarette product standards announced earlier this week, we believe the sector will enter a new era of development—an era marked by enhanced product safety and quality, augmented social responsibilities, and improved intellectual property protection. These developments will pave way for long-term sustainable growth in this sector.”
“In the past quarter, we placed even more focus on investments in R&D, organizational upgrades and operational efficiency improvements in existing channels, shifting from the efforts on distribution network expansion in previous quarters,” said Chao Lu, chief financial officer of RLX Technology. “As a result, we have a richer product portfolio in the pipeline and healthier inventory levels across our value chain.”
“We believe our quarterly revenue drop was temporary, and the investments we made in products, talents, research, and compliance in the third quarter and beyond will place us in advantageous positions under the new regulatory paradigm. We expect these investments to yield steady and sustainable growth soon,” Lu added.

December 3, 2021
China Rules to Require Industry Licensing

Photo: chokniti
China’s State Tobacco Monopoly Administration issued new draft rules governing e-cigarettes on Dec 1, reports Reuters. The move follows a decision by China’s cabinet last week to give the country’s tobacco monopoly oversight over the e-cigarette business.
According to the draft rules, companies selling e-cigarettes in China must meet national standards in order to register with the tobacco authority and do business legally. Companies engaged in the production of e-cigarettes must also receive a special license from the tobacco authority, provided they can prove that they have the funds for production and a facility with equipment that meets standards.
The tobacco authority said that it will establish a “unified national electronic cigarette transaction management platform” that all licensed e-cigarette wholesalers and retailers “must sell products through.” Tax collection and payment of e-cigarettes, meanwhile, “shall be implemented in accordance with national taxation laws and regulations,” the regulator wrote.
China’s e-cigarette sector has been growing rapidly following the international success of vapor products. Market leader RELX Technology went public in New York in January.
The vapor business in China operated in a legal grey zone thus far. Analyst had been expecting the government to assert control over the sector for some time now, and the recent announcements end months of speculation over what regulations might look like.
China’s cigarette industry works under a state-run monopoly directly controlled by the tobacco regulator, which dictates pricing and distribution for brands and generates tax income for the government.
December 2, 2021
Smoking Down in New Zealand

Photo: sezerozger
Fewer New Zealanders smoke cigarettes than last year, reports The New Zealand Herald, citing the results of a survey performed by the Ministry of Health.
Based on data collected between September 2020 and August 2021, the study revealed a larger than usual decrease in daily smoking. In 2020-2021, 10.9 percent of those who took part in the survey were current smokers compared to the 13.7 percent in the study taken across 2019-2020.
However, smoking among Māori and Pacific adults remained high: 22.3 percent of Māori and 16.4 percent of Pacific adults were daily smokers.
“The hard work of the government and those in the smokefree sector is paying dividends,” said Action for Smokefree director Deborah Hart. “But we must prioritize those who need support to quit smoking – Māori, Pacific and those in low socio-economic status.”
Associate Professor Collin Tukuitonga was disappointed by the high smoking rates among the Pacific community.
“It is disappointing that Pacific rates remain high. We can see from the [Covid-19] vaccine rollout what can be achieved when communities are engaged.
“That is what we need to ensure Pacific people get to the Smokefree 2025 goal.”
December 2, 2021
KT&G Strengthens Grip on Korean ENDS Market

Photo: KT&G
KT&G’s share of the South Korean market for electronic nicotine delivery systems (ENDS) rose to a record 40.7 percent by the end of September, reports The Pulse News.
The company’s performance is driven by the success of new tobacco sticks, such as Fiit and Miix, which are compatible with its heat-not-burn cigarette brand Lil.
Cumulative sales of Lil devices surpassed 4 million units this year, compared with 3.22 million in 2020.
The company’s key growth driver has been Lil Hybrid 2.0, which combines KT&G`s proprietary technology using cartridge and stick.
KT&G is also strengthening the lineup of dedicated sticks for its devices. The lineup of Fiit and Miix sticks almost doubled from 11 types in 2019 to 20 today.
The Lil brand has been well received internationally, as well. In a global partnership with Philip Morris International, the KT&G product is now sold in 10 countries, including Russia, Ukraine and Japan.
December 2, 2021
Drug Application for Inhalable Nicotine Replacement Therapy

Photo: Respira
Respira Technologies plans to submit an investigational new drug application (IND) to the U.S. Food and Drug Administration in 2022 for the world’s first inhalable nicotine-replacement therapy.
“There is a void of innovation in solving the smoking crisis from traditional healthcare companies, and as a result, Big Tobacco is trying to position itself as the solution to the problem they’ve created. At Respira, we believe only our technology can effectively help end the death and disease caused by smoking while simultaneously meeting CDER’s [Center for Drug Evaluation and Research] high standards for both safety and efficacy,” said Mario Danek, CEO and founder of Respira Technologies, in a statement.
“We are very pleased with the productive and collaborative discussion with FDA and have confidence that FDA’s guidance will help us achieve our goal to end the death and disease caused by smoking,” said Danek. “The Pre-IND is just the first of many major milestones Respira will achieve, and we are excited to advance our plans to submit our IND to begin human clinical studies.”
In 2020, the company said it aims to disrupt a $618 billion market dominated by decades-old gums and patches from pharmaceutical companies as well as tobacco companies’ electronic nicotine-delivery devices with a nebulizer that converts nicotine to an aerosol.
Respira’s senior management includes Chief Operating Officer Brian Quigley, who spent 16 years at Altria Group where he was CEO of the smokeless tobacco business from 2012 to 2018.
December 1, 2021
Chinese Investors Eye Dominican Tobacco

Photo: alekosa
Chinese investors are negotiating to purchase leaf tobacco from the Dominican Republic, a development that could significantly boost exports from the Dominican Republic, reports The Dominican Today.
The Dominican Republic is already the world’s leading exporter of cigars.
Local industry representatives indicated that the Chinese investors are interested in the Olor Dominicano variety, which the large international cigar companies operating in the country use to manufacture their best blends.
The Dominican Republic exports cigars to 142 countries, according to José Guillermo López, a board member of Asociación de Desarrollo de la Provincia Espaillat.
López said the country has sufficient lands to expand tobacco cultivation. “We have the land capacity to plant four or five times more than what is being planted, without counting the potential of the south.”
The south’s problem of water shortages, he added, has been solved by investments in irrigation canals.
December 1, 2021
New Tobacco Health Warnings in Cambodia

Image: ATIC
New tobacco health warning requirements took effect in Cambodia today, according to The Phnom Penh Post.
The amended rules require cigarette manufacturers to print textual and pictorial messages on 55 percent of each tobacco product pack warning consumers that smoking can lead to heart disease and fatal emphysema.
Retailers may continue to sell existing legally compliant and tax-paid tobacco products until they are depleted in the marketplace.
In the runup to the directive, the Association of Tobacco Industry in Cambodia (ATIC) produced and distributed an informational poster about the new rules to more than 20,000 retail outlets across the Kingdom.
“Our members have printed the new textual and graphic health warning on our product packs,” said ATIC President Roy Manalili. “The association is pleased to follow and support the authorities in this process to promote public health and strengthen fair competition.”
A Kantar study on illicit tobacco trade across Cambodia last year found 3.4 million out of 4.7 million packs complied with the then-prevailing health warning requirements.
Eighteen percent of noncompliant packs were identified as illicit product.
“It was believed that the ministry’s prioritized action to enforce and strengthen the existing regulations on the tobacco products with no pictorial health warning would be a much more important step than releasing new pictorial health warning or enlarging it,” said Manalili.
“Better enforcement would increase the level playing field in the market for a transparent business environment in line with the latest government’s policy reform.”
December 1, 2021
U.S. Civil Money Penalties Adjusted for Inflation

Photo: Jason Stitt
The Department of Health and Human Services has updated its regulations to reflect the required annual inflation-related increases to civil money penalties (CMPs), as per the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
The adjusted CMP amounts apply to penalties assessed on or after Nov. 15, 2021, if the violation occurred on or after Nov. 2, 2015.
This adjustment occurs every year as described by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
To see the updated amounts, please visit the CTP Compliance & Enforcement webpage.

December 1, 2021
Vapor Firms Vying for U.K. Medical Licenses

Photo: makistock
Vapor companies are vying to get their product prescribed by the U.K. National Health Service after the Medicines and Healthcare products Regulatory Agency last month encouraged companies to apply for a medical license, reports The Financial Times.
Companies preparing applications include U.S.-based NJOY, DSL Group, which owns Nottingham-based Multivape, Yatzz of Ireland and Leeds-based Superdragon, whose director David Xiu described the potential market as “much more than a multimillion-pound” opportunity.
The e-cigarette market is worth more than £2 billion ($2.66 billion) in the U.K., according to Euromonitor, much more than in other European countries.
As of yet, none of the leading tobacco companies have launched medicinal-use applications for the vapor brands.
Imperial Brands, the U.K. owner of Blu e-cigarettes, said it was “carefully studying the new guidance.” Japan Tobacco International said it had “not made any decisions regarding licenses” for its Logic brand of vapes. Juul Labs said it had “nothing to announce at this time.”
British American Tobacco, which owns Vuse, declined to comment.
BAT-backed nicotine inhaler Voke received U.K. medical approval in 2014, but was scrapped after financing and manufacturing difficulties.

The medical device will be locked down to a significant degree, with changes only possible infrequently and after jumping through a lot of hoops.
Erik Bloomquist
Tobacco analyst Erik Bloomquist said companies may prefer commercial routes due to the length of the approval process. Licensing could take several years, during which time products can become out of date.
“The medical device will be locked down to a significant degree, with changes only possible infrequently and after jumping through a lot of hoops,” he said.
Compliance costs could also be prohibitive for smaller groups. Chris Allen, chief scientific officer at consultancy Broughton, said clinical trials, marketing and compliance costs could amount to as much as £3 million to £5 million for a single product. This means that “only a handful of companies would look at this path,” he said in a statement.
December 1, 2021