Category: Featured

BAT Calls for Higher Cigarette Taxes in Japan

Photo: Colleen Williams
British American Tobacco has surprised some observers by calling for higher cigarette taxes in Japan, reports the Japan Times.
The company has submitted the request in writing to a group of lawmakers ahead of a tax system reform scheduled for 2022.
The unusual move by a tobacco-maker comes as Japan is slated to raise its tobacco tax only for heat-not-burn (HnB) tobacco products in October 2022, which is expected to make some of such products more expensive than cigarettes.
BAT is concerned that this will discourage smokers from switching to HnB products, which the company believes are less harmful to health than combustible cigarettes.
The company is also requesting that the tax on heat-not-burn tobacco be increased at a slower pace than that for cigarettes in the medium to long run.
In 2018, the government decided to increase the cigarette tax by ¥1 per cigarette each in 2018, 2020 and 2021 and the tax on heat-not-burn products in five stages from 2018 to 2022.
According to the Tobacco Institute of Japan (TIOJ), sales of cigarettes in fiscal 2020, which ended last March, dropped 11.8 percent from the previous year to ¥2.47 trillion, due in part to a fall in opportunities to smoke outside home as people stayed at home amid the coronavirus pandemic.
Tobacco harm reduction activists attribute the sharp drop in smoking to the rising popularity of HnB products.
The TIOJ’s first survey of HnB products showed sales of ¥1.06 trillion, or more than 40 percent of the country’s cigarette sales.
November 5, 2021
Taipei Moves Closer to Banning E-Cigarettes

Photo: Skye
The Taipei city government has passed a ban on vapor products, reports The Taipei Times. If the Executive ratifies the measure, the city will impose a broad-ranging prohibition on the sale, advertisement, display and commercial transportation of novel tobacco products, including vaping devices and heated tobacco units.
Additionally, vaping and using heated tobacco products is to be banned in a 50-meter zone around schools.
Violators risk fines of between TWD2,000 ($71.76) and TWD10,000.
The city ordinance, which initially targeted only e-cigarettes, was expanded to include heated tobacco products at the suggestion of Taipei City Councilor Wang Hong-wei of the Chinese Nationalist Party (KMT).
Lauding the council’s decision, Health Promotion Division Director Lin Meng-hui dismissed as false tobacco industry claims promoting novel tobacco products as harm-reduction tools and smoking-cessation aids.
Lin said government testing showed that more than 80 percent of e-cigarettes contain nicotine, and that the devices create dependence on the substance.
The city has not drafted a timetable for implementing the ban.
November 5, 2021
More Calls for THR Ahead of COP9

Photo: andriano_cz
Activists continue to urge participants in the ninth Conference of the Parties (COP9) to the World Health Organization’s Framework Convention on Tobacco Control to seriously consider tobacco harm reduction in their deliberations.
COP9 will take place Nov. 8-13 online. During the convention, delegates will debate measures to reduce smoking-related death and disease. To the frustration of many tobacco harm reduction proponents, the WHO has been suspicious of vaping and other reduced-risk products, viewing them as an industry tool to keep consumers hooked on nicotine.
“Tobacco harm reduction is a chance for smokers to switch from an extremely harmful to a significantly less harmful alternative,” the Independent European Vape Alliance (IEVA) wrote in a statement ahead of the gathering.

We would like the WHO, together with other representatives from politics and science, to develop a targeted strategy for reducing the damage caused by smoking.
Dustin Dahlmann, president, IEVA
“Unfortunately, the WHO has lost sight of this in recent years. But it is not too late to repent. It must focus on the future of millions of smokers worldwide—a future that is much brighter should they switch to vaping—rather than its own counterproductive ‘quit-or-die’ dogma.”
“As a European association that is independent of the tobacco industry, we would like the WHO, together with other representatives from politics and science, to develop a targeted strategy for reducing the damage caused by smoking. Of course we as an industry are ready for this critical dialogue,” said Dustin Dahlmann, president of IEVA.
“The World Health Organization’s failure to declare a global emergency in 2020 [in the wake of the coronavirus pandemic] will be repeated in 2021 when the WHO will likely abandon international tobacco harm reduction efforts and condemn millions of smokers to an early death,” said Nancy Loucas, a leading consumer advocate based in New Zealand.

The WHO got it totally wrong on Covid-19, and it’s no surprise they’ve also got it very wrong with safer nicotine products such as vaping.
Nancy Loucas, consumer advocate
“The WHO got it totally wrong on Covid-19, and it’s no surprise they’ve also got it very wrong with safer nicotine products such as vaping,” she added. “As an ex-smoker, vaping has improved my health and arguably saved my life, yet the WHO and its sponsor American Michael Bloomberg have pressured countries like mine to ban it.”
On Oct. 18, 100 international health experts sent a public letter urging the COP9 parties to take a more positive stance on tobacco harm reduction. That same month, the Global State of Tobacco Harm Reduction (GSTHR) released a report urging the WHO to update its policies, which the GSTHR described as “frozen in time” as they dated from before the arrival on the market of many less-harmful nicotine delivery devices.
A group of tobacco harm reduction experts will hold a round-the-clock broadcasting event Nov. 8-12, to challenge and scrutinize COP9, which will take placed behind closed doors.
November 5, 2021
STG Posts Results in Line With Expectations

Photo: STG
Scandinavian Tobacco Group (STG) reported net sales of DKK2.18 billion ($338.78 million) in the third quarter of 2021 compared with DKK2.231 million in the third quarter of 2020. EBITDA before special items was DKK627 million, up from DKK614 million in the prior-year period. Organic EBITDA growth was positively impacted by a DKK31 million income from certain duty refunds in the U.S.
The results were driven by continued strong demand for handmade cigars in the U.S, a favorable market and product mix, and synergies from the integration of Agio Cigars. Supply issues in Europe impacted net sales negatively in the third quarter.
“We delivered strong quarterly performance in line with expectations and maintain the positive momentum we have had throughout 2020 and 2021,” said STG CEO Niels Frederiksen in a statement.
“The combination of the integration of Agio Cigars, the growth in handmade cigars and our underlying transformation have significantly improved our performance and raised our earnings and margins levels. I remain proud and impressed with the way our organization has continued to deliver a strong performance throughout a challenging period.”
November 5, 2021
22nd Century Reports Third-Quarter Results

Photo: MIND AND I
22nd Century Group reported net sales of $7.8 million in the third quarter of 2021, up 6.9 percent over those posted in the prior-year period. The increase was due to an increase in contract manufacturing sales.
Gross profit for the third quarter of 2021 improved by 24 percent to $449,000 compared to the prior year period, reflecting the seventh consecutive quarter of year-over-year improvement in gross profit. The improvement in gross margin was primarily the result of increased filtered cigar sales mix due to new customer contracts and price increases on the company’s contract manufactured cigarettes.
Operating loss for the third quarter of 2021 was $7.9 million, an increase of $3.4 million compared to the prior year period. This was primarily driven by an increase in selling, general and administrative expenses and was partially offset by higher gross profit and lower research and development spend in the third quarter of 2021.
Net loss in the third quarter of 2021 was $9.4 million, an increase of $5.1 million compared to the prior year period primarily due to an increase in noncash charges offset by benefits to other income and expenses. This compares to the third quarter of 2020 net loss of $4.2 million.
“I am proud of the tremendous progress we have made during 2021 as we complete the final step to MRTP [modified-risk tobacco product] authorization of our VLN reduced-nicotine tobacco cigarettes and begin to monetize our highly disruptive hemp/cannabis plant lines and IP [intellectual property],” said James A. Mish, CEO of 22nd Century Group, in a statement.
November 5, 2021
Filter: Some PMTAs Not Evaluated on Merits

Photo: Ronstix
Confronted with an unexpected large volume of premarket tobacco applications, the U.S. Food and Drug Administration subjected some premarket tobacco product applications (PMTAs) to only a superficial review, according to documents obtained by Filter.
The report follows the FDA’s denial of more than 1,167,000 marketing applications since Sept. 9, 2021.
The PMTA review process comprises three phases: Phase I (Acceptance), which essentially means an application has been received; Phase II (Notification or Filing), which entails acknowledging a company had enough information for its applications to be formally filed; and Phase III (Review), which involves a substantive scientific evaluation, followed by a marketing granted order or marketing denial order (MDOs).
Overwhelmed by the large number of PMTAs and facing a court-ordered deadline of Sept. 9, 2021, the FDA in effect opted for a shortcut, according to Filter.
The publication cites a memorandum signed on July 9 by Matthew Holman, the director of FDA Center for Tobacco Products Office of Science (OS). “Considering the large number of applications that remain to be reviewed by the September 9, 2021, deadline, OS will conduct a Fatal Flaw review of PMTAs not in Phase III for non-tobacco-flavored ENDS products,” it reads.
The Fatal Flaw review is a simple review in which the reviewer examines the submission to identify whether or not it contains the necessary type of studies. “The Fatal Flaw review will be limited to determining presence or absence of such studies; it will not evaluate the merits of the studies,” the memorandum states.
Filter suggests that CTP reviewers created what’s probably a new method to get through a backlog of millions of PMTAs, searched those applications for longitudinal cohort studies and randomized clinical trials without evaluating any other evidence, and for applications lacking them, did not advance them beyond Phase II and just sent out templated MDOs.
November 4, 2021
Tanzania Leaf Tobacco Sales up

Photo: Taco Tuinstra
Tobacco sales in Tanzania increased to 57 million kg in 2020-2021 from 39 million kg in 2017-2018, reports All Africa, citing Deputy Minister for Agriculture Hussein Bashe.
During 2020-2021, about eight local buying companies had entered into contracts with producers of tobacco countrywide, he said.
Bashe told Parliament the government was continuing to lure farmers by insisting on contract buying, looking for new buyers as well as looking for international markets.
He added that the government was equally eyeing the Chinese market and already the government had brought another seedling of the product and trials had been made, where the sample had been forwarded to relevant authorities for further procedures.
November 4, 2021
Universal Pleased With Six-Month Results

Photo: Taco Tuinstra
Universal Corp. reported net income of $25.87 million for the six months that ended on Sept. 30, up from $14.78 million in the first six months of 2020. Operating income was $40.42 million, compared with $24.88 million in the comparable period last year. Sales and other operating revenues came to $803.98 million, against $692.84 million in the 2020 period. Operating income from tobacco operations jumped 52 percent to $35.8 million.
George Freeman
“I am pleased with our results for the first six months of fiscal year 2022,” said George Freeman III, chairman, president and CEO of Universal Corp in a statement. “Our tobacco operations have continued to perform well, and our ingredients operations, which include our October 2020 acquisition of Silva International, Inc., are making solid contributions to our results.”
“In the six months ended Sept. 30, 2021, tobacco operations results improved on a favorable product mix consisting of a higher percentage of lamina tobacco and fewer carryover sales of lower margin tobaccos, compared to the same period in the prior fiscal year.
“In addition, our uncommitted inventory level of 11 percent of tobacco inventories at Sept. 30, 2021, was significantly below our uncommitted inventory level of 16 percent of tobacco inventories at Sept. 30, 2020. At the same time, we continue to have logistical challenges related to worldwide shipping availability stemming from the ongoing Covid-19 pandemic.
“To address these challenges, we are working closely with our customers to accelerate tobacco shipments in some origins where vessels and containers have been available while diligently managing slower tobacco shipments in origins with reduced container and vessel availability.”

November 4, 2021
Star Enters Turkish FVC and Burley Markets

Photo: MrPreecha
Following the Turkish government’s decision that all cigarettes produced in Turkey for sale in Turkey must contain 30 percent of Turkish tobacco, Star Agritech International (SAI) has decided to enter the market for locally grown flue-cured Virginia (FCV) and burley tobaccos commencing with the 2022 season.
Based on current cigarette consumption, local manufacturers will require between 25,000 to 30,000 tons per year of locally produced FCV and burley. SAI has therefore opened its agricultural branch office in Mus, Turkey, as the project center.
The office is adjacent to the Turkish Tobacco Cooperative Union on which SAI will lean heavily for tobacco production by its farmer members.
SAI’s project envisages the cultivation 5,000 tons of cured tobacco by 2025, the creation of 110,000-square-meter industrial park encompassing green leaf storage, curing barns, a green leaf threshing line, a hand stripping center, a processed leaf warehouse, a CRES line, a recon line and administration offices.
The complex is slated for phased completion in 2022 and 2023. The project will be initially managed by Yagiz Turk assisted on the technical front by Furkan Aslan and on the leaf front by Gokhan Akca. Other Istanbul functions will provide support as required.
The project is SAI’s second direct involvement in tobacco cultivation after its Cameroon cigar leaf plantations. It is projected stimulate the regional economy and create employment.
November 4, 2021
Leaf Exporter Charged With Using Slave Labor

Photo: Tobacco Reporter archive
Brazil has charged a tobacco exporter with using slave labor, reports Reuters. The case comes after labor inspectors found nine workers, including children, living in poor condition on a farm in Venancio Aires, Rio Grande do Sul. The workers were allegedly paid less than a third of Brazil’s minimum wage. They also lacked protective gear, leaving them exposed to high concentrations of nicotine.
The tobacco exporter countered that the farm’s owner was responsible for hiring. The company said it conducts its operations in accordance with Brazilian legislation and has programs to fight child labor.
Under Brazil’s integrated tobacco production system, exporters provide credit, seeds and equipment to leaf growers in exchange for exclusive rights to the farm output. Production contracts allow merchants to audit the farm and dictate how to develop the crops. Labor inspectors insists this degree of control makes companies responsible for the working conditions at the farms they contract.
“The industry’s current position of not being responsible for the illegal exploitation of the workforce … has to be faced,” said labor inspector Leandro Vagliati. “The companies have to be called to account,”
Brazil’s definition of slavery includes not only as forced labor but also as debt bondage, degrading work conditions, long hours that pose a risk to health and any work that violates human dignity.
Since its creation in 1995, Brazil’s anti-slavery taskforce has found more than 55,000 people in slavery-like conditions.
If found guilty of using slave labor after a government review, the accused tobacco exporter could be added to Brazil’s “dirty list” of companies that have engaged in slave labor.
Companies remain on the list for two years and are barred during that period from receiving state loans. The list is also used by international buyers concerned about supply chains.
November 4, 2021