Category: Featured

  • SWM Adjusts Outlook Following Tough Quarter

    SWM Adjusts Outlook Following Tough Quarter

    Photo: SWM

    Schweitzer-Mauduit International reported GAAP income of $12.2 million in the third quarter of 2021, down from $24.5 million in the third quarter of 2020. Adjusted income was $25.8 million, down 29 percent; Adjusted EBITDA declined 18 percent to $52.8 million. Net currency movements had a $1.8 million negative impact on operating profits.

    “We are clearly operating in an unprecedented economic environment for the second year in a row,” said SWM CEO Jeff Kramer in a statement. “After delivering strong 2020 performance despite a global epidemic, we are now seeing robust demand across many of our end-markets. However, manufacturers around the world are now navigating widespread inflationary pressures and supply chain disruptions.

    “Given the performance to-date and expected lingering fourth quarter pressures, we believe our 2021 Adjusted EPS will finish below our originally guided range. However, we are seeing early signs of relief from several challenges and fully expect our 2022 guidance, when issued in February, to reflect a strong operating profit rebound as we are well positioned for growth as conditions normalize throughout next year.”

  • A Tale of Two COPs

    A Tale of Two COPs

    Image: Tobacco Reporter archive

    This year, the first two weeks of November will witness two COPs (Conference of Parties), large policy gatherings aimed at moving the needle on ratified global U.N.-related conventions. Both have to do with health—individual, population and the planet’s health. Yet, one COP is attracting the leaders of the developed world as well as developing worlds in Glasgow, United Kingdom, along with another 20,000-odd stakeholders. The other COP will be held virtually and quietly from its secretariat in Geneva, Switzerland.

    The United Nations Framework Convention on Climate Change (UNFCCC) secretariat is tasked with supporting the global response to the threat from climate change. With 197 members, the UNFCCC has a near universal coverage. The 26th Conference of the Parties (COP26) Glasgow was kicked off on Oct. 31 with great fanfare, high expectations and drama befitting a Hollywood premiere—e.g., Greta Thunberg arrived on a “climate train,” a test in patience and endurance for Greta, her 150 fellow passengers, the media and the climate activists’ mob at Glasgow Central.

    Throughout the course of these two weeks of negotiations, haggling and posturing, the best possible outcome from COP26 could be that all countries commit to keeping global warming limited to 1.5 degrees Celsius. That calls for some serious re-engineering of human behavior and entire societies. Millions of conventional jobs and livelihoods will be lost, millions more potentially created in the new green economy. Some would argue (and justify): Desperate times call for desperate action. Green economy advocates and solution providers, including transforming oil companies and automobile manufacturers, are in full attendance at the summit and are missing no photo-op to burnish their green credentials.

    The UN climate change conference will consider the input of the manufacturers it seeks to regulate, many of which are eager to show how they can be part of the solution. (Photo: adrian_ilie825)

    The other COP, of the Framework Convention on Tobacco Control (FCTC), created by the U.N.’s World Health Organization and run by the FCTC secretariat, follows a completely different tack. It is notionally intended for addressing the harms to society and the world due to risky forms of smoked (cigarettes, bidis, cigars) and smokeless (khaini, gutkha, zarda, etc.) tobacco products that over a billion people consume today. The FCTC is ratified by most of the countries in the world (the USA and Indonesia being notable exceptions), and the ninth Conference of Parties from Nov. 8–13 will see yet another biannual get together making decisions that affect 1.3 billion tobacco users, their families and millions from the tobacco supply chain globally. However, it is held behind closed doors, driven by health activists that simply see the tobacco industry as the problem and tobacco users as AstroTurf for the tobacco industry. Neither are allowed anywhere near the meeting nor are the lay media.

    The FCTC, in its simplest form, is a demand and supply reduction treaty, underpinned by tobacco harm reduction principles. Broadly, what this could mean in policy as well as practice is that those not currently using risky forms of tobacco products, especially children and young adults, should be disincentivized from initiation, and those currently using risky forms of tobacco should get the necessary help to quit. This may take the form of providing nicotine-replacement therapy, prescription medications and behavioral support. It could also mean that those involved in the supply chain, such as farmers and bidi worker women, should be given support to switch to alternative livelihoods.

    Sixteen years on from the ratification of the FCTC, great progress has been made in adopting parts of the treaty that relate to demand reduction by prevention of initiation into national regulations. Advertising campaigns, tax hikes, health warnings and packaging and sale restrictions have led to significant reductions in initiation, especially among youth. On the other hand, support to current users of risky forms of tobacco remains wanting, lacking innovation and largely under-funded.

    The nicotine in these products makes consumers dependent. The cancers, however, are caused by the toxic chemical mix in the smokeless products and from the smoke itself—but not the nicotine. Pharmaceutically licensed nicotine-replacement therapy products, in the form of gums and patches, are on the WHO’s model essential medicines list for tobacco dependence treatment. It is scientifically proven: Quitting risky forms of tobacco (cessation) is not easy; relapse is very common. The high retail price of the cessation products, poor availability and inadequate training of doctors in prescribing these cessation treatments means that current tobacco users miss out on any meaningful access and support.

    It is easy to point to the tobacco industry’s morally and ethically unacceptable behavior for most of the 20th century that led to the smoking epidemic globally, and even today, to the manufacturers of gutkha and pan masala in India who are fueling an oral cancer epidemic. Based on this historical context, the COP organizers exclude this industry from their deliberations. Sadly, that exclusion extends to consumers, effectively the current and future patients suffering from tobacco dependence.

    This raises a sticky question: Are the global public health community, led by the WHO’s FCTC signatories who meet every two years formally at the COP, simply giving up on the 1.3 billion current users of cigarettes, bidis, khaini and gutkha-like products, letting them die preventable premature deaths, for the want of adequate cessation products and support? Would public health not benefit from a wider range of innovative nicotine-replacement products, manufactured to high standards, regulated appropriately and specifically available as cessation aids for current adult users of risky tobacco products?

    In stark contrast to the climate change COP26, at this tobacco-related COP9, manufacturers of cleaner nicotine products (the “solution providers” to the problem) and consumers (the victims of the problem) will be glaringly absent. (Photo: lezinav)

    This COP season, it may be time to draw parallels between two very similar gatherings with diametrically opposite profiles and approaches. Climate change and tobacco-related harms—both are urgent issues facing humankind. Both are being addressed by global treaties and conventions. For both problems, a wide range of solutions are coming from old and new industries.

    In the case of climate change, the Teslas of the world lead the rally. Conventional fossil fuel giants such as BP (of the Gulf of Mexico spill fame) and Shell are not far behind either, showcasing their renewables’ commitment in every ESG communication. The Volkswagen emissions scandal (from less than five years ago) is distant memory, and the automobile industry is at the table, providing cleaner cars by “electrifying” their offerings.

    In tobacco cessation, underpinned by tobacco harm reduction principles, innovation came from a wide range of inventors and manufacturers globally: e-cigarettes from China, heated-tobacco products from Switzerland and the U.K., nicotine pouches from Sweden and cessation apps from the USA. Pharmaceutical manufacturers of conventional nicotine-replacement products and prescription medications are either withdrawing from the markets or not innovating any more. They have not made any visible effort to make their products available at affordable prices in the developing world—and there was never a huge hue and cry about that from public health.

    None of the new innovative products are a silver bullet but promise to provide cleaner, safer nicotine to the billion-plus current consumers of risky forms of tobacco. In countries such as the U.K. and USA, where regulators are informed by scientific evidence and risk assessment, these products are regulated and allowed. Slowly but surely, this will transform the nicotine use profile in these countries, no doubt saving millions of lives and billions of dollars in future health costs from tobacco-related diseases. In Japan, previously known for its high smoking incidence among men, nearly 30 percent of the cigarette market has been replaced by heated-tobacco devices. These devices are increasingly acknowledged for their reduced toxicant exposure vis-a-vis cigarettes. The U.S. Food and Drug Administration has authorized the sale of a specific brand of heated device, an e-cigarette and a Swedish snus-style smokeless tobacco product for their reduced toxicant exposure and potential to reduce tobacco-related harms. In the U.K., e-cigarettes are one of the many options of quitting tools supported by national health bodies.

    In stark contrast to the climate change COP26, at this tobacco-related COP9, manufacturers of cleaner nicotine products (the “solution providers” to the problem) and consumers (the victims of the problem) will be glaringly absent. In countries where regulators do not need the WHO’s blessings to make their own policies (the U.S., U.K. and increasingly the EU), innovation and better regulation will lead to a reversal of harms from risky 20th century tobacco products. In the developing world, including South Asia, the harms from tobacco will remain unabated in the absence of strong regulatory leadership and industry transformation.

    Whether or not we can manage to curb the global temperature rises to a maximum of 1.5 degrees Celsius by 2050, today’s direction of tobacco control as symbolized by COP9 will hinder access to safer nicotine alternatives to over 1.3 billion current users, 80 percent of whom live in developing countries, accounting for millions of preventable deaths in the next three decades.

    Sudhanshu Patwardhan is a British-Indian, U.K.-licensed medical doctor who is passionate about helping people quit risky forms of tobacco. For the past two decades, he has lived and worked in three continents, doing senior roles in research, strategy and policy in the pharmaceutical and tobacco industries.

    In his early years in tobacco harm reduction, his team of clinical researchers and lab scientists set the foundations for the assessment of reduced-risk products, now accepted by regulators and the industry as the definitive approach for duty of care and regulatory compliance. At Nicoventures, a wholly owned subsidiary of British American Tobacco, he was instrumental in enabling the first e-cigarette company acquisition by a global tobacco business. In his policy role there, Patwardhan shaped the creation of a global key opinion leader network in consumer advocacy and public health champions. .

    With the British Standards Institution, Patwardhan led the creation of the world’s first vaping products’ standards for safety and quality in 2015 and the BSI Online Age Checking specifications in collaboration with the Westminster-based Digital Policy Alliance in 2018. .

    In 2018, he co-founded the Centre for Health Research and Education that now has a team of over 40 medical and public health experts globally working in cancer prevention. Patwardhan splits time between the U.K. and South Asia on tobacco harm reduction projects that address the needs of the most disadvantaged tobacco users. He is also a board director of Art Asia, a charity with a mission to communicate the rich and exciting experience of South Asian Arts to the widest possible audiences.
  • Report: Tobacco Took Advantage of Pandemic

    Report: Tobacco Took Advantage of Pandemic

    Photo: Olivier Le Moal

    A new report from tobacco industry watchdog STOP suggests that the tobacco industry embraced the Covid-19 pandemic as an opportunity to gain influence, sway health policies and secure preferential treatment. Reports from civil society organizations in 80 countries, analyzed in the Global Tobacco Industry Interference Index 2021, show that no country was immune to the industry’s efforts to use lobbying and donations, often connected to the pandemic response, to its advantage.

    “The tobacco industry’s behavior during Covid-19 wasn’t just business as usual—this research suggests it’s been far worse in terms of scale and impact,” said Mary Assunta, head of global research and advocacy for the Global Center for Good Governance in Tobacco Control, a partner in STOP and lead author of the index, in a statement. “In the middle of a pandemic, health should be the primary consideration in all policy decisions, but it was often sidelined in favor of the industry’s commercial interests. Where policy isn’t well protected, more lives will be lost to tobacco, and post-Covid economic recovery may be impacted, with higher health costs and potentially less tax revenue to fund recovery.”

    During the pandemic, many governments were short of public health resources. Some, like Botswana, Spain, Chile and India stepped up efforts to protect health policy, but others accepted the tobacco industry’s donations or lobbying, according to the report. Increases in tobacco taxes, for example, were delayed and the industry was able to open up new markets for electronic products. Among countries in the 2021 index report, 18 governments improved how they shield themselves from industry influence while 31 governments deteriorated in their efforts.

    The tobacco industry’s use of CSR donations that target the pandemic response stands in direct contrast to the importance of stopping tobacco use, according to STOP. Since the start of the pandemic, independent studies have found that smokers are more likely to develop severe Covid-19 as compared to nonsmokers. Tobacco use is a known risk factor for a range of chronic conditions that also place people at greater risk from Covid-19.

    “While the pandemic wreaked havoc around the world and the global economy suffered, two of the world’s biggest tobacco companies reported earnings before tax of more than $10 billion each,” said Assunta. “Governments must hold this industry accountable, and it must not be permitted to meddle in policy. It is time for all countries to ban tobacco-related CSR activities.”

  • PMI Applauds Plan to Simplify E-Cig Licensing

    PMI Applauds Plan to Simplify E-Cig Licensing

    Photo: DW labs Incorporated

    Philip Morris International announced its support of the U.K. government’s plan to simplify the pathway to license electronic cigarettes and other inhaled nicotine-containing products as medicines in England.

    “The U.K. already has one of Europe’s lowest smoking rates, supported by a high rate of smokers who have switched to better alternatives,” the company wrote in a press note. “This proposal makes the U.K. the first country in the world to encourage the medical licensing of e-cigarettes via prescription as a route to further lower smoking rates, particularly among low-income smokers.”

    “The U.K. is a global leader in medicine, science and public health,” said PMI’s senior vice president, of external affairs, Gregoire Verdeaux. “Expert scientific reviews in the U.K. and U.S. are clear that smoke-free alternatives—such as e-cigarettes—offer adults who would otherwise continue to smoke cigarettes a better alternative. We welcome the U.K. government’s continued recognition that regulated e-cigarettes and other inhaled nicotine-containing products, while not risk-free, are less harmful than smoking and can significantly benefit public health.”

    PMI said regulators can decisively accelerate the decline of smoking through risk-proportionate regulations for all nicotine-containing consumer products. A growing number of countries—including the U.S., New Zealand, Italy, Portugal, Greece and Bulgaria—have recognized this approach and implemented differentiated regulation for noncombustible alternatives, according to the company.

  • Harm Reduction Rally Ahead of COP9

    Harm Reduction Rally Ahead of COP9

    Delegates from some of the International Network of Nicotine Consumer Organizations’ (INNCO) 37 member organizations in North and South America, Europe, Africa and Asia will gather in London on Nov. 8 to applaud the U.K. government’s evidence-based support for tobacco harm reduction and to highlight the importance of the ninth Conference of Parties of the World Health Organization’s Framework Convention on Tobacco Control, which begins that day.

    “We are ex-smokers who use safer nicotine to save our own lives,” said Charles Gardner, INNCO’s executive director, in a statement. “Many of us around the world face stigma for using nicotine, a drug that is no more harmful to health than caffeine. A global ‘misinfodemic’ is now spreading worldwide, and the only cure is to embrace evidence and evidence-based policies such as those in the United Kingdom.”

  • PMI Invests in Growth Stage Companies

    PMI Invests in Growth Stage Companies

    Photo: William W. Potter

    Philip Morris International plans to dedicate a further $200 million to minority investments in early and growth-stage companies through PM Equity Partner (PMEP), PMI’s corporate venture capital arm. This allocation follows a 2016 commitment of $150 million that PMEP has since fully invested and is intended to support PMI’s smoke-free and beyond nicotine ambitions.

    With this latest round of funding, PMI will leverage its strengths to help investee companies translate innovation into commercial success. Developed through PMI’s journey to replace cigarettes with smoke-free alternatives, the company’s best-in-class capabilities include advanced life science expertise, preclinical and clinical research, and aerosolization.

    PMEP is focusing its investment activities on four distinct technology segments: life science innovations, such as inhaled therapeutics and computational research methodologies; industrial technologies like industrial robotics and automation, the internet of things and technology-based process optimization; product technologies, particularly those that relate to inhalation and aerosolization, chemical formulation and bio-authentication; and consumer engagement technologies, such as user identification and age authentication, innovative customer care and experience management.

     “PMI’s scientific and technological leadership has enabled us to reinvent our company in our pursuit to ‘unsmoke’ the world,” said PMI Chief Financial Officer Emmanuel Babeau in a statement. “We are dedicating further funds to our venture capital arm at a moment when we are in an even stronger position to leverage our expertise to support the development and commercialization of cutting-edge technologies to the benefit of both PMI and investee companies.”

    “PMEP is looking to invest in companies that can help PMI accelerate and further sophisticate our transformation while we support them through our industry-leading expertise to mature their technologies and businesses,” said Alexander Stoeckel, head of PMEP. “We see this exchange as a win-win for PMI, the companies we invest in and society.”

  • Doctors Reluctant to Prescribe E-Cigarettes

    Doctors Reluctant to Prescribe E-Cigarettes

    Photo: omphoto

    Not all doctors and nurses are enthusiastic about England’s intention to let physicians prescribe e-cigarettes to smokers, reports Daily Mail.

    A yet-to-be-published study, involving the University of Oxford, which interviewed 11 medical staff, found most struggled to advise long-term use of e-cigarettes because of concerns about unknown long-term effects.

    A survey commissioned by Cancer Research UK two years ago indicates that two in five English nurses and doctors would feel uncomfortable recommending e-cigarettes to smokers and one in six would never do so.

    General practitioners “find it difficult handing patients something which may cause them harm, even where e-cigarettes are far safer than cigarettes… They struggle to give people devices which may not be entirely safe or may perpetuate addiction to nicotine,” said Paul Aveyard, professor of behavioral medicine at the University of Oxford, who was involved in both pieces of research.

    Martin Marshall of the Royal College of general practitioners urged more investment in community smoking cessation centers. “’Vaping should only be seen as a way to give up smoking, with the intention to then give up vaping,” he said.

    Simon Capewell, professor of clinical epidemiology at Liverpool University, called the Department of Health plan for prescription e-cigarettes deeply worrying.

    “England is out on a dangerous limb,” he said. “Officials here have fallen for the exaggerated claims of the pro-vaping lobby, and are ignoring the health risks. The main claim, that e-cigarettes are a major aid to quitting, is wrong. If that were true, why would the multinational tobacco corporations be pushing vaping so hard?”

  • Christoph Tepr Joins Poda Holdings

    Christoph Tepr Joins Poda Holdings

    Photo: Andryei Yalanskiy

    Tobacco industry veteran Christoph Tepr has joined Poda Holdings as vice president of European sales & international expansion effective Jan. 17, 2022. In the interim, Tepr has joined the company’s global advisory board.

    Tepr has more than 15 years of commercial experience with some of the biggest tobacco and e-cigarette companies in the world, including Philip Morris International, British American Tobacco, and Juul Labs. His broad management experience spans sales operations, commercial deployment, brand management and professional services—targeting customers in mature and emerging product/service segments. He has helped drive the growth of iconic brands such as L&M, IQOS, and Juul.

    At PMI, Tepr held several key sales and management positions and was instrumental in deploying the IQOS product into the Swiss marketplace. At Juul, Tepr was hired to build the Swiss commercial organization from the ground up and, together with his team, took the company to category leadership within 12 months of launch. Subsequently, he successfully restructured the German commercial organization for Juul. Prior to this he held a commercial leadership position with British American Tobacco, focusing on commercializing and growing their Heat-not-Burn and conventional product portfolio.

    Tepr holds a MSc in International Business from Maastricht University as well as an executive certificate in Driving Strategic Innovation from IMD Lausanne / MIT Sloan.

    “Poda is an agile challenger in the fast-growing heat-not-burn space,” said Tepr in a statement. “With their proprietary technology platform, Poda represents a rare opportunity that has the potential to capture significant market share and ultimately transform and expand application areas within the category—while simultaneously improving the lives of the world’s 1.3 billion adult smokers by offering them a potentially less harmful alternative to conventional cigarettes. Having worked in multinational tobacco companies as well as for the fastest-growing e-cigarette start up in U.S. history, I look forward to using that experience to establish Poda’s European operations, set up a world-class team and make commercial headway into key European markets.”

    “I am thrilled that Mr. Tepr has agreed to join the Poda team, both as a member of our global advisory board and, in January 2022, as the vice president of European sales & international expansion for Poda,” said Poda Holding CEO Ryan Selby. “Our goal is to build Poda into a truly global company that can challenge big tobacco head on, and we believe our superior heat-not-burn technology will allow us to do just that.”

  • Malaysia Plans Excise for Vapor Products

    Malaysia Plans Excise for Vapor Products

    Photo: chachanit

    The government of Malaysia plans to introduce excise duties on all vapor products containing nicotine, reports Malay Mail.

    Without revealing the height of the intended taxes, Finance Minister Tengku Zafrul Abdul Aziz said the move was to promote a healthier lifestyle among Malaysians.

    British American Tobacco managing director Nedal Salem commended the plan, saying it was a right move towards tobacco harm reduction in Malaysia.

    “Regulation will not only allow vape users access to reduced-risk alternatives to smoking, but also ensure the products used are compliant to quality and safety standards,” Salem wrote in a statement.

    However, he warned the government that any new tax framework must be carefully crafted to ensure it does not drive consumers toward cheaper, less-regulated alternatives.

    “If not, the mistakes of high tobacco excise rates will be repeated where currently the government loses MYR5 billion (1.2 billion) annually,” Salem wrote.

  • Tobacco Tax Dropped from U.S. Legislation

    Tobacco Tax Dropped from U.S. Legislation

    Photo: RomanR

    Previously proposed tobacco tax increases have been removed from the U.S. Build Back Better Act, a massive piece of legislation conceived to fund Covid-19 relief, boost economic recovery and invest in new infrastructure. The most recent version of the proposed bill, H.R. 5376, makes no mention of the measures.

    The dropped proposal would have effectively doubled the federal excise tax on small cigars and cigarettes, and it would have increased the tax on chewing tobacco from a little over $0.50 to $10.70—more than 21 times its current level. It also called for a new tax on vapor products.

    The proposed tobacco tax hikes attracted fierce criticism from retailers and tobacco harm reduction advocates, among others.

    On Sept. 24., the National Association of Convenience Stores sent a letter warning lawmakers against unintended consequences, such as illegal trade and underage sales.

    “When the price of a product rises too much too fast, illicit purveyors will seize the opportunity to exploit and take advantage of current users and entice new users without discriminating based on age,” the letter read. “This undermines the responsible measures our retailers have taken and creates a problem for society as a whole.”

    Earlier, the Tax Foundation cautioned that the proposal would make cigarettes—the most harmful tool to consume nicotine—cheaper than other, less-risky tobacco products in many states.

    While every U.S. state taxes cigarettes by quantity, a majority tax other tobacco products by price. When states tax tobacco products by price, the tax on the product will “pyramid” since the federal tax is levied at the manufacturer level and the state tax is levied at the distribution level, according to the Tax Foundation.

    “In effect, the state tax base includes the federal tax and becomes a tax on a tax,” wrote Ulrik Boesen, senior policy analyst in excise taxes of the Tax Foundation.

    While the most recent version of the H.R. 5376 omits tobacco tax hikes, there is no guarantee the measure will not reappear in future renderings of the proposed legislation.