Category: Featured

  • Cigarette Prices up in Kenya

    Cigarette Prices up in Kenya

    Photo: Taco Tuinstra

    Tobacco companies in Kenya have increased cigarette prices even after the government withdrew a proposed excise tax increase, reports The Star.

    Following price hikes of between 20 percent and 33 percent, the price of a single cigarette has increased by an average of KES5 ($0.03) at the retail market. Sportsman, one of the most common brands, now costs KES20 per stick with a packet retailing at an average KES400.

    Originally, the government had planned to increase cigarette taxes to KES4,100 per 1,000 sticks from KES4,067.03 per 1,000 sticks. However, following countrywide protest (which also targeted other tax hikes), President William Ruto declined to sign the legislation into law.

    The tobacco companies who since increased the prices earlier opposed the treasury’s proposals, arguing that the measure would stifle the formal industry and boost illicit trade.

    BAT Kenya attributed the price hikes to rising production costs.

    “Over the past year and into 2024, there has been a significant and sustained rise in our cost of production, occasioned by economic turbulence across both our domestic and export markets, arising from global and domestic geopolitical disruptions, currency fluctuations and rising interest rates, which has adversely impacted our trading environment,” the firm told The Star.

    The price increase, it said, was necessary for the business to navigate an increasingly challenging operating environment and enable the company to continue to meet its business obligations, including supporting the livelihoods of over 80,000 Kenyans in its value chain.

    BAT Kenya’s profits declined 19.2 percent to KES5.57 billion in 2023 due to higher operating cost and lower sales volumes.

  • PMI and KT&G to Partner on Submissions

    PMI and KT&G to Partner on Submissions

    Photo: KT&G

    Philip Morris International and KT&G will collaborate on regulatory submissions for KT&G heat-not-burn products in the United States. The companies have signed a memorandum of understanding.

    On Jan. 30, 2023, PMI obtained exclusive rights to commercialize KT&G’s smoke-free products outside South Korea.

    KT&G’s new platform products are expected to be launched first outside the U.S. Thereafter, the partners plan to work on a premarket tobacco product application submission for review by the U.S. Food and Drug Administration.

    “We want every adult smoker who does not quit smoking to switch to a science-backed, better alternative for the benefit of their own and public health,” said PMI CEO Jacek Olczak in a statement.

    “The heat-not-burn category, with different tiers of FDA-authorized products, has a pivotal role to play in making cigarettes obsolete in the U.S.”

    KT&G “is currently pursuing global expansion and structural transformation centered on its three core businesses—next-generation products, overseas cigarettes, and health supplements,” said KT&G President Bang Kyung-man in a statement.

    “We will do our utmost to achieve our future vision of becoming global top-tier by leveraging innovative NGP products and scientific R&D capabilities that will be introduced to overseas markets.”

  • Taiwan: No ENDS Approved Yet

    Taiwan: No ENDS Approved Yet

    Image: tang90246

    Taiwan’s Health Promotion Administration (HPA) has reminded suppliers and consumers that it has not approved any e-cigarettes or heated-tobacco products (HTPs), reports Taipei Times.

    The warning came after security footage showed a lawmaker using an HTP in the legislature’s corridors.

    Novel tobacco and nicotine products require government approval in Taiwan. To date, the HPA has received applications for authorization for HTPs from 12 companies. It has rejected the applications of eight while two of the remaining four have been asked to furnish additional information.

    The HPA has a panel of toxicology, public health and addiction experts to assess requests for authorized use of HTPs. The panel has so far convened 30 meetings.

    Taiwanese law punishes the manufacture, import, sale, supply, display or advertisement of unauthorized novel tobacco products by a maximum penalty of TWD5 million ($152,263) while users may be fined TWD10,000.

  • Eastern Sells Factory to PMI

    Eastern Sells Factory to PMI

    Image: Stephen Finn

    Eastern Co. will sell the land, buildings and currently rented equipment of its Factory No. 9 to United Tobacco Co. (UTC), a subsidiary of Philip Morris International, for EGP1.58 billion ($32.66 million), reports Ahram Online.

    According to an Eastern Co. statement to the Egyptian Exchange, the sales price was the average of three valuations offered by valuation companies.

    As part of the deal, UTC will waive its right to recollect the remaining annual rent value of the factory that was paid in full according to the rent contract that ends on April 26, 2026.

    Egypt is in the process of privatizing many state-owned companies. The government hopes to earn $5 billion from this program.

    In November 2023, Egypt’s Ministry of Public Enterprise sold a 30 percent stake in Eastern Co. to the United Arab Emirates’ Global Investment Holding Co. for EGP19.34 billion.

    In May 2024, PMI acquired an indirect 14.7 percent stake in Eastern Co.

  • Critics Bash Vietnam Tax Hike

    Critics Bash Vietnam Tax Hike

    Photo: Taco Tuinstra

    Vietnam’s tobacco tax hike proposal would strain manufacturers and boost black market sales, according to critics.

    The Ministry of Finance wants to levy a new fixed tax on cigarettes on top of the existing excise tax as the government seeks to discourage smoking. While the excise accounts for 75 percent of factory prices, it is only 38.8 percent of retail prices—far below the 70 percent recommended by the World Health Organization, according to the ministry.

    Nguyen Chi Nhan, general secretary of the Viet Nam Tobacco Association, warned that businesses would struggle to adapt to the sharp tax increase.

    Dinh Thị Quynh Van, chairwoman of PricewaterhouseCoopers in Vietnam, pointed out that cheap cigarettes account for 75 percent of the domestic market. A sudden and sharp tax hike, she said, could spur smuggling.

    Van said this happened in countries such as Britain, Germany and Malaysia.

    “It is important for the ministry to have solutions to prevent tobacco smuggling and a clear tax increase roadmap,” Van told Vietnamnet Global.

    Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultants’ Association, suggested the ministry increase the tax level more gradually to give customers and businesses time to adapt.

    Vietnam is among the top 15 countries in terms of number of smokers.

  • BAT Kenya Sells Pouch Equipment

    BAT Kenya Sells Pouch Equipment

    Photo: BAT

    BAT Kenya is selling the equipment at its oral nicotine pouch factory in Nairobi, reports Business Daily.

    The facility has been idle for nearly five years due to the government’s failure to issue a license for commercialization of the new product.

    The cigarette maker announced the decision on July 25, in a commentary accompanying its financial results for the six months ended June 2024, in which net profit dropped by 24.3 percent to KES2.14 billion ($16.4 million) on lower sales and higher finance costs.

  • Poland Mulls Minimum Vape Sales Age

    Poland Mulls Minimum Vape Sales Age

    Image: marog-pixcells | HP_Photo

    Polish Health Minister Izabela Leszczyna wants to ban e-cigarette sales to minors starting Jan. 1, 2025, reports Polskie Radio.

    The government is currently soliciting public input on a draft amendment to the Act on Protection of Health Against the Consequences of Tobacco and Tobacco Products, which would prohibit e-cigarette sales to people under 18, irrespective of nicotine content.

    The authors of the draft stress that this measure is essential to curb e-cigarette use among young people. They also note that nicotine-free e-liquids are not without risk as they may contain substances like formaldehyde and acetaldehyde.

    Proponents of the legislation also worry that flavored e-cigarettes may entice youths who might otherwise avoid tobacco products.

  • Brazil Volume Down, Earnings Up

    Brazil Volume Down, Earnings Up

    Brazil exported 195.26 million kg of leaf tobacco from January to June, down 8.82 percent from the same period in 2023, according to MDIC/ComexStat. The value, however, increased by 7.56 percent to $1.24 billion. China, Belgium, the United States, Indonesia and Egypt were the top destinations for Brazilian tobacco during the period.

    In 2023, tobacco represented 11 percent of Rio Grande do Sul’s exports, according to SindiTabaco, which expects this share to increase. “The expectation is that we are going to export a smaller volume, due to the smaller size of the crop, but with revenue increasing by 10 percent to 15 percent in dollar terms,” said SindiTabaco President Iro Schuenke.

    Iro Schuenke

    The Brazilian tobacco industry, which is concentrated in the country’s three southernmost states, is still recovering from devastating floods in May.

    A survey carried out by SindiTabaco and its associate companies revealed that the storms hit 75 tobacco-producing municipalities and 1,929 farmers, with losses estimated to amount to BRL95 million.

    According to Schuenke, the impact of the floods was somewhat mitigated by the high per-kilo prices this growing season (see “The Great Scramble”) and the fact that most farmers had already delivered their tobacco to the dealers due to the small crop this year.

    “We regret the one-off losses of some municipalities and tobacco farmers, but we are confident that the size of the tobacco crop in the most affected areas shall remain close to the estimated projections for the 2024/2025 growing season,” he said in a statement.

  • Vaping Tied to Reduced Smoking Prevalence

    Vaping Tied to Reduced Smoking Prevalence

    Photo: Rain

    A new analysis conducted on the latest available U.S. National Health Interview Survey (NHIS) data through 2022 showed that population-level data suggest that smoking prevalence has declined at an accelerated rate in the last decade in ways correlated with increased uptake of e-cigarette use.

    Since their market introduction, the question of whether combustion-free products could be a useful tool in the fight against cigarette smoking or simply a substitute has divided the scientific community. Over the years, technological innovation and the development of various products on the market have modified the health risk parameters related to the use of these tools, creating the basis for a redefinition of public health policies.

    To date, vaping is at the center of scientific debate: both for adult smokers who cannot quit and see these products as a way to reduce exposure to toxic substances released by cigarette smoke, and for the concern over use by at-risk groups, such as younger individuals. Many experts believe that vaping represents a gateway to smoking.

    According to the Center of Excellence for the acceleration of Harm Reduction, evidence for the gateway effect has not been detected in population-level studies on the prevalence of e-cigarette use and smoking among young people; indeed, smoking prevalence remains at an all-time low among U.S. adolescents and young adults, despite increases in e-cigarette use.

    The new analysis “Increased e-cigarette use prevalence is associated with decreased smoking prevalence among U.S. adults” published in the Harm Reduction Journal  is an update on a previous analysis modeling population-level prevalence that assessed whether and how much the introduction of e-cigarettes in the U.S. may be correlated with declining smoking prevalence among populations of U.S. adults using the NHIS .

    Results showed that population-level data continue to suggest that smoking prevalence has declined at an accelerated rate in the last decade in ways correlated with increased uptake of e-cigarette use.

    “We found that as ecig use increases at the population level, smoking prevalence tends to decrease, which is what you’d expect to observe if e-cigarettes were used as an alternative to cigarette smoking in the real world” said Floe Foxon, Pinney Associates researcher and author of the analysis, in a statement

    “We also found that this possible substitution between e-cigarette use and smoking was most pronounced in groups that used e-cigarettes the most, which again would be expected if e-cigarettes were being used instead of cigarettes. While it is important to note that the study does not infer causality and that these methods have limitations noted in the paper, they do appear to support a growing body of literature including other simulation studies, econometric research, and randomized controlled controls which suggest that e-cigarettes substitute for cigarettes among adults.”

  • FDA Almost Done Reviewing Mass Market Products: Report

    FDA Almost Done Reviewing Mass Market Products: Report

    Photo: thodonal

    The U.S. Food and Drug Administration is almost done reviewing premarket tobacco product applications (PMTAs) for mass-market vaping products.

    In a July 22 progress report the agency said it had taken action on 185 of 186 marketing applications for e-cigarette products covered by a 2022 court order, which applied to products with significant market share that filed applications by Sep. 9, 2020.

    The manufacturers of those orders have received either a marketing denial order (MDO) or FDA authorization.

    Observers say the one application still under review is Juul. The FDA issued an MDO to Juul in 2022, but quickly stayed its order and agreed to further review the application. In June, the FDA rescinded the denial order, returning Juul’s products to full scientific review.

    In its report, the FDA says it has also issued more than 18 million refuse-to-accept decisions, over 67,000 refuse-to-file decisions, and approximately 46,000 MDOs—most of them for bottled e-liquid made by small- to medium-sized manufacturers.

    The new progress report is the most recent in a series of reports mandated by the U.S. District Court for Maryland as part of its decision that forced the FDA to move the PMTA submission deadline forward.