Vietnam has extended its 3,000-ton duty-free quota for Cambodian dried tobacco leaves for 2021, reports thePhnom Penh Post, citing Ministry of Commerce spokesman Seang Thay.
The extension is part of the renewal process of a bilateral trade facilitation agreement for 2021–2022 reached by the 18th Cambodia-Vietnam Joint Commission meeting on Dec. 22 and yet to be formally ratified, with retroactive benefits for exports.
Cambodia and Vietnam inked the agreement in October 2016 to drop import tariffs on dozens of products to boost bilateral trade and have renewed it every two years since. The goods covered in the deal, however, are determined on a yearly basis.
The kingdom exported 1.38 million kg of dried tobacco to Vietnam last year valued at $4.2 million, down 34.37 percent by volume from 2019, according to ministry data.
Minister of Agriculture, Forestry and Fisheries data shows that Cambodia exported a total of 5.82 million kg of dried tobacco leaves last year, down 14.02 percent from 2019.
The primary destinations for Cambodian leaf are Vietnam, Indonesia, Hungary, the United Arab Emirates, Belgium, South Africa, Greece, Singapore and Germany.
Last year, the area under tobacco cultivation was 5,175 ha, of which 4,875 ha were harvested, producing 6,132 tons, representing a 1 percent drop from 2019.
Eastern Co. is studying electronic cigarettes as an alternative to traditional combustible products, reports Egypt Today.
In a statement to the Egyptian Exchange (EGX), Eastern Co. said it is consulting with manufacturers of electronic cigarettes in preparation for putting them on the market after obtaining the necessary licenses.
The move is in line with the company’s strategy to expand and diversify its products.
Earlier in March, Eastern Co. announced that it is studying several new investment projects that will enhance its position in the field of smoking and tobacco alternatives.
Eastern Co. operates within the food, beverage and tobacco sectors. It was established in July 1920 and currently holds a monopoly in the domestic tobacco market.
Egypt has invited tobacco companies to bid for a license to manufacture cigarettes in the country, a move that could reduce Eastern Co.’s dominance of the local market.
The Swiss parliament is debating tighter restrictions on the marketing of tobacco products following a people’s initiative calling for a tobacco ad ban, reports SwissInfo.
Switzerland’s tobacco laws are among the world’s most liberal. Despite recent implementation of stricter laws for the industry, such as compulsory smoking areas on train platforms, 27 percent of the country’s population over the age of 15 smokes, according to the Swiss Federal Office of Public Health.
Switzerland is among the few countries that haven’t ratified the WHO Framework Convention on Tobacco Control, despite signing on to the treaty 17 years ago. Until now, advertising targeting young people remains unregulated.
In 2018, more than 100,000 people signed a people’s initiative to protect children and young people from tobacco advertising.
The government, however, has recommended its rejection of the initiative, saying it would amount to a complete advertising ban, which, it argues, goes too far.
In place of the initiative, the national government recommended a tightening of the current Tobacco Products Law. The Senate debated this bill in September 2019, and stricter rules on advertising were proposed, including regulating advertising for e-cigarettes. More than 45 percent of 16-year-olds consume this new form of tobacco on a weekly basis.
In the current spring session, a majority of the House of Representatives followed the recommendation of its Health Committee and rejected the initiative in favor of the bill submitted by the senate.
The parliamentary committee doesn’t, however, plan to mandate that the tobacco industry report figures for spending on advertising. It also won’t ban tobacco advertising in newspapers or on websites that aren’t exclusively aimed at minors.
Several parliamentarians view the proposed tobacco rules as an attack on companies’ commercial freedom and on an individual’s right to choose.
Switzerland is home to Philip Morris International and Japan Tobacco International.
Thomas F. Farrell II will retire from Altria Group’s board of directors following the completion of his current term. Farrell has been a director of Altria since 2008.
Consequently, Farrell will not stand for re-election to the board at Altria’s 2021 annual meeting of shareholders, which is presently scheduled for May 20, 2021. The board will evaluate board leadership succession and intends to appoint a new chairman at its organizational meeting following the 2021 annual meeting.
Farrell is the chairman of the board, chair of the executive committee and a member of the compensation and talent development and nominating, corporate governance and social responsibility committees.
Tom’s contributions over the past 13 years have been immeasurable.
He has served as the executive chairman of Dominion Energy, one of largest producers of energy in the U.S., since October 2020, having previously served as chairman, president and CEO of Dominion from 2007 through September 2020.
“Tom’s contributions over the past 13 years have been immeasurable,” said Billy Gifford, Altria’s CEO, in a statement. “We thank him for his distinguished service and wish him the very best.”
The China Patent Office has approved Next Generation Labs’ (NGL) patent application covering the process for the preparation of R-S [synthetic] nicotine, issue number 201580069647.2.
The approval will give NGL the ability to better enforce its intellectual property rights. NGL is the world’s largest manufacturer of S-isomer, R-S isomer and R-isomer synthetic nicotine sold under the registered brand name TFN.
According to NGL, the U.S. and Korean markets have been inundated with dozens of fake synthetic nicotine products and brands, and many manufacturers have misleadingly labeled bulk pure nicotine, bulk vape liquid mixtures, and vaping and oral nicotine products as made with TFN. In many instances, the nicotine contained in these products is not synthetic, tobacco-free or nontobacco but is in fact derived from tobacco sources.
For almost a decade, NGL has spent considerable effort establishing a strong global intellectual property portfolio that has become distinctive of the company’s goodwill and of the high quality adult consumers expect of TFN-branded nicotine.
NGL now intends to fully enforce its rights against many of these so-called synthetic nicotine brands.
NGL has been taking direct action in the United States and through its sole South Korean distribution partner NextEra to limit the misleading claims of unscrupulous sellers of pseudo-synthetic nicotine and against manufacturers and brand owners who misrepresent that their product contains TFN-branded synthetic nontobacco nicotine.
“With the assistance of the Chinese authorities, NGL now intends to fully enforce its rights against many of these so-called synthetic nicotine brands at their point of manufacture and will take the lead with national customs agencies to limit the flow of fake synthetic nicotine products at trade exit and entry points in China, the U.S., EU, U.K., South Korea, India, Canada and Australia,” the company wrote in a press release.
The Chinese government wants to overhaul the rules governing the market for electronic nicotine-delivery systems (ENDS), according to the South China Morning Post.
Draft regulations posted online by the Ministry of Industry and Information Technology (MIIT) suggest it will seek to regulate these products like traditional cigarettes. The ministry is seeking public comments on the draft regulations until April 22. With an estimated 300 million smokers, China is the world’s largest market for tobacco products and the largest potential market for ENDS.
The news caused the share price of RELX, China’s largest e-cigarette brand, to plunge. At 2:45 p.m. today, its value on the New York Stock Exchange was down nearly 45 percent to $10.69 per share after a recent high of $19.46 per share on March 19.
RLX Technology raised $1.4 billion during its initial public offering (IPO) in January this year. It sold 116.5 million shares with a target price of between $8 and $10 a share. Its market debut turned its 39-year-old founder, Wang Ying, into a billionaire overnight with an estimated net worth of $24.8 billion.
In its prospectus, RLX stated that vaping products only have a 1.2 percent penetration rate in China compared with 32.4 percent in the U.S. According to the China-based Electronic Cigarette Industry Committee, China’s 2020 e-cigarette sales were an estimated CNY14.5 billion ($2.2 billion), an increase of 30 percent from 2019. The U.S. e-cigarette market in 2019 was worth $5.34 billion, according to Grandview Research, which expects the U.S. market to reach $6.50 billion in 2020.
RELX recently announced a partnership with 110 authorized distributors to supply its products to more than 5,000 RELX-branded partner stores and more than 100,000 other retail outlets nationwide, covering over 250 cities in China, according to its prospectus. Revenue for the company nearly doubled in the nine months ended Sept. 30, 2020, to $324 million, with a net income of $16 million, the latest figures available at the time of this writing.
Under scrutiny
Vapor companies are increasingly facing scrutiny from regulators in China. In 2018, the country made it a crime to sell a vapor product to anyone under 18 years of age. In November 2019, an online sales ban was implemented in order to further prevent youth initiation. In 2020, the country passed the Law of the People’s Republic of China on the Protection of Minors. That law is aimed at preventing parents or other guardians from “indulging or instigating minors” to smoke or vape.
The China National Tobacco Corp. (CNTC), which holds a monopoly of tobacco manufacturing in China, is a major source of funding for the Chinese government. Its contribution accounted for an estimated 5.45 percent of the country’s tax revenue in 2018. That amounts to CNY10.8 trillion, according to media reports. The vapor industry in China, by contrast, remains largely in private hands. If CNTC were to enter the vapor market, the monopoly’s existing 5 million domestic retail outlets could present a major challenge for private vape shop owners.
The U.S. Food and Drug Administration (FDA) issued three more warning letters to vapor companies on March 19. The latest announcement brings the count to 69 letters this year for companies selling vapor products without gaining regulatory approval through the agency’s premarket tobacco product application (PMTA) process.
The latest letters were issued to Arizona-based Vapor Outlet, Vapor Tech Hawaii and the Vaporium in Illinois. In its letter to Vaporium, the FDA stated that the company continues to “manufacture, sell and/or distribute to customers in the United States The Vaporium 6 mg Red White and Blue 70/30 30 mL e-liquid product” without a marketing authorization order.
“Your firm is a registered manufacturer with 19,860 products listed with FDA. It is your responsibility to ensure that your tobacco products comply with each applicable provision of the FD&C Act and FDA’s implementing regulations,” the letter states. “Failure to adequately address this matter may lead to regulatory action, including, but not limited to, civil money penalties, seizure and/or injunction.”
Companies that receive warning letters from the FDA have to submit a written response to the letter within 15 working days from the date of receipt describing the company’s corrective actions, including the dates on which it discontinued the violative sale and/or distribution of the products. They also require the company’s plan for maintaining compliance with the FD&C Act in the future.
Many of the FDA’s letters so far have gone to local vape shops that manufacture their own e-liquids in the store. For example, Vapor Tech Hawaii’s letter states that the FDA has determined that it “manufacture[s], sell[s] and/or distribute[s] to customers its Vapor Tech Hawaii Waikikiwi 100 mL 3 mg e-liquid product” without a marketing authorization order.
On March 12, the U.S. FDA sent warning letters to 13 firms that manufacture and sell unauthorized e-liquids.
Stakeholders are debating whether minimum auction prices should continue to determine the pricing of contract tobacco in Zimbabwe, reports The Zimbabwe Mail.
Zimbabwe has a dual marketing system where tobacco is sold through both auction and contract. Over the years, prices have been determined by the minimum price paid on the auction market.
At the time this policy was put in place, tobacco sold through the auction accounted for nearly half the total output. Over the years, however, the share of auction sales has declined sharply because most farmers are unable to self-finance their operations due to lack of collateral. Last year, the Tobacco Industry and Marketing Board (TIMB) registered about 146,000 growers, of which 95 percent were funded by contractors.
Industry players and analysts said it would be absurd to continue applying the policy as the tobacco farming landscape has completely changed.
“Pricing of contract tobacco—95 percent of national production—cannot continue to be based on the minimum of tobacco prices paid on the auction floors,” said Rodney Ambrose, CEO of the Zimbabwe Tobacco Association (ZTA).
We can’t just throw away this important tool of price discovery.
TIMB CEO Andrew Matibiri also believes it is “unfair” for a small crop size of lower quality to determine the minimum grade price of tobacco.
“It is a very valid issue, and the board has agreed that something needs to be done,” said Matibiri, who is scheduled to step down from his position later this year.
However, Zimbabwe Farmers’ Union executive director Paul Zakariya fears that abandoning the dual marketing system would leave farmers exposed to price manipulation by contractors.
“We can’t just throw away this important tool of price discovery,” he told The Sunday Mail Business. “The competition at the auction is quite important.”
There would be some sort of minimum guaranteed price for every grade so that farmers can be protected from price manipulation.
Matibiri said the TIMB would ensure that farmers are protected from rigged prices.
“There would be some sort of minimum guaranteed price for every grade so that farmers can be protected from price manipulation,” he said.
The tobacco selling season is scheduled to start on April 7, with the trade anticipating lower volumes but higher quality than last year. The ZTA expects output to reach at least 180 million kg, down from 184 million kg in the previous growing season.
“Though yields will be down, the quality of this season’s crop is better than 2020,” the ZTA wrote in its monthly tobacco report for March.
Firm prices are also expected during this marketing season, which opens on April 7. Merchants are expected to bring in above US$500 million to the market.
The likelihood of a ban on menthol cigarettes in the United States is increasing as the impact of menthol cigarettes on Black Americans becomes clearer, according to an article in The New York Times.
Many public health advocates have been pushing for a crackdown on menthol cigarettes, but thus far no federal ban has been enacted.
Critics accuse the tobacco industry of marketing menthol cigarettes disproportionally to Black Americans, highlighting racial inequities. According to the Centers for Disease Control and Prevention, Black smokers smoke less but die at a higher rate from heart attacks, strokes and other tobacco-related diseases than white smokers do. The FDA reports that 85 percent of Black smokers use Newport, Kool and other menthol brands. Menthol cigarettes are easier to become addicted to and harder to quit than plain tobacco, according to health advocates.
Covid-19 exposed the discriminatory treatment that Black people have been facing for hundreds of years. It’s precisely at this time that we need strong public health measures.
“Covid-19 exposed the discriminatory treatment that Black people have been facing for hundreds of years,” said Phillip Gardiner, a co-chairman of the African American Tobacco Control Leadership Council, which has been pushing for menthol bans in communities across the country. “It’s precisely at this time that we need strong public health measures.”
Support for a menthol ban has been growing at various levels of government. Many states and municipalities have been passing laws at the state and local level to ban menthol cigarettes, and with many white parents supporting sweeping flavor bans, it has “brought new resources to the issue.”
The FDA is also under a court order to respond to a citizens’ petition for a menthol ban by April 29.
We opened the door on this in a Republican administration. You don’t think a Democratic administration will finish the business? Of course they will.
Many are hopeful that the Biden administration will move forward with a ban, looking to Biden’s past support of tobacco control measures.
“We are thinking about all of our options that could help reduce tobacco use and address persistent disparities,” said Kevin Munoz, a spokesman for the White House.
In 2018, Scott Gottlieb, FDA director under the Trump administration, announced that the FDA would enact a ban on menthol but was immediately opposed by North Carolina Senator Richard Burr, who represents a prominent tobacco-growing state. Burr later convinced the administration to kill the ban in 2019.
Gottlieb believes that the Biden administration will put a menthol ban in place. “We opened the door on this in a Republican administration,” he said. “You don’t think a Democratic administration will finish the business? Of course they will.”
Cambodia’s National Authority for Combating Drugs (NACD) has instructed all relevant ministries and institutions to take immediate action to stop the use and commercialization of heated-tobacco products (HTPs), reports The Phnom Penh Post.
“All forms of trafficking, trading and importation of HTPs must be stopped, and information on import restrictions must be disseminated to all vendors and the public,” the NACD stated in a directive.
Citing the World Health Organization, the NACD said the use of cigars, electronic nicotine-delivery systems (ENDS) and HTPs can lead to serious lung disease and even death. The announcement further said that using these products is also a motivating factor for people to use other illegal drugs.
Cambodia has restricted ENDS since February 2014, but its guidelines did not cover newer HTPs.
Deputy National Police Chief Mak Chito said that in the past, the authorities had confiscated many of these products. He said that although some other countries consider the use of these products legal, Cambodia does not allow it.
“In Cambodia, there are also bad people who are cheating by using methamphetamines or marijuana [with these devices],” he said.
