Category: Featured

  • Smoke-free Product Sales Boost PMI Income

    Smoke-free Product Sales Boost PMI Income

    Photo: PMI

    Philip Morris International’s operating income jumped 34.2 percent to $3.44 billion for the quarter that ended June 30. On an adjusted basis, operating income rose 3.5 percent to $3.66 billion. Net revenues were $9.47 billion, compared with $8.97 billion in the comparable 2023 quarter.

    During the quarter, PMI shipped 157.6 billion cigarettes, 35.5 billion heated tobacco units and 4.2 billion oral smoke-free products, a category that excludes snuff, snuff leaf and U.S. chewing tobacco.

    The smoke-free business accounted for 38.1 percent of PMI’s total quarterly revenues, up 2.7 percentage points from the comparable 2023 period. Oral smoke free products experienced the largest volume gains, growing by 20 percent from second quarter last year.

    This growth was driven by primarily the popularity of Zyn nicotine pouches in the U.S., where shipments reached 135.1 million cans, representing growth of 50.3 percent versus the prior-year quarter. The company expect Zyn sales to reach 580 million cans in 2024.

    Scrambling to fulfill ferocious U.S. demand for Zyn, PMI recently announced a $600 million investment in a new nicotine pouch factory in Aurora, Colorado.

    Quarterly heated tobacco product sales were strong in Japan, following an expansion of the IQOS product range, as well as Greece, Hungary and Spain. In Japan, Philip Morris grew its market share for heated tobacco by more than 3 percentage points to more than 29  percent.

    The company will begin a trial of IQOS in Austin, Texas, USA, in the fourth quarter of this year, according to Chief Financial Officer Emmanuel Babeau.

    “The excellent momentum of our smoke-free business continued with an outstanding second-quarter and first-half performance,” said PMI CEO Jacek Olczak in a statement.

    “The powerful combination of excellent underlying performance and proactive measures across all categories enabled our business to outperform once again, and we are on track for a strong 2024. As a result, we are raising our full-year guidance, despite currency headwinds.”

  • Air Global Launches R&D Facility in Dubai

    Air Global Launches R&D Facility in Dubai

    Photos: Air Global

    Advanced Inhalation Rituals (AIR Global) has launched a new research, design and development (RDD) lab in Dubai.

    Backed by an AED100 million ($27.23 million) investment, the facility will be used to develop and hire tech talent, drive innovation in the shisha industry and speed up the development of new products.

    The global hub will develop new inhalation products that build on the success of OOKA, a charcoal-free, pod-based shisha device, which, according to AIR Global, provides a cleaner alternative.

    OOKA currently delivers approximately 30 percent of AIR Global’s revenue in the United Arab Emirates region.

    The lab will boast newly designed laboratories and deliver purpose-built workshops; new products are in early phases of testing and intended for launch in 2025.

    “I have always drawn personal inspiration in my career from the power of technology—to create entirely new industries, disrupt existing sectors and develop products that no one else has thought of,” said AIR Global Chief Product Officer Paul Dawson.

    “And it’s this exact mindset and ethos that we will achieve through the RDD Lab. With an aspirational team from around the world and cutting-edge technology at our fingertips, we’ll be creating new prototypes and combining them with our existing range of products to fundamentally change how people experience shisha. It’s an exciting time to be part of such a talented team that will drive forward innovation.”

    The RDD Lab will employ 26 people and 19 different nationalities, with equal numbers of men and women in its workforce.

    “The business is embarking on the next phase in its growth journey at an incredibly exciting time, where consumers are showing appetite for more eco-conscious, reduced-risk shisha experiences. The RDD lab will not only create new products that put sustainability, science and technology at the forefront but enable us to break ground into new global regions,” said Chief Legal and Corporate Officer Ronan Barry.

    “The recent launch of OOKA in Germany, a significant shisha market, was a milestone moment for us as we aspire to bring new inhalation experiences to a European market. The launch of this lab gives us even more momentum to build on as we expand our product range and presence globally.”

  • Synthetic Coolants Under Scrutiny

    Synthetic Coolants Under Scrutiny

    Image: yusufadi

    U.S. tobacco companies have been using a synthetic coolant originally developed for shaving products to replace menthol cigarettes, according to an article in Chemical & Engineering News.

    California and Massachusetts ban menthol cigarettes, and the U.S. Food and Drug Administration would like to prohibit them at the federal level, arguing that menthol makes it easier to start smoking and harder to quit.

    In the 1970s, the British shaving product company Wilkinson Sword began altering menthol in search of analogs for its shaving products. It sought molecules that would provide the same cooling effect but without the skin and eye irritation sometimes associated with menthol.

    Cigarette companies took note and created products using similar molecules to mimic the cooling sensation provided by menthol.

    In 2020, the FDA determined that cigarettes with nonmenthol cooling agents, developed by R.J. Reynolds Tobacco Co., are substantially equivalent to menthol cigarettes, basically permitting the marketing of them.

    Critics contend that the vague legal definition of flavors has allowed tobacco companies to develop and market substitute menthol products.

    In challenging fines received in Massachusetts for selling their menthol replacement products, R.J. Reynolds testified that these cigarettes scientifically cannot be a flavored product because they do not activate the taste or olfactory receptors, but only thermoreceptors.

    Reynolds also has a lawsuit pending against the attorney general of California based on similar arguments regarding what constitutes characterizing flavor.

    Public health advocates have argued for legislation that considers a molecule’s chemical structure and function.

    They point to Germany, which bans multiple cooling agent in cigarettes. Belgium and the Netherlands consider molecules’ function in their bans. Canada has a list of approved additives that doesn’t include menthol or any other coolant.

    Michael Chaiton, director of research at the Ontario Tobacco Research Unit, which studies the province’s tobacco strategy, told Chemical & Engineering News that problems arise when lawmakers attempt to regulate things they don’t understand. A better appreciation for how tobacco additives interact with the body would help mitigate their harmful consequences without reliance on semantic arguments about flavor, aroma, and taste, he says.

  • Vietnam Wants to Raise Tobacco Taxes

    Vietnam Wants to Raise Tobacco Taxes

    Photo: Tobacco Reporter archive

    Vietnam’s finance ministry want to raise the excise duty on cigarettes and add an absolute rate per pack, reports Tuoi Tre News.

    The current excise duty on tobacco in Vietnam is 75 percent of the factory price but only 38.8 percent of the retail price, according to the World Health Organization.

    This share is much lower than in Singapore, where tax accounts for 69 percent of the cigarette retail prices, or Thailand, where it is 70 percent.

    To protect public health, the ministry has proposed two solutions. The first involves keeping the 75 percent excise tax unchanged in 2026 but adding an additional tax of VND2,000 ($0.07) per pack.

    From 2027 to 2030, the tax would then be revised up by VND2,000 per pack each year under this proposal until the absolute rate reaches VND10,000 per pack in 2030.

    As an alternative, the ministry has proposed keeping the 75 percent tax unchanged in 2026 but subjecting cigarettes to an absolute rate of VND5,000 per pack.

    This tax will then increase by VND1,000 per pack each year until it reaches VND10,000 per pack in 2030.

    More than 42 percent of adults smoke in Vietnam, which is among the top 15 countries with the highest smoking prevalence.

  • Russia Sues Dutch Owner of Megapolis

    Russia Sues Dutch Owner of Megapolis

    Image: somemeans

    The Russia government is seeking to suspend the corporate rights of Megapolis Distribution, the Dutch owner of Russian tobacco distributor Megapolis Group, reports Interfax.

    On July 18, Russia’s Industry and Trade Ministry filed a lawsuit against Megapolis Distribution in the Arbitration Court of the Moscow Region, according to records.

    The Russian company was earlier included in Russia’s list of economically significant organizations.

    The court has agreed to hear the lawsuit, and the first hearing is scheduled for August 8.

    Shortly after Russia’s invasion of Ukraine in February 2022 and just before the EU imposed sanctions on him, Russian billionaire Igor Kasaev, who owns 40 percent of Megapolis, funneled €8 million ($8.71 million) through the Netherlands, according to the NL Times.

    Kasaev is known to have ties to the Kremlin and the Russian arms industry. He keeps his shares in Megapolis, the largest distributor of cigarettes in Russia, in the letterbox company registered in The Hague. The sanctions froze Kesaev’s assets in his Hague company, “trapping” some €650 million in assets in the Netherlands.

  • Zimbabwe Pioneers Centralized Curing

    Zimbabwe Pioneers Centralized Curing

    Photo: Taco Tuinstra

    Zimbabwe’s Tobacco Industry and Marketing Board and Boost Africa have jointly introduced a centralized curing business system for smallholder tobacco farmers, reports News Day.

    According to Boost Africa representative Henry Dike, the system will not only reduce production cost and efficiency but also boost sustainability.

    Smallholders in Zimbabwe have traditionally cured their tobacco individually. Most use wood as a fuel source, which has led to concerns about deforestation.

    “By providing them with the necessary resources and training, we are not just improving their yield but also elevating their entire farming operation to a commercial level,” said Dike.

    “It’s not just about financial gains; it’s about creating a sustainable, scalable farming practice that can be replicated across the country,” he added.

    Tafadzwa Mukarakate, agronomist and head of the Zimbabwe Farmers’ Union, said the project was critical in ensuring that farmers have the means to reinvest in their operations.

    “The success of this project is a clear indication that with the right support, smallholder farmers can achieve commercial success,” he said.

  • Philippines Halts Online Vapes Trade

    Philippines Halts Online Vapes Trade

    Photo: Ranta Images

    The Philippine government has halted the sale, advertising and distribution of vape products online, reports the Inquirer.

    “This is a temporary suspension until the e-marketplaces are able to convince us of their compliance with their obligations under Republic Act No. 11900, or the vape law, and other laws and related issuances,” said Trade Secretary Alfredo Pascual on July 19.

    According to Pascual, the order was prompted primarily by the need to prevent the sale of vape products to minors and ensure that those being sold online meet the safety standards set by law.

    Vape companies and online sales platforms must submit a sworn certification of their compliance with the law to be allowed to resume sales.

    A recent investigation by the Department of Trade and Industry (DTI) of 90,000 companies engaged in the vape business revealed that 284 had violated various laws, by selling vapes within 100 meters of a school or by using flavors designed to appeal to minors, for example.

    The DTI has confiscated at least PHP32.76 million ($561,454.25) worth of vape products so far this year, mostly for being offered for sale without proper certifications, like the Philippine Standard mark and the Import Commodity Clearance sticker.

    In June, the department ordered the mandatory certification of vape products in compliance with the Vape Act, which lapsed into law in July 2022.

    While supporting the DTI in its efforts to protect consumers and prevent youth access to vaping products, the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) said an outright suspension of online sales would not solve the problem.

    Instead, the organization argued for greater enforcement of existing laws.

    “While the intention behind the suspension is commendable, CAPHRA believes that a more effective approach would be to enhance enforcement measures rather than imposing outright bans that could inadvertently drive consumers back to more harmful combustible tobacco products,” said CAPHRA representative Clarisse Virgino.

  • JTI to Build Factory in Morocco

    JTI to Build Factory in Morocco

    Image: REC and ROLL

    Japan Tobacco International will break ground in August for a MAD931 million ($92 million) factory near Tangier, Morocco, reports Morocco World News.

    “This is a historic moment that marks the beginning of a new era for JTI in North and West Africa,” said Jose Luis Amador, general director of JTI Northern and Western Africa.

    He praised the support from Moroccan authorities, which he described as exemplary and in line with Morocco’s reputation for a favorable business environment.

    Once operational, the facility will create 170 direct jobs and numerous indirect employment opportunities in the region, according to JTI, which aims to hire 30 percent women at its new facility.

    The factory will be built on a 4.7-hectare site with an 18,000-square-meter built area. It will implement energy efficiency measures, such as LED lighting and automated climate control systems. Additionally, a rainwater collection and recycling system will be installed to handle nonpotable water needs.

  • Georgia to Require Production Licenses

    Georgia to Require Production Licenses

    Photo: Taco Tuinstra

    Georgian lawmakers approved legislation requiring tobacco manufacturers to obtain licenses, reports Front News Georgia. They set the license fee at GEL50,000 ($18,521.26).

    The amended Law On Tobacco Control mandates licenses for activities such as slicing, coating, dipping and mixing raw tobacco, as well as the production of cigarettes. The packaging of finished tobacco products and cigarettes also falls under the new licensing requirements.

    Excluded from the licensing requirements are tobacco importers, leaf growers and primary processors.

    The government will determine the specific rules and conditions for obtaining a tobacco production license through a normative act.

    An explanatory note accompanying the draft law highlighted the importance of improving and strengthening the tobacco production process to reduce the use of harmful raw materials. According to the note, high-tech processing by reputable manufacturers can improve health protection standards for smokers.

  • Romania Restricts ENDS Promotions

    Romania Restricts ENDS Promotions

    Photo: cristianbalate

    Romania has tightened advertising restriction on electronic nicotine devices and modern oral products, reports Xinhua.

    Under new legislation signed into law by President Klaus Iohannis on July 19, the rules cover e-cigarettes, heat-not-burn products and nicotine pouches.

    Explicit advertising for these products is now banned on radio and television broadcasts and on public transportation tickets.

    Furthermore, the legislation prohibits advertising for these products within educational and healthcare institutions or within 200 meters of their entrances.

    The law also restricts advertising in publications primarily targeting minors and in theaters before, during and after performances intended for children.