Category: Featured

Altria to Sell Part of its Anheuser-Busch Stake

Photo: Rafael Henrique
Altria Group plans to sell a portion of its investment in Anheuser-Busch InBev (ABI) through a global secondary offering. In addition, ABI has agreed to repurchase $200 million of ordinary shares directly from Altria, concurrently with, and conditional on, completion of the offering.
Altria currently holds approximately 197 million shares of ABI, representing approximately 10 percent ownership. Altria, as the selling shareholder, is offering 35 million of ABI’s ordinary shares. In connection with the offering, Altria expects to grant the underwriters an option to purchase up to 5.25 million additional ABI shares owned by Altria, exercisable within 30 days following the pricing of the offering. In addition, Altria has agreed to a 180-day lockup with the lead underwriter for our remaining ABI shares.
“As good stewards of shareholder capital, we consistently review options to unlock the value of our ABI investment, and we believe this is an opportunistic transaction that realizes a portion of the substantial return on our long-term investment,” said Altria CEO Billy Gifford in a statement.
“Over the decades of our ownership, the beer investment has provided significant income and cash returns and supported our strong balance sheet. Our continued investment reflects ongoing confidence in ABI’s long-term strategies, premium global brands and experienced management team.”
Following its investment sale notice, Altria announced a $2.4 billion increase to its existing $1 billion share repurchase program. The expanded program is expected to be completed by Dec. 31, 2024.
Altria expects cash savings from the elimination of future dividend payments on the repurchased shares.
“These opportunistic capital allocation decisions reflect our ongoing confidence in Altria’s future and the significant value offered in our shares today,” said Gifford. “We have a longstanding history of returning cash to our shareholders, and today’s announcement reflects our continued desire to create long-term shareholder value.”
March 14, 2024
Top KT&G Shareholder Opposes CEO Nominee

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KT&G’s biggest shareholder is opposing the nomination of Bang Kyung-man as the cigarette manufacturer’s new CEO, reports Yonhap News. The Industrial Bank of Korea (IBK), which owns about 8 percent of KT&G, cited falling profitability and dubious business practices during the nominee’s tenure as a board member.
On Feb. 22, KT&G’s CEO candidate recommendation committee selected Kyung-man Bang, senior executive vice president of KT&G, as the final CEO candidate, citing his performance on criteria such as management expertise, global acumen, strategic thinking skills, stakeholder communications and universal morality and ethical awareness.
KT&G shareholders are due to vote on the nomination during the company’s annual general meeting on March 28. The appointment would mark KT&G’s first leadership change in nine years.
IBK opposes Bang’s nomination because “KT&G’s operating profit has fallen more than 20 percent” since he was appointed as vice president of the cigarette maker, an IBK official was quoted as saying.
“Given a decision to secure friendly shares using its own stocks, the independence and fairness of the current board of directors are bound to be seriously questioned,” the official said.
In a regulatory filing dated March 12, IBK also made a shareholder proposal to improve KT&G’s governance by strengthening the expertise and independence of the board of directors.
KT&G has faced pressure recently to be more transparent in its CEO selection process. In a video published ahead of the South Korean tobacco firm’s annual general meeting, KT&G shareholder Flashlight Capital Partners highlighted what it considered the problems during previous CEO nominations.
In January, the incumbent CEO, Baek Bok-in, said he would not seek reappointment.
March 14, 2024
Kazakhstan Mulls Cigar Tax

Photo: Maksym Kapliuk
Kazakhstan’s Ministry of National Economy wants to introduce excise taxes on high-end cigars and other luxury items, reports The Times of Central Asia.
The goals of the new taxes are “to equalize the socioeconomic situation of different segments of the population, to increase the nation’s revenue and to regulate consumption of certain goods,” according to the ministry.
In its proposals, the ministry acknowledged that potential reductions in consumption of the impacted luxury goods, along with the cost of administrating the new taxes, might offset any additional income generated.
The new amendments are also forecast to harmonize excise on general tobacco. Current legislation already provides for a gradual increase in excise taxes on cigarettes, which are due to reach $30.6 1,000 cigarettes this year.
The ministry’s document is publicly available for discussion until March 27, with the new tax code expected to be adopted in October of this year.
March 14, 2024
Call for Climate-Proof Agriculture in Zimbabwe

Photo: Taco Tuinstra
Smallholder farmers, who are the backbone of Zimbabwe’s tobacco farming industry, should have access to affordable irrigation facilities, according to the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement Anxious Masuka.
This years tobacco growing season was impacted by an El Nino-induced drought, which caused leaf volumes to be 10 percent below those of last year’s record 296 million kg.
“We must take innovative ways to climate-proof agriculture,” Masuka was quoted as saying at the opening of the marketing season by The Star. “Seventy-five percent of our tobacco is grown by the smallholder sector who invariably depend on the rains to plant their tobacco.”
The start of the tobacco marketing season is an important event in Zimbabwe’s farming calendar, as tobacco is the country’s largest agricultural export.
Tobacco exports earned Zimbabwe nearly $1 billion in 2023, according to the Tobacco Industry Marketing Board.
This year the first bale of the golden leaf was auctioned for $4.92 per kg compared to $4.35 last year.
March 14, 2024
Zimbabwe Tobacco Season Opens

Image: Taco Tuinstra
Zimbabwe’s auction floors opened today, with high expectations for better prices this season compared to last year, according to The Herald. Deliveries of the contract crop start tomorrow.
Tobacco growers in the country faced poor rains this season, but those with a good crop expect better prices due to demand. The Tobacco Industry and Marketing Board (TIMB) stated that Zimbabwe exported 233,896,182 kg valued at $1.22 billion as of Dec. 15, 2023. The average price for shipments was $5.23 per kilogram.
The auction floors only sell about 5 percent of the crop but are considered the major price setter compared to the contract floors.
Farmers will receive 75 percent of their earnings in foreign currency with the remaining 25 percent in local currency.
Only two auction floors have been licensed this year by the TIMB to buy leaf, the Tobacco Sales Floor and Premier Tobacco Auction Floors (PTAF).
“We have finished all preparations,” Owen Murumbi, PTAF chairman, said yesterday. “The banks are now lined up, EcoCash and Mukuru are all there to bring more convenience to the farmers.
“We have started receiving bales. We should surpass last year’s figures although the volumes are low. We don’t expect them to go down. Farmers need to come, and we are offering excellent services. We are starting with Mukuru and EcoCash on day one. This should improve payment systems for farmers.
“Tobacco sales floors should implement strict age verification processes to ensure that only adults can access the premises. All selling points shall ensure there are no children under 18 in and around selling premises, tobacco processing factories and any other tobacco storage and handling facilities.
“Sales floors should prominently display awareness campaigns that highlight the issue of child labor in tobacco production, posters and educational materials that provide information about the harmful and unethical practices associated with child labor.”
The TIMB has created a transporter compliance framework that will work toward developing a system that monitors movement of tobacco from the primary source to the market. The framework is expected to minimize losses, enhance farmer viability and improve livelihoods and aims to curb side marketing, tobacco bale theft, bale swapping and forgery on stop order launching.
“We appeal to the authorities to ensure that tobacco sold at the auction floors get similar prices with the one which is sold at the contract floors,” said Barbra Marava of Banket. “Farmers incur similar costs, and there is no reason to offer them different prices like before.”
March 13, 2024
Pyxus Achieves Supplier Engagement Leadership

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Pyxus International has been recognized by environmental nonprofit CDP as a Supplier Engagement Leader. Pyxus ranked among the top tier of companies featured on CDP’s Supplier Engagement Leaderboard for its effectiveness in working with its suppliers, particularly contracted growers, to address climate change.
Pyxus’ 2023 Supplier Engagement Rating ranked the company above the industry, North America and global averages and reflects its improved environmental performance, as evidenced by its 11 percent year-over-year reduction of value-chain-related emissions (scope 3), according to a company press release.
“Our sustainability journey cannot be traveled alone. Collaborating with our contracted farmers and other upstream suppliers to reduce our company’s scope 3 emissions is pivotal to achieving our carbon neutrality targets and delivering stakeholder value,” said Pyxus President and CEO Pieter Sikkel in a statement. “We are honored to receive Supplier Engagement Leadership status, CDP’s highest level of recognition, confirming that we are truly working together to grow a better world.”
A company’s Supplier Engagement Rating is derived from information submitted during CDP’s annual climate change disclosure process and assesses a business’ governance, targets, scope 3 emissions and supplier engagement performance. In February, Pyxus achieved Leadership status in CDP’s climate change category.
March 13, 2024
California Firm Sues Zyn Makers

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A law group in California has filed a lawsuit against Philip Morris in the state’s Southern District. The Schmidt National Law Group claims that the maker of Zyn is targeting children and young adults with its flavored nicotine pouches.
“Now comes along Zyn the chewing gum, and the common denominator of all these nicotine delivery systems is as far as targeting towards kids, and I’m talking about kids, middle school, high school, younger and younger,” said Martin Schmidt, managing attorney at The Schmidt National Law Group.
Although a person must be at least 21 years old to purchase the product legally, Schmidt says it is very accessible to people younger than 21. The class action lawsuit seeks “damages” from Philip Morris and Schmidt said he would like stricter limits on access to the product, according to media reports.
The case could take years to work its way through the litigation process, according to Schmidt.
March 13, 2024
IQOS Iluma i Debuts in Japan

Photo: Ned Snowman
Philip Morris International has launched IQOS Iluma i, the latest and most innovative addition to its growing portfolio of smoke-free products, in Japan. The launch marks the 10-year anniversary of IQOS, which debuted in Nagoya, Japan, in 2014.
“We leverage science, world leading brands and commercial capabilities to provide better alternatives to our consumers. This anniversary provides an opportunity to renew our smoke-free vision and our ambition for over two-thirds of our total net revenue to come from smoke-free products by 2030,” said PMI CEO Jacek Olczak in a statement.
“IQOS Iluma disrupted the category by introducing induction-heating technology that heats tobacco from within, to provide a consistent taste experience, no tobacco residue, and no need to clean the device. Today, we take IQOS to new heights, with the launch of IQOS Iluma i—the latest innovation in our smoke-free portfolio, offering a range of advanced features for a clean, seamless, and more flexible experience.”
The IQOS Iluma i series offers three devices in Japan: IQOS Iluma i PRIME, IQOS Iluma i and IQOS Iluma i ONE. All three devices bring a range of adaptable new features.
The new touch screen on the device’s holder allows users to see experience-relevant information quickly and easily. To personalize the experience, IQOS Iluma i introduces a new pause mode. By swiping up or down on the touch screen, users can pause and resume their consumption according to their preferences.
The new IQOS Iluma i also includes smart features that help prolong the lifespan of the holder’s battery. Furthermore, the door for IQOS Iluma i is made from aluminum produced with renewable energy and the inner textile layer of IQOS Iluma i’s Prime leather-like wrap is made of 100 percent recycled plastic.
“IQOS Iluma i is our most innovative offering to date and the new flagship in our portfolio of scientifically substantiated, heat-not-burn smoke-free systems,” said Bertrand Bonvin, president heat-not-burn platforms at PMI. “Like previous IQOS devices, it emits, on average, 95 percent lower levels of harmful chemicals compared with cigarettes. We are proud that consumer feedback continuously fuels our innovation, and IQOS Iluma i is a testament to that.”
March 13, 2024
Zimbabwe Crop Down 10 Percent

Photo: Taco Tuinstra
An El Nino-induced drought has slashed volumes but raised farmers’ hopes for strong pricing.
Zimbabwe’s tobacco volume is likely to be at least 10 percent below last year’s record 296 million kg due to drought, reports Reuters.
The growing season was impacted by El Nino, a natural climate phenomenon in which the surface waters of the central and eastern Pacific Ocean become unusually warm, causing changes in global weather patterns.
At 113,000 hectares, the tobacco growing area this season was 3 percent smaller than that of last year. Yields per hectare were down, as well.
Following an ambitious land reform in the 2000s, Zimbabwean tobacco production is dominated by smallholder farmers who lack irrigation systems.
Zimbabwe’s two licensed Harare auction floors, which handle approximately 5 percent of the country’s tobacco crop, are scheduled to open tomorrow. Deliveries for the far-larger contract sales will commence on Friday.
Contract tobacco sales will be conducted not only in Harare, but also at approved decentralized selling centers in the countryside. These were set up during Covid-19 to minimize travel but proved so successful that they were maintained after the pandemic receded.
March 13, 2024
ITC Shares Jump on BAT Sale

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ITC’s share price jumped more than 8 percent on March 13 after British American Tobacco sold a $2 billion stake in the Indian conglomerate, reports Reuters.
The share price had initially fallen in the wake of BAT’s original announcement, as investors were uncertain of the transaction’s conditions.
The sale of 436.9 million shares, representing about 3.5 percent of ITC’s outstanding shares, still leaves BAT with a stake of more than 25 percent in the company.
Cigarettes are ITC’s largest business, accounting for more than 40 percent of its revenue. The company has been working to consolidate its business, with plans to spin off its hotel business.
BAT said it intends to use the net proceeds to buy back BAT shares over a period ending December 2025, starting with £700 million in 2024. “This will enable the allocation of operating cashflow to fund investment in our transformation, continue to deleverage towards our new target range of 2-2.5x adjusted net debt/adjusted EBITDA, while also maintaining a progressive dividend and supporting a sustainable share buyback,” the company wrote on its website.
March 13, 2024