Philip Morris USA’s cigarette shipment volume during the three months to the end of June, at 27,266 million, was down by 10.8 percent on that of the three months to the end of June 2017, 30,569 million.
Marlboro shipments were down by 10.0 percent to 23,529 million; shipments of other premium brands fell by 9.4 percent to 1,404 million; while shipments of discount brands fell by 18.5 percent to 2,333 million.
PM USA’s share of the retail cigarette market during the three months to the end of June, at 50.2 percent, was down by 0.7 of a percentage point from that of the three months to the end of June 2017. Marlboro’s share, at 43.2 percent, was down by 0.3 of a percentage point; the share of its other premium brands was down by 0.1 of a percentage point to 2.6 percent; while the share of the company’s discount brands was down by 0.3 of a percentage point to 4.4 percent.
The Altria Group yesterday published its second-quarter and first-half results for 2018.
Middleton’s cigar shipment volume during the three months to the end of June, at 417 million, was increased by 2.7 percent on that of the three months to the end of June 2017, 406 million.
Black & Mild brand shipments were up by 3.0 percent to 414 million, while shipments of other brands fell by 25.0 percent from four million to three million.
USSTC’s smokeless-products shipment-volume during the three months to the end of June, at 215.7 million cans and packs, was down by 2.4 percent on that of the three months to the end of June 2017, 221.0 million.
Shipments of Copenhagen were up by 0.4 percent to 138.1 million; those of Skoal were down by 9.1 percent to 59.8 million; while those of other brands were increased by 0.6 percent to 17.8 million.
USSTC’s share of the US market for smokeless products during the three months to the end of June, at 54.1 percent, was down by 0.2 of a percentage point from that of the three months to the end of June 2017. Copenhagen’s share was unchanged at 34.3 percent; Skoal’s share was down by 0.4 of a percentage point to 16.4 percent; while the share of other brands was increased by 0.2 of a percentage point to 3.4 percent.
Altria’s net revenues during the second quarter, at $6,305 million were down by 5.4 percent on those of the second quarter of 2017, while revenues net of excise taxes were down by 3.7 percent to $4,879.
Altria’s second-quarter reported diluted earnings per share (EPS) were down by 3.9 percent to $0.99, while its second-quarter adjusted diluted EPS increased by 18.8 percent to $1.01.
“We continued our strong start to the year with adjusted diluted earnings per share growth of 18.8 percent in the second quarter,” said Howard Willard, Altria’s chairman and CEO.
“Our core tobacco businesses performed well as they continued to make strategic investments in support of their long-term objectives.
“Of course, our results benefited from a lower corporate tax rate.
“We continued to reward shareholders in the quarter by paying out over $1.3 billion in dividends and repurchasing approximately $437 million in shares.
“To reflect a strong first half and continued confidence in our core tobacco businesses, we are raising the lower-end of our guidance and now expect full-year adjusted diluted EPS growth of 16 percent to 19 percent.”
Category: Other Tobacco Products
Volume decimated
BAT’s profit soars
British American Tobacco’s cigarette volume during the six months to the end of June, at 345 billion, was down by 3.1 percent on that of the six months to the end of June 2017 [when the 2017 six-month results were presented, volume was give as 314 billion, which would indicate that volume had increased by about 10 percent, but volume figures for the first half of 2018 have been given on a ‘representative basis’ – as if BAT had owned RAI and other acquisitions, completed in 2017, from 1 January 2017.]
BAT’s tobacco-heating-product (THP) volume, during the six months to the end of June, at 3.3 billion sticks was increased by 855 percent on that of the six months to the end of June 2017; so the company’s combined cigarette and THP volume fell by 2.2 percent to 348.3 billion.
BAT’s oral-tobacco-product volume was up by 1,093 percent to the equivalent of 4.4 billion sticks; its vapor volume, measured in 10 ml units, was up by 160 percent to 77.6 million; and its other-tobacco-product volume, which includes roll-your-own and make-your-own products, was down by 6.9 percent to 10.3 billion stick-equivalents.
BAT’s revenue during the six months to the end of June, at £11,636 million, was said to be up by 56.9 percent on that of the six months to the end of June 2017.
Profit from operations was up by 72.4 percent to £4,438 million, while basic earnings per share were down by 3.4 percent to 117.7p.
In announcing the half-year results, CEO, Nicandro Durante, said the company’s strategy was to continue to grow its combustible business while investing in the ‘exciting’ potentially reduced risk categories of THP, vapor and oral. As the Group expanded its portfolio in these categories, it would continue to drive sustainable growth.
‘In the first six months of 2018, the Group continued to perform well,’ he said. ‘The cigarettes and THP portfolio has outperformed the industry as market share grew 40 basis points (bps) with a tobacco price mix of approximately four percent which is expected to strengthen in the second half of the year.
‘The performance of Reynolds American Inc. (RAI) since acquisition is encouraging and the Group’s diverse NGP portfolio has grown strongly. The foreign exchange impact on the Group’s results was a headwind of eight percent for the first six months of the year and is estimated to be 5-6 percent for the full year, based upon the current foreign exchange rates.
‘Despite the recent slowdown in the THP category in some markets, including Japan and South Korea, we remain confident of exceeding £1 billion of reported revenue in NGP in 2018 as we expect a range of new launches to re-energise growth in THP in the second half of the year.
‘We anticipate another good year of adjusted earnings growth at constant rates of exchange.’SM acquires Gotlands
Swedish Match (SM) today signed an agreement to acquire a majority share in Gotlands Snus AB, which has interests in snus and nicotine-free products.
Gotlandssnus was described by SM as a privately-held Swedish company, located in Romakloster, Sweden, on the island of Gotland.
SM said that Gotlandssnus, which was founded in 2002 and which had annual sales of about SEK50 million, developed, produced, and sold snus and nicotine-free products.
It had sales in Sweden, other parts of Europe, the US and Asia.
‘The company sells popular brands such as Jakobsson’s snus and Qvitt (nicotine and tobacco free pouches),’ SM said in a press note posted on its website. ‘Gotlandssnus produces approximately four million cans per year. The production facility and head office are located in Romakloster, in the heart of Gotland. The company has approximately 40 employees.’
“Under the leadership of its founder, Henrik Jakobsson, Gotlandssnus has successfully grown its market presence through its portfolio of premium, high-quality snus and tobacco/nicotine free products by leveraging the unique heritage of the island of Gotland,” Lars Dahlgren, president and CEO of Swedish Match was quoted as saying. “We look forward to further developing this business together with Henrik and his team, and to enhancing our presence with production in Gotland. Gotlandssnus is an excellent complement to our current portfolio and will provide increased depth to our offerings.”
Meanwhile, Jakobsson said Gotlandssnus was delighted to have SM as a partner, and looked forward to continued growth of its products.
Jakobsson will remain the MD of Gotlandssnus and a minority shareholder.
The transaction is planned to be completed on August 22.
Details of the purchase price were not disclosed.US public misinformed
The US public has become mostly unaware that smokeless tobacco is much less harmful than cigarettes, according to a story by David J. Hill for the University of Buffalo.
In 1986, Hill said, the US government passed legislation requiring a series of warnings for smokeless tobacco products, one of which advised “This product is not a safe alternative to cigarettes”.
That warning, however, obscured an important distinction – that cigarettes were much more harmful to health than were smokeless tobacco products.
And over the 30-plus years since, the US public had mostly been unaware that smokeless tobacco use is much less harmful than smoking cigarettes, Hill said, quoting one of the nation’s leading tobacco policy experts writing in a paper published recently in Harm Reduction Journal.
“It is important to distinguish between evidence that a product is ‘not safe’ and evidence that a product is ‘not safer’ than cigarettes or ‘just as harmful’ as cigarettes,” said the paper’s author Lynn Kozlowski, professor of community health and health behavior in the University at Buffalo’s School of Public Health and Health Professions.
“The process at the time of the establishment of official smokeless tobacco warnings in the 1980s paid no attention to this distinction,” Kozlowski adds. “The American public has become mostly unaware that smokeless tobacco is much less harmful than cigarettes.”
Kozlowski was quoted as saying that as long as cigarettes remained legal in the US, US consumers should be provided with proper information on the relative risks of tobacco/nicotine products that are ‘less lethal’ or otherwise less harmful than cigarettes. In addition, consumers should receive information on the ways in which a product causes harm, he said, adding that none should be viewed as harmless.Time for urgent action
The US’ National Tobacco Reform Initiative (NTRI) is calling on the Food and Drug Administration actively and expeditiously to pursue the course of action the agency announced in July 2017 ‘with respect to its proposed tobacco and nicotine regulatory framework that would focus on nicotine and support innovations to promote tobacco harm reduction based on the continuum of risk for nicotine-containing products’.
On July 28, 2017, the NTRI said, the FDA commissioner, Scott Gottlieb, and the director of the agency’s Center for Tobacco Products, Mitch Zeller, announced new policy directions on tobacco and nicotine that called for a ‘comprehensive regulatory plan’ that would accelerate efforts in winning the war against cigarette smoking.
In a letter to the commissioner on the one-year anniversary of his announcement, the public health leaders who are part of NTRI said that while they had seen progress during the past 50 plus years in respect of declining smoking prevalence, an estimated 32 million US adults still smoked cigarettes. ‘Cigarette smoking remains this nation’s leading cause of preventable disease and death, responsible for about 480,000 deaths each year and costing this country approximately $300 billion in health care costs and lost productivity,’ the NTRI said in a press note. ‘With so many lives on the line each year, there must be an urgency to take bold, visionary actions immediately to reduce the disease burden that smoking addiction inflicts on the health of Americans.
‘While the NTRI fully supports the FDA’s announced visionary initiatives, we are concerned that the FDA is/will become mired in overly bureaucratic processes that will delay taking necessary and obvious steps to protect the public’s health. While some attention is being focused on the priority to consider reducing nicotine levels in cigarettes, the other equally important priority to establish a more workable and flexible regulatory framework to regulate all tobacco and nicotine products based on their risks and relative risks (continuum of risk) is nowhere to be seen.’
“[I]f prudent product standards and reasonable guidelines for making truthful modified risk claims are not available before introducing a product standard for reducing nicotine’s addictiveness in combustible cigarettes, the opportunity to accelerate a mass-migration away from smoked tobacco products, relegating cigarettes to the ashtray of history, will be lost,” veteran tobacco and nicotine researcher and NTRI member, David B. Abrams, PhD, was quoted as saying. Abrams is a professor at the Department of Social and Behavioral Sciences, NYU College of Global Health, New York University.Time called on snus case
A high court ruling in Malta has declared that the man accused of trading in influence and complicity in a request for a €60 million bribe from a Swedish tobacco company, had his human rights breached when the Attorney General refused to declare his evidence closed, according to a story by Matthew Vella for Malta Today.
The ruling in favour of restauranteur Silvio Zammit was handed down by the Court of Constitutional Appeal, which confirmed a decision by the civil court in its constitutional jurisdiction.
Zammit was accused in 2012 of having requested the bribe from snus manufacturer, Swedish Match, and the European Smokeless Tobacco Council (ESTOC), a lobby group, in a bid to convince the-then European Commissioner for health to lift an EU ban on snus, which can be sold legally in Sweden but may not be sold in other European countries.
In its decision, the Court said the law courts hearing the compilation of evidence against Zammit could not delay the process any longer over the inability to summon a witness, who is based in Belgium, to testify in the proceedings.
It said the Attorney General, who appealed the decision that found for Zammit, had the onus to bring the ESTOC secretary, Inge Delfosse, to testify in Malta and not use this snag as an excuse to let the case gather dust on a shelf.
The case against Zammit was filed by the Malta police in 2012 but the Attorney General has so far refused to declare his evidence closed after the last witness refused to testify in the bribery case.MRTP applications meeting
The US Food and Drug Administration has issued a Federal Register notice announcing a meeting of its Tobacco Products Scientific Advisory Committee (TPSAC) to discuss scientific issues related to the modified risk tobacco product (MRTP) applications submitted by R.J. Reynolds Tobacco Company for six Camel Snus smokeless tobacco products, which are currently under scientific review by the FDA.
The meeting is scheduled for September 13-14 at the FDA’s White Oak campus.
The role of the TPSAC is to review and evaluate scientific issues, including safety, dependence, and health issues, relating to tobacco products and provide advice, information, and recommendations to the FDA.
By law, the FDA must refer MRTP applications to the TPSAC, and the TPSAC must report its recommendations on the applications. In providing their recommendations, TPSAC members may not necessarily read the entirety of the applications.
The FDA reviews and makes the determination as to whether to authorize an MRTP, and is not required to follow TPSAC recommendations, including votes. However, the FDA takes into consideration TPSAC members’ insights, along with public comments and other information made available to the agency, before making a determination on any MRTP application.
Before the meeting, TPSAC members receive materials prepared by the FDA and the company that provide context to inform TPSAC members’ discussions, including those materials that relate to specific issues and questions from FDA staff that arose during the agency’s scientific review of the MRTP applications.
The FDA posts all materials provided to the TPSAC (redacted in accordance with applicable laws) on the agency’s website two days before the relevant meeting; so the agency intends to post the materials for the September TPSAC meeting on the FDA website on September 11.
During the upcoming meeting, representatives from R.J. Reynolds Tobacco Company and the FDA’s Center for Tobacco Products’ Office of Science will present information about the company’s MRTP applications currently under FDA scientific review. TPSAC members may then discuss available scientific evidence related to issues and questions posed by FDA about the applications. During this discussion, TPSAC voting members may vote on specific issues and questions, or on other topics arising during the committee’s discussion.
TPSAC meetings include also time for in-person public comments; and instructions on how to submit public comments to the TPSAC are to be found on the Federal Register notice.
Requests to present an oral comment at the September meeting must be received by August 16, while written comments related to the meeting must be received by August 29.
These deadlines apply only to the TPSAC meeting and do not apply to the public docket for R.J. Reynolds Tobacco Company MRTP applications. There is currently no deadline for public comments on these applications.Application will be ‘robust’
The 22nd Century Group says it has initiated three short-term studies ‘investigating the behavioral and biochemical responses’ to its proprietary ‘Very Low Nicotine Content’ tobacco.
The company said in a press note that its scientists would submit to the US Food and Drug Administration the data collected from these studies as part of its ‘revised and enhanced Modified Risk Tobacco Product (MRTP) application for “BRAND A” Very Low Nicotine Content cigarettes’.
In announcing in April/May last year that the FDA had granted it authorization to conduct a clinical trial on its Brand B low tar-to-nicotine ratio cigarettes, the company said it intended to submit an MRTP application to the FDA for Brand B.
‘Slated for submission this year, 22nd Century’s MRTP application will request a marketing order from the US Food and Drug Administration (FDA) to allow 22nd Century to disclose to consumers that the VLN™ tobacco of “BRAND A” cigarettes contains at least 95 percent less nicotine than the tobacco in conventional cigarettes,’ the company said in its most recent press note.
’22nd Century is the only company in the world that has grown commercial crops of proprietary VLN™ tobacco with nicotine levels of just 0.4 mg per gram of tobacco – a level that has been recognized by many public health officials as only “minimally or non-addictive”. Independent clinical trials using 22nd Century’s proprietary SPECTRUM® research cigarettes have shown that Very Low Nicotine Content cigarettes “reduce cravings, reduce consumption of cigarettes, and increase quit attempts”.
‘As announced by the FDA in July 2017, the FDA is seeking to dramatically reduce the nicotine levels in all cigarettes for precisely the same reasons 22nd Century is developing “BRAND A” as a Modified Risk Tobacco Product. Accordingly, 22nd Century may be the first company in the world to win FDA approval to market a combustible cigarette as a “Modified Risk Tobacco Product”.
‘22nd Century’s clinical studies are designed to confirm and substantiate further data previously collected by independent researchers. 22nd Century’s short-term studies will expand the demographic reach of the independent trials, thus demonstrating the suitability of the Company’s Very Low Nicotine tobacco for a wide range of smokers.
‘Summaries for two of the studies, “Evaluation of the Abuse Liability of Very Low Nicotine (VLN) Cigarettes” and “Evaluation of the Abuse Liability of Very Low Nicotine (VLN) Mentholated Cigarettes,” are already posted at www.clinicaltrials.gov.
‘The third study, “A Longitudinal Ambulatory Study to Assess Changes in Cigarette Consumption Behavior and Biomarkers of Exposure during a 6-Week Switch to Very Low Nicotine Cigarettes”, will be added soon.
‘While the FDA is engaged in the rule-making process to limit nicotine in all cigarettes to minimally or non-addictive levels, 22nd Century’s MRTP application for “BRAND A” Very Low Nicotine Content cigarettes pursues a complementary and potentially faster pathway for regulatory approval.’
“22nd Century’s team of scientists, regulatory experts, and specialist consultants are meticulously assembling our revised MRTP application for “BRAND A” Very Low Nicotine Content cigarettes,” president and CEO Henry Sicignano, III was quoted as saying.
“Later this year, we will submit a robust MRTP application that answers many of the questions the FDA is asking with regard to the agency’s planned national nicotine reduction mandate. The public deserves – and desperately needs – a minimally or non-addictive cigarette … sooner, rather than later.”Smoking in rapid decline
The incidence of smoking in the US dropped to 13.9 percent last year, from 15.2 percent the year before, according to preliminary figures from the Centers for Disease Control and Prevention.
An Associated Press story quoted K. Michael Cummings of the tobacco research program at the Medical University of South Carolina as saying that there hadn’t been much change during the previous two years, but that it was clear there had been a general decline and that the new figures showed the decline was continuing.
“Everything is pointed in the right direction,” including falling cigarette sales and other indicators, Cummings said.
In the early 1960s, 42 percent of US adults smoked. At the turn of the millennium, the smoking incidence was about 23 percent.
The story quoted ‘experts’ as saying that anti-smoking campaigns, cigarette taxes and smoking bans were combining to bring down adult smoking rates.
The launch of electronic cigarettes and their growing popularity was said to have ‘likely played a role’ in the decline.
Meanwhile, teenagers too are shunning cigarettes, with figures out last week showing that smoking among high-school students down to nine percent. About 13 percent of high-school students use electronic cigarettes, while the figure for adult use of these devices in 2016 was three percent.FDA deadline nears
The US Food and Drug Administration has advised that June 30 is the deadline for ‘certain manufacturers of deemed tobacco products to provide a listing of their tobacco products to FDA’.
In a note issued through its Center for Tobacco Products, the agency said it had undertaken efforts to educate those who could be affected by answering questions such as: what is the tobacco product listing requirement; what types of changes trigger the requirement and when doesn’t it apply; what steps should companies take to make sure they’re in compliance?
More information is available on the FDA’s new web feature.
