Category: Other Tobacco Products

‘Hookah Suppliers Skipping Warnings”

Photo: Lightfield Studios
A new study from the Boston University School of Public Health (BUSPH) shows that only half of hookah packages assessed included required nicotine warnings two years after a national requirement to do so took effect in the United States.
In August 2018, the U.S. Food and Drug Administration mandated that all hookah manufacturers include a nicotine warning on their packaging to communicate the harms of the tobacco in their products.
Published in the journal JAMA Network Open, the study found that only three brands out of 33 brands assessed were 100 percent compliant with all warning label requirements, which mandated a range of placement and formatting elements.
The study is the first to examine this compliance with warning requirements on hookah packaging in the country.
Hookah tobacco smoke contains many of the same harmful components found in cigarette smoke, including nicotine, tar, heavy metals and carbon monoxide. But people who smoke hookah may inhale as much as 70 times more tar and 11 times more carbon monoxide from water pipes than from cigarettes, due in part to the length of hookah smoking sessions, which typically last at least one hour. These toxic exposures can increase hookah smokers’ risk of developing cancers, heart disease, respiratory issues, and blood pressure complications, according to the FDA and Centers for Disease Control and Prevention.
“We know that warnings are an effective way to communicate to people the harms associated with smoking all types of tobacco, but to be effective, they must exist to begin with,” says study lead and corresponding author Jennifer Ross, associate professor of health law, policy and management at BUSPH, in a statement. “We hope this study will bring attention to the low levels of compliance among hookah manufacturers so that additional action can be taken to increase compliance. We also hope that these findings will lead to efforts to further increase the impact of warnings for hookah, such as implementing more warnings and in more locations to increase people’s exposure to the warning labels.”
“Young people often have misperceptions about the dangers of smoking tobacco in a hookah, such as thinking that the water in the waterpipe ‘purifies’ the tobacco, which is not true,” Ross says.
For the study, Ross and colleagues from Wake Forest University School of Medicine and East Carolina University identified all hookah brands available for online purchase in 2020—a total of 66. They narrowed their analysis to 33 brands, including a total of 181 packages, based on a combination of highest product prevalence and random selection.
The team found that 97, or about half, of the observed packages had the required nicotine warning statement. Of the 33 brands in the sample, 10 of them included no nicotine warnings on their packages at all. Among the packages with nicotine warnings, nearly one-third did not display the warnings in the area of the packaging that the FDA required (on the front, or on the top and back). Similarly, nearly one-third of hookah packages with the warnings did not adhere to the FDA’s style and formatting requirements for the labels.
“This is the first study to assess compliance with the federal law on hookah warnings, and our results show that many brands are not in compliance,” says study senior author Erin Sutfin, professor of social sciences and health policy at Wake Forest University School of Medicine. “The ultimate goal of warnings is to provide information about health harms of product use directly to consumers so they can make informed decisions. We hope these findings are useful to the FDA and will promote enforcement action against noncompliant companies.”
February 14, 2024
Kenya Relaxes Pouch Health Warnings

Image: Tobacco Reporter archive
The Kenyan government has relaxed nicotine pouch health warning requirements following BAT’s statement that it would pull investment from a new factory in the country’s capital, according to The Guardian.
The government agreed to let BAT sell Velo nicotine pouches with significantly smaller health warnings and without mentioning the presence of potentially cancer-causing toxicants, according to letters between BAT and the Ministry of Health, which were obtained by Examination, an investigative news outlet. The ministry agreed to let BAT sell Velo with a small warning stating, “This product contains nicotine and is addictive.”
Current regulations in the country state that labels must cover one-third of the package and include information about health hazards.
Kenya is one of BAT’s key “test markets” in low-income and middle-income countries, according to company financial presentations. The company plans to make Kenya its base of operations for a rollout of Velo across southern and eastern Africa.
In 2021, BAT requested its product be allowed to be sold with a warning label covering 10 percent of the packaging. In a letter, Crispin Achola, BAT Kenya’s managing director, told Mutahi Kagwe, the cabinet health secretary, “our resumption of factory operations and the sale of Lyft [Velo’s previous name] in Kenya hinges on the provision of appropriate text health warnings.”
“Your positive consideration of this request will allow us to operationalize our factory,” the letter said.
In response, the Ministry of Health agreed to allow a warning label covering 15 percent of the front of the package.
Velo is the only nicotine pouch legally available in Kenya, though other brands are smuggled in illegally.
January 24, 2024
A Heady Mixture

Photos: AIR Global
AIR Global is revolutionizing shisha smoking with a mixture of technology and tradition.
By George Gay
As anybody who has tried it will be aware, dabbling with tradition is usually fraught, but it can be done successfully provided the rituals of the tradition remain largely the same and any changes introduced are aimed exclusively at improving the experience of taking part in the traditional activity. This idea came to mind while taking part in a Q&A with Ronan Barry, chief corporate and regulatory affairs officer at Advanced Inhalation Rituals Global (AIR Global), because the focus at one point turned to the company’s latest product, OOKA, which Barry described as the “future of shisha.”
Tobacco Reporter: Can you describe what sets OOKA apart and the philosophy behind it?
Ronan Barry: With OOKA, we’ve successfully blended the rich traditions of shisha with cutting-edge technology, offering a shisha experience like no other. Our philosophy at AIR Global revolves around pushing the boundaries of traditional shisha experiences, with a particular focus on reducing toxicants in shisha aerosol while delivering cleaner, more consistent and higher quality inhalation rituals.
Before you go into the details of OOKA, could you briefly describe traditional shisha consumption?
Traditionally, flavored shisha involves the heating of the shisha mixture rather than burning, setting it apart from combustible tobacco products. Shisha itself is a moist mixture comprised primarily of glycerin and fructose and a relatively small amount of tobacco. The mixture heats to a temperature of about 200 degrees Celsius, creating vapor that is fundamentally different from tobacco smoke. However, the conventional heat source is charcoal, which does burn and emits toxicants such as carbon monoxide. These emissions can, depending on how the shisha is set up, penetrate the waterpipe device and also pollute indoor environments.
But your new product is different?
Very much so. Our latest innovation, OOKA, introduces a revolutionary concept. It is the world’s first pod-based, charcoal-free shisha device, which heats the molasses in a micro-oven powered by a rechargeable battery. Its innovative heating element, in collaboration with an integrated microchip, heats the shisha to its optimal temperature. This ensures users enjoy a consistent and pleasurable experience, drawing a parallel to the precision that coffee enthusiasts seek in achieving the perfect brew. Importantly, OOKA’s innovative design brings the traditional shisha ritual into the modern era by removing the need for charcoal to heat the shisha and, in turn, removing charcoal “smoke” from the experience. As such, OOKA provides the cleanest shisha experience available for both users and the environment. It offers, on average, a 94 percent reduction in a range of harmful chemicals and nondetectable levels of carbon monoxide.
Are there other advantages?
Certainly. The new system eliminates any inconvenience of preparation, ash and mess. It reduces the preparation time to five minutes—four times faster than conventional waterpipe devices on the market. The pods contain the prepared shisha, and OOKA’s smart technology monitoring system checks the temperature 25 times per second before it passes through the water for inhalation. This offers consumers the ease of a lounge experience at home at a drastically reduced price.
Would you describe your company briefly?
AIR Global, which was founded in 1999, is majority owned by London-based private equity firm Kingsway Capital. We are headquartered in Dubai, United Arab Emirates (UAE), with offices in the U.S., U.K., the UAE, [the] KSA [Kingdom of Saudi Arabia], India, Poland and Germany, and factories in Ajman, [the] UAE and Poland. Reinhard Mieck is the CEO of AIR Global, which he joined in May 2021, bringing with him a wealth of experience from a 19-year career in FMCG and nine years in the luxury industry.
Is AIR Global a profitable company?
Yes. Our growth over the years is a testament to our commitment to innovation, product quality and customer satisfaction. Partly by expanding our customer base to more than 100 countries today, we have consistently outperformed the market. We are currently the leading company in the global shisha market, with 47 percent market share. Beyond our current success, we envision significant long-term growth, reflecting the promising future of the entire shisha category. Presently, the global shisha market is valued at $19 billion, and by 2026, it is forecasted to rise to $22 billion, underscoring the potential for continued expansion and innovation.

Our philosophy at AIR Global revolves around pushing the boundaries of traditional shisha experiences, with a particular focus on reducing toxicants in shisha aerosol while delivering cleaner, more consistent and higher quality inhalation rituals.
Ronan Barry, chief corporate and regulatory affairs officer, AIR Global
What products do you offer beyond OOKA?
The most significant is Al Fakher, the world’s leading brand of shisha molasses. We have recently launched Shisha Kartel, the fastest-growing shisha brand in Europe, and we offer Zodiac, which is a non-nicotine, nontobacco tea-based product. Our influence extends to various aspects of the shisha industry, and through our online platforms, such as Hookah-Shisha.com in the U.S. and Shisha World in Europe, we sell a range of shisha devices and accessories. In particular, we promote the use of heat management devices in place of aluminum foil in the setup of a shisha session to deliver a cleaner shisha cloud with minimal toxins to every consumer.
Where, geographically, does AIR Global currently sell its products? Is that geographical spread increasing or decreasing?
AIR Global currently sells its products in more than 100 countries, showcasing our global reach and commitment to serving diverse communities. While the Middle East, the United States, Europe and Africa are our largest markets, our presence continues to expand.
Are AIR Global’s volumes increasing or decreasing, and is this increase or decrease driven by particular markets?
Our sales volumes have been on an upward path, reflecting the appeal of our innovative products such as OOKA. The launch of OOKA made a significant impact, with its charcoal-free and smoke-free design. In fact, OOKA achieved remarkable success in the UAE, where it quickly sold out within a month of launching due to its unique appeal. Our dedication to innovation and product quality continues to drive growth and customer satisfaction in various markets.
Are consumer preferences changing, especially perhaps in respect of shisha flavors?
Consumer preferences are evolving in respect of shisha, and our commitment to staying ahead of these preferences ensures that we continue to provide an exciting and evolving range of shisha flavors to satisfy our customers. Shisha enthusiasts today have a growing appetite for a wider range of flavors and experiences. This has driven us to expand our flavor offerings and introduce innovative options that cater to diverse tastes, such as Zodiac nicotine-free tea-based shisha flavors, which come in both the traditional shisha format as well as in pods designed for the OOKA system, making this shisha experience available to a wider audience. We anticipate substantial growth in the nicotine-free segment, similar to the trend toward alcohol-free beers, wines and spirits.
How does the regulatory landscape for shisha look?
The fundamental differences between shisha and other tobacco and nicotine products are increasingly appreciated by regulators. Recently, the state of California prohibited all flavored tobacco and nicotine products but created a specific exemption for shisha. The reasons for this were the social and cultural importance of shisha as well as the fact that it is not conducive to youth use and tends to be consumed occasionally rather than compulsively. The global average consumption frequency among regular shisha users is two sessions per week.
Do you have any idea of the age profile of shisha users?
External sources, such as data published by the CDC [Centers for Disease Control and Prevention] and FDA [Food and Drug Administration] annually in the United States, demonstrate that shisha is very much an adult-oriented pastime. For several years now, the rate of experimentation by minors with shisha has been in the low single digits and the lowest among tobacco and nicotine products. This is not surprising as shisha is a time-consuming ritual, usually enjoyed in social settings, and cannot be consumed inconspicuously or on the go.

AIR Global says it has blended the rich traditions of shisha with cutting-edge technology.
Why do people consume shisha?
People consume shisha for various reasons, making it a multifaceted experience. Shisha is often a cultural and social ritual that brings people together. It serves as a means of relaxation, enjoyment of diverse flavors and a platform for engaging in conversations with friends and family. The rich heritage and centuries-old tradition associated with shisha contribute to its appeal, fostering a sense of connection and shared experience among enthusiasts.
Given the often strongly social aspects of shisha consumption, did the pandemic have a negative effect on sales?
Yes and no. On the one hand, social engagement was limited during the pandemic; shisha bars were closed in many countries, and that did have an impact. On the other hand, border closures had the effect of substantially cutting down smuggling, which was a boon to legally operating businesses and mitigated some of the negative impacts of the pandemic.
Are counterfeit products a major problem in respect of shisha markets?
Counterfeit products can be a concern in the shisha market, and we take this issue very seriously. The production of counterfeit shisha products creates multiple risks to consumers and can tarnish the reputation of legitimate manufacturers. We are committed to addressing this problem through a multifaceted approach to protect the health and safety of end users and uphold industry standards. For instance, the OOKA pod system incorporates patent-protected smart technology and a counterfeit-resistant design. It uses RFID [radio-frequency identification] technology for heating profiles, an NFC [near-field communication] chip to ensure only AIR Global-approved pods work with OOKA, 128-bit AES [advanced encryption standard] encryption to prevent counterfeit pods from functioning, and microchips for traceability.
How is shisha taxed relative to other tobacco products, and do taxation levels play any part in exacerbating the illegal trade?
Shisha is often unfairly taxed in relation to other tobacco products because of the outdated approach of taxation based on weight. This practice fails to consider the unique characteristics of shisha, which include a significantly lower presence of tobacco and toxicants compared to combusted tobacco. Shisha should be classified as a distinct category with its own taxation framework that doesn’t penalize the weight of nontobacco ingredients in the product. Adopting a more considered taxation system that aligns with the nature of shisha would not only protect consumers from unfair taxation but would also help address the issues of black market and counterfeit shisha products, ensuring the health and safety of end users while preserving government revenue.
Finally, are there going to be any major changes to AIR Global or the way it operates in the near future?
As a forward-looking company, we are continually exploring opportunities for growth and innovation. Our commitment remains unchanged—to deliver the highest quality products and services to our customers. Our focus continues to be on pushing the boundaries of the shisha experience, ensuring that we stay at the forefront of the industry and continue to offer unparalleled shisha experiences.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

November 1, 2023
Seeking Substitutes

Dholakia Tobacco is offering Indian smokeless tobacco products that are less hazardous than the country’s most commonly used varieties. Photos: Dholakia Tobacco
Modern oral nicotine products could help Indian consumers abandon deadly local smokeless tobacco products.
By Stefanie Rossel
When it comes to tobacco, India holds several records: It is the world’s second-largest consumer, third-largest producer and fifth-largest exporter. Its consumption pattern is also remarkable. According to the 2016–2017 Global Adult Tobacco Survey, 266.8 million adult Indians—28.6 percent of the country’s population—use tobacco in some form.
However, with 199.4 million consumers, the most used tobacco product is smokeless (SLT). Only 99.5 million Indians consume tobacco by smoking it. Of these, only 37.5 million smoke cigarettes. Most smokers prefer bidis—cheap, unfiltered cigarettes made of tobacco flakes wrapped in a tendu or temburni leaf that are even more hazardous to health than factory-made cigarettes.
India has the world’s largest number of SLT users. Unfortunately, the type of SLT that prevails here does not reside on the low end of the risk continuum like other smokeless products such as Swedish snus do. A pasteurized oral tobacco with limited negative health effects, snus has helped Sweden achieve the world’s lowest smoking prevalence. Indian SLTs, by contrasts, are considered “uniquely deadly” by experts.
Indian SLTs come in a large variety. The most commonly used variants are khaini, a mixture of tobacco and lime, and gutkha, which comprises tobacco, slaked lime, paraffin wax as well as catechu, an extract of acacia trees and crushed areca (betel) nut. Other local forms of SLTs contain mixtures of betel quid or paan masala. All are highly addictive and full of carcinogens. In addition to the typical ingredients, they can be laced with thousands of chemicals. Available for a few rupees, these SLTs are affordable for low-income groups. Like bidis, they are predominantly consumed in rural areas, where almost 70 percent of the country’s population lives. SLTs are responsible for an estimated 350,000 premature deaths annually in India.
In line with its national health policy, India aims to reduce the number of tobacco users by 30 percent by 2025. The country closely adheres to the World Health Organization’s abolitionist guidelines, but its tobacco control measures are often contradictory. Attempts to curb tobacco use have remained limited to tax hikes on cigarettes rather than bidis and a ban on e-cigarettes and heated-tobacco products. In 2012, all states banned the manufacture, sale and distribution—but not the public use—of pre-packaged gutkha under laws that defined the product as a food. Some states extended this ban to other oral tobacco products, such as paan masala. Enforcement of these bans has been weak, however.
In an interview with The Free Press Journal, Kiran Melkote of AHER, a harm reduction group, outlined the reasons for India’s ineffective tobacco control policy. “Many arms of the government work at cross purposes and implement policies that even on paper are in direct conflict with the WHO Framework Convention on Tobacco Control. The health ministry tries to implement awareness campaigns and maintain zero industry contact norms for its employees while the commerce ministry provides loans and support for tobacco cultivation and the finance ministry bans e-cigarettes and incentivizes bidi manufacturers. All of them generally ignore oral tobacco. The answer therefore lies in understanding that the strategies used in the developed world where the predominant form of tobacco is the cigarette may not really impact tobacco use in India. Here we have a larger population with different problems and an admitted inability to implement existing laws.”

The success of modern oral products in Pakistan is welcome proof that they can replace the deadlier local oral tobacco.
Samrat Chowdhery, director of the Council for Harm Reduced Alternatives
Potential Solution
Perhaps a look across the border might be useful. India’s neighbor Pakistan has a tobacco consumption profile similar to that of India. An estimated 10 million people use SLT, which represents more than 40 percent of the country’s total tobacco market. Recently, Pakistan has seen a remarkable development: In December, BAT announced that its modern oral nicotine brand Velo had achieved a monthly volume of more than 40 million pouches in the country, making it BAT’s third-largest market for nicotine pouches. Modern oral nicotine products consist of pre-portioned bags comprising nicotine applied to a carrier material. They are considered to be a more advanced, cleaner version of Swedish snus.
Could Pakistan’s experience in substituting hazardous SLT products with less harmful varieties serve as a blueprint for India? “The tobacco use patterns in both nations are similar,” says Samrat Chowdhery, director of the Council for Harm Reduced Alternatives, referring to the high share of oral tobacco use. “Nicotine pouches have not been sold on scale before in the South Asian region, hence their substitution potential for the region’s tobacco users, especially the SLT users, was not known. Their success in Pakistan is welcome proof that they can replace the deadlier local oral tobacco—though whether that is indeed happening needs to be better understood.”
Nihar Dholakia, director of next-generation products at Dholakia Tobacco, an SLT company based in Gujarat, India, has been closely monitoring the rise of the modern oral category in Pakistan. “Given that both Pakistan and India have a similar culture of using SLT products, we believe that the success of nicotine pouches in Pakistan could be replicated in India but on a much larger scale.”
In light of the Indian government’s abolitionist strategy and the competitive structure of the local SLT segment, in which two leading companies jointly hold around 40 percent of the market, less hazardous oral products in India could encounter major hurdles, according to Chowdhery. “Nicotine pouches and snus could face opposition from the SLT lobby unless they can be made to see the business potential,” he says. “It would be a major setback if the government banned safer oral nicotine products too.”
Issues are also likely to come up in terms of cultural heritage and consumer education. “Tobacco use, especially oral, has long been part of India’s cultural milieu, just like alcohol is in western nations,” says Chowdhery. “SLT is also available for cheap, and varieties vary across regions. While the social stigma around smoking is beginning to develop, none exists for oral products as there is no secondary harm. Educating users can be challenging given the number of users, with different cultural norms and languages such that it is difficult to design communications.”
“In India, the avenues available for broadly educating consumers about THR and more specifically finessing that message to SLT users may be very limited,” says Dholakia. “The process seems to be largely organic, with consumers themselves becoming aware of the harmful effects and seeking alternatives. This often involved researching THR and exploring a range of reduced-risk products available. Online resources and word of mouth play a significant role in the education process. However, to make a more substantial impact, we require greater consumer advocacy as well as government initiatives to generally raise awareness.”

We believe that the success of nicotine pouches in Pakistan could be replicated in India—but on a much larger scale.
Nihar Dholakia, director of next-generation products at Dholakia Tobacco
Treading New Paths
Despite the government’s reluctance to admit safer substitutes, not all is lost for THR in India. Dholakia and other manufacturers are beginning to look at snus and nicotine pouches. With the Paz brand, his business recently launched the first Swedish-style tobacco snus brands in India. “In fact, we operate India’s first online platform for snus,” says Dholakia. “However, we face regulatory challenges, such as the requirements of an 85 percent pictorial warning of product packaging, high taxes and restrictions on advertisement and promotion. Nevertheless, despite these obstacles, we have observed a growing trend among consumers who are actively seeking reduced-risk products as a better alternative.”
Dholakia Tobacco caters primarily to the premium SLT category. “However, considering the fact that India has over 220 million smokeless tobacco users who lack access to harm-reduced alternatives, we aspire to make our products more accessible and available to any SLT user. Therefore, we are determined to expand our reach to a broader audience in the domestic market as well through the right forms of direct-to-consumer education and word-of-mouth product awareness.”
Indian consumers have responded positively to Dholakia’s snus products, particularly after switching from traditional chewing tobacco, cigarettes or khaini. “Many customers have reported experiencing a positive change firsthand, indicating their acceptance and awareness of the harm-reduced properties of snus products,” says Dholakia. “These are some of our future ambassadors for risk-reduced products, who will quite naturally be out there to talk with other consumers about their experiences with these new products.”
The company also manufactures a filtered khaini brand, which has become popular in many Indian states recently. Filtered khaini is a modern version of khaini chewing tobacco that resembles western-style, portion pouch-packed snus but has a significantly different toxicological profile. “Traditional filter khaini available on the market is not less harmful than regular khaini,” clarifies Dholakia. “In fact, it can be thought of as a pulverized moist version of khaini packed in an oral pouch.”
Dholakia’s filtered khaini brand is not the same, he insists. “The filter tobacco products we offer are different in composition when compared to traditional filter khaini and commercially available products in India currently. It can be said it is less harmful than other filter products due to the use of low-impact base ingredients, the type of quality tobacco and the novel processes as well as our advanced approach to product integrity and testing infrastructure. As far as affordability and availability is concerned, these filter products are comparable to regular chewing tobacco and khaini products. They are available in a few states and are perceived by khaini consumers as a more sophisticated version of a mainstay khaini product.”
Dholakia Tobacco has also ventured into modern oral nicotine pouches. It was the first company in India to venture into this category. “As pioneers of modern oral nicotine pouches from India, our products are currently available only in the global markets we cater to and have not yet been launched domestically,” Dholakia says.
“However, we are considering and working toward introducing them in India as we firmly believe that they can have a positive impact on public health in the country. We are confident that Indian consumers are ready for such a product. Accessibility, awareness, the right information, a fair regulatory framework and quality control are key factors that need to be addressed for the category. Given that India is in dire need of multiple harm-reduced products, we are committed to making them available in India.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

May 1, 2023
FDA Urged to Expand Menthol Ban

Image: Tobacco Reporter archive
The U.S. Food and Drug Administration should extend the ban on menthol cigarettes to other products, like pipe tobacco and cigarette tubes, according to researchers at the Rutgers Center for Tobacco Studies and Ohio State University, reports EurekAlert!.
“Tobacco companies have rebranded their roll-your-own cigarette tobacco as pipe tobacco to avoid taxes and rebranded flavored cigarettes as flavored cigars to skirt a federal ban,” said Andrea Villanti, deputy director of the Rutgers Center for Tobacco Studies and co-principal investigator of a study published in Tobacco Control discussing the addiction potential of menthol cigarette alternatives. “We have already seen companies advertising pipe tobacco and cigarette tubes alongside cigarettes and filtered cigars. The products we tested in our study are likely to be products that tobacco companies will promote following a ban on menthol cigarettes.”
Research showed that mentholated pipe tobacco and tubes in a roll-your-own cigarette were the most appealing substitutes for menthol cigarettes and resulted in the highest number of indicators for future nicotine addiction. The proposed menthol ban does not include these products, however.
“The present findings suggest that components of menthol roll-your-own products, including menthol rolling papers, cigarette tubes and pipe tobacco, should be included in the menthol cigarette and flavored cigar product standards,” said Theodore Wagener, director of the Center for Tobacco Research at the Ohio State University Comprehensive Cancer Center—Arthur G. James Cancer Hospital and Richard J. Solove Research Institute and corresponding author of the study. “Their absence from this restriction will result in a critical loophole that is already being exploited by the tobacco industry and has the potential to lessen the potential public health benefits of the proposed menthol ban.”
December 7, 2022
In the Bag

Photo: Swedish Match
Swedish Match continues to dominate the U.S. nicotine pouch market with its popular Zyn brand.
By Stefanie Rossel
It’s still a fledgling industry but growing rapidly: According to the Foundation for a Smoke-free World (FSFW), nicotine pouches, also known as modern oral products, accounted for an estimated $2.38 billion, or 0.3 percent, of the global retail market in 2021. Toward the end of 2022, the segment had already achieved a value of at least $5.86 billion, estimates Market Reports World. The nicotine pouch market is forecast to expand at a whopping compound annual growth rate of 31 percent until 2028.
Pouches appeal to adult nicotine consumers because they are discreet and spit-free. They can be used in places where cigarettes or vaping products are banned and can be disposed of in household trash after use. Of the global category volume, the five leading modern oral manufacturers jointly hold an 82.1 percent share, according to the FSFW. Swedish Match is the largest player with a share of 48.7 percent, followed by BAT (20.3 percent), Swisher International (6.4 percent), Altria Group (5.4 percent) and Japan Tobacco International (1.4 percent).
Sweden and the United States are the largest markets for nicotine pouches. Both countries have long traditions of smokeless tobacco products. In the U.S., where the modern oral category currently accounts for 2 percent of the nicotine market, one brand sticks out: Swedish Match’s Zyn. Launched in 2016, Zyn pioneered the modern oral nicotine segment and has since experienced impressive and continued growth.
Based on MSA data that records shipments by distributors to retail stores, Zyn could extend its U.S. nicotine pouch market share to 66.5 percent in the third quarter of 2022. According to IRI data, which measures consumer purchases based on a sample of retail stores, the brand’s market share even exceeded 76 percent during the quarter. Zyn’s penetration is particularly high in the west of the U.S., where it was first introduced.
Boosting Production
Zyn’s continuing success in the U.S. was one of the factors that prompted Philip Morris International to make its offer for Swedish Match. In May, PMI bid approximately $16 billion to acquire Swedish Match. To overcome opposition from activist investors, the multinational in October increased the offer price. Nevertheless, Framtiden Partnerships, which owns almost 1 percent of shares in the Swedish company, refused to accept the increased offer, saying it undervalued Swedish Match’s leading position in the fast-growing modern oral nicotine market. At the time of writing, PMI had secured 82.59 percent of Swedish Match.
Owning a substantial stake in Swedish Match will give PMI a comfortable lead in the U.S. nicotine pouch market, where it currently has no presence. In recent years, Swedish Match has ramped up production of its nicotine pouches in the U.S. When Zyn debuted six years ago, it was available in approximately 40,000 stores in the west of the country. By the end of 2021, the product could be purchased in more than 120,000 retail outlets nationwide. Swedish Match increased Zyn U.S. shipments from 114.1 million cans in 2020 to 173.9 million cans in 2021. In February 2020, the company announced that it would raise production capacity again, enabling its factory to produce more than 200 million cans of pouches per year from 2022.
Zyn is made from tobacco-derived nicotine and comes in a variety of flavors, among them coffee, cinnamon or citrus. In 2021, Swedish Match said it had rolled out Zyn Menthol and Zyn Chili nationwide. Nicotine pouches are regulated by the U.S. Food and Drug Administration and are subject to age restrictions, a nicotine health warning and premarket assessment.
Swedish Match submitted premarket tobacco product applications for all Zyn products currently on the U.S. market in March 2020. The applications are currently under review by the FDA. According to Swedish Match, the applications show that almost all harmful and potentially harmful components associated with tobacco products are below detection levels in Zyn. Furthermore, consumer studies indicate that there is little interest in Zyn among users who are not current tobacco consumers and that there is a large potential to attract existing tobacco users to the products.
Lawsuit Pending
Despite Zyn’s dominance, the U.S. market for modern oral nicotine is highly competitive. According to Swedish Match, several companies expanded their nicotine pouch footprint in 2021. And some are even challenging the market leader in court. On Aug. 2, 2021, Dryft Sciences filed a lawsuit in the U.S. District Court for the Central District of California, claiming Swedish Match had driven it off the market with a series of sham legal actions.
Kretek International, the largest importer, marketer and distributor of specialty tobacco products in the U.S., announced the creation of a new company, Dryft Sciences, that would focus exclusively on Dryft nicotine pouches.
In a September 2019 statement, Kretek announced the new company intended to substantially expand its manufacturing capacity and roll out its nicotine pouch globally. It anticipated manufacturing 30 million cans of Dryft in 2020 and 60 million cans in 2021.
Shortly after the announcement, Swedish Match initiated several legal actions: It asked the International Trade Commission to investigate Dryft for alleged patent infringements and sued the company for the same reason in the U.S. District Court for the Central District of California. Next, it filed trade secret misappropriation claims under Kentucky and federal law.
“Because of [Swedish Match’s] actions, Dryft was never able to manufacture or sell the amount of product it reasonably anticipated it would when it issued the September 2019 press release,” Dryft Science explained in statement.
As a consequence, the plaintiffs said, Dryft’s market value dropped significantly. On Oct. 20, 2020, Dryft Sciences sold its formulations, brands, know-how and other relevant assets—originally valued at $485 million—to BAT for $150 million. BAT has since sold the products under its modern oral nicotine brand Velo.
Dryft Sciences requests $1.2 billion in damages. Swedish Match has not publicly commented on the lawsuit, and its financial report for the third quarter of 2022 made no reference to the case.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

December 1, 2022
Morocco to Increase Waterpipe Taxes

Photo: alexlmx
Morocco is preparing to increase taxes on waterpipes, reports Morocco World News.
The country’s Finance and Economic Development Committee approved the new taxes on Nov. 9. Following the increase, smokers would pay MAD675 ($63) per kg of shisha smoking material.
The approval comes after a government amendment to the Finance Bill of 2023 extending the tax base to include shisha without tobacco and electronic cigarettes.
Officials said the measure “aims to preserve the health of consumers, especially young adults, and to protect them against the negative effects of consumption and addiction to these products.”
The statement further explains that the imports of tobacco-free shisha are not subject to taxes, although they carry the same health risks as tobacco-based shisha.
The decision to raise the tax is based on World Health Organization research indicating that smoking products containing a mixture of fruits and herbs without tobacco pose a similar risk to tobacco products.
The WHO recommends subjecting such products to the same restrictions and taxes as tobacco products.
According to the Moroccan government, the European Commission classifies herbal mixtures, aromatic herbs or fruits as smoking products.
November 13, 2022
Bidi Workers Demand Protection Against Cigarettes

Photo: WESTOCK
Bidi workers in Bangladesh formed a human chain on June 21 outside of the Pabna Deputy Commissioner’s office, demanding protection against competition from “foreign” cigarettes, reports The New Nation.
According to the leaders of the group, the biggest competitors to bidis are low-quality cigarettes, which are mostly owned by foreign companies and have not been set to increase in price much in the 2022/2023 budget.
“Bidi industry is a domestic worker-friendly industry,” the group leaders said. “Bidi is a 100 percent indigenous technology-based industry. On the other hand, everything in cigarettes is imported from abroad and depends on technology. Foreign multinational companies are smuggling thousands of crores of rupees by burning the lungs of the people of this country.
“If all kinds of conspiracies against the domestic bidi industry, including the withdrawal of discriminatory advance income tax, are not stopped, we will be forced to wage a fierce agitation.”
After the protest, the leaders of the group presented a memorandum to the prime minister through the deputy commissioner of Pabna.
The group demanded an increase in the price of low-quality cigarettes, withdrawal of a 10 percent tax on bidis, and legislation to protect bidi workers.
June 22, 2022
Medad Pioneers Ultrasound Water Pipe

Image: Studio217
Medad Technology has developed a shisha pipe that it says is less harmful to health than traditional hookah, reports The National.
Unveiled at the recent World Vape Show in Dubai, the company’s Nesta pipe delivers a nicotine hit via ultrasonic vibrations, which could cut cancer risk from inhaling toxic fumes, according to Medad Technology.
The device’s patented algorithm reportedly produces mist droplets containing nicotine that are evenly distributed as they are inhaled.
Misting is distinct from vaping as it uses ultrasound technology rather than heat. The absence of charcoal and tobacco means the product generates none of the harmful carbon emissions or toxic fumes that are usually inhaled by users of traditional hookah pipes, according to the company.
“The challenge was to develop real, alternative products that were safer than shisha and e-cigarettes, not categorized under vaping, so a completely new product,” Medad Holding CEO Mohammed Al Mazrouei was quoted as saying.
The device has been approved by the European Union Medical Agency and by the U.K.’s Medicines and Healthcare Products Regulatory Agency, according to Medad Holding.
It is under review by UAE authorities. The company is planning to also apply for approval by the U.S. Food and Drug Administration.
An estimated 100 million people use shisha, or similar water pipes, on a daily basis around the world.

June 22, 2022
Piping Up

Ruth Gunning (Photo: European Shisha Community Alliance )
Ruth Gunning, board director of the European Shisha Community Alliance, discusses the challenges facing the water pipe tobacco sector in Germany.
By Stefanie Rossel
While still a niche, shisha has become more popular in Germany in recent years. The country is the largest market for water pipe tobacco in the European Union, with entrepreneurs introducing many new shisha brands. Germany is also home to large communities from Turkey and the Middle East, where smoking shisha has historically been a popular pastime. Many Germans try shisha on holidays in Turkey, Egypt or Dubai and subsequently seek it out when they return home.
According to estimates by the European Shisha Community Alliance (ESCA), smokers consume about 5,500 tons of shisha annually in Germany. A quarter of it is consumed in the country’s approximately 6,000 shisha lounges. But the market has a severe black market problem—around 45 percent of water pipe tobacco is nonduty paid or counterfeit.
As part of the country’s recently passed tobacco tax reform, the German ministry of finance will increase taxes on shisha tobacco by an additional €23 ($27.24) per kilo by 2026. Furthermore, pack sizes will be limited to 25 grams from July 1, 2022.
Tobacco Reporter spoke with Ruth Gunning, head of EU engagement for shisha manufacturer Al Fakher and a board director for the ESCA, about the challenges facing the sector.
Tobacco Reporter: Water pipe smoking is a social activity, with much of it taking place in shisha lounges. Which impact has the Covid-19 pandemic had on the German shisha market?
Ruth Gunning: It has been an extremely difficult period, and unfortunately the relief has been slower than originally anticipated so far in 2021. Many of our members have been unable to operate—lounges due to the restrictions that have been put in place and some retailers have had to remain shut due to the nonessential nature of their business. Not just in Germany but across Europe. Much of the use was driven into the home.
As the hospitality sector was allowed to reopen, initially with outdoor areas being most popular, we started to see more anti-tobacco groups being very vocal about banning outdoor smoking and linking it to the spread of Covid-19 despite having no evidence to support this. Shisha is nothing like cigarettes, yet these groups seem to conveniently forget that people’s livelihoods are fully reliant on the shisha sector operating at full capacity. We estimate that there are about 65,000 people across Europe with jobs that are dependent on the shisha category. ESCA has had to work hard with its members to try to ensure that shisha bars and lounges are afforded the same opportunities for reopening as others in the hospitality sector. All of our members are fully committed to upholding extensive hygiene standards to ensure their customers are protected and feel safe.
Amid the crisis, Germany, uniquely in the EU, passed a law to reduce the packaging size for shisha tobacco to 25 grams in order to curb illicit trade. What is your take on this measure?
We support any efforts to help to reduce the problem of illicit trade. The problem with this new proposal is that it requires significant enforcement, which will undoubtedly not happen. It also doesn’t properly address the growing problem of illicit [trade]. Enforcement in Germany, particularly in lounges serving illegal product, is very low, and now with the increase in prices for consumers, the incentive for smugglers will grow and/or people will buy elsewhere, i.e., in countries where they can access larger pack sizes at cheaper prices.
What impact will this regulation have on manufacturers?
Complexity and cost. This new size will require a reconfiguration of the production process in factories. New equipment and materials will be required, and Germany will be the only country to have this, which will be costly. Manufacturers who are hardest hit by illicit [trade] may face real challenges in protecting the legal market if the government does not step in and enforce its new laws.
What does it mean for shisha lounge owners?
Again, it’s a question of enforcement. Many lounge owners are legally compliant; they are already required to serve only 20 gram packs to consumers. But because there is a lack of consistent enforcement, those who seek to abide by the law lose out. They already compete on an uneven playing field.

Many shisha lounges in Germany have been unable to operate due to Covid-19 restrictions. (Photo: Parilov)
Will the new rules help reduce tobacco consumption in Germany?
The more restrictions are placed on products like shisha, the more the illegal market grows—and with that comes an added risk to consumers. Therefore, I don’t think added restrictions will reduce tobacco consumption; it will merely drive it underground.
Germany and Europe’s aim to reduce tobacco use is totally understandable. And in fact, globally, many people recognize that a move from combustible to heated products can be beneficial. However, it is important to remember that shisha is very different from cigarettes. Shisha is heated at a much lower temperature compared to cigarettes, which are burnt, and the aerosol produced when shisha is heated comprises 60 percent water vapor compared to 15 percent in cigarette smoke.
According to the Federal Institute of Risk in Germany, on average, people in Germany use a shisha once or twice a week. If you compare this to cigarette use, where on average users can smoke 20 [cigarettes] to 30 cigarettes a day, the difference in consumption pattern is staggering. The exposure to tar, nicotine and carbon monoxide over a one-week period for average shisha smokers is far less than that for average cigarette smokers. Shisha is much lower on the risk continuum than cigarettes, and as governments aim to reduce cigarette and combustible tobacco use, they should not apply the same regulations to shisha.
Whilst shisha is a tobacco product and is not harmless, it is used very occasionally, it is a social activity, and it has cultural and historical roots. Shisha consumption is a lifestyle choice for adults, is a force for good and is part of an inclusive society.
Your association estimates that illicit product accounts for more than 45 percent of the German shisha market. How does this compare to the situation in other EU markets?
It’s not the worst in the EU because the taxes are not the highest when compared to other countries. However, with the newly imposed excise hikes, this will likely change from January 2022 onward. The biggest factor driving the illegal business in Europe is the EU’s position on shisha taxation. At the moment, shisha is taxed in the “Other tobacco” category, which includes pipe tobacco, cigars and cigarillos. These are very different products to shisha in terms of use and market size. The range of taxes in the EU goes from €22 per kg to €250 per kg. This, combined with the open borders, causes a great deal of instability in the shisha tobacco market. The French market, for example, has 85 [percent] to 90 percent illegal shisha, and that is solely because the tax is so high. Spain, on the other hand, is almost 100 percent legal because it has reasonable taxes. This provides the Spanish government with full control over the sector.
Many countries, such as Russia and now Germany, have introduced a special tax category for shisha alone. But more is needed. In addition to its own tax category, ideally, shisha should be taxed based on the percentage of tobacco contained in the shisha. Shisha only contains about 15 percent tobacco and should be taxed based on this. In Russia, they switched to a tax system that only taxes the actual tobacco content, and they converted the market from almost 100 percent illegal to 100 percent legal in a short period of time.
What, in your view, would be a better solution to tackle black market for hookah tobacco?
The most obvious solution is to apply excise according to the weight of the tobacco. This would bring prices down and significantly reduce incentive for organized criminal gangs to smuggle and counterfeit shisha products. Additional sensible solutions are to stock, prepare and serve shisha in sight of the consumers and from its original packaging. This requires enforcement by authorities and also a desire by consumers to be served genuine product. Consumers should demand certain standards. Introducing a licensing system for shisha lounges with license renewal to be subject to compliance performance—for example, with withdrawal of a license after three infringements—would also be a possibility. Furthermore, there should be regular inspections of inventory and significant fines for those involved in selling illegal products.
Which countries have handled this issue most successfully and could serve as an example?
Spain is really the best example I can give. In addition to the steps outlined above, another known and proven way to get illicit trade under control and to meet the objective of protecting public health is to ensure that the tax rate takes into account the rates in neighboring countries, tax increases are planned over the long term and are increased in regular and small increments and close cooperation between industry and authorities. Additionally, enforcement and penalties should be strong enough to act as a deterrent. A legal market is easier for the authorities to monitor, and legal manufacturers are obliged to follow all product, packaging and marketing regulations, which strengthens the authorities’ aim of protecting public health. Criminals that are involved in the illegal trade of shisha don’t follow any regulations or laws, and the authorities cannot monitor the product as it is mostly sold out of sight and “under the table.”
What about the future of shisha in Europe?
The next big piece of legislation that we need to be prepared for is the revision of the Tobacco Products Directive. The EU has already stated that it aims to ban flavors for all tobacco products. Shisha is inherently flavored; therefore, it would act as a de facto ban of the product. That would be disastrous for thousands of businesses across the EU, deprive EU citizens of the ability to legally consume shisha and exacerbate an already flourishing illegal market.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

October 1, 2021