Category: Retail

  • Retailers Push to Delay Display Ban

    Retailers Push to Delay Display Ban

    Photo: Heorshe

    The Federation of Sundry Goods Merchants Associations of Malaysia (FSGMA) has asked the government to postpone a ban on displaying tobacco products at retail outlets, reports The Star.

    The Control of Smoking Products for Public Health Act 2024 requires sellers to store tobacco products out of view starting April 1, 2025. The FSGMA has calculated that implementing the ban could cost its members up to MYR300 million ($70 million).

    “Each store will have to invest significant resources into making physical modifications to hide these products from customers, but the government has not offered financial assistance or a phased rollout,” said FSGMA President Hong Chee Meng.

    The organization reckons each retailer would incur up to MYR6,000 to comply with the display ban, putting financial strain especially on small, family-run businesses.

    Hong said the association is also concerned that the display ban will encourage the rise of illegal cigarettes and vape products as legitimate products will be hidden from view. What’s more, according to Hong, the lack of clear instructions has left retailers unsure about how to implement the ban.

    “Many have raised concerns about the need for additional staff to manage concealed products and the potential disruption to customer service,” he said. “Retailers deserve to know how to comply, and we deserve time and support to implement these changes.”

  • Regulator Proposes Retail Licensing

    Regulator Proposes Retail Licensing

    Photo: Tabakprom

    Russia’s alcohol and tobacco regulator wants to extend the country’s tobacco licensing requirements to retailers, reports Interfax.

    Doing so would improve regulatory oversight, boost budget revenues and reduce the share of illegal tobacco on the market, according to Rosalkogoltabakkontrol head Igor Aleshin.

    Manufacturers of tobacco products have been subject to licensing since March 1. Among other things, they are required to register their machinery. Unused equipment must be mothballed under the regulations.

    According to Aleshin, 225 tobacco market participants have received licenses so far, of which 190 are producers and the rest are importers.

    The current law does not call for the licensing of retail sales, but it does prohibit retail sales of tobacco-containing and nicotine-containing products that are not in consumer packaging.

    On Sept. 1, 2023, lawmakers expanded the role of the former Federal Alcohol Market Regulation Service, giving it the right to regulate tobacco and nicotine-containing products and renaming it Rosalkogoltabakkontrol.

  • Wholesaler Indicted in Fraud Scheme

    Wholesaler Indicted in Fraud Scheme

    Credit: Postmodern Studio

    A federal grand jury has indicted the owner of a licensed tobacco wholesale business in Connecticut in connection with a tax fraud scheme.

    A 10-count indictment by a New Haven grand jury charged Khawar M. Khokar, 35, with one count of conspiracy, an offense that carries a maximum term of imprisonment of five years; eight counts of wire fraud, each of which carries a maximum prison term of 20 years; and one count of engaging in an illegal monetary transaction, an offense which carries a maximum 10-year term, according to Vanessa Roberts Avery, United States Attorney for the District of Connecticut.

    The indictment was returned on May 15. Khokhar appeared Monday before U.S. Magistrate Judge Thomas O. Farrish in Hartford, pleaded not guilty, and was released on a $100,000 bond, Avery said, according to media reports.

    According to the indictment and statements made in court, Khokhar operated Smokin’ Wholesale LLC, a Connecticut-licensed tobacco wholesale business that acquired smokeless tobacco and other tobacco products from out-of-state distributors, including businesses in Pennsylvania and Illinois, and sold the products to retail merchants in Connecticut.

    For roughly two years beginning around May 2017, Khokhar and Smokin’ Wholesale purchased about $2 million in tobacco products from the distributors, but failed to report accurately to the Connecticut Department of Revenue Services the value of the products imported into the state, and failed to pay to the state the associated tobacco taxes owed.

    Through this scheme, Khokhar and others caused Connecticut to suffer a tax loss around $1 million, Avery said.

  • FDA Warns 14 Sellers of Illegal Flavored Vapes

    FDA Warns 14 Sellers of Illegal Flavored Vapes

    The U.S. Food and Drug Administration announced on May 1 that it had sent warning letters to 14 online retailers. The reason for the warning letters was that these retailers were selling unauthorized e-cigarette products.

    The warning letters specifically mentioned the sale of disposable e-cigarette products marketed under various brand names such as Elf Bar/EB Design, Esco Bars, Funky Republic, Hyde, Kang, Cali Bars, and Lost Mary, according to press release.

    The retailers receiving these warning letters sold or distributed e-cigarette products in the United States that lack authorization from FDA, in violation of the Federal Food, Drug, and Cosmetic Act.

    Warning letter recipients are given 15 working days to respond with the steps they will take to address the violation(s) cited in the warning letter and to prevent future violations. Failure to promptly address the violations can result in additional FDA actions such as an injunction, seizure, and/or civil money penalties.

    The agency announced on April 30 that the U.S. Marshals Service seized more than 45,000 unauthorized e-cigarette products valued at more than $700,000 in California.

    The seized products were mostly flavored, disposable e-cigarette products, including brands such as Puff Bar/Puff, Elf Bar/EB Design, Esco Bar, Kuz, Smok and Pixi.

  • Civil Money Penalties for 22 Elfbar Sellers

    Civil Money Penalties for 22 Elfbar Sellers

    Credit: Jeff McCollough

    The U.S. Food and Drug Administration today announced the issuance of complaints for civil money penalties (CMPs) against 20 brick-and-mortar retailers and two online retailers for selling unauthorized e-cigarettes, including Elf Bar, a popular youth-appealing brand.

    The regulatory agency previously issued warning letters to these retailers for selling unauthorized tobacco products. However, according to an FDA release, follow-up inspections revealed that the retailers had failed to correct the violations.

    Accordingly, the agency is now seeking a CMP of approximately $20,000 from each retailer.

    The approximately $20,000 CMP sought from each retailer is consistent with similar CMPs sought against retailers for the sale of unauthorized Elf Bar products over the last few months, including in Sept., Nov., Dec. and Feb.

    The retailers can pay the penalty, enter into a settlement agreement, request an extension to respond, or request a hearing. Retailers that do not take action within 30 days after receiving a complaint risk a default order imposing the full penalty amount.

  • Minneapolis Mulls $15 Minimum Pack Price

    Minneapolis Mulls $15 Minimum Pack Price

    Credit: Nikolay

    The Minneapolis City Council in Minnesota is considering adding new rules and restrictions on sales of tobacco products, including a minimum price for cigarettes and other products that could be the highest in the nation.

    The changes under consideration include a minimum price of $15 per pack of cigarettes or package of four or more cigars, or for certain-size packages of snuff or snus, according to media reports.

    The changes to the city’s existing tobacco products ordinance also would bar price discounts or coupons for tobacco products, and — starting Dec. 1 — ban free samples of tobacco products, and ban smoking of “samples” inside any retail establishment licensed to sell tobacco products.

    The changes would also increase the penalties for businesses that violate the ordinance — including moving from a $200 fine to a $500 fine for a first violation.

  • Tobacco Product Prices Up in Cuba

    Tobacco Product Prices Up in Cuba

    Credit: Timothy S. Donahue

    Beginning on April 12, Cuban tobacco users experienced higher retail prices for cigarettes and cigars. The brands are the domestic tobacco products sold in local stores used by Cuban residents, not tourists.

    According to the report, the prices of cigarette-style brands like Criollo, Titanes, and Popular are now CUP 30 ($1.25) per pack of 20. H. Upmann Clásico, a short cigar sold with and without filters, is CUP 50, and Popular Auténtico is now CUP 60. (It should be noted that an American dollar on Cuba’s black market averages about CUP 300 to $1; this would put the price of a 20-pack of Populars at about $0.10.)

    Minister of Finance and Prices, Vladimir Regueiro, told Cuban media that the current cost does not cover all the costs and expenses related to the production and commercialization of the tobacco products.

    In a press conference, he added that the measure would “contribute to reducing the fiscal deficit in the country, and new financial resources may be mobilized from the state budget to support the social expenses of priority sectors.”

    He also said that tobacco is not a necessity for the population and that the responsibility of the State and the government is to guarantee an appropriate level and assortment of food products.

  • Maine Lawmakers Change Tobacco Bill to Save Shop

    Maine Lawmakers Change Tobacco Bill to Save Shop

    The Maine House of Representatives passed LD 2157, sponsored by Rep. Matt Moonen of Portland. The bill would prohibit tobacco sales within 300 feet of schools, in an effort to prevent tobacco and nicotine addiction among children.

    “At 300 feet, this would affect one existing business,” Moonen said on the House floor Tuesday night. “That business is in my district, this business sells tobacco within 26 feet of my school, and I would like that to stop.”

    That business is Fresh Approach, located in Portland’s West End. It’s right across the street from the Reiche Elementary School, according to media reports.

    “I’ve been here for 30 years, and in 30 years, I’ve yet to have a fourth grader come in here and try to buy a pack of cigarettes,” Chet Knights, owner of Fresh Approach, said. “It’s just kind of silly.”

    He says Fresh Approach is primarily a neighborhood grocery store, but some people come in to grab a sandwich and a pack of cigarettes. If he is prohibited from selling tobacco, those customers will go elsewhere.

    “When the construction guys come along, and they want to get a sandwich, a soda, and a pack of Marlboros, and they can’t get a pack of Marlboros, you’re gonna go down the street to the store with the big fancy signs,” Knights said, explaining that he does not advertise for tobacco products at his store. “For me, that business is just gone.”

    On Friday, the Maine state Senate amended that bill, so stores could not obtain a tobacco license within 300 feet of schools, but they could renew a tobacco license if they already had one. This essentially grandfathers Fresh Approach in and allows them to continue to sell tobacco products.

    The bill now goes back to the House.

  • Nicotine Pouch Sales Soar While Vapes Slow

    Nicotine Pouch Sales Soar While Vapes Slow

    Sales of cigarettes and e-cigarettes have declined in the last two weeks, while sales of oral nicotine pouches have seen significant growth, according to analysts at TD Cowen.

    They write in a research note that cigarette volumes across multiple channels were down 10 percent in the two weeks ending Jan. 13, a steeper decline than the trailing four weeks and 12 weeks.

    Bonnie Herzog, managing director at Goldman Sachs, remains cautious on the U.S. tobacco/nicotine industry in the near term as the tobacco consumer remains under substantial financial pressure.

    She stated in an emailed outlook that many consumers are being more selective in their purchases and turning to more affordable alternatives, such as 4th tier/deep discount cigarettes, modern oral tobacco and, increasingly, illicit or gray market disposable vapor products.

    “Shifts in category and consumer spending dynamics have been further exacerbated by flavor ban momentum at the state and federal level (with a final rule expected in March) and uncertainty with regard to the future of the e-cig category and category innovation (with FDA PMTA reviews still pending on big market brands such as JUUL and VUSE Alto, as well as menthol variants more broadly),” Herzog wrote.

    E-cigarette sales fell 11.3 percent in the two-week period and 10.7 percent in the four-week period, according to Barron’s.

    Sales of smokeless tobacco, including nicotine pouches, meanwhile grew 12.1 percent in the two-week period and 13 percent in the four-week period.

    The smokeless category continues to show strong dollar sales growth driven by the Zyn brand, the analysts say.

  • Nicotine Market Shares Flat in December

    Nicotine Market Shares Flat in December

    Tobacco Reporter Archive

    Consumer demand for nicotine products has fluctuated due to inflation and rising cigarette prices over the past 13-19 months. However, the Neilsen report covering the four-week period ending Dec. 30 shows that market shares are holding steady for both next-generation and traditional tobacco brands.

    The market share of R.J. Reynolds’ top-selling Vuse e-cigarette remained flat at 42 percent in December at convenience stores, according to the report. While Vuse’s market share was unchanged, No. 2 Juul dropped from 24.3 percent to 24.2 percent for the report covering the four-week period ending Dec. 30.

    As recently as May 2019, Juul held a 74.6 percent share in the U.S. electronic cigarette market. That’s when a series of regulatory actions led to product-reduction concessions, according to media reports.

    Meanwhile, Altria Group’s ownership of No. 3 NJoy hasn’t resulted in a meaningful market-share increase so far. Nielsen cited a research error by why it did not include an update for NJoy in the latest report. It was at 2.6 percent in the previous report.

    Fontem Ventures’ blu eCigs, an affiliate of Imperial Brands Plc, was unchanged at 1.2 percent.

    The overall e-cigarette category was down 9.9 percent.

    In traditional cigarettes, Philip Morris’ top market share was at 50.6 percent in the latest Nielsen report with top-selling Marlboro representing 45.6 percent of overall market share.

    Meanwhile, Reynolds was at 33.2 percent with Newport at 12.9 percent and followed by Camel (7.8 percent), Natural American Tobacco (3.7 percent) and Pall Mall (3.7 percent).

    ITG was at 8.5 percent overall, although ITG has said its market share is closer to 10 percent. Its No. 7 Winston brand remained at 2 percent, while Kool and Maverick remained tied for No. 8 at 1.8 percent.

    Goldman Sachs analyst Bonnie Herzog said that “in terms of specific company trends, total nicotine sales declines improved across the board for Altria, BAT, Imperial and Juul, while decelerating for all other manufacturers broadly in the latest period.”

    The decline in cigarette sales continues at a strong pace, said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.

    “Yet, as Altria results showed and Barclays recently highlighted, much of this is due to cross-category migration,” Sweanor said.

    “People are switching to far lower-risk options. But disposable vaping products appear to currently be the greatest factor in this migration.”

    TD Cowen analyst Vivian Azer said consumers’ cigarette “downtrading to discount and deep discount continues to benefit Imperial’s share trends.”