Category: RYO/MYO

RYO Tobacco Smuggling Network Dismantled

Law enforcement organizations in Spain and Portugal have dismantled an organized crime group involved in large-scale tobacco smuggling, according to Europol.
The criminals would illegally import from Spain to Portugal large quantities of tobacco leaf and strips, destined to produce both cigarettes and tobacco for roll-your-own cigarettes, which were subsequently distributed onto the Portuguese black market.
On June 24, police arrested eight Spanish and Portuguese individuals and seized 11 tons of tobacco leaf and fine-cut tobacco alongside 90,000 illegal cigarettes and 186,500 cigarette filters. The amount of tobacco seized is enough to produce some 11 million cigarettes worth €2.7 million ($3.22 million) in Portugal.
The criminals were managing the import of the tobacco via several companies established with the sole purpose of committing excise fraud. Cutting and processing facilities had been set up in Spain, from which the tobacco was shipped to Portugal where it was stored in different warehouses until it was distributed further.
The revenue loss generated by these tobacco products illegally imported from Spain to Portugal is estimated at more than €2 million.
Europol brought together the national investigators on both sides who have since been working closely together to establish a joint strategy to bring down this network. Since then, Europol has provided continuous intelligence development and analysis to support the field investigators.
June 28, 2021
New Zealand: Call for RYO Graphic Warnings

Photo: Tobacco Reporter archive
A recent study by the University of Otago that was published in the Drug and Alcohol Review recommended that the New Zealand government require that graphic (pictorial) health warnings be placed on packages of roll-your-own tobacco, reports the Otago Times Daily.
Users of roll-your-own tobacco comprise 40 percent of all adult smokers in New Zealand, according to the study. The study’s lead researcher, Mei-Ling Blank, a research fellow in the Otago Department of Preventive and Social Medicine, noted that the nation had an unusually high percentage of roll-your-own smokers compared with many other countries, who also tended to believe their cigarettes were superior and that some health warnings did not fully apply to them.
Blank noted that in New Zealand, many more additives were included in roll-your-own tobacco than in tobacco in machine-made cigarettes, a fact that was opposite what the study’s participants presupposed. Blank said the report suggested that “new, harder-hitting, user-specific themes on tobacco pouches” should be applied.
April 2, 2021
RYO Market Expected to Reach $10.42 Billion

Photo: Sergey Tolmachyov – Dreamstime.com
The value of the global roll-your-own tobacco product market will likely reach $10.42 billion by 2028, according to a new report by Grand View Research. It is expected to expand at a compound annual growth rate (CAGR) of 4.2 percent from 2021 to 2028.
According to the study, the rising consumption of products among females and students is fueling growth around the world. The adoption rate of the product is increasing among youth in major economies. Moreover, the financial stress caused by the Covid-19 pandemic has encouraged numerous smokers to shift from factory-made cigarettes to hand-rolled cigarettes due to the cost advantage of roll-your-own (RYO) tobacco products.
North America is expected to register the fastest CAGR of 4.7 percent from 2021 to 2028, owing to the increasing adoption of the product among young adult consumers.
By product, the filter and paper tip segments are expected to register the fastest CAGR of 4.7 percent from 2021 to 2028.
Europe dominated the market by accounting for over 55 percent in 2020. The rate of smoking in European countries has contributed to the growth of the market in the region.
The offline distribution channel held the largest share of more than 85 percent in 2020.
February 24, 2021
Mignot & De Block Buys EFKA Tube Factory

Photo: EFKA
Imperial Tobacco has sold its EFKA filter tube factory in Trossingen, Germany, to F + C Papiervertriebsgesellschaft for an undisclosed amount.
The buyer is part of Mignot & De Block, a Dutch group known in Germany mainly through its subsidiary, Gizeh Raucherbedarf.
Imperial Tobacco discontinued filter tube production in Trossingen in the first half of 2020 in the wake of declining production quantities and the loss of trademark agreements.
The EFKA brand, patents and other trademark rights remain property of Imperial Tobacco.
“EFKA has been an integral part of Trossingen for more than 108 years,” said Helmut Rutschke, managing director of EFKA. “To have to halt our production here is still very painful personally, particularly with regard to the employees affected. On the other hand, we are pleased to be able to hand the location over to a buyer that wants to continue production—and, with it, an important part of Trossingen’s economic tradition. We wish all parties involved every success.”
Christian Hinz
“We are delighted to lead a well-positioned production location with highly qualified employees into a new future, even beyond the production of filter tubes,” said Christian Hinz, CEO of the Mignot & De Block Group Germany. “Our investment in the site is long-term and growth-oriented.”
A total of 121 employees were affected by the halt of production at EFKA in Trossingen. Imperial Tobacco presented them with a variety of support offers and an extensive social plan.
October 13, 2020
The Safety Net

Photo: zikamatej |Pixabay
Fine-cut tobacco will offer hard-up smokers a legal alternative—if tax officials can keep their ambitions in check.
By Stefanie Rossel
The continuous decline in tobacco consumption over the past years has not only impacted sales of factory-made cigarettes (FMC) but also left its mark on the hand-rolling tobacco market. Global fine-cut tobacco retail value stood at $23.73 billion in 2019, down from $24.11 billion in 2018, according to Euromonitor International.
With a consumption of 24,298 tons in 2019, Germany remained by far the largest market, with stable sales over the past decade. “In Germany, fine-cut tobacco has an important buffer function between FMC and illicit cigarettes,” says Michael von Foerster, managing director of Germany’s smoking tobacco association Verband der Deutschen Rauchtabakindustrie. “It’s a real alternative for all those who want to enjoy tobacco but can’t afford or don’t want to buy expensive cigarettes.”
In terms of rolling tobacco sales, Germany was followed by France, with 7,620 tons, and Poland, with 6,590 tons. Fine-cut tobacco was also popular in the U.K. (6,346 tons) and Belgium (6,098 tons). Across the European Union (EU), fine-cut consumption stood at 80,663 tons in 2019, down from 82,044 tons the previous year.

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“In general, one can say that the fine-cut market is now stable whilst still being characterized as very diverse across the EU,” explains Peter van der Mark, secretary general of the European Smoking Tobacco Association (ESTA). “It is difficult to talk of a ‘European’ market for fine-cut tobacco as this product is not spread homogeneously across the union. In most countries, fine-cut tobacco is still a niche product whilst it can also be a long-established traditional product with a sizeable market share in other countries.”
After the financial crisis of 2008, the fine-cut market in Europe grew substantially until the crisis subsided. “Since 2014, with the general economic recovery, the fine-cut market stabilized and then declined over several years and is stable again,” says Van der Mark. “In 2014, requirements of the EU’s revised Tobacco products Directive (TPD2) entered into force and became mandatory in 2016. The impact on tobacco companies in the EU, and especially on smaller and mid-sized companies, has been significant. The costs of the legislative requirements, including those for track-and-trace, lead to several companies closing down, the shifting of manufacturing plants and other companies being sold. In the end, the TPD2 is driving further market consolidation. Fine-cut taxation has been increased with the minimum requirements of the excise directive, with the last minimum increase in January 2020. In some member states, fine-cut taxation was increased significantly, and tax levels sometimes reached the ones for cigarettes. This led to an increase in illicit trade.”

Michael von Foerster
Impact on exports
According to Van der Mark, the track-and-trace system for fine-cut tobacco products, which manufacturers, importers and distributors had to implement in record time, presented a challenge to the sector. By May 20, 2019, the transition period for both cigarettes and fine-cut tobacco ended. Intended to combat illicit cigarette trade, the EU track-and-trace system requires that each tobacco package carries a unique identifier (UI) code that must be scanned and recorded at every step of the distribution chain and transmitted to both the manufacturer’s database and the EU database, allowing authorities to trace and authenticate tobacco products. This required an entirely new level of data transfer technology as well as a highly developed IT infrastructure and updated packaging machinery. The system involves around 720 million scans a day across the EU, ESTA reports on its website.
Van der Mark fears the track-and-trace system will impede European manufacturers’ ability to export their rolling-tobacco products. “The system, as provided for in the European Tobacco Products Directive, was meant for products placed on the European market—as common sense dictates—but this obligation was later extended through the implementing regulation to export products when manufactured in Europe,” he says.
“As a result, the European tracking and tracing system can introduce a de facto export ban if products are destined to a jurisdiction where regulations are incompatible with the track-and-trace code either due to packaging or labeling regulation or due to incompatibility of the EU code with the code used in the destination country. Fine-cut tobacco, being predominantly manufactured in Europe, often by smaller and mid-sized companies, has as a result already been significantly and disproportionally impacted and disadvantaged,” says Van der Mark.

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Getting taxation right
Peter van der Mark
Taxation has always played an important role in the fine-cut tobacco sector. The EU requires member states to levy a minimum rate of excise duties on cigarettes, which means that a pack of twenty FMC with a retail selling price, excluding taxes, of €0.70 ($0.79) would end up having a retail price, including all taxes, of €3. For fine-cut tobacco, the minimum excise rate stands at 48 percent of the weighted average retail selling price, or €60 per kg, which is significantly lower.
“The directive underlines the objective of ‘convergence’ and ‘approximation,’” says Van der Mark. “This also means that tax levels must cater to the differences that exist between the product categories. Fine-cut tobacco, for example, is a nonfinished product that requires consumers to make additional purchases, its consumers have different characteristics than cigarette consumers and production of fine-cut tobacco involves a higher share of smaller and mid-sized companies.
“For these reasons, fine-cut tobacco has a lower tax-bearing capacity than cigarettes, which is well reflected in the tobacco excise directive, which set the minimum rate for fine-cut tobacco at two-thirds of the minimum level for cigarettes. This tax differential is also key in curbing illicit trade as it allows fine-cut tobacco to fulfill its ‘buffer function’ by capturing price-out cigarette consumers that would have otherwise sought cheaper alternatives, including nonduty paid products. This, also, was well understood by many member states. In general, member states have implemented these new minimum rates in 2020, but this required for some of them significant step increases that put unnecessary pressure on the fine-cut tobacco market,” says Van der Mark.
“Price differences between individual EU member states increase the incentive for cross-border shopping or even contraband,” confirms Von Foerster. “That’s why a sensible tax harmonization within the EU makes sense. The continuously high revenues from tobacco tax in Germany in parallel with the steady decline in cigarette consumption show that a balanced tax policy with moderate tax hikes and balanced product categories works.”

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Potential opportunity
With the Covid-19 pandemic that has paralyzed the global economy for almost six months now, consumers will likely have less income at their disposal in the coming months or even years—a situation that typically results in downtrading within the tobacco category. Past experiences, such as the financial crisis of 2008, suggest that consumption of fine-cut tobacco and associated government revenues will grow this time too.
“When consumers’ disposable income is under pressure, consumers are looking for more affordable alternatives, and downtrading to fine-cut tobacco is the legal option,” says Van der Mark. “This, however, requires one condition to be met: that a country’s tax policy allows fine-cut tobacco to be that cheaper alternative. In several countries, taxation on fine-cut tobacco was aligned with that of cigarettes in the last few years as governments were looking at increasing revenues. In those cases, consumers’ available alternatives were found on the black market, which produces no revenues at all. Authorities, therefore, need to understand that market mechanism to develop the right tax policy.”

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Von Foerster expects the German government to stick to its strategy of moderate tobacco tax hikes, even as it needs to fund multi-billion-euro economic aid programs. “The amendment of the European tobacco excise directive was only just started,” he says. “The amended version is expected to be released in one-and-a-half years. It is unlikely that Germany will change its tobacco taxation legislation during that period. Furthermore, negative examples, such as Greece or France, show that a thoughtless significant tobacco tax hike will not lead to the desired additional revenue—on the contrary, it will lead to a massive plummeting of revenues. Interestingly, this is true for all taxes. It is high time politicians learned from this experience.”
Van der Mark notes that the EU tax directive sets only minimum rates, and many member states, including France, Ireland and the U.K., have implemented far higher taxes, resulting in high levels of illicit trade and nondomestic-duty-paid consumption.
“It would not be surprising if several member states indeed seek to increase their revenues from tobacco sales, thinking demand for tobacco in general is relatively inelastic,” he says. “They, however, should pay due attention to the fact that the demand for legal products is much more elastic. If member states increase taxes without ensuring that consumers can still find cheaper and legal alternatives, consumption may then shift to illicit products, and state coffers will not see the rise in tax receipts that were expected.”

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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.

August 1, 2020
Republic Tobacco Launches Bamboo Rolling Papers

Photo: Republic Tobacco
Republic Tobacco has introduced OCB Bamboo Rolling Papers and papers plus tips.
The OCB bamboo paper is vegan, GMO free, unbleached and made from bamboo. No fertilizers, pesticides or herbicides are used in the growing process, and the bamboo is responsibly harvested, leaving the roots in the ground to regrow.
OCB Bamboo Rolling Papers are available in 1-1/4 and Slim sizes with and without tips.
July 14, 2020
Turkey Bans Sale of Hand-Rolled Cigarettes

Photo: Tobacco Reporter archive
Turkey has banned the sale of hand-rolled cigarettes as part of a crackdown on illegal cigarettes. Violators risk prison terms ranging from three to six years, reports Daily Sabah.
In response to rising cigarette prices, Turkish smokers have been turning to roll-your-own cigarettes, which are considerably less expensive than factory-made smokes.
Authorities suspect at least some of these products to have avoided tax; it is difficult to trace the contents of hand-rolled cigarettes that are sold in packs without official brands.
According to media reports, Turkey is now home to more than 25,000 tobacco shops whose earnings mostly depend on the sale of hand-rolled cigarettes and raw tobacco. Illegal online sales of hand-rolled cigarettes also proliferated in recent years, complicating efforts to track down illegal sales.
Studies show hand-rolled cigarettes illegally sold in tobacco shops contain a high level of cadmium and lead and other materials harmful to the health.
Yuksel Denli, deputy head of the Ministry of Agriculture and Forestry’s department of tobacco and alcohol hopes the new regulations will prevent a yearly tax loss of about TRY9.5 billion ($1.4 billion).
Turkey has taken stricter measures against smoking in recent years. The percentage of smokers in the country is 28 percent, according to official figures.
July 5, 2020
Sourcing Success

Photos courtesy of Belaprom
Based in Bosnia and Herzegovina, Belaprom obtains its materials from the EU to deliver high-quality cigarette tubes at an affordable price.
TR Staff Report
As the cost of cigarettes continues to rise, consumers are finding less expensive ways to smoke. Many are turning to make-your-own (MYO) cigarettes. Using a little machine, MYO allows consumers to create cigarettes at home by inserting their preferred tobacco blends into hollow cigarette tubes.
A relative newcomer to the filter tubes business, Belaprom was founded in Bosnia and Herzegovina in 2014. Over the past six years, the company has been expanding its operations, product portfolio and consumer base. According to Belaprom’s founders, brothers Nadir Jasarevic and Fadil Jasarevic, the company has grown more than 600 percent since opening its doors.
“The main reason why Belaprom continues to grow its customer base is because of the quality of the product we produce,” explained Nadir, who added that the brothers ventured into the tobacco industry because they wanted to provide high-quality products at a reasonable price. They also wanted to be the type of business that its clients could count on by providing the highest level of customer service possible.
“After many years of importing cigarette filter tubes from other European companies, we decided to start producing our own products in order to better the Bosnian economy and bring something new to our country,” says Nadir. “Since beginning Belaprom, the company has grown into the largest cigarette filter tubes producer in the region. This shows that we’ve been doing things the right way.”
The Jasarevics started Belaprom because there were no major importers of cigarette filter tubes in Bosnia and Herzegovina. They believed that starting a local business could become a lucrative project if the company offered higher quality products at more reasonable prices than other players in the market.
“The process of starting the tube manufacturing endeavor had many obstacles. Other companies from Bosnia and Herzegovina operated on a smaller scale; however, from the very beginning, Belaprom was designed to be both a manufacturer and an exporter of goods,” says Fadil. “Finding the right machine, training the personnel and securing the best material suppliers took more than two years.”

As part of its business promotion efforts, Belaprom exhibited at TABEXPO 2019 in Amsterdam. Pictured are General Manager Adnan Mesanovic (left), and Export Manager Mirza Imamovic. (Photo: Taco Tuinstra)
The brothers developed their business acumen by opening a small grocery store, a business that has since grown into a conglomerate of more than 20 supermarkets, 14 gas stations and Belaprom. Fadil oversees the finances and directs the operations of the supermarkets and gas stations while Nadir is charged with importing goods and services, finding new suppliers and increasing the company’s customer base. “Our goal is to be recognized as a leader in both the industry and the marketplace,” says Fadil. “Our clients are more than customers; they are our partners.”
At Belaprom, the company focuses on the production of cigarette filter tubes and the import and wholesale of products for broad consumption. “Our production meets the highest of European standards. All our materials used in production are from the European Union. We do this because it allows Belaprom to guarantee the final product meets the needs of even the most demanding of customers,” says Nadir. “The production plant is equipped with state-of-the-art machinery using highly sophisticated technology to create the highest quality products possible.”
Belaprom’s 3,000-square-meter (approximately 32,292 square feet) production facility is built specifically for the manufacturing of cigarette tubes, according to Nadir. He says that every section of the factory is organized to optimize the production progress. “We decided to purchase Hauni machinery because Hauni is considered the best machine manufacturer in the tobacco industry,” Nadir says. “We use machines that are capable of producing 8,000 tubes per minute or 3,840,000 tubes per day.”
Belaprom is positioned at the crossroads between the eastern and western countries of Europe. The company currently employs 50 skilled and highly motivated workers producing more than 20 brands, according to Nadir. He says that Belaprom can easily produce a brand that meets the specific criteria for any company in need of cigarette tubes. Currently, Belaprom has four licensed brands: Zlatni Filter, Bella, Practic and Casual. Its most popular brand is Ritual 500, which has a modest but pleasing design.
“The reason our brands are popular is that the designs are simple, yet appealing. Our customer base includes many different regions of Europe, so our brands are designed to represent the region where they are sold,” says Nadir. “For example, customers from the flatlands of Croatia use the brand Pannonian Choice, which has a green box symbolizing lush, fertile valleys and golden letters that stand for the plentiful harvest of barley.”
Currently, Belaprom is negotiating the purchase of another tube machine from Hauni for installation sometime later this year. The investment required for the state-of-art equipment is more than €3.5 million ($3.9 million), according to Fadil.
“Belaprom is ramping up its production capabilities and investing more resources into opening up operations to other parts of the world, especially Southeast Asia with its vast population and economic areas. It is part of our five-year plan,” says Fadil. “Long term, we hope to expand globally, with a primary focus on Eastern Europe and North Africa. It’s a balancing act. While we want to offer more markets our superior products, it must not come with a compromise in customer service. Providing the highest level of service to our partners is our primary mission.”

July 1, 2020
Caught off-guard by Covid, the U.K. raises RYO taxes
Struggling to contain a crisis that it ignored for a month, the U.K. government raises the tax on roll-your-own cigarettes.
By George Gay

Photo: zikamatej from Pixabay
In its March budget, and in the midst of the coronavirus crisis, the U.K. government increased the duty on roll-your-own (RYO) tobacco by inflation plus 6 percent. I am told that anti-smoker campaigners had been calling for an increase of inflation plus 15 percent.
I find it difficult to understand how the government and campaigners can act in such an unfair, discriminatory and callous way, especially at this time. Smokers are largely made up of the financially less wellvoff, and many RYO consumers are smokers who cannot afford cigarettes. At the same time, a lot of RYO smokers are elderly, perhaps lonely. Are they to be allowed no solace as they are forced by government diktat into isolation because of the threat that they may contract Covid-19? Having been told for most of their lives—wrongly as it turns out—that smoking will kill them, are they in fact to be killed by a type of virus nobody bothered to warn them about—and without the comfort of a final rollie? Is it not possible for those with power and influence to forget their alcohol (no duty increase, of course), cocaine (illegal, so ditto) and other apparently more acceptable habits for a while and imagine themselves in the shoes of the less well off?
The U.K. government proved to be woefully unprepared to protect its people from the perfectly predictable arrival of a deadly coronavirus that those people, individually, have almost no protection against. But it stands ready to fight any 70-plus-year-old who chooses to indulge in the legal habit of smoking an RYO cigarette.
In one of his statements, the U.K.’s prime minister, Boris Johnson, widely viewed as a libertarian, suggested that one of the reasons why the government was taking a “gently, gently” approach to curbing people’s ability to fraternize during the coronavirus crisis was that the U.K. was a bastion of liberty. Given that smoking tobacco, a legal product, is banned from public places in the U.K., the argument seemed to be that people should, in the name of liberty, be allowed to gather together to spread the deadly virus, which kills within weeks, whereas smokers should not be allowed to gather together because of the miniscule threat that secondhand smoke will kill a bystander within 40 years or so. Of course, as the “science changed,” (you couldn’t make this up) he was soon in full retreat from his defense of liberty and moving to his more usual stance of taking liberties.
The argument seemed to be that people should, in the name of liberty, be allowed to gather together to spread the deadly virus, which kills within weeks, whereas smokers should not be allowed to gather together because of the miniscule threat that secondhand smoke will kill a bystander within 40 years or so.
But one can expect no more. The government, run apparently by a bunch of self-styled weirdos and misfits and bent on undervaluing the country’s experienced, serious-minded and formerly internationally respected civil servants, found itself way out of its depth as it reaped the whirlwind of 10 years of austerity and the onward march of Covid-19 through a nation it had torn apart over Brexit. Covid-19, marching in lockstep with an economic meltdown and a financial panic, emerged on the back of the free market and proved unmoved by the prime minister’s only weapons: bluster and a pantomime-like imitation of Winston Churchill that surely would not earn him an Equity card.
The government couldn’t and, as I write, still cannot provide an efficient or anything like adequate testing regime for the virus. Indeed, a new cabinet, seemingly made up mainly of poodles and patsies who a few months earlier had bleated for the cameras how the government was going to build 40 new hospitals, couldn’t, even by the end of March, provide face masks for all frontline medical staff.
And this, of course, was the reason for the huge increase in RYO tax. It wasn’t about forcing RYO smokers to quit their habit (they are addicted, after all). It was about the government casting about among the financially poor to find the funds necessary to face up to the crisis that it appeared to have largely ignored for a month.
The government’s duty increases on tobacco products will, of course, have greatly pleased the World Health Organization (WHO), which advocates taxing poor smokers heavily (for their own good, of course), but the government’s response to the coronavirus outbreak went down less well with the WHO, which at times seemed nonplussed by the government’s approach, or lack of it. Still, what can the WHO expect? The U.K. is a fully paid-up member of the WHO’s Framework Convention on Tobacco Control, but there is, of course, no Framework Convention on Coronavirus Prevention and Control.
Prevention. Now there’s a thing. What are the chances that, with the world’s health defenses not reserved for tobacco all pointing at Covid-19, anyone is watching our backs for the arrival of the next deadly coronavirus? Not great, I would suggest. And it will arrive as sure as night follows day unless things change and prevention is pushed to the fore. We know what some of the main risk factors in respect of such viruses are, so even if we cannot prevent their outbreak, we can greatly reduce their likelihood. But we won’t; the free market, marching in lockstep with inept leaders around the world, will see to that.
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.

June 4, 2020
The Natural Experience

Photo: Republic Technologies International
Republic Technologies burnishes its environmental credentials.
By George Gay
When Santiago Sanchez of Republic Technologies International (RTI) responded to my request for information about the current state of the RYO/MYO sector, he suggested that I might like to watch a video about how his company had taken part in a program aimed at helping to regenerate areas of Kenya where, for various, often multiple reasons, the environment had become degraded. He warned me that it was “a bit long” but assured me that it was worth watching.
I must admit that normally my heart sinks when I’m asked to watch company videos, but I didn’t find this one overly long, and I thought it was well worth watching. It concerned something that I had known almost nothing about, and it helped me to understand RTI’s approach to its business and its products. The company’s website (www.natural-experience.com/en/natural-world) says that it is dedicated to respecting the environment by reducing waste wherever possible and otherwise reusing or recycling products. “We are committed to quality, human relationships and the environment,” the website says.
Okay, these could be empty words, but watch the video (https://bit.ly/2woh50K) and I think you will find evidence that, at least in respect of the fine line of gum that runs along one edge of each RYO rolling paper produced by RTI, the issues of quality, human relationships and the environment are all to the fore and addressed in ways that might surprise. The idea of an RYO/MYO accessories (and e-liquids) company being indirectly involved in planting trees from the air is, I think, something that would raise questions in the mind of even the most uninquisitive person.
I won’t go into any details here because the video is far more descriptive than I can be, but I shall point out simply that RTI’s support of the nongovernmental organization Seedballs Kenya, through its OCB brand, is linked to RTI’s use on its cigarette booklet papers only of pure, organic, vegan-friendly gum arabic that is extracted from African acacia trees—support that, in turn, helps sustain the livelihoods of the people who harvest and carry out the initial processing of the gum arabic.

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Beyond gum
But RTI has been in the vanguard of addressing environmental issues that go far beyond gum arabic. For instance, the hemp that it uses to produce thin but strong rolling papers is grown organically without the use of insecticides or even irrigated water. And, importantly, the company provides information about its annual needs to the cooperative of French farmers who produce the hemp to ensure that the cooperative can manage its output in a sustainable way.
At the same time, the company offers RYO filters that are made of pure cellulose fibers sourced from sustainably managed forests. They are unbleached and naturally biodegradable and, RTI says, provide a better filtration than is provided by other types of filters. And then there are the rolling paper packs that are produced from recycled paper and printed with vegetable inks that are low in odor and have low-migration properties.
With such an emphasis on respecting the environment, it would be reasonable to expect that RTI and its OCB brand, despite their tobacco connection, would be welcomed as part of the family of responsible companies and products. But that is not necessarily the case. Sanchez told me that the Belgian government has decided that it is contrary to the provisions of the EU’s Tobacco Products Directive (TPD) to allow rolling paper packs to bear messages attesting to the positive credentials of the papers—messages such as “unbleached” or “organic.” I’m not sure, but I guess this will have come about because of the tortured logic that says that consumers, on seeing, for instance, that papers are organic, will be encouraged to smoke. It assumes that consumers’ thinking so lacks nuance that they cannot tell the difference between organic beetroot and organic rat poison.

RTI has further burnished its environmental credentials with the launch, under its OCB brand name, of the Virgin Paper Roll Kit comprising 32 slim paper leaves, 32 unbleached cardboard filters and a foldable rolling tray and rubber band to store the kit. The virgin paper is sourced from Forest Stewardship Council-certified wood and involves no animal testing. It is unbleached, and no chalk or dyes are used in its production. The gum used on the paper is pure gum arabic, and the packaging is printed with vegetable-based inks.
Worrying developments
Fortunately, Belgium is the only EU member state to take this stance. But its doing so shows up one of the problems that a company such as RTI faces. Because the various states, when transposing EU regulations into national laws, can interpret those regulations differently, the TPD does not provide the consistent rulebook that it might appear to provide.
And this is significant because though as an RYO/MYO accessories provider, RTI is not greatly affected by the TPD in a direct way, it of course suffers the cold winds of the TPD that blow through the manufacturers of RYO and MYO tobaccos. And those cold winds keep blowing. While the revision of TPD2 is still about a year away, Sanchez says, he is already hearing comments about how TPD3 will add further restrictions. And he is rightly concerned because, as he pointed out, the imagination of EU regulators is boundless in this area.
Another issue that is likely to cause problems for the tobacco industry in general is the upcoming EU directive on single-use plastics that will probably embrace the “polluter pays” principle where the polluter is interpreted as the manufacturer—of acetate filters, for instance—rather than the consumer who carelessly discards the item.
Meanwhile, things are also tough in the U.S. where, for instance, the process that manufacturers have to go through to obtain approval from the Food and Drug Administration to put a new or modified product on the market seems so complex as to be unreasonable. Sanchez said that it was hardly possible for small RYO/MYO players to comply with these requirements and that some companies had withdrawn from the market. RTI, he added, had to increase its workforce just to do the testing and create the thousands of documents that were needed for compliance.
Standardized packaging is another issue making life difficult—and not only in an indirect way. Although it seems to beggar belief, two countries, Israel and Canada, have implemented standardized packaging requirements for rolling paper booklets while Belgium has done the same for booklets that carry the same brand name as a tobacco product.
But one of the most worrying developments that will inevitably affect RTI indirectly is the tendency for some countries to close or reduce the tax differentials between those applied to cigarettes and those applied to RYO/MYO tobacco. Portugal and the Czech Republic have already closed the gap, and the U.K. in March moved to reduce the difference.
And, of course, RTI is plagued by the availability of counterfeit rolling paper booklets and the reluctance of many countries to take effective action against such illegal trade. Sanchez estimates that just a small proportion of counterfeit products are being intercepted in the EU and the U.S. but is claiming some success for a unique QR code system that the company has introduced and that allows wholesalers, retailers and consumers to check whether they are buying genuine products.
Looking on the bright side, Sanchez says that RYO/MYO companies are generally doing better than the manufacturers of factory-made cigarettes and that RTI is doing particularly well. But, as always, there’s a catch. He said that RTI had been developing its presence on a number of markets—before, that is, the coronavirus crisis had raised its head. The situation was now complex, he added, and it was just too difficult to predict what the future might hold.

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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.

May 1, 2020