Category: Top News

  • Revenue and Income Up at RLX Technology

    Revenue and Income Up at RLX Technology

    Photo: RLX Technology

    RLX Technology reported net revenues of RMB551.6 million ($76.4 million) in the first quarter of 2024, up from RMB188.9 million in the same period of 2023. Gross margin was 25.9 percent, compared with 24.2 percent in the 2023 period. U.S. GAAP net income reached RMB132.6 million, compared with U.S. GAAP net loss of RMB56.3 million in the same period of 2023.

    “We started 2024 with a steady first quarter,” said Ying (Kate) Wang, co-founder, chairperson and CEO of RLX Technology in a statement. “Our international business is developing positively as we refine our regional strategies. Despite challenges posed by regulatory changes across various regions, we continue to identify opportunities and leverage our core strengths to prudently enter potential markets.

    “Domestically, we are encouraged by the positive impact of China’s recent regulatory crackdown on illegal products, but much progress remains to be made. We remain committed to collaborating with regulators and advocating for a well-regulated and healthy e-vapor industry. As a trusted e-vapor brand for adult smokers, we are dedicated to optimizing our product portfolio with premium, compliant, and innovative products that meet our users’ needs and drive growth in this evolving industry.”

    The first quarter marked RLX Technology’s fifth consecutive quarter of sequential revenue growth, according to Chief Financial Officer Chao Lu. “With our resilient business model, effective regional strategies, and consistent strong execution, we are confident of sustaining this growth trajectory and delivering sustainable value to our stakeholders,” he said.

  • Illicit Market Smaller Than Suggested: WHO

    Illicit Market Smaller Than Suggested: WHO

    Photo: Taco Tuinstra

    Pakistan’s illicit cigarette market is smaller than the tobacco industry claims, according to the World Health Organization.

    Nonetheless, the illegal sales still account for 23.1 percent of the country’s total cigarette trade, a survey by the global health body found.

    Of the illicit cigarettes, 47 percent is smuggled, 45 percent is nontax paid and 8 percent is counterfeit.

    According to the study, which is based on Pakistan Bureau of Statistics data, tax evasion on domestically produced cigarettes in 2015-2016 amounted to PKR53.8 billion ($193.16 million). Seventy percent of that share was evaded by the legitimate sector, the WHO study said.

    Anti-tobacco activists have been pressing the government to raise tobacco taxes to 70 percent of the retail price, in line with WHO guidelines

    “With over 60 percent of the population comprising youth, it’s crucial for the government to protect them from the ills of tobacco use,” said Malik Imran Ahmed, country head of the Campaign for Tobacco-Free Kids (CTFK), told Business Recorder.

    He said the move would generate PKR200 billion in additional revenue by year-end, and help recoup healthcare costs associated with smoking-related illnesses.

  • Vaping Surges 600 Percent in Malaysia

    Vaping Surges 600 Percent in Malaysia

    Photo: fedorovacz

    Vaping prevalence in Malaysia has surged 600 percent in 12 years, reports the New Straits Times, citing a recent study.

    The 2023 Global Adult Tobacco Survey (GATS) found that some 5.8 percent of Malaysian adults are e-cigarette users compared with only 0.8 percent in 2011.

    GATS is a nationally representative household survey conducted in more than 30 countries globally.

    The report also revealed an increase in the percentage of people who used both tobacco and e-cigarettes, from 0.8 percent in 2011 to 3.9 percent last year.

    The 15–24 age group had the highest prevalence (8.6 percent) compared with 7.1 percent for those between 25 and 44.

    The top 3 reasons cited for using e-cigarettes were flavors, the perception of lower risk compared to smoking, and more enjoyment.

    The GATS also found that 41 percent of adult smokers in Malaysia have no plans to quit the habit.

    Another 13 percent said they were thinking about quitting smoking within the next 12 months, and another 37 percent said they planned to stop someday.

    The survey found that around 4.8 million or 19 percent of adults in Malaysia smoke, with 3.7 million or 14.6 percent of adults smoking daily.

    GATS Malaysia 2023 queried 5,780 households across all states, with respondents aged 15 years and above, over two months.

  • Korea to Treat Synthetic Nicotine as Tobacco

    Korea to Treat Synthetic Nicotine as Tobacco

    Photo: Purilum

    The government of South Korea aims to regulate synthetic nicotine as tobacco, reports the Yonhap News Agency.

    The Ministry of Health and Welfare and the Ministry of Economy and Finance want to revise the Tobacco Business Act to include synthetic nicotine in the definition of tobacco.

    Tobacco in South Korea is governed by the National Health Promotion Act, under the jurisdiction of the health ministry, and the Tobacco Business Act governed by the finance ministry.

    The current rules define tobacco as a product “manufactured in a state suitable for smoking, sucking, inhaling steam, chewing or smelling, by using tobacco leaves as all or any part of the raw materials.”

    That language fails to capture the e-cigarette liquids made with synthetic nicotine, which is created in a laboratory rather than from tobacco leaves. As a result, vapes are not subject to product requirements, such as health warning labels, age restrictions and tobacco taxes, in South Korea.

    The push for new legislation follows an announcement by BAT that it is mulling the launch of a new synthetic nicotine product in the country. South Korea is reportedly the only nation where the tobacco giant is considering a synthetic nicotine product.

    “We have decided to push for the revision of the Tobacco Business Act when the 22nd National Assembly opens,” an official at the health ministry was quoted as saying. “We will provide necessary materials to the finance ministry, and there is already an abundance of evidence proving that synthetic nicotine is tobacco.”

    The consumption of e-cigarettes has been rising steadily in South Korea, reaching 16.9 percent of tobacco sales in 2023.

  • PMI Opens Factory in Ukraine’s Lviv Region

    PMI Opens Factory in Ukraine’s Lviv Region

    Photo: Vitezslav Vylicil

    Philip Morris International opened a $30 million cigarette factory in Ukraine’s Lviv region, creating 250 jobs, reports Interfax.

    According to a company press release, the factory will have five production lines. The first started operating in May, the second should be launched in June and the rest before the end of the year, bringing the factory’s annual production capacity to 10 billion cigarettes, enough to meet the Ukrainian demand.

    PMI has no plans to export from the facility, which currently employs about 100 people from the company’s Kharkiv factory, which was mothballed in the wake of Russia’s 2022 military invasion.

    PMI has invested about $750 million in Ukraine since entering the market in 1994.

    Before opening the Lviv facility, PMI supplied to Ukraine from eight factories outside the country.

    The company reduced shipments to Ukraine by 30.1 percent to 11.07 billion cigarettes and heated-tobacco units in 2022. In 2023, it increased shipments to the country by 8.4 percent.

    The cigarette manufacturer controls almost a quarter of the Ukrainian cigarette market.

  • Norway: Store Chains to Phase Out Cigarettes

    Norway: Store Chains to Phase Out Cigarettes

    Photo: Tupungato

    Two leading convenience store chains in Norway will phase out cigarette sales, reports The Local.

    Reitan Convenience Norway, which operates Narvesen and 7-Eleven stores, intends to stop selling tobacco products at all its locations by 2026.

    “We already see a declining demand for cigarettes and want to contribute to phasing this out in the long term,” Anniken Staubo at Reitan Convenience Norway told E24.

    Earlier, Reitan Convenience Sweden announced that it would also stop selling cigarettes.

    “Just like Reitan Convenience Sweden, we are also not going to take in new products and brands in this category from 2026,” Staubo said.

    According to Reitan, the phaseout is part of the company’s overall sustainability strategy.

    “There are major environmental and social sustainability challenges in the production of tobacco. We plan for a gradual phasing out of cigarettes in our range and follow the development of any new changes in rules and laws,” Staubo said.

    Norgesgruppen, which owns Norway’s other prominent convenience store chain, Joker, said it had no plans to phase out cigarette sales.

    Since 2017, the number of young people who smoke daily in Norway has fallen while there has been a steady increase in the number of people using snus.

    In 2023, 16 percent of Norwegians aged between 16 and 74 used snus daily compared with just 7 percent of the same demographic who smoked cigarettes every day, according to Statistics Norway.

  • Zimbabwe Tobacco Export Earnings Jump

    Zimbabwe Tobacco Export Earnings Jump

    Photo: Taco Tuinstra

    Zimbabwe’s tobacco export earnings increased by a whopping 138 percent year-on-year to reach $436 million leaf in the first quarter of 2024, reports The Herald, as cigarette manufacturers were urged to explore high-paying markets.

    Traditionally a leading exporter of leaf tobacco, the country aims to extract more revenue from the business by moving to higher value products, such as cigarettes. In 2021, the government adopted the Tobacco Value Chain Transformation Plan, which seeks to build a $5 billion industry by 2025.

    Statistics from the Tobacco Industry and Marketing Board reveal that cigarettes were the most lucrative export product, attracting prices of up to $7.44 per kilogram. Partly or wholly stemmed/stripped tobacco took second places, with earnings of $7.39 per kilogram, and smoking tobacco was third, earning $6.45 per kilogram.

    Zimbabwe Tobacco Growers Association chairman George Seremwe attributed the gains to hard work by farmers and other stakeholders along with the favorable weather in the 2022–2023 growing season, which resulted in good-quality leaf.

    He encouraged cigarette manufacturers to continue targeting markets that guarantee high prices for their products.

  • Zimbabwe: Farmers Urged to Clear Fields

    Zimbabwe: Farmers Urged to Clear Fields

    Photo: Taco Tuinstra

    Tobacco growers who failed to clear their fields of residue from the previous crop by the May 15 deadline will face stiff penalties, Zimbabwe’s Kutsaga Research warned.

    To break the life cycles of tobacco pests and pathogens, along with incidental infestations such as mealybugs and false wireworms, Zimbabwean law requires growers to clear their fields of all stalks from the previous crop before they prepare their seedbeds for the next growing season, according to The Herald.

    The Plant Pests and Diseases Act requires this to be done by May 15 of every year. This year, seedbed preparations may start no earlier than June 1 while planting should not commence before Sept. 1.

    Officials from the Tobacco Industry and Marketing Board, Agritex and Plant Quarantine Services will be carrying out routine inspections of growers’ fields to ensure compliance, Kutsaga Research said in a notice.

    “It is every tobacco grower’s responsibility to be proactive and ensure good agricultural practices and efficient use of aphicides as we enter the news season in order to slow down proliferation of aphids so as to minimize all viral transmissions,” the organization wrote.

    Violators risk fines equivalent to US$100 per hectare.

  • The Takeaways

    The Takeaways

    REDPIXEL

    What did we learn from the E-Cig Summit in Washington, D.C.?

    By Derek Yach

    The E-Cig Summit comes at a time of change in how tobacco harm reduction (THR) products are regarded by those who oppose or support their use as a means of ending smoking. In recent months, new reports, editorials and comments in leading medical journals have highlighted the benefits of vapes for smoking cessation.1,2,3,4 Further, calls for medically licensed vapes have increased from academics who rarely agree on THR policies.5

    Robin Mermelstein, director of the Institute for Health Research and Policy at the University of Illinois, opened the meeting by noting that diverse perspectives are needed for innovations required to end combustible use. With no scientists from the private sector allowed to present research (except for former Center for Tobacco Products [CTP] Director Mitch Zeller, who is currently an advisor to Qnovia), this goal was tough to achieve. And it comes shortly after an editorial in Nicotine and Tobacco Research, the lead journal of the Society for Research on Nicotine and Tobacco, calling for complete exclusion of industry scientists.6 One wonders how widely supported this view is.

    I summarize key inputs from the Summit that address six questions:

    1. What are the major trends in cigarettes and vape use in the United States?

    Rafael Meza of the BC Cancer Research Institute showed that smoking and vaping prevalence in youth has declined. Frequent use (20 days or more over 30 days) is about 6 percent for smoking and vaping in both boys and girls. Among adults in middle age, cigarette consumption has declined in tandem with vaping increasing. Smoking rates, however, have not declined among people over 65 and remain highest among those with the lowest incomes and education. Meza’s projections of future trends are flawed by excluding probable impacts of heated-tobacco products and nicotine pounces joining vapes as providing alternatives to combustibles over the next few years.

    Only 4 percent of all smokers live in the U.S. Resources and debate about global policies are shaped heavily by U.S. federal, academic, nonprofit, philanthropic and private sector perspectives. Global realities need to be brought into summits. To mention two. First, smoking rates exceed 40 percent in men across most Middle East and Eastern European countries and in China and Indonesia. Smoking rates exceed 20 percent in women across Eastern Europe and small island states. These were rates in the U.S. 40 years to 50 years ago. THR provides a route to leapfrog over the road taken by the USA.

    Second, toxic smokeless tobacco products are commonly used, especially across South Asia, and cause about 350,000 oral cancer deaths. Nicotine pouches could well be the route to eliminating this dreadful cancer. A global perspective would place this as an achievable goal.

    1. Is there greater balance in addressing the needs of adults who smoke and those who have early disease compared to what has been a dominant focus in past summits on youth?

    CTP Director Brian King stressed that youth issues remain his priority. In response to Mermelstein, he could not explain why this remains a priority, given extremely low vape use in youth and the absence of convincing evidence that vapes are a gateway to combustibles. In contrast, both the U.K. and New Zealand give priority to ending combustible use in adults.

    King repeated his advice to adults who smoke: first use Food and Drug Administration-approved cessation medications and only then FDA-authorized reduced-risk products. Dual use is not supported. This advice is not in line with current evidence presented at the conference or multiple reports.1,2,3,4,5 Vapes are the most effective means to quit. Dual use lowers overall risks.

    Scott Sherman of New York University stressed that the ultimate goals of tobacco control are to prevent the burden of tobacco-related disease. About 70 percent of people smoke when diagnosed with chronic obstructive pulmonary disease, peripheral vascular disease, schizophrenia, alcohol use disorders and several cancers, to name some major outcomes. The majority are still smoking years after their diagnosis. Sherman believes such patients would benefit from trying vapes. There are few studies in this area. He outlined a small pilot study of patients with chronic diseases comparing vape use to nicotine-replacement therapy (NRT) use that motivates for larger studies. Patients with early-stage chronic diseases who are between 40 years and 55 years of age who quit are likely to yield major health benefits.

    1. Is there evidence of the benefits of nicotine pouches, snus and heated-tobacco products as cessation interventions to complement studies of vapes? And are there studies comparing these products to NRTs and medicated solutions?

    There are few such studies. Jamie Hartmann-Boyce of the University of Massachusetts and the Cochrane Collaboration presented a Cochrane review using indirect methods to compare a range of interventions. Vapes, NRTs and cytosine showed the strongest evidence of cessation effectiveness compared to other medications and interventions. She stressed the need for more high-quality studies. Public, philanthropic and industry funders should invest in such research among populations and countries where smoking and toxic smokeless tobacco rates are extremely high.

    1. Were the benefits of using biomarkers to demonstrate the effects of switching from tobacco products to THR options on proxy health outcomes discussed?

    Zeller mentioned new real-world evidence using biomarkers that suggest benefits of dual use (of vapes and combustibles) in terms of proxy health outcomes. Mike Cummings briefly mentioned the need to use biomarkers of exposure and outcome to accelerate knowledge about THR impact on health outcomes. As an epidemiologist, I have long felt that we need to complement self-reporting and mortality-based studies with use of 21st century biomarkers that allow for more accurate assessment of exposure and earlier determination of outcomes. Tobacco industry scientists currently lead in developing and using biomarkers. Their extensive list of peer-reviewed publications should be cited and used by academics.

    1. There have been important discussions recently in the New England Journal of Medicine (NEJM) and JAMA about the benefits of medical licensing THR products. What are the views of the regulators, industry and academics in going this route and, more broadly, in supporting vapes as an effective way to quit?

    Zeller believes improved medically approved tobacco harm reduction products are part of increasing access for adults to reduced-risk products. Nancy Rigotti of Mass General Hospital stated that a medical pathway is needed despite no medically approved products being available. Her views are based on knowledge that physician practices have widespread impact on their patients and on policies. She is concerned that the U.S. Preventive Services Task Force, the American Cancer Society, the Centers for Disease Control and Prevention, and the American Heart Association are still unclear about the benefits of vapes as being the most cost-effective means of achieving cessation. Their statements are either ambiguous or explicitly oppose vape use for cessation. She restated her NEJM call for clinicians to strongly advise patients who smoke to try vapes.2

    King did not address this, and he deflected issues related to cessation to the FDA’s Center for Drug Evaluation and Research (CDER). The lead FDA tobacco chief should have an integrated approach to ending smoking that involved the CTP and the CDER. That is the spirit of the messages in recent influential journals by leading academics and former FDA heads.3,5 Further, the FDA 2015 CDER guidance on alcohol shows how it accepts abstinence and harm reduction endpoints used for drug approvals. It seems time that the CTP and the CDER could learn how well this is working to end the harm of tobacco use.

    Both Neal Benowitz and Clive Bates of Counterfactual Consulting said we need to address the benefits of nicotine as a range of new products become available. This has implications for future medical licensing and recreational use. We need innovative ways to tease nicotine effects from combustible smoke effects to make progress on the regulatory front and to inform messaging to health professionals and smokers. A recent paper by Jasmine Khouja and her colleagues that used biobank data and multivariable Mendelian Randomization elegantly showed that most harms of smoking are unrelated to nicotine.8 Hopefully, work looking at the benefits of nicotine for Parkinson’s disease will follow. I recommend readers watch this space.

    1. Can THR practices outside of the U.S. inform U.S. policy?

    Like the U.S., adult smoking rates in the U.K. and New Zealand have declined as vaping has increased. Deborah Arnott of Action on Smoking and Health (ASH) U.K. indicated that dual use has followed the path seen years ago when NRTs were introduced and regarded this as a transitional route to eventual cessation. This is an important insight for U.S. policymakers to acknowledge.

    The U.K.-proposed legislation includes a ban on disposables, a new tax on e-liquid (which may reduce illicit trade from China and will maintain a differential tax relative to cigarettes) and measures to reduce the appeal of vaping to children in ways that allow adults to have continued access. Arnott supports vape promotion approaches that have more clinical and fact-based features and other policies that regulate proportionate to risk.

    Ben Youdan of ASH New Zealand showed that for years, New Zealand and Australia had similar rates of decline in adult smoking. Over five years, however, adult rates have diverged, with New Zealand rates falling faster. He believes this is based on differences in vape policies and messaging. New Zealand media and policies support vaping to quit, especially among the Indigenous population. Martin Dockrell of the U.K. Department of Health and Social Care described U.K. government-funded programs to provide vapes to homeless people, people with mental illness and other groups with high smoking rates. The hope is that these initiatives will lower social class inequalities in chronic diseases that are strongly driven by differences in smoking rates.

    Ben Youdan stated that Australia “treats people who vape as criminals or as sick people incapable of self-determination.” The result of this is that 90 percent of vapes on the Australian market are illicit while cigarette access is universal. The opposite is true in New Zealand.

    King mentioned that the FDA is committed to health equity. The FDA should learn from the U.K.’s and New Zealand’s vape policies.Concluding Comments

    The extent of misinformation was a topic that pervaded sessions. Alex Clark of the Consumer Advocates for Smoke Free Alternatives Association gave examples of how the FDA’s youth education campaigns have contributed to negatives views about vapes and nicotine. This could accelerate with the deployment of Chatbots that are explicitly programmed to spread misinformation about vapes and nicotine, the latest WHO one being a notable worrying example.9 Researchers need to rapidly engage computer scientists in building AI-driven ways to address misinformation continuously and at scale before the digital space is dominated by those who oppose harm reduction. This could draw upon the promising results of correcting misbeliefs about nicotine causing cancer and about vapes reported by Andrea Villanti of Rutgers.

    For several years, E-Cig Summits and related standalone vape meetings have led thought leadership about the value of tobacco harm reduction. With the growth of a spectrum of reduced-risk products now available, is it time to consider transitioning such meetings into opportunities to address emerging ways to end smoking and the use of toxic smokeless tobacco products through a wider range of products? That would encourage comparative studies and for a deeper examination of how consumers use products throughout the day. It would also allow for policy discussions that focus more on harnessing a wider community of users and innovative companies to compete to accelerate an end to smoking.

    David Levy of Georgetown University and Bates both made these point very strongly by placing the needs and interests of consumers first and seeing competition between companies and products as beneficial to meeting consumer needs to improve their health.

    For that to succeed, future conferences will need to adopt Mermelstein’s opening words in practice and end boycotts and bans of industry scientists so that all actively developing innovative ways to make progress can debate the best ways forward together.

     

     

     

  • 22nd Ups Performance on Lower Cost

    22nd Ups Performance on Lower Cost

    Photo: 22nd Century Group

    22nd Century Group reported an operating loss of $4.4 million for the first quarter of 2024 compared with $10.4 million in the comparable period of the previous year. Net loss from continuing operations for the first quarter of 2024 decreased to $5.5 million compared with $10.8 million in the prior-year comparative period.

    Adjusted earnings before interest, taxes, depreciation and amortization declined to a loss of $3.5 million from a loss of $9 million in the prior-year comparative period.

    Net revenue from continuing operations was $6.5 million, as the company further refined its revenue mix away from negative margin filtered cigars in favor of higher margin VLN and conventional cigarettes.

    “The first quarter and subsequent events in Q2 2024 demonstrate that we are rapidly transforming 22nd Century’s operating results as we shift our revenue mix and implement a lean operating cost mantra across the company, and strengthening the balance sheet,” said 22nd Century Group chairman and CEO Larry Firestone in a statement.

    “Operating costs declined dramatically, to just $3.3 million, well below our target of $4 million. We also recently announced two significant new customer contracts to drive additional revenue and improve our margin profile, including a 20 percent increase in our CMO production unit volumes. Those contracts commenced in April 2024 with revenue ramping in the second quarter.”