Category: Top News

  • Playing Whack-a-Mole

    Playing Whack-a-Mole

    The CTP’s inability to apply its enforcement priorities often leaves state regulators and businesses baffled.

    By Rich Hill

    The recent onslaught of vapor registry bills in the United States is creating a lot of anxiety. Proposed registries have brought tension to public hearings and drama on social media. Unfortunately, like most current domestic issues, neither side appears to appreciate the perspective of the other. While only a handful of states have enacted product registries, many legislatures have considered and/or are considering such legislation. Understanding what these registries do, why they are promoted and their consequences is essential for all sides of this debate.

    Rationale for Developing Vapor Product Registries

    At present, the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) has granted marketing authorization for only a handful of tobacco-flavored vapor products and insists that all other vapor products are illegal. That said, the CTP has communicated its enforcement priorities related to deemed products numerous times. More specifically, the CTP has indicated its intention to prioritize enforcement efforts concerning certain deemed tobacco products (1) not covered by timely filed premarket tobacco product applications (PMTAs), (2) that have been the subject of marketing denial orders or those covered by PMTAs subject to negative determinations, including those rejected on procedural grounds (i.e., refuse-to-accept or refuse-to-file letters), and (3) that raise youth-use concerns.

    Unfortunately, the CTP’s inability to apply these enforcement priorities consistently to the ever-changing and large number of unscrupulous manufacturers often leaves state regulators and businesses baffled about which products are at increased risk of enforcement action.

    In short, this circumstance, with thousands of products remaining the subject of pending PMTAs that fall outside of the scope of the CTP’s enforcement priorities being sold alongside thousands of noncompliant flavored disposable vapor products, many of which fall within the scope of the FDA’s enforcement priorities, creates confusion in the marketplace and for state product regulators. Given the shortfalls in enforcement against vapor products that are not the subject of still-pending PMTAs, state tobacco regulators need a mechanism by which to determine which products should and should not be sold in their states—hence the value of vapor product registries.

    Rich Hill

    How Do Vapor Product Registry Bills Work?

    Vapor product registry bills establish registries requiring companies to submit evidence demonstrating that products that have FDA marketing granted orders are the subject of pending PMTAs filed by specified dates related to PMTA deadlines or are the subject of administrative or judicial reviews. For example, registration in Louisiana requires manufacturers to attest to the marketing granted or still-pending PMTA status of each product and pay a registration fee. Then these products will be placed on a public-facing registry.

    Positive Aspects of Product Registry Bills

    Regardless of one’s position on registry bills, the legislation at least has the potential to create positive change. By way of example, registry bills can:

    • Provide objective criteria. Vapor product registries can theoretically provide objective criteria upon which wholesalers and retailers can rely in making purchasing decisions. While there will be fewer products available, these products may be purchased without the threat of state regulatory enforcement.
    • Supplement CTP enforcement resources. The CTP has limited enforcement resources. While flavored disposable vapor products have been a high enforcement priority for the center, these products still proliferate the retail space. Vapor registries could aid in making up for the CTP’s enforcement limitations.
    • Target youth-friendly products. The 2023 National Youth Tobacco Survey reported that certain flavored disposable vapor products make up the majority of products used by youth. Registries may help in clearing the market of these products that lack pending PMTAs and are the most popular among youth.
    • Generate Revenue. Of course, registries also provide another revenue stream for state governments. With registration fees for each product, the amounts are not insignificant.

    Consequences of Vapor Product Registries

    All legislation and policy decisions invariably come with costs. Vapor product registries are no different. Some examples include:

    • Inhibit harm reduction efforts. Vapor products are harm reduction tools that benefit adult cigarette smokers seeking to quit or reduce their combustible cigarette use. Prohibiting access to such products prohibits access to the tools necessary to reduce combustible cigarette-related mortality and morbidity.
    • May not slow bad actors. Bad actors will continue to be bad actors. If a company violates the rules now, there is little reason to believe that a vapor product registry will prevent such actions.
    • Burden state resources. States are continuing to be required to do more without increased resources. In many instances, state tobacco regulatory enforcement agencies may simply lack the resources to effectively enforce registry requirements.
    • Innovation outpaces regulation. As the industry has observed before, evolution in the space moves more quickly than the regulatory arms can keep up. Innovative products falling outside of the scope of existing regulatory structures undoubtedly will winnow the effectiveness of product registries in the future. Indeed, most recently, innovations such as nicotine analog products are not covered by most registry bills.
    • Prohibitive scope can be too broad. In several instances, products not within the scope of the problem are swept into the “solution.” In a number of cases, modern oral nicotine products—products that sit at the lowest levels of the continuum of risk—are included in these product registry bills, which continues to undercut harm reduction efforts.

    Final Thoughts

    The problems that created the need for product registry legislation will continue. Until federal regulators embrace a harm reduction agenda and provide adult smokers, who will not or cannot quit, the products that have been demonstrated to assist their transition away from combustible cigarettes, the marketplace, whether legitimate or not, will respond by making them available. Vapor product registries, in and of themselves, will not solve the problems in isolation. The policies driving the need for such registries, ineffectual prohibitionist policies, need attention as well. Until the collective vapor product space, including manufacturers, retailers and consumers, aggressively advocates for policy change, new laws and regulations further limiting the ability to serve adult consumers are likely to evolve.

    Richard Hill is senior director of E-Alternative Solutions.

  • Former STMA Head Expelled from Party

    Former STMA Head Expelled from Party

    Photo: Oleg

    The Communist Party of China has expelled Ling Chengxing, former head of the State Tobacco Monopoly Administration, reports The China Daily, citing an April 22 announcement by the country’s top anti-graft watchdogs.

    According to the Communist Party of China Central Commission for Discipline Inspection and the National Commission of Supervision, Ling violated the party’s disciplines, committed duty-related illegalities and is suspected of bribery and abuse of authority.

    Among other transgressions, Ling accepted banquets, sought benefits for relatives in employment and school admissions, and secured benefits for others in the cadres selection and appointment, the agency said.

    Liang also accepted gifts, sought special treatment in transportation and medical care for his relatives and used his position to benefit others in business operations, employee hiring and job promotions.

    In return he accepted large amounts of property, according to the allegations.

    Originally from Jiangxi province, Ling joined the Party in 1977 and began working in 1980. He held positions, including executive vice-governor of the province.

    Ling was the head of China Tobacco from May 2013 until his retirement in July 2018. He was placed under investigation in October 2023.

  • Lawmakers Urged to Close ‘Loopholes’ in Disposables Ban

    Lawmakers Urged to Close ‘Loopholes’ in Disposables Ban

    Image: Cybrain

    Activists are urging U.K. lawmakers to close “loopholes” in the ban on disposable vapes that is set to take effect next April, reports the BBC.

    In anticipation of the measure, manufacturers such as Elfbar and Lost Mary have been launching reusable versions of their popular disposable vapes.

    “We are continuing to diversify our product lines by providing viable alternatives to single-use devices, addressing the demand for a harm reduction tool that is helping to assist millions of adults [to quit smoking],” an Elfbar spokesman was quoted as saying. 

    The reusable versions differ from their disposable counterparts primarily in that nicotine liquid comes in a replaceable pod, and a USB port at the bottom allows the battery to be recharged. It means the body of the vape can be reused.

    Critics contend that the new vapes will not deliver the environmental benefits envisioned by the ban. “This switch may have negligible environmental impact as these are still items which are low priced and easy to throw away,” said Scott Butler, executive director of Material Focus, a non-profit organization set up tackle electrical waste.

    A spokesman for the Local Government Association, which was one of the leading voices calling for the ban said the addition of a USB port to disposable vapes amounted to an attempt to bypass the restrictions, and called on lawmakers to define “disposable” in a way that would prevent producers from exploiting loopholes

    In a filing with Companies House, the U.K. registrar of businesses, Elf Bar and Lost Mary distributor Green Fun Alliance noted that the disposable vape ban would have a detrimental effect on sales and profitability.

    “However, management have been preparing for this and are well equipped to pivot their business to the exclusive sale of non-disposable vapes and related products,” the company wrote.

  • Parkside Gets Business Development Manager

    Parkside Gets Business Development Manager

    Luke Clark (Photo: Parkside)

    Parkside has appointed Luke Clark as its new business development manager.

    Boasting almost 20 years of experience working in sales roles within the packaging industry, Clark will focus on growing Parkside’s consumer goods and tobacco segments as the company looks to further enhance its plans across Europe, the Middle East and Asia.

    “I am delighted to join Parkside to help drive our business forward,” said Clark in a statement. “We have a long-established reputation across the flexible packaging market for service and quality coupled with a broad and innovative product range meeting many of the ever-changing market demands and needs. The opportunity to help present these to customers is something I’m looking forward to.

    “I have known Luke for over 10 years,” said Parkside Group Sales Director Paul McKeown. “I am aware of his background knowledge and his skill set in the flexible packaging sector. His ambition, energy and development plans match those of us here at Parkside. We are excited to see what Luke will achieve as he works with the Parkside team to bring our sustainable portfolio and market-leading technical capabilities to the market.”

  • Malawi Growers Urged to Tap into China

    Malawi Growers Urged to Tap into China

    Photo: Taco Tuinstra

    Malawi authorities are urging farmers to tap into the Chinese tobacco and soybeans markets, reports Xinhua.

    During the Agriculture Investment Conference on April 19 in Lilongwe, Alfred Mwenifumbo, controller of agriculture, extension and technical services, said sales to China would boost foreign exchange earnings and strengthen the economy.

    Dominated by smallholder growers, Malawi’s tobacco industry could benefit greatly from the Chinese market, Mwenifumbo said. He encouraged large-scale farmers to join the industry to improve the quality of Malawian tobacco and compete with other countries.

    Mwenifumbo suggested that Malawi could increase its forex earnings by up to 30 times if more commercial farmers with large landholdings entered the industry and accessed the Chinese market, noting that existing investors are ready to support local farmers in expanding their operations to seize market opportunities.

    The conference also discussed the investment potential in crops such as macadamia nuts, groundnuts, wheat and maize, highlighting their significant returns.

    Tobacco Reporter highlighted Malawi’s efforts to diverse its economy in its June 2023 issue (see “Broadening the Base”).

  • 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.

  • U.S. Market Poised for Disruption

    U.S. Market Poised for Disruption

    Photo: vfhnb12

    The American tobacco market is poised for disruption as Altria Group’s exclusive U.S. distribution rights to Philip Morris International’s IQOS heat-not-burn product expires on April 30, reports The Wall Street Journal. After this date, PMI will be free to compete in the U.S. with its top noncigarette brand.

    PMI hopes IQOS can help it grab a 10 percent share of the lucrative U.S. cigarette and heated-tobacco market by roughly 2030, representing an additional $2.2 billion in annual earnings before interest, taxes, depreciation and amortization, according to Stifel analysts.

    Altria, with its 50 percent share of the American cigarette market, has a lot to lose if PMI can persuade more smokers to switch to noncombustible alternatives.

    In recent years, U.S. smokers have become more receptive to alternative nicotine delivery methods. Last year, 40 percent of all nicotine products sold in the U.S. were smoke-free offerings such as e-cigarettes and oral nicotine pouches. The share of traditional cigarettes, meanwhile, declined to 60 percent last year from 80 percent in 2018.

    If the trend continues, Americans will be more likely to reach for a vape or nicotine pouch than a cigarette within three years.

    Already earning some 40 percent of its net revenue from smoke-free products, PMI needs not worry about the dwindling number of U.S. smokers because it doesn’t sell cigarettes in America.

    Altria, by contrast, still relies heavily on combustible cigarettes, which currently account for 85 percent of its sales. Its comparatively low exposure to the smokefree market includes brands such as On! oral nicotine pouches and Njoy e-cigarettes. The company also has a joint venture with Japan Tobacco to launch Ploom heated tobacco sticks in the U.S. and is working on its own heat-not-burn brand.

    A badly timed bet on Juul Labs saddled the company with a $12.5 billion loss.

    On the flipside, Altria has a strong U.S. distribution network, which it can leverage to promote its brands—a considerable advantage as the point of sale is one of the few places where tobacco companies are still allowed to advertise their products.

    Altria can also harness data to defend its patch. The tobacco giant is integrated into many retailers’ loyalty programs, allowing it to monitor what shoppers are buying.

  • New KT&G CEO Engages Employees

    New KT&G CEO Engages Employees

    On the April 17, KT&G President Bang Kyung-Man (third from the left) held a casual meeting with employees to kickstart his focus on communication management. (Photo: KT&G)

    Three weeks after his inauguration, KT&G’s newly appointed president, Bang Kyung-man, engaged in a casual meetings with employees to demonstrate his commitment to robust communication.

    The event was held on the 20th floor of KT&G’s Seoul headquarters, and attended by about 20 employees from various jobs and ranks.

    Bang shared his personal growth story, from joining KT&G as a new recruit in 1998 to taking on the role of CEO 27 years later. In addition to sharing his insights as a company senior, he sought employees’ opinions on the company’s mid- to long-term vision and growth strategies.

    Following his appointment as CEO on March 28, Bang immediately visited KT&G’s Chungnam Headquarters and Seo Daejeon Branch, emphasizing communication with the sales team on the ground.

    “This event was organized to reflect the management’s desire to communicate freely with team members, breaking away from traditional formats and fostering consensus on the company’s vision,” KT&G wrote on its website. “We will continue to promote a culture of bidirectional communication among staff to develop a more horizontal and flexible organizational culture.”

  • Sullivan and Mish Resign From 22nd Century Group’s Board

    Sullivan and Mish Resign From 22nd Century Group’s Board

    Photo: Charnchai saeheng

    Nora Sullivan and James Mish have resigned as a directors of 22nd Century Group. In a press note, the company said it does not intend to fill the vacated seats and will instead reduce the board to four seats as part of its focus on corporate cost efficiency.

    “We thank Nora and Jim for their service to the company over the years,” said 22nd Century Group Chairman and CEO Larry Firestone.

    “We plan to reduce the size of the board in 2024, in addition to the previously announced reduction in board compensation, consistent with our efforts to achieve breakeven operations. In total, these changes to our board are expected to save more than $1 million annually.”

  • PMI Urges Action Against Illicit Trade

    PMI Urges Action Against Illicit Trade

    Photo: alexlmx

    Philip Morris Pakistan Limited (PMPKL) has urged action against the growing presence of tax-avoiding products on the country’s tobacco market, reports  The Express Tribune

    In a media briefing, PMPKL Head of Communications Andleeb Uroos Ahmed said the company’s income had plunged by 86 percent in 2023. He attributed the decline to last year’s hike in Federal Excise Duty (FED), which doubled cigarette prices, and the subsequent escalation in market share of illicit products.

    This condition has provided an ample opportunity for numerous local illicit cigarette manufacturers, notably in Khyber Pakhtunkhwa and Azad Jammu & Kashmir, to amass substantial market share while contributing minimally to national revenue, according to critics of the tax hike.

    Illicit cigarettes now command a 63 percent market share, causing the exchequer to miss out on  PKR310 billion ($1.11 billion) in tax collections annually.

    While acknowledging government efforts such as the introduction of tax stamps, Ahmed expressed concern about lax enforcement.

    Stressing the interests of tax-paying companies and government’s need for sustainable revenue, she suggested including tax-evading cigarette manufacturers in the tax net instead of burdening the legitimate industry with additional taxes.

    By curtailing tax evasion, she calculated, the Federal Board of Revenue (FBR) can potentially boost revenue collection from the tobacco sector by more than $2 billion.

    “The potential revenue, if realized, could significantly contribute to human development projects and public health initiatives in Pakistan, addressing critical areas where the country lags in human development rankings,” she added.

    She said that anti-tobacco organizations have been misguiding the government by spreading misinformation about the revenue collection potential from the legitimate tobacco industry.