Category: Uncategorized

  • Qnovia Raises $16 Million

    Qnovia Raises $16 Million

    Qnovia has raised $16 million in Series B funding. The financing was led by Blue Ledge Capital, Evolution VC Partners, Vice Ventures and Gaingels.

    “This Series B financing marks a meaningful milestone for Qnovia as it provides validation for our RespiRx proprietary platform, our progress in the regulatory process and the potential for our inhaled drug delivery platform to improve patient outcomes. We are grateful for the partnership with our investors, who are committed to our vision of advancing the development of inhaled therapeutics for areas of high unmet need, starting with our focus on bringing innovation to medicines to support smoking cessation,” said Brian Quigley, CEO of Qnovia.

    “Our recent infusion of capital will advance QN-01 beyond our Phase 1 clinical trial in the U.S. and support an MAA submission to the MHRA in 2026. We believe that the data we have generated for QN-01, which includes our positive first in-human clinical data and our nonclinical findings, significantly derisks our clinical development plan and accelerates commercial validation to support our MAA submission for an expedited path to revenue generation in the U.K. Overall, this financing brings us one step closer to our vision of transforming the treatment paradigm for smoking cessation for a population who has not had access to any new treatment options in several decades.”

    Since its inception, Qnovia has raised $50 million to advance its proprietary inhaled drug delivery platform. Qnovia will use the proceeds from the recent financing to support the clinical, regulatory and commercial development of its RespiRx Nicotine Inhaler (QN-01) in the U.K. QN-01 has demonstrated clinical proof-of-concept in a first-in-human, Phase 1 study and received U.S. Food and Drug Administration clearance of its Investigational New Drug application. In addition, the company will use the Series B funds to evaluate the feasibility of additional therapeutic indications in their pipeline.

    “We are impressed by Qnovia’s agility and speed in navigating the complex regulatory framework for the development of novel smoking cessation therapies,” said Andy Roche, founder and managing partner at Blue Ledge Capital. “We are confident that their groundbreaking platform will revolutionize smoking cessation as well as drug delivery broadly as a result of its dose-to-dose consistency and favorable pharmacokinetic profile. We are honored to share that journey with the Qnovia team.”

  • Spain: Smoking Drops to Record Low

    Spain: Smoking Drops to Record Low

    Smoking rates in Spain have dropped to a record low, reports Euro Weekly News.

    In 2024, 25.84 percent of the population smoked, down from 33.1 percent in 2022. Health advocates credit successful government initiatives, including higher taxes on tobacco products, stronger restrictions on tobacco advertising, the expansion of smoke-free zones to include public outdoor areas, and increased funding for smoking cessation services.

    Despite these recent declines, tobacco remains a major public health issue in Spain. The Spanish Ministry of Health attributes nearly 50,000 deaths annually to smoking-related illnesses, accounting for nearly 15 percent of all deaths in the country.

    Meanwhile, the decline in cigarette smoking has been accompanied by a surge vaping. The number of e-cigarette users has doubled in the past four years, with 19 percent of Spaniards having tried them. Over half of e-cigarette users are opting for nicotine-free versions.

    In response to this shift, the Spanish government is introducing new regulations to curb e-cigarette usage, including banning e-cigarettes in indoor public spaces, restricting flavored e-liquids, and limiting them to tobacco flavors. It is also considering plain packaging for e-cigarette products, and discussing the introduction of taxes on e-liquids to mirror tobacco taxes.

  • A Platform for Dialogue

    A Platform for Dialogue

    Photos: BAT

    With its Omni tool, BAT has released a dynamic, science-based guide to tobacco harm reduction.

    By Stefanie Rossel

    The concept of tobacco harm reduction (THR) dates back to at least 1976, when Michael Russell made his famous statement that people smoke for the nicotine but die from the tar and suggested that altering the ratio of tar to nicotine could be the way to safer smoking. Almost 50 years on, there is an extensive array of less hazardous alternatives to combustible cigarettes, but misconceptions about nicotine and reduced-risk products (RRPs) continue to be so pervasive that the R Street Institute last year even published a list with the 10 most common misperceptions, arguing that over the past decade, an overwhelming onslaught of misinformation from academics, media outlets and public health agencies had created confusion and significantly slowed THR activities.

    BAT has set out to overcome these misunderstandings with a new tool. At its first-ever Transformation Forum, which took place in London in September, the company introduced Omni, an evidence-based, accessible and dynamic knowledge resource that shows how science and innovation can converge to achieve a smokeless world.

    Under its “A Better Tomorrow” strategy, the company aims to migrate adult smokers who would otherwise continue to smoke from cigarettes to smokeless products and to ultimately consign cigarettes to the dustbin of history. On its transformation journey, however, the company has faced several challenges, including the rejection of THR by key regulatory bodies and nongovernmental organizations, markets that prevent the sale of RRPs, onerous regulatory frameworks that hinder innovation, skepticism toward industry research as well as the already-mentioned misperceptions about nicotine and the relative risks of combustion-free products.

    James Murphy

    Omni, BAT states on its website, is intended to be a compendium of information that underpins the company’s corporate and scientific strategy and offers insights into the work being done at BAT to achieve a world without cigarettes. “The world’s first-of-its-kind resource, Omni explains why THR should be a prominent component of the public health strategy on tobacco,” says James Murphy, director of research and science at BAT. “It draws from hundreds of independent scientific studies, BAT’s own research into its smokeless innovations, and examples of THR in action globally. Beyond that, Omni serves as a dynamic platform for thoughtful, constructive conversations with stakeholders rooted in evidence, where open dialogue around THR is not just welcomed but encouraged.”

    Omni differs from BAT’s Science website, which focuses on the innovations driving the company’s business, Murphy points out. The Science website “serves as a hub for publishing data and peer-reviewed research on our smokeless products such as Vuse, VELO and Glo. The website also provides insights into our global research and development network, which comprises 1,750 R&D specialists across eight different sites worldwide. The emphasis here is on showcasing the science behind our products rather than facilitating discussions on THR policy,” says Murphy.

    Engaging All Stakeholders

    Kingsley Wheaton

    Omni is targeted at scientists, public health authorities, regulators, policymakers and investors, and it aims to spur a dialogue across the wider scientific and regulatory ecosystem related to tobacco and nicotine products. Across nine chapters, it addresses the big questions that the company and the tobacco industry in general are confronted with, among them classics such as what exactly tobacco harm reduction means, whether smokeless products are a gateway to cigarette smoking or what the role of flavors in smokeless tobacco and THR is.

    “We believe that open and constructive dialogue with a broad range of stakeholders is crucial for accelerating the decline in global smoking rates,” says Kingsley Wheaton, BAT’s chief corporate officer. “It is incumbent on regulators, scientists and policymakers to review the scientific and real-world evidence on THR and engage in dialogue on how to encourage smokers to switch completely to smokeless alternatives with a reduced-risk profile. Unfortunately, there are few spaces where these groups can review such evidence and reach common ground on THR science to drive progress.”

    According to Wheaton, Omni demonstrates that the evidence in support of THR is growing daily. “Sweden, which is on the brink of becoming smoke-free, has the lowest adult smoking rates and lung cancer deaths in Europe, which has attributed to the availability, affordability and increased use of smokeless tobacco and nicotine products,” he says. “Yet there is still significant debate on whether THR strategies should be used to reach global smoke-free targets, and more countries are restricting the sale of smokeless alternatives. Our hope is that Omni becomes the platform to engage these stakeholders so that we can create whole-of-society solutions and build smarter regulation that allows THR to flourish.”

    BAT plans to make Omni, which is also available as a PDF download, a fully online, dynamic resource in the coming months. “With THR research rapidly evolving, we want Omni to reflect the latest evidence in support of THR,” says Wheaton. “A team of scientists will regularly update Omni by assessing and collating new academic research, including BAT’s latest peer-reviewed evidence. Omni will both push out information and pull in insights, but the ultimate goal is to create a platform for dialogue. That’s why we are inviting anyone who shares our belief that a smokeless world is possible—and even those who don’t agree with us—to interrogate the evidence and join us on our journey to ‘A Better Tomorrow.’”

    Major Milestone

    BAT will be introducing new tools and technology-enabled platforms to facilitate the interrogation of the latest science and real-world experience of tobacco harm reduction, Wheaton says. “For example, it gives us the opportunity to develop a tech-driven Omni tool to give stakeholders in the THR policy debate more access to our evidence-based answers to the big questions facing our sector and society.”

    “Omni is not a broadcast channel for BAT to talk about tobacco harm reduction,” he stresses. “Our ambition is for Omni to be a platform for a necessary conversation with stakeholders rooted in evidence—a manifesto for change and a call to action, backed by high-quality science and real-world evidence.”

    Omni, Murphy explains, is the result of a major scientific effort, involving over 60 contributors and writers. “It covers products that involve around 9,800 global patents and cites more than 600 pieces of external evidence. This comprehensive compendium reflects over a decade of research—both our own and independent studies—into THR, and we have included the very best of published industry science for assessing the risk profile of smokeless products. We’re incredibly proud of this achievement, and as we’ve said, this is just the beginning.”

    “The launch of Omni marks a major milestone in our transformation toward a smokeless world, and we’re excited about the progress it represents for both us and the industry. By 2030, we aim to have 50 million adult consumers of our smokeless products, and by 2035, for smokeless products to make up at least 50 percent of our global revenue,” says Wheaton. “The ultimate goal we are working toward is a fully smokeless business, hopefully in a fully smokeless world. We believe Omni will be instrumental in achieving this vision, and we’re eager for the next chapter.”

  • At the Turning Point

    At the Turning Point

    Smuggled cigarettes on the Latvian border

    Belarus’ role in the illicit cigarette trade is under scrutiny.

    Contributed

    For years, Belarus has been under scrutiny for its alleged distribution of illegal counterfeit cigarettes, a practice that is now under severe pressure in the current political landscape. This pressure casts a shadow of uncertainty over the industry’s future.

    A cornerstone of the Belarus national budget, the tobacco industry contributed BYR2.5 billion ($76.45 million) in 2023. However, the industry is now facing alarming trends, as highlighted by Belarus President Alexander Lukashenko during a governmental meeting in August 2024.

    The reasons for the existing challenges might be different, Lukashenko vaguely said, emphasizing that despite that, “It is necessary to develop measures to preserve production and export volumes to the maximum extent possible.”

    The Belarusian tobacco industry has been shrouded in secrecy for over a decade. In 2015, the last time official information was revealed, Belarusian authorities set the quota of cigarette consumption on the domestic market at 30 billion pieces. At that time, local analysts indicated that the figure had nothing to do with reality.

    Research by KPMG showed that the actual consumption of cigarettes in Belarus is close to 18 billion pieces. Around 13 billion cigarettes are exported, of which 8.6 billion end up in Russia and 4.3 billion in the EU.

    Woes about the flow of cheap cigarettes, often smuggled, from Belarus have become common in recent years not only in the European Union but also in Russia.

    In 2020, the Russian association Anticounterfeit calculated that Belarus’ domestic consumption was around 17 billion cigarettes and that production nearly three times exceeded the country’s demand. In a letter to the Russian Ministry of Justice, Anticounterfeit claimed that cheap cigarette production was put on an industrial scale in Belarus. The nameplate capacity of the Belarusian tobacco factories was estimated at 67 billion pieces, meaning export potential was tremendous.

    In 2023, Belarus accounted for 84.5 percent of illegal cigarettes sold on the Russian market, estimated the Russian National Scientific Competence Center for Combating Illegal Circulation of Industrial Products. In total, illegal—counterfeit and smuggled—cigarettes represented 15.6 percent of sales on the Russian market. This illicit trade cost the Russian budget around RUB130 billion ($1.35 billion) of lost income in 2023, the analysts calculated.

    Belarussian tobacco consumption is estimated to be close to 18 million pieces per year.

    Shut Borders

    During the past few years, the flow of illegal cigarettes from Belarus to the European Union has subsided, as in the context of political tensions, the Baltic countries and Poland tightened border controls.

    As estimated by KPMG, the volume of smuggled cigarettes from Belarus to the EU dropped by 500 million in 2023 and by almost 2 billion pieces over the past three years. The analysts also cite the tighter control and closure of a number of checkpoints on the border for the decline. The place of Belarusian cigarettes is being taken by suppliers from other countries, primarily Turkiye and Algeria.

    Counterfeit supplies from Belarus to European countries decreased from 2.1 billion to 1.5 billion cigarettes over the year.

    However, Belarus remains the absolute leader in the supply of illegal “white” cigarettes, which mean those smuggled and sold under their own brands to European countries.

    In this category, Belarus holds a staggering 43 percent share in total deliveries to Europe. A year earlier, this figure was around 52 percent, KPMG calculated.

    The most popular western destination for tobacco smuggling from Belarus is Poland. Last year, 0.74 billion illegal Belarusian cigarettes entered the country, which is almost 17 percent less than in 2022 and almost half as much as in 2020. The supply of illicit cigarettes from Belarus to Lithuania fell by 15.2 percent to 0.39 billion pieces and from Belarus to Latvia fell by 27.35 percent to 0.16 billion pieces.

    Russia has declared war on counterfeit cigarettes from Belarus.

    Unraveling Tobacco War?

    However, the main blow comes from the Russian market, where authorities also tightened the screws on illegal sales. Observers believe that problems in Russia were the key reason for Lukashenko’s concerns during the recent government meeting.

    “The meeting is definitely not happening out of nowhere. But we need to call things by their proper names. We are not talking about problems with exports but with smuggling. Legal exports have been virtually nonexistent for a long time,” Nick & Mike, a local analytical Telegram channel reported.

    “Strengthening controls on the western border, where Belarusian state counterfeit goods are seized in industrial quantities, including from tanks with resin, is nothing compared to what the eastern neighbor is doing. Russia has tacitly declared a ‘tobacco war’ and has been striking at illegal businesses,” the analyst claimed, referring to the intensified efforts by Russian authorities to curb illegal tobacco traffic from Belarus.

    For years, Russian authorities have been turning a blind eye to illegal cigarette imports from Belarus, but this era seems to be coming to its end, a source in the tobacco industry who wished to remain anonymous told Tobacco Reporter.

    “I would not call it a war, though. This is primarily about bringing the domestic market in order. Everybody knew that a situation where Russia loses over $1 billion in tax revenues every year to cigarette smuggling from Belarus would not last forever. The country could afford it during the rich times, but now every penny counts,” the source added.

    In April 2024, Russia listed tobacco products among the goods of strategic importance. Andrey Mayorov, deputy head of the main directorate for customs control at the Russian Federal Customs Service, revealed that this move helped the authorities tighten their control of illegal tobacco traffic. One of the first consequences of the step, he added, was a hike in the number of criminal cases opened against tobacco smugglers.

    More legal changes are on the way to turn down illegal cigarette imports to Russia from Belarus.

    An agreement on indirect taxes between Russia and Belarus scheduled to gradually come into force through 2027 is expected to fully protect the Russian market from gray imports of cigarettes from Belarus, assumed Alexei Sazanov, deputy finance minister of Russia.

    “The problem of gray imports stems from a significant difference between tax rates in the countries: Russian excise rates on tobacco products are significantly higher than in Belarus. This means that Belarusian tobacco manufacturers, producing cigarettes in their country, simply supply part of the goods to the Russian market, de facto paying taxes at Belarusian rates,” Sazanov explained.

    The reform is stretched in time not to provoke “social and economic tensions in Belarus,” the deputy minister added.

    Change of Players

    The Belarusian tobacco industry is also going through a profound transformation, with Western companies gradually reducing their presence in the country.

    In September 2024, Japan Tobacco International and its British subsidiary Gallaher Group terminated licensing agreements with the Tabak-Invest factory, suspending production of the brands Winston, Camel, Sobranie and Monte-Carlo.

    JTI’s Minsk office confirmed that the agreement originally concluded in 2008 is no longer in force, declining to provide additional details.

    In December 2023, Tabak-Invest and several of its co-owners were subjected to U.S. sanctions. The restrictions prohibited U.S. citizens and businesses from any deals with sanctioned parties.

    In the meantime, JTI continues doing business in Russia. In March 2022, the company announced a suspension of investments in its four factories and marketing activity in the country. However, in November 2023, the company announced it would continue operations, complying with international and Russian regulations.

    JTI may switch to importing its brands from Russia to Belarus, writes Belmarket, a local business news outlet. Alternatively, the company could sign a new license agreement with a Belarusian tobacco factory that is not subjected to Western sanctions. This could be newcomers Sentoni PRO and Alidi-West, Belmarket’s analysts speculated.

    Alidi-West is a Russian company that distributes Kent cigarettes. It kicked off sales in Belarus in July 2024. Sentoni PRO is another firm registered to sell cigarettes in the country this year.

    According to the Belarusian Ministry of Taxes and Duties, Sentoni PRO will produce Kent, Pall Mall, Rothmans, Vogue and Lucky Strike brands.

    These players may also launch production at the capacities previously run by Western firms.

    BAT in Belarus held a contract manufacturing agreement with the Grodno tobacco factory Neman. After Neman was subjected to the U.S. sanctions in 2021, the contract was canceled, and a part of BAT’s production was transferred to Tabak-Invest.

    Around the same time, sanctions were also imposed against another Minsk factory, Inter Tobacco, which forced Philip Morris to withdraw from the license production.

    In September 2023, BAT announced a deal to sell its business in Russia and Belarus to a consortium of Russian investors and local management, BAT Russia. Upon completion of the “business transfer,” the new structure became known as the ITMS Group of Companies. BAT left the business to its management along with the rights to the trademarks.

    The gradual withdrawal of foreign business from Belarus could add pressure to the tobacco industry, which is braced for a hard time ahead.

  • From Tradition to Transition

    From Tradition to Transition

    By adrian_ilie825

    With the launch of its Sixhill heated-tobacco brand, Firstunion is offering smokers in the Middle East a less risky alternative to smoking.

    By Stefanie Rossel

    The Middle East is one of the last growth markets for combustible cigarettes. Tobacco has been deeply rooted in the culture since the 1600s, and regional smoking rates are among the highest in the world. With a male smoking prevalence of 57.6 percent in 2022, Jordan tops the list, followed by 49.1 percent in Egypt and 42.9 percent in Lebanon, according a report published by THR.net.

    Smoking is generally a male habit in the region. While cigarettes dominate the Middle Eastern tobacco market, other popular products include shisha, also known as waterpipe or hookah, and dokha, a powdered tobacco that comes in different varieties and strengths and is often mixed with spices, herbs and other substances.

    While the World Health Organization projects smoking rates in the Middle East to decrease from 33.3 percent in 2020 to 31 percent in 2025, this is the smallest anticipated decline among all WHO regions. Embracing tobacco harm reduction (THR) could accelerate the decline of smoking prevalence. Demand for e-cigarettes in the region has been growing in recent years, with some places adopting heated-tobacco products (HTPs) and nicotine pouches as well.

    “Increasing awareness of the health risks associated with smoking is driving demand for alternatives like HTPs and e-cigarettes, which are perceived as less harmful,” confirms Wayne Wu, senior director of business development (HTP BU) at Firstunion—Sixhill. “Younger demographics, particularly in countries such as the United Arab Emirates (UAE) and Saudi Arabia, are increasingly turning to e-cigarettes and heated-tobacco products as they become more conscious of lifestyle choices and trends.”

    While vape products are still banned in a few countries, including Iran, Omar and Qatar, most Middle Eastern states now permit the sale of e-cigarettes. Legislation differs by nation, with many countries regulating e-cigarettes using the European Union Tobacco Product Directive as a blueprint. However, several states, including Jordan, Bahrain, Saudi Arabia and the UAE, tax vapes and heated-tobacco products at a rate of 100 percent or more in an attempt to curb the spread of electronic smoking devices, particularly among children, and to address the disparities in taxes between traditional cigarettes and smoking alternatives.

    According to Wu, the evolution of the regulatory environment reflects ongoing efforts to improve product quality and advertising standards. “Additionally, some countries have established specific regulations for e-cigarettes and HTPs, defining product specifications, advertising and sales standards to foster more orderly market development,” he says.

    High-Potential Markets

    Founded in 2004 and headquartered in Shenzhen, China, Firstunion was a pioneer in the field of electronic atomization. The company offers a vast range of electronic nicotine-delivery system (ENDS) technologies, heated-tobacco solutions and atomizing equipment. In the Middle East, Firstunion launched its proprietary heated-tobacco brand, Sixhill, which it distributes through extensive partnerships in countries such as Saudi Arabia, Egypt, Bahrain and Iraq. “Firstunion focuses on the research, design and production of heated-tobacco products,” Wu explains. “We collaborate closely with major international HTP manufacturers, with our products marketed globally. We aim to provide premium, technology-driven and competitive products to our THP [tobacco-heating products] customers throughout the Middle East. We look forward to building deeper, stronger strategic collaborations with more clients across the region.”

    According to Wu, the Middle East markets that offer the highest potential for innovative HTP technology are the UAE, Saudi Arabia and Egypt. The UAE is one of the most open and affluent countries in the region, and since e-cigarettes and HTPs were legalized in 2019, demand for these products has steadily increased. “Young consumers and expatriates in the UAE show a high acceptance of HTP products, especially among middle-[income] and high-income groups focused on health and quality of life,” says Wu.

    “The UAE’s positive stance toward technological innovation makes it easier for new products and technologies to enter the market and potentially expand to other Middle Eastern countries. Furthermore, the UAE’s well-structured regulatory system allows compliant international brands to enter the market, which benefits the long-term growth of companies.”

    Saudi Arabia, the largest economy in the Middle East, has gradually relaxed regulations on smoking alternatives. Since 2019, the kingdom has permitted the sale of HTP products, fueling demand. “With Saudi Arabia’s economic transformation and a rising young population, especially under the Vision 2030 initiative, there is an increasing demand among young people for modern lifestyles and innovative technology,” says Wu. “Saudi Arabia’s substantial market size, combined with a strong consumer preference for international brands and high-tech products, offers significant growth opportunities for companies with innovative heated-tobacco technology.”

    Egypt, with its large population, is a crucial market too. Although HTP regulations are still evolving, the market holds immense potential, according to Wu. “There is a large number of smokers in Egypt, and demand for traditional cigarette alternatives, such as HTP products, is rising, particularly among young people and the middle class,” he says. “Given the market’s high price sensitivity, companies that can provide cost-effective, innovative technology will hold a competitive advantage in Egypt. Additionally, Egypt can serve as a gateway to the broader North African market.”

    Rise of Local Brands

    Regarding THR, Wu describes several trends in the Middle East, including the rise of local and international brands. “Leading international tobacco companies are actively expanding into the Middle East market, offering products that cater to local smokers seeking healthier and trendier options,” he says. “There also is an emergence of local brands: With a growing focus on health, many new tobacco brands have recently emerged across various Middle Eastern countries. These companies provide consumers with more health-conscious vaporized products and offer a more comprehensive, diverse service experience for local customers.” Firstunion collaborates with some of these brands, he adds.

    HTPs and e-cigarette products are now widely available in physical stores, such as supermarkets and convenience stores, as well as through online channels, making it easier for consumers to purchase these products, according to Wu. “Major global and local retail chains are increasing their offerings of heated tobacco and e-cigarette products,” he says.

    In recent years, the vaping industry in the region has diversified. “Besides traditional tobacco, products such as e-cigarettes, nicotine pouches, herbal cigarettes and heated tobacco have flooded the market, offering richer flavors and more advanced technology,” says Wu. “While smokers now have a broader range of differentiated choices, market competition has also intensified. Among these options, HTPs are increasingly favored by consumers.”

    Currently, Firstunion is promoting three heating technologies in the Middle East: Atine, which works with resistance heating; Insheat, which heats with induction; and Breelight, which is powered by infrared heating. Soon, the company plans to introduce its latest technology in the region: Alkaid technology. Launched this year and recognized with a “Best HnB innovation Award” at the 2024 Alternative Awards, Alkaid leverages the high-speed propagation of light to directly deliver energy to the tobacco, bypassing spatial constraints (see sidebar).

    Complex Environment

    Despite increasing demand, HTPs face several challenges in the region. “There is significant variation in tobacco product regulations across Middle Eastern countries, which increases complexity for manufacturers,” says Wu. “Regulations may change quickly due to public health campaigns or international agreements, making it challenging for manufacturers to remain compliant.”

    He also names cultural sensitivity, with views on smoking and e-cigarettes differing widely due to cultural and religious beliefs across the region. “Many consumers still favor traditional tobacco products such as shisha and cigarettes, which may hinder the adoption of e-cigarettes and heated-tobacco products,” says Wu.

    In addition, increasing concerns about health risks associated with e-cigarettes and HTPs could lead to stricter scrutiny and more stringent regulations, whereas misunderstandings about the safety and risks of HTPs may foster a negative public image, influencing regulatory actions. Strict advertising regulations could limit how manufacturers promote their products, affecting brand visibility and consumer awareness. Certain countries in the region may impose import restrictions or tariffs on e-cigarettes and HTPs, impacting pricing and supply.

    “Overall, HTP and e-cigarette manufacturers in the Middle East must operate within a complex landscape of regulations, cultural attitudes, competition and market dynamics,” Wu stresses. “Addressing these challenges effectively is essential for successful market entry and ensuring sustainable growth in the region.”

    Firstunion has made significant strides in the Middle East, focusing on establishing a strong market presence through partnerships, product innovation and strategic marketing, Wu says. “Our future plans include expanding our distribution network, customizing products for local markets, ensuring regulatory compliance and enhancing brand visibility to capitalize on the growing demand for e-cigarettes and heated-tobacco products in the region.”

    As Middle Eastern consumers increasingly prioritize sustainability, the company plans to integrate eco-friendly practices into its production and packaging processes. “This commitment to sustainability enhances our appeal to environmentally conscious consumers,” says Wu.

    The Power of Light

    Firstunion’s Alkaid heated-tobacco technology works with light. The emitted wavelength of Alkaid technology ranges from 200 nm to 1 mm, enabling energy transfer in a noncontact heating process through a vacuum, significantly reducing the limitations of traditional heat conduction.

    Alkaid’s light heating technology provides a continuous spectrum similar to sunlight, including ultraviolet, visible light, short-wave and mid-wave to long-wave infrared. The different wavelengths allow for varying penetration depths, achieving uniform and thorough heating of the entire tobacco segment, greatly enhancing nicotine and smoke release.

    In this mode, the temperature of the tobacco remains below traditional heating levels, effectively avoiding pyrolysis temperatures, which significantly reduces the release of harmful substances.

    Alkaid uses fully automated assembly line production, ensuring stable performance and a long lifespan, with tested cycles exceeding 10,000 times. Its outer casing is made from a material with high electromagnetic wave transparency, and the heating element can reach peak temperatures up to 2,000 degrees Celsius, effectively transferring energy through radiant heat. According to Firstunion, this excites nicotine and flavor compounds within the medium, delivering a rich and refined flavor with a higher nicotine conversion efficiency. S.R.

  • Toward Pure Leaf

    Toward Pure Leaf

    With its new Pure-F sorter, Koerber Technologies removes undesired materials from tobacco at the earliest possible point.

    By Stefanie Rossel

    It’s annoying but unavoidable: Nontobacco-related materials (NTRMs) can find their way into tobacco at any production stage, from harvesting to processing through packing, shipping, warehousing and even beyond. The range of things found in freshly harvested tobacco during the sorting process is nothing short of amazing, including civilization waste such as plastic bags or sweets wrappers, but also organic remainders such as bird feathers, insect cocoons, grass or cobwebs and even cadavers of small animals. Sand, pebbles and small rocks may also be found. This is sometimes added to by metal objects such as nuts, bolts or bearing balls from harvesting and processing machinery failure, and more frequently by packing materials such as shrink wraps, metal staples, strings or cardboard.

    If not removed, the unwanted objects may have a detrimental effect on threshers and slicers. What’s worse, if not removed at a very early stage in the production process, the problem will multiply as once the NTRMs move through the thresher, they will be cut into 10 pieces or even more. The tinier the particles are, the harder and more complex it is to remove them during the following production stages, requiring, of course, even more sorting equipment.

    That’s where Koerber’s new Hauni Pure-F sorter comes in: “Sorting early in the process, before threshing, can replace sorters in the downstream process,” says Ralf Kohlhardt, head of technical sales primary at Koerber. “These are the main reasons why sorting before threshing is so effective: There is a much lower amount of NTRMs. The NTRMs are bigger and hence easier to detect. In addition, it avoids that one NTRM will become 10 or more. And also hand pickers, which are standard in green-leaf threshing (GLT) processing, aren’t required anymore.”

    The Hauni Pure-F, which Koerber claims is the only green leaf sorter on the market, is the successor of the Hauni Aerosort, which was already capable of processing whole leaves. Based on the proven Hauni Aerosort design, the Hauni Pure-F is sorting the leaves in an upstream flow, which is what allows it to process all kinds of whole leaves, hand-cut as well as machine-harvested. The machine features an optimized monolayer for detection because it transports the leaves pneumatically at a speed of 20 meters to 23 meters per second. “When the leaves enter the upstream airflow, they will be separated due to the air velocity,” Kohlhardt points out. “This avoids blockages and allows proper sorting.”

    A heavy particle separator sorts out heavy objects such as tobacco pads or larger pieces of metal. The leaves and remaining NTRMs then travel upward in the sorter to pass the centerpiece of the Hauni Pure-F, its vision unit. The unit, featuring new processing software and hardware developed by the Fraunhofer Institute of Optronics, System Technologies and Image Exploitation (IOSB) and equipped with three state-of-the-art channel cameras, LED lights, static background and a new evaluating processor unit, detects nontobacco particles with unprecedented efficiency, the company says. In a next step, these particles are removed by air, and the NTRM-free tobacco leaves can enter the threshing process. The Hauni Pure-F sorter has been developed for strips and whole leaf in the GLT or primary and has a capacity of up to 12 tons per hour.

    Opting for Camera Technology

    With other suppliers such as Tomra or Key gradually withdrawing from the tobacco market, Koerber remains one of the few providers of advanced sorting equipment in this field. During the last four years, the company has continuously revised its portfolio of sorting equipment, which it now markets under the Pure brand family.

    Among manufacturers of sorting equipment, the technology chosen for the actual detection process of unwanted particles has always been a bit of a holy war. The reason for this is another vital issue in the early stages of production: Certain parts of the tobacco plant itself, such as woody stalks, roots, seed capsules or moldy leaves, are just as little wanted in the final product as NTRMs, as they would negatively impact its quality. The problematic plant remainders are a category in themselves, referred to as nondesired tobacco products, and they pose a particular challenge to optical sorting systems as even perfectly good tobacco displays natural color variations even within the same leaf. Proponents of laser-based sorting systems argue that their systems also examine structural and biological differences while camera-only systems are limited to merely scanning color differences, which reportedly makes it difficult to sort out nondesired tobacco products.

    Koerber has decided on purpose to use camera technology-based vision units. “Besides to the technical abilities, it is the very reliable technology which isn’t subject of any wear and tear,” says Kohlhardt. “The same applies for the LED light.”

    Camera technology is also significantly less costly: Unlike laser technology, which may bring about annual maintenance costs of $30,000 during its years of operation, camera-based vision units are maintenance-free and extremely long-lasting. Koerber’s latest vision unit, benefiting from the company’s more than 20 years of experience in the field of sorting, takes these advantages even further: It is equipped with newly designed encapsulated housing inclusive of a double sealing. Integrated air-conditioning via a water-air heat exchanger makes it also suitable for warm, ambient conditions. Furthermore, it features actively cooled LED lighting. With a newly designed static background, the vision unit comes without any rotating parts, preventing the unit from scratches on the background surface and requiring no cleaning.

    “What is most important about the inside of the vision unit is that it is clean, dark—i.e., there’s no reflection—and cool,” Kohlhardt explains. “Being heat [resistant] and dust resistant, the Pure design is most reliable and failure-free.”

    Sixteen Million Shades

    Being able to detect and process 16 million colors, the new Pure vision unit also distinguishes small color differences in the visible color range as well as in the near infrared range, which makes it possible to distinguish moldy leaves from good product, he adds. “Tobacco reflects infrared light very well. Advanced technologies and new developments contribute to the highest sorting efficiency, including much more efficient LED lighting, much higher resolution of the camera, i.e., pixel size, and a completely new and high-advanced sorting algorithm supported by Fraunhofer IOSB.”

    To customers who use previous Koerber sorter models, such as the tobacco sorter Hauni TS8 or the Hauni Aerosort, Koerber offers to upgrade them with its new Pure vision unit.

    Outstanding efficiency is also a key feature of Koerber’s other Pure sorter models. Its Hauni Pure 1400 T&B and 2100 T&B optical belt sorters are the only ones on the market with integrated second sorting, which means they have an in-built rerun. “Not only does this increase the sorting efficiency, but it also mainly reduces the false reject rate drastically,” Kohlhardt relates. “There isn’t almost any tobacco in the reject waste. According to the defined cross industry test (CIT) procedure, the false reject rate is reduced from approximately 2 percent without rerun to 0.2 percent with integrated rerun. Some factories have hand pickers or even a separate sorter to sort the false reject. This isn’t needed anymore with Koerber’s new technology.”

    A world in which 100 percent sorting efficiency can be achieved is not completely out of reach, he says. “We are on the way. With our detection unit, we see almost all NTRMs. With CIT test results above 90 percent with the Pure, we prove that we are close already.”

  • Next Brazilian Crop Could Touch 700 Million Kg

    Next Brazilian Crop Could Touch 700 Million Kg

    Photo: Taco Tuinstra

    The South Brazilian tobacco crop for 2024/2025 will cover 309,982 hectares, marking a 9.08 percent increase from the previous crop, reports Kohltrade, citing the Brazilian tobacco growers’ association, Afubra.

    Paraná state recorded the largest growth at 13.63 percent, with 83,981 hectares planted. Santa Catarina follows with 11.78 percent, with 94,212 hectares planted and in Rio Grande do Sul, 131,789 hectares were planted, reflecting a 4.6 percent rise.

    More than 138,020 families will be involved in in this year’s tobacco crop, 3.57 more than in the previous season.

    “We are emerging from two very profitable harvests for many tobacco growers, leading to high profitability,” said Afubra President Marcílio Drescher. “As a result, more land is being dedicated to tobacco cultivation, with families returning to this crop. However, these developments are concerning. An increase in cultivated area during a period of stable weather could lead to higher production levels, which may negatively impact producers’ income.”

    In terms of production volume, the initial estimate indicates a boost of 37.08 percent, leading to a total production of 696,435 tons in southern Brazil. This includes 630,539 tons of Virginia tobacco (36.52 percent), 54,624 tons of Burley tobacco (44.07 percent), and 11,272 tons of Common tobacco (36.45 percent).

    Representatives from grower organizations and tobacco companies are currently calculating the production costs for the 2024/2025 harvest. Price negotiations are expected to commence once this assessment is completed.

  • Wild Bill’s Tobacco Buys 34 Cheap Tobacco Shops

    Wild Bill’s Tobacco Buys 34 Cheap Tobacco Shops

    Credit: Wild Bill’s Tobacco

    Wild Bill’s Tobacco has acquired all 34 locations of Cheap Tobacco, including 33 in Central and Eastern Ohio and one in West Virginia, according to a press release from Wild Bill’s Tobacco. The deal was finalized in early November, allowing Cheap Tobacco’s Founder and CEO, Dennis Harper, to retire after “celebrating his 30th year with the company.”

    Harper stated, “We’re confident that Wild Bill’s Tobacco will continue to provide amazing products and service you’ve come to expect while adding even more options to enjoy. We wouldn’t have passed the torch to anyone else but the Wild Bill’s family. Their reputation as a leader in our industry can’t be understated. We are proud to have served you over the years and know you will enjoy the added benefits of this transition.”

    Prior to this deal, Wild Bills’s Tobacco had over 200 stores in Michigan, Indiana and Ohio and celebrated its 30th anniversary this year, according to the release. Wild Bill’s said it is “thrilled” to add its first store in West Virginia with this acquisition. Wild Bill’s said it is the second largest tobacco retailer in the United States and continues to grow its brand rapidly as the premier tobacco retailer in the world.

    “This acquisition allows us to serve a broader customer base and be a part of new communities across the Midwest,” said Jon Welzel, chief marketing officer at Wild Bill’s Tobacco. “Guests will still experience the competitive pricing that became synonymous with Cheap Tobacco, but the store design that is brought to life and streamlined for customer needs, selection, and speed at checkout, as well as the expanded product offerings and premium customer experiences, will create a unique experience for these new members of our family.”

    The retailer plans to renovate and provide a facelift to all 34 Cheap Tobacco stores within six to nine months. Walk-in humidors will be added to each location, featuring cigars from around the world.

    Through this acquisition, Wild Bill’s Tobacco “has retained all Cheap Tobacco store-level employees, from district managers down, and plans to offer additional benefits for Cheap Tobacco staff members.”

  • The Paradox of Publicity

    The Paradox of Publicity

    While commercial promotions have been severely restricted, media stories, however negative, are keeping tobacco in the picture.

    By George Gay

    The following is a transcription of a conversation between Ian Wright and Irene Demur recently overheard at an international tobacco conference.

    Wright: Tobacco advertising and promotions are banned in the U.K., right?

    Demur: Wrong.

    Wright: OK, if you want to be pedantic, there are a few obscure exemptions to the ban, but, taking a specific case, it is not possible to promote cigarettes in a newspaper, right?

    Demur: Wrong.

    Wright: You’ve lost me.

    Demur: Well, it’s just a matter of changing circumstances—as in when, after tobacco adverts were banned, the emphasis was switched to promotions, and when promotions were banned, the emphasis was switched to sponsorships ….

    Wright: You are correct, of course, but in the end, the tobacco industry ran out of road, so my example of there being no way that cigarettes could be promoted in a newspaper today is correct, right?

    Demur: Wrong.

    Wright: Are you being difficult?

    Demur: Certainly not! You should have been more precise in stating your specific example by asking, “It is not possible for those with a pecuniary interest in selling tobacco to promote cigarettes in a newspaper, right?” Then I would have agreed.

    Wright: You seem to be suggesting that others, without such a pecuniary interest, might promote cigarettes in newspapers, but that seems absurd.

    Demur: Right. But it happens, and even those who vigorously oppose cigarettes and smoking sometimes play a part by de facto giving legitimacy to such promotions.

    Wright: But why?

    Demur: I’m afraid that is one question I cannot answer. Perhaps you should ask those involved.

    In August, The Guardian ran a story titled “Totally lit: It’s suddenly fashionable to be seen with a cigarette, but experts fear for young.” The story gives the writer’s view of how risky cigarette smoking is but quickly moves on to say that recently in the U.K., some celebrities have been seen smoking or indulging in, horror of horrors, that most dangerous of activities, carrying cartons of cigarettes—presumably adding hernias to the list of risk factors.

    A rather puny attempt is made to rationalize these actions, and then, with input from anti-tobacco professionals, we are told that while in the 1950s and 1960s smoking was seen to embody coolness and glamour, since then, overall smoking rates have been declining, with, from 2021, higher rates of decline among younger adults than among older people. The story also says that surveys by Action on Smoking and Health (ASH) have found that the younger you are, the less likely you are to be aware of the full health risks of smoking, though no attempt is made to interpret why this seems to translate into higher rates of smoking decline among the young.

    In any case, in the 1990s, the story goes on, smoking rates stopped falling because cigarette marketing was rife and smoking once again had “cultural cachet.” Hazel Cheeseman of ASH (her title wasn’t given, but I believe she was at that time the deputy chief executive and chief executive designate) was quoted as saying that she hoped there wouldn’t be a repeat of what happened in respect of smoking during the 1990s. However, the worry was that despite a tobacco advertising ban having been in force for more than 20 years, the tobacco industry had lots of ways of projecting its image, including through social media.

    Let’s draw breath here and ask why The Guardian or the anti-tobacco professionals it quotes might believe the tobacco industry would spend its resources “projecting its image” when The Guardian is willing to project that image free of charge or project at least what the newspaper sees as the industry’s image but which image large parts of the industry, now busying themselves with lower-risk products, would no longer recognize.

    The story, taking up the equivalent of a full page, spread over two pages, six and seven, includes a portrait picture, 19 cm x 11 cm, of a cool-and-glamorous-looking female model holding a lit cigarette to her mouth. There is another picture, 10 cm x 8 cm, showing a female model wearing shorts decorated with illustrations of red lips holding cigarettes (no, I don’t know either) and two pictures, each 6 cm x 5 cm, showing—inexplicably, given the thrust of the story—a female model smoking in 2002, though possibly not while on a modeling assignment, and Anne Bancroft smoking while playing Mrs. Robinson (the baddy—geddit?) in the film The Graduate, which was made in 1967.

    This story was de facto cigarette promotion, aimed almost exclusively at women, dressed up as a warning about smoking. Take another look at the story’s heading. It’s suddenly fashionable to be seen with a cigarette (read: a few people who we didn’t know smoked enjoy the occasional cigarette, and we thought we could blow this up into a tabloid story), but experts fear for the young (read: but we need to cover our backs in case the story is seen as promoting cigarettes, so we’ve convinced some anti-tobacco professionals to take part).

    This raises the question as to why anti-tobacco professionals allow themselves to be suckered into trying to give legitimacy to such stories. There is of course the possibility that these professionals need to keep smoking alive so they don’t find themselves out of work just short of pensionable age, a view that is supported by the fact that many of these people also oppose vaping in a backhanded way.

    But while I regard myself as being cynical to the point of nihilism, I don’t buy such an argument, which leaves me with the above question hanging in the air. Why, for instance, would Cheeseman be happy to be quoted in a story with the sort of imagery described above as saying: “[w]e know smoking-related imagery can encourage people to try smoking. It is therefore plausible that these depictions of smoking might influence some young people to try a cigarette.” In fairness to Cheeseman, I should point out that when she refers to “these depictions of smoking,” she is probably referring to the story’s rather vague reference to social media use among young people, though the reference doesn’t specify smoking imagery nor depictions. However, looking at the story, it is the smoking imagery of the story’s pictures that stand out, and you cannot help but wonder whether Cheeseman and the other no-doubt well-meaning anti-tobacco professionals mentioned in the piece were happy to be associated with it.

    My advice to them would be to refrain from panic. No matter the situation, it is always worthwhile giving yourself 20 seconds to think, and 20 seconds of thought is enough to tell you that the whims of celebrities are here today and gone tomorrow. Mostly, and not unreasonably given the way they make their livings, what they do is aimed at attracting publicity, which they have managed admirably in this case, partly because of the anti-tobacco professionals whose comments have allowed the story to run. If the anti-tobacco professionals have more than 20 seconds, they might like to research the number of times that celebrities have taken to fine cigars without causing any long-term increase in consumption of these products by either themselves or others.

    I think that one minor reason why smoking imagery was so prominent in the story was because it was used to brighten up what was a double-page spread in which the smoking piece was squashed between two ill-health stories: “Majority of most popular takeaway dishes rated as unhealthy, study shows,” which sported only modest pictures of a pizza and a burger, and “Shortage of medicine for alcoholics ‘scandalous,’ says doctor,” which had no illustrations.

    The Guardian has been banging the drum about unhealthy food for some time, and on Aug. 28 last year, it led with the story, “Ultra-processed foods causing a tidal wave of harm,” say experts. An interesting aspect of that story was a quote from one expert that said, “[t]here is now significant evidence that these products inflame the gut, disrupt appetite regulation, alter hormone levels and cause myriad other effects which likely increase the risk of cardiovascular and other diseases much in the same way that smoking does.”

    One question this raises concerns the cause of death when somebody who smoked tobacco and ate ultra-processed food (UPF) dies of one of these diseases. Was the death caused by eating UPF, cigarette smoking or a combination of both and, perhaps, other factors? I assume that it is impossible to know, but I also assume the death would nevertheless be put down to smoking because, I believe, the death of a smoker from a “smoking-related” disease is automatically put down to smoking, no matter what other risky activities the smoker got up to during her life.

    And you can also assume that this means that deaths from smoking have been and are exaggerated whereas deaths from UPF consumption, alcohol consumption, pollution, etc., have been underestimated. But things won’t change, because preventative medicine runs on the parallel rails of hypocrisy and inertia.

  • Strong Action Needed

    Strong Action Needed

    Billy Gifford | Photo: Altria Group

    Altria calls for a reset of the regulatory system in a way that supports the needs of adult smokers, enforces the rules for all and prevents underage use.

    By Stefanie Rossel

    With a new program, U.S. tobacco manufacturer Altria is seeking to enhance its transition toward a smoke-free future in its domestic market: During its third quarter results in late October, the company announced “Optimize and Accelerate,” a multi-phase initiative intended to centralize, streamline and standardize the organization’s processes with the use of artificial intelligence and automation.

    Anticipated to be substantially complete in 12 months to 18 months, the plan is expected to deliver at least $600 million in cumulative cost savings over the next five years in its initial phase, which the company intends to invest in its businesses in support of its vision to move beyond smoking and its 2028 enterprise goals. As part of the initiative, Altria plans to establish an accelerated business solutions organization within Altria Client Services, which will be responsible for driving efficiency and process improvement across Altria companies in partnership with external service providers.

    Enhancing operating efficiency is vital in a nicotine market where transformation appears to be in full swing. In August this year, cigarette smoking in the U.S. was at its lowest point in 80 years with only 11 percent of adults having smoked a cigarette in the past week, according to Gallup’s annual consumption habits poll. A year-on-year decline of 10.6 percent for Altria’s total cigarette shipment volume and 9.4 percent for its flagship brand Marlboro in the first nine months of 2024 reflected this development. Due to its strong pricing power, though, revenue in Altria’s smokeable products segment declined only by about 3 percent during that period. With net revenues of $15.94 billion during the first nine months of 2024, compared to $16.48 billion during the same period last year, smokeable products remain by far the largest category in Altria’s portfolio.

    Making Progress

    As combustible products lose popularity in the U.S., the market for reduced-risk products continues to grow. At the end of the third quarter, Altria estimated the e-vapor category to include about 19 million adult vapers, up 2.5 million versus a year ago. Altria is well positioned for the category: Through its subsidiary Njoy, the company was the first and is still the only manufacturer to have received marketing granted orders (MGOs) for menthol-flavored vape products. In June, the U.S. Food and Drug Administration authorized two menthol-flavored pods for Njoy’s Ace closed e-cigarette device, which was authorized in April 2022, and two disposable e-cigarettes, Njoy Daily Menthol 4.5 percent and Njoy Daily Extra Menthol 2.4 percent, through its premarket tobacco product application (PMTA) pathway.

    Consequently, Njoy consumables shipment volume grew more than 15 percent to 10.4 million units in the third quarter. Consumables shipment volume for the first nine months was approximately 34 million units. Njoy device shipment volume for the quarter nearly tripled versus the prior year to 1.1 million units and was 3.9 million units for the first nine months.

    “We remain excited about Njoy and its potential as a competitive alternative with both smokers and vapers,” commented Altria’s CEO, Billy Gifford, during the third-quarter earnings report. “This year, Njoy has focused on enhancing trial generation, distribution, visibility at retail and connections with consumers. As a result of these efforts, we’ve seen encouraging repeat purchase data, growing customer loyalty and strong share momentum.

    In the third quarter, Njoy pulled back on certain retail promotional offers to better understand consumer retention and underlying demand. Initial retention results were promising. In the retail accounts where Njoy conducted tests, the promotion drove increased volume by approximately 85 percent compared to the pre-promotion period, and Njoy retained more than half of that volume growth following the promotional period. We believe these results reflect consumer interest in Njoy and their satisfaction after trying the brand, and Njoy plans to continue testing trial-focused investments with a view toward long-term profitability.”

    According to the company, Njoy’s third-quarter retail share of consumables was 6.2 share points, up 2.8 share points versus the year’s period and 0.8 share points sequentially.

    Despite these promising figures, competing in the U.S. vape market remains a challenge for authorized brands. The country has a massive and growing illegal vape market, which reportedly accounts for 60 percent of total sales. “While Njoy’s results are encouraging in the context of the broader e-vapor category, category growth continues to be driven by the proliferation of illicit disposable products,” Gifford specified. “Over the last year, the number of vapers using illicit product grew by approximately 45 percent to 12.4 million vapers while pod vapers declined by more than 20 percent to 2.7 million. While we believe the growth in e-vapor is a proof of concept for tobacco harm reduction, there are too few FDA-authorized products in the market, and FDA enforcement is inadequate.”

    Fighting Illegal Products

    The FDA’s market authorization process is notoriously slow—of the 26.6 million applications the agency received between October 2019 and March 2024, the agency agreed to review roughly 1.2 million, of which it granted MGOs for 30 products, which corresponds to 0.001 percent of new product applications. Until last year, the FDA’s primary enforcement tool was a warning letter to manufacturers, importers, distributors and retailers. Recently, there has been more activity: In June, the Department of Justice announced the creation of a federal multiagency task force with the FDA and other agencies to combat the illicit distribution and sale of e-cigarettes.

    Gifford sees some recent positive developments. “This summer, the FDA, jointly with U.S. Customs and Border Protection, seized more than 50,000 unauthorized vapor products from China at the Chicago port of entry. In August, the FDA issued a proposed rule requiring all imported vapor products to include a PMTA submission tracking number; closing this loophole is something for which we have long advocated. We’ve provided our comments in support of this rule and encouraged additional actions, such as extending it to cover nicotine pouch products.”

    In October, the federal task force announced a joint seizure of unauthorized e-vapor products valued at $76 million. “A strong course correction is needed to protect the harm reduction opportunity for the 30 million adult smokers in the U.S., and moving forward, we hope to see more meaningful enforcement action.”

    In addition, 12 U.S. states have enacted vape product registry bills to compensate for meek federal enforcement, with Louisiana being one of the first. “We support legislation in the states to require manufacturers to certify that they are in compliance with federal law to be allowed to sell in that state,” an Altria spokesperson commented to Tobacco Reporter. “While still early, we believe Louisiana’s enforcement efforts illustrate the effectiveness of a state directory in reducing illicit e-vapor products in the marketplace.” For example, in Louisiana, manufacturers supply documents, such as the cover page of a PMTA with evidence of support.

    At its 2024 CAGNY conference, the company presented data showing that the shipment volume for illegal disposable products in the state declined to almost zero within six months of implementation of the registry bill. It should be noted, though, that in Louisiana, the registry bill tracks wholesale and retail but not vape stores, e-commerce or smaller independent “bodegas,” the channels where most illicit trade is suspected to take place.

    Increase in Illicit Pouches

    With the FDA’s slow progress in authorizing novel tobacco products, Altria is worried that the modern oral nicotine products category in the U.S., in which its brand On! held an 8.9 percent market share in the third quarter of 2024, could suffer the same fate as the vape segment.

    In the company’s view, the illicit market for nicotine pouches is echoing the beginning of the illicit e-vapor market several years ago. “Unfortunately, and similar to e-vapor, we’ve identified more than 1,000 illicit nicotine pouch SKUs at retail and online,” Gifford said during the most recent earnings report. “Many of these are synthetic nicotine pouch products, which are an emerging issue. According to federal law, it is illegal to sell or distribute a synthetic nicotine product in the United States that has not received a market granted order from the FDA by July 2022. To date, the FDA has not authorized any synthetic nicotine pouch products. Despite the clarity of the statute, the FDA’s refusal to enforce the law is causing confusion among legitimate manufacturers, and we call on the agency to clarify its enforcement posture on synthetic products.”