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  • Derailing Harm Reduction?

    Derailing Harm Reduction?

    Image: ArieStudio

    The unhelpful contribution of illicit vaping products

    By Pieter Vorster and Sudhanshu Patwardhan

    The rise of vaping as an alternative to smoking has brought the promise of significant net public health benefits but equally meaningful regulatory challenges. While legitimate vaping products can serve as a powerful harm reduction tool for adult smokers, the proliferation of illicit vaping products has introduced a plethora of problems that require careful consideration.

    This article will address the various impacts of illicit vaping products—ranging from health risks and tax revenue loss to underage use, environmental concerns and the potential for increased criminal activity. In countries where vaping products are banned, the illicit vape market has not only taken over but is also leading to a vicious cycle of vilifying an entire category of products that potentially offer a much less risky alternative to combustible tobacco users. The accompanying stigmatization and criminalization of smokers who seek safer alternatives is an affront to human rights. We will also explore the key drivers of the illicit market and potential solutions to mitigate these.

    Health Risks Associated With Illicit Vaping Products

    A key concern with illicit vaping products is the absence of regulatory oversight. Legitimate manufacturers must adhere to safety standards that ensure their products do not pose unnecessary risks to consumers. These regulations cover product composition, labeling and the disclosure of ingredients. In contrast, illicit products bypass these standards, introducing the potential for harmful substances in e-liquids, unsafe nicotine levels or faulty hardware, such as poorly constructed batteries.

    Potential health risks include:

    • Contaminated ingredients: Illicit vaping liquids may contain dangerous additives such as harmful chemicals or poorly sourced nicotine, increasing the risk of respiratory issues and other health problems.
    • Unregulated nicotine levels: Illicit products can contain nicotine concentrations far beyond legal limits, exacerbating addiction or leading to nicotine poisoning.
    • Defective devices: Poorly made or counterfeit devices may lead to malfunctions, such as battery explosions or inadequate heating mechanisms, posing physical dangers to users.

    Loss of Tax Revenue and Market Disruption

    Illicit vaping products not only pose health risks but have economic consequences as well. In jurisdictions where vaping products are subject to excise taxes or sales tax, such as in many European countries and parts of the United States, the sale of untaxed products represents a significant revenue loss for governments. These funds are often intended to support public health programs, anti-smoking initiatives or infrastructure investments. The absence of taxes on illicit products undermines these efforts and contributes to a broader sense of inequity within the market.

    Moreover, the price difference between legal and illicit products distorts the market. Legitimate operators who comply with taxation and regulatory requirements face unfair competition from cheaper illicit products. The lower price points of these illegal products not only make them more accessible but also undermine the efforts of legal businesses to compete, leading to the potential loss of jobs and investment in the legitimate sector.

    Underage Use and Accessibility

    One of the most troubling aspects of illicit vaping products is their role in enabling underage access and use. In most countries, the sale of vaping products to minors is strictly prohibited, and legitimate sellers are typically required to adhere to age verification processes. However, illicit products bypass these restrictions. Without regulated sales channels, these products can be more easily acquired by underage consumers, contributing to a rise in youth vaping.

    Factors contributing to underage use include:

    • Lower prices: The affordability of illicit products makes them more accessible to those who are underage and often more price-sensitive.
    • Unregulated sales channels: Without the oversight that governs legitimate sales, underage individuals can purchase these products through informal networks or online marketplaces with little to no age verification.

    The availability of illicit products for underage users creates a broader public health challenge. While the long-term effects of nicotine on developing brains remain debated, concerns about early nicotine exposure, potential addiction and its impact on cognitive function continue to drive public health discourse and have been key to the Food and Drug Administration’s highly restrictive premarket tobacco product application process in the United States.

    Elsewhere, the rise in underage vaping, fueled by the availability of illicit products, has prompted calls for stricter regulation of the legitimate market. In the U.K., for example, concerns about underage use have led to proposals for more stringent controls on all vaping products, which could inadvertently restrict access for adult smokers who use vaping as a tool for tobacco harm reduction.

    Environmental Concerns

    The environmental impact of illicit vaping products is another significant issue. Many of these products, particularly disposable vapes, are not designed with recyclability in mind. Since illicit manufacturers often prioritize cost savings over environmental considerations, their products are less likely to comply with proper waste disposal or recycling guidelines.

    Environmental risks include:

    • Disposable vapes: Many illicit, disposable vapes are discarded improperly, contributing to plastic waste and electronic waste.
    • Recycling challenges: Legal products are often part of recycling schemes or are designed with recoverable materials, but illicit products do not follow these environmental protocols.

    A lack of proper disposal mechanisms for illicit products not only exacerbates broader environmental challenges such as electronic waste and plastic pollution but also fuels calls for stricter regulation, or bans, of legal products.

    Criminal Violence and the Illicit Market

    In addition to the public health and economic consequences, the illicit vaping market has the potential to fuel criminal activity, particularly organized crime. The sale of untaxed and unregulated products can provide a significant revenue stream for criminal organizations, which, in turn, may lead to increased violence. Australia, which has imposed a de facto ban on vapes through its prescription model, has seen rising concerns about criminal violence linked to the illegal trade in vaping products. As the illicit market grows, so does the likelihood of violence between rival groups vying for control of the black market.

    Illicit Vaping—A Bipolar Problem?

    Growth in the illicit vaping market is being driven by a combination of factors. Peculiarly, the two bookends of the regulatory spectrum pose the highest risk: overly restrictive or prohibitive at one end and notification with poor enforcement at the other. It is easy to understand why prohibition or overly restrictive frameworks can be conducive for illicit products in the market—decades of prohibition experiments on alcohol, drugs and even chewing gums have shown how that can skew market economics in favor of bad actors.

    Regulations that are perceived as overly restrictive can push consumers and sellers toward the black market. In countries like Australia and the United States, where vaping regulations are particularly stringent, the high cost of compliance, limited access to legal products and high taxes can drive demand for illicit alternatives. These overly restrictive policies, while intended to protect public health, may inadvertently encourage consumers to seek out cheaper, unregulated options that bypass legal requirements.

    In the U.S., where only a limited number of products have been granted marketing authorization by the FDA (none of which are disposable), disposable vapes are estimated to account for close to 60 percent of national unit sales in tracked sales channels.

    Australia is another widely reported example of rampant sales of illicit vapes in response to a draconian regulatory framework, and the list does not end there. India and Thailand, among others where sales of vaping products are banned, have seen significant black markets emerge.

    At the other end are countries where there is no requirement for authorization per se and a basic notification process is considered adequate. Indeed, it may seem counterintuitive that harm reduction goals could be helped by the introduction of barriers to product launches and rapid innovation. However, an overly simplified notification process has the potential to put excessive responsibility on enforcement agencies in the marketplace. For example, in jurisdictions where a vaping product/SKU can be launched following a simple notification process of contents and related risk assessments, the potential exists for unscrupulous manufacturers and distributors to introduce products containing illegal additives or higher-than-allowed nicotine levels in a seemingly legal way. The EU Tobacco Products Directive and its transposition into local regulations in EU and ex-EU countries such as the U.K. creates such a situation. In the U.K., the U.K. Vaping Industry Association (UKVIA) believes that 40 percent to 60 percent of disposable vapes sold in the U.K. are likely illicit.

    A lack of adequate resources for law enforcement agencies also contributes to the persistence of the illicit market. Without sufficient funding and personnel to investigate and crack down on illegal operators, the illicit trade in vaping products continues to thrive. The combination of an unregulated supply chain and weak enforcement allows illicit products to enter the market relatively unchecked.

    Potential Solutions

    Addressing the issue of illicit vaping products requires a multifaceted approach involving both regulatory reform and enhanced enforcement mechanisms. Some potential solutions include regulatory reform, strengthened law enforcement and public awareness campaigns.

    Regulatory Reform

    Governments must strike a balance between protecting public health and ensuring that regulations do not drive consumers to the black market. By adopting a regulatory framework that allows adult consumers to access legal vaping products while maintaining appropriate safety and quality standards, policymakers can reduce the demand for illicit alternatives. This could involve:

    • Harmonizing regulations: standardizing regulations across jurisdictions to prevent regulatory discrepancies that fuel the illicit trade.
    • Moderate taxation: implementing reasonable excise taxes that do not create a significant price disparity between legal and illicit products.
    • Allowing legal access to adult smokers: Providing adult smokers with accessible, affordable and satisfactory regulated alternatives will discourage the use of unregulated products.

    Strengthening Law Enforcement

    To effectively combat the illicit market, governments must provide law enforcement agencies with the necessary resources to investigate and shut down illegal operators. This could include:

    • Increased funding for investigations: allocating more resources to law enforcement agencies to crack down on illicit vaping supply chains.
    • International cooperation: As the illicit trade often involves cross-border networks, international cooperation between customs and law enforcement agencies can play a vital role in curbing the flow of illegal products.
    • Licensing and tougher penalties: In the U.K., the UKVIA has proposed a mandatory licensing framework for vape retailers and distributors, with fines of up to £10,000 ($13,038) for retailers and £100,000 for distributors. The scheme aims to generate additional funding for enforcement, estimated at £50 million annually.

    Public Awareness Campaigns

    Educating the public about the risks associated with illicit vaping products can help reduce demand. Public awareness campaigns can inform consumers about the health risks, potential legal consequences and environmental harms linked to using unregulated products.

    By addressing the root causes of the illicit vaping market and implementing effective solutions, governments can safeguard public health, protect revenue streams and ensure that vaping products remain accessible to adult consumers seeking harm reduction.

    Pieter Vorster is a harm reduction expert with a long career as a financial analyst reporting on tobacco industry stocks.
    Sudhanshu Patwardhan is a medical doctor, nicotine expert and health tech entrepreneur from India, based in the U.K. He works on projects around the world to reduce harm from tobacco, especially among the most disadvantaged tobacco user populations.
  • An Outbreak of Sanity

    An Outbreak of Sanity

    Photos: Stuart Mitchell

    Tobacco Reporter joins Forest on the River Thames for its annual Smoke on the Water reception.

    By George Gay

    It seems there has been an outbreak of sanity at the heart of government in the U.K. In an Oct. 25 story in The Guardian, a Downing Street official was quoted as describing moves to ban tobacco smoking in certain outdoor places as comprising an “unserious policy.” “Nobody really believes smoking outdoors is a major health problem [for nonsmokers],” the official added.

    The story was one of several media reports claiming the ban on smoking in certain outdoor places was being dropped from the government’s upcoming Tobacco and Vapes Bill (TVB). But while the change of policy, if that is what it is, is to be welcomed, it raises a couple of questions, one of which asks why the government was faffing about with an unserious policy when there are many serious matters that need fixing.

    However, more importantly, in my view, is the question of trust or lack of it that arises from this volte face. I take it that if the government had not come under pressure from a hospitality sector concerned about the possible closures of some of its venues should the outdoor smoking ban be imposed, it would have gone ahead with the ban, justifying it on the grounds of protecting nonsmokers, a justification that “nobody” would have believed was valid. Indeed, it is difficult to imagine how, since it was unserious, it would have been anything but a vindictive policy dumped on a largely unorganized but significantly sized minority with little means of defense.

    And from here it is but a small step to questioning what of the other information we are fed about tobacco smoking is unserious—unbelievable. It seems obvious, for instance, that the level of harm caused by tobacco consumption is exaggerated. Deaths from other causes are put down to tobacco smoking, all in the best interests of smokers, of course.

    The formulation of unserious tobacco policies is based, I imagine, on the idea that smokers are often from impoverished backgrounds—so not well educated and therefore dumb enough to fall for such chicanery. But this is a dumb idea apparently subscribed to by people who have the power to dictate policy but who engage only with a thin slice of the society on which their policies are imposed. In October, I had an opportunity to speak for a while to a smoker who had thought long and hard about her habit and who was aware of all the misinformation and hypocrisy that defines much of the debate that surrounds tobacco. Paula (not her real name) had a riposte for all the normal accusations and slurs aimed at smokers and smoking, but what impressed me most was her reaction to being told from above that she should stop smoking. Before people told her to stop smoking, she said, they should come and ask her why she smoked.

    So why did she smoke? It was because she had issues in her life and she found that smoking was the best way to relieve the stress they caused. I got the impression that she thought the government’s best tactic for getting her to stop smoking was to act in respect of the causes of the issues she had. This is unlikely to happen, however, because it is cheap to lecture people and bring in some draconian, perhaps unserious anti-tobacco legislation but more expensive in respect of both effort and money to address some of the issues that cause people to seek refuge in smoking.

    I spoke with Paula on the smoking deck of the Elizabethan, a two-deck Mississippi-style paddle steamer that the Freedom Organization for the Right to Enjoy Smoking Tobacco (Forest) occupied for the evening of Oct. 22 as the venue for its Smoke on the Water reception. Such events, which take place as the Elizabethan paddles gently down and up the River Thames, have traditionally been held in July, but this year’s October schedule was timely because it provided an opportunity to address issues concerning the TVB.

    Simon Clark, the director of Forest, in a brief address to the 180 guests aboard the Elizabethan, said he had two main concerns with the TVB. The first was the generational smoking ban that would make it illegal for those born on or after Jan. 1, 2009, to be sold tobacco products. This was a policy first introduced by the previous Conservative government but dropped when the then prime minister called a general election earlier this year and has since been revived by the Labour government that replaced the Conservatives. Clark said he found it weird that the new government should reintroduce a Conservative initiative and bemoaned the fact that the policy, if enacted, would mean future generations of adults would be treated like children.

    The other main concern was the Labour initiative that would mean smoking’s being banned outside pubs and other public venues, but this seems as if it is dead in the water, an outcome for which Clark claimed some well-deserved credit in a statement issued after the reception. “As for the timing of the government’s alleged U-turn, can it be coincidence that it was reported just 48 hours after our Smoke on the Water boat party …? We’re (half) joking, but there’s no doubt that events like this (promoted throughout the Westminster village) have their place and, occasionally, some influence.”

    This was a good point to make and a cheery one for those of us who tend to think that it is difficult if not impossible to give smokers a voice. The Smoke on the Water guests included members of Parliament, parliamentary aides, think tank staffers, broadcasters and supporters of Forest. The largest group were the parliamentary aides, staffers working for Members of Parliament (MPs) across most of the political spectrum: the Conservative, Labour, Liberal Democrat, and Reform U.K. parties.

    Looked at from this point of view, it is difficult to overestimate the importance of Forest and the way it operates under Clark. “The aim of the event was primarily to engage with the new intake of parliamentary staffers because, following Labour’s landslide election victory and the defenestration of so many Conservative MPs who lost their seats, we had lost a large number of contacts from the previous Parliament,” Clark told me after the event but before it was reported that the government seemed to be on the point of dropping the outdoor smoking ban.

    “The need to engage with MPs and their staff was particularly urgent given the expectation that the new Labour government will reintroduce the previous government’s Tobacco and Vapes Bill before Christmas, and it’s our hope that ministers will, at the very least, reconsider the proposal to extend the smoking ban to outdoor spaces, including beer gardens.”

    Otherwise, the aim of the event had been to highlight the impact of the proposed legislation on future generations of adults, and for this reason, Clark had assembled a panel of people in their 20s to briefly describe where they stood: Sam Bidwell, director of the Next Generation Centre at the Adam Smith Institute; Josh Cheshire, national coordinator for Students for Liberty in the U.K.; Jonathan Heywood, a leading young Labour activist; and Reem Ibrahim, acting director of communications at the Institute of Economic Affairs.

    I think it would be wrong to give the impression that these young people were representative of young people in general, except in the sense that they were looking to have some fun. And those of them who were smokers weren’t representative of smokers, but they were all representative of those who, like Paula, cherish the right to make their own decisions, including decisions that might affect their health, wise or not in the eyes of others.

    One spoke with disdain of a 30-year to 40-year tradition that had imposed on the young “geriatric paternalism,” which, as somebody not far short of being an octogenarian, I can assure the young is what we geriatrics regard as fun. I know it’s sad, but there it is. And another pointed out that with the tide of public opinion going against individual freedoms and the possibility of still more restrictions on tobacco use, smoking was likely to become cool and to be seen as an act of resistance.

    But perhaps the most interesting comment came when Clark asked Ibrahim what she would have said to the secretary of state for health, Wes Streeting, had he been at the reception, which elicited the suggestion that he should have a beer and some fun.

    In fact, I don’t think he needs any such encouragement. In a 2023 interview in The Guardian, Streeting, who was then shadow health secretary, was quoted as saying, “If I’m going out, I’m a binge drinker—terrible messaging for the shadow health secretary!”

    Not wishing to sound even more like a geriatric paternalist, I nevertheless wonder whether that statement goes some way toward explaining why what is being proposed is a generational ban on tobacco smoking and not a generational ban on smoking and drinking alcohol. After all, it is not immediately obvious why drinking should not be targeted. According to the Alcohol Change U.K. website, alcohol consumption is a causal factor in more than 60 medical conditions, including mouth, throat, stomach, liver and breast cancers, high blood pressure, cirrhosis of the liver and depression. Alcohol misuse is the biggest risk factor for death, ill health and disability among 15-year-olds to 49-year-olds in the U.K.

    At the start of this piece, I suggested there might have been an outbreak of sanity at the heart of government in the U.K. Now, it seems I have to qualify that suggestion because the budget, delivered on Oct. 30, indicated there had also been an outbreak of cognitive dissonance, at least in respect of the budget’s treatment of tobacco, nicotine and alcohol. Although the government’s aim is purportedly to improve public health and take pressure off the National Health Service, the chancellor, Rachel Reeves, treated alcohol with kid gloves. But she announced that vapes, the most successful quit-smoking aid, would be the subject of a significant levy. And while the government claims to be helping the less well-off, it is increasing by eye-watering amounts the taxes on tobacco, one of the few pleasures on offer to that demographic.

    This, in part, is what Clark had to say about the budget announcements: “Instead of punishing the low paid, the government should focus on improving the environmental conditions that drive many people to smoke in the first place.” I think that Paula would endorse that.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • Study: Online Retailers Fail to Comply With Rules

    Study: Online Retailers Fail to Comply With Rules

    Eric Leas (Photo: University of California San Diego)

     Online e-cigarette retailers are not consistently adhering to laws aimed at preventing the sale of vaping products to minors, including regulations on age verification, shipping methods and flavor restrictions, report researchers at the Herbert Wertheim School of Public Health and Human Longevity Science at University of California San Diego.

    In a study published online on Nov. 11, 2024, in JAMA, researchers asked 16 people to purchase flavored vape products online and have them delivered to their homes in the County of San Diego, then analyzed the results of these attempted purchases. Of 156 attempted transactions 73 percent were processed and 67 percent were delivered.

    As of March 21, 2024, sale restrictions on flavored tobacco have been enacted in eight U.S. states and 392 cities or counties, but some of these do not cover e-commerce. For example, the 2022 California Senate Bill (SB) 793 prohibited the sale of flavored tobacco products but left e-commerce restrictions ambiguous.

    Due to the ambiguity in California law, the researchers aimed to test differences in compliance with local tobacco e-commerce ordinances. Eight buyers were from the City of San Diego, where an ordinance restricts the sale of flavored tobacco products, including online sales. The other eight were from other County of San Diego communities, which do not have the same restrictions. Delivery did not differ significantly between buyers in these two jurisdictions.

    In addition to violations of flavor restrictions, the online purchases violated the Preventing Online Sales of E-Cigarettes to Children Act, a federal law prohibiting the use of the United States Postal Service (USPS) to ship vaping products and requires both age verification and scanning identifications upon delivery.

    “There are longstanding surveillance systems in place that help implement laws at brick-and-mortar stores, but we do not have a system in place for online retailers,” said Eric Leas, an assistant professor at the Herbert Wertheim School of Public Health and Human Longevity Science, in a statement. “The results of this study highlight the need for greater oversight and enforcement of online tobacco retailers.”

    Key findings include:

    • 1 percent of buyers had their IDs scanned
    • 81 percent of deliveries were made via the USPS
    • 9 percent arrived via couriers with policies restricting shipping tobacco, including 4 percent via UPS, 3 percent via FedEx 3.0 percent and 1.8 percent via DHL
    • 78 percent of buyers reported no interaction with delivery personnel
    • 15 percent of buyers spoke with delivery personnel but did not have their IDs checked
    • 6 percent of buyers had their IDs checked but not scanned

    “Online sales of e-cigarettes are the largest and fastest growing sector of the tobacco. We need to evaluate tobacco retail policies and ensure they cover e-commerce and monitor the market to improve implementation,” said Leas, who is also director of the Tobacco E-commerce Lab.

    In a 2023 study published in Tobacco Control, Leas reported that following the implementation of SB-793, online shopping queries were 194 percent higher than expected for cigarettes and 162 percent higher than expected for vape products.

    As a result, to strengthen state tobacco oversight programs, including online sales of flavored tobacco products, California lawmakers recently approved SB-1230, citing Leas’ Tobacco Control study. The law will go into effect on Jan. 1, 2025.

    “This research is piloting a system for monitoring online compliance that local health departments could mimic as a routine surveillance system to strengthen the implementation of public health laws designed to reduce the sale of tobacco products to minors,” said Leas.

     

  • Choppy Waters

    Choppy Waters

    New taxes and regulations are reshaping the tobacco markets in the Baltic countries.

    By Vladislav Vorotnikov

    Following the Europe-wide trend, the Baltic countries are reshaping the tobacco market with new taxes and health regulations. These efforts promise dramatic changes to the industry, which is already experiencing shifts due to changes in consumer demand and demographic factors while dealing with the large-scale counterfeit problem.

    The Baltic region comprises three post-Soviet republics: Latvia, Lithuania and Estonia. Over the past decades, all three countries have been facing similar trends in tobacco consumption, including waning demand for cigarettes.

    “Within tobacco in the Baltic states, cigarettes are expected to continue struggling to maintain demand in 2024,” Bogdanas Poletajevas, senior analyst at Euromonitor International, told Tobacco Reporter.

    In 2023, around 1.9 billion cigarettes were consumed in Latvia, 2.47 billion in Lithuania and 1.29 billion in Estonia, KMPG said in a recent report.

    In recent years, cigarette consumption followed a steady downward trend, the company noted. For example, in 2020, cigarette consumption in Latvia stood at 2.1 billion, in Lithuania at 2.88 billion and in Estonia at around 1.5 billion.

    A steady depopulation process is one of the factors driving down cigarette consumption across the region. As of 2023, Latvia’s population was estimated at 1.8 million, Lithuania’s at 2.6 million and Estonia’s at 1.2 million. Compared with 2015, when the region boasted 6.2 million citizens, the number of residents dropped by nearly 20 percent.

    Several factors are in play, including weak demography and continuing emigration as a large number of young people seek job opportunities in Western European countries.

    In addition, the Baltic region is influenced by a general trend of cigarettes gradually losing their popularity in the developed countries.

    “Smoking prevalence in terms of cigarettes continues a worldwide trend of gradual decrease,” Poletajevas said. “This was underpinned by heightened health concerns as well as an increase in excise taxes and high inflationary pressure on energy and transportation costs, making cigarettes more expensive.”

    However, in the past few years, the cigarette market benefited from a surge in political tensions.

    In 2023, the share of smokers in Latvia slightly increased, LSM, a local news outlet, reported without providing concrete figures. To some extent, the tendency is attributed to rising stress and anxiety in the context of the Ukrainian conflict.

    “Increased stress levels can drive people to smoke. The geopolitical situation, problems at work, the political and economic situation in the country and possibly price increases [are among contributing factors]. During periods of increased stress, people start smoking to feel a sense of calm,” Agnese Ritene, president of the Association of Pharmacies of Latvia, told LSM.

    Indeed, opinion polls in the past couple of years indicate elevated anxiety levels among the citizens of Baltic countries, which border Russia and Belarus in the east.

    The rise in the number of smokers against this background is tangible. For example, in the age category between 15 and 24, the number of smokers spiked by 18 percent in the past two years, according to the Latvian Center for Disease Control and Prevention. 

    Transition in Progress

    However, market players also indicate that though the number of smokers in the region is on the rise, cigarettes are gradually losing ground to novel tobacco products.

    Poletajevas estimated that regular cigarettes continued to lose retail volume share to perceived less harmful alternatives like e-cigarettes and heated-tobacco products.

    “This trend raises questions about whether the overall popularity of smoking is genuinely decreasing or if consumers are merely transitioning to different forms of tobacco consumption,” Poletajevas said.

    “We have noticed that people are smoking classic cigarettes less. The demand for alternatives to cigarettes, such as electronic cigarettes, heated tobacco and nicotine pouches, has increased,” Madara Apsalone, a spokesperson for Philip Morris Latvia, observed during a press conference in Riga.

    The number of e-cigarette smokers in Latvia jumped from 1 percent to 8 percent, Una Martinsone, a public health analyst with the Disease Control and Prevention Center, reported. The number of women who vape shot up from 1 percent in 2020 to nearly 13 percent in 2022, she added.

    Euromonitor International estimated that the Baltic region’s cigarette market is divided among three leading players: Philip Morris International, BAT and Japan Tobacco International.

    “While cumulatively they are losing volume in the cigarettes category, major investments are focused on alternative nicotine consumption categories like heated tobacco,” Poletajevas said.

    “The leading player in new categories remains Philip Morris as the pioneer; however, BAT has taken [a] more aggressive strategy pricing-wise, which helped to cannibalize [a] substantial part of the market. The latest entrant into the Baltic markets is JTI, albeit [the company] still holds a marginal share and will need time to consolidate,” Poletajevas said.

    On the European Frontline

    The Baltic region also suffers from an inflow of counterfeit cigarettes, primarily delivered by smugglers from Belarus.

    As estimated by KPMG, last year, 260 million cigarettes sold in Latvia were illegal compared to 430 million in Lithuania and 140 million in Estonia.

    Lithuania’s state budget lost nearly €75 million ($82.31 million) as a result of the illegal market, the analyst calculated. Nearly 89 percent of all counterfeit cigarettes to the country were delivered from Belarus.

    In Estonia, the budget losses were nearly €30 million, with 57 percent of the illicit volumes coming from Belarus, the KPMG office noted. Latvia, in turn, lost €43 million, with 61.5 percent of smuggling also coming from Belarus.

    According to PMI’s Apsalone, although the volume of cigarette smuggling in Latvia has decreased in recent years, it still significantly exceeds the EU average. “Smuggled cigarettes in Latvia are still mainly imported from Belarus, even though the border with it is tightly controlled after the start of Russia’s war against Ukraine,” Apsalone indicated.

    Occasional reports indicate that some cigarettes smuggled to the Baltic region from Belarus end up in neighboring EU states, including Poland and Germany.

    KPMG analysts indicated that the general economic situation is tightly linked to the public’s tolerance of smuggling. When the population becomes wealthier, people grow reluctant to buy cigarettes, understanding that they are counterfeit or smuggled.

    However, this trend goes in both directions; when the economic situation deteriorates, illegal traders take advantage of that situation, KPMG indicated, citing the turbulence of the past few years when the energy crisis and rapid inflation took a heavy toll on the Baltic citizens’ purchasing power.

    Legal Initiatives Under Scrutiny

    The shadow segment of the cigarette market is a multifactorial phenomenon that requires the authorities to pursue a well-thought-out excise policy.

    “The legislative direction across all the Baltic states remains united,” Poletajevas said, adding that excise tax increase remains the main method of deterring tobacco consumption.

    However, he noted that regulations on new categories lag behind those for traditional tobacco products, hence offering cheaper alternatives to traditional products.

    This is expected to change in the coming years as plans are set for a steady excise increase for heated-tobacco and vapor categories in the region. Poletajevas said that further talks are being held among lawmakers on disposable vapor products and their risks for youth consumption and sustainability concerns.

    “Although loopholes may exist initially, tighter regulations are expected, potentially impacting the flexibility enjoyed by major players,” Poletajevas stated.

    Latvia is at the forefront of fighting against tobacco consumption in the Baltic region.

    Under a bill recently passed by Latvian Saimas, young people under 20 will be prohibited from smoking, buying or selling tobacco products from Jan. 1, 2025. These restrictions also apply to tobacco substitute products, herbal smoking products, electronic smoking devices and refillable containers for them.

    Other countries in the region also mull various restrictions on tobacco consumption.

    In Lithuania, lawmakers are considering a full ban on e-cigarettes. As explained by Antanas Matulas, chairman of the Parliamentary Committee on Health, earlier in 2024, the authorities are discouraged by persisting fraud on the market. She explained that some tastes and flavors were banned in the country as a part of the anti-smoking campaign, but the companies engaged in this segment refuse to obey. They repacked the banned liquids, put new labels and brought them back on the market, Matulas said.

    However, Matulas admitted that there would not be easy answers.

    The idea of banning e-cigarettes faces firm opposition in Lithuanian society as analysts warn that the move would give a powerful impetus for growth to the illegal segment and push a part of consumers back toward conventional tobacco products.

  • A Breath of Fresh AIR

    A Breath of Fresh AIR

    OOKA is the first heat-not-burn hookah device on the market. | Images: AIR Global

    AIR Global focuses on innovating the shisha and inhalation sphere, catering to growing markets and evolving needs.

    By Marissa Dean

    Paul Dawson

    Much like most of the tobacco industry, the shisha and hookah markets have been around for a long time. Unlike much of the industry, however, these markets have seen comparatively little innovation over the years. Advanced Inhalation Rituals (AIR) Global joined the fray with the goal of “revolutionizing the shisha experience by combining ancient social rituals with cutting-edge technology,” as AIR’s chief product officer, Paul Dawson, said.

    Shisha smoking is risky due to the use of chemical-laden charcoal and combustion. When asked why the company chose inhalation as its focus, Dawson said that they “saw an opportunity to innovate in a space that hadn’t evolved much over the centuries. By focusing on inhalation, we can deliver products that not only provide a better user experience but also reduce health risks and the environmental impact. There is a challenge within this industry sector to harness technology for better experiences and reduce the risk of inhalation rituals.”

    The OOKA device uses pods that contain an intelligent microchip rather than using loose shisha, making the setup much more user-friendly and convenient.

    A New Shisha Experience

    “We’re committed to offering reduced-risk, cleaner and more sustainable alternatives to traditional shisha,” Dawson said. The company’s OOKA product is the perfect example of this. OOKA is AIR’s pod-based heat-not-burn hookah device that heats shisha molasses rather than using charcoal to burn shisha as in traditional hookah smoking. According to the company, OOKA emits on average 94 percent lower levels of harmful chemicals—laboratory aerosol tests showed that carbon monoxide emissions were below the laboratory detection limit of 0.000097 mg per milliliter.

    OOKA uses specially made pods, which contain an intelligent microchip that automatically programs the device to heat to a specific temperature profile that is monitored 25 times per second, creating a consistent experience for users and preventing combustion. Dawson noted that OOKA is a game-changer for the hookah and shisha market. “It’s the world’s first charcoal-free, pod-based shisha device, and by eliminating charcoal, OOKA not only reduces harmful by-products like carbon monoxide but also makes the entire experience more convenient,” he said. “There’s no ash or mess, and the setup time is drastically reduced. This has transformed how people experience shisha, especially outside of traditional lounge settings, allowing them to enjoy it easily at home or even on vacation.”

    Traditional hookah devices require the user to pack what is called a bowl, which sits at the top of the device, with shisha tobacco. The tobacco is then heated using charcoal, creating smoke through the waterpipe as users inhale through an attached hose. Some hookahs include multiple hoses for multiple users at once while others only have one hose. Hookah smoking is usually a social experience shared with friends or family, whether in a lounge setting or elsewhere.

    When asked what inspired OOKA, Dawson noted that OOKA was born out of a desire to modernize the traditional shisha experience by using cutting-edge technology to create something cleaner, more efficient and more user-friendly. “We saw a gap in the market where people loved the social ritual of shisha but were looking for an alternative to the mess of charcoals and packing the bowl, as well as the time taken to prepare traditional shisha and the health concerns associated with charcoal heating,” he said. “So, we wanted to create something which eliminated charcoal, was quicker to set up and [was] mess-free which could revolutionize the shisha inhalation experience. Importantly, we must also recognize that whilst most people enjoy consuming shisha, very few enjoy setting it up and even fewer can recreate a decent shisha experience at home. We wanted to create a decent shisha experience that people could love and fit into their busy lives.”

    “There is a challenge within this industry sector to harness technology for better experiences and reduce the risk of inhalation rituals.”

    Expanding Innovative Inhalation

    While AIR offers other inhalation products as well, OOKA is “definitely [the company’s] most revolutionary and innovative product yet,” said Dawson. The shisha device seems to currently have much of the company’s focus as it moves to expand its markets. “That said, each of our products serves a specific market need, and we see strong demand across different regions,” Dawson said. “Traditional shisha products remain popular in regions like the Middle East, but we are seeing OOKA rapidly gaining traction everywhere—for instance, in Germany, OOKA saw off many competitors and was awarded the Best Hookah Award at the Shishamesse 2024 show earlier this year and already has many admirers in the U.S.”

    Hookah and shisha are traditionally more prevalent in the Middle East, but Dawson noted that there is demand for the products elsewhere. AIR has now opened offices in the U.S., among other countries, and factories in the United Arab Emirates as well as Poland, which focus on high-demand markets in the Middle East and Asia and markets in Europe, respectively, with further expansion forming part of the company’s goal. “Our presence in the U.S. has allowed us to tap into a growing interest in shisha among new demographics, but as with all new products, we started with a test market in California to understand our U.S. customers better,” Dawson said. “While the tradition originates in the Middle East, there’s also significant demand in Western markets, particularly as people look for new social experiences post-pandemic. With products like OOKA, we’ve been able to attract a wider audience, including more health-conscious consumers. The U.S. national launch of OOKA begins in October, and we’re excited to see how others in the U.S. respond to the latest innovation.”

    Recently, AIR opened a Research, Design and Development (RDD) Lab in Dubai, which focuses on “creating revolutionary inhalation products.” AIR’s future is in continuing to expand into new markets, launch innovative products, improve consumer experiences and further commitment to sustainability, health-conscious design and revolutionizing the inhalation space, according to Dawson. “RDD is one of the most exciting teams to be part of within AIR, and we’ve brought together a diverse mix of creative people from over 20 different nationalities to spearhead our innovation portfolio,” he said.

    OOKA is by no means the end of the line for AIR’s innovation, according to Dawson. “While I can’t share too much just yet, we have several exciting products in development that we expect to launch later this year and in 2025 and ambitious plans for the next five years,” he said. “These innovations will continue to push boundaries in terms of health-conscious design, convenience and sustainability.”

    Marissa Dean joined Tobacco Reporter in the summer of 2018 as a copy editor. Since that time, she has taken on additional responsibilities, including feature writing. Her skills span the publishing industry from layout and design to copy editing to content creation.
  • Beyond Ordinary

    Beyond Ordinary

    Photo: Vaporesso
    Photo: Vaporesso

    Since 2015, Vaporesso has been the category leader of open-system vape products.

    By Timothy S. Donahue

    Vaporesso has been a force in the open-system vaping segment for nearly a decade. The China-based powerhouse is one of the world’s largest open-system vaping hardware manufacturers and produces a wide range of mods, pods, tanks, coils and accessories. The company has been so successful that it has received recognition from several media outlets such as Ecigclick, Vapouround, Vaping360 and VersedVaper, winning more than a dozen “best international brand” awards in 2023 alone.

    The company has also won several professional international design awards, including the MUSE Design Award, the German Design Award, the London Design Award and the French Design Award. It has also garnered the Golden Leaf Award from the GTNF, one of the most prestigious awards in the nicotine industry.

    Since 2015, Vaporesso’s commitment to helping combustible smokers switch to less harmful nicotine products has been deeply embedded in its core philosophy, which emphasizes innovation, reliability and style. Maggie Chen, a Vaporesso spokesperson, said during an interview at the GTNF in Athens in September that understanding the diverse needs and aspirations of Vaporesso vapers is a priority.

    “By leveraging local insights, such as preferences for design and culture from subsidiaries in key markets like the USA and France, we have established dedicated touchpoints in each market to gather insights from consumers, retailers and various sales channels,” explained Chen. “This approach enables us to understand the specific requirements of different vaper segments while ensuring that the information we collect is objective and reliable, reinforcing our commitment to meeting the diverse needs of users across regions.

    “This commitment allows us to continuously develop product lines that cater to beginners and experienced vapers, ensuring a wide variety of styles and consistent quality. Our advanced automated manufacturing processes ensure each device is crafted with precision and quality, reflecting our dedication to reliability and excellence. Furthermore, we focus strongly on understanding users’ feedback and monitoring market trends while staying committed to ongoing R&D investment. This dedication enables us to consistently offer innovative open-system products that meet the needs of both consumers and the industry.”

    Vaporesso has held a leading position in the global open-system vaping product category for many years. It is recognized as the top brand worldwide in terms of market share. The company also achieved the highest growth rate among open-system brands, with its mouth-to-lung (MTL) products, such as the XROS series, becoming global bestsellers. The success of the XROS series is due to its compatibility with all XROS pods, reliable quality and superior flavor delivery, according to Chen, who added that the accomplishment highlights Vaporesso’s strong presence in key markets, such as the USA and Europe.

    Eve Wang, executive director of Vaporesso’s parent company, Smoore International Holdings, remarked, “The journey of Vaporesso from 2015 truly reflects the value instilled by the parent company, Smoore Group, which has consistently prioritized the importance of R&D. At the beginning of the story, Smoore dedicated two full years to support the development of our very first product: the patented CCELL vape coil, which is recognized as the world’s first ceramic coil.

    “This innovation reflects Smoore’s substantial commitment to R&D; since going public, the company has consistently invested a total of RMB3.94 billion ($551,923) in R&D by the end of 2023, with an additional RMB760 million allocated in the first half of 2024.”.

    Building on this strong R&D foundation, Vaporesso developed three core technologies: the AXON Chip for intelligent power management and optimized performance, SSS leak-resistant technology, which sets new standards for reliability by preventing e-liquid leakage, and COREX heating technology for faster heating and enhanced flavor.

    These innovations drive continuous improvements across Vaporesso’s product lines, ensuring premium quality and performance, according to Chen. The 2024 iteration of the XROS 4 series, featuring pod compatibility, exceptional flavor and a unique design, has become the world’s bestselling MTL product.

    Currently, disposable vapes dominate significant markets. However, despite the challenges posed by the explosive growth of disposable products since 2020, Vaporesso has excelled in the open-system segment, achieving an average annual growth rate of over 20 percent in the past four years, according to company financial disclosures. This trend reflects open-system users’ strong trust in the Vaporesso brand as it consistently meets consumer demand for continuous innovation, reliable quality and diverse styles. The company has also excelled at combating vaping waste, which is much less when using an open system compared to a disposable.

    “In addition to this growth, as a public company, Smoore Group strongly emphasizes developing various ESG indicators,” Wang stated. “Our commitment to ESG [environmental, social and governance], particularly to environmental sustainability, is reflected in several key areas. We aim to achieve carbon neutrality by 2050 by progressively increasing renewable energy use across our operations. Additionally, we have set a target of sourcing 50 percent of our energy consumption from renewable sources by 2030, further demonstrating our dedication to reducing our carbon footprint and fostering a sustainable future.”

    Chen explained that this commitment is mirrored at the brand level with Vaporesso’s ongoing initiatives, adding that the company embodies this commitment through its dedication to sustainable development.

    “We achieve this by innovating eco-friendly products, such as the ECO series, which features four products made from environmentally friendly materials, including recyclable ocean waste, coffee grounds, sugarcane bagasse and limestone-based inorganic composite material,” said Chen. “Additionally, our brand initiative, Vaporesso Care, promotes global carbon neutrality by collaborating with users, environmental organizations and industry partners, further reinforcing our commitment to sustainability.”

    The vaping industry is still relatively young, with just over a decade of history, and no one can predict the final shape of vape devices, including in the open-system category. Chen explained that Vaporesso is committed to its user-centric R&D approach, focusing on deepening consumer insights.

    “This enables us to anticipate market needs ahead of both competitors and even the consumers themselves,” said Chen. “Moreover, as each market evolves at its own pace with distinct characteristics, we continuously expand our frontline teams to better understand and respond to the specific needs of users in every region. This ensures our products are not only highly preferred but also perfectly tailored to each market.”

    Vaporesso may not have been the earliest entrant into the vaping industry; however, Chen said the company has always dedicated itself to becoming a leading vape brand. As the market has evolved, Vaporesso has stayed true to this vision by continually refining its products, organizational structure and promotional strategies.

    “At Vaporesso, innovation is inspired by our users. We harness advanced insights and global consumer research to deeply understand their preferences. With branches and design centers in North America and Europe, we blend local market expertise with continuous R&D investment to maintain our industry-leading position,” said Chen. “Reliability lies at the heart of everything we do. We prioritize quality manufacturing with the industry’s first medical-grade factory, supported by the most advanced automatic production lines and 14 industrial parks.

    “Our after-sales service, backed by local teams across four continents, ensures top-notch customer support. Our style goes beyond aesthetics. Local design centers provide insights into trends, preferences and lifestyles, enabling us to create stylish products for diverse needs and usage scenarios. Looking to the future, Vaporesso remains dedicated to realizing a smoke-free world, working closely with the industry to turn this vision into reality.”

    Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.
  • Increasing Stakeholder Engagement

    Increasing Stakeholder Engagement

    Image: ngstock

    Accelerating actions to clear the smoke: finding common ground in a polarized world

    By Scott D. Ballin

    During September and October 2024, there were a number of tobacco-related and nicotine-related conferences, including the Global Tobacco and Nicotine Forum in Athens; the Nicotine and Tobacco Science Conference in Charleston, South Carolina, USA; the Tobacco Science Research Conference in Atlanta; CORESTA in Edinburg; and the Food and Drug Law Institute annual tobacco and nicotine conference in Washington, D.C. The E-Cigarette Summit will convene in London in December.

    All of these conferences have a number of things in common, including looking at how to move forward in advancing public health and harm reduction and advocating for more stakeholder engagement. While these objectives are to be applauded and enjoy support, the tobacco and nicotine space remains more divided, polarized and tribal than ever.

    This division and the animosity that often goes with it mirrors what we see happening in societies around the world. This is tragic in terms of public health when more time is being spent fighting perceived enemies than looking for common-ground solutions to save lives.

    The divide is not merely between Big Tobacco and mainstream public health organizations but now also seems to include anyone associated with tobacco and nicotine. It is troubling to me that significant divisions continue to occur within the public health community to the extent that some take the position that anyone engaging with the tobacco and nicotine sector needs to be “called out,” blacklisted and even banned from attending some meetings or conferences.

    For some years now, I have taken the position that “safe-haven” dialogues between stakeholders are essential to advancing our public health objectives of reducing disease and death from the use of tobacco and especially the combustible cigarette, which is by far the riskiest tool for nicotine consumption. Today’s rapidly changing tobacco and nicotine environment is very different from the days of the “tobacco wars” of the late 20th century.

    We should be constantly reminding ourselves that globally, there are approximately 1 billion smokers who are subject to dying prematurely from cigarette smoking. In the U.S. alone, the number of smokers remains close to 30 million, making cigarette smoking the single most preventable cause of death.

    Many battles must be fought, but new approaches, ideas and opportunities need to be discussed and considered as well.

    A Role for CTP

    The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) has an important role to play in providing stakeholders a safe haven where civil dialogue can take place. For me, obtaining FDA regulatory oversight of the tobacco industry and its products was a major priority and a gamechanger in reigning in the bad behavior of the tobacco industry. All three CTP directors—Lawrence Deyton, Mitchell Zeller and Brian King—recognized and acknowledged the critical need for stakeholder engagement. Stakeholder input and engagement has and will continue to assist the agency in its efforts to not only prevent future generations from using tobacco and nicotine products but also to provide significantly lower risk, science-based regulated products to the millions of addicted adult smokers worldwide. It can ensure that bad actors distributing, marketing and selling illegal, unauthorized products are punished and expeditiously removed from the marketplace.

    Many will recall that in July of 2017, the FDA announced a visionary, comprehensive tobacco and nicotine plan. In its press release, then FDA Commissioner Scott Gottlieb and the Center for Tobacco Products Director Zeller wrote: “Envisioning a world where cigarettes would no longer create or sustain addiction and where adults who need or want nicotine could get it from less harmful alternative sources need to be the cornerstone of our efforts, and we believe it is vital that we pursue common ground …. To succeed, participants from all sectors [emphasis added] need to take a step back and work together to reach greater common ground.”

    This visionary plan was generally well received by a broad spectrum of stakeholders as a way to discuss and address important issues in a rapidly changing environment. Unfortunately, and for many reasons, the CTP has put much of the plan on the back burner.

    The time has come for the FDA/CTP to move the comprehensive plan back to the “front burner” and to begin a series of important discussions on how many of these ideas, challenges and opportunities can be addressed and implemented.

    The Morven Dialogue

    In July, the University of Virgnia’s Institute for Engagement and Negotiation (IEN) released its latest report, titled Accelerating Action to Clear the Smoke: Finding Common Ground in a Polarized World. Referred to as the Morven VII dialogue, the report builds on past dialogues and reports and lays out a set of 10 interrelated and overlapping core principles designed to “provide stakeholders guidance and encouragement to commit to engage and work together in a more transparent and cooperative way.”

    The report addresses topics such as updating definitions and terminologies; recognizing the differences between the risks and relative risks of a spectrum of products along the continuum of risk; the need to “modernize” and develop a more flexible and consumer-friendly regulatory framework; ensuring that scientific research is of the highest integrity; encouraging innovation and technology; ensuring comprehensive regulatory oversight while providing flexibility for “fast-tracking” of approved lower risk products for use by adults; ensuring that adolescents do not have access to any tobacco and nicotine products; providing consumers, the general public, medical professionals and other stakeholders with truthful, accurate and consistent information about the risks and relative risks of all tobacco and nicotine products; and encouraging all stakeholders in both the public and private sectors to engage civilly and honestly.

    The Morven VII dialogue report serves as a means for having a more in-depth civil discussion on issues confronting the tobacco and nicotine space. As the IEN director has stated: “It is owned by no one but can be used by everyone.” There are no copywrite restrictions on the report, and all entities are encouraged not only to use it but also to make it available to others, including policymakers, medical professionals, nongovernmental organizations and the media.

    The Morven VII report can be accessed at http://www.tobaccoreform.org.

    Scott D. Ballin worked in the public health policy arena for more than four decades, with much of his time spent on issues pertaining to tobacco and nicotine. He is a former vice president and legislative counsel for the American Heart Association and two-time chairman of the Coalition on Smoking OR Health, which later became the Campaign for Tobacco-Free Kids. In recent years, he has focused on the importance of bringing stakeholders together in both the public and private sectors. He also served as an advisor to the Institute for Engagement and Negotiation at the University of Virginia and as an advisor to the Food and Drug Law Institute.
  • Pride in Tobacco

    Pride in Tobacco

    Photos courtesy of ITGA

    Participants in ITGA’s annual meeting debated the challenges and opportunities facing their sector and obtained an in-depth understanding of U.S. tobacco farming.

    By Ivan Genov

    Jose Javier Aranda

    The International Tobacco Growers Association (ITGA) held its 2024 annual general meeting (AGM) Oct.15–18 in Raleigh, North Carolina (N.C.), USA. The birthplace of flue-cured “bright leaf” was the perfect location to wrap up a year full of activities, which included regional meetings in the Americas and Africa, global campaigns and numerous visits focusing on grower challenges.

    Hosted by the Tobacco Growers Association of North Carolina (TGANC), the meeting included a four-day dynamic program concentrating on the practical side of farming in the U.S. Notably, the association’s members reelected the ITGA’s president, Jose Javier Aranda, for another term. His efforts to defend the legitimate interests of farmers around the world have expanded to most of the leading tobacco-growing markets. As a result, the AGM was attended by a record number of delegates, including representatives from Argentina, Brazil, the European Union, India, Malawi, the Philippines, Tanzania, the USA, Zambia and Zimbabwe.

    The meeting started with a guided tour of the Universal Leaf Factory in Nashville, North Carolina. The facility is the company’s biggest and most advanced plant in the world. Today, it has the capacity to process the entire yearly U.S. crop. Delegates from other regions were able to compare the process to their own markets, but the sheer size of the facility is surely to leave them with a lasting memory. This was followed by a visit to a live auction, a unique experience that is rarely seen in any other place. For example, tobacco growers from Kentucky were sad to note the absence of auctions in their state.

    Mercedes Vazquez

    The open day conference started with an overview of the ITGA’s strategic objectives. Currently, the ITGA focuses on four pillars—information, tobacco sector advocacy, strategic partnerships and reinforcement of the membership base. ITGA CEO Mercedes Vazquez went through the association’s substantial data reserves and capabilities, campaigns to help bring attention to the enormous socioeconomic impact of tobacco growing, such as the May 31 World Understanding Tobacco Farming Day and the Oct. 28 World Tobacco Growers Day, along with the association’s recent participation in the InterTabac/InterSupply trade fair, which presented four ITGA member associations an opportunity to obtain greater visibility. This is particularly important to entities such as Fedetabaco in Colombia, which went through an extraordinary transformation after leading companies left the market with little notice and no alternatives.

    Shane MacGuill, Euromonitor International’s global lead for nicotine and cannabis, provided an in-depth global overview of consumption trends. MacGuill noted that the U.S. market is characterized by an ongoing realignment of consumption behavior in the context of overall flat nicotine volume evolution. Among the most significant global tobacco drivers for the future will be regulatory innovation, including sustainability, cost-of-living crises and risk of impaired sensitivities, along with a broadening of the nicotine universe, according to MacGuill. Currently, the Middle East and Africa are the only cigarette markets experiencing growth, compared with significant declines in Europe and North America.

    The top volume growth cigarette markets in the next five years, according to Euromonitor, will be Ethiopia, the United Arab Emirates, Cambodia, Egypt and Lebanon while the biggest volume declines are expected in New Zealand, Australia, Denmark, the United Kingdom and Ireland. In the reduced-risk products space, heated tobacco is establishing itself as the key format as significant e-vapor value migrates to illicit markets. Euromonitor’s estimates of the total nicotine market (excluding China), which includes legal and illicit sales and all categories, traditional and novel, indicate striking overall nicotine resilience. In stick-equivalent terms, global volumes are expected to remain unchanged from 2018 to 2028. In addition, the reduced-risk categories are gaining share of the total nicotine universe, but by 2028, it is likely that cigarette sales will still account for three in every four nicotine units. Regarding one of the newest tobacco categories, nicotine pouches, growth is predominantly centered in the U.S., with no evidence of serious traction elsewhere. In the “beyond nicotine” category, manufacturers’ activity remains patchy as the cannabis revolution slows down.

    Ivan Genov, ITGA manager of tobacco industry analysis, provided information about tobacco leaf production trends. In 2024, the biggest tobacco variety, flue-cured Virginia (FCV) was characterized by short crops. Unfavorable weather affected some of the leading FCV markets. In Brazil, more humid and warmer climate resulted in lower productivity (see “The Great Scramble,” Tobacco Reporter, May 2024). FCV final volume output was 461 million kg against 551 million kg in 2023. Zimbabwe, which declared a state of disaster during the growing season, registered one of the lowest rainfalls on record. Consequently, production went from 296 million kg in 2023 to 231 million kg in 2024. At the same time, burley production is rising, with Malawi being one of the year’s star performers. The marketing season brought growth in both volume and value terms and expectations for an even better 2025. Another market to pay attention to, Tanzania, was unable to reach the government target of 200 million kg. Nevertheless, local growers produced 116 million kg, twice as much as in 2022. The local ministry of agriculture remains optimistic that Tanzania could become the biggest tobacco exporter in Africa. In summary, demand for tobacco leaf continues to exceed supply on the global markets. Major leaf dealers report low levels of uncommitted stocks, and tobacco is sold very quickly. Current forecasts suggest a larger crop in 2025, but problems that have built up for many years, including thin profit margins for growers, lack of continuity and other social and environmental issues, are now reaching a tipping point.

    The topic was further unpacked in a panel that was moderated by TGANC Executive Vice President Graham Boyd and featured leaf sales executives from Alliance One and Universal Leaf North America. While some expected the FCV market to balance in 2025 and burley in 2026, others, particularly in the audience, saw this happening in a longer time frame. Burley Stabilization Corp. CEO Daniel Green noted that three quarters of the U.S. burley production is now realized on the local U.S. market.

    A panel moderated by William Snell from the University of Kentucky and featuring farmers with many generations’ worth of experience also sparked a lot of debate. Growers were united in the opinion that the issues faced by growers are the same in every market. TGANC President Matt Grissom expressed another sentiment shared by many growers—that they grow tobacco because they love to do it. However, underlying market changes are putting strong pressure on the community. The U.S. tobacco buyout program was also discussed in detail. At its start, stakeholders expected farms to consolidate, individual farm operations to get bigger, production to shift westward and yields to improve. The first three happened as predicted, but the last one failed to materialize, with yields remaining flat. This was also the key focus of ITGA research in 2024. The association interviewed leading agronomy experts to uncover the reasons behind flat or declining yields—a trend that goes against that seen in crops like corn, soybean and cotton. The research identified common factors impacting all growers as well as ones relevant to small scale against commercial growers. After identifying the issue, the ITGA will continue to analyze the underlying factors and come up with ways to address them.

    The session also included a U.S. regulatory update by Universal Leaf Vice President of External Affairs Benjamin Dessart and a global regulatory overview by Michiel Reerink, international corporate affairs director and managing director at Alliance One International. Certain regulatory actions in the pipeline are likely to impact not only consumption but also the whole supply chain, including farmers. These include, for example, the discussions around nicotine reduction in the U.S. and the Due Diligence Directive in the European Union. Tracking regulations that impact growers directly remains a key focus area for the ITGA.

    As part of the AGM, delegates also visited a research farm in Oxford, North Carolina, where Loren Fisher, director of N.C. State Research Stations and Field Labs, explained how the U.S. conducts tobacco production research—how it allocates financing, for example, or how it handles technical aspects related to resilient varieties. ITGA delegates agreed that this is an incredible asset for local growers—one that needs to be kept at all costs. The group also visited a field where experts was noted that crop failures are welcome in the research environment as they help in the pursuit for productivity improvements for the future.

    Finally, ITGA delegates visited the N.C. State Fair, where tobacco featured prominently. The group witnessed a tobacco-stringing contest, visited the TGANC pavilion and came to appreciate the continuing importance of the golden leaf to their host state. This enduring significance was perhaps best captured by a sign stating that “North Carolina still has pride in tobacco”—a sentiment that was not only wholeheartedly shared by the AGM participants but even managed to grow stronger during their short visit to America’s Tobacco Belt.

    Ivan Genov is ITGA’s manager of tobacco industry analysis.
  • Small Packs, Big Problems

    Small Packs, Big Problems

    Tobacco companies may not sell packs containing fewer than 20 cigarettes in Pakistan. | Photo: Taco Tuinstra
    Tobacco companies may not sell packs containing fewer than 20 cigarettes in Pakistan. | Photo: Taco Tuinstra

    Pakistan’s dispute over cigarette exports to Sudan

    By Stefanie Rossel

    No matter the outcome, the situation is unlikely to yield any winners. In April, local news outlets reported that BAT subsidiary Pakistan Tobacco Co. (PTC) had asked Pakistan’s government for permission to fulfill a $20.5 million order from Sudan for cigarettes packed in boxes of 10 sticks each.

    The sale would require a change of law. Under its Prohibition of Sale of Cigarettes to Minors rule, Pakistan bans the manufacture of packs containing fewer than 20 cigarettes. Health activists believe that small packs encourage smoking among lower-income groups, including minors, because such packs are less expensive than packs containing more cigarettes.

    Pakistan Prime Minister Shehbaz Sharif approved PTC’s request on May 28 after a committee comprising members from various ministries argued that the 10-pack prohibition applied only to products intended for sale on the domestic market. The sale could proceed, the committee said, on the conditions that the manufacturer ensured product traceability, printed the text “For export purposes only” on each pack and agreed to submit quarterly export invoices to the health ministry.

    The latter, however, has dragged its feet on giving the required green light. According to local press reports, the ministry has referred the matter to the Ministry of Foreign Affairs. Meanwhile, PTC continues lobbying for a change of law.

    The plans face strong opposition from health groups. Soon after learning about PTC’s plans, the Campaign for Tobacco-Free Kids expressed concern, arguing that the move would not only jeopardize progress made in tobacco control but also directly target those most vulnerable to the harmful effects of tobacco consumption. The group’s country head for Pakistan argued that “kiddie packs” produced for export would inevitably find their way onto the local market, thus directly undermining efforts to discourage smoking among young people.

    In July, representatives of 25 member countries of the African Tobacco Control Alliance wrote a letter urging Pakistan’s prime minister to prevent PTC from exporting small cigarette packs to Sudan. “If a product is too dangerous for one country’s children, it is too dangerous for children anywhere,” the signatories wrote. “Putting other people’s children at risk of tobacco addiction, disease and death is unacceptable—don’t put our African kids at risk by changing your strong tobacco control regulations in Pakistan.”

    Due to the delay in obtaining permission, Sudan started contacting other countries to fulfill its order.

    Both Pakistan and Sudan are parties to the World Health Organization Framework Convention on Tobacco Control (FCTC), which obliges them to prohibit the sale of cigarettes individually or in small packs. However, the treaty does not define what constitutes “small.” Of the more than 180 FCTC signatories, at least 82 member states require cigarettes to be sold in packs containing at least 20 sticks.

    Weak Enforcement

    Daud Malik

    The parties in the dispute now find themselves in a catch-22 situation. For Pakistan, it’s the decision between monetary gain and its tobacco control commitment. Battered by a severe economic crisis characterized by high levels of inflation, dwindling foreign reserves and a depreciating currency, the nation could certainly use the income.

    PTC’s Sudan order, which the company says could be repeated, would bring valuable hard currency into the country. In March, the company was honored as one of Pakistan’s leading taxpayers. In 2023 alone, PTC paid more than PKR229 billion ($821 million) to the national exchequer in taxes and duties. According to Brecorder, the company has been exporting cigarettes to numerous foreign markets since 2019, earning the country $156 million. For the next fiscal year, PTC is targeting $60 million in exports. However, a third of that amount depends on the Sudan order.

    “In the context of Pakistan’s economy, this export order is insignificant,” says Daud Malik from the Alternative Research Initiative, which conducts research in a variety of fields, including tobacco control, health, education, governance and culture, in Pakistan. “However, its consequences are adverse and extremely damaging to the tobacco control efforts in Pakistan. It would send all the wrong messages to everyone working to end smoking in Pakistan. It would raise questions about Pakistan’s commitment to FCTC and the commitment to a smoke-free country.”

    Over the past decade, Pakistan considerably stepped up its tobacco control efforts, for which it was recognized by the WHO in 2021. In recent years, the country introduced a series of significant tax hikes on cigarettes. In February 2023, the government increased the federal excise duty on cigarettes by around 150 percent, resulting in a corresponding increase in cigarette prices.

    However, the tax hike also boosted Pakistan’s already flourishing illegal cigarette market. An Ipsos study in May 2024 revealed a surge in smuggled cigarette brands. With consumers shifting from expensive duty-paid products to duty-avoiding products made at home or smuggled in from abroad, illicit share tobacco sales were expected to exceed half of Pakistan’s total market this year. Most locally manufactured tax-evaded brands, the study found, are available in packs of 25 and 30 cigarettes, encouraging single-stick sales among retailers.

    For PTC, the loss of the Sudan order has other implications. If Pakistan does not allow exporting cigarettes in small packs, the company’s parent company may assign the order to affiliates in Bangladesh or Indonesia, a PTC official said. It would not be the first time that PTC lost export business because of Pakistan’s domestic regulations. In 2019, PTC lost an order for small packs from a customer in the Gulf region after the Ministry of Commerce gave permission but the health ministry did not.

    While struggling to fulfill export orders, the manufacturer has also been coping with increasingly challenging business conditions at home. In May, BAT reportedly threatened to pull out of Pakistan if the government further increased cigarette taxes. According to the company, existing taxation had already caused its sales in Pakistan to plunge by 38 percent. “The past couple of years’ developments on fiscal policies have raised questions about the sustainability of the company’s operations in Pakistan,” Michael Dijanosic, regional director for Asia-Pacific, the Middle East and Africa at BAT, was quoted saying in a meeting with the prime minister.

    Growing Tobacco Market

    Apart from the moral quandary implied by tobacco health activists about prevention of underage smoking in various continents, there is another ethical dilemma: Should a company export a product known for its adverse health effects to a country in the midst of a civil war?

    “Demand for nicotine and tobacco products is bound to go up in war-torn regions and volatile markets as people try to deal with heightened stress, uncertainty and the destruction around them,” says Samrat Chowdhery, journalist and director of the Council for Harm Reduced Alternatives, an Indian registered nonprofit that works on tobacco harm reduction measures. “This was also evident during Covid as smoking rates went up in response to stress despite WHO warnings linking smoking to severe outcomes.”

    With an anticipated cigarette market value of $1.9 billion in 2024 and a projected compound annual growth rate of 16.81 percent by 2029, according to Statista, Sudan is among the few countries still holding potential for tobacco companies. The local cigarette market is dominated by Haggar Cigarette and Tobacco Factory, a subsidiary of Japan Tobacco International, with a share of over 80 percent and BAT subsidiary Blue Nile Cigarette Co. The latter factory is based in Madani, which has been the scene of heavy fighting. The shift of production to Pakistan was meant to ensure the continuity of supply.

    Tobacco taxes are a major source of income for the Sudanese government, with hefty taxes levied on both domestic and imported brands. Recently, nonduty-paid cigarette sales have been a significant issue, which could be acerbated by a shortage in legal supply.

    “Denying people access to nicotine products in war regions in fact contributes more to their hardship than alleviates it, as smuggling takes over, hurting not just their meager resources as prices shoot up, like it is happening currently in Gaza,” says Chowdhery (see “In the Shadow of War,” Tobacco Reporter, October 2024). “But it also affects aid work as cigarette smuggling, due to higher profits to be made, gets prioritized over transporting aid supplies, which also in turn makes these shipments targets of attacks, hurting people in need of aid. In such an environment, ensuring safe, legal supply of nicotine or tobacco products is more humane and the lesser evil.”

    Chowdhery recalls a recent foreign policy podcast describing how loyalties can be bought with cigarettes in Gaza. “So if BAT can ensure a legal, duty-paid supply of cigarettes to Sudan that does not violate the country’s local regulations while Pakistan, which is also struggling financially, can earn some revenue, I don’t see why it is being framed as a negative, especially when the alternative is smuggled cigarettes, which do not earn both countries any revenue, while increasing criminality and increasing stress, withdrawals and the economic hardships of smokers as well as people in need of humanitarian aid,” he says.

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • Spread the Word

    Spread the Word

    BAT’s Danielle Tower shares her views on the tremendous opportunity presented by tobacco harm reduction.

    By George Gay

    Ahead of the 2024 CORESTA Congress that was held in Scotland Oct.13-17 under the theme “Advancing Tobacco Harm Reduction through Scientific Collaboration,” Tobacco Reporter took the opportunity to interview Danielle Tower, group head of scientific and regulatory affairs at BAT, the host of the Congress.

    Tobacco Reporter: In March, BAT went public with the opening of its new U.K. Innovation Centre in Southampton, U.K. (see “Driving Transformation,” Tobacco Reporter, May 2024). More recently, with your Omni initiative, you have presented a summary of BAT’s progress toward making “A Better Tomorrow by Building a Smokeless World.” And last month, you hosted the CORESTA conference under the banner “Advancing Tobacco Harm Reduction Through Scientific Collaboration.” This is all very praiseworthy, but do you have evidence that your tobacco harm reduction (THR) messages are getting through to those people making regulatory decisions about tobacco and nicotine?

    Tower: Governments, the public health community as well as manufacturers like BAT and their business partners have a key role to play in maximizing the potential of smokeless products to contribute to tobacco harm reduction.

    In July 2023, the FDA [U.S. Food and Drug Administration] has authorized the marketing and sale of our vapor product Vuse Alto with Golden Tobacco and Rich Tobacco flavors in the United States. This is good news for adult smokers, who would otherwise continue to smoke, and for public health.

    Evidence-based regulation requires a comprehensive scientific assessment, from data that assesses the health impact of new products, to the impact on the population, including users of new products and nonusers of nicotine products.

    At BAT, we are focused on driving awareness and understanding of our science across multiple scientific and other nonconsumer audiences. We believe that by being open and transparent with our data, we can meaningfully contribute to the discussion on tobacco harm reduction.

    Even in the U.K., where regulations have tended toward the pro-THR, the signs are that things are going to get more difficult for those offering smokeless alternatives to combustible tobacco products. How can you navigate this potentially more hostile regulatory landscape in such a way as to take THR forward?

    We believe that tobacco harm reduction—the switching of smokers, who would otherwise continue to smoke, to alternatives with a reduced-risk profile—is the best way to reduce the harm associated with smoking cigarettes.

    We have a vast body of scientific evidence to substantiate the reduced-risk profile of our smokeless products. And, when required, we conduct new science to support our regulatory submissions.

    BAT is in favor of progressive regulation—based on the best available scientific evidence—allowing adult smokers to have access to smokeless alternative products while providing consumers with high product standards and preventing underage access. 

    The U.K. is a tobacco harm reduction success story. The number of smokers is at an all-time low—6 million—and nearly 3 million people have switched to vaping in the last five years. We are calling for smart regulation that allows smokers to have access to smokeless alternatives while providing consumers with high product standards and guarding against underage access. One of our proposals is a retail licensing system—similar to alcohol. Most importantly, good regulation must be accompanied by robust enforcement—otherwise, it is unlikely to be effective.

    And how do you navigate your way in jurisdictions where regulations are not as supportive of THR as they have been to date in the U.K.?

    Harm reduction approaches have produced diverse opinions from numerous stakeholders. We encourage anyone interested in learning more about tobacco harm reduction to read more and consider the broadest range of available viewpoints.

    Regulation should be based on the best available scientific evidence. And lessons can be learned from countries like Sweden, the U.K., New Zealand and Canada that have embraced tobacco harm reduction and have experienced an associated acceleration in the decline of smoking rates.

    One of the problems with nicotine product regulations seems to be that they are not always fully enforced, something that can unfairly put legitimate companies in a bad light in the general media. Again in the U.K., rogue manufacturers seem able to market noncompliant products because imports, compliance and retail sales, including to those underage, are not properly policed. Is there anything that you can do to turn this around?

    Yes, I think there are three main challenges: Firstly, the lack of awareness or acceptance of tobacco harm reduction. Many prestigious public health organizations are in favor of THR as the way to reduce the harm associated with smoking cigarettes for those consumers who would otherwise continue to smoke.

    Secondly, the lack of enforcement. Regulation must be well enforced with strong sanctions for those who don’t comply. Otherwise, situations as seen in the United States arise where the majority of the vapor market consists of illegal, illicit disposable vapes.

    And thirdly, the lack of flexibility to keep pace with innovation. Regulatory frameworks often struggle to keep pace with a fast-evolving, consumer-led market. It’s important to cater for innovation so that adult smokers have access to the best available smokeless alternatives, which has the potential to accelerate tobacco harm reduction.

    Your new Innovation Centre involved a considerable investment, but, in fact, it is only a part of the total investment needed to bring forward efficacious alternative smokeless products. How do you ensure that these investments are used to the best advantage in producing good products while keeping investors happy? Do you mainly seek to improve the categories of alternative smokeless products already established, or are you involved in blue-sky projects that might come up with revolutionary products?

    Consumer choice is driving the transformation of the tobacco industry. Adult smokers are more likely to switch to a product that delivers comparable satisfaction. That is why we are obsessed with innovation and invest £300 million [$392.27 million] a year in the development of our smokeless products. The Innovation Centre in Southampton will collaborate with BAT’s Innovation Centres in Shenzhen and Trieste [see “Shaping Tomorrow,” Tobacco Reporter, April 2023] to anticipate and meet the needs of consumers through science, technology and innovation.

    I can’t disclose our innovation pipeline, but we are constantly innovating and utilizing new technology to improve our portfolio of smokeless products.

    You compete in most if not all the smokeless product categories and, at the opening of your new Innovation Centre, presentations were given concerning the seemingly impressive levels by which the health risks associated with the consumption of these products is potentially lower than that of smoking combustible cigarettes. But this sort of information does not seem to see the light of day too often. Can this situation be turned around?

    Already today, several public health organizations and regulators are supporting the use of smokeless products. However, to ensure that the full potential of the tobacco harm reduction opportunity is realized, much more focus is required by regulators to ensure that adult smokers in all markets across the world have access to smokeless products and accurate information about their relative risk—so they can make informed decisions about switching.

    We publish the findings of science in peer-reviewed publications and present the results at conferences. This helps to informs other scientists working in the field and those undertaking evidence reviews.

    Governments have an important role to play as a trusted source of information. The U.K. is a good example. The government has undertaken reviews of the scientific evidence on vaping—publishing its key findings (OHID evidence review). And the National Health Service has a page dedicated to vaping as a means of promoting THR—covering the myths and facts (Vaping myths and the facts—Better Health—NHS [www.nhs.uk]).

    Questions have been asked in the recent and not-so-recent past about the relevance of CORESTA in the current tobacco/nicotine environment. Do I take it that, in hosting this year’s congress, you are giving a stamp of approval to this organization and the idea of scientific co-operation even within a highly competitive industry?

    It is a great honor for BAT to host the 2024 CORESTA Congress concentrating on the theme of “Advancing Tobacco Harm Reduction Through Scientific Collaboration.” We are proud to welcome around 500 attendees to the congress, bringing together member and nonmember organizations from over 30 countries, including companies, research institutes, laboratories, associations and regulatory bodies. Our focus is to promote discussion and the sharing of knowledge and understanding in the science related to tobacco harm reduction across a variety of disciplines, from agricultural raw material production to product characterization, nonclinical and clinical assessment and product use behavior. With increasing regulatory requirements, the scientific work and outputs of CORESTA have become a worldwide reference point for tobacco policymaking and support the development of testing standards—such as ISO standards.

    How do you see the future for THR?

    We have an opportunity to usher in a new smokeless world, grounded in scientific research and a firm commitment to public health. The solutions are available today. All that is required is for the relevant stakeholders to actively work together to prioritize tobacco harm reduction and the well-being of millions of people worldwide.

    Countries that have recognized the opportunity tobacco harm reduction presents, and which have adopted supportive policies, have seen striking success in reducing their smoking rates. The U.S., U.K. and Japan are all currently witnessing their lowest smoking rates on record while Sweden is on track to declare itself smoke-free this year—defined as having [less] than 5 percent of daily smokers in the population—16 years ahead of the 2040 EU target.

    Sweden’s experience with snus is a useful case study for tobacco harm reduction. Snus is a traditional smokeless tobacco product that is placed between the lip and gums and held in the mouth for around 30 minutes, during which time it slowly releases nicotine without inhalation. It has been available in Sweden for 200 years, and, while the composition has changed, manufacturing methods have improved dramatically over that time.

    Although Sweden has the highest consumption of smokeless tobacco per capita in the world, Swedish men have the lowest death rate attributable to tobacco and the lowest incidence of lung cancer and other tobacco-related diseases of nearly every country in the world.

    More recently, other smokeless products—vapor, heated products and tobacco-free oral nicotine pouches—have been introduced in Sweden, helping to further reduce the prevalence of smoking.

    This remarkable transformation in Sweden, and other countries, has been driven by acceptance of tobacco harm reduction from policymakers, regulators and health officials in these markets, encouraging smokers, who would otherwise continue to smoke, to migrate to smokeless alternatives.

    And the $60,000 question: Is it, or will it ever be, acceptable for nonsmokers to take to using smokeless nicotine products?

    We market our smokeless products to existing adult tobacco and nicotine consumers. For those who don’t smoke, my message is simple: Don’t start. For those who do smoke, my recommendation is to quit entirely. However, if they will not quit, then I encourage them to completely switch to smokeless nicotine products backed by scientific evidence that shows their reduced-risk potential compared to smoking cigarettes.

    Is there anything you would like to add?

    Tobacco harm reduction represents a significant public health opportunity that cannot be ignored. It is my hope that the Omni will spur dialogue with stakeholders—scientists, public health authorities, policymakers, and investors—and across the wider scientific and regulatory ecosystem related to tobacco and nicotine products. I appreciate that some people will be skeptical of our motivations and actions. The Omni is not intended to be a panacea. It is, however, designed to underscore our commitment to science and facilitate an important conversation about tobacco harm reduction. Omni can be accessed at www.asmokelessworld.com.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.