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  • PMI to produce BAT cigarettes in Switzerland

    PMI to produce BAT cigarettes in Switzerland

    Photo: PMI

    Philip Morris International and BAT have entered into a contract manufacturing agreement for cigarette production in Neuchatel, Switzerland, reports Le Temps.

    “[L]imited volumes of BAT cigarettes will take place in the PMI factory located in Neuchatel,” BAT wrote in a press note cited by the newspaper. “This is an agreement specific to the Swiss domestic market.”

    Only part of the cigarette volumes intended for the Swiss market will be produced in Neuchatel; the rest, as well as previously exported volumes, will be manufactured in other BAT factories.

    Six positions will be added at the Boncourt site, according to BAT, bringing the total number of positions at the site to about 20.

    BAT Switzerland announced this summer that it would maintain its warehouse and shipping department in Boncourt. The company’s head office remains in the canton of Jura.

  • FEELM 2.0 Boosts Puff Count

    FEELM 2.0 Boosts Puff Count

    Smoore International revealed its FEELM 2.0, the first disposable vape to offer more than 1,000 puffs in 2 mL.

    “There is an evident demand for increased puff counts and consistency in taste, especially at a time when the rising cost of living is a constant concern,” said Smoore’s U.K. business director, Thalia Cheng, in a statement. “FEELM 2.0 is our disposable vape solution with the call sign ‘Double the puff, double the joy.’ Based on Consumer Intelligence data, we estimate it can save consumers around £900 [$1.12 billion] annually compared to using standard disposables.”

    According to Smoore, the FEELM 2.0 also heightens the actual vaping experience through enhanced vaping consistency and improved e-liquid utilization.

    Inter Scientific confirmed that FEELM 2.0 shows marked improvements in both e-liquid utilization and vapor consistency when compared to industry standards. The enhanced e-liquid utilization effectively increases the number of puffs while the reduced vapor variation ensures a more consistent experience, minimizing differences with each puff.

    “Smoore’s FEELM 2.0 technology provides consistent uniformity of e-liquid aerosolization over the device life and complies with TRPR 2016 requirements of a tank volume limit of 2 mL,” said David Lawson, CEO of Inter Scientific.

  • Sudhanshu Patwardhan

    Sudhanshu Patwardhan

    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.

    Arizona Advances Landmark Vape Bill

    The Arizona Senate passed House Bill 4001 on May 26 with an overwhelming bipartisan vote of 24-2, establishing the state’s first formal regulatory framework for

  • Vapers Cheer EU Recognition of E-cigs as Possible Quit Aid

    Vapers Cheer EU Recognition of E-cigs as Possible Quit Aid

    Photo: Maren Winter

    The EU’s Subcommittee on Public Health (SANT) has endorsed the potential role of vaping in supporting smoking cessation, according to the World Vapers’ Alliance (WVA).

    Parliament’s report on non-communicable diseases acknowledges that vaping is a way for smokers to gradually quit.

    “Parliament’s recognition that vaping can help smokers quit is a step in the right direction,” said WVA Director Michael Landl. “With the well-documented success of vaping as a smoking cessation aid, it’s crucial for the EU to fully embrace this tool within its strategy to reduce smoking-related illnesses. Vaping not only offers a way out for smokers but is instrumental in achieving public health goals.”

    Despite this recognition, the WVA views the report’s proposal to extend smoking bans to vaping as problematic.

    “Treating vaping the same as smoking in public spaces sends the wrong message to smokers who want to quit,” said Landl. “There is no evidence of harm from secondhand vaping. The Subcommittee must reconsider the broader impact, including the risk of former smokers relapsing. A more thoughtful regulatory approach based on common sense is imperative to ensure that vaping remains a viable option for those committed to quitting cigarettes.”

    The WVA believes that for the EU to significantly lower smoking rates and effectively tackle NCDs, supportive measures for harm reduction strategies like vaping must be integrated into public health policies.

  • JR Cigar Introduces JR Pure Origin: Terra de Andes

    JR Cigar Introduces JR Pure Origin: Terra de Andes

    Image: JR Cigar

    JR Cigar is introducing its second blend, JR Pure Origin: Terra de Andes, beginning Nov. 1. The product will be available exclusively online at www.jrcigars.com.

    The JR Pure Origin line was born out of JR Cigar’s desire to offer its customers something truly unique by using rare and exotic tobaccos from around the world, according to the company.

    The cigar derives its name from the Andes Mountains of South America, home of the tallest active volcano in the world. Not only do the Andes have an incredibly rich history—it’s the birthplace of one of the six earliest civilizations—but the Andes is where the tobacco plant first blossomed. Aided by the nutrient-rich soil, unique microclimate and special ecosystem, tobacco grown in this mountain range produces a bold yet delicate smoke with amazing and diverse tonalities.

    “With JR Pure Origin, we have brought our exclusive lines to new heights, and we look forward to continuing that success with this release,” says Brad Winstead, CEO of JR Cigar. “In partnering with Rafael Nodal and the legendary A.J. Fernandez, we have created a unique and complex cigar that tells the story of the region with each puff.”

    JR Pure Origin: Terra de Andes uses aged Nicaraguan and Peruvian filler tobaccos, giving it a sweet and spicy center. Its Ecuadorian Sumatra binder adds touches of coffee and richness while its Ecuadorian Habano wrapper offers up notes of spice, leather and tobacco sweetness.

    JR Pure Origin: Terra de Andes is packaged in boxes containing 10 cigars, and it is available in three classic vitolas: 5X50 Robusto ($108 per box, $12 per single); 6X50 Toro ($117 per box, $13 per single); and 6X56 Toro Gordo ($126 per box, $14 per single).

  • Gotham Cigars Launches Back Alley Cigarillos

    Gotham Cigars Launches Back Alley Cigarillos

    Gotham Cigars released a new line of cigarillos called Back Alley.

    Back Alley cigarillos are made in the Dominican Republic and are constructed using a blend of carefully aged Dominican tobaccos. The cigars are 4.5 inches long with a ring gauge of 27 and are packed three cigars to a pouch. Six popular flavors are available—Banana, Russian Cream, White Grape, Blue Vanilla, Mixed Berry and Sweet—and benefit from a premium infusion process to ensure the flavors are authentic and delicious, according to a press release. Back Alley cigarillos will be priced at $18.99 for 15 pouches.

    “For some time, I have wanted to introduce a cigarillo that brings something new to the market … Back Alley does just that,” said Manny Balani, owner and president of Gotham Cigars. “Staying true to our urban upbringing, founded in New York City and operating out of Miami for the last 20-plus years, our Back Alley cigarillos are created for an urban audience that is looking for something new, exciting and just a little bit mysterious. We want adult cigarillo smokers to find their own back alley when they light up! We are very proud of this cigar and look forward to introducing it to the market.”

    Back Alley cigarillos from Gotham Cigars are available now at www.gothamcigars.com.

  • Panel: Economics of Harm Reduction

    Panel: Economics of Harm Reduction

    The panel was moderated by economist and author Sinclair Davidson, who argued that through irresponsible fiscal policy on tobacco and nicotine products, the Australian government had created a well-organized illegal market that would be impossible to eliminate even if the government changed course.

    The market for next-generation products (NGPs), Tim Phillips, managing director of Tamarind Intelligence, said, is a complicated, quickly moving sector, which today has a significant global volume of over $50 billion and more than 100 million users. Market development heavily depends on product regulation. In North America, vape products dominate the market, with a small but growing portion of nicotine pouches. In Europe, the Middle East and Africa, vapes are still growing but at a slower pace while heated-tobacco products (HTPs) are establishing themselves in some markets. In the Asia-Pacific region, HTPs are the most popular NGPs. Despite overall increase, the global NGP market still has headroom compared to the combustible cigarette market with its value of $800 billion. Phillips suggested that in 10 years’ time, vape products and HTPs could overtake combustible cigarettes, but he pointed out regulatory issues, consumer confidence and the debate about disposable vapes as headwinds for the sector. The latter issue, he added, could be solved through innovative technologies.

    James Lambert, director of economic consulting Asia at Oxford Economics, warned that a harsher regulatory and fiscal stance on reduced-risk products (RRPs) could create negative economic and health consequences over time. Bans of RRPs will favor the illicit trade, especially in markets where illicit trade is difficult to manage and mitigate and where price sensitivity is higher. For optimal policy, Lambert proposed three key principles: Tailoring the restrictions of use to different market segments to eliminate youth use and at the same time provide adult smokers access to options; differentiating the treatment of RRPs from conventional tobacco products to incentivize the adoption of healthier alternatives; and finding constructive policy stances that include regulatory and fiscal measures to incentivize innovation of less hazardous products.

    Comparing the U.S. tobacco market pre-2005 and after, David Levy, professor of oncology at Georgetown University, said that the advent of Juul in 2018 was a game changer that fueled competition among the cigarette industry, which had reluctantly ventured into vape products and independent players. At the same time, nicotine pouches were growing, like vapes taking market share from cigarettes. Levy predicted that HTPs will become more popular and are likely to be favored by tobacco companies because they are more profitable and because the companies have a first-mover advantage. He expected competition among HTP manufacturers and nicotine pouch manufacturers to intensify and wondered whether the Food and Drug Administration, in its focus on a menthol cigarettes and cigars ban, would recognize the role of harm-reduced substitutes.

    Paul Blair, regional director of external affairs at Philip Morris International, emphasized that there is no one-size-fits-all approach to the transformation opportunities and needs of the tobacco industry. The industry, he said, must be aware of three areas. First, supply: Companies have to take the risks of transformation to meet consumer demand. Second, demand: Consumers will continue to want to quit or are looking for less hazardous products, regardless of any stringent regulations on reduced-harm products. Third, an affordable and accessible marketplace: Cost incentives to quit smoking are extremely important to consumers even in high-income countries as smokers are often from low-income and middle-income groups. A tax differential between RRPs and combustible cigarettes is hence essential, Blair stated, both in the signal it sends to consumers and businesses and because of the cost differential in this journey. To further reduce the U.S. smoking rate, which presently stands at 11 percent, Blair recommended making available a wide range of RRPs and creating a favorable public policy environment.

    Anna Choi, assistant professor in the Department of Public Administration at Sejong University, presented the results of her study on the role of vape products and HTPs in encouraging smokers in South Korea to switch from combustible cigarettes.

    A huge tax hike on cigarettes of about 40 percent in 2015, she said, significantly depressed cigarette consumption. A subsequent health ministry report implying that RRPs were potentially even more dangerous than smoking impacted negatively on the electronic nicotine-delivery system (ENDS) market.

    Since 2017, RRPs and combustibles have been taxed at almost the same rate, eliminating the cost advantage of the former. Despite this, ENDS’ market share increased from 2 percent in 2017 to 17 percent in 2023.

     

  • Panel: Regulation: International Perspectives

    Panel: Regulation: International Perspectives

    Regulation of nicotine products is at a tipping point, said David Bertram, director at EUK Consulting, who moderated the panel. Generational bans and mandatory nicotine reduction for combustible cigarettes have been introduced, whereas taxation of flavors and the move against disposable vapes have the potential to threaten the whole next-generation products (NGPs) category. Panelists provided overviews of the regulatory situation in their respective countries.

    Dave Dobbins, former chief operating officer of the American Legacy Foundation/Truth Initiative, criticized the U.S. Food and Drug Administration’s authorization process for novel products as lacking order. He called for the agency to “clear the field.” “The FDA has two choices: either a market serviced by unregulated actors that don’t have to report to the agency and don’t follow its rules, mandates and instructions or a robust market of approved products that fulfill the demand for adult consumers, and then the FDA can focus its enforcement on actors targeting youth.” The agency, he added, could use its power of post-market surveillance and regulation. Dobbins was concerned that the FDA was paralyzed by fear, making it unable to analyze the benefits of reduced-risk products (RRPs) for adult smokers.

    Adam Afriyie, member of Parliament for Windsor, U.K., said his country was in the pole position in tobacco harm reduction (THR) because of five factors: operating according to the principles of THR and encouraging the good instead of the perfect; treating RRPs as consumer products not medicine; encouraging public bodies to spread the word; trying to de-politicize the issue; and applying pragmatism as a response to changes. Pointing out that the U.K. government was currently consulting on disposable vapes and underage vaping on the base of evidence, he argued that it would only ban the products if this made sense from a point of view of harm reduction to the environment, children and healthcare. Regarding the upcoming tenth Conference of the Parties (COP10) to the Framework Convention on Tobacco Control, Afriyie said he was encouraging his contacts to help the U.K. delegation feel sufficiently emboldened to stress that THR needs to be the principle behind regulation and that a greater degree of transparency is required in how decisions at the COP are made.

    In its traditionally heavy regulation of nicotine products, Australia has always been driven by health considerations, according to Kezia Purick, member of the Northern Territory Legislative Assembly for Goyder, Australia. Tobacco-related diseases are the single biggest cause of death from behavioral risks in the country, with the disadvantaged indigenous population being affected most. Australia banned all tobacco advertising in 1976 and was the first country to introduce plain packaging in 2012. Nicotine vape products are available only from pharmacies with a doctor’s prescription. Health Minister Butler’s approach to ban all disposable vapes is primarily driven by concerns about the rising popularity of vaping among young school children. Purick expects regulation of RRPs to become ever stricter in the future.

    Marina Foltea, managing director at Trade Pacts Consultancy, outlined the complex policy-making process in the European Union. Directives, such as the Tobacco Products Directive (TPD), are binding for all 27 member states and have to be transposed into national law to take effect. The revision of the present TPD2, which already has strict requirements for combustible cigarettes and sets clear product standards for vape products, is currently being discussed. The regulation of tobacco products in the EU is regarded as a model by many countries. However, Foltea said, she didn’t see any explicit recognition of THR in the EU system. “But if you already have this category in the TPD, this means some indirect recognition,” she noted.

    Douglas Ming Deng, head of the NGPs Industry Study at Yunnan University, reminded his listeners of Asian diversity and the resulting differences in regulation of NGPs across countries. South Korea and Japan, he emphasized, have set up good tobacco control systems together with the provision of suitable RRPs, thus becoming blueprints for other countries to follow. He noted that the industry had changed more rapidly in the past 20 years than it had in the century before, meaning the sector was no longer static but dynamic. “As a consequence, regulators, consumers and the industry don’t know each other as they did in the combustible era,” Deng said. “Regulators should study the industry and vice versa.”

  • Investor Panel

    Investor Panel

    This year’s panel looked at how investors view the industry’s transformation and the challenges regulations hold for the further proliferation of reduced-risk products. Among the multinational players, Philip Morris International leads the pack regarding performance of smoke-free products. In the first half of 2023, 34.1 percent of its revenues were generated by such offerings. The acquisition of Swedish Match has catapulted PMI forward in the smokeless category. At BAT, the segment accounted for 16.6 percent of revenues. It was followed by Imperial Brands, with 3.7 percent, and Japan Tobacco, with 3.2 percent. With an operating margin of around 39 percent in 2022, PMI also achieves higher profitability from the category than BAT and JT, which plan to break even by 2024 and 2028, respectively.

    With the introduction of its heated-tobacco product (HTP) brand IQOS in Japan in November 2014, PMI started a success story—reduced-risk products (RRPs) currently account for 37 percent of the country’s tobacco market. Using its first-mover advantage, PMI today holds around 72 percent of the HTP market followed by BAT with 18 percent. JT, which was relatively late to launch Ploom Tech in its domestic market, stands at 10 percent.

    In South Korea, the world’s second-largest HTP market after Japan, PMI’s first-mover advantage was shorter lived as KT&G responded with the introduction of Lil only six months after IQOS had entered the market. The HTP category now represents 19.2 percent of South Korea’s tobacco market, with KT&G being the leading player with a share of 47 percent followed by PMI (41 percent) and BAT (12 percent).

    In addition to Japan and South Korea, Sweden and the U.K. provide examples of how a tobacco harm reduction approach can lower smoking rates. Using these countries as models for others, however, is difficult as the conditions for the success of RRPs vary. In Japan, for instance, HTPs are under the authority of the ministry of finance and looked at from a taxation point of view. They are also boosted by the fact that nicotine vaping is prohibited. In the U.K., government and health bodies have been supportive of RRPs, which played a significant part in the success of the category. Furthermore, there’s a significant price gap between combustible cigarettes and RRPs in the U.K., which nudges consumers toward the latter. In Sweden, the transition to less hazardous products was driven by consumers without government support.

    In general, publicly listed, multinational companies are pushing transformation harder than privately held, single-country companies as demonstrated by the Tobacco Transformation Index, which ranks the world’s 15 largest tobacco companies on their relative progress toward harm reduction. In many countries where the latter are operating, RRPs are banned and the cost of cigarettes is low, so there’s little incentive for these companies to change.

    Companies with a strong exposure to the U.S. market, such as Altria, BAT and Imperial, continue to face regulatory uncertainty. Investors, however, want clarity. In August, the U.S. Food and Drug Administration missed another deadline to finalize its long-anticipated rule prohibiting the use of menthol in cigarettes. The recent Udall-Reagan report on FDA proceedings called for more clarity to ease the burden on the agency and increase efficiency, but panelists were pessimistic that the FDA will put recommendations into practice.

    The upcoming tenth Conference of the Parties (COP10) to the World Health Organization’s Framework Convention on Tobacco Control is expected to bring new, illogical restrictions on RRPs, judging from proposals published in advance, such as a redefinition of aerosol as smoke. Panelists feared that with an “any risk is bad” approach, RRPs will increasingly be treated like combustible cigarettes.

     

  • Snowplus to Launch Gold Bar and Clic in U.K.

    Snowplus to Launch Gold Bar and Clic in U.K.

    Snowplus will soon launch two all-new disposable e-cigarettes. The Snowplus Gold Bar and Snowplus Clic are the first 5,000 puffs TPD-compliant devices to come to market, according to an emailed press release.

    Debuting at the Vaper Expo UK, to be held from October 27-29 in Birmingham, England, the new products represent a “pioneering innovation” in the vaping market, according to Snowplus.

    “The Snowplus Gold Bar will be the game-changer in the industry, it will definitely lead the product development direction,” said a Snowplus spokesperson. “A 5,000-puff TPD disposable vape has never been seen in the UK market before.”

    All vaping products sold in the UK must comply with the EU Tobacco Products Directive (TPD). Most legal disposable vaping products in the UK deliver less than 800 puffs in order to meet TPD requirements.

    The Gold Bar and Clic models both feature transparent e-liquid tanks that give users a clear, real-time view of remaining juice levels. The products also utilize lab-tested mesh coils made of specialized materials to deliver consistent and authentic flavor across 16 different juice options.

    “Snowplus has pioneered responsible innovation since its founding in 2019,” the release states. “With $40 million in funding from renowned investors like Sequoia Capital, the company aims to provide better alternatives to combustible cigarettes for adult consumers.”

    The Snowplus Gold Bar and Clic have also passed numerous third-party safety tests.