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  • Menthol Marketing Orders ‘Significant Step’

    Menthol Marketing Orders ‘Significant Step’

    By Robert Burton

    Vapes are a powerful tool for adult smokers making the transition from cigarettes to reduced-risk products (RRP). The category is governed by market-specific regulation, often influencing public perception and, therefore, uptake.

    Last week, following an extensive scientific review, the U.S. Food and Drug Administration authorized the marketing of four menthol-flavored e-cigarette products for Altria-owned vaping company Njoy. This is a watershed moment for the sector and one which will have a huge and significant impact on the global RRP market.

    This announcement signifies the FDA’s acknowledgment that menthol vaping products have the potential to be an important and effective tool for adult smokers looking for reduced-risk alternatives. This is significant for the wider sector in a number of ways; above all, it sets a precedent for other markets, paving the way for other regulators, particularly those looking at bans, to consider flavors in the context of public health.

    Across the globe, we are seeing an increasing number of markets introduce bans on flavors on a precautionary basis in a bid to mitigate youth uptake. At Plxsur, we have long advocated against the ban of flavors on vape products, arguing that it has the potential to negatively impact those making the transition from conventional cigarettes, who often are drawn to vapes for their flavor, amongst other factors such as price and convenience. There are also arguments and emerging evidence that flavor bans drive the black market sale of unregulated, dangerous products.

    There will be many that, understandably, say this decision is “too little, too late,” but it is nonetheless encouraging to see the FDA, with its extensive science and evidence-based review, validating that with effective regulation and enforcement, flavored vape products are “in the interest of public health.” Those countries that have considered flavor bans should look to the U.S. and conclude that it can’t be justified from a scientific review perspective.

    While this is the first authorization of a “characterizing flavor” by the FDA for vaping products, two of the major regulatory influencing bodies, the FDA and the Medicines and Healthcare Products Regulatory Agency (MHRA), now acknowledge that there is value in non-tobacco-flavored vaping products.

    This decision has the potential to impact the world. The U.S. has long influenced international markets, so it sets a benchmark that we expect other, less vape-supportive governments and regulatory bodies will follow.  

    Rob Burton

    In Italy, tobacco-flavored vapes constitute 40% of the vape market, while menthol represents 21%.[1] This demonstrates the significance of flavored products in the market as a whole. If such flavors were to be banned, this would act as a barrier for smokers to move to reduced-risk alternatives and potentially lead vapers to return to cigarettes.

    In some geographies, it is great to see that vapes are being accepted as an effective alternative to conventional cigarettes, even this week’s news from Australia announcing that vapes – which until now have only been available through prescription – will soon be available for sale within pharmacies without the need for a prescription, offering an effective pathway to end the smoking epidemic in the country.

    As we anticipate the potential revision of the Tobacco Product Directive Review next year, the justification for banning flavors, from a scientific point of view, simply isn’t there. In the case of Njoy, this has been shown through closed-system pod-based devices, which offer a more cost-effective avenue for existing smokers and disposable systems while incorporating child lock systems that will restrict access to children, as is already applied by a Plxsur company, ProVape, in its SALT and KUBIK brands.

    While the FDA’s authorization is specific to these four products made and sold by Njoy and does not apply to any other menthol-flavored e-cigarettes, our expectation is this will open a channel for other such products to achieve authorization by providing the necessary framework and the potential for knowledge-sharing and guidance. With the weight of data-led evidence, the category can advocate for the democratization of this framework, enabling further regulatory authorizations for products produced by responsible vaping companies in the interest of the adult smoker.  

    At Plxsur, we have a clear purpose – to facilitate adult smokers to make positive health decisions by transitioning away from cigarettes to reduced-risk products. Flavor is a key factor in supporting smokers moving completely to such alternatives, and we look forward to seeing a more science and data-led approach being adopted across all markets as we work to save the lives of those impacted by smoking, mitigate the risk of youth uptake, and do so sustainably and responsibly.

    We view this FDA decision as a significant step forward in broadening the pathway for adult smokers, and previously lacking “off-ramp” for U.S. menthol smokers looking to make the switch, which, according to Public Health England, is 95% less harmful and, therefore, undeniably, “in the interest of public health.”[2]

    Robert Burton is Group Scientific and Regulatory director for Plxsur.

    [1] The Global Vaping Market: A Plxsur Snapshot

    [2] E-cigarettes: an evidence update: A report commissioned by Public Health England

  • New Reports Exposes Illegal Tobacco Trade

    New Reports Exposes Illegal Tobacco Trade

    Photo: IvanSemenovych

    A new study, titled “Fighting the Dark Underworld: How the illegal trade in tobacco threatens to overwhelm us,” by Intrinsic Insight and commissioned by Japan Tobacco International, sheds new light on the pervasiveness of organized crime within global society, focusing on four countries with high levels of illicit tobacco trade: Canada, France, Philippines and the United Kingdom.

    The report examines how unstable geopolitical environments, fragile economies and a lack of serious deterrents create the ideal conditions for a surge in criminal activity and increased profits for criminal networks.

    The report highlights key indicators—found across the four countries—that are allowing illegal trade to flourish.

    “A combination of factors ranging from poor border controls and ineffective penalties to corruption, excessive taxation and legislation, are contributing to both the increase in demand for illicit products while making it easier for criminals to grow substantial criminal empires,” said JTI’s global anti-illicit trade operations director Vincent Byrne in a statement.

    1. Cost of living crisis

    Compromised living standards are forcing greater numbers of consumers into making difficult lifestyle decisions, creating ripe environments for criminals to push a larger number of smokers towards cheaper illegal channels and illegal products. Buying illegal tobacco products is in danger of becoming normalized behavior, with four in 10 (43 percent) adult smokers surveyed across these four countries now finding themselves comfortable with the idea of buying cigarettes, even if they know they are produced or sold illegally.

    1. Excessive taxation and loss in government revenue

    As illegal sales continue to bombard the legal tobacco market, governments are facing a decline in tax revenue. According to the World Bank, governments globally are estimated to be losing out on $40 billion to $ 50 billion annually in excise alone due to consumers being lured into buying illegal tobacco products. According to 88 percent surveyed, governments’ inability to collect tax revenue because of illegal trade is a significant issue.

    1. Rapid technological progress

    The criminal shift towards e-commerce and the advancement of artificial intelligence is leading to an increased sophistication of production, distribution and sale of illegal goods. Of those adult smokers surveyed, 14 percent have claimed to have recently purchased illegal tobacco via social channels.

    1. Not cracking down on illegal tobacco trade to curb other serious crime

    Not only is the money being lost to governments, thus limiting their capacity to fund public services such as law enforcement and important public services, the illegal tobacco trade is a direct gateway to other serious crime such as people trafficking and terrorism. The study found that policy makers underestimate the extent of the worry for the public, with 50 percent of respondents citing illegal tobacco trade as being a threat to their country, which is close to parity with those citing drugs/narcotics (54 percent) and terrorism (49 percent) as national dangers. The sale of illegal tobacco is not a victimless crime, according to 61 percent of those surveyed.

    1. Existing penalties are not severe enough to deter criminals

    More collaboration is needed to crack down on illegal trade and its intricate international criminal networks. According to 61 percent surveyed, authorities are not taking the situation as seriously as they should. The United Nations Office of Drugs and Crime estimates that no more than 2 percent of global shipping containers are inspected, signaling to criminal gangs that illegal trade is a relatively “risk free” enterprise with large financial upsides.

    “While the drivers fueling illegal trade are evident in each of the four countries, they have global impact,” Byrne said. “Given the borderless nature of illegal trade, in the future, countries that currently do not have an illicit tobacco problem, are advised to notice the triggers to avoid the onset and spread of criminality linked to illicit trade in their countries.”

    A synopsis of the situation in the four countries and consolidation of key report findings includes:

    Canada

    Contraband tobacco has spread unchecked across the country to the detriment of revenue receipts due to serious disparities in tax harmonization because of Canada’s geography and complicated relationship with First Nation states.

    • In Canada, the high volume of tobacco products produced by First Nation states is a major anomaly that drives illegal trade there. This bears a similarity to ‘free trade zones’ such as those that exist in places like the UAE. Tobacco produced legally in these zones often ends up in other jurisdictions where it then becomes an illegal product.
    • The report found that for 57 percent of Canadians, the economy and general cost of living is one of their top five concerns.
    • Seven out of ten (71 percent) Canadians believe that the proceeds of the illegal tobacco trade should fund law enforcement.
    • Eight out of ten (81 percent) Canadians believe government should work with industry to combat illegal trade.

    France

    High levels of taxation, an absence of border controls and issues of affordability caused by rising living costs are having a big impact on the increase in illegal trade. The French government’s cornerstone policy in the run up to this summer’s 2024 Paris Olympics is to remove illegal tobacco sellers from the streets and has pledged to impose stronger fines, penalties, and arrests of street sellers. Cracking down on clandestine factories is also a focus for government.

    • The report found that one in three members of the French public cite local crime as one of their top five concerns.
    • Seven out of ten (76 percent) French nationals feel that the sale of illegal and fake tobacco by street vendors makes their neighborhoods less safe.

    Philippines

    In a recent reclassification of tobacco as an agricultural product, the Philippines Congress has passed amendments to the country’s agricultural bill that established the smuggling of tobacco as an act of economic sabotage. This amendment, which is expected to be signed into law by the President, includes harsher penalties and fines, and it has the potential to have a significant impact on smuggling and the illegal distribution of tobacco products in Philippines.

    • As a result of legislation passed in 2013 (the RA 10351, known locally as “the sin tax” laws), revenues raised through tobacco sales have been used to finance public services. Several independent studies have shown that these laws have created an increase in demand for illegal tobacco and revenue losses for the government.

    United Kingdom

    While the U.K. is experiencing its largest ever cost-of-living crisis, with public debt standing at over 184 percent GDP, and with 11.7 million of the U.K.’s 67 million population living in poverty according to official figures, the U.K. government is scrambling for revenue.

    • The customs and revenue service estimates that in 2021, the loss in revenue to the U.K. exchequer due to illegal tobacco trade was £2.5 billion ($3.24 billion), money that could be used to fund the U.K. economy and social programs, instead of being funneled directly into criminal networks.
    • While many U.K. authorities, including Customs & Excise, Trading Standards, Border Force, the Police, and the National Crime Agency, have significant roles to play in tackling illegal trade, oftentimes they have conflicting and overlapping responsibilities and dwindling resources.
    • Harsher deterrents and penalties are needed for criminals who are only too eager to exploit these loopholes.
    • The study found that 72 percent of U.K. adult tobacco consumers would be happier paying the tax on tobacco products if the government spent more of these taxes on law enforcement.

    In the report, a multi-faceted approach for tackling the “dark underworld” includes:

    • Increased cooperation between governments and law enforcement at both international and national levels. This includes information sharing between industry and authorities.
    • In the case of tobacco, there needs to be a concerted effort to increase the fines and punishments for those producing, distributing, and selling illicit products to increase the risk and consequences for criminals. This should be coupled with stronger enforcement.
    • Law enforcement agencies should also explore using powers other than anti-smuggling and anti-counterfeiting laws, for example, anti-money laundering, anti-income tax evasion and anti-organized crime laws.

    Reasonable and moderate taxation is vital to maintain affordability of legal produc

  • Brazilian Flood Damage Assessed

    Brazilian Flood Damage Assessed

    Photo: SindiTabaco

    The floods that hit Rio Grande do Sul in early May have done significant damage to the Brazilian state’s tobacco-growing sector, according to a survey conducted by the Interstate Tobacco Industry Union (SindiTabaco) and its associate companies.

    In all, the floods impacted 1,929 rural properties in 75 municipalities covered by the survey. Candelaria municipality was worst impacted, with 214 tobacco farmers suffering losses. Other heavily impacted municipalities included Agudo (136 affected farmers), Barros Cassal (132) and Venancio Aires (116).

    In terms of monetary impact, Venancio Aires was most impacted, with the industry suffering a loss of BRL18.3 million ($3.37 million). Other hard-hit municipalities included Candelaria (BRL16.52 million in losses), Agudo (BRL6.35 million) and Ibarama (BRL5.96 million).

    We are confident that, in spite of this tragedy, the production of tobacco in the affected areas should remain close to the projections estimated for the 2024–2025 growing season

    The survey also demonstrated that 96 percent of the affected farmers intend to continue producing tobacco. “We need to provide the conditions that make it possible for them to carry on with their activities in the upcoming crop year and, within this context, the associate companies have already replaced the necessary inputs to restore the 2,070 seedbeds of lost seedlings, an investment that amounts to approximately BRL1.6 million,” said SindiTabaco President Iro Schuenke during a meeting with representatives of tobacco growers’ association Afubra, the Federation of Agricultural Workers and the Rio Grande do Sul State Federation of Agriculture.

    “We are confident that, in spite of this tragedy, the production of tobacco in the affected areas should remain close to the projections estimated for the 2024–2025 growing season.”

    While the industry and the tobacco farmers’ representatives are doing their best to minimize losses, they will require public support to rebuild curing barns and access credit lines, according to Schuenke, who noted that many tobacco farmers also produce food crops.

  • Health Ministers Debate EU-wide Flavor Ban

    Health Ministers Debate EU-wide Flavor Ban

    EU health ministers on June 21 discussed proposals to restrict flavors in consumer nicotine products, such as vapes and nicotine pouches.

    The EU Employment, Social Policy, Health and Consumer Affairs Council will consider proposals from Latvia and Denmark to support an EU-wide flavor ban and a crackdown on cross-border sales, among other recommendations. 

    If the health ministers reach consensus support for these proposals, the next step would be to ask the European Commission to introduce draft legislation, which would eventually be voted on by the council and the European Parliament, according to Vaping360.

    Denmark, Estonia, Finland, Hungary, Lithuania, the Netherlands and Slovenia already ban vape flavors. Spain recently completed a public consultation on a proposed flavor ban while Latvia reportedly is in the process of introducing flavor restrictions.

    The Tobacco Products Directive allows the member states to set their own rules for flavors. The Latvian proposal asserts that individual bans don’t work due to cross-border sales, among other factors.

    Vaping activists have urged the EU to keep e-cigarette flavors legal.

    “By supporting a flavor ban, EU health ministers would push millions of adults back to smoking or into the black market, endangering lives and ignoring scientific evidence. A flavor ban would be a huge step backward for public health and harm reduction,” said Michael Landl, director of the World Vapers’ Alliance, in a statement.

    “Scientific research consistently shows that flavors play a crucial role in helping smokers quit. The endorsement of the flavor ban ignores those findings and the clear will of the people, opting instead for a policy that will cause more harm than good. The World Vapers’ Alliance will continue fighting for reasonable, evidence-based policies that truly protect public health.”

  • FDA Authorizes NJOY Menthol Products

    FDA Authorizes NJOY Menthol Products

    Image: Tada Images

    The U.S. Food and Drug Administration today authorized four NJOY products through the premarket tobacco product application (PMTA) pathway. The FDA issued marketing granted orders to NJOY, an Altria subsidiary, for two pods for its Ace closed e-cigarette device, which was authorized in April of 2022, and two disposable e-cigarettes—NJOY DAILY Menthol 4.5%, and NJOY DAILY EXTRA Menthol 2.4%.

    The two authorized ACE pods are the NJOY ACE Pod Menthol 2.4% and the NJOY ACE Pod Menthol 5%.  All four of the newly authorized products are pre-filled and non-refillable.

    The decision is significant because it is the first non-tobacco flavored vapor product to be authorized by the FDA. In his TPL Review, Office of Science Director Matthew Farrelly said that NJOY had “demonstrated the potential for these new products to benefit adults who smoke [combustible cigarettes] as compared to those who continue to use [combustible cigarettes] exclusively,” and that the company had “also proposed robust marketing plans that include restrictions beyond those required with PMTA authorization.” Farrelly also highlighted data from a longitudinal cohort study that NJOY submitted with its application, which pointed to “robust absolute switching rates” as well as a higher rate of complete switching than tobacco-flavored NJOY DAILY ENDS.

    The FDA noted, however, that applications are reviewed on a case-by-case basis, and that this authorization of menthol products does not apply to any other menthol-flavored vaping products.

    “It is the responsibility of the applicant to provide the necessary evidence to obtain marketing authorization, and the FDA has made clear what’s needed to successfully achieve that outcome,” said CTP Director Brian King in the agency’s press release. “This action is further reinforcement that authorization of an e-cigarette product is possible when sufficient scientific evidence has been submitted to the agency to justify it.”    

    Altria welcomed the authorizations. “With the addition of NJOY menthol e-vapor products, we are now uniquely positioned with an FDA-authorized portfolio to support adult smokers in their transition to smoke-free alternatives. We believe these marketing orders are a testament to the quality of the NJOY products and the strength of evidence supporting the authorizations of the NJOY menthol e-vapor products,” said NJOY President and CEO Shannon Leistra in a statement.

    “We believe that, for tobacco harm reduction to succeed, adult smokers must have access to a robust marketplace of FDA-authorized smoke-free alternatives,” said Paige Magness, senior vice president, regulatory affairs of Altria Client Services. “FDA authorization of NJOY menthol e-vapor products provides adult smokers and vapers with regulated alternatives to the illicit flavored disposable e-vapor products on the market today. We believe the NJOY menthol marketing orders are a positive outcome for public health.”

    The FDA previously authorized the NJOY Ace and three of its tobacco-flavored pods on April 27, 2022.  In March of 2023, Altria acquired NJOY for $2.75 billion cash.  The acquisition was completed on June 1, 2023.  However, the transaction terms included $500 million in additional cash payments contingent upon the product approvals received today, which would bring Altria’s total spend to $3.25 billion.

  • Zimbabwe Cigar Tobacco Marketing Season Opens

    Zimbabwe Cigar Tobacco Marketing Season Opens

    Image: Taco Tuinstra

    Zimbabwe’s 2024 cigar tobacco marketing season opened in Manicaland with a high price of $7.05 per kilogram recorded on the first sale, according to The Herald. The crop is in its 10th year of production.

    Growers have sold 5,200 kg of cigar tobacco worth $16,432 at an average price of $3.16 per kilogram, according to Tobacco Industry and Marketing Board (TIMB) statistics.

    “Growers comprised 11 small-scale growers all doing half a hectare each and one commercial farmer doing four hectares. The highest price fetched was $7.05 per kilogram,” said Chelesani Tsarwe, TIMB public affairs officer. Sales took place at Mapeto Farm in Burma Valley in the Manicaland province.

    “The first of the anticipated three sales saw 5,022 kg of the crop undergoing sale at an average price of $3.16 per kilogram. The crop was grown under contract with 14 small-scale farmers and one commercial grower,” said James Lindsay Guild, owner of Mapeto Farm. The crop was fermented at the farm for at least a year, according to Guild.

    “The premium tobacco from the crop is destined for the American cigar market. The average yield is around 1,500 kg per hectare,” Guild said.

    The small-scale farmers produced the crop under dryland, and the commercial farmer used irrigation.

  • Germany Revokes Shisha Packaging Rules

    Germany Revokes Shisha Packaging Rules

    Image: ir1ska

    Germany’s finance ministry has revoked its rules for packaging shisha tobacco, which caused major backlash and some retailers to go bankrupt, according to DPA International.

    The packaging regulation was introduced in 2022 to prevent tax evasion, which was a frequent issue in shisha bars. Shisha bars would buy large packages of shisha tobacco and divide them into small portions, which the government said was tax evasion because the bars were paying less in taxes than they should be.

    The packaging regulation subsequently banned 200-gram packs and 1,000-gram packs and only allowed packs to be a maximum of 25 grams. The finance ministry expected an additional tax revenue of €155 million ($165 million) following the restrictions; however, tax income declined as the black market increased.  

    According to DPA, the regulations will be lifted beginning July 1, allowing packs of all sizes to be legal again.

  • BAT to Introduce Vape Vending Machines

    BAT to Introduce Vape Vending Machines

    Photo: evannovostro

    BAT plans to introduce vape and nicotine pouch vending machines in pubs in the U.K., according to Better Retailing.

    The company is hiring at least 12 representatives to target on-trade establishments with the aim of “securing new locations for vending machine and other business development solutions to ultimately increase sellout of specific BAT-related products.”

    Areas being targeted include Basingstoke, Birmingham, Bury St. Edmunds, Cambridge, Coventry, Crawley, Edinburgh, Exeter, Maidstone, Reading, Royal Tunbridge and Sevenoaks.

    Six-month trial contracts are set to start on June 24 “with ambition to extend into 2025 and beyond.”

    “BAT U.K. is excited to be working on a project to sell our Vuse and Velo brands via age-gated vending machines,” said a BAT spokesperson. “At BAT, our purpose is bold: to build A Better Tomorrow. We will do this by reducing the health impact of our business, including by reaching our adult consumers where they use our alternative nicotine products. Vending machines represent an exciting opportunity to further deliver on our purpose.”

    In response to concerns about underage use, BAT stated that their “machines will use best-in-class age verification to ensure that this essential principle is maintained.”

  • ‘Trading Standards Underfunded’

    ‘Trading Standards Underfunded’

    Image: doethion

    Trading Standards, the agency tasked with enforcing U.K. consumer protection laws and fair trading practices, needs more money to enforce the country’s vape legislation, according to an analysis commissioned by the Association of Convenience Stores.

    The study found that the agency needs £168.34 million ($213.45 million) over five years to properly carry out its responsibilities. This figure represents a near 30 percent increase in net budgets for Trading Standards and takes into consideration the cost of enforcement officers, training, detection dogs, legal fees and product disposal.

    The U.K. government previously committed to a £30 million annual enforcement top-up; however, it appears only one-third of the funding boost would have actually been assigned to Trading Standards, according to the U.K. Vaping Industry Association (UKVIA).

    “The ACS-commissioned analysis shows that a huge funding boost is needed if we are to rain down on illegal vape sellers with the full force of the nation’s dedicated, but under-resourced, Trading Standards officers—a cost that the U.K. government has yet failed to meet but one that could be covered by the sector’s comprehensive licensing framework,” said UKVIA Director General John Dunne in a statement.

    “It’s rare for an industry to advocate for its own regulation, but we have and will continue to call on the government to introduce a vape licensing scheme because it is what is needed to back effective enforcement and to usher in a new age of accountability for our sector.”

  • Cigarette Smuggling Impeding Gaza Aid

    Cigarette Smuggling Impeding Gaza Aid

    Image: Robert

    Restrictions on imports of nonessential goods into Gaza have turbocharged cigarette smuggling, reports The Wall Street Journal.

    Aid trucks and storage depots have become targets for Palestinian smugglers seeking to retrieve illicit smokes stashed inside shipments by their accomplices, say U.N. and Israeli officials. Other local criminals are also attacking vehicles they suspect have cigarettes hidden somewhere on board, they say.

    Cigarette prices have soared since Israel limited imports into Gaza to essential goods—which don’t include cigarettes—after Hamas’ Oct. 7 attacks. Cigarettes sell for as much as $25 apiece in isolated Gaza.

    Criminal attacks on aid convoys have reportedly become so severe that over a thousand truckloads of aid have been left sitting on the Gaza side of the Kerem Shalom border crossing with Israel.

    A UN official described cigarettes as “the new gold” in Gaza.