Blog - Tobacco Reporter

22nd Century Eliminates $2.3 million of Debt

22nd Century Group has entered into a binding letter of agreement to eliminate an additional $2.3 million in outstanding debt with JGB Capital.

Under the terms of the agreement, the company and JGB Capital will exchange an aggregate of $2.3 million in principal, fees and expenses owed to JGB Capital for consideration of approximately 1.375 million shares of the company’s common stock and prefunded warrants. Additionally, the company will defer monthly amortization payments for an additional two months, resulting in no required further principal repayment until August 2024.

“This agreement with JGB is another significant step in restoring strength to our balance sheet as we work toward becoming debt-free,” said 22nd Century Group chairman and CEO Larry Firestone in a statement.

“This transaction also preserves our cash resources for commercial use as we work to become cash flow positive by the first quarter of 2025. We have made substantial progress on our commercial programs, including refining our revenue mix, implementing a lean operating cost profile and positioning the company to win new contracts, including the new CMO and distribution agreements announced recently, which are already advancing our sales in the second quarter.”

May 13, 2024

Spain Urged to Keep Vape Flavors Legal

The Independent European Vape Alliance (IEVA) has asked Spain to refrain from banning flavored vapes.

According to the group, the proposed measure presents several risks.

“The effective ban of e-liquids in the Spanish market will lead to a boom in black market activities with dangerous, non–compliant products,” the IEVA wrote in a statement.

In addition, the group warned, it will cause a rise in smoking rates and put at risk more than 3,000 jobs in the Spanish vaping industry, leading to a reduction in government revenues by reducing tax collection.

The IEVA shared its concerns in a contribution to the public consultation that is currently underway.

May 11, 2024

Officers Told to Stop Demanding Kickbacks

Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) has told field officers to stop demanding kickbacks from tobacco growers and transporters, reports The Herald.

According to the newspaper, some field officers are forcing farmers to use only vehicles owned by certain individuals, with some demanding up to $3 per bale for this “service.”

The Tobacco Transporters Trust of Zimbabwe (TTTZ) is reportedly compiling a list of the culprits.

“Lat year, the officers were demanding $1 per bale,” TTTZ Chairperson Rutendo Sande was quoted as saying. “We lodged complaints but no action was taken.”

May 11, 2024

Loans and Grants for Philippine Growers

The Philippine National Tobacco Administration (NTA) has given growers in Pangasinan PHP21.5 million in of grants and loans for the 2023-2024 cropping season, reports the Philippine News Agency.

About 400 tobacco farmers have taken advantage of the Curing Barn Assistance Program (CBAP), which has a budget of PHP8 million for the covered period. “Through CBAP, they buy the necessary materials to cover their harvest in case of rain or to prevent direct sunlight,” said NTA-Pangasinan branch manager Roger Madriaga.

Madriaga said the NTA also released PHP13.5 million to 705 tobacco farmers in the form of cash and material farm inputs, such as fertilizers and pesticides, under the tobacco contract growing system.

“TCGS has three components, which are financial, technology and marketing. We subsidize the farmers depending on their needs through financial assistance and technology, while we monitor the implementation of the technology,” he said.

Meanwhile, Madriaga said only 1 percent to 2 percent of the more than 2,000 hectares of tobacco plantation in the province have been affected by the El Niño weather phenomenon.

The planting season cut-off date for tobacco is from October to Jan. 15, and farmers may harvest the leaves within 55 days to 60 days.

May 11, 2024

Industry Insists on Risk-Appropriate Warnings

The tobacco industry is asking the government of Kenya to distinguish between traditional cigarettes and tobacco-free alternatives, such as vapes and nicotine pouches, when crafting health warning labels, reports The Star.

Kenya’s health ministry is currently gathering public feedback on a proposal that would require cigarette manufacturers to print new graphic health warnings on packs of nicotine products. The consultation ends May 15.

The industry says that most of the proposed images do not correlate with the products for which they are proposed.

“We are looking at information that does not mislead the user, is factual and evidence-based,” said BAT Kenya’s scientific engagement manager, Douglas Weru, during a public participation workshop hosted by the Ministry of Health. “The message coming through from stakeholders in this public participation sessions, and which we agree with, is that the images should correlate to the risk associated with the product,” said Weru.

The Retail Trade Association of Kenya (Retrak) said the proposed warnings require an amendment to the 2007 Tobacco Control Act, given that many of the new products were not widely available when the law was written.

May 11, 2024

Illicits to Surpass Half of Pakistan’s Market

The share of illicit products on Pakistan’s tobacco market is expected to reach 56 percent by the end of 2024, reports Ary News.

According to a recent Ipsos survey, more than 165 brands of cigarettes are being sold in the country without tax stamps, depriving the government of PKR 300 billion in annual tax revenue.

In addition, 104 cigarette brands are being sold below the minimum price.

The shift toward duty-free and smuggled cigarette brands is facilitated by the availability of larger pack sizes and exacerbates the issue of tax evasion, according to the publication.

Stakeholders have been calling for stricter enforcement of existing regulations, enhanced enforcement and new tax policies.

May 11, 2024

Film Portrays Dalligate

The French film director Antoine Raimbault has released a movie about disgraced European Commissioner John Dalli, who was stripped of his role after the EU’s anti-fraud agency claimed he had failed to declare a tobacco-related bribery attempt, reports Malta Today.

The case dates from 2012, when Dalli’s aide Silvio Zammit allegedly tried to obtain a €60 million ($71.17 million) bribe from Swedish Match to reverse the EU ban on snus. The company rejected the offer as improper and reported it to the European Commission.

Une Affaire de Principe–marketed as Smoke Signals in English–recounts the story from the point of view of one of Dalli’s sole champions at the time, Jose Bove, a French farmer and member of the European Parliament for the Green party who is perhaps best known for dismantling a McDonald’s franchise in 1999 to protest new U.S. restrictions on importing Roquefort cheese and to raise awareness about McDonald’s’ use of hormone-treated beef.

Bove suspects Dalli’s defenestration was related to the tobacco industry’s desire to postpone the Tobacco Products Directive.

John Dalli, who has occupied no political post since his ouster from Brussels in October 2012, has always protested his innocence, claiming he was unaware of Zammit’s actions.

May 10, 2024

JT USA to Move to North Carolina

JT International USA (JTI USA) will relocate its U.S. headquarters from Teaneck, New Jersey to Raleigh, North Carolina.

The headquarters will open later this year in One North Hills Tower at North Hill in Midtown Raleigh.

“It’s great to see another international company choose North Carolina for its top-flight workforce, number one business environment and extraordinary quality of life,” said North Carolina Governor Roy Cooper in a statement.

JTI’s group of companies currently operates a tobacco buying station in Wilson, North Carolina, and contracts with hundreds of farms in the state.

“We are proud to welcome JTI’s leadership and headquarters to North Carolina,” said Agriculture Commissioner Steve Troxler. “As a leading buyer of North Carolina tobacco, this move to Wake County is a great sign of their long-term interest in working with our growers and will help us further build on this important trade partnership.”

“I am pleased to welcome JTI and the more than 100 high-paying jobs they are bringing to Raleigh,” said Mayor Mary-Ann Baldwin. “Their decision to move their headquarters here clearly demonstrates the quality of life we offer and the quality of our talent pool. We wish them much success in the future.”

“We are very excited to be joining Raleigh’s diverse community. Raleigh is an ideal location for our new headquarters because it is a vibrant and growing city with a top of its class talent pool for recruitment of new employees,” said JTI USA General Manager and President Corrado Mautone.

JTI USA sells brands such as LD, Wave, Wings and Export A. The company employs more than 250 people across the U.S.

May 10, 2024

MRTP Renewal Application Filed

The U.S. Food and Drug Administration on May 9 filed for scientific review modified risk tobacco product (MRTP) renewal applications submitted by Philip Morris Products for the following IQOS products:

IQOS 2.4 System Holder and Charger
IQOS 3.0 System Holder and Charger
Marlboro Amber HeatSticks (formerly named Marlboro HeatSticks)
Marlboro Green Menthol HeatSticks (formerly named Marlboro Smooth Menthol HeatSticks)
Marlboro Blue Menthol HeatSticks (formerly named Marlboro Fresh Menthol HeatSticks)

In 2020 and 2022, the FDA issued modified risk granted orders for products. These orders are valid for a fixed time period. To continue marketing the MRTPs after the authorized term, the company submitted MRTP renewal applications to FDA.

Starting May 10, 2024, people may submit public comments on these applications on regulations.gov to docket FDA-2021-N-0408 for the IQOS 3.0 device and docket FDA-2017-D-3001 for the IQOS 2.4 device and the Marlboro HeatSticks products.

The FDA will post application documents, including amendments; given that the documents will need to be redacted for any confidential information, they will be posted on the Center for Tobacco Products’ website on a rolling basis.

Once all materials for these MRTP applications, including amendments, have been made publicly available, FDA will announce a closing date for the comment period. The closing date will be no earlier than 180 days from the date of the Federal Register notice and at least 30 days from the date FDA posts the last application materials.

May 10, 2024

Revenue and Profits up at Japan Tobacco

Japan Tobacco’s revenue increased by 11.3 percent to ¥740.3 billion ($4.75 billion), year-on-year, in the first quarter of 2024. Core revenue at constant currency exchange rates rose by 5.7 percent to ¥676.7 billion while adjusted operating profit at constant exchange rates increased by 3.4 percent to ¥231 billion.

On a reported basis, adjusted operating profit increased by 1.5 percent to ¥226.7 billion. Operating profit increased by 4.6 percent to ¥215.8 billion, and profit increased by 8.7 percent to ¥157.3 billion.

“The JT Group delivered robust results in the first quarter,” said President and CEO Masamichi Terabatake in a statement. “GFB [global flagship brands] volume growth and solid pricing, as well as RRP [reduced-risk product]-related revenue increasing by double-digits in the tobacco business, continued to drive the strong performance of the group.”

“RRP volume increased by 25.2 percent year-on-year, mainly driven by the HTS [heated-tobacco sticks] segment, which is our investment priority. Geo-expansion of Ploom X is on track; we have completed launches in four additional markets year-to-date. With plans to launch in four more markets by June, we are making good progress to deliver our ambitions set for 2028.”

May 9, 2024