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  • Doubling Down

    Doubling Down

    Australia’s proposed crackdown on vaping is unlikely to achieve its objectives.

    By Stefanie Rossel

    As a vaper in Australia, you basically have two choices. The first option is to behave like a good citizen, go to your doctor, get a prescription and convince a pharmacist to sell it to you. The alternative is to be not so good and do what 92 percent of Australian vapers do—source your e-cigarettes on the black market. Vapes have been regulated Down Under since October 2021 but so poorly that Australian health professionals speaking at the Warsaw Global Forum on Nicotine in June apologized for the legislation.

    Getting a prescription is more difficult than one might think, according to Carolyn Beaumont, an Australian general practitioner (GP) who advocates for the right of adult smokers to access vaping products. As Beaumont explained during her presentation, among the many barriers is the challenge to find a doctor who is not only familiar with vaping products but also believes in their potential as smoking cessation tools. But Australia is a huge country, where most of the population—and doctors—live along the Eastern Seaboard. In other regions, there are fewer physicians. Additionally, clinics may not be open daily, wait times are getting worse, and more GPs are charging privately. An estimated 20 percent of Australians have no regular GP; Beaumont said it could be even 35 percent.

    Doctors often lack product knowledge and have an inadequate understanding of smoking, vaping and nicotine dependence. Tobacco harm reduction is not taught in Australia, according to Beaumont, and the medical guidelines are not supportive of vaping. Doctors also face an administrative barrier: They need to be registered as an authorized nicotine prescriber. However, the prevailing negative media narrative in Australia makes many GPs reluctant to register. In April 2023, the Australian Department of Health and Aged Care listed 1,963 authorized prescribers nationwide, which equals one in 20 practitioners.

    Once vapers have secured a prescription, they need to find a pharmacy that sells vapes. But few establishments do so, and often, they have only limited stock. Vapes can also be ordered online and imported for personal use under the Therapeutic Goods Administration’s (TGA) personal importation scheme. With a valid prescription, Australians may legally import a three-month supply per order. “It remains illegal for other Australian retailers, such as tobacconists, vape shops and convenience stores, to sell you nicotine vaping products, even if you have a prescription,” the TGA stresses on its website.

    At present, merely 8 percent of vapers have a prescription, and only 2 percent purchase from pharmacies, according to a Roy Morgain survey in February 2023.

    Additional Restrictions

    Colin Mendelsohn

    Things are unlikely to get easier for smokers seeking less hazardous alternatives to combustible cigarettes. In May 2023, Health Minister Mark Butler announced a further crackdown on recreational vaping. He claimed that vaping had been advertised to the public as a therapeutic product meant to help smokers quit but instead spawned a new generation of nicotine users, particularly young people. At press time, details on the new rules were unavailable, but tobacco harm reduction advocates were bracing for restrictions on disposable vapes, flavor options and nicotine concentrations, along with a requirement to package vaping products in pharmaceutical-style packaging and an end to the personal importation scheme, with sales permitted only through authorized pharmacies.

    Writing on his blog, professor Simon Chapman, a determined opponent of vaping, suggested that Butler might ban refillable vaporizers as well. The planned legislation will require federal authorities to seize products at the border and states to police retail sales, but so far, it has not allocated any funding to enforcement.

    The proposed plan is de facto prohibition, according to Colin Mendelsohn, a former GP who has been helping smokers quit for more than 30 years. “It is a doubling down on a failed highly restrictive model that has been rejected by vapers and prescribing doctors and has created a thriving black market, which sells freely to underage users,” he says. “The history of prohibition and the war on drugs shows consistently that it does not reduce long-term illicit drug supply, and there is no reason to believe that this will be different. Bans are effective short-term political strategies but are bad public health policy. The Australian Border Force (ABF) does not have the resources or interest in intercepting vapes and is correctly more focused on dangerous illicit drugs, such as heroin, cocaine, ice, etc., or weapons.”

    In an interview in May, ABF Chief Michael Outram warned that banning vapes at the border wouldn’t be enough to stamp out a rampant black market, as his organization managed to intercept barely 75 percent to 80 percent of illicit drugs making their way into Australia “on a good day.” Of the 8 million containers coming into the country each year, only 1 percent to 1.5 percent are scanned.

    The proposed crackdown, cautions Mendelsohn, will likely have many unintended consequences. “Criminal networks will continue to find ways to import vapes,” he says. “This is a high-profit and low-risk crime, and it is accompanied by stand-over tactics, such as firebombing of retail outlets, gang wars and violence, and corruption of officials. The proceeds fund other, more serious criminal activities. There will be continuing sales to youth and more difficult legal access for adult smokers. Some vapers will relapse to smoking. It will be harder for current smokers to switch to vaping.”

    According to Mendelsohn, the planned law will criminalize otherwise law-abiding citizens who simply want to improve their health, and cause the government to lose revenue from taxes, licensing and vape shops while shouldering increased cost of policing, enforcement, the justice system and prisons. “We will continue to see dodgy, mislabeled, unregulated products with high nicotine levels,” he says. “The harm from unregulated black market products was demonstrated during the EVALI [e-cigarette or vaping product use-associated lung injury] outbreak. There will also be higher prices, increased drug potency [and] stockpiling of nicotine e-liquids prior to the change. All legal, legitimate vape businesses will be closed. It’s a violation of the human right to access a safer alternative to smoking.”

    Unsuccessful Measures

    Low-income and otherwise disadvantaged people, among whom rates of smoking and smoking-related death and disease are significantly higher than in the rest of the population, will be disproportionately affected, according to Mendelsohn. “Australian research has shown that vaping may help to reduce health inequalities,” he says. “Smoking is a leading cause of financial stress in disadvantaged populations, especially at a time of sluggish wage growth, high interest rates and a high cost of living. Spending is diverted from food, clothing, etc., to smoking.”

    Australia has the highest cigarette prices in the world, with a pack of 20 retailing at AUD40 ($25.60). Based on a consumption of 13 cigarettes a day, the average cost of smoking is AUD11,850 per year. Vaping, by comparison, costs AUD500 to AUD1,500 per year, depending on the device used.

    “At the current high levels, further tax rises are no longer effective due to the law of diminishing returns,” says Mendelsohn. “Many addicted smokers are simply unable to quit no matter how high the price. Smoking rates in Australia have not declined over the last four years in spite of high prices, plain packaging and other tobacco control strategies.”

    So where’s the consumer in all of this? Mendelsohn says that the lack of a consumer voice is a big problem. “We had a New Nicotine Alliance AU, which disbanded about five years ago. Recently, the Australian Smokefree Alternatives Consumer Association was formed but is still very quiet. Legalise Vaping is a part of the Australian Taxpayers Association and is the most active advocacy group. I believe they have had some indirect tobacco company funding in the past, but they are focused on legalizing and regulating vaping and the rights of adults to make their own choices. Overall, they do an excellent job with limited resources. All anti-vaping groups are subject to great scrutiny and are smeared and undermined by anti-vaping advocates if there is any potential opportunity.”

    Ideology Instead of Science

    Butler’s plan has attracted criticism from several institutions. On July 8, internal confidential e-mails sent by members of the Australian National Advisory Council on Alcohol and Other Drugs (ANACAD) expressed concerns about further restrictions, saying it would exacerbate the black market problem, criminalize more people and make smoking more attractive. On July 18, Mendelsohn and a group of more than 40 experts from Australia and New Zealand urged lawmakers to listen to the ANACAD ahead of Butler’s proposed vaping crackdown. At the time of this interview, they had not received a response to their letter.

    Mendelsohn is not optimistic that Butler will change course. “Butler has committed himself to this crackdown, and there is no indication that he will soften his approach,” he says. “He is taking advice from a small group of ideologically driven tobacco control academics and health bureaucrats with extreme anti-vaping views.” According to Mendelsohn, Butler operates in a bubble and is ignoring the pro-vaping arguments. “He has refused to meet with Dr. Wodak [a fellow tobacco harm reduction proponent] and me, although we met with his adviser, who was clearly committed to a predetermined position,” says Mendelsohn. “He is under considerable pressure from Australian health charities, medical associations, public health organizations and state governments that are almost universally opposed to vaping. The media is also hostile to vaping. Any turnaround will be very difficult politically.”

    Vaping policy in Australia, says Mendelsohn, is driven by ideology rather than science. “Australia’s peak health and medical research organization, the National Health and Medical Research Council (NHMRC), prepared an anti-vaping position paper on vaping. The NHMRC is very influential in guiding national health policy. The NHMRC document was critiqued in a peer-reviewed article in Addiction by leading Australian and international experts and found to be riddled with serious scientific flaws and misinformation. However, it remains unchanged.”

    For sensible regulation of vaping, says Mendelsohn, Australia should look to its neighbor, New Zealand, which in August 2020 legalized and regulated vaping. “Over the next two years, there was an unprecedented 33 percent decline in the adult smoking rate among those aged 15 and over—from 13.7 percent to 9.2 percent. In Australia during the same period, the smoking rate increased by 4.5 percent. In that time, there have been no major smoke-free policy interventions, almost no mass media spend on quit campaigns and no tobacco tax increases in NZ.”

    Lessons From Drug Policy

    Alex Wodak

    Alex Wodak, Mendelsohn’s ally in the battle for harm reduction-based legislation, is more confident that Australia will eventually change its stance on vaping. Wodak has dedicated his career to drug harm reduction and was instrumental in reforming drug law in Australia. Together with colleagues, he created the country’s first needle exchange program in 1986 and its first medically supervised injecting center in 1999. At this time, both were pre-legal.

    He observes parallels with his country’s current crackdown on vaping. “The World Health Organization opposed drug harm reduction, including needle and syringe programs for a few years in the 1990s, apparently relenting to intense U.S. pressure,” says Wodak. “The default policy for communities, governments and the WHO for new drugs, new forms of drug administration and new forms of drug harm reduction is generally negative. It seems sensible to be initially cautious about changing situations regarding drugs, but we have a problem when the opposition to a new form of drug harm reduction is maintained long after the evidence of effectiveness and safety has become compelling, especially when the costs of delay are so substantial as they are with needle and syringe programs and tobacco harm reduction.

    “The case in favor of vaping and other forms of tobacco harm reduction is now overwhelming. Smokers increasingly prefer to continue to use nicotine but prefer to consume it in safer ways. Many traded tobacco companies are transforming from combustible cigarettes to safer products, some faster than others, but they are changing. Investors pay higher prices for tobacco companies transforming more rapidly. Unfortunately, tobacco control, governments and the WHO are still resisting change, which now seems inevitable. This change is an enormous opportunity for public health, similar to the scale of the benefits from vaccination.”

    Wodak remembers the time when harm reduction was refused in favor of an abstinence-only approach in drug policy circles. “The political debate lags behind the scientific debate,” he says. “There are many lessons from this experience. It is important to continue improving the quantity and quality of evidence. It eventually does make a difference. Being polite and respectful to harm reduction opponents matters. So does persistence. There are no shortcuts. Harm reduction involves consequentialism—that is, making an assessment of both the benefits and costs of a policy or intervention. Opposition to harm reduction often involves deontology—that is, following a set principle, such as aiming for a tobacco-free—or nicotine-free—outcome rather than a smoke-free outcome. The net effect of the policy or intervention is not a concern.”

    Staying Power Needed

    The current approach of the Australian government to vaping is unsustainable, Wodak emphasizes. “It is destined to collapse sooner or later,” he says. “Opponents of harm reduction are unable to justify why a far safer option is severely restricted while a deadly option remains readily available. Despite dominating politics, mainstream media and medical and health publications, 73 percent of Australians support vaping being regulated like cigarettes and alcohol while only 20 percent support prescription-only regulation of vaping.”

    The new approach announced by Butler on May 1 requires legislation to be passed by the House of Representatives and the Senate. “This legislation will most likely be passed by the House of Representatives but is unlikely to be passed by the Senate,” says Wodak. “The black market currently meets 92 percent of the demand from a rapidly growing number of adult Australian vapers, now estimated to number 1.3 million. Although the government asserts it will strengthen law enforcement border efforts to reduce the number of illegal vapes entering Australia, now estimated at about 10 million per month, no additional funds have been provided for this purpose. Heroin was prohibited 70 years ago in Australia. However, in 2022, a survey of people who use drugs found that 87 percent said that obtaining heroin was ‘easy’ or ‘very easy.’ When demand for a good or service is strong and controls are easy to subvert, as is the case with vaping, other sources of supply almost invariably emerge.”

    Wodak views the battle for vaping reform in Australia through the lens of drug harm reduction rather than from a perspective of tobacco control. “I have been involved in battles for drug law reform in Australia over about 40 years. We have won almost all of these battles, although it has often taken more time and effort than we would have preferred. I am very confident that tobacco harm reduction will prevail in Australia. Taking a bet against drug harm reduction is very brave as harm reduction almost always wins.”

    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.
  • Dispelling Myths

    Dispelling Myths

    Photo: Elena Milevska

    A disturbingly larges share of doctors believe that nicotine causes smoking-related diseases.

    By George Gay

    For a long time, people involved in tobacco harm reduction (THR) have bemoaned the fact that many doctors wrongly believe that consuming nicotine causes smoking-related diseases. Clearly, the concern as far as THR advocates are concerned is that, logically, these doctors are unlikely to recommend that smokers transition from combustible cigarettes to other forms of nicotine delivery, such as those afforded by electronic cigarettes, nicotine pouches and, one must assume, even nicotine patches.

    This concern was highlighted in a July 20 press note issued on behalf of the Foundation for a Smoke-Free World (FSFW), which said that a survey of more than 15,000 physicians in 11 countries had found, in part, that 77 percent of doctors mistakenly believed nicotine caused lung cancer, and 78 percent mistakenly believed it caused atherosclerosis. The Doctors’ Survey was carried out online by Sermo with doctors based in China, Germany, Greece, India, Indonesia, Israel, Italy, Japan, South Africa, the U.K. and the U.S.

    “It is imperative that doctors get the proper training to learn the facts about nicotine and tobacco harm reduction options that can help their smoking patients quit,” Muhammad Ahmed, the FSFW’s director of health and science research, was quoted in the press note as saying. “With more than 7 million smokers dying annually from smoking-related diseases worldwide, many lives can be saved if doctors become more knowledgeable about the cessation tools available.”

    Now, the FSFW is inviting researchers to submit (contact support@smokefreeworld.org) proposals to further analyze the Doctors’ Survey findings and propose programs to help improve doctors’ “fluency about smoking cessation and tobacco harm reduction.”

    The report of the Doctors’ Survey has much to recommend it, and I would urge anybody interested in THR to read it. One of its strengths, I would suggest, is that it is a practical attempt to help address the chronic problems associated with doctors being generally ill-informed about nicotine. And it is to be hoped that this practical emphasis continues as researchers further analyze the survey’s findings and propose remedial actions. It would be unfortunate if there were a focus on analysis that led to academic drift. We should not lose sight of the fact that this is about helping smokers, not about helping indigent academics—the words “more research is needed” should be proscribed.

    Primary Sources

    While generally supporting this initiative, I have a few concerns and questions about some of the issues that the survey raises. There is what looks like an unnecessary reference to IQOS in one of the report’s tables, something of an “own goal” I would have thought, given that the FSFW comes under attack for the source of its funding, notwithstanding such attacks might be unwarranted and unfair.

    And I hope that whatever comes out of the proposals for improving doctors’ “fluency about smoking cessation and tobacco harm reduction,” it clears up a couple of questions. Doctors in Japan are said in the survey report to believe mistakenly that “light” cigarettes are less harmful than other cigarettes, but what are doctors working in the EU to make of this “mistake” when the authorities there impose a limit on deliveries? Is it out of malice or a sense of a lightness of being that the authorities in the EU allow only the sale of “lighter” cigarettes? And a related question would ask if anybody knows whether there is any point in doctors recommending smokers cut their consumption. Does anybody know if the risks of smoking are proportionate to consumption levels—in respect of delivery levels per stick and/or by daily stick consumption?

    More importantly, the question arises as to whether we know if doctors are the primary source of the information on smoking and quitting that people absorb and act upon. If so, the direction of the FSFW’s travel seems correct and important. If not, it would seem irrational to spend a lot of time and money trying to improve the training of doctors in this area, especially given that if they haven’t figured out the role of nicotine by now, it is possibly going to take a lot of effort to get through to them. I certainly cannot see how the doctor route could be universally applicable given that many governments oppose at least some aspects of THR, and many health services are at least partly state institutions.

    A cursory internet search indicated that, in the U.K., patients had on average 8.7 consultations with general practitioners during 2018–2019, 3.3 of them face-to-face. Compare that with the uncountable number of times these same people would have gawped at their mobile phones. So, in a country such as the U.K., where the government is convinced of the effectiveness of THR, it would perhaps be better for it to use social media to get messages across. I am not advocating the usual sort of official messages that comprise little more than a tissue of lies but messages simply about the relative safety of nicotine as the government sees it. Otherwise, messages could be included, for instance, on the shirts of professional sorts of people, on public transport and on public buildings. And given the increasingly authoritarian nature of the U.K. government, perhaps it might consider the compulsory tattooing of people with these important messages.

    Another problem was brought to light when Ahmed said that it was imperative for doctors to receive the proper training to learn the facts about nicotine and tobacco harm reduction options that can help their smoking patients quit. The obvious questions arise as to who gets to decide what amounts to proper training and what the facts are in a postmodern world. The facts, for example, as they apply to the use of THR principles and as they are decreed by the authorities in India and the U.K., are likely to be very different.

    The World Health Organization, though paying lip service to THR, opposes the shift from inhaling tar and nicotine to inhaling just nicotine. And the U.S. Food and Drug Administration, whose influence stretches beyond the U.S., while also paying lip service to THR, has done much to discourage smokers making such a shift. In fact, the FDA, at the same time, has de facto promoted the smoking of tar-delivering, low-nicotine combustible cigarettes. What is a trainee doctor to make of such policies—such implied facts?

    Of course, such issues will not have escaped the attention of those behind this initiative, but it concerns me that any attempt at trying to resolve them, either universally or on a state-by-state basis, will simply lead to delays in reaching THR objectives. The vaping advisory industry, in all its guises, should not be seen as being more important than the vaping industry.

    Evaluating the Curriculum

    But I have a bigger concern. The ad nauseam message coming from governments and organizations such as the WHO and the FDA is that “[c]igarette smoking remains the leading cause of preventable disease, disability and death ….” In fact, that quote comes from the Centers for Disease Control and Prevention and refers to the U.S.

    At the same time, the message coming from the Doctors’ Survey is that most doctors are ill-informed about issues surrounding smoking and nicotine consumption because they have received little or no training on smoking cessation. “This may reflect the cursory training they’ve received in smoking and harm,” is a quote from the survey referring to doctors in Italy.

    Let me paraphrase these two positions:

    1. Cigarette smoking is the leading cause of preventable disease, disability and death.
    2. Most doctors receive only cursory training in respect of the leading cause of preventable disease, disability and death.

    It seems I am being asked to believe that doctors, charged, in part, with helping people avoid sickness, are not being properly trained in respect of the most threatening health concern of all. How can I reconcile these two positions or overcome the apparent state of insanity they describe? I could assume, I suppose, that those who devise the curriculums at the base of doctor training courses are not in full control of their mental faculties, that they insist doctors should, when you visit them, be able to rattle off the names of the 206 bones in your body but not be able to give you sound advice on the leading cause of preventable disease, disability and death. On the whole, I find such an explanation unlikely given that we are talking about the curriculum advisers in 11 countries. They cannot all have taken leave of their senses.

    So, I am left with the conclusion that either No. 1 or No. 2 above must be wrong, and I am leaning toward the idea that it is No. 1 that is wrong. But before I expand on this idea, I need to make three points. Firstly, I am not saying cigarette smoking is anything but hugely harmful. I think it stands to reason that inhaling anything but pure air is not a good idea and is likely to cause you harm. Secondly, I am not saying cigarette smoking was never the leading cause of preventable disease, disability and death. Thirdly, I have read in recent times about three things reported to be the leading cause of early deaths in humans: tobacco smoking, outdoor pollution and poor diet.

    Above, I quote Ahmed as saying more than 7 million smokers die annually from smoking-related diseases worldwide. But what does this mean? It is arguably a completely open-ended figure, one that might or might not approach or even surpass the WHO’s 8 million. OK, you could argue the “more than 7 million” is just a throwaway, ballpark figure aimed at underlining the severity of this issue, but surely it is necessary to have more than a ballpark figure before we start trying to build a sturdy quit-smoking edifice?

    Recently, The Guardian newspaper’s health editor, Andrew Gregory, made the point that long-term exposure to air pollution is associated with chronic conditions such as heart disease, asthma and lung cancer.

    Clearly, separating many cigarette-smoking deaths from pollution-related deaths must be difficult, if not impossible, so I find it odd that health professionals are willing to accept and work on the basis of what seem to be highly dubious smoking-related-disease figures. Why are health professionals so keen on expending huge amounts of effort and money addressing what they blindly accept to be the problems caused by smoking, which, by the way, are likely decreasing and which individuals can address for themselves, rather than expend that effort and money addressing the much bigger and growing health problem posed by pollution, over which individuals have next to no control and which are going to get worse as the population of the world approaches 10 billion and becomes even more concentrated in megacities? It is time to ask “cui bono” and “cui malo”?

    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.
  • Major Tax Increase Introduced in Congress

    Major Tax Increase Introduced in Congress

    Credit: Roman R

    Last week, lawmakers in the U.S. introduced the CARE For Moms Act in Congress. That bill would increase healthcare for expecting and new mothers, while also exponentially increasing the taxes for vaping, roll-your-own, cigars and other tobacco products.

    The tobacco tax language in the CARE Act was copied and pasted out of the Tobacco Tax Equity Act, a bill that has been introduced as a rider in bills introduced in previous sessions of Congress but it failed to gain any traction, according to halfwheel.

    That could change after Sen. Ron Wyden and Sen. Dick Durbin have now introduced the Tobacco Tax Equity Act of 2023 in the Senate as a standalone bill, while Rep. Raja Krishnamoorthi introduced the bill in the House of Representatives.

    The tobacco tax-related language includes:

    • New taxes for e-cigarettes;
    • Doubling the tax on roll-your-own tobacco;
    • A more than 16x increase on pipe tobacco;
    • Doubling the tax on small cigars;
    • A massive tax hike for premium cigars;

    For premium cigars, the language removes the existing federal excise tax of 52.75 percent, capped at 40.26 cents per cigar, and replaces it with a weight-based tax of $49.56 per pound.

    Because it’s a weight-based tax, the difference between the existing tax and the new taxes would vary depending on how heavy the cigar is. For cigars robusto or larger, it would likely more than triple the current federal tax rate.

  • DOJ Appeals FDA Premium Cigar Decision

    DOJ Appeals FDA Premium Cigar Decision

    The premium cigar industry recently declared victory in the fight against oversight by the U.S. Food and Drug Administration. Celebrations may have been premature.

    The U.S. Department of Justice has filed an appeal on behalf of the FDA for a decision handed down from the United States District Court for the District of Columbia that fully vacated the Deeming Rule as it applied to premium cigars, according to media reports.

    The lawsuit was filed by the Cigar Association of America, the Cigar Rights of America (CRA) and the Premium Cigar Association. The case focused in part on the rulemaking process, which requires the FDA to inform the public about upcoming regulations and solicit feedback on those proposed rules.

    In last month’s decision in Cigar Association of America et al. v. United States Food and Drug Administration, Judge Amit P. Mehta made a sweeping, albeit expected, ruling that granted relief to the three cigar industry trade groups that sued the regulatory agency in 2016 on behalf of the premium cigar industry.

    The news confirms industry fears that warning labels, premarket tobacco product application (PMTA) review of cigars and other limitations that have impeded the ability of cigarmakers are still a possibility.

    Recently, the FDA acknowledged the decision and one of its impacts, telling cigar companies that it did not plan to assess user fees for “premium cigars” sold during Q4 FY23.

    The Department of Justice, which represents FDA on legal matters, had 60 days to appeal the ruling. It’s unclear whether the agency will ask a court for a stay, which could reenact the deeming regulations for “premium cigars” as the appeal process works itself out.

  • Reynolds Breaks Ground on WaterHub

    Reynolds Breaks Ground on WaterHub

    Image: Reynolds

    Reynolds American Inc., the BAT Group’s U.S. subsidiary, broke ground on the WaterHub at the Reynolds Operations Center in Tobaccoville, North Carolina. The WaterHub is an advanced water recycling facility and product of a subsidiary of NextEra Energy Resources. Several city and state leaders, NextEra Energy Resources and Reynolds representatives and others involved in the WaterHub project gathered Thursday as Reynolds demonstrated progress on its commitment to excellence in environmental stewardship with the project’s official groundbreaking celebration.

    Once construction is complete, the WaterHub is expected to reclaim more than 60 million gallons of water per year, equivalent to the annual water supply of approximately 550 average U.S. households. This installation aims to reduce Reynolds’ environmental footprint and conserve water in Forsyth County’s Yadkin Pee Dee River Basin.

    “Through the WaterHub, we expect to reduce water withdrawn at the Reynolds Operations Center by over 40 percent, which in turn would reduce the water withdrawn across our global operations sites by approximately 6 percent,” said Bernd Meyer, executive vice president of operations at the Reynolds organization, in a statement. “We are doing our part in preserving precious natural resources, and today celebrates a significant investment and long-term commitment to environmental sustainability.”

    The WaterHub at the Reynolds Operations Center will be one of the few projects of its size in the U.S. using advanced water reclamation technologies, allowing Reynolds’ operating facilities to reduce their dependence on potable water for factory utility operations. 

    “At NextEra Energy Resources, we are dedicated to offering innovative solutions that help businesses like Reynolds in achieving their sustainability and environmental responsibility objectives,” said Gary Morris, vice president of distributed generation for NextEra Energy Resources. “The WaterHub not only actively conserves water resources but also bolsters operational resilience.”

    This project complements Reynolds’ work to use water efficiently across its operations facilities. The American Snuff Company facility in Clarksville, Tennessee, and R.J. Reynolds Tobacco Company Whitaker Park site in Winston-Salem, North Carolina, both recently earned Alliance for Water Stewardship (AWS) Certification. Reynolds’ Operations Center in Tobaccoville earned this AWS designation in 2022.

  • Norm Bour: Current State of Vape Industry

    Norm Bour: Current State of Vape Industry

    vape shop customer

    “The more things change, the more they stay the same,” is an expression that has been around for almost two centuries, and it speaks to the fact that the small picture(s) of life may change, but the larger one does not. The vape industry and all the challenges and changes that have happened in the past decade are totally contrary to that famous saying.

    A decade ago, the vape industry was the epidemy of the Wild, Wild West, full of vape shops springing up on every corner, and any/everyone creating e-liquids in their bathtubs at home. Regulation and competition changed all that and brought some semblance of “orderliness” to the market, but as state and federal regulations bombarded the industry, and with the FDA creating onerous and unattainable guidelines, the vape space has truly become one of survival.

    I recently attended a vape event in Phoenix which brought together several dozen top manufacturers, distributors, and buyers, and universally everyone lamented the same concern: business is down.

    Why is business down?

    The reasons are many, including strict regulations, and now, even more enforcement of those regulations, but overall, the cause was much simpler. The huge COVID-19 rebound in 2020-22 put more money in consumers’ pockets and more time on their hands. Those issues combined created an artificial bubble that many thought would last. But time has passed. Add in the inflation that has pushed up food and other cost of living expenses, and some former necessities are now becoming unaffordable luxuries.

    “It’s a balancing act between the addictive nature of some nicotine products and the limitations of buyer’s budgets,” said Jamie Reed with Simple Vape Supply from Orange County California. “I’ve been in the industry for over ten years, and this is evolution in its purest form and based around ’survival of the fittest.’”

    Simple manufactures and distributes over 100 different assortments of nicotine cartridges, including disposables, including various iterations of CBD, Delta-8 and Kratom.

    “It’s interesting,” Reed added. “When I got hired, I was told that there was an ‘expiration date,’ and we all knew that this industry might not last, and that the cream would rise (to the top). We planned to be one of those surviving companies, and we’ve been able to adapt to the times.”

    Her company, along with many that are still around, were mostly run by rebels, radicals, and envelope pushers; and many have in fact changed accordingly, but some have merely learned how to “play the game” and outwardly appear to be toeing the line, but the reality may be different.

    “We were aware that the COVID blip was a one-time event. People were home, they had government money to spend, and no one was checking in on them or requiring any urine tests. The Delta (8,10) boom really added to that, and everyone jumped on that bandwagon,” she said excitedly.

    That line of CBD was an example of how the industry has and continues to push back. The FDA says you can’t do this, so the industry says, “F-you, then we’ll do that.”

    With regulation eliminating or reducing product selection, almost any industry will do the same thing: adapt; repurpose, or reposition.

    Of the dozens of people I spoke with at the event, the numbers (from shop owners and manufacturers) were pretty consistent, and most of them were down 20 to 30 percent. Many were saying that purchase sizes were lower than normal and a typical ten-thousand-dollar order was now half that. They saw some shops closing, but most were working on smaller revenues.

    man holding flavored vape products
    Manager J-K Thorne holds some of the flavored products that are no longer available at Wild Impulse vape shop. (Shane Hennessey/CBC)

    Meanwhile, on the other side of the equation, vape liquid manufacturers who are trying to “play the game” right and submitting premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration are frustrated at the amount of time it takes and how much money is being thrown into a (seemingly) dark hole.

    I spoke with one of the owners of a large vape manufacturing business and distribution company in Idaho, and he shared some facts and figures about their process of trying to make their products “legal.” Legal, in the eyes of the FDA, has caused his company to squander over $5 million in the past few years trying to get authorization.

    Mike Larsen is a detailed and focused vape guy who has been in the industry for over a decade and is with Lotus Vaping Technology, which started in 2011. As a partner and director of sales, he is on the front line of everything the company does to stay legal and compliant and is riding the roller coaster ride on a daily basis.

    “Disposables have really changed the game,” he said, “and they have reduced the role of vape shops where people used to come for education and guidance. Consolidations and closures have also reduced the shop numbers by 30 to 40 percent, and now you have larger conglomerates doing the work of the multitude of shops.”

    We spoke about a possible flavor ban nationally, and he said he was skeptical.

    “The PMTA process has already reduced or eliminated flavors, so it may not be necessary to go to that length. There have been between six and seven million submissions by thousands of companies, and so far, just 23 have been approved. I know of a few companies that submitted over a million applications themselves. And here’s the irony: everyone approved has been a Big Tobacco company, and they make up just a fraction of the total vaping market.”

    The second irony on top of that, is that those so-called approved products are ones that no one wants.

    We talked about whether those approvals were fair or were the result of favoritism and bias, and he smiled since we both knew the answer.

    “When you look at the PMTA process and the rigid requirements, it seems pretty obvious that they were written to the advantage of the larger, established companies, and the “small guy” had very little chance in this skewed game. You can’t even budget for something like this,” he continued. “The original filing costs over a million dollars, and I know several companies that have put another ten million in, only to get denied. Who has deep pockets like that? In 2016 I could have named over 150 liquid companies doing good business; today I can name about three dozen.”

    And that is why the number of companies manufacturing tobacco and vape products is half what it was and is getting smaller every year. The FDA changes the rules of the game continually.

    “There’s something happening here, but what it is ain’t exactly clear,” is the beginning line of a song that speaks to changes going on in society. That song by Buffalo Springfield may have nothing to do with vape, but the message says the same thing: there is something happening here although it may be clearer than we realize. We all knew this would happen; it was predicted a decade ago.

    In the vape space, the more things change…the more things change.

    Norm Bour is the founder of VapeMentors and works with vape businesses worldwide. He can be reached at norm@VapeMentors.com.

  • Retailers Face Civil Money Penalties

    Retailers Face Civil Money Penalties

    The retailers selling illegal flavored disposable vapes are under scrutiny. The U.S. Food and Drug Administration issued complaints for civil money penalties (CMPs) against 22 retailers for the illegal sale of Elf Bar/EB Design.

    The FDA previously warned each retailer in the form of a warning letter to stop selling unauthorized tobacco products, according to the agency. During follow-up inspections, the FDA observed the retailers had not corrected the violations, which resulted in the civil money penalty actions. 

    “The FDA has been abundantly clear that we are committed to using the full scope of our authorities, as appropriate, to hold those who break the law accountable,” said Brian King, director of the FDA’s Center for Tobacco Products (CTP). “These retailers were duly warned of what could happen if they failed to correct their violations. They chose inaction and will now face the consequences.”

    The complaints seek the maximum civil money penalty of $19,192 for a single violation from each retailer. While the FDA has issued civil money penalty complaints to retailers for selling unauthorized tobacco products in the past, this is the first time the agency is seeking CMPs for the maximum amount against retailers for selling illegal flavored disposable vapes.

    The retailers can pay the penalty, enter into a settlement agreement, request an extension of time to file an answer to the complaint or file an answer and request a hearing. Those that do not take action within 30 days after receiving the complaint risk a default order imposing the full penalty amount.

    Courtesy: US FDA

    In addition to the CMP complaints, today the FDA announced an additional 168 warning letters to brick-and-mortar retailers for illegally selling Elf Bar/EB Design products. These warning letters were the result of a coordinated nationwide retailer inspection effort conducted throughout the month of August, according to the agency.

    Warning letter recipients have 15 working days to respond with the steps they have taken to correct the violation and ensure compliance with the law. Failure to promptly correct the violations can result in additional FDA actions such as injunction, seizure or civil money penalties.

    “We continue to monitor closely all those in the supply chain, including retailers, for compliance with federal law,” said Ann Simoneau, director of the Office of Compliance and Enforcement in the CTP. “This includes follow-up inspections and surveillance of those who have received a warning letter, and taking additional action, as appropriate, to enforce the law.” 

  • U.S. Premium Cigar Imports Drop

    U.S. Premium Cigar Imports Drop

    Credit: Timothy S. Donahue

    The Cigar Association of America (CAA) has released a report showing that U.S. imports of premium cigars from January-July 2023 are down 3.4 percent compared to the record pace that was set in 2022.

    Through the end of July, CAA estimates the U.S. imported 252.81 million cigars, compared to 261.63 million in the same period during the year before.

    While the numbers are down compared to last year, the trend line for the first seven months of the year is actually closer to 2022 than the Q1 numbers. More importantly, the numbers are still significantly above pre-Covid-19 levels, reports Halfwheel.

    On a month-by-month basis, imports rose in four of the seven months, though March and April were down a combined 11.7 million cigars, or 14.41 percent compared to 2022. Addittionally, there were 6.5 million more cigars imported in May and July, or 8.33 percent over last year.

    Nicaragua remains the dominant supplier of premium cigars to the U.S., accounting for roughly 55 percent of imports through the first seven months, according to CAA. However, those imports are down 4.2 percent compared to last year.

    The CAA breaks down individual imports from seven countries and all were down except the Dominican Republic, which the group estimates has shipped 3.37 million more cigars compared to the same period last year, an increase of 4.8 percent.

  • Reynolds Expands American Snuff Facility

    Reynolds Expands American Snuff Facility

    Image: Reynolds

    Reynolds American Inc. announced the opening of the recently expanded American Snuff Company (ASC) operations facility in Clarksville, Tennessee. The investment in the facility will position the company for future growth and has already added over 70 roles to the facility’s workforce, with plans to add more in the coming months.

    ASC celebrated the newly enhanced space with a ribbon-cutting ceremony on Tuesday, Sept. 26, 2023. ASC’s significant investment in the property will increase certain production capabilities, optimize existing processes and allow for the installation of additional processing and packaging lines.

    “American Snuff Company has a long history of operations in Clarksville, and we are proud to further invest in our workforce and production capabilities at the site,” said David Waterfield, president and CEO of Reynolds, in a statement. “This expansion and considerable investment reflect our focus on delivering long-term, sustainable growth for the future of our business.”

    The site will further accommodate research and development and create capacity for additional shipping, receiving and tobacco curing. Additionally, the expanded site will include modernized quality labs, maintenance shops and employee areas.

    The Clarksville site expansion follows a strategic review of Reynolds’ U.S. operations that spanned several years. Historically, the facility used processed tobacco from regional farmers before being sent to other ASC factories for production. This move will bring processing and finished goods production under one roof.

    ASC Clarksville is the Reynolds organization’s second-largest production facility in the U.S.

  • France’s Last Cigarette Factory Closing

    France’s Last Cigarette Factory Closing

    Image: Smeilov

    The last cigarette-making factory in France is set to close by the end of the year, according to the site’s owner, reports The Straits Times.

    The Manufacture Corse des Tabacs (Macotab) is located in Corsica, and it manufactures cigarettes for Philip Morris, which recently ended the contract.

    The factory is owned by SEITA, the former French monopoly. Now, around 30 employees work at the factory, down from 143 in the 1980s.

    In 2019, SEITA closed France’s tobacco processing factory located in the traditional growing region of the Dordogne.

    Legislation to reduce smoking and its related health issues has led to reductions in cigarette sales. Majority of European tobacco product production takes place in Germany and Poland.