Blog - Tobacco Reporter

VLN Launched in California

22nd Century Group launched VLN King cigarettes in the California market. Starting July 17, VLN cigarettes will be available in California at more than 275 sites of the No. 1 convenience store in the U.S. in addition to numerous other convenience stores across California.

“We see our VLN product offering Californians who smoke a tremendous new option because VLN cigarettes are specifically designed to help smokers smoke less, increase their number of smoke-free days and reduce their nicotine exposure and dependence,” said John Miller, 22nd Century Group president of the tobacco division, in a statement. “Our goal with VLN is to meet California consumers where they are with a combustible product that helps people smoke less.”

July 17, 2023

Illegal Cigarette Factories Dismantled

Tax authorities dismantled two illicit cigarette operations in the Subic Bay Freeport on July 14, reports the Philippine News Agency.

OneSubic Premier Manufacturing Corp. (OPMC) and Hongcim International Corp. were found to be illegally manufacturing various cigarette brands. While OPMC is licensed to manufacture cigarettes, its brands and equipment were not registered with the appropriate agencies, according to the Bureau of Internal Revenue’s Tax Compliance Verification Drive (TCVD) team.

OPMC and Hongcim produce and package foreign-branded cigarettes, including RGD, Baisha and Bruston.

During their raids, authorities found printing machines, paper materials, inks, cigarette filters and grated tobacco leaves, among other paraphernalia. OPMC reportedly could produce 500 cigarette packs per day.

The Philippines lose an estimated PHP100 billion ($1.84 billion) in tax revenues due to fraud each year, according to fiscal authorities.

July 14, 2023

Health Minister Wants Larger Share Taxes

MemoryMan

The government of Nepal should direct all the money its collects from tobacco products to the Ministry of Health and Population, Health Minister Mohan Bahadur Basnet told lawmakers on July 13, according to a report in My Republica.

The Nepalese state earns an estimated NPR6 billion ($45.66 million) in tobacco taxes annually. The health ministry, however, receives only NPR4 billion, Basnet lamented.

The additional tax revenues could be used to add more doctors and health workers, he suggested.

July 14, 2023

Doctors Decry Tobacco’s Pharma Investments

Pulmonologists are concerned about the tobacco industry’s investments in the pharmaceutical business, according to a Nieuwsuur report relayed by the NL Times.

Confronted with declining sales in their traditional line of business, cigarette manufacturers have been exploring adjacent activities, including in the medical sector. For example, Philip Morris International in 2021 acquired the Vectura Group, a British manufacturer of inhaled treatments, and Fertin Pharma, a Danish developer and manufacturer of pharmaceutical and well-being products based on oral and intra-oral delivery systems.

British American Tobacco and Japan Tobacco, too, have medical interests.

Nieuwsuur journalists looked at 87 pharmaceutical products and medicines the tobacco industry is investing in. They found that half of the products are intended to treat diseases linked to smoking, including lung diseases, heart disease and diabetes.

Frits Franssen, pulmonologist and professor of COPD at the University Medical Center in Maastricht in the Netherlands, worries about tobacco companies’ growing presence in the pharmaceutical business. He called their investments into medicines that treat smoke-related illnesses “uncomfortable,” pointing out that they’re earning twice from the smoker—once from the packet of cigarettes, then from treating the diseases caused by smoking.

Tobacco companies insist that their diversification efforts fit with their strategy to reduce the health toll of tobacco use. By investing in noncombustible products, for example, they are offering smokers a less harmful way to consume nicotine.

July 14, 2023

Brazil Ag Minister Asked for Support Prior to COP

Tobacco supply chain representatives met with the Brazilian minister of agriculture, Carlos Favaro, on July 12, to ask his support ahead of the upcoming 10th Conference of the Parties (COP10) to the World Health Organization’s Framework Convention on Tobacco Control (FCTC).

“Brazil is the top exporter of tobacco worldwide and has occupied this position for 30 years now and is the second largest producer,” said Iro Schunke, president of the Interstate Tobacco Industry Union (SindiTabaco), in a statement.

“For this leadership role, Brazil should be a protagonist in defending a crop that contributes decisively to the socioeconomic progress of several cities, especially in the south region of the country. Historically, the Ministry of Agriculture has been an ally of the productive sector within this context because it has a good grasp of the impacts of the directives coming from the FCTC could have on the thousands of people who derive their livelihood from this crop, which is processed and exported. This is the stance we again expect from the ministry.”

Brazil should be a protagonist in defending a crop that contributes decisively to the socioeconomic progress.

Iro Schunke, president, SindiTabaco

The meeting was also attended by Benicio Albano Werner, the president of the Tobacco Growers’ Association of Brazil (Afubra); Giuseppe Lobo, executive director of the Brazilian Tobacco Industry Association (Abifumo); Guido Hoff, executive director of the Association of the Tobacco Growing Municipalities (AmproTabaco); Carlos Joel da Silva, president of FETAG-RS; Romeu Schneider, president of the Tobacco Sectoral Chamber; and Helena Hermany, mayor of Santa Cruz do Sul.

COP10 is scheduled to take place in November in Panama.

July 14, 2023

Duty Free Retailers Sign Anti-Illicit Trade Doc

The Duty Free World Council (DFWC) and Tax Free World Association (TFWA), the representative organizations for the global duty- and tax-free industry, have welcomed the first cohort of duty- and tax-free retailers signing a new zero-tolerance declaration on illicit trade, counterfeiting and intellectual property theft. The declaration has been created as the next step of the Duty Free: Trusted, Transparent, Secure campaign, which was previously jointly launched by DFWC and TFWA in June 2022.

Duty- and tax-free retailers, ARI, Dubai Duty Free, Dufry, Gebr. Heinemann, Lagardère Travel Retail, and Qatar Duty Free are the first to sign this initiative, with more retailers expected to join in the near future.

The initial signatories of this initiative collectively account for approximately $25 billion of travel retail sales (2019) and rank amongst the largest and most successful duty- and tax-free retailers in the world.

A significant number of major brand owners have also made clear their willingness to make the same commitment, and a separate announcement on brand owner support will be made in the near future.

By signing this declaration, retailers commit to a zero-tolerance approach to illicit trade within their own organization. They are also requesting their suppliers follow suit with a clear anti illicit trade policy. This builds on the commitments already made by a number of duty- and tax-free retailers through the UN Global Compact.

This commitment will be a key tool to demonstrate a united front and will further demonstrate that the duty- and tax-free industry is in no way associated with the growing problem of illicit goods fraudulently labelled as duty-free.

Marking the launch of the declaration DFWC President, Sarah Branquinho, thanked the initial signatories for their strong support and encouraged others to follow their example.

“There is no place in our industry for companies that engage in illicit trade,” she said in a statement. “Illicit trade in all its forms causes substantial societal harm, and costs our industry significant lost sales opportunities. It can also cause our industry reputational harm when illicit or counterfeit goods are fraudulently mislabeled as ‘duty-free’ in an attempt to lend authenticity to the product. Ultimately, consumers should be aware that when they purchase goods labelled as duty-free outside of a licensed duty-free retailer, it is very likely to be a counterfeit product.

“Our industry already boasts one of the most transparent, trusted and secure supply chains in the world. We are proud of our industry’s credentials and commit to maintaining these high standards.

“Today, some of the major players in our industry are making clear their ongoing stance against illicit trade and will be encouraging their suppliers to follow suit. There can be no room for doubt—the duty- and tax-free industry has zero tolerance for illicit trade in all its forms. We want to send a clear message worldwide – when you shop in a duty-free shop, you can do so with complete confidence!

“Our announcement today builds upon the decades of trust that we have built up with our customers, governments, customs authorities, and industry partners. DFWC, TFWA and the initial signatories are keen to grow the momentum behind this initiative and are confident the industry will be fully behind it.”

July 13, 2023

Growers Welcome New Buyer on Market

Tobacco growers in Malawi have welcomed the debut of a new tobacco purchaser, Nyasa Tobacco Buying Co. (NTBC).

According to a report in the Nyasa Times, NTBC paid $3.06 per kg for burley tobacco at the Lilongwe Auction Floors on July 10.

Tobacco is Malawi’s largest agricultural export, earning the country much-needed foreign currency. Growers, however, have not always been satisfied with the prices offered for their leaf.

Tobacco Commission President Joseph Malunga recently assured the country that his organization would bring in more buyers to promote competition.

Tobacco Reporter recently published a special report about efforts to diversify Malawi’s economy and develop supplemental value chains to reduce the country’s reliance on the golden leaf.

July 13, 2023

FDA Grant to Study Effects of Flavors

The U.S. Food and Drug Administration has given the Center for Tobacco Research at The Ohio State University Comprehensive Cancer Center a $3.9 million grant to evaluate the effects of e-cigarette flavors on smoking behaviors of current adult smokers, according to News Medical Lifesciences.

The study will be co-led by Theodore Wagener, director of Ohio State’s Center for Tobacco Research, and Tracy Smith from the Medical University of South Carolina Hollings Cancer Center.

Wagener says, “the FDA must decide how to balance its goals of protecting young people and offering harm-reduction options to adults. This new trial will generate critical data to help make more informed public health decisions that have a lasting impact.”

“The FDA is currently making regulatory decisions about e-cigarette flavors with incomplete scientific data,” Wagener said. “Existing data show that smokers also prefer flavored e-cigarettes, and while there are a few survey studies suggesting that flavored e-cigarettes may be more helpful for switching to vaping, these studies are not rigorous enough for the FDA to base its regulatory decisions on. Our study will be the first to provide the FDA with definitive information as to the benefit, if any, of e-cigarette flavors to adult smokers.”

The national, randomized, controlled trial will recruit up to 1,500 cigarette users from across the country, and researchers will measure e-cigarette flavor impact on product uptake and appeal, cigarette craving, symptoms, dependence and smoking behavior. Combination nicotine-replacement therapy will be used as a comparator to determine potential increased benefit of e-cigarettes versus nicotine-replacement therapy.

“If our study demonstrates no significant improvements in switching with flavored e-cigarette use, then the continued sale of these products is likely indefensible; however, if improvements are significant, these findings will provide a critical counterweight to the current FDA regulations and will aid future decision-making,” Wagener said.

July 13, 2023

Microalgae to Reduce Emissions at PM Korea

Philip Morris International will establish a demonstration facility for carbon capture and utilization technology at its factory in Yangsan, North Gyeongsang Province, South Korea, according to the Korea Environment Corp. (KECO), reports Korea Bizwire.

The facility will leverage the carbon dioxide absorption of microalgae, which is expected to reduce the factory’s annual carbon emissions by 2.15 tons.

The facility will operate solely on solar power and utilize wastewater as well as repurpose the microalgae as fertilizer or feed after use, providing the repurposed products free of charge to local communities.

The site and funding were provided by the South Korean arm of PMI, coordinated by KECO, and research and development support were provided by the Korea Environment and Merchandise Testing Institute.

July 13, 2023

Hong Kong Solicits Feedback on Anti-Smoking Measures

Hong Kong health authorities have asked city residents for feedback on several anti-smoking measures, including a generational tobacco ban, reports the South China Morning Post.

The public consultation, which began July 12 and is expected to end Sept. 30, covers four strategies: regulating supply and suppressing demand; banning promotion and reducing attractiveness; expanding nonsmoking areas and mitigating harm; and enhancing education and supporting those quitting smoking, according to Health Minister Lo Chung-mau.

“To protect our next generation from the harms of tobacco and to ensure the sustainability of our healthcare system, we need to draft strategies that keep up with the times,” Lo told a press briefing. “As a doctor, I don’t want our next generation to suffer from the harms of smoking and secondhand smoke.”

There were 17 possible measures included in the questionnaire for the consultation, including whether Hong Kong should “prohibit the sale of tobacco products to persons born after a certain date.”

Other questions include whether increasing the tobacco tax to 75 percent of the package price should be done rapidly or gradually every year and if a further ban on possessing e-cigarettes and heated-tobacco products is necessary. A ban on importing, promoting, manufacturing and selling e-cigarettes and heated-tobacco products was implemented last year.

In its consultation, the government excluded more aggressive measures, such as requiring shops to get a license to sell tobacco, penalizing third parties who give or sell cigarettes to under-18s, labeling tobacco products imported legally and requiring smokers to use a government app to show their ages when buying goods to verify their eligibility.

July 13, 2023