Blog - Tobacco Reporter

BAT Malaysia First-Quarter Profits Down

BAT Malaysia’s first-quarter net profits were MYR40.32 million ($8.76 million) compared to MYR52.28 million a year prior, according to the New Straits Times. Group revenue declined 25 percent.

The decline in revenue was due to lower volume prompted by the increase in vape usage and persistent tobacco black market, according to BAT Malaysia.

The company’s total market share was 51.5 percent, a decline of 0.4 percent compared to the first quarter of 2022.

“BAT Malaysia is maintaining the growth trajectory of its strategic brands within its premium, aspirational premium and value-for-money segments,” said Nedal Salem, managing director of BAT Malaysia.

“This is in tandem with the company’s aim to deliver combustible value growth to support its multicategory portfolio of reduced-risk products.”

“[W]e aim to continue growing our tobacco-heating product, Glo, which represents our efforts to offer a choice of reduced-risk alternatives to adult smokers,” Salem said. “We will also focus on investing in our VFM [value-for-money] brands and maintaining leadership in the premium segment.”

Short term, the company expects the economic environment to continue exerting pressure on financial performance. “We expect this challenging operating landscape to stretch disposable income, leading to downtrading from legal products to tobacco black market options.

“Nevertheless, in the medium term, we are confident that economic conditions will improve whilst the government looks at introducing balanced regulations on vapor and accelerating their interventions to reduce the tobacco black market,” according to the company.

May 31, 2023

Fiji Tobacco Farming Increasing

Tobacco farming in Fiji is increasing, according to FBC News.

With tobacco cultivation taking only three months in Fiji, many farmers are turning to the crop as an easier, faster agricultural endeavor. BAT offers support for tobacco farming in the area as well.

“Before, it’s really doing cash crop from the farm and then load it and take it to the market and sell, but this one, it’s different; the market is there,” said one farmer.

Tobacco farming is significantly easier than traditional sugar cane farming, according to another farmer. “Sugar cane farming is very hard. This one [tobacco] is only 3 [months to] 4 months, 4 months finished, which is a good, big amount.”

BAT offers access to quality seeds and modern farming techniques as well as training programs and knowledge-sharing initiatives. BAT employs more than 300 farmers across Fiji.

May 30, 2023

New Company Offers Tobacco-Free Nicotine Products

The Public Investment Fund (PIF) has launched Badael, a new company offering tobacco-free nicotine products, reports the Saudi Gazette. Badael will offer its products across Saudi Arabia by the end of 2023 with an aim to expand regionally and internationally in the long term.

The PIF announced the establishment of Badael in the run-up to the World Health Organization’s World No Tobacco Day. The company aims to develop, manufacture and distribute innovative products targeted to reduce smoking prevalence and promote healthier lifestyles by offering tobacco-free and less harmful alternatives.

Badael will also aim to deliver on the PIF’s localization mandate by supporting domestic manufacturing, sourcing raw materials, knowledge transfer and development of intellectual property.

The company’s products will be manufactured in Saudi Arabia. Badael aims to provide new economic opportunities and create jobs in the area.

May 30, 2023

Vietnam Harm Prevention Approved

Vietnam has approved the National Strategy on Tobacco Harm Prevention and Control to 2030, reports Vietnam+.

The strategy aims to reduce the rate of male tobacco use to less than 39 percent between 2023 and 2025 and to reduce the rate of female tobacco use to below 1.4 percent.

It also aims to reduce passive smoking to less than 30 percent at work, less than 75 percent at restaurants, less than 80 percent at bars and cafes and less than 60 percent at hotels.

A road map will be created to increase taxes on tobacco products, regulate the minimum selling price of tobacco products and research and evaluate the effectiveness of the plan for calculating taxes on tobacco products on the retail price in order to achieve a reduced rate of tobacco use.

The strategy also proposes promulgate regulations on the prevention of e-cigarette products, heated-tobacco, shisha and other new tobacco products and the sale of tobacco for juveniles or juveniles selling tobacco under the World Health Organization Framework Convention on Tobacco Control.

Vietnam remains one of the 15 countries with the highest smoking rate among male adults.

May 30, 2023

New Zealanders Want to Ban Vaping

More than two-thirds of New Zealanders want to ban vaping following Australia’s new legislation making vapes prescription only, according to the NZ Herald.

A poll asking, “Should we ban recreational vaping?” showed 68 percent of respondents agreeing while 27 percent disagreed.

Pediatrician Colette Muir stated that the Pediatric Society of New Zealand was “extremely worried” by the level of youth vaping in the country. “While the health policy intention regarding vaping was to reduce smoking, it is now clear that vaping is causing significant harm to Aotearoa’s tamariki and rangitahi,” said Muir, referring to children and their families. “More needs to be done to prevent youth who do not smoke taking up vaping in the first place.”

“We are concerned that an alarming number of high school students are trying or taking up vaping because their friends do it and they’ve heard it’s safe and are curious,” said Muir. “While the Vaping Amendment Act, which came into force in November 2022, aims to make e-cigarettes less appealing and available to teens, we feel more needs to be done to prevent youth taking up e-cigarettes, particularly e-cigarettes that contain nicotine.”

Health Minister Ayesha Verrall said vaping is important to help smokers quit, but the balance needs to be right to make sure youth don’t take up the habit. “We haven’t got that balance right at the moment,” Verrall said.

National’s Christopher Luxon stated he was open to “all things,” including a ban. “I really think we’ve got our vape settings wrong here in New Zealand. I would really like us to take a step back and really look at them closely.

“It’s impacting our young people. Originally, they were introduced so that it actually could help people come off smoking, but it’s actually created a whole class and a new sector of addiction for people,” he said.

May 30, 2023

Vaping to be Banned for Those Under 18

Ireland will ban vaping for those under the age of 18, effective July, reports the Irish Times.

Minister for Health Stephen Donnelly will bring a memo to the Cabinet this week outlining the full legislation. The new law is expected to be enacted before the lower house of Parliament’s summer recess in mid-July.

The legislation includes restrictions on the types of retailers allowed to sell vapes or nicotine-inhaling products as well as measures to curb advertising of nicotine-inhaling products near schools and other locations frequented by kids and young adults.

Donnelly is expected to tell the Cabinet that there is “clear evidence” that nicotine exposure in young people has long-term effects on brain development, referencing recently published surveys of Irish school-aged kids. The surveys, including the Health Behaviour in School-Aged Children survey from 2018 and the European Schools Project on Alcohol and Other Drugs survey from 2019, showed that 9 percent of 12-year-olds to 17-year-olds and 15.5 percent of 15-year-olds and 16-year-olds used electronic cigarettes in the past 30 days. Donnelly is also expected to reference a Health Research Board review that found that kids who vaped were five times more likely to begin smoking.

The government is expected to prioritize passage of the bill through the Oireachtas to allow for full debate and discussion before sending the legislation to President Michael D. Higgins for his signature.

May 30, 2023

A Ban By Any Other Name

The FDA’s reluctance to permit flavored e-cigarettes may be hindering adult smokers’ conversions to less harmful products.

By Neil McKeganey and Andrea Patton

If there is one phrase that must keep e-cigarette and e-liquid company executives awake at night, it must surely be “flavor ban.” In their public statements, U.S. Food and Drug Administration officials have always denied pursuing a ban on e-liquid flavors, encouraging e-cigarette manufactures instead to “show us the data” where e-cigarette flavors are compared to tobacco flavor in terms of their effectiveness in assisting adult smokers in quitting.

The reality of the premarket tobacco application process, however, tells a rather different story. Of the more than 6.7 million applications submitted—over 99 percent of which the FDA has adjudicated upon—not a single flavor other than tobacco has been awarded a marketing authorization. On the basis of those numbers, whether admitted or not, there is an e-cigarette flavor ban in the U.S. in all but name.

But why have flavors drawn such restrictive regulatory action from the FDA? The answer, of course, lies in youth vaping. So great has been the concern at the increase in youth vaping that politicians, public health officials, the media, parents and others have found themselves asking the questions “why are so many kids vaping, and how can we stop it?” When Scott Gottlieb was the director of the FDA, he offered an answer to that question in railing against “kid-appealing flavors.” In the years following Gottlieb’s tenure, it seems the phrase “kid appealing” has been dropped in reference to characterizing flavors per se as the villain of the piece when it comes to youth vaping.

But how can we be sure that it is indeed e-liquid flavors that are driving youth vaping? A surprising answer to that question can be found in the latest results from the 2022 National Youth Tobacco Survey. This survey draws upon data from over 28,000 middle school and high school pupils from across the U.S. and is one of the leading influences on government policy when it comes to e-cigarettes.

When youth who had ever tried an e-cigarette were questioned about the reasons why they first used an e-cigarette, flavors were the ninth most frequently cited reason among middle school pupils and the seventh most frequently cited reason among high school pupils. In explaining their reasons for starting to vape, both middle school and high school pupils much more commonly mentioned curiosity about e-cigarettes, the fact that e-cigarettes were being used by friends or family members, or that they felt anxious, stressed or depressed.

A very similar picture emerged in relation to the reasons youth participants in the survey offered for why they were currently using e-cigarettes. In this case, flavors were the ninth most frequently cited reason among middle school pupils and seventh among high school pupils. Again, much more influential in explaining their current e-cigarette use were the fact that these devices were seen to be a way of reducing stress, the fact that they were used by friends and the attraction of the nicotine buzz. Flavors may be part of the choices that youth make when they are using an e-cigarettes, but that does not mean that they are the key factor in the reason why youth start vaping or continue vaping.

On the basis of those results, one would have to say that flavors may well have been miscast as the cause of youth vaping. There is, however, a further problem with restrictive regulatory action targeted on flavors apart from the fact that it may well not be flavors that are driving youth vaping—the fact that flavors might actually be an important part of adult smokers’ journeys away from combustibles. By reducing the range of tobacco flavors adult smokers can use in their e-cigarettes, regulators may be weakening the capacity of these devices to assist adult smokers in quitting.

With an e-cigarette flavor ban in all but name being applied in the U.S., it is important that e-cigarette companies, and others, monitor the extent to which the reduced range of available flavors may be resulting in fewer adult smokers using e-cigarettes and fewer smokers managing to quit smoking with these products. It is important to remember that the ratchet of restrictive regulatory prohibition can move both up and down depending upon the evidence. If evidence shows that flavors are not driving youth vaping and that those flavors are helping adult smokers to quit, then a case can be made for allowing flavors to reenter the world of adult vaping. In the meantime, attention needs to be focused on how manufacturers and others can work together to ensure that flavored e-cigarettes, while available for adult use, are inaccessible to youth.

Neil McKeganey is the director of the Center for Substance Use Research in Glasgow, Scotland.

Andrea Patton, is a behavioral epidemiologist and head of prevalence research within the Centre for Substance Use Research, Glasgow, U.K. Patton has over 15 years of experience working in public health for academia, regulatory bodies and industry leaders in Europe and the United States.

May 30, 2023

World Vape Day:

A new scientific study on Vuse underscores the contribution vapor products can make toward tobacco harm reduction.

By James Murphy

Almost 20 years ago, I joined BAT as a scientist motivated by the positive change that tobacco harm reduction (THR) can achieve. We have made great strides since then, and on days like World Vape Day, it is encouraging to see continued innovation in this area. This ambition to support THR is embodied by BAT’s release today of one of the largest vapor product studies ever conducted, further supporting the role that Vuse, BAT’s flagship vapor brand, can play in tobacco harm reduction.

Science and research have been fundamental to the progress that I have witnessed over almost two decades at BAT. Together, they form the cornerstone of consumer and regulatory confidence in our brands. This confidence is essential for our new-category products to be able to both support THR and provide reduced-risk*† alternatives for consumers who would otherwise smoke.

Early in my career, I had the opportunity to lead product development for BAT’s first vapor product, which would subsequently turn into Vuse: a billion-pound brand and the No. 1 global vaping brand by market share.¹ Now, in 2023, there is wide acceptance that vaping continues to grow in importance as adult smokers seek reduced-risk alternatives to continued smoking.

As director of research and science at BAT, my priority is to develop and publish science-based information needed to better understand the real-world impacts of our products.

Our latest study, published today in the peer-reviewed journal Internal and Emergency Medicine, is intended to do just that. By comparing clinical measurements from exclusive Vuse consumers with current smokers, the results of the study show that adult consumers using BAT’s vapor brand Vuse² had significantly better results for biomarkers relevant to smoking-related diseases than smokers.

For priority cigarette smoke toxicants identified by the World Health Organization, levels of exposure were significantly lower in the Vuse consumers compared to the smokers. Additionally, favorable differences between the Vuse consumers and smokers were found across all seven measured biomarkers of potential harm relevant to smoking-related diseases.

We believe these results underscore the contribution that vapor products can make toward tobacco harm reduction and how, by using a robust evidence base to substantiate the role of reduced-risk* products, we can give adult smokers who would otherwise continue to smoke access to satisfactory reduced-risk* alternatives.

While World Vape Day brings together a global community to converse and learn about tobacco harm reduction, there are significant barriers and challenges facing companies involved in the vaping industry. I believe a core component to overcoming these barriers is evidence-led and science-backed regulation and leadership. These two areas are key to ensuring that reduced-risk* products are only made available to adult consumers and that consumers feel confident about the quality and safety standards governing the development of alternatives like vapor products.

In countries where the concept of tobacco harm reduction has been embraced, we have seen accelerated declines in smoking rates as smokers migrate to noncombustible products. Sweden, for instance, is on the cusp of becoming the first European country to become officially smoke-free—with smoking rates at just 5.6 percent—a 51 percent drop in a decade. Low smoking rates have also had direct benefits for Swedish public health, with cancer rates that are 41 percent lower than the rest of Europe. However, many countries are yet to offer consumers legal access to reduced-risk* products as alternatives to widely available conventional cigarettes.

I am more convinced than ever that tobacco harm reduction has the potential to be transformative for our consumers and significantly lower currently projected smoking rates worldwide.

There is a clear opportunity to use the scientific evidence we now have available to substantiate the benefits of reduced-risk* products for those who would otherwise smoke. Looking ahead, I am increasingly confident that the quality of ongoing research from us, other manufacturers, academics and public health authorities—combined with open and honest debate with a diverse range of political, regulatory and public health stakeholders—will accelerate tobacco harm reduction.

James Murphy is the director of research and science at BAT.

* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk-free and are addictive.

† Our products as sold in the U.S., including Vuse, Velo, Grizzly, Kodiak and Camel Snus, are subject to FDA regulation, and no reduced-risk claims will be made as to these products without agency clearance.

¹ Based on Vype/Vuse estimated value share from recommended retail price in measured retail for vapor (i.e., total vapor category value in retail sales) in the U.S., Canada, France, the U.K. and Germany. These five markets cover an estimated 77 percent of global vapor closed-system net turnover, calculated in June-July 2021.

² The study focused on self-reported exclusive users of commercially available Vuse ePod or Vuse ePen3. Thus, references to “Vuse” in the context of the study means either Vuse ePod or Vuse ePen3.

May 30, 2023

WHO Urges End to Tobacco Subsidies

The World Health Organization is urging governments to stop subsidizing tobacco farming and support more sustainable crops that could feed millions.

“Tobacco is responsible for 8 million deaths a year, yet governments across the world spend millions supporting tobacco farms,” said WHO Director-General Tedros Adhanom Ghebreyesus in a statement ahead of World No Tobacco Day on May 31.

“By choosing to grow food instead of tobacco, we prioritize health, preserve ecosystems and strengthen food security for all.”

According to the WHO, more than 300 million people globally are faced with acute food insecurity. Meanwhile more than 3 million hectares of land across more than 120 countries are being used to grow tobacco.

“Tobacco is not only a massive threat to food insecurity, but health overall, including the health of tobacco farmers. Farmers are exposed to chemical pesticides, tobacco smoke and as much nicotine as found in 50 cigarettes—leading to illnesses like chronic lung conditions and nicotine poisoning,” said Ruediger Krech, director of health promotion at the WHO.

In response to such criticisms, the International Tobacco Growers Association recently posted retorts to common misconceptions of the sector.

For example, in response to the frequently aired accusation that tobacco growing is bad for the environment, the ITGA points out that tobacco covers only 0.25 percent of the world’s cultivated land. In response to the claim that tobacco growing is bad for growers’ health, it points out that the only health risk unique to tobacco crops is green tobacco sickness—a condition that is easily avoided with proper attire and training.

The ITGA also addresses criticisms about farmer debt and child labor on its website.

May 29, 2023

Pakistan Asked to Reconsider Tax Hike

The chief financial officer and executive director of Philip Morris International in Pakistan has asked the government to reconsider a hike in federal excise duties (FED), reports The Tribune.

In February, the government increased the FED by 200 percent for the current fiscal year, causing legal cigarette sales to drop considerably.

PMI suffered an almost 70 percent decline in sales and a 60 percent drop in production in March and April. “This downward trend is expected to persist in the coming months due to the rise in illicit cigarette sales,” said PMI’s Muhammad Zeeshan.

BAT subsidiary Pakistan Tobacco Co. also scaled back production in the wake of the tax hike, citing fierce competition from the black market. In a letter to the Federal Board of Revenue, the company stated its intention to re-export four cigarette making machines due to a decline in sales volume. The company has reportedly already shut down eight of 10 production lines at its Jhelum facility.

Zeeshan told journalists that the high FED not only depresses fiscal revenue, but also fuels the illicit market, exacerbating the government’s financial challenges.

In the quarter that ended March 31, 2023, PMI paid PKR5.99 billion ($2068 million) in excise duty, sales tax, and other government levies in Pakistan—16.4 percent less than in the previous period. Zeeshan attributed the drop to the decrease in sales owing to the rise in cigarette prices following the tax hike.

He warned that the government’s revenues from the tobacco industry would likely fall short of the targeted PKR260 billion after the FED hike.

Illicit sales account for approximately 40 percent of Pakistan’s tobacco market, according to Zeeshan. Without an adjustment of fiscal policies, it is likely to grow to 50 percent, he warned.

Health activists have accused the tobacco industry of overstating the decline of production to influence policymakers’ discussions about the upcoming budget, according to Business Recorder.

May 29, 2023