Blog - Tobacco Reporter

Civil Money Penalty Complaints Against Vape Companies

The U.S. Food and Drug Administration has filed civil money penalty (CMP) complaints against four tobacco product manufacturers for manufacturing and selling e-liquids without marketing authorization. The targeted companies are VapEscape, Great American Vapes, Vapor Corner and 13 Vapor.

This is the first time the FDA has filed CMP complaints against tobacco product manufacturers to enforce the Federal Food, Drug, and Cosmetic (FD&C) Act’s premarket review requirements for new tobacco products.

It is illegal to manufacture, sell, or distribute e-liquids in the U.S. that the FDA has not authorized. The FDA previously warned each of the companies that, by making and selling their e-liquids without marketing authorization from the FDA, they were in violation of the FDA’s premarket requirements for tobacco products and that failure to correct these violations could lead to an enforcement action, such as a CMP. Despite the agency’s warning, these companies continue to make and sell their unauthorized e-liquids to consumers.

“Holding manufacturers accountable for making or selling illegal tobacco products is a top priority for the FDA,” said Brian King, director of the FDA’s Center for Tobacco Products, in a statement. “We are prepared to use the full scope of our authorities to enforce the law—especially against those who have continued to violate the law after being warned by the agency.”

Currently, under the FD&C Act, the maximum CMP amount is $19,192 for a single violation relating to tobacco products. The FDA typically seeks the statutory maximum allowed by law and is doing so in these four cases. The companies the FDA has filed CMP complaints against 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. Companies that do not take action within 30 days after receiving the complaint risk a default order imposing the full penalty amount.

“These latest enforcement activities are part of a comprehensive approach to actively identify violations and to deter illegal conduct,” said King. “These actions should be a wakeup call that all tobacco product manufacturers—big or small—are required to obey the law.”

Between January 2021 through Feb. 17, 2023, the FDA has issued more than 550 warning letters to firms for manufacturing, selling, and/or distributing new tobacco products without marketing authorization from the FDA. After receiving warning letters, a majority of these companies have complied and removed their products from the market.

February 22, 2023

Parkside Posts Strong Results in Difficult Year

Flexible packaging expert Parkside has reported strong year-on-year growth despite a challenging 12 months for the industry.

Reaping the rewards of significant recent investments made to its global operations, the company says it is on track to achieve its five-year objectives after reporting year-on-year growth of 28.1 percent, returning to pre-pandemic levels.

“With continued supply chain chaos, a lack of raw materials, labor shortages and a string of complex new laws hitting many national markets, we know times are tough for many in the packaging industry,” said Parkside Managing Director Robert Adamson. “Against that backdrop we remained resolute in our commitment to innovation, and we could not be happier with these results which show the company continues to go from strength to strength.”

In the face of ongoing global concerns, Parkside has significantly invested in both its U.K. and Asian capabilities.

The company’s most recent investments include an Allstein printing press and a Universal slitting machine in its Normanton, U.K. factory. The two machines improve the capacity, efficiency and energy consumption of the facility while ensuring its print quality standards remain ahead of the curve.

The company’s operations in Malaysia were also boosted by the recent appointments of Paula Birch as managing director of Asia, and Business Unit Manager Ian Dewar, who has formidable knowledge of the APAC market and the plastics industry.

“This growth would not be possible without the hard work, passion, and endless creativity of all our staff, who drive this company to new heights every day,” added Adamson. “So many long-serving team members have come along on this journey with us, and it is hugely rewarding to have seen the number of internal moves and promotions that we have this year, as we look to the future and explore new frontiers as a company.

“We are developing new business within the tobacco market, crafting exciting new marketing strategies, and with our new MD for Asia we continue to open up new geographic markets and product applications.”

February 22, 2023

22nd Boosts Cultivation for New Zealand

22nd Century Group has accelerated a major seed cultivation project for its proprietary reduced nicotine content tobaccos to support local authorities as they work to implement New Zealand’s new reduced nicotine content law starting from this year. The seed will be used to rapidly scale the availability of 22nd Century’s reduced nicotine content tobacco leaf to manufacture cigarettes compliant with New Zealand’s new reduced nicotine content law.

“New Zealand’s groundbreaking new law will require a sizeable expansion of reduced nicotine content tobacco leaf production to address market needs,” said John Miller, president of tobacco products for 22nd Century Group, in a statement.

“22nd Century’s ultra-low nicotine content tobaccos are the only commercial scale naturally grown tobacco varieties ready to meet the New Zealand law today. We are moving immediately to ensure sufficient leaf capacity of our reduced nicotine content tobacco to serve the entire New Zealand market as the new law is implemented.”

22nd Century’s proprietary reduced nicotine content tobacco varieties grow with 95 percent less nicotine than the commercial tobaccos used in making cigarettes for the New Zealand market. Significantly, 22nd Century’s non-GMO tobacco varieties are already compliant with the New Zealand law, which requires all combustible cigarettes to contain less than 0.8 mg of nicotine per gram of tobacco, inclusive of testing variance.

22nd Century’s expanded growing program, centered in the heart of the U.S. tobacco belt, will produce additional seed sufficient for approximately 2 billion sticks, the entire annual New Zealand cigarette market volume.

“New Zealand has taken the global lead in tobacco control through its new law, which will reduce the harms of smoking and improve public health and health equity, particularly among minority communities that are disproportionately burdened with the health and economic harms of smoking,” said John D. Pritchard, vice president of regulatory science at 22nd Century.

“As we increase quantities of our reduced nicotine tobacco seed, 22nd Century is demonstrating conclusively that the tobacco supply chain will pivot quickly to support the ramp up of the national-scale public health program,” Miller added.

February 22, 2023

Health Advocates Urge FDA to Ban Flavors

Health advocates are urging the U.S. Food and Drug Administration to ban menthol cigarettes and flavored cigars, reports WGBO. The FDA issued draft measures to ban menthol in April 2022. Final regulations are expected later this year.

“Menthol is an analgesic; it numbs the throat, so it lets the poison go down easier,” said Carol McGruder, co-chair of the African American Tobacco Control Leadership Council. “It dilates the alveoli in the lungs, the little sacs in your lungs, and so it allows the toxins to stay longer and deeper in the lungs.”

Lincoln Mondy made a documentary called Black Lives/Black Lungs about the marketing of menthol cigarettes to Black communities, something many have pointed out as a trend in tobacco marketing.

“We say predatory because it was indeed predatory; they went in neighborhoods like Detroit and New York and majority Black neighborhoods and gave out free cigarettes. They just handed out free cigarettes; they drove up in Newport vans and Kool vans and handed out free cigarettes,” Mondy said.

As a result of this “predatory” marketing, 85 percent of Black smokers smoke menthol cigarettes. Some states like California passed laws banning flavors. However, McGruder says that the industry is still finding ways around such bans.

“They’ve already introduced new products that have some chemicals in there that mimic menthol, but they’re not menthol, and they’re actually on the market right now in California, and so now we have to deal with that, and so, the industry will never stop. They are going to continue to recruit their new smokers to replace the folks who are dying,” McGruder said.

February 22, 2023

Imperial Launches Pulze 2.0 Heating Device

Imperial Brands has launched the first all-new upgrade of its Pulze heated tobacco device, as it continues to innovate to create more compelling, potentially reduced harm products.

Pulze 2.0 offers new levels of convenience with a compact all-in-one design and 25 or more sessions from a single charge.

Paired with Imperial’s iD sticks now available in 10 different flavors, Pulze offers an attractive, potentially less risky alternative to consumers seeking to switch away from combustible cigarettes, according to Imperial.

“Our consumer-centric approach to innovation is accelerating the pace of development across all categories,” said Andy Dasgupta, Imperial Brands’ chief consumer officer, in a statement. “Pulze 2.0 is another important milestone on Imperial’s journey to build a healthier future and offers consumers alternative ways to enjoy moments of relaxation and pleasure.”

Heated tobacco devices such as Pulze release nicotine and tobacco aromas without burning and producing smoke. This means that aerosols produced by Pulze contain substantially lower levels of harmful chemicals than those found in cigarette smoke, research shows.

Pulze 2.0 is being launched initially in four markets—Italy, Poland, the Czech Republic and Greece—and will be rolled out more widely across Imperial’s heated tobacco footprint in Europe during the remainder of 2023.

Heated tobacco forms part of Imperial’s multi-category approach to building a strong, focused next generation products business. The company has also recently unveiled major product innovations in vape, with the new Blu 2.0 and Blu bar devices, and modern oral with nine new varieties of its fast-growing Zone X brand.

The launch of Pulze 2.0 comes as Imperial CEO Stefan Bomhard and CFO Lukas Paravicini today present on the progress of the business’ transformation at the Consumer Analyst Group of New York conference in Boca Raton, Florida, USA.

The presentation by Bomhard and Paravicini starts at 4 pm EST. Participants can register here.

February 22, 2023

KT&G Provides Earthquake Relief

KT&G has donated TRY4.5 million ($238,390) to support earthquake victims and post-earthquake relief efforts in Turkey.

KT&G delivered its donation through the Korean Red Cross on Feb. 10 to fund aid supplies and recovery activities in Turkey. The donation was collected in the form of a matching grant named KT&G Sangsang Fund, whereby the company matched the donations made by employees.

KT&G has been reaching out with relief whenever a crisis has occurred in the local community over the past years. During the coronavirus crisis, KT&G secured 4,800 Covid-19 diagnostic kits from South Korea and donated them to hospitals in Istanbul in 2020 when the medical equipment was short in supply due to the pandemic situation. KT&G also provided the relief fund worth TRY700,00 when an earthquake hit Izmir in the same year.

“We hope that this relief effort will be of some help to the people of Turkey, who have maintained a friendly relationship with Korea for a long time,” said Kim Kwan-joong, president of KT&G Turkey, in a statement. We will continue to carry out our activities of social contribution as a member of the Turkish community.”

In 2007, KT&G invested approximately TRY700 million building its first overseas manufacturing plant in Izmir. Built on 145,000 square meters of land in Tire District, the facility exports to Europe and the Middle East.

February 22, 2023

U.K.: ‘Biggest Tobacco Tax Hike in History’

U.K. Chancellor Jeremy Hunt is planning the biggest tobacco tax hike in history, according to the Daily Mail.

A pack of 20 cigarettes will reportedly jump by £1.15 ($1.81), which is an increase of more than 15 percent.

Although cigarette duty usually rises with inflation, some smokers had hoped the Chancellor would put a hold on a jump because of such high levels of inflation.

Tobacco taxes raise almost £11 billion in taxes for the government, representing 1.2 percent of all tax revenue.

The U.K. hopes to reduce the share of smokers in its population to fewer than 5 percent by the end of the decade.

Earlier this year, a poll found a majority of Brits want an immediate ban on cigarette sales.

The findings could fuel the belief of some lawmakers and health experts that public opinion is approaching a “tipping point,” similar to when the U.K. ban on smoking in pubs, bars and restaurants was introduced in 2006 and 2007.

February 22, 2023

Cigarette Prices to Double in Pakistan

Tobacco companies in Pakistan announced an increase in cigarettes prices of 250 percent per pack following the implementation of the government’s PKR170 billion ($649.190 billion) minibudget this week, reports Propakistani.

The budget includes a sales tax increase from 16 percent to 17 percent and a 150 percent increase in the federal excise duty (FED) on cigarettes.

The retail prices of all popular cigarette brands including Marlboro, Gold Leaf, Capstan and Gold Flake, have gone up with the cheapest retailing at PKR211 to the most expensive now on sale for PKR522-525 per pack.

Public health advocates applauded the price hikes, saying that price measures are the most effective way of discouraging tobacco consumption.

Critics say the recent FED threaten legal tobacco companies’ survival because their sales are declining. Others note that the tobacco industry has raised prices above what was required by tax changes.

The industry, they say, has widened the per-packet price differentials by raising consumer rates significantly above the cost of the tax increase on more expensive products and absorbing the tax impact on cheaper products.

February 22, 2023

Inflation Leads Smokers to Cheaper Cigarettes

New inflation survey data examining the opinions of U.S. smokers found that, due to higher prices, smokers were more likely to switch to cheaper cigarettes rather than less expensive as well as less harmful alternative nicotine products. In examining smoker attitudes, this survey also found a lack of education regarding harm reduction products, with almost a third of smokers surveyed saying that nicotine pouches were more harmful than traditional cigarettes.

“In times of rising inflation, it is even more critical that smokers are well informed about the benefits of harm reduction products as it is an opportunity both for health and wallet,” said Markus Lindblad, head of external affairs at Nicokick, an e-commerce company in the smokeless industry, in a statement.

“Instead of switching to a lower-cost traditional cigarette due to rising prices, a better outcome would be switching to cheaper, harm-reduced alternative products like nicotine pouches, gum, or lozenges. Unfortunately, this survey found many smokers are not aware of the health benefits of switching to alternative products like nicotine pouches, and it is incumbent upon policymakers to address this misconception if they are serious about better public health outcomes.”

The survey also found that half of Americans say more education on the less harmful nature of alternative nicotine products would help them switch from cigarettes to products like vapes or nicotine pouches.

Only 21 percent of those surveyed view nicotine pouches as less harmful than cigarettes, with 30 percent incorrectly saying that nicotine pouches are more harmful than traditional cigarettes.

Thirty-six percent of respondents said vaping was more harmful than smoking traditional cigarettes.

February 22, 2023

India Allows Sale of Excess Tobacco

The Indian government has allowed the sale of excess tobacco produced by registered and unregistered growers without penalty on auction platforms in Karnataka, reports Mint.

“Union Minister of Commerce and Industry Shri Piyush Goyal has considered to allow the sale of the excess flue-cured Virginia (FCV) tobacco produced by registered growers and unauthorized flue-cured Virginia tobacco produced by unregistered growers without any penalty considering the low production during the 2022–2023 Karnataka crop season,” the commerce ministry said.

Due to continuous rains in June and July of last year, total production of FCV in Karnataka was 59.78 million kg against the crop size of 100 million kg authorized by the tobacco board.

The government’s decision not to impose penalties on the sale of excess FCV will help farmers recover monetary loss due to lower production during the season, helping growers to continue their livelihood, according to the ministry.

February 21, 2023