Blog - Tobacco Reporter

Indonesia to Raise Tobacco Tax

The Indonesian government plans to raise tobacco excise rates by 10 percent in 2023 and 2024 for hand-rolled cigarettes, with the maximum increase capped at 5 percent per year, reports Antara.

Excise rates for electric cigarettes of all types will be increased by 15 percent, and other tobacco products will be increased by 6 percent every year for the next five years.

The minimum retail price for tobacco products has been adjusted considering the developments in market prices and the average increase in cigarette excise duty.

The goal of the increase in tax is to decrease smoking and tobacco use among the population.

“With excise as a fiscal instrument to control consumption, we hope that the excise will increase prices, which will then reduce the number of smokers,” said Finance Minister Sri Mulyani Indrawati during a working meeting with Commission XI of the Indonesian House of Representatives in Jakarta.

Indonesia currently ranks first in the world for adult male smoker prevalence and fifth in the world for adult smokers.

December 13, 2022

Study Shows Velo Offers Reduced Risk

Users of BAT’s Velo modern nicotine pouch showed significant reduced risk of smoking-related diseases compared to smokers, according to a new cross-sectional clinical study published in Biomarkers.

The study included participants who had been using Velo exclusively for over six months as well as current smokers, former smokers and never-smokers. For the Velo consumers and current cigarette smokers, usage patterns and overall consumption were not controlled under the study protocol as the aim was to assess the impact among people using the products in their “normal” way rather than in a controlled way. Four different groups were enrolled and studied.

The results showed that the levels for the biomarkers of exposure, based on priority toxicants as defined by the World Health Organization, were substantially lower in Velo consumers compared with smokers. The data also showed favorable differences between the Velo consumers and smokers in the majority of the biomarkers of potential harm, with four achieving statistical significance and the others having similar levels across the Velo consumers, former and never smoker groups.

A single set of samples of blood, urine and other clinical measurements was tested for certain toxicants and a range of biomarkers thought to be linked to the development of diseases such as cancer and cardiovascular disease.

“These results add further evidence that supports the important contribution Velo can make to tobacco harm reduction.”

David O’Reilly, director of scientific research, BAT

“These results are very important for Velo and the modern oral nicotine product category,” said David O’Reilly, director of scientific research at BAT, in a statement.

“They build on the extensive scientific evidence, including epidemiological data, that already exists for oral tobacco and add to the weight of evidence that supports our belief that Velo is a reduced-risk product for smokers who completely switch from cigarettes as compared to continued smoking. We have already generated data that shows Velo has a toxicant profile better than snus and comparable to nicotine-replacement therapy. These results add further evidence that supports the important contribution Velo can make to tobacco harm reduction.”

Based on the biomarkers measured, compared to smokers, Velo consumers who had been using the product exclusively showed significantly lower levels in biomarkers of exposure to priority tobacco toxicants; significant favorable differences in a biomarker of potential harm relevant to lung cancer risk; significant favorable differences in a number of biomarkers of potential harm relevant to cardiovascular disease; and significant favorable differences in a biomarker of potential harm relevant to general inflammation.

For the biomarkers that showed no significant difference between the Velo consumers and smokers, similar levels were observed between the Velo and former and never-smoker groups.

Participants were based in Denmark and Sweden, aged 19–55 years old and in good general health.

December 13, 2022

India Mulls Ban on Single Cigarette Sales

The Standing Committee of Parliament has proposed a ban on the sale of single cigarettes in India to help curb tobacco use, according to reports by DNA India and Latestly.

The government should also implement a 75 percent goods and services tax (GST) on tobacco products in accordance with World Health Organization recommendations, according to DNA India. India currently imposes GSTs of 22 percent on bidis, 53 percent on cigarettes and 64 percent on smokeless tobacco. However, tax on tobacco goods has not increased significantly despite the GST, according to the committee.

Smoking is prohibited in public places in the country, with those caught breaking the law facing a fine of up to INR200 ($2.41). Tobacco product advertisements are also banned.

December 13, 2022

FDA Fails in Enforcement: Report

The U.S. Food and Drug Administration has failed to follow through after issuing warning letters to online tobacco products and vapor product sellers, according to a report by the Health and Human Services Office of the Inspector General (OIG).

Between 2010 and 2020, the FDA issued warning letters to 899 online retailers but “took no enforcement actions,” according to the report.

The FDA enforcement schedule, as of March 2022, calls for the following actions: first violation—warning letter; second violation within a 12-month period—fine of up to $320; third violation within a 24-month period—fine of up to $638; fourth violation within a 24-month period—fine of up to $2,559; fifth violation within a 36-month period—fine of up to $6,398; sixth violation within a 48-month period—fine of up to $12,794; and five or more repeated violations within 36 months—no-tobacco-sale order of 30 calendar days or six months or permanent.

The OIG report criticizes the FDA’s lack of transparency, which it says makes it hard to track the FDA’s performance. The report suggests that the FDA collaborate with the Bureau of Alcohol, Tobacco, Firearms and Explosives on oversight of online tobacco retailers; complete its rulemaking on non-face-to-face sales of tobacco products as required by the Tobacco Control Act; collect data to support process and outcome measures for its oversight of online tobacco retailers; and publish information and performance data on its oversight of online tobacco retailers.

In a response, the FDA did not dispute a lack of enforcement actions and agreed with the first and fourth suggestions, stating it is in the process of making those changes. The organization was noncommittal regarding the other two suggestions.

The OIG report is separate from the Reagan-Udall Foundation review of the FDA’s Center for Tobacco Products.

December 13, 2022

KT&G Recognized for Sustainability

KT&G received the Prime Minister’s commendation in the general environmental, social and governance (ESG) sector at the 2022 Sustainable Management Government Award ceremony at the Korea Chamber of Commerce and Industry.

The Government Award for Sustainable Management is the only government award in the sustainable management sector given by the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups. It is awarded to institutions or organizations that have contributed to the expansion and leadership of sustainable management, thereby enhancing industrial competitiveness, creating social values and generating achievements.

KT&G was recognized for its efforts to establish and execute a mid-term to long-term vision of environmental management that extends throughout the value chain; for receiving the Equal Salary Certification from the European Commission for the first time for a listed company in South Korea; and for evaluating and supporting the ESG of partner companies to build partnership.

“We are actively promoting the ESG management at the group level to enhance long-term corporate value,” said Kim Jin-han, director of KT&G’s strategic planning, in a statement. “We will continue to strive for mutual growth with our shareholders and other stakeholders through various sustainability management activities.”

December 13, 2022

Kiwi Lawmakers Pass Generational Ban

Lawmakers in New Zealand passed legislation today that makes it illegal to sell tobacco to anyone born on or after Jan. 1, 2009, reports the South China Morning Post.

“There is no good reason to allow a product to be sold that kills half the people that use it,” Associate Health Minister Ayesha Verrall told Parliament, adding that New Zealand’s healthcare system would save billions of dollars in the cost of treating sick smokers.

New Zealand’s pioneering law means that the minimum age for buying cigarettes will increase year after year. For example, somebody trying to buy a pack of cigarettes 50 years from now would need to prove they were at least 63 years old.

In addition to its age provision, the law will also cut the number of retailers allowed to sell tobacco by 90 percent and require companies to reduce the level of nicotine in combustible products.

The new legislation is part of New Zealand’s drive to become “smoke-free” by 2025, a situation in which fewer than 5 percent of the population smokes, according to the government definition.

Opponents of the legislation said the bill would force many small corner shops, known in New Zealand as dairies, out of business because they would no longer be able to sell cigarettes. They also predicted it would boost illicit tobacco sales.

“Denying adults the right to buy cigarettes legally will infantilize future generations and could make cigarettes more [and] not less desirable.”

Simon Clark, director, Forest

Smokers’ rights group Forest called the generational tobacco ban “absurd.”

“Banning younger adults from buying cigarettes legally won’t stop people smoking. It will merely drive the sale of cigarettes underground with consumers buying unregulated cigarettes on the black market, like any other prohibited product,” said Forest Director Simon Clark.

“Absurd policies like this are what happens when governments set targets for countries to become smoke-free,” he added. “Denying adults the right to buy cigarettes legally will infantilize future generations and could make cigarettes more [and] not less desirable.”

The share of people in New Zealand who smoke cigarettes daily has dropped to an all-time low of 8 percent, down from 9.4 percent this time last year, the annual NZ Health Survey revealed in November. By comparison, OECD data shows 25 percent of French adults smoked in 2021.

The decline in smoking has been accompanied by a rise in vaping. Some 8.3 percent now use e-cigarettes daily compared with 6 percent 12 months ago.

22nd Century Group, an agricultural biotechnology company that has invested heavily in reduced-nicotine cigarettes, applauded New Zealand’s plan to lower nicotine levels. “This policy is exactly what we were hoping for and more, particularly considering the inclusion of ‘testing variance’ in evaluating nicotine content,” said John D. Pritchard, vice president of regulatory science at 22nd Century, in a statement.

By including testing variance in the maximum permitted nicotine content of smoked tobacco products, New Zealand is compelling cigarette makers to target an average value of approximately 0.5 mg of nicotine per gram of tobacco content, which, according to Pritchard, also happens to be the level achieved by 22nd Century Group’s VLN products.

December 13, 2022

Avail Loses MDO Case

A U.S. court rebuffed Avail Vapor’s appeal of the Food and Drug Administration’s refusal to allow its products on the market, reports Reuters. The ruling is the latest in a series of court orders upholding the agency’s regulation of the e-cigarette industry.

The 4th U.S. Circuit Court of Appeals on Dec. 12 found that the FDA had acted within its authority in rejecting Avail Vapor’s premarket tobacco product applications.

In 2016, the FDA determined that e-cigarettes were subject to its regulation and gave manufacturers until 2020 to apply for approval of vapor products.

Avail Vapor sought approval for its products in 2020, telling the FDA that they could help smokers quit by switching to e-cigarettes. The company said it had measures in place that would ensure that its liquids would not be sold to minors.

The FDA denied the application in 2021, saying that the company had not presented long-term studies supporting its claim that its products, which included fruit flavors, were more effective at helping smokers quit than tobacco-flavored liquids, which the agency has said are less appealing to minors.

Avail lost an administrative appeal and then petitioned the 4th Circuit to overrule the agency. The company argued that the FDA failed to inform applicants in 2019 that they would need long-term studies. It also said the agency was obligated to consider the sales plan.

Circuit Judge J. Harvie Wilkinson wrote that Avail “encourages us to neglect the forest for the trees” by focusing on procedural objections rather than the FDA’s mandate to protect public health.

The FDA has denied more than 55,000 applications from e-cigarette products. Those denials have been previously upheld by the D.C. Circuit, 3rd Circuit and 7th Circuit.

December 13, 2022

Juul Settles Marketing Suit With Pennsylvania

Juul Labs has agreed to pay Pennsylvania $38.8 million to end the state’s claims that the company targeted young people with its products, state Attorney General Josh Shapiro announced in a release. As part of the deal, Juul denied any wrongdoing.

“Juul knowingly targeted young people with tactics similar to the tobacco companies’ playbook,” said Shapiro. “They disregarded their growing audience of young users, taking no action as their market share skyrocketed on the backs of American kids. About 13 percent of Pennsylvania students have vaped in the past 30 days—this settlement is only the beginning of keeping our kids safe from the dangers of vaping.”

Filed in Philadelphia County court, the Pennsylvania settlement forbids Juul from marketing its products near schools and playgrounds, advertising at events that include kids or in media outlets where audiences are made up of 15 percent or more of kids.

“This settlement is a continuation of Juul Labs’ progress to resolve issues from the past. We applaud the attorney general’s plan to deploy resources to address underage use in the commonwealth,” the company said in a statement. “The terms of the agreement are aligned with our current business practices, which we started to implement after our company-wide reset in the fall of 2019.”

Earlier this month, Juul settled more than 5,000 lawsuits covering more than 10,000 individual plaintiffs, resolving much of the legal uncertainty that had driven the company close to bankruptcy.

Juul announced on Dec. 6 that it has secured an investment to cover the cost of the settlement. The company has been in talks with two early investors to fund a bailout that would cover legal liabilities.

A pioneer in the vaping business, Juul Labs has gone from dominating the U.S. e-cigarette market to fighting for its survival in a relatively short time.

Following its initial success, the company quickly came under regulatory scrutiny over its marketing practices. Critics blame Juul Labs for contributing to an “epidemic” of underage vaping.

Thousands of lawsuits have been filed against Juul over the past several years, alleging that the company marketed its e-cigarettes to children. Juul has said it never marketed to underage users.

In September, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products.

Juul’s e-cigarettes were briefly banned in the U.S. in late June after the Food and Drug Administration concluded that the company had failed to show that the sale of its products would be appropriate for public health. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul’s marketing application.

In October, Juul published the details of its marketing denial order appeal. In late September, Juul shareholder Altria Group exercised the option to be released from its noncompete deal with the e-cigarette maker.

December 13, 2022

Officials Urged to Fix Vaping Misinformation

A group of public health experts along with the attorney general of Iowa have asked the U.S. Centers for Disease Control and Prevention (CDC) and the U.S. Surgeon General to correct misinformation overstating the dangers of e-cigarettes.

In an editorial published Dec. 12 in Addiction, the authors cite the 2019 outbreak of EVALI and the Surgeon General’s 2016 youth vaping report, which claims that nicotine vaping is a gateway to smoking.

The authors take issue with the CDC’s failure to amend the name EVALI (e-cigarette or vaping product use-associated lung injury) even after it became clear that the health problems were brought about by vitamin E acetate (mixed with cannabis oil by black market sellers) rather than nicotine vapes.

“Smokers are still twice as likely to incorrectly identify e-cigarettes as the cause of a serious lung disease outbreak in 2019 than to correctly identify marijuana vape products contaminated by vitamin E acetate as the cause,” said lead author Michael Pesko of Georgia State University in a press note. “Because many smokers then falsely believe e-cigarettes to be as or more dangerous than cigarettes, the misinformation reduces smoking cessation that would otherwise occur. Population health suffers as a result.”

The Surgeon General’s gateway claim, meanwhile, is simply untrue, according to the authors. “Significant evidence now exists that this association between vaping and smoking is not causal, which is a source of confusion for the lay public and healthcare professionals,” wrote Georgia State University health economist Pesko.

“The lack of causation is underlined by real-life data collected since the SG report’s publication. Even as youth vaping hit its peak in 2019, youth smoking was sinking rapidly, and that decline has continued.”

December 13, 2022

Top Court Clears Way for California Flavor Ban

The U.S. Supreme Court on Dec. 12 refused to block California’s ban on flavored tobacco, clearing the way for the law to take effect next week, reports The New York Times. Consistent with its practice when ruling on emergency applications, the court gave no reason for its decision.

Originally passed by lawmakers in 2020, California’s flavor ban was put on hold after opponents gathered enough signatures to force a referendum on the measure.

After Californians voted to uphold the law on Nov. 8, tobacco companies challenged it in court, arguing that only the federal government can ban tobacco flavors, as the Family Smoking Prevention and Tobacco Control Act gives the U.S. Food and Drug Administration authority to regulate tobacco.

State officials responded that the federal law was meant to preserve the longstanding power of state and local authorities to regulate tobacco products and to ban their sale.

The tobacco companies also argued that they would suffer “irreparable harm” from being shut out of one of the country’s largest markets. Small retailers, they argued, would potentially have to lay off employees and close. The plaintiffs further noted that menthol cigarettes make up about a third of the cigarette market and are disproportionally smoked by people of color, suggesting that that group would suffer disproportionally from a flavor ban.

In their Supreme Court brief, state officials urged the justices not to delay the law any longer. “The unsuccessful referendum campaign has already delayed the implementation” of the law for nearly two years, they wrote, “allowing children and teenagers across the state to be initiated into the deadly habit of tobacco use via flavored tobacco products throughout that period.”

Previously, the 9th Circuit Court of Appeals denied the tobacco companies’ request to block the law pending appeal.

Industry critics welcomed the Supreme Court ruling. “The tobacco companies’ battle against the California law shows once again that they haven’t changed and are lying when they claim to care about anything other than their bottom line,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, in a statement.

The California flavor ban applies to flavored e-cigarettes, menthol cigarettes and flavored cigars but exempts loose-leaf tobacco, premium cigars and shisha tobacco.

The state joins Massachusetts and the District of Columbia in ending the sale of flavored tobacco products, including flavored e-cigarettes, menthol cigarettes and flavored cigars. Three other states—New Jersey, New York and Rhode Island—prohibit the sale of flavored e-cigarettes. With local laws included, 25 percent of the U.S. population will now be covered by laws ending the sale of flavored e-cigarettes.

December 13, 2022