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  • Ukraine: Illicit Tobacco Sales Hit Record High

    Ukraine: Illicit Tobacco Sales Hit Record High

    Photo: Ivan Semenovych

    The share of illicit tobacco products in Ukraine reached its highest level since the country’s independence in 1991, reports Interfax Ukraine.

    According to an October study by the Kantar Ukraine Institute, illicit products accounted for 21.5 percent of the Ukrainian tobacco market in August 2022, up 5 percentage points over the average annual indicator for 2021.

    The survey shows that Ukrainian smokers bought 8.46 billion illegal cigarettes since the beginning of 2022, equaling the volumes for the whole of 2021, and caused the government to miss UAH20.65 billion ($558.71 million) in tobacco tax payments.

    Kantar Ukraine specified that fake cigarettes in Ukraine accounted for 8 percent of Ukraine’s tobacco market in August 2022 compared with 6.6 percent in August 2021.

  • Flavors Detected in ‘Tobacco’ Liquids

    Flavors Detected in ‘Tobacco’ Liquids

    Photo: laboko

    E-liquids marketed as tobacco-flavored contain higher levels of sweet and fruit-flavored chemicals today than they did a decade ago, according to a new study published on Nov. 3 in a special supplement to Tobacco Control.

    This recent development coincides with the U.S. Food and Drug Administration’s ban on the sale of flavors other than menthol and tobacco in cartridge-based e-cigarettes.

    To find out if e-cigarettes marketed as “tobacco-flavored” contained sweet and fruit flavor chemicals, researchers drew on an extensive database of e-liquid and aerosol flavor chemicals to identify any trends and changes in chemical composition and levels since 2010–2011.

    They compared the number and amount of flavor chemicals in 63 “tobacco-flavored” e-cigarette refill fluids purchased between 2011 and 2019 and two popular pod-style e-cigarette brands—Juul and Puff.

    They found that tobacco-flavored products purchased in 2010 and 2011 had very few flavor chemicals; overall, the levels of which were generally very low.

    Nearly two-thirds (63 percent) of the refill fluids bought before 2019 had levels of flavor chemicals below 2 mg/mL, and most (84 percent) were below 5 mg/mL.

    But the total number and level of flavor chemicals in “tobacco-flavored” refill fluids purchased in 2019 and in Puff Bar tobacco e-cigarettes were higher than expected.

    Among the 13 refill products bought in 2019, more than half (54 percent) had total flavor chemical levels above 10 mg/mL. Products with total flavor chemicals of more than 10 mg/mL contained one to five dominant flavor chemicals (each more than 1 mg/mL). 

    The five most frequently used flavor chemicals in “tobacco-flavored” e-liquids were fruity and caramellic: ethyl maltol (sweet or caramel, 60 percent); corylone (caramellic, maple, 44 percent); menthol (33 percent); vanillin (25 percent); maltol and triacetin (fruity, creamy, 24 percent).

    Nine sweet and fruit flavor chemicals, used mainly in products bought in 2016 and 2019, were at levels above 2 mg/mL. 

    The flavor chemical levels for Juul Classic and Juul Virginia were below 0.35 mg/mL while levels of the individual chemicals were, in most cases, equal to, or less than, 0.05 mg/mL.

    Different flavor chemicals were used in the classic and Virginia products, suggesting these were added intentionally to create distinct tastes for each product, according to the researchers.

    Puff “Tobacco,” on the other hand, had 27 different flavor chemicals adding up to a total of 34.3 mg/mL. Individual chemicals ranged from 0.03 mg/mL to 15 mg/mL.

    Four flavor chemicals (vanillin, ethyl maltol, ethyl vanillin and corylone), which were the highest (range 2.07 mg/mL to 15 mg/mL), are typically used in sweet-flavored e-cigarette products, such as Dewberry Cream, which is popular with young vapers, noted the researchers.

    For the dominant flavor chemicals found in both brands, levels of vanillin were 300 times higher in Puff than in Juul while ethyl maltol was 239 times higher and corylone was 41 times higher.

    The total number of flavor chemicals used in Puff Bar tobacco was greater than those found in nearly all (94 percent) the refill fluids evaluated.

    “Concern has been raised previously about the safety of flavor chemicals when inhaled at these high concentrations,” the researchers noted.

    “Although these particular flavors are generally regarded as safe by the Flavor Extract Manufacturers Association (FEMA) for ingestion, FEMA has not evaluated them for inhalation toxicity.”

    In a press note, the researchers said there were two reasons for the FDA to identify and quantify flavor chemicals before authorizing premarket tobacco product applications (PMTAs). “First, flavor chemicals are often used in e-liquids without safety data at concentrations much higher than those found in other consumer products,” they wrote. “Second, our data show that e-cigarette manufacturers are manipulating e-liquid formulations apparently to circumvent flavor chemical regulations.”

  • Industry Braces for California Flavor Ballot

    Industry Braces for California Flavor Ballot

    Photo: PX Media

    The nicotine business is bracing for a likely “yes” vote in the Nov. 8 ballot on California’s flavored products ban.

    In 2020, California lawmakers passed a ban on all flavored nicotine products—including vapes and cigarettes—except in hookah, loose leaf tobacco (for pipes) and premium cigars. Menthol products are also covered by the legislation.

    Opponents of the ban collected more than 1 million signatures and forced the state to hold a referendum on the ban. Originally scheduled to take effect Jan. 1, 2021, the legislation was then suspended until the Nov. 8 vote.

    If voters uphold the legislation next week, California will join a number of states that have already prohibited the sale of at least some flavored nicotine products. Massachusetts banned the sale of flavored nicotine products (including menthol) in 2019; New Jersey, Rhode Island and New York have all banned flavored vaping products.

    California’s proposed law is unique in that it also bars so-called “flavored enhancers,” preventing a person from buying flavored non-nicotine e-liquid and adding it to flavorless nicotine at home.

    Observers expect the California legislation to be approved.

    An Oct. 4 poll from the Berkeley Institute of Governmental Studies found that 57 percent of respondents planned to support the flavor ban, whereas just 31 percent would vote “no,” with only 12 percent looking to be undecided.

    Supporters of the ban appear to have outspent opponents by a significant margin. By mid-October, the billionaire anti-smoking and anti-vaping activist Michael Bloomberg had provided $15.3 million of the $17.3 million raised by the committee in favor of the ban, according to the San Francisco Chronicle. By contrast, the opposition had raised just over $2 million, almost entirely comprised of donations from Philip Morris USA ($1.2 million) and R.J. Reynolds ($743,000).

    Critics worry that, if passed, the ban will spawn a considerable illicit market as it appears to have done in states that have similar restrictions in place. Massachusetts’ ban on tobacco flavors, for example, appears to have encouraged smokers and vapers to obtain their products in neighboring states.

  • Acceptance Period for Swedish Match Offer Expires Today

    Acceptance Period for Swedish Match Offer Expires Today

    Photo: Swedish Match

    Shareholders of Swedish Match must decide today whether to tender their shares to Philip Morris International.

    In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp., objected, saying the bid undervalues their firm.

    In October, PMI increased the price of its bid to SEK116 per share from the SEK106 per share offered in May. Swedish Match’s board of directors advised shareholders to accept PMI’s revised offer.

    Under Swedish law, PMI needs 90 percent of shareholders to agree to the deal in order to get full control over the company.

    Earlier this week, Framtiden Partnerships said it would not accept PMI’s sweetened offer, according to Reuters.

    The investor, which owns nearly 1 percent of the Swedish nicotine products manufacturer, believes Swedish Match is better off as an independent company. Framtiden managing member Dan Juran estimates Swedish Match to be worth close to SEK200 per share.

    Framtiden said it would urge Swedish Match management to initiate a share buyback and potentially a special dividend if the deal does not go through.

    “As we wrote in our white paper, there is incredible long-term value in this asset, but we also think that there is great value to be realized in the short term as well,” Chris Anderson, a partner in Framtiden, was quoted as saying by Reuters, adding that a planned U.S. cigar business spinoff will also provide additional shareholder value.

    On Oct. 28, Elliott Management Corp. raised its stake in Swedish Match to over 10 percent—enough to scupper the deal if it opposed the bid.

  • Smoking Prevalence Halved Since 2009

    Smoking Prevalence Halved Since 2009

    Photo: Comugnero Silvana

    The smoking prevalence in Russia nearly halved between 2009 and 2021, reports Interfax, citing Health Minister Mikhail Murashko.

    “Tobacco consumption among adults went down from 39.5 percent in 2009 to 20 percent in 2021,” Murashko told participants in a recent public health forum.

    The news comes as multinationals are retreating from the Russian cigarette market in response to Moscow’s military assault on Ukraine.

    Following the Feb. 24 invasion, international cigarette manufacturers announced they would end their operations in Russia, but retreating from such a major market is easier said than done. Tobacco companies have had to carefully navigate shifting regulations and avoid missteps that could prompt the government to seize the business, for example—all the while trying to protect employees from becoming targets for arrest.

    Earlier this year, Philip Morris International CEO Jacek Olczak described the process as “bloody complex.” In a July interview, he said the company was unlikely to be able to leave Russia before the end of 2022.

    An analysis of Russian Treasury figures conducted by The Telegraph revealed that the leading international cigarette manufacturers have provided the Russian government with at least $7.25 billion in additional income through tax payments since Feb. 24.

    Russia is the world’s fourth-largest cigarette market. Prior to the war, Japan Tobacco International led the market with a 36.7 percent share, followed by PMI (31.7 percent) and BAT (23.5 percent), according to Cowen & Co.

  • Half-Year Revenue and Income Up at Universal

    Half-Year Revenue and Income Up at Universal

    Photo: Taco Tuinstra

    Universal Corp. posted sales and other operating revenue of $1.08 billion for the first half of 2022, up 34 percent over that reported in the comparable 2021 period. Reported operating income increased 27 percent to $51.2 million. Sales and other operating revenues from the tobacco business were $918.1 million compared with $690.6 million in the first six months of 2021. Tobacco operations contributed $41.9 million in operating income, 17 percent more than in the comparable 2021 period.

    “Demand for both our tobacco and plant-based ingredients products remains very strong, and we are excited about how our fiscal year 2023 is developing,” said Universal Corp. Chairman, President and CEO George C. Freeman III in a statement.

    “We are seeing improvement in shipping availability, particularly in Brazil, where we were able to ship large amounts of carryover tobacco in both the six months and quarter ended Sept. 30, 2022. We also remain very pleased with our strategic investment in our plant-based ingredients platform. Our Ingredients Operations segment diversifies our earnings and delivered higher results driven by higher sales in both the six months and quarter ended Sept. 30, 2022, compared to the same periods in the prior fiscal year.

    “We believe we are through our peak seasonal working capital requirements for fiscal year 2023, and we expect a considerable reduction in debt levels over the next two fiscal quarters. We have already seen significant working capital receipts in October 2022. Our tobacco shipments, which are weighted to the second half of our fiscal year, should enable us to reduce our debt levels from the elevated Sept. 30, 2022, levels as payments are received from our customers.”

    All types of leaf tobacco, but particularly burley, are currently in an undersupply position, according to Freeman. By the end of September, Universal’s tobacco inventories were nearly 90 percent committed for sale.

  • KT&G Net Profit Jumps by a Third

    KT&G Net Profit Jumps by a Third

    Photo: KT&G

    KT&G’s quarterly net profit jumped 29 percent from a year earlier on increased exports and a strong dollar, reports the Yonhap News Agency.

    Net profit for the three months ended in September rose to KRW463.14 billion ($325 million) from KRW359.58 billion during the same period of last year, the company said in a statement. 

    According to the company, the bottom line was boosted by increased sales of heat-not-burn products in the domestic market and increased overseas sales amid a weak won against the dollar.

    The dollar rose to an average of KRW1,338 in the third quarter from KRW1,157 a year earlier, according to the Bank of Korea. 

    Operating profit fell 2.7 percent to KRW405.61 billion during the quarter from KRW417.03 billion a year ago. Sales were up 8.5 percent to KRW1.62 trillion from KRW1.49 trillion during the cited period. 

    Domestically, KT&G sold 11.05 billion cigarettes in the third quarter, down 0.4 percent from a year earlier. The company held a 65 percent share of the local cigarette market. 

    Overseas sales jumped 30 percent to 12.2 billion cigarettes in the September quarter from 9.4 billion a year ago, driven by rising demand from emerging markets. 

    KT&G earns 90 percent of its sales from cigarettes and 10 percent from heat-not-burn products.

    From January to September, net income climbed 21 percent to KRW1.06 trillion from KRW878.58 billion in the same period of last year. 

  • Sri Lanka Mulls Cigarette Price Increase

    Sri Lanka Mulls Cigarette Price Increase

    Photo: MemoryMan

    Sri Lanka may increase the price of cigarettes as part of its upcoming budget, according to the National Authority on Tobacco and Alcohol (NATA), reports Sri Lanka Mirror.

    A suggestions has also been put forward to ban the retail sale of single cigarettes in Sri Lanka. The objective of this proposal is to reduce the number of people who smoke. 

    Meanwhile, a survey jointly conducted by the Department of Census and Statistics, NATA and the Ministry of Health has revealed that 51 percent of adults who smoke in Sri Lanka believe that they should quit smoking. 

  • ‘Reduced Nicotine Decreases Smoking in the Depressed’

    ‘Reduced Nicotine Decreases Smoking in the Depressed’

    Photo: bramgino

    Lowering the amount of nicotine in cigarettes to nonaddictive levels may reduce smoking without worsening mental health in smokers with mood or anxiety disorders, according to a study conducted by Penn State College of Medicine and Harvard Medical School researchers. They said reducing nicotine content in cigarettes could also lessen addiction, lower exposure to toxicants and increase a smoker’s chances of quitting.

    Recent proposals by the U.S. Food and Drug Administration and the New Zealand government seek to limit the amount of nicotine in cigarettes to minimally addictive levels. Prior research indicates that reducing nicotine content could help smokers quit, but there is little evidence to demonstrate if these policies could adversely affect smokers with current or prior affective disorders like depression and anxiety disorders—which affect an estimated 38 percent of U.S. cigarette smokers.

    According to Jonathan Foulds, professor of public health sciences and of psychiatry and behavioral health, smokers with mental health conditions are more likely to have severe nicotine withdrawal symptoms and less success at quitting. He also said there is speculation that lessening nicotine content to very low levels could worsen psychiatric symptoms in smokers with mental health conditions and lead to heavier smoking and increased exposure to toxicants, or harmful chemicals.

    The researchers studied 188 smokers with a history of or who had a current mood or anxiety disorder and had no plans to quit. Volunteer participants were randomly assigned to a group that received either research cigarettes containing the usual amount of nicotine (11.6 mg nicotine per cigarette) or a progressively reduced amount of nicotine for an additional 18-week period (the final amount was 0.2 mg nicotine per cigarette). At the beginning and conclusion of the study, the researchers measured levels of cotinine, a metabolite of nicotine, levels of harmful chemicals, cigarette dependence indexes and various mental health measures.

    “Our data showed that there wasn’t a significant difference in mental health measures between the groups, suggesting reduced nicotine cigarettes might not have adverse psychological effects on this population.”

    The researchers observed no statistically significant differences in mental health measures between the two groups at the conclusion of the study. The team used the Kessler Psychological Distress Scale, a six-item self-report assessment where participants reported on a five-point scale the degree to which they experienced feelings or emotions like “nervous,” “hopeless” or “so depressed that nothing could cheer them up.” Scores are developed by summing points for the six experiences. Participants in the reduced-nicotine content group scored an average of 5.3 at the beginning of the study and finished at an average score of 4.6 while participants in the usual nicotine content group scored 6.1 at the beginning of the study and finished around 4.9.

    “These findings are important because we want to understand the effect these policies would have on smokers with anxiety or depressive disorders,” said Foulds, a Penn State Cancer Institute researcher, in a statement. “Our data showed that there wasn’t a significant difference in mental health measures between the groups, suggesting reduced-nicotine cigarettes might not have adverse psychological effects on this population.”

    Similar to what prior studies reported, Foulds and his team found that groups in the reduced-nicotine content group were absorbing lower amounts of nicotine and ingesting lower levels of harmful carcinogens such as the biomarker 4-(methylnitrosamino)-1-(3-pryidyl)-1-butanol, more commonly known as NNAL. That group also smoked fewer cigarettes and reported lower levels of nicotine addiction by the end of the randomized phase of the trial.

    Unique to this study, participants in both groups were also given the choice to “choose their treatment” after the 18-week period. They could go back to using their own cigarettes, continue smoking the research cigarettes or attempt to quit. Of the 188 participants in the study, those randomized to reduced-nicotine content cigarettes were more likely to have quit smoking 12 weeks later (18.1 percent) compared to those in the control (usual nicotine content) group (4.3 percent).

    “We believe this is the first randomized trial to find that smokers who used very low-nicotine cigarettes were significantly more likely to have quit smoking (with biochemical verification) three months after the end of the trial,” Foulds said.

    “Our results suggest that these policies will likely result in reduced nicotine absorption from cigarettes without worsening the mental health of smokers with mood or anxiety disorders,” said Eden Evins, Cox Family Professor of Psychiatry at Harvard Medical School. “They also suggest that with proper support and resources, smokers with mood and anxiety disorders could quit successfully as a result of these policies.”

  • Ploom X Debuts in the United Kingdom

    Ploom X Debuts in the United Kingdom

    Photo: JTI

    Japan Tobacco International has launched its Ploom X heated-tobacco device at select locations in the United Kingdom, the company announced in a press release. This product is now available in the Greater London area, at pop-up stores in Shoreditch, online nationwide and in selected online vape stores.

    According to JTI, Ploom X represents the cutting edge of the next generation of heated-tobacco products. Technological upgrades include:

    • A redesigned “HeatFlow” system and a higher heating temperature to ensure a more consistent nicotine delivery and a more enhanced flavor delivery;
    • One easy-to-use heating mode;
    • Adjustments to the airflow system enabling a more consistent vapor delivery and increased vapor volume;
    • Session times of up to 5 minutes and the ability to use more EVO tobacco sticks per charge, with up to 22 sessions with one charge; and
    • A smaller and more compact device. Users can customize the device with colorful magnetic front panels.

    According to JTI, Ploom X reduces the level of nine smoke constituents by an average of 90 percent to 95 percent.

    Ploom devices are designed to be used exclusively with EVO tobacco sticks, which contain a tobacco blend made from microground and fine-cut tobacco.

    With 20 sticks in a pack and a recommended retail price of £4.50, EVO costs less than half the price of a pack of cigarettes in the U.K. EVO tobacco sticks are available in classic tobacco, menthol, and fruit and menthol infusions. The company also offers capsule variants that offer consumers the option to release an additional burst of flavor.

    “The launch of Ploom X marks a milestone in JTI’s story and also sets a new paradigm in the heated-tobacco category,” said JTI Director of Marketing Mark McGuinness. “Ploom X is a truly innovative product that will exceed consumer expectations, making their tobacco moments even more pleasurable and truly unique.”