Blog - Tobacco Reporter

Malaysia Postpones E-Liquid Tax

The government of Malaysia has postponed implementation of a new tax on e-liquids following complaints from vapor companies and consumers, according to The Malaysia Reserve.

The proposal called for a duty of MYR1.20 ($0.29) per ml of vape liquid or gel, which could have more than doubled the retail prices of bottles for open-systems.

“We are not surprised by this deferment, considering the blowback from vape industry players and consumers over the high duty rate,” said CGS-CIMB Securities analyst Kamarul Anwar.

Vapor companies said the tax would make e-cigarettes more expensive than tobacco cigarettes and force the industry to compete with much-less expensive black market products.

“The tax rates implemented should be made with proportional risks of the product benefits to the hardcore smoking community,” Malaysian Vape Industry Advocacy President Rizani Zakaria told The New Straits Times in October.

The proposal also ran into opposition from medical groups. “The taxation levels for tobacco harm reduction products in Malaysia must remain risk-proportionate, benchmarked against high-risk products such as cigarettes,” Federation of Private Medical Practitioners Associations Malaysia president Steven Chow said in a statement last November.

Malaysia currently prohibits nicotine sales for non-medical purposes. Earlier this year, Health Minister Khairy Jamaluddin informed the World Health Organization that the country would legalize and regulate vaping products to prevent youth access.

January 7, 2022

VPR Brands Settles IP Dispute

PHD Marketing has agreed to pay VPR Brands $85,000 to settle an intellectual property dispute. As part of the deal, VPR Brands has granted PHD a nonexclusive, non-assignable license to practice the invention set forth in the patent.

This U.S. patent includes claims covering electronic cigarette products containing an electric airflow sensor, including a sensor comprised of a diaphragm microphone. The sensor turns the battery on and off, and covers most auto-draw, e-cigarettes, cigalikes, pod devices and vaporizers using an airflow sensor rather than a button.

VPR previously filed a lawsuit in the U.S. District Court for the Central District of California alleging patent infringement of U.S. Patent by PHD.

“I want to once again thank our legal team at SRIPLAW for their hard work and diligence in settling this matter,” said VPR CEO Brands Kevin Frija in a statement. “It is a Win-Win for All parties when a dispute can be settled ahead of trial.”

Previously, HQDTECH USA and Nepa 2 Wholesale agreed to pay more than $275,000 to VPR Brands for infringing on the same patent.

January 7, 2022

Ukraine Enacts Tobacco Control Law

Ukraine’s President Volodymyr Zelensky on Jan. 6 signed a sweeping new tobacco control law after nearly two years of deliberations.

The legislation prohibits smoking and e-cigarette in enclosed public spaces. Additionally, it bans the advertising, promotion and sponsorship of all tobacco products; increases the size of warning labels required on cigarettes, heated cigarettes and e-cigarettes; and bans flavored products.

More than 40 percent of Ukrainian men smoke and approximately 130,000 Ukrainians die from tobacco-related diseases each year, according to the U.S.-based Campaign for Tobacco-Free Kids (CTFK).

“Ukraine’s new law is a significant step in curbing this deadly toll and will also align the country’s tobacco control measures with member states of the European Union. These measures include regulations on nicotine content and emission levels from tobacco products,” said CTFK Regional Director for Eurasia Joshua Abrams in a statement.

“For decades, tobacco companies have used strategies like youth-oriented marketing and flavors to lure young people into a lifetime of addiction. Ukraine’s new measures send a strong message to Big Tobacco that Ukraine will not allow its youth to face this fate.”

January 7, 2022

Fewer Tobacco Growers in Zimbabwe

The number of tobacco growers in Zimbabwe has declined by nearly one fifth, reports The Herald, citing the Tobacco Industry and Marketing Board (TIMB).

More than 120,000 people registered to grow tobacco for the current season, compared with 144,462 who registered during the same period last year.

The decline is attributed to the TIMB’s stricter grower vetting process and challenges facing the tobacco industry.

“Many farmers have tried and have fallen short, which is why we have less registered farmers,” said TIMB Public Affairs Officer Chelesani Moyo. “We place more pride in having fewer but legitimate tobacco growers whom we know will follow due diligence in all tobacco production processes and produce tobacco in quality ranges one to three by 2025.”

Tobacco Association Zimbabwe President George Seremwe blamed the decline in registrations on the fact that some farmers had incurred losses during the previous season.

“Too much cartels on one cake in the industry,” he said. “Surrogate contractors short changed farmers last season. We cannot have tobacco farmers not paid from last season up to now.”

Following complaints that some buyers were charging excessive premiums for inputs, manipulating prices and paying late, the TIMB has cracked down on contractors. Recently, the regulator also announced stiffer penalties for side marketing.

In related news, the government has given farmers who are still planting tobacco as a result of erratic rainfall at the start of the current farming season until Jan. 10 to destroy seedbeds.

Under normal circumstances, Zimbabwe requires tobacco farmers to destroy their seedbeds by Dec. 31 each year to prevent the spread of pests and diseases.

January 7, 2022

Essentra Filters Names New Managing Director

Essentra Filters has appointed Robert Pye as managing director of filters, based out of Essentra’s Singapore office.

Pye joined Essentra in August 2016 and was most recently the global operations director of the filters division. He succeeds Kamal Taneja, who will take up his new role as managing director of Essentra’s packaging division.

“I am excited to be taking over the new role as managing director of Essentra Filters and I thank Kamal for his hard work and contribution in developing the filters division business under his leadership,” said Pye.

“Our focus has always been to ensure our customers’ success, which we have built over 80 years of commitment to innovation and excellence in the tobacco industry. We continue to be committed to supporting our partners in innovating new products for the growing heated-tobacco segment and more sustainable products, such as our expanding portfolio of ECO range plastic-free filters.”

January 6, 2022

Iluma Prime Debuts in Switzerland Duty Free

Philip Morris International has launched the new IQOS Iluma Prime in Switzerland duty free, according to DFNI Frontier.

The announcement follows the market launch of IQOS Iluma in Japan in 2021.

The IQOS Iluma Prime is PMI’s first tobacco-heating system to introduce induction-heating technology, which utilizes no blade and requires no cleaning.

“Our objective is a world without cigarettes, a world where cigarettes are replaced by smoke-free alternatives that are a better choice than continued smoking,” said PMI CEO Jacek Olczak. “We have launched several generations of our IQOS heated-tobacco system, expanding our portfolio to offer constantly improved, science-backed solutions that take advantage of advancements in technology and address pain points heard from consumers.

“This commitment to continuous innovation plays a significant role in our ambition to deliver a smoke-free future. The launch of IQOS Iluma, our most innovative device yet, gives adult smokers another better choice and represents an important leap forward in our efforts to accelerate the end of smoking.”

“IQOS Iluma is our most innovative offering to date and the new flagship in our portfolio of science-backed, smoke-free products. Its breakthrough induction-heating technology heats tobacco from within, without burning, so there’s no smoke, no ash and, like previous IQOS devices, it emits, on average, 95 percent lower levels of harmful chemicals compared with cigarettes,” said Michele Cattoni, vice president of heated-tobacco platforms at PMI.

“However, unlike our previous tobacco-heating systems, IQOS Iluma has no blade. That means no tobacco residue or cleaning—ever. With this, and other product features, we aim to address consumer pain points that may have hindered some adult smokers from beginning or maintaining their journey away from cigarettes in the past.”

January 6, 2022

Armenia Tobacco Firm Exampted from Duties

The Armenian government will exempt cigarette manufacturer DrimCompany from customs duty payments on raw materials imports to encourage investment, reports the Arka News Agency.

Founded in 2021, DrimCompany aims to sell its products internationally, with a large share of exports going to the Eurasian Economic Union countries.

DrimCompany has pledged to invest AMD11.9 billion ($24.67 million), including AMD2 billion in the purchase of a new production line. The rest will be spent on the construction and purchase of raw materials and equipment.

The company said it will create 100 new jobs with an average salary up to AMD450,000 by 2024.

The customs duty exemption benefit is estimated at AMD937.7 million.

January 6, 2022

Swiss to Vote on Advertising Restrictions

On Feb. 13, Swiss voters will decide on a popular initiative that calls for greater restrictions on tobacco advertising, reports SWI.

The initiative aims to ban tobacco and e-cigarette advertising wherever children and adolescents might see it, for example in the press, on posters, on the internet or at events. Advertising directed only at adults or shown in places to which minors have no access would still be allowed.

For the Federal Council and Parliament, the initiative goes too far, however. They are opposing it with an indirect counter-proposal in the form of the new Tobacco Products Act. The new rules would ban advertising of tobacco products and electronic cigarettes on billboards and in cinemas. In addition, tobacco companies would no longer be permitted to give away free cigarettes or to sponsor international events in Switzerland under the counterproposal. Advertising at kiosks, in the press or on the internet would still be possible, except when aimed at minors, and the sponsorship of national events would still be permitted.

The new Tobacco Products Act can come into force regardless of the outcome of the vote on the popular initiative. But if the popular initiative is approved, federal authorities will be required to adapt the law to respond to the new requirements.

Switzerland has one of the weakest tobacco control regimes in Europe. The 2019 Tobacco Control Scale ranked Switzerland second from bottom overall and last in terms of restrictions on tobacco advertising. In addition, Switzerland is the only European country not to have ratified the World Health Organization Framework Convention on Tobacco Control (FCTC).

At present, the advertising of tobacco products is permitted, subject to certain restrictions. Tobacco advertising on radio and television and advertising aimed specifically at minors is banned. Most cantons have brought in more far-reaching bans, prohibiting tobacco advertising on billboards and in cinemas, for example, or stopping tobacco companies from sponsoring events.

Critics attribute the country’s weak tobacco laws to the fact that Switzerland is home to leading cigarette manufacturers, such as Philip Morris International and Japan Tobacco International. About a quarter of the Swiss population smokes, including around 100,000 people aged 15 to 19.

January 5, 2022

Stiffer Penalties for Side Marketing in Zimbabwe

The Tobacco Industry and Marketing Board (TIMB) of Zimbabwe plans to introduce stiffer penalties for “side marketing” of tobacco, reports Daily News. Side marketing is a form of contract default in which a farmer agrees to grow for one buyer but sells to another. When this happens, the contracting merchant not only loses his tobacco but also the agricultural inputs he provided to the farmer.

“TIMB has zero tolerance to side marketing,” said TIMB public relations officer Chelesani Moyo. “We are encouraging all stakeholders involved in the production of tobacco to stop the practice and make the tobacco farming business sustainable in Zimbabwe as we look ahead to the 2022 tobacco marketing season.”

At the same time, the TIMB has introduced measures to protect farmers from being shortchanged by contractors through underfunding and overcharging inputs.

The organization is currently analyzing the latest submissions from contractors who previously were not compliant.

“We have 37 licensed contractors, and nine out of the 37 are partially compliant because they have submitted partial regulatory information that we require,” said Moyo.

“We gave them up until Dec. 31, 2021, to ensure they are fully compliant. We are going to suspend those who are noncompliant, and farmers will be released and allowed to be contracted to other schemes.”

January 5, 2022

Thailand Urged to Allow E-Cigarette Sales

End Cigarette Smoke Thailand (ECST) wants Thailand to legalize vapor products to enable smokers to legally switch to less harmful nicotine products, according to an article in The Bangkok Post.

Despite a seven-year-old ban on e-cigarettes, the number of vapers has steadily increased in Thailand, according to the ECST. While the National Statistical Office estimates there are 78,742 vapers in the country, ECST representative Maris Kranyawath believes there are almost a million, based on the number of people following social media pages that sell vape products.

Kranyawath said legalizing vapor products would allow state agencies to set product standards. “Thailand has had a ban on vaping for seven years, but the number of vapers has continued to increase despite it,” said Kranyawath. “This means the policy has not been effective. If vape products were legal, they could be examined and standardized by state agencies.”

To protect young people, the ECST has proposed regulations to ban minors from buying and using vape products. “A salesperson must provide vape products that are appropriate for each user,” said Kranyawath. “Moreover, each vaper should register for a vape card at a district office first. When a vaper purchases products, he/she must show the card. Also, vape stores must have a machine to scan cards to identify the customer who has a daily limit of no more than 200 mL of e-liquid per day.”

The push for permitting vapor products has been gaining momentum in Thailand. Recently, Digital Economy and Society Minister Chaiwut Thanakamanusorn said he would explore ways to legalize the sale of e-cigarettes, citing their comparatively low health risk and the impact of black market sales on tax revenues.

January 5, 2022