Blog - Tobacco Reporter

FTC: Jump in U.S. E-Cigarette Sales

The Federal Trade Commission’s (FTC) first-ever report on e-cigarette products reveals surging e-cigarette sales and advertising.

The report, which is based on industry data provided for the years 2015 to 2018, shows that total e-cigarette sales, including both disposable units and those using changeable cartridges, increased more than sixfold from $304.2 million to $2.06 billion in those three years alone. The sales of fruit and other flavored e-cigarette cartridges preferred by youth increased sevenfold over that time, and nicotine concentrations in disposable e-cigarette products also increased.

“The commission’s inaugural e-cigarette report paints a disturbing picture, especially with e-cigarettes driving an unprecedented increase in youth use of tobacco products,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “The data show that this increase coincided with dramatic spikes in the market share of flavored products, higher concentrations of nicotine and an industry attempt to evade a ban on free sampling.”

March 21, 2022

Iceland Mulls New Restrictions on Nicotine

Iceland’s Office of Health Promotion and Science launched a consultation on a draft law on nicotine products, which, if passed, would introduce age limits for nicotine consumption, ban e-cigarette flavors perceived to appeal to children and stipulate a permissible maximum nicotine concentration.

Currently, the minimum purchase age for vapes in Iceland is 18, and the proposed bill would implement the same age limit for other nicotine products.

Iceland currently has an adult smoking rate of 7 percent, the lowest in Europe apart from Sweden.

According to Filter, the misinterpretation that nicotine consumption and smoking go hand-in-hand has distorted perceptions. “Nicotine is not the cause of death from smoking,” according to Yorkshire Cancer Research in England. “Nicotine is not a carcinogen; there is no evidence that sustained use of nicotine alone increases cancer risk. Of the three main causes of death from smoking (lung cancer, chronic obstructive pulmonary disease and cardiovascular disease), none are caused by nicotine. The harm from smoking comes from the thousands of other chemicals in tobacco smoke.”

March 21, 2022

Patricia Nez Henderson to Lead SRNT

The Society for Research on Nicotine and Tobacco elected Patricia Nez Henderson as president, marking the first time that a Navajo American will serve as the leader of the organization, reports Law360.

Henderson, an enrolled member of the Navajo Nation from Arizona and a graduate of the University of Arizona and Yale University School of Medicine, was recently elected to the head of the international association dedicated to supporting research and publications in the field of nicotine and tobacco. She is also the first Indigenous woman to graduate from Yale’s medical school with a Doctor of Medicine degree.

March 21, 2022

Chinese Vapers Stocking up Ahead of Flavor Ban

Vapers in China have reportedly been stocking up on flavored liquids in anticipation of a ban. A staff member at a RELX store in Shanghai told Sixth Tone that his shop had seen an increased demand for flavored pods since the government announcement, with grape and cola-flavored varieties selling out almost instantly.

On March 11, the State Tobacco Monopoly Administration published the final “Management Rules for E-cigarettes,” which includes a ban on domestic sales of nontobacco-flavored e-cigarettes. The rules are scheduled to take effect May 1.

The move was welcomed by anti-vaping groups such as the Campaign for Tobacco-Free Kids, which said the rule would help prevent children from becoming smokers. “Children who use e-cigarettes are more than twice as likely to use cigarettes in the future, according to the World Health Organization,” said Yolonda Richardson, executive vice president for the Campaign for Tobacco-Free Kids, in a statement. “China’s new policy is the right move to protect Chinese kids from these addictive products.”

The flavor ban is part of a long list of new requirements for the vaping business. China’s new rules also ban refillable products and synthetic nicotine while limiting the strength of e-liquid to 20 mg/mL.

Manufacturers, wholesalers and Chinese retailers will be required to conduct all business on a “unified national electronic cigarette transaction management platform,” and exports will be restricted to vapor products allowed in the destination countries.

The new rules will force e-cigarette sellers like RELX to sell competitors’ brands in their Chinese stores—something they don’t do currently.

With more than 300 smokers, China remains the world’s largest cigarette market, representing considerable potential for vapor companies. The country’s domestic e-cigarette market has grown at a rate of 70 percent a year since 2013, according to the Global Times, and is valued at about $1.3 billion.

China exports $15.6 billion of vaping products annually, according to the Shanghai Daily.

March 21, 2022

Morningstar: Stocks Hit Too Hard By Ukraine War

Tobacco companies’ retreat from Russia will materially impact their cash flows, at least in the short term, according to Morningstar. Nonetheless, the financial services company believes investors have overstated the valuation impact as the tobacco companies will be able to recoup some their losses after hostilities end.

Following Russia’s invasion of Ukraine and the imposition of sanctions by Western countries, the leading multinational tobacco companies have all reevaluated their operations in Russia.

Philip Morris International ceased investment in Russia and plans to scale down its business there. BAT will exit Russia and transfer its Russian assets to a third party. Imperial Brands has begun negotiations with a local third party about a transfer of its Russian assets and operations. Japan Tobacco has ceased planned investment in Russia.

Russia is the world’s fourth-largest cigarette market, with market volume of almost 206 billion sticks in 2020, according to Euromonitor. Japan Tobacco is the most exposed with a volume share of 38 percent, representing almost 16 percent of group tobacco volume in 2021. Philip Morris International and BAT are the next largest with shares of 26 percent and 25 percent, respectively, representing 9 percent and 8 percent of group volume. Although Imperial Brands is smaller, with only 8 percent share, Russia represents 7 percent of group volume, according to Morningstar.

The Russian cigarette market has been declining at a 6 percent compound annual rate over the past 10 years and almost 7 percent over the past five years, according to Euromonitor. However, it has been a promising market for tobacco-heating products. Morningstar estimates that heated-tobacco units accounted for 11 percent of the total market in 2021, making Russia one of the largest markets for heated-tobacco outside Asia.

Exiting Russia would be especially painful for PMI because it would jeopardize its medium-term targets for IQOS HeatStick sales, according to Morningstar

Meanwhile, the collapse in the ruble will create translational foreign exchange pressure for all manufacturers and is likely to make an already low-margin market even lower. Regional margins are also likely to contract materially in the near term. Some manufacturers have pledged to continue paying the salaries of employees in Russia and Ukraine even as revenue will probably be decimated.

March 21, 2022

PactAct POS Wants to Help Businesses

The Prevent All Cigarette Trafficking (PACT) Act has caused issues for some businesses trying to navigate the new regulatory landscape. PactAct POS is offering cloud-based software that includes integration with major e-commerce platforms like Shopify, BigCommerce and WooCommerce in hope of helping businesses remain in operation legally, according to a company press release.

“Pact Act vape compliance can be an overwhelming process for companies,” explained Terrence Johnathan, vice president of shipping and logistics for PactAct POS. “In some cases, the requirements are causing small businesses to shut down or stop shipping directly to consumers, which is hurting both consumers and manufacturers.”

PactAct POS provides registration, reporting, shipping and logistics, and government relations services.

PactAct POS is also releasing the PACT Act Survival Guide for 2022, a free e-book that focuses on PACT Act planning and strategies for 2022 and beyond.

“There are so many hoops to jump though,” said Johnathan. “We’ve worked with clients dealing with the vape mail ban [and] every kind of scenario, and we’ve been with them every step of the way. These companies don’t have to go at it alone. They just need to ask for help.”

PactAct POS is a cloud-based platform that automates PACT Act compliance for more than 250 businesses.

March 18, 2022

Denmark to Consider Sales Ban for Those Born After 2010

Denmark is considering a tobacco sales ban for anyone born after 2010, reports The Guardian and Geo News.

“Our hope is that all people born in 2010 and later will never start smoking or using nicotine-based products,” Health Minister Magnus Heunicke said. “If necessary, we are ready to ban the sale (of these products) to this generation by progressively raising the age limit.”

The current age of purchase is 18 years old. The health ministry stated that about 31 percent of 15-year-olds to 29-year-olds smoke.

A Danish Cancer Society poll showed that 64 percent of those surveyed were in favor of the proposed ban, with 67 percent being between the ages of 18 and 34.

Denmark’s proposed ban would be similar to that recently enacted in New Zealand, which will progressively raise the purchase age limit.

March 18, 2022

Indian Growers Hopeful for Better Prices

As tobacco auctions began in Prakasam and Nellore, Indian tobacco farmers are hoping to see better than average prices for their leaf during the 2021–2022 season, reports The Hindu.

Farmers had a hard time marketing leaf the past two years due to lower demand caused by the economic crisis and uncertainties due to Covid-19.

“We hope to make a kill[ing] this year, thanks to the lifting of pandemic restrictions. There are no logistic problems that were witnessed in the last two years when Covid cases were at peak,” said a group of farmers waiting for buyers at the Ongole I auction platform. Exporters have not entered the market yet due to the lack of confirmed orders from their counterparts overseas.

“The exporters are expected to enter the market during next week when the bales put for auction will be stepped up from the present 200 to 300 in each auction platform to 500 to 600,” SLS Regional Manager D. Venugopal assured the farmers, who were worried over nonparticipation in the auctions by all the registered traders.

March 18, 2022

Study Shows Vaping Alters Mouth Microbes

Researchers at New York University led by Deepak Saxena and Xin Li conducted a study to compare oral microbiomes of smokers and vapers, according to the National Institutes of Health.

During the study, 27 smokers, 28 e-cigarette users and 29 nonsmokers were examined over six months. All participants had at least mild gum disease at the beginning of the study, and none had their teeth cleaned during the study period.

Researchers compared the types of bacteria found where the gums meet the teeth at the beginning and end of the six-month study. They also compared markers of inflammation and immune cell activity.

The number of unique bacterial species living in and around the gums increased for all participants during the study. This can be a sign of gum disease getting worse.

The specific types of microbes found in the oral microbiomes differed substantially between the three groups. There was a core set of species common among the groups, but each also had unique features. They were so distinct that a machine-learning program could use the oral microbiome to predict which group people were in with 74 percent accuracy.

However, the program was least accurate at picking out e-cigarette users. The patterns of their oral microbes shared characteristics with both smokers and nonsmokers, with slightly more similarities to smokers. Unique traits among e-cigarette users included enrichment with Fusobacterium and Bacteroidales species, both of which are linked to gum disease.

“We are now beginning to understand how e-cigarettes and the chemicals they contain are changing the oral microbiome and disrupting the balance of bacteria,” Saxena says.

March 18, 2022

Belgium Shuts Down Illegal Cigarette Factory

Belgian Customs, with the help of Europol’s European Financial Economic Crime Center (EFECC), raided and shut down an illegal cigarette manufacturing factory in a former pet hotel in Arlon, Belgium, according to Europol.

Belgian authorities seized the complete cigarette manufacturing machinery and arrested 14 workers, mainly from Eastern Europe. Also seized were 4 tons of tobacco and 2 million counterfeit cigarettes.

Additionally, 40 million counterfeit cigarettes were seized in trailers in an industrial area in Duffel, Belgium. These cigarettes were presumed to have been manufactured at the illegal factory in Arlon and were most likely destined for the black market in France and the U.K.

French Customs was also involved in the investigation, seizing over 25 tons of cigarettes and 16 tons of tobacco from the same organized crime group in the city of La Longueville.

March 18, 2022