Tag: Altria Group

FTC Complaint Against Altria’s Investment in Juul Dismissed

Photo: Aerial Mike
A U.S. Administrative Law Judge has dismissed the Federal Trade Commission’s (FTC) claims against Altria and Juul Labs arising out of Altria’s 2018 minority investment in Juul. Following a three-week trial, the judge found that the evidence failed to sustain the alleged violations.
The judge’s decision is subject to review by the FTC. Any decision by the FTC may be appealed to any U.S. Court of Appeals.
“We are pleased with this decision and have said all along that our minority investment in JUUL does not harm competition and does not violate the antitrust laws,” said Murray Garnick, executive vice president and general counsel of Altria, in a statement
In April 2020, the FTC issued an administrative complaint against Altria and Juul alleging that Altria’s 35 percent investment in Juul and the associated agreements constitute an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust Act of 1890 and Section 5 of the Federal Trade Commission Act of 1914, and substantially lessened competition in violation of Section 7 of the Clayton Antitrust Act.
A public version of the decision is expected to be made available late this month.
February 15, 2022
Altria Lauded for Sustainable Supply Chain Management
Altria Group has been recognized as a member of CDP’s 2021 Supplier Engagement Leaderboard for climate change, highlighting Altria’s and its subsidiaries’ work in sustainable supply chain management. Its supplier engagement rating (SER) positions it in the top 8 percent of companies who disclosed to CDP’s full climate questionnaire.
The SER provides a rating for how effectively companies are engaging their suppliers on climate change. CDP assesses performance on supplier engagement using a company’s response to selected questions on governance, targets, scope 3 emissions, and value chain engagement in the CDP climate change questionnaire.
“We believe Altria’s and our subsidiaries’ strong, sustainable partnerships with our supplier base and trade partners are critical to our future success and the achievement of Altria’s Vision,” said Sal Mancuso, executive vice president, chief financial officer, in a statement. “We are committed to driving sustainability and diversity through the value chain and we welcome the opportunity to engage further with our suppliers on environmental sustainability as a CDP supply chain member.”
Last year, Altria was recognized for a second consecutive year with a double ‘A’ rating for tackling climate change and protecting water security by CDP, a non-profit that runs a global disclosure system on managing environmental impact. CDP’s A List distinguishes companies for leadership on transparency and action on key environmental issues.
February 11, 2022
Dinyar S. Devitre to Retire From Altria Board

Photo: Bill Gallery
Dinyar S. Devitre will retire from Altria Group’s board of directors following the completion of his current term. Consequently, Devitre will not stand for re-election to the board of directors at Altria’s 2022 annual meeting of shareholders, which is presently anticipated to be held on May 19, 2022.
“Altria has benefited from Dinny’s significant contributions for nearly 50 years, including the time he served as Altria’s senior vice president and chief financial officer and his 14 years on the board,” said Kathryn McQuade, Altria’s independent board chair, in a statement. “We thank him for his remarkable service to this company.”
“I’ve had the privilege and benefit of working closely with Dinny over my time in leadership,” said Billy Gifford, Altria’s CEO. “We will miss his insights and perspective built from so many years of distinguished service and wish him all the very best.”
A director on Altria’ s board since 2008, Devitre is the chair of the finance committee and a member of the compensation and talent development, nominating, corporate governance and social responsibility, and executive committees.
He is a director of IHS Markit, Avestar Capital, Pratham USA and the Brooklyn Academy of Music.
February 9, 2022
Morgan Stanley: Antitrust Loss May be Win for Altria

Photo: Andriy Blokhin
The Federal Trade Commission (FTC) may issue its initial decision in the Altria Group/Juul Labs antitrust case by Feb. 17, according to Morgan Stanley. The investment bank expects the FTC to instruct Altria to divest its stake in the e-cigarette manufacturer.
While Morgan Stanley expects the market to react negatively if the FTC finds that Altria’s investment violates antitrust law, it sees little downside to Altria from an adverse ruling.
Altria would likely appeal the decision, which could result in a multiyear legal process, first with the full Commission and then at the U.S. Court of Appeals. Altria would be able to retain its stake in Juul during this process.
What’s more, Juul’s impaired valuation—the company was worth $1.7 billion in the fourth quarter of 2021, down from $12.8 billion—underscores Juul’s tempered growth prospects.
Also, continuing the legal process leaves open the possibility that the companies can reach a favorable settlement.
Alternatively, if Altria does not contest the FTC’s decision and sells its stake in Juul, it would benefit from crystallizing its loss on the original investment, according to Morgan Stanley, and could apply the tax shield to offset capital gains elsewhere
The case dates to April 2020, when the FTC filed an administrative complaint against the companies, alleging that Altria’s investment in Juul violates federal antitrust laws and seeking to unwind Altria’s investment.
The case has been before the administrative law judge since June 2021, with Altria and Juul defending their relationship and presenting extensive evidence and witnesses in support of maintaining Altria’s investment.
The administrative law judge’s initial deadline to decide was Dec. 22, 2021, but the judge filed an extension twice due to the complexity of the issues and extensive amount of materials in the case.
February 8, 2022
Altria Group Reports Full-Year Results

Photo: Casimiro
Altria Group earned net revenues of $26.01 billion in 2021, down 0.5 percent from its 2020 net revenues. Net revenues net of excise taxes was up 1.3 percent to $21.11 billion in 2021. For the fourth quarter of 2021, Altria Group reported net revenues of $6.26 billion, down 0.8 percent over those reported in the comparable 2020 period. Revenues net of excise taxes were up 0.6 percent to $5.09 billion for the fourth quarter.
“Altria delivered outstanding results in 2021 across our businesses, including strong financial performance, progress toward our vision and advancements in our ESG efforts,” said Altria CEO Billy Gifford in a statement.
“We returned more than $8.1 billion in cash to shareholders in 2021 through dividends and share repurchases. This total represents the third-largest single-year cash return in Altria’s history and the largest annual return since 2002.
“Our plans for the year ahead include a continuation of our strategy to balance earnings growth and shareholder returns with investments toward our vision. We expect to deliver 2022 full-year adjusted diluted EPS in a range of $4.79 to $4.93, representing a growth rate of 4 percent to 7 percent from an adjusted diluted EPS base of $4.61 in 2021.”
Altria’s heated-tobacco business suffered a setback when the U.S. International Trade Commission imposed an importation ban on the IQOS device, Marlboro HeatSticks and infringing components following an intellectual property dispute with Reynolds American Inc. As a result, the IQOS system is no longer available for sale in the U.S.
Atria says it remains focused on returning IQOS to the U.S. market.
January 27, 2022
Tobacco Recognized for Environmental Initiatives
CDP has recognized Philip Morris International, Japan Tobacco, Imperial Brands and Altria Group for their environmental leadership.
PMI received CDP’s “Triple A” score, recognizing the company’s environmental performance in tackling climate change as well as protecting forests and water security.
“External validation from organizations like CDP encourages us to continue on our journey to create a net-positive impact on society,” said PMI Chief Sustainability Officer Jennifer Motles, in a statement. “We are humbled PMI has received CDP’s Triple A distinction for a second time.”
Japan Tobacco made CDP’s A List for the third consecutive year.
“We are delighted to be included in the CDP’s Climate Change A List and Water Security A List for the third consecutive year,” said Kazuhito Yamashita, member of the board and senior vice president, chief sustainability, in a statement. “This clearly reflects our continued efforts to reduce our environmental footprint and expand our transparency in disclosing information.”
Imperial Brands made CDP’s climate change A List for a third successive year.
“We have a good track record in minimizing our impact on the environment and are committed to rapidly stepping up the decisive actions required to combat climate change,” said Imperial Brands Global ESG Director Tony Dunnag in a statement.
Altria was recognized by CDP for a second consecutive year with a double A rating for tackling climate change and protecting water security.
“We are committed to conserving the natural resources on which our businesses and communities rely,” said Jennifer Hunter, senior vice president, corporate citizenship at Altria in a statement. “As the latest science makes clear, the global community needs to quickly increase the ambition and progress of environmental targets, build climate resilient businesses and prepare for the net zero economy. Altria is committed to doing our part.”
CDP is a not-for-profit charity that runs a global disclosure system for investors, companies, cities and regions to manage their environmental impacts. Its process is acknowledged as the gold standard of corporate environmental transparency.
The organization’s full 2021 A List of companies is available here.
December 7, 2021
Altria Banned From Importing IQOS Into U.S.

Photo: Kuznietsov Dmitriy
The U.S. Trade Representative has upheld the International Trade Commission’s (ITC) finding that Philip Morris International’s IQOS tobacco heating device infringes on patents held by British American Tobacco, reports The Winston-Salem Journal.
As a result of the ITC ruling, Philip Morris USA is barred from importing PMI’s IQOS 2.4, IQOS 3, IQOS 3 Duo heat-not-burn traditional cigarette products. It also was ordered to halt future sales of those products—marketed as Marlboro HeatSticks—already in the U.S.
Some retailers of the Marlboro HeatSticks, including convenience stores, already had displayed notifications to customers that those products could no longer be sold as of Monday.
“Today’s announcement provides a measure of success for our enforcement of intellectual property rights to ensure we can continue to innovate, as is common practice among innovation-based industries,” Gareth Cooper, BAT’s assistant general counsel, said in a statement. “As we have strenuously noted, there was no reason to overturn the policy.”
Altria said expressed disappointment with the decision. “We continue to believe that the plaintiff’s patents are invalid and that IQOS does not infringe on those patents,” the company said in a statement.
“The ITC’s importation ban makes the product unavailable for all consumers who have switched to IQOS, reduces the options for the over 20 million smokers looking for alternatives to cigarettes, and ultimately is detrimental to the public health.”
This sentiment was echoed by Gregory Conley, president of American Vaping Association, at the time of the ITC’s Sept. 30 decision.
“By potentially denying them the opportunity to switch to a harm reduction production IQOS, the real losers of this protracted court battle could end up being American adult smokers,” Conley said.
“While some may use vaping, snus, or pouches in the absence of IQOS, far too many American adults will choose to just smoke cigarettes instead.”
The U.S. Food and Drug Administration authorized IQOS for sale in April 2019. The products debuted in test markets in Atlanta in October 2019 and Richmond, Virginia, in November 2019. During the second quarter, PM USA expanded retail distribution of Marlboro HeatSticks into the Triad and other metro areas of North Carolina, as well as northern Virginia and Georgia.
Altria will likely appeal to the U.S. Court of Appeals for the Federal Circuit, which handles patent lawsuits. That process could take up to a year to reach a decision, with the likelihood of a successful appeal not favorable, according to industry analysts.
In the worst-case scenario for Altria and Philip Morris, the two companies would have to go back to the drawing board, moving production to the U.S. or changing up the design enough to avoid patent infringement claims.
PMI has successfully defended similar cases in the U.K. and elsewhere. BAT has already pursued litigation over IQOS in Poland, the Czech Republic, Bulgaria, Romania and Greece and through the European Patent Office.
November 30, 2021
Altria Releases Climate Financial Report

Photo: Christian Horz
Altria Group launched its first standalone Task Force on Climate-Related Financial Disclosures (TCFD) Report. The TCFD was formed by the Financial Stability Board in 2015 to help companies provide decision-useful information about their climate-related risks and opportunities to investors. In 2017, the TCFD published final recommendations across four core elements: governance, strategy, risk management, and metrics and targets.
“Just as we believe in the benefits of a science-[based] and evidence-based approach for our industry and tobacco harm reduction, we believe in a science-based approach for climate action,” said Sal Mancuso, executive vice president and chief financial officer at Altria, in a statement. “We also acknowledge this is our first TCFD report, and expectations for environmental, social and governance [ESG] disclosure are rapidly changing. We intend to learn as we go while responding to this dynamic environment as we evolve our reporting in the future.”
This year, Altria disclosed its progress and key metrics for each of its responsibility focus areas: Protect the Environment; Reducing Harm and Preventing Underage Use; Drive Responsibility Through Our Value Chain; Supporting Our People and Communities; and Engage and Lead Responsibly.
Altria’s responsibility focus areas are guided by its materiality assessment process—a comprehensive, formal approach to identify the most impactful ESG issues that Altria believes are important to its long-term sustainability and success.
November 18, 2021
Olczak: PMI-Altria Merger off the Table

Jacek Olczak (Photo: PMI)
Philip Morris International is no longer pursuing a merger with Altria Group, reports Financial Times.
At the Financial Times Global Dealmaking Summit on Nov. 9 PMI CEO Jacek Olczak said that the “chapter with Altria is closed,” the newspaper reported.
PMI was spun off as a separate publicly traded company from Altria in 2008. Altria operates in the United States and PMI operates in non-U.S. markets.
Industry analysts and observers have speculated for years that the two companies might eventually reunite as they both look to diversify their product lines and offset slow declines in cigarette sales.
The two companies said in August 2019 that they were discussing a possible all-stock “merger of equals.” However, those negotiations ended a month later without any deal.
At the time, Howard Willard, then Altria’s chairman and CEO, said, “While we believed the creation of a new merged company had the potential to create incremental revenue and cost synergies, we could not reach agreement.”
During the recent Global Tobacco & Nicotine Forum in London, analysts said reunification of the companies was unlikely because of PMI’s public commitment to derive more than 50 percent of its net revenues from smoke-free products by 2025. Because Altria currently receives a smaller share of its earnings from such offerings than does PMI, it would be harder for the combined entity to meet PMI’s target, they noted. What’s more, many PMI investors like the fact that they can currently choose whether or not they want exposure to the uncertain U.S. market—an option that would no longer be available after any merger.
Altria holds exclusive rights to sell PMI’s IQOS tobacco-heating device in the U.S. However, the U.S. International Trade Commission ruled in late September that Altria and Philip Morris International must halt imports and sales of IQOS because it infringes two patents held by R.J. Reynolds Tobacco Co. The decision is under administrative review and could be overturned.
November 11, 2021
Altria Reports Third Quarter Results

Photo: Casimiro
Altria Group reported net revenues of $6.79 billion in the third quarter of 2021, down 4.7 percent from the previous year’s third quarter. Revenue net of taxes was down 2.6 percent to $5.53 billion. Net revenues for the 2021 nine months were $19.76 billion (down 0.5 percent), while net revenue net of excise was up 1.5 percent to $16.03 billion.
“Altria continued to balance maximizing profitability from our core tobacco businesses with investing to realize our Vision of responsibly leading the transition of adult smokers to a smoke-free future,” said Altria CEO Billy Gifford. “Our tobacco businesses performed well against difficult year-over-year comparisons, and we’re encouraged by the significant retail share growth from On! in the third quarter.”
In the third quarter, Altria sold its Ste. Michelle Wine Estates business and received net cash proceeds of approximately $1.2 billion, which Altria used to partially fund its expanded share repurchase program.
Marlboro HeatSticks retail sales volume increased by more than 20 percent sequentially, primarily driven by broader distribution outside of established metro markets and increasing demand in the Northern Virginia metro market.
However, Altria’s plans to roll out Philip Morris International’s IQOS tobacco heating system in the United States suffered a setback when the International Trade Commission (ITC) banned imports of that product following a dispute between PMI and British American Tobacco’s Reynolds American. subsidiary over intellectual property.
In a press note, Altria said it disagrees with the ITC’s decision as it believes that the plaintiff’s patents are invalid and that IQOS does not infringe those patents. The ITC’s decision is currently under a 60-day review by the Biden Administration. If the decision is not rejected through the administration’s review, the ITC cease-and-desist order will take effect on Nov. 29, 2021, making all IQOS and Marlboro HeatSticks products unavailable in the U.S. marketplace.
Altria said its Philip Morris USA subsidiary is preparing contingency plans surrounding sales and distribution, and has been in communication with PMI regarding its domestic manufacturing plans.
October 28, 2021