Tag: Altria Group

Altria and Juul Support Age-Verification System
Altria Group Distribution Co. and Juul Labs have announced their support of TruAge, a new digital solution that enhances current age-verification systems and protects user privacy.
Developed by the National Association of Convenience Stores and Conexxus, TruAge makes it easier and more accurate to verify a customer’s age when purchasing age-restricted products. At the same time, the system makes identity theft difficult. One-time-use tokens are used to share only the most important elements to confirm the purchaser is of legal age, which also protects the user’s privacy.
TruAge is free to retailers, consumers and POS providers, and its relevant intellectual property will be placed in the public domain—removing barriers to adoption.
“We are excited to join this important initiative because TruAge deepens our trade partners’ support of underage prevention and helps establish retail as the most trusted place to responsibly sell tobacco products,” said Scott Myers, president and CEO of Altria Group Distribution Co., in a statement.
“Over the past few years, we have worked closely with our retailer partners across the United States to implement enhanced access controls for the sale of Juul products, automatically requiring electronic ID scanning to verify the purchaser is at least 21 years of age and limiting the amount of product sold to reduce social sourcing,” said Parker Kasmer, vice president of regulatory engagement for Juul Labs.
“We are eager to support TruAge and the extension of technologically based age-verification solutions across all vapor and other age-restricted products to combat underage use and support a more responsible marketplace.”
TruAge is also supported by more than 130 retail companies that represent 22,000-plus convenience store locations in the United States, plus four industry point-of-sale providers.
October 21, 2021
U.S. IQOS Imports Halted

Photo: theaphotography
The International Trade Commission (ITC) has upheld an initial determination from May 2021 that Philip Morris International’s IQOS device infringes on two patents owned by BAT subsidiary Reynolds American Inc. (RAI).
The agency has instituted an import ban and a cease-and-desist order preventing IQOS consumables and devices from being sold in the U.S. in 60 days. PMI’s U.S. partner, Altria Group, plans to continue to sell IQOS through the 60-day period in its existing markets.
BAT welcomed the ruling. “Infringement of our intellectual property undermines our ability to invest and innovate and thereby reduce the health impact of our business,” the company wrote in a statement. “We will therefore defend our IP robustly across the globe.”
The patents relate to an electronically powered device with a heater to generate an aerosol and expire in October 2026 and November 2031. BAT has filed similar cases globally, including in Germany, the U.K., Japan and Italy.
Morgan Stanley said the ruling would have limited financial impact on PMI and Altria, as IQOS in the U.S. is not a meaningful contributor to the companies’ earnings. The outcome of similar cases brought by BAT against PMI internationally, however, could have a greater impact. But so far, PMI has been successful defending cases in the U.K. and Greece.
The investment bank also noted that the IQOS ban applies to imported product, suggesting it may be overcome by shifting production to the U.S.
The ITC decision will now be reviewed by the U.S. Trade Representative. If the decision is not vetoed within 60 days (only a handful have ever been vetoed), it can be appealed to the U.S. Court of Appeals, but the import ban would still be in effect throughout an appeals process.
September 30, 2021
Altria Revenues up in Quarter and First Half

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Altria Group reported net revenues of $6.94 billion in the second quarter of 2021, up 8.9 percent over those reported in the comparable 2020 quarter. Revenues net of excise taxes were $5.61 billion (up 10.9 percent). For the first six months of 2021, Altria’s net revenues were up 1.9 percent, to $12.97 billion, from the 2020 first half. Revenues net of excise taxes were $10.49 billion the first half, 3.8 percent more than those reported in the first six months of 2020.
“Altria delivered outstanding results in the second quarter thanks to the continued strength of our tobacco businesses and the hard work of our highly talented employees,” said Altria CEO Billy Gifford in a statement. “Our teams have continued their commitment to ‘Moving Beyond Smoking’ by deepening their understanding of adult tobacco consumer preferences, expanding the awareness and availability of our smoke-free product portfolio and amplifying our voice on harm reduction within the scientific and public health communities.”
“With our strong financial performance in the first half, we have raised the lower end of our full-year 2021 adjusted diluted EPS guidance range and now expect full-year adjusted diluted EPS to be in the range of $4.56 to $4.62, representing a growth rate of 4.5 percent to 6 percent from a $4.36 base in 2020. This updated guidance reflects continued confidence in our tobacco businesses, investments in smoke-free products and the expected impact of the recently announced agreement to sell our Ste. Michelle Wine Estates business.”
August 20, 2021
Altria Raises Guidance on Strong Six Months

Photo: Altria Group
Altria Group’s net revenue was $6.9 billion in the second quarter, up 8.9 percent compared to the same quarter in 2020. Net revenue was $13 billion in the first half of 2021, up 1.9 percent compared to 2020.
“Altria delivered outstanding results in the second quarter thanks to the continued strength of our tobacco businesses and the hard work of our highly talented employees,” said Billy Gifford, Altria’s CEO, in a statement. “Our teams have continued their commitment to ‘Moving Beyond Smoking’ by deepening their understanding of adult tobacco consumer preferences, expanding the awareness and availability of our smoke-free product portfolio and amplifying our voice on harm reduction within the scientific and public health communities.”
“With our strong financial performance in the first half, we have raised the lower end of our full-year 2021 adjusted diluted EPS guidance range and now expect full-year adjusted diluted EPS to be in the range of $4.56 to $4.62, representing a growth rate of 4.5 percent to 6 percent from a $4.36 base in 2020. This updated guidance reflects continued confidence in our tobacco businesses, investments in smoke-free products and the expected impact of the recently announced agreement to sell our Ste. Michelle Wine Estates business.”
July 29, 2021
Altria to Sell Ste. Michelle Wine Estates

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Altria Group has agreed to sell its Ste. Michelle Wine Estates business to Sycamore Partners Management for approximately $1.2 billion and the assumption of certain Ste. Michelle liabilities. Altria’s net cash proceeds will be subject to customary net working capital and other adjustments at closing.
Altria expects the transaction to close during the second half of 2021, subject to Sycamore Partners obtaining the necessary financing and the satisfaction of customary closing conditions, including antitrust regulatory clearance.
“We believe the transaction is an important step in Altria’s value creation for shareholders and allows our management team greater focus on the pursuit of our vision to responsibly transition adult smokers to a noncombustible future,” said Altria CEO Billy Gifford in a statement. “Ste. Michelle and its talented employees have built an outstanding portfolio of premium wine brands, and we wish them future success.”
“The Ste. Michelle leadership team and I look forward to working with the team at Sycamore Partners and believe we are well positioned to drive the next phase of our growth,” said David Dearie, Ste. Michelle’s president and CEO.
July 9, 2021
Altria Executives Scorn Their Vapor Products During Trial

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Altria Group Executives have been describing in detail their failure to come up with a marketable vapor product during an antitrust trial, reports The Wall Street Journal. Products leaked, generated high formaldehyde levels and lacked the nicotine smokers were looking for, according to their testimonies.
In April 2020, the Federal Trade Commission (FTC) sued to unwind Altria’s 35 percent interest in Juul Labs, which the cigarette maker acquired in December 2018 for $12.8 billion.
A key question at trial is why Altria ended production of its own e-cigarettes in late 2018, shortly before announcing its investment in Juul.
Altria in October 2018 announced it was halting the sale of its pod-based and fruity-flavored e-cigarettes in response to a call by the Food and Drug Administration for e-cigarette makers to help stem a surge in vaping among children and teens. Then in December of that year, two weeks before the Juul agreement was signed, Altria pulled its remaining e-cigarettes off the market.
The FTC alleges Altria did so because of an illegal side deal in which it agreed to close its own e-cigarette business so it could take a stake in Juul. Altria and Juul both deny they had any such agreement.
Altria says it halted its e-cigarette sales amid pressure from regulators to curb youth use and an internal reckoning about the company’s inability to develop a successful vaping product. Juul says it didn’t see Altria’s e-cigarettes as a threat, didn’t ask Altria to shelve them and was surprised when Altria did so.
Juul and Altria argue that since the deal was struck, competition in the e-cigarette market has increased not decreased. Juul’s market share has fallen as have e-cigarette prices.
The FTC is seeking to force Altria to divest its stake and terminate the companies’ noncompete agreement. The case is being heard by an administrative law judge, who will make an initial decision; the agency’s commissioners will then vote on the matter.
June 24, 2021
Altria Group Holds Annual Meeting

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Altria Group held its 2021 annual meeting of shareholders on May 20. During the annual meeting, CEO Billy Gifford summarized Altria’s full-year 2020 and first-quarter 2021 financial results and discussed Altria’s progress toward its vision of responsibly transitioning adult smokers to a noncombustible future. Gifford also shared Altria’s corporate responsibility priorities and environmental, social and governance efforts, reaffirmed Altria’s guidance for adjusted diluted earnings per share (EPS) and addressed shareholder questions.
Altria’s shareholders elected to a one-year term each of the 11 nominees for director named in Altria’s proxy statement, ratified the selection of PricewaterhouseCoopers as Altria’s independent registered public accounting firm for 2021, approved, on an advisory basis, the compensation of Altria’s named executive officers and rejected two shareholder proposals.
On May 10, 2021, Altria’s board of directors elected Kathryn McQuade to serve as Altria’s independent chair of the board. The appointment became effective following the conclusion of the annual meeting.
In his remarks, Gifford reaffirmed Altria’s guidance for 2021 full-year adjusted diluted EPS to be in a range of $4.49 to $4.62, representing a growth rate of 3 percent to 6 percent from an adjusted diluted EPS base of $4.36 in 2020.

May 21, 2021
Cronos Group Hires U.S. Regulatory Expert

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Cronos Group, a Canadian cannabis producer partially owned by cigarette maker Altria Group, has hired Thomas Cohn as head of regulatory and product, reports Bloomberg Law.
Cohn is a U.S. Federal Trade Commission (FTC) expert who spent the past year as general counsel for privately held consumer products company Avon Co. in New York.
Cronos sought FTC and Food and Drug Administration expertise for “building disruptive intellectual property by advancing cannabis research, technology and product development,” according to an online job posting by the Toronto-based company for a head of regulatory affairs.
In 2018, Cronos became the first Canadian pot producer to be listed on the Nasdaq. Since then, the marijuana market has continued to grow, with Canadian cannabis companies looking to the United States and other cigarette giants like Philip Morris International and British American Tobacco evaluating their legal weed investments.
May 19, 2021
ITC: IQOS Infringes on Vuse Patents

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Philip Morris International’s IQOS device infringes two patents owned by British American Tobacco subsidiary Reynolds American Inc., reports Bloomberg, citing a note posted by Judge Clark Cheney on the U.S. International Trade Commission’s website.
The next step is a likely review by the full commission, which has the power to halt products at the U.S. border and is scheduled to complete the investigation by Sept. 15.
IQOS is the only heat-not-burn product authorized for sale in the U.S., where it’s sold by Altria. Last year, the U.S. Food and Drug Administration allowed the company to market IQOS as reducing consumers’ exposure to harmful chemicals found in cigarettes.
Reynolds claims PMI and Altria copied patented technology that it had developed for its Vuse Vibe and Vuse Solo vaping products, for which it’s filed for FDA approval. The company complained to the ITC in April 2020.
Altria responded with its own patent infringement claims and a separate suit against Reynolds in May. Altria also lodged petitions with the U.S. Patent and Trademark Office challenging the validity of a half-dozen Reynolds’ patents.

The judge has to make a determination on whether even temporarily removing such products is appropriate for public health and what alternatives there are for consumers.
Andre Calantzopoulos, executive chairman, PMI
Reynolds said it expects the judge will recommend an import ban, adding that the unauthorized use of its inventions “undermines our ability to invest and innovate and thereby reduce the health impact of our business.”
Philip Morris called the judge’s findings “one step in a long process that does not have an immediate effect” and it will present its position to the commission.
“BAT’s litigation in the U.S. is part of a worldwide attempt—which has been entirely unsuccessful to date—that is meant to undermine the heated-tobacco segment, where they lag far behind,” the company said.
PMI has also argued that, even if a patent violation is found, it’s not in the public’s interest to keep IQOS out of the U.S.
“The judge has to make a determination on whether even temporarily removing such products is appropriate for public health and what alternatives there are for consumers,” said PMI Executive Chairman Andre Calantzopoulos. “If we remove a product that exists, and the only alternative that people have are cigarettes, it’s a consideration of public health interest, and that has to be taken into account.”
May 18, 2021
Academic Journal Criticized for ‘Juul Issue’

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Academics and anti-smoking charities have criticized The American Journal of Health Behavior for publishing its “Special Issue on Juul,” reports BMJ.
The papers in the special issue focus on the implications of switching to Juul products from combustible cigarettes as well as dual use of combustible cigarettes and Juul products.
The special issue was sponsored by Juul Labs. Altria, the parent company of Philip Morris USA, has a minority stake in Juul. The issue was coordinated and edited by Saul Shiffman, a Pinney Associates consultant. Pinney Associates has provided consulting services to British American Tobacco and Reynolds American.
May 18, 2021