Tag: China National Tobacco Corp

China Tobacco Deputy Head Expelled From Party

Credit: Some Means
Xu Ying, the deputy head of China’s State Tobacco Monopoly Administration, commonly referred to as China Tobacco, has been expelled from the Communist Party of China and removed from his position due to serious violations of discipline and laws, according to the country’s top anti-corruption authorities on Wednesday.
The probe has been carried out by the Communist Party of China Central Commission for Discipline Inspection and the National Commission of Supervision.
Xu, 59, was found to have reportedly accepted gifts and money and attended banquets in violation of regulations. He also failed to report personal matters truthfully and sought benefits for multiple relatives regarding employment and job transfers, the top anti-corruption authorities said in a statement.
It added that Xu abused his power and misused public resources to seek benefits for others and for personal gain. He allegedly engaged in significant power-for-money transactions, using his position to seek benefits for others in administrative approvals, business operations, and employee recruitment, and illegally accepting large amounts of money and goods.
The top anti-corruption authorities identified Xu’s behavior as severe violations of the Party disciplines. Therefore it decided to expel him from the Party and confiscate all his illicit gains, reports China Daily.
The statement added that his suspected violations of national laws will be transferred to prosecutors for further criminal review and investigation.
Public information shows that Xu started his career in the administration in 1988. Since then, he has worked for the nation’s tobacco industry for decades.
In March 2014, he became the deputy head of the tobacco administration.
November 20, 2024
Smoking Persists Despite FCTC

Photo: Tobacco Reporter archive
China continues to grapple with significant tobacco consumption, despite adopting the World Health Organization’s Framework Convention on Tobacco Control (FCTC) two decades ago, reports The Straits Times.
In November 2014, the State Council released a draft on national tobacco control guidelines to meet its obligations under the FCTC. However, the draft never progressed beyond the public consultation phase, which was supposed to be completed by the end of that year, according to the Singpore-based newspaper.
As the world’s largest tobacco producer and consumer, China still boasts an estimated 300 million smokers, constituting nearly a third of global smokers. According to The Straits Times, this phenomenon persists due to various factors including social norms, affordability of cigarettes and limited public education.
Despite efforts such as anti-smoking campaigns and banning smoking in government buildings, many individuals continue to smoke, encouraged by the ubiquity of tobacco shops, low-cost cigarettes and deeply rooted cultural practices.
The State Tobacco Monopoly Administration (STMA), which controls the tobacco industry, also acts as a significant employer, providing jobs to over half a million people across the nation.
In much of China, the tobacco industry is considered a prestigious employer, with its stable income, generous salaries and employee benefits. In surveys of fresh graduates, China’s big tobacco firms—largely state-owned enterprises—are consistently rated some of the best companies to work for, with degree holders happy to take on blue-collar jobs on the factory lines.
Manufacturing some 2.4 trillion cigarettes a year, China’s tobacco industry posted a profit of RMB132 billion ($18.3 billion) in profits in 2022, up nearly 12 percent from the year before.
STMA’s operational arm, the China National Tobacco Corp., does not report sales figures but posted a record taxable income of RMB1.44 trillion in 2022. By comparison, the second-highest taxpayer, the Industrial and Commercial Bank of China, reported taxable income of RMB109 billion.
While the anti-smoking lobby has been urging the government to sever the ties between the industry and its regulator, few expect that to happen, citing a lack of political will.
August 28, 2023
Cullip: China Could Revolutionize THR

Martin Cullip (Photo: Tobacco Reporter archive)
China has the potential to revolutionize global tobacco harm reduction now that its government has asserted authority over e-cigarettes, according to consumer advocate Martin Cullip.
On Nov. 26, China’s State Council on Nov. 26 amended the country’s tobacco monopoly law to include vapor products, which means that vaping products and their manufacturers will be regulated by the Chinese government under the same process as cigarettes.
The announcement triggered feverish speculation about the impact of the new rules, with some commentators fretting that tobacco rules would put vapor companies out of business and others welcoming the prospect of enhanced product safety and quality.
Writing in Filter, Cullip points not only to the vapor industry’s economic significance to China, but also to the potential domestic health benefits of sensible regulation. China, argues Cullip, has a lot to gain from financially from domestic harm reduction, when the country’s high smoking prevalence in an aging population creates heavy costs in health care and lost productivity.
Cullip is also encouraged by China’s willingness and ability to stand up the World Health Organization, which remains ideologically opposed to tobacco harm reduction.
While the government would seem to have much to gain from blocking the growth of safer alternatives such as e-cigarettes and tobacco-heating products—the state-owned CNTC sells more than 40 percent of the world’s cigarettes—there are many incentives for the government to push things in an entirely different direction, according to Cullip.
China manufactures the vast majority of the world’s vape products. More than 170,000 businesses engage in e-cigarette production and the supply chain, employing around 3 million people. The CNTC is also the world’s biggest holder of tobacco harm reduction patents, owning almost 27 percent of all related patent publications.
“It is difficult to imagine the government strangling the market—even if this is motivated more by profit than by its citizens’ health,” writes Cullip.
December 8, 2021
E-Cig Leaders Welcome China Tobacco Rules

Photo: Timothy S. Donahue
China’s recently announced regulatory framework for e-cigarettes should secure the vapor industry’s future in that country, according to leading players in the business.
On Nov. 26, China’s state council amended the tobacco monopoly law to include vapor products, meaning that, going forward, e-cigarettes will be managed like combustible cigarettes.
With more than 300 million smokers—27 percent of adults—China is the world’s largest tobacco market. It also produces about 90 percent of the world’s e-cigarettes, primarily in the technology manufacturing hub Shenzhen.
The government and the tobacco industry are, essentially, one entity in China, with the State Tobacco Monopoly Administration regulating the industry and China National Tobacco manufacturing tobacco products.
To date, the vapor industry in China has operated in a legal grey area. Regulation had been widely anticipated, but many feared that it would wipe out the sector. The Nov. 26 announcement, however, was welcomed by leading players in the business. Industry representatives say it removes uncertainty and will weed out bad actors.
In background article on the recent news from China, Filter cited Smoore global PR manager Frankie Chen, who expects national mandatory standards to significantly improve product safety and provide global vapers with better products.
“Since the standards set higher requirements for vaping manufacturing, it is expected that only the responsible manufacturer with comprehensive safety management can be compliant,” Chen was quoted as saying.
RLX Technology, too, welcomed the new regulatory framework. “We believe the sector will enter a new era of development—an era marked by enhanced product safety and quality, augmented social responsibilities, and improved intellectual property protection,” said RLX Technology chairperson and CEO Ying Wang at the presentation of the company’s third quarter results.
RLX Technology Chief Financial Officer Chao Lu said the company is well prepared for the new operating environment. “The investments we made in products, talents, research, and compliance in the third quarter and beyond will place us in advantageous positions under the new regulatory paradigm,” he said.
December 3, 2021
Report Explores China’s Tobacco-Heating Market

Photo: David Mark from Pixabay
Research and Markets has published a new report on the world’s largest potential market for heat-not-burn (HnB) products—China.
The report provides an overview of China National Tobacco Corp. (CNTC) subsidiaries’ HnB marketing activities from 2017 to 2020.
The report reviews all HnB products that were officially released in domestic and foreign markets as well as cooperation ties in the Chinese HnB market.
China Tobacco has a market of 300 million smokers with a significant part being active HnB users. The domestic HnB sector is dominated by CNTC. It has launched HnB products in Sichuan, Yunnan, Guangdong, Anhui, Hubei, Heilongjiang and other provinces and has been actively engaged in overseas markets. CNTC HnB brands are presented in many foreign markets, mostly in Asian countries and eastern Europe.
Most HnB devices are promoted with dedicated consumables. HnB devices are either produced at facilities of CNTC subsidiaries or are OEM versions developed by third-party manufacturers. The CNTC subsidiaries with the largest number of HnB devices in the domestic market are based in Sichuan, Yunnan and Guangdong.
The report includes a brief review of HnB electronic devices produced in cooperation with major Chinese hardware manufacturers. There is also a brief description of companies engaged in the Chinese HnB market, and a complete list of HnB products with release dates and corresponding references in domestic and foreign markets, a map of presence of CNTC HnB brands in foreign markets and a timeline of CNTC HnB products by release date.
April 21, 2021
China Tobacco’s Overseas Unit Issues Profit Warning

China Tobacco International exports cigarettes and imports tobacco leaf from overseas markets.
Photo: Taco Tuinstra
China Tobacco International (CTI) warned its revenue and net profit may slump by 50 percent to 60 percent from a year ago during the first half of this year.

The company attributed the drop to seasonal fluctuation in the import of tobacco leaf products from Brazil. Also, the sales volume of cigarettes in duty-free outlets in China and the relevant regions declined significantly because of the drop in passenger traffic amid the coronavirus pandemic, the company said.

A subsidiary of the China National Tobacco Corp.—the world’s largest cigarette manufacturer—CTI primarily procures leaf tobacco for its parent company, earning revenue mainly from a fixed markup on the sale of leaves to domestic cigarette makers.

The international unit is also the sole exporter of Chinese cigarette brands such as Yuxi and Hongtashan to duty-free outlets. In May 2018, it began exporting heat-not-burn tobacco products made in China.
In June 2019, shares of CTI started trading on the Hong Kong Stock Exchange.
June 22, 2020