Tag: China

  • Suppliers Updated on New U.K. Landscape

    Suppliers Updated on New U.K. Landscape

    John Dunne (Photo: UKVIA)

    John Dunne, director general of the U.K. Vaping Industry Association (UKVIA), traveled to China to educate vape companies on Britain’s changing regulatory landscape.

    The U.K. will ban disposable e-cigarettes from April next year, and the Tobacco and Vapes Bill, which is currently working its way through Parliament, seeks to give ministers unprecedented powers to ban flavors and decide how vapes are packaged and sold.

    Speaking at the headquarters of the Electronic Cigarette Industry Committee of the China Electronics Chamber of Commerce (ECCC), Dunne shared his expert knowledge to conduct on-site compliance training to some of the world’s leading vape companies, including Elf Bar, SKE, ELUX, HQD, Hangsen, Greensound, Aspire, ICCPP, RELX, ALD, Uwell and Zinwi.

    Describing the U.K. regulatory landscape as “complex and changeable,” Dunne said issues such as the protection of minors, battery recycling and environmental protection were high on the agenda of politicians, regulators and the general public.

    “It is absolutely vital that all companies operating in the U.K. are fully compliant with all local laws and work at all times to show the industry in the best possible light,” he said in a statement.

    Dunne said the UKVIA would continue to work with the ECCC to help members comply with current requirements, prepare for future regulatory change and to foster global cooperation to promote the development and prosperity of the global vaping industry.

  • Former STMA Head Expelled from Party

    Former STMA Head Expelled from Party

    Photo: Oleg

    The Communist Party of China has expelled Ling Chengxing, former head of the State Tobacco Monopoly Administration, reports The China Daily, citing an April 22 announcement by the country’s top anti-graft watchdogs.

    According to the Communist Party of China Central Commission for Discipline Inspection and the National Commission of Supervision, Ling violated the party’s disciplines, committed duty-related illegalities and is suspected of bribery and abuse of authority.

    Among other transgressions, Ling accepted banquets, sought benefits for relatives in employment and school admissions, and secured benefits for others in the cadres selection and appointment, the agency said.

    Liang also accepted gifts, sought special treatment in transportation and medical care for his relatives and used his position to benefit others in business operations, employee hiring and job promotions.

    In return he accepted large amounts of property, according to the allegations.

    Originally from Jiangxi province, Ling joined the Party in 1977 and began working in 1980. He held positions, including executive vice-governor of the province.

    Ling was the head of China Tobacco from May 2013 until his retirement in July 2018. He was placed under investigation in October 2023.

  • Malawi Growers Urged to Tap into China

    Malawi Growers Urged to Tap into China

    Photo: Taco Tuinstra

    Malawi authorities are urging farmers to tap into the Chinese tobacco and soybeans markets, reports Xinhua.

    During the Agriculture Investment Conference on April 19 in Lilongwe, Alfred Mwenifumbo, controller of agriculture, extension and technical services, said sales to China would boost foreign exchange earnings and strengthen the economy.

    Dominated by smallholder growers, Malawi’s tobacco industry could benefit greatly from the Chinese market, Mwenifumbo said. He encouraged large-scale farmers to join the industry to improve the quality of Malawian tobacco and compete with other countries.

    Mwenifumbo suggested that Malawi could increase its forex earnings by up to 30 times if more commercial farmers with large landholdings entered the industry and accessed the Chinese market, noting that existing investors are ready to support local farmers in expanding their operations to seize market opportunities.

    The conference also discussed the investment potential in crops such as macadamia nuts, groundnuts, wheat and maize, highlighting their significant returns.

    Tobacco Reporter highlighted Malawi’s efforts to diverse its economy in its June 2023 issue (see “Broadening the Base”).

  • Former STMA Chief Pleads Guilty to Bribery

    Former STMA Chief Pleads Guilty to Bribery

    Photo: alswart

    The former deputy chief of China’s State Tobacco Monopoly Administration, He Zehua, pled guilty to accepting bribes worth over CNY943 million ($130 million) during a trial in Liaoning province, reports China Daily. The case was publicly heard by the Dalian Intermediate People’s Court. 

    Prosecutors alleged that from 1998 to 2023, He used his various work posts in the country’s tobacco system to seek benefits for relevant people and departments in business operations, business contracting, job promotion and employment in return for monetary bribes. After leaving his work posts, prosecutors alleged, he sought profits for individuals and organizations in tobacco-related business contracting and bank solicitation for monetary bribes as well.

  • Habanos Announces Deal With Liquor Maker

    Habanos Announces Deal With Liquor Maker

    Credit: Creuxnoir

    Chinese liquor company Luzhou Laojiao and Cuban cigar company Habanos SA have signed a strategic agreement to jointly expand their markets.

    During the 24th Habano Festival in Havana, Cuba, Zhang Biao, general manager of Luzhou Laojiao, highlighted the similarities between Luzhou Laojiao’s liquor and Cuban cigars, noting that the cooperation will strengthen the commercial ties between China and Cuba.

    The agreement includes a joint product through co-branding, with the Chinese company handling the marketing. José María López, vice president of development at Habanos, said that this partnership is based on shared values ​​such as craftsmanship, quality and leadership, highlighting the “perfect match” between Chinese liquors and Cuban cigars.

    Habanos executives reported that China is one of the most dynamic markets for Cuban cigar sales. The country contributed heavily to a 31 percent increase in Cuban cigar sales in 2023, reaching a total of $721 million.

    The signing of the Memorandum of Understanding aims to explore new avenues of cooperation for both companies. Luzhou Laojiao, one of China’s oldest liquors, has been produced in the National Treasure Cellars since 1573, with distillation technology dating back 700 years.

    The collaboration will focus specifically on Luzhou Laojiao’s “Guojiao 1573” brand and Habanos Corporation’s Cohiba Atmosphere brand. In addition, seven Guojiao 1573 brand liqueurs were auctioned along with during the festival’s humidor auction, with the funds raised going to public health initiatives in Cuba.

    “This strategic agreement strengthens commercial ties between China and Cuba in the liquor and cigar industries,” according to a press release.

  • China Tobacco Manager Pleads Guilty to Corruption

    China Tobacco Manager Pleads Guilty to Corruption

    Image: waldemarus

    A former deputy manager of China Tobacco Yunnan Industrial Co. pleaded guilty on Jan. 25 to taking more than CNY354 million ($50 million) in bribes, reports China Daily.

    Prosecutors accused Gu Bo of taking advantage of his positions from 1999 to 2018 to assist others in their business activities in return for illegal payments.

    Gu was placed under disciplinary review and supervisory investigation in January 2023. He is the fourth China Tobacco Yunnan Industrial official to be investigated for corruption since last year.

    In 2023, authorities probed the activities of Zhang Shuichang, Zhu Shaoming and Wu Yi.

  • Hong Kong Seizures Hit $288 Million in 2023

    Hong Kong Seizures Hit $288 Million in 2023

    Credit: Alven 0920

    Customs officers in Hong Kong reported that the agency had impounded more than 650 million black market cigarettes worth HK$2.25 billion ($287.8 million) last year, the largest annual cash value in more than two decades, according to media reports.

    The seized cigarettes would have generated about HK$1.54 billion in tax revenue, also a record, over the same period, according to an undisclosed source.

    Last week, authorities in Hong Kong said they were considering a further increase in tobacco duty.

    Last year’s total number of cigarettes seized was lower than the 732 million impounded in 2022, although the value was higher. Last year’s record seizure coincided with a 31 percent tobacco tax increase in February, which raised the average cost of a pack of 20 cigarettes by HK$12 to more than HK$70.

    A pack on the black market costs HK$18 to HK$38.

    The source said the confiscated tobacco products were stored in government warehouses currently, pending court proceedings or further investigations before being destroyed and buried at landfill sites.

    He added customs officials would boost efforts to combat crime syndicates that tried to take advantage of busy logistics services in the run-up to the Lunar New Year to smuggle cigarettes into the city.

  • Vapes Evading U.S. Import Duties

    Vapes Evading U.S. Import Duties

    Image: Gudellaphoto

    E-cigarette companies have imported hundreds of millions of dollars of disposable products from China into the United States without paying taxes and import duties, according to an AP report.

    Last week, U.S. authorities confiscated 1.4 million units of unauthorized single-use e-cigarette products at Los Angeles international airport, with an estimated retail value of more than $18 million. The products were mislabeled as toys, shoes and other items.

    Records show that the makers of disposable vapes routinely mislabel their shipments as battery chargers, flashlights and other items. Critics blame ineffective regulation. “The steps toward regulating disposables have been very weak, and that has enabled this problem to get bigger and bigger,” said Eric Lindblom, a former Food and Drug Administration official.

    Heaven’s Gifts, the parent company of Shenzhen iMiracle, which manufactures the popular Elf Bar and EB brands, previously described how it could help customers evade import fees and taxes, according to the AP report.

    The firm’s website reportedly advertised “discreet” shipping methods, such as mislabeling the content of e-cigarette shipments and declaring a low product value. 

    Another strategy appears to be shipping e-cigarettes by air rather than sea. Air carriers are not required to disclose the same level of detail about their cargo as ocean vessels.

    U.S. tobacco companies have complained that their vaping products cannot compete with such lower priced disposables. Altria Group and Reynolds recently filed cases in California and with the International Trade Commission, respectively, against importers of disposable vapes.

    Flavored disposables began pouring into the U.S. shortly before China banned vaping flavors last year. China’s vaping manufacturing sector, which produces the lion’s share of e-cigarettes worldwide, is worth an estimated $28 billion, and the U.S. accounts for nearly 60 percent of the country’s vape exports, according to the China Electronics Chamber of Commerce.

    Authorities have encouraged those exports while at the same time curtailing the country’s domestic vaping business.

  • RLX Technology Reports Challenging Quarter

    RLX Technology Reports Challenging Quarter

    Photo: RLX Technology

    RLX Technology reported net revenues of RMB428.1 million ($58.7 million) in the third quarter of 2023, compared with RMB1.04 billion in the same period of 2022. Gross margin was 24.7 percent in the third quarter of 2023, compared with 50 percent in the comparable 2022 quarter. GAAP net income was RMB172.7 million, down from RMB505.2 million in the prior-year period.

    “The end of the third quarter of 2023 marked one year since the new regulatory framework for the e-vapor industry came into effect,” said Ying (Kate) Wang, co-founder, chairperson and CEO of RLX Technology, in a statement.

    “As a legitimate industry participant, we have remained dedicated to developing our product portfolio to provide adult smokers with compliant, superior-quality products. While we have made some progress with our recovery, we are still facing external challenges, especially the impact of illegal products. We recognize that many users are still unaware of these new regulations, such as flavor restrictions, which has slowed their adoption of the new national standard products.

    “To address these near-term obstacles, we will forge ahead with our core strategy: providing a wide variety of quality, compliant products across an extensive range of price points to meet users’ various needs. Meanwhile, we are making efforts to enhance users’ understanding of the new regulations and collaborating with regulators to combat illegal products and create a healthy and orderly market. As a trusted e-vapor brand for adult smokers, we believe that more users will gradually switch to our products as increased awareness of the new regulations and the dangers of substandard, illegal products rises.”

    “In the third quarter of 2023, we continued to face significant headwinds due to competition from illegal products,” added RLX Technology Chief Financial Officer Chao Lu. “Against this challenging backdrop, we resolutely executed our strategy and focused on improving profitability, which continues to be our top priority.

    “Our strategic cost optimization initiatives have begun to demonstrate positive outcomes, including a consistent reduction in our non-GAAP operating loss and signs of recovery in our non-GAAP net profit margin. Notably, we achieved a second consecutive quarter of positive operating cash flow this quarter, underscoring our business’ resilience in the post-regulatory era. Looking forward, we will remain committed to enhancing our financial performance and delivering sustainable value to our shareholders.”

     

  • Former STMA Deputy Prosecuted for Bribery

    Former STMA Deputy Prosecuted for Bribery

    Image: Kampan

    Former Deputy Chief of China’s State Tobacco Monopoly Administration (STMA) He Zehua has been prosecuted for accepting bribes, according to China Daily.

    Zehua was accused of taking advantage of his former positions to seek profits for others, accepting a large amount of money and valuables in return, according to a statement by the Supreme People’s Procuratorate.

    Zehua was arrested in July.