BAT Germany has selected Arvato as its logistics and fulfillment partner for its e-commerce operations encompassing e-cigarettes and heated tobacco products.
Since the end of June, BAT Germany online orders have been processed centrally from the site in Marienfeld, Guetersloh district. At this site, Arvato, a leading supply chain and e-commerce service provider, operates a state-of-the-art distribution center spanning approximately 32,000 square meters, serving multiple clients in the technology sector, according to the American Journal of Transportation(AJOT).
The comprehensive logistics services provided for BAT Germany at the facility encompass goods receipt, storage, order picking, packing, and shipping, as well as returns management.
“BAT’s goal in awarding the e-commerce logistics contract was to guarantee the most efficient and fastest delivery service for its customers. Our customer-centric approach allowed us to accommodate BAT’s specific processes and requirements,” says Thomas Becker, executive vice president at Arvato.
The logistics service provider commits to delivering within a 48-hour timeframe. To optimize warehouse operations for efficiency and speed, Arvato heavily integrates automation technology. Automated carton setup and closure processes significantly enhance the speed of operation. Moreover, product information is automatically included with orders through flyer dispensers.
“With its experienced team, Arvato provided us with very flexible and reliable support in setting up our logistics and distribution concept,” confirms Robert Juhnke, distribution manager at BAT Germany. “Even throughout the offer and final negotiation phase, the collaboration has been exceptionally cooperative.”
Sustainability is a growing trend in the vaping industry. Arvato is dedicated to doing its part, according to the AJOT story. In an effort to reduce plastic waste, the company adopted wet adhesive tape made from recycled paper, resulting in the annual saving of approximately 16 tons of plastic, as an alternative to polypropylene adhesive tape. Arvato’s approach to optimizing shipment sizing and processing minimizes the consumption of packaging materials.
The implications could be far-reaching. Reynolds American Inc. (RAI) has filed a U.S. International Trade Commission (ITC) complaint charging multiple manufacturers, distributors and retailers of several popular disposable vaping devices with unfair importation. It is one of several recent actions Reynolds has made to remove its competitor’s vaping products from store shelves.
Reynolds is asking the ITC to investigate and issue an exclusion order preventing further U.S. imports of disposable vaping products. Several legal scholars have told Tobacco Reporter that if the ITC agrees with Reynolds, all flavored disposable vaping devices without marketing authorization could be stopped at the border and prevented from entering the U.S. market.
Reynolds wants the ITC to issue a permanent “cease and desist order” prohibiting any businesses from selling illegal vaping products. The move would push nearly the entire vaping industry underground, with the exception of products owned by major tobacco companies such as Reynolds that have received marketing orders from the FDA.
Several businesses were named specifically as “peddlers of illegal disposable vapes” in the Reynolds complaint, including the “manufacturers, importers, distributors and retailers” of Breeze, Elf Bar, Esco Bar, Hyde, Puff Bar, and R&M disposable vapes.
Also named are several well-known U.S. wholesale and retailers of disposable vapes, including Element Vape, Flawless Vape, Magellan Technology, Mi-One Brands, Price Point Distributors, and Vape Sourcing.
The ITC complaint accuses what amounts to the manufacturers of all unauthorized vaping products of importing “illegal disposable vapes” in violation of Section 337 of the Tariff Act of 1930. Specifically, Reynolds claims the named businesses either falsely advertised that their products are authorized for sale by the U.S. government, failed to comply with federal laws imposing registration and reporting requirements and limitations on sales, or violated customs laws and regulations.
“As a result of the relentless influx of illegal vapor products flowing through U.S. borders, Reynolds American Inc. subsidiaries R.J. Reynolds Tobacco Co. and R.J. Reynolds Vapor Co. have filed a complaint with the U.S. International Trade Commission against more than 30 companies involved in illegally importing unregulated, youth appealing flavored disposable vapor products,” RAI wrote in a statement. “Many of the manufacturers of these disposable vapor devices intentionally and systematically market to youth, selling products with dessert and candy flavors and featuring cartoon characters.
“These illegal disposable vapor devices, which have unknown ingredients and bypass regulations, are jeopardizing public health by refusing to adhere to the laws that regulate the sale of tobacco products. The complaint requests that the ITC institute an investigation into unfair acts in the importation and sale of these Chinese-manufactured, youth appealing flavored disposable vapor devices into the United States.”
Reynolds owns the Vuse vaping brand, including the Vuse Alto. Last week, the FDA issued a marketing denial order, ordering Alto menthol refill pods off the market. The Alto device and tobacco-flavored pods are still under review by the agency. Two older Vuse vapes, the Solo and Vibe models (and their tobacco-flavored refills) are among the 23 products currently authorized by the FDA. The marketing denial order was subsequently stayed by the Fifth Circuit Court of Appeals.
In its ITC complaint, Reynolds states it has the capacity to fill any void in the market if the illegal products were removed. “Reynolds has the capacity to replace any increase in demand if the Accused Products were excluded from importation,” the complaint states. “Reynolds is willing to meet any increased demand and can do so in a commercially reasonable time, given that it already supplies the industry with significant quantities of ENDS products, as well as oral tobacco and nicotine products.”
The ITC has not yet made a decision on the complaint that was filed on Oct. 13.
“The more things change, the more they stay the same,” is an expression that has been around for almost two centuries, and it speaks to the fact that the small picture(s) of life may change, but the larger one does not. The vape industry and all the challenges and changes that have happened in the past decade are totally contrary to that famous saying.
A decade ago, the vape industry was the epidemy of the Wild, Wild West, full of vape shops springing up on every corner, and any/everyone creating e-liquids in their bathtubs at home. Regulation and competition changed all that and brought some semblance of “orderliness” to the market, but as state and federal regulations bombarded the industry, and with the FDA creating onerous and unattainable guidelines, the vape space has truly become one of survival.
I recently attended a vape event in Phoenix which brought together several dozen top manufacturers, distributors, and buyers, and universally everyone lamented the same concern: business is down.
Why is business down?
The reasons are many, including strict regulations, and now, even more enforcement of those regulations, but overall, the cause was much simpler. The huge COVID-19 rebound in 2020-22 put more money in consumers’ pockets and more time on their hands. Those issues combined created an artificial bubble that many thought would last. But time has passed. Add in the inflation that has pushed up food and other cost of living expenses, and some former necessities are now becoming unaffordable luxuries.
“It’s a balancing act between the addictive nature of some nicotine products and the limitations of buyer’s budgets,” said Jamie Reed with Simple Vape Supply from Orange County California. “I’ve been in the industry for over ten years, and this is evolution in its purest form and based around ’survival of the fittest.’”
Simple manufactures and distributes over 100 different assortments of nicotine cartridges, including disposables, including various iterations of CBD, Delta-8 and Kratom.
“It’s interesting,” Reed added. “When I got hired, I was told that there was an ‘expiration date,’ and we all knew that this industry might not last, and that the cream would rise (to the top). We planned to be one of those surviving companies, and we’ve been able to adapt to the times.”
Her company, along with many that are still around, were mostly run by rebels, radicals, and envelope pushers; and many have in fact changed accordingly, but some have merely learned how to “play the game” and outwardly appear to be toeing the line, but the reality may be different.
“We were aware that the COVID blip was a one-time event. People were home, they had government money to spend, and no one was checking in on them or requiring any urine tests. The Delta (8,10) boom really added to that, and everyone jumped on that bandwagon,” she said excitedly.
That line of CBD was an example of how the industry has and continues to push back. The FDA says you can’t do this, so the industry says, “F-you, then we’ll do that.”
With regulation eliminating or reducing product selection, almost any industry will do the same thing: adapt; repurpose, or reposition.
Of the dozens of people I spoke with at the event, the numbers (from shop owners and manufacturers) were pretty consistent, and most of them were down 20 to 30 percent. Many were saying that purchase sizes were lower than normal and a typical ten-thousand-dollar order was now half that. They saw some shops closing, but most were working on smaller revenues.
Manager J-K Thorne holds some of the flavored products that are no longer available at Wild Impulse vape shop. (Shane Hennessey/CBC)
Meanwhile, on the other side of the equation, vape liquid manufacturers who are trying to “play the game” right and submitting premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration are frustrated at the amount of time it takes and how much money is being thrown into a (seemingly) dark hole.
I spoke with one of the owners of a large vape manufacturing business and distribution company in Idaho, and he shared some facts and figures about their process of trying to make their products “legal.” Legal, in the eyes of the FDA, has caused his company to squander over $5 million in the past few years trying to get authorization.
Mike Larsen is a detailed and focused vape guy who has been in the industry for over a decade and is with Lotus Vaping Technology, which started in 2011. As a partner and director of sales, he is on the front line of everything the company does to stay legal and compliant and is riding the roller coaster ride on a daily basis.
“Disposables have really changed the game,” he said, “and they have reduced the role of vape shops where people used to come for education and guidance. Consolidations and closures have also reduced the shop numbers by 30 to 40 percent, and now you have larger conglomerates doing the work of the multitude of shops.”
We spoke about a possible flavor ban nationally, and he said he was skeptical.
“The PMTA process has already reduced or eliminated flavors, so it may not be necessary to go to that length. There have been between six and seven million submissions by thousands of companies, and so far, just 23 have been approved. I know of a few companies that submitted over a million applications themselves. And here’s the irony: everyone approved has been a Big Tobacco company, and they make up just a fraction of the total vaping market.”
The second irony on top of that, is that those so-called approved products are ones that no one wants.
We talked about whether those approvals were fair or were the result of favoritism and bias, and he smiled since we both knew the answer.
“When you look at the PMTA process and the rigid requirements, it seems pretty obvious that they were written to the advantage of the larger, established companies, and the “small guy” had very little chance in this skewed game. You can’t even budget for something like this,” he continued. “The original filing costs over a million dollars, and I know several companies that have put another ten million in, only to get denied. Who has deep pockets like that? In 2016 I could have named over 150 liquid companies doing good business; today I can name about three dozen.”
And that is why the number of companies manufacturing tobacco and vape products is half what it was and is getting smaller every year. The FDA changes the rules of the game continually.
“There’s something happening here, but what it is ain’t exactly clear,” is the beginning line of a song that speaks to changes going on in society. That song by Buffalo Springfield may have nothing to do with vape, but the message says the same thing: there is something happening here although it may be clearer than we realize. We all knew this would happen; it was predicted a decade ago.
In the vape space, the more things change…the more things change.
Norm Bour is the founder of VapeMentors and works with vape businesses worldwide. He can be reached at norm@VapeMentors.com.
The retailers selling illegal flavored disposable vapes are under scrutiny. The U.S. Food and Drug Administration issued complaints for civil money penalties (CMPs) against 22 retailers for the illegal sale of Elf Bar/EB Design.
The FDA previously warned each retailer in the form of a warning letter to stop selling unauthorized tobacco products, according to the agency. During follow-up inspections, the FDA observed the retailers had not corrected the violations, which resulted in the civil money penalty actions.
“The FDA has been abundantly clear that we are committed to using the full scope of our authorities, as appropriate, to hold those who break the law accountable,” said Brian King, director of the FDA’s Center for Tobacco Products (CTP). “These retailers were duly warned of what could happen if they failed to correct their violations. They chose inaction and will now face the consequences.”
The complaints seek the maximum civil money penalty of $19,192 for a single violation from each retailer. While the FDA has issued civil money penalty complaints to retailers for selling unauthorized tobacco products in the past, this is the first time the agency is seeking CMPs for the maximum amount against retailers for selling illegal flavored disposable vapes.
The retailers can pay the penalty, enter into a settlement agreement, request an extension of time to file an answer to the complaint or file an answer and request a hearing. Those that do not take action within 30 days after receiving the complaint risk a default order imposing the full penalty amount.
Courtesy: US FDA
In addition to the CMP complaints, today the FDA announced an additional 168 warning letters to brick-and-mortar retailers for illegally selling Elf Bar/EB Design products. These warning letters were the result of a coordinated nationwide retailer inspection effort conducted throughout the month of August, according to the agency.
Warning letter recipients have 15 working days to respond with the steps they have taken to correct the violation and ensure compliance with the law. Failure to promptly correct the violations can result in additional FDA actions such as injunction, seizure or civil money penalties.
“We continue to monitor closely all those in the supply chain, including retailers, for compliance with federal law,” said Ann Simoneau, director of the Office of Compliance and Enforcement in the CTP. “This includes follow-up inspections and surveillance of those who have received a warning letter, and taking additional action, as appropriate, to enforce the law.”
The latest in vaping industry innovations made its debut during InterTabac 2023, held from September 14-16, as FEELM, a leading closed system solution provider, unveiled its OS Vape in a partnership with OS.
It is the first time FEELM has co-exhibited with its local partner during the world’s largest nicotine and tobacco trade show held in Dortmund, Germany.
OS, a major player in Germany’s shisha product market, recently ventured into the disposable vaping product market.
A representative from the FEELM booth said that collaborating with clients for exhibitions is a new strategy aimed at bolstering the client’s brand presence in local markets.
The FEELM spokesperson said the company intends to continue its co-exhibition format at major global exhibitions, joining forces with clients from various regions in a collective march towards a global presence.
OS Vape introduced a disposable vaping solution that delivers an elevated puff count, cost-efficiency, and unmatched vapor consistency, promising German consumers a rich vaping experience reminiscent of their cherished beers.
The OS Vape uses FEELM Max ceramic coil technology, disposable product the ability to provide 800+ puffs, a more than 30% enhancement in puff count compared to other common disposable products.
This establishes a new standard under TPD compliance, according to the FEELM spokesperson.
“Beyond puff count, OS Vape offers an exceptional vapor and taste consistency of over 95%. These groundbreaking advancements have undoubtedly propelled the vaping industry to new zeniths,” the spokesperson said. “Additionally, the signature transparent e-liquid tank not only alleviates e-liquid concerns but also adds a touch of aesthetic sophistication.”
Stakeholders now have until Oct. 6, 2023, to share their thoughts.
The proposed rule would place new requirements for tobacco product manufacturers regarding the manufacture, design, packing and storage of their products. According to the FDA, these proposed requirements would help protect public health by, among other things, minimizing or preventing contamination and limiting additional risks by ensuring product consistency.
In an article published in Addiction magazine, Brian King, director of the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP), explores the chances and considerations for informing adults who smoke cigarettes about the relative dangers of tobacco products, including e-cigarettes. He collaborated with Benjamin Toll, director of the Medical University of South Carolina Tobacco Treatment Program and co-director of the Lung Cancer Screening Program.
The commentary highlights the findings of a recent survey about misperceptions of tobacco product harms, including cigarettes and e-cigarettes. The survey found that only about 20 percent of adults who smoke cigarettes believed e-cigarettes contain fewer harmful chemicals than cigarettes. While there are no safe tobacco products, the available scientific evidence indicates that tobacco products exist on a continuum of risk, with cigarettes being the most harmful.
The commentary notes that opportunities exist to educate adults who smoke about the relative risks of tobacco products, including e-cigarettes. However, these efforts should be accompanied by efforts to prevent youth tobacco product use; encourage first-line use of FDA-approved cessation therapies; and for adults who both smoke and use e-cigarettes, reinforce the importance of completely transitioning to e-cigarettes.
The commentary further emphasizes that any education efforts on the relative risks of tobacco products must be evidence-based. In particular, it is important to assess the benefits among the intended population (i.e., adults who smoke) and risks among unintended populations (e.g., youth). Currently, FDA is in the early stages of a research effort to assess messaging about the continuum of risk of tobacco products among adults who smoke.
Last week, the FDA announced a virtual listening session opportunity to verbally provide open public comment on the development of the new strategic plan, including proposed strategic goals. After introductions, the center will begin the listening session with an overview of the process used to develop the CTP’s strategic plan, including proposed goal areas.
Registration is open for the virtual listening session on the development of the CTP’s five-year strategic plan, which will take place on Aug. 22 beginning at 10 a.m. EDT.
McKinney Regulatory Science Advisors has launch its new website that promises “a new era of innovation and transparency for their clients,” according to a press release.
The new platform describes an array of advisory services to nicotine and cannabis clients, with an emphasis on providing McKinney clients with the best available regulatory services.
Willie McKinney, CEO of McKinney, said the new website represents a significant milestone in journey to provide exceptional advisory services to our nicotine and cannabis clients.
“The revamped platform reflects our dedication to innovation, transparency, and client satisfaction, making it easier for clients to explore our services and access valuable regulatory resources,” he said
The new website offers a modern design that makes it easy for users to find the information they need quickly. It also features an intuitive navigation system that allows users to identify relevant services and access helpful resources rapidly, according to McKinney. Additionally, the site is optimized for mobile devices so that users can access the site from any device at any time.
“McKinney RSA focuses on providing comprehensive solutions that meet complex regulatory requirements while also delivering superior customer service,” the release states. “With decades of industry experience under their belt, they are committed to helping their clients succeed by providing top-notch guidance every step of the way.”
New York City has filed a lawsuit in federal court charging four vaping product distributors and six persons associated with the companies for illegally selling flavored vaping products other than tobacco in the city. It is possible more companies will be added to the suit.
The civil lawsuit, filed Monday in the U.S. District Court for the Southern District of New York, claims the defendants violated “nearly every federal, New York State and New York City law applicable to the marketing, distribution, and sale of flavored e-cigarettes, the sales of which are prohibited under laws enacted by all three jurisdictions.”
Named in the suit are Magellan Technology Inc., Ecto World LLC (Demand Vape), Mahant Krupa 56 LLC (Empire Vape Distributors) and Star Vape Corp. Also named were Matthew Glauser, Donald Hashagen, Russell Rogers, Nikunj Patel, Devang Koya and Nabil Hassen. The suit also mentions Puff Bar, Elf Bar and Hyde products, however, those manufacturers were not named in the suit.
The lawsuit alleges the defendants committed mail and wire fraud, alongside violations of New York City’s Administrative Code, New York State Public Health Law, and the federal Tobacco Control Act. The city also accuses the companies of violating both the federal Racketeering Influenced Corrupt Organizations (RICO) Act and the Prevent All Cigarette Trafficking (PACT) Act.
The suit centers on disposable flavored vapes. However, the suit alleges that is seeking relief for any type of flavored e-cigarette product on the market. This would suggest the suit could grow into anyone entity that has sold flavored vaping products in the city.
“Although this action speaks principally about (flavored disposables), the favorite type of electronic nicotine delivery system among youth and the most intentionally directed to that market, the City seeks relief for defendants’ violation of laws applicable to e-cigarettes regardless of the type of device with which the violation is committed,” the suit states. “Any non-FDA approved [the FDA authorizes for marketing; it does not approve products] e-cigarette containing a flavored e-liquid is governed by the laws under which the City’s claims are brought and the City seeks relief with respect to all such devices.”
The city says it “seeks to recover monetary damages and civil penalties from the defendants, potentially totaling millions,” according to a press release. The suit also alleges the sales of disposable flavored vapes created a youth use crisis. The suit alleges the largest increase in youth use ever. The claim is unsupported by any facts.
“By distributing devices that provide larger than normal doses of nicotine in a mild aerosol formulated to reduce or eliminate the harshness of burning tobacco and tasting pleasantly of fruit, candy or desserts, [flavored vaping device] manufacturers and distributors have triggered the largest increases in youth nicotine use ever seen,” the suit claims.
The lawsuit states the city will seek triple the damages awarded at trial under the RICO guidelines.
The U.S. Food and Drug Administration on July 10 issued a marketing denial order (MDO) for Myblu Menthol 2.4 percent, an e-cigarette product made by Fontem US. The order prohibits the company from marketing or distributing this product in the United States.
“Thorough scientific review of tobacco applications is a key pillar under FDA’s role to protect the public from the dangers of tobacco use,” said Matthew Farrelly, director of the Office of Science within the FDA’s Center for Tobacco Products. “This application lacked the scientific evidence needed to demonstrate that the product provided a net benefit to the public health that outweighs the known risks.”
Among other shortcomings, the application presented insufficient scientific evidence to show that the menthol-flavored e-cigarette products provided an added benefit for adults who smoke relative to tobacco-flavored e-cigarettes, according to the FDA.
Fontem US may resubmit a new application to address the deficiencies for the product subject to this MDO.
To date, the FDA has authorized 23 tobacco-flavored e-cigarette products and devices. Last year, the FDA issued MDOs to Fontem US for several other Myblu products, which are the subject of ongoing litigation.
