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Stories featured at the top of tobaccoreporter.com

  • Universal Reports Results

    Universal Reports Results

    Photo: Taco Tuinstra

    Universal Corp. reported net income for the quarter ended Dec. 31, 2020, of $33.3 million, compared with net income of $26 million, for the prior year’s third fiscal quarter. Excluding restructuring and impairment costs and certain other non-recurring items net income increased by $27.5 million from the comparable 2019 quarter. Operating income for the third quarter of fiscal year 2021 increased to $60.2 million compared to $44.1 million for the three months ended Dec. 31, 2019.

    Net income for the nine months ended on Dec. 31, 2020, was $48 million, compared with $56.1 million for the same period of the prior fiscal year. Excluding restructuring and impairment costs and certain other non-recurring items, net income increased by $3.4 million for the nine months ended Dec. 31, 2020, compared to the nine months ended December 31, 2019. Operating income of $85.1 million for the nine months ended Dec. 31, 2020, was down from operating income of $94.8 million for the nine months ended Dec. 31, 2019.

    George Freeman

    “Tobacco shipments in the third quarter of fiscal year 2021 exceeded our previous expectations as customer mandated timing for some shipments forecast for the fourth fiscal quarter were accelerated into the third fiscal quarter,” said George C. Freeman, III, chairman, president and CEO of Universal Corp. in a statement. “As a result, total tobacco shipment volumes for the nine months ended Dec. 31, 2020, are similar to those of the prior year’s comparable fiscal period.

    “The majority of our remaining committed tobacco orders for the 2020 crop are packed and ready to ship, and we expect sustained strong tobacco shipment volumes in our fourth fiscal quarter of 2021 barring any unforeseen events including changes in shipment timing. In addition, our uncommitted tobacco inventory levels remain within our target range. We continue to believe our adjusted operating income for fiscal year 2021, which excludes restructurings and certain costs for acquisitions, will materially exceed that for fiscal year 2020, barring any unforeseen events including shipment delays due to lack of vessel or container availability, port congestion, or Covid-19 related uncertainties.”

    Universal Corp.’s board of directors declared a quarterly dividend of $0.77 per share on the common shares of the company, payable May 3, 2021, to common shareholders of record at the close of business on April 12, 2021. 

  • Willie McKinney to Advise Labstat

    Willie McKinney to Advise Labstat

    Willie J. McKinney (Photo: Labstat International)

    Labstat International has appointed Willie J. McKinney to its scientific and strategic advisory board. McKinney’s regulatory and scientific expertise of nicotine-containing and cannabidiol-containing products will help guide Labstat in strategy development, internal program conceptualization and internal scientific research.

    “Bringing onboard someone of Dr. McKinney’s caliber underscores Labstat’s commitment to excellence in testing services,” said Michael Bond, president of Labstat International, in a statement.

    McKinney, founder and CEO of McKinney Regulatory Science Advisors, is board certified in toxicology by the American Board of Toxicology. He works with clients to resolve the complex and dynamic scientific and regulatory challenges associated with preparing new product regulatory submissions. He also served on the FDA’s Tobacco Product Scientific Advisory Committee as the nonvoting representative of the tobacco manufacturing industry and was on the advisory board of the ENDS U.S. 2019 conferences.

    Previously, McKinney served as vice president of global regulatory affairs for Juul Labs and as vice president of regulatory sciences for Altria Client Services.

    Labstat International provides in-vitro toxicology and analytical chemistry testing services for nicotine-containing and cannabis-containing products

  • KT&G Posts Record Results

    KT&G Posts Record Results

    Photo: KT&G

    KT&G posted record results in 2020 due to remarkable growth in its global markets. On Feb. 4, the South Korean company announced an operating profit of KRW1.17 trillion ($1.05 billion) on sales of KRW5.3 trillion, up 7.5 percent and 6.8 percent, respectively over the previous year.

    KT&G attributes its performance to a rise in sales in overseas markets. In early 2020, KT&G the company entered the Middle East by signing a contract worth KRW2.2 trillion for seven years with a local tobacco importer. The expansion of its distribution network pushed up sales in the United States.

    KT&G made inroads into 23 countries last year, increasing the number of its export markets to 103 countries. It also started exporting e-cigarettes to Russia and Japan by forging a partnership with Philip Morris International.

    As a result of brisk overseas market development, the company sold more than 100 million units in annual sales in five countries including Cameroon, Israel, and Guatemala. It sold 48 billion cigarettes worth krw986.2 billion in the global market alone last year.

    Domestic cigarette sales increased by 2.5 percent to 41.6 billion sticks in 2020, a development that KT&G attributes to Covid-19 related overseas travel restrictions, among other factors. South Korea’s market for heat-not-burn remained stable during 2020.

    KT&G’s 2020 fourth quarter and annual earnings release is available for download here.

  • Court Won’t Throw Out ‘SE’ for Premium Cigars

    Court Won’t Throw Out ‘SE’ for Premium Cigars

    Photo: Tobacco Reporter archive

    The U.S. District Court for the District of Columbia on Feb. 4 refused a request to throw out the U.S. Food and Drug Administration’s substantial equivalence requirements for premium cigars, reports Halfwheel.

    Three cigar trade groups had asked the court to “clarify” an August ruling that delayed those requirements until after the U.S. Food & Drug Administration completes a review of whether it should create a new, streamlined process for “premium cigars.”

    As the court pointed out, that “clarification” was in fact a request to have the substantial equivalence requirements thrown out.

    Judge Amit P. Mehta concluded that the court had no authority to vacate the substantial requirements under that argument. By giving the FDA the authority to regulate cigars under the Tobacco Control Act, Congress also gave FDA the authority to require premarket review for cigars, the court reasoned.

    The next phase of the lawsuit will likely focus on the question of whether FDA acted properly when deciding to regulate “premium cigars” the same way as other tobacco products.

    The plaintiffs will argue that FDA neither went through the proper steps nor had sufficient evidence to regulate “premium cigars” the same way FDA has chosen to regulate e-cigarettes, little cigars or hookah tobacco.

    The FDA will not enforce its substantial equivalence requirements until it completes the review mandated in August. There is no established timeline for when that review might be completed.

  • Critics: Beating Cancer Plan Protects Tobacco

    Critics: Beating Cancer Plan Protects Tobacco

    Photo: Paulgrecaud – Dreamstime.com

    Tobacco harm reduction activists have expressed concern about new measures proposed in the European Union’s recently published Beating Cancer Plan. According to the European Tobacco Harm Reduction Advocates (ETHRA), the measures would make low-risk products such as e-cigarettes and smoke-free tobacco products less effective and attractive as alternatives to combustible cigarettes.

    According to the ETHRA, the plan fails to make a distinction between harmful smoking products and smoke-free alternatives, and signals that the European Commission intends to turn its back on innovation and science by cracking down on vaping.

    “The effect would be to protect the tobacco industry, reduce the number of Europeans quitting smoking by switching to low-risk alternatives, and add to the overall burden of cancer—exactly the opposite of the aim of Europe’s Beating Cancer Plan,” the ETHRA wrote in a letter to the European Parliament members on the Special Committee on Beating Cancer.

    The ETHRA also expressed concern about plans to ban nontobacco flavors for e-liquids. “Such an approach is one step short of outright prohibition,” the organization wrote. “It will trigger a range of undesirable reactions among both vapers and smokers—including relapse to smoking among vapers, reduced switching among smokers, increased illicit activity and cross-border trade, workarounds, more home mixing, and the formation of informal, unregulated markets.”

    According to the EHTRA, other proposed measured, such as taxes, public vaping bans and plain packaging would provide further regulatory protection of the cigarette category. “The plan fails to recognize the interaction between smoking and vaping and is naïve about the perverse consequence of the regulatory intervention,” the ETHRA wrote.

    The Independent European Vape Alliance (IEVA), meanwhile, welcomed the EU Beating Cancer Plan but urged regulators to use all means at hand to minimize smoking rates.

    “We welcome the EU Beating Cancer Plan,” said IEVA Chairman Dustin Dahlmann in a statement. “The strategy needs to consider all means available to reduce the burden of cancer related risks: It is of utmost importance that preventive measures are flanked by tobacco harm reduction. Otherwise, millions of smokers might miss the opportunity to tremendously reduce their risk of cancer.”

  • Higher Income, Lower Revenues for PMI

    Higher Income, Lower Revenues for PMI

    Photo: PMI

    Philip Morris International (PMI) reported operating income of $11.69 billion in 2020, up 10.8 percent over 2019. Net revenues were down 3.7 percent to $28.69 billion for the full year.

    PMI sold 628.52 billion cigarettes in 2020, down 11 percent 11.1 percent from 706.71 billion in 2019. The company’s shipments of heated tobacco units (HTU) increased 27.6 percent to 76.11 billion in 2020. Its combined volume of cigarettes and HTUs was 704.63 billion in 2020, 8.1 percent less than in the previous year. Sales of PMI’s flagship Marlboro brand declined by 11.3 percent to 233.16 billion cigarettes.

    Andre Calantzopoulos

    “In 2020, PMI delivered a robust business performance despite the unprecedented headwinds of the Covid-19 pandemic, with adjusted diluted EPS [earnings per share] organic growth of 7.0 percent, supported by stronger-than-anticipated fourth quarter results,” said André Calantzopoulos, chief executive officer, in a statement.

    “IQOS continued to deliver impressive growth in 2020, driving significant increases in our total users, as well as both HTU shipment and in-market sales volumes. During the fourth quarter, we reported record HTU market shares in key IQOS geographies and exited the year with double-digit national shares in ten markets.”

    “We enter 2021 with favorable momentum, although certain headwinds remain, notably related to Duty Free, Indonesia and the continued effects of the pandemic. For the full year, we are expecting a significant recovery, with mid-single-digit organic net revenue growth—driven by the growing contribution of IQOS—and further efforts on cost efficiencies driving an acceleration in forecasted adjusted diluted EPS growth to a range of 9 percent to 11 percent on the same basis.”

    PMI said it has sufficient access to the inputs for its products and is not facing any significant business continuity issues with respect to key suppliers. All of PMI’s cigarette and heated tobacco unit manufacturing facilities globally are operational, and Covid-related restrictions do not have a significant impact on the availability of PMI’s products to its customers and adult consumers.

    PMI will host a live video webcast of presentations and Q&A session by senior management at its 2021 investor day on Feb. 10, 2021. The webcast will be held in a virtual format and provide live video of the entire session beginning on Wednesday, Feb. 10, 2021, at approximately 8:30 a.m. EST and concluding at approximately 1:30 p.m. EST. An archive of the webcast will be available on the company’s website until 5 p.m. EST on March 11, 2021. A copy of the slides and full transcript will be made available on the company website

  • PMFTC Streamlines Philippine Operations

    PMFTC Streamlines Philippine Operations

    Photo: PMFTC

    Philip Morris Fortune Tobacco Corp. (PMFTC) will eliminate about 300 jobs at a factory in the Philippines as part of a streamlining initiative, reports The Inquirer.

    “In light of a steep decline in production volumes resulting in significant idle capacity at the Marikina plant, PMFTC Inc. confirms making the difficult decision to streamline its manufacturing operations that has been impacted by the market conditions over the past years,” PMFTC said in an official statement.

    According to a September 2020 statement from the Department of Labor and Employment, the Marikina plant has about 1,200 workers.

    While refraining to comment on the number of workers impacted, a PMFTC representative said those laid off would be getting a generous separation package.

    Last January, the major shareholders of the company announced a merger. Lucio Tan’s LT Group, which indirectly owns PMFTC through Fortune Tobacco Corp., will merge with Philip Morris Manufacturing Philippines. PMFTC would be the surviving corporation effective in June.

     

  • Small Business to Bear Brunt of U.S. Mail Ban

    Small Business to Bear Brunt of U.S. Mail Ban

    Photo: dference from Pixabay
    Azim Chowdhury

    The outlook for many small vapor companies and online retailers looks bleak following the enactment of new rules that prohibit the U.S. Postal Service (USPS) from shipping e-cigarettes, according to Keller and Heckman’s Azim Chowdhury and Galen Rende.

    Writing on The Continuum of Risk law blog, the attorneys discuss the fallout of a recent amendment to the 2009 All Cigarette Trafficking (PACT) Act.

    In late December, former U.S. President Donald Trump signed into law a $2.3 trillion coronavirus relief and government funding bill that contains a provision banning the USPS from delivering vapor products. The USPS was already prohibited from delivering cigarettes and smokeless tobacco products to consumers under the PACT Act. The law passed in December extends the Act’s original definition of “cigarette” to include electronic nicotine delivery systems (ENDS).

    Tobacco and vapor companies may use private services to ship their products to consumers, but the PACT Act requires them to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives and the tobacco tax administrators of the states into which a shipment is made. Delivery sellers are further required to verify the age and identity of the customer at purchase and maintain records of delivery sales for a period of four years after the date of sale, creating substantial administrative burdens.

    Critically for the vapor industry, the most popular carriers, Federal Express and United Parcel Service, have recently announced that they would cease all deliveries of vapor products.

    The prohibition on the mailing of ENDS is scheduled to take effect after the USPS promulgates regulations clarifying the mail ban, which it is required to do within 120 days of the enactment—i.e., by April 27, 2021.

  • Hall Analytical Offers PMTA Webinar

    Hall Analytical Offers PMTA Webinar

    Photo: Bacho | Dreamstime

    Hall Analytical is offering a virtual seminar on Feb. 11, 5-6 pm GMT about the U.S. Food and Drug Administration’s premarket tobacco product application process.

    E-liquid and device manufacturers will have an opportunity to take part in a live Q&A session with subject matter experts.

    Panelists include David Lawson, CEO, Inter Scientific; Patricia Kovacevic, founder and principal, Regulation Strategy; and Sally McGuigan, principal scientist, Hall Analytical

    This session is limited to the first 50 registrants, and therefore places will be offered on a first come, first served basis.

    Participants can register here.

  • WHO reappoints Bloomberg

    WHO reappoints Bloomberg

    Photo: Bloomberg Philanthropies

    The World Health Organization (WHO) will reappoint Michael R. Bloomberg as the WHO Global Ambassador for Noncommunicable Diseases (NCDs) and Injuries.

    Both as mayor of New York City and as a philanthropist, Bloomberg made it a top priority to combat noncommunicable diseases and their underlying causes. As mayor, he introduced the Smoke Free Air Act and other public health initiatives. His foundation, Bloomberg Philanthropies, promotes policy solutions around the world that reduce rates of noncommunicable diseases like cardiovascular disease and hypertension as a result of factors such as poor diet while also supporting road safety and drowning prevention initiatives.

    Vapor advocates have criticized Bloomberg for his rejection of tobacco harm reduction (THR) strategies, and his philanthropies’ attempts to influence policymaking around the world.

    Recently, the International Network of Nicotine Consumers Organizations urged Vietnam to exercise “true independence” in its regulation of THR products, citing concern that the country’s regulations would be drafted by Bloomberg-financed organizations.

    Anti-tobacco groups welcomed Bloomberg’s reappointment. “Michael Bloomberg is uniquely qualified to focus global attention on this public health crisis and serve as a catalyst for life-saving action around the world, and we look forward to partnering with him and the WHO on proven policy solutions to reduce NCDs and save lives,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids and the Global Health Advocacy Incubator, in a statement.