Tag: Featured

Stories featured at the top of tobaccoreporter.com

Different Packaging Rules After Brexit

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Manufacturers selling tobacco products in the United Kingdom must comply with two sets of health warnings in the wake of the country’s departure from the European Union.
Cigarettes sold in Northern Ireland must continue to bear the warnings prescribed by the EU Tobacco Products Directive. There are three sets of pictures that are rotated on an annual basis starting on May 20 and ending on May 19.
Manufacturers selling in Great Britain must ensure that products placed on market after Jan. 1, 2021, feature one of the text warnings with the corresponding color photograph listed in the picture library in Schedule A1 to the Tobacco and Related Products Regulations 2016 as amended by the 2019 Regulations, according to the U.K. Department of Health and Social Care.
There is one set of pictures and no rotations between sets.
The U.K.-EU withdrawal agreement allows the continued supply of tobacco products that were lawfully placed on the market in the U.K. before Jan 1, 2021.
Through the Tobacco Products and Nicotine Inhaling Products (Amendment) (EU Exit) Regulations 2020, regulation 9 of the 2019 Regulations has been amended to remove the 12-month sell-through deadline.
The regulation allows products featuring the EU pictures that were produced and first supplied on the U.K. market before Jan. 1, 2021, to remain on the market until they reach their end-user.
The diverging packaging requirements for Great Britain and Northern Ireland have prompted cigarette manufacturers to reevaluate their portfolios.
In December, Imperial Brands said it would likely shrink its portfolio in Northern Ireland due to Brexit.
January 7, 2021
EU Urged to Embrace Risk-Based Taxation

Photo: Gerd Altmann from Pixabay
The EU should embrace a risk-proportionate tax system for tobacco-related products, according to the Independent European Vape Alliance (IEVA).
“Revising the current Tobacco Excise Directive presents an opportunity to apply the right incentives for current smokers to improve their health, ideally by stopping the use of nicotine altogether but also by switching to reduced-risk alternatives where this is impossible or unlikely for the individual smoker,” the IEVA wrote in its response to the EU excise duties roadmap.
“Vaping has been found to be significantly less carcinogenic than smoking and an acceptable replacement for cigarettes for many smokers. It follows that any policy designed to reduce cancer rates through prevention must focus on the needs of this particularly at-risk section of the population.”
The consultation period for the revision of excise duties is scheduled for the first quarter of 2021, and commission adoption is scheduled for the fourth quarter of the year.
The feedback period to the roadmap closed on Jan. 5.
January 6, 2021
Record Tobacco Spending in South Korea

Photo: Tobacco Reporter archive
South Korean households spent a record KRW4.3 trillion ($3.96 billion) on liquor and cigarettes between July and September—6.2 percent more than in the same period the previous year, reports The Korea Herald, citing data from the country’s central bank.
The figure marks the highest quarterly figure since the central bank started keeping records in 1970.
The bump in spending follows stricter social distancing measures as coronavirus cases surged in South Korea.
Economic slumps have led to an increase in alcohol and tobacco spending in the past.
The first and second quarters of 1997 saw liquor and cigarettes spending increase by 20 percent and 18.6 percent, respectively, in the runup to the Asian financial crisis.
According to data from Statistics Korea, South Korean households spent an average of KRW43,000 on alcohol and tobacco during the same period, posting a 10.7 percent year-on-year increase.
January 6, 2021
‘Altria Pushed Cigarette Floor Price’

Photo: Rudall30 | Dreamstime.com
Colorado passed its recently enacted minimum cigarette price at the request of Altria Group, according to e-mails obtained by The Colorado Sun.
The cigarette giant reportedly asked Colorado Governor Jared Polis’ office to meet several conditions in exchange for agreeing not to fight legislation that put a question on the November ballot asking voters to raise tobacco and nicotine taxes in Colorado.
One of those conditions was adding a clause to the measure that requires a pack of cigarettes to be sold for at least $7 starting this year. The move is seen as benefiting Altria, which competes primarily in the premium cigarette segment.
“It’s like forcing our Honda to sell for the same amount as Mercedes,” Craig Hughes, a high-powered Democratic political consultant, wrote about the minimum-price clause in a June 3 email to Cary Kennedy, a senior adviser to Polis, according to The Colorado Sun.
The U.S. discount cigarette manufacturers Liggett Group, Vector Tobacco and Xcaliber International filed legal complaints, alleging that the minimum price was anti-competitive and anti-consumer.
Liggett Vector’s lawyers are arguing in state court that Proposition EE violates Colorado’s single-subject rule in the state constitution, which requires legislation to address only one topic at a time. In federal court, the company is arguing that the ballot initiative violates interstate commerce laws.
The lawsuits remain pending, though a federal judge last week rejected Liggett Vector’s request for a preliminary injunction that would have temporarily invalidated the minimum-price provision.
In a written statement to The Colorado Sun, Governor Polis’ office described the proposition that includes the minimum price requirement as a “win-win” for the state of Colorado. “We are able to fund free universal preschool for every child while protecting children and other vulnerable populations from cheap, harmful and addictive nicotine products.”
Polis and the health groups failed to pass a similar tobacco and nicotine tax increase bill in 2019 in large part because big tobacco interests successfully lobbied against the measure.
In 2016, Altria spent more than $16 million to block a tobacco tax increase that was on the ballot in Colorado.
January 6, 2021
RELX Plans $100 Million U.S. Stock Sale

Photo: RELX
RLX Technology, parent to the RELX brand of vaping products, has filed with the Security Exchange Commission in the U.S. to raise up to $100 million in an initial public offering (IPO).
The $100 million request is well below the $1 billion the company said it expected to raise when it announced Citigroup as the bank of record for its planned initial public offering in the U.S., people with knowledge of the matter said.
The Shenzhen-based company, which counts Sequoia Capital among its backers, boasts a 62.6 percent market share in China for closed-system vaping products in terms of retail sales, according to a press release.
“The company has partnered with 110 authorized distributors to supply its products to over 5,000 RELX Branded Partner Stores, and over 100,000 other retail outlets nationwide, covering over 250 cities in China,” the release states.
Revenue for the company nearly doubled in the nine months ended Sept. 30, 2020 to $324 million, with net income of $16 million.
The Beijing, China-based company was founded in 2018 and booked $400 million in sales for the 12 months ended Sept. 30, 2020. It plans to list on the NYSE under the symbol RLX. RLX Technology filed confidentially on Oct. 26, 2020. Citi is the sole bookrunner on the deal. No pricing terms were disclosed.
Chinese companies are choosing to list in the U.S. at a rapid pace despite Congress approving legislation that could force firms to withdraw from American exchanges in a dispute over audit inspection rules. Mainland and Hong Kong firms have raised $14.8 billion through U.S. initial public offerings in 2020, the second-best year on record, data compiled by Bloomberg show.
The IPO plan comes on the heels of fellow e-cigarette device maker Smoore International Holdings’ much sought-after Hong Kong debut share sale. Smoore raised HKD8.19 billion ($1.06 billion) in July after pricing its IPO at the top end of a marketed range.
The share price has soared more than 300 percent.
January 5, 2021
California Cities Remove Tobacco From Stores

Photo: D Thory from Pixabay
Beverly Hills and Manhattan Beach removed tobacco products from all store shelves on Jan. 1, becoming the only jurisdictions in the U.S. to eliminate the sale of commercial tobacco. Both cities included a phase-out period to allow retailers to adjust and to help smokers quit.
“Somebody’s got to be first, so let it be us,” said John Mirisch, council member and ex-mayor of Beverly Hills, who first proposed the concept in 2017 when debating the banning of flavorings in tobacco products, according to Action on Smoking and Health.
Mirisch recently joined the Board of Trustees of the advocacy group Action on Smoking & Health (ASH), which coordinates Project Sunset, an effort to phase out tobacco sales worldwide.
“Cigarettes have become so normalized that to some this might seem like a drastic step,” said Chris Bostic, ASH Policy Director. “But if another product emerged tomorrow that was highly addictive and killed when used as intended, of course we’d ban its sale. We’d probably charge the people who marketed it with manslaughter too.”
While Beverly Hills and Manhattan Beach are the first in the U.S. to pass legislation, the idea of eliminating tobacco sales is not new. When Surgeon General Luther Terry released a landmark report connecting tobacco use to death and disease in 1964, he was convinced that the sale of cigarettes would be outlawed, holding the press conference on a Saturday to lessen the impact on the stock market.
The concept has been gaining traction more recently, within the public health community and more broadly. The Danish Institute for Human Rights, after concluding a human rights assessment of Philip Morris International in 2017, concluded that “there can be no doubt that the production and marketing of tobacco is irreconcilable with the human right to health. For the tobacco industry, the UNGPs [United Nations Guiding Principles on Business and Human Rights] therefore require the cessation of the production and marketing of tobacco.”
At its most recent world conference, the global tobacco control community adopted The Cape Town Declaration on Human Rights and a Tobacco-Free World.
January 5, 2021
South Africa to Appeal Tobacco Ban Ruling

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The government of South Africa will appeal the Dec. 11 court ruling that declared the ban on the trade of tobacco products during the coronavirus lockdown was unnecessary and unconstitutional.
The government stated that the court erred in finding that a different but similar case involving the Fair Trade Independent Tobacco Association (Fita), which was dismissed on grounds that tobacco products were not essential, was not binding to it.
From March to August 2020, the government prohibited sales of tobacco products and alcohol to help stem the spread of the coronavirus. Market leader British American Tobacco South Africa (BATSA) and smaller companies united in the Fita challenged the ban, arguing that a short-term ban on a product whose health risks become evident only in the long run makes no sense.
They also questioned the rationale of the argument around cigarette sharing. Tobacco shortages and high prices of black-market cigarettes would only increase the likelihood of smokers sharing their “stompies,” the tobacco companies said.
The government lifted the ban before the matter had been heard in court, but BATSA decided to proceed with the court action to prevent the ban from being reintroduced at a later stage of the pandemic.
In its ruling, the Western Cape High Court judges who presided over the case said Regulation 45, which the government relied upon for the ban, “cannot and does not withstand constitutional scrutiny.”
The Fita expressed disappointment with the government’s decision to appeal.
“We feel that this step by government is regrettable given the irreparable harm on the tobacco industry along its value chain which was occasioned by the five month-long ban on the sale of cigarettes and tobacco related products for consumption by the local market, and which ban has led to the exponential and unabated growth of the illicit cigarette market, which issue has the knock-on effect of increased losses to the fiscus as less taxes are collected by the receiver,” the Fita wrote in a statement.
“This step by government is further worrisome in that it signals the potential arrival of yet another cigarette sales ban given that the pending appeal will suspend the operation of the Western Cape High Court judgment until the matter is properly ventilated before the courts, which matter could take months if not more to resolve.”
FITA previously came to an agreement with the government stating it be consulted in the case that other cigarette bans are being considered.
January 5, 2021
Egypt to Monitor Tobacco Industry

Photo: Taco Tuinstra
Egypt has created an observatory to monitor tobacco companies—the first of its kind in the Middle East, reports Al-Monitor. Among other things, the observatory will keep track of the industry’s promotional spending and interactions with the scientific community.
Critics have accused the tobacco industry of paying scientists to claim that smoking protects against Covid-19.
A 2019 study by the Cairo Center for Economic Studies and Alastaratejah showed that Egypt was among the top 10 countries in terms of tobacco consumption. According to the statistics, Egyptians consumed 83 billion cigarettes worth EGP73 billion ($4.6 billion) in 2017-2018. During the same period, consumption of hookah tobacco reached 50,000 tons, or EGP3 billion.
Tobacco, alcohol and drugs account for a quarter of Egyptian households’ spending, according to the Central Agency for Public Mobilization and Statistics. An estimated 171,000 Egyptians die annually due to smoking-related diseases.
Through its stake in Eastern Co., The Egyptian government is the largest operator in the domestic tobacco industry.
January 5, 2021
E-Cig Sales Slumping in Convenience Stores

Photo: Juul Labs
Convenience store e-cigarette sales have slumped over the past 10 months in the United States, according to Nielsen. The segment has been in retreat since the Food and Drug Administration restricted flavors in cartridge-based e-cigarettes on Feb. 6, 2020.
Overall e-cigarette sales-volume growth has declined steadily since Nielsen’s Aug. 10, 2019, report, when it was up 60.2 percent year over year, according to a story in The Winston-Salem Journal. Nielsen does not track vape shop sales.
Top-selling Juul’s four-week dollar sales have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to a 15.6 percent decline for the latest report. By comparison, Reynolds’ Vuse was up 87.3 percent in the latest report and NJoy down 31.5 percent.
Bonnie Herzog
Juul’s market share dropped from 54.3 percent in the previous report to 53.8 percent. It was at 55.1 percent a year ago. Vuse’s market share slipped from 28.5 percent to 28.1 percent, while No. 3 NJoy was unchanged at 5 percent, and Fontem Ventures’ Blu was unchanged at 3.6 percent.
Goldman Sachs analyst Bonnie Herzog observed increasing consumer demand for lower-priced traditional cigarettes during the pandemic, which she attributed to downtrading. That trend could be offset somewhat by the scheduled $600 federal stimulus payments to most Americans, which are expected to arrive in many households soon.
January 4, 2021
Study: Vaping Clouds Thinking

Photo: Kevinsphotos from Pixabay
Vaping can have a negative effect on memory, thinking skills and the ability to focus, particularly for young people, according to a recent study by researchers at the University of Rochester (New York) Medical Center.
“Our studies add to growing evidence that vaping should not be considered a safe alternative to tobacco smoking,” said Head researcher Dongmei Li.
The study is based on data analyzed from the over 886,000 participants involved in the Behavioral Risk Factor Surveillance System Survey and the more than 18,000 responses from the National Youth Tobacco Survey.
The researchers concluded that those who vaped or smoked cigarettes were more likely to struggle with cognitive function than those who had never smoked in any capacity. Also, the researchers noted that age played a large role in the participants’ cognitive abilities as they found that when participants were younger than 14 when they started vaping or smoking, they were even more likely to have cognitive struggles as adults.
“With the recent rise in teen vaping, this is very concerning and suggests that we need to intervene even earlier. Prevention programs that start in middle or high school might actually be too late,” Li added.
January 2, 2021