Universal Corp. reported net income of $14.8 million for the first half of fiscal year 2021, compared with $30.1 million for the same period of the prior fiscal year. Excluding certain nonrecurring items, net income declined by $23.9 million. Operating income was $24.9 million, down from $50.7 million in the first six months of 2019.
George Freeman
“Timing factors related to Covid-19 continued to impact our results in the second quarter of fiscal year 2021,” said George C. Freeman III, chairman, president and CEO of Universal, in a statement. “Our tobacco customer orders for crop year 2020 are strong, however, and the vast majority of these committed orders are packed awaiting shipment, with customer mandated shipment timing heavily weighted to our fourth quarter of fiscal year 2021.
“In addition, our uncommitted inventories have come down significantly from the levels at the end of fiscal year 2020 and are at 16 percent of tobacco inventories as of September 30, 2020, which is well within our target range.
“At this time, we believe our adjusted operating income for fiscal year 2021, excluding acquisitions, will materially exceed that of 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. We are closely monitoring shipping conditions and currently expect to complete our scheduled shipments prior to our 2021 fiscal year end.”
Sales of tobacco and cigarettes in Cyprus skyrocketed between March and April 2020.
According Retail Zoom, the sale of loose tobacco went up by 28 percent during the Covid-19 lockdown while cigarettes sales increased by 12 percent.
The spike could be linked to a government decision to close all checkpoints to the north as a precaution against the coronavirus pandemic.
Many Cypriots regularly travel to the north to illegally buy tobacco and cigarettes at cheaper rates. With access to the north forbidden, many had to revert to buying them legally and at full price.
Cigarette sales totaled €28 million ($33.1 million) at the end of May compared with €23 million at the start of February. Over the same period, the sale of loose tobacco increased from €3 million to €4.5 million.
According to KPMG, illegal sales in 2019 accounted for 14.3 percent of all tobacco sales, the highest rate ever recorded in the country. The black market caused the government to miss out on €28 million in revenues.
New demand for security and authentication devices to tackle the threat of counterfeiting caused by the Covid-10 crisis will strengthen the holography market in 2021, according to a global trade body.
The International Hologram Manufacturers Association (IHMA) says authentication and track-and-trace systems, which use holographic technologies, will help to underpin international efforts by government and law enforcement agencies to bolster overt and covert protection strategies in the next 12 months.
While Asia will continue to offer opportunities for holograms in 2021, the IHMA says countries across North America and Europe will also be ramping up investment in technologies to tackle counterfeiting as Covid-19 rages, offering additional opportunities for hologram sales across these regions.
Recent media reports about the dangers of buying fake products online indicate that the pandemic will contribute towards the push for more security devices.
The World Health Organisation (WHO) has said that a growing volume of fake medicines are on sale in developing countries, while Interpol has seen an increase in fake medical products.
This situation is set to continue in the next 12 months, predicts the IHMA, while growth in packaging authentication devices will stay “strong and lucrative” on the back of forecasts that the market for anti-counterfeit pharmaceuticals and cosmetics packaging will reach more than $10 billion by the end of 2026, growing by almost 9 percent in the next five years despite the current situation.
A poll has revealed that almost 50 percent of hologram manufacturers and suppliers are seeing an increase in demand from customers, specifiers and end-users for holographic devices and technologies. This indicates that hologram users will continue to be concerned about the impact of counterfeiting on e-commerce supply chains as the pandemic continues to be felt well into new year.
The IHMA advises brand owners and product manufacturers to tackle the threats, stepping up plans for investment in authentication and verification technologies to protect brands, profits and reputations.
Paul Dunn
“Criminals are infiltrating global supply channels, deploying scams and counterfeits to trick people during these difficult times,” said IHMA Chair Paul Dunn. “Furthermore, items such as falsified medicines and drugs pose a terrible threat and can endanger lives.
“It’s clear that in the face of the continued impact of Covid, we can legitimately say brand owners, law enforcement, government and other influencers will continue to push demand for authentication and brand protection devices such as holograms.”
The use of authentication solutions, as advocated by the ISO12931 standard, enables examiners to verify the authenticity of a legitimate product, differentiating it from fake products coming from counterfeiting hot spots in Asia and eastern Europe. Even those that carry a “fake” authentication feature can be distinguished from the genuine item if that item carries a carefully thought-out authentication solution.
Smokers who switched completely from smoking cigarettes to using British American Tobacco’s (BAT) Glo tobacco-heating product (THP) substantially reduced their exposure to certain cigarette smoke toxicants over three months, according to a company study published in Nicotine and Tobacco Research.
For many of the toxicants measured, the levels found in participants were similar to those in people who stopped using tobacco completely.
BAT scientists are conducting a year-long controlled study to see what impact switching from cigarettes to Glo will have on general health as well as smoke-toxicant exposure.
According to BAT, the study’s results find that smokers who switch from cigarettes to Glo exclusively significantly reduce the levels of harmful toxicants they are exposed to, potentially reducing their risk of developing smoking-related diseases.
“These initial results regarding Glo are extremely encouraging,” James Murphy, group head of potentially reduced-risk product science at BAT, said in a statement. “Glo provides smokers who wish to continue using tobacco and nicotine products with a potentially reduced-risk alternative to cigarettes. The results are another positive step for BAT as we continue our journey to reduce the health impact of our business by offering consumers a range of enjoyable and potentially reduced-risk products.”
Net sales of Scandinavian Tobacco Group (STG) grew to DKK2.23 billion ($354.89 million) in the third quarter of 2020, up from DKK1.81 billion in the comparable 2019 period. EBITDA before special items was DKK614 million after 32.5 percent organic growth. The EBITDA margin was 27.5 percent.
STG attributed its performance in part to changes in consumer behavior following the outbreak of the Covid-19 pandemic in the second quarter of 2020, with high tobacco consumption continuing across product categories and markets. In addition to increasing demand for handmade cigars in the U.S., sales of pipe tobacco and fine cut tobacco have performed better in several markets.
While the increased cigar consumption in the U.S. is expected to continue in the near term, STG expects its financial performance in the fourth quarter to be negatively impacted by the loading of net sales in previous quarters and strong comparison numbers partly driven by the change in sales taxing in France in the fourth quarter 2019.
Niels Frederiksen
“We are able to present a very strong result for the third quarter with double-digit growth in net sales, EBITDA and cash flow, said STG CEO Niels Frederiksen in a statement. “However, we maintain our guidance for the full year as we expect our financial performance in the fourth quarter to be negatively impacted by phasing, a temporary increase in the OPEX ratio and strong comparisons numbers.”
U.K. Member of Parliament Mark Pawsey, chair of the All-Party Parliamentary Group for Vaping, has called for vape stores to remain open during the Covid-19 lockdown to safeguard public health.
“Given its vital role in smoking cessation, even when compared to NRT [nicotine replacement therapy], the case for vaping’s essential status is growing ever stronger,” said Pawsey.
“Vape retailers do not just provide the tools for harm-reduction, but also the expert advice and support which empowers consumers to make a positive change. Now, more than ever, we should be safeguarding the country’s public health; vaping is an important part of that. Let’s support this sector, and all those who rely on it, by keeping vape stores open.”
Earlier this week, the U.K. Vaping Industry Association (UKVIA) urged ministers to consider the essential status for vape stores.
Doug Mutter
“I have seen first-hand how U.K. vaping has risen to every challenge this year, with new safety measures, business practices and routines,” said John Dunne, director general of the UKVIA in a statement. “The passion for helping people in this industry is unrelenting, no smoker looking to quit is on their own. However, with government help we can do even more, because for many people the support of a face-to-face experience is vital.
“If the government does not grant essential status to vaping the impact on sales from stores could be as much as 45 percent-50 percent down,” said Doug Mutter, manufacturing and compliance director at VPZ.
Knowledge-Action-Change has launched a new report documenting the advances and significant challenges facing tobacco harm reduction in 2020.
Titled, “Burning Issues: The Global State of Tobacco Harm Reduction 2020,” the report is the second in a biennial series from the Global State of Tobacco Harm Reduction (GSTHR), a project established to map the development of tobacco harm reduction and use, availability and regulatory responses to safer nicotine products around the world.
Harry Shapiro
Written by Harry Shapiro, “Burning Issues” addresses both progress and achievements in the field since the first edition was published in 2018 but also identifies the major obstacles preventing tobacco harm reduction from fulfilling its public health potential worldwide.
Launching in tandem with the report is GSTHR’s major live data mapping project, which documents regulatory responses with live updates to more than 200 regional and country profiles. The free-to-access resource shows that with the support of global tobacco control, 36 countries have banned vapor devices/e cigarettes, 39 have banned ban snus and 13 countries have banned heated tobacco products.
By contrast, just one country (Bhutan) has enacted a ban on the sale of combustible tobacco, which has been temporarily lifted due to Covid-19.
Schweitzer-Mauduit International (SWM) reported sales of $279.3 million in the third quarter of 2020, up 9 percent over those in the 2019 third quarter. GAAP operating profit was $37 million, up 7 percent, and adjusted operating profit was $52.7 million, up 26 percent.
SWM’s engineered papers segment sales were $140.4 million, up 8 percent, driven by a 2 percent volume increase and favorable price/mix performance of 6 percent. Higher volumes benefited from strong growth across cigarette paper products as customers increased inventory levels to de-risk their supply chains in the event of future disruptions from Covid-19.
These volume gains were partially offset by the continued de-emphasizing of lower margin nontobacco paper products. Price/mix improved due to the strong sales of higher value cigarette papers, including low-ignition propensity papers coupled with the favorable mix impact of lower nontobacco volumes.
“We are pleased to report a strong quarter with sales and adjusted profit growth in both segments,” said SWM CEO Jeff Kramerin a statement. “While the pandemic continued to impact some of our end markets, the global SWM team continues to perform well under challenging circumstances. All of our sites were fully operational throughout the entire quarter, a testament to our people’s commitment to the safety protocols implemented across the company.”
Britain’s sailors will be banned from smoking on board Royal Navy vessels from the start of 2021, reports The Daily Mail. All types of tobacco products will be banned from January, including on ships and submarines.
According to Forces.net, the plan is to “minimize the negative impact of smoking on operational capability.”
The smoking ban will also apply to military sites and could even apply to visitors, civil servants and contractors.
In 1988 the Royal Navy ended its 200-year policy of supplying shore-based staff with cheap cigarettes. Sailors previously received 600 cigarettes a month as well as a daily rum ration.
A scientific report on e-cigarettes prepared for the European Commission is fundamentally flawed, according to the Independent European Vape Alliance (IEVA).
As part of the European Commission’s forthcoming review of the Tobacco Products Directive, the Scientific Committee on Health, Environmental and Emerging Risks (SCHEER) Committee was tasked with producing a scientific review of the health effects of e-cigarettes. On Sept. 23, SHEER adopted its preliminary opinion. The public consultation on the preliminary opinion closed on Oct. 26.
“While we welcome the initiative from the European Commission in taking a view on the science of electronic cigarettes, the draft report it has produced is fundamentally flawed,” IEVA wrote. “What is most striking about the draft scientific review is its failure to compare the risks of electronic cigarette use with the risks of smoking.”
In its response to the preliminary opinion, IEVA cited several areas of concern:
The Committee has concluded that there is insufficient evidence that e-cigarettes are not a useful tool for smokers seeking alternatives, despite quoting two randomized control trials stating precisely the opposite.
In its risk assessment, the Committee has not taken a risk-based approach at all, but rather a hazard-based approach. It states the potential risks of using e-cigarettes without even attempting to compare these with the risks from cigarette smoking, which are exponentially higher.
The Committee has concluded that there is strong evidence that e-cigarettes act as a “gateway” to smoking. However, it has done so based almost exclusively on data from the United States, where an entirely different regulatory regime exists. The Committee also fails to acknowledge that smoking among young people has declined significantly: if vaping leads to smoking, then why are there not more smokers observed during the period where the e-cigarette market grew rapidly?
According to IEVA, the poorly founded conclusions undermine the utility of the report as a document upon which EU decisionmakers can make policy decisions in the best interests of Europeans.
