Tag: Featured

Stories featured at the top of tobaccoreporter.com

Vapers Protest ‘Prohibitionist Policies’

Photo: UVA
Vapor advocates from across the United States descended on Washington D.C. on Saturday to show support for small vapor businesses and to demonstrate to President Donald Trump that their votes have the power to change the upcoming election.
The activists demanded President Trump push for the Food & Drug Administration (FDA) to reform the Pre-Market Tobacco Application (PMTA) process or extend the cutoff before the looming deadline of Sept. 9.
Organized by United Vapers Alliance, advocates peacefully protested to show the world that “We Vape, We Vote” is a movement that has the influence to disrupt the upcoming election with millions of potential votes up for grabs. The vaping advocates vowed to continue to push elected officials to reject prohibitionist policies that threaten access to life-saving vapor products.
“If President Trump does not deliver on real reform at FDA, he is not only risking the destruction of an American industry, but he will be also be creating a situation where millions of adult ex-smokers could return to deadly combustible cigarettes,” said Dimitris Agrafiotis, executive director of the Tennessee Smoke-Free Association.
“HHS Secretary Alex Azar has pledged PMTA reform, but he failed to deliver. Now, it is up to President Trump to stop the FDA from destroying 99 percent of the industry and leaving 160,000 Americans unemployed in the middle of the COVID-19 pandemic.”
September 6, 2020
Activist Want Say on Flavor Ban

Photo: Vchalup | Dreamstime.com
Opponents of California’s recently enacted ban on the sale of flavored tobacco and vapor products are working to get a referendum on the measure, reports The Los Angeles Times.
If the referendum qualifies with the collection of 623,212 signatures, the sales ban would be placed on hold until voters are given a chance to vote on the issue, possibly in 2022.
The referendum is being pursued by a new political group called the California Coalition for Fairness
“We agree that youth should never have access to any tobacco products, but this can be achieved without imposing a total prohibition on products that millions of adults choose to use,” the group wrote in a statement. “This law goes too far and is unfair, particularly since lawmakers have exempted hookah, expensive cigars and flavored pipe tobacco from the prohibition.”
State Senator Jerry Hill, the author of the bill, denounced the plan to seek a referendum.
“California fought Big Tobacco and won,” Hill was quoted as saying. “This shameless industry is a sore loser and it is relentless. It wants to keep killing people with its candy-, fruit-, mint- and menthol-flavored poison. The adults who are hooked on nicotine aren’t enough for Big Tobacco; it wants our kids too.”
The bill was signed into law by California Governor Gavin Newsom on Aug. 28. The legislation prohibits the sale of tobacco and vapor flavors, including menthol, in the state beginning Jan 1, 2021. The legislation does not make it illegal for someone to purchase, possess or use flavored tobacco or vapor products.
September 4, 2020
Philip Morris Opens IQOS Stores in Manila

Photo: Alpar Benedek | Dreamstime.com
Philip Morris Fortune Tobacco Co. (PMFTC) is opening its first four IQOS stores in Manila, reports The Manilla Standard.
While the heat-not-burn product has been available in the Philippines through several retail outlets since April, the opening of the stores marks a significant step towards achieving the company’s vision of a smoke-free future, according to PMFTC President Denis Gorkun.
“PMFTC’s vision is to help adult smokers who would otherwise continue to smoke to move away from cigarettes as quickly as possible and switch to a better alternative,” Gorkun said.
PMFTC parent company Philip Morris International has invested more than $7 billion in research, development and production capabilities to create smoke-free products such as IQOS, which are now available in several countries.
In July, the U.S. Food and Drugs Administration (FDA) authorized the marketing of IQOS and heat sticks in the U.S. with a reduced exposure claim adding that such issuance is appropriate for the promotion of public health.
Gorkun said the FDA decision shows that IQOS is a fundamentally different tobacco product compared to cigarettes and a better choice for adults who would otherwise continue smoking.
About 60 percent of Filipino adult smokers are willing to try smoke-free alternatives provided they are made commercially available and meet quality production standards, according to a study commissioned by PMFTC.
PMFTC said IQOS is aimed at adult smokers. The company is implementing age verification and access restriction to ensure that only legal age consumers 21 years old and above will have access to the stores, the e-commerce website and the IQOS products.
September 4, 2020
Taat Secures Production Capacity

Photo: Kolozov – Dreamstime.com
Taat Lifestyle & Wellness has secured commercial-scale production capacity for its tobacco-free and nicotine-free Beyond Tobacco cigarettes with a manufacturer in North America, the company announced in a press release.
The manufacturer, whose name cannot be disclosed under the terms of the agreement, does production on a contract basis for global and regional brands of both tobacco and hemp cigarettes.
According to Taat, the agreement provides terms for production of Beyond Tobacco cigarettes at pricing that is lower than tobacco industry averages for full-service cigarette production for an initial duration of one year, with renewal of such pricing terms conditional upon the company meeting a first-year production quota.
The manufacturer has also agreed to warehouse Beyond Tobacco cigarettes after they are produced, while also providing outbound logistics services by coordinating the shipment of Beyond Tobacco pallets to the company’s distributors. To protect its trade secrets, Taat will continue to process the Beyond Tobacco base cigarette material in-house.
“While our agreement with the manufacturer precludes me from going into too much detail, I can certainly say that I am very pleased to have them on board to manufacture Beyond Tobacco cigarettes for us,” said Taat CEO Setti Coscarella.
Tim Corkum
“Aside from being able to produce at a much lower cost compared to our initial estimations, working with an established player in the cigarette production space enables us to benefit from their industry-leading standards in machinery, quality control and efficiency.”
In related news, Taat recently appointed Tim Corkum as its chief revenue officer to lead commercialization efforts for Beyond Tobacco cigarettes. Corkum, who spent more than 20 years working for Philip Morris International in the Caribbean and in Canada, is a recognized industry leader in the commercialization of cigarette products as well as reduced risk products.

September 4, 2020
Rains Dampen Malawi’s 2020 Tobacco Earnings

Photo: Taco Tuinstra
Malawi’s 2020 tobacco selling season closed on Aug. 28 with the country realizing $173.5 million, Tobacco Commission statistics announced. According to the statistics, Malawi sold a total of 112.89 million kg of tobacco this year as opposed to 165.67 million kg sold in 2019. However, leaf prices were higher this year at an average of $1.54 per kg as compared to $1.43 per kg last year.
Tobacco Commission CEO Kaisi Sadala described this year’s growing season as a “mixed bag.” “Although prices were better this year, we traded reduced volumes of tobacco this year. Initially we had anticipated producing around 154 million kg of tobacco this season, but we ended up producing just around 112 million [kg].”
Sadala cited the general decline in production to weather impact, especially excessive rains received immediately after the second round of crop estimates.
The Malawi leaf tobacco industry has been struggling with fluctuating volumes in recent years.
Tobacco Reporter covered the country’s leaf sector in-depth in 2017.
September 4, 2020
Vapor Firms Request Delay of PMTA Deadline

Photo: Nmedia | Dreamstime.com
Keller and Heckman has asked the U.S. Food and Drug Administration to postpone its Sept. 9 deadline for filing premarket tobacco applications (PMTAs) by six months because of the Covid-19 pandemic.
On behalf of a group of small vapor product manufacturers, retailers and trade associations, the law firm filed a citizen petition asking the FDA to postpone the PMTA due date until March 8, 2021.
Many of Keller and Heckman’s clients have experienced delays in preparing their applications because of the coronavirus. Without an extension, small vapor companies will either have to file incomplete PMTAs or forego submission altogether, according to Keller and Heckman. This would force them to layoff thousands of employees, close their doors permanently, and remove from the market less risky vapor products that addicted adult smokers rely on to move away from cigarettes, the law firm said.
The current PMTA deadline was set by a federal district court in Maryland as part of a lawsuit filed by anti-vaping groups challenging an earlier August 2022 deadline established by FDA through guidance issued in 2017.
The petition specifically asks FDA to request from the district court an extension on the court-imposed deadline that would apply only to small manufacturers that demonstrate to the agency that they have been working in good faith to complete PMTAs by the Sept. 9, 2020 cutoff and have otherwise taken steps to ensure that their products will not contribute to underage use.

September 3, 2020
Cigarettes Selling Better Than Expected

Photo: Joan Parker from Pixabay
Cigarette sales continue to perform better than expected despite a slight decline in recent weeks.

The U.S. sales volume for traditional cigarettes was down 2.1 percent for the four-week period that ended Aug. 22, according to the latest Nielsen survey of convenience stores. By comparison, the sales volume was down 0.8 percent in a four-week period in May.

The recent decline in cigarette sales is likely linked to a June list price hike by the leading tobacco manufacturers. Philip Morris USA raised its list price by $0.11 a pack for several brands. R.J. Reynolds Tobacco Co. and ITG Brands raised their prices by a similar amount.

Despite the recent acceleration in the contraction of cigarette volumes, the rate of decline is considerably lower than it was last year.

David Sweanor
“The Nielsen data continues to show the decline in cigarette sales moderating to a pace that is only about a quarter of the rate of contraction in the second quarter of last year—before the much-enhanced attacks on vaping,” David Sweanor, an adjunct law professor at the University of Ottawa, was quoted as saying by The Winston-Salem Journal.

“This is fascinating as there is very strong evidence that current tobacco control policies are leading directly to higher rates of smoking than would have otherwise been the case.”

Meanwhile, sales of electronic cigarettes declined 17.4 percent for the four-week period. The category has struggled since the Food and Drug Administration (FDA) tightened regulations on Feb. 6.

The FDA regulations have depressed the demand for closed pod cartridges.

Traditional cigarettes had $60.27 billion in sales at convenience stores over the past 52 weeks, representing 80 percent of all U.S. tobacco sales, according to the Nielsen report.

Moist snuff and chewing tobacco were at $7.59 billion and 10 percent while electronic cigarettes were at $3.72 billion and 5 percent and cigars at $3.63 billion and 5 percent.

When the first round of stay-at-home orders were issued by numerous governors in mid-March to slow the spread of the Covid-19 virus, the sales volume of traditional cigarettes rose 1.1 percent for the week that ended March 22.
September 3, 2020
Morgan Stanley: BAT Underappreciated

Photo: BAT
The growth potential of British American Tobacco (BAT) is underappreciated, reports Sharecast, citing Morgan Stanley. The investment bank believes BAT is better able to offset the challenges in the combustible cigarette market than many investors are willing to give it credit for.
The key to its thesis is BAT’s shift from a combustibles business to a nicotine play.
“We see a significant opportunity in BAT’s new model, just as the shares and investor interest hit multi-year lows,” Morgan Stanley wrote in a statement.
BAT’s user base has grown from about 143 million in 2017 to approximately 146 million by 2019 and might reach roughly 155 million by 2030, according to Morgan Stanley.
Management’s ambition, announced in April, is to have 50 million non-combustible users by 2030, up from 11 million at the end of 2019, which would more than compensate for the falling number of smokers.
The broker also highlighted the 50:50 split in BAT’s volumes between emerging and developed markets, strong management and anticipated stable earnings growth of 4 percent to 8 percent over 2020-2-2025.
Its analysts also argued that the dividend payout was “largely secure” as the company refinanced debt.
Furthermore, the company’s improved position in U.S. next-generation-products allows it to capture users migrating to other products if Washington bans menthols, according to Morgan Stanley.
September 3, 2020
More Restructuring and Job Cuts at Juul

Photo: Juul Labs
Juul Labs is planning another major restructuring effort that includes layoffs and cost-cutting, according to reports in The Wall Street Journal and the Pittsburgh Post-Gazette. The e-cigarette maker is also considering halting sales in Europe and Asia, reducing its footprint to its core markets of the U.S., Canada and the U.K.
“To better serve our mission, we must prioritize how we use our resources to execute on our long-term, focused approach,” the company wrote in a statement.
It’s the third major shakeup since September as Juul attempts to revamp its strategy in the face of heightened scrutiny of vaping.
The bulk of the cuts will hit Juul’s marketing department. Juul said it would cut 150 jobs and phase out the position of chief marketing officer, adding to 500 reductions announced in October. In total, the company is slashing 650 jobs, or 15 percent of its global workforce.
“As the vapor category undergoes a necessary reset, this reorganization will help Juul Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earning a license to operate in the U.S. and around the world,” Juul CEO K.C. Crosthwaite was quoted as saying.
The company’s future advertising efforts will focus on direct marketing. It’s still enforcing its strategy of avoiding TV, print and online marketing.
Juul said it will continue to invest in its product team as the company explores new technologies to combat underage use. The company has reportedly submitted to the U.S. Food and Drug Administration a new version of its vaporizer designed to unlock only for users at least 21 years old.
Juul’s value has deteriorated as concerns mounted about the health risks of vaping and U.S. regulators pushed for a crackdown on e-cigarettes. Juul was also criticized for selling flavored pods that became popular with teens. Altria, which invested $12.8 billion for a 35 percent stake in Juul in 2018, recently wrote down its investment by $4.5 billion.
September 3, 2020
JTI Extends Partnership With Sauber Engineering

Photo: JTI
Japan Tobacco International (JTI) has extended its technology partnership agreement with Sauber Engineering, a leading player in technology and prototype development and part of the Sauber Group of Companies. Through this partnership, both companies will continue to collaborate on the development of precision engineering projects aimed at increasing the performance of the next generation of JT Group products.

The two companies are currently working on innovative solutions to enhance the user experience of JTI’s vapor products, developing innovative product platforms and new functionalities that respond to the changing demands of consumers to offer them even broader choice. JTI has been in the reduced-risk products category since 2011 and is currently present in 28 countries with its e-cigarette brand Logic and heated-tobacco brand Ploom.
September 3, 2020