Tag: Featured

Stories featured at the top of tobaccoreporter.com

Japan: Male Smoking Drops to Historic Low

Photo: Colleen Williams
Fewer than one third of Japanese men are smoking. Male cigarette consumption slipped to 28.8 percent last year, according to the national livelihood survey, a study conducted every three years by the Health, Labor and Welfare Ministry. In 2016, the male smoking figure was 31.1 percent. The female smoking rate fell 0.7 points to 8.8 percent over the same period.

By age bracket, smokers in their 20s saw the biggest drops, with the ratio for men falling 4.1 points to 27 percent and the ratio for women dropping 1.9 points to 8.3 percent.

Most smokers in Japan are in their 40s, with rates of 37.6 percent for men and 13.4 percent for women.

The male smoking rate has been declining since hitting 48.4 percent in 2001. The downtrend is likely driven by growing health awareness and stricter anti-tobacco policies. In April, Japan banned smoking indoors at restaurants, offices, in hotel lobbies and other public places.

The survey of people aged 20 or over counted as smokers those who smoke “every day” or “sometimes.”
August 10, 2020
Universal Welcomes Clearance of Imports

Photo: Taco Tuinstra
Universal Corp. has welcomed a decision by U.S. Customs and Border Protection (CBP) to admit imports from its Limbe Leaf Tobacco Co. subsidiary in Malawi.
On Nov. 1, 2019, CBP issued a withhold release order (WRO) on imports into the U.S. of tobacco from Malawi based on a suspicion that forced labor was used in Malawi to produce the country’s tobacco crop.
Universal Corp. subsequently filed a comprehensive explanation of Limbe Leaf’s supply chain social compliance program, its efforts to identify and minimize the risks of forced labor on contracted farms from which it purchases tobacco in Malawi, and its ability to trace such tobacco once processed and shipped from the shipping vessel back to the individual farms on which it was produced.
CBP evaluated the company’s filing and concluded that Limbe Leaf’s program and on-farm efforts produced evidence that sufficiently supported the company’s claims that tobacco purchased from Limbe Leaf is not produced or harvested using forced labor.
The agency recently confirmed that tobacco imported from Limbe Leaf is again admissible at all U.S. ports of entry.
“Universal Corporation is committed to the sustainable production of tobacco,” said George C. Freeman III, chairman, president and CEO of Universal Corp. “Our commitment is evidenced by our Agricultural Labor Practices program and other sustainability policies, and by the implementation and maintenance of those programs and policies by our operations around the world. We are proud of Limbe Leaf’s dedication to the sustainable production of tobacco in Malawi, and we appreciate CBP’s recognition of those efforts.”
Earlier this year, CBP cleared Malawi tobacco sold by Alliance One International for entry into the U.S.
August 10, 2020
Malawi Takes Heart From IQOS Approval

Photo: Taco Tuinstra
Tobacco growers in Malawi are hoping that recent marketing orders by the U.S. Food and Drug Administration (FDA) for Philip Morris International’s (PMI) IQOS tobacco-heating device will translate into greater demand for their leaf, according to an article in The Nyasa Times.

One of the world’s leading producers of burley tobacco, Malawi has seen demand for its primary export drop in recent years due to growing health awareness and anti-smoking measures worldwide.

In 2019, Malawi realized only about $232 million after selling 160 million kg of all types of tobacco. By comparison, the country earned $361 million from the sale of 192 million kg in 2014.

On July 7, the FDA issued exposure modification orders to PMI, allowing the company tell consumers that IQOS produces fewer harmful and potentially harmful chemicals than combustible cigarettes. Earlier, the agency approved PMI’s premarket tobacco product application, allowing PMI to sell IQOS in the U.S.

The marketing orders are expected to boost demand for IQOS.

Tobacco remains Malawi’s top foreign exchange earner.
August 10, 2020
Processing Factory Planned in Montenegro

Photo: Taco Tuinstra
Novi Duvanski Kombinat Podgorica (NDKP) plans to construct a €12 million ($14.2 million) primary tobacco processing plant in Montenegro. The new facility will employ 30 people and have a production capacity of 900 tons per month, according to NDKP Executive Director Savka Darmanovic.

NDKP will import leaf tobacco because domestic production is insufficient to satisfy the need for raw material, Darmanovic said, adding that the value of the investment would eventually reach €40 million

“The future factory of primary tobacco production is very demanding in terms of technological and spatial conditions and will require additional space in the future,” Darmanovic said. “It is also necessary to define and allocate special capacities for the purchase of raw tobacco, its storage and preparation process,” she added.

In 2016, the Montenegrin government signed a contract for the sale of NDKP to BMJ Industries of the United Arab Emirates. Under the terms of the deal, BMJ will invest €20 million to recapitalize the Montenegrin company, with the bulk of the resources to be spent on the new factory.
August 10, 2020
Eonsmoke Censured for Illegal Sales

Image: Eonsmoke
The Arizona Attorney General’s Office (AGO) obtained a $22.5 million judgment and a permanent injunction against vapor product manufacturer Eonsmoke.

In October 2019, the U.S. Food and Drug Administration (FDA) informed Eonsmoke that it was manufacturing and selling 96 products that did not receive proper FDA approval. Illegal Eonsmoke products, however, continued to be available for sale in retail locations and online to Arizona consumers, according to the AGO. What’s more, Eonsmoke engaged in marketing tactics that targeted underage consumers in Arizona, the agency said.

The AGO filed a consumer fraud lawsuit in January 2020 to stop Eonsmoke from selling illegal vapor products and targeting youth in Arizona.

In February 2020, the Superior Court granted the state’s preliminary injunction request, ordering Eonsmoke to immediately cease the sales of illegal vapor products. On July 27, 2020, the court issued its final judgment against Eonsmoke.

“Eonsmoke is being held accountable for its unlawful conduct in Arizona, including marketing flavored vaping pods to children,” said Arizona Attorney General Mark Brnovich. “If you are an Arizona retailer and have Eonsmoke products on your shelves, they are illegal. This final judgment includes comprehensive injunctive relief, and our office will continue to monitor Eonsmoke’s presence in Arizona and ensure its compliance with all state and federal laws.”

August 10, 2020
Taxpayers’ Group Slams Kiwi Curbs on Flavors
Photo: Duh84bk – Dreamstime.com
New Zealand will enact flavor restrictions and ban vapor product advertising in November, reports the New Zealand Herald.
The country’s House of Representatives passed the Smokefree Environments and Regulated Products Vaping Amendment Bill on Aug. 5—just before the final sitting day in this term of government.
Associate Health Minister Jenny Salesa promised to regulate the industry in November 2018 but didn’t introduced the bill until this year. She described the legislation as the most significant change to the Smokefree Act.
The new law will:
Ban the sale of vaping products to those under the age of 18.
Prohibit advertising the products and encouraging people to buy them in-store.
Limit the sale of all flavors to specialist stores, including online retailers, with shops Like dairies, supermarkets and petrol stations restricted to mint, menthol and tobacco.
Allow specialty stores to continue offering loyalty points and discounts.
Ban vaping in cars with children.
Enable all retailers to display products in-store.
Provide a framework for regulations to be set where people can vape in or outside premises.
Introduce a safety system which would allow the Ministry of Health to recall products, suspend them and issue warnings.
Critics said the new rules are too restrictive and could prompt people using vaping as a smoking-cessation tool to turn back to cigarettes.
“The vaping regulations rushed through under urgency are an absolute boon for the tobacco industry,” said Jordan Williams, spokesman of the New Zealand Taxpayers’ Union. “Decreasing the availability of appealing alternatives to cigarettes will keep disproportionately poor New Zealanders on the durries, paying a massive price in excise tax and devastating health outcomes.
“The range of appealing flavors is one of the key attractors for smokers transitioning off cigarettes,” he said. “When someone walks into a convenience store and is denied access to flavored vape liquid but can still buy their favorite cigarette brand, they’re at risk of falling off the wagon. And a complete ban on advertising for vaping products will prevent these brands from appealing to smokers to make the switch,” said Williams.
August 7, 2020
KT&G Start Exports to Russia Under PMI Deal

Photo: KT&G
KT&G started exporting its Lil tobacco heating devices to Russia last month, according to The Korea Times. Earlier this year, KT&G and Philip Morris International (PMI) signed an agreement under which PMI would commercialize certain KT&G products outside of South Korea.
During the announcement of its second-quarter results, KT&G confirmed that KRW12.5 billion ($10.54 million) worth of e-cigarette devices were exported to Russia in July.
The partnership is calling for KT&G to export its tobacco heating devices and tobacco sticks worldwide through PMI’s global sales network.
The exports to Russia come as heat-not-burn (HNB) appears to be losing steam in South Korea, with category penetration decreasing for the second consecutive quarter. The rate stood at 13 percent at the end of last year but declined to 12.6 percent in the first quarter and 12.4 percent in the second quarter.
The company, however, said this does not mean a deadlock in HNB products’ growth, citing the expansion in overseas markets.
“From a future business standpoint, the overall heat-not-burn tobacco market is expected to grow,” a company spokesperson was quoted as saying. “When the new products are introduced, the market is bound to grow. While there would be some minor impact from governments’ policies and market events, there is no doubt about the growth trajectory.”
KT&G said conventional tobacco sales this year will likely exceed its annual goal set earlier as demand remains strong. In exports, the firm has already secured shipping volume destined for Middle Eastern markets in the second half of the year, while other overseas markets are showing signs of recovery from the impact of Covid-19.
KT&G reported KRW1.32 trillion in consolidated sales during the latest quarter, up 4.8 percent from a year earlier. But the operating profit contracted by 1.1 percent year-on-year to KRW394.7 billion, due to the decline in duty free sales.
Overseas tobacco sales increased by 14.1 percent to KRW286.4 billion, as its main export markets in the Middle East show solid recovery. The company expected growth will continue as its sales are increasing in Latin South America and Africa.
KT&G’s international ambitions were examined in-depth in Tobacco Reporter’s June 2020 issue.
August 7, 2020
Tant to Retire From Imperial Brands

Oliver Tant (Photo: Imperial Brands)
Imperial Brands Chief Financial Officer Oliver Tant will retire from the company once a successor is found, reports Reuters.
The move comes just a month after Stefan Bomhard, a former executive of car dealer Inchcape joined the cigarette maker as chief executive officer.
In May, Imperial Brands cut dividend for the first time since listing in 1996 as it looks to save cash amid the coronavirus pandemic and reduce its £14 billion ($18.31 billion) debt.
Imperial Brands is reportedly looking for an external replacement for Tant, who has been CFO since November 2013.
Imperial Brands reported revenue of £35.56 billion ($47.16 billion) in its fiscal year 2020, up from £31.59 billion in 2019. Its operating profit was £2.73 billion, compared with £2.2 billion the previous year. On an adjusted basis, the company’s revenue was £7.99 billion in 2020, down 0.1 percent from 2019. Adjusted operating profit was £3.53 billion, against £3.74 billion the previous year.
While benefiting from strong tobacco volumes, Imperial Brands said it suffered from a sub-optimal product and market mix in 2020. However, a more disciplined approach in next-generation products reduced second-half losses after a disappointing first six months, the company added.
August 7, 2020
Nat Sherman to Close Premium Cigar Business

The Entrance to the historical Nat Sherman Townhouse in Manhattan (Photo: Askoldsb | Dreamstime)
Nat Sherman will shut down its premium cigar businesses by the end of September.
The 90-year-old company will close both its wholesale cigar business and the company’s iconic New York City retail location known as the Nat Sherman Townhouse.
Altria Group, which purchased Nat Sherman in 2017, had wanted to sell the premium cigar business but reached no deal despite initial interest from buyers.
“We worked hard to successfully transition Nat Sherman International to a new home,” said Jessica Pierucki, general manager and managing director for Nat Sherman. “The Covid-19 pandemic created new challenges that were unfortunately too big to overcome.”
“Leading what has become Nat Sherman International’s final chapter these last nine years has been the honor of a lifetime,” said Michael Herklots, vice president of Nat Sherman International. “Hopefully, our premium cigars will live on in the humidors of our greatest fans and be appreciated with fond memories for many years to come.”
Nat Sherman International includes the retail store as well as the wholesale premium cigar and pipe company. The cigarette portfolio is handled by a different Altria division and is not affected by the closure.
August 6, 2020
Bhutan to Tolerate Tobacco Sales

Photo: Taco Tuinstra
The decision by Bhutan’s government to allow the opening of tobacco sale outlets in the country is consistent with the nation’s Tobacco Control Act and constitution, according to the Office of the Attorney General (OAG).

While the Tobacco Control Act of 2010 restricts the domestic sale and purchase of tobacco products, it allows individuals to import tobacco for personal consumption.

Because of the coronavirus crisis, however, Bhutan has closed official border crossings, boosting illegal imports. By allowing limited domestic sales, the government hopes to crack down on smuggling.

Responding to critics who questioned the legality of the measure, the OAG said the extraordinary situation brought about by the coronavirus crisis justified the measure. However, the office insisted that the domestic sales outlets could be tolerated only for the duration of the pandemic.
Bhutan banned tobacco sales in December 2004. Soon after, Tobacco Reporter visited the Himalayan kingdom to report from the world’s first officially smoke-free nation.
August 6, 2020