Tag: Featured

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Universal Reports ‘Respectable’ Quarter

George C. Freeman III
Universal Corp. reported net income of $7.3 million for the first quarter of fiscal year 2021, which ended on June 30, 2020. Those results were up from $2.1 million in the first quarter of fiscal year 2020.

Excluding certain nonrecurring items, net income declined by $4.3 million for the quarter ended June 30, 2020, compared to the quarter ended June 30, 2019. Operating income of $8.5 million for the quarter increased by $1 million over the previous year’s quarter.

Segment operating income was $4.3 million for the first quarter of fiscal year 2021, down $3.2 million compared to the same period last fiscal year, mainly because of earnings declines in Universal’s Other Regions and Other Tobacco Operations segments.
“Our fiscal year 2021 is off to a slow but respectable start as nearly all of our origins continue to make good progress moving through their various tobacco growing and processing activities. The first fiscal quarter is generally the weakest of our fiscal year given seasonal timing,” said George C. Freeman III, chairman, president and CEO of Universal.

“This fiscal year, as a result of the Covid-19 pandemic, we are also experiencing later openings of the tobacco buying seasons and slower processing due to social distancing and other local government safety requirements,” Freeman added. “We have also had some slower receipts of customer shipping instructions and orders. However, to date, we have not seen a material impact to our supply chain or seasonal planting or harvesting requirements.”

August 6, 2020
Juul Takes Legal Action Against Resellers

Photo: Juul Labs
Juul Labs and its Canadian affiliate, Juul Labs Canada, have filed litigation against a global network of entities and individuals that illegally sourced and resold authentic Juul pods and devices worldwide.
Among the main targets of its legal action are the purveyors of the PodVapes and PodMaster websites, entities based in Canada that acquired Juul products from the U.K., Canada and the U.S. to ship all over the world.
PodVapes, for example, acquired authentic Juul pods from Canada and the U.K. in nontobacco and nonmenthol flavors and shipped them into various states in the U.S. to be illegally resold, according to Juul Labs.
“Through investigations, we have confirmed that PodVapes actively sells diverted Juul pod packs into the U.S.,” Juul Labs wrote in a statement. “PodVapes also shipped Juul devices that were explicitly developed for non-U.S. markets into the U.S. in violation of FDA laws and regulations.”
Juul Labs says evidence of this illicit activity first started to emerge in February 2019. While sales of diverted products were first noticed in the markets of New Zealand and Australia by websites facing those countries, the sales quickly spread to websites facing the U.K. and U.S. and, most recently, Canada.
“As Juul Labs continues to reset the category, it is imperative that the company acts as a responsible partner to regulators and other stakeholders around the world, wherever our products are sold,” Juul Labs stated. “We are committed to aggressively going after bad actors in the vapor category and helping to ensure a responsible marketplace for adult smokers seeking legal alternatives to combustible cigarettes.”
August 6, 2020
Meldrum to Succeed Oberlander at RAI

Guy Meldrum (Photo: BAT)
Ricardo Oberlander
Ricardo Oberlander will step down as president of Reynolds American Inc. (RAI) and from the management board on Aug. 31, 2020. He will leave the BAT group at the end of the year. Oberlander has been with the group for almost three decades, over seven years of which as a member of the management board, firstly as regional director of the Americas and then latterly leading Reynolds American. Oberlander steps down to pursue other opportunities.
Guy Meldrum, currently regional director of Asia-Pacific and Middle East, will succeed Oberlander as president of Reynolds American effective Sept. 1, 2020.
Michael (Mihovil) Dijanosic, currently area director of Asia-Pacific, will be appointed regional director of Asia-Pacific and Middle East, replacing Meldrum.
“I am grateful for the drive and leadership that Ricardo has brought to the group throughout his career and for leaving the Reynolds American business in such robust shape,” said BAT Chief Executive Jack Bowles. “I would like to thank Ricardo for his significant contribution over the last three decades, including over seven years as a member of the management board. We all wish him the very best for the future.
“Guy’s extensive experience with BAT over the last 26 years, including a number of senior roles in Australasia, the North Asia Area, Russia and his recent experience in leading the Asia-Pacific and Middle East Region, will serve him well to further drive the transformation of Reynolds American.
“I am delighted to welcome Michael, who has over two decades of experience with the group, to the management board. He has held a number of senior leadership roles in Asia-Pacific across different markets and has been a member of the regional leadership team since 2012. This in-depth knowledge of the region positions him extremely well to succeed Guy.”
August 5, 2020
State Flavor Ban Drives Users Elsewhere

Photo: Miriam Doerr | Dreamstime.com
Massachusetts’ ban on the sale of flavored tobacco products has shifted rather than reduced tobacco consumption, according to Ulrik Boesen, senior policy analyst with the Center for State Tax Policy at the Tax Foundation.

On June 1, Massachusetts’ ban on the sale of flavored tobacco products, including menthol cigarettes, took effect. At first sight, early data suggests a public health success: sales of cigarette tax stamps in the Bay State have declined 9.2 percent in the first half of 2020 compared to the same months last year.

However, sales of tax stamps in the Northeast region (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) have remained stable in the first half of 2020, suggesting Massachusetts consumers are now buying their tobacco products in neighboring states.

From Jan. 1, 2020, to June 30, 2020, 311,848,000 stamps were sold in the region. For the same period in 2019, that number was 311,974,000. For June alone, sales actually increased from 53,877,000 in 2019 to 63,449,000 in 2020.

Tobacco tax collections, too, have shifted elsewhere, according to Boesen. In December last year, the Massachusetts Department of Revenue estimated the ban would decrease collections by $93 million in 2021. That revenue is now being collected by Massachusetts neighbors.

“It is not in the interest of Massachusetts to pursue a public health measure that merely sends tax revenue to their neighboring states without improving public health,” writes Boesen. “In addition, the ban on flavored tobacco highlights the complications of contradictory tax and regulatory policy, the instability of excise taxes that go beyond pricing in the cost of externalities, and the public risks of driving consumers into the black market through excessive taxation or regulation.”
August 5, 2020
Zimbabwe: Output Expected to Stay Firm

Photo: Taco Tuinstra
The Zimbabwean tobacco industry expects leaf production to hold up despite the Covid-19-related restrictions on movement and a ban on cigarette sales in neighboring South Africa, reports The Herald.
“I don’t foresee any marked change, which would lead to a reduction in the production of tobacco in Zimbabwe,” Paul Zakariya, director of the Zimbabwe Farmers Union, was quoted as saying.
“Covid-19 is just one among other major factors that may affect production,” he added, pointing to other challenges such as the rising cost of inputs.
Tobacco farmers and tobacco auctions were exempted from Zimbabwe’s lockdown and curfew regulations. To limit large gatherings of people, smaller deliveries of leaf were combined into larger ones for transport to the sales floors. And instead of attending the sales process in person, groups of farmers sent representatives. (Also see our June 2020 feature story “Silent Auction”).
The global tobacco market will reach $66,42 billion (in retail prices), increasing at an average of 2.6 percent a year between 2019 to 2024, according to a recent report published by Research and Markets.
Despite a drought in the 2018-2019 cropping season, Zimbabwe still managed to produce a record-breaking tobacco output, reaching an all-time high of 258 million kg.
In the current marketing season, farmers have so far sold 159 million kilograms of tobacco worth $390 million as trading reaches its peak under the World Health Organization Covid-19 health guidelines.
The Tobacco Industry and Marketing Board expects farmers to produce about 224 million kg of tobacco are expected this season, down from the previous year’s output level of 259.5 million kilograms owing largely to drought.
August 4, 2020
Malaysians Want Action on Black Market

Photo: Alex Gresbek from Pixabay
Ninety-seven percent of Malaysians would want the government to take immediate action against illicit tobacco sales, reports The New Straits Times, citing a nationwide survey conducted by British American Tobacco (BAT).
The black market for tobacco products causes the government to miss out on more than MYR5 billion ($1.178 billion) in tax collections, according to BAT.
The survey noted that an overwhelming majority (88 percent) of Malaysians believe the tobacco black market was impeding the nation’s Covid-19 economic recovery.
Participants in the survey said the top three factors sustaining the illegal tobacco sales are corruption (38 percent), high excise duties (27 percent) and insufficient resources for enforcement agencies to tackle the issue (19 percent).
BAT Malaysia Managing Director Jonathan Reed said the company welcomed the enthusiastic response to its Stop the Black Market campaign.
Since going live on July 6, 2020, the campaign’s website has had more than 30,000 unique visits.
Tobacco Reporter covered Malaysia’s struggle with illicit trade in its February issue.
August 4, 2020
Former PMI Strategist to Lead Taat Lifestyle

Setti Coscarella (Photo courtesy of Taat Lifestyle & Wellness)
Taat Lifestyle & Wellness has appointed Setti Coscarella as its chief executive officer as the company prepares for the launch of its Beyond Tobacco cigarettes in the fourth quarter of 2020.

Previously, Coscarella was a lead strategist for reduced-risk products (RRPs) at Philip Morris International (PMI). His leadership and execution at PMI led to the launch of numerous initiatives that collectively yielded a fivefold increase in leads and purchases for RRP.

Beyond Tobacco cigarettes contain a proprietary blend of tobacco flavoring but no nicotine and no tobacco. The product has been designed to offer a user experience that closely resembles that of smoking a traditional cigarette, featuring a familiar traditional “stick” format and cigarette-style packaging.

Each stick contains at least 50 mg of cannabidiol, which has been shown to mitigate tobacco withdrawals and reduce dependency upon tobacco. Beyond Tobacco is to be offered in an “original” and a menthol variety.

“The molecule in our tobacco-free and nicotine-free cigarettes is delivered in a near-identical format to legacy tobacco products, and I strongly believe that smokers would be eager to make the switch if presented with the option,” said Coscarella.

“The early-stage market research results for Beyond Tobacco reflect an extraordinary reception of the product among smokers, and I am very eager to be in the driver’s seat of Taat as we approach the planned launch of Beyond Tobacco in Q4 2020.”
August 4, 2020
BAT Vaccine May Start Clinical Trials Soon

Image: Gerd Altmann from Pixabay
British American Tobacco’s (BAT) experimental Covid-19 vaccine may start clinical trials within weeks, reports Bloomberg, citing BAT Chief Marketing Officer Kingsley Wheaton.
The maker of Lucky Strike cigarettes said it expects a response from U.S. Food and Drug Administration (FDA) any day now.
Kingsley Wheaton
“We’re optimistic,” Wheaton said. “It’s an important part of our strategy to try and build a better tomorrow.”
In April BAT announced it was developing a Covid-19 vaccine from tobacco leaves and could produce 1 million to 3 million doses per week if it got the support of government agencies and the right manufacturers.
Earlier this year, BAT submitted a pre-investigative new drug application to the FDA. It is also talking with other government agencies about the vaccine.
Multiple companies from a variety of sectors have been racing to develop a vaccine for Covid-19, with some of the vaccines already in human trials. Experts have suggested that a Covid-19 vaccine could take 12-18 months to develop.
BAT said it has committed funds to conduct clinical trials. The company has reportedly also invested in additional equipment to boost capacity. The company’s investment in a Covid-19 vaccine were covered in-depth in Tobacco Reporter’s June issue.
Medicago, a biotechnology company partly owned by Philip Morris International, is also developing a plant-based vaccine that could be available in the first half of 2021.
There are 24 vaccine candidates in clinical trials, though nine out of 10 such programs typically fail during trials, according to the World Health Organization.
August 4, 2020
Campaigning Against Underage Access

Photo: VPZ
The U.K. Vaping Industry Association (UKVIA) has teamed up with Trading Standards to prevent the underage sales of vapor products across the country.
With the support of Buckinghamshire & Surrey Trading Standards, the association has published the Preventing Underage Sales Guide—the first of its kind published by the U.K. vapor industry.
John Dunne
The guide covers current vaping age legislation in England, Wales, Scotland and Northern Ireland; use and best practice enforcement of the Challenge 25 rule; and dealing with the issue of proxy purchasing where an adult buys on behalf of someone under 18. It also advises on different forms of ID that can be accepted and methods of deception to be aware of as well as points to consider with digital age verification.
“The legal age to buy vaping products is 18, and we want to keep it that way by making it as hard as possible for minors to get their hands on vaping devices and e-liquids,” said John Dunne, director at the UKVIA. “This guide is designed to ensure consistency and high-level standards across the industry when it comes to age verification.”
August 4, 2020
India Delays New Health Warnings

Image: PixaBay
The health ministry of India has deferred implementation of its new pictorial health warnings for tobacco products. The new warnings will be enforced from Dec. 1 instead of Sept. 1.

Public health advocates criticized the postponement.

“By delaying the next round of pictorial warnings on tobacco products, the health ministry is not only contradicting its own advisory to hold back tobacco use during the Covid-19 pandemic, it is adversely impacting the motivation of tobacco users to quit while being in conducive environment socially,” said Rakesh Gupta, a consultant working for Tobacco Cessation.

Some 270 million adults in India consume tobacco, which is blamed for more than 1.3 million premature deaths every year.

The Global Adult Tobacco Survey 2016–17 showed that 62 percent of cigarette smokers and 54 percent of bidi smokers said they had thought of quitting because of the mandatory 85 percent pictorial warnings on packs. Forty-six percent of smokeless tobacco users thought of quitting because of warnings on smokeless tobacco products.
August 4, 2020