Tag: Featured

Stories featured at the top of tobaccoreporter.com

Cigarette Sales Up in South Korea

Photo: KT&G
Sales of cigarettes in South Korea rose 3.8 percent in the first half of 2020, according to data compiled by the Ministry of Economy and Finance.

South Korean smokers purchased 34.8 billion cigarettes from January until June, compared with 33.4 billion cigarettes in the same period last year.

Meanwhile, sales of heat-not-burn tobacco products fell 6.6 percent to 180 million units in the first half of 2020. Sales of e-cigarettes plunged 80.3 percent to 1.2 million pods during the period as the government strongly advised people against vaping.

The longer-term trend of tobacco sales remains firmly downward. Compared with the first half of 2014, cigarette sales declined 14.7 percent.

In January 2015, South Korea increased the price of cigarettes by 80 percent to KRW4,500 ($3.76). In 2016, it required tobacco companies to place graphic images depicting the harmful effects of smoking on cigarette packs.
August 4, 2020
JT Requests Permission to Raise Prices

Photo: Colleen Williams
Japan Tobacco (JT) has applied to the Ministry of Finance for approval to amend the retail prices of its tobacco products in Japan in conjunction with the planned excise tax increase on Oct. 1, 2020, and the increase of excise tax on tobacco vapor products.
The company has applied for the retail price amendment for a total of 224 products, including 136 cigarette products, 16 cigarillo products, three pipe tobacco products, three cut tobacco products, 18 snuff tobacco products and 48 tobacco vapor products.
The proposed retail prices will take effect on Oct. 1, 2020, subject to approval from the Ministry of Finance.
August 3, 2020
U.S. Clears Limbe Leaf Imports From Malawi

Photo: Taco Tuinstra
U.S. Customs and Border Protection (CBP) has cleared tobacco imports from Malawi by Limbe Leaf Tobacco Co.
As of July 31, tobacco imported from Limbe Leaf is again admissible at all U.S. ports of entry. CBP previously denied these tobacco imports entry into the United States based on suspicion that they were produced using forced labor.
CBP lifted its ban based on a rigorous evaluation of Limbe Leaf’s social compliance program and efforts to identify and minimize the risks of forced labor from its supply chain. According to the agency, these actions produced evidence that sufficiently supports the company’s claims that tobacco from its farms is not produced and harvested using forced labor.
Earlier this year, CBP cleared Malawi tobacco sold by Alliance One International for entry into the U.S.
August 3, 2020
BAT Uganda ‘Resilient’ in Difficult Environment

Photo: Taco Tuinstra
British American Tobacco Uganda (BATU) reported first-half 2020 results with gross revenue down by 12 percent to UGX76 billion ($20.6 million) and pre-tax profits at UGX9.9 billion.
“I am pleased to report that BAT Uganda’s business continues to show resilience despite the difficult operating environment in the country,” said BATU Managing Director Mathu Kiunjuri.
“With rising unemployment and a significant increase in the cost of various basic consumer goods, the [Covid-19] pandemic has left many consumers more cash stretched than ever. Additionally, the closure of retail outlets led to constrained consumer access to our products. Despite these challenges, our business continues to be resilient due to prudent cost management measures undertaken to mitigate the decline in revenue.”
July 31, 2020
BAT: Higher Profits on Lower Volumes

Photo: BAT
British American Tobacco (BAT) reported its 2020 second-quarter results on July 31, with profits up 3.3 percent to £5.37 billion ($6.92 billion) and revenues up 1.1 percent to £12.27 billion.
BAT reported cigarette volume down 6.3 percent for the quarter, which it attributed to international travel restrictions, although a greater proportion of higher priced cigarette sales contributed to the higher revenue figure.
BAT highlighted its “new categories” revenue growth of 14.7 percent, which includes 9.1 percent growth for heat-not-burn tobacco products, 41 percent growth in vapor products and 67 percent growth in “modern oral” products.
BAT’s Kentucky BioProcessing division continues to work on a Covid-19 vaccine with its clinical trial awaiting approval from the U.S. Food and Drug Administration
July 31, 2020
Bhutan Targets Tobacco Smuggling

Photo: Taco Tuinstra
The Bhutan government met on July 30 to discuss ways to combat tobacco product smuggling on the nation’s borders.
Prime Minister Lotay Tshering noted that tobacco product smuggling has been one of the major illegal activities in the country as more than 30 individuals are arrested each day for this crime.
Bhutan bans the sale of tobacco products but not their import. The government is proposing to introduce a scheme to allow people to purchase their tobacco products at the nation’s duty-free outlets but with the nation’s 100 percent excise tax included in the purchase price.
Currently, an individual who enters Bhutan is permitted to carry 800 sticks of cigarettes or 1,200 sticks of bidis or 150 pieces of cigars or 750 grams of other tobacco or tobacco products in a month after paying the excise tax.
July 31, 2020
Combustibles Outperform E-Cigarettes

Photo: Tobacco Reporter archive
Traditional cigarette sales in the U.S. have continued to do better than those of e-cigarettes during the coronavirus pandemic. Overall sales volume for combustible cigarettes was down 0.2 percent for the four-week period ending July 11 while e-cigarette sales were down 13.2 percent, according to Nielsen data.
David Sweanor
The drop in e-cigarette sales follows more regulation on the products from the U.S. Food and Drug Administration. “It is deeply ironic that the credit for the recovery of the cigarette business from a near-death experience a little over a year ago can be credited to the Centers for Disease Control and Prevention, Michael Bloomberg and the others who pushed an abstinence-only agenda on nicotine,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette studies.
“By undermining the low-risk alternatives to cigarettes, they protected the cigarette business.” When the stay-at-home orders were first issued, combustible cigarette sales increased 1.1 percent for the week ending March 22.
July 31, 2020
Japan Tobacco Lowers Forecast

Photo: Tobacco Reporter archive
Japan Tobacco’s (JT) reported revenue of ¥1.03 trillion ($9.84 billion) in the first six months of 2020, 2.7 percent less than in the first half of 2019. Growth in the international tobacco business was unable to offset declines in other business, according to the company. JT estimates the Covid-19 pandemic to have had an unfavorable impact on its business of around ¥35 billion.
JT’s adjusted operating profit was ¥287.6 billion over the six months (down 0.1 percent over the 2019 period) while its operating profit declined by 19.1 percent to ¥252 billion. Profit declined by 23.8 percent over the reporting period.
The company enjoyed significant favorable pricing gains in the international business, but robust currency-neutral performance was offset by stronger currency headwinds than initially assumed.
Operating profit and profit were impacted by a non-recurring one-time 2019 gain in JT’s pharmaceutical business, along with higher financing cost.
Volume trends in Japan returned to levels prior to the Covid-19-related state of emergency declaration after significant declines in April and May.
Anticipating lower tobacco volumes due to the Covid-19 impact and stronger currency headwinds, JT adjusted its fiscal 2020 forecast downward. The company now anticipates revenue of ¥2.01 trillion and adjusted operating profit of ¥457 billion for the full year.
“Although the tobacco industry was not immune to the impact of the pandemic, our performance was resilient during the first half of 2020,” said Masamichi Terabatake, president and CEO of the JT Group. “JT Group maintained solid business momentum and delivered robust growth in adjusted operating profit at constant currency driven by pricing gains in the international tobacco business.
“We have revised our forecasts based on reasonable assumption to date considering the current momentum, business environment and widening impact of currency volatility among other aspects. We believe that our solid business momentum will continue, despite of the Covid-19 challenges on our top-line.”

July 31, 2020
Japan Tobacco to Move Tokyo Headquarters

Photo: Taco Tuinstra
Japan Tobacco’s new headquarters
Japan Tobacco (JT) will relocate its headquarters to a new location in Tokyo on Oct. 5.
The new address is: Kamiyacho Trust Tower, 24-6, Toranomon 4-chome, Minato-ku, Tokyo.
JT will lease the 26th to 30th floors of the building and occupy 19,253.06 square meters of office space.
The company has approximately 62,000 employees in more than 130 countries.
July 31, 2020
Kazakhstan Strengthens Tobacco Controls

Photo: Tobacco Reporter archive
A comprehensive set of tobacco control measures has been adopted after the president of Kazakhstan, Kassym-Jomart Tokayev, approved the legislation on July 8, 2020.

Under the new legislation, the definition of tobacco products has been expanded to include all nicotine products, such as e-cigarettes and heated-tobacco products. The law also bans the import, production, sale and distribution of smokeless tobacco products.

The list of smoke-free places has been expanded, now including bus stops, outdoor playgrounds, underground walkways, transit areas and cars with children inside. Using new products in these places is also banned, and waterpipes are not allowed to be used in public; they are only allowed in homes.

Fines have been increased.
Manufacturers must now disclose information on the content of all nicotine-containing products, and the size of pictorial health warnings has increased. Tobacco products cannot be displayed at point-of-sale, and the purchase age has been raised to 21 years.
July 31, 2020