Tag: Featured

Stories featured at the top of tobaccoreporter.com

  • France Bans the Online Sale of Nicotine Products

    France Bans the Online Sale of Nicotine Products

    Image by lydia-threads from Pixabay

    France has banned online sales of nicotine gum and patches after researchers suggested that nicotine may help protect against the coronavirus, reports the BBC. Sales of nicotine products are now restricted to pharmacies.

    The French government says people will be allowed to buy only one month’s supply of these products, with pharmacies registering buyers.

    The goal is to stop people putting too much nicotine into their bodies and to protect the supply for people who need it.

    Last week, data from a Paris hospital indicated that smokers were statistically less likely to be admitted for treatment for Covid-19.

    The revelation triggered a run on nicotine products.

    The theory that nicotine could play a role in blocking the virus is due to be tested at a hospital in Paris, using nicotine patches.

    The government’s chief health official said the study was interesting but warned that smoking killed 75,000 people a year in France.

    The official also warned that smokers who did become infected with coronavirus tended to have more serious symptoms.

    France has reported nearly 22,000 coronavirus-related deaths since the start of the outbreak earlier this year.

  • Court Extends Deadline for Premarket Applications

    Court Extends Deadline for Premarket Applications

    Tobacco and vapor companies have an extra four months to file their premarket tobacco applications (PMTAs) for newly deemed tobacco products with the Food and Drug Administration (FDA) following a U.S. court ruling.

    On July 12, 2019, the United States District Court for the District of Maryland ordered the FDA to require manufacturers of e-cigarettes, cigars and other deemed new tobacco products that were on the market as of Aug. 8, 2016 to submit applications for premarket review by May 12, 2020.

    However, the coronavirus pandemic has drastically impaired the FDA’s ability to adhere to this timeline. As a result of the pandemic and these exceptional and unforeseen circumstances, the agency requested on March 30 a 120-day extension of the May 12 deadline. This request has now been granted.

    The court order means applications for premarket review for many e-cigarettes, cigars and other new tobacco products are now required to be filed by Sept. 9, 2020. Consistent with the original court order, for companies that submit timely applications, the agency may continue to exercise enforcement discretion, meaning their products would generally continue to be marketed without being subject to FDA enforcement actions, for up to one year from the deadline (up to Sept. 9, 2021), unless a negative action is taken by the FDA on an application during that time.

    Following the Covid-19 outbreak, the agency received numerous inquiries from the tobacco industry expressing concern they would be unable to complete premarket applications by the original May 12 deadline due to disruptions at all stages of preparation, including preventions or disruptions to in-person laboratory work and clinical studies or necessary foreign travel, or from the shuttering of manufacturing facilities abroad.

    In a statement, the FDA said it believes the public health is better protected by not having these firms compromise their employees’ health or take actions that would risk spreading Covid-19 to others by trying to meet the previous May 12 deadline. In the more than a dozen requests for an extension that the FDA received, this public health concern was mentioned repeatedly.

    Another consideration, according to the agency, was that a number of the FDA’s Center for Tobacco Products (CTP) personnel have been deployed to work on Covid-19 pandemic issues for the U.S. Public Health Service (PHS), leaving fewer staff to process applications. Many of those deployed are among the staff that had been playing a critical role as CTP prepared for this deadline.

    “Ultimately, a Sept. 9 deadline will better serve the public health by allowing manufacturers to prepare for, and the agency to conduct, the thorough scientific review of these products that is required under law and vital to our mission of protecting Americans while reducing or eliminating physical contact during this critical period,” the FDA wrote in its statement.

    “Importantly, this new deadline does not detract from our efforts to prioritize enforcement of certain e-cigarette products currently on the market. Although the FDA’s in-person compliance checks and vape shop inspections are currently on hold due to the pandemic, review of previous inspections continues, and we continue to monitor the online marketplace and will take action as appropriate.

    “Accordingly, the January 2020 enforcement priorities guidance, which independently prioritizes earlier enforcement against certain e-cigarette products that are widely used by youth, remains in effect regardless of whether an application is submitted, although we intend to update it for products for which the Sept. 9 date now applies.”

  • Scandinavian Integrates Agio, Trims Workforce

    Scandinavian Integrates Agio, Trims Workforce

    Photo: Scandinavian Tobacco Group

    Scandinavian Tobacco Group (STG) has completed the plan for the integration of Agio Cigars, following the acquisition of Agio Cigars on Jan. 2, 2020.

    The combination of STG and Agio Cigars is expected to deliver substantial cost synergies within sales and marketing, production and back office functions. When full integration has been completed by the end of 2022, it is assumed that Agio Cigars will contribute to an increase in STG’s EBITDA margin before special items of more than 2 percentage points based on estimates of net synergies at the level of DKK225 million ($32.4 million).

    In reaching the synergies, special costs are estimated at the level of DKK450 million with cash impact and another DKK175 million in the form of noncash impairments related to factory closures, including write-down of buildings. Any amounts from the sale of property and buildings from closed-down factories are not included due to uncertainty about timing and sales prices.

    STG is changing its organizational structure as part of the integration. The company is moving from four to three commercial divisions and intends to close three production sites and upgrade two others. Financial reporting reflecting the new structure will begin from the second quarter of 2020.

    STG will close production facilities in Eersel and Duizel in the Netherlands and move the production to its other production facilities over the next nine months to 18 months. The production facilities in Moca in the Dominican Republic will be closed in the near future. Following the changes, around 800 employees are expected to be laid off. STG has approximately 11,000 employees.

    Niels Frederiksen

    “The changes we announce today are a step further in our transformation of Scandinavian Tobacco Group,” said Niels Frederiksen, CEO of STG. “They impact most parts of our organization as we build a more competitive and profitable business with a powerful brand portfolio, strong market positions and robust supply chains. It is an investment in our future and addresses the need for continuous optimization to remain competitive and succeed in tough market conditions. Regrettably, the changes also necessitate that we part ways with a number of hard-working and valued colleagues. I would like to thank every one of them for their efforts and dedication over the years.”

    STG expects to provide an update on the financial guidance for 2020, including Agio Cigars, as soon as the negative impact of Covid-19 on the business can be properly assessed. 

  • Nicotine Patches to Be Tested on Coronavirus Patients

    Nicotine Patches to Be Tested on Coronavirus Patients

    Photo: Meryll | Dreamstime.com

    French researchers are planning to test nicotine patches on coronavirus patients and frontline workers following a study suggesting smokers are less likely to catch the virus according to The Guardian.

    The Paris-based study suggests that something in tobacco helps prevent smokers from contracting the virus, but researchers say they are not encouraging people to take up smoking; cigarette smoke causes damage to the lungs, which can cause individuals who have contracted Covid-19 to suffer more severe symptoms.

    Jean-Pierre Changeux, a renowned French neurobiologist, suggested nicotine may stop the virus from reaching cells in the body. Nicotine may also lessen the overreaction of the immune system that has been seen in the most severe Covid-19 cases.

    The results coincide with a Chinese study showing that only 12.6 percent of 1,000 infected individuals were smokers whereas the national smoking rate is around 28 percent. In Paris, 8.5 percent of 11,000 Covid-19 patients were smokers while the total number of smokers in France is about 25.4 percent.

    “Our cross-sectional study strongly suggests that those who smoke every day are much less likely to develop a symptomatic or severe infection with Sars-CoV-2 compared with the general population,” the report authors wrote. “The effect is significant. It divides the risk by five for ambulatory patients and by four for those admitted to hospital. We rarely see this in medicine.”
     

  • Court Rejects Challenge to Traceability Rules

    Court Rejects Challenge to Traceability Rules

    The EU Court of Justice (EUCJ) has rejected a legal challenge brought by the International Tax Stamp Association (ITSA) against the EU Tobacco Products Directive (TPD).

    Brought in the 2018, the ITSA claim contends that that the TPD implementing regulations on traceability and security features do not conform to the World Health Organization (WHO) FCTC Protocol to Eliminate Illicit Trade in Tobacco Products.

    The association believes that the TPD implementing regulation contravenes the FCTC Protocol’s Article 8. This article requires that the track-and-trace system for tobacco products is under government control, that duties should not be performed by or delegated to the tobacco industry and that public officials should interact with the tobacco industry and those representing its interests in tobacco track and trace only to the extent strictly necessary.

    In May 2019, the EUCJ dismissed the claims on the grounds that ITSA could not challenge the EU track and trace system because it did not have “a direct interest” in the TPD implementing regulation.

    The ITSA subsequently appealed this ruling citing the EUCJ’s “misunderstanding of certain basic facts”—but the appeal has now been rejected

    Juan Yanez

    ITSA Chairman called the ruling disappointing and curious. “The EUCJ determined that ITSA has no material interest in the directive’s derived regulation and the association’s claim was therefore not admissible,” he said. “ITSA members are independent of the tobacco industry and provide traceability systems as part of effective anti-illicit trade program, so how is it possible that ITSA and its members do not have a material interest in the regulations?”

    The FCTC Protocol to Eliminate Illicit Trade in Tobacco Products came into force in 2018 and track-and-trace provisions must be implemented by its parties by 2023. The WHO has yet to define detailed requirements, which are scheduled to be discussed at the second Meeting of the Parties to the Protocol later this year.

     The European Commission has committed to a review of the TPD in 2021.

  • Leaf Sales Commence in Malawi

    Leaf Sales Commence in Malawi

    Photo: Taco Tuinstra

    Maximum prices for contract tobacco reached $2.30 per kg while noncontract leaf fetched $1.20 on the first day of the tobacco selling season in Malawi.

    Minister of Agriculture and Irrigation Francis Kasaila on Monday officially opened the 2020 marketing season at Lilongwe Auction Floors with a secret price-bidding exercise.

    With the social distancing measures to combat the coronavirus, only about 3,000 tobacco bales will be put up for sale daily. In past years, about 10,000 bales would be put up for sale per day.

    In his remarks, minister Kasaila urged the stakeholders to work with farmers to make sure that they produce high-quality leaf.

    He expressed his optimism that this year’s marketing season will be good and satisfactory despite the Covid-19 pandemic. 

    The minister further commended the Tobacco Commission, Auction Holding Limited (AHL) and the tobacco-buying companies for taking proactive measures against the virus pandemic as evident in the availability of sanitizing and hand-washing materials at the floors and around the AHL premises.
     

  • PMI: Strong Quarter Amid Uncertainty

    PMI: Strong Quarter Amid Uncertainty

    Philip Morris International (PMI) reported net revenues of $7.15 billion in the first quarter of 2020, up from $6.75 billion in the 2019 first quarter. Operating income was $2.79 billion in the 2020 quarter compared to $2.05 billion in the comparable 2019 period.

    PMI sold 173.75 billion cigarettes and heated-tobacco units during the 2020 first quarter, down from 175.8 billion during the 2019 first quarter. The number of cigarettes shipped declined from 164.3 billion sticks in the first quarter of 2019 to 157.02 billion sticks in the first quarter of 2020. The number of heated-tobacco units, by contrast, increased from 11.5 billion units to 16.73 billion units between the two quarters.

    “We started the year with a very strong first quarter, reflecting continued structural growth momentum driven by our smoke-free portfolio and favorable combustible tobacco pricing,” said Andre Calantzopoulos, chief executive officer. “We experienced a limited impact on our performance from the early stages of the Covid-19 pandemic as the onset of government restrictions related to social distancing and travel were generally only implemented in our key markets over the course of March.

    “We expect that the pandemic will have adverse impacts on our full-year 2020 business results. Those already observable relate to a severe reduction of our duty-free sales, slower IQOS user acquisition and delayed minimum price enforcement in Indonesia. We also have to assume that, in certain markets, unemployment and related reductions in disposable income will have a temporary impact on market dynamics or the ability of certain small retailers to operate.”

    PMI indicated that it maintains enough inventory of inputs and finished goods and does not expect to see a disruption to its supply. Most of PMI’s manufacturing facilities are operational, including all heated-tobacco unit facilities, but manufacturing facilities representing 20 percent of its cigarette production are closed. However, PMI has over two months’ supply of heated-tobacco units, three months’ supply of IQOS devices and 1.5 months’ supply of cigarettes.
     

  • South Africa Cigarette Ban Challenged

    South Africa Cigarette Ban Challenged

    Photo: Taco Tuinstra

    The Fair-trade Independent Tobacco Association (FITA) plans to mount a legal challenge against South Africa’s temporary ban on cigarette sales, which was implemented to help prevent spread of the coronavirus.

    “The simple truth is that the current situation cannot be endured for much longer by the various role-players along the tobacco industry value chain without severe consequences for all,” said FITA Chairman Sinenhlanhla Mnguni. 

    “Allowing the current situation to continue indefinitely will in all likelihood lead to job losses and/or loss of income for many along the tobacco industry value chain,” he added.

    Mnguni pointed out that people had started being assaulted and murdered for cigarettes. “We are also seeing the illicit trade flourish whilst the legitimate tobacco industry is prevented from participating,” he said, adding that the government is missing out on some ZAR1.5 billion ($79.01 million) a month in excise tax revenue alone.

    “This at a time when we are already dealing with huge deficits as far as our tax collections are concerned with the recent announcement that the South Africa Revenue Service collected ZAR66.2 billion less than estimated for the last financial year,” said Mnguni.
     

  • Menthol Ban: Industry Asks  More Time

    Menthol Ban: Industry Asks More Time

    Tobacco industry representatives are talking to the European Union about postponing the deadline to sell off stock that does not comply with the upcoming ban on menthol cigarettes and new track-and-trace requirements.

    On May 20, two new EU directives are set to come into effect. Article 7 bans the sale of cigarettes with “characterizing flavors” such as menthol. Article 15 requires all tobacco products sold in the EU to comply with track-and-trace rules such as carrying a “unique identifier” to cut down on illicit trade.

    The May 20 deadline was chosen to give suppliers a chance to sell off stock that does not comply with the new rules. Article 15 came into effect in May 2019 but offered a grace period for noncompliant products to be removed.

    The Covid-19 shutdown has left many retailers unable to sell off their noncompliant products and facing losses now that the lockdowns and travel restrictions in many EU countries have been extended into next month.

    The EU Parliament has not commented on a possible extension.
     

  • Controversy About BAT CEO Pay Hike

    Controversy About BAT CEO Pay Hike

    Photo: BAT

    Institutional Shareholder Services (ISS) is recommending that investors oppose British American Tobacco’s (BAT) remuneration report at its annual meeting later this month.

    The proxy advisory firm says support for BAT’s pay report is unjustified because of the increase in CEO Jack Bowles’ salary from £1.18 million ($1.45 million) to £1.29 million. Many leaders at FTSE peers have taken temporary pay cuts because of the Covid-19 outbreak, according to ISS.

    BAT defended the pay increase. “Jack Bowles was appointed on a package that was 21 percent lower than that of his predecessor,” a company spokesman said on Friday.

    “Following the 9.5 percent pay increase for Jack following a very strong first year in role, his total fixed remuneration is still 15 percent lower than his predecessor.”

    The company also noted that its remuneration report had won the backing of Glass Lewis, another proxy adviser.

    BAT has a market value of nearly £68 billion.