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Tag: Germany

  • Luxembourg Sees 17% Surge in Cigarette Sales as Buyers Cross Border

    Luxembourg Sees 17% Surge in Cigarette Sales as Buyers Cross Border

    Legal cigarette sales in Luxembourg jumped by 740 million units in 2024, marking a 17% year-on-year increase, according to a new KPMG report on illicit cigarette consumption across Europe. Despite the surge, only 12% of the 5.1 billion cigarettes sold were smoked within the country, as the remaining 88% were consumed across the border, mostly in Germany, Belgium, and France, where significantly higher tobacco prices continue to drive cross-border purchases.

    Luxembourg’s average cigarette pack price of €5.10 undercuts neighboring countries by up to €3, and is less than half of the cost in France.

    While cigarette consumption is booming, illicit trade remains low. Fewer than 9 million cigarettes consumed in Luxembourg were illicit—just 2% of total consumption. By contrast, France’s illicit cigarette rate has climbed to 38%, among the highest in the EU, as high prices fuel a parallel underground market.

  • Raíces Cubanas Expands into Germany

    Raíces Cubanas Expands into Germany

    Raíces Cubanas entered into an exclusive distribution partnership with Vandermarliere Cigar Family (VCF)/Woermann Cigars to expand its line to Germany, with initial shipments to retailers scheduled for June 16. VCF, the parent company of Oliva and J. Cortès, is known for its strong European network and premium cigar portfolio. The move into Germany represents the brand’s first step into international markets.

    As part of the expansion, two core product lines will be introduced to the German market: Raíces Clasico, available in Robusto (5 x 50), Toro (6 x 52), and Figurado (5 3/16 x 54); and Raíces C5 Black, offered in Robusto (5 x 52), Toro (6 x 52), and Gordo (6 x 60).

    “We are very excited to present the Raíces brand to cigar enthusiasts in Germany,” Ralph Montero, owner of Raíces Cubanas said in a press release. “This is the first step in the expansion of Raíces into cigar markets around the world.”

  • German Study Finds Smokers Unmotivated to Quit

    German Study Finds Smokers Unmotivated to Quit

    A German Study on Tobacco Use (DEBRA) reported that around 30% of the population smoked cigarettes in 2024. The study focused on the habits and thoughts of nearly 1,200 adults who smoked daily and found that 51.2% of people who smoked were not motivated to stop smoking, 29.1% reported an intention to quit in the following year, and the remainder had some desire to quit but had not decided when to try.

    Lack of motivation was highest among people who 65 and older (64.4%) and lowest among those aged 19 to 34 years (38.9%). People with lower socioeconomic status who smoked had less motivation to quit than those with a higher socioeconomic status. In the sample of people who smoke, the barriers to quitting smoking included enjoyment of smoking (50.1%), difficulty in changing habits (41.4%), and lack of discipline (31.2%), with key differences among age groups. Only 27.3% of people who smoke perceived E-cigs/HTPs to have lower health risks relative to cigarettes, versus 84.7% of smoke-free product (SFP) users.

    “The best way to reduce the health risks of smoking is to quit smoking altogether. However, focusing solely on cessation does not acknowledge the real challenges that people who smoke (barriers to quitting) face when trying to quit,” the study concluded. “The survey results, specifically on the lack of motivation to quit, suggest that current tobacco control measures are not effectively motivating the majority of people who smoke in Germany to quit. This study demonstrated that half of the people who smoke surveyed are not motivated to quit, and only 5% plan to quit in the next month. Older segments of the study population (aged 50+) and those in lower-income brackets are even less motivated to quit, with smoking enjoyment being the biggest barrier to quitting, affecting more than 60% of people who smoke and do not want to quit.

    “Lack of motivation to quit smoking and barriers to quitting manifest in different ways, implying that differentiated approaches are required to help people who smoke successfully move away from smoking cigarettes. They should have access to accurate information on the role of combustion-generated toxicants as the primary cause of smoking-related diseases and the relative risks of SFPs compared with continuing to smoke. Sustainably reducing smoking prevalence in Germany will require an integrated strategy that complements the existing tobacco control and prevention measures with tools based on the principles of tobacco harm reduction.”

  • Rebellion Cigars Going to Germany

    Rebellion Cigars Going to Germany

    U.K.-based Rebellion Cigars announced today (March 19) that it has signed an agreement with Royal Cigar Distribution (RCD) of Münster to bring its cigars to Germany.

    “I met [RCD CEO Alex Wehlage] and his team at Intertabac in 2023. Great people with a great understanding of where the cigar market is going in Europe,” said Shaun Wilkinson, co-founder of Rebellion Cigars. “Rebellion smashes the target market and the feedback from the retailers we approached, has been nothing less than superb.”

    The company said that its Rockstar Range will be available in Germany this month and the Country Range will be offered later this year. Rebellion divides its portfolio into two “ranges,” each containing various blends and typically three vitolas per blend.

    “I’ve smoked my first Rebellion cigar at Intertabac in Dortmund,” said Wehlage. “I enjoyed every minute of the Ace of Spade Robusto. A truly great cigar. I’m impressed. The aroma was wonderfully complex and balanced. The story behind the company is amazing and for me, as a rock and metal music fan I love the idea of the cigar names, and I’m thrilled to share the experience with others in Germany.”

  • Philip Morris to Close German Factories

    Philip Morris to Close German Factories

    Image: Evgenia Parajanian

    Philip Morris International is closing two tobacco factories in Germany due to weak demand across Europe, reports Bloomberg.

    The multinational said on Oct. 29 that demand for cigarettes had fallen significantly in recent years and that the trend is likely to continue. Demand for rolling tobacco, made at the company’s Dresden plant, is also in decline.

    PMI employs 372 workers at its factories in Berlin and Dresden, which will close in the first half of next year. Philip Morris said it would begin consultations with employees and work councils, and seek “socially acceptable solutions” for its workforce.

    According to Jan Otten, PMI’s managing director of operations in Germany, the company is constantly reviewing its business processes to ensure operational efficiency. “We are aware that difficult but necessary decisions have to be made in order to adapt to current market developments,” he was quoted as saying in a press note.

    PMI has been working to transition its customers to alternative products such as vapes, heated tobacco and oral nicotine pouches. It has set a target of reaching two-thirds of sales from cigarette alternatives by 2030.

    The announcement comes as Germany’s manufacturing sector is experiencing a prolonged period of weakness, bogged down by high energy costs, weak demand at home and abroad and increased foreign competition.

    The downturn has fueled concern about Germany’s attractiveness as an industrial location.

  • JT to Process HTP Components in Trier

    JT to Process HTP Components in Trier

    The products prepared in Trier will be finalized at a JTI factory in Poland (pictured) Photo: JTI

    Japan Tobacco International is investing about €30 million in its Trier, Germany, factory, reports Tagesschau.

    The company plans to build a new facility that will produce components for heated-tobacco sticks. According to JTI, these products will be prepared in Trier and then integrated into heated tobacco products at a JTI plant in Poland.

    JTI-Trier Plant Manager Peter Kilburg views the investment as a sign of trust in the factory and its workforce.

    According to the company, Trier is the only JTI plant worldwide to establish such a facility. It is expected to be operational in the first quarter of 2026.

    The Trier factory employs about 1,800 people.

  • Germany Revokes Shisha Packaging Rules

    Germany Revokes Shisha Packaging Rules

    Image: ir1ska

    Germany’s finance ministry has revoked its rules for packaging shisha tobacco, which caused major backlash and some retailers to go bankrupt, according to DPA International.

    The packaging regulation was introduced in 2022 to prevent tax evasion, which was a frequent issue in shisha bars. Shisha bars would buy large packages of shisha tobacco and divide them into small portions, which the government said was tax evasion because the bars were paying less in taxes than they should be.

    The packaging regulation subsequently banned 200-gram packs and 1,000-gram packs and only allowed packs to be a maximum of 25 grams. The finance ministry expected an additional tax revenue of €155 million ($165 million) following the restrictions; however, tax income declined as the black market increased.  

    According to DPA, the regulations will be lifted beginning July 1, allowing packs of all sizes to be legal again.

  • Cuban Origin Ruling Final: Court

    Cuban Origin Ruling Final: Court

    Image: fottoo

    The German Federal Court of Justice has ruled that the use of geographical terms of origin “Cuba” and “Habana” and their derivatives “for tobaccos of other origins are inadmissible,” according to Habanos.

    An appeal has been dismissed, and the judgment previously made by the Munich Higher Regional Court ruling that the terms are inadmissible for tobaccos of other origins is final. No further appeals are possible.

    The lawsuit was in response to “unauthorized” and “misleading” use of terms such as “Habano Seed,” “Piloto Cubano,” “Habano Wrapper,” “Ecuadorian Habano Wrapper,” “Ecuadorian Habano Seed Wrapper,” “Cubra—the noble fire of Cuba: Criollo” and “Binder Habano Jalapa—Nicaragua” for non-Cuban tobaccos. The suit questioned whether geographical indications like Cuba and Habana and derivatives could be used for cigars from other geographical regions, especially if the origin is “delocalized” and indications of such, like Ecuador and Nicaragua, are used.

    Corporacion Habanos took legal action in 2020 against the misleading nomenclature.

    The Regional Court of Munich upheld the claim in full, and the Higher Regional Court of Munich dismissed the appeal from the defendant. The Federal Court of Justice has now rejected a final appeal, which was based on points of law not accepted by the Higher Regional Court of Munich.

    According to both courts, use of these geographical terms deceives consumers and undermines the reputation of the geographical locations. By using the disputed terminology, one of the courts found, the defendant took advantage of the protected appellations of origin and their reputation to “transfer the concept, image and prestige” to products of other origins.

  • Germany Legalizes Recreational Marijuana

    Germany Legalizes Recreational Marijuana

    Image: Oksana Smyshliaeva

    Germany has legalized possession and home cultivation of recreational marijuana, according to Vaping360.

    When the law goes into effect, adults aged 18 and older will be allowed to possess up to 25 grams of cannabis in public spaces and up to 50 grams in private homes. Each household will be allowed to grow up to three plants.

    The law could take force as early as April 1 but could be pushed back; the bill must still go through the Bundesrat, the legislative body representing German states, and could be referred to a mediation committee, which would delay final adoption.

    Due to European Union concerns, the bill would not allow for sales in licensed dispensaries and pharmacies but creates a plan for nonprofit “cannabis social clubs” that will grow and distribute cannabis to a maximum of 500 members per club. The clubs could begin operations as early as July depending on the status of the bill.

    There are plans for another bill that would establish pilot programs for commercial sales in some German cities, according to Marijuana Moment; however, that legislation would need to be reviewed by the European Commission beforehand.

    When the bill goes into effect, it will make Germany the ninth country to legalize recreational cannabis and third EU member to do so.

    Not all lawmakers welcomed the legislation. Bundestag conservatives have made it clear that if they take power in next year’s election, they will roll back legalization completely.

  • The Potential of Pot

    The Potential of Pot

    Photo: Konrad

    Despite regional setbacks, global cannabis sales are still getting higher.

    By Stefanie Rossel

    Global cannabis sales continue to grow, albeit at a slightly slower pace than before, facing headwinds in comparatively mature markets, such as Colorado or California. Euromonitor International expects the value of the global legal cannabis market to grow from $41 billion in 2022 to $98 billion by 2027. Despite increasing access and acceptance, the stigma around cannabis remains and regulatory uncertainty prevails.

    The main growth drivers are innovation, investments from tobacco companies and consumer perception. Cannabis caters to the needs of consumers unnerved by economic, environmental and political uncertainties along with the spread of armed conflicts. Indeed, data from Israel’s ministry of health shows a spike in demand for a medical marijuana program one month into the war with Hamas. Meanwhile, the government of Ukraine—another country at war—is preparing to legalize medical cannabis.

    Euromonitor expects noncombustible cannabis products to gain share as consumers become more concerned about their health. Further legislation of adult-use cannabis would have significant implications for other fast-moving consumer goods, according to the market intelligence providers, with innovations in cannabis involving topicals, beverages or edibles.

    Alert to opportunity, the major tobacco players have already ventured into the sector. Philip Morris International has invested in Vectura Fertin Pharma, a contract development and manufacturing organization specializing in gums, pouches, tablets and other solid oral systems for the delivery of active ingredients. According to news reports dated July 2023, PMI is also planning to take over Syqe Medical, an Israeli company, which manufactures a metered-dose inhaler for pain reduction using medical marijuana.

    BAT, for its part, has stakes in 13 cannabis startups. In April, the company entered a joint venture with Charlotte’s Web Holdings, a cannabidiol (CBD) producer based in Denver, Colorado, USA. Since 2021, it also holds a minority stake in Organigram, Canada’s second-largest licensed cannabis producer. In early November 2023, BAT boosted its interest in the company through a cad124.6 million ($90.15 million) investment. Last year, it invested $37.6 million in a leading German cannabis company called Sanity Group.

    Imperial Brands acquired a stake in Auxly in 2019, while Altria is represented in the cannabis market through Cronos of Canada.

    Despite the growth of the market, Canadian companies are struggling to profit from legal cannabis.
    (Image: JHVEPhoto)

    Successful Experiment

    Presently, two markets are of particular interest for investors in the cannabis space: Canada, which in October celebrated the fifth anniversary of legal recreational cannabis; and Germany, which was supposed to legalize cannabis in November.

    Canada’s government had committed itself to reviewing its Cannabis Act after three years, but the Covid-19 pandemic delayed that exercise. In October, the government published a summary of feedback provided by industry, healthcare and community groups. Its conclusions were sobering. Despite the growth of the market, companies across the supply chain are struggling to profit from legal cannabis. Legal producers are burdened by significant regulatory fees, distributor markups and taxes in a hyper-competitive market. The illicit market, meanwhile, still represents 40 percent of the business.

    In their rush to compete with illegal products, sellers of legal cannabis have dropped their prices dramatically, selling products for as low as cad3 per gram instead of the cad10 per gram originally envisaged by the government. Due to advertising and packaging restrictions, communication with consumers, even to inform them about different varieties of cannabis and their effects, is nearly impossible. As a result of such challenges, several first players have exited the market or reduced manpower.

    Legalization has also impacted public health: The Canadian Institute for Public Health noted that cannabis-related emergency department visits and hospitalizations increased 14 percent between 2019 and 2021. Despite its shortcomings, Deepak Anand, principal of Vancouver-based ASDA Consultancy Services, deems legalization a success. “Legalization has resulted in about a 50 percent reduction in illicit market sales,” he says, quoting a recent survey in which 48 percent of cannabis-using respondents stated that they purchased all their products at a licensed retailer.

    “Retailer availability and proximity is an important metric in increasing overall market penetration and facilitating access,” says Anand. “No one expected the illicit market to disappear on day one or year five of legalization. The fact that we are at almost 50 percent reduction says a lot about the progress made.”

    Altogether, 64 percent of Canadians supported legalization, according to the probe. The survey also showed that people aged 45 and older increased their cannabis intake the most of all age groups following legalization, whereas those under 17 reduced their consumption.

    Legalization has resulted in about a 50 percent reduction in illicit market sales.

    Deepak Anand, principal, ASDA Consultancy Services

    Lessons to be Learned

    Anand emphasizes that legalization is a process rather than an event and that the experiences of Canada show other countries what works and what doesn’t. Lessons, he says, include the importance of avoiding over-taxation and overregulation of a nascent industry, particularly when one of the goals of legalization is to transition consumption from illicit to licit channels.

    What’s more, tax earnings derived from legalization must not be used solely to fill government coffers. “Revenues must be reinvested by providing the industry with data, research and tools to support the nascent industry and transition supply from criminal and illicit channels.”

    Governments must also guard against setting the age of access too high or the THC limits too low, according to Anand. Furthermore, they should make sure that social justice reform is baked into any legalization programs.

    Anand expects the final report on Canada’s Cannabis Act, which will be tabled before Parliament in March 2024, to take into account industry suggestions on taxation and THC levels, concerns from academics about the lack of research and a call for an overhaul of the medical system.

    The Canadian cannabis market, he predicts, will see only the fittest companies surviving. “Strong business fundamentals and financial discipline will be rewarded,” says Anand. ”Companies and teams that focus on the plant and the consumer will thrive as we are seeing in the market currently. Cannabis isn’t going anywhere; it is an industry that is here and will not only stay but also thrive in the future.”

    Disappointing Move

    Meanwhile in Germany, legalization appears to have lost some of its momentum. Hopes were high when, in 2021, a new coalition government announced it would permit licensed shops to sell recreational cannabis to adults, i.e., those from the age of 18. The move would have made Germany the biggest EU cannabis market by far. With the legalization, the government aimed to starve the illegal market, decriminalize occasional users, lower criminal justice expenditures and protect public health. The expected cannabis tax, experts predicted, could contribute up to €1.8 billion ($1.92 billion) annually to the state treasury.

    Two years on, all that remains of the lofty plans is a watered-down version. After realizing that full legalization of recreational cannabis would interfere with the U.N. Single Convention on Narcotic Drugs (1961) and EU legislation, the cabinet on Aug. 16, 2023, approved a bill that would allow adults to possess up to 25 grams of the drug, grow a maximum of three plants and acquire weed as members of nonprofit cannabis clubs. The government said it would also launch a pilot project to test the effects of a commercial supply chain for recreational cannabis over five years—a proposal for which it will need to present separate legislation.

    The legislation was scheduled to pass Parliament on Nov. 16, 2023, making cannabis legal from Jan. 1, 2024. However, after meeting fierce opposition from numerous parties, among them conservative policymakers who warned that legalization would encourage cannabis use and create more work for authorities, industry associations and consumer advocacy groups, the final reading was delayed to mid-December.

    In a Nov. 6 parliamentary hearing, the German Cannabis Association (DHV) pointed out that the possession cap of 25 grams per year made home cultivation impossible, as it referred to fresh flowers, which tend to lose weight after drying. “Under these conditions, no one will take the trouble to cultivate cannabis,” says DHV Managing Director Georg Wurth. “The limit would be a promotion scheme for the black market.”

    DHV also advocates to allow private growers to cultivate more than three plants and criticizes the distance rule, which stipulates that consumption will neither be allowed in cannabis clubs nor within a 200-meter distance of schools, kindergartens, playgrounds or cannabis clubs. “Such a distance—or any obligatory distance—would mean that in populated areas there would be no space left for legal consumption,” he says. “The idea to completely prohibit consumption on the premises of clubs whose only aim is to cultivate cannabis is unrealistic and makes no sense. The envisaged distance rule for cannabis clubs is similarly absurd, as it does nothing for youth prevention.”

    Furthermore, the punishments for violations described in the proposed legislation are too harsh, according to Wurth. The bill stipulates imprisonment of up to three years for the possession of 26 grams of cannabis or the cultivation of four plants. Consumption-related offences involve high fines. Smoking pot in a 190-meter radius from a school, for example, could cost the user up to €100,000. The DHV also calls for a legal opportunity to consume self-cultivated cannabis with friends. “After all, the goal is to deprive the black market of as much consumed cannabis as possible,” Wurth says. The association also calls for equal treatment of cannabis and alcohol in road traffic and an alignment of sanctions.

    At press time, an amended version of the bill that takes into account stakeholders’ input had not been released. The first part of the planned cannabis reform in Germany is now expected to become effective on April 1, 2024, at the earliest.

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.