Tag: ITG Brands

  • Nicotine Market Shares Flat in December

    Nicotine Market Shares Flat in December

    Tobacco Reporter Archive

    Consumer demand for nicotine products has fluctuated due to inflation and rising cigarette prices over the past 13-19 months. However, the Neilsen report covering the four-week period ending Dec. 30 shows that market shares are holding steady for both next-generation and traditional tobacco brands.

    The market share of R.J. Reynolds’ top-selling Vuse e-cigarette remained flat at 42 percent in December at convenience stores, according to the report. While Vuse’s market share was unchanged, No. 2 Juul dropped from 24.3 percent to 24.2 percent for the report covering the four-week period ending Dec. 30.

    As recently as May 2019, Juul held a 74.6 percent share in the U.S. electronic cigarette market. That’s when a series of regulatory actions led to product-reduction concessions, according to media reports.

    Meanwhile, Altria Group’s ownership of No. 3 NJoy hasn’t resulted in a meaningful market-share increase so far. Nielsen cited a research error by why it did not include an update for NJoy in the latest report. It was at 2.6 percent in the previous report.

    Fontem Ventures’ blu eCigs, an affiliate of Imperial Brands Plc, was unchanged at 1.2 percent.

    The overall e-cigarette category was down 9.9 percent.

    In traditional cigarettes, Philip Morris’ top market share was at 50.6 percent in the latest Nielsen report with top-selling Marlboro representing 45.6 percent of overall market share.

    Meanwhile, Reynolds was at 33.2 percent with Newport at 12.9 percent and followed by Camel (7.8 percent), Natural American Tobacco (3.7 percent) and Pall Mall (3.7 percent).

    ITG was at 8.5 percent overall, although ITG has said its market share is closer to 10 percent. Its No. 7 Winston brand remained at 2 percent, while Kool and Maverick remained tied for No. 8 at 1.8 percent.

    Goldman Sachs analyst Bonnie Herzog said that “in terms of specific company trends, total nicotine sales declines improved across the board for Altria, BAT, Imperial and Juul, while decelerating for all other manufacturers broadly in the latest period.”

    The decline in cigarette sales continues at a strong pace, said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette and health studies.

    “Yet, as Altria results showed and Barclays recently highlighted, much of this is due to cross-category migration,” Sweanor said.

    “People are switching to far lower-risk options. But disposable vaping products appear to currently be the greatest factor in this migration.”

    TD Cowen analyst Vivian Azer said consumers’ cigarette “downtrading to discount and deep discount continues to benefit Imperial’s share trends.”

  • NASCAR Museum Shut Following Lawsuits

    NASCAR Museum Shut Following Lawsuits

    Image: fabioderby

    An independently owned NASCAR museum in Winston-Salem, North Carolina, USA, has closed following lawsuits from ITG Brands after it bought the Winston name in 2015, according to The Drive.

    In 2019, ITG launched a series of lawsuits against Will and Christy Spencer, who owned the Winston Cup Museum. ITG’s lawsuits, according to a court filing from the Spencers, stated that the company felt the “purchase of Winston Cigarettes from R.J. Reynolds Tobacco Co. in 2015 somehow gave it ownership of Winston Cup history” and that ITG felt the museum was “infringing on their ability to market their cigarettes to racing fans.” Because ITG owns the Winston brand, the company argued that it owned the Winston-branded artifacts the museum possessed.

    The claims were dismissed twice.

    In July, the museum temporarily closed with a plan to rebrand as the Ralph Seagraves Memorial Museum upon reopening. However, the couple decided it was not financially viable.

    “After the past couple of years, we just can’t afford to keep it open and we’ve got to reinvent ourselves,” Christy Spencer said. “We’ve spent the past couple of years dealing with this litigation and so now the time has come to move forward. It’s just not feasible for us to continue to operate the museum.

    “The museum has never been a money generator. It was never designed to be a revenue generator; [it] was really a way to fuel Will’s passion for the motorsports industry and give hardcore race fans a place to come and see some unique pieces of history.”

    A large part of the collection will go to Mecum Auctions in Kissimmee, Florida, in early January.

  • Firms Start Posting Warning Statements

    Firms Start Posting Warning Statements

    Photo: Krakenimages.com

    Altria Group, R.J. Reynolds Tobacco Co. and ITG Brands have started posting warning signs about cigarette smoking in more than 200,000 stores across the United States, reports CNN. The move represents one of the final steps in a lawsuit the Justice Department filed against the tobacco industry in 1999.

    The signs include court-specified statements such as “Smoking kills, on average, 1,200 Americans. Every day.” They must be posted until June 30, 2025, in “highly visible places” in English and also Spanish in regions with significant numbers of Spanish speakers.

    The postings come after years of dispute following U.S. District Court Judge Gladys Kessler’s judgment in 2006, when the tobacco companies were first ordered to make the corrective statements. The landmark judgment found the industry defendants guilty of lying about the dangers of cigarettes and secondhand smoke.

    The defendants lied “about the devastating health effects of smoking and environmental tobacco smoke, they suppressed research, they destroyed documents, they manipulated the use of nicotine so as to increase and perpetuate addiction, they distorted the truth about low tar and light cigarettes so as to discourage smokers from quitting, and they abused the legal system in order to achieve their goal—to make money with little, if any, regard for individual illness and suffering, soaring health costs, or the integrity of the legal system,” Kessler said in her final opinion.

    R.J. Reynolds said these corrective statement signs appear on its website and had previously appeared in newspapers, television, radio and on pack inserts. “The tobacco industry has evolved considerably since this lawsuit was filed nearly 25 years ago, back in 1999,” a company spokesperson said. “Today, Reynolds American Inc. and its operating companies have a clear purpose to build ‘A Better Tomorrow’ by reducing the health impact of our business.”

  • ITG Liable for Florida Settlement Payments

    ITG Liable for Florida Settlement Payments

    Photo: niroworld

    ITG Brands assumed liability for tobacco settlement payments to Florida when it acquired four Reynolds American brands in 2015, a Delaware judge ruled, according to AP. As a result, ITG must compensate Reynolds American Inc. for losses incurred.

    ITG bought the Kool, Winston, Salem and Maverick brands in 2014. Before the sale closed, R.J. Reynolds Tobacco Co. was making payments under a preexisting settlement agreement to reimburse Florida for smoking-related healthcare costs. After the deal closed, Reynolds stopped making payments for the four brands.

    The purchase agreement required that ITG use reasonable best efforts to join the Florida settlement and make payments to the state for the brands it acquired from Reynolds. However, ITG has not joined the settlement agreement or made any payments.

    Florida sued Reynolds and ITG, which ended with a judgment requiring Reynolds to continue paying on the settlement agreement unless and until ITG joins the agreement.

    “That judgment on Reynolds amounts to over $170 million to date and tens of millions of dollars more each year into perpetuity,” noted Vice Chancellor Lori Will. The “unambiguous terms” of the asset purchase agreement support Reynolds’ arguments that ITG agreed to assume the liability imposed by the Florida judgment and must indemnify Reynolds, she concluded.

  • Tobacco Firms Settle Messaging Dispute

    Tobacco Firms Settle Messaging Dispute

    Several tobacco companies have reached an agreement in long-running litigation brought by the U.S. Department of Justice (DOJ) and certain public health organizations regarding the communication of tobacco-related messaging at retail locations.

    The agreement will require Altria, Philip Morris USA, R.J. Reynolds Tobacco and ITG Brands to supply their contracted stores with court-ordered signs that must be posted for 21 months.

    The agreement covers the last remaining dispute from the lawsuit DOJ filed against Altria, Philip Morris USA and R..J Reynolds in the 1990s, according to the National Association of Convenience Stores (NACS).

    “This litigation has always put the retailers in a uniquely bad position,” said Doug Kantor, NACS general counsel. “Retailers were not parties to the lawsuit and should not be burdened with a court-ordered remedy, but this negotiated outcome avoids even worse results that DOJ and public health groups were advocating.”

    The agreement provides that each store under contract with one of the manufacturers will have to post at least one sign carrying one of 17 different, pre-approved health messages that will be distributed at random to retailers around the country.

    Each store will be required to rotate to a new message halfway through the time period required in the agreement. The manufacturers will be required to hire auditors to check whether the signs are properly posted. A summary of the agreement explaining the requirements on retailers as well as answers to frequently asked questions about it can be found here.

    A hearing on the proposed agreement will be held in the U.S. District Court for the District of Columbia on July 28 and 29. The court will then decide whether to accept the agreement and enter an order to implement it.

    The timing of the requirements for signs to be posted will depend on when the court decides whether to accept the agreement.

  • Sgambelluri Named EVP of Sales at ITG Brands

    Sgambelluri Named EVP of Sales at ITG Brands

    Photo: tadamichi

    ITG Brands has appointed Shane Sgambelluri executive vice president of sales. Sgambelluri will report to Kim Reed, who previously held the top sales role before being named president and CEO on June 1. Sgambelluri has more than 23 years of leadership experience in the consumer packaged goods industry and most recently served as vice president of Kellogg Company’s U.S. grocery business.

    At Kellogg, Sgambelluri was responsible for $2.5 billion in sales, representing over 25 percent of the company’s business. He oversaw Kellogg’s grocery portfolio serving national, regional and independent customers and led strategic joint business planning partnerships with major accounts that included Wal-Mart, 7-Eleven and Walgreens. Prior to his nearly two decades with Kellogg, Sgambelluri held positions at two national broker agencies, Crossmark and Advantage Sales & Marketing.

    “Shane’s dedication to strong customer relationships and creative solutions to win in the marketplace will immensely benefit our sales operation while his experience managing large, diverse teams will be an asset to our dynamic sales force,” said Reed in a statement. “I am thrilled to welcome Shane to the ITG Brands team.”

  • RJR and ITG Resolve Texas Payments Dispute

    RJR and ITG Resolve Texas Payments Dispute

    Photo: Alex

    R.J. Reynolds Tobacco Co. and ITG Brands have reached a financial settlement with the state of Texas that resolves the question of responsibility for annual Master Settlement Agreement-type payments on four traditional cigarette brands, reports the Winston-Salem Journal.

    ITG has accepted all payment obligations to the Texas settlement agreement for the Kool, Maverick, Salem and Winston brands.

    The dispute stems from the 2014 purchase by Reynolds American of Lorillard. To obtain federal regulatory approval for the deal, RJR and Lorillard sold the four brands to ITG’s parent company, Imperial Brands.

    After the sale, a dispute broke out about which company was responsible for settlement payments on the brands.

    The MSA was a 1998 agreement in which tobacco companies settled litigation with state attorneys general over the cost of treating sick smokers. Several states, including Texas, made their own deals with tobacco companies.

    In December 2020, the Florida Supreme Court declined to hear an appeal by RJR in a dispute over the four brands, leaving responsibility for the MSA payments with Reynolds.

    The four ITG brands combined currently represent about 7.5 percent of the U.S. market share for traditional cigarettes.

  • Kim Reed to Lead ITG Brands

    Kim Reed to Lead ITG Brands

    Photo: ITG Brands

    ITG Brands has named Kim Reed president and CEO effective June 1. As president and CEO, Reed will oversee all U.S. employees and operations, reporting to Dominic Brisby, division director for the Americas, Africa, Asia and Australasia for Imperial Brands. Reed will succeed Oliver Kutz, who will assume the role of cluster general manager for Central Europe and Ukraine for Imperial Brands as part of a planned transition.

    “I would like to thank Oliver for his leadership in recent years and am thrilled to announce that Kim Reed will serve as the next president and CEO of ITG Brands. Kim has a wealth of experience in the consumer goods sector and a demonstrated record of success in both sales and executive leadership,” said Brisby in a statement. “Kim has expertly led the largest sales transformation in ITG Brands’ history and is the perfect steward for the continued success of Imperial’s largest market.”

    Reed has served as a member of the ITG Brands leadership team for two years in her capacity as executive vice president of sales. According to ITG Brands, Reed has consistently delivered exceptional results during her tenure, including establishing ITG Brands as a market leader in sales of factory manufactured cigarettes and mass market cigars while leading a sales organization of more than 1,000 employees responsible for $3 billion in net revenue.

    Reed designed and oversaw a comprehensive sales transformation strategy that encompassed ITG Brands’ largest-ever external recruitment for field sales while prioritizing a diverse and inclusive culture.

    “I am honored to accept the role of chief executive officer of ITG Brands,” said Reed.

    “I want to thank Oliver for his leadership and his partnership in creating such a fantastic and talented team. I am excited to engage across all aspects of the business and build upon our existing momentum to further accelerate growth.”

    Oliver Kutz

    Prior to joining ITG Brands, Reed led several large sales organizations for major consumer brands. She held various positions at the Kellogg Co., culminating in a role as general manager of U.S. sales, and served in numerous roles at the Pepsi Bottling Group over the course of over 17 years. Reed also serves as the chair of the Manufacturer’s Convenience Distributor Association and a member of the executive leadership council and previously served as a member of the board of CALIBR. She has been recognized as a 2021 top woman in convenience by Convenience Store News and twice as a top woman executive by Progressive Grocer.

  • Capna Intellectual Sued Over Bloom Logo

    Capna Intellectual Sued Over Bloom Logo

    Photo: Capna Intellectual

    ITG Brands is suing Capna Intellectual for infringing its Kool trademark, according to Bloomberg Law.

    According to ITG, the interlocking “O” letters in Capna’s Bloom cannabis e-cigarette brand logo confusingly resemble ITG’s famous Kool logo.

    The suit was filed late January in the U.S. District Court for the Central District of California.

    Capna reportedly applied for federal trademarks covering Bloom for e-cigarettes and oral vaporizers. ITG says it sent Capna a cease-and-desist letter in December.

    The complaint says the Bloom marks are intended to capitalize on Kool’s well-known branding.

  • Court to Hear Arguments Over Disputed Florida Settlement Payments

    Court to Hear Arguments Over Disputed Florida Settlement Payments

    Photo: Michal Kalasek | Dreamstime.com

    A U.S. appeals court will hear arguments today in a dispute about $100 million in payments related to a landmark legal settlement between the state of Florida and tobacco companies, reports Florida Politics.

    R.J. Reynolds Tobacco Co. wants the 4th District Court of Appeal to overturn a ruling that said the company is responsible for making payments to the state related to the Salem, Winston, Kool and Maverick cigarette brands.

    R.J. Reynolds was part of the 1997 settlement in which cigarette makers agreed to pay hundreds of millions of dollars a year to the state because of smoking-related health costs and, in exchange, received liability protections.

    In 2015, Reynolds’ parent company sold the four brands to ITG Brands to gain regulatory approval for its acquisition of Lorillard Tobacco Co. As a result of the sale, R.J. Reynolds contends it is no longer responsible for making payments linked to the four brands.

    A Palm Beach County circuit judge, however, ruled in 2017 that R.J. Reynolds remained responsible for the payments. Reynolds appealed that ruling, and its arguments will be heard today.

    ITG Brands, which was not part of the 1997 legal settlement agreement, contends the appeals court should uphold the circuit judge’s ruling that R.J. Reynolds is responsible for the disputed payments.