Tag: Reynolds American Inc.

  • RAI Workforce Down 11 Percent in 2022

    RAI Workforce Down 11 Percent in 2022

    Photo: RAI

    Reynolds American Inc. reduced its workforce by 10.7 percent, reports the Winston-Salem Journal, citing the 2022 annual report from parent company British American Tobacco.

    In July 2017, BAT purchased the 57.8 percent of Reynolds it did not already own for $54.5 billion. Legacy Reynolds shareholders own 19 percent of BAT.

    Reynolds had 4,921 U.S. employees in 2020 and 4,789 employees in 2021, according to the company’s annual reports.

    The workforce is down 22.3 percent from about 5,500 on Dec. 31, 2016, when Reynolds published its last corporate annual report.

    In March 2021, Reynolds announced its largest workforce reduction in a decade—350 full-time positions—as part of consolidating more of its manufacturing production into the Tobaccoville plant. The consolidation began in April and will take through 2024 to complete.

    BAT’s overall workforce decreased by 5.9 percent to 77,951.

    In January, BAT announced a major restructuring of its global operations. As part of the plan, the company will reduce the number of regions from four to three, and the number of business units from 16 to 12.

    After the restructuring, the company’s regions will be USA (RAI), Americas & Europe (AME) and Asia Pacific, Middle East & Africa (APMEA)

  • Reynolds Requests Retrial of Vuse IP Case

    Reynolds Requests Retrial of Vuse IP Case

    Image: inimalGraphic

    R.J. Reynolds Vapor Co. has asked for a new trial after a U.S. District Court awarded rival Altria Client Services $95.23 million in damages related to an e-cigarette intellectual property dispute, reports the Winston-Salem Journal.

    In early September, a federal jury determined that Reynolds Vapor’s Vuse Alto product infringes on three Altria patents.

    In its retrial request, Reynolds Vapor stated that “Altria’s improper injection of inflammatory evidence regarding patent infringement allegations against Reynolds in other cases denied Reynolds a fair trial. Erroneous evidentiary rulings also prejudiced Reynolds’ ability to present its defense. Those errors independently, and under the cumulative error doctrine, affected the verdict such that a complete new trial is required.”

    Altria said in a statement that “this was a fair trial. There is no basis for another trial, and we are pleased that the jury correctly found that Reynolds Vapor has infringed a number of our patents.”

    The complaint concerns three patents awarded to Altria Client Services by the U.S. Patent and Trademark Office based on filings in April 2015.

    Altria alleged Reynolds Vapor violated Altria’s patents covering the pod assembly used in Vuse Alto.

    Reynolds believes the lawsuit was filed in retaliation for patent infringement complaints filed by Reynolds in April 2020 for infringement by Philip Morris International’s IQOS tobacco-heating device of six Reynolds patents.

    Until recently, Altria was the exclusive U.S. distributor for IQOS in the United States.

    On Sept. 29, 2021, the U.S. International Trade Commission upheld an initial determination from May 2021 that Philip Morris International’s IQOS device infringes on two patents owned by Reynolds. The ruling barred Altria Group from importing IQOS products into the U.S.

  • 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.

  • PMI Argues Against IQOS Import Ban

    PMI Argues Against IQOS Import Ban

    Photo: librakv

    The U.S. International Trade Commission (ITC) should have consulted more with the Food and Drug Administration before banning IQOS imports, lawyers for Philip Morris International argued before an appeals court panel on Oct. 3, according to Reuters.

    In September 2021, the ITC upheld an initial determination from May 2021 that PMI’s IQOS device infringes on two patents owned by BAT subsidiary Reynolds American Inc. (RAI). The agency then instituted an import ban and a cease-and-desist order preventing IQOS consumables and devices from being sold in the U.S.

    PMI has challenged the import ban in court, arguing among other things that the ban deprives American smokers of nicotine products that are less unhealthy than cigarettes.

    The case is part of a global patent dispute between RAI’s parent company BAT and tobacco giant Altria Group, which separated from PMI in 2008 and is the exclusive distributor of IQOS in the United States.

    A North Carolina jury awarded Altria $95 million last month on claims that RAI’s Vuse e-cigarettes infringed its patents. In a separate case over RAI’s Vuse line, PMI won more than $10 million from a Virginia jury.

    RAI sued Philip Morris at the ITC in 2020. Its related patent case against PMI in Virginia is on hold.

    In July 2020, the FDA granted IQOS modified-risk orders, allowing Altria and PMI to tell consumers that the product generates lower levels of harmful chemicals than traditional cigarettes, among other claims.

  • RAI Transitioning to Electric/Hybrid Vehicles

    RAI Transitioning to Electric/Hybrid Vehicles

    Photo: unlimit3d

    Reynolds American Inc. (RAI) is transitioning its vehicle fleet to hybrid and electric models. The move will replace aging vehicles on a rolling basis over the next three years, resulting in a projected annual reduction in carbon emissions of more than 1,000 tons.

    “Our sales and trade marketing representatives average nearly 27,000 miles a year in their territories across the 50 states—that’s a lot of time on the road,” said Ed Mirana, senior vice president of national sales and strategic accounts at RAI, in a statement. “With this move to hybrid vehicles, our sales and operations teams are driving progress on our sustainability ambitions.”

    RAI is collaborating with Ford Pro to transition its current fleet to a mix of vehicle models, including the Escape SEL Hybrid, Explorer Limited Hybrid, Ford E-Transit and Ford-150 Lightning.

    Included in the fleet of more than 1,800 vehicles are nearly 50 light-duty operations vehicles used across RAI’s North Carolina and Tennessee facilities, which will be transitioned to a combination of hybrid and electric models as part of this initiative.

    “We continue to push for new ways to reduce our use of resources and environmental impact. We have a bold global ambition for carbon neutral operations by 2030, and reducing carbon emissions in our fleet is an important step on this journey. In addition, by 2024, more than 95 percent of all industrial vehicles used in operations will be electric,” said Bernd Meyer, executive vice president of operations at RAI. “With these significant changes and investments over the next few years, we are currently on track to meet a fleet carbon emission reduction of 50 percent by 2025.”

    In 2022, approximately 650 hybrid and electric vehicles will replace internal combustible engine vehicles organization-wide.

    RAI joins BAT Group’s growing list of markets across the globe, including Australia, Colombia, Germany, Mexico and the Netherlands, where trade and operations fleet transitions to hybrid and electric vehicles are well underway.

  • Gwinner Named Consumer Goods Tech CIO of the Year

    Gwinner Named Consumer Goods Tech CIO of the Year

    Photo: RAI

    Aaron Gwinner, chief information officer and senior vice president of digital business solutions for the Reynolds group of companies, has won the 2022 Consumer Goods Technology (CGT) CIO of the Year Award.

    The CIO of the Year Award recognizes a consumer goods company’s senior-most technology leader who has made a significant impact through the implementation and utilization of successful technology.

    Those who nominated Gwinner applaud his success in driving transformation within the organization and, in turn, developing a strong company culture.

    “Aaron has been a driving force behind the creation of new capabilities that allow us to operate a stronger, faster and simpler organization,” said Reynolds CEO Guy Meldrum in a statement. “His exceptional leadership continues to accelerate the transformation of our business. All of us at Reynolds congratulate him on this outstanding achievement.”

    Since joining Reynolds in 2019, Gwinner’s impact has been substantial, with notable accomplishments including launching a new e-commerce platform that improved e-commerce growth and enhanced mobile website performance by 500 percent. Gwinner attributed these successes, among others, to his team of more than 400 professionals for the excellent work they do every day.

    Additionally, his team established a hub in Silicon Valley to partner on new technology innovations, replaced all aging marketing platforms and websites while migrating 80 percent of the company data to the cloud, and built a new data science and e-commerce team that increased mobile conversion by 35 percent while delivering $200 million in benefits from data analytics.

    “It is an honor to receive CGT’s CIO of the Year award and a testament to our remarkable teams at the helm of our digital transformation,” said Aaron Gwinner. “They’re the ones who do the work. My job is to set a clear vision, get the roadblocks out of their way and empower them to deliver. When they deliver, and we get recognized for it, I think it’s a great endorsement of my team and the fantastic work they’ve done. Thank you to CGT and all those who submitted nominations for this extraordinary recognition.”

  • Carbon Neutrality for American Snuff

    Carbon Neutrality for American Snuff

    Photo: Sergey Shimanovich

    Two American Snuff locations have boosted their environmental credentials, according to Reynolds American Inc.

    American Snuff Co. Memphis has achieved carbon neutrality for its operations, scope 1 and 2, in accordance with PAS 2060 for the period between Dec. 1, 2020, to Nov. 30, 2021.

    American Snuff Co. Taylor Brothers has also achieved carbon neutrality for its operations, scope 1 and 2, in accordance with PAS 2060 for the period between Dec. 1, 2020, to Nov. 30, 2021.

  • RAI Announces Site Closures

    RAI Announces Site Closures

    Photo: RAI

    Reynolds American Inc. (RAI) will reduce its U.S. manufacturing footprint and close of some sites to position the company for future growth, the company announced.

    The decision follows a detailed strategic review of the company’s operations.

    Guy Meldrum

    “These decisions are never easy,” said RAI President and CEO Guy Meldrum in a statement. “We are focused on delivering long-term, sustainable growth in a rapidly evolving environment. While these changes are necessary to support the future of our business, they will be extremely difficult for our employees at the manufacturing sites that are closing and today we are focused on providing support to them through this transition.”

    Beginning next month and progressing through 2024, Santa Fe Natural Tobacco Co.’s operations in Oxford, North Carolina, and American Snuff Co.’s operations in Winston-Salem, North Carolina will move to Tobaccoville, North Carolina. ASC’s Traditional Oral operations in Memphis, Tennessee, will move to Clarksville, Tennessee.

    More than half of employees across the closing facilities will have the opportunity to transfer sites. These changes will reduce the company’s full-time employee workforce by approximately 350 roles by 2025.

    “After our review, it became clear that we had to align our manufacturing footprint with our growth strategies,” said Bernd Meyer, executive vice president of operations at Reynolds. “Many of our employees will be given the opportunity to transfer sites. Our employees displaced through this process will receive a comprehensive severance and benefits package, including outplacement support to help as they transition to the next phase of their careers.”

  • RAI Heating Technology Declared ‘Unpatentable’

    RAI Heating Technology Declared ‘Unpatentable’

    Photo: tashatuvango

    The U.S. Patent Trial and Appeal Board (PTAB) has determined as unpatentable several claims by RAI Strategic Holdings relating to tobacco-heating technology, reports The Winston-Salem Journal.

    According to federal law, a claim is unpatentable if “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”

    The board’s rulings are the latest developments involving several patent infringement lawsuits between RAI and Philip Morris International.

    In November, the U.S. Trade Representative affirmed a legal victory by RAI’s parent company, British American Tobacco, against rival Philip Morris International and its U.S. partner, Philip Morris USA.

    On Sept. 29, the U.S. International Trade Commission issued a final determination of a violation of the Tariff Act of 1930 by Philip Morris USA and Altria Client Services as it related to two BAT product patents.

    Altria Group, parent of PM USA, asked trade representative Katherine Tai to overturn the ban. The U.S. Trade Representative’s office confirmed no action was taken by Tai.

    As a result of the ITC ruling, PM USA is barred from importing PMI’s IQOS 2.4, IQOS 3 and IQOS 3 Duo heat-not-burn cigarette products into the United States.

    PMI welcomed the PTAB ruling. “We are extremely pleased with the well-reasoned PTAB decisions, which further demonstrate the futility of RJR/BAT’s efforts to litigate this patent family,” a PMI spokesperson said.

    Reynolds said in a statement that “we disagree with the decision finding (the ‘915’ ruling) invalid partially contradicting the International Trade Commission’s ruling, which was based on a highly developed evidentiary record, including a six-day trial with live witnesses.”

    Reynolds said an ITC panel and the full commission “agreed with Reynolds’ position regarding the patent.”

    PTAB decisions can be appealed for review to the U.S. Court of Appeals for the Federal Circuit, which Reynolds has indicated it will pursue.

    Another option for Reynolds, according to the patent board’s ruling, is for Reynolds to amend its patents in dispute or request a reexamination of the challenged patent.

  • Reynolds Prevails in Shareholder Dispute

    Reynolds Prevails in Shareholder Dispute

    Photo: RAI

    The Supreme Court of North Carolina has upheld an April 2020 ruling by the N.C. Business Court that Reynolds American Inc. (RAI)  provided “fair value” to shareholders who objected to the return they received from Reynolds’ $54.5 billion sale to British American Tobacco, reports The Winston-Salem Journal.

    In January 2017, BAT announced it would acquire the 57.8 percent of RAI that it did not already own. BAT acquired a 42.2 percent ownership stake as part of Reynolds’ $4.4 billion purchase of BAT subsidiary Brown & Williamson Tobacco Corp. in 2004.

    BAT’s initial offer for the remaining shares was valued at $59.64 a share. When the deal closed, the share price value had reached $65.87.

    Believing the agreed-upon deal price significantly undervalued Reynolds, a group of dissenting shareholders, led by Third Motion Equities Master Fund, refused to tender their shares at closing. RAI then opted to pay them $59.64 per share plus interest..

    The N.C. Business Court ruled that Reynolds “properly determined the ‘fair value’ of shares, saying the amount equaled or exceeded the value of Reynolds shares as of the date of the merger.”

    The NC Supreme Court agreed with the Business Court judgment that that no further payments to the dissenters are required.