Tag: United States

  • ENDS-game strategy

    ENDS-game strategy

    The US Food and Drug Administration said yesterday that it would pursue a strategic, new public health education campaign aimed at discouraging the use of electronic cigarettes and other electronic nicotine delivery systems (ENDS) by ‘kids’.

    The agency said it planned to expand this fall its The Real Cost public education campaign to include messaging to teens about the dangers of using these products, while developing a full-scale campaign to launch in 2018.

    ‘These efforts are part of the agency’s new comprehensive plan for tobacco and nicotine regulation, as well as ongoing efforts to educate youth about, and protect them from, the dangers associated with using all tobacco products,’ it said in a note issued through the Center for Tobacco Products.

    ‘It is the first time the FDA will be utilizing public health education to specifically target youth use of e-cigarettes or other ENDS.

    ‘More than two million middle and high school students were current users of e-cigarettes and other ENDS in 2016.

    ‘Data also show about half of all middle and high school students who were current tobacco users also used two or more tobacco products last year.

    ‘This use by children and teens is especially concerning because of evidence that youth exposure to nicotine affects the developing brain and may rewire it to be more susceptible to nicotine addiction in the future.’

  • Burley in short supply

    Burley in short supply

    Universal Corporation believes that worldwide demand for Burley tobacco might exceed supply.

    “We are currently forecasting worldwide Burley tobacco production levels for fiscal year 2018 of about 510 million kg, a reduction of approximately 13 percent from fiscal year 2017 levels,” said George C. Freeman, chairman president and CEO. “As a result, we believe that demand for Burley tobacco may slightly exceed supply.”

    Freeman was announcing Universal’s results for the first quarter of fiscal year 2018, which ended on June 30.

    Universal reported net income of $3.6 million, or $0.14 per diluted share, for the quarter. Those results were up $9.1 million from a net loss of $5.5 million, or $0.40 per diluted share, for the first quarter of fiscal year 2017.

    ‘Operating income of $6.6 million for the quarter ended June 30, 2017, improved $14.6 million compared to an $8.0 million operating loss for the quarter ended June 30, 2016,’ the company reported. ‘Similarly, segment operating income was $6.1 million for the first quarter of fiscal year 2018, up $14.3 million compared to the same period last year, mainly as a result of earnings improvements in the Other Regions segment, partially offset by earnings declines in the North America and Other Tobacco Operations segments.

    ‘Revenues of $284.6 million for the quarter ended June 30, 2017, decreased by $10.9 million, or four percent, on lower total volumes and a less favorable product mix.’

    Freeman said that crop purchases were essentially completed in Brazil and were progressing well in Africa.

    “Overall crop qualities are good,” he said. “We expect increased volumes in Brazil to continue to positively affect earnings throughout this fiscal year. At the same time, greater reductions than expected in Burley crop sizes in Africa and continued challenging market conditions in Tanzania will reduce our volumes sold from that region.”

  • AOI volume stable

    AOI volume stable

    In the three months to the end of June, Alliance One International (AOI) sold about 61.2 million kg of tobacco, about the same amount as it had sold during the three months to the end of June 2016, even though South-American shipments were ‘noticeably reduced’ because there had been only ‘minimal carryover’ of the smaller, El Niño-affected 2016 crops.

    In announcing AOI’s first-quarter results to the end of June, president and CEO Pieter Sikkel said revenue had improved by 6.1 percent or $15.9 million to $277.0 million on that of the quarter to the end of June 2016 due to a 4.8 percent increase in average sales price that was driven by a higher ratio of lamina/by-products sales.

    “Additionally,” he said, “at quarter end, our uncommitted inventory reached a seven year low just inside the mid-point of our stated target range of $50.0 to $150.0 million.

    “Due to selling mainly prior year crops during the quarter that were impacted by currency and smaller crops sizes last year, gross profit decreased $5.4 million to $28.6 million. Excluding the impact of currency movement in Other Regions, gross profit would have been consistent with the prior year.”

    Looking ahead, Sikkel said fiscal year 2018 was progressing favorably and in line with expectations. Excluding Malawi, which had a much smaller crop this year, global market conditions were positive.

    Weather patterns were good, supporting better growing conditions; so that, in key markets where AOI was currently buying, crop sizes had returned to more normal levels.

    Later, Sikkel said that AOI’s customers were focused on enhancing global-supply-chain sustainability and driving positive change in nicotine consumption habits with reduced risk products.

    “Alliance One is well positioned to continue to meet customer requirements for traditional products with directed agronomy investments in systems and people,” he said. “Such investments, as well as others, uniquely position our company as a key supplier for new products our customers are developing and we will continue to invest where appropriate returns should be achievable…”

  • FDA on shaky ground

    FDA on shaky ground

    The US Food and Drug Administration’s policy shift toward reducing nicotine in cigarettes is likely to attract significant tobacco-industry litigation, according to a Bloomberg News story relayed by the TMA.

    In announcing a week ago its Comprehensive Plan for Tobacco and Nicotine Regulation, the FDA said that it would require the reduction of cigarette nicotine deliveries to non-addictive levels if that were found to be technologically and practically feasible.

    The Bloomberg piece speculated that the tobacco industry would go to court to stop the FDA from imposing or enforcing its regulatory framework.

    The article noted that, according to tobacco lobbyists, the industry could argue that the policy amounted to a de facto ban on cigarettes.

    And while a 2009 law gave the FDA the power to regulate cigarettes, it explicitly stated the agency did not have the power to ban them.

    Even some anti-smoking advocates think the FDA is on shaky ground with its proposal. “The legal mandate that they have to do this is extremely weak,” Clive Bates (pictured) was quoted as saying. “They say they’re not banning cigarettes, but they are banning cigarettes with any meaningful level of nicotine in them.”

    Lastly, the Bloomberg piece noted that FDA Commissioner Scott Gottlieb, who was confirmed in early May, was ‘turning out to be among the most aggressive (and unpredictable) cabinet officials during the early days of the Trump administration’, which favored deregulation.

    ‘It’s not clear whether Gottlieb personally sought President Trump’s counsel before making the announcement,’ the piece said. ‘An administration official says the White House supports the policy and disagreed that it was a break from Trump’s anti-regulation agenda.’

  • Red-letter day

    Red-letter day

    A US public health expert has described Friday, July 28, as ‘truly a great day for public health’.

    This was the day that the Food and Drug Administration announced its Comprehensive Plan for Tobacco and Nicotine Regulation.

    ‘On Friday, the new FDA Commissioner – Dr. Scott Gottlieb – saved the day for the public’s health by officially embracing a harm reduction approach to tobacco control,’ Dr. Michael Siegel, who is a professor in the Department of Community Health Sciences, Boston University School of Public Health, wrote on his tobacco analysis blog.

    ‘Commissioner Gottlieb announced a new approach to the regulation of tobacco products that, unlike the FDA’s previous strategy, acknowledges the vastly different risks of tobacco cigarettes compared to electronic cigarettes and proposes to regulate each product in alignment with its risk level.’

    Siegel said that, previously, the FDA had lumped e-cigarettes into the same category as tobacco cigarettes and, in fact, regulated e-cigarettes much more stringently. The FDA previously required e-cigarettes to complete burdensome and expensive pre-market applications just to remain on the market, a process from which all traditional tobacco cigarettes were exempted.

    The old approach, Siegel said, would have destroyed about 99 percent of the existing vaping product market, leading to a major reduction in smoking cessation in the US and with that, an increase in smoking-related morbidity and mortality.

    ‘Instead, the FDA will now delay the implementation of the pre-market application requirement for e-cigarettes while seeking ways to ease the expense and burden of the process,’ he said.

    ‘At the same time, the FDA will – for the first time – actually set safety standards for e-cigarettes so that the benefits of these products can be realized while minimizing potential harms.

    ‘And, to top it all off, the agency will consider – also for the first time – actually setting a safety standard for real cigarettes that would require the reduction of nicotine to non-addictive levels if that is found to be technologically and practically feasible.’

    Siegel, in fact, foresaw the possibility of Friday’s announcement by the FDA. Writing on his blog in November, he said that, from a public health perspective, there were many reasons to be concerned about the outcome of the US presidential election. ‘However, there is one reason to potentially be encouraged,’ he said. ‘With a Trump presidency, and with Republican control of the Senate, we ironically have a tremendous opportunity to once and for all craft a sensible regulatory strategy for electronic cigarettes and vaping products.’

    Siegel’s blog is at: http://tobaccoanalysis.blogspot.co.uk/.

  • Qualified support for FDA

    Qualified support for FDA

    A US senator has decried the electronic-cigarette provisions of the Food and Drug Administration’s Comprehensive Plan for Tobacco and Nicotine Regulation, which was announced on Friday.

    “The tobacco industry produces products that kill thousands of Americans each year, and sustains itself by recruiting ‘replacement smokers’ by marketing to young adults,” Oregon’s Senator Jeff Merkley, the top Democrat on the Senate Appropriations Subcommittee overseeing the FDA, said in a statement posted on his website. “That’s why we were hoping to hear a strong plan from the FDA today [Friday].

    “Unfortunately, the FDA instead announced that it will allow e-cigarette products, largely aimed at children, to remain on the market for five more years with very little regulation.

    “According to the CDC’s [Center for Disease Control and Prevention] latest data, 20 percent of high school students, and seven percent of middle school students – 12 and 13 year old kids – use e-cigarettes. And they use it [sic] because they have names like ‘cotton candy’, ‘froot loops’ and ‘gummy bear’. These are not products targeted towards adults. “While the FDA’s goal of reducing the level of nicotine in traditional cigarettes is an important and admirable goal, it does nothing to address the growing threat of e-cigarette usage. Thousands more children will become addicted during this time, and everyone who cares about America’s youth should be deeply concerned by this decision.”

    Meanwhile, the American Heart Association (AHA) has said that while the FDA’s move to lower nicotine and examine flavoring comprise a promising step, the Deeming Rule delay is disappointing. It is concerned, also, that the FDA has raised the possibility of exempting premium cigars in the future.

    “FDA’s move today to lower nicotine levels and take a harder look at how flavored tobacco products attract the young is to be commended,” said AHA CEO Nancy Brown.

    “However, the Association is disappointed with the agency’s decision to delay certain e-cigarette and cigar compliance deadlines. Altering the deadline for FDA review of e-cigarettes and cigars is a troubling step and one that we will closely monitor.

    “We are also concerned that the FDA has raised the possibility of exempting premium cigars in the future. Tobacco in any form presents risk. That’s why we have advocated for – and will continue to insist – that FDA oversight of all tobacco products is absolutely essential. Premium cigars are no different. Cigars are a concern because high school-aged males now smoke them at a higher rate than [they smoke] cigarettes. As we have seen in recent Senate legislation, often the definition for ‘premium cigars’ creates a loophole that allows the flavored and cheap cigars that attract youth to qualify as ‘premium’. Weakening the deeming rule in any way could lead to an increasing number of Americans at risk for heart disease, stroke or even an early death due to tobacco use.

    “As the FDA carries out its new nicotine and tobacco plan, we urge the agency to remember that protecting public health, particularly the health of young people in this country, should be at the very top of its priority list. While we look forward to agency actions that can lower the number of Americans exposed to the harms of combustible tobacco, the FDA must advance all tobacco regulation. We must not take two steps forward and then one step back.”

    The 22nd Century Group welcomed the FDA’s announcement. The group said that it was ‘uniquely positioned to deliver on the new product standards’ given that its proprietary “Very Low Nicotine” cigarettes contained less than 0.6 mg nicotine per piece and yielded less than 0.05 mg nicotine per piece. These levels represented a nicotine reduction of at least 95 percent relative to the levels of other cigarette brands.

    The group said its tobacco was grown on ‘independently-owned farms in US, and was not subjected to any ‘artificial extraction or chemical processes’.

    It was the only company globally that was capable of growing tobacco with non-addictive levels of nicotine.

    The cigarettes produced from this tobacco, it added, had the ‘taste and sensory characteristics of conventional cigarettes’.

  • Nicotine takes Center stage

    Nicotine takes Center stage

    Altria on Friday described the US Food and Drug Administration’s Comprehensive Plan for Tobacco and Nicotine Regulation as an important evolution in the Agency’s approach to regulating tobacco products and a meaningful step forward in developing a comprehensive regulatory policy that acknowledges the continuum of risk.

    ‘We supported FDA regulation because, among other things, it created a framework for communication about reduced harm products,’ the company said in a note posted on its website. ‘Reconsideration of the rules and timelines for newly deemed products is an important and timely step in this effort.

    ‘The process outlined by the [FDA] commissioner today will allow all stakeholders the opportunity to participate in a science and evidence based regulatory framework which is “transparent, predictable, and sustainable”.

    ‘It’s important to understand that any proposed rule such as a nicotine product standard must be based on science and evidence, must not lead to unintended consequences and must be technically achievable. Establishing a standard of any sort is a deliberative process, with multiple opportunities for interested parties to provide perspectives. We intend to be fully engaged throughout this process.’

    In announcing its plan, the FDA said it would serve as a multi-year roadmap to better protect young people and significantly reduce tobacco-related disease and death.

    The approach placed nicotine, and the issue of addiction, at the center of the agency’s tobacco regulation efforts, the FDA’s Center for Tobacco Products (CTP) said in a press note. The goal was to ensure that the FDA had the proper scientific and regulatory foundation efficiently and effectively to implement the Family Smoking Prevention and Tobacco Control Act.’

    “Envisioning a world where cigarettes would no longer create or sustain addiction, and where adults who still need or want nicotine could get it from alternative and less harmful sources, needs to be the cornerstone of our efforts – and we believe it’s vital that we pursue this common ground,” said FDA Commissioner Dr. Scott Gottlieb.

    Among other aspects of the comprehensive approach, the FDA plans to:

    • ‘Issue an Advance Notice of Proposed Rulemaking (ANPRM) to seek input on the potential public health benefits and any possible adverse effects of lowering nicotine in cigarettes. This will help begin a public dialogue about lowering nicotine levels in combustible cigarettes to non-addictive levels through achievable product standards.’
    • ‘Extend timelines to submit tobacco product review applications for newly-regulated tobacco products that were on the market as of Aug. 8, 2016. This will allow the agency to further examine how existing regulatory science can encourage innovations that have the potential to make a notable public health difference and inform policies and efforts that will best protect kids and help smokers quit cigarettes. Under the expected revised timeline, the application deadlines for newly-regulated products would be as follows: combustible products, such as cigars and hookah tobacco, Aug. 8, 2021; non-combustible products, such as ENDS or e-cigarettes, Aug. 8, 2022.’
    • ‘Further explore how best to protect public health in the evolving tobacco marketplace by issuing two ANPRMs to seek input from the public on a variety of significant topics, including: ‘The role that flavors (including menthol) in tobacco products play in attracting youth and may play in helping some smokers switch to potentially less harmful forms of nicotine delivery’; and ‘The patterns of use and resulting public health impacts from premium cigars, which were included in the FDA’s 2016 rule’.

    The FDA’s announcement was generally positively received, though it was acknowledged that some devils could lie lurking in the details.

    The R Street Institute welcome the FDA announcement saying it would postpone a regulation, previously set to take effect this fall, that would have forced manufacturers to get agency approval for tobacco and nicotine products introduced to the market after February 2007. This costly process would, in practice, have resulted in the near-complete elimination of harm-reduction tools such as electronic cigarettes from the market.

    R Street’s harm reduction policy director Carrie Wade said the FDA’s plans should be considered an important first step to reorient FDA regulation of tobacco products from a process designed to protect the sales and profits of the major cigarette makers to one designed to reduce tobacco-related addiction, illness and death.

    “R Street has been one of the leading proponents of a harm-reduction approach to cigarette addiction, so to read today’s [Friday’s] announcement feels like vindication that someone is listening,” Wade said. “It’s taken a little while, but it seems the FDA is beginning to realize something the scientific community woke up to years ago: policies aimed at destroying the e-cigarette market actually would result in the unintended consequence of more smokers sticking with traditional combustible cigarettes.”

    Jeff Stier, the director of the Risk Analysis Division of the National Center for Public Policy Research, said he applauded Gottlieb and the CTP for making sweeping changes to the Obama-era approach to tobacco regulation that would have effectively banned almost all e-cigarettes on the market today.

    “The most significant change is that the FDA’s regulatory approach will now seek to implement a ‘tobacco harm reduction’ approach, recognizing that there’s a continuum of risk among different nicotine products,” he said.

    “In other words, it will not impose onerous deadlines and ill-defined requirements for so-called pre-market tobacco applications.

    “The FDA will first develop clear, science-based product standards before manufacturers would be required to submit applications.

    “The FDA will now begin to develop new rules which will recognize that non-combustible lower-risk products such as e-cigarettes and next generation ‘heat not burn’ products should no longer be treated solely as public health threats. The FDA will instead embark on a rule-making process whereby the products will be regulated based on their risk profile. This approach, if implemented properly, will foster a robust market offering a range of options to smokers who wish to reduce the risk from smoking.”

    Alex Clark, the CEO of the Consumer Advocates for Smoke-free Alternatives Association (CASAA) described the FDA plan as a positive step forward in preserving consumer access to low-risk vapor products. Most importantly, it said, the forthcoming guidance from the FDA would play a vital role in reducing harm for millions of Americans who continued to smoke and would benefit from honest information about low-risk alternatives to combustible tobacco.

    “Delaying the deadline for pre-market tobacco applications from vapor product manufacturers is an important first-step.” said Alex Clark, CASAA’s CEO.

    “CASAA and our membership have been asking for this delay since March as it allows science, genuine public health, and consumer needs – rather than ideology – to contribute to developing reasonable and achievable regulation of low-risk nicotine products.

    “Too much of the current legislative and regulatory efforts are born out of fear and misinformation. As a result, policymakers and regulators are losing sight of the most important goal – reducing the harm from traditional combustible tobacco products.”

    The Vapor Technology Association focused on the FDA’s granting of a four-year extension of the deadline for Premarket Tobacco Applications for electronic nicotine delivery systems (ENDS) until August 8, 2022. “This decision is a victory for science-based regulation and for public health,” said Tony Abboud, VTA’s executive director.

    “By recognizing that US policies need to evolve to the current state of science which demonstrates that ENDS products are at least 95 percent safer than combustible cigarettes, FDA is taking a big step forward in protecting public health by acknowledging for the first time that ENDS are a harm reduction product and need to be regulated as such.

    “By delaying the deadline for compliance for electronic nicotine delivery systems, FDA has also recognized that the current regulations have halted the kind of technological innovation that is key to ending this country’s reliance on combustible cigarettes, and that we need to implement clear and meaningful regulations that strike the right balance between consumer protection and fostering innovation.”

    But not everyone agreed. Matthew L. Myers, resident of the Campaign for Tobacco-Free Kids, said the sweeping tobacco regulatory agenda proposed by Gottlieb represented a bold and comprehensive vision with the potential to accelerate progress in reducing tobacco use and the death and disease it caused in the US. “Critical to his vision is his recognition that the components of his proposal need to work together as ‘a package deal – ‘it is really all or nothing,’ as he put it,” Myers said in a statement.

    “At the same time, it is a serious error for the FDA to significantly delay critical deadlines for complying with the FDA’s 2016 rule establishing oversight of electronic cigarettes, cigars and other previously unregulated tobacco products.

    “This long delay will allow egregious, kid-friendly e-cigarettes and cigars, in flavors like gummy bear, cherry crush and banana smash, to stay on the market with little public health oversight. There is no reason to allow these products to stay on the market while developing and implementing the comprehensive strategy Dr. Gottlieb outlined today [Friday].”

  • PM USA’s volume down

    PM USA’s volume down

    Philip Morris USA’s cigarette shipment volume during the three months to the end of June, at 30,569 million, was down by 2.9 percent on that of the three months to the end of June 2016, 31,470 million.

    Marlboro shipments were down by 2.9 percent to 26,157 million; shipments of other premium brands fell by 6.6 percent to 1,550 million; while shipments of discount brands decreased by 0.5 percent to 2,862 million.

    PM USA’s share of the retail cigarette market during the three months to the end of June, at 50.8 percent, was down by 0.4 of a percentage point from that of the three months to the end of June 2016. Marlboro’s share, at 43.5 percent, was down by 0.3 of a percentage point; the share of its other premium brands was down by 0.1 of a percentage point to 2.7 percent; while the share of the company’s discount brands was unchanged at 4.6 per cent.

    The Altria Group yesterday published its second-quarter and first-half results for 2016.

    Middleton’s cigar shipment volume during the three months to the end of June, at 406 million, was increased by 13.1 percent on that of the three months to the end of June 2016, 359 million. Black & Mild brand shipments were up by 13.6 percent to 402 million, while shipments of other brands fell by 20.0 percent from five million to four million.

    USSTC’s smokeless-products shipment-volume during the three months to the end of June, at 221.0 million cans and packs, was up by 1.4 percent on that of the three months to the end of June 2016, 217.9 million.

    Shipments of Copenhagen were up by 2.6 percent to 137.5 million; those of Skoal were down by 1.2 percent to 65.8 million; while those of other brands were increased by 2.3 percent to 17.7 million.

    USSTC’s share of the US market for smokeless products during the three months to the end of June, at 54.1 percent, was down by 0.8 of a percentage point from that of the three months to the end of June 2016. Copenhagen’s share was up by 0.7 of a percentage point to 34.1 percent; Skoal’s share was down by 1.4 percentage points to 16.7 percent; while the share of other brands was down by 0.1 of a percentage point to 3.3 percent.

    Meanwhile, PM USA’s cigarette shipment volume during the six months to the end of June, at 59,296 million, was down by 2.8 percent on that of the six months to the end of June 2016, 61,009 million.

    Marlboro shipments fell by 2.8 percent to 50,852 million; shipments of other premium brands fell by 5.5 percent to 3,000 million; while shipments of discount brands were down by 1.8 percent to 5,444 million.

    Middleton’s cigar shipment volume during the six months to the end of June, at 773 million, was increased by 12.7 percent on that of the six months to the end of June 2016, 686 million. Black & Mild brand shipments were up by 14.0 percent to 765 million; while shipments of other brands fell by 46.7 percent to eight million.

    USSTC’s domestic, smokeless-products shipment-volume during the six months to the end of June, at 416.8 million, was down by 1.7 percent on that of the six months to the end of June 2016, 424.0 million. Copenhagen shipments were up by 1.2 percent to 262.0 million; Skoal shipments were down by 7.4 percent to 121.4 million; while shipments of other brands were down by 2.1 percent to 33.4 million.

    Altria’s second-quarter reported diluted earnings per share (EPS) increased by 22.6 percent to $1.03, and its second-quarter adjusted diluted EPS, which excludes the impact of special items, increased by 4.9 percent to $0.85.

    Altria’s first-half reported diluted EPS increased by 19.0 percent to $1.75, and its first-half adjusted diluted EPS increased by 3.3 percent to $1.58.

    “Based on strong tobacco operating company performance, Altria delivered solid results in the second quarter and first half of 2017,” said Marty Barrington, Altria’s chairman, CEO and president.

    “The smokeable products segment generated strong income growth despite a large cigarette excise tax increase in California, and the smokeless products segment has largely rebounded from its first-quarter voluntary product recall.

    “We continued to focus on rewarding shareholders, paying out nearly $2.4 billion in dividends and repurchasing $1.6 billion in shares in the first half of 2017. Today we also are announcing a $1 billion expansion of that program.

    “Our business fundamentals remain strong.  We believe we are well-positioned for the second half of the year and continue to expect adjusted diluted EPS growth to be weighted to the second half. Thus, we are reaffirming our 2017 full-year adjusted diluted EPS growth guidance of 7.5 percent to 9.5 percent.”

  • Prices linked to poverty

    Prices linked to poverty

    A recent study has found a correlation between US state and local jurisdictions that increase cigarette excise taxes and the number of households in those jurisdictions that apply for food stamps for the first time, according to a National Public Radio (NPR) story relayed by the TMA.

    The study found that on average, a 56 percent increase in cigarette taxes resulted in seven percent of eligible unenrolled households joining the program.

    The study was discussed on the July 25 episode of NPR’s Morning Edition: http://www.npr.org/2017/07/25/539183590/hidden-brain-cigarette-taxes.

  • Taking on big business

    Taking on big business

    The Republican gubernatorial candidate for California, US, John Cox has said that if elected he would tackle the “corruptive influence of special interests”, including “big tobacco,” according to a story in the New York Times relayed by the TMA.

    Cox was said to have made the statement in a telephone interview with California Today.

    He is said to be pushing an initiative known as Neighborhood Legislature, which is designed to eliminate the influence of money in politics by shrinking legislative districts down to neighborhood size – 12,000 altogether.

    Each district would elect a representative, who would in turn elect representatives from among their numbers to go to Sacramento.