Author: Staff Writer

New Categories Boost BAT Half-Year Revenues

Photo: BAT
British American Tobacco reported revenue of £13.44 billion ($17.35 billion) in the first six months of 2023, up 4.4 percent over the figure recorded in the comparable 2022 period. Growth was driven by the company’s “New Categories” segment. Revenue from noncombustible products now accounts for 16.6 percent of group revenue, up 180 base points (bps) versus fiscal year 2022.
BAT’s Vuse and Velo brands enjoyed strong revenue growth, and New Categories’ financial delivery significantly improved, contributing a £201 million increase to group profit as losses reduced.
Reported profit from operations was up 61.4 percent (with reported operating margin up 1,560 bps to 44.2 percent). Adjusted profit was up 3.6 percent at constant exchange rates. Adjusted operating margin was up 40 bps to 44.3 percent.
“Having been in my new role for 10 weeks, I’m pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organization,” said BAT Tadeu Marroco, who assumed the top job in May. “It is a challenging external environment. High inflation and slower global growth are impacting consumers and business. Yet our revenue, profit from operations and earnings are all up.
“We are making great progress in New Categories. Revenues are up by 29 percent, and we are now close to break[ing] even, with consumers of noncombustible products up by 1.5 million versus FY 2022. While it’s encouraging to see continued good performance in vapor and modern oral, we recognize more work is required in heated tobacco.
“I remain confident that New Categories will deliver a positive contribution in 2024. However, we do not expect contribution growth to be linear, as levels of investment will align with the phasing of our big innovation platforms.
“While more focus is required in the U.S., our sequential performance improvement in the critical premium U.S. combustibles business since January 2023 is encouraging.
July 26, 2023
Amicus Brief Supports Limiting ‘Chevron Deference’

Image: Tobacco Reporter archive
Keller and Heckman has filed an amicus brief with the U.S. Supreme Court on behalf of members of the electronic nicotine-delivery system (ENDS) industry in support of petitioners in a case to overturn or limit the so-called Chevron deference.
Named after a landmark Supreme Court decision dating from 1984, the Chevron deference is a legal doctrine that generally requires courts to defer to an administrative agency’s interpretation of ambiguous statute so long as that interpretation is reasonable.
In practice, Chevron deference often gives agencies broad leeway to reach beyond the limits of a statute’s plain language, often bypassing the rulemaking process otherwise required under the Administrative Procedure Act and making it more difficult to challenge an agency action in court.
In the years since ENDS became subject to Food and Drug Administration regulation, the vast majority of courts reviewing ENDS industry challenges to premarket application denials, as well as FDA rulemakings and guidance documents, have rubber-stamped the agency’s interpretation of the Family Smoking Prevention and Tobacco Control Act (TCA) and the “appropriate for the protection of the public health” standard, Keller and Heckman wrote on its blog.
Critics contend that the Chevron deference has enabled the FDA to impermissibly interpret the TCA to implement a de facto ban on all nontobacco-flavored ENDS products without any requisite notice and comment rulemaking or congressional amendments to the TCA.
The filers on the amicus brief urge the Supreme Court to at least restrict the application of Chevron deference so that it is the exception, not the rule. The Supreme Court will hear oral arguments in the case in its fall 2023 term.
The petition to overturn or limit the Chevron deference was brought by a group of fishing companies challenging the National Marine Fisheries Service’s construction of the Magnuson-Stevens Act to require the industry to pay the salaries of federal monitors.
The ENDS industry amici include the American Vaping Manufacturers Association, the American Vapor Group and Bidi Vapor.
July 25, 2023
FDA Makes Next TPSAC Meeting Materials Available

The U.S. Food and Drug Administration’s Tobacco Products Scientific Advisory Committee (TPSAC) met on May 18 to discuss the “Requirements for Tobacco Product Manufacturing Practice” proposed rule. All the meeting materials, including the recording, transcript and summary minutes, are now available online.
The proposed rule, if finalized, lays out the FDA’s requirements for tobacco product manufacturers regarding the manufacture, design, packing and storage of tobacco products.
Comments on the proposed rule must be submitted by 11:59 p.m. Eastern Time on Sept. 6, 2023.
July 25, 2023
U.S. Congress Committee to Discuss CBD Thursday

A U.S. congressional committee is scheduled to talk about hemp this week as lawmakers presumably will increase pressure on the U.S. Food and Drug Administration to establish guidelines to regulate the CBD market.
A hearing set for 2 p.m. Thursday will look at “Hemp in the Modern World: The Yearslong Wait for FDA Action.”
The House Oversight and Accountability Subcommittee on Health Care and Financial Services session is open to the public and also may be viewed online, according to Hemp Today.
The session is also likely to address what some say is a lack of regulatory clarity and concern about the safety of synthetic delta-8 THC products.
The oversight committee, chaired by Rep. James Comer, is investigating the FDA’s failure to regulate hemp-derived CBD products as dietary supplements.
Lawmakers and the FDA have danced around CBD for nearly five years, with Congress repeatedly calling on the agency to set rules for the unregulated products, which emerged beginning late last decade and grew into a flourishing gray market.
“We are going to investigate why exactly the FDA has decided to ignore their regulation responsibilities related to CBD and other areas of jurisdiction,” said Rep. Lisa McClain, who serves on the committee.
“Without these regulations, dangerous products could make their way to the shelves while safe and credible CBD products could be prevented from entering the market,” McClain said.
July 25, 2023
Michigan Recalls THC Vapes for Banned Chemical

The Cannabis Regulatory Agency in Michigan is recalling certain THC vape cartridges due to the possible presence of banned chemical residue exceeding the established limits, the agency announced.
The vape cartridges — manufactured under the name “FLIGHT LIVE RESIN DISPOSABLE” — were manufactured by the Mount Morris-based marijuana processor Sky Labs near Flint and include three batches called “Grease Monkey,” “Space Ether” and “Bubblegum,” according to the Detroit Free Press.
More than 13,000 of these vape cartridges have been sold, David Harns, a spokesperson for the CRA said, and about 2,200 of them are currently available for sale at 59 dispensaries.
The banned chemical residues that are possibly in the products include Bifenthrin (an insecticide), Myclobutanil (a chemical used as a fungicide), Bifenazate (a pesticide), Paclobutrazol (an organic compound used as a plant growth retardant and fungicide) and Permethrin (an insecticide), he said.
July 25, 2023
Study Linking Vaping and Liver Disease Retracted

A study linking nicotine vapes to liver disease was retracted from Gastroenterology Research after the authors failed to reply to concerns about the researchers’ methods and findings, reports Filter.
The retraction stated that “concerns have been raised regarding the article’s methodology, source data processing, including statistical analysis, and reliability of conclusions.” The study was published in June 2022.
A letter was sent to the editor raising concerns, and the authors were given time to respond but failed to do so. “As is our journal and publisher’s policy, because there was no response or rebuttal from the authors, the manuscript was retracted, and the letter to the editor was not published,” said Robert Wong, editor-in-chief of Gastroenterology Research. “Typically, if there is an author response or rebuttal, we publish both the letter to the editor and the response.”
“This is a greater problem than just one study,” said Gregory Conley, director of legislative and external affairs for the American Vapor Manufacturers Association, noting a 2020 retraction by the Journal of the American Heart Association of a study connecting vaping to heart attacks. The 2020 retraction letter to the journal was made public, but the issue with the Gastroenterology Research paper is less clear because “there is silence around why it was retracted,” said Conley.

It’s gratifying that the journal took the step to retract the paper. There’s just a lot of things going on with this study that make it seem kind of weird.
Ray Niaura, epidemiology professor at New York University’s School of Global Public Health
The 13 co-authors of the study drew from the National Health and Nutrition Examination Survey and analyzed participants’ responses for associations between liver disease and the use of cigarettes or vaping products.
They claimed the results showed “e-cigarette users … were associated with higher odds of having liver disease compared to nonsmokers.”
“I already have a bunch of questions just off the top of my head, basically, just looking at this paper,” said who studies tobacco dependence and treatment. He said there were issues with the data, noting that the only survey question on vaping is broad, asking “Have you ever used an e-cigarette?” Questions on combustible tobacco included “Do you now smoke cigarettes?” and if someone has smoked “at least 100 cigarettes” in their life.
“That’s kind of a weak variable,” Niaura said. “What does it mean? It doesn’t mean much.”
The data also didn’t allow for analysis around timing, which means it’s not possible to tell whether liver disease was developed before or after smoking/vaping. “What’s the resolution of the information in studies like this?” Niaura asked. “It’s tricky.”
“It’s gratifying that the journal took the step to retract the paper,” he said. “There’s just a lot of things going on with this study that make it seem kind of weird.”
July 24, 2023
Bangladesh Mayors Commit to Smoke-Free Future

Mayors from Bangladesh’s municipalities met for a two-day summit with national and international tobacco control experts, where they pledged to aim for Prime Minister Sheikh Hasina’s vision of a tobacco-free Bangladesh by 2040, reports the Dhaka Tribune.
The goal of the summit was to discuss implementation of tobacco control laws and local government guidelines. The country’s tobacco control law was enacted in 2005 after ratification of the World Health Organization Framework Convention on Tobacco Control. The law was amended in 2013, introducing pictorial health warnings and including smokeless tobacco. It took over three years to put the law into practice, and during that time, the health ministry drafted an amendment banning vaping products, lifting the provision of designated smoking zones to prevent secondhand smoke and controlling point-of-sale advertising. The draft is pending Cabinet approval.
Tobacco use is not declining as expected, according to anti-tobacco activists. The latest data shows that 35.3 percent of adults ages 18 and older used tobacco in any form in 2017. Experts warn that if the trend continues, the tobacco-free goal will not be met.
“The key is to have strong local leadership in terms of policy development, policy implementation and mobilizing funds at the local level for the prevention of tobacco use and noncommunicable diseases,” said Tara Singh Bam, regional director of The Union Asia Pacific, who spoke at the summit. “Mechanisms need to be established that ensure mayors are held accountable for safeguarding the development and implementation of public health policies from the undue influence of unhealthy commodity industries.”
“We, the Ministry of Local Government, issued tobacco guidelines for all the municipalities and cities to assist them,” said Joint Secretary Jasim Uddin. “We have distributed these guidelines.” He noted that the mayors attending the summit are “very committed” to preventing tobacco-related diseases and deaths.
The guidelines direct the mayors to improve tobacco control law enforcement, build public awareness, allocate funds for tobacco control and limit the availability of tobacco products.
July 24, 2023
BAT Launches New Vuse 800 Disposable in Korea

BAT Rothmans, the Korean unit of BAT, debuted Vuse 800 in Korea, marking the first launch in Asia, according to The Korea Herald.
The battery-powered e-liquid cigarette product allows up to 800 puffs without charging. There are four flavor options available.
In the U.S., Vuse accounts for nearly half the market.
Vuse’s U.S. market share declined from 42.2 percent to 41.8 percent, compared with Juul declining from 26.1 percent to 26 percent.
In March of this year, Altria Group announced it had entered into an agreement to acquire Njoy Holdings for approximately $2.75 billion in cash.
Altria said it had multiple sources of funding for the deal, including cash from a $2.7 billion agreement with Philip Morris International last year for IQOS.
A day before the Njoy announcement, Altria Group announced it had exchanged its entire investment in Juul Labs for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.
July 24, 2023
China Releases Guideline for Vaping Product Exports
Credit: Zapp 2 Photo
China’s State Tobacco Monopoly Administration released the Guidelines for Promoting the Building of Quality Assurance Systems for Exported Electronic Cigarette Products on July 20, according to 2Firsts, which published a translated version of the release.
The guidelines consist of 18 articles covering the following:

clarifying that enterprises are the main responsible entities for the building of quality assurance management systems for exported electronic cigarette products;
specifying the main content for the building of quality assurance management systems for exported processes, allocation of production resources, the establishment of sound systems, standardization of product packaging, traceability of logistics and transportation, and export declaration and registration requirements; and
specifying the requirements for the building of quality assurance management systems for exported electronic cigarette products.
The guidelines are interpreted by the State Tobacco Monopoly Administration (STMA). The guidelines “shall be implemented” from the date of issuance, according to the STMA.
July 21, 2023
FDA Seeks Input on 5-Year Tobacco Center Strategic Plan

Credit: FDA
The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) will hold a virtual listening session on Aug. 22 to give the public an opportunity to comment on the five-year plan it developed to advance its mission.
As part of its response to the Reagan-Udall Foundation evaluation, the CTP plan includes five proposed goal areas that are interconnected with the themes of health equity, science, transparency and stakeholder engagement.
The proposed goals and the questions that the CTP would like commenters to address are on the agency’s virtual listening session event page.
Following receipt and consideration of public input, the CTP intends to publish its strategic plan by the end of 2023.
After introductions, the center will begin the listening session with an overview of the process used to develop the CTP’s strategic plan. Registered speakers will then have approximately four minutes each to verbally share their comments on any topics related to the strategic plan.
Request to verbally provide open public comment must be submitted by Aug. 14 at 11:59 p.m. Eastern Time.
In addition to this listening session, the public can submit electronic or written comments to the Federal Register notice. Electronic comments must be submitted and written comments must be postmarked by Aug. 29.
July 21, 2023