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KT&G: another tobacco multinational emerging

| June 19, 2015

KT&G expects that its cigarette exports will exceed its domestic sales this year, according to a story in The Korea Times.

A company spokesperson was quoted as saying that KT&G, which accounted for 63 percent of the domestic market, exported 43.4 billion cigarettes to 50 countries last year. Export volumes were up by 27 percent on those of 2013.

The company sold about 56 percent of its output in Korea and shipped the remaining 44 percent overseas.

And this year exports were expected to exceed domestic consumption.

“At first, we set up a presence in the Middle East, Russia and Central Asian nations,” the spokesperson was quoted as saying. “But then, we entered the United States, Turkey, Indonesia, and countries in Eastern Europe and Africa. We have successfully diversified our markets.”

KT&G established plants in Turkey in 2008 and in Iran in 2009. It opened production facilities in Russia in 2010, producing mostly ESSE super-slim cigarettes. In 2011, the company acquired an Indonesian cigarette maker to expand its reach in Southeast Asia.

KT&G’s Shintanjin plant in Daejeon is said to have played a pivotal role in the company’s international expansion.

The Shintanjin plant, which began operation in 1965, recently underwent a renovation and is now capable of producing nearly 50 billion cigarettes annually. The factory employs 1,000 workers and makes ESSE and other super-slim cigarettes.

Timing of emerging-products ban questioned

| June 19, 2015

Singapore’s announcement that it is to ban emerging tobacco products comes at a time when a growing number of public health experts around the world are acknowledging that innovative non-combustible tobacco products can benefit public health, according to a TodayOnline story quoting Philip Morris Asia’s vice president corporate affairs Johan Von Zweigbergk.

The ban, due to come into effect on December 15, is said to include smokeless cigars, cigarillos or cigarettes, dissolvable tobacco or nicotine products, any substance containing tobacco or nicotine intended for use with an electronic nicotine delivery system, and any product containing nicotine or tobacco that may be applied to the skin, implanted, or injected.

Zweigbergk said Philip Morris International had invested US$2 billion in recent years in research and development of potentially reduced-risk products and was working with scientists and governments across the world to establish scientifically the potential of these products to reduce harm.

As a global leader in tobacco control and a center of scientific excellence, Singapore should “continue to value science-based regulation, monitor market developments and remain open to innovative technologies” so that its estimated 600,000 cigarette smokers had access to potentially less harmful products, Zweigbergk was quoted as saying.
The story was relayed by the TMA.

Very low nicotine cigarettes trial to be published

| June 19, 2015

The biotechnology company 22nd Century Group said on Wednesday that an independent Phase II clinical trial that had explored the efficacy of its very low nicotine tobacco as a smoking cessation aid when combined with pharmacotherapy had been accepted for publication in Nicotine & Tobacco Research.

The study, which was conducted at Queen Mary University of London, was supported by a grant from the Global Research Awards for Nicotine Dependence funded by Pfizer.

‘The results of this study once again confirm the effectiveness of 22nd Century’s very low nicotine tobacco cigarettes as a smoking cessation aid,’ 22nd Century said in a press note issued through Business Wire. ‘The Company’s very low nicotine cigarettes satisfy the behavioral aspect of smoking while delivering only trace amounts of nicotine. Indeed, it is 22nd Century’s fundamental assertion that very low nicotine cigarettes uncouple the behavioral/sensory aspects of smoking from the rapid delivery of nicotine.

‘The Queen Mary researchers noted: “[Very low nicotine cigarettes] have been shown to be satisfying… [and] were also shown to reduce tobacco withdrawal symptoms, including urges to smoke and low mood”.’

The clinical trial compared the combination of very low nicotine cigarettes together with two other treatments: 1) varenicline (Pfizer’s Chantix), and 2) nicotine replacement therapies (patches, lozenges, etc.).

In each case, 22nd Century’s proprietary tobacco cigarettes were said to have provided smokers with a substantial boost in their efforts to stop smoking. ‘Despite providing patients with only a 2-week supply of 22nd Century’s very low nicotine cigarettes (a separately published Phase II clinical trial used a 6 week treatment period) researchers found that participants who received very low nicotine cigarettes had higher quit rates at 1-week, 4-weeks, 6-weeks, and at the study’s maximum 12-weeks,’ the press note said. ‘However, due to the size of the study, researchers were unable to achieve statistically significant results at 6 and 12 weeks.’

The Queen Mary study was said to have concluded that the most pragmatic approach might be to offer an ongoing supply of very low nicotine cigarettes to those who want to continue using them.

‘This conclusion echoes former US FDA commissioner Dr. David Kessler’s recommendation that “the FDA should quickly move to reduce nicotine levels in cigarettes to non-addictive levels… It is the ultimate harm reduction strategy.”’

22nd Century said it was ‘deeply committed’ to commercializing this approach and remained the only company in the world capable of producing virtually nicotine-free tobacco.

Johnson Creek Enterprises updates product line, name and website

| June 18, 2015

Johnson Creek Enterprises has announced the launch of hardware for advanced-level vapers, a new line of high-performance e-liquid and a new name.

“To know your customer is to know your future,” said founder and CEO Christian Berkey. “A growing segment of our customers want the ability to customize their vaping gear.”

To meet consumer needs, Berkey’s team has unveiled the Elite hardware series, which consists of the Vea Elite, an electronic box mod with an authentic DNA40 chip. The DNA40 allows users to control the wattage or temperature, depending upon which coil is used. Also part of the series is the Canteen Elite, a tank system with sub-ohm capabilities.

According to Johnson Creek director of product development Joe Dralle, these products require e-liquid that is formulated differently than e-liquids found in the company’s current lineup.

“Think of it as a high-performance car,” said Dralle. “This tank needs higher octane juice for peak performance.”

The company has developed six new flavors with a high vegetable glycerin base that will bring out each product’s flavor and allow for maximum vapor production.

The updated website will separate the company’s previous e-liquid offerings under the category “Johnson Creek Classics,” while the new flavors will be called “Vapor Liquid.”

Johnson Creek’s current e-liquid brands—as well as the original Vea e-cigarette and its accessories—will remain available to consumers.

“Not all vapers want the advanced gear,” Berkey said. “We are simply adding products to meet the needs of our evolving customer base.”

To better reflect the new product line and offerings, the company will also transition its name.

“Because we all need to move away from ‘smoke’ and embrace ‘vape,’” Berkey said, “I felt the time was right for Johnson Creek 2.0.”

The company will now be known as Johnson Creek Enterprises (dba) Johnson Creek Vapor Company.

Singapore to ban emerging tobacco products from mid-December

| June 18, 2015

Singapore will ban emerging tobacco products—those that are not currently available in Singapore as well as existing products in the local market—beginning Dec. 15, the ministry of health announced on June 15.

The ban is a “pre-emptive measure to protect public health against the known and potential harms of such products,” the ministry said in a news release, adding that the ban will be implemented in two phases.

The first phase, which will take effect Dec. 15, covers products that are currently not available in Singapore. Banned products include smokeless cigars; smokeless cigarillos or smokeless cigarettes; dissolvable tobacco or nicotine; any product containing nicotine or tobacco that may be used topically for application either by implant or injection into any part of the body; and any solution or substance, of which tobacco or nicotine is a constituent, that is intended to be used with an electronic nicotine-delivery system or vaporizer—such as e-cigarettes.

The second phase, which will take effect Aug. 1, 2016, will cover existing products in the local market. Banned products include nasal snuff and oral snuff as well as gutkha, khaini and zarda.

According to the ministry of health, the ban on existing products in the local market will take effect at a later date in order to give businesses time to adjust their operating models and deplete their existing stock.

Award of Hungary wholesale license hits tender spot

| June 18, 2015

Three multinational tobacco companies have expressed concern that another multinational is part of a venture granted sole wholesale tobacco concession rights in Hungary, according to a story in Hungary Around the Clock, relayed by the TMA.

In a joint statement released today, Philip Morris International, JT International and Imperial Tobacco Group said the Hungarian government’s decision to issue wholesale tobacco concession rights to British American Tobacco and tobacco distributor Taban Trafik without an open tender breached EU rules.

The statement said that the concession placed PMI, JTI and Imperial in a ‘vulnerable’ position because they would be required to provide their sensitive pricing and inventory data to a close competitor.

Dow Jones reported last week that the Hungarian government had announced that BAT would join forces with a Hungarian tobacco trader to supply tobacco shops in the country.

Under the arrangement, BAT and Taban Trafik would jointly pay 600 million forints ($2.2 million) for the wholesale license, Janos Lazar, head of the prime minister’s office, was reported to have said at a press conference.

Hungary monopolized the retail trade of tobacco in 2013 and, in doing so, radically reduced the number of retail tobacco outlets.

Market experts estimate Hungary’s retail tobacco market is worth about 500 billion forints ($1.81 billion) a year.

In December last year, Hungary’s parliament, which is dominated by the governing Fidesz party, approved legislation to introduce a single firm licensed by the state as the only tobacco wholesaler.

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