News & Development

News & Development

2020-12-07 – FDA Authorizes Marketing of Tweaked IQOS Holder and Charger

The U.S. Food and Drug Administration (FDA) has issued a marketing order to Philip Morris Products authorizing the sale of the IQOS 3 system holder and charger, the agency announced on Twitter .

The newly authorized version has minor design differences from the previous version authorized in April, including how the holder inserts into the charger, changes to the charging connectors and LED indicator lights, a new touch feedback feature, and an option to reduce the perceived heat from the tobacco aerosol inhaled by users.

Data on product use suggest no differences among user populations from the previous version, including no new concerns regarding product initiation or use among youth and young adults.

“The issuance of this marketing granted order confirms that you have met the requirements of section 910(c) of the FD&C Act and authorizes marketing of your new tobacco product,” the FDA wrote in a letter to Philip Morris Products.

“Under the provisions of section 910, you may introduce or deliver for introduction into interstate commerce the tobacco product, in accordance with the marketing order requirements outlined in this order, including all appendices.”

This agency stressed that the marketing order does not mean any version of the IQOS system holder and charger can be marketed as “safe” or “FDA approved.”

“There are no safe tobacco products,” the FDA wrote.

The previous version of the IQOS system holder and charger was initially allowed for sale in the U.S. following the FDA’s issuance of a marketing order in April 2019 . The company later submitted another premarket tobacco application requesting to market an updated version of the device holder and charger.

2020-11-17 Data from the Ministry of Finance of Japan: IQOS accounts for 18.7% of the Japanese tobacco market and Glo is 4.5%

Heat not burn is regarded as the future of tobacco.

Philip Morris (PM) first proposed the concept of heat-not-burn in Japan. In this regard, their first-mover advantage means that, compared with BAT's Glo, the overwhelming market leadership has an overwhelming advantage, and the overall share of the tobacco market has been rapidly increased.

Seekingalpha believes that Philip Morris' first-mover advantage in the vast global market will achieve the same results as the Japanese market and will seize a large part of the market share. Although the promotion in Europe and other regions is still in its infancy, the results of understanding the potential PM lead through Japan are encouraging.

Since IQOS was launched in Japan in 2016, it has accounted for 7% of the entire Japanese tobacco market in the first quarter. The situation up to the last quarter shows that Philip dominates Morris with IQOS alone. And a considerable share of the market for alternative tobacco products.

Glo is also growing, but since BAT later entered the market, the lead of IQOS has greatly increased.

(Source: Data for the second quarter of the Ministry of Finance of Japan)

In the third quarter update, based on the heating components sold, we saw a further significant improvement in IQOS market share compared to Glo. This is happening in the context of the overall decline in transactions in the traditional product market, but heat-not-burn is growing. In the third quarter, the share of Glo and IQOS in the overall tobacco market also increased.

(Source: Ministry of Finance of Japan)

IQOS's leading advantage over Glo has been consolidated until recent quarters. Although the overall heat-not-burn market growth has shown a downward trend, it shows that Glo is also continuing to be popular.

A growing body of evidence shows that the use of the Japanese market as a pioneer of new tobacco test plots will benefit a lot from it. Since the profit margin of IQOS is more than 50% higher than that of traditional cigarettes, the huge market integration from competitors' traditional products to IQOS will mean a substantial increase in profit margins.

After the COVID-19 crisis abates, once the traditional transaction volume stabilizes a bit in the overall downward trend, we should see a more optimistic operating profit situation, which will show a clearer profit growth trajectory.

However, there are still risks in the new tobacco business. First of all, IQOS's lead in the broad global market is not as large as in Japan, because when they enter the Japanese market, heat-not-burn is a new category. Therefore, the launch at that time will be more competitive.

In addition, the COVID-19 quarantine at the beginning of March also slowed the launch of certain markets, giving BAT time to prepare for a stronger launch of IQOS.

Therefore, the results of the global market may be different from the situation in Japan, but we still believe that IQOS's first move in many major markets will give it an overall advantage in heat-not-burn due to its product growth rate in the third quarter Exceeded expectations.

July 15, 2020-Euromonitor International: South Korea’s HNB product sales

in 2020 are expected to rise to US$16 billion

Electronic Cigarette News: According to the "Korea Herald" quoting Euromonitor International, despite the impact of the epidemic, the entire tobacco market is expected to decline, but sales of heat-not-burn tobacco products in Korea may increase this year.

According to market intelligence companies, the Korean tobacco market reached 17.19 trillion won (approximately US$14 billion) in 2019. Among them, 18.90 million (1.5 billion U.S. dollars) billion won was spent on non-burning cigarettes, making South Korea the second largest tobacco market in the world. This type of product is second only to Japan.

Euromonitor predicts that the market for heated tobacco products in South Korea will reach 2 trillion won ($1.6 billion) by the end of 2020.

Due to the South Korean government’s new restrictions on e-cigarettes, sales of e-cigarettes this year are expected to fall by 80% to 16.6 billion won (13.44 million US dollars).

At the same time, flavored tobacco products are becoming more and more popular in Korea. Last year, flavoring products accounted for about 20% of the Korean traditional cigarette market, higher than Japan (7%) and China (1.7%).

July 14, 2020-The UK bans the use of menthol in cigarettes,

the opportunity for iQOS is here

The new iQOS heat not burn brand "HEETS"

According to the Tobacco Products Directive (TPD) revised by the European Union, menthol cigarettes have been banned throughout the European Union since May last year. Despite Brexit, the ban also applies to the UK, including capsules, click on, click & roll, popcorn and double menthol cigarettes, but does not include steam and heated tobacco products. The measure took effect on May 20, and anyone selling menthol products in the European Union (EU) will be fined up to 1,000 euros.
"No one shall produce or supply cigarettes or cigarettes with filters, paper, packaging, capsules or other flavor-containing ingredients; filters, paper or capsules containing tobacco or nicotine; or a technical feature that allows consumers to change the product. Odor, taste or intensity of smoke,” explains Action on Smoking and Health (ASH).

For the tobacco giants, this is an opportunity, not a threat

Allegedly, PMI UK used this ban to hire sales representatives to sell its menthol-heated tobacco products directly to newspaper agents. According to reports, the Yemen tobacco company also provided new customers with promotional kits and trials of menthol. There are HEETS sticks in any of the four menthol flavors at half price. PMI is expected to take advantage of this ban and even call it a "huge opportunity" for its business. To
PMI is expected to take advantage of this ban, even calling it a "great opportunity" for its business. To

In response to the decline in global smoking rates, tobacco companies have been investing heavily in alternative products such as iQOS and Glo. As the first company to launch a heated tobacco product supplemented with menthol in the UK, PMI expects to take advantage of this ban and says this is a "great opportunity" for its business.


An article about Bureau disclosed that iQOS is not only the “closest substitute for menthol” sold by PMI, but also in an email to his employees, Peter Nixon, general manager of Philip Morris ) Called the menthol ban a major opportunity. "...2020 is the most important year in history... The momentum of iQOS combined with the menthol ban has given us a huge opportunity. At the end of this year, I hope all of us can look back and say that we have paid all."

This is the best time for menthol smokers to quit


University of Nottingham (University of Nottingham) UK Centre for Tobacco & Alcohol Studies (UK Centre for Tobacco & Alcohol Studies) director and professor of epidemiology John Britton said that although the smoking ban is an excellent way to help smokers quit smoking Opportunities, but tobacco companies will do their best to get customers to switch to their other products.

"For many smokers, the menthol ban will be bad news. They will find that smoking is no longer so attractive, so this is a great opportunity to quit." Britton added that the tobacco company would "hope Minimize the number of people who quit smoking and maximize the number of people who continue to buy products from them."

He added: "Any nicotine product has a certain range of risks, from medicinal products to combustible tobacco."
"We don't know the location of iQOS, but it is definitely closer to combustible tobacco than e-cigarettes or medicinal nicotine."

June 20, 2020-Turkish government says it will levy taxes on

new tobacco products

According to the China Tobacco Science and Education Network, the Turkish government’s fiscal and taxation department recently announced to the outside world that the government will levy taxes on new tobacco products.

The reason for taxation is to reduce the harm of such products to consumers, especially young people.

In response, Turkish President Erdogan made a statement on World No Tobacco Day: In order to reduce the country’s smoking rate and reduce the harm of Yemen tobacco shop consumption to public health, the government will increase Yemen tobacco tax rates and impose taxes on new Yemen tobacco products. .

At the same time, President Erdogan also stated that the tobacco industry uses various propaganda methods to advertise its products, so the tobacco industry should be subject to stricter supervision.

June 15, 2020-Japan Tobacco International is selected as one of the

top 100 European patent applications

According to PR Newswire, the number of patents applied by Japan Tobacco International (JTI) for low-risk products has more than doubled from the previous year.

The 2019 Patent Index of the European Patent Office (EPO) in Geneva shows that JTI ranks among the top 100 EPO patent applicants. This selection strengthened the position of JT Group as an innovation leader, especially in the field of low-risk products, in which the number of patent applications filed by JTI more than doubled from the previous year .

Stephane Hedarchet, Vice President of Intellectual Property of JTI, said: "We are among the top applicants for EPO patents, showing our commitment to innovation and the result of extensive internal research and development. We are always developing new technologies and New products, especially for our heat-not-burn Ploom series and Logic e-cigarette products, can better meet the needs of our consumers."

Heat not burn Ploom series products

Globally, the Japan Tobacco Group has obtained 4,200 patents, and there are 2,800 patent applications waiting for approval. The group filed 355 patent priority applications in 2019, covering the development of its diversified product series.

Heidache added: “Since 2018, we have invested nearly 1 billion U.S. dollars to develop and further promote our low-risk products. We are included in the top 100 EPO patent applicants list, highlighting our implementation of our One of the many key achievements in the intellectual property strategy, and shows that we continue to ambitiously develop in the field of new tobacco."

Japan Tobacco International Corporation is a leading international tobacco and e-cigarette company with operations in more than 130 countries around the world. The company is the global owner of Winston and Camel, the world's second largest cigarette brand outside of the United States, and has the largest sales share of these two brands.

Other global brands include Mevius and LD. JTI also occupies an important place in the e-cigarette market. It owns the e-cigarette brand Logic and the heat-not-burn Ploom series.

JTI is headquartered in Geneva, Switzerland and has approximately 45,000 employees. It has been awarded the title of "Global Employer" for the sixth consecutive year. JTI is a member of the Japan Tobacco Group of Companies.

June 10, 2020-KT&G plans to expand sales points of HNB product

Lil Hybrid to all of South Korea

According to Tobacco News, South Korean tobacco giant KT&G plans to expand sales of its heat-not-burn product Lil Hybrid 2.0 to all cities in South Korea.

The product debuted in major cities such as Seoul in February and expanded to 37 metropolitan areas in April.

Lim Wang-seop, business director of KT&G's next-generation products, said that the expansion was carried out after a series of surveys in areas where consumers have not yet released products.

Lim Wang-seop said: "Since the product was launched, we have been expanding our sales outlets. We will use technological innovation to enhance product competitiveness and improve customer satisfaction, so as to continue to lead the new tobacco market."

Lil Hybrid 2.0 is equipped with a feature that automatically warms up when the joystick is inserted for the first time. The OLED display can provide information about battery power, battery box power and remaining puffs. The suggested consumer price of the product is 110,000 won (US$90.27).

June 2, 2020-Taiwan's "Tobacco Hazard Prevention and Control Law"

will be submitted for review again: a total ban on e-cigarettes is proposed,

with a maximum fine of 50 million

According to Taiwan media reports, as the draft amendment to the "Tobacco Harm Prevention and Control Law" was stranded during the previous session of the Legislative Yuan, Taiwan’s Ministry of Health and Welfare recently stated that it will resubmit the draft amendment to the "Tobacco Harm Prevention and Control Law" to prohibit electronic cigarettes, heating cigarettes, etc. Related tobacco manufacturing, sales and import; in addition, the legal smoking age is raised from 18 to 20.

The Director of Health Wang Yingwei stated that the draft will add a definition of "quasi-tobacco products", expressly prohibiting the manufacture, import, sale, supply, use, and display of related tobacco products, so as to prevent electronic cigarettes and other "quasi-tobacco products" from causing health hazards to the public ; Violators can be fined 10 million to 50 million yuan (about 2.3 million to 11 million yuan).

In addition, in view of the recent legislation in the United States, Singapore and other places, the legal smoking age was set at 21 years old respectively, and more than 82% of smokers in Taiwan had started smoking before the age of 20. He emphasized that before the age of 20, the brain is still reaching a mature stage and is vulnerable to nicotine addiction, so he proposed to raise the age for banning smoking.

Smokers who violate the above regulations must receive smoking cessation education. If they supply tobacco products to people under the age of 20, they will be fined 10,000 to 250,000 yuan (about 2300 yuan to 60,000 yuan).

Wang Yingwei said that due to the continuous occurrence of severe lung injuries caused by e-cigarettes in the United States last year, it has attracted global attention to emerging tobacco products. According to statistics, the use rate of e-cigarettes among teenagers in Taiwan last year was 4.2%, an increase of more than 50% over the previous year. As soon as possible in the Legislative Yuan this session.

Australian experts support e-cigarettes

At present, there are three top medical schools in Australia, and they all play a role in helping smokers quit smoking through e-cigarettes, especially when other methods are not passed.

Others are the Royal College of Psychiatrists of Australia and New Zealand (RANZCP) and the Royal Australian College of General Practitioners (RACGP).

The policy of the Royal Australian College of General Practitioners is now in line with the policy of the Royal College of Physicians. The Royal College of Physicians issued a landmark report in 2016 encouraging the widespread use of e-cigarettes to help smokers quit smoking.

This support is in sharp contrast to the Australian government's health department, health charities and AMA's opposition to e-cigarettes.

All three universities agreed to scientifically support the role of e-cigarettes. It is time for the government to follow up with experts and evidence.

WHO expert on tobacco harm reduction: promote tobacco harm reduction

Tobacco Harmless Taiwan Foundation FSFT, Taiwan Tobacco Harm Reduction Association TTHRA, WHO FCTC tobacco harm reduction expert Wang Yuyang said: “Australia is a pioneer country in global tobacco harm prevention and control. This time I saw that the Australian physician group publicly expressed its position in order to promote tobacco harm reduction. The value of electronic cigarettes instead of cigarettes is moving."

He hoped that the Taiwanese government, the Tung Foundation, and people in the pharmaceutical industry can refer to the latest scientific evidence and work together towards the goal of a smoke-free Taiwan instead of stifling the e-cigarette industry and consumers in a total ban.

May 29, 2020-EU Member States ask the Commission to tax

new tobacco

According to foreign news reports, EU member states will require the European Commission this week to include e-cigarettes, heated Yemen wholesale tobacco products cigarette and other new Yemen premier tobacco products into the EU Tobacco Excise Directive, which means that these products will be taxed like traditional Yemen prime wholesale tobacco products.

Although from a health perspective, the Tobacco Products Directive regulates new tobacco products, there is currently no EU-wide excise tax framework.

Some member states levy taxes on e-liquid and heated tobacco products at different rates, while others do not levy taxes at all.

In January 2018, the European Commission (European Commission) did not propose a uniform tax on new tobacco products, citing lack of data.

However, in February 2020, the Chief Executive issued a report expressing concern about the impact of the lack of unification on the operation of the EU's internal market.

The report pointed out that the current tax regulatory framework for these products lacks coordination, which also limits the possibility of monitoring their market development and controlling their movements.

The tobacco industry believes that compared with traditional smoking, new tobacco products and e-cigarettes significantly reduce health risks, so taxes should be levied at a lower level.

May 29, 2020-British American Tobacco's heating non-combustion

products are sold in 48 countries and regions around the world

According to news from British American Tobacco, a recent performance report released by British American Tobacco shows that the company has made significant progress in the development, production and commercialization of new tobacco products.

Data show that the company's potentially low-risk heat-not-burn products have been sold in 48 countries and regions around the world.

British American Tobacco CEO Jack Bowles said in an interview with reporters that the company is transforming from a company that always values and adheres to sustainable development to a leader in the company's industry, which will serve its consumers and employees. , Shareholders and society bring a better future.

On May 27, 2020 Eastern Time, British American Tobacco's stock price rose 2.09% to a closing price of $40.47, a new high since March.

May 13, 2020-Arizton Research: The global e-cigarette market will

exceed 60 billion US dollars by 2025

According to research and analysis by Arizton, a consulting and intelligence company, from 2020 to 2025, the global e-cigarette market revenue will exceed 60 billion U.S. dollars, growing at a compound annual growth rate of approximately 15%.

Main highlights of the study:

1. From 2015 to 2025, the global e-cigarette market will achieve an absolute growth of 590%, and revenue will soar by US$49 billion.

2. Driven by the shift in preference for next-generation smoking products and the demand for HNB tobacco by smokers, by 2025, the total revenue of e-cigarette products will exceed 57 billion US dollars.

3. Between 2019 and 2025, there will be a high compound annual growth rate of about 6%.

Arizton Consulting and Intelligence is an innovation and quality-oriented company, mainly researching consumer goods and retail technology, automotive and mobility, smart technology, healthcare and life sciences, industrial machinery, chemistry and materials, IT and media, logistics and Packaging and other industries.

April 29, 2020-Philip Morris International's heat-not-burn shipments

increase by 45.5% in the first quarter of 2020

Recently, the world tobacco giant Philip Morris International (PMI) released the Q1 financial report showing that Q1 turnover in 2020 was 7.15 billion U.S. dollars, higher than the 6.75 billion U.S. dollars in Q1 in 2019, an increase of 6% year-on-year; net profit was 2.79 billion U.S. dollars , Compared with US$2.05 billion in 2019, an increase of 36% year-on-year.

Philip Morris International (PMI) sold 173.75 billion cigarettes and heated tobacco in the first quarter of 2020, down from 175.8 billion in the first quarter of 2019. Cigarette shipments fell from 164.3 billion in the first quarter of 2019 to 157.02 billion in the first quarter of 2020.

In contrast, the number of heated tobacco has increased from 11.5 billion to 16.73 billion. Taken together, cigarette shipments fell by 4.4%, and heat-not-burn tobacco shipments increased by 45.5%.

As of the end of the quarter, the total number of IQOS users is estimated to be approximately 14.6 million, of which approximately 10.6 million have quit smoking and switched to IQOS. IQOS market share (excluding the United States) increased by 1.9 points to 6.6%.

On March 30, 2020, Philip Morris submitted a supplementary pre-market tobacco product application (PMTA) for the IQOS 3 tobacco heating device to the US Food and Drug Administration.

"We have performed very strongly since the first quarter, reflecting the continued growth of our structure as a result of the increase in our smokeless product portfolio and combustible tobacco prices," said CEO Andre Calantzopoulos (Andre Calantzopoulos) . "From the early stages of the Covid-19 pandemic, we have had a limited impact on our performance, because the onset of government restrictions related to social distancing and travel is usually only implemented in our main markets in March."

“We expect the new crown epidemic will have an adverse impact on our full-year business performance in 2020. The situation that has been observed is related to the significant reduction in tax-free sales in Indonesia, the slower acquisition of IQOS users, and the delay in the implementation of the minimum price. We must also assume In certain markets, unemployment and related reductions in disposable income will have a temporary impact on market dynamics or the ability of certain small retailers to operate."

April 24, 2020-Patent applications for China Tobacco's heat-not-burn

products are gaining momentum

It is well known that IQOS, a well-known heat-not-burn Yemen tobacco brand, is forbidden to be sold in China, but the general trend of new Yemen tobacco products such as heat-not-burn, domestic traditional Yemen tobacco companies are also accelerating the development of heat-not-burn Yemen tobacco products, and the state and relevant departments are also accelerating the establishment Regulatory mechanism for new Yemen tobacco shop products.

From the perspective of the country's gradual implementation of tobacco product reforms, there will be significant improvements in new domestic tobacco products in the future. This is not only the reform of the tobacco industry, but also people's demands for health. The new tobacco wave is coming rapidly.

Through the search for "heat not burn smoke" on Soopat, as of the end of 2019, my country has 9278 heat not burn related patents.

On the whole, the number of HNB tobacco applications in my country from 2013 to 2018 showed an upward trend, and it declined slightly in 2019. In 2019, the number of HNB related patent applications was 855.

Although my country has not yet passed the sales approval of heat-not-burn smoke, through the search for “heat-not-burn smoke” on Soopat, as of the end of 2019, my country Tobacco Group has accelerated the research and development of heat-not-burn smoke related fields.

Among them, China Tobacco Yunnan Industrial Co., Ltd. has the largest number of applications for heating non-combustion cigarettes, with 187, followed by China Tobacco Hubei Industrial Co., Ltd. with 130 applications.

Source: Foresight Economist

April 7, 2020-Tobacco giants are actively "anti-smoking",

leaving little time for traditional cigarettes

01
JUUL applies for a patent for "AI" intelligent nicotine limiting device to help users get rid of "nicotine"


Juul has applied for a patent for a device based on "artificial intelligence", which can help users gradually quit nicotine by reducing their daily nicotine intake. From the outside, this is another way for JUUL to restore public goodwill. The latest attempt.

The device is connected to a smart phone, and learns the frequency of use and nicotine intake of e-cigarette users through software, and then adjusts the supply according to the user's use habits, thereby gradually reducing nicotine intake, and finally getting rid of nicotine addiction The role of.

Simply put, it is to record the user's frequency and habits through the smartphone application and then analyze to determine the acceptable reduction of nicotine by the user, and then the mobile application returns the data to the electronic cigarette device to accurately control the nicotine supply each time It allows users to gradually reduce the demand for nicotine without knowing it.

James Monsees, the co-founder and chief product officer of Juul, said that Juul has already begun to develop plans for devices that can be connected to smartphones in 2018, which can not only be used for user authentication, but also for The user provides assistance with nicotine withdrawal.

The equipment uses artificial intelligence machine learning algorithms to solve problems for users, and to simplify the operation as much as possible, even without user intervention or settings, it can easily complete nicotine withdrawal without knowing it.
E-cigarette + Bluetooth + APP is a relatively mature technology at present, and it is also a solution with a lower cost and a higher degree of feasibility. It can not only realize the real-name authentication function to prevent teenagers from using e-cigarettes, but also add algorithms to achieve nicotine intake. Decreasing intake, truly abstaining from nicotine.

At the same time, if the cartridge is modified, the source of the cartridge can also be traced to prevent users from buying illegal channel products, and it also solves the losses caused by counterfeit and generic cartridges to the enterprise.

The Bluetooth technology of "one stone and birds" has opened the real curtain of "smart electronic cigarettes". Although these functions can be realized for the chip industry in Shenzhen, they are rarely affected by the cost and supply chain. There are e-cigarettes willing to use.
Perhaps the new regulatory measures are the driving force behind the popularization of technology.


02
Philip Morris International: Completely phase out traditional cigarettes by 2030


International tobacco giant Philip Morris International (PMI) has been holding high the banner of anti-"smoke" in recent years, but it opposes "traditional cigarettes" and promotes the new type of tobacco iQOS.

PMI has also made great efforts in "tobacco innovation". It not only spent huge sums of money to pass the PMTA in the United States, but also discussed with the British authorities to establish a 1 billion pound tobacco transformation fund to help smokers switch from cigarettes to safer alternatives. For example, my own iQOS.

According to foreign media reports, a leaked document indicates that PMI funds will be provided to British authorities and the Public Health Agency (PHE) to encourage smokers to switch to safer alternatives. For example, PMI's own "heat not burn" new tobacco product IQOS. These documents show that relevant parties are discussing to submit a smoke-free bill to the British House of Commons to establish the fund. If the bill is passed, it will help lift the current advertising and marketing ban on e-cigarettes.

Foreign media commented that this is the latest action in a series of actions taken by PMI to win public trust. These actions are intended to change public perceptions, so that the public no longer believe that smoking is the culprit of cancer, and new tobacco products become the solution to smoking. Part of the solution of the problem.

Deborah Arnott, chief executive officer of Action on Smoking and Health (ASH), said the tobacco company’s approach was “very hypocritical”.
As early as 2018, PMI launched a controversial advertising campaign, including a full-page advertisement in major newspapers that claimed "Hope people can give up traditional cigarettes". These ads aroused the anger of anti-tobacco activists, but PMI is still emphasizing that it hopes to achieve this goal by 2030.


03
Combating illicit tobacco trade


Last summer, after KPMG (KPMG) released a new report that pointed out the challenges and financial costs of illegal trade, tobacco giant PMI once again called for continued action to combat illegal tobacco trade. The "Stella Report" pointed out that the consumption of counterfeit and smuggled cigarettes in the EU in 2018 is estimated to account for 8.6% of total consumption, equivalent to 43.6 billion cigarettes.

The KPMG report commissioned by PMI also shows that the European Union's cigarette black market has caused a total of 10 billion euros in tax losses to governments, which is equivalent to the total legal cigarette sales in the United Kingdom, the United States, Austria and Denmark combined. Compared with last year, the consumption level of illegal cigarettes seems to remain stable, but the report shows that the consumption of counterfeit cigarettes has increased by 30%, which is the largest increase on record so far.

Alvice Giustiniani, vice president of illegal trade prevention at PMI, said: “In addition to harming government revenue, it also harms the interests of legitimate businesses and aggravates criminal activities in local communities. The unregulated supply of cheap cigarettes on the black market undermines the reduction of smoking rates and Efforts to prevent young people from smoking."
"If PMI is to have an impact on our global anti-smoking campaign, we must continue to work together to eliminate the illegal cigarette trade while ensuring that men and women receive better alternatives in a responsible manner, otherwise they will continue to smoke."

Although PMI is preparing to set up a "quit smoking fund" in the UK, the nature of tobacco companies determines that their ultimate goal is not to make people quit smoking, but to encourage smokers to transform into "new tobacco" products with higher profits and lower risks.

And PMI will become the biggest beneficiary in this "tobacco innovation" movement, because it is difficult for opponents to compete with it in terms of intellectual property rights or product experience. In the future, PMI will continue to increase the intensity of "tobacco innovation" to leave its opponents far behind in this new round of elimination.

Of course, “obstacles” must be cleared before “make a facelift”, just as cheaper alternative products, such as “electronic cigarettes”, must be cleaned up before cigarette prices increase. The same formula, the same taste.

Although Juul and PMI are electronic cigarettes and new tobaccos, it is not difficult to see that they have the same attitude towards traditional tobacco. They both want to use the advantages accumulated in the new field to combat their opponents and maximize their benefits.

According to this general trend, whether the final result is e-cigarettes, new tobaccos, or the coexistence of both, the only certainty is that there will not be much time left for traditional tobacco.

March 31, 2020-BAT releases sustainability report: heating

non-combustion users increase to 50 million in 2030

A few days ago, British American Tobacco released a new sustainability report, which is based on the group’s continuous development strategy and aims to reduce the health impact of its business by providing consumers with more interesting and lower-risk products , So as to achieve a "better tomorrow".

The development report was released together with the Group’s annual report and was released after the capital market webcast last week, which announced the expansion of new goals in the environmental, social and governance (ESG) field, including:

Increase the number of heat-not-burn consumers to 50 million by 2030;

Achieve carbon neutrality by 2030, and accelerate the achievement of existing environmental goals by 2025;

By 2025, eliminate unnecessary disposable plastics and make all plastic packaging recyclable.

According to British American Tobacco, the group’s new sustainability agenda supports the company’s goal of achieving a better tomorrow with the main focus on harm reduction and other outstanding ESG priorities. This will jointly promote the long-term business sustainability of British American Tobacco and create common value for consumers, society, employees and shareholders.

It is reported that since the launch of the first steam product in the UK in 2013, BAT has made significant progress in the development, manufacturing and commercialization of a series of new products. Today, its potential low-risk products have been listed in 48 markets around the world. In 2019, the company's new category of business increased by 37% to 1.3 billion pounds.

Jack Bowles, CEO of British American Tobacco, said: "Today, we are transforming from a company that has always valued sustainability to a company that we do everything we do with sustainability as the center. Business."

March 4, 2020-South Korean tobacco giant KT&G signs an

agreement to enter the UAE

According to the Tobacco Industry News, South Korean tobacco giant KT&G signed a 2.2 trillion won (approximately US$1.8 billion) contract with Dubai’s Alokozay Group for a period of 7 years and 4 months.

Industry officials said that the transaction will help KT&G avoid the huge cost of establishing an independent sales network in the UAE.

The transaction also brings predictability to the South Korean company’s business, as it requires Alokozay to purchase a certain amount of KT&G products during the agreement period.

On January 29 this year, KT&G has signed a supply agreement with Philip Morris International (PMI) to export new types of tobacco globally in the next three years.

The agreement allows PMI to exclusively distribute current KT&G smoke-free products and their evolution, and does not restrict PMI from distributing its own or third-party products.

KT&G's smokeless products include heated non-combustible tobacco systems (such as Lil Mini and Lil Plus), hybrid technologies that combine heated non-combustible tobacco and electronic vapor technology (such as Lil hybrid), and electronic vapor products (such as Lil vapor).

In recent years, a large part of KT&G's profits have come from real estate income, rather than cigarettes and vapor e-cigarette products. However, with recent export transactions, analysts and the tobacco manufacturer expect long-term improvements in company value and growth.

An official of KT&G said: "After the transaction is completed, we expect the global tobacco business will have long-term growth potential and profitability, and the company's overall value will also increase."

KT&G has been expanding in markets outside of Korea, and plans to expand its business scope from 80 countries to 100 in 2020, and plans to become one of the world's largest tobacco companies by 2025.

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