TI Digest

SOUTH AFRICA

BAT to Buy Out Twisp

A sampling of Twisp’s Signature eliquid flavours.

JOHANNESBERG—British American Tobacco (BAT) has received approval from the South African Competition Commission for the acquisition of Twisp, a leading South African vaping products company. The transaction is expected to complete in early Q4 2019.

Twisp is the largest, multi-channel distributor of vaping products and flavors in South Africa. It has close to 70 dedicated stores nationally in prime locations, nationwide retailer distribution and a modern e-commerce platform, and has become the number one destination for adult consumers looking for potentially reduced-risk products in South Africa.

BAT leads the vaping category in Europe and has a strong presence in the US. This acquisition allows BAT to expand its geographical presence in a key market with Twisp’s portfolio of innovative potentially reduced-risk products.

It also expands BAT’s existing consumer engagement strategy through ownership of an increasing retail footprint. Twisp’s retail outlets will increase BAT’s existing retail footprint of 110 outlets in the UK, around 100 outlets in Germany, and 636 outlets in Poland.

Kingsley Wheaton, Chief Marketing Officer, British American Tobacco, said: “Twisp in South Africa brilliantly complements our well-developed existing New Category retail footprint in Poland, the UK and Germany.”

This footprint is of strategic importance to BAT’s future, says Wheaton. “It allows us to develop direct-to-consumer relationships, gain substantial consumer insight and the ability to fast pilot and test new product lines from our New Category brands.

“Consistency in this retail footprint will be critical for consumer navigation, and the roll-out of a homogeneous retail branded proposition has already commenced in Europe.”

The first Twisp store opened in Montana Park, Pretoria, South Africa in 2016.

ARMENIA

Cigarette Production up 9.5 Percent

YEREVAN—Armenia saw an increase in tobacco production in the first seven months of 2019, the latest official statistics show, according to a report from Panorama, the Armenian news service.

The country produced a total of 17 million 69.5 thousand units of cigarettes from January to July, up by 9.5 percent from the same months of 2018, when the output stood at 15 million 582.4 thousand units.

As a result of the growth, the cigarette production share in Armenia’s processing industry made up 14.4 percent in the reporting period. According to statistics, more than 50 percent of Armenian men and almost four percent of women above 16 years of age are smokers.

AUSTRALIA

World Record Price Per Pack

SYDNEY—The average pack of cigarettes in Australia has reached a world record of $35, thanks to a recent 12.5 percent excise tax hike, according to the Daily Mail Australia.

The federal Government has now hiked tobacco excise for seven consecutive years, with an average pack expected to cost $40 a pack by 2020.

CHINA

Juul Vapes Disappear from Chinese Websites

BEIJING—Juul Labs sales were halted on two websites in China shortly after the launch of the products in that country, according to press reports.

No explanation was given, and no indication was given as to when they might return. These websites were the only marketing avenue for Juul in China.

“While Juul products are not currently available on e-commerce Web sites in China, we look forward to continued dialogue with stakeholders so that we can make our products available again,” said a Juul spokeswoman.

The two sites were reportedly JD.com Inc. and Alibaba Group Holding Ltd.’s Tmall. They had been selling Juul vaporizers along with refill pods. Some of the pods were in flavors such as mint, Virginia tobacco, mango and crème. One wondered if it was a coincidence that this happened in the midst of the vaping death panic in the U.S.

JAPAN

Three New Versions of glo Heated

Tobacco Products Launched tokyo—British American Tobacco has introduced three new products from its glo brand of heated tobacco products in Japan. The products are:

• glo Pro, the most advanced heated tobacco product yet to be introduced, BAT says. It is powered by a brand-new technology—induction heating—and that technology has been significantly miniaturized to deliver a heat not burn experience with taste satisfaction and rapid heating for quicker taste release. glo Pro will be available in Japan from October.

glo Pro

BAT

• glo Nano is the slimmest device among glo products and gives greater convenience for on-the-go use than ever before. Enhanced design and reduction in size versus the existing products ensures there is no compromise on taste satisfaction. glo nano will also be available in Japan from October.

glo Nano

BAT

• glo Sens was launched in August in South Korea and Japan. glo sens takes a radically different approach to heated tobacco, combining vaping technology with real tobacco. It is designed to deliver a totally new, flavor experience for consumers who have not yet found a satisfying option among alternative products to cigarettes.

glo Sens

BAT

All the glo products heat, rather than burn, tobacco, producing no ash, less smell, and an aerosol that contains significantly less toxicants than cigarette smoke. They have been designed with a focus on choice and customization to appeal to varying consumer preferences.

“We firmly believe in choice,” said Kingsley Wheaton, BAT’s Chief Marketing Officer. “We want adult smokers to find the right alternative product for them—and it is great that over nine million consumers have already chosen one of our potentially reduced-risk products.”

But the company is, however, committed to continued product innovation in this space to increase these numbers and encourage as many adult smokers as possible to choose a product with reduced-risk potential instead of continuing to smoke, he said.

“The launch of these new products is a clear sign of how technological innovation is driving fundamental change in our business and the products we are able to offer our consumers,” he said. “These products are based on cutting-edge, brand new THP technology, and we are confident that they will provide our consumers with more satisfying options when looking for alternatives to cigarettes.”

There are further expansion plans for these products in the remainder of the year and into 2020.

MOROCCO

Contraband Increases

RABAT—The penetration rate of contraband cigarettes in the domestic market has reached 5.23 percent in 2019.

A report in Morocco World News said that at a September meeting of the National Commission Against Cigarette Smuggling, results were presented on the prevalence of contraband cigarettes.

This rate increased compared to 2018, when it was only 3.73 percent. However, the rate decreased compared to 5.64n 2017 and 7.64 percent in 2016.

SOUTH AFRICA

A Controversial Smoking Bill

CAPE TOWN—The draconian measures included in the federal anti-smoking bill now in the hands of Parliament (see Tobacco International, June 2019) seem to have attracted some opposition from at least one unlikely party.

Dr Kgosi Letlape of the Africa Harm Reduction Alliance said in a recent radio interview that parts of the anti-smoking bill may be too restrictive.

“There has to be a measure of knowing what our Constitution says, and people have their rights” [to smoke or not to smoke!].

One part he referred to was the harsh jail time or fines that could be imposed under the proposed new law, which recently ended a period of public comment and is in the hands of the legislature. If you were caught smoking in banned areas, you could receive a fine or prison time of up to three months, while those found guilty of manufacturing or importing tobacco products which do not meet the new requirements and existing standards could face a fine and imprisonment of up to 10 years.

Some of the other striking changes that the bill would introduce include:

• A zero-tolerance policy on in-door smoking in public places (including the removal of designated smoking areas in restaurants);

• A ban on outdoor smoking in certain public places;

• The removal of all signage on cigarette packaging aside from the brand name and warning stickers;

• Cigarettes may no longer be publicly displayed by retailers.

SWITZERLAND

Major Staffing Cuts at JTI

GENEVA—Japan Tobacco International (JTI) is planning to reduce its staff by 3,720 employees or six percent of its total workforce over the next threeyears in a restructuring program, according to SWI swissinfo, a service of the Swiss Broadcasting Corporation.

JTI’s headquarters in Geneva, Switzerland.

JTI

A total of 268 positions will be eliminated here in JTI’s headquarter in Geneva. About 900 employees will remain at the Geneva office.

JTI has reportedly said it is committed to keeping its headquarters in Geneva. But it will concentrate its resources in the future on Warsaw, St Petersburg and Manila.

Declining sales, especially in Japan, have hurt the company’s bottom line in recent years.

UNITED STATES

Pyxus CEO: Bans on Vape Flavors Aren’t the Answer

MORRISVILLE, N.C.—Bans and outright restrictions of an adult’s use of flavors in e-liquid products are misguided and not based on scientific research, said Pieter Sikkel, President, CEO and Chairman of Pyxus International, Inc. said in September.

“As manufacturers and marketers of e-liquids, an adult-use product, our subsidiaries and affiliates recognize the unique responsibility in bringing nicotine products to market and are committed to responsible marketing practices,” he said.

Pieter Sikkel, President, CEO and Chairman of Pyxus International, Inc.

He insisted that the companies that Pyxus works with recognize the seriousness of youth access to e-liquid products and support responsible efforts to address this issue.

The fact is, e-liquids are intended only for responsible adult consumption. He said, “Like other adult products, the [regulatory] effort should be focused on educating and preventing underage access to all e-liquids rather than restricting the types of products legal age adults can and do enjoy today.”