In the latest in an ongoing series of quarterly briefings looking at major (and some minor) developments in the world of tobacco, we assess the latest performance of the major multinationals, important cannabis and NPD/NGP updates, further M&A activities from Altria, the reviewed economic growth projections for the world’s key markets and what to look for in the next quarter.
In November 2018, the FDA in the US proposed new steps to protect the younger generation by preventing access to flavoured tobacco products and banning menthol in cigarettes, which could be implemented by the end of the review period (ie around 2021-2022). This will likely lead to significant disruption of the combustible cigarettes market in the country, as menthol accounted for 30.5% of all cigarette sales in 2017. The FDA also proposed banning flavoured cigars and cigarillos. These products have benefited from the 2009 flavoured cigarette ban. In addition, the FDA restricted the sale of flavours other than tobacco, menthol and mint, only to age-restricted, in-person locations. The rule, therefore, does not extend to vape stores, as some industry players feared, but addresses certain concerns connected with increased youth usage of vapour products.
In December 2018, 22nd Century Group submitted a Premarket Tobacco Application (PMTA) and a Modified Risk Tobacco Product (MRTP) application for the company’s Brand “A” low nicotine cigarette product under the proposed name VLN. If granted, VLN will be the first and likely only combustible product to achieve such an order.
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