Tobacco Asia

42 tobaccoasia MANUFACTURING NEWS 制造新闻 its footprint with this new purpose-built facility. This move will support the launch of next-generation product lines and provide a modern, efficient manufacturing space. "We are very excited to be coming to North Carolina and to be working closely with Caswell County and PCC," said Jay Barker, owner & c.e.o. of Cherokee Tobacco Company and JEB International. "We believe this new facility will improve efficiency for both groups and create the optimal environment to carry our companies and our brands into the future." BAT Kenya Downsizes Nairobi Facility Operations British American Tobacco (BAT) Kenya revealed its intention to streamline operations at its Nairobi manufacturing plant, leading to the elimination of 19 positions. This move is part of a larger strategy to enhance operational efficiency and tackle the ongoing challenges in the business landscape. In an internal memo to its employees, BAT explained that the decision follows a comprehensive review, influenced by several factors. These include increasing regulatory uncer- tainty, unstable fiscal frameworks, and the rising prevalence of illicit trade, all of which have led to a decline in cigarette volumes and higher operational costs. The staff reduction is part of BAT's effort to streamline operations in response to these market challenges. The memo further highlighted that the process would adhere to Kenyan labor laws, including the Employment Act of 2007, with the company committing to consult with affected employees and stakeholders throughout the process. Pakistan Faces US$2B Loss from Illicit Tobacco and Manufacturing Pakistan incurred a loss of over PKR567 billion (US$2.0 billion) in revenue over the past decade due to tobacco smuggling and illegal cigarette manufacturing, a high-level meeting revealed. Co-chaired by federal minister of state Ali Pervez Malik and KP adviser Muzammil Aslam, the meeting discussed the significant economic and health impacts of the illicit tobacco trade and outlined a strategy to counter it. The meeting included key participants such as the KP excise minister, representatives from the Federal Board of Revenue (FBR), the Pakistan Tobacco Board, and tobacco companies. The discussions emphasized the pressing need for a coordinated approach to address this growing challenge. Several key agreements were made, including enhancing monitoring and enforcement efforts. This includes improving the estimation process to curb illicit tobacco cultivation, implementing stronger track-and-trace mechanisms for tobacco products, and promoting data sharing between federal and provincial governments to better monitor cigarette exports. The KP finance adviser stressed that the excise duty on tobacco in the province is intended to support health services. He urged manufacturers to withdraw their legal challenges and engage in constructive dialogue for resolution. A special technical committee was formed to create a comprehensive action plan to implement the meeting's decisions. Data reveals that the illicit cigarette trade now accounts for around 33% of the market, with smuggled brands compris- ing 12%. Despite the FBR's introduction of a track and trace system (TTS), which covers 55% of cigarette packs, the illegal trade continues to thrive, particularly in rural areas with lower compliance rates. Between July and November 2023, the legitimate tobacco industry's output dropped by 40%, mainly due to the prolifera- tion of untaxed cigarettes. The government has also experienced significant tax revenue losses due to the emergence of new unregulated brands, following an increase in the federal excise duty (FED). Within just two months of the duty hike, over 70 new brands offering cheaper alternatives flooded the market. To combat these challenges, FBR plans to extend the TTS to all cigarette manufacturing units and penalize retailers selling unstamped products. Strengthening enforcement, expanding tracking systems, and raising public awareness are seen as crucial steps to reduce smuggling, recover lost revenue, and protect public health. Latvia Shuts Down Large-Scale Illegal Cigarette Operation Latvian authorities dismantled a major illegal cigarette manu- facturing operation, seizing 300 million counterfeit cigarettes and 47 tons of shredded tobacco. The discovery occurred during 26 raids in Riga, as well as in Ludza, Rēzekne, and Daugavpils, supported by Europol. The cigarettes, which mimicked popular brands, would have cost the state approxi- mately €75 million (US$79 million) in lost tax revenue if they had reached the market. A recent report revealed that over 35 billion illicit ciga- rettes were consumed across the EU last year, with 12.7 billion of them being counterfeit. The rise in counterfeit cigarette production within the EU is believed to be driven by tighter border controls and a reduced likelihood of detection, with criminal groups increasingly targeting higher-taxed EU countries. The operation resulted in the arrest of 32 individuals, including 25 Ukrainians, 6 Latvians, and 1 Russian. Authorities also seized counterfeit excise stamps, production machinery, raw materials, an unregistered firearm, ammunition, and advanced technical equipment such as GPS jammers and detectors. Pakistan's legal tobacco output fell 40% from untaxed cigarettes. Credit: 2happy, CC0.

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