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USA: Tobacco Products
U.S. adult nicotine use remained persistently elevated in 2025, with the market continuing to shift away from cigarettes toward vaping and nicotine pouches. Overall nicotine use among adults aged 55-65 increased significantly from 25.0% to 29.5%. Nicotine vaping among 19-30-year-olds reached a record 19.3% past-30-day prevalence, while past-year nicotine pouch use rose sharply to 12.7%, up from 4.8% in 2023. Cigarette smoking remained near historic lows at 8.3% among 19-30-year-olds, although the long-term decline showed signs of plateauing.
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Illicit Trade – RRPs: International
Illicit high-nicotine and high-capacity disposable vapes are rapidly expanding across European markets, with products openly sold online at nicotine concentrations of up to 80 mg/mL and liquid volumes reaching 70 mL – far exceeding EU regulatory limits. The proliferation of these products, often stocked in European warehouses for rapid domestic delivery, highlights significant enforcement and market-surveillance gaps, as non-compliant products are widely available through standard websites and payment systems.
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USA: Tobacco Regulation – States
California’s Legislature has passed AB 762, which would make the state the first in the U.S. to comprehensively ban the sale and distribution of single-use (disposable) e-cigarettes, citing battery-related waste fires and environmental concerns. The legislation would require vaping devices sold in California to use removable or rechargeable batteries, with fines of up to $2,000 for repeat violations. The bill now moves to the Governor for signature.
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Patents Wars: International
The European Patent Office has dismissed Philip Morris International’s appeal over a patent covering a multi-power-supply architecture for aerosol-generating devices, following a challenge by Japan Tobacco. The EPO found the main claims lacked novelty and that three amended versions lacked inventive step, preventing PMI from maintaining protection for the technology. The ruling adds to a series of 2026 EPO setbacks for PMI and gives competitors greater freedom to operate around this specific power-supply architecture.
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Scandinavian Tobacco: Q2 2026 Results
Scandinavian Tobacco Group reported signs of stabilization in Q2 2026, with organic sales broadly flat and EBITDA rising 3% to DKK 515 million despite continued FX pressure. Handmade cigars remained the key growth driver, while nicotine pouches under the XQS brand continued to expand, offsetting declines in machine-rolled cigars and smoking tobacco. STG also agreed to sell its BREAK and Moro fine-cut tobacco brands for DKK 1.3 billion, while reaffirming its full-year 2026 guidance and highlighting a 122% increase in quarterly free cash flow to DKK 264 million.
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KT&G: News
South Korea’s Supreme Court has ended the long-running patent dispute between KT&G and electronic-device maker EM-Tech, upholding EM-Tech’s rights to five of the six disputed heated-tobacco patents. The patents relate to early prototype technologies developed during KT&G and EM-Tech’s 2017 collaboration and are not used in KT&G’s current commercial products. KT&G said the ruling will therefore have no impact on its Next Generation Products business, with no changes to production or sales required.
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Global Vape Market
China’s vape exports reached a 2026 high of $1.05 billion in July, up 16.5% year on year, driven overwhelmingly by a 53.5% surge in shipments to the U.S. to $404.2 million. January-July exports rose 5.8% to $6.01 billion, with disposable vapes and prefilled pods accounting for most of the growth, while hardware exports remained broadly flat. The U.S. rebound contrasts with mixed performance elsewhere, with strong growth in South Korea, Indonesia, Japan and Saudi Arabia offset by sharp declines in several European markets.
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Philip Morris International: News
Philip Morris International (PMI) and Altria have signed a contract manufacturing agreement under which Philip Morris USA will produce cigarettes for PMI’s non-U.S. affiliates, with initial shipments expected to begin in early 2027. The deal will improve PMI’s manufacturing and supply-chain efficiency while allowing Altria to generate additional economic returns from its U.S. production capacity and duty-drawback benefits. PMI said the agreement does not change its decision to remain outside the U.S. combustible cigarette market and expects no material financial impact in 2026.
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Tobacco Regulation: European Union
The European Ombudsman has opened an inquiry into how the European Commission’s DG TRADE manages contacts with tobacco industry representatives, following a complaint alleging regular and insufficiently transparent interactions. The investigation will examine internal documents, meeting records and communications involving tobacco and nicotine issues, including potential compliance with Article 5.3 of the WHO Framework Convention on Tobacco Control. The case could lead to tighter and more consistent transparency requirements for tobacco-related lobbying across the Commission.
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PMTA: Premarket Tobacco Product Application
The FDA has authorized 11 additional ZYN ULTRA nicotine pouch products, including ten 9 mg variants and an 11 mg unflavored product – the first nicotine pouch above 10 mg ever authorized by the U.S. FDA. The products were cleared through the FDA’s nicotine pouch review pilot after the agency determined they contain substantially lower levels of harmful constituents than traditional smokeless tobacco products and can provide sufficient nicotine delivery to help adult smokers transition. The decision brings the total number of FDA-authorized nicotine pouch products in the U.S. to 43, including 23 reviewed through the pilot program.
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China Tobacco International: News
China Tobacco International (HK) reported a 26.9% decline in H1 2026 revenue to HK$7.54 billion, primarily due to a 40.5% drop in tobacco leaf import revenue amid lower volumes and shifting international trade dynamics. However, strong growth in tobacco leaf exports and Brazil operations, with combined revenue up 56.8%, helped limit the impact, while export volumes increased 10.6% and export operating income surged 52.7%. Net profit fell a more modest 11.2% to HK$627 million, as stronger export margins, FX gains and lower finance costs partly offset the import-related weakness.
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