Week of July 21 Regulatory Intelligence Recap

Trade Press and Regulatory Summary:

• Philip Morris International Reports 2025 Second Quarter & First Six-Months Results and Raises Full-Year Guidance - PMI

Our smoke-free business accounted for 41% of total net revenues (up by 2.9pp vs. Q2 last year) and over 42% of total gross profit (up by 3.8pp vs. Q2 last year).

In the e-vapor category, VEEV continued its increasingly profitable growth, and is now available in 42 markets. Shipment volumes more than doubled, driven by Europe.

In the U.S., ZYN reaccelerated its offtake growth to approximately 36% in June, and 26% in Q2 overall as measured by Nielsen. This reflects the strength of the brand as in-store availability improved and legal-age consumers regain access to the full ZYN portfolio offering. Restocking was effectively completed in the first-half, with the estimated impact slightly lower than initially expected. To further grow the brand and nicotine pouch category overall, commercial activities were reaccelerated towards the end of the quarter.

• NACS Asks Trump Administration to Address Illicit Chinese Vapes - NACS

NACS and its cosigners are asking for the following actions to address the issue:

1. Require CTP to decide all premarket applications: CTP should make decisions fast. Many products awaiting decisions are very similar to authorized products and seem easy to authorize. Regardless of which way these are decided, however, process clarity is better than uncertainty. Even denials will at least start the process of legal challenges and getting to final decisions.

2. Require CTP to provide clarity: CTP must be told to reveal exactly which products (not just manufacturers) have been denied, exactly which products remain in legal limbo and exactly which products submitted timely applications. The majority of stores in the U.S. are small businesses that do not have in-house legal teams to read through agency jargon. They need clear and concise information from CTP.

3. Supercharge the multi-agency task force: Once product clarity has been provided, the federal multi-agency task force led by FDA and Department of Justice, which was established in June 2024 to combat illicit vapes, should be directed to bring the strongest civil and criminal enforcement actions against the worst offenders to deter ongoing noncompliance. Illicit product, wherever it is found, should be seized. FDA has direct authority to regulate the distribution chain, and it should fully utilize this power.

4. Require more from Customs and Border Protection (CBP): CBP should strengthen its efforts to prevent the importation of illicit Chinese vapes by increasing targeted inspections throughout the supply chain, expanding the use of risk-based analytics tools and pursuing civil and criminal penalties in cases of fraudulent import misdeclarations.

• Major trade association claims to oppose ‘illicit’ Chinese vapes after raking in cash from their manufacturers - Washington Examiner

Last week, the Vapor Technology Association ran ads stating its opposition to illegally imported Chinese vapes, citing the risk they pose to children, despite its leadership and the organization itself having strong financial ties to the manufacturers of those same devices.

Among vendors that were listed as VTA members in March and sold Geek Bars are a mix of large online retailers and brick-and-mortar shops such as Vapor Lounge, Element Vape, Red Star Vapor, White Horse Vapor, Kingdom Vapor, and Vaportech Wholesale. The VTA collects between $500 and $200,000 in dues payments from its business members, depending on their tier.

VTA Secretary Jon Glauser owns a business-to-business vape wholesaling company that deals in Geek Bars. New York City sued his company in 2023 for allegedly violating federal and state law by distributing flavored vapes. New York state filed another suit against his company, Demand Vape, in February, advancing similar allegations. Glauser told a federal judge in 2022 that he had sold more than $132 million worth of Elf Bar e-cigarettes, another disposable Chinese vape accused of targeting children.