LOUISVILLE, Ky.--(BUSINESS WIRE)--Turning Point Brands, Inc. (NYSE:TPB), parent company of North Atlantic Operating Company (NAOC), the exclusive licensee of the iconic Zig-Zag® brand of cigarette papers in North America, today announced that police from the city of Yiwu in Zhejiang Province in China have commenced a coordinated set of actions in multiple Chinese cities targeting what appears to be the country’s biggest networks supplying counterfeit cigarette paper products to the United States.
Police have disclosed that investigations, raids and detentions have already taken place against manufacturing facilities, packaging suppliers and trading companies in Yiwu and other cities. The police have discovered that the counterfeiters have been copying virtually every major international cigarette paper brand, including the Zig-Zag brand for the United States.
The actions have been supported with information and other assistance from the Yiwu Tobacco Monopoly Bureau and the enforcement support team at Alibaba.
It is expected that the police investigations will be completed by mid-2018, after which prosecutions may be brought against the key individuals behind the network. It is also expected that information identifying those companies and individuals in the United States purchasing counterfeit cigarette papers will be supplied.
According to James Dobbins, Senior Vice President and General Counsel of NAOC:
“North Atlantic Operating Company has a zero-tolerance policy with respect to counterfeiting of its products. The company’s brand protection team has investigated distributors of fake papers for several years, filing legal actions wherever possible in the United States. We anticipate taking actions against those in the United States who are identified and revealed in these investigations.
"The latest actions by the Chinese police clearly demonstrate the resolve of the Chinese government to address the problem at its roots.
"To date, we are informed that the Yiwu police have seized several hundred thousand booklets of counterfeit cigarette papers of many popular brands, packaging materials sufficient to produce millions of additional units, sophisticated production equipment, and extensive production and sales data.
"We have offered Chinese authorities any and all further assistance they may need to investigate the current counterfeiting network, as well as others that are understood to be operating in China.”
Mr. Dobbins additionally noted:
"The Company has devoted substantial resources to pursue investigations and enforcement actions throughout the United States, targeting internet sellers, bricks-and-mortar distributors and retailers. While this has increased administrative expense, we believe it has also increased our sales of Zig-Zag cigarette papers in the United States. We expect to continue these activities for the foreseeable future."
About NAOC and Turning Point Brands, Inc.
NAOC is an indirect, wholly-owned subsidiary of Turning Point Brands, Inc. NAOC is the exclusive licensee and distributor of Zig-Zag brand cigarette rolling papers and accessories, as well as nicotine vapor products, in the United States and Canada. It also is the owner of the Zig-Zag brand for cigars and make-your-own cigarette and cigar products. Louisville, Kentucky-based Turning Point Brands, Inc. (NYSE: TPB) is a leading U.S. provider of Other Tobacco Products. TPB, through its three focus brands, Stoker’s® in Smokeless Products, Zig-Zag® in Smoking Products, and the VaporBeast® distribution engine in NewGen Products, generates solid cash flow which it uses to finance acquisitions, increase brand support and strengthen its capital structure. TPB does not sell cigarettes. More information about the company is available at its corporate website, www.turningpointbrands.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by TPB in this press release speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict these events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, (i) unexpected developments and difficulties in the investigations and anticipated prosecutions and (ii) the results of the investigations may differ from the results currently anticipated.
