Transformation and Its Enemies
The twin strategies of migration away from combustible nicotine products and diversification into new businesses underpin the tobacco industry transformation. Why is there so much opposition?
By Clive Bates
How should a rational and dispassionate public health advocate think about tobacco companies? How should tobacco companies think about public health?
The simple and lazy answer is that they are sworn enemies in a permanent and irreconcilable conflict. This idea has now been immortalized as a guiding principle by the World Health Organization. The “scream test” devised by Australian anti-tobacco campaigners was a crude forerunner of the WHO’s principle: “If a new policy gets no reaction from the tobacco industry, it rarely has an impact, but if the industry screams blue murder, the impact will be large.” If the industry hates it, it must be good for public health.
But what if there are policies, practices and messages that are good for the tobacco industry and public health? Or bad for both? One of the accusations frequently thrown at public health advocates who favor tobacco harm reduction is that they are doing the bidding of Big Tobacco. No one likes to be accused of that. But implicit in that accusation is either the assumption that tobacco harm reduction cannot be good for both or worse, that it is more important to hurt the tobacco industry than to serve public health. We see this playing out in the industry’s twin-track efforts to transform by migration and diversification: migration into noncombustible nicotine products and diversification into non-nicotine businesses in which they have natural commercial advantages.
These issues loom large in the transition strategies of tobacco companies, which range across a continuum from “not bothered; we like the business as it is” to “this is the competitive play of the 21st century, and we’re all in.” In my view, the transition strategies of the companies will be highly beneficial for both public health and the companies that successfully transform. Transition involves giant companies moving out of the merchant-of-death business and into something closer to selling mild and popular recreational stimulants. For public health reasons, I would be happy if tobacco companies made handsome profits from a diversified business far less reliant on cigarettes. Yet their efforts to attempt this attract strident opposition at every turn.
Why? I think it is worth unpacking this opposition a little.
First, is the continued sale of cigarettes just too much to bear? How can public health welcome transformation when the companies involved are still hooking kids, selling trillions of cigarettes and killing millions of people? Here, public health advocates must understand the nature of the market and a corporation. Every country has a lawful market for cigarettes. Commercial tobacco sales are permitted, regulated and taxed by governments. There is also a demand for cigarettes, with over a billion smokers consuming over 5 trillion cigarettes annually. This demand will inevitably be matched by supply, and the suppliers are, by definition, the tobacco industry. We should treat this as a given not an act of evil—a fact of life that we may not like that much but that constitutes the reality in which we try to secure public health gains. I am all for putting pressure on the cigarette trade through tobacco control measures, but these are the prerogative of governments. We should expect companies to compete vigorously for market share within the parameters set by policy and law. That should not be a shock; it is what companies do. Public health advocacy should be focused on influencing the regulatory, fiscal and communications environment in which tobacco companies operate and challenging abusive business practices. Other than gratifying righteousness, it serves little purpose to condemn tobacco companies for what they are and must be. What matters is how this can change.
Second, should we only trust the tobacco industry when they pull out of cigarettes? There have been numerous calls for companies to stop selling cigarettes. The problem is that the advocates of this idea believe the companies should just do it unilaterally. Public health colleagues need a better grasp of shareholders and fiduciary duties. The companies cannot simply squeeze or shut down a lucrative earnings flow to their shareholders. The management would be fired, the company taken over or the cigarette assets sold as a going concern with no public health benefit. Ironically, the companies, to varying degrees, do have viable exit strategies for cigarettes—migration of the nicotine business to noncombustibles and diversification to “adjacent” industries such as plant biotechnology and vaccines, inhalation technologies and recreational stimulants. This strategy to exit the cigarette trade meets an essential requirement; if successful, it can work well for shareholders. The irony is that public health campaigners lament the slow progress in phasing out cigarettes. Yet, at the same time, they oppose every element of the only commercially viable strategy to bring it about: migration and diversification.
Third, is tobacco harm reduction just the “nicotine maintenance strategy of Big Tobacco”? The concern is that diversification is merely a cunning ruse to escape the inevitable demise of the tobacco industry and the nicotine market. Here, public health advocates need to think more carefully about the product and where it is heading. I believe there is a far more robust long-term market for nicotine than for smoking. That’s because nicotine use is popular among many for its impacts on stress, anxiety, concentration and pleasurable sensations. And nicotine itself is not that harmful. The main reason people have stopped using nicotine over several decades is the health impacts of smoking and the pressures from policies and taxation to address the health impacts of smoking. The early stages of migration to noncombustibles have been welcomed by many as a harm reduction option for smokers. But in the longer term, the noncombustible products represent the basis for a nicotine market that operates within the normal boundaries of acceptable risk. This may open a frightening vista for some in public health. Nicotine products with minimal harm create weird new challenges that we have yet to fully grasp. The deterrence effects from the harms of smoking are lost, the case for taxes and regulation to control use is diminished, the designation of nicotine as an addictive agent no longer applies and the whole purpose of the vast complex of tobacco control interests is lost. There is only a case for tobacco control if there are serious harms. Otherwise, it becomes a moralistic war on drugs enterprise.
Fourth, is diversification just an exercise in reputation laundering? Much tobacco control activism now relies on “denormalizing” the industry and, by inference, whatever the industry touches. Tobacco companies can deploy their human resources, facilities, assets and intellectual property to branch out into new businesses for which they have inbuilt advantages. Shocking venom and energy have gone into attacking companies and their staff for some of their efforts to develop or acquire pharmaceutical businesses, invest in vaccine production, exploit their plant biotechnology expertise, enter new markets for personal well-being recreational drugs or even provide ventilators to struggling hospitals. It is bizarre. What is achieved by preventing companies from moving into new businesses that reduce the dependence on cigarettes? This can only be explained by a fear that the industry will reform itself into a more normal business and that arguments grounded in denormalization will fail. The arguments from tobacco control are peculiarly aesthetic—it just looks wrong for a tobacco company to make drugs to treat chronic obstructive pulmonary disease (COPD) or provide Covid-19 vaccines. But why is this so wrong? What are the ethics of opposing the development and deployment of a vaccine or COPD treatment if these would otherwise be successful in the market?
Finally, will migration and diversification be additional and not replace cigarettes? Maybe Big Tobacco is building even bigger, more voracious businesses? Here, public health advocates need to grasp what shapes a market. Ultimately, that is up to consumers and what they are inclined to buy. But in a market like this, policymakers and communicators have a role. For example, they can make taxation and regulation proportionate to risk. They can communicate candidly about risks. They can have better insights into unintended consequences or test and reject assumptions that fail to hold water in real life. Some companies may grow bigger through migration and diversification or even acquire a larger share of the cigarette business—that is how competition works. What matters for public health is not what individual companies are doing, though it matters greatly to the companies. What counts is the migration of the whole market to reduced-harm products instead of cigarettes, which is strongly affected by public health policies and communications. If the companies also diversify to keep their shareholders engaged and exploit their advantages during a transition, what exactly is wrong with that?
In public health, we need to stop our warrior rhetoric and think harder about the world as it really works and what will change it for the better.
