Author: Marissa Dean

Punching Above Its Weight

LTL’s tobacco reclaimers are characterized by their high levels of efficiencies and relatively low running costs. | Photo: LTL
A small family business, LTL holds its own as a supplier of equipment to the global tobacco industry.
By George Gay
While I was corresponding in March with the founder of LTL, Paul Lawton-Bryant, he was involved hands-on with others in his company fulfilling an order for one of its CR120P super-slim format cigarette-tobacco reclaim systems (CTRS). I mention this because LTL is very much a family company, and when asked what its strengths were, Lawton-Bryant said at the end of his reply that one of them was down to his personal drive for perfection in everything he did.
“I am very hands on in the business and spend many hours in our workshop machining parts and building the machines to ensure that the high quality I demand is maintained,” he added. And the point is that I could see this quest for perfection from another angle. Although heavily involved in the new CTRS project, he took the time to answer with precision and clarity every one of a long list of questions that I had sent to him. And he answered frankly: He even made the point that his drive for perfection could also be seen as a weakness.
LTL is owned privately by Lawton-Bryant and his wife, Julie, who is the financial director. They started trading in 1997, though the company, as currently constituted, was founded in 2001. It operates out of premises in the village of Chilbolton,* Hampshire, U.K., where it designs and manufactures primary processing equipment for the global tobacco industry, though, in recent years, it has supplied mainly CTRSes, tobacco feed systems and central dust collection systems. It is involved, too, in nontobacco-related projects, but its core business is focused on tobacco-related products and services.
Quality of Output
The CR120P, which is LTL’s most in-demand reclaim system, and the higher-capacity CR250P are characterized by their high levels of efficiencies and relatively low running costs. “Our systems regularly achieve in excess of 96 percent reuseable reclaimed tobacco yield,” Lawton-Bryant told me in an email exchange. “Energy consumption is quite low, with a total electrical load of 4.2 kW and compressed air usage of just 3.0 cfm for the CR120P and a little higher on the CR250P. In addition to this, the machines use very few consumable spare parts and come with an industry-leading two-year warranty based upon single-shift operation.”
LTL’s reclaim systems are 99 percent standard, though there are different versions for regular and slim cigarettes, and the company will supply units to feed rejected cigarettes into the CTRSes if required. Otherwise, the main customizations take in the usual elements such as supply voltages/frequency and paint color. The CR250P was launched about 10 years ago in response to several inquiries for larger capacity machines and a general trend among competitor companies. However, generally, LTL’s customers still prefer the flexibility of having a smaller capacity machine—running two or more for different blends rather than having one larger-capacity machine.
The focus in developing the CR range of reclaim systems has been on the quality of the output product because, Lawton-Bryant said, once a cigarette had reached the stage where its tobacco needed to be reclaimed, that tobacco was probably at its most fragile and at its most valuable, having been conditioned, blended, cut, expanded, dried and flavored. “The particle size and moisture content of the tobacco within a cigarette means that the tobacco could easily be degraded through unsophisticated mechanical handling and separation processes, and it is in those areas that we have focused our design to minimize damage and maximize yield,” he added.
Return on Investment
The potential monetary savings inherent in efficiently reclaiming processed tobacco that would otherwise become a costly burden would seem to make an indisputable case for CTRSes, but I wondered whether there were other factors in play. In answer to a question about whether tobacco industry ESG (environmental, social and governance) policies had been driving demand for CTRSes, Lawton-Bryant said that such policies would be a consideration in purchasing decisions but that he did not see them as driving demand.
The key drivers in any business had always been and would continue to be the need to make a return on investment. A cigarette was at its most valuable having gone through the full primary process, he said, a fact often given less consideration than it deserved, so any damage and loss occurred at that point in the process would be the costliest that it could be. This fact alone often helped justify the relatively small investment required to purchase a good-quality CTRS, though actual payback periods would vary drastically depending upon individual circumstances.
For example, in the past, LTL had sold a machine to a customer that previously disposed of all its reject cigarettes, which was said to have made the payback very short indeed. “A more usual scenario would be the savings our particular machine can make when compared to a competitor’s machine,” Lawton-Bryant said. “We have seen reuseable tobacco yields as low as 70 percent in other machines available in the market, so with our machine regularly achieving 96 percent yields, a 26 percent increase could mean payback within 12 months.”
Global Reach
LTL supplies machines to a wide range of customers around the world, though, recently, the Middle East and Africa in particular have provided good opportunities. In fact, the project mentioned at the start of this story involved the supply of a CR120P to a customer in the Middle East that is planning to buy a second machine following the installation of the first one. “We are very fortunate in that we have several repeat customers,” said Lawton-Bryant, “and I feel this is one of the best references we could possibly provide.”
At the same time, LTL supplies machines to companies both large and small, though most of its customers tend to be those operating smaller manufacturing facilities with between one and 10 makers. In fact, Lawton-Bryant said that LTL was probably an unusually small-scale company among those supplying equipment to the global tobacco industry and that it was understandable that this could be seen by some customers as a risk. “However, I do feel that our long history of supplying high-quality and innovative equipment to the global tobacco industry proves our commitment to the industry and should provide some assurances,” he added.
This takes us back once again to the start of the story because, clearly, small, family-run businesses offer several advantages. “I think it is our small size which allows us to react quickly and effectively to new challenges and changing customer demands,” said Lawton-Bryant. “A good example of this was our reaction to the recent global pandemic where travel restrictions were imposed. This had a massive impact upon our ability to install and commission equipment, so our team focused upon a remote commissioning solution, which included fitting a router and camera to machines, thereby allowing us to remotely access the PLC, guide the customers on installation, remotely commission the machines and view the product results through the camera.
“Our core team has over 160 years of experience in the industry covering both mechanical and electrical/software engineering and process knowledge, which meant that the new system was conceived, designed and implemented within a matter of weeks, and not one of our customers suffered through our inability to travel to site throughout the restrictions. This remote access remains a feature of the CR range of reclaim systems today and can assist with ongoing support and training if required.”
Enduring Resilience
In fact, it is clear that Lawton-Bryant sees the advantages of running a small-scale operation as outweighing the potential pitfalls of trying to grow the business. “Over almost 30 years of running my own business, I have resisted the pressures to grow into a large company,” he said. “I wish to serve the niche industry that we are in to the very best of our ability, and that requires a very tight level of control throughout the business processes, something which can easily be lost in a larger company.”
When I asked how confident he was about the future of the tobacco industry and, especially, the cigarette industry, that part of the industry LTL mainly served, he was frank in his reply. “For more than 20 years now, I have had regular periods of concern over the sustainability of our business in the tobacco sector, though I am happy to say that so far those fears have been relatively unfounded,” he said. “Of course, the industry has faced several challenges and continues to do so, but generally, it is very resilient.”
And finally, I asked how confident Lawton-Bryant was about LTL’s future. “I am confident that we can respond to the many challenges that running a business encounters,” he said. “Whether that remains mostly in the tobacco industry remains to be seen, but I sincerely hope that it does,” he said.
*Although “only” a village, Chilbolton, too, punches above its weight with an observatory that boasts facilities and expertise in atmospheric science, satellite tracking, radio astronomy and communications that support U.K. academia and industry.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

July 1, 2024
Celebrating Diversity

Diversity and equal opportunities are an integral part of JTI’s business success.
By Stefanie Rossel
According to studies, diversity in the workplace can contribute to smarter decision-making, greater productivity and reduced rates of employee turnover, along with improved corporate reputations. In recent years, companies around the world have increasingly implemented diversity, equity and inclusion (DEI) programs—a collection of practices and policies intended to support people from varying backgrounds and give them the resources they need to thrive in the workplace.
More precisely, diversity is embracing the differences everyone brings to the table, whether it’s someone’s race, age, ethnicity, religion, gender, sexual orientation, physical ability or other aspects of social identity. With different backgrounds come different perspectives, which ultimately lead to better ideas and solutions and better outcomes—or products, for that matter.
To ensure equal circumstances for all individuals across the organization, employers must recognize that not everyone is starting at the same level. Rather than giving everybody the same tools, companies that strive for equity provide employees with what they individually need to have an equal opportunity for success.
Inclusion means that while the workplace requires professionalism and etiquette, employees should not be barred from being themselves; they should not worry about “code-switching” or shielding part of their identity when going to work. Inclusion is what maintains diversity.
Research conducted by McKinsey shows that in 2020, companies worldwide spent an estimated $7.5 billion on DEI-related efforts, a number that was projected to double by 2026. According to a LinkedIn analysis, the number of chief diversity and inclusion officer positions grew by 168.9 percent in the U.S. between 2019 and 2022. However, DEI programs have been under siege from some quarters recently, with U.S. state lawmakers launching efforts to restrict DEI efforts in public schools and universities and companies rolling back their efforts. DEI initiatives, opponents argue, are an overly political, damaging waste of time or a distraction from organizations’ primary activities.
In fact, there has been little scientific research to evaluate the effects of DEI, which emerged at the time of the U.S. Civil Rights Movement in the 1960s. A 2023 review by Boston University researchers found that successful programs were composed of trainings that were grounded in theory. Effective trainings were longitudinal instead of one-time and not only focused on defining concepts but also provided additional support, trainings and skills, such as how to navigate challenging conversations. In successful programs, DEI was not limited to diversity but also emphasized inclusion, meaning companies engaged individuals or groups who had been historically excluded from decision-making activities. This, in turn, drove equity.
Culture of Inclusivity
Fernando Bonaduce
Geneva-headquartered Japan Tobacco International has had a comprehensive DEI program in place since 2018. “We foster an environment that embraces diversity, ensures equal opportunities and provides a safe space for everyone to contribute,” says Fernando Bonaduce, JTI’s DEI director. “This commitment is integral to our business success. I am proud that all JTI branches worldwide have adopted DEI principles. Our employees play a crucial role in this endeavor. Starting from the highest levels of the organization and extending through our global team, we are nurturing a culture of inclusivity. This gives everyone the freedom to choose, think, express themselves and be authentic.”
In 2020, JTI launched its first employee resource group (ERG), PRIDE, for the LGBTIQ+ community. “Today, we have four ERGs with hundreds of change agents involved in key DEI areas such as gender equality, race and ethnic inclusion, gender identity and sexual orientations or diverse thinking,” says Bonaduce. Changes in corporate culture, he notes, require both time and effort and are “anything but an easy road.”
In 2021, the company committed to increasing women in leadership roles to 30 percent by the end of 2023. “We achieved this ambition in August of that year, well ahead of schedule,” says Bonaduce. “Our commitment to gender equality reflects our efforts to foster a diverse, equitable and inclusive workplace, creating an environment where female colleagues are set up for success.”
One year later, the company’s DEI division was merged with the human resources department, an initiative that has been guided by a DEI strategy focusing on four strategic pillars: strategic commitment, value diversity, building inclusion and nurturing employees’ well-being. “This strategic focus has influenced talent attraction, retention and promotion processes by ensuring all our decisions are geared toward bringing out the human best in our organization. For instance, embedding the DEI principles means that talent management needs to develop a diverse representation in leadership roles,” says Bonaduce.
The company’s DEI-rooted approach, he says, implies that JTI constantly seeks to identify and remove barriers that prevent underrepresented groups from fully participating in the whole recruitment process. Initiatives to achieve this objective include encouraging and monitoring language to not exclude potential applicants based on their background and designing interviews and panels in a way to provide every candidate with the best chance for success. “This approach helps us remove biases from the selection process as best we can,” says Bonaduce.
Work-Life Balance
JTI uses channels and platforms that directly address underrepresented groups, like myGwork, to attract a more diverse applicant pool. The remarkable increase in the number of women in leadership roles, Bonaduce says, is a direct result of the company’s efforts, which aim to enhance the visibility of its top female talents and provide mentorship for them. “Every year, each member of JTI’s global executive committee, except for the CEO, sponsors a senior female talent from around the globe for a period of 12 months. This program aids our talented individuals in their career development, fostering an inclusive and diverse culture from the very top of our organization.”
To help employees recognize and overcome unconscious biases and ensure managers become a catalyst for inclusion and nurture individuals as they are, the company offers various training programs.
Mental health is also an important element in JTI’s DEI strategy. “Our employees dedicate a significant portion of their day to work-related activities,” says Bonaduce. “We know how important physical fitness is for our health and well-being. Unfortunately, people can still hesitate to openly seek psychological guidance or support with mental health due to uncertainty about others’ reactions or feelings of shame. At JTI, we are committed to helping people remove the stigma that still exists in some parts of society.”
The company therefore offers its employees a mental fitness test so that they can check how balanced and healthy they are, live training sessions and a global employee assistance program that provides round-the-clock access to over 40,000 counselors, mental health trainers and specialists 365 days a year. “This service is free, confidential and professional, with assistance available in 200 different languages.” Additional mental health first-aid program modules promote peer-to-peer support on various mental health and personal well-being topics.
Taking Pride in Being Different
Rene Staebe
PRIDE is a particular success story within the company’s DEI approach. “Having an LGBTIQ+ ERG like PRIDE at JTI is crucial for fostering an inclusive and supportive workplace,” says Rene Staebe, co-founder of PRIDE. “Such groups provide a safe space where individuals can express their true selves, share their experiences and find solidarity among peers. This sense of belonging not only boosts individual well-being and job satisfaction but also enhances overall company performance.” According to research, a third of LGBT+ people in the European Union hide their identity from co-workers, and even more have faced discrimination at work because of who they are.
“Our initiatives focus on educating colleagues, promoting understanding and encouraging open dialogue,” says Staebe. He says he has witnessed remarkable and positive changes across the company since PRIDE’s creation, one of the most significant shifts being the noticeable increase in active allies. “Employees from all levels and departments have stepped up to show their support, especially at senior management level, who have been instrumental in setting a powerful example for others to follow whilst their endorsement has helped embed the values of PRIDE into the fabric of our corporate culture, making inclusivity a core component of our identity,” says Staebe. “We have seen a substantial increase in the number of internal webinars and educational sessions focused on LGBTIQ+ issues providing valuable platforms for sharing knowledge, raising awareness and fostering open dialogue. This has been aided by the implementation of more inclusive policies and practices to include more comprehensive nondiscrimination clauses and more inclusive healthcare and parental leave benefits.”
Meanwhile, PRIDE has a global ERG footprint, with chapters in Canada, the U.S., Switzerland, the Philippines and 13 other countries. Staebe highlights that continuous support is being provided to employees in regions that are not friendly toward the queer community. PRIDE is exploring ways to empower local markets, such as the Middle East, by setting up resource groups while complying with local regulations.

“We are always striving to create a confidential environment where LGBTIQ+ employees can feel safe and valued, which is why it’s so important to have a presence within countries where there are challenges for community members. For this to be possible, we are supported by JTI’s “embassy” model, which enables us to have a presence despite the challenges that people may face,” says Staebe.
In 2023, the company was honored with the Swiss LGBT Label award for the second time. Its progress was also awarded with EY’s Global Equality Standard certification in 2021, in which JTI received several of the highest assessment scores for equal opportunities and equal pay in the workplace. The company has also been recognized as a Global Top Employer.
For a DEI program to be successful, it is important to maintain constant dialogue with underrepresented groups, Bonaduce says. “Feedback from our employees confirms that management is becoming increasingly inclusive. Almost 90 percent of our global employees experience a full sense of belonging to the organization. We also observe our leadership bench becoming even more diverse, with talent from different genders and cultural backgrounds.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

July 1, 2024
Brand ‘Zambia’

Photo: Taco Tuinstra
Operating in the shadow of its tobacco powerhouse neighbor, Zimbabwe, Zambia is trying to make a name for itself on the global market.
By George Gay
When researching leaf tobacco production in Zambia, it is almost de rigueur to seek an answer to the question of why the country grows a Virginia flue-cured crop only about one-eighth the size of that produced by its neighbor Zimbabwe. After all, Zimbabwe has a land mass only about 50 percent of that of Zambia, and the populations of the two countries are comparable.
One of the answers normally given to this question is that tobacco has been prioritized in Zimbabwe because it is a hugely important contributor to the country’s GDP and foreign exchange earnings whereas it has been less important in Zambia, where mining plays a dominant role. Of course, this explanation seems to beg the question since both countries are rich in minerals and both have soils and climates ideal for growing tobacco, but that doesn’t mean the explanation is wrong. Presumably, sometime in the past, those who took control of the region of Africa now made up of Zambia and Zimbabwe decided, for whatever reasons, on where they should prioritize mining and agriculture, and those priorities remain in force today because change, even if desirable, is sometimes impossible or at least difficult to bring about.
Decades ago, a tobacco grower of my acquaintance told me that Zambia struggled to attract international tobacco buyers who, after spending months in Zimbabwe each year, were reluctant to move on to Zambia to buy what was then a small crop, and without the prospect of a significant number of buyers showing up, there was no viable way of increasing the size of the crop and attracting more buyers …. If it wasn’t a catch-22 situation, it was close to it.

Zambia produces about 30 million kg of flue-cured and 8 million kg of burley annually.
Limits to Production
Albert van Wyk
Ironically, when significant change did come about in Zambia, it came in the form of a boost from Zimbabwe. Zambia’s current level of tobacco production can be traced back to the 2002–2003 season and the arrival of Zimbabwean growers whose land had been taken from them under compulsory acquisition policies brought in from 2000 under former President Robert Mugabe’s land redistribution policies. From that point on, apart from a hiccup that occurred about 10 years ago, production increased steadily.
And contrary to the impression that might have been given above, tobacco comprises an important business in Zambia, which produces flavorful flue-cured and burley between September and April in its southern, eastern and central provinces, about 70 percent of it rain-fed and 30 percent under irrigation. It is clearly important in rural areas and, also, less obviously, in urban areas, in part because it helps to reduce population drift to the cities. Tobacco is produced by about 24,000 growers, and about 270,000 people depend on its production for their livelihoods. Most of its leaf is processed locally by Tombwe Processing and exported, mainly to China and Japan, for use in cigarette manufacture, earning much-needed foreign exchange.
But having made the case for the importance of tobacco, it must be said that unless something unexpected occurs, it is unlikely that Zambia will in the future significantly increase the size of its tobacco crops from their current annual levels of about 30 million kg of flue-cured and 8 million kg of Burley. And here, at least, the reasons are not difficult to discern.
Albert van Wyk, a Zambian tobacco grower for 40 years and the general manager of the Tobacco Association of Zambia (TAZ), told me during a telephone conversation in April that “compliance,” specifically its environmental aspects, limited the amount by which the tobacco crop could be expanded. To comply with buyer and manufacturer requirements, it was necessary for growers to maintain sustainable woodlots to produce the fuel they needed for curing, and these currently could only just keep abreast of current production; they could not be expanded easily and quickly to allow for a major increase in production. The only other option would be to move to using coal for curing additional flue-cured, but coal, which is produced in Zambia, raises its own environmental concerns, is relatively expensive, and its use might be phased out soon.
The TAZ clearly takes seriously issues of compliance, which go far beyond the maintenance of woodlots, and van Wyk told me that the industry, which is fully private, liked to think of itself as self-regulating within the laws of the land. Currently, it was trying to establish “Brand Zambia” in the market, something that would put it ahead of Malawi and Zimbabwe. In fact, not only is tobacco production self-regulating in Zambia, but it is also self-propagating. Perhaps reflecting the relatively lowly status of tobacco growing in the country, there is no facility to train growers, so it keeps going on an informal apprenticeship scheme whereby established growers teach and mentor younger growers, as well as farm hands, who need to be skilled.

Tobacco cultivation is clearly important in rural areas and, also, less obviously, in urban areas, in part because it helps to reduce population drift to the cities.
Compliance
So far, in talking about why it is unlikely that production will increase significantly in Zambia, I have ignored the elephants in the room—grower tobacco prices, efficiencies and profitability, which these days are connected to “compliance” because compliance, in all its guises, doesn’t come cheaply. Generally, prices on Zambia’s tobacco market, which runs from April to August and which are based on contracts, are not at a level to inspire major production increases.
Having said that, this year’s crops are of good quality and are short in a year when all the major flue-cured and burley producer countries have come up with smaller-than-expected quantities of these types, so prices are likely to be better. In fact, van Wyk, who was in the process of selling his tobacco when I spoke with him, said that Zambia’s growers were expecting increases of $0.40 per kilogram and hoping for $0.80 per kilogram. “In a year of a shortage, I think things have to shift,” he said. “If they aren’t going to shift now, when will they shift?”
Nevertheless, van Wyk is nothing if not practical, and he acknowledges that even though prices might not be as high as growers would like them to be, tobacco is still a better value crop than others. Tobacco, he said, would pay a grower’s medical bills and school fees and on a community-wide basis allow the building of schools and other social facilities. And in this sense, he is politely dismissive of the representatives of nongovernmental organizations who show up from time to time promoting moves away from tobacco and into other crops and business activities. And it is not hard to see his point. Tobacco growers such as van Wyk didn’t come down with the last shower of rain; they have been around for a long time. During their careers, they, like the rest of us, will have been looking for ways to make more money by doing less. They will have been down these other avenues, so the fact that they are still in tobacco tells its own story.
Sealed Systems
Van Wyk is politely dismissive, too, of the sorts of generational smoking bans being debated in the U.K. and discussed elsewhere. He sees such bans as playing a part in shifting the tobacco business from what he calls the honest trade to the dishonest trade. Again, it is easy to see his point and, indeed, wonder whether the problem doesn’t run deeper than he suggested. Is this just a demand issue or a supply issue also? Is the line in the sand between the honest and the dishonest trade maintained even if noncompliant tobacco is available in a year such as this, when there is a shortage of the main cigarette tobacco types? Is there no crossover? It seems difficult to imagine that there are two sealed systems working alongside each other—one involving sustainably grown compliant tobacco sold through proper channels and used in licit manufacture and the other comprising noncompliant tobacco grown unsustainably, sold through opaque channels and winding up with illicit manufacturers.
The reason why this question must be asked goes back to the fact that Zambian growers are hoping for good prices this year but are not sure of them. Why not? If the two closed systems described above were in operation, prices would be bound to rise in a year of shortage, especially since licit manufacturers do not keep stocks as big as once was the case. The fact that higher prices are not guaranteed seems to suggest that there is some crossover—that noncompliant tobacco enters the mainstream, something that would clearly put downward pressure on prices—as well as call into question the very idea of compliance, sustainability and traceability.
Of course, the above comprises just hypothetical questions, but it is worth giving some thought to them because there is another reason why the trade in noncompliant leaf might be more invasive than otherwise imagined—the permeability of some borders. Recently, people in the U.K. and some other countries have had to consider more closely than in the past the legacies left behind by colonialism. As you would expect, the reactions to such reflections have varied, at least in the U.K., but only the willfully obdurate cling to the claim that there have been no negative outcomes. Some of these outcomes are now widely discussed, though, often, the underlying reasons for them are not: for instance, the “creation” of African nations by the drawing by non-Indigenous people of boundaries seemingly heedless of the historical understandings and sensitivities of the way in which Indigenous people ordered their lives. And, certainly, this seems to be the case with Zambia, which has borders with eight countries, including Malawi, Tanzania and Zimbabwe. Given the circumstances under which these borders were decided upon, I would be reluctant to use the word “smuggling” when talking about some of the cross-border movement of leaf tobacco; perhaps “osmosis” would be a better word.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

July 1, 2024
A Broader Approach

According to experts, established tobacco control measures may be insufficient to achieve the desired reductions in smoking and the associated burden on healthcare systems. | Photo: Taco Tuinstra
To lower the health and economic burden of smoking, lawmakers should incorporate tobacco harm reduction into their policies.
By Stefanie Rossel
The figures are staggering. Smoking cost the world economy an estimated $1.85 trillion, or about 1.8 percent of global gross domestic product (GDP), in 2012, according to a monograph published by the World Health Organization and the U.S. National Cancer Institute in 2016.
The authors distinguish between direct and indirect costs. Direct costs, which include both healthcare expenses, such as physician fees or medical supplies, and nonhealthcare costs, such as transportation, were approximately $467.3 billion, representing 6.5 percent of global health expenditures, or 0.5 percent of global GDP. Indirect costs, which include the value of productivity and lives lost due to tobacco-related diseases, were an estimated $446.3 billion for disability and $938.6 billion for mortality.
Low-income and middle-income countries (LMICs) account for almost 40 percent of the expenses incurred globally due to tobacco use, with direct costs representing up to 4 percent of total health spending in these countries. The total economic costs of smoking in LMICs ranged from 1.1 percent to 1.7 percent of GDP in the countries investigated in the report compared with an estimated 2.4 percent in the Americas and 2.5 percent in Europe.
Some of the data in the monograph dates back to the late 1990s, and it is likely that costs have increased since its publication. While some research released since the publication of the paper suggested that reductions in smoking prevalence would translate into lower healthcare costs quite quickly, these papers focused primarily on the healthcare systems of large, wealthy and technologically advanced societies rather than LMICs, where 80 percent of the world’s smokers live.
People in LMICs are significantly more likely to die from noncommunicable diseases (NCDs), which include cardiovascular and chronic respiratory diseases, cancer and diabetes, along with mental and neurological conditions. According to the WHO’s website, NCDs account for the deaths of 16 million people prematurely, i.e., before their 70th birthday, worldwide each year.
Tobacco use represents the leading risk factor for NCDs, ahead of other risk factors such as air pollution, excess sodium intake, alcohol abuse or sedentary lifestyles. According to WHO data, tobacco currently accounts for 8.2 million deaths per year, including the effects of exposure to secondhand smoke, a figure that is projected to increase over the coming years.
However, the WHO is far from achieving the U.N. Sustainable Development Goal of reducing premature deaths from NCDs by one-third by 2030. Depending on the source (and even the WHO’s numbers are inconsistent here), there are currently between 1.1 billion and 1.3 billion smokers in the world, and the figure is likely to rise, due in part to population growth.
One of the major weaknesses of prevention is that the benefits take a long time to materialize.
Focus on Prevention
“When governments and government agencies lie about the health costs of vaping relative to smoking, they are betraying the trust of the public.”
According to critics, the WHO’s established tobacco control measures are insufficient to achieve the desired reductions in smoking and the associated burden on healthcare systems. To accelerate progress, policymakers need to fundamentally change their approach, argues Andrzej M. Fal, president of the Polish Society for Public Health, who spoke at the Warsaw Global Forum on Nicotine in June.
“If we enforce policies that reduce the risk of smoking now, there will be a significant reduction in cancer in 15 [years] to 20 years,” Fal pointed out. Because chronic diseases account for 90 percent of premature deaths, he argued, investing in their prevention is more cost-effective than treatment. The WHO itself recommends prevention as a response to noncommunicable diseases. Fal cited calculations from the global health body showing that every dollar invested in smoking prevention saves $7.43 down the road.
Based on such considerations, Fal urges authorities to place greater emphasis on prevention and tobacco harm reduction. In 2023, the Polish Parliament analysis office asked Fal to prepare an analysis of the state of the tobacco “epidemic” in Poland. Fal and his co-authors concluded that the country lost 250,000 years of life as a result of tobacco consumption.
Education about health, Fal suggested, should begin in kindergarten. People who are already ill and refuse to quit smoking should be incentivized to minimalize their risk using less hazardous nicotine-delivery alternatives. “If someone is already seriously ill,” Fal explained, “they can still achieve a better quality of life, live longer, and cost the system less,” he said.
Fal proposed that each country launch at least one prevention clinic, which should be accessible without referral and would offer access to anti-smoking therapy, nicotine-replacement pharmacotherapy and harm reduction products. The clinics should also be responsible for regional health prevention programs and smoking information campaigns.
Governments, he suggested, should set tobacco tax rates based on the relative harm of each product category, following the principle of “less harm, less tax.” Taxes on cigarettes—the most harmful tools for tobacco consumption—should rise “radically but progressively,” said Fal, who also called for publicly funded and supervised studies assessing the efficacy, safety and harm reduction in cases where the existing evidence was insufficient.
One of the major weaknesses of prevention, however, is that the benefits take a long time to materialize. In a U.S. study analyzing the relationship between cigarette sales and lung cancer deaths, for example, it took 20 years for the first measures taken to curb tobacco consumption to show up in lower lung cancer death statistics. That time frame is too long for many lawmakers. “Politicians are not interested in investing in prevention as its benefits are seen long after they have left the government,” said Fal.
Progress is also obstructed by conflicts of interest. In 2018, he noted, Poland’s tobacco-related health expenditures plus productivity loss were between PLN7 billion ($1.71 billion) and PLZ8 billion in 2018, whereas excise and VAT income from cigarettes amounted to PLN23.5 billion.
Every dollar invested in smoking prevention saves $7.43 down the road.
Myopic MPs
Sinclair Davidson
All too often, politicians are uninterested in considering the potential unintended consequences of their decisions. For example, Australia’s rules requiring vapers to get a medical prescription and banning imports of disposable e-cigarettes have caused the illicit market to flourish. Ninety-two percent of Australian vapers currently source their vapes from the black market, exposing them to unrelated products. More than 70 tobacco shops have gone up in flames since Health Minister Mark Butler started his crackdown on vapes. Police suspect some of the attacks are carried out by criminal groups as retaliations against store owners who refuse to stock their black market products.
“Australia tends to pursue harm minimization policies in most areas—except in tobacco and nicotine consumption,” said Sinclair Davidson, professor of institutional economics at RMIT University, Melbourne. “Here, Australia pursues the most socially harmful policies that the so-called public health lobby can dream up. The costs this policy’s short-sightedness imposes on the economy are likely to be large but hidden or indirect. For example, when cigarettes are stolen from convenience stores, this results in insurance costs being increased on those stores and prices being increased for all consumers.
“Similarly, when criminal profits are increased, criminal behavior in the economy increases. When criminal behavior increases, police budgets increase, resulting in higher taxes for all citizens and higher levels of criminal behavior. We are all victims of crime and criminal behavior—except, of course, the public health lobby, who have built careers off their policy work, and politicians and law enforcement agencies who get expanded budgets and powers as a result of poor policy. It is a vicious cycle of ‘Baptists and bootleggers’ who benefit while the rest of society suffers.”
Meanwhile, the decline in tobacco tax revenue even as smoking rates have stabilized suggests that people are still smoking—they’re just not smoking legal cigarettes. “The challenges are twofold,” said Davidson. “Government itself has become addicted to tobacco excise revenue, and that source of revenue has become unreliable. The subsidy from smokers to the rest of the population has been captured by criminals. Criminality imposes huge costs on society. This occurs through the normalization of violence and the misallocation of resources from legal activity to illegal activity. Furthermore, criminality has a corrupting influence on law enforcement activities. Poor policy corrodes civil society by undermining public trust in public institutions. When governments and government agencies lie about the health costs of vaping relative to smoking, they are betraying the trust of the public and undermining their moral worth in society.”
By contrast, Sweden’s success in reducing smoking rates by accommodating snus is a public health success story, according to Davidson. Since 2008, Sweden has slashed its smoking rates from 15 percent to 5.6 percent, according to Smoke Free Sweden. The nation’s smoking prevalence is expected to dip below 5 percent this year, making it the first country to achieve “smoke-free” status as defined by the WHO.
Sweden’s incidence of cancer is 41 percent lower than in the rest of the EU, corresponding to a 38 percent lower level of total cancer deaths. The country has a 39.6 percent lower rate of death of all tobacco-related diseases compared to the EU average. “I don’t know to what extent Australian consumers are familiar with snus and what the uptake would be—but the principle remains. Low(er) risk products on the market result in consumers substituting away from the high(er) risk products,” said Davidson.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

July 1, 2024
Major Australian Pharmacies Against Vape Sales

Image: Catrina Haze
Several major pharmacy chains in Australia have stated that they will not stock vapes once their sale is prohibited outside of pharmacies and a prescription requirement for adults is lifted.
In communications with their stakeholders, TerryWhite Chemmart, Priceline Pharmacy, National Pharmacies in South Australia and 777 Group in West Australia all voiced strong disagreement with new laws allowing the sale of vapes without prescriptions.
In a statement, The Pharmacy Guild of Australia said Blooms and thousands of independent pharmacies had also opposed the government’s deal with the Greens to open access for adults from October.
Chemist Warehouse has told the ABC it is still looking at the implications of the decision and seeking more information on how it will work.
While those pharmacies have indicated they will not be moving to stock vapes, franchisors under the brands are technically able to make an independent decision to do so.
Many pharmacies under those brands already supply vapes nationwide or are licensed to do so. The key dispute raised by them is the “down scheduling” of vapes from requiring scripts to being available behind the counter for adults once they have had a conversation with their pharmacist.
Health Minister Mark Butler said earlier this week that pharmacies would not be forced to stock vapes and the government did not expect that all pharmacies would.
June 28, 2024
Zimbabwe Leaf Sales Reach $721 Million

Photo: Taco Tuinstra
So far this marketing season, Zimbabwe’s tobacco farmers have brought in $721 million from the tobacco auction and contract floors, down from $832 million in the same period last year, reports The Herald.
This year, 208 million kilograms have been delivered to the marketing floors so far compared to 275 million kilograms last year. The target this year is 265 million kilograms, which is lower than last year’s target; however, this year’s crop was affected by El Nino induced drought.
The Tobacco Industry and Marketing Board noted that 11.7 million kilograms have been delivered to auction floors and 197 million kilograms have been delivered to contract floors. The average price is $3.45 with the highest price at $6.99. Fewer bales have been rejected this year compared to last year.
June 28, 2024
Estonia Smoke-Free Spaces Expanding

Image: Scanrail
Estonia’s government has plans to expand smoke-free outdoor spaces, including places like beaches and parks, according to ERR News.
The government approved Estonia’s positions on tobacco policy, including the expansion of smoke-free outdoor areas to include terraces, parks, beaches and other recreational areas where many people gather.
“Today, we are talking about a restriction that still allows individuals to smoke but in a way that does not harm the health of those around them,” said Aive Telling, head of environmental health and chemical safety at the Ministry of Social Affairs. “This is the most important point in ensuring a smoke-free environment. We must consider others, and this is also about changing societal attitudes to ensure our actions do not harm others.”
“Let’s say that today, alcohol consumption on the beach is monitored, people are reminded that drinking alcohol on the beach is not allowed,” said Piret Valjaots, head of the Tartu Health Service. “Similarly, it will likely be possible to monitor tobacco use during the beach season. It becomes more complicated with parks as there is no constant law enforcement presence in public spaces.”
A detailed plan is not yet in place.
“Things do not change overnight, and this is just the beginning of a longer and broader process,” said Telling. “Today, these positions are the direction in which we are moving throughout Europe.”
June 26, 2024
SindiTabaco Publishes Anniversary Paper

Image: SindiTabaco
To celebrate its 77th anniversary, SindiTabaco launched the document “Controversial issue, counterpoint necessary.” In 54 pages, the document addresses the history of tobacco in Brazil and the most relevant numbers of the supply chain. Its larger objective, however, is to challenge themes that are not always duly contextualized and end up being treated as contradictions by society.
“The tobacco supply chain is one of the most organized and advanced in Brazilian agriculture, with initiatives that set an example to other sectors. Not rarely, however, it is left aside in terms of agribusiness. The launch of this document has the purpose to demystify and provide the necessary counterpoint to those who insist in refusing to state the obvious: Tobacco is agro!” Iro Schuenke, SindiTabaco president, said.
Questions like indebtedness, monoculture, deforestation, the use of pesticides, suicides, green tobacco sickness, child labor and slave labor are themes addressed by the paper, now beginning to circulate among the main stakeholders of the entity in printed format, but it is also available online at www.sinditabaco.com.br.
“Over the years, we have given visibility to the social and economic importance of the sector to hundreds of municipalities in South Brazil, and we have promoted a series of initiatives about agricultural practices that turn Brazilian tobacco into one of the most demanded in the world. In the meantime, we have suffered uninterrupted attacks on account of the finished product, which is legal and an adult choice. Not rarely, we witness anti-smoking activists attacking the production of tobacco, and the list of attacks has been gradually expanded over the years. From polluters to slavers are some of the biased written lines. It is about them we are talking,” said Schuenke.
June 26, 2024
Australia Softens Prescription Mandate

Photo: Zerophoto | Adobe Stock
Australia will soften a proposed ban on vaping following opposition from the Greens party, leading the government to agree to revise a bill that would have limited vapes to those with a doctor’s prescription.
The agreement between the ruling center-left Labor Party and the Greens will lead to the passage of legislation later this week that restricts the sale of vapes to pharmacies and removes them from retail shelves. This move is aimed at curbing the rise in youth vaping.
However, the bill falls short of the government’s initial ambition to restrict sales only to those with a doctor’s prescription, which would have been a world first. The amended bill will take effect on July 1, reports Reuters.
Under the compromise deal, vapes will be moved “behind the counter” in October. Customers will need to have a conversation with the pharmacist before making a purchase, and those under 18 years old will need a prescription.
Health Minister Mark Butler said in a statement that the government “welcomed constructive engagement with the crossbench and secured the support of the Greens for our world-leading vaping laws.”
The Labor Party does not have a majority in the upper house and must negotiate with other parties and independent senators to pass legislation.
June 25, 2024
Durbin Decries Menthol Vape Order

Credit: Dick Durbin
When the U.S. Food and Drug Administration authorized the marketing of four Njoy brand menthol e-cigarette products, Senator Dick Durbin was disappointed. He said the agency should have done better. The move marks the first nontobacco-flavored e-cigarette products to be authorized by the FDA.
“Flavors like menthol are used by Big Tobacco companies to mask the harsh taste of their dangerous products. FDA knows this from its own experience seeking to ban the production of menthol cigarettes to protect the public health,” Durbin stated. “We’ve seen that children begin nicotine use with menthol. Today’s authorization of menthol-flavored vapes will create an opening for more children to become addicted to harmful products.”
Earlier this month, Durbin, chair of the Senate Judiciary Committee, held a committee hearing titled “Combatting the Youth Vaping Epidemic by Enhancing Enforcement Against Illegal E-Cigarettes.” The hearing underscored the alarming level of youth e-cigarette use and the role that flavors—such as menthol—play in youth use of tobacco products and examined how federal agencies have failed to enforce laws designed to protect children from a lifetime of nicotine addiction.
Tony Abboud, executive director of the Vapor Technology Association, who also spoke at Durbin’s hearing, said he applauds the FDA’s decision to “finally follow the massive body of science” that shows flavored e-cigarettes help people quit smoking. However, Abboud said the move does little to address the massive problems surrounding the regulatory agency’s authorization process.
“The reality is that this news, while a tiny step in the right direction, again reveals a more troubling pattern—the FDA acting only in self-interest to quell political pressure rather than acting in the interest of the American people,” said Abboud. “The only vapes authorized today are all owned by the biggest cigarette companies.
“Today’s authorizations once again demonstrate Brian King and the FDA’s hypocritical allegiance to those cigarette companies whose deadly cigarettes and other combustible products that the FDA continues to flood the market with at a record pace.”
June 25, 2024