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Committed to Science

David O’Reilly (Photo: BAT)

David O’Reilly, director of scientific research at BAT, shares his views on the roles of science and nicotine in tobacco harm reduction.

TR Staff Report

Science is instrumental as the tobacco industry transitions from combustible products to less risky smoking alternatives. Tobacco Reporter spoke with BAT’s director of scientific research, David O’Reilly, about the roles of science and nicotine in tobacco harm reduction.

Tobacco Reporter: You have been with BAT since 1991. Could you please compare the role of BAT’s science department at the time when there were only combustible cigarettes to the role it plays today?
David O’Reilly: BAT has a long history of conducting scientific research and has had an R&D facility in the U.K. for over 60 years. Throughout this period, we have seen the science significantly change.
Originally, the majority of R&D we conducted was focused on cigarettes and tobacco plant science, but the more we learned about combustion and the harm that burning tobacco causes, the more we shifted our efforts to exploring new ways to provide consumers with less risky alternative products.
Initially, our focus was on reduced-toxicant cigarettes, but, utilizing the growing body of evidence and the Institute of Medicine report that highlighted the negative impact of combustion, we shifted our activities to the development of noncombustible products.
This is now where the majority of our R&D efforts are focused: generating new evidence to support our new category products but also developing new or improved products.
To ensure that we are using the latest scientific thinking and cutting-edge techniques, we have increased our investment in science and expanded the number of scientists within BAT. We have recruited people from a broad range of backgrounds, such as genetics, neuroscience and data sciences.

With so much focus on the development of reduced-risk products (RRPs), does BAT still conduct research on combustible cigarettes?
Our primary focus within R&D is our new category products, as we know that consumer preferences continuously evolve, but also that science and innovation continue to change at pace. However, we do undertake some R&D on our combustible products. This is essential to ensure that they are produced to high quality and manufacturing standards.

What are your thoughts on very low-nicotine cigarettes with regard to their role in tobacco harm reduction?
Our belief is that tobacco harm reduction is the best way forward to reduce the health impacts of smoking. The evidence shows that most of the harm from cigarettes is caused by combustion and the burning of tobacco, not by the nicotine.
In fact, nicotine plays an important role in tobacco harm reduction. Since it is one of the reasons why people smoke, nicotine’s presence in products that, though not risk-free and addictive due to the presence of nicotine, are designed to be reduced risk¹ compared to cigarettes. These products can help adult smokers to switch instead of continuing to smoke.
As Professor Michael Russell said in his 1976 pivotal paper, “People smoke for nicotine, but they die from the tar,”² and we know if you take the nicotine away or offer very low amounts, consumers may not be satisfied and revert back to cigarettes rather than switching completely to a reduced-risk alternative that is backed by scientific research, such as vaping.

In RRP development, one of the most pressing challenges is youth initiation. To what extent can innovation help prevent underage consumption? Will it be necessary to sacrifice all nontobacco vaping flavors to achieve this goal?
We are clear that our products are for adult consumers only and that youth should never use any nicotine products, be it cigarettes or vaping products.
Our products are sold to adult consumers via reputable retailers that verify the age of consumers before sale and follow our youth access prevention standards, which include prominent 18-plus labels on the front of all packaging and on all communications.
This is in addition to robust age verification on our own e-commerce channels, our youth access prevention training and certification for retailers and our “iCommit” training for employees.
It is worth highlighting that alternative products need to be satisfying to prevent adult consumers from going back to cigarettes, and research has shown that flavors play an important role in encouraging adult smokers who would otherwise continue to smoke to switch to better alternatives. However, a priority for BAT is ensuring that our flavors and device colors are designed to appeal to adult consumers, not youth.

In order to switch away from combustibles, consumers need to like the alternative, less hazardous product. What still needs to be done to improve nicotine delivery and consumer satisfaction? Can you please give an example of how you improved one of your next-generation products in this respect?
When we develop any new product, we think holistically about the consumer experience, and we use science and consumer insights to guide our development programs and deliver products that consumers want and find satisfying. For example, when we think about a product, we think about many aspects, including the design, the feel, the power of the battery, ingredients of the liquids, taste, etc. BAT was one of the first companies to use nicotine salts, as we knew that consumer satisfaction is important to make vaping more acceptable to cigarette smokers. This is just one example of how science and consumer insights combine to enhance our products.

For tobacco harm reduction to succeed, product must be affordable, especially to customers in the low-income and middle-income countries where many of the world’s smokers reside. What solutions in addition to nicotine pouches are you researching in this regard?
Our purpose is to build “A Better Tomorrow” by reducing the health impact of our business. We are doing this by developing a wide choice of alternative products for adult consumers who would otherwise continue to smoke, tailored to meet their evolving preferences.
Two key components of every innovation program we undertake are sustainability and affordability. It is important that these aspects are considered from the outset and at every step of the way so that we deliver a product that consumers want. We continue to launch these in markets across the globe, and our aim is to switch 50 million consumers to our noncombustible products by 2030.

Sustainability is increasingly important. BAT has introduced a recycling campaign for its electronic nicotine-delivery devices and has begun replacing plastic elements of vapor products with pulp-based alternatives. However, vaporizers contain circuit boards, which in turn contain plastics and heavy metals, and they also use lithium-ion batteries. How is BAT tackling this issue?
Every product developed has sustainability as a key component of the development plan, and we are committed to carbon neutrality across our operations by 2030. In May 2021, Vuse became the first global carbon neutral vape brand due to our ongoing efforts, notably by offsetting its carbon impact.³
Also, in many markets where Vuse is available, there is a takeback scheme in place, which allows consumers to return products for responsible disposal.
As part of our ongoing Vuse “Cut the Wrap” initiative, Vuse Go packaging has no external plastic poly wrap. The initiative, which is our commitment to reduce single-use plastics in our packaging, has already saved approximately 250 tons of plastic, the equivalent to more than 10 million plastic bottles.⁴

Misconceptions about the relative risks of RRPs and misconceptions about the nature of nicotine also present major challenges to harm reduction. An increasing number of U.S. adult consumers believe that vaping is as hazardous or even more hazardous than smoking, for example, and there are also misperceptions in the scientific and medical world. Such misunderstandings are often fueled by flawed studies. What can the industry do to address this problem without being accused of lobbying and in an environment where many are skeptical about tobacco industry-funded research?
At BAT, we think that the solution cannot be delivered by industry alone. To the contrary, BAT needs to work together with the wider scientific community and other key opinion leaders to create a system that is clear about the harm caused by smoking yet recognizes, holistically and consistently, where real public health gains can be made. A system that encourages adult consumer choice. We want a “whole-of-society approach”—as referenced by the United Nations—to this important public health issue.
There is also a need for the ongoing generation of robust scientific evidence. BAT continues to invest in scientific studies and openly share the results to help build the evidence base that supports alternative tobacco and nicotine products and their potential role in tobacco harm reduction.
At BAT, we believe that adult consumers should have access to information that enhances their understanding and allows them to make informed choices based on the best available evidence.

The concept of harm reduction has been widely accepted in fields such as substance abuse. Why does it face so much resistance when applied to tobacco, and how can this be overcome?
Firstly, it is important to recognize that there are some governments, such as the U.S., U.K., Sweden and New Zealand, who have adopted progressive public health policies that reflect the growing weight of evidence that supports the role of alternative tobacco and nicotine products in providing less risky alternatives to those who would otherwise continue to smoke. In these countries, although not all at the same stage, we see the continued decline in smoking rates and progress toward becoming smoke-free (under 5 percent of the population).
In other countries, many of whom have adopted policies that do not differentiate between cigarettes and alternative products, we see little or even a reversal in progress. Often the reason for such an approach is the “precautionary principle.” Essentially, in the absence of epidemiological data about alternative products, governments will not recommend them.
However, we believe, based on the already available evidence about alternative products and providing a complete switch, that these are reduced risk¹ compared to cigarettes. This is a view reflected through the work of independent organizations, such as Public Health England, who determined that based on current knowledge, vaping is at least 95 percent less harmful than smoking.⁵ However, it is important to note that these alternative products are not risk-free and contain nicotine, an addictive substance.

BAT has started to build an innovation hub in Trieste, Italy. What role will this hub play within the company’s global strategy for innovation and sustainability? What does this mean for your R&D site in Southampton?
The Trieste innovation hub will host a range of facilities, including a new manufacturing site for BAT’s New Category products, a digital boutique, innovation lab and Centre of Excellence for digital transformation and digital marketing. These activities, alongside the activities undertaken at our other R&D and innovation sites, complement and build upon the research and development work undertaken in Southampton, which is focused on generating the science needed to substantiate our products whilst ensuring they are produced to high standards.

What role should tobacco harm reduction play nowadays?
Tobacco harm reduction is one of the most important public health strategies. Science plays a critical role in delivering the alternative products that enable it but also allows us to measure the impact and outcomes of switching completely from cigarettes.
Work by scientific experts, using advanced computing and modeling, has shown us the potential for substantial life year gains and premature deaths caused by smoking-related diseases averted than can be delivered by switching smokers to vapor products.⁶ The longer these alternative products are on the market, the more real-world data we will be able to collect, which will be very powerful and reinforce our belief about the critical role they play in tobacco harm reduction and building “A Better Tomorrow.”

¹Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk-free and are addictive.

² Russell MJ. Low-tar medium nicotine cigarettes: a new approach to safer smoking. BMJ 1976;1:1430–3.

³ Based on Vuse Go, [Vuse Go Max], Vuse ePod, ePen, eTankmini, Alto devices and consumables internal sales forecast (calculated March 2022) for 12 months starting from April 2022. Vuse will have reduced its carbon emissions by circa 55 percent (as of March 2023) through its internal sustainability initiatives since launched in 2019 and has now offset the remaining circa 45 percent.

⁴ Plastic saving was calculated from 2020 global sales volumes and 2021 forecasted sales, and the plastic bottles comparison was based on a 22.9 g bottle weight, representative weight of 500 mL commercially available soft drink bottles (May 2020).

⁵ Evidence review of e-cigarettes and heated-tobacco products 2018 (publishing.service.gov.uk).

⁶ Potential deaths averted in the U.S. by replacing cigarettes with e-cigarettes – PubMed (nih.gov).

January 1, 2023
Charting History

Photo: Shaiit

Are the experiences with harm reduction from the past applicable to the future?
By George Gay
Knowledge Action Change (KAC), the U.K.-based public health agency, published in the middle of November what it described as a landmark report, The Right Side of History. According to a press note, the report “charts the history of tobacco harm reduction (THR) to date and considers the future of a strategy that can hasten the end of smoking and drastically reduce smoking-related death and disease worldwide.”
The Right Side of History is the third in what has been a biennial series of Global State of Tobacco Harm Reduction (GSTHR) reports, following No Fire, No Smoke in 2018 and Burning Issues in 2020. Alongside the biennial reports, GSTHR Briefing Papers and other publications, a free-to-access global database enabling users to explore tobacco harm reduction and safer nicotine product use on a country-by-country basis, is available, also under the GSTHR brand.
There can be no doubt that these publications and databases comprise a tremendous resource from an organization that boasts a dedicated—I would say passionate—team of experts with long experience in various fields of harm reduction research and application. This was the organization that, in 2014, launched the annual series of forums that brought together a wide range of people with interests in, but not limited to, nicotine—people who, importantly but unusually for such events, included consumers. Under the name Global Forum on Nicotine (GFN), these events have been held mainly in Warsaw, Poland, though, during the period of Covid-19, when face-to-face meetings, especially international meetings, were difficult to organize, the GFN was moved rapidly to a partly online format.
And there is a lot more to what KAC has achieved through the application of innovative ideas. For example, the following is from the report’s foreword: “As an organization, we also wanted to help expand research capacity and understanding in relation to the principles and delivery of tobacco harm reduction. To achieve this, we established the Tobacco Harm Reduction Scholarship Programme (THRSP), … funded by the FSFW [Foundation for a Smoke-Free World]. Scholars from across the world have worked on a wide range of topics, helping improve professional and community understanding, with outputs including articles published in peer-reviewed journals, the establishment of regional networks, podcasts and films. Graduates of the THRSP will play vital roles in the ongoing struggle to expand and improve THR.”
Losing Sight
I have long been an admirer of KAC, its people and what it has achieved in a relatively short space of time, so I hope that I will be forgiven for being critical about its latest undertaking—for saying that I believe the latest report is a step in the wrong direction: backwards, where history always leads. To me, the latest report suggests that we are in danger of losing sight of our objectives, that the consumers, who were once championed, have been pushed aside while academics, experts and journalists on either side of the THR debate engage in an unseemly slugfest of recriminations.
But, before I go any further, I should declare an interest, or a lack of interest, perhaps. I am on the side of history that thinks history is bunk and largely a drag on moving forward. I find it impossible to see how history can play a positive role in promoting a disruptive technology. You cannot move fast and break things if you are dragging behind you the weight of history and all its petty grievances, real and imagined.
The Right Side of History is, of course, a brilliant title because it plays to the idea that history is written by the victors and so stakes a claim for THR advocates to be the victors and therefore to have written the one true history. But if we are going to move forward, we must accept that others have different versions of history with which we might disagree but with which we might have to engage. More importantly, we need to focus on the fact that it is the consumers who must eventually be the victors.
Perhaps it is because it is constantly reminded of its past that the tobacco/nicotine industry seems to me to have an unhealthy obsession with history and, especially, U.S. history, which is often presented as being universally applicable. Start talking about addiction and you will be transported back a quarter of a century to the testimony of the heads of U.S. tobacco manufacturers. Start talking about tobacco prohibition and you will be referred back 100 years to failed U.S. efforts with alcohol. And in chapter one of The Right Side of History, those interested in disruptive technologies are taken back perhaps a thousand years to what indigenous Americans got up to with tobacco.
I am not qualified to judge such matters, but, knowing the author, I feel certain that the history of tobacco and nicotine as presented in the KAC report is excellent and will be of much interest to historians, but I cannot see what relevance the ancient beliefs of indigenous Americans have to do with what the report refers to as safer nicotine products (SNPs). I struggle even to understand what relevance descriptions of early iterations of SNPs have on disruptive technologies, though I would concede that it would be wise to take note of, and keep in mind, any instances where products caused a disturbance in the forcefield of disruptive technology, either because the technology went in the wrong direction or it handed ammunition to anti-THR activists.
It would be wise, but it probably wouldn’t happen because, as Georg Hegel pointed out, if we learn one thing from history, it is that we learn nothing from history.
Engaging Consumers
I get the feeling that we, the people involved in trying to nudge governmental policies in the direction of THR (as opposed to the technicians working on new products), have run out of ideas and come to accept that, as a number of famous people have been quoted as saying, history is “just one damned thing after another.” But this again runs against the grain of disruptive technology. It speaks to a determinism—a fatalism even; it suggests that it is time to throw in the towel and wait for events to overwhelm us.
I certainly worry that this is what is happening. The GSTHR-branded products are produced with the help of a grant from the FSFW, which is funded at arm’s length by Philip Morris International, though I should add that the GSTHR project and all its outputs are editorially independent of the foundation, under the terms of the grant agreement.
It is interesting to note here that the foundation also funds the Tobacco Transformation Index (TTI), the second biennial report of which was launched in September. That report presented details of the findings of two further years of research into the efforts made by the world’s 15 largest tobacco companies to reduce the harm caused by the consumption of their products. The 2022 TTI report evaluated the tobacco companies’ actions across six business functions, designated “categories,” and 35 underlying indicators that are said to cover “measures indicative of harm reduction …”
As I understand things, the TTI is supposed to harness analysts and investors to use their influence to encourage the 15 tobacco companies to beef up the transformation of their portfolios from high-risk products to low-risk products and thereby accelerate the reduction of harm caused by tobacco use. The idea is that investors can be harnessed in this way by ranking the tobacco companies on their relative progress or the lack thereof in transforming their portfolios. A system of Naming and Faming/Shaming.
But the way I see it is that the new KAC report and the second TTI report are so far from the consumer coalface, so far from real-world THR, as to be largely irrelevant. These reports are certainly not meant to engage with smokers. Few, I would assume, are likely to read the 130-page KAC report and even fewer the 140-page TTI report and its 80-page methodology.
Of course, it might be said with some justification that these reports are not meant for consumers but for the experts who know best and who are battling hard to make THR a reality around the world. But this seems to run foul of a principle recognised in the foreword to the KAC report: “nothing about us, without us.”
Success Stories
Surely there must be more direct and efficacious ways of using the important foundation funding. Perhaps it is time to recognize that one of the problems with the foundation is the word “World.” Perhaps those of us who support THR have to admit that we have bitten off more than we can chew in aiming for a world revolution.
What if, for the time being, we forget about the world, large swathes of which are under the anti-THR influence of the World Health Organization? What if, for the time being, we concentrate on a handful of countries that have already proved amenable to THR by helping their SNP industries to prosper? If we are right and THR can be achieved through encouraging the switch from high-risk products to SNPs, then the countries chosen will become exemplars for the rest of the world—health and economic success stories that cannot be ignored or brushed aside by the WHO.
Of course, it could be argued that these exemplars will arise anyway, even if the emphasis is on the whole world. Again, there is truth in this, but I would argue that we are talking about time here. Take the U.K.; it has been relatively successful in encouraging the switch from high-risk products to SNPs, but the progress could be much faster, perhaps with an injection of cash.
Anybody who attended the U.K. Vaping Industry Association’s conference in November could not, I think, have failed to have been impressed by the practical nature of some of the panel sessions at which compliance issues were discussed. It occurred to me, though, that some of these sessions would be even more helpful if, with the right level of funding, they were staged as stand-alone educational workshops.
I use the U.K. and compliance as examples, but there are other THR-progressive countries where other issues, such as the illegal trade, could probably use some help if they are to become exemplars.
But if such ideas are not seen as worthwhile or are unworkable under FSFW protocols, at least the next KAC report should turn to more practical matters by looking at the environmental impact of SNP use against that of smoking combustible cigarettes. It cannot be right that neither the KAC report nor the TTI report mentioned environmental matters in any meaningful way. Some SNPs, such as snus, probably have a very low environmental impact while vaping devices and heat-not-burn products probably have high impacts. Either way, we need to know, and we need to know whether the high-impact products can be improved. It is no good extending the lives of individuals by a few years if we are seriously polluting the world for everybody.

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.

January 1, 2023
Branching Out

Photo: JTI

Ploom X debuts in the United Kingdom.
By George Gay
Many people find it difficult to understand why not all smokers have experimented with reduced-risk vaping devices and subsequently used them to cut down or quit their consumption of combustible cigarettes, but there are, in fact, any number of reasons. What is more difficult to understand is why some smokers have never tried vaping devices. Though, again, it is not hard to come up with a few reasons. Smokers might, for instance, eschew disposable vaping devices on environmental grounds but find other types of devices rather daunting. While some people like gadgets, especially when they come with lots of options controlled by multiple buttons, lights and digital displays, other people see these options and their controlling levers as overly complex—as providing more options for things to go wrong.
Japan Tobacco International perhaps had this sort of thing in mind when it developed its Ploom X heated-tobacco product (HTP), an updated version of its Ploom S. Ploom X, which has been available in Japan for almost 18 months and which made its beyond-Japan debut when it was launched* by JTI U.K. at the beginning of November, is a sleek, compact, minimalist HTP that, at first glance, has no buttons, lights or displays—just a USB port at the bottom of the device and, at the top, a slider that, when moved to the side, reveals a hole—the entrance to the device’s “oven”—into which tobacco sticks, called EVO sticks, are placed.
Of course, there is a “button,” one activated by touching the button area of the front panel of the device, and, when the device is in use, there is an LED display supported by a vibration function, which together provide notifications of such things as battery charge level, heating time, vaping time and possible malfunctions. But the thing is, even I, an aged technophobe, was able to master the device in no time at all because of a simplicity of operation made possible in part by its having only one heating mode. This is basically how it goes: Move the slider to the right, insert the tobacco stick, wait briefly for one flash of the LED display and two short vibrations, and you’re ready to vape.
In fact, two of the main things I took away from going through the simple process of taking a new Ploom X device out of its box, reading the instructions, inserting a tobacco stick and taking a few puffs were that this was a product that, with its sleek look and accessories, would appeal especially to young adults while, because of its operational simplicity, also being comprehensible to us older folk. And this is important if the aim is to encourage as many smokers as possible to switch from combustible cigarettes to less risky products. It is easy to forget that smokers come in all shapes and sizes across the adult age spectrum, and while, arguably, younger adult smokers have more to lose by continuing to smoke, older smokers should not, in my view, be left behind.
This need to cover all bases seems to be at the heart of JTI U.K.’s strategy. While it already had a range of alternative products on the U.K. market, it has launched Ploom X even though HTPs have played second fiddle to other vaping devices in the country—though a second fiddle that is starting to make more noise, perhaps.
Ploom is said to have been improved by using a higher heating temperature—up from the 230 degrees Celsius of Ploom S to 295 degrees Celsius of Ploom X—and a redesigned heat-flow system to ensure a more consistent nicotine delivery and a more enhanced flavor delivery from the first puff. Adjustments made to the airflow system are said to have enabled a more consistent vapor delivery and increased vapor volume. And the new device is said to provide for longer (about 30 seconds) session times of up to five minutes and the possibility of using more tobacco sticks per charge: up to 22 sessions with one charge. At the same time, it requires minimal cleaning, amounting to about five seconds of effort after the consumption of 20 sticks.
Of course, what is written above describes only half the story. If higher temperatures and redesigned heat-flow systems are to be meaningful, the tobacco sticks that are put into the devices must play their part, a part that is largely to do with providing choice. So while the device is simple to operate, choosing your EVO stick is more challenging, at least for the newcomer. EVO sticks, which contain a blend manufactured from “microground and fine-cut tobacco,” come in three broad categories: tobacco flavors, of which there are two, EVO Bronze and EVO Amber; menthol tobacco flavors, of which there are two, EVO Green and EVO Green Option; and fruit and menthol flavors, of which there are four, EVO Purple, EVO Purple Option, EVO Magenta and EVO Ruby. This sounds a little daunting but is less so once you know that the presence of the word “option” indicates the stick has a flavor capsule and once you know that “purple” means berry, “magenta” means grape and “ruby” means apple.
There is further help at hand too because each product is given a five level rating on various aspects of its delivery: intensity and flavor in the case of the tobacco products; intensity, flavor and cooling in the case of the menthol tobacco products; and intensity, aroma and cooling in the case of the fruit and menthol products.
Unfortunately, I’m not sure that these ratings are generally available. I believe they can be provided only to somebody who has demonstrated an interest, and this, I think, is a pity. The U.K. government has been generally progressive in its rule-making around vaping products, but this is an area where things perhaps need to be revisited. It is often said that the key to getting as many smokers to switch to less risky tobacco and nicotine products is to provide them with the information they need to make informed choices. It would be a tragedy if some smokers gave up on Ploom or other devices and products simply because, for instance, they had to choose sticks on the basis of insufficient information and therefore never arrived at the product best suited to them.
That is perhaps unlikely. Having paid £39 ($47.63) for a device (there was an offer at the time of writing by which consumers could buy a device and two packs of sticks for £29), consumers are likely to persevere and maybe run the gamut of stick options until they find the flavor or flavors they like. Another reason to persevere is that a pack of 20 sticks sells for a recommended retail price of £4.50, about half the price of a pack of 20 combustible cigarettes, so, providing a 20-a-day consumer can afford the initial outlay for the device, she will more than recoup that outlay within about 10 days.
*Ploom X was launched in the U.K. online nationwide at www.ploom.co.uk and in a limited number of stores in the Greater London area and elsewhere.

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.

January 1, 2023
Choppy Waters

Photo: Igor Groshev

As the Covid pandemic ebbs, the tobacco shipping business faces new challenges in 2023.
By Stefanie Rossel
At the beginning of last year, forwarding businesses that specialized in the shipping and storage of tobacco were groaning under the burden Covid-19 had placed on their operations. The pandemic had severely disrupted the global supply chain, causing shortages of containers in places where they were needed and surpluses in places that had no use for them.
As economic movements and production came to a halt, large numbers of containers accumulated in North America. In order to control costs, carriers lowered the number of vessels at sea, slowing imports and exports as empty containers were no longer picked up. When Covid eased and Asian traders became the first to resume business, retrieving containers turned out to be challenge. A reduction in container production during the pandemic, raw material shortages and Covid-related port closures contributed to the crisis, resulting in significant delays in turnaround times and an unprecedented increase in the costs of transporting goods by container ship.
Since the beginning of 2020, shipping rates had risen between five times and seven times over the initial freight rates depending on the route. The price of shipping cargo to the U.S., for instance, increased 530 percent since the start of 2021.
The good news is that toward the end of 2022, scarcity of containers was no longer an issue; on the contrary: global container depots, where empty containers are stored, are now filling up or are full. Freight rates have fallen accordingly. According to the December 2022 Drewry World Container Index, the average rate of a 40-foot container has dropped to $2,139, which is 79 percent below the peak of $10,377 reached in September 2021.
The falling prices should provide freight forwarders room to negotiate better rates with shipping lines in 2023, experts say, but margins for forwarders will also be tighter as they operate in a market that is anticipated to consolidate. They will have to optimize operational cost and carefully monitor demurrage and detention charges, such as insurance charges or claims, according to industry watchers.

Slowing Trade
In general, however, supply chain concerns are expected to persist in 2023 as new issues have come up. ING Think, the economic and financial analysis arm of ING Research, believes that the new year could prove to be even more challenging for global goods trade due to faltering consumer demand, returning oversupply and the mounting cost of energy as a result of the war in Ukraine. More than 80 percent of world trade is seaborne.
While major ports, such as Los Angeles-Long Beach and Shanghai, have managed to work off the backlogs caused by the pandemic, global congestion of ports is far from over, analysts point out. Shipping times may have improved since their peak at the beginning of 2022, but they still amount to approximately double the pre-pandemic lead times of 80 days to 90 days. According to Sea Intelligence, schedule reliability stood at 46.2 percent in August, which is trending upward but still significantly lower than the 2018–2019 average of 74 percent. Some 7 percent of the global fleet, ING Think says, is still stuck in queues in ports around the world, and 11 percent of goods are sitting on waiting container ships.
For 2023, analysts predict the moderation in the transportation sector to continue in light of recession scenarios and hesitant consumer demand. With energy prices expected to remain high, purchasing power continuing to erode and manufacturers struggling with labor and material shortages, ING Think forecasts that receding demand will meet oversupply. While trade in consumer products is expected to remain below growth average, decreasing new export orders and declining order books also indicate a slowdown on the industrial side, with Europe being hit particularly hard by the energy crisis.
With minimal Russian gas flows, the 2023–2024 winter season will likely make it more difficult to build inventories. Further sanctions on Russian oil and refined products are anticipated to lead to a shift in global trade patterns; on Dec. 5, 2022, the European Union and the U.K. banned the seaborne imports of crude oil from Russia; from Feb. 5., 2023, they will also embargo Russian oil product imports.
Labor shortages and material shortages will continue to challenge the transport sector in 2023. Strikes for higher wages and better working conditions took place in all parts of the world last year—a situation that could worsen with the war in Ukraine. At 10.5 percent and 4 percent, respectively, Russia and Ukraine supply significant shares of the world’s sailors. If Russia announces a full mobilization, the shortage of deckhands could intensify.
According to ING Think, 2023 will see enhanced capacity management of container liners, increasing operational costs and larger capital investments in new, more environmentally friendly vessels and more expensive compliant biofuels as well as in wages. Global supply chains are still fragile and exposed to volatility. As the analysts observe, “Normality is still way off as we approach 2023.”

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.

January 1, 2023
Growing Pressure

Photo: Prestige Leaf

Inflation and competition from alternative crops are compounding the traditional challenges facing oriental tobacco.
By Stefanie Rossel
For more than 100 years, oriental tobacco has been used as a key ingredient in American blend cigarettes, but the history of this aromatic, small-leafed variety goes back much further. In the early 17th century, the Spanish introduced the tobacco plant to the Ottoman Empire. The Turks developed their own cultivation processes. It is assumed that oriental tobacco emerged as a mutation spawned by the growing countries’ climatic conditions, poor soil and the “starvation” method of cultivation in which the plants are placed very close to one another. Today, classical oriental tobacco is mainly grown in the countries of the eastern Mediterranean, with Turkiye and Greece being the biggest producers followed by North Macedonia and Bulgaria. Thailand, India, Albania, the CIS countries and China also cultivate oriental varieties.
Compared to other tobaccos, oriental is a niche product. Due to the hot and arid conditions in which it is grown, the leaf contains significantly lower levels of nicotine than flue-cured Virginia or burley, and harvesting and curing methods are more pristine: The leaves are picked by hand and sun-dried for about a week, a process that enables the leaves to retain some of the natural sugars, which provide a hint of sweetness and a unique taste.
While the authenticity of the cultivation practices may appeal to some, they also present a major challenge. The oriental tobacco sector is struggling to replace aging farmers and working hard to become more efficient and sustainable.

Today, classical oriental tobacco is mainly grown in the countries of the eastern Mediterranean
(Photo: Missirian)

Smaller Crop Size
The summer of 2022 was hot and dry, especially in southern Europe. In Turkiye, it was the second year that the growing season suffered from drought, according to Zafer Atici, owner and managing director of Prestige Leaf, a global leaf supplier based in Hong Kong. “Planting was delayed beyond the usual window,” he says. “Extreme hot weather in July and August also adversely affected the growth and consequently yield of plants in the field. In some areas, production dropped to half. As Turkish tobaccos are mostly sun-cured, the curing period was better without any rainfall.”
Turkiye’s 2022 oriental crop was almost identical to the 2021 crop, which was one of the smallest in history, notes Atici. “While an increase was expected, the prevailing weather conditions that were similar all over Europe last summer took their toll on the yields,” he says. “The Izmir variety, which is the flag carrier, may result in a total of 42 million kg, with 35 million kg in the western part in the Aegean Region and 7 million kg in the eastern part of Turkiye, respectively.”
In other regions, the crops were also smaller than in previous seasons while the quality was rated normal to good. “Quality has not been negatively affected by the dry summer,” says Dora Gleoudis, managing director of Greek leaf tobacco exporter Nikos Gleoudis Kavex. “In general, such weather conditions are affecting oriental tobaccos mainly in regard of reduced yields.”
According to Nikos Tzoumas, managing director of Greek leaf merchant Missirian, the country’s oriental leaf production decreased from 11,500 tons in 2021 to 8,500 tons in 2022. Production of Basma amounted to 5,400 tons, and production of Katerini was 3,100 tons in 2022.
In Bulgaria, 2022’s crop shrank by 18 percent to 4,500 tons compared to 2021. North Macedonia by contrast increased its crop from a record low of 18,700 tons in 2021 to 21,000 tons this season. “The weather conditions that prevailed in the Balkan areas were not extremely dry,” explains Tzoumas. “The temperatures were quite mild—close to the historical average—throughout the cultivation season and very favorable during the last part of the curing period with a lot of sunshine. The rainfalls were short in the first half of the season and at normal levels later. The farmer yields were kept at regular levels and were not affected by climate change.”
Prior to this summer’s weather conditions, the sector confronted the challenges brought by the outbreak of Covid-19. Gleoudis says the pandemic had a minor impact on tobacco production in Greece and the Balkans. “However, there have been serious delays in the shipping schedules due to the lack of available containers, but this has been drastically improved lately,” she says.
In 2021, Greek production was affected by a lack of external workers, mainly from Bulgaria and Albania, due to travel restrictions, according to Tzoumas. “The production of 2022 was scheduled to be at lower levels, with the Greek farmers being informed about the workers’ absence well in advance,” he says.
Unsurprisingly, the war in Ukraine, which has created an energy crisis and driven inflation to new heights, has made life more difficult for oriental farmers. “Now, the challenge is to be able to produce agricultural products, including tobacco plants and leaf, under current economic conditions,” says Atici. “Increases in the oil prices have affected all crop inputs for the growers. In Turkiye, the gasoline price increased four times. With the war, wheat prices soared, and we also saw some areas switching production from tobacco to wheat. Less energy-dependent crops like oregano were also increasingly planted. The leaf price will increase due to increased costs.”
In Greece, farmers’ production cost increased at an average of 25 percent in 2022, says Tzoumas. “The factory costs of supplies, such as transportation, energy and packing materials, have increased by 25 to 200 percent, depending on the category.”
Gleoudis says that the combination of higher cost, higher inflation and reduced yields are forcing the dealers to pay growers better prices. In addition to covering the cost of production and offering farmers a modest standard of living, this helps secure the future production of oriental tobacco, which is increasingly facing competition from alternative crops, such as wheat, corn and sunflower, which demand less labor and currently attract high prices due to the Ukraine crisis.

Oriental tobacco is a notoriously labor intensive and producers have struggled to mechanize the process. (Photo: Prestige Leaf)

Changes Required
So does it still pay for growers to cultivate oriental tobacco under the given circumstances? Speaking for Turkiye, Atici says one of the main concerns is the decrease in the rural population as many people migrate to the cities in search of better economic opportunities.
“Oriental tobaccos could be viable to grow,” he notes. “However, some things need to change. For example, there should be less reliance on conventional energy and more use of renewables, along with smart mechanical tools instead of intensive labor usage, in particular in harvesting, as well as a better fertilizer regimen and financial improvement for crop input via cooperatives, private companies or government bodies. A good example is what Prestige Leaf does in India by providing fertilizers to growers as a financial help. The advantage of oriental growing is that it is an environmentally friendly crop. It requires very little irrigation and fertilizer and cures under the sun.”
In recent years, stakeholders have attempted to improve the efficiency of harvesting in the oriental tobacco sector. In 2020, an oriental tobacco harvesting machine entered the market. For the time being, however, picking the crop remains a manual job for most growers. The harvesting machine did not create the desired impact, according to Atici, citing high startup costs and insufficient efficiency gains.
For farmers with more than 10 ha of land, however, the harvesting machine ended up being a successful tool, says Tzoumas. “In 2020, it did not have the support it needed from the market, though, as the appearance of the final product could not match the one of a handpicked crop,” he says. “In other products, such as cotton, for example, this case was solved many years ago. Today, it is clear that even in oriental tobaccos, there is no future if it will not be fully mechanized, considering the lack of field workers and increase of wages.”
Oriental crops currently struggle to meet the demand levels, he says. “Farmers receive the messages and react fast to the new facts. The viability of the crop, however, depends not only on the demand but also on the alternative crops’ income, which is mainly food, farmers receive.”

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.

January 1, 2023
Adding Value

Photo: Taco Tuinstra

Moving up the tobacco value chain requires a content and stable grower base.
By George Gay
Why is tobacco produced anywhere, given what is known about the risks of consuming it? I ask because it seems to me that if there is one thing that governments around the world agree on, it is that the consumption of tobacco comprises a serious negative, socially and economically, which suggests they ought, in unison, to ban production universally.
Of course, all sorts of arguments can be put forward as to why this strategy couldn’t be made to work, but, thinking about it, I could not come up with one such argument that was irrefutable. So why isn’t production banned worldwide? Where’s the catch? I think it lies in the fact that many governments are happy to enjoy tobacco’s positive aspects but uncomfortable about admitting to them. It lies in the degree of negative consequences suffered by a country because of tobacco consumption and the degree to which these consequences are offset by the positive outcomes that can accrue to those countries that produce tobacco. Obviously, the desire to ban tobacco production would be much stronger in a country that doesn’t grow tobacco but has a large smoking population than it would be in a country that grows and exports tobacco but has a small smoking population. And this dial might shift further in the future in favor of some producer countries as they try to add to the value of their exports by empowering local merchants and manufacturers.
I started thinking about such issues after reading a Dec. 1 story in The Star newspaper that described how the Kenya Tobacco Control Alliance had asked President William Ruto to reconsider his decision to sign a trade pact with South Korea aimed at increasing exports of, among other things, tobacco. The alliance was fearful that such increased trade would cause the expansion of tobacco production at a time when efforts were being made to encourage growers to switch to other crops and activities.

Spiraling production cost, price stagnation, the impact of climate change… members of the International Tobacco Growers Association had plenty to discuss when they met in Portugal late last year. (Photo: ITGA)

Perennial Issues
A press release issued following the International Tobacco Growers’ Association (ITGA) 2022 annual general meeting held in Castelo Branco, Portugal, Oct. 26–29, stated that its members were calling for inclusion in the global-level, regional-level and country-level consultations shaping the present and future of the tobacco production sector.
Particularly, the ITGA wants to be able to take part in the Conference of the Parties (COP) to the World Health Organization Framework Convention on Tobacco Control (FCTC), COP10, which is due to be held next year in Panama. “By preventing growers’ access to the ongoing discussions, the Framework Convention on Tobacco Control acts against the international institutions’ rules of procedures and therefore against its own,” the press note said. “Growers urge for closer and stronger engagement with partners to overcome the common challenges facing tobacco growing. Costs of production and price stagnation, in the face of rapid inflation, mean […] that growers need support from all industry stakeholders to fight pressing issues, including the effects of climate change, deforestation and child labor.”
At least 400 ha of irrigated tobacco have been damaged in Zimbabwe after farmers applied counterfeit chemicals to their crop. (Photo: Taco Tuinstra)
In fact, these are just a taste of the challenges confronting tobacco production. Running one’s eye over reports from around the world, it is also possible to pick up on perennial issues, such as the aging of the tobacco grower bases in some countries and labor shortages more generally. Then there are the not constant but all-too-frequent concerns surrounding unhelpful currency movements and severe weather events, such as hurricanes. As usual, government regulations come into the picture, either indirectly, through efforts to reduce product consumption, or directly, though it needs to be noted that not all such regulations are negative. Interestingly, there seems to be little immediate concern about moves in the U.S. to require very low levels of nicotine in tobacco, perhaps because many people see this as either a nonstarter or something that is way off in the future.
Other issues are particular to these times: The Covid-19 pandemic is still posing risks and causing logistical problems while Russia’s invasion of Ukraine has pushed up the prices of energy and some agricultural chemicals and, according to one report at least, led to the use of counterfeit chemicals that have damaged crops. Perhaps Graham Boyd, executive vice president of the Tobacco Growers Association of North Carolina, summed the situation up best when, addressing the ITGA meeting, he said that the reward to risk ratio of producing tobacco in the U.S. was currently too low.

Adding Value
Pyxus International has been recognized for its efforts to promote responsible fuel production in Malawi. (Photo: Pyxus International)
Few of these challenges are new, of course, but some of the responses to them are. At the Global Tobacco and Nicotine Forum in October, Pyxus International’s subsidiary, Pyxus Agriculture Malawi (PAM), received the Golden Leaf Award in the Best ESG (environmental, social and governance) Program category for its efforts to promote responsible fuel production in Malawi. These efforts have involved the company producing charcoal in what it describes as a responsible manner using residual wood from its preexisting forest plantation. PAM is able, using its parent company’s proprietary track-and-trace platform, to ensure that any lumber used in its charcoal manufacturing is sustainably sourced and can be replenished.
PAM is clearly well regarded in Malawi, where it was last year given a platform to describe the strides it was making in diversification and value addition. The occasion was the opening on June 23 of the 34th Congress of the Tobacco Association of Malawi Farmers’ Trust by Malawi’s then minister of agriculture, Lobin Clarke Lowe.
According to a story in The Nyasa Times, Lowe said tobacco growers needed to diversify and add value to their produce as they had in the past by lifting yields from 1,000 kg per hectare to 1,800 kg per hectare. This had been one step in the right direction because improving productivity allowed growers to maintain their tobacco production while freeing up land for growing other crops.
“Recent global events are teaching us that we need to intensify on value addition and stop exporting crop commodities in raw form,” he said. “My ministry is working on an ‘agricultural and general crops act,’ which will see improvements in the conduct of markets for all crops and encourage investments in production and value addition.”
The idea of value addition in the country of production has been around for a long time, which is an indication, I think, of how easy it is to imagine but how difficult it is to bring about. The Herald newspaper reported in the middle of last year that the Zimbabwe government was spearheading the Tobacco Value Chain Transformation Plan that aimed to transform the country’s tobacco value chain into a $5 billion industry by 2025. “The plan, which was … [announced] last year [2021], focuses on increasing primary production to 300 million kg by 2025, localizing financing for small-scale producers and increasing value addition from 2 percent of total tobacco produced to more than 30 percent,” the story said.

Overcoming Challenges
Value addition cannot come soon enough, according to an October story in The Sunday Mail newspaper, which said that while the country’s land reform program had led to the empowerment of the tobacco sector at the primary level, it had not translated into gains further down the value chain, where higher returns were being made by leaf merchants and cigarette manufacturers.
With one or two exceptions, indigenous merchants had failed to penetrate the market due to formidable entry barriers, including limited access to low-cost funding and a lack of factory processing capacity, the story said. And, as a result, indigenous merchants had been condemned to trading as speculators at the sales floors. They engaged in surrogate buying on behalf of the big merchants, and they were involved in the management of contract growing schemes on behalf of the large merchants.
Returns from all these activities comprised a pittance relative to the returns indigenous players could realize in export markets as leaf merchants or cigarette manufacturers, the story said. The indigenous tobacco merchant did not have a seat at the main table and was surviving on crumbs dropped by larger merchants.
The industry in Zimbabwe clearly has some issues that need to be addressed, though whether the empowerment of indigenous merchants, clearly a good idea in itself, would address those issues is a moot point. In a report in The Independent newspaper, the president of the Tobacco Association of Zimbabwe, George Seremwe, said tobacco growers were expecting the Tobacco Industry and Marketing Board (TIMB) to iron out problems that had affected growers last season. Some contractors had failed to pay growers last year and still had not paid them, so those contractors should not be buying tobacco this season, he said.
And Seremwe had more serious accusations to make. “We all know that this sector is regarded as one of … [those] heavily infected with cartels,” he said. “This should end. We want sanity in the tobacco industry, and I urge TIMB to make sure that all these things negating the industry are eliminated,” he said.
Reading some of these Zimbabwe stories is like being transported back decades to India’s export leaf production industry when stories were rife of growers not being paid during the season in which they handed over their tobacco and perhaps not being paid at all in some cases. At the same time, rumors of cartels were similarly rife. But India got its act together in large part by switching from a contract system of buying tobacco to an auction system. I have not been to India for many years, and I’m sure that the industry has its challenges, but from what I can gather, the situation there is fairer and therefore more stable than it was.
Of course, the arrival of the auction system did not account completely for the turnaround of the industry in India, and it is obvious that other countries manage to operate production industries using contract buying. Nevertheless, it is interesting to note comments reportedly made recently to The Herald by the CEO of the Zimbabwe Tobacco Association, Rodney Ambrose, who said there was a need to restore the viability of the auction system to insulate growers from “all kinds of abuse by the merchants.”
“We need to return to a system where farmers self-finance themselves so that the auction system remains viable,” he was reported to have said. “We cannot have a situation where contractors determine the price of inputs, the price of extension services, the prices of the final product. This leaves farmers in debt. Besides, the contract system is not healthy in terms of foreign currency generation.”
What it comes down to, I guess, is that a strategy of value addition is all well and good, but to make it work, you need tobacco and, therefore, a content and stable grower base.

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.

January 1, 2023
Pondering Prohibition

Photos: Chris Frenzi

The pitfalls of banning tobacco and nicotine
TR Staff Report
Mention prohibition and most people will think of the United States’ ill-fated attempt to eradicate the health and social problems associated with alcohol consumption by banning the manufacture, transportation and sale of intoxicating beverages in the 1920s. Rather than achieving the desired effects, the experiment fueled a wave of illegal manufacturing and smuggling while spawning some of America’s most notorious crime syndicates. In 1933, the federal government acknowledged defeat and repealed the law.
Given prohibition’s poor track record, it’s tempting to conclude that the measure has been consigned to the dustbin of history. Surely, modern policymakers would steer clear of such a crude and ineffective tool? But as became clear during a panel discussion at the recent Global Tobacco and Nicotine Forum (GTNF), prohibition has been making a bit of comeback lately, even if its contemporary proponents are careful to avoid the term. As moderator Flora Okereke of BAT pointed out, 15 years ago, the concept existed only at the fringes of tobacco control. “Today it is mainstream,” she said. “At some point in the not-too-distant future, tobacco and even nicotine could be outlawed.”
Okereke’s panel included experts with a variety of professional backgrounds: Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs; Abrie du Plessis, trade law consultant; Kgosi Letlape, president of the Health Professions Council of South Africa and president of the Association of Medical Councils of Africa; Simon Clark, director of the smokers’ rights group Forest; and Riccardo Polosa, full professor of internal medicine at the University of Catania and director of the Center of Excellence for the Acceleration of Harm Reduction.
During a skillfully guided, hour-long debate at the Hay-Adams hotel in Washington, D.C., they examined the drivers and consequences of the new prohibition movement and offered suggestions on how tobacco regulation might more sustainably evolve to embrace harm reduction instead of prohibition.

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Snowdon started by noting that, despite the negative U.S. experience with alcohol, prohibition has always been the natural conclusion of the anti-smoking campaign. “Prohibition somewhere is probably more imminent than some people think,” he said, pointing to New Zealand’s recently announced policy of gradually raising the age at which consumers can buy tobacco until it covers the entire population and the United States’ plan to require tobacco companies to reduce the nicotine in their products to a level at which nobody would want to smoke. “Both are variations of prohibition,” said Snowdon, but neither country is calling it that, instead using euphemisms such as “tobacco-free generation” and “endgame.”
The panelists identified several reasons for prohibition’s revival, including pressure from advocacy groups, continued hostility to the tobacco industry and health ministers eager for approval from their colleagues and the World Health Organization.
Other unfortunate examples of recent tobacco prohibitions include that in Bhutan (recently lifted in the wake of thriving illicit trade and concerns about cigarette smugglers spreading Covid), the ban implemented by the Islamic State terrorist group when it controlled swaths of Iraq and Syria, and the quickly reversed South African prohibition temporarily instituted during the Covid-19 lockdown.

Clark observed that the threat of prohibition has never gone away. The temperance lobby from the start of the 20th century, he said, has simply reappeared under the guise of public health and devised a new strategy—creeping prohibition. As examples, Clark cited public smoking bans, which in some jurisdictions have expanded to include outdoor areas and even social housing, preventing people from smoking in their own homes. Britain’s ban on menthol cigarettes, he observed, has outlawed a product category that accounted for 20 percent of the domestic market.
Meanwhile, England, Scotland, Wales and Ireland have all set dates by which they want their countries to be “smoke-free,” by which they mean less than 5 percent of adults smoking. According to Clark, those targets can be achieved only by further and excessive regulation. He was particularly disturbed by Philip Morris’ call on the U.K. government to ban the sale of cigarettes by 2030—a step that could very well backfire, according to Clark. “The day will surely come when alternative nicotine products, including e-cigarettes, will also be targeted for prohibition—as indeed they already are in some parts of the world,” he said.

In recent years, prohibition has also been deployed under the guise of Covid prevention. Snowdon pointed out that, in 2020, one in five people lived in a country where you could not buy tobacco or e-cigarettes—mainly as a result of India’s temporary sales ban. But the most striking recent illustration of the risks associated with prohibition comes from South Africa.
After the World Health Organization declared Covid-19 a public health emergency in March 2020, South Africa quickly banned sales of alcohol, tobacco and e-cigarettes to help slow the spread of the virus. According to du Plessis, the minister in charge acted rationally based on the information available at the time. She feared that smokers sharing cigarettes would accelerate transfer of the disease and that smoking would exacerbate the symptoms of Covid, resulting in an overload of hospitals. Unfortunately, when evidence for her assumptions failed to emerge and the cigarette market moved underground, she failed to adjust her strategy.
The University of Cape Town Research Unit on the Economics of Excisable Products found that within a short period after the start of the ban, 100 percent of South African tobacco users were able to find tobacco in the illicit market, albeit at heavily inflated prices. This meant that none of the outcomes the minister sought were possible anymore; the measure could not serve as a break on Covid transmissions because, unlike the treasury, the virus does not distinguish between licit and illicit cigarettes.
The tobacco industry challenged the ban and the case went all the way to the Supreme Court, which ruled the measure was unconstitutional. Because the illicit market had completely replaced the licit market, the ban had no impact, the judges noted, so denying legal operators the right to sell tobacco was senseless.
South Africa lifted its tobacco ban on Aug. 17, 2020, but its negative impact endures. To maintain their market share, illicit traders started selling their products below the minimum collectable tax level after prohibition ended. Today, one in four cigarettes in South Africa are sold below the excise and VAT level combined while the share of the illicit market remains higher than that of the licit market.

Despite such experiences, one GTNF panelist saw a role for prohibition under certain conditions. Polosa said he would favor a ban on traditional cigarettes providing there are alternatives in the form of combustion-free products. In a market still dominated by combustibles, however, he said such a move would be ill advised.
Clark said that tobacco harm reduction is best achieved by extending consumer choice and allowing companies to produce and market reduced-risk products (RRPs). “The onus is not only on government to adopt light-touch regulation policy on vaping and smokeless products; the industry can also help by developing better RRPs that appeal more to smokers,” he said, adding that many smokers don’t want to switch because they don’t like the currently available RRPs as much as they like smoking. “So instead of calling for a ban on cigarettes as Philip Morris has done in the U.K., the industry should fight prohibition and focus on improving e-cigarettes and other RRPs,” Clark said.
Letlape stressed that the key to tobacco harm reduction is education, empowerment and appropriate regulation based on science and evidence. “Prohibition should be prohibited,” he said, noting that the main party harmed by smoking is the smoker himself. Part of the challenge, according to Letlape, is that the “tobacco wars” of the past century have not been dealt with. Health advocates battered by that conflict hold on to a grudge and pass it on to new generations based on lack of information, he observed. “How do we break the chain? By saying, ‘we don’t have to reconcile—we don’t have to love each other—but we must sit around the table and talk about these issues.’ Anywhere you want to reduce harm, you got to get all parties around the table.”

Asked what role prohibition might play during next year’s Conference of the Parties to the Framework Convention for Tobacco Control (FCTC), du Plessis reminded his audience that, while currently dormant, the concept of prohibition is present in the FCTC preparatory documents. When the FCTC was negotiated, the smoking rate was so high that the parties considered a ban inappropriate. Yet if prevalence is reduced to a certain level, the FCTC may very well again look at the feasibility of prohibition. Pursuing an endgame, however, requires getting the illicit market under control, according to du Plessis, because the FCTC measures were designed for a controlled environment. “You can’t do tobacco control unless you control tobacco,” he said.
Okereke then invited the panelists to speculate on which countries would attempt to ban tobacco next. Snowdon expected it to be a place with an authoritarian leader—“any of the countries with names ending in ‘stan,’” he ventured—or perhaps North Korea “if President Kim Jong-un gives up smoking and becomes a classic ex-smoker.” Other candidates were countries with histories of temperance movements and already low smoking rates: the Scandinavian nations, Australia and New Zealand, along with, remarkably, the country with arguably the most traumatic prohibition experience, the United States, if it moves forward with its nicotine-reduction plan.

In a post-panel interview, Okereke identified three lessons from the history of prohibition: First, she said, policymaking must be context specific. “There is no one-size-fits-all approach to tobacco control policies,” she said. “What is right in the Pacific will not necessarily be right in South Africa or Singapore or Malaysia. And if the preconditions are wrong for a policy—such as high levels of illicit trade—there can be serious and irreversible consequences for society.”
Second, policymaking must be evidence-based and science-based. “Policy experimentation is prone to failure, can violate international law and can create unintended consequences that can create costs for society that vastly outweigh the benefits of a proposed policy,” said Okereke, adding that policies should be based on what has worked historically, subject to impact and cost-benefit analysis, and must take into account science about the behaviors of people and the relative risks of products. “Believe it or not, these first two points hew very closely to what the WHO itself has said about extreme tobacco control policies,” said Okereke. “They must be context specific, and they must be based on evidence.”
Finally, Okereke noted, the world has a better chance of changing through choice. “We should strive for promotion and not prohibition,” she said. “We will more quickly and effectively move consumers away from more harmful forms of tobacco by providing appealing, affordable and well-regulated access to reduced-harm products versus pouring our energy and resources into prohibition and at the same time criminalizing a whole segment of society that uses nicotine and tobacco.”

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January 1, 2023
On a Mission

Photo: ANDS

ANDS has set out to promote a smoke-free lifestyle in the Middle East and North Africa region.
By Stefanie Rossel
At first glance, the Middle East and North Africa (MENA) region holds massive potential for the sale of reduced-risk products (RRPs). Of the 547 million inhabitants, 140 million—mostly men—smoke. Smoking prevalence is generally high, with Jordan leading the area with a record smoking rate of 65.3 percent among males, and it is still increasing. But the promise comes with many hurdles. Of the 22 markets in the region, 14 have banned electronic nicotine-delivery systems (ENDS), and of those markets where ENDS are legal, several have implemented prohibitively high taxes on these products.
Despite the often adverse business environment in the region, Fadi Maayta has ventured into the ENDS market. In 2020, he co-founded Alternative Nicotine Delivery Solutions (ANDS), which he heads as president. Headquartered in Dubai, the company sells and distributes vaping products and heated-tobacco products (HTPs) across the Middle East and Africa, including in the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Jordan, Egypt and Bahrain.
Maayta, who at the recent Global Tobacco and Nicotine Forum described MENA as a forgotten region in terms of tobacco harm reduction (THR), says his company’s mission is to provide adult smokers with high-end, verified and tested alternative nicotine-delivery solutions promoting a cigarette-free region. He believes there are two main reasons why THR in the MENA region is making only slow process: misinformation and isolated policymaking, which stands in stark contrast to the approach taken in the United Kingdom, the United States and several European countries. “These countries have made huge steps toward reducing smoking incidences through switching smokers and encouraging nicotine alternative solutions while the Middle Eastern countries are still treating e-cigarettes as combustible cigarettes,” says Maayta.
According to him, disproportionate taxation of ENDS is a symptom of this wrongheaded approach. In January 2022, Bahrain, Saudi Arabia and the UAE implemented 100 percent custom duties on e-cigarettes, from 5 percent before 2022, making e-cigarettes far more expensive than the illicit products that evade all taxes, Maayta points out.
“In Jordan, the government applies 200 percent excise tax on e-cigarettes, which makes their prices relatively higher than combustible cigarettes,” says Maayta. “The price of a disposable device of 500 puffs is five times higher than the price of a pack of cigarettes. This kind of fiscal treatment will cause two effects: unprecedented numbers of illicit trade in e-cigarettes and a relapse of [former] smokers to smoking combustible cigarettes.” Meanwhile, state budgets and legitimate companies are deprived of revenues.

Fadi Maayta (Photo: Chris Frenzi Photography)

Differentiation Needed
To accelerate the transition toward safer alternatives in the region, governments need an unambiguous strategy of communicating the benefits and risks, according to Maayta. “First, we need to be clear [that] these products are not risk-free, and they are addictive,” he says. “We don’t recommend the use of these products by minors or nonsmokers. On the other hand, these products represent a better chance for smokers who cannot quit smoking conventional cigarettes. Countries need to define differential fiscal and regulatory frameworks that will encourage smokers to switch to these products, having the right information backed by science while explaining to smokers and users the advantages to switch to these alternatives and explaining that they are not 100 percent risk-free. These products should be taxed and regulated differently from combustible cigarettes, and more open and controlled communications should be allowed with users while at the same time protecting minors and nonsmokers.”
Despite the challenges operating in the Middle East and North Africa, he is confident about the future of ENDS there. “I can see that this category will be growing further in the region,” says Maayta. “My only concern is that Middle Eastern countries will be missing out on a lot of chances to reduce smoking incidences and save the lives of millions of smokers by being resistant to recognizing the role of ENDS in making smokers switch from combustible cigarettes. We therefore advise government and regulatory authorities to think differently about this category, allowing further development in research and development and allowing further communication with adult smokers.”
The experience of Egypt is encouraging for the future of RRPs. In December 2021, the region’s most populous country, where 42.3 percent of men and 0.4 percent of women smoke, lifted a ban on e-liquids and cartridges and subjected them to regulation. Vaping products and e-liquids must be compliant with Egyptian standards and are subject to VAT and/or excise tax. Egypt also recently legalized HTPs.
ANDS has not yet launched its products in Egypt, as authorities took time to develop and validate the product registration process. “But this has been expected because these products are new to the Egyptian market, and usually, new products take time to be normalized in such markets,” says Maayta. ANDS has big plans for Egypt, which represents a big addressable RRP market given the country’s high adult smoking rate.

Comprehensive Product Range
Setting up a corporation with mass operations amid a pandemic was challenging, according to Maayta. but with its experience and determination, the team was able to achieve the desired expansion and commercial success.
Prior to creating ANDS, Maayta worked in various senior positions with Juul and Philip Morris International throughout the region. “Through the past three years, we have learned a lot, faced many challenges, succeeded in some and failed in some—but overall, I’m proud of what the company has achieved so far and how the team of professionals have made this happen,” he says. “But more importantly than the commercial success is that we are playing a big role in changing the mindset of our audience regarding the ENDS category.”
ANDS currently has more than 10 brands representing different categories of ENDS, including disposables, closed systems, open system liquids, zero-nicotine disposables and HTPs. “Within the vape category, we have different volume sizes, number of puffs and a wide range of flavors,” he says. “Our plan is to have a total-category solution that ranges from vapes and HTPs to smokeless products, like nicotine pouches and patches, to cover different needs of smokers and users. Our plan is in line with the concept of population harm reduction, which aims at having products with the potential [for] risk reduction while being accepted by the population of smokers.”
In addition to distributing products made by other manufacturers, ANDS has registered three HTP and vapor brands under its name: Slix, Zing and Seek. “We have plans for far more advanced technologies that we will reveal in 2023,” says Maayta. “We are also planning to have smokeless products like patches and pouches in our portfolio for the next year, as these products are getting more attention by health authorities and harm reduction advocates.”
To prevent underage use, ANDS has developed and implemented the “Sentinel Program,” which monitors sales channels to make sure that the company’s products’ packaging and marketing practices are not appealing to minors and nonsmokers.
Sustainability also plays an important role at ANDS. “We are making sure that our products have a route to be disposed of properly, and some of the materials used in them are being recycled as well,” says Maayta.

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.

January 1, 2023
Science-based Regulation?

Photo: Li Ding

Politics and data in tobacco harm reduction

By Cheryl K. Olson

In the last couple of years, I’ve written several articles for Tobacco Reporter on how the U.S. Food and Drug Administration thinks about science. Trying to get a novel nicotine product authorized by the Center for Tobacco Products (CTP)? Tell a story about why your particular vape, pouch or gum, is appropriate for the protection of public health, illustrated by data.
That’s how the system is supposed to work. FDA staff make decisions based on what the science says about the relative health risks and benefits of a novel nicotine product. The CTP’s website states: “Our ability to enact science-based regulation has the true potential to reduce the death and disease toll from tobacco products.”
But evidence suggests that stronger forces have shoved science out of the driver’s seat. Recently released memos from the CTP’s Office of Science show that subjective factors drove the decision to deny a marketing authorization for a flavored vaping product. JTI’s Logic brand was teed up as the first menthol-flavored electronic nicotine-delivery system (ENDS) likely to complete the premarket tobacco product application review process. After CTP leadership changed last summer, the emphasis shifted from how menthol vapes might help adults quit smoking, to the purported risks that any flavored ENDS product (including menthol) posed to youth. Prominent politicians have openly pressured the CTP to eliminate flavored vaping products.
In 2019, a CTP toxicologist filed a complaint that the organization had changed its review process from a “fully quantitative review to a more qualitative one,” according to a report on the Government Executive website. CTP researchers were found to have been retaliated against for raising concerns and disagreeing with interpretations of science.
Disagreements about research findings ought to be dispassionate and evidence based. But in tobacco harm reduction, debates about “the science” are often mere veneers over deeper disputes. Trying to make sense of divergent perspectives on e-cigarettes, researchers from the University of Toronto and the University of Cambridge recently interviewed 21 experts on tobacco and harm reduction. They concluded, “The majority of meanings attached to tobacco harm reduction were rooted in values, ideology, politics and opinions rather than straightforward disagreements about the scientific evidence.”
Some industry commenters found the Reagan-Udall Foundation’s much-anticipated operational evaluation of the CTP to be a damp firecracker. Their report does correctly note that “some issues before CTP are fundamental policy questions that must be informed by science but are not, themselves, scientific issues. Rather, they are policy issues with profound societal impacts.”
Before we can talk about the science, we need to acknowledge the values-laden differences in meaning that make logical, civil discourse about nicotine products so difficult. It would take a book to cover it all, but here are a few of the stumbling blocks.

The Legacy of “Light”
In 2009, Mitch Zeller (future director of the CTP), Dorothy Hatsukami and colleagues laid out a vision and blueprint to guide tobacco control efforts. It focused on harm reduction, defined as “strategies that would reduce morbidity and mortality … from continued use of tobacco or other nicotine-containing products.” It noted the now-famous continuum of risk—with smoking far more hazardous than noncombustible nicotine sources—and cautiously acknowledged a role for “potential reduced exposure products,” between cigarettes and nicotine-replacement therapies.
But the article also made clear that all novel reduced-harm products are burdened with the legacy of past industry deception: “The major concern held by some public health experts is that these new products may be nothing more than a more scientifically sophisticated version of the ‘light’ cigarette.” As tested by smoking machines, such products appeared lower risk; as used by humans, they were not. In the authors’ view, naive public health officials were duped by industry into promoting light cigarettes to health-conscious smokers.
Fear of repeating the experience of “light” cigarettes, where claimed reduced exposure to toxins did not lead to reduced disease or death, shaped the Tobacco Control Act of 2009. A well-intended effort to prevent future deceptive advertising now blocks another stated goal of Zeller and colleagues: to “educate the public accurately on the precise risks of different [nicotine] products.”

Unclear Definitions
Before moving full-time into harm reduction, I studied the potential effects of violent video game content on youth. I learned how important shared, clear definitions are to research. In that case, the biggest problem was defining “aggression.” To some researchers in the field, arguing or play-fighting were equivalent to attacks with intent to harm. A study about time spent virtually running amok has very different implications if the consequences are teasing versus criminal assault.
Nicotine research has similar problems with definitions, often also involving youth. For example, anti-tobacco organizations, such as the Campaign for Tobacco-Free Kids, have long worried that “kid-friendly flavors” might attract teens to experiment with vaping.
What constitutes a “kid-friendly flavor”? As Clive Bates has pointed out, as of 2017, this label was attached to candy store or ice cream shop ENDS flavors, or silly ones like “Unicorn Puke.” Removing them from the market would still leave many options for adults who smoked. But today, by definition, all ENDS flavors—other than “tobacco,” and including menthol—attract kids. This is a classic case of moving the goalposts to achieve a win. (The use of “kids” to represent adolescents is a separate debate.)

Unquestioned Assumptions
In a recent interview, author Malcolm Gladwell defined bad science as “science committed by people who think they know the answer before they start.”
Assumptions about vaping’s harm to youth have an increasingly tenuous relationship to science. Objections used to be automatically couched, as in this 2020 article, as a concern that these new nicotine users “may become addicted to vaping, which may lead to smoking.”
Has the availability of vaping coincided with a youth smoking increase? Look at the newly released results from Monitoring the Future, an ongoing national study of U.S. youth substance use. Among 12th grade students, who are typically aged 17–18, any reported nicotine use other than vaping showed a “quite dramatic” decrease, from 21 percent in 2017 to 8 percent in 2022. (Vaping and marijuana use have also dropped, and stayed down.)
By contrast, past-year alcohol use by 12th graders is up, at 52 percent. Documented youth appeal of “alcopop” flavors receives little attention. Interestingly, a Google Scholar search for recent papers on “flavored alcohol youth” brings up more articles on e-cigarette flavors than on alcohol products.
Data suggesting that the gateway from vaping to smoking may be imaginary does not make it less real in the minds of believers. The Campaign for Tobacco Free Kids’ website still describes a vaping epidemic and “serious health risks to the health of young people.” Their list of risks consists of the possibility that nicotine “can harm … parts of the brain responsible for attention, memory and learning,” the risk of nicotine addiction and the increased risk of smoking or “future addiction to other drugs.”
On one hand, we see declining nicotine use and limited real-world evidence of specific health harms to youth. On the other, we see hundreds of thousands of dead adult smokers every year. It’s hard to understand how U.S. regulators consistently weight the former more heavily than the latter. The Reagan-Udall report singled out this balance (on page 15) as one that “scientific analysis alone will not resolve.”

A Shared Goal
Finally, we come to the ultimate policy controversy that research can inform but not solve: Is the goal to end all nicotine use (and addiction)? Or, is the goal to reduce tobacco-linked death and disease? Whether the latter goal is your endgame, or just step one of two, all sides ought to be able to work toward it together.
Dismissing data that doesn’t fit a desired narrative has consequences for public health. As eight respected U.K. experts wrote in response to repudiations of tobacco harm reduction: “The pursuit of arguments that vaping cannot help people to quit smoking, in the face of clear evidence that it does, risks undermining public trust in science.”
It’s time to rethink our assumptions and take a fresh look at patterns of evidence. One pattern we observe, exemplified by Karl Fagerstrom’s new country-by-country analysis, is that more use of reduced-risk noncombustible tobacco is linked to less smoking. Let’s start a discussion about how to rapidly put attractive, lower risk nicotine products in the hands of people who smoke.

Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.

January 1, 2023
Cohiba Trademark Canceled in U.S.

Image: Tobacco Reporter archive

After more than 25 years of court battles, General Cigar Co.’s trademark for Cohiba cigars was canceled by the United States Trademark Trial and Appeal Board (TTAB).

Scandinavian Tobacco Group, General’s parent company, and Empresa Cubana del Tabaco (Cubatabaco) have fought over the U.S. rights to the Cohiba trademark since 1997. In a ruling earlier this month, the TTAB sided in favor of the Cuban cigar conglomerate in its claim on the name, saying that General Cigar Co.’s registrations on the Cohiba trademark are to be canceled due to a violation of an international agreement that dates back to 1929.

In the U.S., the Cohiba brand is made by General Cigar Co. and is known for a Cohiba logo with a red dot that fills the O in the word. In the rest of the world, the Cohibas found on store shelves come from Cuba and are known for a gold and black color scheme as well as the profile image of a Taino Indian, writes Patrick Lagreid from Halfwheel.

While the TTAB’s ruling indicated that General’s registrations on the Cohiba marks are to be canceled “in due course,” it does not mean that the General-made Cohibas have to immediately be pulled from store shelves. First, the TTAB did not award the Cohiba mark to Cubatabaco; second, General Cigar Co. has vowed to appeal, saying that it will continue to manufacture and sell Cohiba cigars during that process.

Cohiba is a particularly unique case due to both its prominence on the global stage and its creation by the state-run tobacco company after the Cuban Revolution, whereas other brands with Cuban roots that General Cigar Co. owns, such as Partagas, Hoyo de Monterrey and La Gloria Cubana, were assumed by the Cuban government in 1959.

Similarly, General’s largest competitor in the cigar industry, Altadis USA, owns several brands with pre-Revolution roots, including Montecristo, Romeo y Julieta and H. Upmann. Prior to Imperial Brands selling its premium cigar business in April 2020, Altadis USA was owned by Imperial, which also owned a 50 percent stake in Habanos S.A., a joint venture with the Cuban tobacco monopoly for the sales and marketing of Cuban cigars. Imperial also owned stakes in distributors of Habanos S.A. products around the world and stakes in companies that make and distribute Cuban machine-made cigars.

The U.S. Court of Appeals for the Federal Circuit in 2015 ruled in favor of Cubatabaco. After the Supreme Court’s denial to hear the case, it went to the TTAB.

December 30, 2022