Category: Also in TR

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  • Smart and Smooth

    Smart and Smooth

    Koehl operates out of Wecker, town in Luxembourg near the German border | Photos: Koehl Machinenbau

    Stefan Hahn, managing director of Koehl, discusses the latest trends in cigarette manufacturing.

    By Stefanie Rossel

    Stefan Hahn

    Production efficiency continues to be a priority for tobacco companies. On the road to “Industry 4.0,” the world’s four leading cigarette manufacturers are focusing heavily on automation, ranging from information technology to operation technology, according to Stefan Hahn, managing director of Koehl Maschinenbau, a Luxembourg-based supplier of primary processing and logistics solutions.

    Intralogistics, which involve all flows of goods and materials on a company’s site, are increasingly important. Optimizing the coordination of processes is a key challenge in today’s intralogistics system implementation.

    Greenfield factories exemplify the seamless integration of internal logistics: Their highly automated shop floors consist, for instance, of a series of halls that are arranged on both sides of a long corridor aptly called “the spine.” Here, mobile robots that transport materials from the pallet to the machine have the right of way on dedicated lanes much wider than the footpaths. The spacious halls, which among others accommodate the Primary department, the filter-making division and the secondary, feature wide spaces between production lines, allowing the robots to maneuver. Below the ceiling, a filter segment supply buffer system completes the flow of materials.

    “When planning a factory from scratch, it’s easy to accommodate comprehensive intralogistics solutions,” says Hahn. “Tobacco manufacturers, however, currently seek to automate their existing plants, and this often proves to be a challenge. Today, several meters between production lines is standard, but when some of the older plants were built, machinery was placed much closer to each other. Or take the factory of one of our customers: Here, production is spread over three floors, which means that AGVs [automated guided vehicles] have to take the elevator to reach all production lines.”

    Koehl is well positioned for such challenges. While tobacco solutions still account for 50 percent to 60 percent of the company’s turnover, the company has two additional, fast-growing business units that specialize in intralogistics and robotics, respectively, and a department that focuses on automation and IT, where programmers enable production lines to communicate with the customer’s enterprise resource planning and business intelligence systems. “Automation is our daily business,” Hahn says. The company currently has more programmers than design engineers. This reflects a strategic focus on software development within the organization, highlighting the critical role of programming in its operations and product offerings. The balance between technical disciplines is essential to drive innovation and maintain competitive advantage in the market.

    The company currently has more programmers than design engineers.

    The latest version of Koehl’s Flavour Application System optimizes the application process and features state-of-the-art software.

    Wanted: Flexible and Robust Machinery

    Koehl is also active in enabling the implementation of the Open Platform Communications Unified Architecture Tobacco Machinery Communication (TMC) standard, which Philip Morris International, BAT, Japan Tobacco International and Imperial Brands jointly developed to describe general requirements for manufacturers of primary and secondary machinery that apply to both machine-to-machine and machine-to-business communication (see “Smart Connection,” Tobacco Reporter, September 2022). Koehl has already realized the first projects to integrate the standard.

    The company’s machinery complies with the TMC standard. In addition, Koehl has developed a solution for shop floors with equipment from different suppliers that was developed before the standard was introduced. Koehl also provides an interface service that facilitates integration for suppliers aiming to enter or expand within the tobacco industry. Its machine-to-cloud solution, the IIoT Server, enables vertical data transmission to a business intelligence system without, in the best case, changing the components’ programming. This way, all data accumulated on the shop floor can be semantically processed in the same way to collect and analyze it centrally.

    In the future, Hahn expects the number of employees in a cigarette factory to remain the same but that their tasks will change. “The transportation of physical items like paper, cigarettes and shrink film may become obsolete through the automation possibilities,” he says. “The focus will shift toward enhancing the efficiency of production processes. This evolution will prioritize innovation and optimization over traditional logistics.”

    Regarding tobacco machinery in general, Hahn sees two main trends, one being maximum flexibility.

    “In the future, the trend will shift away from highly specialized machinery capable of producing massive quantities of a single product,” he says. “The focus will instead be on versatile equipment that can swiftly adapt to various formats, catering to a market that values diversity over volume. This approach aims to minimize the setup time and enhance efficiency in manufacturing processes. For this reason, we have revised, for example, our track-and-trace portfolio to quickly adapt to changes in packaging formats and cover a wide range of product variations.”

    The other important theme is “robustification,” which means minimizing the risk of errors and protecting against hacking.

    Koehl has also developed equipment for non-cigarette tobacco product formats, such as pouches.

    Solution for Complex Tasks

    Koehl operates out of Wecker, near the German border, where it has 120 employees, including engineers, programmers and visualizers. The company develops it innovations in close cooperation with its customers. Its location in Trier, Germany, is a manufacturing facility, where 60 people build all tobacco machinery, intralogistics and robotics solutions and clients can carry out preliminary acceptance tests.

    The medium-sized company manages multiple projects simultaneously, each with significant financial stakes, which requires a high level of coordination and expertise. Koehl aims to expand its annual turnover of €40 million ($42.63 million). The plan depends in part on the company’s ability to fill 25 to 30 additional positions, as Germany presently experiences a shortage of specialists.

    In the tobacco industry, Koehl occupies a lucrative niche with its specialized machinery in the primary and secondary areas, such as its patented Flavour Application System (FAS 4 Evolution), an enhanced flavor application system offering numerous benefits to customers. The latest version optimizes the flavor application process in tobacco, filter and next-generation product manufacturing and features state-of-the-art software. An optimized feedforward controller effectively eliminates startup waste while an integrated radio frequency identification system ensures complete traceability from filling to application. An additional benefit of the FAS 4 Evolution is its compatibility with all current makers. Its design allows quick flavor changes, enhancing efficiency and flexibility in production processes.

    The company also caters to track-and-trace requirements for other tobacco products (OTP), which will take effect in the EU on May 20, 2024. Koehl adapted its track-and-trace system for cigarettes, which can apply an individual code into a black field on the pack without damaging the foil, for OTP applications. “OTP machinery runs at a much slower speed than cigarette packaging equipment, but there is vast product and format variety, including pouches, cans, outers, tins, wooden boxes or buckets,” says Hahn. “It’s a challenge to handle all these different sorts of bundles, so we had to develop new machinery for OTP tracking and tracing.”

    While tobacco manufacturers in recent years focused their investments primarily on the secondary department—a development that was among other things driven by track-and-trace requirements—Hahn is convinced that companies will soon look more closely at their primaries again. “The primary sector’s machinery, some of which dates back 30 [years] to 40 years, incurs significant maintenance and energy expenses and poses potential safety hazards to workers,” he says. “It is anticipated that by 2030, there will be a substantial rise in investment to modernize this equipment.”

    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.
  • Feeling the Squeeze

    Feeling the Squeeze

    Photo: Taco Tuinstra

    A crackdown on vapes has pushed some Chinese companies out of business and encouraged others to prioritize international sales.

    By Stefanie Rossel

    China is the world’s center of e-cigarette production, accounting for approximately 90 percent of vapor hardware. Between 2022 and 2023, China’s vape product exports increased 12 percent, according to ECigIntelligence. Domestically, however, the vape category seems condemned to disappear, although with over 350 million smokers and an estimated annual smoking-related death rate of more than a million, the country’s potential for reduced-risk products is huge. This year, the country’s vaping population stands at 3.5 million, ECigIntelligence estimates.

    The rise of China’s internal vape market was short-lived. Initially, there was little awareness of e-cigarettes in the country. In 2013, domestic vape sales surpassed $13.75 million, and the sector continued to grow rapidly until November 2021, when China’s State Tobacco Monopoly Administration (STMA), the administrative arm of China National Tobacco Corp., which with around 2.5 trillion cigarettes a year is the world’s largest producer, asserted its authority over the vape industry.

    In November 2022, the Electronic Cigarette Management Measures (ECMM) took effect, putting substantial restraints on manufacturers catering to the domestic market. The measures regulate the production, sale, marketing and import and export of all vape products, including cartridges, vape sets and products sold as a combination of cartridges and sets, but not heated-tobacco products, which will be regulated as traditional cigarettes.

    It is worth noting that the ECMM legalized an industry whose legal status was previously dubious. Whether the legal space it gives vape manufacturers is enough to keep their domestic business viable is questionable, however; none of the companies approached was prepared to comment on the record.

    Among other requirements, the new regulations prohibit the sale of e-cigarettes with flavors other than tobacco on the domestic market. The document also sets a wide range of technical standards, including permitted ingredients and additives, nicotine levels, testing and safety standards and accreditation. Manufacturers, wholesalers and retailers of vape products are required to obtain a license from the STMA and are obliged to process all transactions through an e-cigarette transaction platform overseen by the monopoly. Other measures include prohibition of vape product advertising and a ban on e-cigarette sales through vending machines or any other self-service mechanism.

    Shortly after the ECMM entered into force, e-cigarettes became subject to a consumption tax. The rate for the production and import of e-cigarettes is 36 percent while the rate for wholesale is 11 percent.

    Sharp Decline

    Mercedes Gorgni

    The ECMM follows a tightening of other rules, such as the decision at the end of 2019 to ban the online sale and advertising of e-cigarettes in response to concerns about underage vaping. In April 2022, the STMA released a new set of trial policy measures, which sought to control the structure of the e-cigarette industry by regulating where production capacity is concentrated and dictating the distribution of vape product retail outlets.

    One-and-a-half years after their introduction, the rules have taken a toll on domestic vape sales. “The market uninterruptedly grew from 2017 up to 2020 when the online ban of e-cigarette sales dampened the growth. However, the increasing popularity of prefilled pods and the increase in prices still generated a 26 percent growth rate compared with 2019 despite the setback in accessibility,” says Mercedes Gorgni, China analyst at ECigIntelligence.

    “The peak of the market was reached in 2021 at an estimated RMB19.7 billion ($2.7 billion) with 7 million adult vape users. Regulations in 2022 resulted in a sharp decline in the domestic market. The market value is estimated to have shrunk to RMB9.3 billion in 2023 and 3.8 million users due to restricted flavors, tax-induced price increase and a declining number of retailers offering products.”

    The shift in regulations, Gorgni says, posed a challenge for smaller and medium-sized companies within the industry, as adapting became increasingly difficult. “On the other hand, leading firms such as RELX leveraged their superior capabilities and resources to meet these stringent government demands, securing approval by the first half of 2022. RELX was—and still is—the leading brand in China. During 2021–2022, net revenue of Fog Core Technology, RELX’s holding company, saw the impact of the new regulations, dropping from RMB8.5 billion to RMB5.3 billion, with a further decline in 2023 when revenues fell to RMB1.5 billion.”

    The new regulatory environment, which favors larger companies capable of meeting the complex technical requirements, has incentivized domestic brands toward seeking opportunities beyond national borders, Gorgni explains. “It’s only natural that leading domestic brands like RELX, Yooz and Moti are now also pivoting their focus toward international markets as a strategic move to diversify their product offerings and mitigate investment risks. At the same time, several Chinese manufacturers are relocating to Southeast Asian countries like Indonesia and Malaysia, making the most of the benefits of lower labor costs and more favorable trade tariffs, thereby enhancing their competitive edge in the global market.”

    More recently, RELX’s market share has declined as other, mostly compatible, pod brands are widely sold informally, mainly via online platforms such as WeChat, Douyin or Xiaohongshu, in flavors other than tobacco and flavored disposables. “The illegal or informal market has certainly expanded, especially due to the availability of flavored disposable vapes sold online at significantly lower prices than on vape or retail stores,” says Gorgni.

    China’s illicit vape market is significant yet challenging to accurately quantify. With the government intensifying its crackdown on e-cigarettes, physical sales have become increasingly difficult. “However, the online black market is flourishing, offering popular models such as the ‘bubble teacup’ or other designs featuring cartoons, typically coming in sweet flavors and large capacities,” says Gorgni. “Moreover, pods designed to be compatible with RELX devices, indistinguishable in design and available in over 20 flavors from various brands like VS, Yeeg and Zgar, can easily be purchased with just a conversation on WeChat. These vapes are then discreetly shipped to buyers through common mail, a practice that has become widespread with the rise of e-commerce platforms like Taobao. Some vape shops surveyed by ECigIntelligence have also started adapting to this situation, acknowledging that a portion of their customer base prefers to have their purchases mailed to them given the inconvenience of visiting physical stores.”

    Focus on Exports

    Offline enforcement of e-cigarette sales regulations is stringent, according to Gorgni. “Conversations with the Electronic Cigarette Chamber of Commerce, which represents over 650 manufacturers in Shenzhen, have revealed there will be an increase in government crackdowns over the next four months. This enhanced enforcement aims to limit the growing illegal market for vaping products in China,” she says.

    Many retailers have already gone out of business following implementation of the ECMM. Prior to the regulations, the market was flooded with a vast number of specialist and generic e-cigarette retail points, with approximately 190,000 retail stores and 47,500 specialist vape retailers operating across the country, according to Gorgni. “After the new regulations, which required retailers to get authorization to sell e-cigarettes, took effect, the number of specialist retail points plunged to under 15,000, signaling a significant shift in the industry landscape,” she says.

    “Retail stores can now apply either for a license to sell e-cigarettes or traditional tobacco, incentivizing retail chains and supermarkets to play safe and possibly to maintain combustible cigarette sales. In 2022, a survey carried by ECigIntelligence showed that more than 70 percent of legal e-cigarette retailers faced financial challenges, with less than 10 percent remaining profitable.”

    Online, enforcing the new rules proves more challenging. “Sellers skillfully navigate the digital landscape by continuously opening new accounts, using alternative terms in posts and comments to avoid direct references to e-cigarettes, and engaging with potential customers through comments on popular videos and posts,” says Gorgni. “This method of operating under the radar complicates efforts to monitor and control the online sale of e-cigarettes, underscoring the complexities involved in regulating the digital aspect of the vaping market.”

    The regulatory measures were introduced in accordance with the country’s “Healthy China 2030 Plan,” which was released in 2016 and calls for a comprehensive strengthening of tobacco control to reduce the smoking rate to 20 percent among adults over the age of 15 by 2030. So far, progress remains slow. According to Gorgni, more than 25 percent of Chinese aged 18 and over were smokers in 2022, with men making up more than half of the smoking population. “With the focus on regulating e-cigarettes more strictly and limiting the availability of flavored vapes, consumers who previously turned to vaping as an alternative to smoking may revert to traditional cigarettes. It is expected that smoking rates may stabilize or even increase slightly,” she says.

    With the increasing focus on exports and the growth of the global vape market, Chinese vape manufacturers will likely continue to prioritize overseas markets due to the challenges and restrictions in their own domestic market. “The export volume of disposable vapes has been rapidly increasing, proving a shift toward international markets,” says Gorgni. “Enforcement being done by governments, like the U.S., is vital to avoid their population accessing low-quality vapes and eventually suffering the consequences. The STMA is aware of this situation and has made its regulations accordingly. Western governments should make use of this and improve communication with its Chinese counterparts to curb contraband practices and protect their own population.”

    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.
  • Driving Transformation

    Driving Transformation

    Photos: BAT

    BAT’S new U.K. Innovation Center demonstrates the company’s commitment to become a predominantly smokeless business.

    By George Gay

    Is BAT edging into the field of transhumanism, specifically democratic transhumanism? This thought struck me when, during an introductory presentation ahead of a tour of BAT’s new U.K. Innovation Center in Southampton, the company’s director of research and science, James Murphy, described the range of BAT products now on offer, a seven-category range that transcends nicotine to include well-being and stimulation products.

    Using science, technology and innovation to take human beings to the next level is, of course, a rough definition of transhumanism, and doing so with a product that can be afforded by most people would put this project into the realm of democratic transhumanism. Certainly, such speculation is not at odds with BAT’s stated aim of creating “A Better Tomorrow.”

    On a more practical level, what to me was most significant about the Innovation Center and the research and development site within which it sits was the ambition on display. Hundreds of specialists are working there on prototype smokeless tobacco and nicotine products, on scientific research to determine the relative risk of using such products compared to smoking cigarettes and on building capabilities beyond nicotine. This is tobacco harm reduction (THR) plus—writ large.

    Doing Good and Making Money

    Of course, a lot of people opposed to or unconvinced of the benefits of THR claim that the major tobacco companies are only in business to turn a handsome profit and don’t care about the harm they cause nor about reducing it. And it is true that these companies are hugely profitable. Murphy mentioned that BAT had reported revenues of just over £27 billion ($33.93 billion) and profits of about £12.5 billion in its latest full-year results. But what seems to get lost in this argument is that it is possible to do good while making a handsome profit: one only need look at pharmaceutical companies to realize this is true. Indeed, perhaps it is necessary to make such profits because the investments needed to reinvent an industry, which is what is happening in respect of the tobacco industry, are not inconsiderable.

    That BAT is reinventing its business can be seen from the fact that of the just-over £27 billion in revenue the company earned, £3.5 billion came from its new category business. Again, the cynics will point out that the new category business made up only a relatively small part of the overall business. And again, this is true, but that reading of the situation needs some grounding. BAT launched its first new category product only in 2013, so while it has been manufacturing traditional tobacco products and people have been consuming those products for more than 100 years, it has been offering new category products for just over 10 years. Additionally, while combustible tobacco products are on sale universally, because regulatory climates vary around the world, the sale of reduced-risk, noncombustible products is allowed only on about 55 percent to 60 percent of markets, something that Murphy chalked up as one of the challenges BAT faced. How, he wondered aloud, could more regulators be encouraged to embrace THR?

    Unfortunately, if the February Conference of the Parties (COP10) to the World Health Organization Framework Convention on Tobacco Control (FCTC) (see “Doubling Down on Failure,” page 12) is anything to go by, the answer to Murphy’s question must be, “with difficulty.” Apparently, the Global Alliance on Tobacco Control, previously known as the Framework Convention Alliance, used COP10 to hand its “Dirty Ashtray” award to the Philippines for having had the temerity to promote THR.

    And while the intellectual debate around THR bumps along the bottom in this way, there seems little hope of quickly expanding the number of markets where regulated THR products are made available. Not surprisingly, the WHO holds sway in many countries, especially those that find it difficult to fund independent health research.

    The investment in the Southampton facility follows the opening of BAT’s Innovation Centers in Italy and China.

    The Promise of New Products

    This is all very sad because those who call the FCTC shots refuse to engage with the tobacco industry even though the industry has much to say that is informed and interesting to anybody concerned with reducing the harm caused by cigarette smoking. And one industry voice worth listening to is that of Elaine Round, a geneticist who is head of the global life sciences team at Southampton, where she has been for two years on an international assignment for U.S.-based R.J. Reynolds, which BAT bought in 2017.

    Alongside Murphy, Round took part in the introductory presentation to a group of journalists, and it soon became clear that while she was involved in the THR quest in a scientific capacity, she also had skin in the game. Before describing some of the results of the emissions and toxicology tests that BAT carries out on its three main reduced-risk products, Round mentioned that she had joined Reynolds in 2008 when she saw a job description that indicated the company was making efforts around harm reduction. At that time, she said, people in her family smoked, and she wanted to make sure they had options to use reduced-risk products if they were unwilling to quit.

    That timeline, which suggests that the tobacco industry has been concerned with THR for longer than most people realize, probably needs some explanation. Reynolds was in the vanguard of the quest for reduced-risk products and, as far as I am aware, was the first company to produce a heated-tobacco product (HTP). That product, which was different from the HTPs available today and which, for various reasons, was commercially unsuccessful, nevertheless provided a spark that was later to be reignited.

    The three main reduced-risk products described by Round comprised the vaping device Vuse, the HTP Glo and the oral nicotine pouch Velo, for which BAT scientists have published respectively 81, 85 and 25 peer-reviewed studies. Vuse delivered toxicant levels 99 percent lower than those of a combustible cigarette, Round said, while Glo delivered toxicant levels 90 percent to 95 percent lower, and Velo delivered toxicant levels 99 percent lower compared with those of cigarette smoke.

    Velo nicotine pouches must comprise one of the most interesting reduced-risk products to emerge in recent years because they produce toxicant levels down even on those of snus, an oral product that has been credited with helping to reduce the smoking rate in Sweden to around 5 percent and having thereby sent lung cancer rates in that country crashing. Indeed, nicotine pouches sit comfortably alongside nicotine-replacement therapy products on the continuum of risk and are perhaps the most environmentally friendly of all the reduced-risk products being used to assist smokers to move away from cigarettes. It is not surprising, therefore, that BAT has demonstrated its confidence in this product by including in its Innovation Center a nicotine pouch pilot plant that allows researchers to go from concept to trial product in an hour.

    At BAT’s Southampton Innovation Center, specialists are working on prototype smokeless tobacco and nicotine products, on scientific research to determine the relative risk of such products compared to smoking cigarettes and on building capabilities beyond nicotine.

    Supporting the Mission

    Officially opened on March 7 in the presence of BAT’s entire management board, the Innovation Center is housed within BAT’s Southampton research and development facility, which has been in operation since 1956 on a site occupied by the company for more than 100 years. In a press note, BAT said the £30 million investment in the Innovation Center would support its mission to become a predominantly smokeless business in which 50 percent of its revenue was derived from noncombustibles by 2035.

    The group of journalists, of which I was one, was given, on March 8, a tour of the Innovation Center, entering by way of a vast atrium that put me in mind of going to school in a finger-concealing blazer with the words of my mother ringing in my ears, “you’ll soon grow into it.” Clearly, bigger and better things will be happening there in the years to come. Some of the Innovation Center was off limits because of commercial sensitivities, and we passed various spaces that were yet to be occupied. But we were taken into a large flavors laboratory, which is likely to be at the forefront of the battle to keep reduced-risk products appealing to adult consumers while complying with the seemingly inevitable restrictions imposed by regulators fearful of these products being used by those underaged. Overlooking the working, clean-space, nicotine-pouch pilot plant from a room above and adjacent to it was a highlight of the tour, but I was amazed, too, at the large number of specialists working at computers on new product design, until it was pointed out to me that products must be customized to a certain extent to meet the regulatory requirements and consumer preferences of many different markets.

    The Innovation Center provides nine specially designed technical spaces to aid the development of BAT’s portfolio of new category products. “These spaces are dedicated to research for modern oral nicotine pouches, for liquids and flavor for vapor products, for heated products and for well-being and stimulation beyond nicotine,” the press note said. “The investment will also support work on packaging, engineering, innovation development and system integration ….

    “The new facilities will bring together cross-functional and key R&D teams—with 400 highly specialized scientists and engineers, drawn from a range of fields, including biotechnology and clinical trials. These teams will accelerate the development of the next generation of BAT’s new category products and provide the robust evidence necessary to encourage adult smokers to switch to less risky alternatives, backed by science.”

    The inclusion of a nicotine pouch pilot plant at the Innovation Center demonstrates BAT’s confidence in the product category.

    A Positive Path

    Meanwhile, BAT said it had more than 1,600 specialists spread across the U.K., the U.S., Brazil, Indonesia, Malaysia and China. “The £30 million investment in the Southampton facility follows the opening of BAT’s Innovation Centers in Trieste, Italy, in 2021 and in Shenzhen, China, in 2022, and an investment of £300 million a year in R&D to develop new category products and establish substantiation of their reduced-risk potential,” the company said.

    This summary of the totality of BAT’s investment in R&D is significant because it gives an indication of the capability uplift the company has had to bring about within its ranks during a relatively short time and therefore its commitment to THR and, more latterly, well-being products. In 1956, and for a long time afterward, the R&D carried out at Southampton would have involved mostly scientists working with tobacco while in recent years, it has had to venture into fields formerly far beyond its comfort zone, so it has had to recruit, for instance, software engineers, formulation chemists and flavorists.

    I started this piece by speculating about whether BAT was venturing into transhumanism. That was a bit of a stretch, but it is worth noting that the company, at Southampton and its other Innovation Centers, is carrying on in a specialist field the humanist project that stretches back to the Enlightenment and the use of scientific methods to better understand the world and the place of humans within it. The cynics will point out that the Enlightenment journey has not always wound up in good places, and, again, this is true, but I cannot see how anybody could argue that the general direction of travel has not been hugely positive. Science-led THR, properly applied, follows in that direction.

    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.
  • Doubling Down on Failure

    Doubling Down on Failure

    Photo: v-a-butenkov

    The FCTC COPs comprise a counterproductive, environment-busting waste of time and money.

    By George Gay

    If COP10 proved one thing, it is that there should be no COP11.

    The continuing existence of the Conference of the Parties (COP) to the World Health Organization Framework Convention on Tobacco Control (FCTC), which is seemingly controlled by a coterie of authoritarian, publicity-shy, self-appointed morality overseers and to which supposedly sovereign governments humbly send their delegates to worship at the altar of the FCTC Secretariat, is an affront to the environment and to the taxpayers who part fund these COP affairs and whose taxes could be better spent feeding and otherwise providing for people currently in desperate need.

    From the information that seeps out, everything that gets done at these secretive affairs could be done through emails and the odd telephone call. It seems unconscionable, verging on suicidal, that, with 2023 having marked the first time that every day within a year, the temperature exceeded 1 degree Celsius above the 1850–1900 preindustrial level, with close to 50 percent of days 1.5 degrees above and two days in November, for the first time, more than 2 degrees above,* more than 1,000 COP delegates should kick off 2024 by flying to Panama supposedly as part of a health initiative. This was insanity on stilts.

    I asked the organizers what the carbon footprint of the event was, but answer came there none, so one must assume that while the secretariat likes to interest itself in the environmental impact of tobacco, it is unconcerned about keeping its own house in order. In other words, it is safe to assume that COP10 was a totally avoidable environmental disaster waved through so a few people could carry forward a vanity project aimed at their trying to interfere with the lifestyle choices of smokers.

    Why should the diktats dreamed up by a tiny clique of would-be tobacco prohibitionists and lifestyle controllers be allowed to affect the choices of 1 billion adult smokers?

    Limiting Choices and Threatening Livelihoods

    Why should the diktats dreamed up by a tiny clique of would-be tobacco prohibitionists and lifestyle controllers be allowed to affect the choices of 1 billion adult smokers? Why should they be allowed to threaten the livelihoods of millions of tobacco growers, their families and those who work for tobacco companies and allied businesses?

    The futility of COP10 was nicely, though unintentionally, summed up by one of the European Union delegates when, in his three-minute introductory slot, he said that the EU had been at the forefront of tobacco control and a driving force in negotiating the FCTC and its protocols, now an important component of the 2030 agenda for Sustainable Development (SD). Then, without offering any reason or apportioning any blame, he said that at the midway point of the 2030 SD agenda, 85 percent of the SD goals were off track and that nearly a third of the targets were in regression. Turning to the home front, he said that despite the introduction of tobacco control legislation and policies, smoking rates in the EU remained high, again without questioning why this might be the case.

    Meanwhile, seemingly oblivious to the failures he had described, the delegate started to sum up by talking of the need to redouble joint efforts by saying that the EU remained fully committed to the FCTC and adding that by working together during the conference, delegates could take a step forward in their global tobacco control agenda. At first, I thought the delegate had taken as advice Walt Kelly’s put-down, “having lost sight of our objectives, we redoubled our efforts.” But then I realized this was not true because whereas I had assumed the main objective was to encourage people to quit tobacco smoking, the EU delegate’s objective was seemingly to implement WHO measures whether they worked or not.

    He finished by saying, “Together, we can deliver sustainable progress and pave the way for a tobacco-free world where people can enjoy healthy lives with no one left behind.” Here we were into Candide territory where everything is for the best in the best of all possible worlds. Fortunately, the Ukraine delegate was there to remind delegates that this was not the best of all possible worlds and that tobacco consumption goes up when people are under stress, especially when they are constantly under the threat of death because their territory has been invaded by the forces of another country.

    Whereas I had assumed the main objective was to encourage people to quit tobacco smoking, the EU delegate’s objective was seemingly to implement WHO measures whether they worked or not.

    No Progress Without Change

    Do the WHO and the delegates at these affairs really believe that by trying to force people to give up tobacco smoking, they will ensure everybody leads a healthy life, with no one left behind? What about the many people around the world daily facing rape, torture and violent death by invading forces or simply at the hands of their own less than benevolent governments? Will the multitudes afflicted by under-reported starvation, with their dying words, thank the delegates for saving them from the ills of tobacco? Will those vulnerable people deeply afraid of the arrival, on the WHO’s watch, of the next pandemic, offer thanks for being protected from a lifestyle choice they can protect themselves from? And do these delegates think that when we are all standing knee-deep in water following environmental breakdown, we shall thank them for removing the temptation of smoking, if for no other reason than because the matches would be too damp to light our tobacco? If they do, they need to get out more.

    And they need to mend their bullying ways. One of the main reasons why there should be no COP11 is down to the disrespectful way the COP10 affair treated the Philippines. Apparently, the Global Alliance on Tobacco Control (GATC), previously known as the Framework Convention Alliance, in a puerile intervention in what should have been an adult debate, handed the country the GATC’s pathetic “Dirty Ashtray” award for having the temerity to promote tobacco harm reduction (THR). The Philippines is a sovereign democracy that decided after robust debate that the health of its people could be aided by allowing smokers access to safer alternatives to combustible cigarettes. It should continue along that path unless it, and it alone, decides otherwise. Its decisions should not be brought into question by a gaggle of anti-tobacco organizations whose existence is dependent on the continuing health of the tobacco industry but that is threatened by the rise of THR.

    Indeed, the FCTC Secretariat and the GATC should, in any properly run debate, recuse themselves when matters of THR are raised since they could be seen as having a vested interest in not wanting the tobacco industry, especially the cigarette industry, to be fatally undermined—rather than suffering the flesh wounds the FCTC is able to inflict. That this is the case is supported by the existence of the COP byproduct, the Meeting of the Parties (MOP3, as it was in Panama) to the Protocol to Eliminate Illicit Trade in Tobacco Products, whose love affair with “track-and-trace” systems is aimed at ensuring tobacco manufacturing businesses retain their customers.

    The best reaction to the GATC’s intervention would be for all nations that are committed to THR to withdraw from the FCTC, which is not going to change its ideology. And without change, there can be no progress.

    But for all COP10’s faults, I cannot help wondering whether hypocrisy isn’t the very worst. I would suggest that a significant proportion of the more than 1,000 delegates and officials who attended the Panama affair drink alcohol. And I would further suggest that a good proportion of those are addicted, or regular drinkers, some of whom might be “problem drinkers.” How, I wonder, do these drinkers manage to take the moral high ground and condemn smokers? Do they have to stand on their empties? Isn’t that a little unstable? Or perhaps they are used to such balancing acts. Perhaps they are used to using just one eye to examine the damage done to individuals by their smoking while shutting the one that might focus on the even greater damage done to populations and societies at large by drinking. Sadly, I doubt that many have the level of self-awareness that would encourage them to engage with such issues. They exist in a closed world of self-righteous indignation.

    Although that is not the way the secretariat sees things. COP10 headlined a post-conference press note with possibly the longest heading ever written: “COP10 adopted historic decisions to protect the environment from the harms of tobacco and to address cross-border tobacco advertising, promotion and sponsorship and the depiction of tobacco in entertainment media.”

    How any of the above warrants the epithet “historic” is beyond me. The idea that what went on in Panama Feb. 5–10 should be regarded as famous or important in history is simply laughable. From what has emerged, COP10 was just another case of the same people using a lot of words to say the same things as they have said in the past. The only way that COP10 could write itself into the history books would be to do the decent thing and write FCTC COPs out of history.

    Shrouded in Secrecy

    How do I know that the same people said the same things? I don’t; I’m guessing; I have to guess. WHO COPs are conducted along the lines of secret society meetings by people supposedly so frightened that anybody should learn of the lack of intellectual rigor guiding their processes that delegates are required to go through a type of omerta ceremony, though, bizarrely, they seem to refer to it as the application of Chatham House Rules. Journalists and anybody with an independent mindset are not allowed to enter the hallowed halls of the conference.

    Or are they? According to the press note with the longest heading, “COP10 was open to the media ….” But this does not chime with report after report by journalists and other interested parties who have complained about not being granted accreditation at any of the FCTC COPs due to a standard FCTC cop-out. One of the best brief reports on COP10 that I read was by Nick Powell for EU Reporter, who wrote, “Like many journalists, I was refused accreditation, but that made little difference as the conference voted to exclude the press.”

    It is difficult to square these two takes on the situation. I did ask the organizers of the event about this, but answer came there none. All I can go on is that the overwhelming evidence points to the fact that Powell is correct. And this is probably admitted in the full sentence in the press note with the longest heading: “COP10 was open to the media, which had the opportunity to observe all public and open sessions, enabling reporters to witness more than 1,000 delegates from around the world unite over six days to consider and take action on important issues related to implementation of the convention.” It seems that this was obfuscation because there were few “public” or “open” sessions. I must admit that they had me fooled there for a minute, but then I thought that press notes, even those with the longest headings, were supposed to inform, not mislead.

    Silly me. Health Policy Watch (HPW), obviously having read another post-event press note, quoted the WHO as saying: “Globally, some 200,000 hectares of land are cleared every year for tobacco cultivation, accounting for up to 20 percent of the annual increase in greenhouse gasses (GHGs).” But, as HPW pointed out, the WHO “failed to explain the source for the GHG estimate.”

    And it could do with explaining something else. This is from the thoughtful COP10 conclusions of the International Tobacco Growers’ Association (ITGA): “ITGA, as the global tobacco growers’ representatives, observes with concern the impunity applied to using arguments against tobacco farming without providing reliable data. A fresh example is the WHO FCTC claim that 200,000 hectares of land are being cleared every year to grow tobacco when in fact, the harvested area of tobacco has consistently declined in the last decade.”

    COP10 was just another case of the same people using a lot of words to say the same things as they have said in the past.

    Avoiding Harm Reduction

    But let me go back to Powell’s piece because it contained something else most interesting. He immediately followed the sentence quoted above with one saying: “That was shortly after the organizers cut off the microphone of a delegate who had the temerity to suggest that the priority should be harm reduction.” Of course, this incident makes a mockery of the statement in the press note with the longest heading that is quoted above as saying 1,000 delegates from around the world were united over six days. Clearly, they were not united. Questions around THR and less risky alternatives to combustible cigarettes had to be kicked down the road.

    Powell did not say which delegate was cut off so rudely, and I can imagine there might be any number who would have wanted to make the point about THR, including those from the Philippines, of course, but I do know the U.K. delegation was supposed to make such an intervention. A meeting in the U.K.’s Houses of Parliament on Jan. 18 was told by Dame Andrea Leadsom, the parliamentary undersecretary of state for health and social care, that the U.K. delegation to COP10 would put forward its position that vapes comprised an important tool for helping adults quit tobacco smoking.

    Leadsom was speaking during a backbench debate organized by Member of Parliament Andrew Lewer and aimed at uncovering what stance the government would take at COP10. Lewer, and others who spoke during the debate, were concerned that COP10 might resolve to establish equivalence in the regulation of combustible cigarettes and reduced-risk products, thus undermining the U.K.’s successful strategy of using vapes to help smokers quit their habit. Concern was expressed during the debate also about the fact that though the U.K. was a major contributor to the FCTC, it seemed diffident in its approach to tobacco COPs.

    If backbenchers were hoping for a robust stance by the U.K. this time around, they must have been disappointed, at least in respect of the three-minute introductory presentation by the U.K. delegate, who did not mention THR and whose reference to vapes was confined to saying how the U.K. was concentrating on reducing the appeal of these products to children. I could not see whether she tugged her forelock when she declared commitment to the FCTC.

    What a contrast to the New Zealand delegate’s brilliantly measured presentation where she spoke of the country’s pride in reaching tobacco control milestones and coming close to its goal of reducing the incidence of smoking below 5 percent. This had been achieved, she added, through a mix of FCTC-endorsed measures and the considered implementation of evidence-based harm reduction measures, including making available to smokers a range of nicotine-replacement products.

    The question is, why should these pointless events continue. Most governments run by sentient creatures must know that FCTC COPs comprise a counterproductive, environment-busting waste of time and money. Safer alternative products can replace combustible cigarettes within a reasonable time. All that is needed is for those governments to apply and enforce consistent, light-touch but effective regulation to these products, ensure that messaging about them aimed at consumers is accurate, clear and consistent, and then sit back and let the private sector do the rest.

    The FCTC has already ruled itself out of being a part of such a process.

    *Figures from the European Commission’s Copernicus project
    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.
  • A Defining Decade

    A Defining Decade

    The vaping industry has significantly changed in the 10 years since Vapor Voice started publishing.

    By Timothy S. Donahue

    The vaping industry has changed dramatically during the past decade. When Vapor Voice published its first issue in 2014, the e-cigarette industry was about six years old and still in its infancy. Cig-a-likes and tobacco flavors were still popular, but flavors and mods started taking off. In an online article on Dec. 14, 2019, Vapor Voice reported that Clearette was named “Best E-Cigarette and Vapor Line of 2014” in a competition organized by ECig Review Central.

    ECig Review Central gathered 25 leading vapor enthusiasts from around the United States. The judges were blindfolded and sampled 20 prominent e-cigarette brands over six hours. “I liked the bold e-cigs the best,” said one judge. “The throat hit was perfect, and the draw was extremely smooth.”

    Each tester was given a 15-minute to 20-minute break between individual e-cigarettes. Judges rated taste, quality and delivery on a scale of one to 10. In 2014, 21 out of 25 judges rated Clearette’s line as the best tasting. “The entire line was incredible,” stated another judge. “I was thinking it might be a tobacco company’s, but it wasn’t. The vapor tasted just like smoke.” Sadly, like many early vapor companies, Clearette and ECig Review Central are no longer in business.

    These early devices provided little vapor, and battery life was short compared to today’s products. One early industry leader, Njoy, is still producing products, albeit now under the Altria umbrella. The difference between Njoy’s original Daily disposable and its current Daily disposable exemplifies the vapor industry’s technological growth. In addition, Njoy’s Ace pod system is the most technologically advanced vaping product to have received marketing authorization from the U.S. Food and Drug Administration.

    Vapor Voice’s first print edition followed Altria’s announcement to launch its MarkTen e-cigarette nationwide. Altria also purchased Green Smoke for $110 million in cash and up to $20 million in incentive payments. Both the MarkTen and Green Smoke products are no longer on the market. Later that year, Greg Conley started the American Vaping Association, a nonprofit vapor industry advocacy organization that has now become part of the American Vapor Manufacturers Association, and the Oxford English Dictionary voted “vape” as the word of the year. Philip Morris International also launched its heated-tobacco product, IQOS, in Milan, Italy, and Nagoya, Japan.

    In 2014, the U.S. Food and Drug Administration also released its proposed rule for extending its authority to all tobacco products, including e-cigarettes, cigars, hookah and pipe tobacco (“the deeming rule”). The new regulations for electronic nicotine-delivery system (ENDS) products were finalized in 2016. The final deeming regulations were officially published on May 10, 2016, and became effective 90 days later on Aug. 8, 2016.

    The deeming rule changed the vaping industry. Many would say it nearly decimated it. The FDA’s channels for manufacturers and retailers to gain permission to sell their products threatened to put them out of business. According to the Brooklyn Law Review in a 2017 paper, “Through the far-reaching ‘Deeming Rule,’ e-cigarette manufacturers are forced to comply with financially burdensome and time-consuming requirements before taking most of their products to market.”

    The Juul Experience

    Credit: Insurance Journal

    In 2015, we had our first introduction to Juul Labs. During a tobacco industry event in New York, Brian Haynes, with Troutman Pepper, and myself were shown a Juul device by Gal Cohen, Juul Labs’ head of Scientific and Regulatory Affairs. We snuck off into the back corner of a bar together, and he let us both take a few puffs. He wouldn’t let us have one. It blew our minds. We knew then that it was potentially an industry-altering product.

    Juul altered the industry too. Its impact could be summed up as “the good, the bad and the ugly.” The good was that Juul was a technological marvel at the time. The Juul device helped smokers switch to vaping faster than any product before it. Sales began to soar. Juul was the catalyst for the rapid growth of the vaping industry from 2016 to 2019.

    In 2017, Kevin Burns joined Juul Labs as CEO about two years after the company launched Juul. Juul was estimated to make up about 40 percent of the e-cigarette industry at that time. Then, in December 2018, Altria Group invested $12.8 billion in Juul Labs, acquiring a 35 percent interest and valuing the company at $38 billion. Altria claimed Juul Labs would remain a fully independent company.

    Soon after Altria’s investment, Juul Labs began to decline. The company and its advertising practices came under fire. The FDA accused Juul of creating a vaping “epidemic” by hooking youth on vapes, and Burns even went as far as to say he would apologize to parents whose “children were addicted to the company’s products” as concern grew around the teen vaping epidemic.

    There was also the great EVALI scare. The outbreak of “e-cigarette or vaping product use-associated lung injury,” to use the outbreak’s official but misleading name, started in 2019 and was caused by illegal, unregulated cannabis vaping products laced with vitamin E acetate. The U.S. Centers for Disease Control and Prevention, however, wrongly blamed nicotine vaping products. This episode, too, almost ended the e-cigarette industry.

    EVALI and the youth “epidemic” became too much of a burden for Juul Labs. Burns resigned as CEO of the company in September 2019. K.C. Crosthwaite, who was serving as the chief growth officer for Altria, was named his successor. In October 2019, Juul Labs announced it would be laying off about 500 employees by the end of the year. Several Juul Labs executives also moved on from the troubled company that year.

    Stung by Juul’s disappointing performance, Altria announced in October 2019 that it was reducing the value of its investment in Juul by $4.5 billion. In January 2020, the FDA issued a policy prioritizing enforcement against unauthorized flavored e-cigarette products that appeal to kids, including fruit and mint flavors. However, the flavor restriction didn’t apply to disposable e-cigarettes. “Under this policy, companies that do not cease manufacture, distribution and sale of unauthorized flavored cartridge-based e-cigarettes (other than tobacco or menthol) within 30 days risk FDA enforcement actions,” the agency stated.

    Juul subsequently pulled all its flavored pods from the U.S. market except for tobacco and menthol. The impact of the FDA’s rule was devastating for the pod-based Juul and all other pod-based vaping systems. By October 2020, Altria further reduced Juul’s valuation to approximately $10 billion. By March 2021, the valuation was cut to $4.3 billion; by March 2022, it was reduced to $1.6 billion. In July 2022, the valuation of Juul Labs was further cut down to $450 million, which was only 3.5 percent of its original value.

    The fall of Juul may go on to be one of the most significant corporate collapses of this century. Coupled with the FDA’s nonenforcement policy of flavored disposable vaping products, Juul Labs’ downfall caused substantial changes in the vaping industry. No longer were pod systems a dominant force. Instead, sales of disposable vaping products exploded.

    Disposables are King

    Njoy ACE

    The vapor industry has grown dramatically since Vapor Voice started publishing. In 2014, the vaping industry was worth an estimated $7.2 billion, according to Statista. In 2023, its value had grown to more than $23 billion. The global vaping industry is expected to reach more than $26 billion by 2028. The disposable e-cigarette market size was valued at $5.7 billion in 2021 and is poised to grow from $6.8 billion in 2022 to $14.8 billion by 2030, according to SkyQuest Technology.

    While favored by consumers, disposable products present their own issues for the industry. It started with the rise of Puff Bar, which entered the U.S. market in 2019. At the time, it was owned by Cool Clouds Distribution of California. Cool Clouds sold Puff Bar to the brand’s Chinese manufacturer, DS Technology Licensing, in early 2020.

    During the summer of 2020, the FDA instructed Puff Bar to stop selling its products. This decision was made because Puff Bar became a popular alternative to Juul after the latter discontinued some of its flavored products. Critics accused Puff Bar of targeting young people. In February 2021, Puff Bar resumed sales with a new design and synthetic nicotine, which, at the time, was not regulated by the FDA. Most disposable makers followed the same playbook. In 2020, U.S. lawmakers asked the FDA to force Puff Bar off the market.

    Puff Bar sales began to decline; however, it wasn’t long before another disposable brand, Elf Bar, took over the market. Founded in 2007, iMiracle Shenzhen Technology was originally an e-commerce firm. In 2018, the company switched to disposable e-cigarettes and launched the Elf Bar brand with synthetic nicotine. In 2022, the FDA said it needed Congress to act to bring synthetic nicotine under its purview.

    Congress closed the loophole last year. Under the new rules, companies were supposed to remove their flavored synthetic vapes from the market and file premarket tobacco product applications with the FDA. New products continued to be launched anyway. Puff Bar and Elf Bar began introducing products under different brand names, and thousands of other manufacturers followed suit.

    This is where the industry stands today. Disposables dominate the market while pod systems continue to trail far behind. However, the FDA has tried to clamp down on the growth of illegal disposables. The agency has issued over 550 warning letters and more than 100 civil money penalty actions to retailers for selling unauthorized e-cigarettes.

    Primarily, the regulatory agency’s actions have proved ineffective. Few retailers responded to the FDA’s actions. This has forced many states to step in. Due to the federal agency’s inability to control illegal flavored products, many state legislatures have introduced premarket tobacco product application (PMTA) registry bills. These bills require retailers only to sell products on a state list filled with products authorized by the FDA (of which there are only 23) and products with a PMTA under review by the regulatory agency. The Consumer Advocates for Smoke-Free Alternatives Association (CASAA) has issued calls to action for several registry bills. Vaping companies are also being sued for selling flavored disposables without authorization.

    Credit: Postmodern Studio

    Altria and BAT subsidiary R.J. Reynolds (the maker of Vuse vaping products) have taken legal action to kill their vape competition. Last October, Altria subsidiary Njoy filed a lawsuit in a federal district court against dozens of manufacturers, distributors and retailers of disposable vapes, including the Breeze, Elf Bar, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog and Puff Bar brands. Njoy asked the court to bar imports by the companies and said it would “consider further litigation activity.”

    In January, a U.S. District Court in California dismissed the lawsuit against many of the disposable vape manufacturers, distributors and retailers. The court found that the defendants did not participate in “the same transaction, occurrence or series of transactions or occurrences,” and therefore were improperly joined in the lawsuit. However, the case against iMiracle, the manufacturer of Elf Bar, has not been dismissed. The case is still pending.

    The environmental impact of disposables is also a growing issue. Many companies are moving away from these products as more countries and U.S. states seek to ban them. Martin Miller, Chief Commercial Officer for Plxsur, a company that recently reached $1 billion in consolidated revenues, (see “Keeping Pace,” pg. 18) said safeguarding the environment and delivering safe and innovative products are core to the company’s sustainability agenda.

    “We have worked closely with our partner companies to put in place commercial strategies to migrate consumers away from disposables. Our Italian business, Puff [no relation to Puff Bar], has already successfully migrated many of its consumers using disposables to pod and open devices,” he said. “These alternative products have already outperformed legacy single-use vapes by volume. Adding to this, migration away from disposables is present across our entire group, with Ireland-based Hale having already launched a new pod system and others with an ever-growing portfolio of owned and third-party pod systems.”

    The e-cigarette industry is still growing rapidly. The Federal Trade Commission issued its third report on e-cigarette sales and advertising nationwide in April. The report found that combined sales of cartridge-based and disposable e-cigarette products to U.S. consumers by nine leading manufacturers increased by approximately $370 million between 2020 and 2021. The total topped $2.67 billion. E-cigarette companies spent $90.6 million more advertising and promoting their products in 2021 than in 2020.

    Reported sales of cartridge products increased from $2.133 billion in 2020 to $2.496 billion in 2021; sales of disposable, non-refillable e-cigarette products increased from $261.9 million in 2020 to $267.1 million in 2021. As technology improves and new products come to market, vaping products will continue to save the lives of many combustible tobacco smokers. That’s one thing that isn’t going to change any time soon.

  • Navigating the Fog

    Navigating the Fog

    Image: VlaDee/pavlofox

    Brazilian lawmakers mull regulation of e-cigarettes.

    By Claudio Teixteira

    In the face of growing concerns about public health, the expansion of the illicit market, and the persistent inaction of the Health Agency in assuming its regulatory responsibilities, the Federal Senate of Brazil has taken matters into its own hands with a bill for the regulation of electronic cigarettes in the country. This initiative, driven by Senator Soraya Thronicke, seeks to fill a legal loophole that has favored organized crime for over a decade and ensure adequate consumer protection. The bill under discussion in Brazil has the potential to mark a before and after in the vaping policy of the largest market in Latin America. Below, some fundamental aspects of this project are detailed, and the perspectives of experts on the subject are gathered.

    Nearly 15 years have passed since the Brazilian National Health Surveillance Agency (ANVISA) banned commercial activities related to electronic cigarettes, and the discussion about this measure remains as relevant as it was at the beginning.

    Although the current law does not restrict personal use or possession of vaping devices, the ANVISA’s decision in 2022 to maintain the ban, after an exhaustive review process and public consultation, has generated a polarized debate among the Brazilian population. The consultation conducted last February has revealed considerable interest from consumers and various social sectors in reviewing and softening the current rules, favoring a more open and evidence-based policy.

    The ANVISA’s decision not to engage in the regulation of vaping products has spurred a significant legislative reaction from the Federal Senate. This situation highlights a critical moment in Brazil’s public health policy, marking a possible turning point in how the country addresses the regulation of these contemporary and widely debated products.

    In this context, Bill No. 5,008 of 2023, promoted by Thronicke, emerges. This legislative initiative is proposed as a direct response to the ANVISA’s inaction and seeks to establish a comprehensive regulatory framework for electronic cigarettes and similar devices in Brazil. The project covers many aspects, including production, marketing, importation and exportation as well as the regulation and specific supervision of these consumer products.

    Intending to establish precise requirements for their control, this bill represents a comprehensive effort to manage the presence and distribution of vaping devices in the Brazilian market, ensuring proper regulation from their manufacture to their promotion.

    Benefiting Organized Crime

    The senator has expressed concern that Brazil, unlike 84 percent of Organization for Economic Cooperation and Development countries, lacks specific legislation to regulate electronic cigarettes. According to her, this omission leaves consumers vulnerable, facing a proven ineffective ban that does not align with the more advanced legal and regulatory standards adopted globally.

    Thronicke emphasizes that the protection of public health must be the priority, with a particular focus on the safety of young people. She proposes implementing strict regulations covering all aspects from production to marketing, promotion and consumption of these products. The senator maintains that adopting such measures is essential to minimize the risks associated with the use of electronic cigarettes and ensure a market supply that is responsible and regulated.

    The senator has expressed her deep dissatisfaction with Brazil’s current lack of regulation of electronic cigarettes. In an interview with Poder360, she pointed out how this legislative gap directly benefits organized crime. She highlighted the critical need to be held accountable for this omission and wondered who truly benefits from this legal void.

    “I wish those responsible for this omission face the consequences. I need to know who is behind this and who is facilitating organized crime operations. In this legal limbo scenario, the only beneficiaries are, without a doubt, criminal groups,” emphasized the senator, underscoring the importance of addressing and closing this legislative gap to combat the advancement of organized crime in this sector effectively.

    The senator’s concern extends to the quality and safety of vaping products in the Brazilian market. Many of these products evade regulations and contain components of unknown composition, posing a significant risk to public health. Furthermore, she criticizes the current prohibitive policies for their inconsistency, banning potential alternatives in favor of products whose dangers are already widely documented.

    Thronicke argues that if bans are to be implemented, they should be applied equitably, including traditional tobacco products. “If the decision is made to ban electronic devices, then conventional cigarettes should also face prohibition. It takes courage to do so, especially when nicotine is legal in Brazil, and electronic cigarettes represent just another way of consuming it.”

    These statements underline the urgency and complexity of formulating precise and compelling regulations for electronic cigarettes and other reduced-risk products in Brazil, focusing on safeguarding public health and combating illegality.

    Her concerns are evident when she points out how the absence of regulation benefits organized crime through the illicit trade of these products. She also highlights the risks of using unregulated devices and liquids whose ingredients are unknown and potentially harmful. “What is currently sold in Brazil evades any regulation. In Brazil, it’s simple to adulterate these products. The substances used for refilling or containing are made up of unknown ingredients, representing a serious health risk,” the senator emphasized.

    Knowing the Bill

    • The bill proposes that companies wishing to manufacture or import electronic cigarettes in Brazil register their products with the ANVISA. This process would include paying a “sanitary surveillance and inspection fee” set at BRL100,000 ($20,000) for each registration application or renewal.
    • Additionally, registering these products with the Brazilian Federal Revenue service will be required. As part of the process, interested parties must also submit a toxicological evaluation report to the ANVISA that should comprehensively analyze the additives and materials used in the products. This measure seeks to ensure rigorous control over the quality and safety of electronic cigarettes available in the Brazilian market to protect public health and ensure that only safe and regulated products are accessible to consumers.
    • The National Institute of Metrology, Quality and Technology and the National Telecommunications Agency will play crucial roles in establishing technical and safety criteria for the proper functioning of vaping devices. These guidelines will include regulations on safety in the charging process and standards for the wireless communication of devices, aiming to ensure that their use is safe and effective.
    • On the other hand, the bill introduces rigorous regulations for liquids containing nicotine, establishing a maximum volume limit of 22 mL and a maximum nicotine concentration of 35 mg per milliliter.
    • Additionally, the devices must be designed to prevent inappropriate tampering and ensure that they are inaccessible to children as part of a comprehensive effort to increase the safety of these products and primarily protect minors.
    • For heated-tobacco products and their respective packaging, the legislative project specifies that each package must contain 20 units, with a nicotine emission that does not exceed 1 mg per tobacco stick.
    • Product packages must include an informative leaflet covering essential aspects for the consumer, including instructions for use and storage, contraindications, possible adverse effects and warnings directed at at-risk groups.
    • The products must detail their ingredients, the nicotine concentration, the batch number and production and expiration dates. In addition, they must incorporate warning messages about health risks and the obligation to keep these products away from children and adolescents.
    • The products must display explicit warnings about several critical aspects of consumer safety and health. Firstly, they must prominently indicate the prohibition of their sale to minors under 18 years of age along with a strong recommendation against their use by nonsmokers. The need to keep the product out of reach of pets will also be emphasized.
    • Specific contraindications will be detailed to ensure that consumers are fully informed about situations in which the use of the product is not recommended or can be risky. This includes warnings focused on high-risk groups, such as pregnant women, people with diabetes and patients with heart conditions, reinforcing the project’s commitment to public health protection and the promotion of responsible consumption.
    • The product label must provide detailed information on the possible adverse effects of using the product and warnings about the risks of dependency and toxicity arising from its prolonged use.
    • The products will include detailed contact information, such as the company’s legal registry and the manufacturer’s or importer’s address, to ensure effective communication with consumers and facilitate the submission of complaints if necessary. According to the senator, this set of requirements promotes high transparency and accountability, encouraging these devices’ safe and informed use.
    • The packaging of electronic cigarette products must clearly and visibly display on their exterior a series of crucial information for the consumer. This includes a detailed list of ingredients, categorized explicitly and understandably by the type of additives and nicotine concentration. It is also crucial to include the batch identification, the production date and the product’s expiration date.
    • A prominent warning that the product must remain out of reach of children and adolescents is essential, along with a message about the health risks that must occupy at least 20 percent of the packaging surfaces most visible to the consumer.
    • Regarding the wording of the products, a specific prohibition will be implemented on using numbers, expressions or graphic elements that evoke flavors associated with desserts, sweets or any other element that may attract children and adolescents.
    • The ANVISA will determine the substances whose use will be prohibited, thus ensuring thorough control over the components of these products to safeguard public health.
    • The advertising of electronic cigarettes and related products will be subject to a rigorous ban in all media, including television, radio, billboards, print publications and digital platforms, such as social networks. The only exception allowed will be promoting these products within physical sales points or through e-commerce platforms, provided that strict age control is implemented to prevent minors from accessing them.
    • Expressly, any direct or indirect reference to youth culture is prohibited, including images of people who may be perceived as under 25 years of age, to deter interest in these products from this age group. These measures aim to reduce the appeal of electronic cigarettes and similar products among young people, safeguarding their health and well-being.
    • A robust age verification system will be required at the point of sale to confirm that the purchaser is over 18 years old, using biometrics or other equivalents.
    • Sales points must also comply with regulations prohibiting placing electronic cigarettes near products intended for children, such as candies and toys, thus avoiding any association that may be appealing to minors.
    • Furthermore, an explicit ban will be imposed on the free distribution of electronic cigarettes by manufacturers, importers or traders for promotional purposes to prevent encouraging consumption among new users, particularly young people.

    The regulations surrounding the consumption of harm reduction products will be established in line with the rules applied to traditional cigarettes, including restricting their use in enclosed spaces under existing legislation.

    The controversial prohibition of open-system devices is among the critical challenges to implementing and complying with the proposed regulation. These are characterized by a reservoir that can be refilled and generally offers the option to recharge. In contrast, closed systems comprise devices designed typically for single use, which are nonrechargeable and disposable after use.

    Such devices, due to their customization capability and low cost, present a significant alternative for those users looking to quit smoking by allowing them to adjust the nicotine concentration according to their specific needs.

    However, a critical limitation of the proposed law is that the prohibition significantly restricts the tools available for harm reduction and smoking cessation. This limitation to specific devices poses notable challenges in compliance and effective implementation of the regulation, implying the allocation of resources that could be used more effectively in other tobacco control strategies and in promoting awareness of the associated risks.

    ‘Chemical Weapons’

    The journey of the bill proposed by Thronicke in the Brazilian Senate is anticipated to be full of obstacles. One critic is conservative Senator Eduardo Girao, who has fervently defended the approval of his project, the PL 4.356/2023, which seeks to ratify the prohibitions already imposed by the ANVISA on electronic cigarettes, which he describes as “authentic chemical weapons with a technological varnish.”

    Girao argues that e-cigarettes are designed to attract new consumers, thus compensating for the loss of users that the tobacco industry has experienced in Brazil and globally over the last decades. During a plenary session of the Senate on March 11, he warned about the “serious health consequences in the short [term], medium [term] and long term” that an increase in the consumption of these devices could entail, especially among young people. Among these consequences, he mentioned an increase in the incidence of respiratory diseases, cardiovascular diseases and cancer.

    Despite this opposition, there are voices like that of Deputy Heitor Schuch suggesting that it’s unlikely any bill will succeed without explicit backing or a prior determination by the health agency.

    The scenario underscores the complexity of the legislative and regulatory debate around electronic cigarettes in Brazil, reflecting the divergence of opinions both within the political spectrum and in the academic and medical fields. The situation highlights the need for a deep and balanced analysis that considers both public health and the realities of nicotine consumption in the country. Amid this debate, various voices, including politicians, scientists and civil society representatives, urge Brazil to adopt a coherent and safe regulatory framework for nicotine products.

    With 22 million active smokers and about 3 million vapers, the lack of defined regulation and clear inequality in access to less harmful alternatives underline the urgency of establishing effective regulation through legislation. This measure is essential for promoting public health, social equity and economic stimulus. This raises the question of whether this will be the moment Brazil moves toward a more equitable and effective tobacco control policy.

    However, as several experts, including Schuch, have highlighted, the likelihood of any bill progressing without the endorsement or a preliminary determination by the health agency seems slim. This scenario highlights the complexities surrounding the formulation and implementation of public policies in tobacco control, emphasizing the importance of a consensus among the stakeholders involved to move toward solutions that adequately address the public health challenges in Brazil.

    Finding the Right Balance

    For professor Ingrid Dragan Taricano, a prominent toxicologist, regulating electronic cigarettes is at a decisive moment. Taricano identifies several aspects that underline the urgent need to regulate these devices, covering everything from public health and the protection of minors to environmental implications and risk and safety assessments from a toxicological perspective.

    Following the essential principle of toxicology, which holds that “every substance is toxic; it is the dose that makes the poison,” Taricano highlights the need to carry out rigorous health-risk assessments to establish safe exposure limits to any substance that comes into contact with humans. This approach emphasizes the importance of addressing concerns about toxic substances in electronic cigarettes and raises a crucial question: What is the safe dose for each component of these products?

    Bill PL 5008/2023 incorporates this vision by requiring the submission of toxicological evaluation reports for registering electronic nicotine-delivery devices with the ANVISA. Taricano views this proposal positively, highlighting its relevance within the regulatory framework to ensure a comprehensive evaluation considering the additives used, the manufacturing material and an objective toxicological comparison with traditional cigarettes.

    Taricano emphasizes the importance of toxicology as a cornerstone for developing policies and regulations regarding electronic cigarettes. This scientific discipline provides the foundation for establishing quality and safety criteria, restricting certain ingredients and flavors and adopting measures to prevent young people’s access to these products.

    In nations where effective regulation has been implemented, specific limits for nicotine concentration have been determined, and proven quality components of e-liquid have been required. This scenario contrasts significantly with deregulated markets, where devices can contain dangerous substances without supervision, as Taricano warns.

    She criticizes positions against regulation that focus solely on the presence of harmful elements in electronic devices, overlooking the fundamental toxicological principle that “every substance is toxic, and everything is a matter of dose.” According to Taricano, user safety can only be guaranteed through the appropriate regulation of the quantities and quality of the components.

    Taricano highlights the complexity of establishing balanced regulation that protects public health without inhibiting innovation or individual freedom. For her, it’s fundamental that regulatory decisions are supported by a solid scientific base, ensuring that both the risks and benefits of using electronic cigarettes are considered. In this sense, science must be the beacon that guides toward informed and effective regulation, always with consumer well-being as the highest priority.

    ‘An Obstacle to Quitting’

    Alexandro Lucian, a renowned expert in harm reduction associated with smoking and leader of the Directory of Information for Tobacco Harm Reduction, a nongovernmental organization dedicated to improving anti-tobacco policies, highlights the bill’s importance as an essential tool to address current issues of smuggling, tax evasion and the indiscriminate use of products attractive to young people.

    Lucian points out that this project seeks to ensure that consumers have access to products that comply with appropriate health regulations and are adequately informed about the risks involved in their use.

    However, Lucian emphasizes that the bill requires significant reforms. He criticizes the imposition of an annual registration fee of BRL100,000 and the misclassification of electronic cigarettes as tobacco derivatives, which could hinder the legalization of numerous existing initiatives, thus fostering the illegal market and posing a risk to public health. “This fee will prevent most of the initiatives already existing in the country from becoming legal, fueling illegal trade and bringing incalculable risks to public health,” he says.

    He also underscores the need to review the project section that suggests banning open systems, which many users prefer. He argues that restricting legal access to these systems could further stimulate illegal trade. Lucian highlights that these systems, by offering the possibility to adjust the nicotine dose, facilitate the process for traditional cigarette smokers to migrate to electronic ones and, over time, give up the smoking habit.

    ‘An Obstacle for Small Businesses’

    From the consumer’s perspective, Ignacio Leiva, leader of ASOVAPE Chile and coordinator of the “Vaping Is Not Smoking” campaign, is a recognized activist who has significantly contributed to formulating progressive vaping regulations in Chile. Sharing his vision of the situation in Brazil, Leiva considers that Thronicke’s project represents a notable advance for Brazilian legislation, which currently faces unfavorable conditions due to the total ban.

    According to him, this situation has fostered the rise of a black market that not only puts consumers’ health at risk due to the lack of control over product quality but also deprives the state of significant tax revenues in addition to benefiting marginal groups that trade in these products.

    Leiva expresses concern about the BRL100,000 required for product registration, which he sees as a particularly onerous barrier for small-sized and medium-sized enterprises, possibly favoring large corporations and potentially resulting in a monopoly in the sector.

    While he supports advertising restrictions for conventional tobacco, Leiva advocates for greater freedom in promoting harm reduction products. He highlights the need to inform society about less harmful alternatives. He argues that regulation facilitating access to safe and regulated options can motivate a positive change in consumption habits, reducing tobacco use and benefiting public health. Moreover, he defends adopting fair regulatory measures that do not unjustly favor large corporations to the detriment of smaller market players.

    Leiva emphasizes the importance of achieving a balance between offering less harmful alternatives to smokers and protecting minors. He positively values the measures included in Thronicke’s proposal to prevent minors from using electronic cigarettes. He applauds the initiative to restrict the sale of these products alongside items aimed at the child and youth audience. This approach reflects, in his opinion, a solid commitment to the protection of young people, ensuring that efforts to minimize the harms associated with tobacco do not increase the use of electronic devices among the most vulnerable population.

    Protecting Public Health and Promoting Equity

    The voices of politicians, civil society members and scientists urgently highlight the need for a more coherent and safer regulatory framework for managing nicotine products in Brazil. There is widespread agreement on the need to focus policies on protecting public health and combating illegal trade as well as addressing smoking-related complications.

    It is also recognized that adopting appropriate regulations in the country would benefit public health and boost the economy through job creation, increased revenues and significant fiscal contributions to the state. This perspective underscores the importance of a balanced approach that combines health objectives with economic incentives to positively impact the population’s well-being and the country’s economic development.

    Although Brazil records lower smoking rates compared to other nations, there remains a significant fraction of the adult population, approximately one in eight adults, who continue to smoke. This represents about 22 million people. This data, derived from national statistics on tobacco consumption, highlights the pressing need to implement effective public health policies.

    The prohibition of products recognized as harm reduction options in Brazil poses a severe challenge in terms of social justice. A higher incidence of smoking is observed in the lower socioeconomic classes compared to the ability of middle and high classes to access less harmful alternatives, which evidences an apparent disparity in access to healthier options.

    This inequality suggests that strategies to promote a healthier lifestyle are predominantly available to those with greater economic capacity, leaving people with fewer resources and limited options to quit or reduce tobacco use. This scenario underscores the need to adopt inclusive measures that allow all layers of society to benefit from safer and more effective alternatives for smoking cessation.

    The current prohibition becomes a significant obstacle to implementing public policies aimed at improving access to harm reduction methods in communities most impacted by smoking. In this context, adopting effective regulation emerges as a crucial element, with the potential to make harm reduction strategies accessible to all levels of society, thus helping to mitigate health inequality.

    The discussion on regulating less harmful alternatives, such as electronic cigarettes, becomes especially relevant, offering solutions to the adverse consequences of prohibition in Brazil’s social fabric. Furthermore, this debate opens a new avenue in the fight against smoking. Considering social justice issues, it is imperative to promote policies that foster equity and ensure fair access to safer options for all citizens.

    Claudio Teixeira is a journalist, director of C3PRESS Agency and editor of The Vaping Today. He lives in Brazil.
  • Reclaiming the Initiative

    Reclaiming the Initiative

    Photo: CME Automation Systems

    Boosting efficiencies may help tobacco companies cope with tough times, according to CME Automation.

    Contributed

    Paul Knight

    Cigarette manufacturers should scrutinize their manufacturing processes and “go the extra mile” to maximize efficiencies in response to difficult market conditions, says Paul Knight, CEO of CME Automation.

    Severe supply chain disruptions, climate factors such as El Nino and climate change in general, in addition to ever more stringent regulation, are posing significant challenges for cigarette manufacturers—particularly over the past year.

    In its position as an automated systems supplier for the sector, CME Automation is highlighting how cigarette manufacturers are responding to these pressures by maximizing efficiencies in raw material usage—seeking to “soften the blow” of these global factors.

    “Whilst most sectors are struggling in some capacity, the tobacco and cigarette markets are particularly vulnerable when you consider the global nature of the market in combination with ever increasing taxes and duties,” said Knight.

    “It might seem counterproductive for companies to invest in equipment when times are tough. However, when supply chains are unstable and raw material costs are high—maximizing efficiencies is often the answer and automation is key to achieving this.”

    Knight draws attention to the processing and packaging stages of production where cigarette manufacturers are driving further efficiencies.

    “The labor-saving benefits of automated packaging such as cartoning, palletizing and tax stamping systems are widely understood and this is being demonstrated by the enquiries we are receiving.

    “Another area we are seeing particular interest in is cigarette waste management through the increasing popularity of our tobacco reclaimer system.”

    The tobacco reclaimer is an automated solution that recovers usable tobacco from rejected cigarettes and is capable of processing up to 100 kg of tobacco per hour, with recovery rates of up to 95 percent.

    “Manufacturers are always going to want to minimize waste but recent turbulence may have sharpened minds somewhat,” continued Paul Knight.

    “Fundamentally, tackling the current market difficulties comes down to making the most of what you have in terms of raw materials – and that means cutting wastage down to an absolute minimum.”

    This article was contributed by Nielsen McAllister Public Relations on behalf of CME Automation Systems.

  • A Risky Strategy

    A Risky Strategy

    Photo: kurgu128

    Banning e-liquid flavors may not achieve the outcomes that proponents have in mind.

    By Neil McKeganey, Gabriel Barnard and Christopher Russell

    In the world of drug development, very clever people spend a lot of time determining what chemicals need to be combined, in what quantities, over what duration and with what frequency, for a medication to have maximum therapeutic effect. By contrast, much less attention is directed at determining the color, shape, taste or aroma of the pill or capsule involved. If we think of e-cigarettes principally as drug delivery systems, with the drug in question being nicotine, we similarly may come to think that issues of taste and flavor are of secondary importance. In reality, flavors may exert a huge influence in shaping how, why, when and whether adults who smoke use e-cigarettes as an alternative to smoking.

    Faced with concerns around youth vaping, there have been increasingly strident calls to ban all e-liquid flavors other than those that tase and smell like tobacco or menthol. The belief here is that by restricting e-cigarette flavors in this way, fewer youth will vape while leaving adults who smoke able to access at least a couple of the flavors that have been available for use.

    The risks here are considerable. First, there is the possibility that, even in the face of a ban of e-liquids containing characterizing flavors, youth interest in and use of e-cigarettes remain unchanged. That possibility is by no means unlikely given that the U.S. National Youth Tobacco Survey has shown that flavors lag well behind “curiosity” and “family and friends use” in terms of youths’ reasons for vaping. Second, there is the risk that by reducing the range of available e-liquid flavors, fewer adults will use e-cigarettes as a route out of smoking.

    At the moment, e-cigarettes are very popular. They are typically cheaper than regular cigarettes, available in a huge range of flavors, can be discretely used in a wide range of settings, and they can help adults to quit smoking. As e-cigarettes sit increasingly in the crosshairs of regulatory control, we can see each of these benefits steadily being reduced as a result of initiatives to ban flavors, raise taxes, shrink the number of outlets selling e-cigarettes and increase restrictions on where people can vape. The upshot of those accumulated restrictions may be that youth vaping remains largely unchanged while fewer adults use e-cigarettes as a way out of smoking.

    In the past, when faced with an increase in rates of volatile solvent abuse (glue sniffing) among U.K. youth and ingestion of Tide Pod detergents by youth in the U.S., the call to ban these products was resisted in favor of restrictions that were placed on how these products could be displayed and sold in retail outlets. In the case of volatile solvent-based products, out went the open shelves of solvent-based glues and cleaning products and in came the locked glass cabinets and the requirement to ask sales staff directly to provide access to the desired product.

    Through restricting how these items could be displayed, we found a way to ensure a useful household product could continue to be sold while reducing youth access to harmful chemicals. The case for trying to do the same with e-cigarettes is even greater and more compelling. The price of failure here is not simply the loss of a range of helpful household products, for which there were available alternatives, but the loss of what may be the single most impactful innovation in promoting adult smoking cessation.

    The options are stark. In the face of proposals to ban characterizing flavors, it will become increasingly important for industry to support independent research showing what role flavors play in consumers’ decisions as to whether to vape, what to vape and, most importantly, whether to continue or cease smoking. Where flavor bans are initiated, it will be important to monitor what happens once the range of preferred flavors are no longer available; will adults who have already switched from smoking to vaping with the help of now-banned flavors revert back to smoking instead of using the narrowed range of available vape flavors to “stay switched?” Will fewer adults who smoke adopt and use e-cigarettes as a route out of smoking? In addition, industry would be wise to consider ways in which flavored e-cigarettes can be packaged and displayed that actually reduce youth interest in and access to these products.

    If we fail to find a way to balance the need for youth protection and the importance of adult consumer choice in promoting smoking cessation, there is a real risk that we will have undermined vaping as a popular, permanent road away from smoking. The cost of that failure will be measured not in the loss of a range of useful household products, as was the case with volatile solvents and Tide detergent pods, but in the loss of millions of lives of adults who smoke.

    Neil McKeganey is director of the Center for Substance Use Research in Glasgow, Scotland.
    Gabriel Barnard is a director of the Center for Substance Use Research in Glasgow, Scotland.
    Christopher Russell is director of Russell Burnett Research and Consultancy in Glasgow, Scotland.
  • Celebrating Two Decades of Excellence

    Celebrating Two Decades of Excellence

    Odiri Erewa-Meggison

    Odiri Erewa-Meggison reflects on the significance of BAT’s Ibadan factory in Nigeria as it celebrates its 20th anniversary.

    Contributed

    This year, BAT celebrates the 20th anniversary of its Ibadan factory in Nigeria. To mark the occasion, Precise Platform, a PR agency, interviewed Odiri Erewa-Meggison, external affairs director of BAT West and Central Africa.

    Precise Platform: Please tell us about the significance of celebrating 20 years of manufacturing excellence for your organization.

    Odiri Erewa-Meggison: Celebrating 20 years of manufacturing excellence holds immense significance for BAT West and Central Africa on several fronts. Firstly, it marks a significant milestone in our journey, showcasing two decades of dedication, innovation and resilience in the manufacturing industry within the region. This achievement underscores our commitment to quality, responsible and sustainable business practices in all aspects of our operations.

    [We are] celebrating our two decades of quality output, impacts and milestones despite the economic challenges and regulatory changes that have made a lot of foreign companies quit their investments in the country. We are able to adapt to the market dynamics and impact on our operating environment with over 350,000 job opportunities and boost the economy of the nation through our export operation.

    From the excellent productions in our Ibadan factory, we export to 11 West and Central Africa countries and recently to the USA, with $110 million annual foreign exchange from export, among other socioeconomic impacts. These achievements, which are worth celebrating, speak volumes of our strong contributions and the vital roles British American Tobacco has played in driving economic growth with social progress in our operating environment and also provide an opportunity for us to express gratitude to our employees, partners and stakeholders, whose unwavering support and dedication have been instrumental in our success. Their commitment and passion have been integral to our journey toward manufacturing excellence.

    In essence, celebrating 20 years of manufacturing excellence is not just about looking back at past achievements but also about looking forward with optimism and determination toward a future of continued success and positive impact as BAT Nigeria is here for the long haul.

    How has BAT Nigeria’s Ibadan factory evolved and grown its manufacturing capabilities while achieving sustainability milestones over the past two decades?

    British American Tobacco Nigeria has undergone substantial evolution and growth in terms of its manufacturing capabilities, reflecting its commitment to meeting the dynamic needs of the market and its stakeholders. BAT Nigeria has continually invested in upgrading its manufacturing facilities with cutting-edge technologies. These advancements have enhanced production efficiency and quality control measures, enabling the company to stay competitive in the manufacturing industry.

    Also, BAT Nigeria places a strong emphasis on maintaining high-quality standards across its manufacturing operations. The company adheres to stringent quality control protocols and certifications to ensure that our operations meet or exceed both regulatory requirements and consumer expectations for safety.

    We have also integrated sustainability practices into our manufacturing processes, aiming to minimize environmental impact and promote social responsibility. In order to reduce our carbon footprint, in 2022, we transitioned from diesel[-powered] to gas-powered generation, and in 2023, we installed our 1.4-megawatt solar plant in our manufacturing facility, which was recently launched by the executive governor of Oyo State, Seyi Makinde, during our 20th anniversary celebration. We also installed a wastewater treatment plant with a 30,000-cubic-meter storage capacity to recycle and reuse all wastewater. This earned us the Alliance for Water Stewardship (AWS) certificate. These initiatives encompass our evolution and efforts to reduce energy consumption, minimize waste generation [and] support local communities, to promote responsible business practices within the manufacturing sector.

    The success of BAT Nigeria’s manufacturing operations, particularly at the Ibadan factory, can be attributed to several key strategies and initiatives that have been instrumental in achieving milestones, beginning with our investment in the state-of-the-art manufacturing facility and sustainable technologies that enable efficient resource utilization and minimize environmental impact. These strategies have led to 100 percent waste recycling and transitioning from diesel to gas operation at our Ibadan facility.

    BAT fosters a culture of continuous improvement, where employees are encouraged to identify opportunities for optimization and innovation across all aspects of manufacturing operations. We also work closely with our suppliers and partners to promote responsible sourcing practices and ensure the integrity of our supply chain. This proactive approach enables the implementation of cost-saving measures, quality enhancements and sustainability initiatives.

    Another factor that has contributed to the success we are celebrating is our large investments in human capital training and development programs to equip employees with the skills and knowledge necessary to excel in their roles and contribute to manufacturing excellence. This includes technical training on operating equipment, safety protocols and environmental stewardship practices.

    How does BAT Nigeria guarantee the highest quality standards in its manufacturing processes while simultaneously prioritizing sustainability and environmental considerations, as outlined by the AWS and the International Renewable Energy Certificates (IREC)?

    We implement rigorous quality control measures at every stage of the manufacturing process, from sourcing raw materials to packaging finished products. This includes comprehensive testing, inspections and audits to ensure that our products meet or exceed regulatory requirements and consumer expectations for safety, consistency and quality.

    By adhering to internationally recognized certifications and standards for quality management, environmental management, and occupational health and safety, we foster a culture of continuous improvement, where employees are empowered to identify opportunities for enhancing quality, efficiency and sustainability in manufacturing operations. This includes implementing lean manufacturing principles, conducting root cause analyses and investing in training and development to drive continuous improvement initiatives.

    By prioritizing quality, sustainability and environmental considerations in our manufacturing practices, we not only meet regulatory requirements and consumer expectations but also contribute to the long-term viability and resilience of our business and the well-being of the communities and environments in which we operate.

    BAT Nigeria prioritizes maintaining the highest quality standards in its manufacturing processes while adhering to sustainability and environmental principles outlined by the Alliance for Water Stewardship and the International Renewable Energy Certificates.

    Our dedication to sustainability extends beyond energy efficiency and waste reduction. We prioritize responsible water management practices, evident in our state-of-the-art wastewater treatment plant. This impressive facility boasts a 30,000-cubic-meter storage capacity, allowing us to capture and treat all effluent wastewater generated during production. This commitment to water stewardship ensures no untreated wastewater is released into the environment.

    More importantly, we don’t simply treat the wastewater; we reuse it. In 2023 alone, we successfully recycled a significant amount—17,388 cubic meters of treated wastewater. This recycled water is likely used for noncritical processes within the factory, reducing our dependence on freshwater resources.

    This approach exemplifies our commitment to minimizing our environmental impact and operating responsibly. By effectively managing our wastewater, we not only conserve precious freshwater resources but also demonstrate our alignment with the principles set forth by the AWS certification that we hold.

    The IREC compliance translates to our using energy-efficient machinery and exploring renewable energy sources in line with the recently commissioned 1.4 MW solar plant. This reduces the factory’s dependence on fossil fuels and lowers our carbon footprint.

    This multifaceted approach allows BAT Nigeria to be a leader in manufacturing excellence. We believe this commitment to quality, sustainability and responsibility sets us apart and contributes to a brighter future.

    As BAT Nigeria celebrates two decades of manufacturing excellence in a multi-category industry, how will you leverage your achievements to further enhance and sustain your competitive advantage? Additionally, how does your annual environmental, social and governance (ESG) forum contribute to this strategy, fostering collaboration and innovation for a sustainable future?

    As we celebrate 20 years of manufacturing excellence, we are committed to further enhancing and sustaining our organization’s competitive advantage in the industry through strategic initiatives and forward-thinking plans. Here are some of our key plans:

    We will continue to invest in cutting-edge technologies beyond what we have achieved so far and innovation to optimize our manufacturing processes, improve efficiency and enhance product quality.

    We will reinforce our commitment to sustainability and environmental stewardship by implementing additional initiatives to minimize our environmental footprint, reduce waste generation and promote responsible sourcing practices. With a steadfast commitment to sustainability, we will sustain our recycling cigarette butts initiative and annually hold our private sector ESG forum to continually drive our advocacy for a sustainable environment in alignment with the sustainable development goals.

    By implementing these plans and initiatives, we aim to further enhance and sustain our organization’s competitive advantage in the industry, ensuring continued success and growth for the next 20 years and beyond.

    Our annual ESG forum plays a critical role in these strategies by fostering collaboration and innovation for a sustainable future. The forum brings together industry stakeholders, experts and thought leaders. This allows BAT Nigeria to share its own sustainability journey and learnings while also gaining valuable insights from others.

    Added to this, by facilitating open discussions on key ESG challenges and solutions, the forum fosters collaboration across the industry. This can lead to the development of innovative approaches to tackling environmental and social issues.

    The ESG forum allows BAT Nigeria to stay abreast of emerging trends and best practices in sustainability. This ensures we can continuously adapt and improve our strategies to maintain a competitive edge in a future increasingly focused on ESG performance.

    Is there any message or reflection you would like to share with the employees, stakeholders and customers who have been a part of this 20-year journey of manufacturing excellence?

    I would like to extend my appreciation to all our employees and stakeholders, who have been integral to our 20-year journey of manufacturing excellence. The BAT Nigeria team’s unwavering support, dedication and commitment have been instrumental to our success and achievements over the years.

    As we reflect on this milestone, we are reminded of the collective efforts, resilience and passion that have propelled us forward, even in the face of challenges and uncertainties. Together, we have overcome obstacles, embraced opportunities, and [we] continuously strive for excellence in everything we do.

    As we embark on the next phase of our journey, we remain committed to upholding the highest standards of excellence and sustainability in all aspects of our operations. Together, we will continue to innovate, collaborate and lead the way toward a future of continued success and positive impact.

    Thank you for being a part of our 20-year journey of manufacturing excellence. Here’s to many more years of partnership, growth and shared achievements ahead.

  • Half Measures

    Half Measures

    Photo: Be Free

    Though a generational tobacco ban is not without merit, the U.K. will not allow it to work in the way that it could—and thus the measure should be shelved.

    If I have this correctly, the U.K.’s proposed generational tobacco sales (GTS) ban has been attacked by libertarians as being contrary to the principles that people should be allowed to make their own choices about the risks they are prepared to take in life and to take responsibility for the consequences of those choices, providing they act within the law and their actions do not harm others.

    These are powerful arguments, but are they enough to defeat the proposal, which, as currently envisaged, would mean that from Jan. 1, 2027, anyone born on or after Jan. 1, 2009, could never be sold tobacco products legally in the U.K.? I suspect not.

    One problem arises because the first duty of the government is to protect U.K. citizens, and while, by not allowing smoking in public places, the U.K. government might be seen mostly to have discharged that responsibility in the case of smoking, it is not difficult to imagine how some might argue otherwise. Smokers may still smoke at home, affecting family members, and because, we are told, smoking has a negative economic impact on society, it must be seen as causing harm to nonsmokers by robbing society of the funds to help those in need.

    These are powerful arguments, but are they enough to support the radical idea of a GTS ban? I suspect not.

    A major problem to my way of thinking is that the GTS ban is based, as is much else to do with tobacco and vaping, on faulty statistics and information and on ideological rather than rational ideas. Regulatory skyscrapers have been and are being built on dodgy foundations.

    Here is an example. The first words of a GTS ban blog post from the U.K. Department of Health on Jan. 30, titled “Creating a smoke-free generation and tackling youth vaping: What you need to know,” had it that “The prime minister has set out plans to build a better and brighter future for children.”

    I find it intolerable that I am being told by a government department that I need to know something that is misleading. A Feb. 20 story by social policy editor Patrick Butler published in The Guardian newspaper and quoting the Association of Directors of Children’s Services had this to say: “In a withering assessment of the government’s record over the past few years, they said ministers had presided over deepening child poverty, crumbling schools and an exploding health and well-being crisis in young people, with low-income families worst affected. The government’s failure to prioritize the post-pandemic needs of children in England was a ‘massive missed opportunity’ that would leave many thousands of youngsters ‘left behind.’”

    The prime minister referred to in the blog is Rishi Sunak, who has been either prime minister or chancellor of the exchequer during almost the entire time frame referred to in The Guardian piece. Does it really sound like he has been building a better and brighter future for children?

    Of course not. So the question arises as to why anybody should believe anything else in the blog or any of the other so-called information put out by the government in relation to the GTS ban. And the answer is that there is no reason to believe and every reason to suspect one is being conned. You have only to gaze briefly at the graphic “warnings” on tobacco packages to realize how misleading they are and, I would contend, are meant to be. And the statistics linking diseases and death directly to smoking and to no other causes (drinking, eating highly processed food and taking nonprescription drugs, etc.) are clearly misleading.

    But as they say, we are where we are, and whether you accept the necessity of the GTS ban will probably depend largely on whether you believe the information put out by the government. So let’s for the moment accept the government’s position and say that because of the tragic consequences of smoking, and smoking alone, it is necessary to put an end to the habit.

    At this point, we need to ask whether the GTS ban is the best approach, and I think you have to say that probably it is. Nearly everyone dismisses the idea of outright prohibition because they say it would not work, and once you say that, you know it won’t be allowed to work—you have set yourself up to fail. Another idea would be to employ tobacco harm reduction (THR), but this will take forever because there are so many people opposed to it, and even those who believe in it can be made to jump and think again simply by saying, “Boo! Children!”

    So a GTS ban is the best game in town? Possibly, but that is not to say that even it would work. Let’s take a look. Despite what I wrote in the second paragraph, the blog actually says that from Jan. 1, 2027, anyone born on or after Jan. 1, 2009, “will never be able to legally sold tobacco.” That does not make sense, of course, and it makes you wonder how much effort has gone into the GTS proposal, which is being hurried along in an election year. But, no matter, the idea is not without merit. It has the advantage that, in theory, nobody who has taken up smoking after being sold tobacco products legally will ever be forced to quit.

    It has the advantage, too, that it is not really a ban. Smokers, we are told, smoke for the nicotine, and, as things stand and in theory, those who are born after Jan. 1, 2009, will still be able to buy nicotine in inhalable and possibly other forms once they have turned 18. I write that with a feeling of trepidation, however, because a U.K. representative at the February meeting of the Conference of the Parties to the World Health Organization Framework Convention on Tobacco Control said that no nonsmoker should use a vape. Whether this was meant to be simply a moral judgement whose basis was not spelled out or whether it heralded a regulatory extension of the GTS to cover vapes was not clear. If the latter is the case, GTS is probably dead in the water.

    If, on the other hand, the former is the case, it looks like GTS is set to roll, right? Not so fast. One of the major objections made against the ban is that it would create a two-tier society where some people are allowed to buy tobacco products and some are not. I am not sure that this should be seen as a huge problem because we already have age-determined dividing lines in our society in respect of many products and activities; it would just be the case that the dividing line would be on a sliding scale in respect of one product, which is not something that should send us into an intellectual death spiral. After all, the pension age has also been moved on to such a scale.

    A connected and more concerning issue to my mind is that the ban would put retailers in an invidious position because they would be required to tell the difference between two adults, one of whom was one year older than the other. There is age estimation technology available that can reliably tell if somebody is under 25 and therefore trigger a request for that person to prove they are over 18, but it seems unlikely that it could split, say, a 40-year-old from a 41-year-old.

    There are ways around this problem using some form of identity documents but none that I can think of that would be foolproof in a society where not everybody has such documentation and where not everybody who does carries it with them. And it would be a brave politician who raised the specter of a universal system of identity cards in the U.K. simply to help smokers.

    The only answer to this problem as I can see it is to make it illegal for anyone born after Jan. 1, 2009, to buy tobacco products, putting the onus on the buyer rather than the seller, who would nevertheless still be required not to sell to those under the age of 18.

    The objection here would be that people would ignore the rules and buy tobacco products illegally. But would this really matter? The law would be in place in large part to protect the individual so that if an individual decided to sidestep the law, it would be their fault if they fell ill from smoking, were fined, not an unlikely outcome at some time given that they would need to buy a pack every day or two, or if somewhere down the line they were forced to quit because the last licit smoker had died or if manufacturers withdrew cigarettes on the grounds that there were too few people left who could buy tobacco legally.

    So, we are back on track? A GTS ban it is? No, sorry, there are still a few things we need to clear up. For a GTS ban to work, in my view, it is necessary to have a long-term THR policy in force that provides a range of attractive, reasonably priced, less risky alternative products to help those who want to quit smoking and, importantly, so as not to discriminate against people based on age—one year of age. And despite the U.K.’s reputation of having embraced THR, we are nowhere near having a comprehensive policy that people can rely on to still be in force next month. Snus is banned, and the government continues to dither over heat-not-burn products. Even vapes are subject to winds of change. The government is going to ban disposable products, it is set as I write this piece to further tax these products, and, because the middle classes said, “Boo! Children!,” it is going to ban various flavors.

    And worse is to come. Because, despite what it says, the government will not adequately fund the organizations charged with controlling the retail sale of products to those underaged, the general media will soon be crawling with stories about how little Johnny, the light of his mother’s life, was sold vaping products laced with crack, drawn into a den of vice and reduced to a life that was solitary, poor, nasty, brutish and short.

    Let’s face it: Though GTS is not without merit, it is not going to be allowed to work in the way that it could, and it needs to be shelved. It is true that it is simply too risky to design policy initiatives when politicians are trawling for votes, as they currently are in the U.K.

    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.