Category: News This Week

  • French Vote Paves Way to Disposable Ban

    French Vote Paves Way to Disposable Ban

    Credit: Laurence Soulez

    France has moved one step closer to a ban on disposable vapes. The Senate voted unanimously Wednesday to ban pre-filled, disposable e-cigarettes.

    “The marketing of these products is intended to attract young people with colors, fruit [flavors] and aromas, and low price,” Labour and Health Minister Catherine Vautrin told the chamber.

    While the Senators approved the law, they modified the National Assembly’s text to clarify the ban, according to media reports.

    The text would ban the “manufacturing, marketing, sale, distribution or offering for free” of the products and prohibit owning them with the intent to sell or distribute them, with a fine of up to €100,000 ($108,000).

    The two chambers will now need to combine their text and approve that version before it is sent to the European Commission, which will have six months to hand down an opinion.

    The government has said it hopes the ban will come into effect in September.

    Meanwhile, vaping and other recent smoking innovations are expected to be high on the agenda as country representatives gather in Panama City on Monday, tasked with revising the World Health Organization Framework Convention on Tobacco Control (FCTC), the first treaty ever adopted under the auspices of WHO, entered into force.

  • Past WHO Officials Highlight THR Strategy

    Past WHO Officials Highlight THR Strategy

    Photo: Alexander Ovsyannikov

    Harm reduction should be a central strategy of the Framework Convention on Tobacco Control (FCTC) in addition to the measures for demand and supply reduction, according to Robert Beaglehole and Ruth Bonita.

    Writing in The Lancet, the two former World Health Organization directors argue that while the FCTC has been influential in encouraging a global response to tobacco control, it has been challenging to show a strong and consistent association between the implementation of FCTC measures and smoking prevalence and cigarette consumption outcomes.

    The FCTC does not prohibit harm reduction approaches but leaves it up to member states to decide how to regulate e-cigarettes and other novel nicotine products. The WHO’s lack of endorsement of tobacco harm reduction limits healthier choices for the 1.3 billion people globally who smoke and who are at an increased risk of early death, according to Beaglehole and Bonita.

    The authors note that there is no scientific justification for WHO’s position that e-cigarettes and other novel nicotine products should be treated in the same way as tobacco products. This position, they argue, overlooks a risk-proportionate approach.

    “We believe WHO needs to provide positive leadership and technical support to countries as they consider the use of e-cigarettes and other nicotine delivery devices,” the authors write. “WHO’s current approach to these lower-risk product is to reward countries, such as India, for banning e-cigarettes; thirty-four countries, primarily low-income and middle-income countries, now ban e-cigarettes.”

    Beaglehole and Bonita note that, in some countries, substantial reductions in smoking prevalence have coincided with the uptake of novel nicotine products. In New Zealand, for example, the prevalence of adult daily smoking plummeted from 13.3 percent in 2017–2018 to 6.8 percent in 2022–2023 after e-cigarettes became widely available, a 49 percent decline in five years.

    In the same period, and with the support of the government and regulation of vaping, the prevalence of adult daily vaping increased from 2.6 percent to 9.7 percent. New Zealand’s recent decline in smoking occurred in the absence of any other major tobacco control policy, apart from the annual cost-of-living price increases, according to the authors. “The decrease in smoking during this period in New Zealand shows what can be achieved, and exceeds the WHO smoking prevalence reduction goals of 30 percent over 15 years from 2010 to 2025,” they write.

    The New Zealand 2022 smoke-free legislation includes a “tobacco-free generation”, a 90 percent reduction in smoked tobacco retail outlets, and compulsory denicotinization of retail tobacco. The New Zealand government, elected in November 2023, is committed to reaching the Smokefree 2025 goal of 5 percent (or less) smoking prevalence for the adult population, but intends to repeal the 2022 smoke-free legislation.

    However, because of the implementation timelines, fears that this repeal would jeopardize the Smokefree 2025 goal can be allayed, according to Beaglehole and Bonita. This is because none of the three headline measures would be expected to have an impact before 2025 and might have had negative unintended consequences. “Based on recent progress, New Zealand’s Smokefree 2025 goal looks likely to be reached by consent rather than coercion and by further support for switching to smoke-free nicotine products,” the authors note.

    Beaglehole and Bonita also highlight the success of other high-income countries in reducing smoking prevalence in association with the use of a range of lower-risk nicotine delivery devices to complement FCTC demand and supply reduction measures.

    Sweden, with a long tradition of snus use, has the lowest prevalence of adult daily smoking in the world, down to 6 percent in 2022, accompanied by low mortality from tobacco-related diseases.

    Norway has had similar success with reducing smoking prevalence in the context of increased use of snus and e-cigarettes, and in England vaping is helping adults to quit smoking. The substantial decline in cigarette consumption in Japan is associated with the rapid uptake of products that heat, rather than burn, tobacco.

    Less progress has been made in low-income and middle-income countries where tobacco control capacity and political will to advance tobacco control measures are weaker, and the potential of tobacco harm reduction is not being realized, according to the authors.

    Beaglehole and Bonita say two concerns suggest why tobacco harm reduction is not more actively embraced, despite its association with reduced smoking prevalence. The first is that, compared with cigarettes, where the damage has been known for more than half a century, the long-term effects of e-cigarettes are unknown.

    Although vaping may not be risk-free, especially for people who do not smoke, the risks of there being substantial long-term harm from the constituents of e-cigarettes are likely to be low, especially when compared with the damage caused by smoked tobacco, the authors point out.

    The second concern is that the widespread availability of e-cigarettes in the absence of adequate controls and regulations encourages youth nicotine dependence and enables the vaping industry to act unethically. Beaglehole and Bonita say there is little evidence to suggest that vaping leads to smoking among youth, and although the proportion of non-smoking youth who vape is increasing, it remains at a fairly low level.

    Stricter regulations, including enforcing sales restrictions, and appropriate health promoting campaigns are needed to prevent vaping by young people, according to the authors, but these measures must be balanced with the health needs of older adults who smoke and require support to quit.

    Beaglehole and Bonita acknowledge that there is understandable skepticism about the motives of the tobacco industry in selling smoke-free products while continuing to expand tobacco markets in low-income and middle-income countries. To remain profitable, they say, the tobacco industry will eventually need to migrate its global business to less harmful alternatives since cigarettes will no longer monopolize the delivery of nicotine.

    The authors express concern about the recommendations, found in COP10 background papers, to treat nicotine products as equivalent to cigarettes and regulating them in a similar way. This approach, they argue, is a retrograde step because they are not comparable products in terms of the damage they cause; after all, it is the burning of tobacco that causes harm, not nicotine. Worse, such a strategy would ultimately favor the global cigarette market and may discourage vaping, according to Beaglehole and Bonita.

    The focus, they insist, must remain on the central public health problem—the damaging health effects of tobacco consumption. “Reducing cigarette smoking is the most effective way to prevent tobacco-related deaths and tobacco harm reduction is the fastest and fairest way to lower smoking prevalence,” the authors write.

    “WHO needs to embrace these innovations in nicotine delivery. Countries that are reaping the benefit of tobacco harm reduction, such as New Zealand, Sweden, Norway, England and Japan, should encourage participating countries at COP10 to support proposals that will quickly reduce smoking rates. The world’s 1.3 billion people who smoke, half of whom will die early, deserve this leadership.”

     

  • Firms Recognized for Sustainability

    Firms Recognized for Sustainability

    Photo: lovelyday12

    Philip Morris International and Japan Tobacco have been recognized for their environmental initiatives.

    For the fourth consecutive year, PMI received a triple-A rating from CDP for its disclosures on climate change, forests and water security.

    PMI has maintained a position on CDP’s Climate A-List for the past 10 years, reflecting its commitment to transparency and performance as the company progresses toward achieving its science-based targets as well as carbon neutrality for scope 1 and 2 by 2025 and net zero by 2040 for scope 1, 2 and 3.

    PMI’s efforts to halt deforestation, moving to zero net deforestation in managed forests by 2030, have further been recognized by CDP, which placed the company on its Forests A-List for the fourth consecutive year. This is the fifth year that PMI has been featured on CDP’s Water A-List as the company works toward its water optimization targets, which include optimization of 10 million cubic meters of water in its tobacco growing areas by 2030.

    “External recognition from organizations like CDP encourages us to continue our transformation journey and commitment to sustainability. We are pleased PMI has received CDP’s triple-A distinction for the fourth consecutive time,” said Scott Coutts, senior vice president of operations, in a statement. “Clear and transparent reporting of our progress helps us find new opportunities for action, identify and tackle growing risks, and get ahead of regulatory and policy changes.”

    PMI is also committed to advancing the adoption of the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations and intends to publish its first TNFD-aligned report for financial year 2025. Accordingly, PMI has been included in an inaugural cohort of organizations that intend to become TNFD early adopters.

    “We recognize the urgency to address climate change and protect biodiversity, and this is why our decarbonization strategy and progress are closely tied to preserving natural ecosystems,” said Jennifer Motles, chief sustainability officer. “We are proud to be an early adopter of the TNFD framework and will be reporting on it in 2025, which builds on the work we have already done to incorporate climate-related risk and opportunities into our overall business strategy and disclosure efforts, following the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations.”

    Japan Tobacco was recognized by CDP for its leadership in corporate sustainability for a fifth year in a row. The JT Group is one of 61 companies worldwide and 22 in Japan to be included on the Climate Change A-List and Water Security A-List out of more than 23,000 companies participating in the 2023 CDP environmental disclosure program. Overall, this inclusion marks the group’s sixth recognition for climate change, and fourth recognition for water security.

     “We are honored that the JT Group has been recognized on CDP’s A-List for a fifth consecutive year,” said JT Group Senior Vice President and Chief Sustainability Officer Hisato Imokawa, in a statement. “This inclusion reflects our continued efforts to reduce our environmental footprint and expand our transparency in disclosing information. ‘Living with the Planet’ is a key aspect of the JT Group Materiality, and we aim to achieve the sustainable relationship between nature, people and businesses through efforts to improve the impact of our activities on the environment. We are currently defining more ambitious targets for our environmental initiatives and plan to disclose them in early 2024. These targets will support our goals of contributing to the sustainable development of society by further fulfilling our responsibilities and maintaining the trust of our stakeholders.”

  • ‘BAT Unlikely to Buy Back Russian Assets’

    ‘BAT Unlikely to Buy Back Russian Assets’

    Image: Framestock

    British American Tobacco is unlikely to exercise its option to buy back its Russian assets, given the perceived risk of investing in Russia, reports Interfax.

    Following the 2022 invasion of Ukraine, many Western-headquartered firms pulled out of Russia. BAT sold its assets in Russia and Belarus to a consortium led by local management. The sale included an option to buy back the assets within two years.

    After the transaction, the assets were renamed ITMS Group. As of September 2023, ITMs was owned by BFI Holding of the United Arab Emirates, according to Russia’s Unified State Register of Legal Entities.

    BAT’s retreat from Russia depressed the company’s 2023 results. BAT reported revenue of £27.28 billion ($34.38 billion) a loss of £15.75 billion on Feb. 8, and attributed the declines over 2022 in part to the loss of its Russian business and its decision to write-down of the value of several U.S. cigarette brands to reflect the dimming prospects for combustible products.

    BFI Holding is owned by Faruk Yener, Oleg Barvin, Elena Zavarzina, Andrey Osavolyuk and Sergey Kudinov. Yener was general director of BAT for Russia, Turkey, the Caucasus, Central Asia and Belarus, while Barvin headed the company’s legal department.

    ITMS posted revenues in 2022 of RUB42.74 billion ($467.34 million) versus RUB38.94 billion in 2021, while net profit was RUB2.21 billion versus RUB1.73 million, respectively.

  • Defending Liberty

    Defending Liberty

    Photo: Wieslaw

    The U.K.’s proposed generational tobacco products sales ban was variously described as nuts, insane, ludicrous, mad, illiberal, impractical and petty minded by speakers at a House of Commons reception on Feb. 7.

    The reception, which was lively, going on boisterous at times, was hosted by the Conservative MP Giles Watling on behalf of the Freedom Organisation for the Right to Enjoy Tobacco (Forest), whose director, Simon Clark, told the gathering of about 50 invited people the purpose of the event was to bring together a broad coalition of groups to show the breadth of opposition to the ban: the Institute of Economic Affairs, the Taxpayers’ Alliance, the Adam Smith Institute, the Consumer Choice Centre, Students for Liberty and the LSE Hayek Society.

    Watling, a non-smoker but at one time a 60-Marlboro-a-day man, described the proposed ban as insane and said it was not good for the Conservative Party. There were better things that it should be doing than this piece of legislation.

    The idea that there were more important things for the government to be doing was taken up forcefully by Baroness (Claire) Fox of Buckley, who sits in the second chamber, the House of Lords, as a non-affiliated life peer. After outlining some of the huge and urgent domestic and international issues facing the government, she said she found it unbelievable that the prime minister had dedicated precious legislative time and energy on the most ludicrous anti-smoking law.

    Clark, who organised the event, said that, in his view, smoking was a bellwether for liberty and that the war on smoking should be of concern to anybody who cared about individual freedoms. Freedom was all about supporting things that you yourself might not like, he added, before describing how a Forest banner showing a cartoon depiction of the prime minister, Rishi Sunak, pushing a pram under the heading, “Say No to Nanny,” had been confiscated by parliamentary security on the grounds that it might be offensive to some people.

    The generational tobacco sales ban as it is currently proposed would make it illegal to sell tobacco products to anyone born on or after Jan. 1, 2009, which, Clark said, would lead to the ludicrous situation where, for instance, at some point these products could be sold legally to a person of 30 but not to a person of 29.

    This would seem to put retailers in an invidious position and, given the U.K.’s dislike of identity cards, might perhaps sink the proposed ban if it were focused on any other product. But there was a sense that the ban would be difficult to stop. Fox made the point that the government might find it difficult to extricate itself from the proposed ban, even if it wanted to, because it was the one thing around which all the political parties had united.—George Gay 

  • Flavors Help Save Lives

    Flavors Help Save Lives

    Image: Fotofabrika

    Today, the R Street Institute released a new report that explores how flavors are processed by the brain, especially as it pertains to tobacco and nicotine products. Using these findings, the author, Jeffrey Smith, resident senior fellow for integrated harm reduction policy at R Street, explains how flavor can influence behavior and why well-intentioned efforts to ban flavored tobacco and nicotine products can have unintended consequences in the fight to reduce smoking rates in the United States.

    This report comes at a crucial time as the debate over flavored tobacco and nicotine products continues at state, national, and international levels. Across the United States, policymakers are proposing or enacting flavor bans without fully appreciating the impact of their actions for adult smokers. And just this week, the World Health Organization’s Framework Convention on Tobacco Control is hosting their 10th session of the Conference of the Parties (COP10), where many expect the WHO to continue its crusade against flavored, reduced-risk nicotine products.

    To reduce the nearly 500,000 smoking-related deaths that occur each year in the United States, the CTP must take a scientifically driven approach that recognizes the neurobiological rationale for allowing a wide variety of flavored, reduced-risk products to be available to adults—while minimizing youth access.

    Smoking rates have declined in recent years and, under the Trump administration, the age to purchase tobacco products was raised to 21. This has reduced youth use, and continued enforcement will help lower rates even more. However, millions of adults in the United States still smoke combustible cigarettes to the detriment of their health.

    A number of tools exist to help these individuals quit smoking. Flavor, for example, has been shown to help move adult smokers away from combustible cigarettes to alternative, reduced-risk products. This makes sense on the surface; if it tastes good, then it’s more appealing. However, in R Street’s report, author Jeffrey Smith goes far deeper and explains the neurobiological connections between flavor and behavior. While adults may seek tobacco flavored products to initially switch, other flavors help them maintain abstinence from cigarettes. In the end, flavor will save more lives, according to Smith’s research.

    “To reduce the nearly 500,000 smoking-related deaths that occur each year in the United States, the FDA Center for Tobacco Products (CTP) must take a scientifically driven approach that recognizes the neurobiological rationale for allowing a wide variety of flavored, reduced-risk products to be available to adults—while minimizing youth access,” said Smith in a statement. “It is essential that the CTP approve non-tobacco-flavored, reduced-risk products.”

  • Product Mix, Demand Boost Universal Income

    Product Mix, Demand Boost Universal Income

    Photo: Tobacco Reporter archive

    Universal Corp. reported operating income of $153.8 million for the nine months that ended Dec. 31, up 20 percent over the comparable period in 2022. Tobacco operations contributed 148.9 million in income, 25 percent more than in the first nine months of the previous year. Universal attributed the performance of its tobacco operations largely to higher prices and a more favorable product mix, partially offset by lower tobacco sales volumes.

    “Our tobacco business continued to perform very well, driven by a favorable product mix and strong demand from our customers,” said Universal Chairman, President and CEO George Freeman III in a statement.

    “Improved margins, larger crops in Africa, and strong tobacco shipments in line with our expectations benefited our results in the nine months and quarter ended Dec. 31, 2023, compared to the same periods in fiscal year 2023.

    “Global leaf supply for all types of leaf tobacco continues to be tight, and as of December 31, 2023, our uncommitted tobacco inventory was at a low level of 8 percent. While we expect global leaf tobacco supply to remain tight in fiscal year 2025, in part due to El Nino weather conditions, we believe the strength of our diverse global footprint will help us satisfy our customers’ leaf tobacco needs.”

    Freeman also expressed satisfaction with the progress made by Universal’s ingredients business, particularly with the expansion of the company’s factory in Lancaster, Pennsylvania, USA, and the advancement in achieving Universal’s sustainability agenda. The company recently published its 2023 sustainability report and announced its participation in a solar project that it believes will help Universal reduce its operational greenhouse gas emissions by a third by 2030.  

  • IQOS Surpasses Marlboro in Revenue

    IQOS Surpasses Marlboro in Revenue

    Photo: Arkadiusz Fajer

    Philip Morris International reported net revenues of $9.05 billion for the fourth quarter and net revenues of $35.17 billion for fiscal year that ended Dec. 31, 2023. On a reported basis, the figures were up 11 percent and 10.7 percent, respectively, over the comparable 2022 periods.

    Performance was driven by revenue growth in both the combustible cigarette business, where pricing offset reduced volumes, and the company’s smoke-free operations, which continued to increase their share of the company’s business mix.

    “We are pleased that smoke-free products reached nearly 40 percent of our total net revenues and over 40 percent of our gross profit in the fourth quarter,” said PMI CEO Jacek Olczak in a statement.

    “This was led by the continued growth of IQOS, which has now surpassed Marlboro in terms of net revenues, confirming its position as the leading premium nicotine brand less than 10 years from launch. The fourth quarter also marked the first anniversary of our combination with Swedish Match, which delivered very strong results in 2023 driven by the stellar U.S. performance of ZYN.”

    PMI shipped 116.3 million cans of ZYN in the fourth quarter of 2023, representing growth of 78.2 percent versus fourth-quarter 2022 Swedish Match shipments of 65.3 million cans.

    “We are entering 2024 with strong momentum, and we expect it will be another year of excellent performance underpinned by an acceleration in organic smoke-free net revenue and profit growth,” said Olczak.

    PMI also expects to benefit this year from a recent settlement with British American Tobacco that resolves all ongoing patent infringement litigation between the parties related to heated tobacco and vapor products. The deal allows each party to innovate and introduce product iterations.

  • Write-Down Weighs on Results

    Write-Down Weighs on Results

    Photo: BAT

    British American Tobacco reported a loss of £15.75 billion for 2023. The company’s results were heavily impacted by its decision last year to write down the value of some its traditional cigarette brands in the United States to reflect the diminishing outlook for combustible tobacco products.

    Revenue was £27.28 billion, dragged by the sale of its businesses in Russia and Belarus, foreign-exchange pressures and lower cigarette volumes, and partially offset by the increased new categories revenue, according to The Wall Street Journal.

    Revenue from ‘new categories’ rose to £3.35 billion, up 21 percent from 2022 on an organic basis.

    “2023 was another year of resilient financial performance and delivery in line with our guidance, underpinned by our global footprint and multi-category strategy, despite a challenging macro-environment, said BAT CEO Tadeu Marroco in a statement.

    “New categories delivered continued volume-led revenue growth and increased profitability, driven by Vuse and Velo. As a result, our new categories portfolio has turned profitable two years ahead of our original target.

    “In combustibles, our commercial plans in the U.S. are enabling early signs of portfolio recovery.” The company’s Africa and Middle East business performed well in 2023, as did BAT’s Asia Pacific/Middle East/Africa region, according to Marroco, who credited strong revenue and profit performance, along with a well-balanced portfolio.

    2023 was another year of resilient financial performance and delivery in line with our guidance, underpinned by our global footprint and multi-category strategy, despite a challenging macro-environment.

    During the presentation of BAT’s results, Marocco also suggested the company would sell some it shareholding in ITC, the Indian consumer goods giant that makes much of its revenue from cigarettes but also runs hotels and a paper business, among other operations.

    Such a sale would allow BAT to pay down debt and accelerate toward the leverage range at which it could resume the share buybacks that some investors have been pressing for. BAT owns approximately one-third of ITC and would need to retain 25 percent to keep its veto rights.

    In related news, BAT announced that it has submitted an modified risk tobacco product application to the U.S. Food and Drug Administration to make certain health claims about its Glo Hyper Pro tobacco heating device, which the company launched in Japan, Italy and Poland earlier this year.

  • Counter-COP Laments Bloomberg’s Influence

    Counter-COP Laments Bloomberg’s Influence

    Photo: TPA

    Participants in the Taxpayers Protection Alliance (TPA) Good COP/Bad COP event in Panama lamented the influence of U.S. billionaire philanthropist Michael Bloomberg over tobacco control policies.

    “Michael Bloomberg is spending money to reduce consumer choice…He thinks he’s this big philanthropist, that he’s helping kids, helping adults—he’s not,” said TPA President Davd Williams. “By limiting these products, he’s not helping anyone but himself and his own ego.” 

    The Bloomberg-backed and funded Campaign for Tobacco-Free Kids  (CTFK) has nearly 40 representatives in the provisional attendees listing while Bloomberg-created Vital Strategies has nearly 20 representatives present.

    According to the TPA, CTFK takes Bloomberg funding to spread misinformation and myths to pressure international agencies to implement draconian regulations on tobacco harm reduction products while Vital Strategies supports bans on the sales of flavored harm reduction products across the world.

    “Bloomberg’s billions and groups may have TPA’s Good COP outnumbered and outspent, but the science and facts are on our side,” the TPA wrote in a press note.

    On Feb. 7, participants in the Good COP/Bad COP panels focused on the science, consumers, and policy of tobacco harm reduction. Experts discussed struggles unique to low and middle income countries in embracing harm reduction, misinformation, along with Bloomberg’s influence.