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  • A Broader Approach

    A Broader Approach

    According to experts, established tobacco control measures may be insufficient to achieve the desired reductions in smoking and the associated burden on healthcare systems. | Photo: Taco Tuinstra

    To lower the health and economic burden of smoking, lawmakers should incorporate tobacco harm reduction into their policies.

    By Stefanie Rossel

    The figures are staggering. Smoking cost the world economy an estimated $1.85 trillion, or about 1.8 percent of global gross domestic product (GDP), in 2012, according to a monograph published by the World Health Organization and the U.S. National Cancer Institute in 2016.

    The authors distinguish between direct and indirect costs. Direct costs, which include both healthcare expenses, such as physician fees or medical supplies, and nonhealthcare costs, such as transportation, were approximately $467.3 billion, representing 6.5 percent of global health expenditures, or 0.5 percent of global GDP. Indirect costs, which include the value of productivity and lives lost due to tobacco-related diseases, were an estimated $446.3 billion for disability and $938.6 billion for mortality.

    Low-income and middle-income countries (LMICs) account for almost 40 percent of the expenses incurred globally due to tobacco use, with direct costs representing up to 4 percent of total health spending in these countries. The total economic costs of smoking in LMICs ranged from 1.1 percent to 1.7 percent of GDP in the countries investigated in the report compared with an estimated 2.4 percent in the Americas and 2.5 percent in Europe.

    Some of the data in the monograph dates back to the late 1990s, and it is likely that costs have increased since its publication. While some research released since the publication of the paper suggested that reductions in smoking prevalence would translate into lower healthcare costs quite quickly, these papers focused primarily on the healthcare systems of large, wealthy and technologically advanced societies rather than LMICs, where 80 percent of the world’s smokers live.

    People in LMICs are significantly more likely to die from noncommunicable diseases (NCDs), which include cardiovascular and chronic respiratory diseases, cancer and diabetes, along with mental and neurological conditions. According to the WHO’s website, NCDs account for the deaths of 16 million people prematurely, i.e., before their 70th birthday, worldwide each year.

    Tobacco use represents the leading risk factor for NCDs, ahead of other risk factors such as air pollution, excess sodium intake, alcohol abuse or sedentary lifestyles. According to WHO data, tobacco currently accounts for 8.2 million deaths per year, including the effects of exposure to secondhand smoke, a figure that is projected to increase over the coming years.

    However, the WHO is far from achieving the U.N. Sustainable Development Goal of reducing premature deaths from NCDs by one-third by 2030. Depending on the source (and even the WHO’s numbers are inconsistent here), there are currently between 1.1 billion and 1.3 billion smokers in the world, and the figure is likely to rise, due in part to population growth.

    One of the major weaknesses of prevention is that the benefits take a long time to materialize.

    Focus on Prevention

    “When governments and government agencies lie about the health costs of vaping relative to smoking, they are betraying the trust of the public.”

    According to critics, the WHO’s established tobacco control measures are insufficient to achieve the desired reductions in smoking and the associated burden on healthcare systems. To accelerate progress, policymakers need to fundamentally change their approach, argues Andrzej M. Fal, president of the Polish Society for Public Health, who spoke at the Warsaw Global Forum on Nicotine in June.

    “If we enforce policies that reduce the risk of smoking now, there will be a significant reduction in cancer in 15 [years] to 20 years,” Fal pointed out. Because chronic diseases account for 90 percent of premature deaths, he argued, investing in their prevention is more cost-effective than treatment. The WHO itself recommends prevention as a response to noncommunicable diseases. Fal cited calculations from the global health body showing that every dollar invested in smoking prevention saves $7.43 down the road.

    Based on such considerations, Fal urges authorities to place greater emphasis on prevention and tobacco harm reduction. In 2023, the Polish Parliament analysis office asked Fal to prepare an analysis of the state of the tobacco “epidemic” in Poland. Fal and his co-authors concluded that the country lost 250,000 years of life as a result of tobacco consumption.

    Education about health, Fal suggested, should begin in kindergarten. People who are already ill and refuse to quit smoking should be incentivized to minimalize their risk using less hazardous nicotine-delivery alternatives. “If someone is already seriously ill,” Fal explained, “they can still achieve a better quality of life, live longer, and cost the system less,” he said.

    Fal proposed that each country launch at least one prevention clinic, which should be accessible without referral and would offer access to anti-smoking therapy, nicotine-replacement pharmacotherapy and harm reduction products. The clinics should also be responsible for regional health prevention programs and smoking information campaigns.

    Governments, he suggested, should set tobacco tax rates based on the relative harm of each product category, following the principle of “less harm, less tax.” Taxes on cigarettes—the most harmful tools for tobacco consumption—should rise “radically but progressively,” said Fal, who also called for publicly funded and supervised studies assessing the efficacy, safety and harm reduction in cases where the existing evidence was insufficient.

    One of the major weaknesses of prevention, however, is that the benefits take a long time to materialize. In a U.S. study analyzing the relationship between cigarette sales and lung cancer deaths, for example, it took 20 years for the first measures taken to curb tobacco consumption to show up in lower lung cancer death statistics. That time frame is too long for many lawmakers. “Politicians are not interested in investing in prevention as its benefits are seen long after they have left the government,” said Fal.

    Progress is also obstructed by conflicts of interest. In 2018, he noted, Poland’s tobacco-related health expenditures plus productivity loss were between PLN7 billion ($1.71 billion) and PLZ8 billion in 2018, whereas excise and VAT income from cigarettes amounted to PLN23.5 billion.

    Every dollar invested in smoking prevention saves $7.43 down the road.

    Myopic MPs

    Sinclair Davidson

    All too often, politicians are uninterested in considering the potential unintended consequences of their decisions. For example, Australia’s rules requiring vapers to get a medical prescription and banning imports of disposable e-cigarettes have caused the illicit market to flourish. Ninety-two percent of Australian vapers currently source their vapes from the black market, exposing them to unrelated products. More than 70 tobacco shops have gone up in flames since Health Minister Mark Butler started his crackdown on vapes. Police suspect some of the attacks are carried out by criminal groups as retaliations against store owners who refuse to stock their black market products.

    “Australia tends to pursue harm minimization policies in most areas—except in tobacco and nicotine consumption,” said Sinclair Davidson, professor of institutional economics at RMIT University, Melbourne. “Here, Australia pursues the most socially harmful policies that the so-called public health lobby can dream up. The costs this policy’s short-sightedness imposes on the economy are likely to be large but hidden or indirect. For example, when cigarettes are stolen from convenience stores, this results in insurance costs being increased on those stores and prices being increased for all consumers.

    “Similarly, when criminal profits are increased, criminal behavior in the economy increases. When criminal behavior increases, police budgets increase, resulting in higher taxes for all citizens and higher levels of criminal behavior. We are all victims of crime and criminal behavior—except, of course, the public health lobby, who have built careers off their policy work, and politicians and law enforcement agencies who get expanded budgets and powers as a result of poor policy. It is a vicious cycle of ‘Baptists and bootleggers’ who benefit while the rest of society suffers.”

    Meanwhile, the decline in tobacco tax revenue even as smoking rates have stabilized suggests that people are still smoking—they’re just not smoking legal cigarettes. “The challenges are twofold,” said Davidson. “Government itself has become addicted to tobacco excise revenue, and that source of revenue has become unreliable. The subsidy from smokers to the rest of the population has been captured by criminals. Criminality imposes huge costs on society. This occurs through the normalization of violence and the misallocation of resources from legal activity to illegal activity. Furthermore, criminality has a corrupting influence on law enforcement activities. Poor policy corrodes civil society by undermining public trust in public institutions. When governments and government agencies lie about the health costs of vaping relative to smoking, they are betraying the trust of the public and undermining their moral worth in society.”

    By contrast, Sweden’s success in reducing smoking rates by accommodating snus is a public health success story, according to Davidson. Since 2008, Sweden has slashed its smoking rates from 15 percent to 5.6 percent, according to Smoke Free Sweden. The nation’s smoking prevalence is expected to dip below 5 percent this year, making it the first country to achieve “smoke-free” status as defined by the WHO.

    Sweden’s incidence of cancer is 41 percent lower than in the rest of the EU, corresponding to a 38 percent lower level of total cancer deaths. The country has a 39.6 percent lower rate of death of all tobacco-related diseases compared to the EU average. “I don’t know to what extent Australian consumers are familiar with snus and what the uptake would be—but the principle remains. Low(er) risk products on the market result in consumers substituting away from the high(er) risk products,” said Davidson.

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • A Clean Sweep

    A Clean Sweep

    Holger Twrdy

    At Cerdia’s much-anticipated 12th filter colloquium, speakers detailed the progress in reducing the industry’s carbon footprint.

    By Stefanie Rossel

    “On the road toward a sustainable future” was the theme of Cerdia’s 12th filter colloquium, which took place in Freiburg, Germany, June 3–5. The conference has a rich tradition. Except for the time of the Covid-19 pandemic, the acetate tow manufacturer’s event has taken place every three years since the mid-1980s. This year, speakers from all parts of the tobacco industry supply chain shared their strategies to reduce their carbon footprint.

    Sustainability has always been important to Cerdia, which was created after the Blackstone Group purchased Rhodia’s acetate tow business in 2016. However, as Cerdia CEO Jens Ebinghaus explained in his opening speech, the topic gained even greater prominence after the acquisition and the company’s subsequent rebranding.

    Cerdia employs approximately 1,100 people worldwide and has revenues of around $750 million. In addition to its Freiburg facility, it operates factories in Santo Andre, Brazil; Serpukhov, Russia; and Kingsport, Tennessee, USA. While investing in core filter tow technology and diversifying into new business segments, the company focuses heavily on ESG, which encompasses energy diversity and efficiency as well as safety, compliance and governance, and community engagement.

    In 2023, Cerdia allocated 45 percent of its capital expenditure to projects supporting sustainability. According to Ebinghaus, the business environment for tow manufacturers has become significantly more volatile since 2019. The rising costs of raw materials, for example, has forced manufacturers to increase efficiencies. At times and often regionally, the industry also suffered from issues relating to transportation, disrupting supply chains. In addition, the geopolitical situation has become more challenging, with conflicts in Ukraine and the Middle East erecting new hurdles for business, for example. At the same time, business opportunities have emerged from next-generation products such as heated-tobacco products (HTPs), sales of which have been growing rapidly in recent years.

    Maria Viloria

    Lots of Levers

    Part of Cerdia’s roadmap to sustainability was a “double materiality” assessment, carried out in 2022, according to Maria Viloria, Cerdia’s head of sustainability and R&D. Through a survey, the company learned what was most important to its customers, suppliers and other stakeholders. Based on these findings, it created a “significance map” that put Cerdia’s ESG priorities in perspective. The company then developed a set of sustainability objectives that are in line with the U.N. Sustainable Development goals and established a sustainability committee to support its strategy.

    By 2030, Cerdia aims to reduce its greenhouse gas emissions by 30 percent, its landfill waste to zero and its water withdrawal by 10 percent compared to 2019. Medium and major injuries are to be reduced to zero and complaints to under 0.5 per delivered kiloton. The company has been sourcing its wood pulp from 100 percent certified sustainable forestry for years.

    By 2030, Cerdia aims to have trained 95 percent of its employees in compliance and to have fully implemented the EU Corporate Sustainability Reporting Directive (CSRD). In autumn 2024, Cerdia will move its Basel headquarters to a new, carbon dioxide (CO2)-neutral building. The company, which in 2021 received a silver medal from the business sustainability rating provider Ecovadis, is now aiming for gold.

    Cerdia’s new biosteam project, which is planned to come online in the first quarter of 2025, will play a vital role in the company’s CO2 reduction strategy by using biomass for steam production, according to Holger Twrdy, Cerdia’s vice president, manufacturing. The power plant will reduce the Freiburg factory’s CO2 emissions by 15 percent to 20 percent, or 26,000 tons annually, and Cerdia’s overall CO2 emissions by 10 percent.

    Further CO2 reduction of around 1,500 tons per year will come from a new absorption column in the Freiburg plant’s acetone absorption division, which will also start production early next year. In addition, the company will expand an existing CO2-free residential heating project, supplying green energy to Freiburg’s Dietenbach district.

    Esther Abe

    HTPs on the Rise

    Esther Abe, Cerdia’s market intelligence manager, provided an overview of the global tobacco market during the colloquium. After years of decline, cigarette sales stabilized in 2020, and Abe expects them to grow slightly, with increases in HTP and super-slim cigarette sales offsetting declines in other categories.

    She expected the global cigarette market to reach 5.55 trillion sticks in 2024 and anticipates it to increase to 5.7 trillion units by 2030. According to Abe, China’s cigarette market is likely to increase by a compound annual growth rate (CAGR) of 0.3 percent by 2030 due to the rising popularity of super slims and restrictions on vape products while HTPs are the fastest-growing segment in the rest of the world.

    Abe expects sales of combustible cigarettes to remain stable in China but to decline in the Commonwealth of Independent States, the Americas and Europe. The main sources of volume growth will likely be Africa and the Middle East, she said.

    The HTP category is envisaged to grow by a CAGR of 17 percent, to reach approximately 526 billion sticks in 2030. While Cerdia will remain focused on filter tow for the tobacco industry, which accounts for 85 percent of its business, it is also exploring other lines of business. To that end, the company recently established a new business development (NBD) team, which is exploring complementary acetate tow applications.

    According to NBD head Josef Hudina, the product is meltable in various recipes, soluble in many eco-friendly solvents and hydrophobic enough to be suitable as a plastic substitute. Moreover, it can be processed in the form of fibers, films, granules or powders. With its new cellulose acetate compounds, CellspherA Micro and CellspherA Granules, Cerdia offers an alternative to fossil materials that are widely used in the personal care industry. As the EU microplastic restriction boosts the demand for natural alternatives, Hudina is convinced that cellulose acetate could pass the EU microplastic exemption.

    Speakers at the colloquium anticipated tobacco industry regulations to increase further.

    Cerdia Product Stewardship Manager Emmerich Sackers detailed the scope and requirements of the European Deforestation Regulation, which entered into force in 2023 and will apply to large businesses from the end of this year.

    Jan Muecke, managing director of the German Association of the Tobacco Industry and New Products, pointed out that the recent decision at the 10th Conference of the Parties to the Framework Convention on Tobacco Control (FCTC) to focus on the environmental concerns described in FCTC Article 18 will likely influence how the EU Tobacco Products Directive, the U.N. International Plastic Treaty and the EU Single-Use Plastics Directive end up dealing with cigarette filters.

    Further legislative initiatives are underway under the European Green Deal, including the Packaging and Packaging Waste Regulation, the Corporate Sustainability Due Diligence Directive, the CSRD, the Ecodesign for Sustainable Products Regulation, the EU Batteries Regulation and the Green Claims Directive.

    Jens Ebinghaus

    Comprehensive Approach Required

    Instead of a one-size-fits-all approach, the road to sustainability is a puzzle with many pieces, all of which are vital. Logistics, for instance, account for 11 percent to 12 percent of total CO2 emissions, as Sergio Barbarino, chairperson of the Alliance for Logistics Innovation through Collaboration in Europe (ALICE), explained.

    The EU aims to decarbonize its transportation sector by 2050. ALICE has identified five pillars for the future of logistics: In addition to energy-efficient fleets and assets that use the lowest possible emissions energy source available, which presently is at the center of efforts, the focus in the mid-term should be on the management of demand, smart use of transport modes and sharing of fleets and assets.

    Procurement is another factor. Benjamin Saur, global category manager of sustainability at BAT, shared that 42 percent of his company’s greenhouse gas emissions are under the procurement department’s remit. BAT has designed a Supplier Climate Enablement Program that segments the approach to neither overburden suppliers’ own organizations nor BAT.

    In manufacturing, the biggest lever for increasing sustainability lies in increasing machine and process efficiency, according to Klaus Masuch, head of strategic product management secondary at Koerber Technologies. Options for actions, he said, are machinery-driven, people-driven and service-driven improvements along with data-driven and software-driven improvements, with a focus on tobacco savings and emphasis on the development of eco-friendly alternatives, such as biodegradable filters.

    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.
  • Bearing Fruit

    Bearing Fruit

    Photo: Taco Tuinstra

    Alliance One’s seed breeders in Brazil are boosting crop quality and yields while improving disease resistance and tolerance for extreme weather conditions.

    By Taco Tuinstra

    Small may be beautiful, but in some cases, bigger is better. Take tobacco seeds, which range between 0.5 mm and 1 mm in diameter. A single gram of the material can contain a whopping 10,000 seeds.

    While that may seem efficient, seeds of that size are also difficult to handle. That’s why Alliance One International (AOI) has installed a pelleting machine at its Global Research, Development and Deployment Center in Passo do Sobrado, Santa Cruz do Sul, Brazil. In a process similar to that used by pharmaceutical companies in pill production, the device coats tobacco seeds with a mix of inert materials, including clay (drug companies use gelatin), to beef them up to more manageable dimensions. The seeds that exit the machine are up to 50 times bigger than the ones that go in, allowing the grower to plant them accurately.

    The seed pelleting machine is only one of many investments at the center’s seed industrialization unit, which was inaugurated in January of this year. The facility also houses equipment that performs functions such threshing, grading, upgrading, drying and finishing—capabilities that help improve germination, stimulate healthy, consistent crop development and increase yield. The unit, which sits on an 82 ha farm housing greenhouses, laboratories and other key infrastructure, has an annual tobacco processing capacity of nearly 2 metric tons and the ability to pelletize more than 200,0000 cans of seed for sale each year.

    In addition to commissioning new equipment, the unit has been expanding its skills base, hiring agronomists, biologists and agricultural engineers, among other professionals. During the Brazilian crop’s peak period, the center employs approximately 100 people.

    The investments are part of AOI’s endeavor to strengthen its global function using existing capabilities. AOI has been a major supplier in Brazil’s tobacco seed market for years, selling not only to its contracted farmers but also to other leaf merchants. Roughly 40 percent of Brazil’s tobacco volume, or more than 100,000 hectares, are produced with AOI seeds, according to the company.

    Keen to share the “fruits” of the labor in Passo do Sobrado with its other origins, the seed industrialization unit now also services AOI operations outside Brazil. “Basically, we transformed a local research center into a global research center,” says Helio Moura, AOI’s vice president of global crop science and value chain. Already supplying AOI in Guatemala, Argentina, Turkiye and Thailand, the center is currently in the process of entering additional markets.

    According to Moura, the new unit provides the company with greater quality control and makes it possible for all activities to be governed by the company’s internal integrated quality management system. “Improved quality control opens doors to selling our seed in new markets at a faster speed, increases customer and farmer satisfaction, and drives efficiencies within our business,” he says.

    Those are important benefits because seed breeding is a finicky, labor-intensive and time-consuming business. For example, plants must be pollinated flower by flower—a delicate process that doesn’t lend itself to mechanization. Getting the necessary approvals and certifications requires time too. When you add up all the steps, creating a new variety can take up to 10 years.

    Moura likens the process to a funnel. “You have thousands of breeding lines, then we start selecting and narrowing it down until we are able to launch a better variety than we currently have,” he says, adding that there is always room for improvement. “The latest variety is not perfect, just superior to the previous one,” he observes.

    A single gram of material can contain a whopping 10,000 tobacco seeds. | Photos: Taco Tuinstra

    The seed industrialization unit breeds for characteristics such as quality, yields, disease resistance and tolerance for extreme weather conditions, an attribute that has become increasingly important in recent years, as was tragically demonstrated in early May when Santa Cruz do Sul suffered the worst flash floods in living memory.

    To ensure the required variation, the seed industrialization center houses a germplasm bank with thousands of “mothers” and “fathers” for burley, flue-cured and dark tobaccos, along with oriental styles. “We have access to more than 3,000 different tobacco varieties to cross and create new, unique strains,” says Moura. The resulting hybrids don’t produce seeds, which means they are impossible to replicate and thus guarantee return business for AOI. At least once every three years, seed samples in the germplasm bank are tested to make sure that they are germinating. That way, the company knows they will be available when it needs them.

    With the help of DNA markers, AOI’s scientists identify the desirable qualities. Advancements in biotechnology have made the work quicker, easier and more accurate. “Thirty years ago, there were only a few tools for making selections; nowadays, instead of looking for the phenotypes in the fields, we can look inside the plant and see the genes,” marvels plant breeding supervisor Elaine Batista. What’s more, the cost of equipment has decreased significantly, allowing biologists to make selections quicker, more accurately and with less effort.

    To ensure that the results of its research and development are rolled out correctly, AOI works closely with its contracted farmers. A new variety may deliver superior yields under controlled conditions, but if it’s improperly deployed in the field, the grower will not enjoy the full benefit. “So we spend much time training our growers on the correct way to work with the seeds,” says Moura.

    Aware of the importance of capturing and retaining knowledge within their organization, the scientists meticulously document their work. “For every project, we create a business case and a project brief. If someone asks about it 10 years from now, we can save time and money,” says Moura, who at previous employers faced many situations in which colleagues inquired about a past project only to be told that the results were no longer available, forcing the company to reinvent the wheel. And while it may be tempting to document only the projects that worked, the seed industrialization unit insists on documenting both its successes and failures. “We don’t have the time or money to spend on things that don’t add value,” says Moura.

    Even as demand for cigarettes stagnates and some nicotine users are switching to tobacco-free products, the work carried out at the seed industrialization unit is likely to remain relevant far into the future. As a respected flavorist pointed out during a recent Coresta meeting, consumers are able to tell the difference between nicotine created in a laboratory and nicotine derived from natural tobacco leaf. The depth of expertise and the sheer variety of genetic material housed in Passo do Sobrado will enable the unit to continue developing varieties that not only improve farmers’ operations but also meet and exceed consumers’ expectations for many years to come.

    Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.
  • Brand ‘Zambia’

    Brand ‘Zambia’

    Photo: Taco Tuinstra

    Operating in the shadow of its tobacco powerhouse neighbor, Zimbabwe, Zambia is trying to make a name for itself on the global market.

    By George Gay

    When researching leaf tobacco production in Zambia, it is almost de rigueur to seek an answer to the question of why the country grows a Virginia flue-cured crop only about one-eighth the size of that produced by its neighbor Zimbabwe. After all, Zimbabwe has a land mass only about 50 percent of that of Zambia, and the populations of the two countries are comparable.

    One of the answers normally given to this question is that tobacco has been prioritized in Zimbabwe because it is a hugely important contributor to the country’s GDP and foreign exchange earnings whereas it has been less important in Zambia, where mining plays a dominant role. Of course, this explanation seems to beg the question since both countries are rich in minerals and both have soils and climates ideal for growing tobacco, but that doesn’t mean the explanation is wrong. Presumably, sometime in the past, those who took control of the region of Africa now made up of Zambia and Zimbabwe decided, for whatever reasons, on where they should prioritize mining and agriculture, and those priorities remain in force today because change, even if desirable, is sometimes impossible or at least difficult to bring about.

    Decades ago, a tobacco grower of my acquaintance told me that Zambia struggled to attract international tobacco buyers who, after spending months in Zimbabwe each year, were reluctant to move on to Zambia to buy what was then a small crop, and without the prospect of a significant number of buyers showing up, there was no viable way of increasing the size of the crop and attracting more buyers …. If it wasn’t a catch-22 situation, it was close to it.

    Zambia produces about 30 million kg of flue-cured and 8 million kg of burley annually.

    Limits to Production

    Albert van Wyk

    Ironically, when significant change did come about in Zambia, it came in the form of a boost from Zimbabwe. Zambia’s current level of tobacco production can be traced back to the 2002–2003 season and the arrival of Zimbabwean growers whose land had been taken from them under compulsory acquisition policies brought in from 2000 under former President Robert Mugabe’s land redistribution policies. From that point on, apart from a hiccup that occurred about 10 years ago, production increased steadily.

    And contrary to the impression that might have been given above, tobacco comprises an important business in Zambia, which produces flavorful flue-cured and burley between September and April in its southern, eastern and central provinces, about 70 percent of it rain-fed and 30 percent under irrigation. It is clearly important in rural areas and, also, less obviously, in urban areas, in part because it helps to reduce population drift to the cities. Tobacco is produced by about 24,000 growers, and about 270,000 people depend on its production for their livelihoods. Most of its leaf is processed locally by Tombwe Processing and exported, mainly to China and Japan, for use in cigarette manufacture, earning much-needed foreign exchange.

    But having made the case for the importance of tobacco, it must be said that unless something unexpected occurs, it is unlikely that Zambia will in the future significantly increase the size of its tobacco crops from their current annual levels of about 30 million kg of flue-cured and 8 million kg of Burley. And here, at least, the reasons are not difficult to discern.

    Albert van Wyk, a Zambian tobacco grower for 40 years and the general manager of the Tobacco Association of Zambia (TAZ), told me during a telephone conversation in April that “compliance,” specifically its environmental aspects, limited the amount by which the tobacco crop could be expanded. To comply with buyer and manufacturer requirements, it was necessary for growers to maintain sustainable woodlots to produce the fuel they needed for curing, and these currently could only just keep abreast of current production; they could not be expanded easily and quickly to allow for a major increase in production. The only other option would be to move to using coal for curing additional flue-cured, but coal, which is produced in Zambia, raises its own environmental concerns, is relatively expensive, and its use might be phased out soon.

    The TAZ clearly takes seriously issues of compliance, which go far beyond the maintenance of woodlots, and van Wyk told me that the industry, which is fully private, liked to think of itself as self-regulating within the laws of the land. Currently, it was trying to establish “Brand Zambia” in the market, something that would put it ahead of Malawi and Zimbabwe. In fact, not only is tobacco production self-regulating in Zambia, but it is also self-propagating. Perhaps reflecting the relatively lowly status of tobacco growing in the country, there is no facility to train growers, so it keeps going on an informal apprenticeship scheme whereby established growers teach and mentor younger growers, as well as farm hands, who need to be skilled.

    Tobacco cultivation is clearly important in rural areas and, also, less obviously, in urban areas, in part because it helps to reduce population drift to the cities.

    Compliance

    So far, in talking about why it is unlikely that production will increase significantly in Zambia, I have ignored the elephants in the room—grower tobacco prices, efficiencies and profitability, which these days are connected to “compliance” because compliance, in all its guises, doesn’t come cheaply. Generally, prices on Zambia’s tobacco market, which runs from April to August and which are based on contracts, are not at a level to inspire major production increases.

    Having said that, this year’s crops are of good quality and are short in a year when all the major flue-cured and burley producer countries have come up with smaller-than-expected quantities of these types, so prices are likely to be better. In fact, van Wyk, who was in the process of selling his tobacco when I spoke with him, said that Zambia’s growers were expecting increases of $0.40 per kilogram and hoping for $0.80 per kilogram. “In a year of a shortage, I think things have to shift,” he said. “If they aren’t going to shift now, when will they shift?”

    Nevertheless, van Wyk is nothing if not practical, and he acknowledges that even though prices might not be as high as growers would like them to be, tobacco is still a better value crop than others. Tobacco, he said, would pay a grower’s medical bills and school fees and on a community-wide basis allow the building of schools and other social facilities. And in this sense, he is politely dismissive of the representatives of nongovernmental organizations who show up from time to time promoting moves away from tobacco and into other crops and business activities. And it is not hard to see his point. Tobacco growers such as van Wyk didn’t come down with the last shower of rain; they have been around for a long time. During their careers, they, like the rest of us, will have been looking for ways to make more money by doing less. They will have been down these other avenues, so the fact that they are still in tobacco tells its own story.

    Sealed Systems

    Van Wyk is politely dismissive, too, of the sorts of generational smoking bans being debated in the U.K. and discussed elsewhere. He sees such bans as playing a part in shifting the tobacco business from what he calls the honest trade to the dishonest trade. Again, it is easy to see his point and, indeed, wonder whether the problem doesn’t run deeper than he suggested. Is this just a demand issue or a supply issue also? Is the line in the sand between the honest and the dishonest trade maintained even if noncompliant tobacco is available in a year such as this, when there is a shortage of the main cigarette tobacco types? Is there no crossover? It seems difficult to imagine that there are two sealed systems working alongside each other—one involving sustainably grown compliant tobacco sold through proper channels and used in licit manufacture and the other comprising noncompliant tobacco grown unsustainably, sold through opaque channels and winding up with illicit manufacturers.

    The reason why this question must be asked goes back to the fact that Zambian growers are hoping for good prices this year but are not sure of them. Why not? If the two closed systems described above were in operation, prices would be bound to rise in a year of shortage, especially since licit manufacturers do not keep stocks as big as once was the case. The fact that higher prices are not guaranteed seems to suggest that there is some crossover—that noncompliant tobacco enters the mainstream, something that would clearly put downward pressure on prices—as well as call into question the very idea of compliance, sustainability and traceability.

    Of course, the above comprises just hypothetical questions, but it is worth giving some thought to them because there is another reason why the trade in noncompliant leaf might be more invasive than otherwise imagined—the permeability of some borders. Recently, people in the U.K. and some other countries have had to consider more closely than in the past the legacies left behind by colonialism. As you would expect, the reactions to such reflections have varied, at least in the U.K., but only the willfully obdurate cling to the claim that there have been no negative outcomes. Some of these outcomes are now widely discussed, though, often, the underlying reasons for them are not: for instance, the “creation” of African nations by the drawing by non-Indigenous people of boundaries seemingly heedless of the historical understandings and sensitivities of the way in which Indigenous people ordered their lives. And, certainly, this seems to be the case with Zambia, which has borders with eight countries, including Malawi, Tanzania and Zimbabwe. Given the circumstances under which these borders were decided upon, I would be reluctant to use the word “smuggling” when talking about some of the cross-border movement of leaf tobacco; perhaps “osmosis” would be a better word.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • Bhutan’s Tryst with Health Imperialism

    Bhutan’s Tryst with Health Imperialism

    The author standing with a local in front of a pharmacy stocking NRT gums adjacent to a grocery shop officially selling tobacco. (Photo courtesy of Sudhanshu Patwardhan)

    Without offering locally relevant cessation tools, prohibition is doomed to fail.

    By Sudhanshu Patwardhan

    Bhutan, a country that measures its riches in terms of “gross national happiness,” may have become an unsuspecting victim of a new form of imperialism: health imperialism. A blind copy-paste of Western tobacco control policies, worsened by local gold-plating, may have landed Bhutan in a mess. A visit to the landlocked nation gave the author a unique insight into how prohibition of tobacco without offering locally relevant and innovative tobacco cessation tools threaten this Shangri-la.

    The Forbidden Kingdom

    A series of district-wide tobacco control measures in Bhutan from the 1980s culminated in the declaration of a nationwide ban on the sale of tobacco products in 2004 through a resolution of the National Assembly. Overnight, Bhutan became a poster child of global tobacco control, an emerging David against the Goliath of transnational tobacco companies. Nanny statists got a lifeline, and the “p” word—prohibition—was resurrected after successive failures of over 150 years in alcohol and drug prohibition movements. The Tobacco Control Act of 2010 further enshrined into law restricted access, availability and appeal of tobacco products and gave sweeping powers for arresting those selling or even possessing tax-unpaid tobacco for personal consumption. Bhutan was all set to become a tobacco-free society. A happy nation was also going to become healthier. In theory.

    Market Forces Take Over

    The roller-coaster ride between 2010 and 2019 is captured in the World Health Organization’s regional office’s 2019 publication The Big Ban: Bhutan’s journey toward a tobacco-free society. A big achievement in this period was visible reduction in public place smoking. Otherwise, the optimistic title belies the details of the failed ban confessed in the publication. It is a classic tale of good intentions scuppered by poor execution. A highlight of the data reported there is the difficulty in enforcing the ban, evidenced by availability of tobacco products below the counter in most shops in Bhutan. Tobacco use among 13-year-olds to 15-year-olds went up from 24 percent in 2006 to 30 percent in 2013 based on the Global Youth Tobacco Survey findings. The severe penalties required by the initial law resulted in more than 80 people being imprisoned between 2010 and 2013. There was growing discontent about the disproportionality of the penalties among the people of a nation gradually moving from a benevolent absolute monarchy to a democratic constitutional monarchy. Public furor and rethinking among the lawmakers resulted in amendments and milder punishments, and the law’s “claws (were) trimmed,” states the WHO report. Between 2010 and 2014, permissible quantity for personal possession was steadily increased for both smoked and smokeless tobacco products. The ban and its enforcement were proving ineffective and untenable. And then Covid-19 happened.

    Reversal of a Failed Ban

    The government was obviously losing revenue due to the flourishing black market of smoked and smokeless tobacco products smuggled from India and elsewhere. The fear of tobacco smugglers bringing in the Covid-19 virus was enough excuse to act decisively. In July 2021, the government amended the 2010 Act, thus lifting a decade long ban on local tobacco sales.

    The pragmatism of the politicians who reversed the ban presents a sharp contrast to the previous prohibitionist policy. Today, sales and consumption continue, and based on the most recent (2019) WHO STEPwise approach to surveillance (STEPS) data, 24 percent of those between ages 15 and 60 currently use tobacco products. Sadly, the ban did not make Bhutan a tobacco-free society. Anecdotally, e-cigarettes are also available now in some grocery stores in the capital, Thimphu, and attracting use among smokers and never-smokers. These are not regulated nor used as smoking cessation tools, presenting another area of concern for public health. A ban may not be the answer for these products either. Regulation that balances current smokers’ needs for safer alternatives versus prevention of uptake by the youth and nonsmokers will be key.

    Peering Through an ‘Addiction’ Lens

    I first read about the ban’s overall failure in the 2019 WHO report and then heard about the reversal of the ban during the global Covid-19 pandemic. How did Bhutan land in this situation? There is, of course, economics at play: demand, supply and something to do with a genie being out of the bottle. When I put my doctor’s hat on, a key explanation stares at me: lack of quitting support for the existing 120,000 tobacco users. Reams of self-congratulatory publications and numerous WHO awards to Bhutan since the 1990s have focused on success in awareness-building and restricting access and use. The famous case of the Buddhist monk who was jailed for three years in 2011 for the possession of $2.54 worth of tax-unpaid tobacco misses the point that he was very likely addicted to tobacco and may have needed more than punishment to quit. In the absence of availability of tobacco products, it should have been a human right for him to have access to safer nicotine to manage nicotine withdrawals and achieve craving relief. This assessment should not be used to vilify tobacco users. Instead, it should be a reminder to those in tobacco control that preaching to nicotine-dependent users without offering alternatives is not enough and also unethical. A key demand-side reduction measure, to use Framework Convention on Tobacco Control (FCTC) vocabulary, is that of providing tobacco dependence treatment and services. This is covered under FCTC Article 14 but rarely implemented in low-income and middle-income countries (LMICs), Bhutan included. I saw firsthand recently the country’s struggles with rising tobacco use coupled with a lack of cessation products and services.

    Tobacco Cessation: The Poor, High-Maintenance Cousin

    In Bhutan, like in most LMICs, overall tobacco control is run by public health experts, and tobacco cessation specifically (and separately) falls under the remit of psychiatrists. Neither groups are excited by tobacco cessation for a variety of reasons. Public health professionals often have little or no experience in treating individual patients and have increasingly been sold a unidimensional narrative that the tobacco epidemic is singularly driven by the commercial vested interests of tobacco companies (the “vector”). For them, the tobacco user is a victim of the tobacco industry, should be labeled an addict and then preached at to quit. Psychiatrists, on the other hand, are generally geared toward treating established mental health conditions and severe mental illnesses and even within the “de-addiction” field prioritize substance abuse treatment and alcohol de-addiction over tobacco cessation. Tobacco cessation with nicotine-replacement therapy and other pharmacological interventions are costly and need a level of training and qualification to prescribe—and are therefore cost-prohibitive to be offered at scale. They are also not without their failures, give around 20 percent quit rates at one year in controlled clinical studies and much less success in real-world settings. The success of quitting cold turkey is overrated and often drives policymakers’ wrong beliefs and attitudes about the ease of quitting. Public health tobacco control awareness campaigns and advocacy, on the other hand, are highly visible, scalable, inherently worthy endeavors, and most do not require impact assessment as proof of success. The FCTC’s Article 14 thus remains a neglected tool for reducing harms from tobacco globally and receives little or no funding from international donors and national governments nor any interest from pharmaceutical companies or tobacco companies to innovate in.

    Safer Nicotine Not Widely Available in Bhutan

    Nicotine illiteracy among healthcare professionals and lack of availability of safer nicotine alternatives can translate into poor quitting among tobacco user patients. From my field visits to pharmacies and discussions with frontline healthcare professionals in Bhutan, I noted that 2 mg and 4 mg nicotine gums have only recently become available in some pharmacies in Thimphu, but patches are not stocked. Patients come and buy these over the counter, but there is little record of how long they take it for, their quit and relapse rates and whether their doctors support them in their quit journeys. Varenicline or bupropion are not available for cessation. When called, the “national quitline,” contrary to the claim of the 2019 and 2024 WHO publications, do not deal with tobacco cessation support. Most of the healthcare professionals in Bhutan receive their undergraduate and graduate training in India, Sri Lanka and other nearby Asian countries. Similar to the rest of the world, doctors in Bhutan are not confident about prescribing nicotine-replacement therapy and may harbor misperceptions about nicotine itself. They have not received any tobacco cessation-related training in the past five years, and nicotine-replacement therapy is not available for free or at subsidized prices anymore, unlike other medications in Bhutan.

    Navel-Gazing Time for All?

    The backpedaling by Bhutan on the tobacco ban has not been reported or analyzed widely enough. Bhutan’s failure to rein in tobacco sales and increased use, despite a ban, should be a wake-up call for all parties involved. What was touted as a role model for other countries for eliminating harms from tobacco has instead become a cautionary tale for poor policymaking done to pander to international funders and organizations. The undue influence of a select few Western nations in national health policymaking for LMICs is also a matter of concern as the global geopolitical order rapidly morphs. Projects such as FCTC 2030, funded by the U.K., Norway and Australia, continue to churn out reports such as the Investment Case for Tobacco Control in Bhutan (WHO/UNDP, February 2024), ignoring lessons from the ban, mostly unaware of capacity issues on the ground and not addressing the need of current tobacco users for safer nicotine alternatives. Emergent strong economies such as China and India will no longer tolerate meddling by past colonial powers and imperialist nations in their health policies, but neither should other LMICs.

    Toward Gross National Health

    For a nation of around 750,000 people, tobacco use is claimed to kill between 200 people and 400 people every year—all preventable deaths (side note: the data for the same year varies dramatically between two WHO reports). Global tobacco control has failed Bhutanese tobacco users and their families. For a nation built on principles of sustainability, risky forms of smoked and smokeless tobacco products have no place in society. The mountains, the clean air, the happy smiles and peace-loving people of Bhutan deserve to own tobacco control initiatives, not be made to adopt hand-me-down Western ideologies or policies. That will require the doctors and pharmacists in Bhutan to understand the science of tobacco cessation and harm reduction and make quitting sexy. Availability of nicotine-replacement therapy products, innovation in safer nicotine alternatives and improved cessation services will need to be ensured and incentivized by the government. That has the potential to keep their nation happier and healthier for the coming generations.

    Disclaimer: The author’s work here or elsewhere is dedicated to using ethical and scientific evidence-based approaches to eliminate harms from all risky forms of smoked and smokeless tobacco products. The article is based on the author’s personal conversations with experts and lay people in Bhutan and from shop visits and an analysis of two of the most recent WHO reports on this topic. The intent of this article is to shine a light on a vulnerable LMIC’s experience with unchecked health imperialism to create insight and debate on the impact and implications of such practices. The author holds utmost respect for the nation, the policymakers and the people of Bhutan.

    Sudhanshu Patwardhan is a medical doctor, nicotine expert and health tech entrepreneur from India, based in the U.K. He works on projects around the world to reduce harm from tobacco, especially among the most disadvantaged tobacco user populations.
  • Heated Breakthrough

    Heated Breakthrough

    Greentank is at the forefront of innovation with the launch of its patented Heating Chip technology.

    By Timothy S. Donahue

    The vaping industry is in a constant state of innovation, primarily driven by advancements in hardware. A significant focus has been on enhancing battery quality as well as the electronics and circuitry within vaping systems. Notably, there have been substantial advancements in atomization technology. This includes the development from traditional wire coils and wicks to a more progressive adoption of ceramic materials.

    Atomization technology is crucial because the heating element functions as the core of a vaping system. The coil’s role in atomizing e-liquid is pivotal; the more efficient the element, the better the aerosol production, consistency and flavor. Recently, a leading technology company announced its breakthrough in heating technology, set to revolutionize the market.

    It has been seven years since a significant advance has been made in atomization technology. Enter Greentank: a company with a wholly new design representing a dramatic step-change from the conventional ceramic and wicked coil systems prevalent in many of today’s vaping products, promising enhanced safety, performance and experience.

    Greentank is a business-to-business technology company that specializes in the design, development and manufacturing of precision-made inhalation devices and atomization technology, according to CEO Dustin Koffler. Greentank’s latest innovation in atomization is called Quantum Vape. It replaces cotton wick and ceramic heating elements with a state-of-the-art patented Heating Chip.

    According to Koffler, the Heating Chip outperforms all other leading atomization products. For example, the Heating Chip performs better on key safety metrics such as harmful and potentially harmful constituents (HPHCs) and heavy metal testing than other leading technologies in the market. It also produces the “absolute greatest” release of flavor and the most consistent consumer experience from the first draw to the last, he says.

    “With this breakthrough in inhalation science, we’ve catapulted beyond the current generation of atomization technology,” said Koffler. “Our Heating Chip is set to disrupt the global market. It’s a distinct departure from anything currently available. While many companies focus merely on tweaking the substrates and print materials used in ceramic-based systems, they remain bound to the same ceramic foundation.

    “They’re refining ceramics—making components slightly smaller, slightly tighter, experimenting with new materials and formulations. Greentank, however, is pioneering an entirely novel approach that’s unlike anything witnessed in the industry before.”

    The Heating Chip is small. It comfortably fits on a fingertip and is one-fifth the size of today’s heating solutions. However, Koffler said its high-performance standards are due to advances that have never been achieved before with atomization. Typically, in a ceramic heating element, over time, flavor starts to dissipate naturally. This is because there is caking or buildup inside the pores of the ceramic, causing the temperature throughout the ceramic to vary after each use, leading to thermal cycling. With the Heating Chip, there is zero potential for thermal cycling, according to Greentank; every puff tastes the same as the first.

    “The Heating Chip employs a unique capillary action to draw the oil through the heating element, ensuring that each puff initiates a fresh cycle of material,” explained Koffler. “Many products boast consistent flavor throughout use, yet we’re all aware that the current market offerings fall short in maintaining this throughout the life of the product. In contrast, the Heating Chip integrates nanofabrication into its design.

    “The entire manufacturing process is proprietary, involving novel methods to assemble materials into the Heating Chip that emits no ceramic particle emissions and contains the lowest levels of harmful and potentially harmful constituents. While it’s not feasible to claim complete absence, third-party testing and rigorous chemical analysis have found these HPHCs to be at undetectable levels.”

    Additionally, Greentank only recently completed a longevity study using the Heating Chip in one of the company’s proprietary electronic nicotine-delivery system devices with a target of 15,000 puffs. “We easily achieved this target while demonstrating consistent vapor output from the first puff to the 15,000th puff,” explained Koffler. “Furthermore, we provided these same devices, along with new ones, to Labstat International to conduct aerosol analysis for both carbonyls and metals. The results showed that there was no difference in the safety efficacy from the first puff to the 15,000th puff.”

    Technically Speaking

    To a scientist, it’s a micro channel-based aerosol generator that delivers sub-micron particles according to its proprietary design. To the average consumer, it’s a smoother experience with maximum flavor intensity in a less-risky delivery than currently marketed e-cigarette and cannabis vape products. The Heating Chip isn’t anything like ceramics, said Koffler. Porosity isn’t inconsistent. It’s a chip with thousands of small holes and microchannels that allow for a superior level of precision and control in the atomizing process.

    One of the major challenges in designing the Heating Chip was finding the right talent to help develop the manufacturing process, said Koffler. The manufacturing of the Heating Chip requires specialized equipment, and bringing together a system that worked was incredibly complicated. The manufacturing of the Heating Chip can be compared to producing semiconductors.

    “By adapting pioneering techniques from other advanced industries and tailoring them to meet our specific requirements, we’ve enhanced our technology’s performance,” Koffler revealed. “The expertise of our global team, the precision of the equipment we utilize and our methodical focus on perfecting one aspect of the process at a time has been instrumental in overcoming the challenges we faced.”

    The next generation of atomization technology is moving away from ceramics, according to Koffler. The Heating Chip technology avoids all heavy metal leaching and ceramic particle emissions and ensures the lowest HPHCs all while permitting an unprecedented taste and consistency over a longer lifetime.

    It also offers a smoother experience and better mouth dispersion. Interestingly, the device is also able to create particulate matter small enough to reach lower lung absorption levels for nicotine, much like combustible cigarettes. This could be a giant innovation in getting smokers to adapt to less risky nicotine-delivery systems.

    “Utilizing microfluidic channel technology, we’ve engineered a system that precisely controls aerosol nucleation and optimizes particle size, enriching the sensory experience while maximizing intensity without any harshness,” Koffler detailed. “Our design includes independently arranged channels and a thin film interface that safeguards against chemical reactions and thermal decomposition. This architecture not only enhances flavor fidelity and ensures consistent temperature but also elevates safety standards and reduces potential harm significantly. From the outset, our goal was to achieve unparalleled performance and safety.”

    The size of the Heating Chip is incredible. It’s tiny. It’s one-fifth the size and 100 times the precision of any ceramic atomizer on the market today, according to Koffler. Its reduced size creates greater design flexibility and quicker response times. The Heating Chip is produced on sophisticated micro- electromechanical systems (MEMS) machinery. MEMS is a general term for forming a micron-level three-dimensional structure on a support substrate such as a silicon wafer and integrating functions such as electronic circuits, sensors and actuators.

    “Unlike the broad, imprecise methods typical of ceramic manufacturing, our approach from start to finish is meticulously controlled and exact,” explained Koffler. “This precision is why developing the right equipment for producing the Heating Chip was an extensive process. The level of control we achieve with the MEMS technology not only enhances consistency but also opens up revolutionary possibilities in precise dosing for pharmaceutical applications. This capability to finely tune dosages is a game changer in both vaping and medical fields.”

    Future Markets

    Based in Toronto, Canada, Greentank doesn’t produce nicotine. It doesn’t manufacture e-liquids or cannabis products. At its core, Greentank is a technology and product development company with a focus on safety, performance and reliability. The Heating Chip is not made from ceramics. While the material is proprietary, Koffler insists the technology is something new and its application in inhalation products is only scratching the surface of its potential. It is designed specifically for multiple verticals, predominantly electronic nicotine-delivery systems but also pharmaceuticals and wellness products.

    “We have expanded to over 100 employees across Canada, the U.S., the U.K., Singapore and China, with the majority focused on research and development,” Koffler detailed. “We’ve assembled a highly skilled manufacturing team to produce our innovative chip and have strengthened our engineering and material science capabilities. Last summer, we acquired Numerical Design, a company specializing in microfluidics and microfabrication, boasting an extensive portfolio of patents that further strengthen our intellectual property. This strategic expansion underscores our commitment to leading the edge in technology and manufacturing excellence.”

    Greentank spent over three years developing and testing the technology surrounding the Heating Chip and its manufacturing process. Additionally, it has been created with a robust intellectual property portfolio involving more than 50 patent families to bring forward a variety of advancements. The company’s technology is manufactured in ISO-certified labs, and all products undergo third-party testing.

    The technology is completely different from what exists in today’s inhalation devices. It gives Greentank the flexibility to be adopted into various inputs and varying viscosities. For example, it works well with both low-viscosity water-based e-liquids and high-viscosity resin oils from cannabis materials.

    In March of 2023, Greentank announced that it successfully closed a $16.5 million Series B financing round led by a strategic investor group with more than 15 years of manufacturing experience. The total investment in Greentank to date is now reported at $38.5 million.

    “Our Series B funding was a strategic move to elevate our operations from industrial prowess to global commercialization,” said Koffler. “We’ve established a 20,000-square-foot cutting-edge R&D and manufacturing facility, a project that spanned 18 months to build and equip with the most advanced technology needed to scale our Heating Chip.

    “This facility not only pushes the limits of what’s possible with specialized equipment and expertise but is also designed with flexibility in mind. Our vision was to create a model that can be replicated anywhere in the world, preparing us to expand into any other market as we continue to grow our business.”

    The expansion of the business is about phases, and Koffler said that during the next phase, whether that be the medical or wellness industry, Greentank needs to be able to produce chips to meet global demand with scale in mind. Koffler said this means that the company will look to leverage automation.

    Koffler emphasized that the real measure of Greentank’s success will be seen as the next generation of inhalation devices hits the market. He highlighted that numerous devices are on the cusp of being launched, with the Heating Chip poised to redefine industry benchmarks for safety and efficiency. Currently, Greentank is aiming to influence tobacco harm reduction significantly.

    “At Greentank, our commitment extends beyond mere compliance with regulatory standards; we are dedicated to establishing new paradigms of transparency and consumer safety,” said Koffler. “We are not just participating in the market—we are leading it toward a safer and better future.”

    Timothy Donahue is the assistant editor of Tobacco Reporter. Since joining our team in January 2013, he has become not only an expert on the traditional tobacco business but also a well-respected voice in the rapidly developing vapor industry. Tim spends much of his time on the road, attending conferences and interviewing industry representatives. His networking skills, work ethic and quick mind are valuable assets to our diverse audience.
  • Revenant Rule

    Revenant Rule

    Image: MarijaBazarova

    Canada’s new health minister is breathing new life into a 2021 proposal to ban vape flavors nationwide.

    By Stefanie Rossel

    Thomas Kirsop

    There’s life in the old dog yet: In March 2024, Canada relaunched a three-year-old plan to ban all vape flavors except tobacco, mint and menthol. The regulations were first published in June 2021 in the Canada Gazette, signaling the government’s intention to implement the flavor ban within six months after the obligatory public consultation. But the rule that was supposed to launch in January 2022 never came, and Canada’s health authorities never mentioned the flavor ban again—until Health Minister Mark Holland, in office since July last year, recently revived the idea.

    Outrage about the proposed ban among vapers, consumer advocacy groups and the vape industry was as huge in 2021 as it is now: Canada’s planned rule goes further than most flavor bans, which tend to prohibit only certain “characterizing flavors” or flavor descriptors. Under the Canadian proposal, all sweeteners in vaping products would be prohibited, and vape manufacturers would be allowed to create their liquids using only approved ingredients.

    They would have to select from a list of 82 approved compounds, 40 of which can be used to impart a tobacco flavor and 42 of which can be used to impart flavor of mint, menthol or a combination of the two. “Menthol tobacco” or a “mint tobacco” are off limits under the rules.

    “Should the flavor ban be adopted as it was written in 2021, Canadian users of vaping products will see the removal of nearly all existing flavor profiles in the legitimate vaping products market within 180 days of publication of the proposed order and regulation from 2021,” says Thomas Kirsop, managing director of Canada’s Vaping Industry Trade Association (VITA).

    “The only two products on the market that would not require removal or reformulation would be ‘unflavored’ liquids and unadulterated ‘menthol.’ All existing ‘tobacco’-flavored vaping products would need to be removed from the market, reformulated to remove sweeteners and flavoring compounds not on the permitted constituents list and then reintroduced to the Canadian market.”

    The proposed rule would also prescribe “sensory attributes standards,” which are defined only vaguely, stipulating, for example, that a vaping product or its emissions should not have “sensory attributes that result in a sensory perception other than one that is typical of tobacco or mint/menthol,” thus limiting manufacturers’ ability to make vape products that have “a highly pleasant smell or taste.”

    “Sensory attributes regulations are referenced over 40 times in the proposal, but there is no specific section explaining how these regulations would be drafted, implemented or enforced in a clear manner,” says Kirsop. The VITA interprets this part of the planned regulation as meaning that manufacturers can make their liquids using the 82 permitted compounds, and at some time in the future, the government will pay a third party to smell, taste and possibly vape this product. “If that third party thinks that the liquid does not align with the permitted flavor profiles or is ‘too palatable,’ then that formulation will be prohibited regardless of its adherence to all the objective standards in legislation,” says Kirsop.

    Relapse to Combustibles Expected

    The impact of such a regulation on Canada’s 1.5 million vapers would be dramatic, according to Kirsop. His organization anticipates a major relapse to combustible cigarettes among consumers. “The number of cigarettes consumed per capita will increase,” he says. “It is well understood that vaping products and combustible products are economic substitutes in the nicotine market. A regulatory impact on one will result in an inverse reaction of the other.”

    Kirsop refers to a 2023 study by Abigail Friedman that investigated the effects of e-cigarette flavor restrictions on tobacco product sales in the U.S. and found that while the flavor restriction did impact vaping rates in the manner intended, the impact on legitimate cigarette sales was substantial, with 12 extra cigarettes sold in the legitimate market for every 0.7 mL pod not sold due to a flavor ban. The VITA has similarly calculated that a nationwide flavor ban in Canada would result in additional cigarette sales of almost 4 billion sticks per year.

    For the country’s independent vape manufacturers and estimated 1,800 specialty vaping product shops, such a measure would have a significant, possibly existential, impact, according to Kirsop. “It is the variety of flavored vaping products that make a specialty store economically viable,” he says. The illicit market, by contrast, would receive a boost, especially if the flavor ban comes on top of the 12 percent federal vape product tax hike planned for July.

    “From any historical reference point, the removal of a product with significant consumer demand from the legitimate market will result in that demand being met by the illicit market,” says Kirsop. “Our investigations lead us to believe that the black market will expand quite rapidly to fill the void. Our only question is whether that illicit trade will favor small players, producing flavored liquids in garages and basements, if it will follow the Australian model, with organized crime groups importing flavored disposable vaping products from overseas, or if it will be some hybrid combination of both.”

    There are plenty of cautionary examples close to home. Six of Canada’s 13 provinces and territories have already restricted the sales of e-cigarettes to tobacco-flavored varieties. “In Nova Scotia, over 40 percent of specialty vape stores closed immediately following the flavor ban, and when VITA commissioned an investigations company to survey the market, we found significant illicit trade and a consumer outlook that supported that illicit trade,” says Kirsop. “News reports showed that in the year after the flavor ban, tobacco excise collection increased 13.6 percent. We also identified that consumers are starting to adapt by adding their own third-party commercial flavoring products to vaping liquids.”

    Goal Missed

    Maria Papaioannoy

    Kirsop says it’s too early to determine the impact of flavor bans on youth usage. However, the VITA has found no data that differentiate Nova Scotia, which was the first province to ban flavored vaping products, from provinces that kept them on the market or banned them at a later date. “Nova Scotia shows youth past-30-day vaping behavior has dropped from 25.1 percent to 23 percent since their flavor ban,” says Kirsop. “However, all provinces except Quebec saw youth vaping rates drop in the same category during that time frame, and some of them did significantly better. Alberta saw youth use drop from 19.9 [percent] to 14.8 percent, British Columbia 27.6 [percent] to 16 percent, Manitoba 21.5 [percent] to 16.7 percent and Saskatchewan 29.6 [percent] to 23.7 percent. All the latter have no bans on flavors.”

    So, while the intended impact on adolescents remains questionable, the effect on adults would be devastating, according to Maria Papaioannoy of Rights4Vapers. “Flavors are a critical part of what makes vaping such an effective alternative to cigarettes,” she wrote in a letter to Prime Minister Justin Trudeau. “If a person who smokes decides to move to vaping, they do not want to be reminded of the taste of tobacco.” A ban on flavors as proposed, she argues, would mean a prohibition of the entire category through the back door. “Who would pay for an unpalatable product?”

    In 2021, Rights4Vapers started a letter-writing campaign, resulting in more than 20,000 Canadians submitting arguments to Health Canada against the proposed regulation. Papaioannoy has organized a similar campaign now. To date, the government has received more than 27,000 letters from adult consumers raising concerns over this ban. In mid-March, Papaioannoy spoke at Health Canada’s stakeholder meeting but left disillusioned. “Consumers had a huge voice in vaping regulation with previous health ministers,” she says. “In this call, all I felt from Health Canada representatives was sympathy, not compassion.”

    Like many, Papaioannoy believes that the proposed flavor prohibition is not so much an action of bureaucracy but a mandate being driven by Holland, who formerly worked for the nongovernmental organization Heart and Stroke, a known opponent of vaping.

    Both tobacco harm reduction activists hope that as lawmakers debate the measure, reason will prevail. “The wild card is the minister of health,” says Kirsop. “Generally, one would think that policy decisions that could impact millions of Canadian smokers and 1.5 million adult Canadian users of vaping products would be based on scientific data and academic literature and not driven by emotional talking points and flag waving.

    “This minister has demonstrated that he has no grounding in literature or the science, and it does not appear at this point that he cares much for it if it does not align with his ideology or that of his former peer group. Ideology forms a very poor starting point for public health decisions.”

    Papaioannoy is more optimistic, noting that the proposal still has to go through the Treasury Board of Canada, with the time frame between proposing and enacting being long and opposition strong against a measure that would affect small businesses. “Besides, I believe in the institution,” she says. “Someone from the government will raise the flag.”

    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.
  • A Spark in the Dark

    A Spark in the Dark

    Photos courtesy of Mathijs Aliet

    Not all is lost for brand owners operating in dark markets.

    By Stefanie Rossel

    In February, the Canadian Cancer Society released a report detailing the global progress on tobacco health warnings and plain packaging, which requires cigarette manufacturers to market their products in uniform, unattractively colored packs without brand imagery and print their brand names in generic fonts.

    To date, 25 countries or territories have adopted standard packaging, the most recent ones being Myanmar, Oman and Georgia. A further 14 countries are preparing legislation, and three more have it “in practice,” meaning that they import cigarettes from a country with plain packaging requirements, as happens, for example, in Monaco, which buys its cigarettes from France. In addition, the report notes, the graphic health warnings mandated by some governments are so large that they resemble plain packaging. In nine countries, graphic health warnings account for at least 85 percent of the front and back side of the pack.

    Recommended in the guidelines for implementation of Article 11of the World Health Organization Framework Convention on Tobacco Control (FCTC), standardized packaging is viewed by its supporters as an efficient means to reduce the appeal of tobacco products and increase the effectiveness of health warnings. By removing the visual cues that prompt existing users to purchase the product and by preventing new customers from developing brand loyalty, proponents argue, plain packaging ultimately leads to better public health.

    Plain packaging is also a comparatively inexpensive intervention that can be implemented more easily than other FCTC measures, such as establishing a national tobacco cessation system. But despite abundant research since standardized packaging made its global debut in Australia in December 2012, there is still no reliable evidence that the measure achieves its objectives, as studies remain inconclusive or even contradictory. Opponents claim that the removal of branding has merely led to commoditization, causing well-established brands to lose market share to cheaper alternatives.

    The Power of Word of Mouth

    Mathijs Aliet

    For tobacco companies, marketing products in such “dark” markets is a challenge, even more so because most of the countries that require plain packaging also ban tobacco advertising and product displays at the point of sale (POS).

    A 2023 report by the U.S. Federal Trade Commission underlines the importance of the POS for the industry. In 2022, U.S. tobacco manufacturers spent more than $8.3 billion promoting cigarettes and smokeless tobacco at the POS, accounting for over 97 percent of their total marketing expenditure for those product categories.

    Yet, despite the loss of conventional marketing instruments, dark markets are not lost for brand owners, according to Mathijs Aliet, founder of Square44, a brand design agency based in Bangkok. “Consumers decide if they want a product or not,” he says. “There are still needs that are fulfilled, and word of mouth is a big thing. Regulations will not stop people from talking to each other, comparing experiences and making recommendations.”

    Consumers also play an essential role during the launch of new brands in dark markets, when there is zero association in the buyer’s mind. “In markets that are extremely dark, it’s often people watching people that triggers new trends,” Aliet explains. “People that meet friends that have a new product are seen as trendsetters—this is something that is hard to stop.”

    Square44 operates in 20 different markets across Asia, the Middle East and North Africa and has worked for tobacco companies such as Philip Morris International, BAT and Japan Tobacco International. Due to the widespread restrictions on cigarette branding, however, tobacco jobs are “rare and few,” according to Aliet. In dark markets, Square44 has profound experience working for manufacturers of alcoholic beverages in Thailand, Myanmar, Nepal and Indonesia.

    “Many markets have individual rules, and most face dark market challenges in various degrees,” says Aliet. “Brand support extends into different spaces—the smoke zones at airports, brand environment design, creating bespoke structural solutions or working on new product development concepts for test are areas where we support tobacco clients. Building connections to the trade or retail channels as well is an opportunity where still quite a bit of activity takes place, such as dealer events, partner get-togethers, etc. This is an example of spending the marketing budget in dark markets in the right way with entertaining, training and incentives to make them sell your brands.”

    Generally, Aliet advises his clients to be proactive. Manufacturers who anticipate change can build a loyal following for their brands before any restrictions take effect.

    Plain packaging is a comparatively inexpensive intervention—for governments anyway—that can be implemented more easily than other FCTC measures.

    Innovation Is Key

    Another strategy to sustain brand awareness is developing surrogate brands in an unrelated, nonrestricted category, according to Square44. “Back in the days in Europe, the Camel brand invented outdoor clothing to keep their brand alive beyond cigarettes,” says Aliet. “This was at that point a clever way out. The brands that survive are the ones that pay extra attention to channels or touchpoints where they are still allowed to connect.”

    Surrogate brands also help with events, according to Aliet. “You can get the brand out and organize something around a smoke-infused snack or beverage that happens to carry the same name,” he says. “B2B events are largely unregulated and an important influential factor for most manufacturers that play an important word-of-mouth role. Building solutions that drive value, solve problems or address needs there are will always result in success.”

    Generally, brands that survive in dark markets establish their unique identifying brand assets and elements well, observes Aliet. “Use that across touchpoints in 2D graphics, even 3D environments. Colors, shapes—anything where we don’t show brand but queue recognition is what comes to mind.”

    Social media can play a role too. “Depending on the location of platform, a manufacturer might not be able or allowed to localize messaging, but we see user-generated content pick up big time, especially on social selling channels,” says Aliet. “We’re luckily not that far yet that governments are telling platforms to ban images of consumers smoking or using product. Using influencers is getting heavily restricted market by market.”

    Self-regulation and brand innovation are other vital, Aliet points out. “There’s no doubt that brands should pivot,” he says. “Governments are making legislation tougher, and certain categories will most likely not survive. We see this in the energy space as well, where fossil fuels are facing a lot of negative press. The smart companies pivot and innovate beyond category—cannabis, vaping, liquid drinks—as people are still looking to fulfill a need. Brands can reinvent themselves around needs with newer solutions that appeal to a clean, next-gen lifestyle. That’s what brands must do regardless—innovate around market movements and changes in consumer preference.”

    A Different POS

    Depending on the degree of restrictions, the point of sale may turn from a place of communication and product variety into a wasted space. In Australia, for example, customers who want to buy cigarettes must ask the store clerk. There are no signs directing smokers to the POS, according to Christoph Moser, managing director of POS Tuning, a German company that offers POS shelf and storage solutions to customers worldwide.

    According to Moser, priorities are different at a dark market POS. “In classic dark markets, product availability is getting ever more important. Shelves are equipped with sliding doors or flaps, and the opening time is limited. There is a defined time slot during which presentation and removal of a pack takes place, which makes it more important that the merchandise can be seen immediately at the time of opening. Push-feed systems are therefore essential, as they facilitate access for the salesperson.”

    His company offers mechanical as well as digital systems that allow customers to take stock immediately. “This works with an indicator for the inventory or with a digital push-feed system that records inventory levels in real time and signals when stocks are too low or if there is an out-of-shelf [situation],” he says.

    In many dark markets, the placement of tobacco products has changed. Instead of being displayed on the back wall of the store, as is often the case in less restrictive markets, cigarettes are placed under the counter, where they are invisible to customers. “Sixty percent of sales at petrol stations are generated with tobacco products,” explains Moser. “If displaying the products is banned or restricted, it has consequences. POS Tuning has developed specific push-feed solutions to place the vast variety of tobacco products that are usually stored in the back wall in the limited space of a counter. These solutions allow for placement of several brands in one row behind one another, meaning the same amount of product can be placed on a significantly smaller surface.”

    Moser observes that many retailers in countries changing to a dark market try to put off the transition as long as possible—and are thus insufficiently prepared. “Fast and efficient solutions are required that enable the covered presentation of goods in existing shelves. We offer various retrofit kits for this,” he says.

    Just like the appearance of the POS, the attitude of consumers in dark markets has changed, notes Moser: “Customers get used to this kind of [product] presentation,” he says. “In most cases, it’s a planned purchase, which means customers prefer a certain brand, which they then buy, thereby accepting other pack sizes.”

    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.
  • Controlled Kick

    Controlled Kick

    TJP Lab’s oral nicotine factory in Pickering, Ontario, features high-speed pouch filling equipment and sophisticated technology to ensure consumer safety and product efficacy.

    TJP Labs’ novel nicotine particulate significantly speeds up nicotine delivery.

    By Stefanie Rossel

    David Richmond-Peck | Photos: TJP Labs

    More than two decades after the debut of the first commercial e-cigarettes, delivering consumers the right degree of nicotine—the “perfect kick”—remains a challenge for manufacturers of reduced-risk products.

    To solve this issue, Canada-based TJP Labs has developed a novel nicotine particulate, for which it filed for patent protection in April 2024. The new technology dramatically increases the speed of nicotine release compared to polacrilex, a resin complex commonly used in nicotine-replacement therapy (NRT) products, and other forms of nicotine that presently exist in recreational products, according to David Richmond-Peck, chief relationship officer at TJP Labs.

    “Our technology allows for control and extreme flexibility in terms of the finished product’s nicotine release profile,” he says. “It is quite versatile and can be used with different forms of nicotine—whether it’s tobacco-derived, synthetic, a prodrug or an analog. This inclusivity helps with its applicability across a wide range of products. Quite notably, the development can aid in addressing concerns with tobacco-specific nitrosamines, which are minimal or absent, especially in synthetic forms. Further, our innovative development has the potential to provide an enhanced consumer experience by providing a faster and more efficient nicotine release, aiming to provide a more satisfying and potentially safer alternative.”

    According to TJP Labs, the nicotine particulate offers versatile particulate size customization, ranging from ultra-fine to several hundred microns, for precise product design as well as precision-targeted binding. “When utilized in combination with other features, our technology allows us specific customization capability to tailor products for faster or more controlled release, addressing various consumer needs and improving efficacy. Such control can lead to cost-effective production and better overall product performance, enhancing the success rates of smoking cessation efforts or providing more enjoyable recreational options.”

    The product can also be used with a broad spectrum of core materials, including porous or nonporous, biodegradable and various organic compounds, notes Richmond-Peck. This enhances the company’s ability to innovate and tailor nicotine-delivery products. “This versatility means products can be designed to mimic the nicotine uptake of combustible tobacco more closely, potentially improving their effectiveness as smoking cessation aids or recreational alternatives,” he says. “The flexibility in core material choice allows for innovations that can help to meet diverse consumer preferences and regulatory requirements.”

    The particulate can be utilized in both NRT products and recreational nicotine products. “This includes applications in gums, patches and lozenges, especially in modern oral nicotine pouches, where controlled nicotine release is crucial,” says Richmond-Peck. “Our technology is designed to enhance both the efficacy and consumer satisfaction of these products, making them viable alternatives to traditional smoking products.”

    Pouches with Potential

    Other advantages include efficient raw material use, allowing for nicotine loading several orders of magnitude over polacrilex, and optimization for organic and inorganic forms, including biodegradable resins, according to TJP Labs. The technology is designed for seamless integration, enabling easy incorporation into nicotine pouch formats and related products.

    A wholly owned subsidiary of Kik Ass Products, TJP Labs is a full-service, global contract manufacturer of next-generation products, specializing in modern oral buccal delivery pouch manufacturing. It is also a newcomer to the industry. In 2021, it began developing innovative pouched products for energy and nutraceutical uses. In September that year, it opened Canada’s first modern oral nicotine contract manufacturing facility for oral nicotine pouches in Pickering, Ontario. Spread over a rapidly expanding campus, the plant features high-speed pouch filling, in-line photography, check weighers and integrated finished product metal detectors to ensure high standards of consumer safety and product efficacy.

    “We are currently expanding our production capabilities, aiming to achieve an impressive output of over 100 million retail units annually by mid-2025,” says Richmond-Peck. “As market dynamics evolve, we plan to double this capacity to 200 million retail units by 2026. Our operations extend beyond manufacturing to include robust research and development efforts, all driven by our commitment to advancing harm reduction.”

    In addition to contract manufacturing for international brands, TJP Labs has also launched its own brand, L!X nicotine pouches, which was first marketed by its subsidiary L!X Innovations. In early 2022, TJP submitted a premarket tobacco product application to the U.S. Food and Drug Administration for L!X nicotine pouches.

    In June 2023, Imperial Brands acquired 14 L!X pouch variants for an initial consideration of £65 million ($81.57 million) and an additional deferred sum based on sales volumes over five years. The deal is meant to enable Imperial’s U.S. operation, ITG Brands, to expand its next-generation product offerings in the United States. Following further consumer testing, ITG Brands launched the range in the U.S. under the brand name Zone in the first quarter of 2024, with TJP Labs continuing to manufacture the pouches under contract.

    “Our primary focus in the nicotine industry has consistently been on harm reduction,” says Richmond-Peck. “Although we started as a manufacturing company, we have broadened our capabilities to include research and development. In 2023, we facilitated Imperial Brands’ entry into the U.S. market by selling them our range of nicotine pouch products and serving as their contract manufacturer. We retained the global rights to our L!X pouches outside the U.S. and are actively seeking market opportunities and partnerships in additional territories. Currently, our development efforts are concentrated on providing consumers with innovative pouched products that incorporate energy and other nutraceutical ingredients.”

    To TJP Labs, modern oral pouches are an innovative delivery system with the potential to deliver various active ingredients, with applications ranging from pharmaceutical to recreational use. “In 2021, we began to develop a separate category of energy products for adult consumers. These products are now market-ready and slated to launch later this year,” says Richmond-Peck.

    For its new nicotine particulate, TJP Labs anticipates to receive initial evaluation data by the end of the second quarter this year. Next steps will involve exploring partnerships or licensing opportunities to leverage the technology effectively for harm reduction, according to Richmond-Peck. “Depending on the product application, regulatory approvals will be necessary, such as certifications from medical agencies for NRT products or FDA approval for recreational nicotine products in the U.S. Our objective will be to sell or license the intellectual property to the party that can most effectively contribute to global harm reduction.”

    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.
  • Losing Steam

    Losing Steam

    Photo: Ned Snowman

    Heated-tobacco products continue to eat into the sales of combustible cigarettes in Japan, albeit at a slower pace than before.

    By Stefanie Rossel

    This year marks the 10th anniversary of IQOS’ debut in Japan. Within a decade, Philip Morris International’s heated-tobacco product (HTP) has changed the country’s tobacco market beyond recognition. HTPs accounted for 37.9 percent of all tobacco sales in Japan last year. In January 2023, HTP sales for the first time overtook cigarette sales in Tokyo, accounting for 50.4 percent of consumer takeoff, according to PMI figures presented at the CAGNY conference in February 2024.

    Perhaps the only tobacco market to have experienced a similarly seismic shift among product categories is Sweden, where the popularity of snus has altered consumption patterns to such an extent that its smoking rate will likely fall below 5 percent at some point this year. In both countries, smoking rates declined not as a result of anti-tobacco policies but due to consumers spontaneously opting for safer alternatives when presented with such options.

    Until the advent of the new category, Japan was long considered a smokers’ paradise, and it still is one of the world’s largest tobacco markets, with more than 17 million Japanese smoking regularly. Japan’s ministry of finance still owns 30 percent of Japan Tobacco, the successor to the country’s tobacco monopoly, thus benefiting from high tax revenues.

    For decades, the industry was able to flourish in a relatively unrestricted market. Low prices and moderate regulations facilitated consumption, with smoking incidence peaking at close to 50 percent of the population in the 1960s. Smoking, mostly a male habit in Japan, started declining slowly after the introduction of a series of anti-smoking regulations. More measures took effect when Japan hosted the 2020 Olympic Games and faced external pressure to crack down on the habit. Extensive public smoking bans contributed to a drop in smoking prevalence from 28 percent in 2002 to 16.2 percent in 2022, according to the Foundation for a Smoke-Free World. But while cigarette sales decreased at a leisurely annual rate of 1.8 percent between 2011 and 2015, they started dropping much faster after the arrival of HTPs.

    Japan is an ideal place to study the impact of HTPs. The country prohibits the sale of nicotine-containing e-cigarettes, which are classified as pharmaceutical products and can be purchased only with a prescription in medically licensed shops whereas non-nicotine vape products are freely available. In addition, Japanese consumers are health-conscious, tech-savvy and receptive to new gadgets. Values such as discretion and politeness are deeply rooted in Japanese culture, meaning that smokers in the densely populated country are keen to avoid bothering others, for example, through secondhand smoke.

    Heated-tobacco products continue to enjoy a tax advantage over combyustible cigarettes in Japan, but this may change in the future. (Photo: Taco Tuinstra)

    A Mature Market

    Ten years into the introduction of the category, however, fascination appears to have worn off a little, with HTP sales plateauing during the past few years. According to Euromonitor International, the retail value generated by HTPs in Japan fell from $11.14 billion in 2022 to an estimated $11.13 billion in 2023 and will reach $11.23 billion this year. Japan nevertheless remains by far the leading market of the category, representing almost a third of the expected global retail volume of $40.59 billion this year, well ahead of Italy, which now ranks second with an estimated HTP market value of $6.511 billion in 2024.

    IQOS continues to dominate the Japanese HTP market with a share of 70.5 percent in 2023, according to PMI. A survey commissioned by Statista revealed that IQOS Iluma was the most popular HTP in Japan between July 2023 and August 2023, with more than 21.1 percent of respondents using the product. IQOS Iluma One was the second most popular heating product, with a share of 20.7 percent of respondents. It was followed by JT’s Ploom X with 19.4 percent and British American Tobacco’s Glo Hyper+ with 12.9 percent.

    The maturity of Japan’s HTP market has sparked a fierce battle for market share among the leading manufacturers. Price competition is increasing, and consumers are experimenting with other brands and devices while manufacturers are subsidizing products and launching new models.

    In October, BAT lowered the prices of six Lucky Strike consumable variants for its Glo Hyper device after it had already cut the prices of 19 of its Glo Hyper products by ¥40 ($0.25) to ¥50 on Aug. 1, 2023, in an attempt to boost its market share. A pack of 20 Lucky Strike heat sticks now retails at ¥400.

    Tax Differential in Danger

    Japan also saw a series of new HTP launches in the past year, all focusing on improved performance and enhanced flavor delivery. In July 2023, JT introduced With 2, an infused tobacco vapor device under its respective new brand With. The product features JT’s infused technology, which generates vapor while an atomized liquid passes through a capsule containing granulated tobacco, and has been available at convenience stores and tobacco stores in Japan since September.

    According to the company, there is no delay in nicotine delivery, as tobacco vapor is generated the moment it’s inhaled, and there is almost no tobacco smoke with the product since tobacco leaves are not directly heated. Following the launch, JT discontinued its Ploom Tech, Ploom Tech+ and Ploom Tech+ With devices for infused tobacco capsules. The recommended retail price for the With 2 device is ¥1,980, including tax, while a pack of the respective tobacco capsules under the Mevius brand retails at ¥580.

    In November 2023, JT started selling Ploom X Advanced in Japan. The device, which replaces the Ploom X model, comes with an upgraded heating system. Named “Power Heatflow,” this technology increases the maximum heating temperature from 295 degrees Celsius to 320 degrees Celsius to provide a richer flavor experience. Charging time is reduced from 110 minutes for the previous model to around 90 minutes. The device is sold at a suggested tax-included retail price of ¥1,980.

    In January, BAT presented the most recent version of its Glo heating device, Glo Hyper Pro, in Japan. Charging takes about 90 minutes, allowing for use for 20 sessions. This compares to 210 minutes for Hyper X2, 120 minutes for Hyper Air and 135 minutes for IQOS Iluma, according to BAT. The Glo Hyper Pro also features a new screen displaying performance settings and information as well as a new “HeatBoost” technology for better taste. At ¥3,980, the device sells in the same price category as IQOS Iluma, which retails at ¥3,980 to ¥9,980, depending on the discount, but is more expensive than the now discontinued Ploom X, which could be purchased for as little as ¥980 after discount.

    To mark the 10th anniversary of IQOS’ introduction in Nagoya, PMI in March 2024 chose Japan for the launch of its Iluma i-series, the next generation of Iluma devices, which comes with a series of new features, such as a touch-screen that allows users to view the relevant information easily, and a pause mode that enables users to stop and resume their use and thus reduce waste. The device is adaptive to use patterns, and the holder’s battery has a longer life span, according to PMI. Retail prices range between ¥3,980 for Iluma One i and ¥9,980 for the premium model, Iluma Prime i.

    Intensive competition has caused IQOS devices to be significantly less expensive in Japan than in other markets.

    As manufacturers fight for market share, they may lose another advantage. One factor that helped HTPs gain ground in Japan was their favorable taxation. When the products debuted in this market, they were taxed at between 10 percent and 70 percent of the combustible cigarette rates due to their small amount of tobacco.

    Takes hikes between 2018 and 2022 raised those levels to between 70 percent and 90 percent. Seeking to boost its defense spending, the Japanese government in late 2022 proposed to gradually raise HTP taxes until they reach the level of cigarettes in 2027. According to The Mainichi newspaper, the government had not made a decision on the tax hikes by early 2024. If it decides to move forward, however, the measure will likely further decelerate the growth of Japan’s HTP market.

    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.