Category: Harm Reduction

FDA on shaky ground
The US Food and Drug Administration’s policy shift toward reducing nicotine in cigarettes is likely to attract significant tobacco-industry litigation, according to a Bloomberg News story relayed by the TMA.
In announcing a week ago its Comprehensive Plan for Tobacco and Nicotine Regulation, the FDA said that it would require the reduction of cigarette nicotine deliveries to non-addictive levels if that were found to be technologically and practically feasible.
The Bloomberg piece speculated that the tobacco industry would go to court to stop the FDA from imposing or enforcing its regulatory framework.
The article noted that, according to tobacco lobbyists, the industry could argue that the policy amounted to a de facto ban on cigarettes.
And while a 2009 law gave the FDA the power to regulate cigarettes, it explicitly stated the agency did not have the power to ban them.
Even some anti-smoking advocates think the FDA is on shaky ground with its proposal. “The legal mandate that they have to do this is extremely weak,” Clive Bates (pictured) was quoted as saying. “They say they’re not banning cigarettes, but they are banning cigarettes with any meaningful level of nicotine in them.”
Lastly, the Bloomberg piece noted that FDA Commissioner Scott Gottlieb, who was confirmed in early May, was ‘turning out to be among the most aggressive (and unpredictable) cabinet officials during the early days of the Trump administration’, which favored deregulation.
‘It’s not clear whether Gottlieb personally sought President Trump’s counsel before making the announcement,’ the piece said. ‘An administration official says the White House supports the policy and disagreed that it was a break from Trump’s anti-regulation agenda.’
August 4, 2017
NZ to legalize smokeless
The sale of smokeless tobacco products is to be legalized in New Zealand with a view to providing smokers with less-risky alternatives to cigarettes, according to a story by Rachel Thomas for stuff.co.nz.
Associate Health Minister Nicky Wagner said yesterday that some smokeless products available internationally, including heat-not-burn, snus, moist snuff, dissolvables and inhaled nicotine devices, might be significantly safer than were cigarettes.
Additionally, she added, restricting sales of these products might exacerbate supply and demand issues; for example, by encouraging black market sales.
Current laws ban the import, sale and distribution of tobacco products described as suitable for chewing or any other oral use besides smoking.
In her announcement Wagner said the government intended to establish a pre-market approval system for smokeless tobacco and nicotine-delivery products, other than e-cigarettes.
“This is part of new thinking – a forward looking approach, building on some of the innovative new technologies that are available intentionally to try and give smokers safer alternatives to tobacco,” she said.
Under pre-market approval provisions, smokeless products could be sold legally only after manufacturers had demonstrated that the use of these products was significantly less harmful than was tobacco smoking.
Wagner made her announcement in front of health experts and advocates who were presenting the Achieving Smoke-free Aotearoa Project (ASAP) – a road map on how to achieve the country’s smoke-free 2025 goal.
Their plan called for the government to reduce the availability and convenience of tobacco products, to place severe restrictions on retailers and to impose massive cigarette tax increases.
Project leader, University of Otago Wellington Professor Richard Edwards, reportedly was “a bit taken aback” by Wagner’s announcement.
“We put all these recommendations and things in the report and this wasn’t one of them,” he said of Wagner’s announcement.
Edwards said the government should assess the impact of new laws on e-cigarettes, which are set to come into effect next year – before adding other types of tobacco-containing products.
August 3, 2017
Airy approach to holes
The EU Commission is keeping a watching brief on the question of ventilation holes in cigarette filters; so, as things stand, nothing will happen before 2021 at the earliest.
In May, an article in the Journal of the National Cancer Institute suggested that the US Food and Drug Administration should consider regulating cigarette filter ventilation, up to and including a ban.
It further suggested a research agenda to support such an effort.
A short background to the article said that filter ventilation was adopted in the mid-1960s and was initially equated with making cigarettes safer. But since then, lung adenocarcinoma rates had paradoxically increased relative to other lung cancer subtypes.
Filter ventilation was said to alter tobacco consumption in such a way as to increase smoke toxicants. It was said to allow for elasticity of use so that smokers inhaled more smoke to maintain their nicotine intake. And it was said to cause a false perception of lower health risk from ‘lighter’ smoke.
This led to questions being raised in the EU parliament.
In a preamble to their questions, the Dutch MEP, Gerben-Jan Gerbrandy, and the Belgian MEP, Frédérique Ries, said that, on May 29, the Dutch national newspaper ‘de Volkskrant’ had reported that ventilation holes in cigarettes contributed to an increasing risk of ‘adenocarcinoma’, the most common form of lung cancer.
‘Research from the National Cancer Institute in the US shows a connection between the perforated filter and an increase in this specific type of cancer,’ they said.
‘Based on the findings of the research institute, the ventilation holes in cigarettes could pose a new threat to public health.
‘Moreover, these ventilation holes mislead the measuring equipment that is developed to detect harmful substances in cigarettes.
‘Experts have therefore requested a strict ban on ventilation holes.’
Gerbrandy and Ries went on to ask whether the Commission was aware of the potential health risk of ventilation holes in cigarettes and whether the Commission had taken any action or investigated the issue at an earlier stage?
‘Based on the research findings, does the Commission believe that the European standards for cigarette components and the measurement methods, which are developed to detect harmful substances in cigarettes, should be adapted?,’ they asked.
‘Has the Commission envisaged other steps to further investigate the issue and does the Commission intend to update the current Tobacco Products Directive (2014/40/EU) based on the findings of this research?’
In its written answer, the Commission said it was aware of the risk of the use of ventilation holes by tobacco manufacturers to lower measured values of tar, nicotine and CO emissions (TNCO), such as in so-called “light cigarettes”.
‘Branding such cigarettes as “light, “mild” or “ultra-light” had been shown to mislead consumers since they do not have health benefits for smokers. As a result, the Commission banned such descriptors on cigarette packages in 20011. Instead, TNCO were required to be indicated,’ the Commission said.
‘However, as these values were found not to reflect the actual emissions during intended use, the revised Tobacco Products Directive 2014/40/EU2 discontinued TNCO labelling on cigarette packs.
‘In absence of a gold standard and for the purpose of regulatory continuity, the International Organization for Standardization methodology continues to be used for emission measurement. However, Article 4 of the Tobacco Products Directive gives the Commission delegated power to adapt the measurement methods, based on scientific and technical developments or internationally agreed standards.
‘The Commission and the member states have discussed measurement methods in the Expert Group on Tobacco Policy on several occasions. By 2021, the Commission will report on the application of the Tobacco Products Directive. If appropriate and based on the findings of the report, proposals for amending the directive may be foreseen.’
August 2, 2017
Red-letter day
A US public health expert has described Friday, July 28, as ‘truly a great day for public health’.
This was the day that the Food and Drug Administration announced its Comprehensive Plan for Tobacco and Nicotine Regulation.
‘On Friday, the new FDA Commissioner – Dr. Scott Gottlieb – saved the day for the public’s health by officially embracing a harm reduction approach to tobacco control,’ Dr. Michael Siegel, who is a professor in the Department of Community Health Sciences, Boston University School of Public Health, wrote on his tobacco analysis blog.
‘Commissioner Gottlieb announced a new approach to the regulation of tobacco products that, unlike the FDA’s previous strategy, acknowledges the vastly different risks of tobacco cigarettes compared to electronic cigarettes and proposes to regulate each product in alignment with its risk level.’
Siegel said that, previously, the FDA had lumped e-cigarettes into the same category as tobacco cigarettes and, in fact, regulated e-cigarettes much more stringently. The FDA previously required e-cigarettes to complete burdensome and expensive pre-market applications just to remain on the market, a process from which all traditional tobacco cigarettes were exempted.
The old approach, Siegel said, would have destroyed about 99 percent of the existing vaping product market, leading to a major reduction in smoking cessation in the US and with that, an increase in smoking-related morbidity and mortality.
‘Instead, the FDA will now delay the implementation of the pre-market application requirement for e-cigarettes while seeking ways to ease the expense and burden of the process,’ he said.
‘At the same time, the FDA will – for the first time – actually set safety standards for e-cigarettes so that the benefits of these products can be realized while minimizing potential harms.
‘And, to top it all off, the agency will consider – also for the first time – actually setting a safety standard for real cigarettes that would require the reduction of nicotine to non-addictive levels if that is found to be technologically and practically feasible.’
Siegel, in fact, foresaw the possibility of Friday’s announcement by the FDA. Writing on his blog in November, he said that, from a public health perspective, there were many reasons to be concerned about the outcome of the US presidential election. ‘However, there is one reason to potentially be encouraged,’ he said. ‘With a Trump presidency, and with Republican control of the Senate, we ironically have a tremendous opportunity to once and for all craft a sensible regulatory strategy for electronic cigarettes and vaping products.’
Siegel’s blog is at: http://tobaccoanalysis.blogspot.co.uk/.
August 2, 2017
JT’s volume plummets
Japan Tobacco Inc. reported today that its domestic cigarette sales volume during the six months to the end of June, at 46.8 billion, was down by 11.2 percent on that of the six months to the end of June 2016, 52.7 billion.
At the same time, industry volume was said to have been down by 11.0 percent from 86.2 billion to 76.8 billion.
JT said that its volume and that of the industry had been affected mainly by the expansion of the tobacco vapor category and a continuing market decline.
JT’s market share during the period was said to have been 61.0 percent, unchanged from the level of the previous year.
Core revenue for the domestic tobacco business fell by 7.6 per cent to ¥294.4 billion and adjusted operating profit was down by 7.4 percent to ¥12.0 billion.
Meanwhile, Japan Tobacco International’s total tobacco (including cigarettes, fine-cut, cigars, pipe tobacco and snus, but excluding water-pipe tobacco, emerging products and contract manufactured goods) shipment volume during the six months to the end of June, at 193.2 billion, was down by 3.3 percent on that of the six months to the end of June 2016, 199.7 billion.
JTI’s Global Flagship Brand (GFB) shipment volume was unchanged at 140.8 billion.
JT reported that a strong performance, primarily in Iran and Taiwan, had been unable to offset the impact of industry volume contractions in several markets and the unfavorable inventory comparisons of the first quarter. GFB shipment volume had remained stable because of market share gains in several key markets.
JTI’s core revenue fell by 1.2 percent to ¥577.2 billion, while adjusted operating profit rose by 1.0 percent to ¥195.1 billion.
“In the first half, we achieved continued growth in the group’s adjusted operating profit at constant currency driven by the international tobacco and pharmaceutical businesses, despite an increasingly uncertain and challenging operating environment,” said Mitsuomi Koizumi, president and CEO of JT, in commenting on the consolidated results.
“We’ve seen high earnings growth in the international tobacco business, for which our well-planned and executed cost optimization initiative is bearing fruit, as well as higher royalty revenues in the pharmaceutical business which also contributed to the group’s profit increase.
“In the Japanese tobacco business, cigarette industry volume decline puts further pressure on us, resulting in adjustments to our business performance.
“In the meantime, our promising tobacco vapor product, Ploom TECH, continues to receive strong interest from consumers in Tokyo, where we launched at the end of June. Given the unique features of Ploom TECH as well as our commitment and resources, we are confident to win in the increasingly competitive Japanese tobacco vapor category in the mid-term.
“As announced, 2017 has proved to be a particularly difficult year for us, however, we remain committed to investing for future sustainable profit growth and will continue to do so during the rest of this year.”
August 2, 2017
Qualified support for FDA
A US senator has decried the electronic-cigarette provisions of the Food and Drug Administration’s Comprehensive Plan for Tobacco and Nicotine Regulation, which was announced on Friday.
“The tobacco industry produces products that kill thousands of Americans each year, and sustains itself by recruiting ‘replacement smokers’ by marketing to young adults,” Oregon’s Senator Jeff Merkley, the top Democrat on the Senate Appropriations Subcommittee overseeing the FDA, said in a statement posted on his website. “That’s why we were hoping to hear a strong plan from the FDA today [Friday].
“Unfortunately, the FDA instead announced that it will allow e-cigarette products, largely aimed at children, to remain on the market for five more years with very little regulation.
“According to the CDC’s [Center for Disease Control and Prevention] latest data, 20 percent of high school students, and seven percent of middle school students – 12 and 13 year old kids – use e-cigarettes. And they use it [sic] because they have names like ‘cotton candy’, ‘froot loops’ and ‘gummy bear’. These are not products targeted towards adults. “While the FDA’s goal of reducing the level of nicotine in traditional cigarettes is an important and admirable goal, it does nothing to address the growing threat of e-cigarette usage. Thousands more children will become addicted during this time, and everyone who cares about America’s youth should be deeply concerned by this decision.”
Meanwhile, the American Heart Association (AHA) has said that while the FDA’s move to lower nicotine and examine flavoring comprise a promising step, the Deeming Rule delay is disappointing. It is concerned, also, that the FDA has raised the possibility of exempting premium cigars in the future.
“FDA’s move today to lower nicotine levels and take a harder look at how flavored tobacco products attract the young is to be commended,” said AHA CEO Nancy Brown.
“However, the Association is disappointed with the agency’s decision to delay certain e-cigarette and cigar compliance deadlines. Altering the deadline for FDA review of e-cigarettes and cigars is a troubling step and one that we will closely monitor.
“We are also concerned that the FDA has raised the possibility of exempting premium cigars in the future. Tobacco in any form presents risk. That’s why we have advocated for – and will continue to insist – that FDA oversight of all tobacco products is absolutely essential. Premium cigars are no different. Cigars are a concern because high school-aged males now smoke them at a higher rate than [they smoke] cigarettes. As we have seen in recent Senate legislation, often the definition for ‘premium cigars’ creates a loophole that allows the flavored and cheap cigars that attract youth to qualify as ‘premium’. Weakening the deeming rule in any way could lead to an increasing number of Americans at risk for heart disease, stroke or even an early death due to tobacco use.
“As the FDA carries out its new nicotine and tobacco plan, we urge the agency to remember that protecting public health, particularly the health of young people in this country, should be at the very top of its priority list. While we look forward to agency actions that can lower the number of Americans exposed to the harms of combustible tobacco, the FDA must advance all tobacco regulation. We must not take two steps forward and then one step back.”
The 22nd Century Group welcomed the FDA’s announcement. The group said that it was ‘uniquely positioned to deliver on the new product standards’ given that its proprietary “Very Low Nicotine” cigarettes contained less than 0.6 mg nicotine per piece and yielded less than 0.05 mg nicotine per piece. These levels represented a nicotine reduction of at least 95 percent relative to the levels of other cigarette brands.
The group said its tobacco was grown on ‘independently-owned farms in US, and was not subjected to any ‘artificial extraction or chemical processes’.
It was the only company globally that was capable of growing tobacco with non-addictive levels of nicotine.
The cigarettes produced from this tobacco, it added, had the ‘taste and sensory characteristics of conventional cigarettes’.
August 1, 2017
HNB status unclear
Two months after a smoking ban came into effect in pubs and restaurants in the Czech Republic, smokers are getting acquainted with heat-not-burn (HNB) products that they might be able to use in public places, according to a Radio Prague story.
The Czech authorities have yet to classify heat-not-burn products, which contain but do not burn tobacco, and that deliver nicotine in a vapor rather than in smoke.
“What is important is that the tobacco does not burn –it is merely heated to 300 degrees Celsius which means that there is no smoke and no ash, and you cannot smell it as much as normal cigarettes,” Philip Morris’ Klára Jirovcová Pospíšilová was quoted as saying.
Radio Prague said that HNBs first appeared on the Czech market in 1988, but that they were not a commercial success.
‘At the time, they were no match for the classic cigarette, but with tough anti-smoking laws in force around Europe, tobacco companies are hoping HNBs will see new opportunities opening up,’ Radio Prague reported.
‘Some countries in Europe, such as Poland, Hungary and Spain, have already issued a tough ban on HNBs, putting them on par with regular cigarettes, but others like the Czech Republic have yet to lay down the rules for these products.’
The Czech Health Ministry says the smoking ban should apply to HNBs, but others claim that under Czech law they would fall into the same category as electronic cigarettes, which are not banned in pubs and restaurants.
Meanwhile, it has not been decided at the EU level how to tax HNB tobacco products and the Czech Finance Ministry has yet to address the issue.
For the time being, HNBs are exempted from consumer tax in the Czech Republic, which gives them an enormous advantage over traditional cigarettes.
An amendment to Czech law is expected to clarify the status of HNBs by 2019.
August 1, 2017
Nicotine takes Center stage
Altria on Friday described the US Food and Drug Administration’s Comprehensive Plan for Tobacco and Nicotine Regulation as an important evolution in the Agency’s approach to regulating tobacco products and a meaningful step forward in developing a comprehensive regulatory policy that acknowledges the continuum of risk.
‘We supported FDA regulation because, among other things, it created a framework for communication about reduced harm products,’ the company said in a note posted on its website. ‘Reconsideration of the rules and timelines for newly deemed products is an important and timely step in this effort.
‘The process outlined by the [FDA] commissioner today will allow all stakeholders the opportunity to participate in a science and evidence based regulatory framework which is “transparent, predictable, and sustainable”.
‘It’s important to understand that any proposed rule such as a nicotine product standard must be based on science and evidence, must not lead to unintended consequences and must be technically achievable. Establishing a standard of any sort is a deliberative process, with multiple opportunities for interested parties to provide perspectives. We intend to be fully engaged throughout this process.’
In announcing its plan, the FDA said it would serve as a multi-year roadmap to better protect young people and significantly reduce tobacco-related disease and death.
The approach placed nicotine, and the issue of addiction, at the center of the agency’s tobacco regulation efforts, the FDA’s Center for Tobacco Products (CTP) said in a press note. The goal was to ensure that the FDA had the proper scientific and regulatory foundation efficiently and effectively to implement the Family Smoking Prevention and Tobacco Control Act.’
“Envisioning a world where cigarettes would no longer create or sustain addiction, and where adults who still need or want nicotine could get it from alternative and less harmful sources, needs to be the cornerstone of our efforts – and we believe it’s vital that we pursue this common ground,” said FDA Commissioner Dr. Scott Gottlieb.
Among other aspects of the comprehensive approach, the FDA plans to:
- ‘Issue an Advance Notice of Proposed Rulemaking (ANPRM) to seek input on the potential public health benefits and any possible adverse effects of lowering nicotine in cigarettes. This will help begin a public dialogue about lowering nicotine levels in combustible cigarettes to non-addictive levels through achievable product standards.’
- ‘Extend timelines to submit tobacco product review applications for newly-regulated tobacco products that were on the market as of Aug. 8, 2016. This will allow the agency to further examine how existing regulatory science can encourage innovations that have the potential to make a notable public health difference and inform policies and efforts that will best protect kids and help smokers quit cigarettes. Under the expected revised timeline, the application deadlines for newly-regulated products would be as follows: combustible products, such as cigars and hookah tobacco, Aug. 8, 2021; non-combustible products, such as ENDS or e-cigarettes, Aug. 8, 2022.’
- ‘Further explore how best to protect public health in the evolving tobacco marketplace by issuing two ANPRMs to seek input from the public on a variety of significant topics, including: ‘The role that flavors (including menthol) in tobacco products play in attracting youth and may play in helping some smokers switch to potentially less harmful forms of nicotine delivery’; and ‘The patterns of use and resulting public health impacts from premium cigars, which were included in the FDA’s 2016 rule’.
The FDA’s announcement was generally positively received, though it was acknowledged that some devils could lie lurking in the details.
The R Street Institute welcome the FDA announcement saying it would postpone a regulation, previously set to take effect this fall, that would have forced manufacturers to get agency approval for tobacco and nicotine products introduced to the market after February 2007. This costly process would, in practice, have resulted in the near-complete elimination of harm-reduction tools such as electronic cigarettes from the market.
R Street’s harm reduction policy director Carrie Wade said the FDA’s plans should be considered an important first step to reorient FDA regulation of tobacco products from a process designed to protect the sales and profits of the major cigarette makers to one designed to reduce tobacco-related addiction, illness and death.
“R Street has been one of the leading proponents of a harm-reduction approach to cigarette addiction, so to read today’s [Friday’s] announcement feels like vindication that someone is listening,” Wade said. “It’s taken a little while, but it seems the FDA is beginning to realize something the scientific community woke up to years ago: policies aimed at destroying the e-cigarette market actually would result in the unintended consequence of more smokers sticking with traditional combustible cigarettes.”
Jeff Stier, the director of the Risk Analysis Division of the National Center for Public Policy Research, said he applauded Gottlieb and the CTP for making sweeping changes to the Obama-era approach to tobacco regulation that would have effectively banned almost all e-cigarettes on the market today.
“The most significant change is that the FDA’s regulatory approach will now seek to implement a ‘tobacco harm reduction’ approach, recognizing that there’s a continuum of risk among different nicotine products,” he said.
“In other words, it will not impose onerous deadlines and ill-defined requirements for so-called pre-market tobacco applications.
“The FDA will first develop clear, science-based product standards before manufacturers would be required to submit applications.
“The FDA will now begin to develop new rules which will recognize that non-combustible lower-risk products such as e-cigarettes and next generation ‘heat not burn’ products should no longer be treated solely as public health threats. The FDA will instead embark on a rule-making process whereby the products will be regulated based on their risk profile. This approach, if implemented properly, will foster a robust market offering a range of options to smokers who wish to reduce the risk from smoking.”
Alex Clark, the CEO of the Consumer Advocates for Smoke-free Alternatives Association (CASAA) described the FDA plan as a positive step forward in preserving consumer access to low-risk vapor products. Most importantly, it said, the forthcoming guidance from the FDA would play a vital role in reducing harm for millions of Americans who continued to smoke and would benefit from honest information about low-risk alternatives to combustible tobacco.
“Delaying the deadline for pre-market tobacco applications from vapor product manufacturers is an important first-step.” said Alex Clark, CASAA’s CEO.
“CASAA and our membership have been asking for this delay since March as it allows science, genuine public health, and consumer needs – rather than ideology – to contribute to developing reasonable and achievable regulation of low-risk nicotine products.
“Too much of the current legislative and regulatory efforts are born out of fear and misinformation. As a result, policymakers and regulators are losing sight of the most important goal – reducing the harm from traditional combustible tobacco products.”
The Vapor Technology Association focused on the FDA’s granting of a four-year extension of the deadline for Premarket Tobacco Applications for electronic nicotine delivery systems (ENDS) until August 8, 2022. “This decision is a victory for science-based regulation and for public health,” said Tony Abboud, VTA’s executive director.
“By recognizing that US policies need to evolve to the current state of science which demonstrates that ENDS products are at least 95 percent safer than combustible cigarettes, FDA is taking a big step forward in protecting public health by acknowledging for the first time that ENDS are a harm reduction product and need to be regulated as such.
“By delaying the deadline for compliance for electronic nicotine delivery systems, FDA has also recognized that the current regulations have halted the kind of technological innovation that is key to ending this country’s reliance on combustible cigarettes, and that we need to implement clear and meaningful regulations that strike the right balance between consumer protection and fostering innovation.”
But not everyone agreed. Matthew L. Myers, resident of the Campaign for Tobacco-Free Kids, said the sweeping tobacco regulatory agenda proposed by Gottlieb represented a bold and comprehensive vision with the potential to accelerate progress in reducing tobacco use and the death and disease it caused in the US. “Critical to his vision is his recognition that the components of his proposal need to work together as ‘a package deal – ‘it is really all or nothing,’ as he put it,” Myers said in a statement.
“At the same time, it is a serious error for the FDA to significantly delay critical deadlines for complying with the FDA’s 2016 rule establishing oversight of electronic cigarettes, cigars and other previously unregulated tobacco products.
“This long delay will allow egregious, kid-friendly e-cigarettes and cigars, in flavors like gummy bear, cherry crush and banana smash, to stay on the market with little public health oversight. There is no reason to allow these products to stay on the market while developing and implementing the comprehensive strategy Dr. Gottlieb outlined today [Friday].”
July 31, 2017
BAT’s volume down
British American Tobacco’s cigarette volume during the six months to the end of June, at 314 billion, was down by 5.6 percent on that of the six months to the end of June 2016.
Volume, at 58 billion, was increased by 1.7 percent in the company’s Western Europe region, but it was down in each of its other three regions: in its Asia Pacific region by 9.5 percent to 95 billion; in its Americas region by 5.3 percent to 53 billion; and in its EEMEA (Eastern Europe, the Middle East and Africa) region by 5.3 percent to 108 billion.
BAT reported that group cigarette volume from subsidiaries (excluding associates and joint ventures) fell by 5.6 percent to 314 billion, or by 5.8 percent on an organic basis, as growth in Bangladesh, Gulf Co-operation Council countries, Vietnam and Nigeria was more than offset by market contractions in Pakistan, Ukraine, Iran, Brazil, Indonesia and Japan. The company said that its market share had increased by 0.30 of a percentage point, driven by the continued growth of its Global Drive Brands, whose market share had risen by 0.50 of a percentage point, albeit on volume that was by 1.3 percent down.
Of the drive brands, Dunhill’s volume fell by 4.5 percent and its market share was lower by 0.10 of a percentage point; Kent’s volume was 1.6 percent lower while its market share was up by 0.15 of a percentage point; Lucky Strike’s volume was up by 12.4 percent and its market share was increased by 0.20 of a percentage point; Pall Mall’s volume fell by 9.6 percent while its market share grew by 0.10 of a percentage point; and Rothmans’ volume grew by 6.2 percent and its market share was up by 0.15 of a percentage point.
Meanwhile, the volume of BAT’s other international cigarette brands fell by 7.0 percent, as sales growth in State Express 555, in Vietnam, and Shuang Xi, mainly in Russia, was more than offset by lower volumes of Viceroy in Turkey and Venezuela, Peter Stuyvesant in South Africa and Vogue in Russia, South Korea and Canada.
BAT’s revenue, calculated at constant rates of exchange during the six months to the end of June, at £6,901 million, was said to be up by 3.5 percent on that of the six months to the end of June 2016. It was up by 15.7 percent to £7,717 million at current rates.
Profit from operations was up by 3.7 percent to £2,295 million at constant rates of exchange, and by 16.3 percent to £2,574 million at current rates.
Basic earnings per share were down by 15.3 percent to 121.8p.
In announcing the half-year results, CEO, Nicandro Durante, said the performance of the group in the first six months of the year had been in line with expectations and demonstrated the good organic progress the company was making.
“The relative weakness of sterling led to a significant tailwind on our reported results, with revenue 15.7 percent higher and profit from operations up 16.3 percent at current rates of exchange,” he said. “Excluding the translational tailwind and the adjusting items, adjusted revenue and adjusted profit from operations were both up, 2.5 percent and 3.2 percent respectively at constant rates of exchange.”
Durante said that BAT had made good progress with its next-generation-product business and was now present in 15 markets worldwide with its vapor products and THP [tobacco-heating product]. “In the Japanese city of Sendai, glo continues to perform exceptionally well, reaching an estimated 8 percent share and with one in three smokers in Sendai having purchased glo,” he said. “We have recently expanded our coverage to Tokyo, Miyagi and Osaka and national rollout in Japan is planned for October 2017. While it remains early days, the initial results in Tokyo are excellent, with performance ahead of [that of] Sendai over the same period. We are also now present in Canada (Vancouver) and nationally in Switzerland, with very encouraging early signs.
“To support our on-going glo expansion plans, and to meet the increasing demand, investment in Neostik production capacity is taking place in South Korea and Russia.
“We are the largest vapor company in the world, with market leadership in the US, through Vuse, and in Poland and the UK, with the latter driven by the two fastest growing vapor brands in the market, Vype and Ten Motives. Vype is now present in 10 markets and, whilst still immaterial in the context of the group, our European vapor business grew with turnover up strongly against [that of] the same period last year.”
Durante said he was delighted that BAT had completed the deal to acquire the balance of Reynolds shares on July 25.
He said the company was on course to deliver another good year. “We continue to expect profit growth to be weighted to the second half of the year, which will be moderated by the continued roll out of NGP and is against a strong prior year comparator in Ukraine,” he said. “Although the challenging environment in a number of markets continues, including in Russia, I am confident that we remain on course to deliver another year of good earnings growth at constant rates of exchange.”
July 27, 2017
E-cigarettes are quit aids
An increasing number of people in the US are giving up cigarettes, and a new study suggests that the take-up of electronic cigarettes might be the reason, according to a story by Steven Reinberg for HealthDay.
After stalling for 15 years, the US quit-smoking rate rose to nearly six percent in 2014-2015, up from less than five percent in prior years, national survey data indicates.
Researchers at the University of California, San Diego School of Medicine believe e-cigarettes have helped fuel the increase.
“From 2014 to 2015, more e-cigarette users tried to quit cigarette smoking and succeeded in quitting than those who didn’t use e-cigarettes,” said lead researcher Shu-Hong Zhu, director of the university’s Center for Research and Intervention in Tobacco Control.
Reviewing survey responses from nearly 25,000 current and former smokers in 2014-2015, Zhu and his colleagues found that vapers were more likely than non-users to make a quit attempt (65 percent versus 40 percent). And they were more likely to succeed for at least three months (eight percent versus five percent), he said.
In background notes, the researchers said the use of e-cigarettes in the US became noticeable around 2010 and increased dramatically by 2014, which would coincide with the rising quit-smoking rates.
Reinberg reported that scientists remained divided over whether e-cigarettes provided a gateway to smoking or a less harmful tool that helped smokers quit, but added that the new study seemed to support the second theory.
“People should be open to consider e-cigarettes as a way to help them quit, especially if they have used everything else in the past,” Zhu said. “The important thing is that people continue to try.”
Zhu added that a national tobacco control campaign that began airing in 2012 probably also helped boost quit rates.
July 27, 2017