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  • A Good News Story

    A Good News Story

    Photo: Teo

    Tobacco harm reduction has made more progress than is often assumed.

    By Patrick Basham

    The good news about tobacco harm reduction is the bad news is wrong. The tobacco harm reduction experience is actually a positive story.

    It is true that the preponderance of influential and well-funded public health institutions and stakeholders are rabidly anti-tobacco harm reduction (THR). The World Health Organization is the most clear-cut example, with billionaire philanthropists funding global campaigns that, in concert with the WHO, incentivize national governments and their public health agencies either to ignore or to disparage THR’s demonstrated ability to improve public health.

    It is also true that most politicians who talk about THR-related reduced-risk products (RRPs) are critical of the technology and its marketing and are subsequently prohibitionist with regard to e-cigarettes, heated-tobacco products (HTPs), oral smokeless tobacco, etc. It is also true that the tone and substance of the vast majority of media coverage is highly negative.

    Such a choreographed chorus of naysaying has most everyone with even a passing interest in THR assuming that the political, institutional and media criticism is, first, representative of a global consensus among stakeholders that THR is a bad idea and second, that THR policies fail whenever and wherever they are introduced. Consequently, when surveyed, the public is at best ambivalent about RRPs’ comparative benefits vis-a-vis combustible cigarettes.

    All of the above may be true, but it is not the entire truth about tobacco harm reduction and reduced-risk products.

    The Other Side of the Coin

    My recent THR report pushes back against the criticisms—and against the broader skepticism they engender. The report does not attempt to catalogue THR’s critics and their mostly ill-informed critiques. The case against THR is readily available, easily accessible and delivered ad nauseam. Instead, this report seeks only to inform the reader that there is actually another, distinctive and very positive side to the THR coin.

    To that end, my report addresses overlooked and underappreciated elements of this policy conundrum. The report discusses the public opinion hurdle that must be surmounted by THR proponents in order for their political representatives to adopt more progressive and enlightened positions on this crucial aspect of public health policymaking. A summary is also provided of RRPs’ successful, yet largely unknown and therefore unappreciated, track records since their adoption in many parts of the world.

    There is an accounting of the many pro-THR governments who have adopted sophisticated strategies and policy prescriptions; there is also recognition of influential public health stakeholder endorsements since THR products became a commercial reality more than a decade ago. The report concludes by drawing lessons from the THR story so far, so that open-minded political and regulatory decision-makers may be better guided on their policymaking journey.

    Consumers worldwide are, on average, either uninformed or ill-informed about the concept of tobacco harm reduction and the specific reduced-risk products central to its implementation. Such ignorance is understandable as the THR paradigm is a comparatively new concept beyond public health circles and RRPs are innovative new technologies that only recently delivered commercially viable options for consumers.

    Such ignorance is nonetheless frustrating because respective prohibitionist politicians, philanthropists, regulators, public health organizations, academics and consumer groups have consciously erected the central barriers to better consumer understanding of, and appreciation for, THR and RRPs.

    The aforementioned anti-THR actors are seemingly dedicated to the proposition that tobacco and nicotine products scientifically proven to be less harmful than combustible cigarettes should not be readily available for use either by current smokers seeking less (often far less) toxic sources of tobacco and nicotine or even by smokers seeking to quit smoking altogether.

    Layered upon the anti-THR and anti-RRP campaigns are unhidden, viscerally anti-industry agendas that reflexively oppose any innovative technology or business model that may preserve, let alone enhance, the profitability of the tobacco and nicotine industries.

    A great many countries, international institutions and public health organizations are employing, and advocating for, THR policies and strategies to reduce cigarette consumption. To date, nearly 70 countries have adopted regulatory frameworks on reduced-risk products.

    An enormous number and variety of electronic nicotine-delivery products are in the marketplace, with nearly 16,000 flavors available and global sales rising to $15 billion in 2019. HTPs were also available in over 50 markets worldwide in 2020. Only one Western democracy (Australia) still requires its citizens to acquire a nicotine prescription in order to vape.

    Snus can be legally bought in 81 countries. RRPs are already being used by 112 million people worldwide, with approximately 82 million using nicotine vaping devices, 20 million using heated-tobacco products and 10 million using smokeless tobacco.

    Contributing to Cessation

    The evidence in favor of THR as a complementary intervention to help drive down death and disease from smoking is robust. For example, we now have evidence of the impact vaping has had on smoking. Vaping is today widely considered to be the world’s most effective smoking cessation tool.

    Extensive international evidence supports the conclusion that vaping plays a major role in smoking cessation. All of the nearly 70 countries that have adopted regulatory frameworks on safer nicotine products subsequently report a decline, often a dramatic one, in smoking prevalence. Countries that embrace vaping have witnessed a decrease in smoking rates that is twice as fast as the global average.

    Snus’ extensive contribution to improvements in Swedish public health is well documented. When Norway allowed snus products to be more widely available, cigarette smoking fell by half in just 10 years.

    Japanese tobacco harm reduction is the story of HTP-driven success.

    Japan’s policies have led to a remarkable drop in cigarette smoking. In October 2020, in the world’s largest heated-tobacco market, the smoking rate dropped to a record low of 16.7 percent, down 1.1 percent on the previous year. Between 2016 and 2021, domestic combustible cigarette sales declined 43 percent.

    This decline is directly attributable to the availability of noncombustible RRPs, mainly HTPs. HTP popularity caused cigarette sales to plummet five times faster than before HTPs were available.

    Tobacco harm reduction is a refreshingly good news story, as detailed in the preceding sections. That is the reason governments around the world are increasingly placing THR at the heart of their tobacco control strategies.

    Pro-THR policymakers are legalizing RRPs for widespread consumer use as regulators in these countries construct regulatory frameworks that harness the products’ potential to reduce tobacco-related harm while restricting their availability to adult consumers exclusively.

    That said, certain governments and regulatory agencies have disproportionate influence on the global stage. The governments of many smaller and medium-sized nations, in particular, look to the likes of the U.S. Food and Drug Administration, the European Union and the Chinese government for case studies, regulatory models, bureaucratic signals and political cover regarding THR’s innate veracity, as well as the applicability and suitability of specific RRPs to public health in general and the consumer marketplace specifically.

    Some of the steps taken by governments and public health bodies with outsized influence have empowered THR while other steps have retarded its progress. My report’s accounting and cataloging of THR successes and adoptions provides these institutional actors, and those influenced by them, with numerous lessons concerning the best way forward should public health be the overriding concern.

    Ten policymaking lessons stand out:

    • Tobacco harm reduction should be the principal driving force behind a nation’s tobacco control strategy.
    • Legalize the import, export, sale, possession and use of reduced-risk products. These products should be as widely available as tobacco products and available without a prescription.
    • The debate is not legalization versus prohibition. The latter approach is empirically unsound, unenforceable and counterproductive. Hence, it is crucial that specific regulations and tax policies are THR-friendly, too.
    • Employ the “weighting principle,” that is, employ concepts such as absolute risk, relative risk, and usage patterns in order to calculate the net public health effect of RRPs, and utilize that data to guide the adopted regulation.
    • RRPs are most suitably regulated as consumer products rather than as medicines or tobacco products.
    • Apply the “continuum of risk” approach across tobacco and nicotine products. Regulation should reflect the lower toxicity levels of RRPs and, therefore, regulations and taxes should correspond to the level of harm caused by a given product, hence the need for the differential taxation of RRPs.
    • Lower rates of taxation for RRPs than for cigarettes help to ensure the affordability of RRPs for low-income consumers, who smoke disproportionately, and incentivize smokers to switch from combustible products.
    • Smokers have the right to accurate information on RRPs; therefore, governments should underwrite health education messages about the comparative risks of RRPs. A pragmatic regulatory approach furthermore recognizes the utility in fewer restrictions on RRP advertising than on cigarettes, hence reduced-risk claims for RRPs should be permitted in advertising.
    • Providing a choice of flavors to adult consumers encourages them to switch from combustibles to less harmful products.
    • Traditional cessation approaches are not the only tools available to help people transition away from smoking cigarettes. Vaping is the world’s most effective smoking cessation tool.

    The greater the number of governments that learn and apply these lessons, the greater will be the public health benefit that the world experiences from tobacco harm reduction’s focus upon the reduced-risk potential of innovative tobacco and nicotine products.

    Patrick Basham directs the Democracy Institute, a politically independent think tank. Basham was previously a Cato Institute senior fellow and taught tobacco regulation at Johns Hopkins University. Prior to Cato, he led tobacco policy research at Canada’s Fraser Institute. In 2016, he was the only pollster to predict both Brexit and Donald Trump’s Electoral College victory. A prolific author, Bahsam recently published “Covid-19: WHO is to blame?”
  • Lifting the Fog

    Lifting the Fog

    Photo: Andrii

    An official acknowledgement of nicotine pouches’ comparatively low risk clears the way for appropriate regulation in Germany.

    By Stefanie Rossel

    The news was a minor sensation given German authorities’ reluctance to acknowledge the reduced harm potential of novel tobacco products. On Oct. 7, 2022, the Federal Institute for Risk Assessment (BfR), a scientific institution of the German government, published a statement in which it confirmed that tobacco-free nicotine pouches could reduce the health risks compared to smoking.

    Jan Muecke | Photo: German Association of the Tobacco Industry and Novel Products

    The risk profile of modern oral nicotine products, as they are also called, is comparable to that of medical nicotine-replacement products such as nicotine patches, the institute wrote in its evaluation, which was published in several scientific journals, including Tobacco Control. Carried out by BfR scientists in August 2022, they study showed that aside from nicotine, the pouches contain no substances that present health concerns. In some samples, researchers detected traces of tobacco-specific nitrosamines, which are also found in medical nicotine-replacement products. According to Jan Muecke, chief executive of the German Association of the Tobacco Industry and Novel Products, this problem is solvable, however.

    To protect consumers, the BfR recommended regulation of the manufacture, presentation and sale of nicotine pouches. Tobacco harm reduction advocates hope the findings will prompt German authorities to finally regulate modern oral nicotine products as tobacco products.

    Nicotine pouches comprise small sachets with a mixture of cellulose fibers, flavorings, water, humidifying and gelling agents along with preservatives and artificial sweeteners. Since their introduction in Germany, they have existed in a regulatory gray area. Because the products contain nicotine, authorities decided that sales require monitoring. However, since the products are tobacco-free, the German tobacco product law does not apply.

    Following several assessments and court rulings, German regulators classified modern oral nicotine products as food, making it subject to European food law. However, the European Union prohibits the use of nicotine as a food, food ingredient, food additive or food flavor, which means nicotine pouches classified as food may not be sold in the trade bloc. In March 2021, the administrative court in Hamburg confirmed that the sale of modern oral nicotine products was illegal. Other German courts have followed suit.

    According to Muecke, the classification of nicotine pouches as food has been problematic because it misleadingly implies that the products are being eaten. “This is nonsense,” he says. “The products are consumed by putting the pouch between the upper lip and gum and leaving it there while the nicotine and taste is being released. After use, the complete pouch is disposed of. This makes them comparable to toothpaste or floss—no one would think of declaring these products as food.”

    Regulation Protects Consumers

    By classifying nicotine pouches as food, Germany is an outlier. In the 16 EU member states where modern oral products are available, they are regulated either as tobacco or as a consumer product. Demark and the Czech Republic have even created a new product category for nicotine pouches, defining them as tobacco surrogates and allowing the sale to adults.

    Muecke welcomes the opportunity that the BfR assessment offers Germany to change its classification. “The BfR statement contains all data that are required for appropriate regulation of nicotine pouches,” he says. “Scientific studies have confirmed that if nicotine content is limited to a maximum of 20 mg per pouch, nicotine blood levels will not be higher than when smoking a combustible cigarette. We therefore hope that the government will take the request of the consumer protection conference of the federal states seriously who in 2021 had called for regulation of nicotine pouches under tobacco law.

    “In the current state of legal uncertainty, modern oral nicotine is nevertheless on the German market—consumers buy their nicotine pouches online from abroad. These products often do not stick to nicotine limits, and child and youth protection cannot be efficiently controlled. Adequate regulation of nicotine pouches as tobacco products would hence protect consumers and youths.”

    A chance for a change is already in sight: Under a delegated directive from the European Commission, the German government has until July 2023 to revise the country’s rules for heated-tobacco products (HTPs). “HTPs will be more strictly regulated in Germany in the future,” Muecke explains. “Therefore, it would make sense to find legal regulation for nicotine pouches during the same legislative process, which for HTPs will have to be concluded in the first half of 2023. To wait for a new version of the EU Tobacco Products Directive (TPD) that won’t be translated into national law until 2025 or 2026 would be wrong as unregulated online purchases of modern oral nicotine products with excessive levels of nicotine would continue to endanger consumers.”

    The European Commission intends to publish a draft of the revised TPD in 2024. While the wording is still unknown, the public has an opportunity to share its views through a consultation. Muecke encourages all stakeholders to take part, for example through the German-language website dein-ding.de.

    While it would technically be possible to regulate nicotine under the revised TPD, this is not Muecke’s preferred solution. “The products are on the market right now and available in 16 EU member states, especially in most of our neighboring countries, hence Germany shouldn’t be an island of prohibition,” he says. Muecke suggests regulators use the TPD’s e-cigarette regulations as guidelines for modern oral nicotine products.

    Muecke is confident that appropriate regulation for the novel oral nicotine products will be implemented in Germany. “A ban of nicotine pouches would not be in accordance with the principle of risk minimization,” he says. “The government must create a possibility for consumers to buy such reduced-risk products at retailers—it’s an absolute necessity.”

    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 the Plot

    Losing the Plot

    Image: Adobe Stock

    When it comes to tobacco, the European Commission should abandon its overly complex ideas and embrace some fresh thinking.

    By George Gay

    The people of England and Wales were advised by health chiefs not to get drunk on Dec. 21—and I think it is worth pausing for a moment to take in the enormity of the implications of that advice …

    But, moving on, the reason for the advice’s having been given specifically for Dec. 21 was that ambulance drivers were due to go out on strike that day, which meant it was going to be more challenging than usual to deliver to hospitals those people, drunks and their victims, injured by drunken behavior.

    No such advice had to be given in respect of the consumption of tobacco. Those seeking enjoyment through the consumption of nicotine rather than alcohol do not over-consume, and, importantly, do not, as a result of their smoking, lose their faculties for thinking clearly and, like drinkers, start acting in silly, violent and otherwise bizarre ways.

    Given this, I feel moved to ask, not for the first time, why it is that, in most parts of the world, and certainly in Europe, about which this story is concerned, tobacco and tobacco consumers are regarded as society’s pariahs while alcohol and alcohol consumers are regarded as being part of the normal social milieu—hail fellow, well met! Why is it that we take seriously people who, while drinking alcohol and becoming increasingly muddled in their thinking, pontificate on, among other things, the evils of tobacco and smoking?

    It seems totally illogical, but one answer, I guess, could be that so many people drink alcohol that, collectively, we have passed the tipping point of population-level befuddledness and, consequently, are no longer able to summon the level of critical faculties necessary to see through the inconsistencies and hypocrisies that drive our lives. On the whole, unlikely.

    Nevertheless, something weird is going on that defies logical analysis. While the world at large has long been at war with tobacco consumption, the original, often well-meaning objectives seem to have been pushed to one side. The purported reason behind the tobacco conflict, as I understood it, was to reduce the death and disease caused by smoking, but the focus seems to have shifted elsewhere, in part to the defiance of the various methods being used in the conflict, and to a whole string of largely peripheral activities. We are told that there are 1 billion smokers worldwide, but there must now be another billion who owe their livings or part of their livings to anti-smoker activities and/or to devising ways of defending the wasteful expenditure of conflict funds.

    A Curious Leaflet

    In June last year, the European Commission issued a curious leaflet that included a table illustrating what, at first glance, seemed to be the overall level, EU-wide, of the implementation of a European Council recommendation on the enforcement of smoke-free and vapor-free environments. In fact, some of the smoking restrictions, including those to do with outdoor areas and private places, and the vapor restrictions, apparently fall outside the remit of the recommendation but presumably within rules in force within some EU states. The left column of the table listed 20 places where, technically, a person could smoke or vape, but, according to the rules, may or may not be allowed to do so. The table had three right-hand columns, one headed “Traditional products for smoking,” the second headed “E-cigarettes” and the third headed “Heated-tobacco products.” Against each of the 20 places, three colored circles appeared, one in each of the right-hand columns indicating whether enforcement was “very good” (dark green), “good” (light green), “moderate” (yellow), “low” (orange) or “very low” (red). So, for instance, enforcement in indoor workplaces, the first of the rows, was indicated to be very good (dark green) in the case of traditional smoking products but only moderate (yellow) in respect of e-cigarettes and heated-tobacco products.

    What struck me about the right-hand columns of the table, which, in total, included 60 colored circles, was that it looked like something designed by a child, whiling away a wet Sunday afternoon, innocently unaware that some people have difficulty distinguishing such colors. But, of course, this was something that had been produced by adults paid to do so. It had been funded presumably by the anti-tobacco, anti-smoker money tree, which spares no effort, no expense on even the most peripheral of exercises.

    The table seemed so far removed from the coalface of tobacco harm reduction (THR) that I couldn’t understand what purpose it served, but I felt certain that the money it cost could have been better spent. The needle of THR would have been shifted more if the funds needed to produce the table had instead been used to buy 100 or so e-cigarettes or packs of snus that were subsequently handed out to impoverished smokers.

    And there was a sinister side to the table. One of the places listed in the left-hand column was designated “private homes,” where enforcement was described as very low (red) in respect of all three products. This raises a worrying question. Does the commission believe that, at some stage in the future, it would be very good if the lights changed to green along this row, indicating that people were being monitored in their homes to determine whether they were smoking or vaping? This is not idle speculation. The commission says in the leaflet that “There is a gap in the legislation of exposure to smoking in multi-unit housing” while acknowledging that “Smoke-free measures are difficult to monitor in private places (for example, homes and cars).”

    Of course, the amount of money wasted on the leaflet is probably small, but I suspect there is an awful lot of such ephemera wafting through the halls of the commission, and a lot of small amounts of money can add up to … well, a lot of money. And more is planned, even in these straitened times. The commission says that the 2009 recommendation is limited and that, in part, “There is a need to increase financial and human resources available for monitoring and enforcing rules on smoke-free environments.”

    Collective Consumer Intelligence

    Nothing could be further from the truth. The commission should pause for thought. When e-cigarettes first became available, they quickly became popular through a system of what I would call collective consumer intelligence, a human version of swarm intelligence in which insects such as bees and ants work together to form efficient societies without the need for management. Early adopters of e-cigarettes went on to the internet and performed waggle dances to indicate where the best e-cigarettes were to be found, and things started to work well. It was only with the intervention of countless managers, including those at the commission, that THR started to slow down.

    In fact, one of the proofs of this argument lies with snus rather e-cigarettes. The EU must have spent millions of euros purportedly on trying to get smokers to quit, but it banned snus, except in Sweden. Banning snus has got to rate as one of dumbest policies ever devised, anywhere in the world, in respect of anything. It requires apparently sentient people ignoring the evidence staring them in the face—ignoring the fact that the proportion of smokers in Sweden, which is heading down toward 5 percent, is lower than in any other EU country.

    But perhaps it is me who is being dumb in believing that the EU wants to reduce the level of tobacco smoking within its territory. After all, this premise is based on self-reporting. If it is wrong that this is the aim, then its actions become perfectly logical.

    Chasing its Tail

    The idea that the commission and the EU have lost the plot is supported by the effort they have put, and are putting, into the establishment and operation of a traceability system for tobacco products. Although this effort is aligned with the Protocol to Eliminate Illicit Trade in Tobacco Products, which came into force in 2018 under the aegis of the World Health Organization Framework Convention on Tobacco Control, it is not a health initiative. It has nothing to do with seriously trying to stop people smoking but is aimed at providing, in the commission’s words, “member states and the commission with an effective tool that enables the tracking and tracing of tobacco products throughout the union and the identification of fraudulent activities that result in illicit products being available to consumers.” In other words, the huge effort that is being expended to put the system in place is aimed at increasing the sales of licit tobacco by reducing those of illicit tobacco. But you have to ask whether this is a proper use of the commission’s energies, especially in the straitened times we are suffering.

    It could be argued, of course, that it is in society’s interest to stop illegal trading no matter what products are involved, but I would counter that, in the case of cigarettes, such efforts merely show the commission to be chasing its own tail. The illegal trade in cigarettes in the EU is fueled by unfair levels of taxation applied to tobacco products by countries, in part at the behest of the commission, so the simple answer is to reduce taxes and do away with the need for a complex traceability system.

    And it is complex, as anybody will realize if they read through the commission’s Nov. 3 draft of recommended amendments to the 2018 traceability system Implementing Regulations, which weighs in at 17 pages with 23 pages of appendices. “The traceability system established in accordance with Implementing Regulation (EU) 2018/574 started collecting data on tobacco products’ movements and transactional data on 20 May 2019,” the draft says. “Experience in its implementation has further demonstrated the importance of high quality, accuracy, completeness and comparability of the data that need to be recorded and transmitted to the system in a timely manner.

    “In its report on the application of Directive 2014/40/EU of 20 May 2021, the commission stressed that the member states and the commission had considerable problems with the quality of traceability data …”

    You can imagine where this goes—into a haze of legalese covering the minutiae of tobacco product logistics. None of this helps smokers, but it helps to provide jobs for those in the burgeoning and lucrative trade of making miserable the lives of smokers.

    Who pays for this traceability rigmarole, you might ask. Well, according to the commission, it’s very simple. The costs of operating and maintaining the system, and of storing the data, is borne largely by tobacco manufacturers and importers. But you would have to be terribly naive to accept that at face value. The costs purportedly borne by manufacturers and importers will be passed onto smokers, which will increase the financial burden on them and make it more likely that they will turn to illicit products. The system, incomprehensibly, is designed to punish those who buy licit products for the sins of those who buy illicit products. Again, the commission is chasing its tail.

    What the commission needs right now is a good dose of simplicity. It should throw out the complexities of traceability, unban snus, stop agitating for a ban on nicotine pouches, stop interfering in the development of the sorts of e-cigarettes and heated-tobacco products capable of persuading smokers to quit their habit, and stop worrying about novel products that might or might not come along.

    The collective intelligence of smokers, aligned with the best interests of tobacco product and nicotine product manufacturers, clearly intent on converting the market, will do the heavy lifting. It is time to sweep away the musty, overly complex ideas of the past and let in some light and new thinking.

    Yeah, like that’s going to happen in the run-up to the EU’s Tobacco Products Directive III, with the huge number of anti-smoker jobs on the line.

    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.
  • CTP to Detail its Reagan-Udall Response

    CTP to Detail its Reagan-Udall Response

    Brian King at the GTNF 2022
    (Photo: Chris Frenzi)

    The U.S. Food and Drug Administration Center for Tobacco Products (CTP) will provide an update in February on its planned actions in response to the Reagan-Udall Foundation’s evaluation of its program, CTP Director Brian King wrote in a letter published on the FDA website today.

    In July 2022, FDA Head Robert Califf instructed the Reagan-Udall Foundation to review the agency’s food and tobacco programs following months of criticism over its handling of the baby formula shortage and e-cigarette reviews.

    The report, published in December, highlighted several problems at the agency and offered suggestions for improvements in regulations and guidance, application review, compliance and enforcement.

    “We are in the process of closely reviewing this feedback and in February will provide an update on our planned actions in response to the evaluation,” wrote CTP Director Brian King.

    In his letter, King also noted the CTPs priorities for 2023, which include finalizing the product standards relating to menthol cigarettes and flavored cigars, along with developing a proposed product standard that establish a maximum nicotine level to reduce the addictiveness of cigarettes and other combusted tobacco products.

  • BAT Restructures its Operations

    BAT Restructures its Operations

    Photo: BAT

    British American Tobacco is restructuring its operations to streamline and accelerate the transformation of its business. The new structure will feature fewer but larger business units to improve collaboration and speed up decisionmaking.

    “As our transformation journey towards our strategic milestones gathers pace, we need to further sharpen our operating model, streamline our business to drive agility, and continue to enhance organizational capabilities,” said BAT CEO Jack Bowles in a statement.

    “As part of our commitment to building ‘A Better Tomorrow,’ the changes we have announced today will drive increased focus, accelerate our transformation and fuel growth as we strengthen the foundations of our future as a category-led enterprise.”

    BAT will reduce the number of regions from four to three, and the number of business units from 16 to 12, while also accelerating its market exit plans. After the restructuring, the company will have the following regions: USA (Reynolds American Inc.), Americas & Europe (AME), and Asia Pacific, Middle East & Africa (APMEA)

    In addition, two new management board roles will be created in order to ensure clarity of ownership, accountability and focus: chief transformation officer and director, combustibles.

    The chief transformation officer will be responsible for driving faster transformation, accelerating greater capability build in key areas and enabling an even faster, simpler and more agile organization. The director, combustibles will lead the focus on driving value from combustibles to fuel further investment in new categories.

    The changes we have announced today will drive increased focus, accelerate our transformation and fuel growth as we strengthen the foundations of our future as a category-led enterprise.

    Jack Bowles, CEO, BAT

    The following structural changes and appointments will take effect April 1, 2023:

    • Johan Vandermeulen, currently regional director, Europe, will be appointed to the new role of chief transformation officer
    • Luciano Comin will be appointed to the new role of director, combustibles
    • Frederico (Fred) Monteiro will be promoted to the management board as regional director, AME
    • Guy Meldrum will continue to lead BAT’s largest business in the USA as president, Reynolds American Inc.
    • Michael Dijanosic will take on an expanded role as regional director, APMEA
    • Javed Iqbal, director, digital and information, will work with the regional directors and chief transformation officer to ensure that the digital and information agenda is fully aligned with BAT’s corporate transformation

    The president of Reynolds American Inc. and regional directors for AME and APMEA, and the director, digital & information, will report to the chief transformation officer. The director, combustibles will report to the chief growth officer.

    Vandermeulen joined the management board in 2014 and has extensive leadership experience across BAT, previously leading the Asia Pacific and Africa & Middle East regions, following general and marketing management roles in Russia, Turkey and as a global brand director. Vandermeulen will report to Bowles.

    Comin was regional director, Americas & Sub-Saharan Africa, prior to which he held senior general and marketing management positions in Europe, Mexico and Malaysia.

    Monteiro has spent more than 20 years with BAT, most recently as area director of central Europe south, based in Romania. Prior to this role, Monteiro has held numerous senior leadership positions including marketing director, next generation products; head of marketing for the Europe Region and general manager, BAT Japan.

    Further, David O’Reilly, director, research and science, will step down from the management board on Feb. 28, 2023, and leave BAT with effect May 31, 2023, to pursue other interests.

    O’Reilly joined the management board in January 2012, and has been instrumental, both internally and externally, in driving the science agenda that has underpinned BAT’s transformation.

    O’Reilly will be succeeded by James Murphy, currently executive vice president of scientific research and development at Reynolds American Inc.

    Murphy has been with BAT for over 17 years and has held a number of senior roles in the center in R&D, operations and marketing as well as in the Americas and Sub-Saharan Africa region. Murphy will join the management board as the director, research and science designate, with effect from Feb. 1, 2023, before assuming the role of director, research and science, reporting to the CEO, on March 1, 2023.

  • German Trade Group Blasts Call for Vape Ban

    German Trade Group Blasts Call for Vape Ban

    Jan Muecke
    (Photo: German Association of the Tobacco Industry and Novel Products)

    Recent calls to ban e-cigarettes lack a scientific basis, according to the German Association of the Tobacco Industry and Novel Products (BVTE).

    In a recent interview with Deutsche Presse-Agentur, Manne Lucha, minister of social affairs, health and integration for Baden-Württemberg, said that e-cigarettes should be treated the same as combustible cigarettes and that flavored vapor products should be banned.

    “It is a scientific consensus that the intake of harmful substances when vaping e-cigarettes is much lower than when smoking tobacco. With his ‘post-factual’ statements, the minister is causing consumer uncertainty with counterproductive consequences for health policy,” said BVTE CEO Jan Muecke in a statement.

    Muecke cited a 2020 statement by the German Cancer Research Center, which acknowledged that a complete switch from smoking to vaping reduces the consumer’s exposure to harmful substances. He also quoted Public Health England’s finding that e-cigarettes are at least 95 percent less harmful than smoking.

    According to the BVTE, e-cigarettes are the most frequently used smoking-cessation tool in Germany, ahead of less effective methods such as medical nicotine replacement products. The wide choice of flavored liquids, meanwhile, is a significant factor for adult smokers to switch to vaping, the organization wrote.

    “Instead of fueling fears with false claims and misguided demands for bans, e-cigarettes should finally be promoted in Germany as an opportunity to minimize risks for smokers,” Muecke said.

  • PMI and KT&G Boost Collaboration

    PMI and KT&G Boost Collaboration

    Photo: KT&G

    Philip Morris International and KT&G are extending their cooperation in selling smoke-free devices with a long-term deal. The arrangement builds on a deal signed in March 2020 that has seen PMI commercialize the South Korean cigarette manufacturer’s Lil heat-not-burn product in more than 30 markets.

    The new agreement, signed on Jan. 30, runs until Jan. 29, 2038, with performance-review cycles and associated commitments, based on volume, to be confirmed for each three-year period. PMI and KT&G expect these commitments to increase over the full duration of the agreement, starting with a total commitment for the first three-year period equivalent to 16 billion consumables.

    The agreement gives PMI continued exclusive access to KT&G’s smoke-free brands and product-innovation pipeline, including offerings for low- and middle-income markets, that will enhance PMI’s existing portfolio of smoke-free products.

    It gives KT&G continued access to PMI’s global commercial infrastructure and experience commercializing smoke-free products to support the further expansion of KT&G’s smoke-free business outside South Korea.

    “We have been pleased with the success of our cooperation with KT&G so far and believe a long-term collaboration will accelerate the achievement of a smoke-free future. We want everyone who does not quit smoking to switch to a better alternative, for the benefit of their own health, public health, and society at large,” said PMI CEO Jacek Olczak in a statement, adding the KT&G’s Lil products play a complimentary role to PMI’s popular IQOS heat-not-burn device.

    “With KT&G’s technology and speed of innovation and PMI’s science and commercial infrastructure, we believe our partnership will accelerate our shared vision of a smoke free future.”

    “We are now able to further raise the competitiveness of KT&G’s smoke-free products in the overseas market and establish a basis for stable growth of our global business through the advancement of the strategic partnership with PMI,” said KT&G CEO Baek Bok-In in a statement. “KT&G will make efforts to acquire world-class capabilities to become a global top-tier company in NGP earlier than planned and to lead the next generation tobacco market.”

    KT&G introduced Lil in 2017 and has been launching updated versions of the product at frequent intervals.

    Following their March 2020 agreement, PMI and KT&G first introduced Lil in three markets including Japan. Later, they expanded sales to into 31 to countries in Europe and Central America, among other regions.

  • Judge Lowers Royalty Payments in Alto Case

    Judge Lowers Royalty Payments in Alto Case

    Photo: RJRVC

    A U.S. federal judge in North Carolina lowered the rate of ongoing royalties R.J. Reynolds Vapor Co. will have to pay to Altria Client Services in an intellectual property dispute involving RJR’s Vuse Alto e-cigarette, reports Law360.

    In September 2022, the U.S. District Court for the Middle District of North Carolina awarded Altria Client Services more than $95 million after finding that Reynolds Vapor Co.’s Vuse Alto e-vapor product infringed three Altria patents.

    In his Jan. 27 opinion, U.S. District Judge N. Carlton Tilley Jr. ruled that continuing royalties on Vuse Alto are justified but not at double the rate decided by the jury.

    The opinion lowers Altria’s requested rate for ongoing royalties from 10.5 percent to 5.25 percent, which Reynolds will have to pay quarterly until the last of Altria’s patents expire on April 22, 2035.

    “Altria has not shown that the pod patents’ contribution to the Alto’s performance since May 2019 justifies increasing the jury’s royalty rate of 5.25 percent,” Judge Tilley wrote.

    Earlier this month, Judge Tilley denied Reynolds a new trial in the Vuse Alto dispute.

    Reynolds Vapor Co. has requested a new trial, stating that “Altria’s improper injection of inflammatory evidence regarding patent infringement allegations against Reynolds in other cases denied Reynolds a fair trial.”

  • Belgium Health Minister Pushes For Pouch Ban

    Belgium Health Minister Pushes For Pouch Ban

    Photo: Liudmila

    The Belgian health minister, Frank Vandenbroucke, has called for a ban on nicotine pouches, citing concerns about youth exposure to tobacco products.

    “Our goal is to prevent our children and young people from smoking,” Vandenbroucke said. “If you are fully committed to a smoke-free generation, you must ensure that young people come into less contact with smoking or anything related to it.”

    Nicotine pouches are popular with youth, according to The Brussels Times, because they are easy to use, like snus, which is banned in the EU except for Sweden, but without the tobacco, and because they are cheaper than other tobacco products. Dutch research has shown that nicotine pouches are addictive and cause harm to the brain.

    “These nicotine pouches, like electronic cigarettes and vaping, can be a steppingstone to smoking at an early age,” Vandenbroucke said. “That is why we are resolutely opting for a ban on them. We are doing this because protecting the health of children and young people is an absolute priority.”

  • Group Predicts Growth for Holograms in 2023

    Group Predicts Growth for Holograms in 2023

    Photo: Taco Tuinstra

    Commercial holograms will maintain robust growth in 2023 despite the global challenges, according to the International Hologram Manufacturers Association (IHMA), which marks its 30th anniversary this year.

    Authentication and track-and-trace systems featuring holograms will continue to help to underpin international efforts by government and law enforcement agencies to bolster overt and covert protection strategies in the next 12 months, said IHMA chair Paul Dunn.

    “Counterfeiting is and will remain a massive global threat, continually placing governments, brands and the public at risk—and will continue to be tackled effectively to minimize the impact on society. Despite the economic, social and global supply chain challenges, we expect to see [growth] in 2023 with countries enhancing and bringing forward their anti-counterfeiting plans, which feature holograms,” he said.

    “These holograms will become even more integrated with other technologies to create intuitive brand engagement programs while, simultaneously, authentication through scanning a QR code on the label acts as a secondary product verification method. This provides a simple unified platform for brands to interact and engage with their customers.”

    Dunn also sees the hologram on labeling continuing to become part of a wider function to track a product throughout its lifecycle and post-life cycle in 2023. This combination of authentication and tracking, he says, will give brand owners complete visibility and control from sourcing raw materials through to recycling.

    This year will also see continued growth in high security print applications as, increasingly, holography origination capabilities are brought in-house. This cuts the innovation cycle and enables printers to get their technologies specified for new banknote work.

    Sustainability will also be one of the key themes of the next 12 months with manufacturers developing strategies to cut their carbon footprints as part of their corporate responsibility strategies. “The IHMA will be leading efforts through its Sustainability Working Group to encourage best practice by sharing information and showcasing companywide initiatives,” Dunn said.