Tag: GTNF 2021

  • Matt Ridley

    Matt Ridley

    Photo: Malcom Griffiths

    The Importance of Innovation

    Matt Ridley, who is a member of the U.K. Parliament’s upper house, ended his presentation by saying the All-Party Parliamentary Group for Vaping, of which he is a member, had recently urged the U.K. government to attend this year’s Conference of the Parties to the World Health Organization’s Framework Convention on Tobacco Control and, while there, use its relatively independent post-Brexit voice to argue strongly against the e-cigarette prohibitionists and in favor of scientific evidence and the harm reduction argument. “I don’t know whether we will be listened to by the U.K. government on this, but we are going to try and get this point across because I think it’s … it’s a moral one, and I think we have a duty to try to win the point,” he said.

    This will have gone down well with many of the conference participants, who will have agreed with Ridley’s earlier comment that the WHO’s war on vaping was “positively unhinged” and flew in the face of evidence that it reduced smoking. And here he illustrated his point by quoting Chris Snowden of the Institute of Economic Affairs as saying the WHO had doubled down on its hostility to vaping even as real-world evidence continued to show smoking rates declining as vaping rates increased.

    Ridley’s was the first keynote presentation of the event, and, while it did not contain much else that was new, it ran through most of the underlying issues causing concern to the vaping industry, and it did so with panache. He covered, among other subjects, the assessment of relative risk and its relationship with the concept of harm reduction, innovation and the main ideas that motivated some people, including some public health professionals and politicians, to want to ban the technology underpinning vaping.

    The first motivation, he said, was down to the inappropriate application of the precautionary principle in answer to the question, “What if this technology turns out to have unknown risks?” While that question was valid, he added, in the case of vaping, the answer was that it would be better to take the small risk that there were unknown hazards than the known risks that there were large hazards. The second motivation was a general hatred of all things related to nicotine, which was deeply ingrained in the culture and underlined by the involvement of tobacco companies in the vaping industry.

    The third motivation was self-interest. The pharmaceutical industry had a nice little earner called nicotine-replacement therapy, and since its patches and gums didn’t work very well, the market for them remained limitless. And the fourth motivation was simply down to the urge to ban. Some people loved to disapprove, and they were able to come up with all sorts of specious arguments about why they disliked e-cigarettes and why, therefore, they should be banned.

    Ridley, an author whose books have sold more than a million copies and been translated into 31 languages, added to his output in 2020 with the publication of How Innovation Works, and part of his presentation looked at the way in which innovative products often initially meet with considerable opposition. Margarine, he said, had been opposed by dairy producers, refrigerators by natural ice suppliers, tractors by the people who went under the name of the Horse Association, umbrellas by hansom cab drivers, coffee by vintners and the telephone by what sounded like an old curmudgeon worried that this then-new contraption would destroy private life if it were not restricted. (Of course, with most of us now suffering daily from the debilitating effects of vacuous, secondhand mobile conversations, it might be worthwhile revisiting the old curmudgeon’s complaint.)

    The audience, I think, will have been struck by two things in relation to these examples. One, obviously, is that they are all from the distant past. The other is that whereas nearly all of them involve people trying to protect their self-interests, those self-interests comprised their livelihoods and none of their actions threatened to cause direct harm to others. So while the opposition to these products and services can be likened to the opposition to vaping, there is an important difference because unjustified opposition to vaping does directly threaten the well-being of others: current smokers.

    Given that this session report starts with Ridley’s last words, it might be appropriate if it ends with his first words: a gentle plug for his latest book. It had been co-authored by a brilliant molecular biologist at Harvard, Alina Chan, he said, and it was called Viral: The Search for the Origin of Covid-19. “You can buy it in all good bookstores from the middle of November,” he added helpfully.

  • Stefan Bomhard

    Stefan Bomhard

    Photo: Malcom Griffiths

    Putting consumers first

    Across all industries, the Covid-19 pandemic has been one disruptive force, which drove government intervention, accelerated consumer trends and, as a result, spurred further innovation. The tobacco and nicotine industry, which finds itself in a period of rapid change, has been no exception: Controversial policy led to bans on combustible cigarettes as seen in South Africa, but at the same time, growing health consciousness has led to an increased interest in reduced-risk alternatives.

    Stefan Bomhard, who previously worked in the alcohol industry and joined Imperial Brands as CEO in July 2020 from Inchcape, a global distribution and retail leader in the premium and luxury automotive sectors, shared his views on the longer term transformation of the tobacco and nicotine industry, looking at how stakeholders could collectively be best at making a reality of a healthier future. He observed parallels between the vaping sector and the automotive industry, where manufacturing for many years had been seeking to improve the efficiency of the 160-year-old technology of the combustible engine. “Then climate change became the climate crisis, and the e-engine meant a complete turnaround,” he said.

    Innovation, Bomhard emphasized, can happen only if supported by private sector efforts. As regulation of reduced-risk products (RRPs) edges toward prohibition, unintended consequences such as illicit trade arise. “The industry has to step up and present continuously better choices for consumers,” Bomhard said. “Smokers need to be perceived as informed people who want to make informed choices. There is no single route to tobacco harm reduction, but a billion individual paths.”

    Imperial Brands, which in the past 25 years developed from a domestic player into an international player, sees its role in this development in delivering a better experience for consumers. “From my experience, small players can flourish with the right mindset,” he said.

    While keen to transform the tobacco industry, Bomhard insisted Imperial Brands remains 100 percent committed to combustible cigarettes. “They are the core business for building a harm-reduced company, as they finance the investments in tobacco harm reduction,” he noted.

    To transform Imperial Brands, he explained, additional capacities have been built, including increased research of consumers’ needs. The company hired its first consumer product officer earlier this year. Products will be improved based on the findings of consumer studies. At this point in time, consumers have chosen heated-tobacco products over vaping, according to Bomhard, so Imperial Brands focuses on offering products in that segment.

    Furthermore, a number of new executives have joined Imperial Brands, bringing in new capabilities and contributing to the development of a new, more innovation-headed mindset in the organization. The focus is on the question of how employees can play a practical role in driving innovation, Bomhard pointed out.

    In addition to harm reduction, he went on, the industry had other important challenges, inclusive of supporting better lives for farming communities, transitioning to a lower carbon business model and reducing waste. “The future of the industry will without doubt have twists and turns,” he said. “For me, having enjoyed a career in a variety of fast-moving industries, each one of them facing major structural changes, the year with Imperial has enforced my first impression that right now, there is no more dynamic sector than tobacco and nicotine.”