Japan Tobacco has announced the results of a clinical study that demonstrates a reduction in exposure to, and uptake of, selected harmful and potentially harmful constituents in healthy Japanese adult smokers who switched to four in-market heated-tobacco products, including Ploom TECH+ and Ploom S 2.0.
The study was conducted in consultation with a medical advisor, Yuji Kumagai, who is a professor at Kitasato Clinical Research Center.
These results strongly underpin the potential of heated-tobacco products, including Ploom TECH+ and Ploom S 2.0, to reduce the health risks associated with smoking.
“With this study, the JT Group contributes another small but meaningful piece to the jigsaw of scientific evidence on heated-tobacco products. Although further research is required, these results strongly underpin the potential of heated-tobacco products, including Ploom TECH+ and Ploom S 2.0, to reduce the health risks associated with smoking,” said Ian Jones, JTI vice president and R&D principal scientist, in a statement.
“We continue to conduct research to provide scientific evidence of the potential benefits of using our reduced-risk products. As we continue our studies, we will communicate our research data on our science website, JT-science.com,” said Jones.
The U.K. Advertising Standards Authority (ASA) has banned a Nordic Spirit nicotine pouch ad for implying that the product has a mood-altering and stimulant effect, reports The Evening Standard.
The ad appeared on Crunchyroll, an anime streaming service, and depicted people using Gallaher’s Nordic Spirit pouches as they got ready to play an online video game. The players reacted enthusiastically to the game while online text read, “A new nicotine experience,” “great flavors,” “pocket-sized convenience” and “never miss a moment.”
There was small text on the screen throughout the advertisement stating that the product was for those 18-plus, that it contained nicotine and that nicotine is addictive.
Gallaher said the ad did not intend to target minors; according to the company, 85 percent of Crunchyroll’s audience was 18 years or older. The streaming service requires users to confirm that they are at least 16 years old.
The ASA found that the ad did not breach rules in respect of the ad being appropriately targeted to its audience. However, it did find that the product was not advertised responsibly.
The video ad was designed purely to emphasize the hands-free convenience of Nordic Spirit for existing adult nicotine users as an alternative to smoking cigarettes.
“We considered that the combination of the depiction of players using the product as they were about to start the game, the sense of anticipation created by music building to a drop and their reactions of excitement associated the use of the product with the game,” the ASA said. “These all implied that it had a mood-altering and stimulant effect, which would enhance enjoyment and gameplay. In the context of an ad for a product that contained nicotine, we considered that was irresponsible and breached the code.”
“We are disappointed with the finding that our advert for Nordic Spirit suggested that using the product made video gaming more fun and enjoyable and that the advert implied a mood-altering or stimulant effect,” said a spokesperson for Gallaher’s parent company, JTI. “The video ad was designed purely to emphasize the hands-free convenience of Nordic Spirit for existing adult nicotine users as an alternative to smoking cigarettes or using other nicotine-containing products.”
“While we maintain that at no point did our advert convey any mood-altering or stimulant effect, the ASA’s decision does provide some useful and clearer guidance to help ensure that ads for nicotine-containing products meet the ASA’s requirements.”
Japan Tobacco International (JTI) will invest €60 million ($70.43 million) to upgrade the production capacities of its factory in Romania, reports SeeNews.
The investment program will be deployed over the next three years, increasing the volume of JTI cigarettes manufactured in Romania.
The factory located in Bucharest’s Pipera industrial area is expected to play a key role in JTI’s sourcing to the EU markets.
“JTI Manufacturing will be provided with cutting-edge equipment in terms of technology and production standards,” JTI Romania factory lead Jamie Dunlop said.
Romania is the third-largest cigarette manufacturer in Europe after Germany and Poland. At present, some 70 percent of JTI Manufacturing Romania’s production is exported to some 50 countries.
According to the National Institute of Statistics, in 2020, exports totaled over €1.3 billion.
JTI Manufacturing will be provided with cutting-edge equipment in terms of technology and production standards.
Currently, JTI employs more than 1,200 people in Romania, including 500 at the Bucharest factory.
The company’s two entities in Romania—manufacturing and trading—paid over RON4.77 billion ($1.14 billion) in excise, VAT and other taxes, duties and contributions to the Romanian state in 2020, up 12 percent from the previous year.
JTI started operating in Romania in 1993 as R.J. Reynolds International and was one of the first multinationals to invest in the local tobacco industry. The company has invested over €250 million in Romania to date.
British American Tobacco (BAT), Japan Tobacco International (JTI) and Imperial Brands have been recognized by the Top Employers Institute.
BAT and JTI were certified as two of only 16 “Global Top Employers.” Imperial Brands was named a “Top Employer Europe” for a fourth consecutive year in 2021.
“Receiving Global Top Employer certification for the fourth-year running is a fantastic achievement as it acknowledges our commitment to creating an inclusive and innovative working environment that our employees enjoy being a part of,” said Hae In Kim, director, talent, culture and inclusion at BAT, in a press note.
“Our employees are our most important asset, and we are particularly proud of the resilience and determination they have displayed during the pandemic. Without doubt, they are a key driver in our continued strong performance as we transform our business and build A Better Tomorrow for all our stakeholders.”
“The Top Employer certification is not an end-in-itself,” said Steve Dyer, JTI’s vice president, global talent management, in a statement. “For us, it is confirmation that we have always been on the right track by making our workplace a safe and flexible environment for all our employees, whether they are farmers, scientists, office or factory workers.
“This seventh consecutive certification also sends a strong message to our future employees: we constantly give our people the opportunity to develop their career under the best conditions in order to perform to their highest abilities while being themselves.”
“I am delighted that Imperial has been recognised for another year with the Top Employer certification,” said Alison Clarke, chief people and culture officer at Imperial Brands, in a statement.
“Our HR Practices have been surveyed against an international benchmark with a thorough methodology. This accreditation is a symbol of the high standards that we aspire to deliver every day for our people.”
“Despite the challenging year we have experienced, which has certainly made an impact on organisations around the globe, our regional top employers have continued to demonstrate the power of putting their people first in the workplace,” said David Plink, CEO of the Top Employers Institute.
Top Employers Institute is the global authority on recognizing excellence in the conditions that businesses create for their people.
Companies participating in its prestigious certification program have the potential to gain top employer status following a comprehensive analysis of people development practices.
The institute’s analysis covers 600 practices across a number of areas including: talent strategy, workforce planning, on-boarding, learning and development, performance management, leadership development, career and succession management, compensation and benefits and culture.
Japan Tobacco International (JTI) has launched its Ploom S heated-tobaccodevice in the U.K., reports The Grocer.
The product will be sold through two Ploom-branded lounges in London, Ploompop-up shops, online at www.ploom.co.uk and through accredited retailers.
The device is used with tobacco sticks, which are sold separately. The tobaccosticks will be available in four different flavors—flavored tobacco, smoothtobacco, menthol and menthol/berry. The Ploom S device will have arecommended retail price of £89 ($116.06) and the consumables will have arecommended retail price of £4.50 for a pack of 20 sticks.
“The time is right for JTI to enter this exciting growth segment in the U.K. with aproven product that continues to grow in markets in which we have alreadylaunched,” said JTI U.K. General Manager Dean Gilfillan.
Ploom S is the second tobacco-heating system available in the U.K., after PhilipMorris International’s IQOS, which launched in 2016.
Previously, JTI launched Ploom in Japan, Russia and Italy.
Japan Tobacco International (TJI) has published a report, independently verified by Intrinsic Insight, entitled ‘The Gathering Storm’, on how the illegal tobacco trade is operating during the Covid-19 pandemic and preparing to reap the rewards in the economic aftermath.
Law enforcement agencies around the world have welcomed the report, which is based on 63 field studies, conducted across 50 countries including Russia, Canada, Malaysia and the Philippines where tobacco smugglers currently have a strong presence. JTI intelligence found that the global public health crisis and financial downturn has created the conditions for a ‘perfect storm’ where organized criminal groups will further exploit public demand for cheap goods, and capitalize on dwindling buying power in the impending global recession, particularly in countries with high tax regimes.
The report has provided JTI with a global picture of four emerging trends, consistent with Euromonitor and Europol intelligence:
Evidence shows that criminal groups are biding their time in readiness for an anticipated boom in illegal tobacco sales
Western countries have seen relatively little reduction in the production and availability of illegal tobacco. Since April 2020, local enforcement agencies have made significant seizures of illegal factories or their components in the Czech Republic, Greece, Ireland, Belgium and Spain
Changed law enforcement priorities and border restrictions have been mixed in limiting supply and the availability of illegal tobacco: whilst governments and authorities in Far East Asia were quicker to impose restrictions, those in the West failed to act with such precision
Technology has been increasingly deployed throughout the pandemic to enable sales of illegal tobacco to continue where strict lockdowns were put in place by governments throughout Eastern Europe, the Middle East, Africa and Asia Pacific, where WhatsApp and Facebook have provided quick and easy methods of communication between the consumer and criminals. Furthermore, the International Chamber of Commerce predicts that global counterfeit trade will reach $4 trillion by 2022, primarily fueled by e-commerce.
According to the World Bank, the global trade in illegal tobacco is already worth an estimated $40 billion-to-50 billion each year to the criminal groups who produce, manufacture, smuggle, distribute and sell tobacco products on which there is no tax duty paid. The loss of revenue to law-abiding retailers is also significantly felt, as is the impact on consumers who are lured into buying sub-standard products.
“To some consumers illegal tobacco is a victimless crime, which is why we need to inform them not only of the hidden dangers they are consuming, but the wider social consequences of buying from criminal groups who also traffic people and arms,” said Ian Monteith, JTI’s global anti illicit trade director. “Our report, shared with over 160 law enforcement agencies across the world, is the first of its kind for intelligence gathering during the pandemic, and we hope it will serve as a warning to governments of ‘the gathering storm’ in the black market.”
To tackle ‘the gathering storm,” JTI is calling for:
Improved enforcement at national borders
Improved intelligence sharing through public and private partnerships between all industries and law enforcement agencies
Exploration of fiscal measures that will allow consumer confidence to grow and avoid the temptation to spend on illegal products
Coordinated global campaigns to inform consumers through increased awareness about the dangers of illegal tobacco and the consequences that arise through its trade.
Japan Tobacco International (JTI) has extended its technology partnership agreement with Sauber Engineering, a leading player in technology and prototype development and part of the Sauber Group of Companies. Through this partnership, both companies will continue to collaborate on the development of precision engineering projects aimed at increasing the performance of the next generation of JT Group products.
The two companies are currently working on innovative solutions to enhance the user experience of JTI’s vapor products, developing innovative product platforms and new functionalities that respond to the changing demands of consumers to offer them even broader choice. JTI has been in the reduced-risk products category since 2011 and is currently present in 28 countries with its e-cigarette brand Logic and heated-tobacco brand Ploom.
Bob Blackman, chairman of the U.K. All Party Parliamentary Group on Smoking and Health, has criticized British American Tobacco (BAT) for leaking information about products made by Japan Tobacco International (JTI) following the ban on menthol cigarettes sold in the European Union, reports I News.
Blackman said he received a letter from BAT that claimed it had data showing that a new range of JTI cigarettes still contained menthol. “As I responded, their offer is completely inappropriate; their public duty is to share the evidence with the appropriate authorities without delay,” said Blackman.
A spokesman for BAT said the group had analyzed several JTI products and found them to contain menthol characteristics.
While admitting its new cigarettes contain menthol, JTI insisted they do not break the new laws.
“Some JTI cigarettes and rolling tobacco sold in the U.K. do still contain very low levels of menthol,” a spokesman for JTI said. “This is not prohibited under the law, provided that the use of such flavorings does not produce a clearly noticeable smell or taste other than one of tobacco—which they do not.”
Blackman said he had forwarded a copy of the letter to Public Health Minister Jo Churchill who responded that the issue was “being followed up” by her officials to investigate.
JTI repositions itself for achanging tobacco landscape.
By Stefanie Rossel
The year 2019 marked another milestone in the industry’s attempt to balance the familiar world of tobacco with that of next-generation products (NGPs). Between September and December, the world’s three leading tobacco manu- facturers announced comprehensive restructuring plans to make their operations fit for the new realities. Together, Japan Tobacco International (JTI), British American Tobacco (BAT) and Philip Morris International (PMI) will cut more than 5,350 jobs around the globe.
JTI alone will lay off 3,720 employees, or more than 8 percent of its global workforce, over the next three years. The measure will also hit JTI’s Geneva headquarters where about a quarter of the company’s 1,100 employees will be let go. The company said that it would create 1,300 new positions by creating global business centers (GBS) in Warsaw, St. Petersburg and Manila. The centers will provide support and management services to the company in finance, marketing and sales, research and development, legal matters and the supply chain. With around 850 workplaces, most new jobs will be created in Warsaw.
According to Antoine Ernst, senior vice president and chief transformation officer at JTI, the benefits of the GBS will be enhanced service levels through specialization, increased speed of the service delivery to the business and harmonized processes with simpler interfaces and integration of systems. Those benefits will lead to efficiencies and will allow markets and corporate functions to further concentrate on consumer and customer needs.
The transformation will take up to three years to implement. “The world and our external operating environment change at a very fast pace,” says Ernst. “This creates tensions but also new needs and opportunities. Our business operations, structures, services and product offerings will continuously adapt. We must be fit and agile to take full advantage of the changes and transform these opportunities [into] superior growth realities. The main goal of the JTI transformation is to be more competitive. It will improve our operating standards while investing and developing leading skill sets, ways of working and commercial capabilities needed for our future success. This is a continuous improvement road map with a clear focus [on] giving more and better tools to differentiate the JTI portfolio and win the consumer battle.”
Need to adapt
“All businesses are under fairly constant pressure to change and improve,” comments consumer staples specialist Jon Fell, principal at Ash Park. “While this restructuring should produce important savings, it’s also about improving the speed and efficiency of the organization and bringing in new skills, particularly digital ones.”
This expertise will be essential for JTI: The company emerged in 1999 as the international arm from the privatization of the Japanese tobacco monopoly, which took place in 1985, and grew through mergers and acquisitions to become the world’s No. 3 tobacco company. In 2017 and 2018, the Japan Tobacco Group (JT Group) acquired five major tobacco companies for about $6 billion. Today, around 60 percent of the JT Group’s operating profits come from its international division.
JTI has a wide range of tobacco products and vapor products in its portfolio. In addition to global cigarette brands, such as Winston, Camel, Mevius and LD, JTI offers shisha products under its Nakhla brand, snus with its LD brand, rolling tobacco under brand names such as Amber Leaf and Old Holborn, and cigars including the Hamlet brand. The company recently launched Nordic Spirit, a nicotine pouch, in Scandinavia, the U.K. and Switzerland. The product does not contain tobacco and can thus be legally sold throughout the European Union, which bans regular snus in all member states bar Sweden.
In the vapor market, JTI is represented through its Logic range of e-cigarettes including Curv, Pro, LQD and, recently, Compact.
JTI says that it continues to innovate and expand in the vapor category. Between 2015 and 2020, the firm will have invested $2 billion in the category. The company also expanded a number of its R&D facilities and factories to include its range of reduced-risk products (RRPs). It also has a new digital division to manage its online marketing and sales platforms. In RRPs, JTI is present in 28 countries, which together account for almost all global sales of the category.
The company’s priorities in the coming years are to pursue ambitious growth, to raise the bar in RRPs and to prioritize its investments through innovation, organic growth and acquisitions both in conventional tobacco products and RRPs.
While its international business has done comparatively well, the company’s domestic market has declined in recent years. With a share of 61.8 percent in 2018, according to Statista.com, JTI’s parent company Japan Tobacco (JT) continues to dominate the Japanese tobacco market. But its cigarette sales volume shrank by 8.5 percent year on year to 63.2 billion sticks between January and October 2019. While the company’s adjusted operating profit for the international tobacco business grew at a constant 10.2 percent in the third quarter of 2019, adjusted operating profit for the Japanese domestic tobacco business decreased by 4.3 percent due to unfavorable cigarette volume during that period, JT said.
The environment in Japan has changed significantly for smokers over the past years. Increasing taxation and the introduction of restrictive legislation in preparation of the 2020 Tokyo Olympic Games have considerably impacted consumer behavior. Introduced in 2018, the Health Promotion Law aims to restrict smoking in public in order to reduce exposure to secondhand smoke.
Compared to other industry nations, Japan still has a high rate of smoking, especially among adult males. According to JT’s annual survey on smoking, the percentage of male and female smokers in 2017 was 28.2 percent and 9 percent, respectively. Since the time of JT’s privatization, the male smoking rate has dropped by more than half.
Increasing product variety
The most drastic decline in smoking, however, occurred after the introduction of a new product category. According to a study by the American Cancer Society published in June 2019, the rate of decline in cigarette sales accelerated from 2 percent per year from 2011 through 2015 to 10 percent per year for the same period. The 2018 report “No Fire, No Smoke: The Global State of Tobacco Harm Reduction” (GSTHR) revealed that cigarette sales volumes in Japan fell 14 percent from 2016 to 2018 and a further 13 percent in 2018.
The acceleration was triggered when PMI began test marketing its IQOS heated-tobacco product (HTP) in 2014. Japan presented a near-optimal environment for such a product. Japanese consumers are known for their health consciousness, their love of innovative products and their tech savviness. What’s more, Japan prohibits the sale of nicotine vapor products, which means there is little competition from other alternative products.
Although the initially rapid growth of HTPs decelerated after February 2018, the new category continues to churn the country’s tobacco sector. JT estimates HTPs to account for 30 percent of Japan’s overall tobacco market by the end of 2020 compared to 21 percent in 2018.
Japan represents about 85 percent of the global $6.3 billion HTP market, according to Euromonitor International. With a 71.8 percent share of the Japanese HTP market in 2018, IQOS continues to be the incumbent, according to Reuters, but it faces increasing competition. BAT’s Glo held a share of 20.1 percent in 2018. JT’s Ploom Tech, the second to enter the market, accounted for 8.1 percent of the country’s HTP market during 2018 and approximately 9 percent during the third quarter of 2019.
Unlike competing products that heat tobacco directly, Ploom Tech generates vapor that passes through a capsule filled with granulated tobacco. While it emits far less sidestream smoke than other HTPs, some consumers have found its taste too weak. In January 2019, JT introduced Ploom Tech+, which the company says offers richer flavor and improved satisfaction. Its Ploom S heats tobacco sticks directly. To boost sales, the company also started offering starter kit sales at half price.
Both products are designed to give a stronger taste and to lure back those who tried Ploom Tech but stopped using it, Mutsuo Iwai, head of JT’s domestic tobacco business, told Reuters at their launch. He also stated the company intends to become No. 1 in the Japanese HTP market, arguing that a success in the world’s largest HTP market would lead to success globally.
“In time, JT can be a strong competitor in tobacco heating, but it is currently a little behind its main rivals, and it may take time and several product iterations for it to really get this category right,” says Fell.
Wanted: a new approach
The man leading the JT Group through its transition is Masamichi Terabatake, a JT veteran who took over as CEO in early 2018 and earned his stripes by integrating the company’s two largest overseas acquisitions—R.J. Reynolds’ international business and Gallaher. Before taking the helm, Masamichi spent much time in JT’s strategy division where he was also responsible for NGPs. In an interview with the Financial Times, Masamichi described the challenges a company with decades of expertise in a low-tech sector faces when it has to “become brilliant” overnight in the field of handheld consumer electronics. While the traditional cigarette business ends with the sale of the product, NGP manufacturers must develop an ongoing relationship with their customers; an entire ecosystem must be established around the new devices.
“I think the CEO is right,” says Fell. “The route to market is different, and there are more options for marketing these products, including via digital channels. Consumers switching for the first time from combustible products might need some guidance and ongoing support. There are different supply chain challenges because you have to coordinate the availability of devices along with the consumables, which can present forecasting challenges. And the innovation cycle needs to speed up—it’s important to have visibility on the product pipeline several versions ahead, and companies prob- ably have to work with external partners more often than they have been used to with conventional cigarettes.”
Apart from making greater inroads into the NGP segment, one of Masamichi’s tasks will be to broaden the company’s geographical footprint, which is presently focused on Japan, Russia and Europe. The group has already started to expand into emerging markets with recent acquisitions in Indonesia (Karyadibya Mahardhika), the Philippines (Mighty Corp.) and Bangladesh (the Akij Group’s tobacco business).
To stimulate further growth, JT will remain on the lookout for acquisitions, albeit perhaps through smaller deals as opportunities for larger acquisitions have dwindled in the wake of industry consolidation. Fell is optimistic. If the JT Group gets its strategy and execution right, he says, “there should still be plenty of room for growth and value creation in its core business.”
The Australian government has not yet published its Post-Implementation Review (PIR) regarding plain-packaging six months after the conclusion of the consultation period.
This delay in publishing has raised concerns about the integrity of the report and caused concerns that its authors could be misrepresenting data or omitting evidence in order to ensure the country’s plain-packaging policy is viewed as a success.
Plain packaging was introduced in Australia in 2012 with an end goal of reducing the nation’s smoking rates. According to the Australian government, the objectives of the plain packaging measure are to reduce the attractiveness and appeal of tobacco products to consumers; increase the noticeability and effectiveness of mandated health warnings; reduce the ability of the retail packaging of tobacco products to mislead consumers about the harms of smoking; and to ultimately reduce smoking rates.
In the three years since plain packaging was introduced in Australia, no change to the decline in smoking rates has been shown, according to the latest official data from the Australian government. Without evidence of a decline in smoking rates, supporters of plain packaging are finding it difficult to claim the measures have achieved their goals.
“The Department of Health [DoH] knows that this policy has failed,” said Michiel Reerink, Japan Tobacco International’s (JTI) regulatory strategy vice president. “The objective of the ban on brands was to improve public health by discouraging people from using tobacco products, and reducing their exposure to tobacco smoke. The government’s own data shows that these objectives have not been met.”
The DoH began its review of Australia’s plain packaging earlier this year, at which time it requested information detailing the impact the policy has had since its implementation. The consultation period ended in March. Although government guidelines suggest that PIRs should be published within three to six months after information is gathered, the Australian government has yet to publish this information.
“Tobacco control lobbyists are traveling around the world on taxpayers’ money to convince regulators that plain packaging has been a success in Australia,” said Reerink. “But anyone who looks at the official data can see for themselves: There is no proof that this ban on brands has worked.”
JTI has called for transparency from the Australian government regarding publication of the PIR.
“We urge the Department of Health to publish a complete and transparent review of this policy, without further delay,” says Reerink. “The PIR should be based on all of the evidence, in line with the requirements of the Australian Government’s Office of Best Practice Regulation. Crucially, the results of the plain packaging policy should be measured against its original objectives. Without this report being published soon, people risk being misled by biased reports and analysis on a measure that has done nothing to improve public health.”
JTI repositions itself for a changing tobacco landscape.