Clear The Air News Tobacco Blog Rotating Header Image

Tobacco Company

Inside Big Tobacco’s Academy of Lies, the Inventor of ‘Alternative Facts’

Don’t like the science? Then invent one you do like. It was one of America’s greatest snow jobs, costing millions of lives. And it’s happening again with climate change and this time billions of lives are at stake.

http://www.thedailybeast.com/articles/2017/03/25/inside-big-tobacco-s-academy-of-lies-the-inventor-of-alternative-facts.html

The world is warmer than it’s ever been since records began to be kept in 1880. The Antarctic ice sheet is melting so fast it alone is responsible for 10 percent of the global rise in sea levels. The coral bleaching of Australia’s Great Barrier Reef, a direct result of global warming, is now virtually irreversible.

All this as the Trump administration abandons measures to combat climate change and gives climate change deniers full powers to put the brake on any scientific research devoted to establishing a link between climate change and human activity. Goodbye Planet Earth.

This is the willful corruption of science in the cause of ideology. But we’ve been here before. To understand how this game is played, we can go back to what you could call the foundation of the Liars’ Academy, the professionalization of the crafting of alternative scientific facts.

It’s generally thought that the turning point in establishing a direct link between smoking and cancer came with the U.S. surgeon general’s report of 1964. Drawing on 7,000 scientific studies and the work of 150 consultants, the report demonstrated that the death rate among smokers was 70 percent higher than among non-smokers.

In fact, the first really authoritative warning about smoking came in 1953, when Alton Ochsner, president of the American Cancer Society and the American College of Surgeons, predicted that the male population would be decimated unless steps were taken to reduce the cancer producing content of cigarettes.

At this point any link between smoking and cancer had not been acknowledged by the National Cancer Institute or the U.S. Public Health Service or most of the medical establishment. (As late as 1958 a Gallup survey showed that only 44 percent of Americans believed smoking caused cancer.)

A top R.J. Reynolds executive, Claude Teague, had reviewed the same evidence as Ochsner and reported, “Studies of clinical data tend to confirm the relationship between heavy and prolonged tobacco smoking and incidence of cancer of the lung.”

All copies of Teague’s report were collected and destroyed, and a week after Oschner’s speech six tobacco company presidents met to take stock of the threat now facing them. As a result, they called in John Hill, founder of the public relations firm Hill & Knowlton. What followed was a strategy described by a lawyer as “the industry’s ultimate public relations sham.”

Hill & Knowlton advised the companies:

“There is only one problem—confidence and how to establish it; public assurance and how to create it—in a perhaps long interim when scientific doubts must remain. And, most important, how to free millions of Americans from the guilty fear that is going to arise deep in their biological depths—regardless of any pooh-poohing logic—every time they light a cigarette.”

This marked the beginning of what became, literally, an industrial scale exercise in the promotion of an alternative scientific reality. It involved not just alternative facts but an entire body of false scientific argument to deny that smoking caused cancer. This was the work of an unholy alliance of tobacco company executives, public relations flacks, corporate lawyers, scientists, politicians, and gullible media.

The full extent of the conspiracy was revealed only in 2001, when David Kessler, the former commissioner of the Food and Drug Administration, and relentless foe of the tobacco industry, published his memoir, A Question of Intent.

(Personal disclosure: I was one of a team of researchers who worked with Kessler on the book.)

It is timely to revisit this story because, among other things, it demonstrates that the daily flood of alternative facts from the White House builds on the foundation of Big Tobacco’s model of disinformation. There is no need to compare this with the propaganda machine of Nazi Germany or of any totalitarian state. In its reach and sophistication it is a wholly American achievement.

For more than four decades Big Tobacco had one objective: to maintain the pretense that the link between smoking and cancer remained unproven. In that method it anticipated the entire strategy of climate change deniers, to argue that even if the earth was warming up there was no link between that and human activity. In order to pursue their disinformation campaign the tobacco industry had to produce its own alternative facts—or alternative science.

Hill & Knowlton outlined a four-point strategy to deal with scientific critics: “(a) smearing or belittling them (b) trying to overwhelm them with mass publication of the opposed viewpoints of other specialties (c) debating them in the public arena; or (d) we can determine to raise the issue far above them, so they are hardly even mentioned, and then we can make our case.”

The first step in pursuing this strategy was to set up a body that looked and sounded like an authoritative scientific enterprise, then to staff it with scientists prepared to sell themselves to the mission. It was named the Council for Scientific Research, CTR, and its director was a Harvard-educated cancer researcher of international renown, Clarence Cook Little. He, in turn, recruited similarly illustrious peers to the cause.

All of these supposed experts were satisfied that they could rest their reputations securely on the narrow premise on the “unproven” link. In this they were abetted by lawyers who discovered that when cases against the tobacco industry came to court juries were inclined to believe that smoking was a personal choice. So-called scientific witnesses supported attorneys who argued that “association cannot prove causation.”

“Everyone was molded according to the script,” one industry official told Kessler later as he investigated the record.

Kessler, respectful of C.C. Little’s reputation, could not understand how he could have gone along with the CTR’s strategy. He went through Little’s private papers and found no answer. He did, however, find a letter to Little from Charles Huggins, a Nobel laureate cancer researcher at the University of Chicago. Huggins pleaded with Little: “Please leave the tobacco industry to stew in its own juice…[it] is criminal to promote smoking. It is dastardly. This is the Age of the Hollow Man. Let it not be known as the age when our finest thinkers sell out.”

Eventually the industry decided that the CTR was not as effective as it should have been. In 1964, following the surgeon general’s report, the alternative facts campaign had another instrument, Special Projects. This had no official address, no incorporation papers, no board of directors, no by-laws and no accountability.

In fact, Special Projects marked the ascendancy of lawyers. David Hardy, of the law firm Shook, Hardy & Bacon, began looking for scientists and physicians prepared to testify against the surgeon general’s report before Congress. Special Projects was run by the general counsels of the tobacco companies, supported by Shook, Hardy and the Washington, D.C. law firm Covington & Butling.

Kessler discovered that every decision, every research project, every public presentation, went through lawyers who had one prevailing concern: liability.

Kessler found an industry source who was prepared to talk as long he remained identified only as “Veritas.” Discussing the lawyers involved in Special Projects, Kessler asked, “Where did they cross the line?”

“When you commission the research and know the outcome, that’s fraudulent. When you market that as the truth, that’s evil,” Veritas replied.

The cynicism of the operation could sometimes catch a rooky lawyer unawares. One recent law school graduate working for another law firm, Wachell, Lipton, involved with Big Tobacco pointed out that the industry money flowing to the firm was being “used to purchase favorable judicial or legislative testimony, thereby perpetrating a fraud on the public.”

He asked for guidance from more senior colleagues. There was no record of the response. We are fond of describing America as a nation of laws. Maybe so, but we are also a nation of lawyers, and you get what you can pay for.

Although the industry’s main effort was directed at squashing litigation, there was a more subtle program of “managing the social climate for tobacco use.” The industry always worked hard to recruit young smokers—after all, the market had always to replace the people being killed off by smoking with another generation of initiates. They noticed that anti-smoking campaigns were beginning to work among teens. In response they branded public health advocates as the enforcers of political correctness, even commissioning a theater group to satirize “the new puritanism.”

Kessler discovered that at Philip Morris successful manipulation of the story wasn’t thought to be enough. Part of a top secret plan called Operation Rainmaker was that they should not only shape the story but own the means of delivering it. Notes for a meeting in 1990 said, “If we are to truly influence the public policy agenda and the information flow to the populace, we must be the media…the only way to do this is to own a major media outlet.”

The proposed targets included the Knight-Ridder newspaper chain; the Copley News Service, United Press International and U.S. News & World Report.

This plot never came to pass. But in some cases Big Tobacco didn’t need to buy the media because the media gave them a pass. Perhaps the most egregious example of this was in a surprising place: the newsroom of The New York Times.

For years some of the most rigorously sustained reporting on Big Tobacco had been the work of Philip Hilts in the Washington bureau of the Times. Hilts had a deep grasp of scientific detail and a passion for pursuing the secrets of how the ingredients of cigarettes were manipulated to create addiction. After a lot of digging Hilts discovered that in Philip Morris’s Benson & Hedges brand there had been a significant rise in the levels of nicotine. Company research had described these levels as “optimum.”

Following publication of the Benson & Hedges story, Philip Morris executives went ballistic and demanded that the paper print a correction. The editors refused, saying that no error had been made.

However, in the Times newsroom some editors had developed a “not another tobacco story” resistance, feeling apparently that there was little left that could surprise. And a week later, Soma Golden Behr, assistant managing editor for national news, called Hilts to New York. Over lunch Behr told Hilts that his tobacco beat was finished and he was reassigned. For two years, until 1999, the Times basically dropped the story.

In that period Alix Freedman of The Wall Street Journal won a Pulitzer for her coverage of Big Tobacco.

Kessler thought Hilts’s reporting had been invaluable and later sought to find out why he had been pulled from the story. He decided that it wasn’t directly a result of the Philip Morris intervention. It was more a dumb misjudgment by editors who thought that the reporter had become too committed to one story.

There is a moral to this, and one I know well from personal experience. Obsession can be the difference between a reporter who sees no further than the news cycle and one who implicitly understands where a story is really going and will stick with it until it gets there. Obsession is good. And when you’re up against alternative facts it’s indispensable.

In his time as FDA Commissioner, under presidents Bush and Clinton, from 1990 to 1997, Kessler was the most formidable opponent ever faced by Big Tobacco. The Supreme Court ultimately refused to accept his case that tobacco should be classified as a drug and therefore that it should be regulated by the agency.

Nonetheless his agency’s investigations finally exposed the lethal secret that the industry had hidden beneath its mountain of alternative facts: cigarettes were, basically, a nicotine delivery system, nicotine led to addiction, everything that could be done to strengthen the dose of nicotine was done, and nicotine addiction killed.

Kessler also proved in chilling detail that the public good can suffer grievous harm as a result of a deliberate and sustained campaign to corrupt science and defer for generations the acceptance of scientific fact. Climate change is a far greater threat than smoking ever was. The ethic of the Liars’ Academy has now been incorporated into main stream politics: the methods of denial haven’t changed, but the stakes are now so much higher. And, as with smoking, there is no concern for future generations, just a greedy defense of the indefensible.

Dutch cancer assoc. files lawsuit against tobacco producers

Dutch cancer fighting association KWF is suing four major tobacco companies for aggravated assault resulting in death and forgery. According to the association, the tobacco companies deliberately incorrectly inform smokers about the damage smoking actually causes, AD reports.

http://nltimes.nl/2017/03/24/dutch-cancer-assoc-files-lawsuit-tobacco-producers

KWF is filing charges against the largest tobacco manufacturers in the world – Imperial Tobacco Benelux, British American Tobacco, Philip Morris and Japan Tobacco International.

The association is charging the tobacco companies with forgery because KWF believes they intentionally manipulate the mandatory tests that measure the emission of harmful and addictive substances in cigarettes. In this the KWF points to what they call the “sjoemel cigarette” [tampered cigarette]. These cigarettes have little holes that tests show make smokers inhale less harmful substances. But according to the KWF, this is wrong – smokers partly cover the holes with their fingers, thereby inhaling more harmful substances in practice than the tests indicate.

KWF is suing the tobacco companies with two smoking victims Anne Marie van Veen and Lia Breed and the Youth Smoking Prevention foundation.

PMI to convert Greek cigarette plant to make iQOS sticks

Philip Morris International (PMI) will invest EUR 300 million (USD 323 million) to convert a Greek cigarette factory to into a plant capable of turning out 20 billion tobacco sticks for its iQOS heat-not-burn device, the company said.

http://www.tobaccojournal.com/PMI_to_convert_Greek_cigarette_plant_to_make_iQOS_sticks.54155.0.html

Expansion and remodeling the Aspropyrgos plant operated by affiliate company Papastratos will create 400 new jobs in addition to the 800 current ones, PMI said. Construction will begin immediately with operations expected to start in January 2018.

“This investment is further evidence of our progress towards a smoke-free future. We are encouraged by the 1.4 million smokers who have already switched to IQOS around the world, and we expect this momentum to continue,” said Frederic de Wilde, PMI regional president for the European Union.

Aspropyrgos will be the third facility dedicated to iQOS production. Production currently is centred in a specially built facility in Crespellano, Italy and a small scale Industrial Development Centre in Neuchatel, Switzerland.

AMP snuffs out tobacco investment

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11821645

AMP Capital is to snuff out its investment in tobacco manufacturing companies including millions of dollars invested through its KiwiSaver funds.

The move is part of a decision to pull out of tobacco investments worth A$440 million across its global investment portfolio.

The asset manager will also pull its Australian investments out of cluster munitions, landmines, biological and chemical weapons companies.

The move follows on from its New Zealand arm which pulled out of these investments last year following reports by the New Zealand Herald and Radio New Zealand which highlighted KiwiSaver’s exposure to the controversial sectors.

AMP Capital chief executive Adam Tindall said it had excluded tobacco manufacturers under a new environmental, social and governance and socially responsible framework because their products were highly addictive, could not be consumed safely and impacted non users via second-hand smoke.

He said cluster munitions, landmines, biological and chemical weapons manufacturers were excluded because their products indiscriminately kill through normal use (including during peace time) and their use leaves a legacy of significant and specific danger for civilians.

“We are not prepared to deliver investment returns to customers at any cost to society.

This position has been affirmed through consultation with major institutional clients and engagement with retail customers.”

Divestment from the tobacco investments would occur progressively over 2017 the company said, with impacted investors notified prior to any changes being made.

“The managers of impacted portfolios will be instructed to progressively sell down their holdings of excluded securities in a reasonable manner. This may take up to 12 months from time of formal notification,” a spokeswoman said.

Last year the Herald identified AMP Capital’s KiwiSaver funds had $17,169,091 invested in tobacco companies in the year to March 31, 2015.

It also has investment funds outside of KiwiSaver which are likely to include tobacco investments.

The AMP spokeswoman said it was not giving a regional breakdown for its tobacco investment.

$127 Billion Australian Manager Dumps Tobacco, Weapons Investing

Australia’s largest publicly traded wealth manager is ditching stock and debt investments in companies with ties to tobacco, cluster munitions and land mines, in the latest push for ethical investing in the nation.

AMP Capital Investors, the investment management arm of AMP Ltd., is dumping about A$440 million ($338 million) worth of investments in tobacco manufacturing-related companies and about A$130 million in land mine and cluster munition manufacturers. The moves come as AMP Capital rolls out a new decision- making framework across its A$165 billion investment portfolio, the wealth manager said in a March 16 statement.

“We are not prepared to deliver investment returns to customers at any cost to society,” AMP Capital Chief Executive Officer Adam Tindall said in the statement. “AMP Capital has a long-term focus on responsible investing supported by an integrated approach to considering ESG factors across all asset classes.”

Growing Demand

The money manager’s decision comes amid burgeoning demand for ethical investments in Australia’s A$2.2 trillion retirement savings pool. Assets at funds that screen out investments that don’t meet ethical investing criteria grew by 16 percent to A$24.7 billion in 2015-16, according to the Responsible Investment Association Australasia.

AMP, which also controls insurance and banking businesses Down Under, will implement a new framework that considers harm as well as “denial of humanity” when determining investment decisions. Tobacco manufacturers were culled under the framework because their products were addictive, while cluster munitions and biological weapons would “indiscriminately kill through normal use,” the company said.

The sales of the stakes will occur progressively throughout 2017, AMP said in the statement. The company engaged the help of consulting group, The Ethics Centre, to create its ethical investing framework, according to the statement.

“AMP Capital still firmly believes in company engagement in order to effect meaningful change,” Tindall said. “In the case of tobacco, cluster munitions, land mines, biological and chemical weapons manufacturers, however, no engagement can override the inherent dangers involved with their products.”

Can we trust Big Tobacco to promote public health?

There’s a new catchcry in public health: people working in tobacco control should join with Big Tobacco to promote “safer” tobacco products.

http://www.econotimes.com/Can-we-trust-Big-Tobacco-to-promote-public-health-588041

It runs like this: before starting work each morning, tobacco company employees sing with gusto the company song “Thank you, thank you, addictive nicotine”. But they really hate the small problem that smoking kills around two in three of its long-term users early. Just think of all the lost revenue from those collective millions of smokers who die an early death.

So for decades tobacco companies have been busy trying to get their chemists and engineers to develop “safer” (ie less dangerous) products, e-cigarettes being the latest kid on the block.

The public health community has always seen the tobacco industry as the largest vector for lung cancer and all the other diseases caused and exacerbated by smoking. This is why the World Health Organization’s Framework Convention on Tobacco Control – now ratified by every country in the world except Cuba, Haiti, Argentina, Mozambique, Switzerland (headquarters to Philip Morris International) and the US – has a whole section (Article 5.3) detailing how governments should work to combat tobacco industry interference in tobacco control. I contributed a background document on the many ways the tobacco industry tries to gut tobacco control at every turn.

Shifting the focus

The new catchcry proposes Big Tobacco really, really wants to stop selling its deadly products and have all its smokers, in time, switch over to its we-are-not-yet-sure-how-much-but-probably-less-deadly products.

It emphasises the only real goal tobacco control should have is to reduce disease caused by using tobacco products. And guess what? This now turns out to be a shared goal: Big Tobacco and public health both want the same thing so they should forget all the mistrust and animosity of the past, welcome the industry to the table, invite them to conferences, share data and embrace them as partners.

Unfortunately, the catchcry is profoundly myopic. No, let’s not muck around. It displays weapons-grade naivety and ignorance in those promoting it, as this opinion piece shows.

Has Big Tobacco really changed?

Here is why the “they’ve changed” argument about Big Tobacco hits the rocks.

Can anyone name a single example of any Big Tobacco company taking its foot off the accelerator of aggressive opposition to any policy that promises to effectively reduce its core mission: selling more cigarettes?

Philip Morris tried and failed recently in a legal case to gut Uruguay’s tough, comprehensive tobacco control program. The company was doubtless attempting to bully a minnow nation into submission, to send a loud message to any other small nation silly enough to get ahead of itself with such policies.

All tobacco companies fight with all they have to stop tax rises. Just go to British American Tobacco (BAT) Australia’s twitter feed, where tweets about illicit tobacco feature heavily. Here’s an example:

Capture

But why is BAT so obsessed with illicit tobacco? The company is trying to get public brownie points by showing it’s concerned about tax lost to illicit trade. Its main agenda is it wants the government to stop raising tobacco tax. It knows that a tax-reduced lower prices will increase tobacco sales like nothing else, particularly to low income groups like the poor and kids. Tax is the single most effective policy in reducing use, which is why Big Tobacco gives such priority in its lobbying to trying to defeat tax rises.

All the main transnationals poured millions into trying (and failing) to stop Australia’s pioneering plain packaging legislation. Go figure why they tried that.

And as recently as December 2016, BAT wrote this appalling letter to the Hong Kong administration trying to stop graphic health warnings going ahead. This was from a company which, published in its 2016 financial results statement a call to “champion informed consumer choice”.

Informed, yes, but please we don’t want smokers to see pictures of what smoking does to you and be THAT informed.

Big Tobacco would love its new generation products to sell well. But down the corridor from its harm reduction division are its cigarettes, financial and executive divisions that know which side the corporate butter is spread thickest. The only possible conclusion is Big Tobacco’s goal with reduced risk products is not to cannibalise its own core product, but to try and promote dual use (cigarettes and e-cigarettes): “smoke when you can, and vape when you can’t”.

Cigarettes still core business

Three of the world’s biggest tobacco transnational companies have very recently affirmed that cigarettes will remain their “core” business.

Philip Morris says:

…cigarettes, our core product.

Imperial says:

Our core business is built around a tobacco portfolio…

BAT says:

Tobacco will be a core part of our business for many years.

BAT chief executive officer, Nicandro Durante said recently the company expects to continue to boost sales of traditional cigarettes in several key markets, pointing to (paywall) the fastest growing areas:

Places like Vietnam, the Philippines, and Indonesia — there are many opportunities out there.

He added that BAT derives more than half of its total revenues from emerging markets.

No firewall between ‘good’ and ‘bad’

The Royal College of Physicians of London wrote recently (p188):

There is no firewall between a “good” tobacco industry that is marketing harm-reduction products in the UK and a “bad” one that promotes smoking, or undermines tobacco control activities, in low- and middle-income countries.

It’s report continued:

Tobacco companies make their money by selling tobacco, and the industry’s recent programme of investment and acquisitions in e-cigarettes perhaps indicates recognition that these products represent a disruptive technology that should be harnessed to protect the core business of selling tobacco, exploited to expand tobacco markets or developed as an opportunity to make nicotine products attractive to non-smokers. There is little likelihood that the industry sees e-cigarettes as a route out of the tobacco business, but it is highly likely that e-cigarettes will be exploited to enhance claims of corporate social responsibility, and to undermine implementation of Article 5.3 of the World Health Organization Framework Convention on Tobacco Control.

Those who believe the tobacco companies are born-again public health angels with the advent of e-cigarettes have little to say about Big Tobacco’s business as usual with cigarettes. It’s a bit like arguing that we should pat a mafia boss on the back for donating a few hundred thousand dollars to a drug rehabilitation clinic while it’s business as usual during the rest of his week.

Health Ministry sued over soft treatment of iQOS

Dubek, a manufacturer and importer of tobacco products, sued the Health Ministry for showing favouritism by allowing Philip Morris International to skirt advertising restrictions in marketing iQOS, the Jerusalem Post said.

http://www.tobaccojournal.com/Health_Ministry_sued_over_soft_treatment_of_iQOS.54143.0.html

Health Minister Ya’acov Litzman reportedly is waiting to see how US regulators deal with the tobacco heating device. In the meantime, iQOS is being sold and marketed without restriction in Israel. In its complaint to the High Court of Justice, Dubek said this discriminated against its tobacco products, which face restrictions, the Post said.

Study explores alarming threat of emerging Asian tobacco companies to global health

There are already one billion tobacco smokers worldwide, and this number is likely to rise further with Asian tobacco companies poised to enter the global market, according to SFU health sciences professor Kelley Lee.

http://www.sfu.ca/sfunews/stories/2017/03/theloomingthreatofasiantobaccocompaniestoglobalhealth.html

“While companies like British American Tobacco and Philip Morris, traditionally known as ‘Big Tobacco’, have been rightfully targeted by tobacco control efforts to date, on the horizon are several companies based in Asia ‘going global’ with their business strategies,” says Lee, a Tier I Canada Research Chair in Global Health Governance.

“Their aim is to grow their share of the world market through increased marketing, new products and lower prices. This is likely to mean more smokers worldwide.”

Lee and her team are the first to study the global business strategies of Asian tobacco companies, recently published in a special issue of Global Public Health entitled, “The Emergence of Asian Tobacco Companies: Implications for Global Health Governance.”

Their aim in analysing companies in Japan, South Korea, China, Taiwan and Thailand was to document how these companies are shifting from a domestic focus to become aspiring transnational companies.

“Several of these companies have already started to export their brands to rapidly growing markets in Asia, Europe, the Middle East and Africa,” says Lee.

“Their success will mean a further increase to the already six million deaths caused by tobacco use each year.”

These new research findings suggest that globalization of the tobacco industry may be entering a new phase.

Rather than supporting the expansion of these companies as sources of profit, Asian governments need to recognize that far greater economic, environmental and social costs are being caused by this deadly industry.

The authors conclude that collective action by all countries, focused on the World Health Organization’s Framework Convention on Tobacco Control, is needed more than ever.

Lee sat down with SFU News to go over the five case studies that were examined in the special issue, and answered three questions about the findings:

What are the key factors behind the global business strategies of the five Asian tobacco companies?

Trade liberalization and tobacco industry lobbying pressured Asian countries to open their markets to transnational tobacco companies (TTCs) from the late 1980s. British American Tobacco, Philip Morris, R.J. Reynolds and other companies introduced new brands, marketing methods and undermined tobacco control measures to gain a major share of the market in Asia.

The loss of domestic market share also prompted Asian tobacco companies, in turn, to look abroad to grow their own foreign markets. Their global business strategies have borrowed many of the practices used by existing transnational tobacco companies.

Which global business strategies have Asian companies pursued?

Government supported consolidation, restructuring and rationalizing of domestic operations. This included shutting down facilities deemed inefficient, merging smaller concerns into larger ones and upgrading production capacity.

The companies also increased manufacturing, specifically for export to foreign markets, and engaged in new product development to create brands that have global appeal.

Moreover, there has been product innovation, including specially designed filters, flavourings, super slim cigarettes and electronic cigarettes, as well as foreign direct investment in the form of joint ventures, overseas manufacturing and leaf growing operations.

How globalized are Asian tobacco companies to date?

Japan Tobacco International was the first Asian tobacco company to successfully globalize, beginning in the late 1990s, supported by the Japanese government as part owners. Today, Japan Tobacco International is the third largest transnational tobacco company in the world.

Korea Tobacco & Ginseng is well positioned to become the world’s next transnational tobacco company given its active and successful pursuit of foreign markets since privatisation in 2001. The company is achieving rapid growth in eastern Europe, the Middle East and South Asia countries.

The China National Tobacco Company is by far the world’s largest tobacco company but to date has been largely domestically focused. Consolidation has been followed by a strong commitment by the state owned monopoly to “go global” over the next decade through exports, overseas manufacturing and leaf production.

Taiwan Tobacco and Liquor Corporation and Thailand Tobacco Monopoly have both expressed ambitions to globalize, but remain domestically focused and are more likely to become regional players in the foreseeable future.

Tobacco company files suit against Health Ministry

Philip Morris chose Israel to be one of the first countries to market iQOS.

http://www.jpost.com/Business-and-Innovation/Health-and-Science/Tobacco-company-files-suit-against-Health-Ministry-484079

Dubek, Israel’s tobacco manufacturer and importer, filed a suit in the High Court of Justice against the Health Ministry on Monday for showing “favoritism” to the international tobacco company Philip Morris, which is marketing its no-smoke heated- tobacco cigarette iQOS.

Dubek said it is limited in marketing and advertising its own products, while Health Minister Ya’acov Litzman – against the views of public health professionals inside and outside his ministry – allows iQOS to be sold and advertised without limit.

This laxity will continue, Litzman decided recently, until the US Food and Drug Administration decides what to do about the product.

The sale and marketing of iQOS has been prohibited in the US and other countries until the FDA releases its ruling.

A few days ago, Avir Naki, a nonprofit organization that fights smoking, petitioned Attorney-General Avichai Mandelblit to revoke Litzman’s authority on all tobacco legislation and regulation because he has shown a “personal connection” to a number of issues relating to tobacco. Litzman met with Philip Morris lobbyists before announcing his decision.

Dubek said the ministry “has ignored blunt violations of the law for restricting advertising and marketing of tobacco products” by Philip Morris, thus carrying out unfair competition. It also charged that the Tax Authority does not levy sales taxes on iQOS and “causes a huge loss of revenue to the state coffers.” Sales taxes constitute 80% of the price of regular cigarettes.

IQOS, Dubek said, claims to be a “less-harmful product” than conventional cigarettes because the tobacco and additional chemicals are warmed but not burned.

But Philip Morris’s claim has not been proven, Dubek said, also complaining that iQOS is not required to carry any health warnings on the package.

Philip Morris chose Israel to be among the first countries to market iQOS, thus turning its population into “guinea pigs” in a “huge experiment for which we will all pay,” the Israel Medical Association’s Society for the Prevention of Smoking and Smoking Cessation said early this year.

‘War of Innovation’ Rages in Tobacco Industry

A recent Bloomberg report titled “Big Tobacco Has Caught Startup Fever” sheds light on traditional tobacco and cigarette industry leaders’ accelerated race to offer innovative products in light of anti-smoking regulation and campaigns, along with changing consumer preferences. As a byproduct of this shift, market giants such as Philip Morris International Inc. (PM), Reynolds American Inc. (RAI) and Japan Tobacco Inc. have invested heavily in product development, funding tech incubators, launching venture funds and creating apps after the style of Silicon Valley in efforts to develop next-gen reduced-risk tobacco platforms. (See also: Business Groups Increasingly Turn Against Tobacco.)

http://www.investopedia.com/news/war-innovation-rages-tobacco-industry/

‘Next-Gen Nicotine Delivery’

Philip Morris, the world’s largest publicly traded tobacco company, demonstrated its commitment to offer “next-gen nicotine delivery” through a new $111 million environmentally progressive research center called the Cube.

As a testament to the Lausanne, Switzerland-based firm’s new greeting on its re-launched homepage, “Designing a smoke-free future,” the high-tech center has three wings named Earth, Wind and Air. The absence of Fire signifies the company’s push for “heat not burn” tobacco products, including its popular IQOS heat stick. Philip Morris has poured more than $3 billion into new tobacco-based inventions as an alternative to the fragmented e-cigarette market. The decision makes sense given that the largest companies already have a competitive edge in the tobacco space.

A Cigarette-Free Future

A wave of tobacco companies shadowing Philip Morris have shown their willingness to deliver tobacco through any means consumers will adopt, whether it be heat-not-burn products, gum, lozenges, dip, e-cigarettes etc.

In January 2016, America’s second-largest tobacco company, Reynolds, announced the formation of RAI Innovations Co., following the nationwide release of its e-cigarette brand Vuse. Later, British American Tobacco Inc. (BTI) announced plans to acquire Reynolds for $49.4 billion. The London-based company’s CEO, Nicandro Durante, told sources that the deal was more about the future of smokeless nicotine than of scale.

“It’s going to be an arms race,” said analyst Nik Modi of RBC Capital Markets. “Who has the best technology, the best science? Who can get their applications through the FDA the quickest? We’re not in a pricing war. We’re in an innovation war.” (See also: Tobacco Giants Push New ‘Alternative Products’.)